THE
WASHINGTON CPA
Volume 64, Number 3
spotlight on
mental health WINTER 2021
Employee Mental Health & Well-being During & Beyond COVID-19: A Top Priority 3 Tips to Recharge When Your Tank Is Running on Empty How to Audit During a Pandemic? Your Top 5 Questions Answered
THE WASHINGTON CPA WINTER 2021
www.wscpa.org • memberservices@wscpa.org Tel 425.644.4800 902 140th Ave NE Bellevue, WA 98005-3480
BOARD OF DIRECTORS Jared M. Theis Chair Thomas J. Sulewski Vice Chair Diane Pietrowski Treasurer Andrew Brajcich Secretary Amanda V. O’Rourke Immediate Past Chair Kimberly D. Scott President & CEO
Sara E. Bailey Joyce Lee Aaron R. Dawson Bill Reed Sarah Funk Leslie A. Sesser Lowel J. Krueger Susan L. Thomson Kris Lambright Bonnie Tse CHAPTER BOARD CHAIRS Laurel Cohen Bellingham Area Charles Meyerson Everett Area Darin Johnson Olympia Area Allison McClure Seattle/Bellevue Area Shayna DesJardin Spokane Area Jessica Packer Tacoma Area Anthony Adams Tri-Cities Area Connie Olson Tri-Cities Area Raquel Martinez Yakima Area
Jeanette Kebede Kaitlin Brake
Editor Art Direction
CONTENTS
On the Cover How to Audit During a Pandemic? 14 Your Top 5 Questions Answered 3 Tips to Recharge 16 When Your Tank Is Running on Empty Employee Mental Health & Well-being During & 18 Beyond COVID-19: A Top Priority
Spotlights Communication Ettiquette 10 in a Distributed Workforce Precision vs Accuracy: 36 Financial Modeling Best Practices
Departments Leadership Lens 5
The Washington CPA is published by the Washington Society of Certified Public Accountants for its members. Views and opinions appearing in this publication are not necessarily endorsed by the Washington Society of CPAs. The products and services advertised in The Washington CPA have not been reviewed or endorsed by the Washington Society of Certified Public Accountants, its board of directors, or staff. The Washington CPA (USPS 009754) is published four times annually by the Washington Society of Certified Public Accountants, 902 140th Avenue NE, Bellevue, WA 98005-3480. $12 of members’ annual dues goes toward a subscription to The Washington CPA. Periodicals postage paid at Bellevue, Washington and additional mailing offices.
Membership News 7 Advocacy 9 Upcoming CPE 26 WSCPA Peak Firms 30 Classified Ads 32 Washington CPA Foundation 35
Cover Illustration: © iStock/ DrAfter123 Cover Photo: © iStock/ Anchiy
POSTMASTER: Send address changes to The Washington CPA, c/o WSCPA, 902 140th Avenue NE, Bellevue, WA 98005-3480.
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LEADERSHIP LENS
WELCOME to 2021! I hope everyone had a happy holiday season and the new year is off to a great start. I, like many of you, am glad to put 2020 in the rearview mirror and welcome in 2021. This past year was historic on many levels, and a year that will have lasting influence and be talked about for generations (although it probably will not be too exciting to tell our grandchildren, “I remember where I was during the pandemic”). As I reflect on 2020, one thing is for certain: it did not turn out at all as I expected at this time last year. Some of the things that I missed the most were travelling to new and exciting places, going to sporting events and concerts, hosting large gatherings of family and friends, etc. But, most of all, I missed meeting and interacting in person – even something as simple as sitting at a small, local bar with friends to watch a game (without cardboard fans in the stands). While technology certainly has advantages that enabled us during the pandemic, it just does not provide that same level of social interaction, spontaneity, and community that our society thrives upon. Yes, many of these things will return as we get back to “normal” in 2021, but there will also be many differences from what we are used to – good or bad, depending on your perspective. So, while we still must navigate the road to recovery, there is light at the end of the tunnel. I am excited to start 2021 and build upon the lessons learned and perspectives gained from 2020 – both personally and professionally. I am looking forward to many things big and small, such as facing new challenges with our clients as the economy and regulatory environment evolves, re-connecting in person with colleagues and friends that I have not seen in person in more than a year, attending a football game with my college buddies, dropping my kids off at school, and hopefully taking my wife on that sunny paradise vacation that I owe her (and buying the grandparents a gift for watching the kids). I am also excited for the WSCPA’s diversity, equity, and inclusion strategic plan updates to come to fruition and be put into action to empower lasting change for our profession across the state. It’s truly been inspiring to see how our board and staff – from a diverse set of backgrounds, experiences, locations, and ideologies – have been closely aligned on the importance and direction of these updates. In addition, our great staff is continuing to work diligently on new and innovative ways to engage and provide a valuable experience for you. I am truly thankful for their immense efforts and support that enable the Society to be successful. So, 2021 is looking to be a pretty solid year and it’s just starting! I may be going out on a limb here, but I suspect the second half of my board chair tenure will likely not be as historically eventful as the first half. However, I appreciate the challenges faced in the past year, especially how it has made me a better leader and person, and the opportunity to continue to serve you this year.
I wish everyone a safe, happy, successful, and healthy 2021. Thank you for your support of the WSCPA. Jared Theis, CPA, is an Accounting Advisory Director in the Seattle office of KPMG LLP and chair of the WSCPA Board of Directors. You can contact him at jtheis@kpmg.com.
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Thank You to Our 2020 Sponsors
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MEMBERSHIP NEWS
Find a CPA - Free WSCPA Resource! Enroll your firm in the Find a CPA directory! Help prospective clients find your firm through an easy, interactive, and searchable directory, at no charge to your organization. Explore the directory at wscpa.org/find-a-cpa
Take Advantage of Reduced Virtual CPE Prices The WSCPA is proud to announce that we are lowering our standard fees for select 8- and 16-hour webcasts! Our new, lower pricing means that you'll save up to 20% on the same quality CPE you rely on to keep your practice current. View the full list of webcasts with lower prices in our catalog, and register for some CPE today! Check out our Reduced Price Virtual Classes on page 28.
WSCPA Now Offers Ethics On Demand We are excited to announce the addition of WSCPA self-study ethics! Now you can take Mark Hugh's Washington State ethics course whenever you want. Find the new Washington Ethics and New Developments 2020 - ON DEMAND in the WSCPA online catalog. Learn more at wscpa.org/ethics-on-demand.
Utilize your Passport Corporate Card to save big in 2021! Chewy: $15 off first purchase of $49+ with free shipping Costco Wholesale: Join Costco as a new member and receive a $30 Costco Shop Card • Total Wine & More: Save 15% on 750ml and 1.5L Wine Save 10% on Beer Singles. • Woodinville Wine Country Association: 15% off Wine Passes. Visit wscpa.org/passport for more discounts. • •
Virtual WSCPA Annual Meeting Webcast, June 3 1 CPE Credit
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MIKE NELSON
2021 ADVOCACY OUTLOOK
ADVOCACY 2020 was certainly full of surprises and unprecedented challenges. The WSCPA advocacy team and our member volunteers, have been advocating for CPAs every week (not an exaggeration) during a year of unparalleled legislative and regulatory flux. Now that the legislative session is underway, here are our advocacy priorities for 2021.
Budget Shortfall After the state and country first went into a lockdown it was projected that the state’s budget would be facing a more than $8 billion dollar shortfall through June 2023. Over the summer and through the winter that number has fallen to just over a $2 billion dollar deficit. While still significant, that number is considerably better than only a few months ago and importantly, not projected until the 2021-2023 budget, which means the need for immediate revenue increases before June of 2021 is diminished. State and federal aid will be a crucial part of an economic recovery now and once COVID-19 vaccines are widely available. Current hope is that Washington will receive federal funds to distribute between state and local governmental organizations. Depending on how much or if any is earmarked for the state to spend, the legislature may look at other revenue options to provide more aid to struggling families and businesses in the coming months. Several proposals for this additional revenue we continue to watch are increases in the B&O rates, a sales tax on professional services, a payroll tax, and a capital gains tax.
Tax Structure Reform Beyond any revenue needed for budget deficits and economic recovery packages, we continue to participate and work with the Tax Structure Workgroup (TSWG) and the Technical Advisory Group (TAG) as they examine the overall tax structure of the state. The goal of these groups is to one day propose sweeping changes to how the state taxes individuals and businesses. Together the groups have looked at how different types of taxes could be implanted to replace Washington’s existing sales, property, and B&O taxes. At their December meeting the TSWG reviewed economic research into the various types of personal and corporate income tax streams as well as value added and margin taxes that they may consider going forward. If you would like to review any of the past meetings or presentations, you can find them online at wscpa.org/tswg. In 2021 as the TSWG works toward providing the legislature with recommendations of which reforms should be implanted, it will convene meetings and gather feedback from stakeholders across the state
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on these various types of taxes. If you would like to be involved in this process, please let me know.
Licensure Standards Our profession continues to face challenges to our licensure standards. During the shutdown there were repeated calls to look into the requirements for licensure in a number of service industries. While schools and other facilities that used to provide these tests, trainings, and certifications were shut down new entrants into some industries were all but blocked for most of 2020. One of the proclamations signed by Governor Inslee waived the bar exam requirement for new lawyers this year. This has raised many questions about the requirements for even professional services. With this backdrop we expect to see continued legislation that would damage the CPA license and our profession’s mobility.
Virtual Legislative Session In addition to the multifaceted revenue and licensure issues facing Olympia, the first virtual legislative session in our state’s history is being held this year. Legislators will be navigating all new procedures in this virtual environment, from speaking on a bill on the floor to having a conversation with colleagues during a committee meeting. Communication will be the most important avenue to support or oppose legislation in 2021 but also the most difficult. That is why the relationships our members have been building and maintaining all summer and fall will be even more important. We will need to have members ready in case we need to communicate with legislators quickly during the session. If you have a relationship with a legislator already or would like to be involved, please reach out to me.
Washington State Board of Accountancy (WBOA) As he had announced previously, Charles Satterlund is retiring as the Executive Director of the WBOA at the end of January. Governor Inslee started soliciting applications for his replacement in December and the WSCPA has been working with his office to make sure that CPAs are involved in the selection process moving forward. With all of the uncertainty surrounding the profession and politics it is more important than ever to contribute to the CPAPAC. Donate today and we can continue to build the vital relationships that help us influence the legislation that comes through Olympia. Mike Nelson is WSCPA Manager of Government Affairs. You can contact him at mnelson@wscpa.org.
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REMOTE WORK
Communication Etiquette in a Distributed Workforce
Etiquette is more than knowing which fork to use at a fancy dinner party. It’s a social convention that encompasses agreed upon rules and interactions between groups. Etiquette within your workplace is defined by the people who make up your culture. In an in-person work environment, some rules of etiquette may include being aware of smells or keeping your workspace tidy. In a remote or distributed workforce (aka your team not working in the same physical space), arguably, the most important rules are around communication etiquette.
Julie Davis
It is vital to establish a communication etiquette that is accessible and universally applied across your organization. The primary considerations involved in effective communication etiquette of remote teams include: • How quickly to respond to each other • How and when to use video • What hours may be off limits To help you create your own communication etiquette rules, we’ve put together the following guidelines designed to maximize your efficiency and minimize your confusion.
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Set Expectations Around On/Off Hours One major benefit of distributed teams is spanning work hours across teammates and, in some cases, time zones. For employers and project managers, this means your team potentially can achieve progress over a longer workday. For customers and members, their needs can be attended to more regularly. However, it also presents the challenge of delaying communication and lacking personal boundaries. To minimize those challenges, employees should identify their “On” and “Off” hours and share them with their team. “On” hours – any time of day the employee is open to receiving communication – essentially their personal standard work hours (approved by their manager). For some, this may be a strict 9 a.m.-5 p.m., but others might express their best work and availability is late at night or Sunday mornings – flexibility is a great benefit of your remote team.
Use Video for Difficult Conversations and Needed Face-to-Face Do not lose the personal element of crucial and sometimes difficult conversations. When having a sensitive conversation such as constructive feedback, negotiations around raises, or removal from a project or position, video is a critical element to the conversation. Use the same techniques and tones as you would in an in-person conversation. Do not take the “easy” way out by making a phone call or emailing because it might feel less awkward for you. Additionally, use video at least once a week to connect with your teammates and those you manage. While it should not be required to use video for every call (you don’t want to give the impression of micromanaging), it is an important way to maintain a regular connection with and between your employees.
“Off” hours – any time outside of the “On” hours. Encourage employees to disable notifications during their “off” hours to help them fight the temptation to work all day. Communicate a preferred back up plan for how to reach each other during off hours (e.g., phone call or text). In short, be mindful of coworkers’ varying schedules. Aligning expectations appropriately will make for smoother communication and more engaging collaboration.
Response Time and Purpose
Work Status and Availability
To institute your organization’s communication etiquette you won’t need to send everyone to “finishing” school. Set clear priorities and expectations around communication, and your team will have the savoir-faire they need to succeed.
Sharing your availability throughout the day with colleagues is an important part of communication etiquette in a remote environment. Most communication tools such as Slack, Microsoft Teams, Outlook calendar, Google calendar, etc., allow users to share their status and availability with others. Set policies and be consistent in using these tools to help reduce the “back and forth” questioning about others’ availability to meet. Aim to strike a balance between respecting others’ work times and getting the information you need during your team’s “On” hours.
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One of the greatest perks of remote work is the ability for employees to build their own schedules (depending on your company policy). It is important to align teammates on expectations for both internal and external response times. Set clear policies and be consistent in their use and when managers and employees are expected to respond.
Julie Davis is Director of Marketing with Achurch Consulting. You can contact her at julie@achurchconsulting.com with any questions regarding remote work strategies. Illustration: © iStock/ Oleksandra Klestova
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As a WSCPA member, you are part of a community. One of the WSCPA's most important functions as an organization is to provide you with opportunities to collaborate, socialize, and celebrate with your fellow members. The Connect platform is your interactive member directory. Find and chat with members from across the state. You can join groups organized around your interests and participate in discussions on a variety of topics that are important to you. Connect is your gateway to join resource groups and committees. Find groups you are already a part of and find others to join. Then, let the collaboration begin!
Join the discussion and find great resources on Connect! Women's Initiative Resource Group Diversity & Inclusion Resource Group COVID-19 Business Challenges Resource Group and more!
Check it out: wscpa.org/connect
AUDITING
How to Audit During a Pandemic? Your Top 5 Questions Answered. Carl R. Mayes, Jr., CPA This year has been anything but conventional. As auditors prepare to audit clients who’ve found themselves financially affected by the pandemic, the AICPA has received many questions. To bring a little clarity in the time of COVID-19, here are answers to the most frequently asked questions.
1
IS IT POSSIBLE AND EFFECTIVE TO AUDIT REMOTELY?
You’re not prohibited from conducting audit procedures remotely. Auditing standards generally specify what evidence must be collected, but not how it must be collected. In most cases, we can reliably gather audit evidence remotely. To audit remotely, you must have the necessary infrastructure and resources in place — licenses for videoconferencing technology, staff training, security and privacy protocols, etc. While certain aspects of an audit, such as observing inventory counts, are harder to do without being physically present, there are a wealth of resources available for auditors to use when working remotely to assure you’re complying with the requirements of professional standards. Access the AICPA’s COVID-19: Audit & Assurance resources at wscpa.org/aicpa-audit.
2
HOW CAN I AUDIT PROPERTY, PLANT AND EQUIPMENT (PP&E) AND INVENTORY WHILE WORKING REMOTELY?
While your ability to perform in-person audit work may be limited, auditors are still required to test assertions that traditionally require them to be onsite, like PP&E and inventory existence. A possible solution to confirm the existence of PP&E and inventory is livestreaming. Using video that is confirmed to be live (as opposed to pre-recorded), management can put their fixed assets on camera so you can verify their existence. Regarding inventory existence, livestreaming is also a valid solution if COVID-19 has made being physically present for inventory counts impracticable. Another solution is to observe the inventory count on a different date and review and test the inventory roll-forward, assuming adequate controls exist over inventory. If the client has a perpetual inventory system, you can consider relying on the client's cycle counts. These counts are often conducted quarterly and include a portion of the client's inventory on hand. If you’ve been testing those controls and relying on them to establish the existence of inventory, you may be able to go back to the client’s last cycle count and roll forward to year end by testing sales and purchases during that interim period. If the client's inventory balance is material but they’re unable to
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AUDITING
perform a physical inventory count, and alternative procedures to test inventory existence are not possible, you may face a scope limitation in your audit. While other procedures like price testing and obsolescence testing may provide indirect evidence regarding the existence of inventory, they are unlikely to provide sufficient appropriate audit evidence. For more information on how to test inventory remotely, visit wscpa.org/site to read “How auditors can test inventory without a site visit,” a Journal of Accountancy article.
3
WILL EVERY BUSINESS HAVE A TRIGGERING EVENT?
Given the economic environment in 2020, many entities are likely to conclude that triggering events occurred, causing them to perform impairment testing. To evaluate whether a triggering event has occurred for a client, refer to ASC 350. ASC 350 defines what a triggering event is and lays out the circumstances that indicate if a triggering event has occurred. ASC 360 gives you the order in which you should perform impairment testing with respect to indefinite-lived intangible assets, long-lived assets and goodwill. FAQs regarding audit and financial reporting matters related to COVID-19 at wscpa.org/afr can help.
4
IF COVID-19 IS A TRIGGERING EVENT FOR MY CLIENT, WHAT DATE WILL BE USED TO DO THE EVALUATION?
WILL COVID-19 LEAD TO A RISE OF BUSINESSES WITH ISSUES REGARDING GOING CONCERN?
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I’m hearing from practices that practitioners are anticipating an increase in the number of clients with going concern issues. And because of that, reporting is an area where auditors risk tripping up. If more clients have substantial doubt about their ability to continue as a going concern, there is likely to be an increase in the number of audit reports where an emphasis of a matter paragraph is required. If management believes their plan alleviates substantial doubt, auditors will need to scrutinize the evaluation, carefully review any supporting materials management used to reach that conclusion and evaluate the adequacy of management’s disclosures in the financial statements before issuing an unmodified report. There are many more reporting outcomes possible based on specific circumstances. To determine which report is required by professional standards based on the circumstances, visit wscpa.org/flowchart to access the AICPA’s auditor’s report tool (requires AICPA free or member account).
Carl R. Mayes, Jr., CPA, is AICPA Associate Director – CPA Quality & Evolution, Association of International Certified Professional Accountants. You can contact him at Carl.Mayes@aicpa-cima.com.
Originally published on the AICPA Insights blog and reprinted with permission.
March 2020 — the date the World Health Organization declared COVID-19 a global pandemic.
Illustration: © iStock/ DrAfter123
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SELF-CARE
3 Tips to Recharge When Your Tank Is Running on Empty Donald Altman, MA, LPC The stress of the holidays is past, and just when you think you can breathe a sigh of relief, along comes the start of tax and audit season. Let’s not forget that the uncertainty around the pandemic and worries about the recovery of the economy are still with us. Well, here’s the dirty truth that no-one told you: Change and transition drive anxiety, stress and burnout. Plus, you’re probably coping with more stress than ever before. If you’re feeling like you don’t have the energy reserves, that you are on edge, upset, anxious, angry, sad, depressed, or feeling disengaged from work and others, you are not alone. These are normal reactions to feelings of overwork and uncertainty. What can you do to reverse this harmful trend, both personally and in your workplace? Fortunately, there are some proven ways to help you recover and recharge from stress.
3-Steps to Recharging and Reinvigorating
Step 1: Change Your Perception of Stress As many stress researchers have learned, it’s not stress that kills you, but your perception of stress. In other words, it’s how you think about stress that makes all the difference! When faced with a stressful situation or problem, think about the following: • How is your stress temporary, as opposed to permanent? Remember that even COVID-19 is a temporary problem that will improve as vaccines are implemented. • Can you problem-solve a way to reduce and/or manage the stress? For example, take a different route home to avoid freeway traffic. • Can you find a way to prevent or avoid potential stress? Reduce the number of transitions in your day, such as by making one trip to do three errands at once, instead of making three separate trips. • Can you notice negative self-talk? After you’ve found the “can’t,” replace it with a statement consisting of positive self-talk that motivates you to move forward.
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Step 2: Take a Two Minute Vacation with Guided Visualization You might be surprised at how effective guided visualization is in producing a state of calm. This method is routinely used to help athletes perform at their best. Visualization exercises trigger your brain to react as if what you’re imagining is actually happening. • Find a quiet place where you will not be disturbed for two minutes. Turn off your phone or other devices so you won’t be interrupted, and consider setting a timer for two minutes. • Remember as vividly as you can an activity that energizes you and makes you feel good. You might picture yourself hiking in your favorite place, running, swimming, dancing, biking, sunning on the beach, or whatever activity makes you feel good, revitalized and energetic. • Notice as many colors, sounds, sensations as possible. Totally immerse yourself in the activity! Don’t be surprised if your heart rate and respiration increase, just as if you were actually performing the activity that you’re visualizing! • At the end of the two minutes, take a nice, deep breath in as you stretch your arms high over your head. Exhale slowly as you lower your arms, feeling more refreshed after this two-minute vacation. Best of all, you can use this practice multiple times a day, as often as needed.
Step 3: Activate Your Body’s Relaxation System in Two Minutes Believe it or not, your body has a built-in relaxation system that automatically reduces stress. It also lowers your blood pressure, pulse rate and respiration, as well as produces alpha brain waves for calm and clear thinking. A belly breath or diaphragmatic breathing, using the three different postures below, turns on this relaxation system. Try each for two minutes (turn off your phone and set a timer) and see which is most natural for you, and helps the abdomen move with the breath. (For detailed illustrations and instructions on these postures, see my book, Simply Mindful.) • Posture 1: Sitting or standing, clasp your hands behind your back. This will stretch the rib cage. Breathe slowly, and allow the abdomen to become soft so it expands as you breathe in. • Posture 2: Raise your elbows outward as you place your hands on your lower rib cage. As you breathe in, notice the expansion of your abdominal area moving outwards, side to side. • Posture 3: Raise your arms up and clasp your hands behind your head/neck. Breathe slowly as you allow the breath to go into the belly. To find the most benefit, use these three tools each day to counter stress and burnout. You’ll be surprised at how they can shift your experience and help you feel more positive and happy each day.
Donald Altman, MA, LPC, is an international mindfulness expert, psychotherapist, and award-winning author of 15 books that have been translated into many languages worldwide. His newest book is Simply Mindful: A 7-Week Course and Personal Handbook for Mindful Living. You can contact Donald at www. mindfulpractices.com. Icons: © iStock/ Vectorios2016 Illustration: © iStock/ Aleksei_Derin
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HUMAN RESOURCES
EMPLOYEE
Mental Health & Well-being During & Beyond COVID-19:
a top priority
Center for Workplace Mental Health
E
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mployers recognize their workforce as a highly valuable resource. Over the past few years, employers of all sizes and representing diverse industries began to focus on more effectively addressing workplace mental health. No longer was it an afterthought, but a business imperative.
U.S. Census Bureau shows nearly a tripling of people experiencing signs of depression and anxiety1.
Now, with the COVID-19 pandemic, our nation is experiencing a surge in people showing signs of depression, anxiety, and other serious mental health distress. Recent data from the
There are critical steps that employers can take to support the mental health and well-being of employees.
In this unprecedented time, the pandemic is causing high levels of stress, anxiety, and uncertainty about job security, health, finances, and the future.
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HUMAN RESOURCES small groups, online town hall meetings, and at organization wide forums.
Data from U.S. Census Bureau.
MODEL GOOD BEHAVIOR & SHOW EMPATHY: Acknowledge the disruption people and communities are experiencing from the pandemic and with community protests around the country. Emphasize this is difficult for everyone, including leaders in the organization. Leaders set the tone and culture of organizations. They should remind people to take care of themselves and share what they are doing to stay healthy and well. This may mean leaders must get outside their comfort zone.
Supporting the Mental Health & Well-being of Employees Employers are uniquely positioned to support employees in managing stress, building resiliency, and connecting them with needed services and supports. Employers can make a positive difference for all employees and their organizations by focusing in four key areas represented by LEAD.
Leadership People are experiencing unprecedented fear, stress, uncertainty, grief, and loss, so increased support and finding new ways to lead are essential. Here are recommendations to consider in supporting employees:
Employees are likely to be reassured by the willingness of leaders to show vulnerability and share how they are coping. This conveys to employees that they are not alone in what they are feeling and experiencing. Ideally, it communicates we are in this together and you are supported. Also, it demonstrates the organization's commitment to transparency and continuous communication. MAKE MENTAL HEALTH VISIBLE: Multiple reports show depression, anxiety, substance misuse and other mental health conditions on the rise. Now is the time for leaders to talk openly about mental health, a topic that has often stayed in the shadows and not been confronted head on.
REASSURE: People need reassurance to feel calmer and more in control. Leaders can build key alliances with employees by sharing that management and employees have many of the same concerns and questions.
Speak to employees about rising rates of mental health and substance use conditions, remind them of the need to get help early for these conditions, and discuss how to connect with services and supports. When this is communicated from the highest level of organizations, it opens the door to employees feeling safe to seek care when it is needed.
Even if leaders do not have all the answers, calm reassurance and normalizing how these difficult times are impacting everyone, including leaders, is helpful.
Effective Communication MAKE IT ROUTINE: Leaders, HR and supervisors should check in often with employees about life and work.
Leaders should consider convening employees to reassure in multiple ways including individually – to the extent feasible, in
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HUMAN RESOURCES Use these regular, weekly if possible, checkins to remind employees where they can find resources on key topics like self-care, stress management, building resiliency, connecting to mental health care and more. Ask what support is needed. LISTEN: Be available to employees through these challenging times. Create reliable feedback loops for employees to share questions, concerns and to seek information "Now is the time for on key issues.
leaders to talk openly
This might include online and digital options, Q&A during topic that has often stayed online meetings, 1 in the shadows and not on 1 virtual meetings, and via other been confronted head on." modes of communication. If questions and issues come up that all employees should know about, create an online space for frequently asked questions (FAQs) and related information.
about mental health, a
Create safe spaces for discussions with supervisors and peers and ask employees how they would like those spaces to be structured. BE A TRUSTED SOURCE: Conflicting information is emerging about staying safe during the pandemic and what the future holds. This fuels fears, anxiety, and stress for many. Although no one currently has all the answers on the pandemic, employers should acknowledge the uncertainty while gathering and sharing reliable updated information from trusted sources. Make this information easily accessible online and routinely remind employees where they can find it and when it is updated. Being transparent and communicating timely updates builds trust with the workforce and shows the organization's commitment to a culture of caring.
address those needed to keep people healthy and safe. BE WILLING TO MODIFY LEADERSHIP STYLE: Depending on the size of the organization, there are likely managers and supervisors with multiple leadership styles. Now is the time to work with supervisors on the importance of empathy, support, and open communication with their teams. Ideally this message comes from the top and reinforces the need to lead with compassion and empathy, supporting employees, while working together to achieve the goals of the organization. Working collaboratively across the organization during these tumultuous times is likely to result in creative solutions and positive outcomes. CREATE EMPLOYEE CONNECTIONS: For employees working remotely, transitioning back to work, and continuing essential on-site work, employers should consider forming peer groups and employee resource groups (ERGs) to connect employees around key issues. This may include ERGs focused on mental health or ERGs focused on addressing COVID-19 and related issues. These peer support networks are important vehicles for feedback loops and to support employees through challenging times.
Double Down on Access to Care With the surge in mental health and substance use conditions associated with the pandemic and with protests taking place in many communities, addressing employee mental health and well-being has never been more important. Before the pandemic, navigating mental health and substance use care was extremely challenging. It is likely to get even harder with more seeking care. Employers have a key role to play in ensuring employees can access effective, timely and affordable care. This includes helping to dismantle long standing barriers to mental health and substance use care - like stigma, fear of judgment, discrimination, and concern for negative job consequences.
Adapt to Change REALIGN ORGANIZATIONAL POLICIES AND PRACTICES: People are distracted, stressed, and taking on additional personal responsibilities. Yes, jobs must get done, but in these uncertain times setting reasonable expectations sends a message of support for employees. This includes, to the extent possible, addressing flexibility with deadlines, options for working remotely, flexible work schedules, and leave policies, among others.
Here are ways employers can make a positive difference in breaking down barriers, supporting employees in accessing care and supporting employees' mental health and well-being during and beyond the COVID-19 pandemic: Share mental health and well-being resources with employees. This can be done through emails, on Intranets, in newsletters and through other modes of communication3.
Organizations should review their policies and practices to
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HUMAN RESOURCES Share signs of common mental health conditions like anxiety, depression, substance misuse and more. Encourage employees to NOTICE changes in themselves and/or others, TALK by checking in and letting a person know that you care, and ACT by offering to connect the person with services and supports. You may observe changes in appearance, behavior, mood or thinking.
Focus on strengthening prevention efforts that support mental health and well-being by considering the following: Offering resources on managing stress during the pandemic 4. Employers may also consider offering digital, interactive stress management training.
Request the EAP vendor provide weekly aggregated data summarizing the number of employees accessing support, and the concerns, questions and conditions being raised. Collaborate with the EAP to create solutions that work if there is a spike in requests for support or if there is not, to find new and innovative ways to reach employees with support. Improve access to timely, affordable and effective mental health and substance use care. Employers are well positioned to work with their health plans and third-party administrators (TPAs) to improve access to care in three ways7. Sustaining momentum and ensuring quality in the delivery of tele-mental health. Work with your health plans and TPAs on the following:
Promoting resiliency5. Creating a mental health Affinity Group or Employee Resource Group (ERG)6.
• Continue offering employees a choice in the modality of care delivery. People may wish to continue receiving care virtually now and into the future,
Promoting meditation, mindfulness, and coaching by offering employees apps to download or free online resources. Apps promise to address issues like anxiety, sleep, focus, wellbeing and more. Employers may also consider scheduling a virtual meeting with an expert offering guided meditation and mindfulness sessions so employees can learn how to use these tools on their own.
• Reimburse treating health care providers at comparable rates whether care is delivered virtually or in an office setting,
Increase employee engagement with your Employee Assistance Program (EAP) and learn what innovative approaches the EAP is using to connect with employees. Consider these approaches:
• Ensure the quality of the services provided and request that providers report on outcomes achieved.
Promote information about the EAP and the resources provided to employees and families through multiple communication channels like emails, newsletters, and weekly check-ins. Review the mental health services offered through the EAP and consider adding additional options, like well-being coaching sessions, additional counseling sessions, online assessments, 24-hour support, and on-demand crisis intervention. Ask the EAP to expand the availability of online self-care tools focused on stress management, mindfulness, meditation, and resilience training.
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• Ensure that care is reimbursed whether delivered by phone or video to not exclude those without video available and at a rate on par with comparable telehealth care delivered by other medical professionals, and
Supporting expansion of the evidencebased Collaborative Care Model in primary care. With the surge of people experiencing mental health and substance use conditions, and the national shortage of mental health providers, primary care providers will be on the front lines in delivering care. The Collaborative Care Model8 (CoCM) is effective in producing positive outcomes and cost savings, based on more than 80 randomized control studies9, and commercial insurers are covering it, yet availability is still the exception rather than the rule. Here are recommendations
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HUMAN RESOURCES
"When the importance good of mental health is communicated from the highest level of organizations, it opens the door to employees feeling safe to seek care when it is needed."
MENTAL HEALTH RESOURCE CENTER FOR CPAS
for employers to support the expansion of the CoCM: • Ensure health plans and TPAs are promoting the CoCM and providing primary care providers with technical assistance to implement this effective integrated care mode10, and • Request data from health plans and TPAs showing whether providers are billing the CPT codes for the CoCM and if not, asking them to be proactive in working with providers to expand the model. Expanding screening for Mental Health and Substance Use Conditions. Standardized tools exist to screen for common conditions and should be used to both detect conditions early and to track treatment progress to improve outcomes. Employers should request that their health plans and TPAs request that all treating providers use existing behavioral health screening tools, like the PHQ-9 and GAD-7, to identify common mental health and substance use conditions and to track progress throughout treatment. This helps build greater accountability and improves treatment outcomes.
As CPAs are working to adjust their business operations and serve and advise clients/ colleagues during the Coronavirus pandemic, the WSCPA has compiled a variety of mental health resources to assist employees and managers alike.
WSCPA.ORG/MENTAL-HEALTH
This is an excerpt of the Center for Workplace Mental Health’s complete guide. To access the complete guide, visit wscpa. org/mental-health-guide. For additional information and resources, visit the Center for Workplace Mental Health, which provides employers the tools, resources and information needed to promote and support the mental health of employees and their families at workplacementalhealth.org. References
In closing... We may still be in the middle of this pandemic, which means the plan for recovery will be long-term and require sustained efforts. Supporting the mental health and well-being of employees during the pandemic and these tumultuous times is not just the right thing to do but is good for business.
1 U.S. Census data published in the Washington Post, June 14, 2020. 2 http://workplacementalhealth.org/Employer-Resources/Working-RemotelyDuring-COVID-19 3 http://workplacementalhealth.org/Mental-Health-Topics/Knowing-theWarning-Signs ; https://www. psychiatry.org/patients-families/warning-signsof-mental-illness ; https://www.rightdirectionforme.com/ 4 https://www.cdc.gov/coronavirus/2019-ncov/daily-life-coping/managingstress-anxiety.html 5 http://workplacementalhealth.org/Mental-Health-Topics/Resilience 6 https://www.mindsharepartners.org/post/mental-health-employee-resourcegroups 7 Preparing for the Second Wave: The Path Forward for Mental Health and Substance Use in the Face of COVID-19. http://workplacementalhealth. org/Employer-Resources/The-Path-Forward-Initiative ; https://www. nationalalliancehealth.org/www/initiatives/initiatives-national/workplacemental-health/pathforward 8 Infographic describing The Collaborative Care Model: http:// workplacementalhealth.org/Employer- Resources/Infographic-CollaborativeCare-Model 9 Guide to implementing The Collaborative Care Model: https://www.psychiatry. org/psychiatrists/practice/ professional-interests/integrated-care/implement 10 https://aims.uw.edu/collaborative-care/evidence-base Photo: © iStock/ Anchiy Illustration: © iStock/ DrAfter123
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Upcoming CPE A selection of WSCPA CPE events scheduled February - May are listed. To view the hundreds of course listings and complete details, please visit the CPE & Event Catalog at wscpa.org/cpe.
Governmental Accounting & Auditing Conference Webcast, April 27-28 16 Credits
International Tax Conference Webcast, May 27 8 Credits
Online CPE
Washington State Tax Conference Webcast, June 2 8 Credits
Reduced Virtual Event Pricing
DATE
COURSE TITLE
2/8
Value Pricing - Getting Started WEBINAR
4
2/10
Member Exclusive: Excelling at Excel WEBINAR
1
2/10
Owning and Renting a Principal Residence WEBCAST
1
2/11
Basic Understanding of Yellow Book and Single Audit WEBCAST
8
2/12
Auditing Revenue Under the New Revenue Standard WEBCAST
4
2/12
Prix Fixe: Emotional Intelligence Primer WEBINAR
1
2/16
Excel for Accounting Professionals Session 1: Tables and Named References WEBCAST
2
2/16
Corporate Governance, Fraud and Control: Setting the Strategy and Executing it Efficiently WEBCAST
8
2/16
Internal Control Development That Balances Risk with Strategy WEBCAST
8
2/16
Presentation Skills for Auditors WEBINAR
2
2/17
Excel for Accounting Professionals Session 2: Data Validation and Conditional Formatting WEBCAST
2
2/18
Excel for Accounting Professionals Session 3: Workbook Design Principles and Organization WEBCAST
2
2/18
Excel - Advanced Financial and Statistical Calculations WEBINAR
2
2/18
Governance Time! Form 990 Part VI & Schedule O Narrations WEBINAR
1
2/18
Partnerships: How to Calculate and Report Partner's Basis WEBINAR
2
2/19
Excel for Accounting Professionals Session 4: Conditional Summing and Lookups WEBCAST
2
2/19
Fraud: Practical Approaches to Prevention & Detection WEBCAST
4
2/19
Critical Thinking for Financial Professionals WEBINAR
1
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CREDITS
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Register at www.wscpa.org/cpe
EDUCATION AND EVENTS
DATE
COURSE TITLE
CREDITS
2/22
Excel for Accounting Professionals Session 5: Error Trapping and Improving Lookups WEBCAST
2
2/23
Excel for Accounting Professionals Session 6: List Comparisons and Indenting WEBCAST
2
2/23
COSO: ERM for Small and Medium-Sized Enterprises WEBCAST
8
2/23
Money Laundering Awareness for Accountants WEBINAR
2
2/24
Excel for Accounting Professionals Session 7: Date Driven Workbooks and Concatenation WEBCAST
2
2/24
Individual Tax Update 2020 WEBINAR
2
2/25
Excel for Accounting Professionals Session 8: Dynamic Headers, Mapping Tables and Error Check WEBCAST
2
2/25
Managing Your Time As If It Was Your Money WEBCAST
2
2/26
Analytical Procedures - Methods and Evaluation WEBCAST
4
2/26
Prix Fixe: Organization Tips WEBINAR
1
3/2
Time Management for CPAs WEBCAST
2
3/2
Cost of Capital Determinations for Business Appraisal WEBINAR
1
3/2
Self-Rental Real Estate: Passive Activity and Section 199A WEBINAR
2
3/3
Integrating Audit Data Analytics into the Audit Process WEBCAST
8
3/3
Boost Your Bottom Line: Reduce Internal Fraud, Theft & Abuse WEBINAR
2
3/8
Governmental Accounting and Auditing Update WEBCAST
8
3/8
Common Frauds and the Internal Controls Designed to Prevent and Detect Them WEBCAST
8
3/8
Real Estate Professionals, Passive Activity and Section 199A WEBINAR
2
3/9
Excel Bootcamp - Building Great Spreadsheets WEBINAR
8
3/9
Financial and Tax Accounting for S Corporations WEBINAR
4
3/9
Professional Conduct & Ethics - AICPA and Washington Board CPA Regulatory Update - 2020 WEBCAST
1
3/9
Recession Preparedness for Businesses WEBINAR
1
3/10
Basic Concepts of Governmental Accounting, Financial Reporting and Auditing WEBCAST
8
3/11
Blockchain for Financial Advisors WEBCAST
6
3/12
Accounting Analysis Basics WEBCAST
8
3/12
Excel - Using PivotTables for Data Analysis WEBINAR
4
3/12
Prix Fixe: Risk Management Best Practices WEBINAR
1
The Washington Society of CPAs is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of group live and group-internet-based continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org For more information regarding refunds, complaints, program cancellations or other policies visit www.wscpa. org/cpe/cpe-policies or call 425.644.4800
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EDUCATION AND EVENTS
Register at www.wscpa.org/cpe
Online CPE
Reduced Virtual Event Pricing
DATE
COURSE TITLE
3/15
Blockchain for Healthcare WEBCAST
4
3/15
Leadership Skills Training WEBCAST
8
3/15
Enterprise Risk Management Concepts and Strategy for Small and Medium-Sized Companies WEBCAST
4
3/15
Understanding Specific Risks in the Small and Medium-Sized Organization WEBCAST
4
3/16
Small Business Issues in Today's Market WEBCAST
2
3/16
Innovative Forecasting and Budgeting: Moving Beyond the Traditional Techniques WEBCAST
4
3/16
Planning and Strategy Formulation for Your Organization's Financial Success WEBCAST
4
3/18
Adobe Acrobat Must Know Features for Beginners WEBINAR
4
3/18
Revenue Recognition: Mastering the New FASB Requirements WEBCAST
8
3/19
Purchasing, Inventory, and Cash Disbursements: Common Frauds and Internal Controls WEBCAST
4
3/19
Leases: Mastering the New FASB Requirements WEBCAST
8
3/22
Multi-Task Role of the CFO/Controller WEBCAST
8
3/23
Annual Update for Accountants and Auditors WEBCAST
8
3/23
Credit Analysis Basics: The ABC's Of Bank Lending WEBCAST
2
3/24
Sustainability Assurance Engagements WEBCAST
4
3/25
Advanced Controller and CFO Skills WEBCAST
8
3/26
Fraud - What are the Clients Expectations and are We Meeting Them? WEBCAST
4
3/26
Prix Fixe: Governmental Accounting and Auditing Update WEBINAR
1
3/26
The Changing Role of the Controller: Advancing from Tactical to Strategic WEBCAST
4
3/26
Risk, Cost, and Cash Management for Controllers and Financial Managers WEBCAST
4
3/29
Case Studies in Accounting Fraud WEBCAST
4
3/30
Remote Working for Accountants WEBINAR
2
3/31
How Technology is Impacting the Accounting Profession WEBINAR
2
4/1
Fraud: Practical Approaches to Prevention & Detection WEBCAST
4
4/1
Adobe Acrobat Must Know Features for Beginners WEBINAR
4
4/2
Boost Your Bottom Line: Reduce Internal Fraud, Theft & Abuse WEBINAR
2
4/5
Power BI - Introduction to MS Power BI Tools WEBINAR
2
4/8
Blockchain Technology: What Every CPA Should Know - 2020 Update WEBINAR
2
4/12
Bribery and Corruption Awareness for Accountants WEBINAR
2
4/12
Eldercare Financial Scam Protection WEBINAR
1
4/13
Yellow Book Standards for CPAs in Public Practice WEBINAR
2
4/14
Guide to Cyber Security Planning WEBINAR
2
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The Washington CPA Winter 2021
CREDITS
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Register at www.wscpa.org/cpe
EDUCATION AND EVENTS
DATE
COURSE TITLE
4/16
Prix Fixe: International Tax Conference Sample WEBINAR
1
4/19
Cash and Credit Management WEBCAST
8
4/19
SSARS Codification: Preparation, Compilation and Review of Financial
8
4/19
The Accountant's Role in Mergers and Acquisitions WEBCAST
8
4/20
Change the Way You Work: Success as a Virtual CFO WEBCAST
4
4/20
Demystifying Artificial Intelligence WEBCAST
4
4/20
Use Power Pivot to Build More Powerful Pivot Tables WEBCAST
2
4/20
S Corporations: How to Calculate the Shareholder's Basis WEBINAR
2
4/21
Fundamentals of Single Audit WEBCAST
8
4/21
Member Exclusive: Economic Update WEBINAR
1
4/22
Roadmap to Artificial Intelligence WEBCAST
4
4/22
Compilations and Reviews: Risks, Procedures and Fraud WEBCAST
8
4/23
Prix Fixe: Washington State Tax Update WEBINAR
1
4/26
Power BI - Introduction to MS Power BI Tools WEBCAST
2
4/26
Power BI - Prepare Your Data Efficiently for Excel Analysis WEBCAST
2
4/26
Key Ratio Analysis WEBCAST
8
4/26
Section 199A: Review and Recent Developments WEBINAR
2
4/27
FASB Update: What's New? WEBCAST
2
4/27
Single Audit Primer WEBINAR
2
4/28
Basic Understanding of Yellow Book and Single Audit WEBCAST
8
4/28
OCBOA Case Studies WEBCAST
8
4/29
Preparing Financial Statements for Clients WEBCAST
4
4/29
Entertainment & Parking Expenses: Coping with the New Rules WEBINAR
2
4/30
How Fraud Can Affect Smaller Organizations WEBCAST
4
4/30
Prix Fixe: Single Audit Update WEBINAR
1
5/5
Prix Fixe: Community Property WEBINAR
1
5/12
Member Exclusive: Latest Trends in Personnel-Related Dilemmas: Do's and Don'ts for Employers WEBINAR
1
5/14
Prix Fixe: Getting "Unstuck" from Sticky Situations WEBINAR
1
5/18
Winning The Fraud Battle In The Digital Age: Prevention and Detection WEBCAST
8
5/19
Statement of Cash Flows: Preparation Guidance and Presentation Illustrations WEBCAST
4
5/19
Update on Recent AICPA Standard Setting: Staying Current in a Changing Environment WEBCAST
4
5/21
Prix Fixe: Cannabis Accounting Update WEBINAR
1
5/24
Fringe Benefit Planning for 2020 and Beyond WEBCAST
8
5/25
Creative Strategies for Buying, Selling, and Gifting a Business WEBCAST
8
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CREDITS
The Washington CPA Winter 2021
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WSCPA PEAK FIRMS
WSCPA PEAK FIRMS! The WSCPA Peak Firm program recognizes and awards special benefits to firms that sign up 100% of their eligible staff for WSCPA membership. Being a Peak Firm establishes you as a leader in the profession and provides an array of discounts and benefits.
ty ocie
PAs of C
•
Membership Dues Stay With Your Firm – Traditionally, WSCPA memberships remain with an individual, even if they leave your firm. When a member leaves a Peak Firm, we’ll honor your previous investment by providing FREE membership for the remainder of the membership year to your new hire.
•
FREE WSCPA Room Rental – One room per year, up to $920 value, subject to availability.
•
FREE Job Listings – Up to two free listings on the WSCPA Job Board per year, additional listings at discounted member rate. Up to $200 value.
•
FREE Passport Corporate Cards – All staff, members, and support staff/nonmembers; up to 30% of paid membership.
•
Recognition – Your firm will be listed as a Peak Firm on the WSCPA website and social media, as well as in our quarterly magazine, The Washington CPA.
•
Receive a Peak Firm Logo – Display on your website to help recruit staff and clients.
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BENEFITS FOR FIRMS:
2020
-2
All benefits are for the membership year.
DO YOU QUALIFY? HERE'S HOW TO BECOME A PEAK FIRM. •
100% of your licensed CPA staff are enrolled as WSCPA CPA Members.
•
100% of your students, exam candidates and exam passers that are not yet licensed are enrolled as WSCPA student members.
•
Your firm has demonstrated commitment to the profession by making a contribution to the Washington CPA Foundation or CPAPAC of at least $50.
Request enrollment in this program by completing and submitting the Peak Firms Enrollment Form at wscpa.org/peak-enroll
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The Washington CPA Winter 2021
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WSCPA PEAK FIRMS
NEW PEAK FIRM APPOINTEES
EXISTING PEAK FIRMS Bader Martin PS
Greenwood Ohlund & Co CPAs
Rettig Flyte Co
Brantley Janson
Hagen Kurth Perman & Co PS
Ryan Jorgenson & Limoli PS
Cordell Neher & Co PLLC
HMA CPA PS
Sweeney Conrad PS
Falco Sult & Co PS
Hunt Jackson PLLC
The Doty Group
FBCPA Group PS Inc
Hutchinson & Walter PLLC
The Myers Associates PC
Finney Neill & Co PS
Jacobson Jarvis & Co PLLC
Werner O'Meara & Co PLLC
Nicholas Knapton PS
Photo: © iStock/lightphoto
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31
CLASSIFIED
Detailed advertising information is available online at wscpa.org under Resources. Contact Sharon Olene-Marander at smarander@wscpa.org for more information.
Mergers & Sales Considering Selling Your Practice? Consider all your options. We do the work. Confidential. We have buyers actively seeking practices. Call Mark Hause at (877) 345-7722 or visit our website at www.accountingpracticesales.com Accounting Practice Sales. We make dreams happen! IBA Sells Privately Held Companies. Do you represent a client who is ready to retire or has taken a company as far as they want to or can? IBA is the Pacific Northwest’s oldest business brokerage (M&A) firm. We are professional negotiators with over 4000 completed transactions. Please contact us if we can be of assistance at (800) 218-4422 or www.ibainc.com
(WA 1146) Northeast Seattle: This Seattle CPA practice is an excellent acquisition target for most any practice. The firm is 100% income tax and related professional services. All the clients are long time clients and substantially upper middle class which provides consulting services dealing with Estate and Trust areas. The client transition will be very efficient with the practice being paperless and no employees save the owner. The net cash flow to owner is excellent with the realization percentage equaling an eye popping 85%. The final element of this practice is the average fees which are excellent and will transition to any size practice. Any serious buyer looking for an acquisition needs to look at this firm for a quality addition to any group of clients. (WA 1145) Marysville/Everett Area: This taxbased CPA firm is for sale. The practice revenue mix is approx. 71% Income Tax with Write Up being the balance. The firm has a flex staff that assists the Seller with the busy season workload. Otherwise, the practice is operated by the owner in the day to day operation of the firm. This firm fits a variety of Buyers by having a solid growth and revenue potential whether as a starter practice or an excellent addition to a new or existing practice looking to make a jump to the next level of revenue. All of this is found in a firm made strong by the excellent service provided by the Owner. To assist in the sale, the Seller will provide financing but will require excellent credit and collateral be a part of the transaction.
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The Washington CPA Winter 2021
Office Space Office space for Rent - S King/N Pierce Counties. Well located south King/north Pierce counties, Attractive and Reasonable. Space is in a Park Like setting with a cooperative Landlord. There is room to expand, if needed. Contact Mark Freitas at markfccim@gmail.com or 206.947.3313 for more information. Situations Wanted CPA/Accountant To Share Office Space (Redmond) Older CPA looking for person with their own clients to share office space in exchange for assisting me in my tax practice. Experience with Pro/Fx CCh tax software needed. Convenient downtown location with ample parking. Opportunity for practice succession in the future. Contact Van Deming at van@demingandassociates.com or 425.883.2441.
(WA 1144) Bellingham/Ferndale Area: This CPA practice is a full-service practice including attestation services in the professional services rendered. The firm revenue percentages are income tax 54%, auditing 28%, reviews 13%, with the balance being consulting engagements. The practice is filled with many long-term clients, with low turnover, who provide the practice with new client referrals, that include a high number of client’s with multiple engagements involving personal, business, and fiduciary returns. This firm provides excellent net cash flow to the owner and is a great opportunity to move into ownership or expand your existing practice. To assist in the acquisition of the firm, the Seller will finance a significant percentage of the purchase price provided the Buyer makes a sizable down payment and has excellent credit and collateral. (WA 1143) Centralia/Chehalis/Olympia Area: This CPA tax practice is for sale. The firm revenues are 100% income tax preparation providing the opportunity to grow by either adding write up services or continuing the rapid growth experienced in tax services. The profit pf the practice is excellent with approx. 75% pf fees being realized by the owner. In addition, the fees are excellent and allow for this firm to fit nicely into any practice regardless of the size of the firm. The practice is an ideal opportunity for any individual or firm looking to start or expand a firm with little to no changes. (WA 1141) Seattle: This CPA practice is unique in that it provides a wide variety of governmental accounting and attestation services. These services include performance audits, attestation services, and internal control assignments. The firm is filled with many loyal clients with long term relationship who consistently utilize the professional services of the firm. Reflecting the commitment and desire to provide the best transition possible, the Seller’s are insistent on providing a hands-on transition for the Buyer of this excellent practice. This firm offers a unique
Volunteer Opportunities The following organizations need a CPA to serve on the board of directors and/or provide other guidance on financial matters. Learn more about these and other organizations that need your help online at wscpa.org under community. Spokane Angels AMA Puget Sound Arivva Center for Arts & Technology Cedar River Montessori School Helping Link / Môt Dâu Nôi The Max Foundation Tilth Alliance
opportunity for any practitioner or firm to immediately be a force in the arena of governmental accounting services. Any firm with experience working in this field of professional services will have an advantage in acquiring this practice. (WA 1138) Seattle-Financial District: This EA practice is 100% tax services with per return averages of approx. $1,500 per return for all professional services rendered. With the growth of the Seattle metro area, a high percentage of clients have opted to mail in their returns. As a result, the practice uses a home office and an office time share for its facilities. The result is a very reasonable charge for office facility expense. If desired, the office arrangements could be a more traditional in nature with an accompanying increase in monthly obligation for the increased office square footage. All of these qualities in this practice make for an excellent addition to any firm’s client base with excellent average fees that make this an easy decision.
SOLD
(WA 1133) North East Washington/ Stevens County: This CPA firm located in North East Washington is a tax and accounting practice with a small amount of write up during the year. The practice revenues consist of income tax preparation and consulting 97% and write up 3%. The firm’s fee structure is excellent with realization rates that are the equal of any firm regardless of size. The strength of the firm is found in the cash flow to the owner that is well above the norm reflecting the excellent management practices of the Seller. This firm is the perfect fit for a professional looking for an excellent opportunity coupled with a pace and style of life that is not big city. When combined with a Seller who seeks to provide a good transition, this firm provides opportunity that many seek but few find in moving to ownership.
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CLASSIFIED ADS Up, and 2% Payroll. The firm is owner operator and has extremely low overhead with 2019 Seller’s Discretionary Earnings at almost 89% of gross revenue. The owner is willing to stay on for up to one year to assist with the transition to new ownership, if desired. For more information email “Listing #1118 - Clackamas County Oregon CPA Practice” to info@privatepracticetransitions.com or call 253.509.9224. Profitable Clallam County Tax Practice: Private Practice Transitions is assisting a client, located in Clallam County, with the sale of a busy tax firm. The firm’s service by revenue breakdown is 36% Individual Tax Preparation and Planning, 18% Corporate Tax Preparation and Planning, and 46% Write-Up. The firm filed 1,176 tax returns in 2020 and has eight (8) staff including the owner. The firm is in a fantastic location, is completely turn-key and ready for new ownership. With average gross revenues of ~$600,000 the last three years (2017-2019), you don’t want to miss out on this thriving practice. Email “Listing #1123 - Profitable Clallam County Tax Practice” to info@privatepracticetransitions.com or call 253.509.9224. Pierce County Tax Book of Business: Private Practice Transitions is assisting a client in Pierce County with the sale of a thriving book of tax business. The service breakdown is 94.5% Tax Return Preparation & Accounting Services and 5.5% Bookkeeping. The book of business includes over 700 active clients that bring in an average of over $285,000 each year (2017-2019), with 2020 revenues looking even stronger. If you’re interested in adding this solid book of clients to your current business, contact us today! Email "Listing #1122 – Pierce County Tax Book of Business" to info@privatepracticetransitions.com or call 253.509.9224 to learn more. Clackamas County Oregon CPA Practice: Private Practice Transitions is assisting a client, located in Clackamas County, Oregon with the sale of an established CPA business. The firm’s service by revenue breakdown is 63% Income Tax Preparation, 15% Consulting & Tax Planning, 10% Review Engagements, 10% Compilation & Write
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Highly Efficient Bellevue CPA Practice: Private Practice Transitions is assisting a client, located in Bellevue, Washington with the sale of a thriving CPA business. The firm’s service by revenue breakdown is 100% Income Tax Preparation and Planning Services. The firm filed 336 tax returns in 2019 for both businesses and individuals. The firm is owner operator and has extremely low overhead with 2019 Seller’s Discretionary Earnings at almost 82% of gross revenue. The owner is willing to stay on for up to one tax season to assist with the transition to new ownership, if desired. For more information email “Listing #1121 - Highly Efficient Bellevue CPA Practice” to info@privatepracticetransitions.com or call 253.509.9224. Eastern Washington CPA Practice: Private Practice Transitions is assisting a client, located in Eastern Washington with the sale of a busy tax and accounting practice. Tax preparation accounts for about 72% of the firm’s business and 28% comes from accounting services. The firm was established in the 1980’s, has over 600 active clients and has an excellent reputation in the community. The firm employs four staff, including the owner, in a fully furnished office. With average gross revenues of $458,000 the last three years (2017-2019), you don’t want to miss out on this amazing opportunity. Email “Listing #1115 – Eastern Washington CPA Practice” to info@privatepracticetransitions.com or call 253.509.9224.
is 100% Income Tax Preparation and Planning Services. The firm filed over 350 tax returns in 2019 for both businesses and individuals and has three staff, including the owner. The firm is completely turn-key and ready for new ownership. The owner is willing to stay on for up to one year to assist with the transition to new ownership. For more information email “Listing #1114 - Established Seattle CPA Practice” to info@privatepracticetransitions.com or call 253.509.9224. Highly Profitable Oregon Tax Practice: Private Practice Transitions is assisting a client in Washington County, Oregon with the sale of a highly profitable, turn-key, private tax practice. The service breakdown is 72% Tax Preparation & Planning, 25% Accounting and Write-up, and 3% Other. In 2019, the Practice brought in over $1.1 Million in gross receipts and has approximately 550 active clients as of July 2020. The Practice has shown consistent YoY growth each of the last three years, is well known in the community for providing the highest level of customer service and employs nine (9) staff including the owners. Email "Listing #1113 – Highly Profitable Oregon Tax Practice" to info@privatepracticetransitions. com or call 253.509.9224 to learn more. Profitable West Seattle Tax Practice: Private Practice Transitions is assisting a client, located in West Seattle, with the sale of a busy tax and bookkeeping firm. The firm’s service by revenue breakdown is 95% Tax Preparation, 4% Bookkeeping and Ancillary Services, and 1% Other. The firm has over 1,400 active clients and is completely turn-key and ready for new ownership. The firm is centrally located in a well-established, thriving market, and is poised for explosive growth. With average gross revenues over $350,000 in 2018, you don’t want to miss out on this great opportunity. Email info@privatepracticetransitions. com or call 253.509.9224.
Established Seattle CPA Practice: Private Practice Transitions is assisting a client, located in Seattle, Washington with the sale of a busy CPA firm. The firm’s service by revenue breakdown
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Set Sail on the CPA Seas With a $5,000 Accounting Scholarship! WILL YOU BE 1 OF 75?
The Washington CPA Foundation is excited to be able to offer nearly $500,000 in scholarships for students in Washington State. The number of scholarship recipients typically exceeds 75 students.
Help Us Give Away Nearly $500,000 in Accounting Scholarships!
BECOME A SCHOLARSHIP REVIEWER
AWARD AMOUNT $5,000 - $8,000*
* $8,000 scholarships for master’s / PhD candidates
APPLICATION DEADLINE
February 16, 2021
APPLY NOW! WSCPA.ORG/CPASEAS
TIME COMMITMENT 15-20 hours
REVIEWER TIMELINE Virtual Reviewer Training* 2/8 *Recorded for those who cannot attend live.
Review Round One 2/19 - 3/10 Review Round Two 3/12 - 3/22
QUESTIONS? 425.644.4800 foundation@wscpa.org
Scholarship applications are reviewed in your home or office through our secure, online portal with a provided scoring matrix and guidelines.
For more information and to sign up, please contact Monette Anderson at manderson@wscpa.org.
$5,000
WASHINGTON CPA FOUNDATION
COVID-19 & Scholarship Support This year marks my 6th scholarship season with the WSCPA and Washington CPA Foundation. I’ve been involved in the process from fall to summer, encouraging students to submit applications, working with the scholarship review team, interacting with students to obtain all the pieces needed to get their checks in the mail and ensuring students are recognized in spring accounting banquets, and of course, introducing them to their professional community at the WSCPA. I don’t do this alone, of course; members are involved in every step of this process from our Foundation board managing timelines and review processes, to volunteers promoting in classrooms and at their firms, volunteers reviewing scholarships, and firms and individuals generously contributing to support students. It’s been incredibly rewarding to see these scholarship recipients whom we supported as college juniors or seniors, transition from student members to licensed CPAs and take roles in our chapters and committees, or be recognized for their work within their firms. Often these new professional members are ready to give back to this community and support the next generation of future CPAs. I am grateful for the amazing group of members who work so hard to create community within this profession.
Challenges During COVID-19 This year feels very different. I’m very aware of the changes and challenges affecting students navigating remote classes and new remote workplaces. I’ve heard from students who are struggling more than ever with remote learning, isolation and depression, as well as financial struggles. Some have family members who are no longer able to support tuition due to unemployment. Many students support themselves at least partially through school, and with many internships cut short this summer, students were left scrambling to save the funds they needed for fall semester. Some students sent thank you notes last summer that said without their Washington CPA Foundation scholarship, they expect they may have had to put school on hold and taken time away to support families or save up more money. Other students had to turn down their scholarship awards, as remote classes meant they would not be returning from out of state to attend school. As this year’s scholarship deadline (February 16) approaches, I am closely monitoring application numbers and see a startling spike in year-to-date application numbers, with more than double the number of applications compared to last year.
An Opportunity to Volunteer Now is the time of year we typically are recruiting volunteer scholarship reviewers, and based on application numbers to date, we’ll need those reviewers more than ever to ensure we are able to efficiently and equitably award half a million dollars this year to aid students on their journey to CPA. Sarah Whitaker, the Chair of Scholarship Committee and a Washington CPA Foundation Trustee said, “Serving as a scholarship reviewer has helped me feel connected to our next group of professionals. Each year I am impressed with the caliber of students who are preparing to enter the workforce. It also reminds me of the excitement I had when I was entering the profession. It’s a great way to give back and be reminded of why I was first interested in pursuing my accounting career.” Our review season kicks off in mid-February and runs through late March, is completely virtual, and you can participate on your own time from your own device. Typically 60-70 volunteers serve on our review team, but this year we would like to see that increase substantially in anticipation of more applications. Typical time commitment is 15-20 hours during that period, but the more reviewers we have, the fewer hours required across the board. Will you consider joining our review team?
Monette Anderson is the WSCPA Director of Membership. You can contact her at manderson@wscpa.org.
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For more information or to become a scholarship reviewer please contact me at manderson@wscpa.org.
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Financial Modeling Best Practices Evan Wells
What would happen if you had all the time in the world to build a forecast for the next year? Enough time so that not a single thing is left out. Site traffic, conversion rates, hiring, inventory, and every item in between factored into an elaborate prediction model. Then, six months in — BAM! Your forecast is 100% precise. Number by number, line by line; everything is spot on. You would likely respond by doublechecking every formula, just to make sure there are not any errors. Because this never happens in the world of accounting. Not only is this scenario highly unlikely, but attempting to achieve this level of numerical enlightenment could actually be bad for business. You read that right. It might seem counterintuitive, but this level of precision is not the point of financial modeling, and it can even harm your forecasting capabilities. Instead, we should aim for accuracy. To do that, we need to understand the difference between precision and accuracy. 36
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FINANCIAL MANAGEMENT
What is precision vs. accuracy? Granted these two words are similar in nature and definition. That said, there is a difference, particularly for controllers and CFOs. Here’s an example from real life: I was once tasked with building a forecast for a medical device company to help pitch for a round of funding. A major goal of the forecast was to predict the impact of switching manufacturing from in-house to outsourced production. I eagerly got to work. In order to precisely account for every possible number of units sold, and the related cost and profitability, I created a model that tabulated every conceivable Cost of Goods Sold (COGS) in 1,000unit increments. And I did it up to 300,000 units sold. The result was a massive, 36 MB Excel workbook. It was so large and complex because the various levels of possible production filtered back into the financial forecast and multiple other sheets in the file. The model was precise down to: • The exact number of units sold • Each cost to produce those units (accounting for discounts at each 1,000-unit tier) • The tabulation in the overall forecast
The problem with precision There was one glaring problem with my incredibly precise forecast. The problem wasn’t the number of metrics. Or the complex breakdown of costs. The problem was that no one else understood how to update or even use it. The model was stuffed into the supporting documentation of the overall investment presentation. And when it came time for potential investors to see how the numbers on the slides were calculated—the Excel spreadsheets wouldn’t work for them. Even if the investors could get them running, it would be nearly impossible for me to explain succinctly how they worked.
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Here's a glimpse at a portion of my overly-precise financial model. That's over 300,000 rows in one sheet!
The solution? A simpler, yet still accurate model.
Long-term accuracy is far more effective than shortterm precision An accurate financial model is one that: • Allows for everyone (who needs to) to understand how the numbers work, not just what the numbers are • Is easily updated, so it remains useful over a set period of time, instead of quickly becoming unusable or inaccurate • Allows for easy decisionmaking thanks to clarity and ease-of-use — not necessarily 100% precision Ideally, a financial model should be simple enough for anyone on the executive team to update. Business leaders — not just finance leaders — should be able to quickly change the quantity of goods and cost of goods assumptions without needing a detailed explanation of how things work. This is the big problem with precision. The more precise your model, the more complex your calculations, and so fewer people (if any) will understand how you came to your conclusions. That barrier to entry in understanding the model results in an inaccurate forecast over time. In my own example, no one knew how to operate the workbook and even if they did, it was unreliable due to the size of the file. If I had made the model simpler, those potential investors would have been able to see the business potential for themselves instead of having to trust my slides in the pitch deck.
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FINANCIAL MANAGEMENT HERE’S ANOTHER QUICK EXAMPLE OF HOW ACCURACY WINS OVER PRECISION: Here are a few more ways accuracy wins over precision: • Makes the model more understandable and usable by those who are using it • A model regularly updated is more reliable than a “precise” one-time forecast • With a better understanding of the model, better business decisions can be made
Complexity might be fun, but simplicity wins in the long run A simpler model is often a more accurate model over time. And that should be the goal — and the reason for existing — for any financial model. Key takeaway: When building a financial forecast or financial model, you may be tempted to try to get everything perfect. This requires a lot of variables, assumptions, and guesswork to get it right. When this happens, you spend a ton of time, create a lot of complexity, and ultimately hurt your ability to forecast. So instead of trying to be so precise, you should try to be accurate. Accept that there will be a margin of error in your forecast. And make the model easy to share and update, even for non-finance experts.
How to create a more accurate forecast There are lots of reasons for creating a financial model. You may want to pitch investors, prepare for a sale of your business, improve cash flow, or just improve overall profitability. Whatever the situation, use an accurate forecast. And be careful not to get too precise.
A company is figuring out how many sales reps to hire over the next three to five years. To do this, they need to project the commission each sales rep will earn. Option A: Average the average commission payout percentage and multiply this by sales. For instance, if the company has two commission tiers (one at 10 percent and another at 20 percent), we blend the two rates and forecast a 15 percent commission payout in aggregate. Option B: A more precise way to forecast commission expense is to calculate how much each rep could make for every month. This requires building out a large, complex table of hires, rates, and months. Then you pull the totals back into your financial forecast. The result is a bulky model that no one wants to use a few months down the road because it’s too difficult to figure out how it works and have confidence that there are not errors. Option A will not forecast commission expense to the dollar, but it will probably be pretty close, and you’ll likely actually use and update the model with Option A. If the forecasted commission expense is not matching up with reality, then it’s a simple task to change the average commission percentage assumption.
Less precision doesn’t mean less data And no, sacrificing precision does not mean using fewer metrics or oversimplifying data. For example, using a financial planning and analysis solution, such as Jirav, allows you to input any number of variables, track key KPIs, and even add custom spreadsheets to your analysis and forecasts. Reports and financial dashboards can be easily updated and make the numbers easy to understand for anyone. Free yourself from yesterday’s financial modeling tools and see for yourself how accuracy wins over precision for financial modeling.
Evan Wells, VP BizOps & Financial Services at Jirav. You can contact him at evan@jirav.com. Graphics: © iStock/ Petro Bevz
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save the date WSCPA Spring Conferences Governmental Accounting & Auditing Conference
Washington State Tax Conference
Webcast, April 27-28 16 Credits
Webcast, June 2 8 Credits
International Tax Conference Webcast, May 27 8 Credits
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