CPA Report 2nd Quarter 2011

S eco nd Edi tion 20 1 1

CPA Report South Carolina Association of Certified Public Accountants

Meet James Etter, New Director of DOR

Why IFRS Matters Now

Community Banking Perspective

CPA Report South Carolina Association of CPAs

South Carolina Association of Certified Public Accountants Magazine Volume 41, Second Edition 2011 Officers Timothy L. Baker, CPA, President Michael R. Putich, CPA, President-elect Sharon E. Mann, CPA, Vice President Malynda M. Grimsley, CPA, Secretary-Treasurer Charles E. “Eddie” Brown, CPA, Past President BOARD OF DIRECTORS William R. Barefoot, CPA Patrick P. Carey Jr., CPA Clarence Coleman Jr., CPA, Ph.D. Mark S. Crocker, CPA Alys Anne Dennis, CPA J. Bratton Fennell, CPA Cheryl O. Lang, CPA Penny A. Lewis, CPA A.D. “Dave” Masters, CPA J. Patrick McDermott, CPA James W. McIlrath, CPA Philip R. Snipes, CPA Michael J. Targia, CPA, CFA Robert M. Tilton, CPA Beth T. Zamorski, CPA EXECUTIVE DIRECTOR Erin P. Hardwick, CAE MANAGING EDITORS Allison K. Caldwell Maureen Taylor GRAPHIC DESIGNER Lisa S. McGee Contributing writers Reva Brennan, MPA, CAE, IOM Allison Caldwell William M. Grooms, CPA, Ph.D. Erin P. Hardwick, CAE Mark T. Hobbs, CPA, CFF Derrick B. Stark, CPA Maureen Taylor Dr. Laura D. Ullrich 2011 Editorial Board Charles E. Alvis, CPA, MPA, MBA, Chair Ellen K. Adkins, CPA, MBA John B. Brantley, CPA Neil A. Brown, CPA, MAcc, CFP Amanda S. Colgate, CPA Lisa S. Cooke, CPA Erin P. Hardwick, CAE Karen A. Hursey, CPA Lesley H. Kelly, CPA Margaret L. Lattimore, CPA Marsha G. LePhew, CPA Anthony G. Masino, CPA A. D. “Dave” Masters, CPA Derrick B. Stark, CPA Victor C. Webster, CPA, MBA

Charleston

2430 Mall Drive, Suite 360

Greenville

843-884-3912

Charleston, SC 29406

864-245-8788

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South Carolina CPA Report

www.american-pensions.com

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In This Issue 9

Tax Tuesday Feedback

10

State of the South Carolina Economy

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Financial Outlook 2011: A Community Banking Perspective

14

Meet James Etter, New Director of DOR

16

Why IFRS Matters Now

18

Calling Star Students | Support SCACPA’s Education Fund

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Workplace Leaders in Financial Education Awards

20

Young CPA Leadership Academy Nominations

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SCACPA’s Blue Ribbon Panel Update

22

Major Provisions of the Health Care Reform Act

In Every Issue 5 6 8 24 27 29 31 32 34 38

From the President Association News On Your Behalf Board of Accountancy News Member Profile Doug Warner Welcome New Members Member News Chapter Connections | Chapter Profile Kara Shealy Upcoming CPE Classifieds/Advertiser Index

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers or members of the SCACPA. Advertising rates will be furnished on request to SCACPA, 570 Chris Drive, West Columbia, SC 29169, (803) 791-4181. Publication of an advertisement in The CPA Report does not constitute an endorsement of the product or service by The CPA Report or the SCACPA. (888) 557-4814 | www.scacpa.org

South Carolina CPA Report

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E-5929-0411 SC

Timothy L. Baker, CPA, CITP, CMA 2011 SCACPA President SCACPA member since 1994

M

any of our members in industry have passed their busiest season with year-end activities, and our many practitioners are counting down their last days of tax season.

During this very active time of year, our fantastic SCACPA staff has also been hard at work. Here are a few of the latest happenings and what we can do to get involved: • Blue Ribbon Panel on Private Company Reporting. The latest in this piece of profession news is that the Panel’s final recommendations have been made to the Financial Accounting DOR MEETING Foundation (see p L-R: Darren Hardin, Jason Sweatt, DOR Director page 21 for more Jim Etter, Erin Hardwick, Mark Hobbs and Todd Dailey at the South Carolina Department of Revenue. information). I will be appointing a task force to assist with advancing this issue and need your help — please see the sidebar on this page to learn more. SCACPA will be asking each CPA that prepares or uses small company financial statements to write a personal letter in support of differential standards and a separate standard-setting board. We also ask that you reach out to your clients and request that their CFO, CEO or other significant user (such as a banker) write a letter of support.

• Past SCACPA President John Camp, Executive Director Erin Hardwick and I met in February with Catherine Templeton, the new director at the South Carolina Department of Labor, Licensing and Regulation (LLR).

We discussed the workings of LLR and the changes she is making. As you are aware, LLR is the administrative arm of our state government that administers the South Carolina Board of Accountancy. SCACPA has a longstanding relationship with the Board of Accountancy and LLR, and it is important to maintain a good working relationship. We will be monitoring the changes in LLR and how it affects the BOA, our profession and the citizens of South Carolina.

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• A cadre of tax professionals along with our executive director also met recently with the new director of the state Department of Revenue, Jim Etter (see page 14 for an interview with Jim). As with LLR, this was a relationshipbuilding meeting to ensure there is open communication between the agency and SCACPA. We hope this results in enhanced working relationships between SCACPA members and the agency.

• The annual Tax Guides for state legislators were distributed to the General Assembly on February 23.

SCACPA staff and 10 SCACPA members participated. The production and delivery of these guides is another way SCACPA seeks to keep CPAs on the forefront with our elected officials.

• The Association’s strategic plan implementation is under way. Several related task forces are working to achieve the goals and objectives, as outlined in the plan. Stayed tuned as we report activities and accomlishments that evolve from this multi-year process.

I’d like to thank each of our volunteer members for all you do to help SCACPA meet its obligations to our members and the profession. As always, I welcome your input and feedback as valued members of SCACPA. Please let me hear from you on how we can meet your professional needs better. n

Timothy L. Baker, CPA, CITP, CMA, is vice president of consulting for Blytheco, LLC. He can be reached at (803) 612-7500 ext. 2641 or via email at tbaker@blytheco.com.

COALITION FOR PRIVATE COMPANY STANDARDS In conjunction with AICPA’s efforts for private company financial standards, SCACPA is seeking volunteers to serve on a coalition that will be advancing this issue. Volunteers should be a preparer or user of financial statements, an auditor or a lender. This task force will develop and execute a plan to educate South Carolina CPAs about the issue and spearhead a letter-writing campaign to advocate for a separate set of financial standards for private companies. If you are interested in serving, please send your contact information along with a brief description of your credentials to SCACPA Executive Director Erin Hardwick, ehardwick@scacpa.org.

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SCACPA Welcomes Maureen Taylor Maureen Taylor has joined SCACPA as member services manager. Maureen is responsible for leading and managing SCACPA’s member services including membership recruitment and retention, benefits and outreach programs. Maureen also oversees SCACPA’s quarterly magazine, the CPA Report. She serves as staff liaison for the Accounting Careers/Academic Relations Task Force, the Benefits Committee, the Membership Committee, Editorial Board Task Force and the Financial Literacy Task Force.

Maureen has over 25 years of experience in the nonprofit sector. She most recently served as program director of the South Carolina Business Initiative/Women’s Business Center where she counseled entrepreneurs on launching or growing a business with a focus on marketing. A native of Pittsburgh, Maureen is a graduate of Ohio University. She enjoys spending time with her family, boating on Lake Murray and motorcycling (with her husband) along South Carolina’s back roads.

SCACPA

Get the Conversation Going — Start Blogging Have an observation, commentary, link to a website or article you’d like to share with your peers? The SCACPA blog is the perfect place to connect. Short for web log, a blog is a website where individuals can post periodic entries and readers can comment. Whether you’re an expert on a particular subject, concerned about the current fiscal crisis or want to take a stand on a legislative issue, why not get started today? Sign up to be a SCACPA guest blogger.

Staff contact: Emily Allen, ext. 106

570 Chris Drive, West Columbia, South Carolina 29169 (803) 791-4181 or Toll-free (888) 557-4814 Fax (803) 791-4196 | www.SCACPA.org

2011 Professional Issues Update Series Get current on the most significant issues affecting the CPA profession in these interactive, multimedia programs held exclusively for members of SCACPA. Providing four hours of FREE CPE in eight communities across South Carolina, these events will give you up-to-date information, insight and analysis. Attendees will also have an opportunity to make their opinions count. There will be a variety of ways for you to give feedback on the top issues that make a difference in your day-to-day operations.

Save the dates and join us for 2011 PIUs. Staff Contact: Sandra Oxner, ext. 112, or visit www.scacpa.org/PIU

AUGUST Peer Review Seminars July 21 ∙ August 23-24 ∙ August 25 | West Columbia, SC

IS YOUR FIRM READY FOR PEER REVIEW? With the changes in the 2009 revised standards, be sure that your firm is prepared. Whether this is your firm’s first peer review or your review date is approaching, this course will help ensure you are ready.

Aim High

CPA

South Carolina Association of Certified Public Accountants

pFor more information on peer review courses visit www.scacpa.org or request a Peer Review brochure by contacting April Cox at extension 110.

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South Carolina CPA Report

Florence: Southeastern Institute of Manufacturing (SIMT) 12:30 - 4:40 p.m.

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Myrtle Beach: Horry Georgetown Tech – MB Campus 8:30 a.m. - 12:10 p.m.

SEPTEMBER

20

Rock Hill: Baxter Hood Center 12:30 - 4:40 p.m.

23

Columbia: Radisson Hotel 8:30 a.m. - 12:10 p.m.

What does it take to have an effective quality control system that leads you to a clean, pass peer review report? Find out how to prepare for your next review and what can be done on a daily basis to create a strong quality control environment for your firm.

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Charleston: Embassy Suites – Convention Center 8:30 a.m. - 12:10 p.m.

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Fees: Early Bird $210, Member $235, Nonmember $310

*Sea Island Chapter to present four hours of afternoon CPE after morning PIU.

JULY 21, 2011 Upcoming Peer Review: Is Your Firm Ready? (73611A)

South Carolina

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To register for this course visit www.scacpa.org/peerreview.

(888) 557-4814 | www.scacpa.org

NOVEMBER

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Spartanburg: Converse College 12:30 - 4:40 p.m.

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Greenville: Embassy Suites 8:30 a.m. - 12:10 p.m.

(888) 557-4814 | www.scacpa.org

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First Quarter Report For the profession, by the profession—that’s what the South Carolina Association of CPAs is all about. SCACPA’s board of directors, committees and task forces and Young CPAs Leadership Cabinet are hard at work making decisions, providing guidance and embarking on projects and programs that strengthen the profession and enable members to improve their knowledge, network and technical skills.

REPORT FROM SCACPA BOARD MEETING

The SCACPA Board of Directors met January 21 in Columbia.

Among many items of business, the board focused much of its time on legislative and policy issues.

Private Company Financial Standards: President-elect Michael Putich briefed the board on the work of the Blue Ribbon Panel and led a discussion about it. The Blue Ribbon Panel was sponsored by FAF, the AICPA and the National Association of State Boards of Accountancy to develop policy recommendations for private company financial standards. A report containing the panel's recommendations for a new separate standard-setting board and for modifications to U.S. GAAP to recognize the unique needs of private company financial statement users was submitted to Financial Accounting Foundation (FASB’s parent organization) in late January.

A proposal for public comment is expected to be released this spring.

CPAs, lenders and other users, private companies and small business owners are encouraged to be engaged in this critically important initiative to help transform the recommendations into reality.

The SCACPA board supports the creation of private company financial standards and will launch a letterwriting campaign later this year.

There will also be efforts to develop

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South Carolina CPA Report

a state coalition of organizations representing CPAs, bankers and businesses to strengthen these efforts.

Legislator Award: The SCACPA board approved the creation of a new award — a state legislator award that will recognize elected officials who have gone the extra mile to help SCACPA in its legislative work.

Criteria for the award is now being developed.

The Young CPAs Leadership Cabinet: Immediate Past Chair Leigh Schaefers attended the board meeting and presented the cabinet’s 2010 activities and accomplishments.

The YCPAs first Emerging Leaders Conference was a success and a second conference is being planned now for August 18-19, 2011.

ADVOCACY AT WORK IN 2011

The Legislative and Advocacy Committee, Key Person Contacts, SCACPA staff and lobbyists were quite busy during the first quarter of 2011. Here are a few highlights.

SC DEW and Payroll Reports: Late in 2010, the S.C. Department of Employment and Workforce distributed a notice announcing a new deadline for quarterly payroll reports. The new deadlines fell on the 15th day following the end of a quarter. Needless to say, this posed a serious work-compression issue

“The SCACPA board supports the creation of private company financial standards and will launch a letter-writing campaign later this year.” for CPAs working in tax. SCACPA’s Legislative and Advocacy Committee drafted a detailed letter to SC DEW (which was posted on www.scacpa. org) explaining why this change was implausible. SC DEW also heard from many CPAs directly. As a result, the agency decided not to pursue the regulation change that would have imposed a new deadline for quarterly payroll reports. This was certainly a victory for the profession.

SC DOR and PT-100s: Also in late 2010, the S.C. Department of Revenue announced a change in how property tax form 100 is to be filed.

Starting in 2011, all PT-100 forms are to be filed through the S.C. Business One-Stop (SC BOS) system. While most SCACPA members embrace technology and agree that electronic filing is the right path, many were surprised by this change and are not prepared to e-file the PT-100s returns this year. Filing PT-100s through the SCBOS system, while developed for the individual filer, can be adapted by third party preparers, like CPA

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“Tax Conformity was signed into law by the governor on April 11.” p L-R: Phil Betette, Tripp Newsome, Leon Maginnis, Caroline Strobel, Tommy Bryson and Bill firms. Following several meetings and conversations with DOR staff, SCACPA released information in March that gave CPAs and their firms options for handling PT-100s.

See SCACPA’s website for more information.

Tax conformity: Each year SCACPA works to ensure tax conformity legislation is passed early in the year in order to provide tax professionals with the certainty they need in completing their client work. And 2011 is no different, except that legislative maneuvering, particularly in the senate, delayed attention on tax conformity for nearly a month. As a result, tax conformity passed later than hoped for. SCACPA is optimistic that over time, state legislators will understand more clearly the importance of tax conformity and this annual effort will become streamlined. n

Erin P. Hardwick, CAE, has served as SCACPA’s executive director since 2005. She has more than 25 years of experience in association and nonprofit executive leadership and is one of 18 Certified Association Executives in South Carolina, the highest credential in the association management profession. She currently serves as secretary/treasurer of the CPA Society Executives Association, and a member of the S.C Secretary of State’s Nonprofit Advisory Council and the S.C. Council on Economic Education Board of Directors.

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Grooms at WIS-TV Columbia for Tax Tuesday.

SCACPA Members Field Viewer Calls During Tax Tuesday

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CACPA members volunteered their time and knowledge recently to man the phones during Tax Tuesday on WIS-TV, Columbia. Bill Grooms, Leon Maginnis, Caroline D. Strobel, Philip Betette, Tripp Newsome and Tommy Bryson fielded over 200 viewer calls during a two and a half hour period.

While all agreed it is difficult for practicing CPAs to get involved during tax season, the consensus was that they would do it again. SCACPA asked the Tax Tuesday team to share their experience and some of the more unusual questions they received.

WHAT TYPES OF ISSUES DID VIEWERS ASK ABOUT? • People receiving only social-security income wanted to know whether or not they were required to file.

• Questions related to retirement plans (how to report distributions, early withdrawal penalties, maximum contribution amounts, etc.).

• Filing questions: head of house, married filing separate.

WHAT WAS THE MOST UNUSUAL QUESTION YOU RECEIVED? • A person who won the lottery in Georgia and lived in South Carolina wanted to know which state they should file.

• Callers wanting to take dependency exemptions for grown children who are unemployed and living with them.

WOULD YOU ENCOURAGE YOUR FELLOW SCACPA MEMBERS TO GET INVOLVED NEXT YEAR? • Yes, it is an excellent way for the profession to give back to the community.

• It is a good experience and sort of gets you into the real tax world. It is nice to get away from AMT. HOW WOULD YOU DESCRIBE YOUR OVERALL EXPERIENCE? • Very positive. The studio personnel were very cordial and helpful. I enjoyed talking with my fellow CPAs, and I enjoyed helping the callers with their questions.

• It is very interesting to see what situations drive the taxpayers’ decisions.

For this year, in my opinion, the biggest problems are unemployment and dependency on family as a result of unemployment, and the elderly who do not need to file but are confused about the tax credit associated with Social Security.

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The recent recession was driven by many factors, but the one that has gained the most attention over time was the housing boom seen across the United States.

BY THE NUMBERS

by Dr. Laura D. Ullrich

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or the past two years, I have consistently heard people call the recession we recently endured — and the recovery we are currently in — “different.”

I totally agree and think that most people, whether they are economists or not, recognize that this recession was not your standard economic downturn. Many people also understand that although we are indeed recovering from an economic growth perspective, the unemployment rate is not falling as quickly as is generally expected postrecession. What I don’t think people fully grasp is why it was, and is, different. While there are many reasons why the most recent recession and recovery stand out from others, I will focus on a few explanations that I think are important in explaining the velocity of both, especially here in South Carolina.

For the past two years, I have consistently heard people call the recession we recently endured — and the recovery we are currently in — “different.”

Recessions begin for many different reasons. We expect there to be natural peaks and troughs within the business cycle, and specific events, such as an oil crisis or an event like September 11, can escalate an economy’s tendency towards these cyclical movements. The recent recession was driven by many factors, but the one that has gained the most attention over time was the housing boom seen across the United States.

I totally agree and think that most people, whether they are economists or not, recognize that this recession was not your standard economic downturn.

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South Carolina CPA Report

According to Freddie Mac’s CMHPI, South Carolina’s housing prices increased 28.7 percent between the first quarter of 2004 and the second quarter of 2008 (the peak of home prices in South Carolina). Since the second quarter of 2008, home prices have fallen 5.4 percent.

According to Freddie Mac’s CMHPI, South Carolina’s housing prices increased 28.7 percent between the first quarter of 2004 and the second quarter of 2008 (the peak of home prices in South Carolina). Since the second quarter of 2008, home prices have fallen 5.4 percent. This compares to a national increase of 25.2 percent, and a subsequent decrease of 8.1 percent, over the same time period. While many other states have had housing crises more significant than ours (Arizona, Nevada and other “sand states”), the downturn in the housing and related industries has been extremely harmful to the South Carolina economy. At this point, housing prices are continuing to fall in many

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(888) 557-4814 | www.scacpa.org

South Carolina counties even as the overall economy is expanding, thus leading to a muted recovery. Until the trend of falling home prices and high vacancy rates ends, economic growth will remain slower than would typically be expected absent this phenomenon. This will likely take several years as excess supply is absorbed into a naturally growing economy.

State government issues have also played a significant role recently and have led to slower recoveries than previously seen. South Carolina has maintained one of the highest unemployment rates in the country throughout the recession and the recovery, along with states like Nevada, Michigan and California. It may not be clear why South Carolina belongs in the same crowd as states that have faced well-known economic challenges. However, the issues specific to South Carolina are very serious — they simply fly a little more under the radar and may not be as recession-specific as the other states with high unemployment.

In 2006 Act 388 was passed, which represented a sweeping change to the property and sales tax system in the state.

The law was then phased in between 2006 and 2008 right as the recession began. Act 388 was essentially a tax swap, eliminating school taxes on owner-occupied housing and increasing the state sales tax rate by one cent (and removing the sales tax on unprepared food). While this policy may not have been a solid choice for tax policy regardless of the time frame, the timing of the phase in was terrible.

In general, property tax revenues are one of the most stable local tax revenues during an economic downturn.

Sales tax revenues, on the other hand, are one of the least stable. Swapping a stable revenue source for an unstable one resulted in a significant gap between the potential

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revenue absent Act 388 and the level of revenue that has been collected since that time. As we move towards more steady economic growth sales tax revenues will become more stable, but they are unlikely to exceed the revenues that could have been collected absent the tax change.

This policy modification was responsible for a significant percentage of the revenue losses across the state, and undoubtedly makes South Carolina’s economic recovery different, especially for K-12 education, which relied heavily on the property taxes that were eliminated.

Another very significant current issue in South Carolina is our underfunded state pension program. The South Carolina defined benefit system is currently underfunded by a staggering $13 billion. Even more concerning, for current policy, is the $88 million deficit the fund faces in this year alone. This means that $88 million must be taken out of the South Carolina budget and spent on the underfunded pension program rather than funding the public services and programs that the money was originally allocated for. Both of our neighboring states, North Carolina and Georgia, have fully-funded pensions and have been able to keep their spending on state supported programs at more stable levels than is possible at this time in South Carolina. There is no doubt that the pension shortfall will result in lower spending on K-12 and higher education, as well as spending on healthcare, prisons and other state supported programs.

For these and many other reasons, the recent recession and recovery are indeed different. Until the problems underlying the restrained growth patterns are remedied, the South Carolina unemployment rate will likely remain higher than we would see under a typical recovery. The good news is that the overall economy is on the mend, and South Carolina’s economy is currently growing at a rate higher than the national average. If we can make some important and politically brave changes, much brighter days will certainly be on the horizon. n Dr. Laura Dawson Ullrich is an assistant professor of economics at Winthrop University in Rock Hill. Originally from Athens, Georgia, she holds a Bachelor of Business Administration in Economics from the University of Georgia and a Master’s and Doctorate in Economics from the University of Tennessee. Her research interests include school finance reform, local and state level tax and expenditure analyses, and welfare policy.

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Financial Outlook 2011

A Community Banking Perspective

by Allison Caldwell

p Laura and Brian Ullrich with their three boys. (Photo by Andrea Berry Photography.)

Tax Talk: A Family Matter

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hen Brian and Laura Ullrich started dating at age 19, they had already known each other for 18 years. Both grew up in Athens, Georgia and attended the University of Georgia. Brian had dreams of becoming a CPA and Laura dreamed of one day becoming a CEO. They knew they both wanted a family, and they both wanted rewarding careers.

They also knew that this wasn’t always an easy balance.

Four years later, shortly after getting married in 2001, Laura decided that she wanted to go back to school and become an economics professor. The next six years were a blur as Brian became a CPA, Laura finished her masters and Ph.D. in Economics, and they brought two sons, Dawson and Reed, into the world.

In 2007, Laura and Brian moved to Rock Hill. Laura began her academic career at Winthrop University, and Brian joined Burkett Burkett Burkett’s Rock Hill office. They have since adopted son number three, Allen, and enjoy being involved in their local church, running road races and spending time together as a family. Their oldest two boys are active in soccer, basketball, gymnastics and Cub Scouts. Life is incredibly busy and incredibly fun!

Having two tax professionals in one household has been a tremendous blessing to both Brian and Laura. They are interested in the same things, just from different angles. Laura specializes in tax policy and incidence issues, while Brian sticks to corporate and individual tax compliance. Although their degrees and specializations differ, they often consult each other on policy, law and what future tax policy may look like.

They certainly feel as though their clients and students benefit from the knowledge that they share, and love having a spouse who doesn’t mind a lot of ‘tax talk.’ n

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T

he nation’s economy may finally be showing signs of life, but much still needs to happen before economic recovery is strong and sure. Here in South Carolina, the leaders of several locally-headquartered banks say that even though they’ve struggled like everyone else, their institutions and the communities they serve have managed to weather the storm. They offer a cautious but optimistic financial outlook from the community banking perspective.

What signs indicate that local economies are starting to recover, or what will you be looking for most towards that end?

MIKE CRAPPS, PRESIDENT/CEO, First Community Bank: We reflect the successes and the challenges of our customers and communities. I hear stories of some businesses seeing improved activity, some feeling as though things have stabilized, and, unfortunately, some indicating that business is still declining.

Overall, I feel as though the business climate has stabilized and shows signs of very gradual improvement. First Community Bank will continue its commitment to assisting local businesses and professionals achieve their financial goals. As our customers become more successful, our local economy will be enhanced.

CRAIG NIX, CFO, First Citizens Bank: Two recent signs indicate that the local economy is starting to recover: a decline in unemployment rates and a slight rise in consumer spending. Long-term unemployment continues to be a challenge, and we see very little forward momentum in the housing market. It will take time to absorb the excess supply of houses, and sustained GDP growth [is needed] to meaningfully move the unemployment rate down to pre-recession levels. We’re well-positioned to face these headwinds due to our strong capital and liquidity position. First Citizens will help boost the local economy by helping customers meet and exceed their financial goals.

We’ll continue making loans to local residents and businesses, providing customers with products and services that meet their needs, and being a valued corporate citizen in our communities.

RICK SAUNDERS, PRESIDENT/CEO, First Reliance Bank: Until we create jobs, not much will change in the near future. South Carolina has a relatively inexpensive work force, solid infrastructure and a port, and the state’s leadership [is] working hard to promote these assets. The Boeing plant in Charleston has a positive impact on that region. Columbia is more government-based, so while it has been fairly stable we expect more budget cuts to put greater pressure there. The Pee Dee area has seen higher unemployment than other markets, but is improving slightly. We expect continued improvement in 2011, but modest at best.

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JUSTIN STRICKLAND, PRESIDENT/ CEO, Southern First Bank: I’m not sure [that] the economy is recovering as much as stabilizing. A reduction in unemployment numbers is the key component reflecting a recovery.

We’re also closely watching the housing market — an increase in building permits would reflect an economy that has absorbed the abundance of excess housing units, and a demand for new units. We expect to continue to grow our company profitably [this year], and that means making quality loans and expanding our client base. The pace of economic recovery and the level of continued regulatory restrictions will be key points for the ability of community banks to expand in 2011.

JOHN WINDLEY, PRESIDENT/CHIEF BANKING OFFICER, South Carolina Bank and Trust: We’re seeing a slight uptick in loan demand, which indicates some improvement in overall consumer confidence. We’ve also seen improvement in past due or “problem” loans. When an economy starts to recover, past due ratios turn down.

We’re cautiously optimistic about these early signs — nothing dramatic, but we are seeing slow improvement overall. We’re constantly looking for opportunities to lend money. We’ll try to increase these opportunities in 2011, thereby becoming more successful in growing our customer base and attracting new customers. As local economies improve, we’ll definitely be playing a part. n

Excerpted from articles published in the February 2011 issues of Greater Columbia Business Monthly and Greater Pee Dee Business Journal, www.columbiabusinessmonthly.com and www.greaterpeedeebusinessjournal.com.

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An Interview with James Etter

What about your past experiences has prepared you to lead a state agency, and what do you hope to accomplish?

Etter: Public accounting, both domestically and internationally, gave me a breadth of experiences that enabled me to quickly evaluate situations and opportunities that would help improve overall operations and hopefully improve various companies’ bottom line.

The variety of experiences included very large (Fortune 50) as well as very small companies, private as well as publicly traded. These experiences helped me to develop a skill set that will enable me to help manage the Department of Revenue efficiently and effectively. My firsthand experiences dealing with the Department of Revenue from a nongovernmental point of view give me a perspective to better relate to the taxpayers as a whole.

New DOR Director Seeks to Make Agency More User-Friendly Under Gov. Nikki Haley’s administration, South Carolina’s state agency directors are tasked with making their organizations more businessfriendly and responsive. For South Carolina CPAs, the Department of Revenue (DOR) has a direct impact on the profession as a whole as well as the clients they serve. SCACPA recently asked James Etter, director of DOR, how his professional background has prepared him to lead the agency and what his priorities are for the coming year.

You were appointed by Gov. Haley in January as the new director of the South Carolina Department of Revenue. Briefly describe your professional background and service specialties leading up to this position.

Etter: After receiving my bachelor’s and master’s degrees in business administration from the University of Cincinnati, I joined Arthur Young & Company in the Cincinnati office.

I was promoted to senior auditor after one year and worked mostly on manufacturing or financial audits.

After four years, I was transferred to Tokyo as an audit manager and worked on U.S. publicly traded clients that had major operations

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South Carolina CPA Report

in Japan or Korea. I returned to the states as an audit manager in the Charlotte office.

I joined Abbott Laboratories as director of international internal auditing; then moved to Puerto Rico as a group controller and then back to Chicago as director of Corporate Financial Analysis. I was then recruited to join Sam Solomon & Company in Charleston, S.C. as chief financial officer. After Sam Solomon was sold, I worked with several private companies in Charleston, including real estate operations, as their CFO and/or chief executive officer.

I then was recruited to head up a new real estate investment trust in Denver to take them public. That process took approximately two years. The company grew and was later sold to a private real estate group. I returned to South Carolina and worked as a consultant or employee for several small companies that needed my skill set to help identify areas that needed improvement both in operations as well as accounting issues. I was also appointed by the federal bankruptcy court to assist the bankruptcy trustee in administering the research and liquidation of the assets for the HomeGold case.

(888) 557-4814 | www.scacpa.org

The Department of Revenue is one of the best run agencies in the state, so to make major changes in the way the department runs is not an overriding goal. However, every organization can be improved as conditions change and new legislation is enacted. New technological changes always require changes in how the agency operates and interacts with the taxpayer. Efficiencies in operations will be a primary goal in years to come.

Making the department user friendly and impartial in its dealings with taxpayers is an important objective for all concerned.

taught general business as a one semester course. I had no prior inclination or interest in business as a career.

As he presented the material, he introduced the class to many of the opportunities in the business field, and becoming a CPA was one that he stressed as being very rewarding. I then took a basic bookkeeping course and thoroughly enjoyed the challenge; thus started a journey in accounting/finance.

The most enjoyment during my career has been in treating each opportunity as a clean slate or canvas with the opportunity to start from fresh and create an efficient organization that would benefit the stakeholder and organization as a whole.

Tell us about your family, hobbies, favorite activities— what you do for fun.

Etter: I have four children, two daughters-in-law, one son-in-law and seven grandchildren. Having lived overseas twice, we are an international family with three of our kids born overseas and three of our grandchildren born overseas. My hobbies include golf and woodworking. n

What areas and issues will be top priority in 2011? As CPAs in particular, what should our members be aware of in the near future? How do you envision working with the CPA profession to advance common areas of interest?

Etter: The one main area where I see the department and CPAs working closely together is the feedback the DOR can receive from CPAs, individually and as a group, as to issues that are causing taxpayers problems in filing returns — not only in content, but the forms themselves.

I understand well that small filers have difficulty in understanding the content and the process in filing all the required tax forms. Another area where we can benefit each other is in training and seminars. The DOR would be glad to participate in CPE courses that SCACPA sponsors for CPAs and others across the state.

At MG&C, our experienced professionals are committed to excellent service and innovative solutions for diverse legal and business challenges.

Experience. Service. Results.

As a finance executive and former CPA, what made you choose the accounting/financing field? What do you enjoy most about what you do? mgclaw.com

Etter: Choosing accounting/finance as a profession was the result of a dedicated junior high school teacher. He

(888) 557-4814 | www.scacpa.org

Columbia

Charlotte

Charleston

Greenville

Raleigh

Myrtle Beach

South Carolina CPA Report

15

Why IFRS Matters Now

by Derrick B. Stark, CPA SCACPA member since 1996

Business decisions we are making today may be impacted by material changes to applicable accounting standards, and we must consider the possible scenarios.

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here is no shortage of insightful writing on the significant differences between accounting principles generally accepted in the United States (U.S. GAAP) and International Financial Reporting Standards (IFRS), the history and road map for convergence between the two,

and the popular inclination that the IFRS world tour is coming to town. If your company or clients transact business with, own, or are owned by non-U.S. entities, you are probably familiar with rules regarding initial adoption and the differences in key issues such as revenue recognition, business combinations and financial statement consolidation, inventory valuation and lease accounting.

The general business implications, however, are why a general understanding of IFRS is relevant to us now.

Business decisions we are making today may be impacted by material changes to applicable accounting standards, and we must consider the possible scenarios. These might include the following: • For those of us who operate private businesses or advise others on business operations, how will pending convergence or adoption of IFRS impact contract negotiations or future IT infrastructure development?

• As readers of financial statements, how can we reconcile our hard-coded expectation for conformity with the transitional guidance for IFRS adoption, draw relevant comparisons, and make good strategic business decisions?

• As we move toward the broad, principles-based IFRS, how will the fundamental reversals of event-based, Enron-type rules and standards affect overall business risk?

• Will the migration to disclosure-centric standards increase or decrease our exposure to litigation risk?

BUSINESS OPERATION IMPLICATIONS

As U.S. GAAP and IFRS move closer to each other via the long running convergence projects, there will no doubt be cascading business implications.

For example, operating type leases may become a thing of the past. If every lease, big or small, is subject to capital lease treatment, material changes to the balance sheet assets and liabilities will impact loan covenants, executive bonuses and performance compensation, and tax strategy.

As strategists, we have to anticipate likely convergence and adoption scenarios for contracts executed now.

Moreover, current infrastructure decisions — particularly those related to information technology — must consider not only the establishment of new standards and reporting requirements, but the messy duplication of transition and change. Those entities that deal or reasonably expect to deal in the future with non-U.S. parent or subsidiary entities will need applications and hardware that can support both U.S. and international reporting and provide enough flexibility for the rapid change in both.

Like office space, we want to have enough capacity when we need it, but not be so foolish as to overindulge.

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South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

(888) 557-4814 | www.scacpa.org

FINANCIAL STATEMENT CONFORMITY AND RISK

Academically, a singular body of standards for our global economic environment makes sense. Moreover, the idea of broad principles-based standards that permit issuers to exercise sound professional judgment and readers to draw their own conclusions seems more relevant than ever.

And yet, if we can reconcile our comfort in explicit rules with our purpose to present fair and relevant representations about the health and performance of an entity, we must consider the short-term impact on comparative value. For example, IFRS provides mandatory and optional exemptions for initial adopters making it difficult to compare financial statements among companies at various stages of implementation and measure trends of individual companies through the process of adoption.

Consolidations present another twist. Although both standard sets consider the substantive risks and rewards of interrelated entities for purposes of consolidation and reporting, differences in treatment of potential voting rights and finance structures can lead to components that are consolidated in one presentation and not in the other.

Even when fully disclosed, the comparative value of financial statements will be diluted as readers find it more difficult to develop norms, predict outcomes and evaluate performance relative to expectations.

Convergence and/or adoption will continue to bring rapid change in the foreseeable future. Although a worthwhile and necessary exercise to reflect global economic interconnectedness, it seems a slippery slope in the near term. Like expanding major roadways that are overwhelmed by population growth, where traffic gets worse before getting better, preparing and using financial statements will surely be more complex for now.

Familiarity with IFRS and a general sense of the impact on financial accounting and reporting in the United States will be an important part of our knowledge well before there are specific rules of engagement. n

Derrick B. Stark, CPA, is managing member of ClaraVista LLC, a reimbursement and consulting firm serving home medical equipment suppliers throughout the United States. He currently serves on SCACPA’s Editorial Board Task Force and has previously served on the CPA Ambassadors Task Force, the Business Valuation and Forensic & Litigation Services Task Force and the Young CPAs Task Force.

South Carolina CPA Report

17

Help Shape the Accounting Profession

2011 Educational Fund Donors

Support the SCACPA Educational Fund

Donors through March 30, 2011

With sincere gratitude for each and every contribution, SCAPCA would like to recognize our 2011 Educational Fund Donors. Your generous support helps to shape the future of the accounting profession in South Carolina.

“It’s time to roll up your sleeves to raise funds, showing true commitment to your cause.”

A

s a CPA, what will exist beyond your lifetime? Possibly the firm or company you work for, or the firm that bears your name. But the common thread among all CPAs is the profession itself. Kept alive by new CPAs, the profession will last long after you’re gone.

The SCACPA Educational Fund, Inc. invites you to consider contributing to the legacy. Honor a senior partner or your firm with a named scholarship.

A gift of $10,000 allows you to name a scholarship, given each year to a deserving South Carolina student.

This gift may be paid with a one-time payment or, if you prefer, you may

MAIL DONATIONS TO: SCACPA Educational Fund, Inc. 570 Chris Drive West Columbia, SC 29169

make a pledge of $10,000 and pay it over a three-year period.

What happens once a firm, company or individual makes that $10,000 pledge?

It’s time to roll up your sleeves to raise funds, showing true commitment to your cause. One firm pledged $10,000 in honor of their firm’s anniversary. To meet their goal, the firm mailed letters, worked with clients and colleagues and actively spread the word about the foundation’s mission — a successful game plan. They not only met but exceeded their goal.

Our latest fundraising effort is to establish a named scholarship in memory of Francis A. Humphries, a SCACPA member from 1967 until his death in 2008 following a battle with cancer. A life member, Francis served

as president of SCACPA in 1979, was a member of numerous committees and task forces and an active peer reviewer, conducting over 300 reviews through SCACPA’s statewide Peer Review Program. As a member of AICPA, he was a past vice president and a member of the board, and served 10 years on the AICPA Council. A contribution to the Francis A. Humphries Scholarship Fund is a fitting tribute to Francis’ memory and his contribution to the CPA profession.

The SCACPA Educational Fund Inc. is a 501(c)3, so all contributions are tax deductible. A scholarship made possible by your donation will help shape the future of the accounting profession in South Carolina. Contribute to the accounting profession by sending your check today!

Staff contact: Glenna Minor, ext. 107

CALLING STAR STUDENTS! Now Accepting Scholarship Applications SPREAD THE WORD! The deadline to apply for the SCACPA Educational Fund Inc. 2011-2012 accounting scholarships is Wednesday, June 1, 2011.

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South Carolina CPA Report

Each year the SCACPA Educational Fund awards thousands of dollars in scholarships to deserving accounting students just like you. The amount of the award and the number of scholarships varies depending on the number of qualified applicants. Visit www.scacpa.org to download the scholarship application, which includes the eligibility requirements. All scholarship applications and supplemental materials must be postmarked

by June 1, 2011. Staff contact: Glenna Minor, ext. 107

MAIL COMPLETED APPLICATIONS & MATERIALS TO: SCACPA Educational Fund Inc. 570 Chris Drive West Columbia, SC 29169

(888) 557-4814 | www.scacpa.org

INDIVIDUAL DONORS William E. Abernethy Jr., CPA Claudia W. Adams, CPA T. D. Ainsworth Timothy L. Baker, CPA John P. Barber, CPA Henry D. Barnett Jr., CPA S. C. Beckwith, CPA, CFP Roddey C. Bell James B. Black Lois R. Blanco, CPA Cynthia E. Bolt-Lee, CPA, MS Roger A. Borgmeier, CPA Brian J. Brady, CPA, CFF CFE CIA Duncan F. Breckenridge Jr., CPA K. Brodie Brigman Jr., CPA Christopher A. Brown, CPA Maurice Brown, CPA William W. Brown, CPA Thomas J. Bryson, CPA Orvis B. Buie, CPA Monica A. Burbano de Lara William L. Byrd, CPA John F. Camp, CPA Pierce W. Cantey, CPA Robert D. Capell Jr., CPA Patrick P. Carey Jr., CPA Robert B. Carpenter, CPA Steven D. Carter, CPA Christine E. Cassidy, CPA, JD, LLM Linda P. Caughman, CPA Jan M. Clark, CPA James B. Cobb, CPA Deanna L. Cochran, CPA Marie S. Codinha, CPA Mary Jo Cole, CPA Clarence Coleman Jr., CPA, PhD Christopher J. Controne, CPA Robert C. Cooper, CPA George L. Counts Jr., CPA Neil F. Crossley Sr., CPA, PFS Robert A. Curtis, CPA, PFS, MST Andrew T. Derajtys, CPA James H. Derrick, CPA Julia A. DuMars, CPA

George W. DuRant, CPA, ABV, ASA Spamvetta T. Edwards, CPA Cimberlie D. Elkins, CPA Donald L. Ellis, CPA, MBA Mary L. Enright, CPA Philip O. Espy, CPA, MBA Barbara J. Evans, CPA MBA Michael R. Evans, CPA A. L. Fee, CPA John B. Fennell, CPA Willie E. Fergusson, CPA Ryan F. Finklea, CPA Susan S. Fitzpatrick, CPA Charles R. Fliflet, CPA Tammy M. Flowers, CPA Jennifer N. Gahl, CPA Kimberly R. Getz, CPA Jonathan I. Godwin, CPA Dennis L. Gore, CPA Henry D. Green III, CPA Mary E. Green, CPA John M. Greene, CPA Ralph M. Greene Jr., CPA Amanda T. Hallman, CPA David J. Haney, CPA Erin P. Hardwick, CAE Gary A. Harris, CPA Martha M. Hartley, CPA Larry W. Hartsell, CPA Alice B. Hazel, CPA Robert M. Heil, CPA Douglas W. Henderson, CPA Kenneth S. Higgenbotham, CPA J C. Hincher, CPA MA Mark T. Hobbs, CPA Samuel G. Holtzclaw, CPA Leonard A. Hoogenboom, CPA Samuel L. Howell, CPA, MAcc M. Timothy Hucks, CPA Donna K. Hudson, CPA Donald L. Hunter, CPA Harry A. Huntley, CPA Richard A. Hutto, CPA Leona L. Hydrick, CPA

(888) 557-4814 | www.scacpa.org

Arthur L. Jayroe Jr., CPA Robert M. Jones, CPA W. K. Jones, CPA Richard L. Jordan, CPA Kevin C. Kern, CPA Michael J. Kerscher, CPA James D. Kidd, CPA Jeffery E. Kinard, CPA Susan J. Kranz, CPA Douglas D. Kugley, CPA Holly L. Kyle, CPA Cheryl O. Lang, CPA Carol C. Lawlor, CPA Paula J. Lawrence, CPA David G. Lewis, CPA Penny Lewis, CPA Carol M. Libby, CPA Daniel E. Livengood, CPA Kenneth E. Love, CPA Michael W. Lowrance, CPA, MBA Patrick M. Luciano, CPA Roger F. Luttrell, CPA, MBA Larry B. Mack, CPA Sharon E. Mann, CPA Bobby T. Mardis, CPA Leigh A. Marks, CPA J T. Massey Glenn J. Matthews, CPA Karen R. Mattison, CPA Sheryl G. McAlister, CPA, CFP Renee O. McCall, CPA Christine A. McCarty, CPA Chris A. McCraw, CPA J. P. McDermott, CPA J. P. McDermott, CPA C. Stephen McDonald, CPA Ann A. McDuff, CPA Henry A. McFaddin, CPA James W. McIlrath, CPA Hunter McKeown Sheila C. McKinney, CPA Charles L. McLafferty, CPA, PhD Susan P. Miller, CPA David H. Mims, CPA

Thomas P. Monahan, CPA Kenda L. Monroe, CPA Jeanne F. Morrisette, CPA Frances Y. Moseley, CPA Albert A. Munn IV, CPA Robert J. Nagy, CPA James R. Newell, CPA Gina S. Noble, CPA James M. O'Cain, CPA, CFP, CLU, ChFC Donald M. Oates, CPA Sherry N. Ouzts, CPA Renita M. Owens, CPA Christopher A. Paris, CPA, MBA Sara B. Penn, CPA Barbara G. Pierce, CPA, PhD, MP Janet M. Pierce, CPA Sarah D. Pope, CPA Jeffery S. Powell, CPA Robert B. Privette, CPA, MBA Joseph E. Pruitt, CPA Betsy M. Ragsdale, CPA Kelly S. Ramirez, CPA Michael P. Ravan, CPA Charles M. Redfern III, CPA Renee R. Reid, CPA Stephan P. Riley, CPA Ray L. Roberts, CPA William C. Robertson Jr., CPA William C. Robinson, CPA Duncan M. Rogers, CPA Deborah M. Rose, CPA Del A. Rosebrock, CPA W. T. Rubenstein, CPA Amy H. Rubin, CPA Michael W. Saunders, CPA Janene K. Schmidt, CPA, MBA Douglas P. Schmieding, CPA Terry K. Schmoyer Jr., CPA Ruth A. Schult, CPA William E. Sellars Jr., CPA Paul A. Semones Jr., CPA Ernest M. Sewell III, CPA Robert H. Silvers, CPA Teodor D. Simeonov, CPA

Nancy F. Simonetti, CPA Nancy F. Simonetti, CPA Clifford C. Simunek, CPA Robert M. Sisk, CPA Charles H. Smith, CPA James B. Snoddy, CPA Douglas A. Sparacino, CPA Curtis C. Stewart, CPA, JD James M. Stewart Jr., CPA, MBA, MST Richard G. Stoeppler, CPA Eugene F. Svatek, CPA Bruce K. Tallant, CPA Robert T. Theodore, CPA Billie H. Thomas, CPA Mark E. Thorne, CPA Richard C. Tiller, CPA Bruce E. Truesdale, CPA, MBA Edgar A. Vaughn, CPA David R. Veldman, CPA Donna G. Waga, CPA Audrey R. Waldrop, CPA Mark W. Webster, CPA Susan O. Weesner, CPA Harry M. White, CPA David L. Whitehead, CPA D. Ken Whitener, CPA Howell B. Williams IV, CPA Kathy B. Wine, CPA Jacqueline C. Wirszyla, CPA Amy L. Wood, CPA Tom J. Younan, CPA Yulien Yuan, CPA Beth T. Zamorski, CPA

FIRM CONTRIBUTIONS GMK Associates Burkett Burkett & Burkett Central Chapter of SCACPA

South Carolina CPA Report

19

Blue Ribbon Panel Update

Leadership Awards

Private Company Financial Reporting Initiative Takes Another Step The following article was provided by AICPA.

T Workplace Leaders in Financial Education Award

T

he American Institute of CPAs and the Society for Human Resource Management have joined forces to launch the Workplace Leaders in Financial Education Award. The program recognizes organizations with exemplary workplace financial literacy efforts to enhance employee financial well-being, and encourages employers to implement and further develop financial literacy programs.

Winning organizations must provide financial education programs to employees that increase their ability to make sound financial decisions and improve employee financial well-being. Workplace financial education programs help employees manage all aspects of their finances, from setting a budget and managing debt to paying for college and saving for retirement.

The panel proposed two major shifts: u A separate board with standard-setting authority under FAF’s oversight. The new board would consist of five to seven members with private company constituent experience. The new board would work closely with the FASB.

For more information or to apply, visit www.wlife.org. Applications are now being accepted online until July 1, 2011.

v Changes and modifications to existing U.S. generally accepted accounting principles, where appropriate, for private companies to reflect their financial statement users’ unique needs. All such changes would reside in the one GAAP Codification.

Nominate a Young CPA for the 2011 AICPA Leadership Academy Help Shape the Future of the CPA Profession!

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FAF’s Board of Trustees discussed the report at a meeting on February 15. On March 4, FAF announced it was forming a Trustee Working Group to address standard setting for nonpublic entities, including nonprofit organizations which were specifically excluded from the Blue Ribbon Panel’s charge. While the AICPA expected FAF to form such a group, the broader scope adds complexity. Still, FAF said it intends to issue an action plan in six to eight months (September– November).

Visit www.aicpa.org/leadershipacademy for details.

According to FAF, the Working Group will conduct outreach to stakeholders in various ways, including roundtable meetings, surveys and meetings with advisory and constituent groups and others. It will also seek input on suggested improvements, including the solutions recommended by the Blue Ribbon Panel.

he 2011 AICPA Leadership Academy offers three days of training and a lifetime of leadership to promising young CPAs. From Oct. 4-6, 2011, attendees will have the opportunity to forge valuable relationships with other dynamic young CPA leaders. Academy alumni will leave with an expanded leadership skill set and strategies for leading in their organizations, communities and professions. Only 30 promising young professionals will be selected. Apply or nominate a young CPA today. The application and sponsorship deadline is June 1, 2011.

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he past year’s focus on the lack of relevance and increased complexity of information in private company GAAP financial statements culminated in late January when the Blue Ribbon Panel on Private Company Financial Reporting presented its recommendations to the Financial Accounting Foundation (FAF), the oversight body of the Financial Accounting Standards Board. Passing of the report from the panel to FAF represented a significant step in the process to bring historic change to private company financial reporting, making it more meaningful for owners, lenders, investors and other users of private company financial statements.

South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

(888) 557-4814 | www.scacpa.org

For more information and resources, visit www.aicpa.org/privateGAAP.

The Blue Ribbon Panel was formed in early 2010 by the AICPA, the FAF and the National Association of State Boards of Accountancy to explore how to address problems with standard setting for private companies. The panel’s 18 members came from a top level cross-section of financial reporting constituencies, including lenders, investors, owners, preparers and auditors. AICPA President and CEO Barry C. Melancon, CPA, also served on the panel. The panel’s mission was unlike other prior committees or groups created to study the issue over the past few decades because it looked at the standard-setting process from a policy level, rather than at specific changes to individual standards.

“CPAs should get ready to respond to FAF when it seeks public input this spring,” said Tim Baker, president of the South Carolina Association of CPAs. “To make sure the profession’s ultimate goal is achieved, it is more critical than ever for CPAs, their clients, private company employers and private company financial statement users to support differential standards and a separate standard-setting board.

We will have more communications and direction for you coming shortly.” n

COALITION FOR PRIVATE COMPANY STANDARDS In conjunction with AICPA’s efforts for private company financial standards, SCACPA is seeking volunteers to serve on a coalition that will be advancing this issue. Volunteers should be a preparer or user of financial statements, an auditor or a lender. This task force will develop and execute a plan to educate South Carolina CPAs about the issue and spearhead a letter-writing campaign to advocate for a separate set of financial standards for private companies. If you are interested in serving, please send your contact information along with a brief description of your credentials to SCACPA Executive Director Erin Hardwick, ehardwick@scacpa.org.

South Carolina CPA Report

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This is the final article in the Health Care Act series. In earlier articles, the tax ramifications of the health

Major Provisions of the Health Care Reform Act William M. Grooms, CPA, Ph.D. SCACPA member since 1967

care act were addressed in major part through the end of 2013. This article concludes a review of this very massive new act as to its tax impact on the typical taxpayer and accountant.

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he health care tax credit, which had been available to small businesses, will only continue to be available if the insurance is acquired from an insurance exchange for years after 2013. In addition, the credit will now only be available, even to the small businesses, for 2014 and 2015.

The IRS will issue a check to a government insurance plan (state insurance exchange) for certain individuals who have secured health insurance from such an exchange. An insurance exchange is a government mandated program run by the state government. The eligible individual is an individual or family with income up to 400 percent of the federal poverty level ($43,320 for an individual or $88,200 for a family of four, using 2009 poverty level figures) that are not eligible for Medicaid, employer sponsored insurance, or other acceptable coverage. The check from the IRS to the insurance provider will depend upon the person’s income.

PENALTY FOR NOT HAVING INSURANCE Beginning in 2014, if one does not have acceptable insurance, they will be required to pay a penalty for not having it. The penalty will depend upon the number of people in the family plus one’s income. The amount of the penalty goes up with the passage of time with exceptions based upon financial hardship, religious objections and those with income below a given level.

“No one believes that the Congress would override the veto. Thus, the act is here unless the courts rule against it. The timing of those decisions is uncertain. Thus, as professionals, we have a problem.”

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South Carolina CPA Report

If one has insurance, the insurance company will send the individual

(888) 557-4814 | www.scacpa.org

(888) 557-4814 | www.scacpa.org

a form attesting to the fact that the person has insurance. This form must be attached to the 1040 just as a form W-2 is. In the absence of this, the penalty must be shown on the 1040 when filed. Failure to attach the insurance form will result in the IRS asserting the penalty. However, the IRS cannot take any enforcement action to collect this penalty other than to hold any refund. This becomes “a tiger without teeth.” Further, employers who have 50 or more fulltime employees (a large employer) but no health plan, or a plan that its employees cannot afford, will have to pay a penalty. The penalty in some cases will be less than the cost of the insurance, thus some employers will find it economically better to pay the penalty than to acquire the insurance.

Employers (including self-insured employers) will have to report a host of additional information to the IRS. At the time of this writing (Feb. 17, 2011) four different U. S. District Courts have ruled on the constitutionality of the penalty provisions and the requirement that the states establish an insurance exchange. Two of the decisions have held for the act and two have held against it. These cases will be appealed to the U. S. Circuit Court of Appeals for the 4th, 6th and 11th Circuits and eventually the U. S. Supreme Court.

Further, it appears that if any part of the act is unconstitutional, the entire act is. Thus, a holding that the Congress cannot require a state to establish an insurance exchange or that the Congress cannot require one to buy insurance, will abolish the entire act.

In addition, it appears certain that in the very near future, the requirement for 1099s to be issued for any business purchase of $600 or more of services or merchandise to any seller (individuals, partnerships, corporations, etc.), in 2011 will be repealed. Finally, beginning in 2018, if an employee is covered by an employer’s reimbursement plan that reimburses more than a given amount (a so-called Cadillac plan), the excess will be subject to a non-deductible excise tax of 40 percent.

The future of this act is very uncertain at this time. The current U. S. House of Representatives has voted to repeal it.

The U. S. Senate did not concur. If both bodies were to repeal, it is believed that the president would veto the measure.

No one believes that the Congress would override the veto. Thus, the act is here unless the courts rule against it. The timing of those decisions is uncertain. Thus, as professionals, we have a problem. n

William M. Grooms, CPA, Ph.D., is a sole practitioner in Columbia with more than 40 years experience in his field.

He was previously a partner of Ernst & Young, LLP, and a CPA with Clarkson, Harden & Gantt, Arthur Young & Co. and the Internal Revenue Service. Bill serves on SCACPA’s Taxation Committee and is a past chairman of the Taxation Committee, past president of the Central Chapter and a past member of AICPA Tax Division’s Executive Committee.

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Second Quarter Report Comparison of South Carolina Association of CPAs and the South Carolina Board of Accountancy

by Mark T. Hobbs, CPA SCACPA member since 1981

M

any licensees do not have a clear distinction between the roles and responsibilities of the South Carolina Board of Accountancy (the “board”) as compared and contrasted with the South Carolina Association of Certified Public Accountants (the “association”). I believe some of this confusion has been caused by the very close working relationship that both the licensing board and the association have enjoyed in South Carolina.

This is a perfect case where a good situation can lead to misunderstandings and confusion. I am hoping that this article will serve as a useful reference guide as you encounter questions about the roles and responsibilities of each organization.

The chart (at right) serves as a useful guide about the roles and responsibilities of each organization. u

I would like to point out that South Carolina enjoys a unique relationship where we have established a tradition that past presidents of the association are normally recommended to the governor to be nominees for the seats open on the board. Each sitting governor has continued this tradition. This generally results in an individual who has been involved with the association for 10–15 years as a board member and officer. In addition, the individual has normally either served at the chapter level or committee levels of the association and/or both. I compare this to some other states that I have observed at the National Association of State Board of Accountancy — many appointees may be CPAs, but they have either not been active enough to understand the issues facing the profession or merely are political appointees based on some type of political litmus test. I hope our state will continue to enjoy the excellent relationship between our board and the association. n

SOUTH CAROLINA DEPARTMENT OF LABOR, LICENSING AND REGULATION

Comparison of South Carolina Association of CPAs and the South Carolina Board of Accountancy TOPIC

SC ASSOCIATION OF CPAS

SC BOARD OF ACCOUNTANCY

MEMBERSHIP/LICENSURE

• Professional society • Voluntary - dues system

• Licensing board • License fees- statutory- bi-annual licensure • Required by state statute

PRIMARY GOALS

• • • •

• Protection of the public (financial information credibility) • Oversight of profession, quality & integrity

RELATED ORGANIZATIONS

Closely aligned with AICPA

• Nationally aligned with other state boards through NASBA- membership • State legislature/law

GOVERNANCE

• Board of directors - 20 • Elected by membership • Executive committee - 5

• Appointed by state government • 9 members - 5 CPAs - 2 accounting practitioners - 2 public members

AUTHORITY

Assumed by influence of members

State law

FISCAL

• Generally fiscally sound • AICPA provides support & resources • Active in lobbying and advocacy for the benefit of the profession

• Budget constrained and limited resources • State government umbrella agency controls operations in state government environment

PEER REVIEW

Responsible for administering the peer review program for AICPA and S.C. licensees on behalf of the Board of Accountancy

S.C. accountancy law requires peer review and the board is responsible for making sure the program works to improve the quality and protect the the public in South Carolina

ANNUAL BUDGET

$1,005,000

$550,000

NUMBER OF EMPLOYEES

10 full-time employees

4 full-time employees (certain services are shared at LLR)

EXECUTIVE DIRECTOR/ ADMINISTRATOR

Erin Hardwick, CAE

Doris Cubitt, CPA

VOLUNTEER/GOVERNOR APPOINTED

Tim Baker, President

Bobby Creech, Chairman

OTHER INFORMATION

Membership allows greater participation • Civil penalties can be assessed up to $10,000 in AICPA life insurance programs among per violation other programs • Other punishment include revocation and suspension of licensees license to practice • Mandatory CPE

Board of Accountancy • (803) 896-4770 www.llr.state.sc.us/pol/accountancy

SCACPA On-site Customized

Training Solutions

Customized Training to Fit Your Team Get the highest quality CPE tailored to meet your specific needs at a fraction of the off-site cost. SCACPA can help you plan and customize educational programs for any size group. From technical topics to professional ethics to leadership and management courses, we can find a great fit for any organization and any budget. Get Started! Contact Reva Brennan, MPA, CAE at (803)791-4181 x103 or rbrennan@scacpa.org, or visit www.scacpa.org/onsitetraining.

24

South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

(888) 557-4814 | www.scacpa.org

Educational needs of members Lobbying for benefit of members Monitoring professional trends Network of professionals

South Carolina CPA Report

25

Fo c u s O n M e mb e r s h i p Member Profile

Leonard D. “Doug” Warner, CPA SCACPA member since 1992 “The most challenging economic time since the Great Depression has led to an increased regulatory environment for banks.”

What made you choose to become a CPA? Warner: I really enjoyed the logic of accounting when studying it as part of my first set of business courses.

After researching the profession, I discovered how many different avenues there were and decided to commit to it.

What do you believe are the keys to a successful career?

Warner: The ability to get along with people and be adaptable to change.

Special Offer for State Society Members. *

ADP gives you the choice of doing business the way that best fits your firm. Whether you want to refer payroll or process it yourself, ADP provides world-class payroll and beyond payroll services, so you can focus on what matters most: growing your business and helping your clients be successful. In addition, your state society membership means that you will be rewarded with the following special benefits when you partner with ADP: ■

Payroll for your firm — FREE for up to 50 employees with discounted solutions to meet the needs of larger businesses

■

Special discounts for your firm’s clients

■

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■

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■

30% discount on all CCH tax and accounting publications

Contact your local ADP representative today.

What do you find most rewarding working in the banking industry?

Warner: I would say some of the technical advances in accounting, which have made every day a learning experience. As an employee of TD Bank, I also have a tremendous opportunity for professional growth with an organization that continues to grow. TD is one of only two North American banks that are still AAArated by Moody’s, which helps to attract new relationships with customers and which allows us to continue growing and expanding.

What changes have you seen as a result of recent economic events?

Warner: The most challenging economic time since the Great Depression has led to an increased regulatory environment for banks.

Doug Warner, CPA Carolina First Bank A trade name of TD Bank® Greenville, SC SCACPA Involvement: Financial Literacy Task Force Hometown: Ashburn, VA Favorite Book: Sherlock Holmes novels by Arthur Conan Doyle.

Favorite Movie: Animal House

While 2011 will continue to have its share of challenges for all banks, at TD Bank, we are incredibly well-positioned to leverage the investments the bank has made in its franchise to continue growing and taking market share from our competition.

What is the toughest issue you have had to deal with in this economy?

Warner: Prior to TD Bank’s acquisition of the South Financial Group, it was dealing with issues related to the credit cycle. Since the acquisition, more of our attention has been focused on purchase accounting and conversion items.

What do you think are the major concerns of CPAs today, and how can they be addressed?

Warner: Deadlines, workload and establishing a healthy work/life balance will probably always be a lifestyle concern for CPAs. How have you benefited from membership in SCACPA? Warner: I know I can count on SCACPA to keep me abreast of professional issues and to provide high quality CPE. What advice do you have for young CPAs? Warner: Always try to learn something from everything you do, even from tasks that seem the most mundane.

What have you accomplished that makes you proud to be a CPA? Warner: That’s a tough one, but I am proud that some of the folks who have worked for me have gone to other companies and are having very successful careers there. I am also proud that my son is also a CPA. Who do you admire most and why?

Warner: I would say Abraham Lincoln for his ability to make decisions that were unpopular at the time, but which turned out to be nation-changing. n

*Discount/free payroll applies to companies with 1 to 49 employees that sign complete ADP sales order and to all features of standard payroll processing invoiced on client’s regular processing cycle and does not include additional non-payroll services; excludes pass through costs, courier and other delivery fees, including off cycle fees, hardware, or penalty and interest fees. Only available to new ADP Clients using EasyPaysm or RUN Powered by ADP® in the continental U.S. Must be set-up for direct debit of fees (“DDF”) as the payment method. © 2010 ADP, Inc. The ADP Logo is a registered trademark of ADP. EasyPay is a service mark and RUN Powered by ADP is a registered service mark of ADP, Inc. All other trademarks are the property of their respective owners.

(888) 557-4814 | www.scacpa.org

South Carolina CPA Report

27

Fo c u s O n M e mb e r s h i p

Charleston, Grand Strand and Wilmington Region

Welcome New Members

Victoria G. Dotson Vice President & Manager of Trust Services Peter A. Curcio Senior Trust Officer (Not Pictured) Jeremy A. Jutzeler Trust Officer

AFFILIATE, non-CPA Susan A. Beauford Greenwood, SC

843.529.5617

Kamee M. Bowlin Mount Pleasant, SC

Elsewhere in South Carolina

Cathleen Cleary Columbia, SC

Mary Ann Brown Senior Trust Officer 843.815.5507

James Everett III West Columbia, SC JoBeth Hite Greenwood, SC Gloria Karlin Greenville, SC Kristin Peniston Greenville, SC

ASSOCIATE

Our trust officers are easily accessible and deliver local, hands-on service. We have no call centers….never have, never will. We’re always glad to meet when and where it is most convenient for your client. We can establish a trust with fewer assets than you might think — and at First Federal, all of our trust clients receive a level of personal service that other banks can’t match.

Member FDIC I

28

Kelly N. Jewell Greenville, SC James D. McAllister Jr. Greenwood, SC Rachel M. Nightengale Hanahan, SC

Lee Wagner Greenwood, SC

Beth A. Robertson Charleston, SC

CPA CANDIDATE

Nicole S. Robinson Charleston, SC

Lucy W. Brenner Charleston, SC Ashley M. Brouillette Greenwood, SC Brandi G. Buff Greenwood, SC Andrew Dobson Spartanburg, SC

www.FirstFederal.com

Barrett E. Sammons Charleston, SC James J. Sanyi Summerville, SC Eric S. Schoenbaechler Summerville, SC Katherine E. Spaugh Greenville, SC Charles M. Wooten West Columbia, SC

FELLOW – GOV’T

Deron E. Smith, CPA Walterboro, SC

South Carolina CPA Report

PERSONAL

Daniel B. Howard Greer, SC

William C. Pitts Greenwood, SC

Amanda D. Blagg Greenville, SC

If you’re interested in referring a prospective trust client to First Federal, please call one of our trust officers today. They’re looking forward to hearing from you.

Travis J. Hoverman Duncan, SC

Gary L. Rogalski Mount Pleasant, SC

MacKenzie L. Andrews Greenville, SC

We’re one of the strongest and most trusted banks in South Carolina, with the resources to help our clients accumulate, preserve and protect their wealth.

We have selected and work with three non-proprietary investment managers whose track records speaks for themselves.

Roger T. Godwin Jr. Greenville, SC

S. C. Paul Charleston, SC

Christina M. Alvanos Charleston, SC

When you recommend a trust manager to your clients, you’re putting your relationship on the line. You want to refer them to a trust officer who looks out for them the same way you do. At First Federal, we do.

Tiffany M. Ehrhart Charleston, SC

Brenda Carroll Augusta, GA

Our trust officers provide the same level of personal service that you do.

Susan M. Edwards Charleston, SC

(888) 557-4814 | www.scacpa.org

BUSINESS

W E A LT H M A N A G E M E N T

(888) 557-4814 | www.scacpa.org

FELLOW

Cheryl A. Beckwith Reidville, SC Jonathan W. Blanchard York, SC Diana C. Bray Columbia, SC Christine Dupont Greenville, SC Philip O. Espy Daniel Island, SC Michael W. Greene Cerro Gordo, NC Patrick C. Haller Greenville, SC John F. Hatcher Charleston, SC Catherine Holt Florence, SC Ginger R. Lawrimore Florence, SC Kevin S. Light Hartsville, SC Brittany Long Columbia, SC Robert J. McMillan Charleston, SC Christina R. Miller Greenville, SC Matthew S. Miller Columbia, SC Ryan Miller Columbia, SC Stephen Pelcher Greenville, SC Joseph P. Phipps Charleston, SC

January 1 – March 28, 2011 Marisa S. Phoenix Charleston, SC Addison B. Potter Columbia, SC Chad W. Reingardt Greenville, SC Lacey C. Satterfield Greenville, SC

FIRM ADMINISTRATOR Mary Preston Greenville, SC

Posey M. Royall Charleston, SC

STUDENT

Monica A. Burbano de Lara Charlotte, NC Carolyn Craven Dalzell, SC Tracy Creech Leesville, SC Christen N. Dail Conway, SC Crystal L. Ferguson Moncks Corner, SC Frances M. Fox Charleston, SC Hunter McKeown Marietta, SC Erin E. Novak Greenville, SC Everette M. Poston Rock Hill, SC Donna-Jean R. Royals Fountain Inn, SC Rodrick T. Shiver Gadsden, SC Anna E. Strom Spartanburg South Carolina CPA Report

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Fo c u s O n M e mb e r s h i p

5 REASONS TO REGISTER FOR YOUR CPE ONLINE

IN THE NEWS

Registering for, keeping up with, and tracking CPE courses is almost a full-time job itself, which leaves less time for accounting. For your convenience, SCACPA has lessened the chore of registering for CPE by offering easy online registrations. To register online, visit www.scacpa.org/coursecatalog.

5 4

Instant Gratification

Your registration goes into our system on the spot, and you can expect your confirmation email from SCACPA within minutes.

Anthony Masino, CPA, an accounting professor at South Carolina State University, is coordinating an Accounting Speaker Series to assist students in preparing for a career in the field. Neil Brown, CPA, Burkett Financial Services in West Columbia, kicked off the series. Additional speakers include Richard Livingston, CPA, Dixon Hughes in Charleston.

The chances of a registration getting lost or delayed in the mail or caught up in the fax machine lines are much greater than the chances of a registration getting lost through the website.

3

PCI Compliance

Jerry Trapnell, CPA, executive vice president and chief accreditation officer for the Association to Advance Collegiate Schools of Business, has received the 2011 Federation of Schools of Accountancy-Joseph A. Silvoso Faculty Merit Award.

Our website is Payment Card Industry Compliant, so you do not have to worry about your information being compromised within our system.

2

Keep Up With It

Robert Moise, CPA, WebsterRogers in Charleston and James Mcllrath, CPA, Duncan Farmer Munden Mcllrath and Cobb in Myrtle Beach, were awarded the Silver Beaver Award by their respective South Carolina Boy Scout Councils.

Online registrations are immediately added to the Event Calendar under your Membership tab on the SCACPA website. Keep track of your classes the easy way.

1

Best of All : The Early Bird Gets the Great Rate Be assured that you won’t miss out on catching the early bird registration discount by losing your registration because you’ve already signed up through www.scacpa.org!

For assistance in logging in to the website, contact April Blake, 803.791.4181 ext. 100 or ablake@scacpa.org

South Carolina CPA Report

William A. Russell III, CPA, principal of Jarrard, Nowell & Russell, LLC, has been named chair of the Greater Summerville/Dorchester County Chamber of Commerce board of directors and treasurer of Lowcountry Local First’s board of directors. He is also a member of the new executive committee.

Charlton Jacobs, a student member pursing his master’s degree at Winthrop University, has been selected as a 2010-11 AICPA Minority Scholarship recipient.

No “Oops, My Bad”

30

Member News

(888) 557-4814 | www.scacpa.org

Frank D. Thomas, CPA/ABV/CFF, CVA, of Kirkland, Thomas, Watson & Dyches, LLC, Columbia, has been awarded the Certified Forensic Financial Analyst Credential (CFAA) by the National Association of Certified Valuation Analysts.

Curtis C. Stewart, CPA, has been promoted to Chief Operating Officer of Companion Property and Casualty Group, Columbia.

(888) 557-4814 | www.scacpa.org

FIRM NEWS

Greenville-based accounting firm Joseph F. Montgomery CPA has changed its name to Montgomery & Co. to reflect its 16-year record of growth.

MEMBER MOVES

Nancy Drummond, CPA, has joined Elliott Davis LLC as a senior manager in the Greenville office.

Mary L. Goode, CPA, has joined Moore Beauston & Woodham LLP as a senior accountant in the firm’s West Columbia office.

Stephen Hetherington has joined the staff of Scott and Company LLP, Columbia, as staff accountant, tax and advisory services.

Charles M. Wooten has joined Moore Beauston & Woodham LLP , West Columbia Office as a staff accountant.

Elizabeth B. Ringham, CPA, has joined GlaserDuncan Certified Public Accountants in Mount Pleasant as a manager working in the firm's tax and small business services departments.

Patrick Odom, a SCACPA student member, has joined Jarrard, Nowell & Russell LLC, in Charleston as an intern.

CONDOLENCES

Floyd Edward Powell of Columbia passed away February 28, 2011 at the age of 90. Floyd was born Nov. 5, 1920, in Wilmington, Delaware. A lifetime member of SCACPA, Floyd earned his CPA license in 1952 in Delaware and gained certification as a CPA in the state of South Carolina in 1969. After working with the firm of Finch, Kight & Jackson, Floyd worked for the state of South Carolina, retiring as director of auditing services in 1986. That year he was presented the Order of the Palmetto by the Governor. Floyd was a U.S. Army veteran and served in World War II.

CONDOLENCES, con’t

Carl Morgan Donnelly died March 5, 2011. Born June 19, 1949, in Winchester, MA, Carl was a partner with Tatum CFO Partners, LLC and was most recently employed as director of international tax with Prysmian Cable Systems. A graduate of Greenville High School and University of Notre Dame (Bachelor of Business Administration, 1971), Carl began his career at Price Waterhouse, working with the firm for 18 years and serving as a tax partner.

Over the course of his career, he served as partner-in-charge for the Columbia office of Elliott, Davis & Company, LLP, held CFO roles with Affinity Technology Group, Inc. and Conita Technologies Inc. He was a member of SCACPA and the American Institute of Certified Public Accountants and a past president of both the Columbia Estate Planning Council and the International Association for Financial Planning.

W.E. "Bill" Fergusson III of Chapin passed away March 12, 2011. Born in Richmond, Va., he was a graduate of the University of Richmond and Central Michigan University and a CPA, certified management accountant, certified internal auditor and certified bank auditor. He retired from South Carolina National Bank as executive vice president of statewide operations in 1982 and again in 1999 from the South Carolina Department of Revenue as the director of internal audit. Bill also served as a distinguished lecturer of accounting at the University of South Carolina from 1982-1988 and was active in the Institute of Management Accountants (IMA) and the Institute of Internal Auditors (IIA) for more than 50 years. He served the IMA Columbia Chapter in numerous director positions including Chapter President and served on the IMA National Board of Directors.

Bill was one of the founding members of the IIA Columbia Chapter.

South Carolina CPA Report

31

u

So

South Carolina

CPA

Chapter News

2011 President of the Foothills Chapter of SCACPA

Chapter Spotlight WHAT HAVE YOU LEARNED – ABOUT OUR ASSOCIATION, FELLOW MEMBERS OR YOURSELF – BY SERVING AS A CHAPTER LEADER? By serving as a chapter leader, I have learned just how dedicated members are to the association. This dedication was especially evident last summer in Beaufort at the Board Planning Retreat. Chapter officers and board members gave up time out of their busy schedules to attend the planning retreat for the benefit of SCACPA and its members. This dedication illustrates the importance of SCACPA to its members.

WHAT HAS BEEN YOUR PROUDEST ACCOMPLISHMENT DURING YOUR TENURE? For the past several years, our chapter has hosted Student Night for students attending the Spartanburg area colleges. We always have a great turnout of both students and SCACPA members. This event allows the students to learn more about the accounting profession and becoming a CPA, as well as finding out information on future jobs and internships with SCACPA members.

Our chapter is very proud of this event!

WHAT ADVICE DO YOU HAVE FOR THOSE CONSIDERING GETTING INVOLVED AND ENGAGED IN SCACPA AND THEIR LOCAL CHAPTER? I would highly recommend getting involved in SCACPA and the local chapter. It’s a great way to network and meet other CPAs in your area and throughout the state. n

Kara Shealy, CPA, is an advanced tax analyst with Milliken & Company in Spartanburg. She previously served as treasurer and vice president of the Foothills Chapter.

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South Carolina CPA Report

Chapter Events

an ts

r Ce

SCACPA Member since 2003

2010 Quality Chapter Award Recipients

QUALITY CHAPTER AWARD tifi

Kara Shealy, CPA

rolina Assoc Ca ia t n io

F o cus O n M e m be r s hip

th

ed nt Public Accou

Central • Coastal • Foothills Grand Strand • Piedmont

South Carolina

CPA

CATAWBA

Dues: $60, includes discounted registration to CPE seminars and free family/networking event • Summer: Family/Networking Event • August: Annual Business Meeting • September 20: Professional Issues Update (4 hours, 70411RH) • September: CPE Seminar (8 hours) • November: Annual Tax Update (8 hours) • Winter: Family/Networking Event

CENTRAL

Dues: $50, includes discounted registration to CPE seminars, free Oyster Roast, Family Day and Business Meeting Dinner; invitation to Professional Night and Golf Tournament • May 21: Annual Barbeque at the Zoo • June 6: Nonprofit Auditing & Accounting Update, Jeffrey Lieman (8 hours, CE60611A) • June 7: Comprehending OMB A-133, Jeffrey Lieman (8 hours, CE60711A) • September 22 : Annual Business Meeting Dinner (CEABM11) • September 23: Professional Issues Update (4 hours, 70411CO) • September 27: Mastering the Applications of Budgeting While Side Stepping the Pitfalls, Ron Rael (8 hours, CE 92711A) • October: Corporate Law for Accountants (3 hours) • October 14: Annual Oyster Roast & Harvest Hope Food Bank Drive • December: Tax Update (8 hours)

COASTAL

Dues: $130, includes free registration to CPE seminars (additional registration fee for Tax Update) and free registration to family/ networking event • May 18: A&A Update with Jeffrey Lieman (8 hours, CO51811A) • August: Social & CPE Seminar (2 hours) • September: Annual Business Meeting • September 20: Technology Update with Randy Johnston (6 hours) and Current Tax Update with Jason Sweatt (2 hours) (CO092011) • September 29: Professional Issues Update (4 hours, 70411CH) • October 27: Federal Tax Update with Jack Surgent (8 hours, CO102711)

(888) 557-4814 | www.scacpa.org

FOOTHILLS

Dues: $40, includes discounted registration to CPE seminars and three free social/networking events • May: CPE Seminar (3 hours) • Summer/Fall: Bankers’ Night • August 4: A&A Update, Russ Madray (8 hours, FO080411) • September: Annual Business Meeting • October: Student Night • November 10: Professional Issues Update (4 hours, 70411SP) • December: CPE Seminar • December: Social Event

GRAND STRAND

Dues: $125, includes free registration to CPE seminars; Holiday Party and Student Recruitment Fair • May 11: Estate Issues, Art Werner (4 hours, GR511AM) • May 11: Estate and Gift Tax Update, Art Werner (4 hours, GR511PM) • August 26: Professional Issues Update (4 hours, 70411MB) • September: Annual Business Meeting • September: Meet & Greet with CCU Accounting Students • November 11: A&A Update with Mark Hobbs (8 hours, GR1119A) • December: Holiday Dinner/Social

PIEDMONT, con’t

• June 16: Property Tax/Canadian Tax or Tax Managers/ SALT, Income (4 hours, PITMG2) • August 18: Corporate FIT/Sales Tax or International Tax/ UCP, 1099, Wage (4 hours, PITMG1) • September 22: Property Tax/Canadian Tax or Tax Managers/SALT, Income (4 hours, PITMG2) • September: Annual Business Meeting • September 29: Corporate FIT/Sales Tax or International Tax/UCP, 1099, Wage (4 hours, PITMG1) • November 11: Professional Issues Update (4 hours, 70411GR) • November 17: Corporate FIT/Sales Tax or International Tax/UCP, 1099, Wage (4 hours, PITMG1) • December 15: Property Tax/Canadian Tax or Tax Managers/SALT, Income (4 hours, PITMG2) • December: Annual Holiday Charity Luncheon

SEA ISLAND

Dues: $135, includes free registration to CPE seminars and two special events, Tax Breather Social and Professionals’ Night • May: Accounting & Auditing Update (8 hours) • June: Lunch and Learn • September 30: Professional Issues Update (4 hours) • September 30: CPE (4 hours) • November: Professionals’ Night • December: CPE (8 hours)

PEE DEE

Dues: $50, includes discounted registration to CPE and free social events • August 25: Professional Issues Update (4 hours, 70411FL) • September: CPE Seminar (4 hours) • September: Annual Business Meeting • November: Chapter/Student Bowling Night

Auditor Malpractice Issues Litigation Consulting/ Representation

Peer Review & Inspections Over 425 system Reviews Conducted Nationwide

PIEDMONT

Dues: $50, includes registration for CPE at a nominal fee and free holiday luncheon • May 19: Corporate FIT/Sales Tax or International Tax/UCP, 1099, Wage (4 hours, PITMG1)

John F. Hamilton, CMA, CPA Dir e ct (8 0 3 ) 6 0 8 - 8 0 6 6

(888) 557-4814 | www.scacpa.org

Em ai l J oh n f h @ aol.c om South Carolina CPA Report

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SAVE THE DATE 2011 SCACPA Conferences

SCACPA Continuing Professional Education Great Prices Any Way You Slice It!

Y

our CPE savings through SCACPA is worth bragging about. Are you aware of the various ways you can save hundreds of dollars on your CPE with SCACPA? If not, let me count the ways!

u Member Discount. Save $75 just because you’re a

SCACPA member, and save an additional $25 when you register at least three weeks before an event.

v Firm Discount. Save $15 per person when registering five or more people for the same event.

w AICPA Discount. Save $30 per eight hour seminar on all AICPA seminars.

If you are committed to earning all 40 hours of CPE with SCACPA and attending the vacation clusters, the Choice Card is the best deal for you. The Choice Card allows you to save approximately 40 percent on your total professional education for the year. Become a member, purchase the Choice Card and save even more!

Two additional great facts about the Choice Card:

u Any SCACPA member in the firm can use the Choice Card. It is not exclusive to the member who purchases it.

v The 2011 Choice Card is now available at half the price

x Onsite Training. Save $100 or more when you don’t have to cover travel and lodging to out of town events, when you have 10 or more people to train.

y Choice Card. Approximately 40 percent savings! The

with half the coupons, if you are committed to earning at least 20 hours with SCACPA. Learn more about this great discount savings and purchase securely online at www.scacpa.org/choicecard. n

best price on SCACPA events, including vacation clusters.

Budgeting for professional education is a major priority and expense. When you crunch the numbers, the price you would pay as a non-member greatly exceeds the cost of a SCACPA membership. In this economy, your SCACPA membership would save you hundreds on CPE alone. Take a look at the numbers!

4-hour Vacation Cluster $225, Non-member price $170, Member price $145, Member Early Bird

8-hour Course $310, Non-member price $235, Member price $210, Member Early Bird

16-Hour Conference $405, Non-member price $305, Member price $280, Member Early Bird

34

South Carolina CPA Report

S

CACPA conferences feature a variety of speakers and topics in various formats on the latest issues you need to stay aware of in the CPA profession. Conferences offer a great variety of CPE — any way you slice it!

by Reva Brennan, MPA, CAE, IOM Serving SCACPA Since 2001

MEMBER USING CHOICE CARD VS. NON-MEMBER CHOICE CARD SAVINGS* $1,615 Typical non-member

$1,220 Typical member

cost per 40 hours

$1,000 Typical member

cost per 40 hours

using Choice Card

2011

TOTAL CHOICE CARD SAVINGS: $615

*Example is a mixture of CPE opportunities: clusters, seminars and conferences.

(888) 557-4814 | www.scacpa.org

Mark your calendar for the following dates to ensure you get the slices you want and need.

GOVERNMENT AND BENEFIT PLANS CONFERENCE May 19 | Marriott (Columbia) This conference provides insight and understanding on new developments in government accounting and auditing, and other areas deemed appropriate. This conference will have an education track designated to benefit plans.

INDUSTRY CONFERENCE October 13-14 | Columbia Metro Convention Center (Columbia) This conference provides an update to CPAs in industry, including CEOs, CFOs and Controllers, on various topics of importance to CPAs not in public practice including employment law, employee benefits, risk management and much more.

TRUSTED BUSINESS ADVISOR WORKSHOP May 20 | SCACPA (West Columbia) Discover practical tools, techniques and skills for strategic client planning, so you can return to the office with a concrete action plan to enhance your practice. Through solutiondriven sessions, you’ll learn how to translate the issues clients face into opportunities for consulting with them - by hearing first-hand why some clients switch firms and what they’re looking for from a CPA.

PERSONAL FINANCIAL PLANNING CONFERENCE October 20 | SCACPA (West Columbia) Designed for all practitioners who provide clients with personal financial planning services or who wish to add this growing service to their practice.

EMERGING LEADERS CONFERENCE August 18-19 | TBD (Charleston) This conference is designed to develop critical skills and competencies needed to achieve long-term success and satisfaction in your career as a CPA, and to develop involvement in the profession through SCACPA.

(888) 557-4814 | www.scacpa.org

TAX CONFERENCE & ANNUAL SUMMIT November 3-4 | Columbia Metro Convention Center (Columbia) This premier event provides members with unique CPE opportunities which include tracks in various areas of interest, a profession update and a report on the successes of the current year and goals for 2012—plus the installation of incoming officers, recognition of outgoing board members and the semi-annual New CPA Oath Ceremony. This event has been combined with the Tax Conference.

GOVERNMENTAL BONUS WORKSHOP November 15 | Columbia Conference Center (Columbia) In-depth workshop on current topics specific to the governmental arena.

Designed for CPAs in government and public accountants serving this area.

WOMEN IN LEADERSHIP CONFERENCE November 17 | Embassy Suites (Columbia) This conference is designed to promote and celebrate women professionals.

The Women to Watch awards is presented during this event.

ACCOUNTING & AUDITING CONFERENCE December 8-9 | Marriott (Charleston) CPAs in public practice, industry, and government attend this top-rated conference. With many sessions to choose from, both the traditional and non-traditional CPA will benefit.

CPA PRACTITIONERS’ & ACCOUNTING EDUCATORS’ FORUM December 16 | SC Pharmacy Association (Columbia) This forum is designed for accounting educators and CPA practitioners to help them re-energize their thinking, adjust their approach, and position their organizations to thrive. n

South Carolina CPA Report

35

2011 Vacation Clusters

Courses You Don’t Want to Miss!

MAY 26, 2011 Audits of Defined Contribution Pension Plans: Emphasizing 401K Plans (70611) Defined contribution audit requirements. Typical EBP audit and reporting deficiencies. Unique audit planning characteristics in EBP audits.

403(b) plan audit requirements and considerations. Difficult audit areas in EBP engagements. Limited scope and full scope audit requirements. Recent changes to 401k financial statement reporting and disclosure requirements.

Updating and documenting the RAS standards in EBP audits. Filing and reporting requirements for Form 5500. Unique employee benefit plan accounting and financial reporting requirements. Fair value accounting, reporting and disclosure considerations and changes. Area: A&A

JUNE 22, 2011 Update on IRS Tax Controversy Procedure: Dealing with the IRS in the Real World (72711SW) Examinations: Update on IRS Exams and what to expect in the future. Tips on how to handle an IRS examination for your clients. Collections: Dealing with the Revenue Officer when the taxpayer owes taxes can be confusing and difficult. Learn how to simplify the process and work with the Revenue Officer to obtain the results desired by the taxpayer. Appeals: Learn how to effectively represent your client before the IRS Appeals office, and when and how to get your client's case before the Appeals office. Area: Taxation

36

South Carolina CPA Report

JULY 25, 2011 Controllership: 25 Critical Lessons from the Trenches (73711A) Tired of CPE that has no practical application? Put into practice 25 practical tools that will improve your daily job performance in the controllership area. This course focuses on the practical skills required to be a successful controller and to enhance the profitability of any growing company. You will learn how to shift from a reactive to a proactive mode of operation as well as how to avoid the constant crisis techniques common to many private companies. This course also highlights various financial and managerial tools and techniques to improve day-to-day decisions that affect business operations and profitability.

Area: A&A

AUGUST 15, 2011 Advanced Excel (77811) Although many accountants consider themselves experts in using Excel, most accountants are self-taught and do not use Excel to its full potential.

This course is designed to take experienced, self-taught users to the next level. It provides real world examples developed by accountants for accountants in the following six major topic areas: collaboration and workbook security; using tables to analyze and report data; integrating and manipulating data from external sources; creating and auditing complex formulas; advanced data analysis with subtotals, filters, and PivotTables; and using charts to analyze and communicate information. If you use Excel extensively, you need this course!

Area: Accounting/Specialized Skills & Knowledge

AUGUST 30, 2011 South Carolina Tax Update (70211AM) This four hour course is designed to review, explain and update the S.C. tax topics which are of particular interest to practitioners. Specific topics will include: (1) S.C. income taxation (both corporate, and individual); (2) Allocation and apportionment of multi-state entities; (3) Property taxes and fee in lieu and the impact of Act 338 (the assessable transfer of interest or point of sale legislation); (4) Fee in lieu of property tax and special source revenue credits for new investments; (5) Sales and use taxes and the proposed Taxpayer Fairness Act; (6) Business license taxes; (7) Economic tax incentives including jobs tax credits; (8) Individual credits including conservation, insurance and rehabilitations. Area: Taxation

AUGUST 30, 2011 What Every CPA and Tax Attorney Should Know about IT- International Tax! (70211PM) This seminar will cover what every CPA and tax attorney should know about individual tax applications for their clients who travel outside the U.S. or have clients visiting the U.S. Also the FBAR reporting requirements will be addressed for those U.S. residents who have investments outside the U.S. This seminar will not require advanced preparation. The goal of the course is to cover a broad area of tax issues, allowing for deeper study at the next level. The global economy is bringing a variety of unique challenges for which tax return preparers need to prepare. The potential penalties are extreme for failure to address and report minor transactions.

Area: Taxation

(888) 557-4814 | www.scacpa.org

A

s children we all looked forward to summer vacation. For those few months, life was good! You had the chance to forget about education and concentrate on relaxation. As adults these long breaks are no longer an option. Let SCACPA help you with combining the two and create the perfect combination where you can earn education and have time for relaxation. Join us for one or more of our vacation clusters between May and September, from the mountains to the sea.

At these unique events you are able to mix and match the affordable, four-hour education sessions and carve out time for a little relaxation. Each cluster has something for every CPA from general topics to focused sessions like FIN 48, Lean Accounting, Real Estate, IFRS, S Corps, C Corps, Partnerships, Fair Value, OCBOA and more. To help you relax and enjoy your time away from the office and home, SCACPA has arranged for a discounted room rate that extends over the weekend, making it easier to get your CPE and enjoy a mini-vacation with the family or some quiet time alone. Register online today at www.scacpa.org/clusters!

MYRTLE BEACH • June 13-15, 2011

Myrtle Beach Marriott Resort & Spa at Grande Dunes 8400 Costa Verde Drive, Myrtle Beach, SC 29572

Relaxation & Education The Perfect Combination

Reservations: 1-800-228-9290 or www.marriott.com

Group code: gscgsca Room rate: $189 (expires May 20, 2011)

ASHEVILLE, NC • July 11-13, 2011 The Grove Park Inn Resort & Spa 290 Macon Avenue, Asheville, NC 28804

Reservations: 1-800-438-5800 or www.groveparkinn.com

Group code: 6920UP Room rate: $163 (expires June 11, 2011)

CHARLESTON • August 8-10, 2011 Marriott Charleston 170 Lockwood Blvd, Charleston, SC 29403

Reservations: 1-800-228-9290 |1-800-968-3569 or www.marriott.com/chsmc

Group code: CCSCCSA Room rate: $129 (expires July 15, 2011)

Vacation Cluster Reservations: A discounted block of rooms are available for the vacation cluster courses. The group room rates are available only when you make reservations before the expiration date and identify yourself as being with the South Carolina Association of CPAs. Reservations made after the expiration date are subject to space availability and may be substantially higher.

(888) 557-4814 | www.scacpa.org

GREENVILLE • September 21-23, 2011 Embassy Suites 670 Verdae Blvd, Greenville, SC 29607

Reservations: (864) 676-9090 or www.embassysuitesgreenville.com Room rate: $109 (based on availability)

South Carolina CPA Report

37

ADVERTISER INDEX

OFFICE SPACE AVAILABLE

AD SPACE AVAILABLE

LOCAL FOCUS - PERSONAL SERVICE

GET YOUR AD IN FRONT OF THE RIGHT AUDIENCE

The focus of our firm is only on CPA practices in North and South Carolina.

This gives us the time to understand local issues and opportunities and allows us to be close enough to provide personal service. Our purpose is to help owners decide if and when they should sell or transition our of their practice. If they sell, we implement a plan to maximize the firm’s value and address any concerns about transitioning it to a new owner. This allows us to offer potential buyers firms with demonstrated value and a plan to sustain that value through the transition. To learn more, visit www. stratfordconsultinggroup.com or call Bill Britt @ 866-768-0089.

Whether you’re looking for a potential buyer, renter, consumer or new staff member, the CPA Report will put your ad in front of more than 4,000 CPAs and accounting professionals in South Carolina. Classified advertising rates are $1 per word for members and $2 per word for nonmembers with a $30 minimum. Contact Emily Allen at eallen@scacpa.org or call 803-791-4181 to find out more.

Accounting Practice Sales www.accountingpracticesales.com Inside Back Cover ADP www.adp.com Page 26

Call Brannon Poe, CPA to start the conversation!

We have buyers waiting.

BRANNON POE, CPA | 1.888.246.0974 | POE@KNOLOGY.NET WWW.ACCOUNTINGPRACTICESALES.COM

Aon/BB&T Insurance Services/AICPA Professional Liability Insurance Program www.cpai.com Page 4 American Pensions www.ampen.com Inside Front Cover

Blytheco www.blytheco.com Back Cover First Federal www.firstfederal.com Page 28 John F. Hamilton, CPA JOHNFH@aol.com Page 33 McAngus Goudelock & Courie, LLC www.mgclaw.com Page 15

SOUTH CAROLINA PRACTICES north columbia – $530,000 Exceptional CPA practice by all measures. Owner has prior big-8 as well as mid-size firm experience and has built a great practice located in a wonderful community. Firm has excellent clients, paperless office, desirable location, efficient systems and quality staff in place…just to name a few of the strengths of this business.

There is no audit work and owner has been very selective about which clients to accept. Future growth potential is strong and past growth has been consistent. This could make an excellent addition to an area firm, or a great opportunity for someone with similar experience to strike out on their own.

charleston – $220,000 Well established firm with very strong employees. The Charleston area is a wonderful place to live and work.

The area offers great recreation, entertainment and a good business environment. The “low country” of South Carolina is one of the most beautiful areas around with excellent beaches nearby.... and historic downtown Charleston is very unique.

NOW AVAILABLE – ACCOUNTANT’S FLIGHT PLAN

Using real-world scenarios, practice owner testimonials, and written exercises, CPA and author Brannon Poe offers keen insights for developing customized, straightforward approaches to hone your focus, eliminate frustration, grow your bottom line, and achieve meaningful work-life balance while increasing profitability.

PREVIEW AT WWW.ACCOUNTANTSFLIGHTPLAN.COM 38

South Carolina CPA Report

(888) 557-4814 | www.scacpa.org

South Carolina Association of CPAs

PRSRT STD US POSTAGE PAID PERMIT NO. 1146 Columbia, SC

570 Chris Drive, West Columbia, SC 29169

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