CPA Report - Fourth Quarter 2012

Fou r th Edi tion 2 0 1 2

CPA Report South Carolina Association of Certified Public Accountants

Navigating the Changing Health Care Environment PLUS...

Health Care Act Opens Up Opportunities

Stretch With Us in 2013

Understanding the New S.C. Ethics Requirement

Charleston

2430 Mall Drive, Suite 360

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843-884-3912

Charleston, SC 29406

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South Carolina CPA Report

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CPA Report South Carolina Association of CPAs

South Carolina Association of Certified Public Accountants Magazine Volume 42, Fourth Edition 2012 Officers Michael R. Putich, CPA, Chair Sharon E. Mann, CPA, Chair-elect J. Bratton Fennell, CPA, Vice Chair Robert M. Tilton, 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 W. Ashley Thiem, CPA Beth T. Zamorski, CPA CHIEF EXECUTIVE OFFICER Erin Hardwick Pate, CAE MANAGING EDITOR Maureen Taylor GRAPHIC DESIGNER Lisa S. McGee Contributing writers Keith J. Benson, MHA, Ph.D. Reva Brennan, MPA, CAE, IOM Chip Hardy, AIF Chip Hunt, AIF Michael Matthews, Ph.D., MHA Erin Hardwick Pate, CAE Mark Riley Laurel Suggs, RHU Maureen Taylor Erick Wells 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

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Special Section: Navigating the Changing Health Care Environment 13 16 16 17 19

CPAs Will Play Vital Role in Changing Health Care Landscape Impact of Health Care Reform Disability, Long Term Care and the Affordable Care Act Health Care Act Opens Up Opportunities for CPAs in Business and Industry Member Profile: Challenges and Rewards of Health Care Industry

In This Issue 20 Stretch With Us When You Renew Your Membership!

22 SCACPA Educational Fund Awards Scholarships to 18 Students 23 Thank You to Our Educational Fund Donors 24 408(b)(2) Fee Disclosure Regulations…

26 SCACPA Members Named Women to Watch 27 Emerging Leaders Step It Up During Summer Conference 27 Benefits Continue to Grow for Young CPAs 32 AICPA Developing New Financial Reporting Framework for Small and Medium-Sized Entities 34 Understanding the New South Carolina Ethics Requirement

In Every Issue 5 6 9 29

From the Chair Association News On Your Behalf Member News

30 31 35 38

Welcome New Members 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. South Carolina CPA Report

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From the Chair “Regardless of your career choice, the CPA credential binds us all to some common qualities including objectivity, competence and integrity.”

A

s I make my way around the state with this year’s Professional Issues Update (PIU) series, I am reminded of the many career paths from which a CPA can choose.

Public accounting provides a range of opportunities, from large international firms to small local firms, even one man, or woman, shops. Within a public accounting firm you can work in audit, tax, small business, business valuations, management consulting, the list goes on. The same holds true for business and industry, where you can work with companies of any size in diverse areas such as financial accounting and reporting, management accounting and financial analysis. In government, you can choose to work at the federal, state or local level. There are even diverse opportunities

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in non-profit organizations and education.

Regardless of your career choice, the CPA credential binds us all to some common qualities including objectivity, competence and integrity. Our profession brings with it a responsibility to understand that which we practice and to conduct ourselves in an ethical manner. As we strive to stay up to date with all the changes in financial reporting standards and tax laws, we must remember that we are all trusted advisors regardless of our area of practice.

While we, as CPAs, are busy carrying out our responsibilities, SCACPA is also busy supporting each of its members, regardless of career choice, by offering programs and services that protect and advance the profession. During its fall retreat, the SCACPA Board of Directors, along

Michael Putich, CPA 2012 SCACPA Chair SCACPA member since 2000

with chapter leadership, met to further discuss the association’s strategic plan that was created in the fall of 2010. In an attempt to remain relevant, the plan, like the world in which we live, changes to meet the needs of its members.

As a result of the board retreat and the 2011 member research project, the board is currently examining the following: 1. Who is SCACPA’s primary target audience? 2. What are the association’s core services and how do they add value? 3. What are SCACPA’s current and longterm technology needs? 4. How can SCACPA’s internal structure change to be more effective in its role in supporting the profession? Further discussion will continue at the board’s October meeting and decisions will be made when, and as, appropriate.

As CPAs you play a vital role in understanding change and making sure it is implemented correctly, regardless of area of practice. As your professional home, SCACPA will continue to strive to provide the resources and guidance you need to be successful in your chosen career path.n

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Hardwick Named President of CPA SEA SCACPA’s Chief Executive Officer Erin Hardwick Pate has been named president of the nationwide CPA State Executives Association.

“It’s a tremendous honor to serve as president of CPA SEA. Having served as a CPA SEA board member and now as president, I have access to connections and resources that have helped SCACPA move forward,” Hardwick said.

CPA SEA is an association of all CPA society executives that provides a forum for communicating across state lines. Members share information, resources and best practices on professional issues to better serve CPAs. CPA SEA also advocates in the interest of state societies when warranted.

SCACPA Welcomes New Staff Members SCACPA recently welcomed two new staff members to the team. Allison Cowherd is the new digital marketing coordinator and Jessica Ando will serve as office and member services coordinator.

Allison is responsible for providing electronic marketing support including digital marketing and social media and serving as SCACPA’s webmaster, staff photographer and videographer. She also serves as liaison to the Awards Committee. Prior to joining SCACPA, Allison worked at the Sisters of Charity Foundation of South Carolina in Columbia. She currently serves as a member of the Harvest Hope Food Bank Young Professional’s Advisory Board. Allison is a graduate of the University of South Carolina where she earned a bachelor’s in journalism. Allison and her husband, Jon, have two sons, Parker and Owen, and a boxer puppy, Brice. Her hobbies include photography, traveling and cheering for the University of South Carolina Gamecocks.

As office and member services coordinator, Jessica is the first point of contact for SCACPA members, non-members, vendors and guests in the office. She processes member information and renewals, assists staff members with special projects and oversees office operations. Jessica previously served as executive assistant for the Streamlined Sales Tax Governing Board in Nashville, Tenn. She is a graduate of the University of North Carolina-Wilmington where she earned a bachelor’s in English. In her spare time, Jessica enjoys reading, gardening, cooking and traveling. She and her husband, Tony, have a 5-year-old son, also named Tony.

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South Carolina CPA Report

Beck Joins AICPA Volunteers Joe Beck, CPA, of Jones Pounder in Charleston, has been appointed to AICPA’s Accounting Review & Services Committee for the 2012-13 volunteer year. The Accounting and Review Services Committee is an AICPA’s senior committee for compilations or reviews and is designated to issue pronouncements in connection with the unaudited financial statements or other unaudited financial information of nonpublic entities.

Beck joins the following SCACPA members in serving on AICPA committees: Ellen K. Adkins, CPA, WebsterRogers LLP, Summerville - Technical Standards Subcommittee Amanda S. Colgate, CPA, Godshall & Colgate, LLC, Columbia - Young CPA Committee Eddie Dutton, CPA, Cherry Bekaert & Holland, LLP, Spartanburg - Uniform Accountancy Act Committee Pat McDermott, CPA, The Beach Company, Charleston - AICPA Council Todd R. Mitchell, CPA, CEO Solutions, LLC, Greer - Women’s Initiatives Executive Committee Robert M. Moise, CPA, WebsterRogers LLP, Charleston – IRS Practice & Procedures Committee Michael R. Putich, CPA, Robinson Grant & Company, PA, Hilton Head Island – Designated Council Representative David M. Rainey, CPA, Dixon Hughes Goodman, LLP, Greenville – Partnership Taxation Technical Resource Panel Victor C. Webster, CPA, WebsterRogers LLP, Florence – Nominations Committee, Practice Advisory Group Note: List does not contain task forces or the Virtual Grassroot Panel (888) 557-4814 | www.scacpa.org

Promoting the Profession CPAs with Moore Beauston and Woodham, LLP volunteered their time in July to serve as auditors for the Miss South Carolina and Miss South Carolina Teen pageants at the Township Auditorium. The CPAs represented four of the firm’s locations and served as auditors for the entire pageant, which lasted four nights. Participating were Robbie Ellison of the North Charleston office, Greg Alexander of the Hartsville office, Steven Rau of the Greenville office, Chanda Horne, Michael Targia, Kenneth Newhouse, Doug Ryan, Chris Mauney and Charlie Wooten, all with the West Columbia office.

In September, Amy Larkin of Blue Cross Blue Shield in Columbia served as auditor for the Miss Chesnee and Miss Spirit of Chesnee pageants.

All Miss South Carolina and Miss South Carolina Teen pageants are required to use CPAs as auditors.

CL I CK

Interested In Volunteering?

Visit www.scacpa.org/ volunteerconnections.

For more information contact mtaylor@scacpa.org

Pictured right: Greg Alexander (at left) and Ken Newhouse Pictured below: Moore Beauston and Woodham CPAs (from left) Charlie Wooten, Chris Mauney, Robbie Ellison and Mike Targia at the Miss South Carolina and Miss South Carolina Teen pageants.

SCACPA

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 Karen M. Hancock, CPA Finance Director Ext. 108, khancock@scacpa.org Maureen Taylor Member Services Manager Ext. 105, mtaylor@scacpa.org Glenna P. Osier Peer Review and Member Services Manager Ext. 107, gosier@scacpa.org April C. Cox Education Manager Ext. 110, acox@scacpa.org Sandra P. Oxner, CMP, CMMM Chapter & Special Events Manager Ext. 112, soxner@scacpa.org Allison Cowherd Digital Marketing Coordinator Ext. 106, acowherd@scacpa.org Jessica Ando Office and Member Services Coordinator Ext. 100, jando@scacpa.org

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

South Carolina CPA Report

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We Need You Become a Key Person Contact The South Carolina Legislature continually considers legislation that impacts the CPA profession and your clients. As a Key Person Contact (KPC) for SCACPA, you can play a vital role in the association’s governmental relations efforts.

Consider serving as a KPC for your legislator. As a KPC, you can help legislators understand the impact a given piece of legislation can have on South Carolina, and more importantly, on that legislator's district. SCACPA provides the tools and in turn you will be asked to relay messages on legislation as needed. In this election year it’s more important than ever to build this grassroots effort. Volunteer today.

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For more information or to sign up as a KPC visit www.scacpa.org/KPC

Clarified Standards Transition Required CPAs have fewer than 100 days to prepare for the Dec. 15, 2012 transition to the clarified auditing standards effective for calendar year 2012 audits. New requirements may affect interim testing and other fieldwork and some mandate changes to the report. The AICPA has developed the Improving the Clarity of Auditing Standards webpage with a number of free resources to help CPAs prepare for the Dec. 15 deadline.

Visit www.aicpa.org to learn more.

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South Carolina CPA Report

Blumer Named Top 100 Most Influential People in Accounting Jason Blumer, CPA, CITP, CFE, has been named one of the Top 100 Most Influential People in Accounting

by Accounting Today. A SCACPA member since 1999, Jason is the chief innovation officer and founder of Blumer & Associates, CPAs, PC in Greenville.

"I'm pumped to be included in the Top 100 Most Influential in the Accounting Industry! I didn't expect to receive this honor, but I'm thankful,” Blumer said. “I know our profession is one of the most creative and innovative professions around, and we are on a mission to change our customers lives, as well as the CPA community.”

“I'm glad to be doing this through our CPA Network, THRIVEal. We are seeing a new generation of CPA leadership rise to the challenge of solving new business problems. It's exciting to see what the future may hold!" he added.

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To learn more about THRIVEal visit http://THRIVEal.com

S.C. Board of Accountancy Announces Officers, New Members Two SCACPA members have been named as officers for the South Carolina Board of Accountancy. Donny Burkett, CPA, with Burkett, Burkett & Burkett, CPA, PA in West Columbia has been named chair. Mark S. Crocker, CPA, with Dixon Hughes Goodman, LLP in Greenville will serve as vice chair. Gary Forte, CIMA, CIMC is the secretary. Forte is senior vice president for investments at UBS Wealth Management in Greenville.

The board also welcomed two new members recently: Walter C. (Trey) Kannaday, JD, CPA, CIA and Kristian M. Cross, Esq. will serve four-year terms beginning June 30, 2012. Kannaday is a recruiting manager with Robert Half Finance and Accounting. Cross is an associate with Collins & Lacy practicing in workers compensation and retail, hospitality and entertainment law.

Correction

In the Q3 issue of the CPA Report, Key Person Contact Robbie Ellison was incorrectly listed as Ronnie Ellison. We apologize for the error.

(888) 557-4814 | www.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.

AUGUST 2012 SCACPA BOARD MEETING

Board members of your professional association set the direction for the organization and determine the priorities for serving members.

SCACPA’s 20-member board meets four times a year, typically for a half-day, to address the issues at hand. The August board meeting is a longer, more intense board meeting that incorporates planning for the future.

This year the board had a fair amount of homework to prepare for the discussions at the August meeting.

They were charged with analyzing the results of SCACPA’s recent member survey and reading Race for Relevance, a thought-provoking book on the future of membershipbased associations. Armed with this information, board members engaged in forward-thinking discussions about what SCACPA should be focused on to better serve members now and in the future. Four workgroups are currently refining proposals discussed at the planning meeting.

As part of the planning meeting, the SCACPA board holds an official board meeting in order

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to take care of business. One of the most important items of business was filling the vice chair position left vacant by the death of Malynda Grimsley earlier this year. According to the association bylaws, the board of directors can fill vacant seats as needed. Therefore, the following appointments were approved by the board at its August meeting: • Bratton Fennell, CPA, moved from the position of secretary– treasurer to vice chair • Robert Tilton, CPA, moved from a board member at-large to secretary-treasurer • Ashley Thiem, CPA, is a new board member appointed to serve out the remainder of Robert Tilton’s board seat.

Ashley serves as co-president for the local firm Thiem & McCutcheon, CPAs, PA in Charleston.

NOMINATIONS FOR SCACPA BOARD SERVICE

SCACPA’s 2012 Nominating Committee, chaired by Patrick McDermott, CPA, developed a slate of new or renewing board members, which members will have the chance to vote on at the association’s annual business meeting at 7:45 a.m. on Thursday, Nov. 1 during the CPA Summit.

Should they be approved by the membership, they will take office July 1, 2013 under SCACPA’s new fiscal/program year (see page 11).

The slate is as follows: • Chair: Sharon Mann, CPA. Sharon serves as the chief financial officer for General Information Services in Chapin. As the 2012 chairelect, she will automatically ascend on July 1, 2013 to the position of chair of the board.

p Pictured above: SCACPA Board Chair Michael Putich opens the strategic planning meeting. William Barefoot (at left) and Eddie Brown hard at work.

Members will vote Nov. 1 on the following nominees: • Chair-Elect: Bratton Fennell, CPA. Bratton serves as the chief financial officer of Burroughs and Chapin in Myrtle Beach.

• Vice-Chair: Robert Tilton, CPA. Robert serves as an audit manager at WebsterRogers in Florence.

• Secretary/Treasurer: Penny Lewis, CPA. Penny is a sole practitioner and her practice is on the Isle of Palms.

• At-large seat: Jason Sweatt, CPA. Jason serves as senior manager, tax quality and risk management for the global firm Ernst & Young in Greenville.

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• At-large: Ken Newhouse, CPA. Ken serves as senior accountant for the local firm Moore Beauston Woodham in Columbia.

• At-large: James McIlrath, CPA. James is a principal for the local firm Duncan Farmer Munden McIlrath in Myrtle Beach.

• New chapter board representative: The Central Chapter has elected Lesley Kelly, CPA, a partner with the local firm of McGregor & Company in Columbia.

GOVERNMENTAL ADVOCACY AGENDA 2013

In 2011, members told us that advocacy for the individual CPA and the profession is one of the most important roles the association plays.

The more effective SCACPA is in stopping burdensome proposals while advancing issues of benefit to the profession, the more value you see from your membership.

SCACPA’s Legislative and Advocacy Committee along with related task forces have surfaced issues and concerns that are forming the base of the legislative agenda in 2013. The issues of focus for the year are: Autonomy For the Board of Accountancy. The profession’s regulator in the state – the S.C. Board of Accountancy (BOA) – plays a vital role in not only protecting the public, but also protecting the profession. When the BOA is effectively doing its job, the profession’s credibility and reliability remain strong. The structure under which the BOA operates now is a pooled environment where resources, staff and investigators are shared with other professional and trade regulating boards. Did you know that your license fees go into a general fund and the S.C. Department of Labor Licensing and Regulation then determines how these funds are spent to serve the

some 40 regulating boards under their jurisdiction? All this is to say, it’s time for a change, time to help the BOA gain a level of autonomy over its resources and its ability to achieve its mission. SCACPA will be working on legislation to assist in this effort.

Exempting CPAs from requirement to be a private investigator. A state law now requires businesses and individuals who perform forensictype services to become licensed as a private investigator, including the types of services that many of our members deliver. While the law has not yet been enforced among the CPA community, it is important to explicitly exempt CPAs from this requirement. SCACPA will work on legislation that will do just that.

Federal-state tax conformity.

Members on the tax side of the profession make their case every year that having certainty of the tax rules early in the calendar year is important to completing returns accurately. Until the legislature passes the bill each year we cannot be certain what the S.C. rules will be. Working to influence legislators to pass the bill early also saves taxpayers and the state by lowering the number of amended returns that must be filed. SCACPA will work on getting conformity legislation moving early in 2013.

Working with Department of Revenue. SCACPA meets quarterly with the SCDOR director and senior staff of the department to identify and hopefully resolve systemic issues. This will continue in 2013 and we encourage you to let us know when you encounter issues related to the SCDOR. However, in addition to problem-solving efforts, SCACPA

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South Carolina CPA Report

“SCACPA is committed to monitoring the legislative environment and advocating on your behalf with various governmental and legislative bodies.” will be advocating with the state legislature on two items related to the agency: 1) encouraging the passage of technical correction legislation that will fix inconsistencies with the state tax code, and 2) encouraging funding for the DOR’s technology systems integration so that new types of returns (such as partnerships) can be filed electronically.

Monitoring business climate issues.

As an active member of the S.C. Chamber of Commerce, SCACPA monitors issues that may affect the business climate in our state. We will inform you regularly of issues we are watching that could impact your business or your clients’ businesses.

Monitoring the legislative environment. SCACPA is committed to monitoring the legislative environment and advocating on your behalf with various governmental and legislative bodies. However, it is critical that CPAs are ready and willing to assist in these efforts when needed. What does this mean?

When you volunteer to serve on a committee, task force or as a Key Person Contact (KPC), you make a difference. For example, as a KPC, you let us know that on occasion, and when needed, you are willing to contact your local legislators to share

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

your perspective on a particular issue. Your voice as a local CPA makes a tremendous difference in our advocacy efforts!

We need more KPCs, especially this year with a large number of newlyelected legislators. Won’t you help in this most important way? To volunteer visit www.scacpa.org/ KPC.

WHY SCACPA IS CHANGING ITS FISCAL YEAR END

For decades SCACPA’s fiscal year end has matched the calendar year ending on Dec. 31. For several operational and programmatic reasons, the SCACPA Board of Directors is changing its fiscal year end to June 30. This change will also have a positive effect on how members engage with their professional association. Here’s a synopsis of the impetus for the change: SCACPA has traditionally conducted its budgeting process in the August/ September timeframe for the following fiscal year. Because the CPE reporting deadline is Dec. 31, the month of December carries the largest volume of SCACPA sponsored CPE. In fact, nearly one-third of SCACPA’s annual CPE activity takes place in the month of December alone. By moving the fiscal year end to June 30, internal budgeting will take place in the February/March timeframe – after the year end which is often a strong indicator of the subsequent year’s performance.

SCACPA’s governance structure – board, committees and chapters will evolve to July 1 program year start date. What difference will that

make, you ask? We have found that historically when a committee, for example, has a Jan. 1 start date, the committee chair and its members are challenged to find the time to meet and engage in service in the month of January. In fact, it is usually after busy season when committees (and chapters) get to work on activities for members. It made sense to start the programmatic year in July to give committees and chapters the summer and fall to get projects under way before busy season kicks in.

The year-end change will facilitate better planning and execution and ultimately make SCACPA a stronger organization and better positioned to serve you.

CHARTERED GLOBAL MANAGEMENT ACCOUNTANT

If you’re one of the some 1,500 management accountants in South Carolina, then you probably have heard about this new designation.

You must be a CPA and have three years of management experience under your belt to qualify to become a CGMA. As of mid-September, there are just over 300 CGMAs in South Carolina. Are you one of them? Let us know by logging in and updating your credentials in your member profile or email mtaylor@scacpa.org.

We are also interested in hearing if you would like to connect with other CGMAs in South Carolina. n Erin Hardwick Pate, CAE, has served as SCACPA’s CEO since 2005.

She currently serves as president 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.

South Carolina CPA Report

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CPAs Will Play Vital Role in Changing Health Care Landscape.................................. 13 Impact of Health Care Reform...................................................................................... 16 Disability, Long Term Care and the Affordable Care Act ........................................... 16 Health Care Act Opens Up Opportunities for CPAs in Business and Industry.......... 17 Member Profile: Challenges and Rewards of Health Care Industry.......................... 19

Industry Changes Mean CPAs Will Play Even Greater Role

by Keith J. Benson, MHA, Ph.D. and Michael Matthews, Ph.D., MHA, Winthrop University

T

he passage of the Patient Protection Affordable Care Act (PPACA), also known as the Affordable Care Act (ACA), changed the operating landscape of the health care insurance industry but also influences the CPA profession. Any act of Congress that hires new IRS agents will definitely impact CPAs. The impact of the ACA increases the importance of CPAs to understand and explain the changing role of health insurance to their cli-

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ents. One way for CPAs to understand the impact of this new law is threefold: 1. How it will impact the cost of clients providing health insurance benefits to employees.

2. The ACA’s tax implications to clients. These tax implications will affect both individual and corporate taxes. 3. It will affect how CPAs operate their business.

“As with many new financial laws, there will be some benefits, some costs, some opportunities and some headaches for CPAs.”

OVERVIEW

When the U.S. Supreme Court upheld the ACA on June 28, 2012, it

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meant the implementation of ACA will continue. Some components of ACA are already in effect and the impact will vary among businesses.

There will not be a one size fits all response to the ACA. Each business will have to evaluate the costs, benefits and potential problems the ACA will have on their business.

That is an important point, that ACA will have both positive and negative consequences to clients.

CPAs will become an even greater advisor to clients under ACA.

COSTS OF PROVIDING HEALTH INSURANCE BENEFITS One of the biggest changes is the individual mandate that requires a

person to have health insurance or pay a tax. Since many Americans have health insurance through their employer it means employers will have to evaluate to keep, restructure, reduce or discontinue offering a health insurance benefit.

There are pros and cons to each of the above options. A few examples of how operating costs may be impacted: 1. Companies with 50 or more fulltime equivalent (FTE) employees must offer health insurance. CPAs may help their clients calculate this number. The first 30 employees are exempt from the tax. For example a company that has 65 employees

would pay the $2000 tax on 35 employees equaling a total of $70,000.

2. Small businesses may receive a tax credit of up to 50 percent of nonelective contributions the business pays for insurance premiums; 35 percent for not for profit organizations by 2014 as long as the average employee salary is $50,000 or below.

Thirty-five percent for businesses and 25 percent for not for profit until 2014. This will help relieve the cost burden of small business who have as a goal to provide health benefits for their employees.

3. Employers that self-insure will have to provide minimum essential

Timeline of Health Care Reform

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2010

Insurance Reforms

Drug Rebate

Tax on Tanning Beds

Healthcare Workforce Commission

2011

Provision Minimum Medical Loss Ratio

Medicare Reforms

Change to Tax‐ Free Savings Accounts

Other

2012

Annual Rx Fees

Medicare Independence Project

Quality/Cost initiatives

Healthcare Disparity Reduction

2013

Itemized Medical Expense Deductions

Flexible Spending Account Limits

Medicare Tax Increase

Health Plan Changes

2014

Insurance Insurance Requirements

More Insurance More Insurance Requirements

More Insurance More Insurance Requirements

More Insurance More Insurance Requirements

2015‐ 2018

Increase in CHIP

Create Health Compacts

High Cost Insurance Plans Insurance Plans

CHANGES TO COME??

South Carolina CPA Report

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

“The ACA will not take full-effect until 2018. Until then there will be new provisions of the law going into effect each year.

CPAs will have to invest in staying current with the applicable laws and the forthcoming regulations.” coverage and report coverage information to IRS and the individual.

4. State exchanges may provide an opportunity for some employers to no longer offer health insurance benefits. It may be cheaper to pay the $2,000 per employee fine than the health insurance premium.

5. Employers must report the value of employer provided health insurance benefits to IRS in the W-2 for businesses.

4. Health Saving Accounts (HSAs) can no longer be used to purchase non-prescription, over-the-counter medicines.

5. A 2.3 percent excise tax on medical device manufacturers no matter the size of the business.

6. In 2018, there will be a 40 percent excise tax on Cadillac Health Insurance plans. These plans have premiums over $10,000 single/$27,500 family and will be linked to inflation.

6. Employee’s portion of health insurance premiums must be 9.5 percent or less of W-2 wages or employers may face a penalty.

QUALIFERS

ACA TAX IMPLICATIONS

1. People, who due to religious reasons, are not part of Social Security.

2. Incarcerated people.

3. A member of a recognized Indian Tribe.

4. Income below the threshold to file for taxes; $9350 for individuals and $18,700 for families.

5. Premiums more than 8 percent

of income.

There are 21 new taxes and changes to existing tax code in the ACA. Some of these taxes have already taken effect, others will take effect in the upcoming years. Some taxes will impact employers, some employees, other investors. A few examples of the new taxes and changes: 1. An additional 0.9 percent Medicare tax will be collected from individuals whose adjusted gross income exceeds $200,000 or joint filers who exceed $250,000.

ACA does offer exclusion to the requirement to purchase health insurance. These exclusions include:

CHOICES CLIENTS/CPAS WILL FACE

2. A 3.8 percent surtax on investment income in households earning exceeding $200,000 for individuals, $250,000 for joint filers.

The ACA will cause each business to review and consider how it will offer health care and other benefits.

Choices that clients face will be similar for CPAs and their firms. A few examples of the choices:

3. The contribution limit for Flexible Spending Accounts is $2,500.

1. Provide qualifying coverage or drop coverage and pay a fine.

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

2. Educate employees on health care exchanges.

3. Hire full-time or part-time employees or outsource.

4. Eliminate “Cadillac” health insurance plans.

5. Determine how to comply with new documenting/reporting requirements from new regulations. Do them in-house or outsource?

6. Calculate the cost of plans, the cost of benefits, the cost of paying penalties, the cost of business expansion and the potential cost of lost productivity if the business chooses not to expand. Strategic planning is critical.

CONCLUSION

The ACA will not take full effect until 2018. Until then there will be new provisions of the law going into effect each year. CPAs will have to invest in staying current with the applicable laws and the forthcoming regulations. As with many new financial laws, there will be some benefits, some costs, some opportunities and some headaches for CPAs. n Keith J. Benson, MHA, Ph.D., is an associate professor in health care management at Winthrop University, which he joined in 1999. He received his Ph.D. in health policy and administration from Penn State.

Michael Matthews, Ph.D., MHA, is an associate professor in health care management at Winthrop University, where he has served for seven years.

He received his Ph.D. in health care management from the University of Alabama-Birmingham. His previous experience includes long term care and hospital administration.

South Carolina CPA Report

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Disability, Long Term Care and the Affordable Care Act

by Laurel M. Suggs, RHU, Insurance Management Group

T

he ACA does not address disability insurance. Interestingly, a new report from the Congressional Budget Office (CBO) shows Social Security Disability Insurance benefits will increase 70 percent over the next 10 years. Since 2008 there has been a dramatic increase in applications and awards for Social Security disability. The disability insurance program has paid out $119 billion to 8.3 million workers in fiscal year 2011, accounting for approximately 18 percent of all Social Security spending. The numbers are expected to jump to $204 bil-

lion — an increase of 71 percent, approximately — as the number of disabled workers and dependents receiving money increases to 12.3 million by 2022. We anticipate much discussion about possible changes to Social Security Disability in the next decade.

The ACA bill signed into law on March 23, 2010 included a long term care program called the CLASS Act which would have created a new national public long term care program. This part of the law was abandoned in September 2011 when it was determined that

this new government program was not fiscally sustainable. However, the need for Americans to address their long term needs has never been greater. Unless a person qualifies for Medicaid, or the limited benefits under Medicare for rehab or skilled care services, there is no government assistance for true long term care needs. n

For more on how SCACPA members can purchase both individual CLICK disability and individual long term care insurance with discounts, visit www.imgsc.com, call 803-461-5912 or email Mark Ackerman at marka@imgsc.com.

The Impact of Health Care Reform

by Eric Wells and Mark Riley, Southeastern Insurance Consultants

A

s we move forward into 2014, there are a few portions of PPACA or the “Affordable Care Act” (ACA) that will have a direct impact on consumers’ choices and cost with respect to their health plans. The first is the individual mandate. By requiring all Americans to purchase health insurance, it is assumed that it will increase the insured pool, and therefore reduce costs. Unfortunately, the way the mandate is structured, this will not be realized.

With a very low penalty, no real enforcement provisions, and the ability to purchase a plan at any

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“Consumers will have fewer plans from which to choose from and typically, the more limited the choice, the higher the costs for those choices.”

time with no waiting periods or late entry penalties, the mandate will actually reduce the insured pool in some areas and cause the cost to increase for those who carry insurance all the time.

The second impact that will be felt by consumers is the lack of choice of health plan options. Since the addition of the essential benefits mandates and the directive in

the law requiring certain limits on deductibles and out of pocket costs, the number of plan options will actually decrease. Consumers will have fewer plans from which to choose from and typically, the more limited the choice, the higher the costs for those choices.

The third impact is one that is not being discussed much in the continued on page 38

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

Health Care Act Opens Up Opportunities for CPAs in Business and Industry The following article was provided by the American Institute of Certified Public Accountants

W

hen President Obama signed the Patient Protection and Affordable Care Act (PPACA), he ushered in one of the most dramatic and controversial health care reform initiatives since the passage of Medicare more than 45 years ago.

In pursuit of its goal to address rising health care costs and provider access, the PPACA has raised the demand for specialized professional skills and knowledge as well as new internal business processes. Organizations need expert insights for understanding legislative provisions and explaining them to employees as well as policies and procedures for ensuring compliance with current and future requirements.

CPAs performing management accounting duties on behalf of business and industry have an opportunity to take on a leadership role within their organizations, guiding management as it navigates the way through the intricacies of PPACA legislation, and helping maintain smooth, continuous and successful operations.

Recognized by the new Chartered Global Management Accountant (CGMA) designation, created by the AICPA and the Chartered Institute of Management Ac-

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

countants (CIMA), CPAs in business and industry, can distinguish themselves as PPACA authorities through their extensive education, training and experience in finance, management and regulatory affairs.

Expanded Role and Heightened Profile

The far-reaching scope of the PPACA extends beyond health care providers and insurers to include organizations representing virtually every industry, size and geographic area. PPACA’s broad application presents vast opportunities for CPA, CGMAs to further improve operational efficiency and performance, and showcase the full extent of their capabilities, value and contributions.

“Employee morale, productivity, recruitment and retention are only a few of the issues that are heavily impacted by an organization’s ability to successfully implement the new health care reform legislation,” said Paul L. Shillam, controller, Pacific Medical Centers.

“CPAs, CGMAs’ combined financial and non-financial expertise, and insights into workplace dynamics, are guiding organizations to legislative compliance, a well-informed management team and an engaged workforce.”

“In pursuit of its goal to address rising health care costs and provider access, the PPACA (Patient Protection and Affordable Care Act ) has raised the demand for specialized professional skills and knowledge as well as new internal business processes.”

South Carolina CPA Report

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“CGMAs play a dominant role in keeping the organization abreast of the latest legislative developments and explaining their impact on the organization and its members.”

Although the degree of the PPACA’s impact depends largely on the size of the employer, there are a number of key responsibilities that are uniquely suited to the expertise of CPA, CGMAs and are in strong demand by managers at organizations across the country.

These responsibilities include the following:

Identify and Respond to Additional Costs

PPACA implementation has a number of penalty provisions that need to be identified and addressed. Management will need help fully understanding the complete range of possible penalties, explain the consequences of penalty-related decisions, and create strategies for avoiding and mitigating penalties whenever and wherever possible.

Evaluate the Full Impact of Coverage Decisions

CPAs in business and industry counsel their organizations on the bottom-line ramifications of failing to provide employees with health insurance coverage, and help reach decisions that best serve the organization and its employees.

Ramifications may include increases in employee compensation to offset the expense employees will incur for private insurance as

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South Carolina CPA Report

well as additional payroll taxes.

Other consequences can include employee recruitment challenges, declines in employee retention and overall satisfaction, and damage to the organization’s brand and reputation.

Assist with Process and Procedural Changes

The PPACA includes a number of provisions that result in changes to existing systems and procedures that can be more successfully accomplished with CPA, CGMA guidance. For example, Section 9002 of PPACA expands reporting requirements for employersponsored health care benefits on employees’ IRS Form W-2 at yearend. Human resource and payroll systems will need to be updated to capture the cost of employer-sponsored insurance benefits effective for calendar year 2011, and extended to 2012 by the IRS.

Contribute to Hiring, Compensation and Benefits Decisions

As implementation of PPACA moves forward, organizations need professional expertise in fully understanding the legislation’s impact on hiring decisions and compensation and benefits packages. Among the human resource responsibilities that are undergoing drastic changes, and require close CPA, CGMA involvement, are evaluating employer-sponsored insurance benefits; attracting employees; weighing the advantages and disadvantages of full-time, part-time, temporary and per-diem team members; and addressing potential changes to compensation structures.

Answer Tax Questions

The PPACA contains numerous tax provisions that will impact

individuals and businesses of all sizes. AICPA Tax Manager Kristin Esposito suggests taxpayers consult with their CPA to determine whether they should sell assets or take other steps to minimize their liability. “If income rates revert to pre-2001 levels in 2013,” Esposito cautioned, “there will be an even higher tax on any portion of investment income, e.g., interest and annuity payouts, that is taxed at individual income rates.”

Keep Leadership Updated on Legislative Changes

PPACA, similar to other legislation of its magnitude, must be viewed as a process rather than an event.

In the years ahead, laws that have been passed may be modified and new laws will take effect, and the key to complete compliance is being prepared and proactive.

Upcoming laws may address issues ranging from clarifying the PPACA’s intent to being more specific with respect to compliance provisions, particularly those pertaining to enforcement and penalty provisions.

CGMAs play a dominant role in keeping the organization abreast of the latest legislative developments and explaining their impact on the organization and its members.

From holding face-to-face meetings with the management team to preparing briefing reports for board members, CPA, CGMAs are senior leaders’ valued resource for the news and information that help keep operations PPACA compliant and successful. n

CLICK

To learn more about the CGMA designation, visit cgma.org or www.scacpa. org or contact mtaylor@ scacpa.org

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

Member Profile

Member Profile:

Ryan Foster, CPA Title and Company: Controller, UCI Medical Affiliates, Inc Hometown: Columbia, SC SCACPA Involvement: Young CPA Leadership Cabinet 2009-2010, Members in Business and Industry Task Force 2011-current SCACPA Member since: 2006

“Uncertainties abound in the health care industry due to recent legislation and our industry is faced with the challenge of evolving how we deliver care and services to our patients without sacrificing the quality of those services. The biggest challenge is to lower the overall health care system costs to our users.�

Why did you become a CPA? I decided to become a CPA while at the University of South Carolina because I enjoyed the challenge of the course work and the eventual challenge of passing the CPA exam. The career path of a CPA provided a stable job marketplace after college and endless opportunities to become a professional that positively contributes to the organization in which you are employed.

What do you enjoy most about working as a CPA in the health care industry?

I spent the first seven years of my career in public accounting serving clients in many different industries and was exposed to many different ways various industries positively contribute to their customers, clients and markets. The health care industry is particularly rewarding as a CPA because our finance function provides support to our team of medical providers and clinic staff as they deliver needed medical care to the many communities we serve.

What is the biggest challenge that the health industry is facing?

Uncertainties abound in the health care industry due to recent legislation and our industry is faced with the challenge of evolving how we deliver care and services

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

to our patients without sacrificing the quality of those services. The biggest challenge is to lower the overall health care system costs to our users. It is incumbent on the providers of health care to develop and promote wellness programs and engage our patients in preventative care to help reduce systemic high cost health care utilization with our patients.

How have you benefited from your membership in SCACPA? My membership in SCACPA has provided me the ability to grow professionally through interaction with fellow CPAs in continuing education, social events and the ability to engage in other important initiatives for our profession in South Carolina.

How do you enjoy your leisure time?

My leisure time is spent with my wife Kelly and two children Grace, 3, and Nolan, 1. My wife and I enjoy spending Saturdays at Williams Brice tailgating and cheering on the Gamecocks in the fall. I attempt to enjoy the game of golf as time permits.

What is one thing your colleagues would be surprised to learn about you?

I am a self-professed music snob and enjoy attending live music shows when able. n

South Carolina CPA Report

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Stretch With Us When You Renew Your Membership!

F

or the past few months we’ve been asking you to stretch with us. In 2013, SCACPA will transition to a July 1 fiscal year.

So what does this mean for your membership? In order to transition from the current calendar fiscal year, your will receive an 18-month dues renewal notice in December 2012.

When you renew, your dues will be paid through June 30, 2014.

Your renewal statement also includes an opportunity to join your local chapter, contribute to the Educational Fund and make a donation to the Political Action Committee. For CPAs 35 and younger, you can also join the Young CPA Network.

SCACPA strives to ensure you have the tools and resources you need to thrive in your profession and prides

itself on being your professional home for: u Advocacy – SCACPA is your voice at the state and national level and the only South Carolina organization that provides critical updates and advocacy for the CPA profession. u Education – Grow your knowledge base with relevant CPE and timely updates on emerging issues. Whether you prefer conferences, seminars, live webinars or self-study, the discount you receive on CPE will often pay for your membership. u Communications – Stay current on the latest news and information that impacts you and the profession through the SCACPA website, CPA Report and electronic newsletters.

Exchange knowledge and information with your peers through

educational offerings, chapters and volunteer work. SCACPA also works to promote the CPA credential through public outreach and connecting you with communitybased volunteer opportunities.

Members are encouraged to renew prior to Dec., 31, 2012. Renewals received after Feb. 28 will incur an additional fee.

The fastest and easiest way to renew is online at www.scacpa.org. To renew follow these four steps: (1) Log into your membership account; (2) Select “Manage My Membership;” (3) Select “Pay My Dues;” and (4) Either renew for yourself or multiple people within your firm or organization.

QUESTIONS? Contact Maureen Taylor at mtaylor@scacpa.org. n

MEMBERSHIP FAQ

H

ave questions about your membership? The following are the most common questions our membership department receives.

Q. What period does my dues payment cover?

A. Your membership investment covers an 18-month period from Jan. 1, 2013 to June 30, 2014.

Q. Are my SCACPA dues tax deductible?

A. Dues are not deductible as a

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South Carolina CPA Report

charitable contribution but may be deducted as an ordinary business expense. A portion of your dues (estimated at 9 percent) are not deductible as an ordinary and necessary business expense to the extent that SCACPA engages in lobbying.

Q. When should I pay my dues?

A. Dues are payable upon receipt of the renewal notice – due by Dec. 31, 2012. Dues that are not paid by Feb. 28 will incur an additional fee.

STAY CONNECTED Log into your member profile and make certain we have your current information.

Need help logging in?

Email membership@ scacpa.org or call us at 803-791-4181.

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

MEMBERSHIP FAQ, con’t

Q. Can I pay my dues online?

A. Yes, in fact we prefer online dues payments. Pay online at www.scacpa. org. Simply log in and click on the Membership Area, Pay Dues Online link. Need help logging in? Contact jando@scacpa.org Q. My contact information has changed. How do I update my information with SCACPA? A. Update your information online in your membership account, on the mailed renewal notice or by emailing mtaylor@scacpa.org. We require all membership contact information updates in writing.

Q. I’ve recently retired or am planning to retire this year. Can I pay the retired rate?

A. No, please contact SCACPA via email, mail or fax to have the change approved. We require notification of all membership changes and requests in writing and handle these on a case by case basis.

Q. I’m unemployed, is there a special membership rate for me?

A. Yes. We have an unemployed classification that offers reduced dues.

You must request this special rate in writing and complete an inactive membership waiver form.

Q. At this time I no longer wish to remain a member. Can I just ignore the statements?

A. No. Per the SCACPA Constitution you must resign from membership by sending a letter or email to

request resignation. In addition, we require you return your certificate of membership to the association office.

Members who have not renewed within 90 days are no longer members in good standing. Membership dues must be paid in order to register at member rates for CPE seminars and other events, participate in Chapter events and to be eligible for SCACPA insurance and discount programs.

Q: I allowed my membership to lapse and would like to rejoin. Can I pay the pro-rated dues amount?

A: The pro-rated dues amount is available only to those that have never been a SCACPA member. Former members must also pay a reinstatement fee of $35. n

GR WTH It’s what CGMA stands for.

Officially, of course, it’s Chartered Global Management Accountant.

A new designation representing accomplished professionals that drive and deliver business success, worldwide.

Find out more at cgma.org

South Carolina CPA Report

Copyright © 2012 American Institute of CPAs. All rights reserved.

Q. What form of payment does SCACPA accept?

A. Dues can be paid by personal check, firm or company check or VISA, MasterCard, American Express or Discover credit card.

21

A

th Carolin Sou a

ional Fund cat du

tion of CPA cia s• o E ss

Investing in the Future

T

he SCACPA Educational Fund Trustees recently awarded $21,000 in scholarships to 18 students across the state.

“The scholarships promote the study of accounting as a career path and are awarded to rising juniors or seniors majoring in accounting or master’s degree students,” said Angel Hamilton, CPA, and chair of the trustees. “These outstanding young men and women represent the future of the CPA profession. We are excited to assist them in their endeavors.”

The 2012-13 scholarship recipients will be honored Nov. 2 at a student recognition luncheon during SCACPA’s Annual Summit at the Metropolitan Convention Center in Columbia. n

SCHOLARSHIP CRITERIA Scholarship recipients must be South Carolina residents and possess a GPA of no less than 3.25 overall, with a GPA in accounting of no less than 3.5. Recipients must apply annually and scholarships are not renewable. Winners also receive a free one-year student membership to the South Carolina Association of CPAs.

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South Carolina CPA Report

SCACPA Educational Fund Awards $21,000 in Scholarships to 18 Students Following is a list of SCACPA scholarships and student recipients, including hometown and school: • Brigman, Holcomb, Weeks Scholarship Alan Smith, Spartanburg University of South Carolina-Upstate • Burch, Oxner, Seale Scholarship Shawnna Fowler, Conway Charleston Southern University • Burkett, Burkett, Burkett, CPA, PA David Westmoreland, Charleston University of South Carolina-Upstate • C. C. McGregor Scholarship William Stormer, Columbia, Clemson University • Central Chapter of SCACPA Scholarship Wyche Scarimbolo, Irmo University of South Carolina • Central Chapter of SCACPA Graduate Student Scholarship Mary Glenn, Conway University of South Carolina • Coastal Chapter of SCACPA Scholarship David Westmoreland, Charleston University of South Carolina-Upstate • Edgar Vaughn Scholarship Josepha Segbefia, Columbia Benedict College • Francis Humphries Scholarship Corinne Buescher, Charleston University of South Carolina • JOE JACKSON MEMORIAL SCHOLARSHIP Susan Blake, Columbia University of South Carolina

• Kaye Carter Scholarship Brandi Teat, Easley Winthrop University • Lollie Harper Scholarship Jonathan Foltz, Rock Hill Winthrop University • SCACPA Past Presidents Scholarship Steven Thompson, Aiken University of South Carolina • Piedmont Chapter of SCACPA Scholarship John Rogers, Fort Mill Clemson University • Ray Waters Scholarship Victoria Broome, Spartanburg Converse College • Robinson Grant & Co., PA Michael Varga, Edisto Island University of South Carolina • SCACPA Graduate Student Scholarship Garrett Copeland, Fort Mill Clemson University • Sea Island Chapter of SCACPA Scholarship Brittany Washington, Charleston University of South Carolina • Sheheen Hancock & Godwin Scholarship Garrett Copeland, Fort Mill Clemson University • WebsterRogers LLP Scholarship Jessica Robinson, North Charleston Converse College (888) 557-4814 | www.scacpa.org

Thank You To Our Educational Foundation Donors SILVER PARTNER: $2,500-$4,999 Coastal Chapter (Francis Humphries Memorial)

CUM LAUDE: $100-$499

Timothy L. Baker, CPA S. C. Beckwith, CPA, CFP Charles E. Brown, CPA William L. Byrd, CPA John F. Camp, CPA John B. Fennell, CPA Erin P. Hardwick, CAE Suzanne M. Harnois, CPA Penny Lewis, CPA A. D. Masters, CPA Sheryl McAlister, CPA, CFP James W. McIlrath, CPA Sara B. Penn, CPA Barbara G. Pierce, CPA, Ph.D., MPA Robert M. Tilton, CPA

DEAN'S LIST: $50-$99

William E. Abernethy Jr., CPA Claudia W. Adams, CPA T. D. Ainsworth Monique M. Albarado, CPA Dr. Liz W. Arnold, CPA, Ph.D., MBA Janice F. Avant, CPA John P. Barber, CPA William R. Barefoot, CPA Lois R. Blanco, CPA Donald G. Boan, CPA P. Ransey Bower, CPA Duncan F. Breckenridge Jr., CPA K. Brodie Brigman Jr., CPA Christopher A. Brown, CPA Thomas J. Bryson, CPA Pierce W. Cantey, CPA Robert D. Capell Jr., CPA Patrick P. Carey Jr., CPA Christine E. Cassidy, CPA, JD, LLM Converse A. Chellis III, CPA James B. Cobb, CPA Dr. Clarence Coleman Jr., CPA, Ph.D. Christopher J. Controne, CPA Annmarie Corrow, CPA George L. Counts Jr., CPA Doris E. Cubitt, CPA Robert A. Curtis, CPA, PFS, MST Stephanie G. David, CPA Zoe M. Davis, CPA, CFE Andrew T. Derajtys, CPA (888) 557-4814 | www.scacpa.org

George W. DuRant, CPA, ABV, ASA Cimberlie D. Elkins, CPA Donald L. Ellis, CPA, MBA Mary L. Enright, CPA Barbara J. Evans, CPA, MBA Michael R. Evans, CPA A. L. Fee, CPA Ryan F. Finklea, CPA Emeric Fischer Stephen W. Fitchett, CPA Charles R. Fliflet, CPA Robyn M. Frampton, CPA Jennifer N. Gahl, CPA John W. Gandy, CPA, MBA Ransom H. Gibson III, CPA Stephen A. Gimbel, CPA Michelle S. Gneisig Jonathan I. Godwin, CPA Henry D. Green III, CPA Mary E. Green, CPA John M. Greene, CPA Ralph M. Greene Jr., CPA Harry B. Gregory Sr., CPA Amanda T. Hallman, CPA Angela W. Hamilton, CPA David J. Haney, CPA Gary A. Harris, CPA Martha M. Hartley, CPA Larry W. Hartsell, CPA Alice B. Hazel, CPA Robert M. Heil, CPA Ronald I. Hendrix, CPA Kenneth S. Higgenbotham, CPA J. C. Hincher, CPA, MA Katherine W. Holmes, CPA Donna K. Hudson, CPA Donald L. Hunter, CPA Harry A. Huntley, CPA Karen L. Hutton, CPA Leona L. Hydrick, CPA Arthur L. Jayroe Jr., CPA W. K. Jones, CPA Robert P. Jordan, CPA Michael J. Kerscher, CPA James D. Kidd, CPA Wendy J. Kinross, CPA Douglas D. Kugley, CPA Holly L. Kyle, CPA Cheryl O. Lang, CPA Carol C. Lawlor, CPA Paula J. Lawrence, CPA Elizabeth I. Leitner, CPA Daniel E. Livengood, CPA

Kenneth E. Love, CPA Michael W. Lowrance, CPA, MBA Patrick M. Luciano, CPA Roger F. Luttrell, CPA, MBA Glenn G. MacNeil, CPA, BBA, CA, CMA Sharon E. Mann, CPA Bobby T. Mardis, CPA Kenneth M. May Chris A. McCraw, CPA J. P. McDermott, CPA C. Stephen McDonald, CPA Ann A. McDuff, CPA Henry A. McFaddin, CPA Sheila C. McKinney, CPA David H. Mims, CPA Thomas P. Monahan, CPA Albert A. Munn IV, CPA Robert J. Nagy, CPA L G. Newell, CPA, MBA Michael J. Nicolini, CPA,CIA Gina S. Noble, CPA Renita M. Owens, CPA Philip G. Palmer, CPA Jackie H. Park, CPA Clark B. Parker, CPA Sadhna Patel, CPA Janet M. Pierce, CPA Sarah D. Pope, CPA Robert B. Privette, CPA, MBA Michael R. Putich, CPA Sandra S. Rabon, CPA Larry A. Ramsey, CPA, CPA/ABV, CVA Charles M. Redfern III, CPA Laura D. Rippy, CPA G. Randy Rish, CPA Duncan M. Rogers, CPA Del A. Rosebrock, CPA Amy H. Rubin, CPA Michael W. Saunders, CPA Terry K. Schmoyer Jr., CPA Clancy M. Self, CPA Nancy F. Simonetti, CPA Clifford C. Simunek, CPA H. B. Smith, CPA Elizabeth M. Stalvey, CPA Curtis C. Stewart, CPA, JD James M. Stewart Jr., CPA, MBA, MST Bruce K. Tallant, CPA George F. Taylor Jr., CPA Thomas V. Taylor, CPA, MBA Billie H. Thomas, CPA Bruce E. Truesdale, CPA, MBA Michael S. Upton, CPA

David R. Veldman, CPA John C. Von Lehe Jr., CPA, JD Dennis L. Wade, CPA, CIA Nicole Watchinski, CPA Kathleen W. Wates, CPA, MAcc, CMA Mark W. Webster, CPA Susan O. Weesner, CPA Kathy B. Wine, CPA Jacqueline C. Wirszyla, CPA Beth C. Wolfe, CPA, MBA Amy L. Wood, CPA James W. Worthy, CPA Yulien Yuan, CPA Beth T. Zamorski, CPA

HONOR ROLL: $25-$49

James B. Black Michael J. Targia, CPA, Cr.FA

SUPPORTER: up to $25

Randy J. Bell, CPA, PFS Joseph C. de Brux, CPA Alleen S. Ernst, CPA Dennis L. Gore, CPA William D. Hardaway III Robert Holloman, MA, CGFM, EA Samuel L. Howell, CPA, MAcc M. Timothy Hucks, CPA Robert M. Jones, CPA Joycelynn S. Knight, CPA Leigh A. Marks, CPA Leesa C. McRae, CPA Amy E. Mezger, CPA Gregory R. Morgan, CPA Jeanne F. Morrisette, CPA Christopher A. Paris, CPA, MBA Dustin L. Pease, CPA Gwendolyn L. Randolph, CPA Linda H. Richards, CPA David W. Sage, CPA, CFP, PFS Ruth A. Schult, CPA Ernest M. Sewell III, CPA Ariel Stewart Robert T. Theodore, CPA Nancy R. Waring, CPA Maurice A. White, CPA Philip E. Williams Tom J. Younan, CPA SC Association of Accounting Educators (11-15-11 to 9-25-12)

South Carolina CPA Report

23

408(b)(2) Fee Disclosure Regulations…

Understanding the Hidden Perils for Retirement Plan Fiduciaries

by Chip Hunt and Chip Hardy, PrimeTRUST Advisors

A

s retirement plan sponsors are aware, in recent years, the Department of Labor (DOL) has undertaken a series of regulatory initiatives to ensure that employee benefit plan fiduciaries, as well as plan participants and beneficiaries, obtain comprehensive information about the services that are provided to employee benefit plans and the cost of those services.

The DOL believes that responsible plan fiduciaries need this information, when selecting and monitoring service providers, to satisfy their fiduciary obligations under ERISA (Employee Retirement Income Security Act of 1974) to act prudently and solely in the interest of the plan’s participants and beneficiaries and “for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan.”

As strange as it may sound, ERISA states that the furnishing of goods, services, or facilities between a plan and a “party in interest” (service provider) to the plan is generally prohibited under ERISA. As a result, a service relationship between a plan and a service provider would constitute a “prohibited transaction”. However, ERISA exempts certain arrangements between a plan and a service provider from the prohibited transaction rules if: 1. The contract or arrangement is “reasonable”, 2. The services are necessary for the establishment and operation of the plan, and 3. No more than “reasonable” compensation is paid for the services.

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South Carolina CPA Report

According to the DOL, a new stipulation is now added by virtue of this §408(b)(2) regulation which provides that a contract or arrangement is not “reasonable” unless covered service providers disclose to the responsible plan fiduciary certain specified information relating to: 1. The services provided, 2. The status of the service provider, (fiduciary or non-fiduciary), and 3. The compensation received (both “direct” and “indirect”) by the service provider and/or related parties.

This detailed information should have been received by plan fiduciaries no later than July 1st of this year.

This §408(b)(2) regulation, coupled with ERISA’s §404 duty of prudence, requires that fiduciaries carefully consider the information disclosed to them in order to assess the services provided and the reasonableness of compensation being paid for such services.

It is the DOL’s view that if service providers fail to disclose the required information, or if such contracts or arrangements are deemed to be unreasonable, fiduciaries may be precluded from entering into (or continuing) the service provider contract or arrangement. Doing so, would constitute a prohibited transaction and a breach of fiduciary duty!!

“It is the DOL’s view that if service providers fail to disclose the required information, or if such contracts or arrangements are deemed to be unreasonable, fiduciaries may be precluded from entering into (or continuing) the service provider contract or arrangement.”

Accordingly, fiduciaries must now know how to analyze the information disclosed to them in order to evaluate the necessity and (888) 557-4814 | www.scacpa.org

reasonableness of such fees and service arrangements.

To emphasis the point, the DOL in its preamble to the regulation states, “fiduciaries should, at a minimum, compare the disclosures they receive from a covered service provider to the requirements of the regulation and form a reasonable belief that the required disclosures have been made.”

Fortunately, paragraphs (c)(1)(vii) and (c)(1)(ix) of the final rule provide a class exemption for responsible plan fiduciaries which permits such fiduciaries to avoid engaging in a prohibited transaction in the occasion when a covered service provider either: u when acting in good faith and reasonable diligence, makes an error or omission in disclosing the required information, or,

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u fails to disclose required information and the fiduciary did not know that the covered service provider failed to make required disclosures and “reasonably believed” that such disclosures were made.

However, in the DOL’s own words, “the Department does not believe that responsible plan fiduciaries should be entitled to relief provided by the class exemption absent a reasonable belief that disclosures required to be provided to the covered plan are complete.” To this end, it is recommended that fiduciaries at least develop a checklist of disclosure requirements and use the checklist to verify that the disclosures have been provided by their covered service provider(s).

This act would serve to protect the fiduciary from engaging in a breach of duty.

My number is… 100

We performed a brief search on the internet and found a number of checklists which may prove useful for such purposes. As you would expect, however, some checklists are more complete than others. Accordingly, we have developed a detailed checklist of disclosure requirements and have posted it on our firm’s website (www.primetrustadvisors.com) for use. Additionally, the DOL has resource information on their web site and an abbreviated summary of the regulations can be found at http:// www.dol.gov/ebsa/newsroom/fs408b2finalreg.html. n Chip Hunt, AIF®, and Chip Hardy, AIF®, are the principals of PrimeTRUST Advisors, a retirement plan consulting and investment advisory firm. They are committed to advancing awareness of fiduciary standards of care through writing articles, giving presentations, facilitating training programs and in practice with clients. View their website www. primetrustadvisors.com for additional resources and information.

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T

Women to Watch Recipients Honored at Women in Leadership Conference

hree female CPAs from South Carolina are recipients of the Women to Watch Award, cosponsored by the Women’s Initiatives Executive Committee of the American Institute of Certified Public Accountants and the South Carolina Association of CPAs. The Women to Watch Award, which is in its third year, highlights the accomplishments of women in the CPA profession. There are two categories: Experienced Leaders, given to more established members of the profession, and Emerging Leaders, awarded to new professionals.

Winners were selected based on: • Major or unique contributions to the accounting profession • Demonstration of leadership characteristics • Public and/or community service • Mentoring of emerging professionals

The South Carolina Women to Watch were honored on Oct. 18 at the Women in Leadership Conference in

Congratulations to the 2012 South Carolina Women to Watch:

Columbia. The awards were presented by SCACPA Chairman Michael Putich.

The Women in Leadership Conference included the following sessions: Developing Your Sphere of Influence and Business, Leveraging Mentors, Brand Development and Generating Business with Social Media, Avoiding Social Media Pitfalls and Cultivating Competencies in Communication and Conflict.

For information about the individual award winners, visit the South Carolina Association of CPAs website at www. scacpa.org/Women2Watch. n A diverse profession is a sustainable profession! SCACPA and AICPA are committed to the attraction and retention of women in the profession through the advancement and visibility of women leaders and the successful integration of personal and professional lives. Plan on nominating your colleagues for the 2013 Women to Watch Awards!

TRANSFORMING THE GOVERNMENTAL LANDSCAPE

EMERGING LEADER: Brittany B. Owen, CPA Tax Manager Elliott Davis, LLC Columbia, S.C.

EXPERIENCED LEADERS: Anne P. Harty, CPA Chief Financial Officer City of Rock Hill Rock Hill, S.C.

Debra A. Turner, CPA Managing Partner WebsterRogers, LLP Charleston, S.C.

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

Carl Blackstone Kim Kent

Billy Routh Jeff Thordahl

www.HSBCopperDome.com

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

Emerging Leaders Step It Up During Summer Conference

S

CACPA’s young CPAs braved the summer heat to step up their careers in Famously Hot Columbia at the 2012 Emerging Leaders Conference, Aug. 16-17 at the Marriott City Center. The conference, which was previously held in Charleston, was moved to a central location to allow more young CPAs the opportunity to attend.

The conference planned by emerging leaders for emerging leaders offered a combination of technical sessions and networking opportunities including:

p Pictured above: Young CPAs Brent Reese (at left) and Sam Howle at the 2012 Emerging Leaders Conference. Attendees listen intently during one of the technical sessions.

Hennie van Bulck, MBA, Ph.D., CPA/ ABV, of Van Bulck & Company, CPAs, provided an overview of buy-sell agreements including types of agreements, trigger points, timing and frequency of valuations, elements of buysell agreements and funding pitfalls.

Robert Tilton, CPA, of WebsterRogers, LLP discussed what it means to be a fiduciary in today's retirement plan environment.

One of the most popular sessions was Occupation Fraud lead by Roy E. Strickland II, CPA, CFE, of Dixon Hughes Goodman, LLP. Strickland focused on the "people" side of occupational fraud and workplace environments that are conducive to fraud.

Local favorite, Rebecca Lee, CPA, of Sheheen Hancock & Godwin, LLP, addressed fraud with specific instances and procedures to address fraud from the accounts payable side.

Donald P. West, CPA, CISA, CISSP, of Donald P. West, CPA, LLC wowed the crowd with his session on CyberCrime and CyberWar. He reviewed the current threats, risks and responses regarding these issues.

Thursday evening provided an opportunity for young CPAs to unwind and network with their colleagues and chat about issues or concerns they have integrating their professional and personal lives. n

Benefits Continue to Grow for Young CPAs

by W. Ashley Thiem, SCACPA member since 2008

A

s the Young CPA Network wraps up its inaugural year, I am very excited about the goals we have already achieved. The YCPA Network hosted several events while fostering the growth in involvement for young CPAs in SCACPA and our profession as a whole.

In 2012, the YCPA Network hosted three events with the help of local SCACPA chapters that were free to members of the network. Two of those were networking events, one in Greenville with the young lawyers and young bankers and

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

one in Charleston with the young lawyers. The third event was a welcome reception for the new CPAs that participated in the oath ceremony in May in Columbia. We are also working with every SCACPA chapter to host various networking opportunities so we can reach all areas of South Carolina. Our goal is to have two events in each chapter region, one with young CPAs and one in partnership with another profession (lawyers, bankers, etc.).

As a YCPA Network member you also receive $20 off the Emerging

Leaders Conference, which the YCPA Leadership Cabinet hosts. The conference includes 16 hours of CPE and is geared towards CPAs under the age of 35. This year the conference moved from Charleston to Columbia.

By switching to a more centralized location combined with the YCPA Network discount, we had over 60 participants. I am sure we will continue to grow attendance at this premiere learning and networking event for young CPAs.

continued on page 28

South Carolina CPA Report

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Finally, as a member of the YCPA Network you are eligible to apply for the YCPA Leadership Cabinet.

This is a great opportunity to get to know other young CPAs from around the state and meet the leaders of SCACPA. If you would like more information about the cabinet, please feel free to email me at wathiem@ tmcpas.com or visit our page on the SCACPA website, where you will find a link to the application- http://www. scacpa.org/ycpa. Applications are due each year by Dec. 31.

year to help a cause and our goal is to provide everyone in the network the opportunity to join us.

On the horizon for 2013, YCPAs are considering launching a newsletter that will focus on tips, CPE of interest and social functions. YCPAs are also exploring a statewide CPA Day of Service. Currently, the YCPA Leadership Cabinet meets once a

W. Ashley Thiem, CPA, is the co-president of Thiem & McCutcheon. He serves as chair of the Young CPA Leadership Cabinet and a member of the SCACPA Board of Directors. He is also a member of the Legislative and Advocacy Committee, the Behavioral Standards Committee and serves as a Key Person Contact.

If you are a CPA under the age of 35, I encourage you to join the YCPA Network. The $20 membership fee offers access to invaluable networking events and the opportunity to meet and form relationships with other young CPAs across the state. We look forward to another successful year as the benefits of membership continue to grow. n

CALLING ALL EMERGING LEADERS Are you a CPA under the age of 35 and ready to: • Take your leadership and networking skills to the next level.

• Help shape the future of SCACPA and the profession • Promote the profession through community service Apply today for SCACPA’s Young CPA Leadership Cabinet. Learn more at www.scacpa.org/ycpa

PIUs Draw Over 900 SCACPA Members

O

ver 900 SCACPA members received four hours of free CPE by attending the 2012 Professional Issues Update (PIU) series. The PIUs visited nine locations across the state and offered an update on regulatory, professional and legislative issues.

SCACPA Board Chair Michael Putich, Robinson Grant & Company, PA, Hilton Head Island, and CEO Erin Hardwick Pate discussed: • The New Private Company Council • Movement toward mandatory audit rotation • Certified Global Management Accountant credential • Federal and state legislative updates • SCACPA’s 2013 legislative agenda • Generational differences in the workplace • Skills needed to move from a controller to a CFO • Results of SCACPA’s member research project The program included an update from the S.C. Board of Accountancy. All nine locations, which included Rock Hill, Florence, Myrtle Beach, Spartanburg, Greenville, Charleston, Hilton Head, Columbia and Anderson, also featured a legislative panel. n

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p Pictured above: (Photo at top, from left) Rep. James Smith, Sen. Ronnie Cromer and

Rep. Chip Huggins at the Columbia Professional Issues Update. The Columbia program drew approximately 180 members.

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

Focus on Membership Member News Darin Aldinger, CPA, has been promoted to senior manager in WebsterRogers’ Columbia office.

Aldinger specializes in international tax consulting, planning and compliance for clients in the real estate, professional services and software fields.

Michelle Carl, CPA, has been promoted to the position of senior staff accountant in WebsterRogers’ Summerville office. Carl specializes in providing audit and attest services to the construction and manufacturing industries as well as performing ERISA audits for a wide variety of clients.

Holly Crown, CPA, has been promoted to the position of senior staff accountant in WebsterRogers’ Georgetown office. She specializes in business advisory services and focuses primarily on assisting small businesses and individuals with tax-related issues and QuickBooks support.

Gabrielle P. Davis, CPA, has been promoted to manager at McGregor & Company in Columbia. Davis primarily audits governmental, notfor-profit and nonpublic companies.

Helen Dowbak, CPA, has joined Elliott Davis, LLC as an assurance manager in its Greenville, S.C. office.

Joe Griffin, CPA, has been promoted to senior manager in WebsterRogers’ Florence office. Griffin specializes in corporate and partnership tax consulting, compliance and planning for a wide array of industries.

Trevor L. Hartley, CPA, has been promoted to senior staff accountant at McGregor & Company in Columbia. He primarily audits nonprofit and real estate entities.

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

John F. Hatcher, CPA, has been promoted to senior manager in WebsterRogers’ Charleston office.

Hatcher specializes in tax consulting, planning and compliance to the health care industry.

Shareholder George Kennedy has relocated to Elliott Davis, LLC’s Greenville office. Kennedy provides comprehensive assurance services to clients in the higher education, government and not-for-profit industry sectors.

Marcy M. Loucks, CPA, and Sheryl S. Medders, CPA, have been admitted as shareholders to McKinley, Cooper & Co., LLC in Greenville.

Travis H. Moran, CPA, has been promoted to senior staff accountant at McGregor & Company in Columbia.

He primarily audits governmental and nonpublic companies.

Drew Rogers, CPA, with Elliott Davis, LLC in Greenville, has been named among the “Best & Brightest 35 and Under” by Greenville First Bank and Greenville Business Magazine. The “Best & Brightest” honors local, young professionals who have been identified by the community through a nomination process as Greenville County's future leaders.

Kerri B. Snipes, CPA, has been promoted to senior staff accountant at McGregor & Company in Columbia.

She primarily audits governmental and non-profits.

Art Tompkins, CPA, has been appointed to the South Carolina Governor’s School for Science and Mathematics board. Tompkins is with Upstate Financial Accounting Services in Easley.

Patricia Trombly, CPA, has been promoted to the position of senior staff accountant in WebsterRogers’ Myrtle Beach office. She specializes in business advisory services as well as tax consulting, planning and compliance for individuals, partnerships and corporations.

Caroline Van Hook has been admitted as a shareholder with Elliott Davis, LLC, Greenville, S.C. John von Lehe, CPA, was elected as vice chair of the USC Board of Trustees. A partner of Nelson Mullins Riley & Scarborough LLP in Charleston, von Lehe practices in taxation, estate planning and appellate law.

Firm News

WebsterRogers LLP has been named to the INSIDE Public Accounting (IPA) Top 200 list for 2012. This is WebsterRogers’ first year being ranked on the IPA Top 200 list. The IPA 200 is one of the most comprehensive lists of its kind and the most current snapshot of the financial and operational health of the largest public accounting firms in the nation.

Condolences

Daniel L. McKnight, Jr., CPA, died Aug. 2, 2012. A Charleston native, he went into an accounting practice with George G. McKnight in 1948 and joined SCACPA that same year.

A lifetime member of the association, he served as board president in 1958.

Dan retired as senior managing partner with McKnight and Frampton Co., CPA in 1989. He was past president of the Charleston Sertoma Club, past chairman of Trident United Way, a member of The Citadel Brigadier Club, The Citadel Alumni Association and The Citadel Foundation. n

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29

Focus on Membership Welcome New Members (through 9-29-12) ASSOCIATE

Louise S. Brodie, CPA Mt. Pleasant, S.C.

Kelly M. Engelbert, CPA Daniel Island, S.C.

Joy M. Franklin, CPA Mt. Pleasant, S.C.

Zachary H. Mueller, CPA Greenville, S.C.

Lisa G. Mutch, CPA Taylors, S.C. Jason R. Pflug, CPA Greer, S.C.

CPA CANDIDATE Nicholas G. Buchan Charleston, S.C.

Matthew W. Curran Charleston, S.C.

John B. Gerrald Murrells Inlet, S.C.

Gina Hassert Anderson, S.C.

John Hobbs Columbia, S.C.

Amanda V. Hunter Greenville, S.C.

Shane E. Kirkley Camden, S.C.

Shannon O. Nofsinger Mount Pleasant, S.C. Anne F. Rosell Charleston, S.C.

Daniel B. Smoak Greenville, S.C.

Matthew R. Stainaker Greer, S.C. Jennifer D. Walton Charleston, S.C.

Samuel L. Wheeler Columbia, S.C.

FELLOW David J. Bethea, CPA Greenville, S.C.

Emily H. Blake, CPA Boiling Springs, S.C.

Lisa K. Burgess, CPA Simpsonville, S.C.

Cathy D. Caldwell, CPA Woodruff, S.C.

Amanda M. Croston, CPA Piedmont, S.C.

Glenn Cunningham, CPA Sullivans Island, S.C.

Pamela R. Greene, CPA Charleston, S.C. Kevin J. Hoyle, CPA Greenville, S.C. Erin V. Hudson, CPA Greenville, S.C. Nancy A. Inserra, CPA Aynor, S.C.

Jeffery R. Lewis, CPA Simpsonville, S.C.

John R. Markel, CPA Greenville, S.C.

Jennifer E. Neff, CPA, EA Greer, S.C. Michael J. Nicolini, CPA, CIA Greenville, S.C.

Donna L. Page, CPA, MBA Easley, S.C. Jaime A. Stevens, CPA Greenville, S.C.

David L. Taylor Gaffney, S.C.

Roy D. Jones, CPA Greenville, S.C.

Cedric A. Thibodeaux, CPA Columbia, S.C.

Walter C. Kannaday III, CPA, JD Adelle Y. Torres, CPA Columbia, S.C. Lake Wylie, S.C.

Kevin S. Karpowicz, CPA Julia N. Vasquez, CPA Spartanburg, S.C. Mount Pleasant, S.C. Patricia A. Knoetzsch, CPA Greenville, S.C.

FELLOW - OTHER Patricia R. Dennis, CPA Greenville, S.C.

Don D. Grant, CPA Columbia, S.C.

Reshma N. Parikh, CPA Columbia, S.C.

PROFESSIONAL AFFILIATE

Annie C. Spilde West Columbia, S.C.

Laura M. Rhoads Darlington, S.C.

Donna L. Bradley Beaufort, S.C.

RETIRED Nelson E. Hamilton, CPA Fernandina Beach, S.C.

STUDENT Corinne Buescher Columbia, S.C.

Lucas B. Chase Florence, S.C.

Timothy Colley Myrtle Beach, S.C.

Jonathan D. Foltz Rock Hill, S.C.

Shawnna D. Fowler Conway, S.C. Mary Glenn Columbia, S.C.

John C. Rogers Fort Mill, S.C.

Josepha Segbefia Columbia, S.C.

Alan C. Smith Spartanburg, S.C. William C. Stormer Columbia, S.C.

Brandi Teat Rock Hill, S.C.

Steven Thompson Cayce, S.C.

Michael R. Varga Columbia, S.C.

Brittany Washington Charleston, S.C.

David J. Westmoreland Spartanburg, S.C.

Benjamin W. Wingo Pauline, S.C.

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Contact Reva Brennan, MPA, CAE at (803)791-4181 x103 or rbrennan@scacpa.org, or visit www.scacpa.org/onsitetraining.

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South Carolina CPA Report

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

Chapter Connections CALENDAR OF EVENTS CATAWBA

Dues: $60, includes discounted registration to CPE seminars and free family/networking event • October 25: Annual Tax Update (CA102512, 8 hours) • Winter: Family/Networking Event

CENTRAL

Dues: $50, includes discounted registration to CPE seminars, free Oyster Roast, Family Day and Business Meeting Dinner; invitation to Entertainment Night • October 26: Annual Oyster Roast & Harvest Hope Food Bank Drive • November 12: Annual Tax Update, William Grooms (CE111212, 8 hours)

COASTAL

Dues: $130, includes free registration to CPE seminars (additional registration fee for Tax Update) and free registration to networking events • November 8: Federal Tax Update with Jack Surgent (CO110812, 8 hours) • November 15: Entertainment Night Social Event (COEN12)

FOOTHILLS

Dues: $40, includes discounted registration to CPE seminars and three free social/networking events • October 24: Annual Tax Update (FO102412, 8 hours) • December: Social Event

SEA ISLAND

PEE DEE

Dues: $50, includes discounted registration to CPE and free social events • November: Chapter/Student Bowling Night • October 26: Annual Tax Update (PE102612, 8 hours)

Dues: $135, includes free registration to CPE seminars and two special events, Tax Breather Social and Professionals’ Night • November 8: Professional’s Night, invite your banker/attorney for a fun-filled evening at Oldfield River Club.

PIEDMONT

Dues: $50, includes registration for CPE at a nominal fee and free holiday luncheon • December: Annual Holiday Charity Luncheon

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A tax lawyer with courtroom savvy.

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Jerry represents North and South Carolina clients in U.S. Tax Court proceedings, federal refund actions, tax collection actions, and state income and sales tax proceedings.

When it’s time for your client to call in a tax lawyer, Jerry Meek is courtroom ready.

GRAND STRAND

Dues: $125, includes free registration to CPE seminars; Holiday Party and Student Fair • November 15: A&A Update, Mark Hobbs (GR1112A, 8 hours) • December 4: Holiday Dinner/ Social (GRHP12)

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

250 N. Trade Street, Suite 207 | Matthews, NC 28105 Tel: 704.845.9490 | www.jerrymeek.com

South Carolina CPA Report

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AICPA Developing New Financial Reporting Framework for Small & Medium-Sized Entities

W

ith the Financial Accounting Foundation’s decision in May to create a Private Company Council, it appears U.S. GAAP is on the road to being modified for private companies. The AICPA, most of the state CPA societies, many of America’s private companies and thousands of other stakeholders now eagerly await changes in accounting standards where appropriate. But what about the millions of private companies that do not need financial statements prepared in accordance with GAAP? How can they get less complexity and more relevance, as well as costbenefits, for their financial statements?

The AICPA is working to improve financial reporting for owner-managed, for-profit companies that do not need GAAP financial statements. A new self-contained financial reporting framework for small- and mediumsized entities (FRP for SMEs) is under development for release next year. An exposure draft is expected this fall.

“In many cases U.S. GAAP is unnecessary, and therefore not the best solution for a small- or medium-sized enterprise,” explains Erin Hardwick Pate, chief executive officer of the South Carolina Association of CPAs. “The new framework promises to be a straightforward, concise way to accurately convey a private company’s performance, what it owns and owes, and its cash flow.”

The new framework will be a blend of accrual income tax methods and traditional accounting methods and offer

AICPA Seeks Input On Development of New Financial Reporting Framework

“The AICPA is working to improve financial reporting for owner-managed, for-profit companies that do not need GAAP financial statements.” an additional basis for a non-GAAP accounting system (the others being cash, tax, regulatory and contractual).

It will use only relevant financial reporting topics (no comprehensive income, for example) and simplified principles (fewer disclosure requirements and no complicated derivative accounting or stock compensation rules). It is intended as a less complex and less costly option for businesses in any industry that don’t need to use U.S. GAAP, but want their financial statements prepared in a consistent, reliable manner and in accordance with a framework that has undergone public comment and professional scrutiny. The framework is being developed by a working group of AICPA members and staff with years of experience serving small- to medium-sized entities.

FRF for SMEs will be available for use as soon as it is issued in the first half of 2013. FAF has publicly supported the AICPA project, calling it “important and complementary.”

Watch for an exposure draft of the framework this fall. For more information, visit the AICPA’s Financial Reporting Center at aicpa.org/FRC. n

The AICPA wants to gain insights from CPAs as it develops the financial reporting framework for smalland medium-sized entities. The Institute is exploring CPAs’ awareness and use of non-GAAP accounting systems, the types of guidance you would want to help you implement the new framework and what resources would help you educate private company financial statement users about its benefits.

Respond to a brief online survey at aicpa.org/OCBOAsurvey. The survey will be open through 2012 and responses are anonymous.

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South Carolina CPA Report

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

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When you choose the AICPA Premier Plan, you’re on the right path to your firm’s future.

Contact Charles Cauthen at BB&T Insurance Services, Inc. today at (888) 868-3721 or (704) 954-3033 Endorsed by:

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One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. The statements, analyses and opinions expressed in this publication are those of the respective authors and may not necessarily reflect those of any third parties including the CNA companies. CNA is a service mark registered with the United States Patent and Trademark Office. Copyright © 2012 CNA. All rights reserved.

E-9002-0312 SC

Ethically Speaking: Understanding the New South Carolina Ethics Requirement Reva Brennan, MPA, CAE, IOM, SCACPA Chief Operating Officer

I

n May 2012, changes to the South Carolina Board of Accountancy regulations regarding CPE ethics went into effect. However, the board made the decision to implement the changes on Jan. 1, 2013. The first three-year period will be from Jan. 1, 2013 to Dec. 31, 2015, and then every three years thereafter. For this first initial three-year period only, licensees who complete an ethics course between May 25, 2012 and Dec. 31, 2012 may apply the hours toward their 2013-2015 requirements.

Below is the section of Regulation 1-08 that deals with the Ethics CPE: (e) Of the required hours over a three (3) year period, six (6) of the hours must be in ethics, and at least two (2) of these hours must be in South Carolina Rules and Regulations.

New South Carolina licensees (who have never been licensed in another state) will be exempt from the ethics CPE within the three-year period they were licensed in. This is due to the ethics requirement to license.

In 2011, the Board of Accountancy determined it would follow the National Association of State Boards of Accountancy’s CPE fields of study.

According to NASBA, ethics courses can be classified in three areas.

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BEHAVIORAL ETHICS

Subjects related to the general professional ethics programs including, but not limited to: • Ethics and Professional Conduct • Ethical Practice in Business • Personal Ethics • Ethical Decision-Making • Corporate Ethics

REGULATORY ETHICS

This field of study deals with the necessary ethical background knowledge required to adhere to rules and regulations of state licensing bodies, other governmental entities, membership associations and other professional organizations or bodies. Creating an ethical framework is absolutely necessary to be able to sort through professional dilemmas. This curriculum covers the needs of licensees in public practice, industry and government. The listing below illustrates the primary topics in this field of study.

• Public Interest and Responsibilities • General and Professional Standards • Licenses and Renewals • SEC Oversight • Competence - Discreditable Act • Advertising and Other Forms of Solicitation • Independence • Integrity and Objectivity • Confidential Client Information • Contingent Fees, Commissions and Other Considerations • Conflict of Interest • Discreditable Acts • Full Disclosure • Malpractice • Record Retention

PERSONAL DEVELOPMENT

Subjects related to the general development of personal skills including, but not limited to: • Principle-Centered Leadership • Career Planning • Time-Management Note: General ethics programs are treated as personal development programs.

SCACPA has developed courses to meet the S.C. Rules and Regulations requirement that are pending approval by the board. Upon approval, the courses will be posted on the board’s website.

SCACPA plans to offer these programs beginning this fall. Watch your email and check the SCACPA website for course dates at www.scacpa.org/ ethics.n

CPE REPORTING DEADLINE AND REMINDERS u CPE should be earned annually,

by December 31 and reported to the South Carolina Board of Accountancy by completing a CPE report and submitting to the Board office on or before Jan. 31 of each year. u Self-study courses are limited to 20 hours per year and cannot be carried over. There is a 10 hour cap on the number of hours an individual can earn in a day. Self-study courses must be NASBA QAS approved. u Members of SCACPA can access their CPE transcript online at www.scacpa.org, under My Membership, Manage My CPE. u Personal Development is limited to eight hours per year. These hours cannot be carried over.

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

Focus On CPE ACCOUNTING & AUDITING CONFERENCE PREVIEW

Clarity - Complexity Simplified Reva Brennan, MPA, CAE, IOM, SCACPA Chief Operating Officer

R

egistration is now open for the 2012 Accounting and Auditing Conference, Dec. 6-7 in beautiful downtown Charleston at the Marriott Hotel. SCACPA members save $125 when registering by Nov. 15.

This conference features dynamic speakers that will provide you the clarity needed for a variety of complex topics. The format of the conference offers you the flexibility to choose the sessions that best meet your needs, and the delivery that is convenient for you. This is a conference you don’t want to miss!

HIGHLIGHTS INCLUDE: • Two days with 16 CPE credits, two tracks and eight concurrent sessions.

• The kick-off general session is an A&A Update with Kelly Ericson, CPA, Dixon Hughes Goodman, LLP. This session will review newly issued accounting principles and other activities of the Financial Accounting Standards Board (FASB).

Greatest Tax Show on Earth An Expanded Learning Experience

FIVE CONVENIENT LOCATIONS TO CHOOSE FROM! December 10 - Charleston – Marriott December 13 - Greenville – Embassy Suites December 14 - Columbia – Embassy Suites December 17 - Florence – Southeastern Institute of Manufacturing & Technology December 17 - Webcast – www.scacpa.org/taxwebcast12

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

• A featured session on Private Company Financial Reporting Update from Jeffrey Mechanick, CPA, assistant director of the Federal Accounting Standards Board.

• Michael Auerbach, CPA, chief of the Division of Accounting Services Employee Benefits Security Administration of the United States Department of Labor will provide an ERISA update.

• Technology guru Chris Whitfield, CPA. CITP, CGMA, MCP of K2 Enterprises will lead three sessions: Desk Top Tools for Preventing Fraud, Internal Controls for Computing Assets & Remote Access and Accountant’s Bag of Tricks.

• South Carolina favorite, Rebecca Lee, CPA, Sheheen Hancock & Godwin, LLP, will cover hot topics such as: Revenue Recognition, Going Concern and Special Purpose Framework with a pinch of her southern hospitality.

• The favorite governmental A&A session returns with a newcomer to the conference, James Brown, CPA, who will provide an update from the GASB. • Lease Accounting has been a moving target over the past few years.

Chris Rouse, CPA, will help get a better aim.

For the first time ever, this conference will webcast live several sessions over the two days. If you can’t find time to travel to beautiful downtown Charleston, you can still earn the last minute A&A hours you need before year end. For conference details or to register, visit www.scacpa.org/ A&A12.

DON’T MISS THE GREATEST TAX SHOW ON EARTH! 2012 Federal Tax Update With Walter Nunnallee Every year CPAs rave about the greatest tax show on earth. People drive from miles around just to hear Don Farmer and Walter Nunnallee’s famous seminar.

Through their knowledge and engaging sense of humor, the materials are invaluable and filled with the reliable, up-to-the-minute tax tips you’ve come to expect. For event details or to register, go to www.scacpa.org/CPE. Register today—the show is about to start!

FIVE CONVENIENT LOCATIONS TO CHOOSE FROM! Dec. 10 Charleston – Marriott Dec. 13 Greenville – Embassy Suites Dec. 14 Columbia – Embassy Suites Dec. 17 Florence – Southeastern

Institute of Manufacturing

& Technology Dec. 17 Webcast – www.scacpa.org/

taxwebcast12

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Last Chance - CPE Frenzy!

DECEMBER 27, 2012

Professional Ethics for CPAs (88612AM) With the profession in the hot seat, CPAs need to be aware of standards and principles that impact the services they provide. This program covers ethical issues affecting CPAs in practice and industry.

CPE Credits: 4.00 – Regulatory Ethics Accounting and Auditing Update (88612PM) This program is a must to keep you on top of the changes you need to know to be effective. The course authors evaluate and emphasize those standards with broad application and develop detailed practical guidance and illustrations. Synopses are provided for specialized issues.

CPE Credits: 4.00 – Accounting/Auditing

DECEMBER 28, 2012

Identifying and Addressing the Risk of Fraud in Not-for-Profit Organizations (88712AM) This four-hour module will help auditors and those working in not-for-profit organizations to identify and address the most common fraud and abuse schemes that are perpetrated against them. Using a case study format, participants will learn how these fraud schemes can be prevented and detected. The issue of fraud is especially important to understand in an economy where incentive and pressure to commit a fraudulent act is intensified.

CPE Credits: 4.00 - Auditing Using Tax Basis and Other Special Purpose Frameworks Presentations Effectively (88712PM) With the complexities and cost of GAAP financials, many practitioners have encouraged clients to use tax basis and other special purpose frameworks financial statements. This program will address special purpose frameworks reporting and disclosure requirements, including the AICPA interpretation and practice aid on special purpose frameworks.

CPE Credits: 2.00 - Accounting For event details or to register, go to www.scacpa.org/cpe

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South Carolina CPA Report

Tax Season Survival Guide DECEMBER 3

The Complete Guide to Payroll Taxes and 1099 Issues (87212) - West Columbia

DECEMBER 4

2012 Annual Individual Tax Update (87312) - West Columbia

DECEMBER 5

2012 Annual Business Tax Update (87412) - West Columbia

DECEMBER 10

Federal Tax Update with Walter Nunnallee (87512FH) - Charleston

DECEMBER 12

Annual Tax Update (87812SW) - Charleston, Greenville, West Columbia, Webcast

DECEMBER 13

Federal Tax Update with Walter Nunnallee (87512FG) - Greenville

DECEMBER 14

Federal Tax Update with Walter Nunnallee (87512FC) - Columbia

DECEMBER 17

Federal Tax Update with Walter Nunnallee (87512FF) - Florence

DECEMBER 18

Form 990: Moving Beyond the Basics (88212A) - West Columbia

DECEMBER 21

Surgent McCoy's Advanced Critical Tax Issues for Limited Liability Companies and Partnerships (88512) West Columbia

JANUARY 7

The Complete Guide to the Preparation of Form 1041 (90213) - West Columbia

JANUARY 8

The Complete Guide to the Preparation of Form 1041 (90313) - Greenville

JANUARY 9

Small Business Entity Tax Forms Workshop (90113SW) - Charleston, Greenville, West Columbia, Webcast

JANUARY 14

The Complete Guide to Preparing Limited Liability Company, Partnership and S Corporation Federal Income Tax Returns (90513) - West Columbia

JANUARY 15

Preparing Individual Tax Returns for New Staff and Para-Professionals (90613) West Columbia

JANUARY 16

Closely Held Business Taxation: Smart Strategies to Slash Taxes (90013A) West Columbia

JANUARY 17-18

AICPA's 1040 Tax Return Workshop by Sid Kess (90413A) - West Columbia

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

Focus On CPE

Get a Jump Start on 2013 CPE! JANUARY 10

Audits of HUD-Assisted Projects (90813A) - West Columbia Learn how to discern the various audit requirements for HUD programs and how to comply with specific HUD regulations, contracts and procedures. Plus, review the latest developments on professional standards affecting particular federal programs and how they affect your audits.

This course provides you with knowledge of the effect of Government Auditing Standards (“Yellow Book”), AICPA standards, OMB requirements and the Consolidated Audit Guide on the design of the audit plan.

Who Should Attend Practitioners involved with or considering the performance of audits of HUD-assisted projects Government auditors and HUD assistance grantees

Topics Discussed • Coverage of the Consolidated Audit Guide • HUD’s Organization, Programs and Policies • Current Developments in HUD Housing Programs • Section 8 Programs • Auditing Key Regulatory and Contract Provisions • Applying the Consolidated Audit Guide to HUD Regulated Mortgagees

2013 Multi-State CPE & Ski Conference

January 7, 8, & 9, 2013 24 Hours of CPE New Location! Beaver Run Resort & Conference Center, Breckenridge, CO Sponsorship: Sponsored by the Colorado Society of CPAs and the following seventeen state CPA Societies: Arkansas Society of CPAs, Connecticut Society of CPAs, Florida Institute of CPAs, Hawaii Society of CPAs, Idaho Society of CPAs, Indiana CPA Society, Iowa Society of CPAs, Kansas Society of CPAs, Society of Louisiana CPAs, Mississippi Society of CPAs, Montana Society of CPAs, South Carolina Association of CPAs, South Dakota Society of CPAs, Texas Society of CPAs, Utah Association of CPAs, Washington Society of CPAs, Wisconsin Institute of CPAs. The 2013 Multi-state CPE & Ski Conference supported by eighteen state CPA societies is pleased to bring you the very best CPE & Ski Conference. The Conference features six 4-hour sessions on a wide variety of today’s most popular CPE topics. The instructors rank among the top CPE instructors in the United States. To receive an information packet containing detailed course descriptions and instructor biographies, please call K2 Enterprises at (888) 542-9390. Or you may register by faxing the registration form below to the Colorado Society at (303) 773-6344 or mail the form to the Colorado Society of CPAs, 7887 E. Belleview Avenue, Suite 200, Englewood, CO 80111.

Registration Form (Please indicate the sessions you would like to attend) Name: Company: Address: City, State & Zip: Excel – Best Unknown Features for Accountants iPad Federal Tax Update Accounting and Auditing Update Tech Update Storing & Synchronizing Data in the Cloud

www.k2e.com/ski

1/7/13 1/7/13 1/8/13 1/8/13 1/9/13 1/9/13

7:30am - 11:00am 4:10pm - 7:40pm 7:30am - 11:00am 4:10pm - 7:40pm 7:30am - 11:00am 4:10pm - 7:40pm

Phone & Fax: 4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE 4 hours of CPE

$100.00 $100.00 $100.00 $100.00 $100.00 $100.00

Payment Due at time of Registration: Check One: 8 hours - $200 12 hours - $300 16 hours - $400 20 hours - $500 24 hours - $600 Method of Payment: Check Visa MasterCard Discover Card Card Number: Expiration Date: Cardholder Name: Signature: Hotel Accommodations: Reservations can be made by calling Beaver Run Resort at 1-800-525-2253 and identifying as being part of the Colorado Society of CPAs CPE & Ski group and/or K2 Enterprises CPE & Ski and group code: 50B7CV. Colorado Society of CPAs Cancellations/Transfers Policy: A. Cancellations made 8 business days or more before the conference - no charge. B. Cancellations made within 3 to 7 business days are subject to a charge equal to 12% of the registration fees. C. Cancellations made within 2 business days are subject to a charge equal to 50% of the registration fees. D. No notice given of cancellation is subject to a charge equal to 120% of the registration fees. E. Transfers will be handled on the same basis as cancellations. I agree to the terms of this cancellation policy.

Signature_____________________________________

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

South Carolina CPA Report

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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.

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.

The cumulative effect of years of marketing exclusively to the accounting profession, combined with our timetested system of identifying suitable candidates, topped-off with experiencedriven transition planning – achieves your intended results.

Our goals for every sale: 1. Maximize the practice’s value.

2. Simplify the process. We have a unique process…The Seamless Succession™ 3. Help the buyer succeed.

Current Featured Practice: SC1049 Charlotte Area Payroll BusinessEstablished payroll service available in the Charlotte area available for $1,500,000. Great systems in place with excellent cash-flow to owner.

Impact of Health (continued from 16) mainstream. Beginning in 2014, the ACA requires that all plans adhere to a 3:1 ratings ratio with no ability to base the rates on gender. In our current system, there is somewhere close to a 7:1 ratio, which means that a 20 year old will pay about seven times less than a 70 year old. This is because the older we get, the more care we typically require. We also currently have a system that allows for rating based on gender. Young mens’ premiums are less than the premiums for young women, and older mens’ premiums are typically higher than premiums for older women. In the future, under the ACA, premiums will be the same for both sexes. How does this impact you as a consumer? Well, since there will no longer be more than the 3:1 ratio, rates for our younger population (those under 45) will increase dramatically in order to comply with the law.

These are just a few of the items that will have an impact on your health plans as we move into the future of health care reform. How much of an impact these all have remains to be seen. Stay tuned to Southeastern Insurance Consultants for more information as we start to see the impact of this law.

Visit www.sicconsultants.com to learn more.

CLI CK

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South Carolina CPA Report

Accounting Practice Sales www.accountingpracticesales.com Inside Back Cover ADP accountant.ADP.com Page 25 American Pensions www.ampen.com Inside Front Cover Aon/BB&T Insurance Services/ AICPA Professional Liability Insurance Program www.cpai.com Page 33 Blytheco www.blytheco.com Back Cover CAMICO www.camico.com page 12 CGMA www.cgma.org Page 21 Copper Dome Strategies, LLC www.HSBCooperDome.com Page 26 Jerry Meek www.jerrymeek.com page 31 John F. Hamilton, CPA JOHNFH@aol.com Page 32 PNC Bank 1-877-535-6316 page 4

Get Social

with SCACPA on Facebook, Twitter, LinkedIn and Wordpress!

Visit www.scacpa.org/socialmedia (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

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