CPA Report Q3 2012

Third Edi tion 20 1 2

CPA Report South Carolina Association of Certified Public Accountants

SCDOR Looks Back at 2012 Tax Season and Ahead to 2013

PLUS How Can SCACPA Help You Succeed

Meet the New LLR Director

Introducing SCACPA’s Future Leaders

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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CPA Report South Carolina Association of CPAs

South Carolina Association of Certified Public Accountants Magazine Volume 42, Third Edition 2012 OFFICERS Michael R. Putich, CPA, Chair Sharon E. Mann, CPA, Chair-elect J. Bratton Fennell, CPA, Secretary-Treasurer Timothy L. Baker, CPA, Immediate Past Chair BOARD OF DIRECTORS William R. Barefoot, CPA Charles E. “Eddie” Brown, CPA Patrick P. Carey Jr., CPA Zoe M. Davis, CPA Amanda Hallman, CPA Suzanne Harnois, 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 CHIEF EXECUTIVE OFFICER Erin Hardwick Pate, CAE MANAGING EDITOR Maureen Taylor GRAPHIC DESIGNER Lisa S. McGee CONTRIBUTING WRITERS Charles Ayers, CPA Charlie Blanton, CPA Reva Brennan, MPA, CAE, IOM Eddie Dutton, CPA Mark T. Hobbs, CPA, CFF Ken Newhouse, CPA Erin Hardwick Pate, CAE Thomas G. Stephens, Jr., CPA, CITP Maureen Taylor 2012 EDITORIAL BOARD Charles E. Alvis, CPA, MPA, MBA, Chair John B. Brantley, CPA Amanda S. Colgate, CPA Lisa S. Cooke, CPA Karen A. Hursey, CPA Lesley H. Kelly, CPA Margaret L. Lattimore, CPA Anthony G. Masino, CPA A. D. “Dave” Masters, CPA Erin Hardwick Pate, CAE Derrick B. Stark, CPA V. Carroll Webster, CPA, MBA

Special Section: The CPA Voice 10 11 12 13 13

SCDOR Looks Back at 2012 Tax Season and Ahead to 2013 SCBOS Shares New Projects, Updates SCACPA Members Meet with SCDOR Highlights of eSales Tax Force Meeting IRS & SCDOR Want to Hear from You

In This Issue 16 17 20 22 25 26 29 32 39

New LLR Director to Focus on Licensing Process, Efficiency SC CPA-PAC Contributions Meet SCACPA’s Future Leaders How Can SCACPA Help You Succeed? -- In Your Words Ethically Speaking - The Impact of Community Service on Independence CPA Day at the State House In Honor of Malynda Grimsley Marking Up and Adding Comments to PDF Documents I See It! The Clarified Auditing Standards

In Every Issue 5 6 8 18 28

From the Chair Association News On Your Behalf Board of Accountancy News Welcome New Members

28 36 37 42

Member News Chapter Connections Upcoming CPE 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 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 SCACPA. (888) 557-4814 | www.scacpa.org

South Carolina CPA Report

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From the Chair “By volunteering a small portion of your time serving on one of SCACPA’s task forces or committees, or by serving as an officer at the chapter level, you are also giving back to the profession.”

R

ecently, I had the opportunity to attend the AICPA’s Spring Council meeting in Washington, DC with other members from our state. It was a special event this year as the AICPA is celebrating its 125th anniversary. As we celebrated, our speakers and honored guests congratulated the profession on its achievements and its accomplishments.

We were reminded of the important role CPAs play in the economy. We were also reminded of how far the profession has come since its early days. But most importantly, we were reminded of how technology will continue to rapidly change the landscape of our profession’s future.

With a profession that is changing ever so rapidly, it becomes increasingly necessary for CPAs to become more actively engaged. SCACPA provides a variety of opportunities for each member to give back to our profession.

By giving back, we each have an opportunity to chart the course for the future.

One of the most important ways that a CPA can give back to their profession is by conducting themselves ethically

and competently. The value of our profession is measured by the competency level and ethical nature of its professionals. The old adage…”one bad apple can spoil the whole bunch” rings true when applied to the effect of an unethical or unprepared CPA. As CPAs throughout the United States become mindful of their quality of output, the perception and value of the profession rises.

Michael Putich, CPA 2012 SCACPA Chair SCACPA member since 2000

p Congressman Joe Wilson meets with SCACPA Chair Michael Putich and Chair-elect Sharon Mann.

You also give back to the profession by maintaining your SCACPA membership and contributing to both the South Carolina CPA PAC and the education fund. SCACPA, with its 3,900 members statewide, ensures our profession has a voice at the State House and with other state agencies that impact our profession. SCACPA’s annual CPA Day at the State House and its Key Person Contact program allow us to influence legislation for the future of the profession.

By volunteering a small portion of your time serving on one of SCACPA’s task

forces or committees, or by serving as an officer at the chapter level, you are also giving back to the profession.

When we pay our membership dues AND volunteer our time the value of our membership and the amount that our association can accomplish for our profession in South Carolina increases exponentially. There are many ways to become actively engaged. With 25 different committees and task forces, there is sure to be one aligned with your areas of interest. If you are interested in serving on SCACPA’s Board of Directors you might want to begin by serving as an officer in your local chapter. Many of SCACPA’s current board members began this way.

Your service will allow you to develop leadership skills while working with and learning from others.

With the profession changing, there is a call for all CPAs to become more involved. Our involvement will allow us to pass to our children and our grandchildren a profession that is both valued and rewarding. n

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South Carolina CPA Report

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Task Force to Focus on Student Recruitment

Financial Literacy Task Force Partners with Junior Achievement

SCACPA’s Accounting Careers/Academic Relations Task Force met recently to establish goals for the next two years. In order to achieve its mission of increasing student and academic membership and involvement, the task force will research the wants and needs of students and examine how it can add value to this membership group. The task force will also evaluate the current campus champion program and examine ways to re-engage educators with a focus on student recruitment.

SCAPCA’s Financial Literacy Task Force is partnering with Junior Achievement (JA) to deliver presentations to K-12 students around the state.

Task force members include: Chair Sherri Freudiger, Sherri L. Freudiger, CPA, PA, Myrtle Beach; Tim Baker, USC Darla Moore School of Business, Columbia; William Byrd, William Levan Byrd, CPA, PC, Sumter; Lindsay Campbell, AVX Corporation, Fountain Inn; Ben Cartwright, Dixon Hughes Goodman, LLP, Greenville; Bruce Cole, Southern Wesleyan University, Central; Clarence Coleman, Winthrop University, Rock Hill; Matt Foreman, ScanSource, Inc., Greenville; Mandy Hallman, CMAC, Inc. d/b/a Logan's Roadhouse, Myrtle Beach; and Matt Joy, The Hobbs Group, PA, Columbia.

Task force members include: Chair Ken Newhouse, Moore Beauston & Woodham, LLP, CPAs & Consultants, West Columbia; Anne Poag Harty, City of Rock Hill; Zoe Davis, Hubbard Davis CPAs, LLP, Mount Pleasant; Cynthia Johnson, Burroughs & Chapin Company, Inc., Myrtle Beach; Renita Owens, Renita M. Owens, CPA, LLC, Greenville; Uvette Pope Rogers, The Childrens Trust of SC, Columbia; Lynn Sherlock, PricewaterhouseCoopers, LLP, Spartanburg; Catherine Stoddard, Dixon Hughes Goodman, LLP, Greenville; Pamela Turner, Francis Marion University School of Business, Florence; and Sylvia Wood Amaya, Roper Saint Francis Healthcare, Charleston.

Junior Achievement provides all the materials and training to the volunteer, either live or online. The program is delivered in five, 45 minute lessons, generally once a week for five weeks. However, the volunteer can work with the local teacher to lengthen the lesson time thereby decreasing the number of days required. SCACPA members can also build in a few minutes to educate students about the CPA profession.

The task force is also looking for additional members in the Grand Strand, Sea Island, Catawba and Pee Dee areas of the state. If you are interested in serving on the task force or making a presentation through JA, please contact staff liaison Maureen Taylor at mtaylor@scacpa.org.

Win a Free CPA Annual Summit Registration Let us know what comments and concerns you would like to share with the IRS and S.C. Department of Revenue and you could win a complimentary registration to the 2012 CPA Annual Summit and Member Meeting, Nov. 1-2, in Columbia.

See page 13 to find out more.

Members Invited to Participate in SCACPA’s Congratulations to Erin Hardwick Annual Meeting SCACPA will hold its annual business meeting on Thursday, Nov. 1, 2012 at the Columbia Convention Center. This annual meeting, which is part of the CPA Summit, will offer members the chance to elect board members, approve the organizational budget and hear an update on association achievements and activities. There is no fee to participate in this meeting.

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South Carolina CPA Report

SCACPA Chief Executive Officer Erin Hardwick married Tommy Pate June 2 at Huntington Beach State Park in Murrells Inlet. Tommy is cofounder and CEO of Fuel Interactive, a digital media and software services company, located in Myrtle Beach.

In addition to the name change, Erin’s email address has changed to ehardwickpate@scacpa.org.

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

Get Connected with Knowledge Networks A few of SCACPA’s specialty committees and task forces have created a special interest network to develop a community of professionals where you can find answers and share information with others who share a common interest.

Knowledge Network benefits include: • Dedicated web pages with content and links to upcoming events • Idea exchanges using email list serves to ask questions and get answers CPAs in Business & Industry - This network serves as a resource for members who serve in many different capacities such as CFOs, CEOs, consultants and industry CPAs. The group communicates the value of the CPA in the business community and offers numerous opportunities for networking, learning and interaction.

Taxation - This network maintains a program of cooperation with the South Carolina Department of Revenue, the IRS and the Federal Tax Committee of the AICPA. The group submits recommendations for changes in tax laws and keeps the membership informed of significant tax changes and their implication.

The network provides numerous opportunities for networking, learning and interaction.

Valuation & Forensic Services This network conducts educational meetings throughout the year, monitors developments in valuation and litigation and assists the membership with their knowledge and understanding of these areas.

In addition, the group conducts roundtable discussions with topical experts on varying issues affecting this area of expertise.

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

To support all CPAs - whether in public practice, industry, government or education - with lifelong learning opportunities necessary for their success and to promote high ethical standards and legislative advocacy for both the public good and the profession.

Erin Hardwick Pate, CAE Chief Executive Officer Ext. 104, ehardwickpate@scacpa.org

Reva E. Brennan, MPA, CAE, IOM Chief Operating Officer Ext. 103, rbrennan@scacpa.org

Join a knowledge network today – www.scacpa.org/networks

Call for Volunteers - Get More. Get Involved.

Join a SCACPA Committee or Task Force SCACPA’s Board of Directors has made a commitment to becoming a more inclusive organization that provides increased opportunities for participation. With that in mind, we are conducting an open call for interested and qualified individuals to contribute to the future growth and success of SCACPA. As a committee or task force member, you will devote time, energy and ideas to move SCACPA projects and programs forward as envisioned by the Board of Directors and, in turn, lead the profession in supporting a wide-range of efforts on behalf of our members, communities and CPAs across the country.

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

Whether you’re looking to share your skills, gain practical experience, enhance your career, build your contacts, or give back to the profession, SCACPA relies on you to help make a difference for South Carolina’s accounting profession.

When you choose to volunteer, you will get more from your membership.

Just tell us how you would like to get involved.

CLICK

To find out more visit www. scacpa.org/getinvolved or contact COO Reva Brennan at rbrennan@scacpa.org or 888-557-4814, ext. 103.

Karen M. Hancock, CPA Finance Director Ext. 108, khancock@scacpa.org

Glenna P. Osier Peer Review and Member Services Manager Ext. 107, gosier@scacpa.org

Maureen Taylor Member Services Manager Ext. 105, mtaylor@scacpa.org

April C. Cox Education Manager Ext. 110, acox@scacpa.org

Sandra P. Oxner, CMP, CMMM Chapter & Member Events Manager Ext. 112, soxner@scacpa.org

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or 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.

HIGHLIGHTS FROM MEETING OF SCACPA BOARD OF DIRECTORS The SCACPA board of directors met May 2 following the annual CPA Day event in Columbia.

SCACPA Changes Internal Fiscal Year Timing: After research and deliberation, a task force proposed a change in fiscal year end from December 31 to June 30, effective July 1, 2013. The impetus for this change is primarily operational and will have minimal effect on the membership.

Task force leader Tim Baker suggested that many internal processes, such as budgeting, would become more timely and effective. The proposal was approved by the board. SCACPA CEO Erin Hardwick Pate is charged with developing an implementation plan for the change. Look for more details in the next issue of The CPA Report.

Member Feedback Drives Board Discussion: The board heard a summary report of the results of the member survey and focus groups conducted late in 2011. Key findings of this survey may be found on page 22 of this issue. At its annual planning meeting in August, the SCACPA board will take a deep dive into the results and what members say they want and need from their professional association.

Program changes will likely result based on the direction members want us to go.

2012 STATE LEGISLATIVE UPDATE From January to June, SCACPA lobbyists keep an eye on legislation that can affect CPAs and their firms and companies. During the 2012 session the association focused on the following issues on your behalf.

Federal/state tax conformity: 2012 was a banner year for state tax conformity legislation. The annual legislation was passed by both the Senate and the House and went to the governor’s desk for signing on Feb. 22.

Board of Accountancy (BOA): The BOA is housed under the umbrella state agency called Labor Licensing and Regulation, or LLR. LLR introduced legislation early in the session that would have made significant changes to the Engine Bill, the law that gives the agency authority over regulating boards and commissions like the BOA. Because LLR Director Catherine Templeton tendered her notice early this year to

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South Carolina CPA Report

“Indeed, there is an existing state law which requires individuals who provide forensic investigatory work to become licensed as a private investigator, all of which falls under the authority of SLED.” move to DHEC, LLR leadership was in transition and the legislature was reluctant to take up this legislation this year.

The BOA drafted and introduced new regulations that went into effect near the end of the legislative session.

Among the changes in these regulations is the new ethics CPE requirement.

While the specific start date for this new CPE rule is yet to be determined, all CPAs will be required to get six hours of ethics CPE over a three–year period. Two of the six hours must be South Carolina specific. SCACPA is developing curricula to help members satisfy this requirement.

CPAs as Private Investigators?: In a political game of ping pong this issue arose late in the session, was thought to have been taken care of and then at the 11th hour was back again. In late April, a CPA firm leader brought to our attention a legitimate threat to CPAs in South Carolina who provide fraud investigation or forensic-type services to clients.

Indeed, there is an existing state law which requires individuals who provide forensic work to become licensed as a private investigator, all of

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which falls under the authority of SLED. The law defines private investigation business as one that “engages in business or accepts employment to obtain or furnish information related to the identity, habits, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputation, or character of a person.” Or “securing of evidence to be used in a criminal or civil proceeding, or before a board, an administrative agency, an officer, or investigating committee.”

While SLED has not enforced this requirement and has in fact stated that it does not require CPAs or firms to become licensed as PIs, the law indicates the agency has that authority.

SCACPA

In May, SCACPA had language inserted in a modifying bill that would exempt CPAs explicitly. The bill, S.580, was approved by the House and Senate; however in mid-June the governor vetoed the bill due to other provisions, not the one relating to CPAs. SCACPA will revive efforts to exempt CPAs in legislation when the General Assembly reconvenes in January 2013.

South Carolina to Washington -Capitol Hill Visits: Most Americans agree that our country is in financial trouble. During a May visit with South Carolina congressmen, SCACPA leaders expressed concern over the national debt and shared non-partisan tools and resources. A video produced by AICPA entitled What’s at Stake gives a CPA’s insights into the federal government’s finances. Designed for policymakers,

the video explains the importance of reliance on financial statements and what elements within should be considered.

Another tool, called Total Tax Insights, is a website that helps taxpayers better understand their estimated TOTAL tax liability. The online calculator links federal taxes with state and local taxes to help educate the public about taxes.

This is a tool you may want to try yourself and share with your clients.

Visit totaltaxinsights.org n

Erin Hardwick Pate, CAE, has served as SCACPA’s CEO since 2005.

She currently serves as presidentelect of the CPA Society Executives Association, a member of the S.C. Secretary of State’s Nonprofit Advisory Council and Francis Marion University Advisory Council for the Non-Profit Leadership Institute.

Navigating the Changing Landscape 8 CITIES | 4 HOURS FREE CPE | SCACPA MEMBER EXCLUSIVE Change is on the horizon. Whether regulatory, legislative or professional issues, the 2012 Professional Issues Update series will help you navigate the changing landscape that will impact your business.

You can’t afford to miss this fast-paced, comprehensive look at key issues affecting your profession.

Register now for this members-only opportunity to: u Discuss key issues affecting the CPA Profession u Learn about new trends in accounting and business u Discover multigenerational issues impacting CPAs u Hear from your local legislators u Get the latest news from the Board of Accountancy Credit: 4 hours personal development SEATING IS LIMITED. REGISTER ONLINE WWW.SCACPA.ORG/PIUS

SCDOR Looks Back at 2012 Tax Season and Ahead to 2013

T

ax season has come and gone but before you know it the process will begin all over again.

SCACPA asked the S.C. Department of Revenue (SCDOR) what worked well, what didn’t and what is on the horizon for next year.

How does SCDOR rate this tax season?

SCDOR saw a successful 2012 income tax season overall, but there is always opportunity for improvement.

The modernized e-filing process for individual income tax returns underwent system improvements during this season and 54 percent of the state’s electronically filed income tax returns were done so through modernized e-filing. In 2012, SCDOR implemented a debit card program to issue income tax refunds. Overall, the program proved to be a success as the most recent data indicates that the state saved approximately $3 per debit card issued in the place of a paper check.

With each new income tax season there are unique issues that arise and SCDOR is consistently working to review processes and develop procedures that function to improve future tax seasons.

What aspects of this season went exceptionally well and why?

SCDOR consistently promotes electronic filing over the filing of a paper return and electronic filing volumes were up 4.49 percent as of June of this year, compared to the same period in 2011. We continually concentrate on improving processing times of income tax returns and this year’s figures show an improvement.

What aspects of this season were the weakest and why?

The implementation of the debit card program with Bank of America faced

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South Carolina CPA Report

unforeseen hurdles as some of South Carolina’s taxpayers faced difficulty with understanding the usage of the card. This demographic of taxpayers were unfamiliar with debit cards and our feedback showed that these taxpayers would have preferred a standard paper check, but mistakenly did not choose this option on their tax return.

How was the debit card program received by taxpayers?

For the majority of the state’s taxpayers that received the debit card it was a success. For the group of taxpayers who were unfamiliar with the card, the program was not well received.

Four percent of taxpayers who received a refund received a debit card. The majority of taxpayers filing electronically chose direct deposit for their refund, which is SCDOR’s preferred method for refunds.

What areas does SCDOR see for improving communication with practitioners and their clients?

Analysts are available at SCDOR to assist practitioners and clients with concerns or needs that may arise.

SCDOR continues to meet with SCACPA on a quarterly basis and a strong line of communication is kept rmation in order to exchange key information ating in throughout the year. Participating portant Clemson Workshops is an important mprove role for SCDOR in order to improve communication with other tax professionals. SCDOR’s policy group maintains a listserv of policy documents and revenue rulings in an effort to share information and to keep professionals and taxpayers aware of changing tax laws.

Are there plans for enhancing taxpayer services and ease of access?

Content on the SCDOR website is constantly being maintained and we are working to improve the appearance to make recent tax law changes and policy information available to taxpayers. Training classes are available throughout the year based on tax-related topics and industry needs. Electronic filing is important to taxpayers as well as to SCDOR, so we continue to look at ways to make electronic filing accessible for various taxes.

What plans/ideas are on the board for the 2013 season?

SCDOR is continually reviewing our current processes to determine changes and improvements for 2013 and years to come. We are implementing a new and improved eSales application for filing sales tax returns electronically. A new web filing option for motor fuel returns will be moving toward production in July 2012. Taxpayers will also be able to receive their 1099 electronically via E1099. As always, SCDOR consistently works with the South Carolina Business One Stop to provide electronic filing and payment options to improve taxpayer and business filing procedures. n

SCBOS Shares New Projects, Updates

by Ken Newhouse SCACPA member since 2001

I

n 2011, the South Carolina Department of Revenue required that the PT-100 be filed online with South Carolina Business One Stop (SCBOS). Members of SCACPA were caught off guard and did not have enough time to adjust to the new requirement. Since then the association has worked to open new channels of communication with the Department of Revenue and SCBOS. SCBOS established a Business Advisory Board to provide a forum where members of the business community and the association could be involved in changes to the online system. Currently two members of the SCACPA’s Tax Committee are serving on the advisory board, Charles Ayers and me. The advisory board meets a few times a year to discuss upcoming projects, solicit input and test drive the system prior to public release.

SCBOS IS CURRENTLY WORKING ON THE FOLLOWING: New home page – The new page will be more intuitive and make it easier for users to find the forms they use most frequently. The forms themselves will not change, only the initial screen after login.

Improved handshaking – This will allow software providers to transmit data directly from their systems to SCBOS. In the first quarter, they expanded the ability to receive quarterly unemployment reports from multiple vendors.

New eSales module – SCBOS is making changes to the eSales module that many of you have expressed concerns with in the past. We have two members from the tax committee that are meeting with SCBOS as they tackle this project.

Third-Party Preparer System – SCBOS will be establishing a new interface for CPAs and other practitioners that some of you have requested.

The new system would allow for a firm account to have multiple users. It will provide the ability to set

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

“I think the good thing that came out of the PT-100 filings is that we now have a new and open channel of communication that will allow for our needs to be heard and any issues to be addressed at a much higher level.” permissions levels for the staff. The system will also establish a client approval process. The project is in the beginning stages and gives us a lot of opportunity.

I think the good thing that came out of the PT-100 filings is that we now have a new and open channel of communication that will allow for our needs to be heard and any issues to be addressed at a much higher level. If you have any suggestions or problems please forward them to us and we will make sure your voice is heard in our meetings. n

Ken Newhouse, CPA, is with Moore Beauston & Woodham, LLP, CPAs in Columbia. He currently serves as chair of SCACPA’s Financial Literacy Task Force and is a member of the Legislative and Advocacy Committee and the Taxation Committee.

South Carolina CPA Report

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SCACPA Members Meet with SCDOR

by Charles Ayers, SCACPA member since 1988

O

quickly when (and if) extenders are approved.

• SCACPA members have had concerns about the issuance of debit cards and these concerns were shared with SCDOR. SCDOR reported that 66 percent of all refunds are issued in the form of direct deposits and only 4 percent are issued as debit cards. SCDOR made revisions to the debit card issuance system during this past filling season and will continue to monitor and revise the system to make improvements.

• SCDOR will be requesting feedback from preparers regarding how to define income from “personal service” for purposes of the calculation of tax under the alternative fixed rate (currently 5 percent, but may be changing to 3 percent or zero). With the reduction of the rate, the definition of what is income from personal service will become more important as the income from personal service will remain taxable at the rates in the tax table, up to 7 percent.

• SCDOR has provided an updated phone listing, which will be posted on pages 14-15 and on the SCACPA website.

n June 22, members of SCACPA’s Ad Hoc Liaison Committee met with executives of the S.C. Department of Revenue (SCDOR) for a regularly scheduled meeting to discuss issues and exchange ideas.

Highlights of the discussion included: • SCDOR expects to complete the move from Gervais St. to the new offices at Market Pointe off of Bush River Road

by September. Mailing addresses remain the same.

• SCDOR is looking for volunteers from SCACPA for input on revisions to property tax forms and alcohol beverage licensing forms for 2013. If you would like to assist, please contact Erin Hardwick Pate, ehardwickpate@scacpa.org.

• SCDOR was very appreciative of the input SCACPA members Gayle Wenzel of Gayle H. Wenzel, CPA in Lexington and Donna Bordeaux of Bordeaux & Bordeaux, CPAs, PA in Lake Wylie provided on their recent work on revisions to the eSales system.

• SCDOR is requesting input on topics for the fall workshops in light of the lack of tax change legislation this year. Email suggested topics to Erin.

• The S.C. tax forms are ready for extenders. The sections of the forms and instructions are present, but grayed-out until such time that the U S Congress U.S. C acts. t SCACPA did this so that they can move

CPAs

PA SCAC 12

South h Carolina l CPA Report

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SCDO

Based on other concerns shared by SCACPA and their members SCDOR reported the following: • There are no plans to create a S.C. annual withholding form and frequency similar to federal Form 944.

• There have been problems with some erroneous sales tax notices being issued, but SCDOR believe that this issue has been resolved.

The issue was generated due to errors in quarterly vs. monthly filer status of taxpayers.

• There are no known systemic problems with withholding notices.

• There were some issues with Forms 1040 that appeared to be late filed returns, but the erroneous post mark dates in the SCDOR system have been resolved.

• They are considering changing payroll withholding forms to include gross wages/liability by month to more accurately calculate late payment penalties.

• SCDOR is aware of the desire of many SCACPA members to be able to e-file partnerships. Due to resource allocation e-filing for partnerships won’t be available until 2014 at the earliest.

If you are aware of any issues with SCDOR that you feel may affect many SCACPA members, especially systemic problems, please contact Erin so that these issues can be discussed at our next meeting. The more specific the information you can share (without compromising client confidentiality), the better SCACPA is able to discuss the issue with SCDOR in order to devise a resolution that will help our clients. If your client gives permission to share their information with SCDOR in order to provide a specific example of the issue, SCDOR can better research and resolve the issue than when we present them with a general statement. If you do not have consent from the client to use their situation as an example, please provide a generic example of the issue in as much detail as possible. n

Charles M. Ayers, CPA is a manager with McDowell-Pearman, LLC in Columbia. He currently serves as chair of SCACPA’s Taxation Committee and previously served on the Information Technology Committee.

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

Highlights of eSales Tax Force Meeting

S

CACPA members Gayle Wenzel of Gayle H. Wenzel, CPA in Lexington and Donna Bordeaux of Bordeaux & Bordeaux, CPAs, PA in Lake Wylie participated in the recent eSales Task Force meeting with project managers and staff from the S.C. Department of Revenue (DOR) and S.C. Business One Stop (SCBOS). Following are highlights from the meeting concerning the system as currently designed: 1. You will enter from SCBOS as opposed to the SCDOR site.

2. CPAs will have a user ID that will allow every client, form, etc. the user works on to be viewed in summary on one screen. In the future, CPAs will have the ability to add other user IDs and limit what the other user can see. Clients will be able to access returns online and view at the same time as the CPA without viewing other client’s information.

3. If you obtain a new client that used another preparer in the past, the client will need to call SCDOR and request their filing history be transferred to a new user ID. It was requested that a form be made available for the CPA to complete and the client to sign and turn in.

4. There will be an option that will allow you to upload an Excel spreadsheet detailing the local taxes being remitted. This will be designed by the SCBOS staff.

5. The system will allow a return to be filed without making a payment, or only making a partial payment. This is important because the failure to file penalty is greater than the failure to pay penalty.

6. It will allow you to cancel what you processed if you do so before the settlement date. It will cancel the payment but not erase the form. The form will no longer be considered “filed”, but all of the data will still be there. This gives you the opportunity to make a change to the data without having to re-input data and re-submit.

7. A shopping cart feature will allow you to prepare the returns and place them there without having to submit them for filing immediately. That enables a staff accountant to prepare several returns and save to the shopping cart. A supervisor and/or partner can review the returns before they are filed and paid.

8. An email will be sent to the email address associated with the account if a return has been prepared and in the shopping cart, but has not been filed. This will be sent out three days before the due date of the return.

9. If several sales tax return EFT payments will be made out of the same account, you can file all of those together. If not, you will need

IRS & SCDOR Want to Hear from You On Oct. 25, the SCACPA Taxation Committee will host the annual meeting with the Internal Revenue Service and South Carolina Department of Revenue. During this meeting key employees from both agencies will address issues and concerns of the CPAs of South Carolina as provided in the annual survey. This is an ideal opportunity to share your issues and concerns.

A report of the meeting will be provided in the January issue of the CPA Report.

All SCACPA members are encouraged to share their comments through the online survey, available on the SCACPA website at www.scacpa.org. There you’ll find important questions with a chance to share your thoughts about reoccurring issues or things the agencies are doing well.

Upon completion of the survey, participants can enter a drawing to win a complimentary registration for the 2012 CPA Annual Summit and Member Meeting, held in conjunction with the Tax and Technology Conferences, Nov. 1-2 in Columbia.

JUST THREE EASY STEPS TO HAVE YOUR CONCERNS ADDRESSED BY THE IRS AND DOR:

u v

Visit www.scacpa.org Complete the online survey

by Friday, Sept. 7

w

Read the January issue of the CPA Report

continued on page 42 (888) 557-4814 | www.scacpa.org

South Carolina CPA Report

13

SCDOR Contact List EXECUTIVE DIVISION

Jean Funches

Taxpayer Rights Advocate

803-898-5444

Jim Etter

Agency Director

803-898-5040

Phone Line Topics - Legislative and Local Government Services

Harry Cooper

Executive Deputy Director

803-898-5035

Property - Exempt

803-898-5482

Property - Manufacturing

803-898-5055

FIELD OPERATIONS DIVISION Mont Alexander

Senior Administrator

803-898-5950

Property - Business Personal

803-898-5222

Ricky Taylor

Administrator, Audit Services

803-898-5604

Property - Motor Carrier

803-898-5222

Carol Pierce

Administrator, Collections Services

803-898-5621

Compliance and Recovery

C&R Hunt Line

803-898-5381

Dana Krajack

Manager, Regulatory

803-898-5172

Problem Resolution Office

problem@sctax.org

803-898-5199

Phone Line Topics - Field Operations

OFFICE OPERATIONS DIVISION

Alcohol Beverage Licensing

803-898-5864

Bingo Tax

803-898-5393

Coin-Operated Devices Tax

803-898-5454

Estate Tax

803-898-5626

Fiduciaries

803-898-5791

Gift Tax Individual Income Tax

803-898-5756 Automated Refund Inquires General Information, Request for Forms, Individual Declarations, Notice of Adjustments & Information Letters (Computer Generated) Copies of Returns Debt Matches under Offset Program

803-898-5300

803-898-5709 803-896-1164 Number on Taxpayer Notice

Sherrie McTeer

Senior Administrator, Office Operations

803-896-1912

Mario Alvarez

Administrator, Office Operations

803-896-1445

Sylvan Proser

Manager, Research and Review

803-898-5706

Ulysses Byrd Technical Questions Only

Sales Tax, Motor Fuel and Misc. Taxes

803-898-5744

Bob Thomas Technical Questions Only

Corporate/Tax Credits

803-898-5786

Maggie Glass Technical Questions Only

Individual Income/Tax Credits

803-898-5838

PROXY BOX

taxtech@sctax.org

Phone Line Topics - Office Operations Accommodations Tax

Sale Hunt Line

803-896-1420

Admissions Tax

MISC Hunt Line

803-896-1970

Alcoholic Liquors Tax

MISC Hunt Line

803-896-1970

Bank Tax

Corp Hunt Line

803-896-1730

803-898-5640

Beer Tax

MISC Hunt Line

803-896-1970

Levy/Garnishments

803-898-5611

Cigarette Tax

MISC Hunt Line

803-896-1170

Property - Utilities

803-898-5482

Copies - Tax Returns

Records Hunt Line

803-896-1764

Solid Waste Tax

803-898-5737

Corporate Income Tax

Corp Hunt Line

803-896-1930

Tax Credits - Individual

803-898-5709

Deed Recording Fee

MISC Hunt Line

803-896-1970

Electric Power Tax

MISC Hunt Line

803-896-1970

RARâ&#x20AC;&#x2122;s, CP2000, Non-filers Filing Enforcement Hunt Line

SUPPORT SERVICES DIVISION Laura Watts

Senior Administrator

803-898-5038

Nancy Wilson

Administrator, Human Resource Planning and Development

803-898-5453

INFORMATION RESOURCE MANAGEMENT DIVISION Mike Garon

Senior Administrator

803-898-5586

SCBOS HelpDesk

SCBOS

803-898-5690

GENERAL COUNSEL- POLICY DIVISION Rick Handel

Senior Administrator

803-898-5132

GENERAL COUNSEL- LITIGATION DIVISION Milton Kimpson

Senior Administrator

803-898-5131

LEGISLATIVE & LOCAL GOVERNMENT SERVICES DIVISION

Electronic Services Electronic Program Questions and Issues for Individual Income, Corporate, Sales, Motor Fuel, Withholding and Miscellaneous Taxes E Services Hunt Line Business Telefile: Registration and Filing Program Line Telefile System Help Line Sales Telefile Tax Questions Withholding Telefile Tax Questions Batch Withholding

803-896-1715 803-898-5918 803-896-1715 803-896-1420 803-896-1450 803-896-1715

Electronic Filing-Preparer Questions

E Services Hunt Line

803-896-1855

Meredith Cleland

Senior Administrator

803-898-5402

Forest Renewal Tax

MISC Hunt Line

803-896-1970

Samantha Cheek

Public Information Director

803-898-5281

Hospital Tax (Indigent Care) MISC Hunt Line

803-896-1970

14

South Carolina CPA Report

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

Licenses: Admissions, Bingo, Corporate, Highway Use, Motor Fuel, Sales, Use and Withholding Taxes Registration Hunt Line

803-896-1350

Low-Level Radioactive Waste

MISC Hunt Line

803-896-1970

Motor Fuel Tax

Motor Fuel Hunt Line

803-896-1990

Partnerships

Partnership Hunt Line

803-896-1590

PSC Utility Tax

MISC Hunt Line

803-896-1970

Rental Surcharge Tax

Sales Hunt Line

803-896-1420

Registration for Taxes

Registration Hunt Line

803-896-1350

Retail License

Registration Hunt Line

803-896-1350

Sales and Use Tax General Information Sales Hunt Lines (Refunds, Durable Medical Equipment, Local Option Failure to File, Casual Excise, E911)

803-898-5788

SECTION

PROXY BOX

Use

Sales

salestax@sctax.org

Electronic Funds Transfer of Business Taxes

Electronic

businesseft@sctax.org

Individual Income Tax Electronic Filing

Electronic

indelf@sctax.org

SCnetFile

Electronic

scnetfile@sctax.org

Sales & Use - Telefile

Electronic

telefile@sctax.org

eSales

Electronic

salesinternet@sctax.org

EDI Sales or Motor Fuel (Electronic Data Interchange)

Electronic

edi@sctax.org

Withholding Tax Telefile

Electronic

telefile@sctax.org

eWithholding

Electronic

ewithholding@sctax.org

ePay

Electronic

epay@sctax.org

803-896-1370 803-896-1420

Individual Income Tax

IIT

iitax@sctax.org

Partnership Tax

Partnership

partnerships@sctax.org

Licenses: Admissions, Corporate, Sales, Use, Withholding

Registration

retail@sctax.org

Registration for Taxes

Registration

retail@sctax.org

Retail License

Registration

retail@sctax.org

Withholding

Withholding

withholdtax@sctax.org

Admissions

MISC

admissions@sctax.org

Cigarette

MISC

cigarettetax@sctax.org

Deed Recording

MISC

deedrecordingtax@sctax.org

Electric Power

MISC

elecpowtax@sctax.org

Forest Renewal

MISC

forestrentax@sctax.org

Liquor By The Drink Tax

MISC

liquorbythedrink@sctax.org

Low Level Radioactive Waste

MISC

llrwtax@sctax.org

Tobacco

MISC

tobaccotax@sctax.org

Wine

MISC

winetax@sctax.org

Savings and Loan Tax

Corp Hunt Line

803-896-1730

Telephone-911 User Fee & 900# Tax

Sales Hunt Line

803-896-1370

Tobacco Tax

MISC Hunt Line

803-896-1970

Use Tax

Sale Hunt line

Wine Tax

MISC Hunt Line

803-896-1420 803-896-1970

Withholding Tax General Information WH Hunt Line (Refunds, Balance Dues, NR Contractor, NR Real Estate) Batch Withholding Filing Program W-2 Filing Program (Magnetic Media) Enterprise Zone Act/Rural Development Act Credit

EMAIL PROXY BOX TOPICS

803-898-5752 803-896-1450 803-896-1715 803-896-1450 803-896-1460 or 803-896-1388

Alcohol Liquor

MISC

alcoholtax@sctax.org

MISC

beertax@sctax.org

EMAIL PROXY BOX TOPICS

SECTION

PROXY BOX

Beer

Accommodations

Sales

acctax@sctax.org

Motor Fuel

Motor Fuel

motfuellic@sctax.org

Aviation Gasoline

Sales

salestax@sctax.org

Forms Suggestions

Forms

Capital Projects

Sales

localoptsales@sctax.org

suggestions4forms@sctax. org

Casual Excise

Sales

casualtax@sctax.org

Corporate

Corporate

corptax@sctax.org

Bank Tax

Corporate

banktax@sctax.org

Savings and Loan Tax

Corportae

savloan@sctax.org

Tax Credits

Research and Review

taxcredit@sctax.org

Fiduciaries

Filing Enforcement

fiduciaries@sctax.org

Catawba Sales

Sales

salestax@sctax.org

Local Option

Sales

localoptsales@sctax.org

Rental Surcharge

Sales

rental@sctax.org

Sales & Use

Sales

salestax@sctax.org

School District

Sales

localoptsales@sctax.org

Telephone

Sales

teletax@sctax.org

Business Personal Property

Property

BPPProperty@sctax.org

Transportation

Sales

localoptsales@sctax.org

Property Tax

Property

Propertytax@sctax.org

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

South Carolina CPA Report

15

New LLR Director to Focus on Licensing Process, Efficiency

H

olly Gillespie Pisarik was named director of the Department of Labor, Licensing and Regulation earlier this year. As head of the agency that regulates and licenses South Carolina CPAs, SCACPA was interested in learning what Pisarik’s priorities are, how she plans to support the Board of Accountancy and how her law background has prepared her for the position.

You were appointed by Gov. Nikki Haley in March as the new director of the Department of Labor, Licensing and Regulation. Briefly describe your professional background and service specialty (-ies) leading up to this position.

Prior to coming to the South Carolina Department of Labor, Licensing and Regulation, I worked at Nelson Mullins Riley & Scarborough, LLP, practicing primarily in the area of health care, and representing clients before federal, state, and administrative law courts and administrative agencies. In addition, prior to law school, I worked for the Florida Department of Health as a public information officer and program manager. My undergraduate degree is in business administration with an emphasis on health care administration.

What about your past experience, including serving as LLR’s chief advice counsel, has prepared you to lead a state agency, and what do you hope to accomplish?

Prior to being named director at LLR, I served as the agency’s chief advice counsel. In this position, it was my job to advise professional and occupational licensing boards on statutory and regulatory matters, provide legal advice to staff, draft legislation for the boards and other agency programs and manage

16

South Carolina CPA Report

and my desire to have a collaborative relationship.

“My pledge to you and all boards is that I will continually review the licensing process. I welcome any suggestions you may have.” a team of attorneys. Serving in this role, I gained an in-depth knowledge and appreciation for the individual duties and responsibilities of the agency’s boards, including accountancy. This experience, along with the time I spent practicing in the private sector and representing clients before LLR and other state agencies gave me great insight into running a state agency.

My ultimate goal is to make sure that we, as an agency, are providing excellent customer service to all of our customers, including licensees. To that end, I want to make sure that the processes we have in place to fulfill our legal responsibilities are the most efficient and effective they can be.

How do you plan to work with and support the S.C. Board of Accountancy?

As director of LLR, it is my job to work with and provide support to the Board of Accountancy and all of our boards. I have made it a priority to meet with all of the boards and express to the members my open door policy

From the first day I was confirmed as director, I began reviewing the licensing process with a focus on making it as simple and headache-free as possible while still complying with the law. My pledge to you and all boards is that I will continually review the licensing process. I welcome any suggestions you may have.

I also am reviewing the investigative process for complaints that come into our agency. I want to make sure that it is an efficient process and that these matters are handled in a timely manner. To assist with this, I hired attorney Dean Grigg, former advice counsel to the Board of Accountancy, as the new deputy director to oversee the professional and occupational licensing boards, including our Office of Investigations and Enforcement.

Mr. Grigg has worked at LLR for a few years, and previously worked at the State Attorney General’s Office, so he fully understands and appreciates the investigative process and is an asset to my efforts to improve the investigations process. We have already implemented several changes.

What areas and issues will be a top priority for 2012-13? As CPAs, what should we be aware of in the near future?

As I previously mentioned, customer service is job one. A big part of providing excellent customer service is making sure that all customers understand who we are and what we do. I have been meeting with and talking to board members, association members and other agency customers continued on page 42 (888) 557-4814 | www.scacpa.org

SC CPA-PAC Contributions The South Carolina CPA-PAC has made contributions to select candidates running for the South Carolina Senate and House of Representatives. The SC CPA-PAC trustees carefully consider which candidates to support taking into account their past support of business friendly issues as well as those affecting the CPA profession. The total contributed for primary elections was $32,000. Receiving primary contributions from the SC CPA-PAC were:

SENATE:

HOUSE OF REPRESENTATIVES:

Thomas Alexander, R-Oconee Kevin Bryant, R-Anderson Paul Campbell, R-Berkeley Ray Cleary, R-Georgetown John Courson, R-Richland Mike Fair, R-Greenville Wes Hayes, R-York Hugh Leatherman, R-Florence Joel Lourie, D-Richland Shane Massey, R-Edgefield Larry Martin, R-Pickens Glenn McConnell (Serving as Lt. Governor) William O’Dell, R-Abbeville Glenn Reese, D-Spartanburg Nikki Setzler, D-Lexington David Thomas, R-Greenville* Kent Williams, D-Marion

Rita Allison, R-Spartanburg Carl Anderson, D-Georgetown Jimmy Bales, D-Richland Liston Barfield, R-Horry Kenny Bingham, R-Lexington Joan Brady, R-Richland Tracy Edge, R-Horry Shannon Erickson, R-Beaufort Mike Forrester, R-Spartanburg Mike Gambrell, R-Anderson Bobby Harrell, R-Charleston Jackie Hayes, D-Dillon Chip Limehouse, R-Charleston Phillip Lowe, R-Florence

James Lucas, R-Darlington David Mack, D-Charleston Dennis Moss, R-Cherokee Denny Neilson, D-Darlington* Harry Ott, D-Calhoun Steve Parker, R-Spartanburg* Michael Pitts, R-Laurens Rick Quinn, R-Lexington Bill Sandifer, R-Oconee Garry Smith, R-Greenville Roland Smith, R-Aiken Mac Toole, R-Lexington Brian White, R-Anderson Tom Young, R-Aiken

* Lost primary

Key Person Contacts

A sincere thank you goes to the following South Carolina CPAs who serve as Key Person Contacts and volunteered to hand-deliver contribution checks to their local legislator.

Charles Alvis Bob Baldwin Donny Burkett John Camp Don Cochran Bobby Creech Mark Crocker Keith Dooley Ronnie Ellison Bratton Fennell Ryan Finklea

Arden Gatchell Harry Gregory Ronnie Givens Jackie Highley John Horton Rob Jordan Charles Lindley Steve Mann Pat McDermott Robert Moorhead Gerry Owen

Christian Rasor Don Rickenbaker Buzz Rogers Wanda Scott McRoy Skipper Mike Stancil Chuck Talbert Nancy Upton Bob Wade Ken Whitener

CPA-PAC Donors (3/15/2012 – 6/25/2012) Investor: $100-$249 Michael R. Putich Backer: $50-$99 Monique M. Albarado Jason M. Blumer William L. Byrd

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

Charles G. Carpenter Doris E. Cubitt Katherine W. Holmes Patrick M. Luciano Steven M. Mann Thomas V. Taylor

Supporter: up to $49 Michael J. Targia

South Carolina CPA Report

17

Board of Accountancy News

Third Quarter Report

by Mark T. Hobbs, CPA SCACPA member since 1981

T

18

he South Carolina Board of Accountancy has been busy the first part of 2012 putting together our initial annual report. The annual report was a cooperative effort between the board, SCACPA, NASBA and Labor Licensing and Regulation (LLR - our umbrella agency). I would like to personally thank all who assisted with this project with special thanks to SCACPA’s Maureen Taylor who truly was an outstanding participant in this endeavor. A complete copy of the annual report is available through a link at the board’s website - www.llronline.com/ POL/Accountancy/. I hope you will take a few moments and review this document since I believe it reflects the board‘s current agenda. The report also includes board member profiles, a message from LLR Director Holly G. Pisarik, an analysis of state licenses and financial information of the board.

I have been honored to serve the Board of Accountancy and the State of South Carolina. I appreciate the dedicated service of the board’s staff and the staff of SCACPA to always do the “right thing” as it pertains to the protection of the public. The board’s immediate challenges consist of developing a system to monitor the peer review process in South Carolina with the establishment of a Peer Review Oversight Committee (PROC), development of a program to provide ethics education to S.C. licensees and to enhance communications between the board and all audiences including, but not limited to, licensees, students, educators, financial institutions, attorneys, other regulators and the general public.

In June, we received notice that Malane S. Pike, Esquire would be replaced at the end of her first term, which expired June 30, 2012. In addition, three other board members’ terms expired on June 30 including Vice Chair Bob Baldwin, Accounting Practitioner David C. Nichols and mine. Accounting Practitioner Wendell Lunsford’s term expired June 30, 2009. The future composition of the board rests with the appointments of Gov. Haley.

While we are all eligible and willing to serve another term on the board, I suspect the future composition of the board will be impacted by the current political environment.

Evidence indicates that some firms are not complying with the peer review requirement in South Carolina. The law was passed in 2004 and regulations took effect in 2007. In addition, there is a concern that non-AICPA member firms may not be viewed very aggressively by the Review Acceptance Body as are AICPA firms. As a result of these as well as other concerns, there is a joint AICPA and NASBA initiative to create state board oversight of the peer review process. Former BOA Chair Chuck Talbert, CPA; special consultant to the board Jim Holloway, CPA; and Administrator Doris Cubitt, CPA, have agreed to serve as the initial

South Carolina CPA Report

“The board needs to seek to improve communication through all avenues available in today’s technological age. ” members of the Peer Review Oversight Committee. Hopefully, their work will commence this summer and we can be assured that we have a level playing field for all licensees in South Carolina.

The regulations have passed that incorporate an ethics requirement into our CPE. Several licensees have approached me asking about the reasons behind this change. The bottom line is that South Carolina CPAs need a better understanding of the South Carolina Accountancy Practice Act. We are constantly faced with licensees who do not know our law. This pertains to many topics from CPE and acceptable courses to the

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

requirement to have a registered office or be in a peer review program. We have tried to communicate these requirements but it has not gotten the job accomplished. We believe the six-hour requirement over three years will improve the compliance of our licensees. In a three-year period, two hours must be on the South Carolina law specifically. We hope to incorporate cases as well as problems that the board has experienced in practice.

The board needs to seek to improve communication through all avenues available in today’s technological age. This should include social media as well as enhancements to our website to allow licensees direct interaction to use technology to enhance the regulation process. CPE reports should be able to be transmitted by digital means and licensees should be able to determine their reports have been received in a “real time” environment.

I believe that South Carolina needs a strong accounting regulator to assure the public is protected through monitoring of licensees, investigation of allegations of misconduct and greater communication to the citizens about the role of the accounting profession. A strong accounting regulator provides a vital ingredient for the economic growth of our state since financial statement users can place reliance on the work product of the profession. The federal legislation, Sarbanes Oxley Act, specifically addressed the very important role of state boards in the regulation of the profession at the state level. An effective state regulator protects the public and also assures licensees that inappropriate behavior or failure to follow standards will not be tolerated in South Carolina.n

p Attending the NASBA Regional Meeting in Philadelphia in June are: (from left) Donny Burkett, S.C. Board of Accountancy and NASBA Board member; Tanya Greenlee, S.C. Board of Accountancy; Mark Hobbs, Chair, S.C. Board of Accountancy; Doris Cubitt, Board Administrator; Bobby Creech, former Board chair and NASBA Nominating Committee.

Mark Hobbs, CPA, is the managing partner of The Hobbs Group, PA in Columbia. A past president of SCACPA, Mark currently serves on SCACPA’s Investment Committee as well as the Investment Committee and the Women to Watch Awards Task Force. He may be reached at mark@hobbscpa.com.

Stars in the Profession Do you know a SCACPA member deserving of recognition for their contributions and achievements? Nominate your peers for one of SCACPA’s five 2012 Member Awards. Recipients will be recognized at the 2012 CPA Summit, Nov. 1-2, Columbia.

Categories include: u Service to the Profession u Public Service u Accounting Educator of the Year u Outstanding Member in Business & Industry u Young CPA

Nomination Deadline September 19, 2012

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

Visit www.scacpa.org/awards for eligibility criteria and nomination forms. QUESTIONS? Contact Erin Hardwick Pate, ehardwickpate@scacpa.org

South Carolina CPA Report

19

S

CACPA’s Young CPAs Leadership Cabinet (YCPA) welcomed seven new members at the May quarterly meeting.

“We are truly excited to welcome this new group of professionals into the cabinet,” said Erin Hardwick Pate, CEO of SCACPA. “The cabinet develops future leaders for the association, the profession and the community through leadership development opportunities, networking and community outreach.”

Founded in 2009, the cabinet engages CPAs 35 years old and younger who have demonstrated leadership skills and active involvement in the accounting profession and the community. The seven new members bring the total cabinet members to 22, with each serving a three-year term.

We asked the new members to briefly introduce themselves and what they would do if they had not become a CPA.

Melissa Barbour, CPA, Streetman, Jones & Powers, LLC, Charleston

A graduate of James Madison University in Harrisonburg, Va., Melissa received her Masters of Science in Accounting from the College of Charleston. She joined Streetman, Jones & Powers, LLC in December 2007 and after completing a year of employment became a CPA. Melissa focuses on all aspects of tax compliance for small businesses and non-profit organizations. She is a member of the

20

South Carolina CPA Report

James Island Chapter of VITA and is also involved with Fields to Families, an organization focused on providing healthier food options to the hungry in Charleston. In her spare time she is a member of two performance companies at DanceFX Charleston, a young-adult dance studio.

In another life…

If I hadn’t found a passion for crunching numbers, I would love to have moved d to New York to live the life of a struggling artist, eventually finding my way on Broadway. __________________________________ Harris Darver, CPA, McGregor & Company, LLP, Columbia

Harris received his Bachelor of Science in Business Administration, majoring in both Accounting and Finance, from the University of South Carolina. For the past four years, he has been with McGregor & Company, LLP, where he serves as a senior staff accountant.

Harris’ areas of specialization and experience include not-for-profit and governmental accounting and auditing concentrating in school districts, health care organizations, association management companies and small business groups. In his free time, Harris enjoys watching sports, doing yard work, ceramic arts and the theater.

Allyson DeHart, CPA, The Hobbs Group, PA, Columbia

Allyson is a supervisor with The Hobbs Group P.A. in Columbia where her practice areas focus on tax compliance and consulting services for individuals, privately held businesses, tax exempt organizations, trusts and estates. A 2004 graduate of Clemson University, she received a Bachelor of Science in Accounting and minored in legal studies. Her adoration for accounting began in high school when she participated in a work study program that allowed her to work at the small public accounting practice of McDade & Fant, LLP in Union. She is a member of AICPA, the Association of Certified Fraud Examiners – Palmetto Chapter and Carlisle United Methodist Church where she serves on the Finance Committee and as church historian.

Allyson also volunteers with animal rescues in South Carolina and North Carolina.

In another life…

If I could do or be anything in another life it would definitely be Radio City Rockette, which means I would have to be taller since I am a whopping 5’2. In order to be a Rockette you must be between 5’6 and 5’10 ½.

In another life…

I would love to either be on stage on Broadway or in some investigative capacity with the CIA.

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

Stephanie Denham, CPA, Pathology Service Associates, LLC, Florence

Stephanie is a graduate of Francis Marion University in Florence where she earned a Bachelor of Business Administration in Accounting. While attending FMU, Stephanie began her career at Pathology Service Associates, LLC, now a MED3OOO company.

Stephanie serves as director of client services at PSA. She also directs the operational audit department, ensuring that policies and procedures are followed consistently in each of PSA’s four centralized billing operations.

Stephanie serves as treasurer of the finance committee and on the board of directors of the Florence Family YMCA. She enjoys spending time with her husband, Jason, and son, Noah.

In another life…

I would like to live in New York City and be a personal trainer and/ or personall shopper. In my spare time I would travel the world with my husband and son. __________________________________ Alan Leichtle, CPA, S.C. Association of Realtors, Columbia

Born in Columbia, Alan graduated from Elon Univesity with a double major in accounting and business with a concentration in finance. He began his professional career at Derrick, Stubbs & Stith, LLC, where he was an auditor for just over three years. In 2007, Alan joined the South Carolina

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

Association of REALTORS® (SCR) and went on to obtain his CPA license and MBA from Keller Graduate School.

He currently serves as senior vice president of finance and administration at SCR. Alan is also actively involved with Columbia Opportunity Recourse (COR) and serves on the Connectivity Committee.

In another life…

I would want to be a sailboat instructor in the islands and own a restaurant in Costa Rica. __________________________________ Doug Torchio, CPA, Johnson Lambert & Co., LLP, Charleston

Doug received his Bachelor in the Science of Accounting with a concentration in financial analysis and his Masters of Accountancy from North Carolina State University. He joined Johnson Lambert & Co. LLP in the fall of 2008 and has been working exclusively in the insurance industry since then. Doug has worked on the audits of both life and property and casualty companies. In addition to SCACPA, he is a member of AICPA and the South Carolina Captive Insurance Association. He has actively volunteered with Habitat for Humanity since 2006 and also assisted the Volunteer Income Tax Assistance program for the 2012 year.

Damon Hilton, College of Charleston, Charleston

Damon serves as assistant director of financial services for institutional advancement at the College of Charleston (COFC) and adjunct faculty at Strayer University and Southern Wesleyan University. He received his Bachelor of Science in Business Administration from COFC, a Bachelor of Science in Business Administration/ Accounting from Limestone College and a Master of Business Administration with an accounting concentration from Baker College Center for Graduate Studies. He has over 10 years of financial experience in a variety of accounting and finance positions. Damon is a member of Royal Missionary Baptist Church where he serves as a lead Sunday school teacher, deacon, trustee and church treasurer/ finance manager. He also conducts free teen and adult finance seminars and is a Cannon Street YMCA Volunteer for the Y-Dance and various programs since 2001.

In another life…

I would be a singer. I love to listen and sing along to great songs. I am also very good at remembering music artists, reme song titles, song melodies and lyrics.

However, I recognize that God did not give me the gift to sing. “How do I know?” you may ask. My family tells me every time I try to sing a song. n

In another life…

If I could do anything in another life I would be a professional f i l athlete, most likely golf or baseball player.

21

How Can SCACPA Help You Succeed?

MEMBER RESEARCH PROJECT RESULTS -- IN YOUR WORDS

by Maureen Taylor SCACPA Members Services Manager

MEMBER

15%

PARTICIPATION

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CACPA is your professional home and in an effort to ensure it is a continually relevant and evolving organization that meets your needs, we asked you to make your voice heard.

In the fall of 2011, the association worked with an independent consultant, Work Volf Consultants of Charleston, to conduct a member research project that included an online survey of members, eight focus groups and telephone surveys of nonrenewing members and CPAs that have never been SCACPA members. Specifically, we asked you what programs and services you value and what areas SCACPA should focus on as we move forward.

Recently, Work Volf released the final report, By the Numbers. SCACPA’s Board of Directors will be delving into the report at the August board planning retreat, but we would like to share with you some of the key findings.

More than 600 members, or 15 percent of the membership, participated and many of the issues that you find important mirror national trends, as documented in AICPA’s Horizons 2025 report. Over a six-month period in 2011, AICPA sought input from CPAs nationwide on current and forecasted trends that would impact the profession. Ten key themes emerged that offered insight into how the profession is currently conducting business and how it will conduct business in the future, serve clients and employers, attract and retain employees and new business and remain competitive. For comparison sake, we focus on five of these themes. The Horizons 2025 report is available through the AICPA website at www.aicpa.org.

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South Carolina CPA Report

“SCACPA members look to technology for communication, connectivity, marketing and education and cite the need for user-friendly solutions that will help you acquire the knowledge you need to further your career.”

DEMOGRAPHIC SHIFT The profession can expand its appeal by recognizing U.S. and global demographic shifts, according to the AICPA study.

This includes working to attract and retain younger people, women and minorities, while also tapping into the knowledge and experience of CPAs in or near retirement.

By the Numbers shows that you see the role of SCACPA as being career stage dependent. You cited promoting the profession to students and career placement opportunities for younger members as a priority. You also recognize that younger members network and learn differently than older demographics. Many of you also expressed concern over who will take over the profession as baby boomers near retirement.

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In Your Words - How Can SCACPA Help the Profession Succeed?

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Career placement opportunities for younger/student members.

Reaching out to CPA candidates (college or career – unemployed) and others in the industry considering becoming CPAs. Reach out to members about offering internships to high school and college students.

Use a succession planning approach to pass along practice knowledge and experience to a newer CPA.

TECHNOLOGY According to Horizons 2025, this is a major force for CPAs, affecting the services you offer, how you offer them and how you do business.

SCACPA members look to technology for communication, connectivity, marketing and education and cite the need for user-friendly solutions that will help you acquire the knowledge you need to further your career.

Your recommendations include a help desk, business opportunities bulletin board, referral systems and online technical resources. Many of you also stress that you want to be communicated with on your terms, meaning the platforms you prefer and the topics that are of interest to you.

In Your Words - How Can SCACPA Help You Succeed?

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As more and more of business goes digital, more CPE is needed on technology and how to use it to my advantage.

More information on latest technology.

On the website, there could be a technical level resource or body of knowledge to provide information on a specific advanced issue.

Information should be targeted to my needs.

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“SCACPA members understand the role of the association as promoting the CPA brand and see it as a priority, especially in this economic climate.”

In Your Words - How Can SCACPA Help You Succeed?

CPA VALUE PROPOSITION

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AICPA’s national survey found that it is important to promote CPAs as the trusted advisers who provide recognized core services but who are also agile enough to develop new solutions to complex business problems as they occur. SCACPA members understand the role of the association as promoting the CPA brand and see it as a priority, especially in this economic climate.

Your recommendations include public education about the CPA credential, increased media coverage and community-based volunteer opportunities. According to the research report, you would also like SCACPA to promote the CPA referral system.

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Educate and communicate to the public the value of the credential.

Providing information to newspapers and TV about what CPAs do would enhance public appreciation of what is accomplished for them.

Promote the CPA designation to the public and set up a CPA referral system.

It is imperative to explain to companies the importance of hiring a CPA.

PRIDE IN THE PROFESSION Because CPAs remain among the most respected and trusted financial professionals, it is important for them to maintain the high standards and integrity that reinforce this perception.

Continued advocacy on the profession’s behalf will be a key element in doing so, according to Horizons 2025. By the Numbers reinforced that you understand the role of the state association as a continued on page 24

How Can You Help SCACPA Succeed?

In order to continually improve the value of your membership, we need your help.

By the Numbers offered a broad overview of your wants and needs, but we need to know what is important to each of you as individuals and your preferred method of communication. So, how can you help?

Log into your membership profile and update your contact information, areas of interest and areas of expertise.

Join SCACPA’s Facebook and LinkedIn pages and post your comments and suggestions.

Email your SCACPA staff and let us know how we can better serve you.

Volunteer to serve on a task force or committee.

Enroll in SCACPA’s Find a CPA program.

SCACPA is your professional home and we want to make certain you are an active part of your CPA family. For more information on By the Numbers, contact mtaylor@scacpa.org

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“It is interesting to note that while advocacy is not the primary reason for joining SCACPA, you give it high marks in terms of the quality of services you receive with your membership.”

provider of updates on critical issues and advocacy for the profession. It is interesting to note that while advocacy is not the primary reason for joining SCACPA, you give it high marks in terms of the quality of services you receive with your membership.

In Your Words - How Can SCACPA Help You Succeed?

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Continued work in advocacy area that supports a business friendly climate.

Continue to inform about issues facing the profession.

By keeping me informed of regulations/issues by providing CPE, and by continuing to advocate for the profession on major issues that cause CPAs hardships.

Continue to make CPAs aware of emerging issues and how they relate to the CPA profession in our state.

LIFELONG LEARNING/EDUCATION Although this will remain a cornerstone of the profession, what CPAs learn and how they learn it will change. To retain their roles as trusted advisers, CPAs will have to broaden their understanding in a variety of areas,

including economic and technology trends. In By the Numbers, you list continuing professional education as a core function of the association and a primary reason for joining.

Recommendations vary by industry and specialization, but you want to ensure it is relevant to your area of practice. You also want a variety of formats including seminars, conferences live webinars and selfstudy.

In Your Words - How Can SCACPA Help You Succeed?

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Continue the excellent and varied CPE courses.

Would like to see more "business" and technology CPE offerings.

Since I am in industry, I always appreciate CPE topics that relate to CPAs in industry or topics that relate to all CPAs like technology and personal development.

Provide seminars that deal with work-related matters.

Relevant CPE for nonprofits, manufacturing, small accounting departments.

Consider offering leadership development training. n

In 2013, SCACPA will change its fiscal year.

Currently, the year runs from Jan. 1 – Dec. 31. The new fiscal year will begin on July 1, 2013 and run through June 30, 2014. Many operational efficiencies will be realized by this change.

That means the membership year will also change.

In November, you will receive a renewal notice for 18 months in order to transition to the new fiscal year. Additional details will follow soon and as they unfold we are certain you will see the many reasons you should stretch with us!

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South Carolina CPA Report

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Ethically Speaking:

The Impact of Community Service on Independence

by Eddie Dutton, CPA SCACPA member since 1988

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PAs are increasingly being offered opportunities to serve on local business, community, not-for-profit and governmental boards. For the organizations, this provides experienced members who can have a material impact on the financial operations of the organization such as budgeting, reporting and internal control development.

For the CPA, it provides an opportunity to give back to the community for the support it has provided to the CPA as his/her career has developed. The name recognition and networking channels developed can significantly impact the growth and specialization of the CPA’s practice. In addition, it satisfies the CPA’s desire to share his/her knowledge and experience.

So why not accept all the board positions offered to you? Setting aside the potential liability issues that must be evaluated, you should consider the known and potential independence and conflict of interest issues that can arise from this role. Is it truly a full voting board position, or can it be an advisory board or honorary board member role? Does this organization fund or oversee other organizations for which you do attest work? Are the goals and services of the organization in conflict with other organizations for which you or members of your firm serve as board members?

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“Every request is a compliment to your recognition as a professional, but with it comes a duty to review independence and conflict of issue questions.”

Each request must be evaluated on its own facts and circumstances. The AICPA, as well as many state societies, has published interpretations and rulings that can provide assistance in evaluating the impact of these opportunities. In addition, the AICPA has an Ethics Hotline (ethics@aicpa.org or 888-777-7077) that can assist you.

Consider the following scenarios.

What would you do?

Q-1. You have been asked to lend the prestige of your name to a not-for-profit organization that limits their activities to those of a charitable, religious, civic, or similar nature by being named as a director. Would your independence be impaired as to that organization?

Q-2. You are invited to serve as a director or officer of a United Way or similar federated fundraising organization. Certain local charities receive funds from the organization.

Would independence be considered to be impaired with respect to such charities?

A-1. An individual who permits his or her name to be used in this manner would not be considered to impair independence under rule 101[ET section 101.01] provided his or her position is clearly honorary, and he or she cannot vote or otherwise participate in board or management functions. If the individual is named in letterheads and externally circulated materials, he or she must be identified as an honorary director.

Active participation and voting would impair independence.

A-2. Independence would be considered to be impaired if any partner or professional employee of the firm served as a director or officer of the organization and the organization exercised managerial control over the local charities.

Every request is a compliment to your recognition as a professional, but with it comes a duty to review independence and conflict of issue questions. You should assist organizations where your passion lies, but realize serving as a director may impact your practice. n

Eddie Dutton, CPA, is chief quality, compliance and risk officer for Cherry, Bekaert & Holland, LLP. Located in the firm’s Spartanburg office, Eddie serves as chairman of SCACPA’s Behavioral Standards Committee, is a member of the Technical Standards Committee and a past president of the Foothills Chapter.

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CPA Day at the State House

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egulatory and legislative updates topped the agenda at CPA Day at the State House.

More than 225 SCACPA members, new CPAs and state legislators attended the 6th annual event at the Columbia Metropolitan Convention Center in May.

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The program included a Washington Update with Brady King, director of congressional and political affairs with the American Institute of CPAs and a State Legislative Update with Billy Routh of Copper Dome Strategies. Attendees also had an opportunity to get to know the new director of the S.C. Department of Labor Licensing and Regulation, Holly Pisarik.

Other sessions included a State Budget and Panel Discussion with The Honorable Curtis Loftis, South Carolina State Treasurer; Bill Blume, CPA, director of the S.C. Retirement System; and Frank Rainwater, executive director, Board of Economic Advisors. David Costello, CPA, and former CEO of the National Association of State Boards of Accountancy, shared highlights and issues within the profession. The legislative luncheon offered members an opportunity to network with 56 state legislators and strengthen the profession’s voice at the state level.

During the Oath Ceremony, 35 new CPAs were sworn in by Costello.

Friends, family members and fellow CPAs also heard from SCACPA President Michael Putich, Board of Accountancy Chairman Mark Hobbs and Young CPA Cabinet Chair Ashley Thiem. The ceremony was sponsored

by Dixon Hughes Goodman, The Hobbs Group and Elliott Davis, LLC. Following the Oath Ceremony attendees were treated to an ice cream social sponsored by SCACPA’s membership cabinet. n

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p (1) From left: Donny Burkett, Sen. Billy O’Dell, former NASBA CEO David Costello and Tammy Velasquez, Ernst & Young

(2) Rep. Philip Lowe (R-Florence) and Rep. Shannon Erickson (R-Beaufort) speak with newly-appointed LLR Director Holly Pisarik. (3) BOA Chariman Mark Hobbs and former NASBA CEO David Costello (4) New CPA Holly Crown with Rep. Carl Anderson (D-Georgetown) and McRoy Skipper, CPA (5) Sen. Luke Rankin with new CPA Kristy Fahrenbruck and Robbie Clinger (6) Bob Milhous, CPA with Rep. Joseph McEachern, (D-Richland) (7) South Carolina’s newly-licensed CPAs

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Welcome New CPAs October 2011 - March 2012 Monique M. Albarado Amber L. Albert Yoana Allen Christopher E. Allman Mackenzie L. Andrews * Andrew J. Asbury Clark M. Avery Phillip M. Barnhill * Frank C. Bello Erin W. Bigham * Beth A. Blackwell * Hans T. Blake * Lucy W. Brenner * Lauren A. Burgess Allison E. Caldwell Kristi Cameron Lindsay Campbell * Stacey Carfi Pamela Carroll Kening G. Catoe Robert C. Charles * Alice L. Chiu *

Erin Ciechowski * Dr. Michael C. Cipriano * Bruce K. Cole Kimberly L. Colegrove Peter H. Cook * Rodney L. Crampton Courtney J. Crandell * Holly E. Crown * Bernd Deffland Andrew P. Dobson * Adam E. Donevant * Amanda S. Doran Margaret S. Duncan * Byron D. Duren Eyo Effiong * Tiffany M. Ehrhart * Jennifer A. Elder * Jessica L. Ellis Kristy L. Fahrenbruck * Mohamed Fathy Emmett Ferri Patrick M. Fillippa

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Karen A. Fine Sarah L. Flynn * Herbert L. Fritz III Nancy M. Godfrey Roger T. Godwin, Jr. * Brittany L. Gordon Steven M. Graham Lawrence Hammond, Jr. Neekis D. Hammond Brett B. Hancock Kris G. Hetager, II William R. Hickman, Jr. * Derek G. Hipp * Lisa R. Hornyak Lee F. Horton * Travis J. Hoverman * Daniel B. Howard * Natalie K. Howard Thomas M. Husek Rachel B. Hutson * Annie E. Jennings * Kelly N. Jewell *

Christopher A. Jones Matt Joy William D. Kain * Swathi Kakarala Jacquelyn M. Kastner Sandra A. Kemper * Thomas O. Khoury * David W. Kirby * Amanda D. Kirkpatrick Lindsey Kitterman Heather B. Koepenick * Elizabeth B. Kreisel * Robert A. Leichtle, II * Kenneth D. Lewis * Elizabeth M. Lott Richard G. Mace Brandon Maciejewski Elizabeth F. Martin Daniel B. Mauldin Shelley R. McCall Aihua McCall * Justin M. McCourry Cathy McDowell Elizabeth H. Meadows Britt L. Michaelson James P. Miller

J. Evan Mitchell * Alonzo N. Munyeneh Frank J. Natta Rachel R. Nightengale * Mary E. Pace Bradley D. Page Sarita S. Panvelker Christopher Paris * Kevin Patterson Allison B. Pena * Kristin M. Peniston * William D. Pickens, II Joseph B. Poore * Timothy Quinn Erin N. Reece * Elizabeth W. Richardson * Julia E. Ridley Dominic A. Romeo Barrett Sammons * Natalie J. Schembra Katherine S. Schreiner * Jenny F. Secker * Frank P. Sesta Brittany N. Shook * Alyson R. Smith * Caroline Stone

Edward C. Taylor George C. Theodore * Robert T. Theodore * Cedric A. Thibodeaux Andy Thrower Dean E. Tretinik Courtney C. Trich Richard A. Tully Marry Ann D. Twohig * Michael P. Vandre Linwood Vereen, Jr. Mary C. Wallner Kyle Waltz * David M. Ward * Valerie F. Warrington Joseph F. Warther * Jamie B. Weber * Melissa J. Westergard Kyle J. Whitson Duncan W. Wilkes Chase K. Williams Victor L. Williams Patrick C. Wilson Charles M. Wooten* *= SCACPA Member

South S So ou o uth Ca C Car Carolina arro a oli lina CPA CP PA Re PA R Report eport

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Focus on Membership Member News Dr. Hendrikus E. van Bulck, CPA, of the University of South Carolina Sumter was selected as the 2012 Governor’s Professor of the Year. The S.C. Higher Education Foundation, sponsor of the program, honored the recipients at a luncheon at the University of South Carolina.

Charlotte Allen, CPA, CFE, WebsterRogers, Summerville, has earned the Certified Information Technology Professional (CITP) designation.

Mary Ann Prater, CPA, recently celebrated her retirement after 30 years of teaching accounting at Clemson University.

Henry N. Webster, II, CPA, APM, has been promoted to audit manager with the S.C. Office of Regulatory Staff, the state’s utility regulators. He is managing the regulatory audits related to transportation, telecom and new nuclear deployment, including the construction of two nuclear reactors being built in Jenkinsville, S.C. by SCE&G.

Condolences

Tim Baker, CPA, immediate past president will be joining the School of Accounting faculty within the University of South Carolina Moore School of Business starting with the Fall 2012 semester.

His duties will include teaching undergraduate classes including accounting information systems, and working with the mentoring and internship programs.

Cindy Babb Moore, CPA, age 56, died June 11. Born in Union, S.C., Cindy was a graduate of the University of South Carolina. She was employed as CFO with the S.C. Office of Rural Health. A SCACPA member since 1989, Cindy was a member of the AICPA, National Association of Rural Health Clinics, Audit Committee, SCANPO, and LMC Cancer Care Committee. n

Herb Hucks, CPA, died June 13 in Georgetown. A graduate of the University of South Carolina, he opened the first CPA practice in Georgetown in 1973 and has had offices in Pawleys Island, Myrtle Beach and Surfside Beach. He was a member of the AICPA and a lifetime member of SCACPA, joining in 1971.

Welcome New Members ASSOCIATE

CPA CANDIDATE

Marvin L. Bethune, CPA Atlanta, Ga.

Emily P. Buddin Columbia, S.C.

Kathleen L. Gorton, CPA Johns Island, S.C.

J. S. Williams, CPA Greenville, S.C.

Judy Ponds West Columbia, S.C.

Dianne B. Baughman, CPA Columbia, S.C.

Dana A. Thompson, CPA Summerville, S.C.

Stephanie Febo Beaufort, S.C.

Fred T. Grant Jr., CPA Greenville, S.C.

STUDENT

Jessica L. Robinson Charleston, S.C.

Rebekah T. Branham, CPA Kershaw, S.C.

Nichole Watchinski, CPA Lexington, S.C.

Brittany L. Jones North Charleston, S.C.

Jamie M. Hypes, CPA York, S.C.

Amanda L. Shumway Murrells Inlet, S.C.

Harold M. Breazeale, CPA Lexington, S.C.

AFFILIATE

Thomas Martin Jr. Myrtle Beach, S.C.

Kristina S. Junker, CPA Simpsonville, S.C. Thomas R. Larson, CPA Greenville, S.C.

Jessica J. Bosak Greenville, S.C.

John L. Clemmer Jr. Ridgeland, S.C.

Dennis C. McGlory Mt. Pleasant, S.C.

APPLICATIONS FOR REINSTATEMENT ASSOCIATE

Lesley Weston Columbia, S.C.

Justin McCourry, CPA Greer, S.C.

Victoria Broome Spartanburg, S.C.

Stephen N. Froehlich, CPA Sparta, N.J.

Philip E. Williams Columbia, S.C.

Michael W. Mohr, CPA Beaufort, S.C.

Michelle Conroy Blythewood, S.C.

Andrew P. Viehe, CPA Greer, S.C.

Harmony A. Romo, CPA Charleston, S.C.

Robert A. Hodges Mount Pleasant, S.C.

CPA CANDIDATE

Christopher D. Wilson Columbia, S.C.

FELLOW MEMBER

FELLOW - OTHER

Patty B. Resch West Columbia, S.C. Benjamin S. Halligan Columbia, S.C. Ruth Ann B. Shuler Columbia, S.C. Tina Smerdon Greenville, S.C. Mary Beth Langley Greenville, S.C. Jessica Brown Greenville, S.C.

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Arthur W. Baker III Dalzell, S.C. WIlhelmina K. Bingham Charleston, S.C.

Kenya N. Iloka Spartanburg, S.C.

Daniel P. Breazeale Sr., CPA Bruce K. Cole, CPA Lexington, S.C. Forest Acres, S.C.

Susan R. Ledford Spartanburg, S.C.

Steven F. Cruice Jr., CPA Taylors, S.C.

Howard C. Miller Columbia, S.C.

South Carolina CPA Report

William H. Ellis, CPA Columbia, S.C.

Michael D. Glazier, CPA Myrtle Beach, S.C. Kenneth B. Herron, CPA Greer, S.C. Frank E. Pinckney, CPA Lexington, S.C.

Christopher C. Peavy Conway, S.C.

Teresa M. Self, CPA Simpsonville, S.C.

Brandon S. Thomas Duncan, S.C.

Edward D. Sullivan, CPA Columbia, S.C.

FELLOW

R. Patten Watson, CPA Columbia, S.C.

Gary S. Austin, CPA North Myrtle Beach, S.C.

** As of June 28, 2012

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In Honor of Malynda Grimsley

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n April 30, SCACPA Board of Directors Vice Chair Malynda Grimsley lost her battle with cancer. This was Malynda’s second bout with the disease and throughout it all she maintained her commitment to serving SCACPA and its members with enthusiasm and humor.

Malynda joined SCACPA in 1994 and in that time served on over a dozen committees and task forces as well as in leadership roles for the board and the Central Chapter. She was slated to

serve as SCACPA’s board chair in 2014 and most recently served as chair of the Finance Committee, board liaison for the Membership Committee and the Young CPA Leadership Cabinet and a member of the Audit Committee. Malynda was an advocate for the association and the profession as well as a colleague, friend and mentor to many of you. We thought it only fitting to honor Malynda with your tributes.

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Malynda Mills Grimsley was an exceptional CPA. She was as bright and talented as anyone I have worked with in my 33 years of practice. I often challenged her to work more since I thought she had more to offer the clients of our firm.

Malynda had her priorities in order and work-life balance was a concept that was dear to her and one that she shared with us at The Hobbs Group. She was devoted and adored her family and her church community. When I mention family, I am also referring to her extended families - SCACPA, Clemson University Tigers and The Hobbs Group. She will be remembered as a truly accomplished professional who had the integrity and compassion that serves a CPA well in today’s world. May her memory be eternal.

Malynda was a valued member of our professional community. Over the years she volunteered her time to our profession in many different ways. First, as an active chapter volunteer and then as a volunteer at the state level. At the state level, I had the opportunity to work with her on the Audit Committee, Finance Committee and on the Executive Committee. Malynda’s contribution to our professional community brought with it a sense of positive energy and enthusiasm. People enjoyed working with her. I enjoyed working with her. She gave a lot and enjoyed doing it. I miss her good natured spirit and will be forever thankful for having the opportunity to have known her. Thank you Malynda!

Michael Putich, CPA

Mark T. Hobbs, CPA, CFF The Hobbs Group, Columbia

Robinson Grant & Company, PA Hilton Head Island continued on page 30

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I met Malynda at the membership committee meeting in Columbia. She was leaving soon to go to MD Anderson, and I sensed she was a fighter who intended to give it her all and hopeful that tomorrow would be a better day. Although I did not know her well, I admired her attitude both personally and professionally. The world would be a better place if there were more people like her.

her friends was a true testament to what a remarkable person she was. Her influence in my professional and personal life will forever be cherished. We will surely miss her and all that she offered during her precious life.

Carol Williams, CPA Carolyn L. Williams, CPA, LLC, Simpsonville

I first met Malynda at a SCACPA event shortly after she was first diagnosed with cancer. I approached her and asked what form of cancer she had. She was very open when I told her my brother-in-law, Chan had recently been diagnosed with colon cancer.

We immediately formed a unique bond and often talked about their different treatment options. When I saw her at a meeting in May 2011, she asked about Chan. I told her he had stage 4 and was looking for a trial. At the board retreat in 2011, her son Mills and I “raced” on our horses. Mills and I had a great experience and it was the highlight of my trip to be able to share this with Malynda.

Of all the CPAs I’ve met in my seven years at SCACPA, Malynda was one of the most dedicated supporters of the profession and of SCACPA. She used her time, intellect and her innate tenacity to make a difference as a volunteer. She never thought twice about saying “yes,” it was just in her DNA, a get-it-done kind of woman. She accepted many volunteer roles – from chapter leader and committee member to SCACPA board member and more recently board officer. She made a real difference and was on track to be one of the youngest board chairs to serve the association. Malynda was a standout and we miss her a lot.

Erin Hardwick Pate, CEO SCACPA, West Columbia

Accountant, mentor, leader, role model, Clemson Tiger, teacher, mother, sister, daughter, friend are just a few roles that Malynda Grimsley had in life, and no matter what role you may have found her, she always had a way of making you a special part of her life. I had the wonderful pleasure of meeting Malynda when I began working with The Hobbs Group in 2007. Over the years, I discovered that Malynda was a beautiful person through and through.

She had a heart of gold and was one of the most caring and sincere women in my life.

Malynda’s strength was evident, as she always fought for what she wanted and even faced cancer with the will and determination of a warrior. Her dedication to her family, church and Lord, the CPA profession and

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South Carolina CPA Report

Allyson DeHart, CPA The Hobbs Group, Columbia

Penny Lewis, CPA Penny A. Lewis, CPA, Isle of Palms

I had the pleasure of knowing Malynda Grimsley first as Chuck Grimsley’s wife, then as a member of the Columbia Clemson Club who worked at The Hobbs Group, then as a member of SCACPA. My favorite memory was a SCACPA staff outing, a scavenger hunt that took us all over the downtown area.

As part of the scavenger hunt we had to have a picture with a member and a tiger. Our group took off to The Hobbs Group as we knew we’d get two for one. Malynda was still in her office working so she took her diploma off the wall and we huddled around her and took the photo. We were the first team back.

Malynda was such a smart, talented and fun loving person. She had a deep faith and loved her friends and family unconditionally. She will be missed by so many but she has also left a lasting impression on all of us that knew and loved her.

Glenna Osier, SCACPA, Member Services & Peer Review Manager

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I had the pleasure of working with Malynda for eight years. She has got to be one of the most wonderfully hard-headed die hard Clemson fans I have ever known. I teased her relentlessly on many occasions on Tiger football and baseball, and she would return the favor whenever USC would stumble.

The best part of it was, no matter how hard we went at it, it never got serious.

Some folks take the garnet-orange thing very seriously and personally. I will miss having the opportunity to razz her, and one part of me hopes that Clemson will win a national championship for her this year--a small part that is.

Jeff Nates, CPA The Hobbs Group, Columbia

Malynda was a colleague but more importantly a dear friend. I had the pleasure of knowing Malynda for the last 13 years. I started at The Hobbs Group the year before she did and over the years we grew together in our careers to shareholders and personal lives from single, to wives, to first-time mothers. Malynda put her all into everything she did – work, family, church, volunteering and her fight with cancer. She truly was a special person and impacted my life in ways that I believe have made me a better person. I truly miss her and she will forever be in my heart.

Christina Kelly, CPA The Hobbs Group, Columbia

I had the wonderful pleasure of knowing Malynda for the past 13 years while working here at The Hobbs Group, PA. She was a great mentor, coworker, and friend and was a very dedicated mother and wife.

I will be forever grateful to have had her in my life. Malynda took me on my first audit and taught me many things about the CPA profession and about life. Among the memories I have, one stands out the most and makes me laugh every time I think about it. Malynda and I were taking a client out to lunch, she was driving and was pregnant at the time, we got stuck behind this huge truck that was emitting fumes which made her sick and before I knew it she had pulled over, jumped out, threw up and then jumped back in and said “much better, you ready to go?” We all looked at each other and just started laughing. She had such a great outlook on life and was a very strong-willed person which I admired her for. She will forever be part of our firm and a part of my heart. We miss you.

Allison B. Pena, CPA The Hobbs Group, Columbia

for how to live your life. I will miss her wisdom and laughter and very much wish she was still with us.

Sharon Mann, CPA General Information Services Inc., Chapin

During the time I worked with Malynda as a SCACPA board member, there were four things she was very passionate about -God and her church, her family, Clemson University and the members of SCACPA. Malynda spent tireless hours working on our behalf as association members, even while battling the side-effects of chemotherapy. We should count ourselves as blessed to have had such a wonderful person in our midst. Malynda, we will miss you.

Tim Baker, CPA USC Moore School of Business, Columbia

College Education Fund for Mills Grimsley Malynda and I became good friends through our service to the Central Chapter and later on the SCACPA board.

I was always impressed by her dedication to her family, her church, her work and to her fellow CPAs. No matter how tough it got with her illness she was always upbeat and positive, a true role model

When Malynda Grimsley passed away on April 30 she left behind her husband, Chuck, and 11-year-old son, Mills. In an effort to help with the ever increasing cost of college, her employer, The Hobbs Group, is collecting funds that will go directly to the cost of Mills’ college education.

If you would like to make a gift (NOT TAX-DEDUCTIBLE), please make checks payable to The Hobbs Group, PA and mail to: The Hobbs Group, PA Attn: Will Stevens, CPA 1704 Laurel Street Columbia, SC 29201 The funds will be used to establish a Future College Savings Plan for Mills Grimsley. The custodian of the account will be his father, Chuck Grimsley.

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Mark Up and Add Comments to Your PDF Documents

I

ncreasingly, busy professionals receive various types of written content in the form of Portable Document Format (PDF) files.

This content might be in the form of contracts, financial statements, reports, and even manuals associated with Continuing Professional Education (CPE) events. Often, recipients of this content would like to add notes, highlights, comments, and other markups to these PDF documents. In this tip, you will learn how to markup and add comments

by Thomas G. Stephens, Jr., CPA, CITP K2 Enterprises

to PDF documents on various devices, including your computer and tablet.

Marking Up a PDF Document on a Personal Computer If you have downloaded the PDF document onto your PC and if you have Adobe Acrobat Standard, Professional, or Suite installed on the PC, marking up and adding comments to a PDF document is a simple and straightforward process.

Additionally, if the author of the document has enabled this feature

in the document, you can even use Acrobat Reader to mark up and comment on a PDF document.

Assuming the author of the document has not secured the document to prevent such markups, you can edit, markup, and add your comments to a PDF document by opening the document and clicking Comments to open the Comment Pane, as shown in Figure 1.

Figure 1 - Opening the Comment Pane in Adobe Acrobat Pro X

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With the Comments Pane open, you can easily select from the diďŹ&#x20AC;erent types of markups and edits you would like to add to the document. Two of the more popular options are the Highlight text tool and the Add sticky note tool. As shown in Figure 2, upon clicking the Highlight text tool in the Comment Pane, you simply click and drag your mouse over the text you wish to highlight.

Figure 2 - Using the Highlight Text Tool in Acrobat X

Likewise, upon clicking the Add sticky note tool in the Comment Pane, you can add a note to the document, as shown in Figure 3. Once you have added the sticky note, you can minimize its appearance by clicking the minimize button in the upper right corner of the note.

These tools, in addition to the others available in the Commenting Pane, provide users with the ability to markup and comment on a PDF document on their PC just as if the document was paper-based and the user had a yellow highlighter in hand.

Figure 3 - Adding a Comment to a PDF in Acrobat X

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Figure 4 - Opening a PDF Document in Adobe Reader for iPad App

Marking Up a PDF Document on a Tablet Device Apple iPads, Motorola Xooms, and countless other tablet devices are re-shaping how many people collaborate, communicate, and compute. In a growing number of cases, owners of these devices choose to receive and open documents – including PDF documents, such as those described previously – on their tablets. Since users interact with tablets in a much different way than they interact with their PC, many are unaware of their options to markup and comment on PDF documents on their tablets. In this section, we examine some of the many options for doing so, using the iPad as the foundation of the discussion.

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Figure 5 - Editing Toolbar in GoodReader

Of course, before you can markup or comment on a PDF document on your tablet, you must first download and install an appropriate app that provides the functionality. Numerous quality options exist for this task, including Adobe Reader (free), GoodReader for iPad ($4.99), and iAnnotate PDF ($9.99).

For a complete list of the PDF apps available for your tablet, visit your device’s app store and search for “PDF.”

Adobe Reader Our first illustration will use the free Adobe Reader app for the iPad as the demonstration vehicle. If you choose to open a PDF using

this app, your mark up and commenting options are virtually non-existent. As shown in Figure 4, available options are limited to switching between Reading Modes; Forwarding, Printing, and Opening in another app; Searching the PDF; and Adding a Bookmark. Given this dearth of functionality, it is all but a requirement to utilize a more robust app for this task.

GoodReader for iPad One of the more popular PDF tools for the iPad is GoodReader for iPad. GoodReader provides numerous mark up and commenting tools.

As shown in Figure 5, GoodReader docks a toolbar to the right side of the window.

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Figure 6 - Marking Up a Document in GoodReader

Figure 7 – Marking Up a PDF Using iAnnotate PDF

“Since users interact with tablets in a much different way than they interact with their PC, many are unaware of their options to markup and comment on PDF documents on their tablets.”

The GoodReader toolbar contains options for marking up a document, including a comment tool, a highlighter tool, the ability to add free-form drawings and text.

Using these tools, you can markup a document to achieve a result very similar to that obtained when marking up on a PC, as shown in Figure 6.

annotate these documents using highlighting, a pen tool, notes, bookmarks, and other options. iAnnotate PDF also provides a tabbed browser that allows you to work with multiple PDFs simultaneously and the ability to sync your documents to other devices using Dropbox.

Figure 7 provides an example of the iAnnotate PDF user interface with a marked up document.

iAnnotate PDF iAnnotate PDF is a PDF app with a very deep and robust feature set designed to allow you not only to read PDF documents but also to

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ability to edit these documents, nor does it mean you have to print the documents to paper and then markup and comment on the documents using traditional methods. Rather, if you will invest a few minutes to explore some of the electronic options for marking up and editing documents, you will be pleasantly surprised that most, if not all, of your familiar markup tools are available from within your software or app of choice.

Summary The march toward electronic documents continues, but that does not mean that you will give up the

For a video demonstration of this tip, please visit www.tinyurl.com/ k2tips114. n

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Chapter Connections CALENDAR OF EVENTS CATAWBA

COASTAL

Dues: $60, includes discounted registration to CPE seminars and free family/networking event • Summer: Social • August 20: Professional Issues Update (89012RH, 4 hours) • September: Annual Business Meeting • October 25 : Annual Tax Update (CA102512, 8 hours) • Winter: Family/ Networking Event

Dues: $130, includes free registration to CPE seminars (additional registration fee for Tax Update) and free registration to family/ networking event • Fall: Student Night at College of Charleston Meet, greet and network with Accounting Students • September: Annual Business Meeting • September 24: Technology Update (CO092412) with Randy Johnston (6 hours) and Current Tax Update with Jason Sweatt (2 hours) • October 4: Professional Issues Update (89012CH, 4 hours) • November 8: Federal Tax Update with Jack Surgent (CO110812, 8 hours) • November 15: Entertainment Night Social Event (COEN12)

CENTRAL Dues: $50, includes discounted registration to CPE seminars, free Oyster Roast, Family Day and Business Meeting Dinner; invitation to Entertainment Night • August 21: Internal

Controls Design, Evaluation, and Communication for Smaller Entities, Glenn Helms (CE83812, 8 hours) • September 7: Financial Planning Issues for Boomers with Neil Brown (CE83912, 8 hours)

• September 20: Annual Business Meeting Dinner

(CEABM12)

• October 9: Professional Issues Update (4 hours)

• October 26: Annual Oyster Roast & Harvest Hope Food Bank Drive • November 12: Annual Tax Update, William Grooms (CE111212, 8 hours)

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FOOTHILLS Dues: $40, includes discounted registration to CPE seminars and three free social/networking events • September: Student Night • September: Annual Business Meeting • September 27: Professional Issues Update (89012SP, 4 hours) • October 24 : Annual Tax Update (FO102412, 8 hours) • December: Social Event

GRAND STRAND Dues: $125, includes free registration to CPE seminars; Holiday Party and Student Recruitment Fair • August 28: Professional Issues Update (89012MB, 4 hours) • September: Annual Business Meeting • September: Meet & Greet with CCU Accounting Students • November 15: A&A

Update, Mark Hobbs (GR11512A, 8 hours)

• December: Holiday Dinner/Social

PEE DEE Dues: $50, includes discounted registration to CPE and free social events • August 27: Professional Issues Update (89012FL,

4 hours)

• September 19: Annual Business Meeting • October 26: Annual Tax Update (PE102612,

8 hours)

• November: Chapter/ Student Bowling Night

PIEDMONT Dues: $50, includes registration for CPE at a nominal fee and free holiday luncheon • September 28: Professional Issues Update (4 hours) • September 28: Annual Business Meeting • 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 • September: Annual Business Meeting • October: Professional’s Night • October 5: Professional Issues Update (4 hours) • October 5: CPE (4 hours) to follow PIU • October 29: Annual Tax Update (SE102912,

8 hours)

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Focus On CPE

2012 Fall Conferences You Don’t Want to Miss!

OCTOBER 18, 2012 Women in Leadership Conference “Unlocking Potential”

UNLOCKING POTENTIAL An Expanded Learning Experience

Acquire the knowledge and tools you need to unlock your potential at the 2012 Women in Leadership Conference. Designed for women, Women In Leadership Conference this innovative program features CPA C PA P A dynamic speakers that will help you transform your life and your career. This conference features the 2012 Women to Watch Awards Luncheon.

October 18, 2012 Embassy Suites Columbia, South Carolina

explo

re ex chan

ge e xcel

South Carolina

X-

South Carolina

October 23, 2012 South Carolina Association of CPAs Headquarters West Columbia, South Carolina

South Carolina

Do you have the X factor, that special quality or skill that makes you stand out and ensures you thrive in your profession? Let SCACPA help you fine tune your X factor at the 2012 CPA Summit. During this fast-paced, information packed program eXplore the opportunities and resources available to help you shine in your career and eXchange knowledge with your peers and leaders in the profession. Variety is the key to any successful learning experience. It’s what motivates and excites. With four educational tracks to choose from, thought-provoking leaders, innovative session formats, and networking events, the 2012 Summit will help you eXcel.

Governmental entities are subject to very complex accounting and disclosure requirements. In this environment, governmental Governmental Bonus Workshop executives and their auditors CPA C PA P A must focus on the transparency in financial reporting. This workshop provides an update of the issues at the forefront of industry to assist the auditor in assessing risk. Register today to make sure you stay in the loop!

N November b 13 13, 2012 Columbia Conference Center Columbia, South Carolina

In this turbulent economy nothing can be left to chance, especially when preparing for your financial future. The 2012 Personal Financial Personal Pers sona all Fi Financial inan nciall Planning l Conference Planning Conference is designed to CPA ensure you have the tools you need to prepare for your future – and your clients. Learn the latest strategies and techniques that will enable you to excel as a trusted advisor and help your clients succeed in attaining their financial goals.

NOVEMBER 1-2, 2012 CPA Annual Summit in conjunction with the Tax & Technology Conferences -- “eXplore. eXchange. eXcel.”

NOVEMBER 13, 2012 Governmental Bonus Workshop “Stay in the Loop”

STAY IN THE LOOP An Expanded Learning Experience

OCTOBER 23, 2012 Personal Financial Planning Conference “Leave Nothing to Chance”

LEAVE NOTHING TO CHANCE

DECEMBER 6-7, 2012 Accounting & Auditing Conference “Clarity – Complexity Simplified”

Clarity – Complexity Simplified An Expanded Learning Experience

With the rapid and complex changes in today’s accounting profession, it is difficult to keep up with the Accounting & Auditing Conference pace. The 2012 Accounting & CPA Auditing Conference will update you on the latest changes and break down complex issues to ensure you have clarity of the latest developments and projects. You will leave the conference with a clear understanding of what you need to do next to ensure you provide the best services to your clients.

D December b 6-7, 2012 Charleston Marriott Hotel Charleston, South Carolina

South Carolina

For more details on each of these events or to register securely online visit www.scacpa.org/conferences (888) 557-4814 | www.scacpa.org

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Focus On CPE

Courses You Don’t Want to Miss!

SEPTEMBER 19 – Greenville New! Financial Reporting: Turn Information into Action! (84612) Financial managers at all levels produce volumes of reports every year. Unfortunately, not all of these reports generate an equivalent degree of action! It is a fundamental fact of life: information does not equate to action.

Financial professionals must learn how to plan, process and present effective reports and presentations.

service organization reports, SOC1SM, SOC2SM and SOC3SM have now been developed to replace the old SAS 70 reporting. This course will provide you with a comprehensive review and application of the new authoritative standards and other guidance for dealing with service organizations.

OCTOBER 16 – West Columbia New! A Complete Guide to the New 2011 Yellow Book (85212)

SEPTEMBER 28 – Charleston New! Conservation Easements: What, Why and How Co-sponsored by the Lowcountry Open Land Trust and the SC Association of CPAs (89012) For professional advisors, the many benefits of conservation easements provide valuable financial and estate planning opportunities. An in-depth understanding of conservation easements will allow you to more effectively serve the growing segment of conservation-minded clients who are concerned about the long-term status of their lands for conservation or legacy purposes.

OCTOBER 15 – West Columbia New! Service Organization Reporting Frameworks: Life After SAS 70 (89112) In today's global business environment, outsourcing has become a standard operating procedure for many companies both large and small. Payroll processing, healthcare administration and now cloud computing are just a few examples of core business processes that today's entities are outsourcing to service organizations. Previously, the risks of outsourcing were dealt with under SAS No. 70, Service Organizations. However, three new

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In December 2011, the GAO issued an omnibus revision to the Yellow Book.

The new Yellow Book will be effective for financial audits and attestation engagements for periods ending on or after December 15, 2012. The new Yellow Book features a conceptual framework approach to independence, updated financial auditing standards, clarified attestation standards, and more. The purpose of this course is to increase your confidence and proficiency in performing Yellow Book engagements through a thorough understanding of the new standards.

The course materials utilize a highly illustrative format to increase concept comprehension and retention.

OCTOBER 17 – West Columbia The AICPA's Auditing Standards Board Clarity Project is no longer on the distant horizon -- it's here! Find out what the first comprehensive rewrite of the SASs since 1972 entails and its implications on your auditing practice. Prepare now for the clarified SASs that generally will be effective for audits of financial statements for periods ending on or after December 15, 2012. The course materials utilize a highly illustrative format to increase concept comprehension and retention.

NOVEMBER 26 – West Columbia New! Effective Tax Strategies-The Benefits and Hurdles (86712) Most taxpayers want to minimize their overall tax burden. This course will address a variety of specific tax planning strategies used by individuals and businesses, from the simple to the very sophisticated. To help them accomplish their goal, tax planners also need to know a number of things including: (1) the rules provided by the Internal Revenue Code and the tax regulations; (2) judicial doctrines and prior court decisions; (3) the IRS's position on various tax issues; (4) expected changes in tax legislation; (5) the taxpayer's own financial position. This course will address the hurdles that must be overcome, including those imposed by the IRS and courts.

Learning Cafes SCACPA has partnered with the SC Bar to host educational opportunities mid-day across the state which offer lunch, networking, and learning. What a great combination at a convenient time of day. Make plans to join us at one of the following locations: t $PSQPSBUF 4USVDUVSFT September – Greenville t #VTJOFTT 7BMVBUJPOT October – Myrtle Beach t 5BYBCJMJUZ PG 4FUUMFNFOUT and Settlement Structures November – Columbia Programs are designed for certified public accountants and attorneys, and offer 1-2 hours of CPE and CLE credit.

For more details and to register visit www.scacpa.org/learningcafes.

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I SEE IT! The Clarified Auditing Standards

by Charlie Blanton, CPA Surgent McCoy CPE, LLC

H

ave you ever gazed at the stars and wondered what’s out there, and if something is out there, will it ever visit us? Well, this may not be what you or the Mayans were thinking about, but in December, the auditing world will be invaded by a large mass of new clarified auditing standards. While there is no need to panic, in fact, most of your neighbors will not even know this is occurring, there is a need for all auditors to prepare for this once in an auditing career-type event. As auditors prepare for the new clarified auditing standards, they will need to consider the following essential points.

1. THIS IS NOT THE FIRST TIME THAT THE AUDITING STANDARDS HAVE BEEN RESET AND WE SURVIVED THE LAST ONE. The auditing world encountered a

“Well, this may not be what you or the Mayans were thinking about, but in December, the auditing world will be invaded by a large mass of new clarified auditing standards.” similar event in 1972 with the issuance of Statement on Auditing Standards (SAS) No. 1, Codification of Auditing Standards and Procedures. SAS No. 1 consolidated the prior Statements on Auditing Procedures and more or less reset U.S. generally accepted auditing standards (GAAS) and set a starting point for the auditing standards that we have been following for the past forty years. A key difference between the old SAS No. 1 and the new clarified

auditing standards is that this time the AICPA Auditing Standards Board (ASB) has elected to reset GAAS in a series of standards instead of one SAS. Prior to 2011, the ASB issued four clarified auditing standards consisting of SAS No. 117, Compliance Audits (2009); SAS No. 118, Other Information in Documents Containing Audited Financial Statements (2010); SAS No. 119, Supplementary Information in Relation to the Financial Statements as a Whole (2010); and SAS No. 120, Required Supplementary Information (2010). In 2011, the ASB issued four additional clarified auditing standards consisting of SAS No. 122, Clarification and Recodification; SAS No. 123, Omnibus Statement on Auditing Standards – 2011; SAS No. 124, Financial Statements Prepared in Accordance With a Financial Reporting Framework Generally Accepted in Another Country; and SAS No. 125, Alert That Restricts the Use of continued on page 40

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audits of financial statements for periods ending on or after December 15, 2012. For auditors performing financial audits in accordance with the Yellow Book, the 2011 Yellow Book revision will also become effective for periods ending on or after December 15, 2012.

CPA “When faced with a hurtling mass of new standards the audit team needs a superhero.

You are that superhero! “ the Auditor’s Written Communication. It should be noted that SAS No. 121, Revised Applicability of Statement on Auditing Standards No. 100, Interim Financial Information, was not issued as a clarified standard and will be superseded by SAS No. 122.

2. SOME OF THE CLARIFIED STANDARDS HAVE ALREADY INVADED THE AUDIT PROCESS. Because the ASB felt that SAS Nos. 117, 118, 119, and 120 were needed to address pressing issues in practice, these standards were issued with earlier effective dates. SAS No. 117 became effective for compliance audits for fiscal periods ending on or after June 15, 2010. SAS Nos. 118, 119, and 120 all became effective for audits of financial statements for periods beginning on or after December 15, 2010. These four standards related to compliance auditing and supplemental information. If SAS Nos. 117, 118, 119, and 120 applied to your audits, it is important to remember that you have already successfully implemented several clarified standards as you prepare for the main invasion of the clarified standards. After all, once you have leapt over one building in a single bound, how much harder can the other buildings be?

3. THE MAIN INVASION IS OCCURRING IN DECEMBER 2012. Consisting of approximately 800 pages, SAS No. 122 is by far the most significant and the largest of the clarified standards. SAS No. 122 contains requirements that range from preconditions for accepting an audit engagement to audit reporting and subsequent events. SAS Nos. 122, 123, 124, and 125 all generally become effective for

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4. TWO CRITICAL CHALLENGES. In implementing SAS Nos. 122, 123, 124, and 125 auditors will face two critical challenges. The first challenge involves becoming accustomed to the different look, language, and location of the clarified standards.

The clarified standards have a different look from the prior standards in that each standard contains five sections (i.e., the introduction, objective, definitions, requirements, and application and other explanatory material sections). The clarified standards employ some different language from that utilized in the prior standards (e.g., emphasis-of-matter and other-matter paragraphs have replaced explanatory paragraphs). The clarified standards have relocated and retitled the former AU section numbers to align to the International Standards on Auditing (e.g., the majority of the guidance contained in the former AU 330, The Confirmation Process is now found in AU-C 505, External Confirmations).

The second critical challenge in implementing SAS Nos. 122, 123, 124, and 125 is incorporating all of the actual changes that have occurred in the standards. The clarified standards contain changes over and above the look, language, and location of the standards. Some of the changes contained in the clarified standards are significant and will affect everyone (e.g., under the clarified standards the audit reports will incorporate new headings, new paragraphs, and discussions of topics like responsibility for internal control). Other changes contained in the clarified standards are significant and will not affect everyone (e.g., for auditors involved in audits of group financial statements AU-C 600, Special Considerations-Audits of Group Financial Statements [Including the Work of Component Auditors] is significantly different from the former AU 543, Part of Audit Performed by Other Independent Auditors). The clarified standards also contain changes that while perhaps not that significant, nevertheless are new requirements (e.g., AU 325, Communicating Internal Control Related Matters Identified in an Audit allowed auditors to communicate internal control deficiencies that were not significant deficiencies or material weakness to management. AU-C 265, Communicating Internal Control Related Matters Identified in an Audit, requires the auditor to communicate to management such

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“Consisting of approximately 800 pages, SAS No. 122 is by far the most significant and the largest of the clarified standards.

SAS No. 122 contains requirements that range from preconditions for accepting an audit engagement to audit reporting and subsequent events.” other deficiencies in internal control that have not been communicated to management by other parties and that, in the auditor’s professional judgment, are of sufficient importance to merit management’s attention.)

5. TEN STEPS TO BECOMING A CLARIFIED AUDITING STANDARDS SUPERHERO. When faced with a hurtling mass of new standards the audit team needs a superhero. You are that superhero! The great news is that you do not have wait for a meteor from space to land in your backyard to provide you with incredible powers of insight into the clarified standards. The ability to become a clarified auditing standards superhero already exists within you provided you allow for some preparation and training.

7. Use your ninja-like powers of concentration to focus on changes that are very apparent to others like report wording and remember that peer reviewers have similar powers.

8. Let your clients know that they are going to see some changes in items like the engagement letter, some of your audit procedures, and the report wording.

9. Stay informed of additional developments related to the clarified standards.

10. Remember that a superhero never gives up and always wins! The good news is that, if the past is any indicator of the future, it will be 2052 before we have another resetting of GAAS! n

Charlie Blanton, CPA is the Director of Governmental and Nonprofit Product Development for Surgent McCoy CPE, LLC in Devon, PA. He is the author of several CPE courses including, I See It! Bringing into Focus the New Clarified Auditing Standards and Latest Developments in Government and Nonprofit Accounting and Auditing 2012.

Charlie can be contacted at blantonc@cpenow.com

TRANSFORMING THE GOVERNMENTAL LANDSCAPE

Ten steps to becoming a clarified auditing standards superhero include: 1. Read the clarified standards and any and all commentary about them.

2. Make sure you are comfortable with the new look, language, and location of the clarified standards.

3. Think about your particular clients and focus on the changes that are going to have the biggest impact on those clients.

COPPER DOME S T R A T E G I E S, L L C A Subsidiary of Haynsworth Sinkler Boyd, P.A.

4. Make sure that your firm’s audit publications, programs, checklists, documentation tools, and training fully incorporate the clarified standards.

5. Remember that all superheroes have super friends so converse and network with other auditors to determine the obstacles they are fighting with the clarified standards and how they are overcoming them.

Carl Blackstone Kim Kent

Billy Routh Jeff Thordahl

www.HSBCopperDome.com

6. Take a CPE course just on the clarified standards.

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Classified

ADVERTISER INDEX

LOCAL FOCUS - PERSONAL SERVICE The focus of our firm is only on CPA and Accounting practices in the Carolina’s and Southern Virginia. This allows us The Carolinas’ Resource the time to understand local issues and for Accounting Practice Sales opportunities and enables us to be close enough to provide personal service. Our purpose is to help owners decide if and when they should sell or transition out of their practice. As part of the process, we help them develop and implement a plan to maximize the firm’s value and address any concerns about transitioning to a new owner. This allows us to offer 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.

I represent a long established, highly reputable, CPA firm seeking to acquire two accounting practices by 12/31/2012. Fair Price will be paid on good terms including 6-12 months employment post acquisition. Contact me for a confidential and prompt analysis. Jackson L. Cobb CCIM, 803-530-3665, jcobb@sc.rr.com

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SELLING? Contact Brannon Poe with Poe Group Advisors, an affiliate of Accounting Practice Sales-North America’s Leader in Practice Sales. To learn more, please visit www.PoeGroupAdvisors.com or contact us at info@PoeGroupAdvisors. com or by calling 1.888.246.0974.

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E Sales (continued from 13)

to click “file” separately for each return whose payment comes from a different account. You will get a confirmation number for each filed separately, but when several are filed together you will only get one confirmation number.

10. Currently, there are too many separate screens, drop down menus and check points to call this system efficient. A request has been made that choices be listed on the screen so you can choose without having to click on a drop down menu. The same screen should also be populated with information based on the choice made. That would eliminate the need to go back and forth if an incorrect choice is inadvertently made. There are several opportunities for this to be incorporated into the system.

11. It was requested that the process for filing a zero sales return be as easy as clicking a button on the first screen where you input the client’s sales tax number. It should skip all other inputting screens and go straight to the shopping cart to be filed.n South Carolina CPA Report

ADP accountant.ADP.com Page 27

American Pensions www.ampen.com Inside Front Cover

READY TO RETIRE?

42

Accounting Practice Sales www.accountingpracticesales.com Inside Back Cover

John F. Hamilton, CPA JOHNFH@aol.com Page 36

Get Social with SCACPA on Facebook, Twitter, LinkedIn and Wordpress!

Visit www.scacpa.org/socialmedia

LLR Director (continued from 16)

about their thoughts on the agency. I have attended several board meetings and plan to attend at least one for each of the boards.

The thing I hear most often is that the agency and how it does business is a mystery. It is my intent to let the sun shine in on all of our processes. Two things I plan to do quickly are hold training for new board members, and reduce our processes in writing from start to finish and publish them on our website.

What led you to choose law as a career path?

What do you enjoy most about what you do?

Since childhood, I have wanted to be a lawyer. I enjoy practicing law because I find it intellectually challenging, and it allows me to serve others. n (888) 557-4814 | www.scacpa.org

South Carolina Association of CPAs 570 Chris Drive, West Columbia, SC 29169

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

SMILES on a CLOUDY day