NEW LOOK FOR TODAY’s CPA
Today’sCPA July/Aug. 2011
T ex as So c i et y of
Ce rtifie d Public Ac c oun tan t s
Conversation with the
Chairman Incoming Society Leader Says TSCPA Service Has Been Her Window To The World
Ethics Education for CPAs in Texas: Is it Working? Paperless Tax Solutions The 82nd Texas Legislature Goes On
Also: 2011-2012 TSCPA Chapter Officers Inside!
How long
would your savings last if your paychecks stopped tomorrow?
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our income means more than the numbers written on your paycheck. That’s because your financial future is generally based on your ability to earn an income. But what if a serious car accident leads to back injuries? Or your doctor diagnoses cancer and prescribes an aggressive course of radiation and chemotherapy? Or the sudden headache is really a stroke that leaves you unable to work as a financial professional?
They’re all real-life scenarios. And they could easily mean the end of your ability to earn a paycheck as a financial professional. Without a steady income, how long would your family be able to pay rent or take care of the mortgage? What about car payments? Credit card bills? Utilities like electricity and the phone? What happens to your children’s college education? Those everyday expenses don’t disappear just because your paycheck stops. That’s why TSCPA sponsors the Group Disability Income Insurance Plan. Unlike many disability plans offered through an employer or counted as a “business expense” if you pay your own premiums, benefits through this program for TSCPA members are generally paid TAX-FREE.1 Plus, the plan is designed to pay up to $5,000 in monthly benefits if a covered disability prevents you from working as a financial professional. The TSCPA plan pays if you can’t work in your own occupation. (Many other disability plans only pay benefits if you can’t work in ANY job.) Think of it as TSCPA’s way of helping you protect your earning power as a specially trained financial professional.
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Real-Life Illnesses & Injuries That Can Stop Your Income
You’re not immune from the financial impact of a disability just because you have a desk job. Take a look at five common medical conditions that are already preventing other professionals from earning an income: 1. 2. 3. 4.
Cancer Back injuries Complications of pregnancy Heart attacks, heart disease and stroke 5. Joint, muscle and connective tissue diseases Your income is too important to leave unprotected. Take a closer look at the TSCPA-sponsored Group Disability Income Insurance Plan today.
Ready to find out more about the TSCPA-sponsored Group Disability Income Insurance Plan?
For complete plan information (including eligibility, premium rates, benefits, limitations, exclusions and termination provisions, etc.), call toll-free
1-800-262-7689 or visit us online at: www.tscpainsure.com
Please consult your tax advisor for more information.
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Sponsored by
AR Ins. Lic. #245544 CA Ins. Lic. #0633005 d/b/a in CA Seabury & Smith Insurance Program Management
Underwritten by New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010 (Policy Form GMR)
50011 ©Seabury & Smith, Inc. 2011
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50011 TS
Full Size: Live Size: Bleed: 1/ Folds to: Colors: 4C
Contents
July/August 2011 Volume 39, Number 1
Chairman Donna Holliday Wesling, CPA
Executive Director/CEO John Sharbaugh, CAE
Editorial Board Chairman Arthur Agulnek, CPA
Staff Managing Editor DeLynn Deakins ddeakins@tscpa.net 972-687-8550 800-428-0272, ext. 250
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Technical Editor C. William Thomas, CPA, Ph.D. Bill_Thomas@baylor.edu
Column Editors Greta P. Hicks, CPA Mano Mahadeva, CPA, MBA James F. Reeves, CPA C. William (Bill) Thomas, CPA, Ph.D.
Web Editor Wayne Hardin whardin@tscpa.net
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Contributors Ali Allie; Melinda Bentley; Rosa Castillo; Jerry Cross, CPA; Anne Davis, ABC; Donna Fritz; Rhonda Ledbetter; Craig Nauta; Kim Newlin; Bob Owen, CPA; Catherine Raffetto; Patty Wyatt
Director, Marketing & Communications Janet Overton Design/Production/Advertising The Warren Group thewarrengroup.com custompubs@thewarrengroup.com
Classified Donna Fritz Texas Society of CPAs 14651 Dallas Parkway, Suite 700 Dallas, Texas 75254-7408 972-687-8501 dfritz@tscpa.net
Editorial Board Arthur Agulnek, CPA-Dallas; Lisa Bauman, CPA-Dallas; James Danford, CPA-Fort Worth; Greta Hicks, CPA-Houston; Jeffrey Liggitt, CPA-Dallas; Mano Mahadeva, CPA-Dallas; Alyssa Martin; CPA-Dallas; Dawne Meijer, CPA-Houston; Ty Moore, CPA-Houston; Jan Taylor Morris, CPA-Houston; Windford Paschall, CPA-Fort Worth; Marshall Pitman, CPA-San Antonio; Mattie Porter, CPA-Houston; Kamala Raghavan, CPA-Houston; James Reeves, CPA-Fort Worth; Mike Rogers, CPA-Houston; Brinn Serbanic, CPA-East Texas; Paul Willey, CPA-Dallas.
cover story
columns
24 Conversation with the Chairman
5 Chairman’s Message
Today’sCPA
| July/August 2011
Incoming Society Leader Says TSCPA Service Has Been Her Window To The World
society features 14 Eye on the Ball
Mi Tierra CFO Chairs Chapter Funlympics
19 Capitol Interest
The 82nd Texas Legislature Goes On
Strong, Diverse, United – Wherever Our Paths Take Us, We Are All CPAs
6 Tax Topics
Deductible Entertainment Facility Expenses
7 Business Perspectives
Bridging the Gap
technical articles
8 Accounting and Auditing
32 Ethics Education for CPAs in Texas: Is it Working?
10 Emerging Issues
© 2011, Texas Society of CPAs. The opinions expressed herein are those of the authors and are not necessarily those of the Texas Society of CPAs. Today’s CPA (ISSN 00889-4337) is published bimonthly by the Texas Society of Certified Public Accountants; 14651 Dallas Parkway, Suite 700; Dallas, TX 75254-7408. Member subscription rate is $3 per year (included in membership dues); nonmember subscription rate is $28 per year. Single issue rate is $5. Periodical postage paid at Dallas, TX and additional mailing offices. POSTMASTER: Send address changes to: Today’s CPA; 14651 Dallas Parkway, Suite 700; Dallas, TX 75254-7408.
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Ethics education requirements have been added to the CPA exam and for all licensees. Are CPE providers meeting CPAs’ continuing education requirements?
It’s All About the Money (or is it?)
The Best Album of All Time
12 Chapters
2011-2012 TSCPA Chapter Officers
36 CPE: Paperless Tax Solutions
departments
16 Take Note 42 CPE Calendar 44 Classifieds
Public accounting firms are automating the tax preparation process. Here are some ways you can go paperless in your office.
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Chairman’s Message By Donna Holliday Wesling, CPA | TSCPA Chairman
Strong, Diverse, United – Wherever Our Paths Take Us, We Are All CPAs Incoming TSCPA Chairman Donna Holliday Wesling, CPA-Austin, discusses her theme and goals for 2011-12 in this first Today’s CPA issue of the Society’s new fiscal year. Next issue, Wesling and TSCPA Executive Director/CEO John Sharbaugh, CAE, will continue to provide a joint Chairman’s and Executive Director’s Message for Today’s CPA.
My theme for this year as your TSCPA chairman is: Strong, Diverse, United. As incoming chairman of a Society that supports and serves a diverse and strong community of accounting professionals, my goals for the coming year include continuing the effort to meet the needs of all our members. We are arguably one of the most diverse work forces in the state, a work force that is united by our certificate and a special identity: we are united as certified public accountants. I think the word “diversity” has evolved into an overly narrow focus. This is especially
significant to me as I contemplate our profession’s leading strength: diversity. Our diversity as certified public accountants in Texas is more than racial diversity, although we are becoming more racially diverse. Our diversity is more than gender diversity, although we have an equitable balance of men and women among our ranks in 2011. But CPAs connect on many other levels of diversity. The 28,000 members of TSCPA speak as young and old, and as members in public practice, industry, government, nonprofits and education. One of the many initiatives we have for our diverse membership is in our business and industry sector, and I want to see those initiatives continue. That’s because what makes us strong, our diversity, is also our biggest challenge. A diverse membership equals diverse needs. We must focus our resources to create value in Society membership for all those very different professionals. There will also be a focus on our strategic planning goal to ensure that we continue to develop younger leaders for the future. I made a big push to place a certain number of members who are 40 years and younger on every TSCPA committee. I think we have accomplished that. We also sent the chapters a list of people in their area who had at least three years of experience and asked them to look at those CPAs with an eye to who would
be good in a leadership position. And I think we’ve done a good job to ensure that those new and younger CPAs are actively welcomed into leadership and encouraged to develop. At TSCPA’s Leadership Day in May, there were a number of those young people in attendance. I noticed that the established leaders participating went out of their way to make contact with our up and coming torch bearers. That is very gratifying. I am very excited about that. We have also begun the process of publicly recognizing “rising stars” in the profession, to encourage others to make that a part of their career and volunteer goals. Our new Rising Stars program will soon be underway, and you’ll be hearing more about it in the months ahead. A very critical stage of leadership development is nurturing our student members, particularly at the chapter level. We want to get them involved with the Society as soon as possible in their professional development, which can be a challenge given all the competition from university clubs and programs. But there are very real advantages in early involvement for accounting students and for TSCPA. Many chapters are already very much invested in this kind of effort, like the Permian Basin Chapter shrimp boil for students and the Houston Chapter’s long standing and active student auxiliary. We can carve out our niche in any number of innovations. CPAs hold a unique place in the world and here in Texas. TSCPA’s membership is strong, diverse and united. We recognize the value of our colleagues, however much their path may diverge from ours in some ways. We are different, yet we are all alike. We serve the common good, ours and the public’s. We are all CPAs. I look forward to serving as your 2011-12 TSCPA Chairman. n
Donna Holliday Wesling can be contacted at donna@weslingcpa.com.
Today’sCPA
| July/August 2011
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Tax Topics By Greta P. Hicks, CPA | Column Editor
Deductible Entertainment Facility Expenses Jim has a tour bus, one of those self-contained buses with a living room, bath, kitchen and bedroom. Jim sells insurance and as a business promotional tool, the bus sits at music venues where he allows the musicians to use the bus before, during and after the concerts. The bar, kitchen and bath facilities are fully stocked. Most of the time, Jim is in attendance and answers questions about insurance products, claims and other insurance-related matters. The expenses for the bus include: interests, utilities, repairs, maintenance, insurance and storage fees. Plus, there is depreciation for the cost of the bus, its improvements and related contents. The out-of-pocket expenses include food, beverages and miscellaneous items for guests. Yes, Jim does spend the night in the bus himself. What part of these business development expenses can Jim deduct? Almost none! Under Sec. 274(a)(1), “no deduction otherwise allowable for any expenditure with respect to entertainment unless the taxpayer establishes: i) that the expenditure was directly related to the active conduct of the taxpayer’s trade or business, or (ii) in the case of an expenditure directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), that the expenditure was associated with the active conduct of the taxpayer’s trade or business.” I.T. Regs. Sec. 1.274-2 (e)(3)(i) list as nondeductible expenditures: depreciation and operating costs, such as rent and utility charges, expenses for maintenance, preservation or protection of a facility, salaries and expense for subsistence paid to caretakers or watchmen, and losses realized on the sale or other disposition of a facility. The general rules imply nothing is deductible, but I.T. Regs Sec. 1.274-2(f) defines specific exceptions, and I.T. Regs. Sec. 1.274-2(e)(3)(iii) provides an exception for
“out-of-pocket” expenses incurred at the time of an entertainment activity. Which exceptions does Jim possibly meet? Jim does discuss business with the musicians before, during or after the entertainment. He also has out-of-pocket costs during the entertainment, which is limited to 50 percent under Sec. 274(n). Of the specific exceptions in I.T. Regs Sec. 1.274-2(f), most relate to employees versus customers. A facility used by employees or the general public is more likely to be a deductible facility versus one used by customers. One that Jim might consider is, “Expenses for goods, services and facilities made available by the taxpayer to the general public.” I.T. Regs Sec. 1.274-2(f)(viii), items available to the public. Any expenditure by a taxpayer for entertainment (or for a facility in connection therewith) to the extent the entertainment is made available to the general public is not subject to the limitations on allowability of deductions provided for in paragraphs (a) through (e) of this section. Expenditures for entertainment of the general public by means of television, radio, newspapers and the like will come within this exception, as will expenditures for distributing samples to the general public. Similarly, expenditures for maintaining private parks, golf courses and similar facilities, to the extent that they are available for public use, will come within
this exception. For example, if a corporation maintains a swimming pool which it makes available for a period of time each week to children participating in a local public recreational program, the portion of the expense relating to such public use of the pool will come within this exception. Documentation under Sec. 274 is required. Jim must keep a diary, log, journal, or some written record of use of the facility. The IRS assumes that the bus is personal unless Jim can provide the documentation otherwise. What other types of facilities meet the definition of entertainment facility? The IRS definition of entertainment facility is very broad. Sec. 1.274-2(b)(1) and (2) of the Income Tax Regulations provides the following examples: entertaining at night clubs, cocktail lounges, theaters, country clubs, golf and athletic clubs, sporting events, and on hunting, fishing, ski, and vacation lodges. Other examples of facilities which might be used for, or in connection with, entertainment include sail boats, fishing boats, yachts, hunting lodges, fishing camps, swimming pools, tennis courts, bowling alleys, automobiles, airplanes, apartments, hotel suites, and homes in vacation resorts. To determine if expenses for your facility are deductible, see if they meet one of the 1.274-2(f) exceptions: • Food and beverages for employees. • Certain entertainment and travel expenses treated as compensation. • Reimbursed entertainment expenses. • Recreational expenses for employees generally. • Business meetings for employees, stockholders, etc. • Meetings of business leagues, etc. • Items available to the public. • Entertainment sold to customers. For entertainment to be deductible, expenditures for the use of entertainment facilities must (1) meet one of the I.T. Regs Sec. 1.274-2(f) exceptions, (2) be an ordinary and necessary Sec. 274(a)(1) business expense or an expense for the production of income and (3) be properly and completely documented under Sec. 274(d). n
Greta P. Hicks, CPA, is a consultant on IRS problems, seminar discussion leader, author of continuing education courses and web content provider. She can be reached at gretahickscpa@yahoo.com or www.gretahicks.com.
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Today’sCPA
| July/August 2011
Business Perspectives By Mano Mahadeva, CPA, MBA | Column Editor
Bridging the Gap Hardly a day goes by without the financial press reporting in-depth issues related to pension plans in the United States. Just recently, the trustees for Social Security forecast that its funds will dry up in 2036, one year sooner than previously thought. Similarly, over the past few years, there has been a focus on the epic underfunding of defined benefit plans within state and local governments. Private sector defined contribution plans have done no better because of lower amounts in contributions and ill-informed consumers. It has become a new world of personal responsibility. Pension plans have been around since the 1800s, and the real growth of these plans may be attributable to developments around the Second World War period. High tax rates on corporate profits encouraged companies to take advantage of inexpensive, tax-deductible pension plans. Managers boosted fringe benefit programs by offering liberal pension provisions, to offset price and wage control stabilization programs, which were legislated to combat inflation. A third attribute may have risen due to the social and political environment of the Depression era via a pressing need to provide for economic security for the American people. And labor leaders felt that pensions were required as a supplemental source of retirement income as Social Security payments as the sole source of income benefits was considered inadequate. A pension plan is an arrangement by an employer who provides paid benefits to employees after they retire, for services they provided while being employed. The two most common plans are the defined benefit (DB) plan and the defined contribution (DC) plan. A defined benefit plan defines the benefits the employee will receive at retirement. The benefit formula is based on either/and a combination of the years of service and the employee’s rate of pay at or near retirement. The
employer is responsible for the payment of the defined benefits, and any shortfalls in accumulated assets must be made up by the employer. In a defined contribution plan, only the employer contribution to the plan is defined. Therefore, the liability to the sponsor is only the contribution made to the plan, and not the benefit ultimately received by the participants. This contribution can be based on many factors, but typically relate to employer profits, length of employee service, and employee compensation. It was easy for employers to make pension promises in years long past. There were only a few lives at stake. It was easier to promise greater pension benefits in the future than pay higher wages. The cost to manage and fund plans was low as the window of liability was far in the future. Today, pension plans are facing many challenges due to demographic changes, overly optimistic plan assumptions, and an over reliance on broad market performance, resulting in major financial implications for the beneficiaries. Due to better health habits, newer therapies and state of the art technology, beneficiaries have longer life expectancies today. Some beneficiaries are retiring earlier and therefore, are living longer in retirement. Baby boomers have reached retirement age in large numbers;
they are succeeded by a smaller generation of beneficiaries, who will shoulder a larger cost burden in the future. Pension plans linked to market performance, instead of an asset liability structure, have fallen well short of target. And these shortfalls have had a significant impact on company financial position, results of operations and cash flows. To manage risk and expense, companies have adopted various strategies. Some have frozen their plans; some have reduced contributions for new plan entrants; some have begun to move toward defined contribution plans instead. A move toward a defined contribution plan reduces future promises for the sponsor organization, and transfers total risk over to employees who do not have the time, knowledge or skill to think about asset returns, tax rates, inflation or required contributions! Unfortunately, there are not many viable solutions. Increasing taxes may not be a political option; increasing contributions depends on the financial status of the sponsor organization. Asset returns are not expected to replicate those of a decade ago. Reducing other societal benefits to fund a pension shortfall may not be feasible or not a politically viable solution. A potentially viable option, supported by future demographic trends, is for some of the older labor force to extend their working lives and defer retirement by some years. This option would make them eligible for higher benefits and potentially offer them a financial cushion in retirement. The cumulative result may be that many employees face retirement with an income well short of their expectations. And if pension incomes are lower than expected, older workers may be unable or unwilling to retire. Going forward, state governments, Congress and employers will have difficult decisions to make. Large sums are at stake. The sooner the shortfalls are dealt with, the better. n
Mano Mahadeva, CPA, is executive director with U.S. Oncology in Plano. He serves on both the Editorial Board and the Business and Industry Issues Committee for TSCPA. Mahadeva can be reached at mano.mahadeva@usoncology.com.
Today’sCPA
| July/August 2011
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Accounting and Auditing By C. William (Bill) Thomas, CPA, Ph.D. | Column Editor
It’s All About the Money (or is it?) Why did we become CPAs? Were you like me, choosing a college major because you were a practical person in need of a job to earn a living? And hasn’t it provided us a pretty handsome return? Let’s face it: we all get a buzz from playing the game, making money and counting it up. That’s what we do, right? Has this been your primary attitude toward the accounting profession for your entire career? Just a way to make a living? Or as you have matured as a successful professional and have used your professional skills to provide for your material needs and more, have you ever wondered, like the title to the old song, “Is that all there is?” Have you ever thought of using your accounting skills as a way to “give back?” What a novel idea! Actually, giving back by using our financial skills to serve others isn’t really a novel idea. Many of us have been faithfully contributing our skills to worthy causes like community charities, churches, synagogues, mosques, schools, and other organizations throughout the years on a pro bono basis. However, volunteer work is sometimes put on the back burner, and pro bono accounting services are still in fairly short supply. The fact is, our skills and talents are in big demand, and not always by those who can afford to pay us. Have you engaged your accounting and business skills in service to others yet?
A World of Hurt, An Ocean of Needs This summer, my wife and I will help sponsor 14 Baylor University students on our department’s third annual vocational mission trip to Uganda. It’s quite a stretch for me. The trip has helped focus my attention on the fact that so many
nonprofit organizations, as well as persons who serve humanity through full-time charitable work, need basic business skills to thrive, and sometimes, even survive. Let me provide a few examples. Uganda has a 70 percent unemployment rate, even for well-trained new accountants. We are sponsoring a career development seminar for Ugandan students, featuring sessions on how to dress, how to build a resume, and how to conduct an interview. Because so few of them get jobs, though, we’re adding sessions in entrepreneurship, how to start their own businesses, and how to seek and utilize start-up capital. Accounting systems and technology are quite primitive in Uganda, with inconsistent electrical services, few computers and few resources to buy them. We’re hosting financial budgeting and planning seminars for pastors of Ugandan churches. Our tools for these financial seminars will be 10-column journal paper and four-function calculators (remember
those?). In addition, they have no concept of internal controls, and financial and fiscal accountability. Where do you start? Another U.S.-based charity, run by an American physician and his wife, is doing miraculous things to help refugee children of the former Lord’s Resistance Army, a group that enslaved and made soldiers out the children. They operate a hospital, a school, remote clinics, and an orphanage where about 60 children live. Although they’re doing great humanitarian things, their financial and internal control systems, as well as their corporate governance system, are pretty much in disarray. We’re going to try to help them. An estimated 1.2 million people are living with HIV in Uganda, which includes 150,000 children. An estimated 64,000 people died from AIDS in 2009 and 1.2 million children have been orphaned by Uganda’s devastating epidemic. Many survivors struggle to make a meager living that averages less than $100 per month from various “cottage businesses” such as bead making and selling vegetables. We are going to work with some of these businesses to help provide them start up “micro-loans.”
So What? Involvement in this trip has reminded me how fortunate I’ve been to have received an education and to have achieved some measure of financial security. As a baby boomer, I have come to the realization that it’s time for me to give back. Maybe you learned this lesson earlier than I have. If so, good for you! If you haven’t, there is still time to do so. Go ahead, volunteer! From serving on a nonprofit board, to participating in a Volunteer Income Tax Assistance (VITA) program, to perhaps being a volunteer controller or CFO of a charity, there is no shortage of opportunities. You don’t have to go to Africa to use your accounting skills to help someone else learn to help themselves. After all, it’s not just about the money! n
C. William Thomas, CPA, Ph.D., is the KPMG/Thomas L. Holton Chair and the J.E. Bush Professor of Accounting in the Hankamer School of Business at Baylor University in Waco. Thomas can be reached at Bill_Thomas@baylor.edu.
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Today’sCPA
| July/August 2011
Newest Member Benefit Discount Tickets for TSCPA Members TSCPA is pleased to introduce its latest member benefit, discounted pro sports tickets! Currently, TSCPA has arranged deals with the San Antonio Spurs, Houston Rockets and Dallas Mavericks. To check out the discounts, please visit the Member Benefits Marketplace at tscpa.org. Stay tuned for more ticket packages on the way. Becker CPA Review Direct Bill Program
What can you expect from TSCPA besides Personal and Career Development Cutting-Edge Professional Information and CPE Enhancing the Image of the CPA Profession Recruiting New Members to the Profession Protecting the CPA Certificate You can expect special deals and discounts
full four-part CPA review course www.beckercpa.com/tscpa Texans Credit Union Full service financial institution 800-843-5295, www.texanscu.org Paychex Partner Program Payroll processing 877-264-2615 ProPay Discounts on credit card processing 888-227-9856 Tech Depot Discounts on computer and technical products 888-289-6424 Office Depot Discounts on office supplies 973-594-3527 FedEx Office Discounted pricing on most services, including digital printing and copying 646-302-9242 Infinet, Inc. AntiSpam/AntiVirus Protection 214-446-0089 Accurate Forms & Supplies Discounts on computer supplies and tax forms 800-777-0072 Nova Information Systems Discounts on payment processing services 800-546-1831 Monroe Systems for Business Discounts on calculators and other supplies www.monroe-systems.com Bank of America TSCPA credit card programs – Platinum MasterCard, CPA logo and other benefits 800-932-2775 CPA Exam Review Discounts For a complete list of exam review discounts available, visit the Member Benefits Marketplace at tscpa.org.
FedEx Shipping Discounts on select FedEx shipping services Passcode: 4R9TJP 1-800-MEMBERS InterCall Exclusive rates on audio and web conferencing services. 1-800-636-2377 Subscription Services Discounts on magazine subscriptions 800-603-5602 CareerBank.com Online career center for accounting and finance professionals tscpa.careerbank.com Framing Success Discounts on professional framing of all certificates 800-677-3726 Marsh Affinity Group Services TSCPA Insurance Trust offering a variety of insurance plans, including TSCPA-sponsored professional liability insurance 800-262-7689 Liberty Mutual Homeowners and auto insurance - ID number: 7026 800-524-9400 AXA Equitable TSCPA Members’ Retirement Program – Members are waived $25 enrollment fee. 800-523-1125, www.axa-equitable.com/mrp Hertz Discounts on car rentals - ID number: 1041643 800-654-2200, www.hertz.com La Quinta Inns and Suites Ten percent off standard room rates. Discount code: TXSCPA 800-531-5900, www.lq.com Quest Membership Program Save 50 percent on your next hotel bill 800-STAY450
Please visit the Member Benefits Marketplace at tscpa.org for complete information and links to each of our Member Discount Programs. Today’sCPA 46
| July/August 2011
Today’sCPA
May/June 2011
Questions? Contact the Member Benefits Administrator at 1-800-428-0272 ext.9216 or craffetto@tscpa.net.
Emerging Issues By James F. Reeves, CPA | Column Editor
The Best Album of All Time As I was recently participating in AICPA’s CPA Horizons 2025 survey and asked to opine on the Top 5 issues facing the accounting profession over the next 12 months, five years and by 2025, I was reminded of a recent conversation about the best album of all time. I thought that was an easy one … The Beatles’ “White Album,” right? As we discussed it, however, we thought of a few more great albums, then a few more, and then a few more that deserved our consideration. Before I knew it, we had compiled a Top 25 list. Similarly, when thinking about the top issues or trends facing the accounting profession, it seems like an almost endless list of changing dynamics that will shape the profession in the years ahead: • the rapidly consolidating and increasingly competitive CPA firm marketplace, • globalization, • demographic trends and the multigenerational workforce, • new platforms for communication, • a burgeoning entrepreneurial environment, • technology-enabled mobility and telecommuting, • immigration and multiculturalism, • ever-increasing complexity, • the convergence of information and software, • sustainability, and • the evolution of key industries like energy and health care. These will each have a profound impact on the profession. That said, given that generally accepted accounting principles (GAAP) and/or the federal tax code constitute the foundation of most CPAs’ body of work, two issues rise to the top of any conversation about the most impactful trends facing the profession in the years ahead.
Accounting Standards Evolution Everyone by now has at least heard of International Financial Reporting Standards (IFRS) and that the United States is one of
the only industrialized nations not in sync with the rest of the world. We are currently going down a path of convergence of selected Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) standards under a 2006 Memorandum of Understanding. That project is supposed to be completed this year, but so far the convergence process is not hitting its milestones. On a parallel path, the Securities and Exchange Commission (SEC) is pursuing a work plan whereby it is scheduled to announce its position on IFRS for U.S. public companies by the end of the year. It could range from an outright requirement to adopt IFRS by a date certain (say 2016), to an option to convert, leaving it up to individual registrants, or a hybrid condorsement approach. With condorsement, first mentioned (and I don’t think by accident) by SEC Chief Accountant James Kroeker, U.S. GAAP would continue to exist. FASB and IASB would finish their joint convergence projects, then FASB would work to converge remaining U.S. GAAP with IFRS over a period of time. FASB would also utilize an “endorsement” process, similar to that used in the European Union (EU), to consider new standards issued by IASB for incorporation into U.S. GAAP, with or without modification. This condorsement approach would move the United States gradually toward IFRS but allow FASB to retain control over U.S. GAAP, and reduce the effort and risks associated with a full-scale mandated switch to IFRS. What happens in the nonpublic company arena
is another story altogether. In February, the Blue Ribbon Panel recommended a separate board under the oversight of the Financial Accounting Foundation (FAF) be established to develop a new standard-setting model that follows U.S. GAAP, with exceptions for private companies. FAF has formed a working group to obtain input and issue an action plan later this year to address whether or how to devise rules that differ from those of public companies. One thing to keep in mind as this process unfolds is that the demand for private company GAAP will likely become even more acute if the SEC mandates IFRS for public companies, a framework consistent with other countries, as Canada, the United Kingdom and others are keeping national GAAP for private companies. It’s also worth noting that FAF now is including nonprofit entities in the scope of their deliberations, whereas the Blue Ribbon Panel specifically excluded nonprofits.
U.S. Deficits and Federal Tax Reform As the current imbroglio over raising the debt ceiling has illustrated, the debate over solutions to the U.S. fiscal crisis will likely become the center of the 2012 presidential campaigns. While no one expects serious action before 2013, the likelihood that federal tax reform will be one of the key elements of the debate is increasing as each new proposal is floated. From the National Commission on Fiscal Responsibility and Reform (aka Deficit Commission), to the Domenici-Rivlin Plan, to Rep. Paul Ryan’s Path to Prosperity (adopted by the House of Representatives), to the Gang of Six to President Barack Obama himself, each proposal favors lowering the corporate tax rate and broadening the base by reducing or eliminating tax expenditures. The problem is that most U.S. businesses are pass through entities, which brings individual taxation into the tax reform discussion. Ernst and Young recently published a study showing that small business owners’ tax liability would increase by approximately 8 percent if corporate rate lowering and base broadening were enacted. This leads directly into individual tax reform, which is much more politically dicey, especially at this point in the political cycle.
James F. Reeves, CPA, is Senior Vice President, New Product Development at the Tax and Accounting business of Thomson Reuters. Contact him at jim.reeves@thomson.com, or visit his blog at http://jamesfreeves.blogspot.com.
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Today’sCPA
| July/August 2011
A similar political challenge is the fallout from creating winners (via rate reduction) and losers (from the loss of targeted tax incentives that would be eliminated) that would certainly occur with such an approach to tax reform. In any serious tax reform efforts, I believe we’ll see an evolution of the current system as opposed to a more radical approach like a value added tax (VAT). It will probably begin with noncontroversial simplification proposals like those recommended by the Volker Commission – consolidating child benefits, retirement benefits and education benefits, simplifying the kiddie tax, and eliminating the individual and corporate alternative minimum tax (AMT). It should also address persistently troublesome areas like worker classification, the earned income credit, the myriad of phase outs, and neutralizing debt and equity financing of businesses. It will probably include increased funding for technology initiatives at the Internal Revenue Service (IRS), like extensible business reporting language (XBRL) for tax reporting and IRS Commissioner Douglas Schulman’s vision for a 21st-century return filing process, whereby the taxpayer or preparer downloads a 1040 pre-populated
with 1099 and W-2 data from irs.gov, adds whatever additional information is necessary to complete the return, and electronically submits. The reform efforts will also include base broadening, tax expenditure eliminating proposals similar to the ones suggested by the Deficit Commission et al. This will be the contentious part, as sacred cows like mortgage interest, state and local tax, and charitable contribution deductions will be on the table, along with the exclusions for employer-provided health insurance and municipal bond interest. On the corporate side, tax expenditures include accelerated depreciation, the U.S. manufacturing deduction, the research and development (R&D) credit, last in first out (LIFO), the low income housing credit, and the deferral of controlled foreign corporation (CFC) income. In one recent proposal, conservative economist and former Reagan advisor Martin Feldstein provided what may be a model to overcome the political hurdles tax reform will face. Feldstein suggested in a recent New York Times op-ed that a cap on the tax reduction from tax expenditures, calculated as a percentage of adjusted gross income, would be a way to eliminate
the revenue drain from tax expenditures without eliminating individual deductions. The cap would not determine the amount of an individual deduction or exclusion, so individuals would continue to benefit from their chosen tax benefits, up to the amount of the cap. Given political realities, it will take some creative policy making and effective legislation drafting to make tax reform happen, but Feldman’s proposal may provide a blueprint for a bipartisan solution. Finally, reform will likely address certain global realities, including a territorial tax system that has been proposed for multinationals, enabling income to be taxed in the territory where it is earned.
The List Keeps Growing In a sense, we’ve just scratched the surface when thinking about issues and trends that will shape the accounting profession in the years ahead. In any scenario, however, it’s hard to imagine that accounting standards evolution and federal tax reform would not be part of the conversation. But like trying to pick the top album or top song of all time, the list just keeps on growing, which is why we have the Emerging Issues column in Today’s CPA. n
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Chapters By Rhonda Ledbetter | Chapter Relations Representative
EMERGING ISSUES
2011-2012 TSCPA Chapter Officers
accomplished through direct expenditures rather than through the tax code. Further, she Abilene Chapter recommends that Congress approach tax reform inDiane a manner similar to zero-based budgeting, Terrell, President Blanks, anJeffrey approach also President-elect proposed by the National Lori E. Herrick, ViceResponsibility President and Commission on Fiscal Gerald A. Reid, Secretary/Treasurer Reform. What a novel idea – dealing with the nation’s public policy objectives in an open and Austin Chapter transparent way, which ultimately empowers the Jan Keeling, President voters, while improving the ability of individuals Guy Draper, President-elect and businesses to make sound economic Connie B. Clark, Vice President decisions. Matthew G. Malcom, Vice President In addition to complexity and fairness Chuck Zeugner Jr., Vice President concerns, drivers of fundamental tax reform Jeannette M. Cortinas, Treasurer include the temporary nature of the recent Ansley S. Carruth, Treasurer-elect
agreement to extend all the Bush tax cuts Brazos Valley Chapter and the 2009 estate tax structure, the everLyn Kuciemba, increasing reach ofPresident the AMT, dozens of expiring Rodney J. Horrell, President-elect/V.P. Amy N. Restivo, Secretary Amber M. Bass, Treasurer
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tax provisions (many that are now on yearto-year life support), the $350 billion tax gap, Central Texas Chapter and competitive issues for our multinational corporations by President the Code’s approach Michelle R.created Downs, L. Brown,income, President-elect toMichael taxing worldwide which in turn Sally W. Wolfe, Vice President drives these corporations to look for less taxing Shelly R. Secretary locations forNelson, investment in property, plant, Teri Lynnand H. Meyers, equipment, people. Treasurer Corpus Impact of TaxChristi Reform onChapter CPAs
Have no fear of fundamental tax reform. Susie Infante, President The Tax Reform Act of 1986 was the last time Natalie K. Klostermann, President-elect Washington actually enacted signifi cant tax Paul A. Damerow, Vice President reform, that ushered in a golden age for Anita and Cadena, Secretary/Treasurer tax professionals. Businesses still have to Dallas Chapter measure income. The government’s need for David isE.increasing Colmenero, Chair revenue exponentially as boomers Kirby H. Jackson Jr.,health Chair-elect begin retiring, the new care laws are John N. Treasurer phased in, Perkins, and we look for a more sustainable Arthur M. Agulnek, Treasurer-elect
fiscal path forward. Trust me – there is no easy way to raise $2.6 trillion a year through taxes East Texas Chapter ($3.8 trillion if you include federal expenditures financed CPAsPresident will continue to ChristybyL.debt). Gibson, Kristy A.role Everitt, play a vital in thePresident-elect area of tax planning, Gina G. DeHoyos, Vice President compliance and administration for many Kimberly S. Park, Vice President years to come. Randy L. Turner, Secretary/Treasurer
Future installments in this series will explore political and policy considerations, El Paso Chapter and the various tax reform alternatives that Jonathan W. Lucas, will be considered in thePresident coming tax reform Tony Benitez, President-elect debate.
James M. Caylor, Vice President Christopher A. Parker, Vice President Terithe A. Author: Reinert,James ViceF. President About Reeves, CPA, is Senior Belen D. Briones, Vice President, New ProductSecretary Development at the Tax and Accounting business of Thomson Reuters. Contact Isabel L. Fitzgerald, Treasurer
him at jim.reeves@thomson.com, or visit his blog at Fort Worth Chapter http://jamesfreeves.blogspot.com. Susan S. Roberts, President Keith A. Hollar, President-elect
Today’sCPA March/April 2011
| July/August 2011 Today’sCPA
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Michael D. Dunlap, Vice President Steven G. Newcom, Vice President Kim L. Saunders, Vice President Robin T. Christian, Secretary Susan L. Sessions, Treasurer Adam M. Lawyer, Treasurer-elect Houston Chapter Brian C. Jones, President Mark D. Lee, President-elect Thomas J. DeGeorgio, Vice President Loyd J. Stegent, Secretary Gregory L. Mayer, Treasurer Paul A. Vanek, Treasurer-elect Panhandle Chapter Lyle C. (Cory) Joiner, President J. Mark Fields, President-elect Anne M. Carpenter, Vice President Alicia M. Pickens, Secretary Stephanie M. Fitzgerald, Treasurer Permian Basin Chapter Crystal D. Baylor, President Billy Kelley, President-elect Ryan G. Bartholomee, Vice President Valarie N. Sanchez, Secretary/Treasurer
Rio Grande Valley Chapter
Southeast Texas Chapter
Ben Peña, President Cheryl A. Bellamy, President-elect Carol B. Collinsworth, Vice President Bill Ruppert, Secretary David Segovia, Treasurer
Sheri K. DelMage, President Chris W. Busch, President-elect Brian Hebert, Vice President Cecilia Jungen, Vice President Mary Ellen Robertson, Secretary Laura C. Williams, Treasurer
San Angelo Chapter Gayla C. Thornton, President Jerry Ramirez, President-elect Patti B. May, Secretary Curtis A. Holtman, Treasurer San Antonio Chapter Tracy L. Merritt, President Melanie C. Geist, President-elect Don Crane, Vice President Maria A. Martinez, Vice President Janet E. Stigent-Burns, Vice President Charles T. Clark, Secretary Lynn S. Kupper, Treasurer Martha C. Perez, Treasurer-elect South Plains Chapter Kent Payne, President Tony Riley, President-elect Elaine D. Flynt, Vice President Cindy L. Read, Secretary/Treasurer
Texarkana Chapter Deidra D. Reeves, President Jay T. Hoy, President-elect Mark R. Van Herpen, Vice-President Kristin L. Peeples, Secretary/Treasurer Victoria Chapter Lynn M. Miori, President Christopher R. Janecek, President-elect Brenda K. Roth, President-elect Nominee Diane R. Kliem, Treasurer Wichita Falls Chapter Jason Chad Stroud, President Jeffery A. Morton, President-elect Timothy W. Norden, Vice President Mark A. Anderson, Secretary James K. Rowland, Treasurer
n
Rhonda Ledbetter is the TSCPA chapter relations representative. Contact her at 972-687-8508 or at rledbetter@tscpa.net.
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Spotlight on CPAs By Anne McDonald Davis, ABC
Eye on the Ball – Mi Tierra CFO Chairs Chapter Funlympics A beaming little boy looks up into your face and says, “Hey, mister, I had so much fun …” Is that the sort of experience that brings meaning to your life? It is for Joe Guerra, CPA-San Antonio, who after years of volunteering in some capacity for Funlympics, took over as chair. “I look back on these events and think … wow. It’s very satisfying to be involved with something that gives back to the community, a little change of pace from the day-to-day work of being a CPA. The reward is … just the kids.” Each year, the San Antonio Chapter of the Society holds a one-day community service event for underprivileged children in the Bexar County area called “Funlympics.” Youngsters vie in old fashioned competitions like tug-of-war and hula hooping and ball games. Regardless of the winners, all the participants score ribbons, and a cap, T-shirt and backpack full of school supplies to start the school year. Guerra notes the special worth of that last item: “My wife, Karen, is a school teacher and has said to me, ‘Joe, I have students who show up at school with nothing. You don’t know how important that [backpack] is for them.” The chapter works with local youth centers to bus kids to the festivities, where
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Ronald McDonald, Joe Guerra, CPA-San Antonio, and San Antonio Chapter President Tracy Merritt, CPA-San Antonio, at Funlympics in July 2010. Ronald McDonald was one of the guest entertainers at the event.
CPA and non-CPA volunteers make sure everyone is well fed and entertained. Area organizations send out mascots like Ronald McDonald and Henry the Puffy Taco from the Missions baseball team; holding demonstrations are the local police, as well as the fire department, complete with blazing red truck. Guerra emphasizes, “The community and chapter members have been very supportive. The Funlympics committee is a great group of CPAs who lend their time and talents to ensure that Funlympics is a first-class event. I was well trained by Tracy Merritt (CPA-San Antonio) to take over; she is the former Funlympics chair and current San Antonio Chapter president.”
Road to the ’lympics Guerra, who “mostly” grew up in San Antonio, claims native status despite being technically born “at the airport” in Austin. He laughs: “It was actually Bergstrom Air Force Base back then. My dad was in the military. He was even stationed in Montgomery, Ala., in the ’70s. But except for those few years, I’ve been here in San Antonio. I’ve had opportunities, situations, where I faced having to take on a new job and seemed like I might have to move. I never relished that idea. My family is here; my roots are here.” It’s only fitting that today Guerra is the CFO for MTC, Inc., which many Texans would recognize more readily as the parent
Today’sCPA
| July/August 2011
company for Mi Tierra Cafe, a beloved landmark eatery. Back in the 1940s, Pete Cortez immigrated to Texas and together with his wife, Cruz, opened a three-table restaurant in the San Antonio Market Square. Over 70 years later, the Cortez family continues to operate Mi Tierra Café, a restaurant that never closes, as well as two other restaurants in downtown San Antonio. A St. Mary’s University graduate, Guerra started out in public accounting before going into business and industry. Prior to joining MTC, he worked for Pizza Management, Inc., a large restaurant company, and then for Play By Play Toys and Novelties, Inc.
Speaking of Heritage … Another chapter program near and dear to Guerra’s heart is the Leadership Advantage Program. Guerra was involved from almost the beginning – a member of the “second class” and, he jokes, “not the youngest.” But looking back, he realizes the value of bringing the next generation along in leadership roles, and how it gave him some needed insights and perspective.
He enthuses: “It was great; I’m so glad I did it. I would encourage anyone to participate. There’s a lot of talent coming into the profession. This program is a great place for a younger CPA, or even an older CPA, to refresh skills and get new ideas. It was a fantastic networking and professional development opportunity. The class was comprised of a wonderful group of people. I hope that others take advantage of an opportunity that can really give you an edge. Sometimes we forget how important a skill leading is.” When Guerra was a young person finding his way, it was hardly a foregone conclusion that he would become a leader in his profession, or end up in accounting, or even in college, for that matter. Growing up in a blue-collar neighborhood, he doesn’t recall a lot of classmates bound for higher education. “I wanted to go to college, even though I wasn’t really sure what college was all about. Nobody else in my family except for one aunt had ever gone. Certainly, nobody had studied business or accounting,” he reminisces. “But when I took my first accounting class as a sophomore, I realized
I had an aptitude for this. So I declared myself an accounting major.” All these years later, Guerra finds it meaningful to look out for the next generation. Next year, he says he will be proud to pass the torch along to his Funlympics co-chair, “a young man named Dustin Michalak.” His own children are grown, a son, 25, a daughter who recently graduated from the University of Texas at Austin and the youngest son, a senior in college. Now that he and Karen are “empty nesters,” he tries to take advantage of his love of the outdoors – running, skiing and biking. “Most of all, I am a crazy cyclist,” chuckles Guerra. “All kinds of bikes – competitive and recreational. I especially love to ride and race mountain bikes. I think people should work hard and then have some fun.” The man who has joined his chapter in helping a lot of kids “have fun” was named the San Antonio Chapter’s Outstanding Volunteer recently, which “kind of surprised” him. “I don’t get involved for any kind of recognition,” he says quietly. “I just enjoy the kids.” n
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Take Note Renewing Your Membership Now is the time to renew your TSCPA membership! In April, TSCPA sent dues statements to all members via e-mail or regular mail, and the annual dues are payable upon receipt. You can renew online on the secure website at tscpa.org; or if you received a dues statement in the mail, you can renew using the form that was sent to you. If you have any questions, please contact Rosa Castillo in Member Services. She can be reached at rcastillo@tscpa.net or at 800-4280272, ext. 260 (972-687-8560 in Dallas).
What’s New on the TSCPA Website
AICPA Accounting Doctoral Scholars Program
Accountants Confidential Assistance Network
If you’ve considered earning a Ph.D. in accounting, AICPA’s Accounting Doctoral Scholars Program (ADS) may be the program for you. To be eligible for the program and its funding, a candidate must have: three years of recent public accounting experience in auditing and tax; a commitment to a career in teaching and research at a U.S. AACSB accredited university upon completion of a doctoral program focusing on tax or auditing; the potential to gain admission to a doctoral program at one or more of the participating universities; and U.S. citizenship or permanent resident status. For more details, please visit www.adsphd.org.
CPAs, exam candidates or accounting students dealing with alcohol or drug dependency problems or mental health issues can turn to TSCPA’s Accountants Confidential Assistance Network (ACAN). The program offers a 24-hour hotline – 1-866-766-ACAN – to help people who need assistance, or you can contact Craig Nauta at cnauta@tscpa.net. For more information on the ACAN services, please visit TSCPA’s website at tscpa.org/resource/peerasst.
Go to tscpa.org to learn more about … TSCPA Chairman Donna Holliday Wesling, CPA-Austin TSCPA’s incoming 2011-2012 chairman is highlighted. Please see “Meet TSCPA Chairman Donna Wesling, CPA” on the left side of the home page. Quick Response Codes Have you seen quick response (QR) codes like this on TSCPA’s website? A QR code is a matrix barcode that’s readable by dedicated QR barcode readers and camera phones. The information encoded can be text, URL or other data. TSCPA is adopting QR codes to supplement ongoing efforts to streamline your online experience. Members will now be able to read publications on their mobile phones and smart phones without typing in the web address. By scanning a QR code on a publication postcard or promotional piece, you will be able to take your brochure with you on the go. You’ll need to download a QR Code reader (apps) so that you can scan and read mobile barcodes (QR Codes). Many of the QR code reader apps are free. Please visit the iPhone App Store, Android Market, Blackberry App World or your phone’s software store to download the code reader app for your device.
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Succession Planning Resource for Members TSCPA can assist you with your succession planning needs. The Texas Society Practice Management Institute, developed in partnership with the Succession Institute, LLC, offers you resources that are focused on firm management and practice management issues. As a TSCPA member, you have access to free material and content on succession planning. In addition, there is a variety of CPE self-study course offerings available to TSCPA members at a discounted rate if you would like to receive CPE credit. To learn more, go to the CPE section of the website at tscpa.org, scroll down and select Practice Management Institute CE.
Submit an Article to Today’s CPA Have you ever wanted to be a published author? If you’d like to see your name in print, consider submitting an article for publication in Today’s CPA magazine. Today’s CPA accepts bylined articles for consideration in the magazine. To submit an article or for more information, contact managing editor DeLynn Deakins at ddeakins@tscpa. net or technical editor Bill Thomas at Bill_ Thomas@baylor.edu.
Houston CPA Society’s Scholarship Extravaganza
The Houston CPA Society’s Scholarship Extravaganza raised $300,000 for accounting scholarships and CPAs Helping Schools which funds initiatives in public and private schools from kindergarten through grade 12. This year’s event, chaired by Society Board member Susan Sample, Fulbright & Jaworski, and Vice President Mark Lee, deputy general counsel for American General Life Companies, Neartown, was a sell-out. It attracted more than 400 CPAs and guests to the Junior League to honor Roland Rodriguez and Houston CPA Society Board member Linda Gonzalez and dance to the music of Mango Punch. Houston CPA Society President David Acosta welcomed Jim “Mattress Mack” McIngvale of Gallery Furniture as master of ceremonies and honored Society Board member Linda Gonzalez and Roland Rodriguez. Gonzalez, a member of the Houston CPA Society Board of Directors, established her CPA firm in 2001. Roland Rodriguez is managing principal and one of the founders of MFR, P.C., the largest Hispanic-owned certified public accounting firm in the U.S.
Today’sCPA
| July/August 2011
2012-2013 Leadership Nominations The nominations process is one of the most important activities affecting the success and future of the Texas Society of CPAs. Your input is vital! I urge you to complete this form and submit it by Aug. 16, 2011. The Nominations Committee members are: Amelia Proctor, Vice Chair, Sam Cheng, Harry Harelik, Keith Hollar, Iliana Jaramillo, Tracy L. Merritt, Janice Keeling, John Misitigh, Jerry Spence, Jr., Antonio Villeda and Mike Young. They are not eligible for consideration for any positions for which they are nominating. Please send your completed form to: Nominating Committee, TSCPA; 14651 Dallas Parkway, Suite 700, Dallas, TX 75254-7408; Attention: Ali Allie, Staff Liaison; or by e-mail at aallie@tscpa.net; or by fax: 972-687-8602. C. Jeff Gregg, Nominating Committee Chair
Chairman-Elect 2009-2010 C. Jeff Gregg
Wichita Falls 2010-2011 Chairman
Treasurer-Elect
2009-2010 Richard T. Baumeister, Jr. Fort Worth 2010-2011 Treasurer
Secretary
2009-2010 Marshall K. Pitman San Antonio
2010-2011 Donna H. Wesling
Austin 2011-2012 Chairman
2010-2011 Tracy B. Stewart
Brazos Valley 2011-2012 Treasurer
2010-2011 James F. Reeves Fort Worth
TSCPA Position Statement on Campaigning: Organized letterwriting campaigns and/or other methods of electioneering are NOT encouraged. Communiques from the general membership should not be sent to individual members of the Nominating Committee, but rather to the chairman of the Nominating Committee, in care of the TSCPA office in Dallas. Nominated by:_____________________________________ Chapter:__________________________________________ City/Sate:__________________________________________ E-mail:___________________________________________
2011-2012 Fred J. Timmons
San Antonio 2012-13 Chairman
2011-2012 Stephen G. Parker
Houston 2012-2013 Treasurer
2011-2012 Dora J. Dyson Central Texas
Fill in nominations below: 2012-2013
_______________________ (2013-2014 Chairman) ______________________ (2013-2014 Treasurer) ______________________ (2012-2013 Secretary)
Executive Board Members
Includes six Executive Board members for staggered terms. Four current members have unexpired terms. Two members for three-year terms will be selected by the Nominating Committee. Three members will be appointed by Chairman-elect Donna H. Wesling for a one-year term, 2012-2013. The TSCPA Executive Director/CEO also serves as an Executive Board member.
2009-2010 Elected
2010-2011 Elected
2011-2012 Elected
Austin
Austin
Houston
Donna H. Wesling
(Three-year term ending 2010-2011)
Anthony B. Ross, Sr. (One-year term ending 2010-2011)
Mark D. Lee
(Three-year term ending 2012-13)
Michael W. Young
Michael W. Young
James R. Oliver
(Three-year term ending 2010-2011)
(Three-year term ending 2010-2011)
(Three-year term ending 2012-13)
Panhandle
Panhandle
Mark D. Lee
Jesse Dominguez, Jr.
(Three-year term ending 2011-2012)
(Three-year term ending 2012-2013)
(Three-year term ending 2013-14)
Houston
Austin
William H. Hornberger
James R. Oliver
Lei D. Testa
(Three-year term ending 2011-2012)
(Three-year term ending 2012-2013)
(Three-year term ending 2013-14)
Dallas
San Antonio
Fort Worth
2009-2010 Appointed
2010-2011 Appointed
2011-2012 Appointed
El Paso
Wichita Falls
Southeast Texas
Patrick L. Attel
Kelly J. Parr
Charlotte M. Jungen
Donna R. Rutter
Jeannette P. Smith
Katharyn W. Kapka
Carol G. Warley
Brenda R. (Roxie) Samaniego
Keith Reeger
Fort Worth Houston
Rio Grande Valley El Paso
_______________________
San Antonio
Sandra Kay F. Brown Brazos Valley
Fill in nominations below:
East Texas
South Plains
_______________________ (Three-year term ending 2014-2015)
2012-2013 Leadership Nominations Directors-At-Large Terms Expiring 2012
Terms Expiring 2013
Terms Expiring 2014
Abilene
East Texas
Dallas
E. Leroy Bolt
C. Wayne Barton
John E. Baines
Diane DeCou
Michael L. Brown
Allyson B. Baumeister
Fernando J. Rocha
D.D. Holmes
Nancy E. Foss
Donna J. Hugly
Penny Dear
Sidney P. Glandon
Toni McBee Joyner
Melanie C. Geist
Ruth S. Gonzalez
Maria A. Martinez
Mary Pat Jones
Kerry B. Lore
Susan L. Sessions
Treba A. Marsh
Kelly J. Parr
Russell J. Chimeno
Lisa M. Ong
Richard Pitre
Rance G. Sweeten
Martha C. Perez
James F. Reeves
Donna P. Tadlock
Marshall K. Pitman
Cameron M. Talbert III
Michael E. Wenske
Joan E. Schwartz
Oran J. Tsakopulos, Jr.
Jane M. Whitfield
Kimberly F. Turner
Michael W. Young
Corpus Christi San Antonio Dallas
Brazos Valley San Antonio Fort Worth
Southeast Texas
Rio Grande Valley Central Texas Victoria
Southeast Texas
Central Texas Fort Worth Austin
San Antonio
Southeast Texas East Texas Dallas
San Antonio San Antonio San Angelo
South Plains
Fort Worth Austin
Fill in nominations below: (Terms expiring 2015)
_______________________ _______________________
El Paso
Rio Grande Valley El Paso
_______________________ _______________________
Wichita Falls Houston
Fort Worth
_______________________ _______________________
Central Texas San Antonio Panhandle
Nominating Committee Member (Terms expiring 2013)
Members of the Committee on Nominations shall have been members of the Society for at least five years and may not serve two succeeding years. Dan L. Popejoy Janice L. Keeling Terms Expiring 2011 Terms Expiring 2012 Austin Austin Kym Anderson, Chair C. Jeff Gregg, Chair El Paso Wichita Falls Susan S. Roberts John S. Misitigh Kenneth D. Sibley Vice Chair Fort Worth Amelia N. Proctor, Vice Chair Houston Dallas East Texas Kathy M. Ploch Jerry D. Spence Houston Corpus Christi Jane M. Whitfield Harry I. Harelik Southeast Texas Central Texas Wendi C. Taber Antonio Villeda San Antonio Rio Grande Valley Craig A. Anderle Keith A. Hollar Fort Worth Fort Worth Jeannette P. Smith Samuel Cheng Rio Grande Valley Dallas Sally W. Wolfe Iliana Jaramillo Central Texas Wichita Falls Robert J. Sweeney Michael W. Young Houston Panhandle Rodney C. Overman Tracy L. Merritt East Texas
San Antonio
Fill in nominations here: (One-year term) ___________________________________________________________________ AICPA Council
Ten members represent Texas. Three-year terms plus one one-year designee. The current TSCPA chairman-elect automatically fills the one-year designee vacancy, and the current TSCPA chairman automatically fills one of the three-year vacancies for AICPA Council. Allyson B. Baumeister Jerry L. Love Terms Expiring 2011 Permanent Members: Fort Worth Abilene James A. Smith B.Z. Lee (Board Member) Dallas Houston Nancy Carefoot William D. Schneider Fort Worth Rene Pe単a Stanley J. Scott Dallas Houston Dallas William L. Reeb (Board Member) Austin C. Jeff Gregg Fill in nominations below: Donna H. Wesling (Board Member) Wichita Falls (One-year designee)
Terms Expiring 2012 Steven R. Goodman Houston
Marshall K. Pitman San Antonio
Joyce J. Smith Austin
(Terms expiring 2015)
Austin (One-year designee)
Terms Expiring 2014
Terms Expiring 2013
Wichita Falls
C. Jeff Gregg
_______________________
El Paso
James F. Reeves
_______________________
Patrick L. Durio
Carol A. Cantrell
Kym Anderson Houston
Fort Worth Houston
_______________________
Capitol Interest By Bob Owen, CPA | TSCPA Managing Director, Regulation and Legislation
The 82nd Texas Legislature Goes On The Texas Legislature meets for 140 days every odd-numbered year, and the only bill they have to pass is a balanced budget. Legislators failed to pass a balanced budget by the May 30 adjournment date and Gov. Rick Perry called them into an immediate special session on May 31 that started at 8 a.m. Admittedly, there weren’t very many legislators on the House or Senate floor at 8 a.m. After all, they now have another 30 days to get the job done. In addition to the budget issue, Perry included measures on the session agenda that will allow the school districts to operate more efficiently and address health care cost containments, managed care services, and creation of economic and structural incentives to improve the quality of Medicaid services. Then, on the first day of the special session, Perry added congressional redistricting to the agenda and subsequently Texas Windstorm Insurance Association and immigration issues, including the prohibition against sanctuary cities. By the time you read this, you will know if he added more, as the special session will likely be over. The last few days of the 2011 regular session were packed with actions, inactions, chubbing, filibusters, threats and parliamentary maneuvers. While the legislature did pass House Bill (HB) 1, the Appropriations Act for the next biennium, there was only a momentary sigh of relief. For the budget to be certified as balanced by State Comptroller Susan Combs, legislators needed to pass Senate Bill (SB) 1811, which included departmental operating directions and revenue enhancements, sometimes referred to as the smoke and mirrors bill. They didn’t pass SB 1811 and the balanced budget was down the proverbial drain. SB 1811 was taken up on the House floor about 7 p.m. Sunday, the last night before adjournment. The bill was 393 pages long and included public education finance reform. The education reform concepts had never been discussed on the floor of the House or Senate, and a number of Democrats complained about the “take-it-
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or-leave-it” vote. Points of order were called and overruled and members spoke pro and con until finally, late into the evening with the midnight deadline fast approaching, the House passed the bill 84-63. No Democrats voted for the bill and 16 Republicans voted against it. The Senate took up the bill Sunday night at 10:32 p.m., just 88 minutes before the midnight deadline. Sen. Wendy Davis (D-Fort Worth) talked the bill to death in what may have been one of the shortest filibusters in Senate history. The bill died at midnight. The Senate tried to get the votes to bring the bill back to the floor on Monday, the last day of the session. The rules require a fourfifths majority (25 senators) to do so. During this process, Perry reportedly threatened to veto the Senate redistricting bill and to call a special session to begin Tuesday, May 31, not only to complete the budget, but to also consider a prohibition against sanctuary cities, which was one of his emergency items that did not pass during the regular session. The veto threat did cause some senators to think about it, because all the senators – except Davis – are well protected by the redistricting bill as passed. Some have speculated that Davis’ filibuster against SB 1811 was as much because of the redistricting bill as her opposition to SB 1811. If so, she might be the only winner if Perry vetoed the Senate plan (which as of this writing had not been done). Regardless of all arguments, discussion or threats, the Senate could not get the 25 votes necessary to revive SB 1811 and the session ended with no certifiable budget. The legislature also
did not pass a congressional redistricting plan, so Perry added that item to the call. Democrats had accused the Republicans of purposely not passing a congressional redistricting plan so congressional redistricting could go directly to federal court and avoid certain Department of Justice review; more about redistricting later. Despite not passing a budget or congressional redistricting, the 82nd Texas Legislature did do some business.
No New Taxes Let’s start with what they didn’t do. Over 1,600 fewer bills were filed during this session than last. Surprisingly, the number of bills passed this session was only 80 less than in 2009. Despite the biggest budget shortfall ever, the Republican-led legislature made good on their no-new-taxes pledge. They started the session saying they would not raise taxes, but also that they would not contemplate reducing state revenue, telling all that if a legislator wanted to “fix” a tax (reduce revenue) he/she had to offer a way to replace that revenue.
Franchise Taxes Few franchise tax bills were filed and only one was passed. The one that passed was HB 2383 by Rep. Charlie Geren (R-Fort Worth) to authorize an interim study of the efficacy of a franchise tax credit for research and development expenditures. That’s more of a franchise tax “wannabe” than a genuine tax bill. Numerous bills were filed to make the $1 million minimum revenue provision permanent. None of those made it out of committee, but HB 262 by Rep. Harvey Hilderbran (R-Kerrville) to extend the amount for two years was approved by the House Ways and Means committee only to die in the Calendars committee. Hilderbran then added his bill as an amendment to SB 1811 (see above). The extension would have cost the state $150 million in revenue over the biennium. continued on next page
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Capitol Interest
TSCPA Legislative Agenda
continued from previous page
Results on the TSCPA legislative agenda were mixed. Opposing sales taxes on professional services is a perennial agenda item and, despite the worst budget shortfall in history, this was the easiest session to oppose new sales taxes. The no-new-tax mantra resulted in no serious bills offered on the subject. A freshman legislator, Rep. James White (R-Hillister), filed HB 3367 “relating to the repeal of the laws authorizing the imposition of ad valorem taxes” and to expand the sales tax base and rate to make up the resultant revenue shortfall. While the filing of the bill got our attention, this concept is not new and has been advocated by the Texas Public Policy Foundation for some time. White admitted the bill had no chance of passing, and he was right. White hopes for an interim study on the concept. Would CPAs be willing to support sales taxes on professional services if the trade-off was no property taxes? Not likely a decision to be faced anytime soon. In a hang-over agenda item from last session, TSCPA supported transferring fifthyear accounting scholarship funds to the control of the Texas State Board of Public Accountancy (TSBPA). These scholarship funds come from a $10 designated amount included in the CPA license fee. Last session, TSCPA supported legislation to transfer both the scholarship administration and funds to TSBPA from the Higher Education Coordinating Board. The legislation passed, but in one of the last bills of the session the funds transfer was reversed in a routine move driven by concern over budget certification. This session, through SB 777, we were successful in getting the funds transfer authorized again without any last-minute reversals. SB 777 was authored by CPA and TSCPA member Sen. Tommy Williams (R-The Woodlands) and sponsored in the House by CPA and TSCPA member Rep. John Otto (R-Dayton). TSCPA also supported making some modest changes in the Accountancy Act. These changes were included in SB 566, also authored and sponsored by Williams and Otto. The changes included strengthening the confidentiality of disciplinary investigations and allowing CPAs to provide client confidential information to the Texas State Securities Board and the Public Company Accounting Oversight Board. The legislation provided that CPAs can comply with court orders for client information when the order is signed
Other franchise tax changes which were added as amendments to SB 1811 in the House and that survived the conference committee included: • extension of pre-margin tax credits until 2016, which were originally scheduled to expire Dec. 31, 2012; • redefining retail trade to include apparel rental activities for entities classified in SIC codes 5999 or 7299; • for a qualified live events promotion company (defined in the legislation), payments made to an artist for a live performance or promotion of a live performance shall be excluded from total revenue; and • for a qualified courier and logistics company (defined in the legislation), subcontracting payments to nonemployees for the performance of delivery services shall be excluded from total revenue. In the special session, SB 1811 was re-filed as SB 1 and all of these franchise tax amendments, including the $1 million minimum revenue, were still in SB 1 when it was filed. Perhaps the most interesting franchise tax related idea was Senate Joint Resolution 52 by Senate Finance Committee Chairman Steve Ogden (R-Bryan), which proposed a constitutional amendment to make it clear that taxing the income of business entities that are organized to provide liability protection to their owners would not constitute a personal income tax. This would mean limited partnerships and limited liability partnerships could be made subject to an income tax. Ogden proposed replacing the current margin tax with a franchise tax based on business income, more or less like it was before the margin tax was enacted. The proposed amendment also included a prohibition against a margin tax. Ogden didn’t file SJR 52 until late in the session and had to get permission from two-thirds of the senators to do so, but to no avail. The resolution never made it out of committee. It would have taken a vote of two-thirds of the legislature to give the voters a shot at it. It may be a portent of things to come. At the end of the session, we heard rumors that there would be an interim study of the franchise tax with the expressed aim to return the tax to an income-based tax.
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by a judge. SB 566 also gave the board the right to waive penalties and fees in extenuating circumstances and allowed for stronger enforcement actions against the unauthorized practice of public accounting. Finally, the bill removed outdated sections of the law that pertained to a paper and pencil CPA examination. SB 566 passed the Senate and made it through the House Licensing and Administrative Procedures committee, but it died in the Calendars committee in the final bill rush of the session. The Calendars committee is responsible for setting the bills that will be debated on the House floor. The bill was into the Calendars committee by April 26, which should have been ample time to be scheduled for debate. We were first told that Senate bills would not be scheduled for floor debate until after the House bill deadline of May 12, and that proved to be true. We were then told that our bill would be scheduled, but delays caused by budget negotiations and long debates on budget bills and others on the House floor created a situation where the Calendars committee had far more Senate bills on their plate than could possibly be scheduled. As it turned out, our bill “was just not important enough” to take up legislators’ time in the waning days of the session. TSBPA is one of a number of state agencies that is not subject to the appropriations process. TSBPA is allowed to budget and fund operations using licensing and examination fees without legislative appropriations as long as they pay $700,000 into the state’s general fund each year. The legislation authorizing this procedure, generally referred to as self-directed, semi-independent agencies (SDSI), is due for sunset review in 2013. Sunset review requires the legislature to reauthorize the legislation or it ceases to exist. The Accountancy Act that establishes TSBPA is due for sunset review in 2015. TSCPA suggested to the Sunset Commission that these two reviews should both be conducted in 2015 as an efficiency measure. The future Sunset Commission Chairman, Rep. Dennis Bonnen (R-Angleton) agreed that the reviews should be done in the same year, but he preferred 2013 and made that change in the omnibus sunset review bill. We kept working on the issue and on the last Friday of the session (with adjournment due on Monday), current Sunset Commission Chairman Sen. Glenn Hegar (R-Katy)
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offered to assist us in postponing the reviews until 2015. At that time, the bill was in conference committee and the conference committee was due to report momentarily. The conference committee report moved the TSBPA sunset review back to 2015, but left the SDSI review set for 2013. We discovered this shortly before the conference committee reported, but it was too late to get the change corrected. Bills that we supported required us to find a sponsor, provide assistance in initial drafting, review and suggest changes and amendments to the filed bills as drafted by the Texas Legislative Counsel, helping legislators with required analyses and talking points, visiting with members of the relevant committees, testifying at committee hearings and getting help from our key persons to contact legislators involved in the process. Key person volunteers are essential to TSCPA’s legislative effectiveness. Members should express appreciation to those volunteers, especially since we ask them to help during the busiest part of the year for CPAs. Special thanks are due to Tee Bowman, CPA-Corpus Christi, Bruce Galloway, CPA-Dallas, Jeff Harris, CPA-
Houston, Jim Ingram, CPA-Brazos Valley, and Johnny Veselka, CPA-Houston, for very effective and timely assistance.
Bill Review and Defense The legislature filed almost 6,000 bills and resolutions during the 2011 session. TSCPA monitors those bills to determine which might be of concern to CPAs. Through an electronic, key-word search process, we identified 845 bills that might be of concern to CPAs. Our electronic system makes it relatively easy to communicate and provide bill review comments, but that still means all of those bills had to be read. We have 13 CPAs, plus staff, who agreed to review bills in certain subject matter areas. Members owe these volunteers a vote of thanks for their time spent during this busy time of year. Special thanks go to: • Leroy Bolt, CPA-Abilene • George Carefoot, CPA-Fort Worth • Jo Chadwick, CPA-Dallas • Doug Duffie, CPA-Fort Worth • Brady Light, CPA-Houston • Michael McConnell, CPA-Houston • Christi Mondrik, CPA-Austin • Donna Rutter, CPA-Fort Worth
Bigger is Better
• Tom Tourtellotte, CPA-Austin • Gilbert Zamora, CPA-Austin I’d also like to express my appreciation to TSCPA’s State Taxation Committee Chair Christi Mondrik, committee member Ira Lipstet, CPA-Austin, and Jerome Kotzur, CPA-Victoria, for their consultation on specific legislation during the session. Of those 845 bills read by volunteers, we identified 85 bills to follow closely and another 129 to monitor for possible changes that might affect CPAs. From all of that monitoring, we identified several bills that needed further attention. HB 2291 by Rep. Bill Callegari (R-Katy) started out as a bill to amend the Labor Code with such broad language that it threatened the very core of professional licensing, including the CPA profession. The bill would have made it much easier for an individual to challenge the state’s right to regulate any occupation, leaving that decision in the hands of a judge rather than the legislature. The bill was not CPA-specific, but covered all occupations and amounted to an end-run around the continued on next page
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Capitol Interest continued from previous page
Occupations Code. We were very concerned about this bill. We started a dialogue with Callegari and his staff. After that dialogue and testifying in opposition to the bill on two occasions, Callegari offered a substitute bill that changed the focus from challenging professional licensing to challenging agency rules if they were not necessary to implement the licensing legislation. This was a major improvement and mitigated most of our concerns, but the bill still included one issue that we opposed. We were not the only profession opposed to the bill, but we were the most vocal. The bill was voted from the House Government Efficiency and Reform committee, which Callegari chaired, but it died in the Calendars committee. HB 599 by Rep. Jim Jackson (R-Carrollton) would have limited TSBPA’s access to felony and misdemeanor convictions that were satisfied by deferred adjudication. TSBPA needs access to information about financial crimes, regardless of the method of adjudication, to investigate complaints against CPAs and to vet CPA exam candidates. After extensive discussions with Jackson and assistance from CPA Rep. John Otto, Jackson agreed to change his bill to eliminate felonies from the bill and to allow TSBPA to have access for misdemeanor crimes of theft, forgery and fiduciary theft or theft from a financial institution. HB 599 did pass the House, but it died in the Senate Criminal Justice committee. Senate Bill 934 by Williams was a bill proposed by State Comptroller Susan Combs to add conspiracy to commit a tax code violation as a crime whether or not the violation actually occurs, expand money laundering scope, and expand organized criminal activity to include tax code violations. The bill also substantially increases penalties for tax code violations by adding more penalties for intent to evade taxes, and reducing the amount of unpaid tax from $10,000 to $50 to be considered a Class C misdemeanor, reducing the amount from $10,000 to $1,500 to be considered a state jail felony and making it an offense to intentionally fail to produce records required by the comptroller. In its original form, the bill included vague language that some thought would be interpreted to make
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tax planning a crime, but was subsequently changed to eliminate this problem. The substitute bill did pass the legislature and was signed by the governor. Another interesting bill was HB 2403 by CPA Rep. John Otto (R-Dayton) to clarify sales tax nexus in such a manner as to require retailers with any physical presence in Texas to collect Texas sales taxes. This bill would have made Amazon.com collect Texas sales taxes as it currently operates. The bill was passed by the legislature, but vetoed by Perry; however, the issue may be revived in the special session. The complete text of this bill is included in SB 1 (see above) as filed in the special session.
Financial Literacy TSCPA has made it a priority to help Texans better understand their personal finances. As part of that program, we have supported legislation from time to time that will help produce a more financially literate public. During this session, three bills were passed to improve access to financial literacy education and information. They were: • HB 399 by Rep. Joaquin Castro (D-San Antonio) to require general academic teaching institutions to offer personal financial literacy training; • HB 2615 by Rep. Marc Veasey (D-Fort Worth) requiring the Consumer Credit Commissioner to accumulate financial literacy resources, make them available on the commission’s website and provide the information to the commission’s clients; and • SB 290 by Sen. Kirk Watson (D-Austin) to require a personal financial literacy component in certain public school mathematics courses.
Tort Reform With a two-thirds majority in the House, Republican leadership started with a long list of tort reform bills. The bill with the most press was HB 274 by Rep. Brandon Creighton (R-Conroe) frequently referred to as the “loser pays” bill. The bill was supported by Perry, who made it emergency legislation late in the session to get it moving through the House. As passed by the House, the bill had some strange provisions, including one that could cause someone who won a lawsuit to pay attorney’s fees for the loser. In the Senate, all parties interested in the legislation came to agreement and the
bill was completely rewritten. The new approach directs the Texas Supreme Court to adopt rules to accomplish most of the substance of the bill. The court must adopt rules “to promote the prompt, efficient, and cost-effective resolution of civil actions” of $100,000 or less. The bill also directs the court to adopt rules that provide for loser pays in some circumstances. According to tort reform advocates, the bill is expected to discourage frivolous lawsuits by establishing procedure to allow a meritless lawsuit to be dismissed early in the process and possibly impose costs on the losing party. The bill should also encourage earlier settlement of lawsuits at fair and reasonable amounts because of a loser-pays offer of settlement process. The revised bill passed and was signed into law by Perry. HB 2973, by Rep. Todd Hunter (R-Corpus Christi), was a tort reform bill that did not seem to have the support of traditional tort reform organizations. The bill is part of a nationwide movement to address the problem of litigation intimidation. Well-heeled individuals and entities may file litigation against individuals who don’t have matching resources to try to intimidate them to stop actions, even if those actions are protected by the constitutional right of free speech, petition or association. There was little overt opposition to the bill. It passed and is now in the governor’s hands. SB 321, by Hegar, proposed allowing concealed handgun licensees to keep a weapon in a locked car on an employer’s parking lot, passed. While this may seem more like a gun rights bill than a tort reform issue, businesses were very concerned about liability that might be incurred if the handgun was used while on the employer’s premises. As finally passed, the bill did include some liability protections for employers. SB 1160, by Sen. Kel Seliger (R-Amarillo), makes it explicit that a landowner has no responsibility of care for trespassers passed and has been signed by the governor. While the common law in Texas has historically held that landowners had no responsibility for trespassers, there are evidently some court cases in other jurisdictions where the common law has been eroded. SB 1160 makes it clear that trespassers have no cause of action against Texas landowners. SB 115, by Sen. Carlos Uresti (D-San Antonio), limits the liability of space flight entities, making it clear that space flight is a
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dangerous activity and that if a space flight participant signs a waiver, the space flight company is free from liability except for gross negligence. Orbit at your own risk.
The Two-Agenda Session This session was touted as a two-agenda session: budgeting and redistricting. As it turned out, it was almost a one-agenda session, with the state budget getting most of the press ink, and in fact taking even more of the legislators’ time than was expected. With the biggest budget shortfall in history and the no-new-taxes pledge by legislative leaders, the challenge was formidable. By comparison, State House and Senate redistricting bills were passed with a modest amount of time and debate. Almost all of the senators were satisfied with the Senate redistricting bill. While it was not possible to make all 150 members of the House happy, most House members felt protected by the plan. As mentioned above, the legislature did fail to pass a congressional redistricting bill, at least in part because the Texas members of Congress could not agree among themselves what such a bill should look like. After congressional
redistricting was included in the special session agenda, the chairmen of the House and Senate redistricting committees, Rep. Burt Solomons (R-Carrollton) and Sen. Kel Seliger (R- Amarillo), jointly issued a congressional redistricting plan the first day of the special session. The Department of Justice must concur that all the redistricting plans comply with the federal Voting Rights Act before they can take effect. All the plans will undoubtedly be challenged in court. Indeed, some lawsuits were filed even before the session was over. Despite the time spent on the budget, the legislature did manage to spend a lot of time on voter identification, sonograms before abortions and sanctuary cities. Voter ID and sonograms passed, but sanctuary city legislation died in the Senate after extensive debate in the House.
The Lighter Side While those whose bills died in the logjam at the end of the session might begrudge the time spent on the following resolutions, what would Texas be without a few more “official” designations? The legislature designated:
• Lamesa is the official Legendary Home of the Chicken-fried Steak. • Western Swing is the official State Music of Texas. • Marshall, Texas is the official home of the Boogie-Woogie. • 42 is the official State Domino Game of Texas. • Nymphaea Texas Dawn is the official State Waterlily of Texas. • The Red Drum is the official State Saltwater Fish of Texas. • The bison herd at Caprock Canyons State Park is the official State Bison Herd of Texas. • Giddings is the official Depot Capital of Texas. • The city of Richardson is the official International Business Capital of North Texas. • A portion of the city of Gonzales is the official Texas History Museum District. n • About the Author: Bob Owen, CPA, is TSCPA’s managing director of regulation and legislation. Contact him at bowen@ tscpa.net.
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| July/August 2011
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Cover Story
Conversation with the Chairman
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Incoming Society Leader Says TSCPA Service Has Been Her Window To The World By Anne McDonald Davis
Donna Holliday Wesling, CPAAustin, defines herself as “a Texas woman.” Born on the island of Galveston (which Wesling says is known there as “BOI”) and raised in Corpus Christi, the A&M alumnus loves her home state. But she also credits her career-long involvement in the Texas Society of CPAs with giving her a broader outlook and worldview that she might not otherwise have experienced, running her small tax practice on the sunny banks of Lake Travis. As Wesling embarks on her year as 2011-12 Society chairman, she shares some touchstones, personal and professional, with Today’s CPA. continued on next page
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Chairman continued from previous page
Q:
Why did you choose the accounting profession?
A: Calculus.
Q:
Calculus?
A: I hated calculus. (Laughs.) To back up, now I’m showing my age, but when I was in high school and wanted to go to college, I went to the school counselor to discuss my future. She said, “Well, you should be a school teacher because you’re a good student.” Well, no, I didn’t really want to spend my days in a room with 30 children. I did become a mother later on and I love my children, but even back then I knew teaching wasn’t for me. So the counselor’s next suggestion was, “OK then, you should be a nurse.” Uh, no. So without much helpful guidance, I declared myself a math major because I had always liked math. I went on to college and had a 98 math average until I got to calculus … and I hated it. It was the only class I ever dropped. This caused me to step back and ask myself, “What am I going to do with my math studies? Obviously, I’m not some big theoretical math whiz. But I like numbers and I like business … maybe accounting?” Now I had never met an accountant in my life, didn’t know what it would be like to be a CPA … but that’s what I did. Although looking back, when I was 12, my mother worked at a pharmacy and there was a guy who did the bookkeeping. When they didn’t have anyone to fill in for him the week he went on vacation, my parents volunteered me! I didn’t think anything of it, just sat down at the calculator; I guess that’s when I actually started becoming an accountant. Maybe I was destined. I feel lucky that it turned out well for me because there was so little guidance for women at that time, again unless you wanted to be a teacher or a nurse. I graduated fifth in a class of 500 students and nobody ever suggested I become, uh, a doctor maybe? Not that I was interested in that, but – ?!
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Looking back at the town of Telluride
Q:
All that has changed a great deal for women, hasn’t it? A: It sure has. I recently responded to a LinkedIn request to join AICPA’s Women in the Profession; one of the participants started an online discussion of her early days in accounting and she invited others to comment. Well, there have been about 120 responses so far … and they are hilarious and appalling and every other adjective you can think of. It got some of us thinking, “Wow, we’d almost forgotten what it was like … how about the younger women in the profession who didn’t live through that? They probably can’t imagine.”
Q:
Tell us about your practice. Have you always worked in public accounting? A: Yes, I’ve always worked in local public accounting. Straight out of A&M, I went with a firm in Bryan/College Station. After three years, through a connection at the Texas Society of CPAs, I met a guy in Austin and went to work for a firm there for several more years. Then at the ripe old age of 28, I hung out my shingle. Somewhere I have a photograph of the sign outside my first office in a retail center that was having trouble leasing space … there was a glass door with my name and “Certified Public Accountant,” then some other guy’s name and “Hypnotist.” I thought, oh well, if people were coming to me upset about
really horrible tax problems, maybe they could use him too. Eventually, I merged with another CPA, and then my ex-husband got a job offer in Houston and we moved there in the late ’80s. Again, my connections at the Society led me to a job at a local firm there where I became a partner after about a year and a half. Still, it wasn’t the right long-term place for me, and I was pleased when we got a chance to return to Austin. I actually looked at franchises and thought about starting a business at that point; I had worked with a lot of different kinds. But I finally realized that I really liked my tax practice and the relationships I had built with clients, many of whom had been with me from the beginning; I still have a number of my original clients on board. I love entrepreneurs and small business people … I enjoy being part of their team and helping them run their businesses. I’m just not an “administrator.” I like to focus on practicing accounting.
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Wesling’s hike to the top of Ajax, above Telluride, with members of Telluride Ski and Golf
Q:
What is the most rewarding part of your career and the most challenging? A: Again, I enjoy my clients. I like to go out to different offices. I have a client where I spend every Monday acting as their contract controller. I get invited to all their company events, just like an on-staff member. (Laughs.) To me, it’s the best of both worlds. I get to do something different, somewhere different, every day. It keeps me on my toes. My firm’s stated philosophy is that “we are a small firm by choice.” My goal is to tailor personal and professional attention to each client. Another goal I had was to never have another partner or employee, even though I’ve had some great ones. But I like being on my own; that’s just me. When my children were younger, it gave me the flexibility I needed. I violated this goal when my husband came to work with me four and a half
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years ago, which has also been rewarding. My husband was an IT [information technology] professional who had spent 30 years in a large corporate environment and was ready for a change … and I was at a point in my practice where it was really taking off and I was struggling to handle everything. So we decided to give working together a try. Well, we’ve survived five tax seasons and haven’t murdered each other yet! (Laughs.) I have an unbelievable IT system for a small practice. I would never have gotten the website up and running without him; he does most of the initial organizing for the tax returns while I deal with the clients and do the accounting. So that’s a huge help, but it’s still a challenge to stay current with all the tax regulations and changes. When we do surveys of CPAs across the country, that’s one issue everybody has whatever their practice area – keeping up. The volume of information today is so overwhelming.
When I went back into practice for myself, I decided to no longer handle non-profits or audits. A sole practitioner simply cannot practice in all areas anymore. Even in my small practice, in the past six months, I’ve had several issues come up that are not just interstate but international. I’ve got a client doing business in Germany; I’ve got a client who thinks he might be doing business in the United Arab Emirates by the end of the year … so add that to U.S. laws and legislation that are constantly changing and it’s quite the challenge. That’s just one reason to stay involved with TSCPA. I really value the support network of my peers and all the information resources.
Q:
As someone who works with small businesses in Texas, do you see the economic environment improving? continued on next page
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Chairman continued from previous page
A: I do, but I’m really concerned for that group of graduates who got trapped in the middle and how they’re going to get their careers started when they’re no longer in the university world with the services that help them get employed. Also, the state and federal budget deficits … not good. But in some ways, I think we’re out of the woods for now. The past couple of years in my practice, I just saw us all holding our own. But this spring, things have started popping again. I had a lot of new business come out of what I call “organic growth,” with my existing clients starting new ventures. There are also just a lot of flat out new clients coming in starting new businesses or expanding. So that tells me that at least small business is doing a little better and some sectors are having an upturn. My clients in the building trades are still struggling, but they’re doing OK … not as OK as they were, but holding on.
because young people became more aware of the powerful influence we have on business, what we bring to the table. Many students seemed to have a reaction of, “Oh, this is important. I’m going to major in accounting.” So the talent pool is deeper now.
Q: CPAs?
Do you have advice for any of those students interested in becoming
A: For me, it’s been a great career and there are so many options for what you can do. Even if you aren’t a fit for some aspect of public accounting, there are so many avenues in business, industry, government, nonprofits, education. You have a good foundation for being an entrepreneur. I can’t tell you how many of my clients wish they had a background in accounting because while they may be good at what they do, it’s difficult to be really successful when you don’t have a true understanding of business.
Q:
Q:
A: One of the top challenges is keeping current. When we survey members, they indicate that keeping up with constantly changing laws, pronouncements, etc. ranks first to them. Another challenge today, as I see it, is embracing the broader implications of diversity within our profession (please see the Chairman’s Message, page 5). I think it is a challenge for our professional organization to stay relevant by bringing all the many sectors of the profession together to speak as one voice, so that we can have some effect on this constant barrage of new information and be a resource for our members. Staffing used to be the top issue, but not quite as much today. It is often ranked second or third in our surveys. There was a dip in students majoring in accounting when the 150-hour rule was first passed. A lot of candidates decided to take their chances in high tech, and maybe get stock options and get rich. Then that time passed and, oddly, all the controversy over Enron and Arthur Andersen turned into some positive public relations for the profession
A: We got the bill affecting our scholarship fund passed, and we didn’t have an overly large legislative agenda this year, no big items we were pushing for. Mostly “cleanup” bills regarding the Public Accountancy Act. We wanted to give the State Board the authority to waive fees under certain circumstances. For example, some poor guy was in a coma and didn’t pay his licensing fees and incurred thousands in fines … and the State Board had no authority to waive that. Unfortunately, this bill, along with a lot of others, never got out of calendars in the House and therefore did not pass. So we’ll have some things to do next legislative session. Also, most of the money from our licensing fees goes to the State Board so that they can administer the Public Accountancy Act without going through appropriations; that whole process was up for Sunset Review in 2013, and the State Board itself was up for Sunset Review in 2015. We wanted it all consolidated in one year, but it did not happen.
What do you see as the top issues facing the accounting profession?
28
What state legislative issues affect the profession, and what role does TSCPA play?
We were worried about the potential sales tax on professional services before the November election, but now that is pretty much a non-issue. We’ll have to remain vigilant, since that sort of thing always has potential when the state is looking for funds. We monitor hundreds of bills on an ongoing basis for anything that looks like it might affect CPAs.
Q:
You have been involved in TSCPA leadership for a number of years. Why did you become a volunteer? What are some of your milestones and how has TSCPA service impacted your career? A: I immediately joined TSCPA and AICPA the minute I began practicing. The guy I was working for had just formed the Brazos Valley Chapter, but I missed being a charter member because I wasn’t a CPA yet; I had to join officially the next year. He and his wife were going to the Society annual meeting in New Orleans that year, and one of my older friends and colleagues in town was going too, so I attended my first annual meeting the first year I was certified! I’ve been to most ever since. One thing that gives me a unique perspective is that I began actively participating at a chapter level, first with that small chapter in Brazos Valley, then next when Austin was a mid-sized chapter. By the time I was the president of the Austin Chapter, it was a large chapter and then with the move to Houston I was active in a really large chapter, and finally back with Austin. I think it’s unique that as TSCPA chairman, I have been an active member, volunteer and leader at chapters of all sizes. At the state level, I started on the Executive Board when I was 34, and have been off and on ever since. I don’t think there’s ever been a year in my career that I wasn’t on a committee for the chapter, TSCPA, AICPA or the State Board.
Q:
That’s a lot of volunteer activity, especially considering the demands of your practice. A: I value the perspective it gives me, a bigger world view and a broader take on the profession than I would have simply running a small firm. I have the opportunity
Today’sCPA
| July/August 2011
to be in meetings with national firm partners and individuals like the reporting partner for Shell Oil. Whatever the number of volunteer hours, I still feel like I got more than I gave. I am absolutely convinced that I am a better CPA for it, no question in my mind about that at all. It’s part of who I am. I view my certificate as very important, and I view the Society as the entity that protects it and keeps me up to date. I want to be part of that.
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Q:
Tell us about your family and other interests.
A: I’ve put many of my civic volunteer activities on hold during the next year while I’m chairman. I’ve been a very active member in my Rotary Club, including being a past president, and the Lake Travis Chamber of Commerce. I do love to be outdoors and we often go snow skiing in Telluride. It’s golfing and hiking in the summer. I’m also a cyclist and have been on several different cycling vacations. I’m an avid reader and especially like biographies. I used to needlepoint a lot. If you go to the Austin Chapter headquarters, you’ll see a needlepoint banner with the Society logo. (Laughs.) I did that back when I was chapter president. More recently, I took up knitting, which is very relaxing and Zen-like. I just knitted a blanket for the silent auction at the TSCPA Annual Meeting. I wonder if I’m the first knitting chairman? This tax season, I knitted every night to mellow out. My husband, Steve, and I have been married 16 years. I was divorced with a nine-year-old daughter, Kirsten, and he was widowed with a nine-year-old daughter, Holly, who he had raised alone since she was two. So she became mine, too. Right now, she’s living with us after getting her degree in mechanical engineering, one of those underemployed young people I mentioned who got caught in the current economic crunch. Kirsten has a degree in Writing and Rhetoric, and she lives up in Portland, Oregon, and is a tattoo artist. (Chuckles.) She designed a tattoo for me, knowing I would never get one – just wanted to show me what it should look like if I changed my mind. But she adapted it for my TSCPA chairman’s PowerPoint presentation logo.
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29
Donna and Steve Wesling’s daughters, Holly and Kirsten
Chairman continued from previous page
Funny story about Kirsten and Holly. My ex-husband and I had known Steve and Holly ever since daycare, and the girls were friends. Well, shortly after he and I separated, Kirsten came into the room and said, “Mom, can Holly and I talk to you about something?” I said “Sure,” and their proposition was that if I did end up divorced, that I marry Steve. (Laughs.) I explained that I wasn’t ready to have
Donna and her husband, Steve, dancing in Italy
a conversation about getting remarried before I was even divorced and that, besides, Steve and I were really good friends, and good friends were hard to come by, so … no. Kirsten accepted it but Holly tried to protest; Holly really wanted a mom. A few months later when Steve came by to pick her up, he inquired, “Holly says you … want to marry me?” Of course, we did end up dating and getting married, so Holly thought she was a matchmaking genius.
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Q:
Any anecdotes from your career?
A: Yes, one … albeit a little embarrassing. I was a member of the CPE committee at the State Board for about 10 years. One day we were on a break during a TSCPA board meeting when I got a message that the TSBPA CPE committee meeting had been cancelled. So I began speculating to a friend and volunteer from Abilene that, “I wonder if someone is playing politics and canceling our meeting?” The man standing behind us stepped up and said, “Hi, I’m Mike Conaway, the chairman of the State Board of Public Accountancy. Let me explain why I cancelled your meeting.” To which I retorted, “No, you’re not.” To which my peer from Abilene replied, “Yes, Donna, he is.” I turned 10 shades of red. Then we all filed back into the board meeting where they introduced special guest – Mike Conaway. (Sighs.) Timing is everything. I grouched to myself, “They couldn’t have introduced him before the break?!” He never forgot me, and after that I always took great care to address him as “Oh Great Chairman.” Of course, now he is in Congress, so I have to call him “Oh Great Congressman.”
Q:
Well, now’s your chance. Would you like any TSCPA members to address you as “Oh Great Chairman” during the coming year? A: (Laughing.) Absolutely not. Donna will do just fine. n About the Author: Anne Davis, ABC, is a freelance reporter, writer and editor in Dallas, Texas.
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Feature
By R. Kathy Hurtt and C. William Thomas, CPA, Ph.D.
Ethics Education for CPAs in Texas: Is it Working? In 2003, the Texas State Board of Public Accountancy (TSBPA) amended its rules for licensure to require a three-semester-hour ethics class of all persons sitting for the CPA examination in Texas starting in 2005. TSBPA also implemented a four-hour biennial mandatory ethics update for all licensees in Texas starting that same year. Since that time, other states have added ethics education requirements for CPA exam candidacy. As a result, educational institutions all across America have allocated millions of dollars in resources to accommodate TSBPA’s formal ethics education mandate. In addition, Texas licensees have spent between 500,000 and 750,000 person-hours taking the mandated ethics update, and have spent millions of dollars in continuing education fees to comply.1 Clearly, because of these mandates and those of other states, both formal and continuing education in ethics for CPAs have become big business. Rule 511.58 under Title 22, Part 22 of the Texas Administrative Code defines educational requirements for candidates for the CPA examination. Under Subparagraph (c) of that rule, “related business subjects” includes a required three-semester-hour course in ethics. The stated purpose of the required ethics course is to “provide students with a framework of ethical reasoning,
professional values and attitudes for exercising professional skepticism and other behavior that is in the best interest of the public and profession.”2 After five years of implementation experience, it is logical to ask whether there exists any evidence that the efforts of colleges, universities and CPE providers to educate CPAs in ethics are achieving the stated purpose of the requirement.
The February 2010 Texas State Board Report of TSBPA shows that the rate of ethics disciplinary actions taken against CPA licensees in Texas declined 43 percent in 2006 compared to 2005, and that the rate of such actions by the Board has remained significantly lower on average from 2006 to 2009, compared to the four preceding years. The executive director of TSBPA attributes the decline at least partly to ethics training.3 Although confounding factors, such as increased mandatory peer review, make it impossible to attribute exclusive cause and effect, the fact that mandatory ethics education for CPAs in Texas has existed for exactly the same period certainly makes the impact of ethics education on CPA behavior appear more than coincidental. To address the issue more directly, the authors surveyed Texas CPAs licensed between 2005 and 2010 to determine their perceptions of the effectiveness of the mandatory ethics education they received, both as formal and as continuing education requirements. The results of the survey are described in sections that follow.
The Survey The authors obtained permission from TSBPA to survey the entire population of 9,532 individuals licensed between 2005 and 2010. The Board agreed to send out an e-mail request to these individuals with a link to our
Kathy Hurtt, is an assistant professor at Baylor University in Waco. She can be reached at Kathy_Hurtt@baylor.edu. C. William Thomas, CPA, Ph.D., is the KPMG/Thomas L. Holton Chair and the J.E. Bush Professor of Accounting in the Hankamer School of Business at Baylor University. He can be reached at Bill_Thomas@baylor.edu.
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Figure 1. Demographic Statistics A. Year Licensed 2010
2009
2008
2007
2006
2005
Total*
Response
674
659
512
441
292
255
2,833
Percentage
24%
23%
18%
16%
10%
9%
100%
Other
Total*
B. Gender Male
Female
Total*
Response
1,179
1,487
2,666
Percentage
44%
56%
100%
Hispanic
Asian
PI
C. Ethnicity AA
Caucasian
Response
104
1,906
217
379
7
80
2,693
Percentage
4%
71%
8%
14%
0%
3%
100%
<25
25-29
30-34
34-39
40>
Total*
Response
89
1,061
605
338
583
2,676
Percentage
3%
40%
23%
13%
22%
100%
Public
Industry FP
Industry NFP
Government
Education
Total*
Response
1,142
1,100
76
152
47
2,517
Percentage
45%
44%
3%
6%
2%
100%
Yes
No
Total*
Response
1,798
877
2,675
Percentage
67%
33%
100%
D. Age Group
E. Current Professional Responsibilities
F. Master's Degree?
* Non-responses omitted
survey attached (www.surveymonkey.com/s/ CPAEthics). There were 2,696 individuals who completed the entire questionnaire, for a response rate of 28.3 percent. Not all respondents answered all questions, so the response totals for each question vary slightly. Figure 1 presents the demographic information of respondents. Over 90 percent of the respondents were licensed between 2006 and 2010. Their gender proportions are 44 percent male and 56 percent female; ethnicity is distributed 4 percent, 71 percent, 8 percent, 14 percent, and 3 percent, to AfricanAmerican, Caucasian, Hispanic, Asian, and Other categories, respectively. Ninetyseven percent of respondents are age 25 or older, and 67 percent of them have earned a mastersâ&#x20AC;&#x2122; degree. The authors discussed these statistics with officials of the licensing division of TSBPA, who confirmed that they are reasonably representative of the demographic continued on next page
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Figure 2. Location of Course Panel A. Type of Institution Type of Institution
Response Count
Percentage
Public, part of degree program
915
33
Private, part of degree program
267
10
Community college, supplemental
152
5
Online approved course
1,149
42
Public, not part of degree program
237
9
Private, not part of degree program
35
1
2,755
100
Total usable responses
Panel B. Host Department Within Institution Department Accounting Business, outside of accounting University, outside business Total usable responses
Response Count
Percentage
1,655
78
402
19
72
3
2,129
100
33
Figure 3. Perceived Impact of Required Ethics Course vs. Biennial Ethics Update (11 point scale; 0=strongly disagree, 11=strongly agree) Response
Panel A. Required 3-hour College Course
Panel B. Biennial Ethics Update
As a result of taking the required ethics class …
Rating Average
Modal Response
Count
Rating Average
Modal Response
Count
My ability to recognize ethical issues has increased.
7.27
9 (Agree) 29.7%
2,867
6.54
6 (Neither Agree nor Disagree) 33.0%
2,081
My ethical reasoning ability has increased.
7.14
9 (Agree) 25.9%
2,860
6.48
6 (Neither Agree nor Disagree) 33.6%
2,078
I understand the concept of auditor independence.
8.15
9 (Agree) 35.3%
2,864
7.11
6 (Neither Agree nor Disagree) 31.8%
2,078
I have a greater understanding of the role of the accounting profession in business and society.
7.69
9 (Agree) 31.5%
2,864
6.80
6 (Neither Agree nor Disagree) 33.6%
2,081
I feel that I will make better ethical decisions.
7.17
9 (Agree) 24.5%
2,864
6.59
6 (Neither Agree nor Disagree) 35.3%
2,076
I feel I have a framework for making ethical decisions.
7.57
9 (Agree) 29.0%
2,858
6.77
6 (Neither Agree nor Disagree) 34.2%
2,078
I now consider the ethics of more decisions.
7.23
9 (Agree) 26.3%
2,858
6.61
6 (Neither Agree nor Disagree) 34.7%
2,064
Ethics Education continued from previous page
breakdown of the entire population of CPAs newly licensed within the past five years. Figure 2 shows the location of the ethics course taken by respondents, both by type of institution (Panel A) and by host department within the institution (Panel B). Panel A shows that 43 percent of the 2,755 usable responses indicated they took the required course as part of a degree program at a public or private college or university. Fifteen percent of the respondents took the required course at either a community college, or as part of post-baccalaureate programs at public or private schools. A total of 1,149 respondents (42 percent) indicated they had taken an online distance education course approved by the Board for certification, which the authors found surprising since there are relatively few such courses and they have only been available since 2006. This highlights the rising popularity of online format for courses like ethics, and may also indicate the importance of TSBPA’s oversight policy and requirements for comparability of quality with live courses.4 The authors also inquired about what
academic department offered the ethics courses. Panel B shows the host department for the three-hour class as indicated by our respondents. Of a total of 2,129 usable responses, 1,655 individuals (78 percent) took the course through the accounting department of the institution; 402 individuals (19 percent) took the course in the business school outside the accounting department; and 72 individuals (3 percent) took an approved course outside the business school. These figures support the results of an earlier study5 that showed an overwhelming preference among instructors for offering the TSBPA required ethics course in the accounting department.
Impact of Required Three-Hour Course Respondent perceptions of the impact of the required three-hour college ethics course were generally positive. As shown in Figure 3, respondents were asked to rate, on an 11-point scale (1 = strongly disagree; 11 = strongly agree), whether they felt the course improved their knowledge, skills and abilities based on the implied objectives of Rule 511.58 (c). Panel A of Figure 3 shows that respondents generally agreed that the three-hour ethics
class they took in college improved their abilities to recognize ethical issues; reasoning abilities; understanding of the concept of auditor independence; understanding of the role of the accounting profession in business and society; decision-making abilities; and ethical frameworks for making decisions. The mean responses for each of these dimensions was in the mid-7s, indicating a slightly positive impression. The modal (most frequent) response for each dimension was nine out of 11 (agree). When asked if the ethics class they took in college was a valuable learning experience, students generally agreed (9.0 modal response), with the question receiving an average 7.67 rating on the 11-point scale. Respondents were asked to describe, in free-response format, the most valuable learning activities or concepts they were exposed to in their three-hour class. The most frequently listed responses to this question were case studies, both real and hypothetical, that required evaluating alternatives and reaching decisions; exposure to the concept of independence, as well as other pertinent sections of the AICPA Code of Professional Conduct; open group discussions related to situations involving ethics; and guest
Footnotes: 1. According to the TSBPA website, as of Dec. 13, 2010, 88 educational institutions (20 located outside of Texas) offered a total of 108 approved courses in ethics for university students. An Internet web search using the terms “CPA Ethics CPE” produced approximately 72,000 hits. Using an average fee of $90 per course, and a conservative estimate of 60,000 licensees per biennial period, CPAs are spending about $5,400,000 every two years for the ethics update. 2. Texas Administrative Code, Title 22, Part 22, Chapter 511, Subchapter C, Rule §511.58(c).
34
3. Texas State Board Report, Vol. 102 (February 2010), page 11. 4. TSBPA has rather stringent standards for offering online distance education courses. For details, see http://www.tsbpa.state.tx.us/education/criteria-boardapproved-ethics.html. 5. R. Kathy Hurtt and C. William Thomas, “Implementing a Required Ethics Class for Students in Accounting: The Texas Experience. Issues in Accounting Education 23, No. 1, February 2008, 31-51.
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speakers who actually had experienced ethical failure, including participants in recent fraud cases. Respondents were also asked to describe, in free-response format, the activities they regarded as least effective. Interestingly, the individuals who chose to respond to this question generally had negative impressions of the overall value of the course. Many of these respondents questioned whether teaching ethics to young adults is a useful activity. Numerous individuals responded that they didn’t believe ethics could be taught in the classroom. They also commented that learning about the classical theoretical basis for making ethical decisions was not helpful. In addition, they felt that examples used by instructors were not relevant to the real life experiences they face as young professionals. This is supported by responses to another question: “I have encountered ethical situations that were similar to situations I was exposed to in the required college ethics class.” Over 70 percent of respondents to this question indicated they have never encountered similar situations to those they were exposed to in their formal class in ethics. Conversely, the fact that 30 percent of respondents to this question indicated they have actually encountered one to five such situations in their brief careers is worth noting.
Impact of Required Biennial Ethics Update In the next section of the survey, respondents were asked identical questions to those in the first section regarding their impressions of the impact of biennial ethics updates they have been required to take since becoming licensed. About 63 percent of respondents indicated that they have taken at least one such update since initial licensure. Panel B of Figure 3 shows respondents’ views of the relative value of the biennial ethics update, based on the same rating scale as used for the formal ethics course. With respect to every dimension, respondents had less favorable impressions of the impact of the biennial update on their abilities to recognize ethical issues, to understand the role of the accounting profession, and to make sound ethical judgments and decisions, in comparison with the three-hour formal course they had obtained as a part of their formal education. The average rating of these courses dropped to the mid-6s (slightly above neutral on the 11-point scale), and the modal response on every dimension fell to 6.0 (neither agree nor
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disagree). A question eliciting their overall response to the CPE updates produced similar results; 77.4 percent of respondents indicated they had never encountered ethical situations in practice that were similar to the situations they were exposed to in the biennial updates. Given that ethics updates may be expected to add current and relevant information to licensees’ experiences, this finding may help to explain respondents’ less favorable impressions of the biennial updates, compared to the three-hour ethics classes they took as a part of their formal educational experiences. A review of responses to an open-ended question – “Do you have any other comments for us?” – gives further insight into their relatively negative impression of the four-hour update. A sample of comments indicates: • some feel the required updates are too frequent; • those licensed in multiple states with ethics CPE requirements do not like that states generally do not grant reciprocity for one ethics class, resulting in these licensees being required to take multiple ethics updates; • some feel that updates are redundant (or “overkill”); • some feel that the information in the updates is irrelevant; and • some feel that teaching ethics to adults is a meaningless exercise.
Other Factors Contributing to the Decline in Enforcement Actions Regardless of the positive or negative impressions of CPAs toward ethics education, the fact remains that the rate of enforcement actions taken against CPAs by TSBPA has dropped significantly over the same time period that required ethics education in Texas has been in force. We asked respondents for their opinion as to what other factors might have contributed to this result. A total of 892 individuals supplied free-form responses to this question. A sample of these responses indicates their perceptions: • increased media coverage of high profile unethical practices in business and the consequences of those practices has increased public awareness of the function of CPAs and has placed the accounting profession under greater scrutiny; • increased governmental regulation (Sarbanes-Oxley and the Public Company Accounting Oversight Board) has strengthened internal controls and
has made corporations as well as CPAs behave in a manner that shows more accountability for their actions; • a recessionary economy may have led to more circumspect behavior on the part of CPAs in an effort to remain employed; and • the fallout from the Enron and Arthur Andersen situation, while almost a decade ago, still lingers as a warning, and CPAs are self-policing their actions to avoid a recurrence. The authors were pleasantly surprised to find that a relatively large number of respondents were quite complimentary of TSBPA’s mandatory ethics education policy. Many actually thanked the Board for imposing ethics education and asked them to retain the requirement, stating that they truly felt these requirements had helped them become more thoughtful and diligent practitioners.
The Numbers Don’t Lie After five years of implementation experience, licensed CPAs in Texas have a relatively positive impression of the impact of a mandatory three-hour college ethics course on their careers. This is a testimony to the hard work of educators across the country who believe that ethics education can have a positive impact on individuals, even if obtained beyond the formative years of life. It is also a testimony to the courage of TSBPA in implementing such a requirement, in the face of what was, at the time, rather formidable opposition from both the practicing and academic branches of the profession. Practicing CPAs in Texas have a somewhat less positive impression as to the effectiveness of the mandatory two-year ethics update. They cite excessive frequency, redundancy and irrelevance of subject matter as contributing factors. Given the amount of resources that are being spent on mandatory ethics for CPAs, TSBPA should take these observations under advisement in deciding future CPE guidelines on ethics for practicing CPAs. Regardless of whether one accepts or rejects the idea that mandatory ethics education is effective, it is hard to argue against it, given the decline in reported ethics violations over the past five years. Mandatory ethics education, along with increased public scrutiny and tighter regulation, have all apparently contributed to a better informed, and better behaved, population of CPAs in Texas. n
35
CPE Article By Brinn Serbanic, CPA
Paperless Tax Solutions A growing number of public accounting firms are expressing interest in automating the tax preparation process, and reaping the benefits and efficiencies of a paperless workflow. If your office is considering a paperless tax conversion, you may be asking: Where do I start? What solutions are available and who offers them? How are we going to make this transition? And, of course, what is this going to cost? Information and resources are abundant for practitioners researching a paperless move, and a multitude of options are available to meet a firm’s specific needs. In fact, identifying the best solution can be an overwhelming process. Before delving into specific product offerings, begin by assessing what your firm would like to accomplish by going paperless.
The benefits of a paperless tax preparation process include: • greater efficiency and time savings; • faster turnaround for clients; • increased accuracy; • improved workflow throughout the office; • standardization of processes and consistency within the firm; • reduced storage and paper costs; • enhanced client service due to less time spent on menial tasks and more on value-added tax planning; • instant access to client data, enabling quick response to client inquiries in person or over the phone; and • remote access to client data, which may facilitate telecommuting arrangements and working from home.
“Going paperless” is a gradual process rather than a one-time event due to the considerable time and costs associated; therefore, understanding the firm’s goals and the ultimate purpose to be achieved through a paperless office is a vital first step.
Overview of Paperless Solutions The typical paper tax preparation process involves: • distributing organizers to clients; • waiting to receive client information; • copying pertinent client documents; • creating a paper file for the current year; • organizing, editing and marking up workpapers; • entering data into the tax preparation software;
CPE Self Study Curriculum: Tax, Management Level: Basic Designed For: Tax Practitioners Objectives: To provide a comprehensive overview of the paperless tax preparation process, and to inform practitioners of the various solutions and relevant features available Key Topics: Paperless tax preparation, client portals, tax document automation, electronic workflow management, document management Prerequisites: None Advanced Preparation: None
36
Today’sCPA
| July/August 2011
• • • • •
printing the tax return; updating the route sheet; manually transferring file to reviewer; signing off on return; and storing the paper file.
Referring to Figure 1, any or all of the paper steps may be automated or converted to a digital form. Vendors offer standalone products for each stage of the digital process, as well as sophisticated document management systems that encompass all six aspects of paperless tax preparation. Portals Client portals are currently the hot topic in paperless solutions. CPAs are emphasizing client privacy as a result of increased regulations and stiffer penalties regarding the treatment of confidential client information. Clients request copies of tax data on a regular basis, and in the past, firms may have sent Form W-2s or prior year tax returns via e-mail. Federal and state privacy protection regulations are calling for a higher standard of security when transmitting private tax data. The industry’s solution is client portal applications, which are essentially electronic store rooms facilitating the exchange of documents between the tax preparer and the client in a secure environment. Portals are typically packaged within another paperless tax solution, such as a document management system (DMS), but may also be created through a secure page on the firm’s website. The client accesses the firm’s portal with a username and password, and may then upload or download documents. Two-way portals improve tax preparation both at the front-end in the receiving of client documents and at the back-end for paperless e-file authorization and delivery of the completed tax return. For example, portals can decrease the lag time between a client collecting pertinent tax documents and mailing them to the preparer. Clients simply download a 1099 from their brokerage company’s website and then upload to the accountant portal within seconds. E-mail transmissions not only lack sufficient security, but large attachments, such as QuickBooks files, are often unable to be transferred. Portals handle large file sizes with ease, and clients are able to easily access and control their financial data. The exchange of business information is increasingly conducted in electronic marketplaces; for example, the majority of banking customers demand online banking and bill paying in
Today’sCPA
| July/August 2011
contrast to considering the services an added feature. By employing a client portal, an accounting firm will gain a competitive edge and be positioned to tap into a new source of tech-savvy clients. Simply stated, client portals are the next step in improving client service. Scanning Any progress towards a paperless process requires the following initial equipment: dual computer monitors and a high-quality scanner. The scanner should be: • at least 300 dpi; • sheet-fed and can handle 50 documents or more; • able to scan both sides of a document; • able to scan different size documents simultaneously; and • fast enough to handle a throughput of at least 30-40 pages per minute. Using only this basic equipment, many firms have already instituted a paperless archiving process, called back-end scanning. The paper preparation of tax returns remains the same, but at the end of the process, tax returns, supporting documents and workpapers are scanned in for storage. Thus, the firm reduces storage costs and maintains the integrity of client documents year after year. However, these firms are missing out on
the true potential and efficiencies of paperless tax solutions. Tax Document Automation System Tax document automation systems, or electronic document editors, generally organize the shoebox of 1040 client information and source documents into an easy-to-use paperless .pdf document or documents using optical character recognition (OCR) software. These systems eliminate the need for professional staff to wade through stacks of client data and copy the pertinent information for the file. Instead, the input of source documents can be transferred to an administrative employee, enabling the professional staff to conduct more valueadded activities. The admin scans in a pile of disorganized client data in no predefined order and, within a few minutes, a .pdf document is created in which the source documents are organized and bookmarked. In performing the scanning, some tax document automation systems require separator sheets to be inserted, and these divider sheets may utilize barcodes that designate the client while others are used simply to keep multi-page documents intact. Tax document automation systems first continued on next page
Figure 1. Tax Preparation Process: Paper vs. Digital.
Paper
Digital
Distribute Client Organizers
Access Client Portals
Run Copies of Client Data
Scan Client Data
Organize Source Docs & Create Workpaper
Tax Document Automation Center
Data Entry into Tax Software
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Storage of Paper Files
Informal or Formal Document Management System (DMS) 37
Paperless Tax Solutions continued from previous page
arrange the documents based on a default or customizable sequence to facilitate the review of the return, such as wages, then interest income, etc. If documents were scanned in upside-down or brokerage statement pages were out of order, the system will correct the orientation, delete blank pages, and regroup multi-page documents. Then documents are bookmarked by the system for easy access and efficient scrolling through large .pdf files. By clicking on a bookmark label, the user automatically jumps to the page. After the software processing, the preparer receives an assembled .pdf file. Digital workpapers may be marked up and manipulated, in much the same way as paper documents, using Adobe Acrobat tools or a vendor’s proprietary .pdf document program. The preparer may insert or remove pages, rearrange documents or bookmarks, and add annotations such as tickmarks, comments or sticky notes on a page. Calculator tapes can be pasted onto a page, and links enable the user to jump to a different location at the click of a button. The .pdf document may be easily searched using a “find” or keyword search function. The initial collection of client data is rarely complete and additional client information is received at a later time. If the information is one or two pages, then the documents can be appended to the existing .pdf file. However, if a substantial amount of new information is received, most tax document automation systems allow subsequent submissions in which the new data is scanned, processed and then merged with the existing document while maintaining the previous notes and annotations. With the use of dual monitors, the professional staff will then refer to source documents on one monitor and enter tax data into the preparation software on the second monitor, eliminating the need to toggle back and forth between windows. Tax document automation systems may be Internet-based or hosted on the firm’s servers. Internet-based is more cost efficient; however, service disruption issues could occur and the security of the system should be closely scrutinized. Scan-and-Populate Systems Scan-and-populate systems advance the tax document automation process a step further and automatically transfer data from the
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organized .pdf source document into the tax preparation software, thus almost completely eliminating manual data entry. Of course, the program cannot populate the entire return; some information requires the discretion of the tax preparer. For example, if multiple 1098s for mortgage interest are received, the system will not automatically know which 1098 should flow to Schedule A. Some systems address the discretionary items in a review wizard before auto-population of the data, while other products may produce a point sheet after import notifying the preparer which particular forms were not populated. At this time, the scan-and-populate offerings are only integrated with certain major tax preparation software products. Electronic Workflow Management Converting to digital files and electronic workpapers includes discarding paper route sheets and implementing a new workflow management system. A workflow management system enables a firm to: • assign tasks among preparers and manage workloads; • determine the status of a particular project; • track due dates; • standardize the tax preparation process throughout the firm; and • essentially monitor the movement of work down the line. The value of electronic workflow tools is in the centralization of all engagement data, such as the series of tasks required and client knowledge, to one electronic location for everyone in the firm to access. The systems are designed to completely eliminate the need for informal sticky notes, to-do lists and e-mails communicating the priority of various returns or internally designated deadlines if, for example, the client will be leaving town. Within an electronic workflow system, reviewers may assign a priority level to a return so that preparers can quantify the importance of returns and complete them accordingly. In addition, electronic workflow systems may generate customizable reports of all types and sizes. A reviewer can create a report every week of the assigned client list with specific status reports such as “waiting on K-1” or “waiting on gain/loss statement” rather than the generic “waiting on info.” In a manual paper system, when client data is received and physically delivered between the reviewer, admin, and preparer, the risk
is that the paper file will be temporarily lost or misplaced and a filing deadline may be missed. Unfortunately, many firms operate by simply allowing paper files stacked in an office to serve as the preparer’s “to do” list. Electronic workflows eliminate this risk by recording the receipt of client data in an electronic environment that cannot be misplaced and is accessible by the entire firm. Electronic workflow systems extend beyond the tax preparation process to encompass the management of all aspects of a firm’s business. Managing partners are able to customize measures that formally track and record staff performance on individual engagements or as a whole, improve the distribution of assignments, compare actual time and expenses of an engagement with budgeted figures, and maintain a repository for all client interactions throughout the year. Essentially, CPAs are able to spend more time adding value for clients rather than acting as an office manager. Most comprehensive document management systems incorporate an electronic workflow management system; however, the features and scope of products vary greatly. Workflow automation is one of the most critical aspects to consider as a firm progresses through the “going paperless” process. Document Management System At the end of the manual process, paper files are stored in a file cabinet or storage room. In a digital process, physical storage is represented by either a formal or informal DMS. A DMS provides for the storage, management and quick retrieval of electronic documents. Using an informal approach, firms may simply save bookmarked .pdf documents and e-mail correspondence into the firm’s network filing tree of Windows file folders. However, as a firm grows, the cost of electronic storage space and the growing navigation time between folders can become cumbersome. A formal DMS is a comprehensive tool for the tax preparation of individual and corporate engagements of all types and sizes. A DMS is the foundation for managing all of a firm’s electronic files, such as QuickBooks files, e-mails, Microsoft Office documents or spreadsheets, billing files, and time keeping reports. Advanced document management systems incorporate portals, tax document automation systems, sophisticated workflow management,
Today’sCPA
| July/August 2011
Figure 2. Features of Vendor Products.
Copanion
SurePrep
FileCabinet CS CCH
Inclusive Portal Application
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X
X
X
X
Tax Document Automation
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X
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Scan and Populate
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Electronic Workflow
DMS
Basic DMS
1040 Clients
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Business Returns X
helpful features, built-in record retention, and customizable settings.
Vendor Profiles After determining the goals your firm hopes to achieve with paperless conversion, explore the product offerings. Vendors offer stand-alone solutions for a particular stage of the process or comprehensive products that incorporate all stages of tax preparation. Contact the vendors and ask for either an online or in-person demonstration of the system. Major providers of paperless tax solutions include Copanion, SurePrep, Thomson Reuters FileCabinet CS or GoFileRoom, CCH and Doc.It. Figure 2 summarizes the features and sophistication of various vendor products, and three of the solutions are profiled in detail. Copanion Portal: Gruntworx Gather Tax Document Automation System: Gruntworx Organize and Gruntworx Trades Scan and Populate: Gruntworx Populate Applicable for: 1040 clients only Gruntworx Gather is a portal application between the client and tax professional in which the client can grant permission for banks and other financial institutions to release tax data directly to the portal for access by the CPA. The CPA is even notified by e-mail when new documents, such as a corrected 1099, have been issued by a financial institution. Gruntworx Trades is an application that analyzes and summarizes brokerage information into a Microsoft Excel spreadsheet for easy entry into the tax software. The program can take pages and
Today’sCPA
| July/August 2011
GoFileRoom
Doc.It
X
X
X
X
X
X
X
X
Including TB clients
X
X
pages of brokerage statements, organize the trades creating a capital gain and loss spreadsheet, and identify transactions with missing cost basis. Gruntworx Organize is a web-based tax document automation system. Client documents are scanned in with no separator pages required and submitted to the Internetbased system. A processed .pdf is received within minutes or hours depending on the volume being processed at that time. Gruntworx provides a guaranteed 24-hour processing time, and the average during tax season is 10 hours. So an administrative employee could scan and submit client information at the end of the day, and the client .pdf documents would be ready for the preparer the next morning. Other file types, such as Microsoft Excel spreadsheets, must be printed to .pdf and inserted into the .pdf file; thus, formulas would not be accessible by a reviewer. The original Excel document could be saved on the firm’s network, and if editing is required, the document can be reintegrated into the .pdf file. Gruntworx Populate is a scan-and-populate tax document automation system. The application processes client data into a .pdf source document and then automatically transfers data directly into the tax preparation software. If particular source documents are not recognized, then a point sheet is generated after import to alert the preparer. The following tax preparation software programs are compatible with Gruntworx Populate: GoSystem Tax RS, ProSystem fx Tax and UltraTax CS. Pricing: $20 to $30 per return for use of all Gruntworx applications. However, the programs are also offered separately, and discounts are available based on volume.
Particular Features: Security is a high priority when using Internet-based paperless solutions, and Gruntworx is IRC Sec. 7216 and SAS 70 compliant. Gruntworx products are a low-cost option for firms looking to ease into a paperless 1040 process. Thomson Reuters GoFileRoom Portal: NetClient CS Tax Document Automation System: TaxSort Electronic Workflow Management: FirmFlow DMS: RecordsFlow Applicable for: All individual and business clients and returns; no trial balance capabilities GoFileRoom is a comprehensive web-based DMS designed to smoothly manage all of a firm’s workflows. All client data is contained in binders that simulate paper files. The system employs a user-friendly interface with easy-to-navigate virtual file drawers and tabs within a client binder. For full scanning functionality, GoFileRoom requires a special scanner with barcode-reading capabilities. Each scanning job will have a barcoded client cover sheet, and the admin will insert specific divider sheets relative to the type of tax document. For example, all K-1s should have a K-1 divider sheet in front of the document. Although this system requires more extensive preparation in the scanning process, the advantage is that any return type may be organized with bookmarks rather than simply 1040 clients. Bookmark settings are available for 1120s, 1065s, 5500s, 990s, etc. For example, client data for a partnership return can be sorted prior to scanning, separated by divider sheets such as Financial Statements continued on next page
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Paperless Tax Solutions continued from previous page
or Depreciation, and the data is populated in the pre-defined set of Form 1065 bookmarks. Upon logging in to GoFileRoom and opening a client binder, the preparer is able to access all current year projects associated with this client in the top half of the page. The second half of the page contains tabs that organize the binder data. For instance, the Checklist tab contains a customizable list of questions specific to the return type for both the preparer and reviewer to address when completing a return. The Routing Info tab reveals the current status of the return and essentially serves as the routing history for the binder. The Documents tab contains all workpapers for the current project, including the bookmarked .pdf created from scanned client data. Excel or Word documents and e-mails may be added to the Documents tab in native format. GoFileRoom employs a document check-in/check-out feature and a query function for keyword searches within all clients and across all years. Workflows are electronically routed between preparer, reviewer, and admin at the click of a button. GoFileRoom’s electronic workflow system monitors the progress of an engagement from start to finish. The system can generate custom reports, allow management to set priority levels of client returns, and manage the workload of preparers to maximize staff utilization. The system also handles a firm’s administrative and HR functions. Customizable security settings enable these areas to be restricted to the appropriate staff level. Pricing: GoFileRoom mandates an extensive implementation program in which firms customize all aspects of the system. After the initial setup costs, firms are charged on a per user, per month basis. Particular Features: GoFileRoom facilitates the customization of drawers, index structures, workflows, checklists, and reports. The system boasts built-in e-mail functionality so that e-mails may be sent from within GoFileRoom and e-mail attachments may be separately indexed from the e-mail message at the click of a button. In addition, the system manages record retention according to firm-specific policies. GoFileRoom is an effective DMS and tax document automation process for all types of returns and any size firm.
Doc.It Complete DMS, including portal, document automation and electronic workflow management Applicable for: All individual and business clients and returns; no trial balance capabilities Doc.It’s DMS has a unique set up that mirrors the use of paper files in the office. The server-based software essentially maintains two distinct document management systems: Work-in-Process (WIP) binder and Doc.It Archive. The WIP binder is for unpublished or not yet completed client files, and the Archive binder stores published or completed engagements, thus isolating the clutter of prior year data. The primary purpose for separating the systems is to maintain document integrity. Navigation between the two repositories is simple, and the dashboard interface is user-friendly and provides quick access to all tools. In the tax preparation process, documents are first scanned in using divider sheets that separate the multi-page documents. No barcoding or special scanner is required. After scanning, the administrative employee accesses the client’s binder and submits the scanned file for processing. Using OCR and auto form recognition programs, the software populates folders within a specific client’s binder in seconds. This approach differs from systems that scan and organize client data into a single .pdf. Doc.It scanning routes each client source document to an appropriate location in a folder. For example, all interest income 1099s would be extracted during scanning and populate the Interest Income folder. Therefore, rather than using bookmarks to navigate client information, a folder is expanded, and all of the relevant documents are in view and labeled using a consistent naming convention. Within folders, the system stores and permits editing of any file type, including Word and Excel documents and e-mails. Preparers and reviewers may sign off on each individual document or the client folder as a whole. Documents are checked in and out by current users to eliminate the risk of simultaneous editing. The system also features version control, which maintains all previous revisions to a document or spreadsheet under a separate tab.
Throughout the return preparation process, Doc.It manages the workflow of the client return. For example, the status of a return is updated by the preparer and can include notes such as “Waiting on client to provide mortgage interest statement.” The status of any return can be viewed by any person in the office. In addition to the basics of tracking due dates and the status of returns, the workflow system can assign returns based on staff availability, skill level or past experience with the particular client. Once the return is complete, the client binder is submitted to Doc.It Publisher and Doc.It Policy Manager wizards, which ensure all returns are saved and archived in a consistent format. All completed engagements are then retained and compressed for storage in the Archive for easy access and retrieval. Pricing: $25 to $35 per month, per user not including initial setup and training costs; accommodates firms with three to 300 users. Particular Features: No security issues to consider because the software is hosted in-house on the firm’s servers. Doc.It’s PDF Editor is the vendor’s proprietary software so a firm would not be required to purchase Adobe Acrobat licenses. A query function is available within a single document, client or all clients. The system allows the dragand-drop of e-mails to client binders, and attachments can be stored separately from the e-mail. Notes can be added at three levels: within a document, at the document level and at the binder level. Implementation of Paperless Solutions The major obstacles to implementing a paperless process are resistance to change and a lack of commitment. Appoint a person or group to champion the new processes. The designated person or group should be heavily involved in the initial setup and training of personnel, and serve as the communication liaison between the firm’s professional staff and the software provider. The question these days is not “Should our firm go paperless?” but rather “How much longer can we delay conversion?” The benefits and efficiencies of paperless tax preparation have been tested and proven by the increasing number of firms currently employing electronic solutions. The paperless revolution is rapidly gaining momentum and will soon become the norm within the public accounting profession. n
Brinn Serbanic, CPA, is a tax accountant for Curtis Blakely & Co. in Longview, Texas, and can be reached at bserbanic@cbandco.com.
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Today’sCPA
| July/August 2011
CPE Quiz Today’s CPA offers the self-study exam below for readers to earn one hour of continuing professional education credit. The questions are based on technical information from the preceding article. Mail the completed test by August 31, 2011 to TSCPA for grading. If you score 70 or better, you will receive a certificate verifying you have earned one hour of CPE credit – granted as of the date the test arrived in the TSCPA office – in accordance with the rules of the Texas State Board of Public Accountancy (TSBPA). If you score below 70, you will receive a letter with your grade. The answers for this exam will be posted in the next issue of Today’s CPA. Answers to last issue’s self-study exam: 1. d, 2. d, 3. a, 4. a, 5. b, 6. d, 7. c, 8. c, 9. c, 10. b PARTICIPATION EVALUATION (Please check one.) 5=excellent 4=good 3=average 2=below average 1=poor 1. The authors’ knowledge of the subject is: 5__ 4__ 3__ 2__ 1__. 2. The comprehensiveness of the article is: 5__ 4__ 3__ 2__ 1__. 3. The article and exam were well suited to my background, education and experience: 5__ 4__ 3__ 2__ 1__. 4. My overall rating of this self-study exam is: 5__ 4__ 3__ 2__ 1__. 5. It took me___hours and___minutes to study the article and take the exam. Name _______________________________ Company/Firm________________________ Address (Where certificate should be mailed) ___________________________________ City/State/ZIP_________________________ Enclosed is my check for: ___ $10 (TSCPA member) ___ $20 (non-member) Please make checks payable to The Texas Society of CPAs. Signature____________________________ TSCPA Membership No._______________ After completing the exam, please mail this page (photocopies accepted) along with your check to: Today’s CPA; Self-Study Exam: TSCPA CPE Foundation Inc.; 14651 Dallas Parkway, Suite 700; Dallas, Texas 75254-7408. TSBPA Registered Sponsor #260.
Today’sCPA
| July/August 2011
Paperless Tax Solutions 1 An electronic workflow management system allows users to: Autofill tax data in the tax preparation software Manage staff assignments Generate an organized .pdf file for tax data Mail completed tax returns to clients 2 Which of the following vendors offer paperless tax solutions? Thomson Reuters CCH Doc.It All of the above 3 The growing demand for client/ CPA portals is primarily a result of: Advances in technology Decreasing technology costs Increased federal and state privacy protection regulations Firms desiring to reduce paper costs in mailing completed tax returns
6 Which of the following statements are true? Portals are unable to handle large file sizes. Any or all of the stages of tax preparation can be automated or converted to digital form. Users may not keyword search .pdf files of client source documents. Portals autofill tax data into tax preparation software products. 7 According to the article, one common reason paperless conversions fail is: Articulating the goals to be achieved with paperless conversion Underestimating the expense Lack of commitment to the conversion Lack of training 8 Which of the following is false regarding tax document automation systems? Tax document automation systems use optical character recognition (OCR) software to identify tax documents. An organized .pdf file is created and the user must create bookmarks and classify the documents. Tickmarks and annotations may be inserted in the generated .pdf file. Systems are Internet-based or hosted on the firm’s local servers.
4 According to the article, which of the following items are considered 9 Which of the following is basic equipment necessary to initiate not a benefit of a paperless tax a paperless tax preparation process? preparation process? Dual computer monitors Increased time spent on menial tasks Tax document automation system Ability to work from home Adobe Acrobat Cost savings on paper and storage Electronic workflow system Quick turnaround for clients 5 A formal DMS performs which functions for the paperless preparation of tax returns? Storage of completed tax returns Tax document automation and organization of source documents Storage of e-mail correspondence All of the above
10 Firms that manually prepare tax returns and then scan in workpapers and the completed return are employing: Tax document automation Front-end scanning Document management Back-end scanning
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CPE Calendar TSCPA Continuing Professional Education Programs august MONDAY
TUESDAY
Accounting and Auditing Update Galveston CPE Credits: 4
1
Estate Planning Strategies: Minimizing Taxes and Maximizing Wealth Galveston CPE Credits: 4
Financial Fraud, Forensics and the CPA Galveston CPE Credits: 4
WEDNESDAY
2
Cloud Computing Houston CPE Credits: 8
Financial Forecasting: Planning for Success Galveston CPE Credits: 4 Innovative Tax Tips for Individuals Galveston CPE Credits: 4
Enhancing the Success of Your Organization with a Winning Culture Galveston CPE Credits: 4
Advanced Issues in Mergers, Acquisitions and Sales of Closely Held Businesses Galveston CPE Credits: 4
Cash Flow Statements: Preparation and Presentation Options Galveston CPE Credits: 4
FRIDAY
4
Determining How Much Money You Need To Retire, And Tax Ideas And Money Management In Retirement Houston CPE Credits: 4 Outlook, Word, Excel and Adobe Tips, Tricks & Techniques Dallas CPE Credits: 8
5 New Critical Decisions in Selecting the Best Retirement Plan for Small Businesses in 2011 Houston CPE Credits: 8 Texas Franchise (Margin) Tax San Antonio CPE Credits: 8 CPA Technology Boot Camp: Key Trends and Strategies Every CPA Should Know and Understand Dallas CPE Credits: 8
Effective Workplace Communication Galveston CPE Credits: 4 Solving the Choice of Entity Riddle: Key Tax and Business Implications Galveston CPE Credits: 4
S Corporations: Strategies from Formation to Termination Galveston CPE Credits: 4 Essential Skills for the Survival and Growth of Your Organization Galveston CPE Credits: 4
Preparing Tax Basis Financial Statements: A Private Company’s GAAP Alternative Galveston CPE Credits: 4
Lean Accounting: Transforming Your Accounting Function for Maximum Performance Galveston CPE Credits: 4 Estates and Trusts: Mastering Complex Income Tax Issues Galveston CPE Credits: 4
Revenue and Cash Receipts: Common Frauds and Internal Controls Galveston CPE Credits: 4
Cloud Computing Dallas CPE Credits: 8
THURSDAY
3
Controller’s Update: Latest Trends for Today’s Financial Manager Galveston CPE Credits: 4
Accounting for Deferred Income Taxes: SFAS No. 109/FIN 48 Galveston CPE Credits: 4 International Taxation: To and From the United States Dallas CPE Credits: 8
Texas Sales and Use Tax Dallas CPE Credits: 8
Financial Statement Presentation and Disclosures-A Realistic Approach Dallas CPE Credits: 8
AICPA’s Annual Update: Top 12 Audit Issues Facing CPAs Dallas CPE Credits: 8
8
15
Internal Control Essentials for Financial Managers, Accountants and Auditors Houston CPE Credits: 8 Texas State Taxation Conference Austin CPE Credits: 14
Compilation and Review Annual Update: A Seminar Designed for Smaller Firms Dallas CPE Credits: 8
9
16 Internal Control Essentials for Financial Managers, Accountants and Auditors Dallas CPE Credits: 8 AICPA’s Annual Update: Top 12 Audit Issues Facing CPAs Houston CPE Credits: 8
Texas Franchise (Margin) Tax Houston CPE Credits: 8
10
Audits of 403(b) Plans: A Challenging New Audit Area Dallas CPE Credits: 8
Texas Sales and Use Tax Houston CPE Credits: 8
11
Federal Estate And Gift Tax Returns – Forms 706 And 709 Workshop Dallas CPE Credits: 8
17
Personal and Professional Ethics for Texas CPAs Fort Worth CPE Credits: 4 Governmental and Nonprofit Annual Update Dallas CPE Credits: 8
Audits of 403(b) Plans: A Challenging New Audit Area Houston CPE Credits: 8
12 LLC and Partnership Principles: An Introduction to Subchapter K San Antonio CPE Credits: 8 What You Need to Do Now in Estate Planning Under the New Tax Law Dallas CPE Credits: 8
18 19 Annual Yellow Book Update and Performance Analysis: Identify Review: A Realistic Approach Profit Improvement Opportunities San Antonio CPE Credits: 8 Dallas CPE Credits: 8 LLC and Partnership Principles: An Introduction to Subchapter K Austin CPE Credits: 8
Identifying Fraudulent Financial Transactions Houston CPE Credits: 8
Identifying Fraudulent Financial Transactions Dallas CPE Credits: 8
Annual Yellow Book Update and Review: A Realistic Approach Austin CPE Credits: 8
Personal and Professional Ethics for Texas CPAs Houston CPE Credits: 4 Performance Analysis: Identify Profit Improvement Opportunities Houston CPE Credits: 8
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Today’sCPA
| July/August 2011
august MONDAY
TUESDAY
22
Internal Controls Design, Evaluation and Communication for Smaller Entities Houston CPE Credits: 8 Tax Staff Training – Level 1 – Individual Dallas CPE Credits: 16
WEDNESDAY
23 Personal and Professional Ethics for Texas CPAs Dallas CPE Credits: 4
THURSDAY
24
MBA in a Day! Houston CPE Credits: 8
FRIDAY
25 26 Hot IRS Tax Examination Issues for International Versus U.S. Individuals and Businesses Accounting: What in the World is Houston CPE Credits: 8 the Difference Houston CPE Credits: 8 International Versus U.S. Accounting: What in the World is Hot IRS Tax Examination Issues for the Difference Individuals and Businesses Dallas CPE Credits: 8 Dallas CPE Credits: 8 Advanced Estate Planning Conference San Antonio CPE Credits: 20
Advanced Excel Dallas CPE Credits: 8
29
Multistate Income Tax: Simplifying the Complexities Houston CPE Credits: 8 Personal and Professional Ethics for Texas CPAs San Antonio CPE Credits: 4
30 31 Personal and Professional Ethics Compilation & Review Update: for Texas CPAs Advanced Issues Austin CPE Credits: 4 SATELLITE BROADCAST Various CPE Credits: 8 Multistate Income Tax: Simplifying the Complexities Advanced Excel Dallas CPE Credits: 8 San Antonio CPE Credits: 8 Advanced Excel Houston CPE Credits: 8
Annual Update for Accountants and Auditors Houston CPE Credits: 8
Identifying Fraudulent Financial Transactions San Antonio CPE Credits: 8
Annual Yellow Book Update and Review: A Realistic Approach Dallas CPE Credits: 4
CPE Personal Assistant Be sure to use your CPE Personal Assistant on the TSCPA website. It’s an online tool TSCPA members can use to track, maintain and update their CPE records. You can access this tool by going to the CPE area of the TSCP website (tscpa.org) and clicking on the Wizard.
SEPTEMBER MONDAY
Advanced Texas Tax for Major Industries Houston CPE Credits: 8
TUESDAY
WEDNESDAY
THURSDAY
12
13
14 Accounting and Auditing Update SATELLITE BROADCAST Various CPE Credits: 8
19
20 Internal Control Deficiencies: Assessment and Reporting Under SAS 115 San Antonio CPE Credits: 8
21 Personal and Professional Ethics for Texas CPAs Houston CPE Credits: 4
Internal Control Deficiencies: Assessment and Reporting Under SAS 115 Austin CPE Credits: 8
Fiduciary Income Tax Returns – Form 1041 Workshop Houston CPE Credits: 8
FRIDAY
15
16
22
23 Navigating the LLC and Partnership Allocations and Basis Minefield Dallas CPE Credits: 8
Advanced Texas Tax for Major Industries Dallas CPE Credits: 8
LLC and Partnership Principles: An Introduction to Subchapter K Fort Worth CPE Credits: 8
Frequent Frauds Found in Governments and Not-For-Profits Dallas CPE Credits: 8
Financial Institutions Conference Dallas CPE Credits: 18
Social Security, Medicare, and Prescription Drug Retirement Benefits: What Every Baby Boomer Needs to Know Now Houston CPE Credits: 8 Personal and Professional Ethics for Texas CPAs Tyler CPE Credits: 4 Frequent Frauds Found in Governments and Not-For-Profits Austin CPE Credits: 8
26 27 Revenue Recognition: Getting the Cash and Tax Basis Financial New Standard Right Statements – Preparation and Dallas CPE Credits: 8 Presentation Dallas CPE Credits: 8 Cash and Tax Basis Financial Statements – Preparation and Revenue Recognition: Getting the Presentation New Standard Right Houston CPE Credits: 8 Houston CPE Credits: 8
28
29
30 Navigating the LLC and Partnership Allocations and Basis Minefield Houston CPE Credits: 8 Personal and Professional Ethics for Texas CPAs Dallas CPE Credits: 4
Tax Staff Training – Level 2 – Business San Antonio CPE Credits: 16
Today’sCPA
| July/August 2011
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Classifieds Positions Available Longview, TX CPA firm is searching for a tax manager. Our clients are in the oil and gas industry, manufacturing, professional services and a variety of other enterprises. The candidate should have at least 4 years’ experience in public accounting with an emphasis in tax preparation. The firm is well established and respected in the community, giving the successful candidate excellent opportunity to progress professionally. E-mail your resume to khgriffin@ dg-cpa.net. Tax Manager LBJ & 75 Earn equity, take over high profit practice, reply to CPADallasmgr@gmail.com. Tax Manager – Dallas/Uptown Regional Firm looking for a CPA with minimum 5 years of public accounting experience. Tax experience in real estate, auto dealerships, construction, and healthcare a plus. Candidate must be able to perform advanced level tax related services for clients, identify and resolve tax problems, and assist in departmental policies and procedures. Candidate will be responsible for supervising, reviewing, training, and developing staff. Candidate will interface with prospective clients and identify and pursue marketing and networking opportunities. Interested candidates, please e-mail resume and contact information to: uptowndallastaxmgr@gmail.com.
Practices For Sale North Dallas $520,000 High quality small business clients, 65% tax – 35% compilation/reviews, year round cash flow, long-term staff, owner transition, reply to dallascpa2011@gmail.com. $75,000 gross. CPA practice with tax and accounting. Small town NW Louisiana. Building available for lease or purchase. Please reply to: File Box #5197, Texas Society of CPAs, 14651 Dallas Parkway, Suite 700, Dallas, TX 75254.
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Accounting Broker Acquisition Group 800-419-1223 X21 Accountingbroker.com Maximize Value When You Sell Your Firm Texas Practices Currently Available Through Accounting Practice Sales: $440,500 gross. Bell County. Well-established practice in desirable locations. Solid staff on board. TXC1030 $192,750 gross. Austin. Primarily business clients with the majority of revenue derived from monthly services. TXC1042 $233,488 gross. TX Panhandle/OK. Strong cash-flow. Large number of business clients. Building also available. TXW1004 $295,900 gross. TX Panhandle. Nice sized firm provides tax, accounting, payroll and consulting services. TXW1013 $238,000 gross. Lubbock Metro area. Quality CPA firm with 45% accounting services and 55% tax prep. TXW1018 $167,000 gross. East Texas. Profitable practice with year-round income and strong cash flow to owner. TXN1231 $215,000 gross. East Texas. Well established. Great cash flow to owner. Partnership opportunity. TXN1249 $25,000 gross. Terrell-Kaufman Area. Turnkey tax practice with great potential for growth. Priced to move. TXN1254 $120,000 gross. N. Dallas/Galleria Area. Well-known tax practice with strong fees and knowledgeable staff. TXN1255 $72,000 gross. Rotan. Quality CPA practice composed of 85% tax prep. Strong cash flow & growth potential. TXN1258
$174,000 gross. East Texas. Highly profitable with strong fees. Quality client base includes many businesses. TXN1264 $368,000 gross. North Dallas. 80% tax work, strong fee structure and experienced, qualified staff. TXN1266 $102,600 gross. Arlington. 80% bookkeeping and payroll services provide steady, yearround income. TXN1267 $338,000 gross. Duncanville. Long-term client base, tenured staff. About 75% of revenues from business clients. TXN1273 $60,000 gross. Fort Worth. Established CPA practice with solid fee structure. 67% tax prep and 33% accounting. TXN1270 $200,000 gross. Forth Worth. Tax practice with good fees, strong cash flow and excellent growth potential. TXN1275 $131,000 gross. Keller. CPA practice in desirable area with many business clients. 60% tax and 40% accounting. TXN1268 $100,000 gross. Mesquite. Well-established with loyal clients. Evenly balanced (50/50) between tax and accounting. TXN1272 $145,000 gross. Richland Hills. Highly profitable with quality clients and strong fees. Desirable mix of services. TXN1274 $172,760 gross. Alvin. Primarily tax work with a loyal client base that should allow for expansion of services. TXS1088 $27,800 gross. Northwest Houston. Stable practice with over 300 clients that targets Rapid Refund customers. TXS1090 $238,700 gross. Bryan-College Station. Quality tax practice with loyal staff and potential for expanding services. TXS1093
$313,000 gross. Arlington. Desirable revenue mix and loyal client base of mostly businesses and owners. TXN1261
$175,575 gross. West Houston. Specializing in helping small business owners. Virtual office. TXS1094
$95,000 gross. Kaufman Area. Highly-profitable CPA practice with 70%+ cash flow to owner and quality clients. TXN1262
$185,123 gross. McAllen. Excellent cash flow to owner. Owner willing to sell building. TXS1095
Today’sCPA
| July/August 2011
Classifieds $354,730 gross. Rio Grande Valley. Reputable firm with balanced service mix produces 70% cash flow. TXS1097 $63,000 gross. Brownsville. High concentration of tax work with 7 bookkeeping clients. Bilingual staff in place. TXS1100 $286,289 gross. Brazoria County. 70% tax & 30% bookkeeping. Located in desirable area with experienced staff. TXS1101 $101,363 gross. Corpus Christi Area. Revenues consist of 79% tax prep and 21% accounting/bookkeeping. TXS1103 $169,000 gross. Montgomery County. CPA practice with great mix between tax (34%) and accounting (66%). TXS1105 ACCOUNTING PRACTICE SALES North America’s Leader in Practice Sales Toll Free 1-800-397-0249 See full listing details and inquire/register for free at www.accountingpracticesales.com PRACTICES FOR SALE THROUGHOUT TEXAS … including Dallas $350,000; South of Dallas CPA $600,000+; Tyler area CPA $200,000+; Oklahoma City $250,000. Many others nationwide! We provide 10-year bank
financing on ALL listings with PAS! Confidential, prompt, professional. Contact Leon Faris, CPA at Professional Accounting Sales, USA’s No. 1 accounting brokerage network. Phone 972-292-7172 or 800-729-9031. Visit our website at: www.cpasales.com.
Practices Sought BUYING OR SELLING? First talk with Texas CPAs who have the experience and knowledge to help with this big step. We know your concerns and what you are looking for. We can help with negotiations, details, financing, etc. Know your options. Visit www. accountingpracticesales.com for more information and current listings. Or call toll-free 800-397-0249. Confidential, no-obligation. We aren’t just a listing service. We work hard for you to obtain a professional and fair deal. ACCOUNTING PRACTICE SALES, INC. North America’s Leader in Practice Sales
Local CPA firm is interested in paying a premium for CPA practices up to $1 million in San Antonio area. We will retain staff or partners or work with transitioning retiring partners. Please contact psmith@cpatx.com. 210-366-9430.
Accounting Broker Acquisition Group “Maximize Value When You Sell Your Firm” A Local Texas Corporation You Sell Your Firm Only Once! Will You Leave Money on the Table? Free Report: “Discover the 12 Irreversible Fatal Errors You Must Avoid When You Sell Your Firm!” We sell small & large CPA firms… 100 percent of our acquisition brokers are “Ex-Big Four” CPAs! We are the only firm of our type in the nation that can make this claim! Call now for your Free Report! 800-419-1223 x101 or send a quick e-mail to maximizevalue@accountingbroker.com
Classifieds continued on next page
TSCPA offers opportunities for members and non-members to advertise in the Classifieds section of Today’s CPA magazine. To request a classified ad, contact Donna Fritz at dfritz@tscpa.net or 800-428-0272, ext. 201 or in Dallas at 972-687-8501; fax 972-687-8601. Or write to: TSCPA, Today’s CPA Classified Ads, 14651 Dallas Pkwy, Suite 700, Dallas, TX 75254-7408. All classified ads must be paid in advance. MasterCard, Visa, American Express, personal and business checks are accepted. Please contact Donna Fritz for rates and more information.
Today’sCPA
| July/August 2011
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Today’s CPA AD INDEX
Classifieds Practices Sought continued
PRACTICES WANTED… Let our 28 years of CPA firm merger-acquisition experience work for you. We have hundreds of well qualified buyers anxiously seeking practices in the Austin, Dallas, Houston, and San Antonio areas. We provide 10-year financing so you can cash out at closing! Confidential, prompt, professional. Contact Leon Faris, CPA at Professional Accounting Sales, USA’s No. 1 accounting brokerage network. Phone 972-292-7172 or 800-729-9031. Visit our website at: www.cpasales.com.
For more information on placing a classified ad in Today’s CPA, please contact Donna Fritz at 972-687-8501 or 800-428-0272, Ext. 201, or e-mail dfritz@tscpa.net
Company
Services Need assistance with a Client’s Texas Sales Tax Issue/Problem? Audits? Refunds? Not permitted? We were trained by and worked for the Comptroller of Public Accounts. We know Sales Tax Law and Audit procedures. Your client has options. Michael J. Robertson, CPA Web page: Texas-SalesTax.com 817-478-5788 Fax: 817-478-8779
Software For Sale PROVEN OIL and GAS ACCOUNTING SYSTEM keeps getting better. Fast, easy to use. Developed for PC/network by CPA. Over 2,000 users. G/L, A/P, depletion, payroll, joint interest billing, revenue distribution, document imaging, and production management. WolfePak Software; 2901 S. First St., Abilene, TX 79605. 325-677-1543 or 800-299-1543. E-mail: sales@wolfepak.com.
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Accounting Practice Sales accountingpracticesales.com
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Audimation Services, Inc www.audimation.com
13
CPA Mutual www.cpamutual.com
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CPE Link www.cpelink.com
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Financial Valuation Services www.fvsvaluations.com
12
Goodman Financial www.goodmanfinancial.com
11
Law Office of Antonio Villeda mybusinesslawyer.net
30
Looper, Reed, & McGraw P.C. www.lrmlaw.com
23
Marsh U.S. Consumer www.marshpm.com
2
Pay My Taxes, LLC www.paymytaxes.com
15
PDP Systems www.pdpbind.com
48
Strasburger www.Strasburger.com
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TaxWorks www.taxworks.com
4
The answers are out there Every firm has its own set of challenges. If you’re looking for individualized support for your firm, CPA Mutual is here for you. CPA Mutual has provided risk management services to our member-owners for over 23 years. They all enjoy direct contact with us should the need for assistance arise. Whether its pre-claim assistance or avoidance, coverage questions on new services or clients, or engagement assistance, we are just a phone call away. No delays ... no wasted time. We’re ready to join your quest to make your firm a success – and to help you sleep at night.
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Our business is taking care of your business. Today’sCPA
| July/August 2011
STRASBURGER & PRICE, LLP
2011 ANNUAL TAX SYMPOSIUM SAVE THE DATE AUGUST 15 MONDAY,MONDAY, AUGUST 23 Westin Galleria Westin Galleria DallasDallas
REGISTRATION and BUFFET 11:15 am 11:00 am Registration andLUNCH Buffet Lunch WELCOMING REMARKS 11:45 am Welcome Remarks Current Developments in State & Local Taxes 12:10 pm Dan Butcher/Mike McClelland (Dallas) Dan Butcher (San Antonio/Houston) 11:55 am Current Developments in Texas Taxes Dan Butcher/Mike McClelland 12:50 pm Update on Recently Enacted and Proposed(Dallas) Tax Legislation Dan Butcher (Houston/San Jim Browne (Dallas) Crawford Moorefield Antonio) (San Antonio/Houston)
12:00 pm
13340 Dallas Parkway 13340 Dallas Parkway Dallas, TXDallas, 75240 TX 75240 972.934.9494 972.934.9494
TUESDAY, AUGUST 16 TUESDAY, AUGUST 24
Recent Developments - Estate Planning Update 12:25 pm State Tax Audits Dani Smith/John Round (Dallas/San Antonio/Houston) Mike McClelland (Dallas) 2:10 pm (Houston/San Antonio) Responding John to IRSMuller Requests for Information: Legal, Ethical, Practical and Other More Serious Considerations Farley Katz/Chad MullerRecently (Dallas/San Antonio & ) Chad Muller/Gary Siller (Houston) 12:55 pm Update: Enacted Proposed Tax Legislation Jim Browne (Dallas) 2:50 pm QUESTIONS Crawford Moorefield (Houston/San Antonio) 3:00 pm BREAK Recent – Estate Planning Update Estate Planning - TheDevelopments Basics 3:15 pm 1:35 pm Round/Dani Smith (Dallas/Houston/San Antonio) Brad FletcherJohn (Dallas/San Antonio/Houston)
1:20 pm
Embassy Suites Downtown Houston The Omni San Antonio
1515 Dallas Street 9821 Colonnade Boulevard Houston, TX 77010 San Antonio, TX 78230 210.691.8888 713.739.9100
WEDNESDAY, AUGUST 17 WEDNESDAY, AUGUST 25 Plaza San Antonio MagnoliaMarriott Houston
3:55 pm 2:25 pm Current Developments Taxation Hot TopicsininPartnership Return Preparation
555 South Alamo Street 1100 Texas Avenue San Antonio, TX 78205 Houston, TX 77002 210.229.1000 713.221.0011
Farley Katz (Dallas/Houston/San Antonio) Panel Discussion: How Healthcare Reform Will Affect Your Business— 3:05 pm Questions The Opportunities and Hazards Jim Browne (Dallas) Crawford Moorefield (San Antonio/Houston)
4:35 pm
Luke Bailey/Gary Lawson/Kevin Robinowitz (Dallas/San Antonio/Houston)
The Symposium qualifies for 6.00 hours of MCLE
THE SYMPOSIUM QUALIFIES FOR 6.00 HOURS OF CPE FOR TEXAS CPE for Texas CPAs and 5.00 hours of C PA s A N D 5 . 0 0 H O U R S O F M C L E F O R T E X A S AT T O R N E Y S . R S V P E - M A I L : Mfor A R YTexas C AT H E R Iattorneys. NE.UNIS@STRASBURGER.COM
3:15 pm Labor, Employee Break Benefits & ERISA
Bill Darling (Dallas, Houston) Kevin Wood (San Antonio)
3:30 pm Healthcare Advanced Estate Planning Techniques 5:35 pm QUESTIONS Brad Fletcher (Dallas/Houston/San Antonio) CUT HERE
Cost: $85/person Registration information to follow.
4:00 pm Registration Form
Cafeteria Plans; Healthcare Reform Update Luke Bailey/Gary Lawson (Dallas/Houston/San Antonio)
MONDAY, AUGUST 16. No refunds issued after August 4:45 16. pm Current Developments in Partnership Taxation For questions, please contact: Jim Browne (Dallas) & Price, LLP” (credit cards not accepted). FEE $80 PER PERSON – Includes materials and refreshments. Make checks payable to “Strasburger Crawford Moorefield (Houston/San Antonio) carman.sanchez@strasburger.com or DALLAS • Monday, August 23, Westin Galleria Dallas LOCATION Which Symposium will you be attending? call Carman Sanchez at 214.651.2057 PLEASE CHECK ONLY ONE. SAN ANTONIO • Tuesday, August 24, The Omni San Antonio 5:30 pm Questions
DEADLINE
HOUSTON • Wednesday, August 25, Magnolia Houston
Strasburger
Full Name ATitle TTORNEYS
RSVP Contact: marycatherine.unis@strasburger.com To ensure your registration, complete this form and return it by mail, along with payment, BEFORE MONDAY, AUGUST 16 to:
AT LAW
Company www.strasburger.com
Address Mary Catherine Unis Austin • Collin County • Dallas • Houston • San Antonio • New York • Washington, D.C. • Mexico City - Strasburger & Price, SC City / State / Zip Email Telephone / Fax
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STRASBURGER TAX SYMPOSIUM 901 Main Street, Suite 4400 Dallas, Texas 75202
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