The WashingtonCPA by Washington Society of CPAs

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CPA January/February 2011

Volume 53, Number 4

Breakups Entity Selection - Should I Be Concerned about How to Get Out? What to Do When a Client Calls You and Says, ‘We’re Getting a Friendly Divorce’

Important Notices from State Board of Accountancy

New Strategies Required for CRE Portfolios

Engagement Letter Essentials

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Contents

wa s h i n g t o n

CPA www.wscpa.org • memberservices@wscpa.org Tel (425) 644-4800 • Toll free in WA (800) 272-8273 Fax (425) 562-8853 902 140th Ave NE Bellevue, WA 98005-3480 BOARD OF DIRECTORS James R. Ladd Chair Mark A. Hugh Vice Chair David E. Katri Secretary Mary D. Marino Treasurer Carmen J. Aguiar Immediate Past Chair Richard E. Jones President & CEO

Robert M. Cole, Jr. Jolene G. Cox Peter E. Doubleday Joyce G. Etheridge Michelle H. Gretsch Susan E. Legel Lucy L. Liu Nerelys M. Ortiz

Russell D. Price Thomas A. Pucci Lisa J. Sunderman David E. Trujillo Randy L. Wells William L. Wells Glenn G. Wisegarver

CHAPTER BOARD CHAIRS Bryce Hansen Bellevue Area Joseph Crowther Central Joseph M. Reid Central — North Seattle Richard E. Helke, II Northwest Vicki Dixon Olympia — Peninsula — Pierce County Amanda J. Goodman Sammamish Valley Connie L. Griffith Seattle Court Carter Snohomish County Michael K. Briggs South King County John Vogel South Sound Industry Trayson J. Harmon Southwest Shaun W. Johnson Spokane — Wenatchee Katrina L. Cantu Yakima Jeanette Kebede

Editor

The WashingtonCPA 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 WSCPA. 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 WashingtonCPA (USPS 009754) is published six 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 WashingtonCPA. Periodicals postage paid at Bellevue, Washington and additional mailing offices.

Breakups Issue

6 8

Entity Selection - Should I Be Concerned about How to Get Out? What to Do When a Client Calls You and Says, ‘We’re Getting a Friendly Divorce’

11 Important Notices from the Washington State Board of Accountancy 12

Nominate an Outstanding Member

15 New Strategies Required for CRE Portfolios Will You Be Ready? 20 Engagement Letter Essentials 22 My Journey to Africa: Empowering Entrepreneurs in Malawi 24 New Year’s Goals? Turn to Your Member Benefits

Departments 4

Leadership Lens

Events

News Briefs

Photo Album

Advocacy

CPE Digest

Send address changes to The WashingtonCPA,

Industry Voice

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c/o WSCPA, 902 140th Avenue NE, Bellevue, WA

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WashingtonCPA January/February 2011

Leadership lens

New Tax Return Preparer Rules— About Half Right By Rich Jones, CPA, President & CEO

ince January 2010 the IRS has been busy promulgating regulations to implement their new plans for regulation of tax return preparers. These plans began in June 2009 when IRS Commissioner Douglas Shulman launched the Return Preparer Review program, which was an extensive process to gather information about the tax preparer industry from a very large number of sources, including tax return preparers, tax professional organizations, members of associated industries, federal and state government officials, consumer groups and the public. The report resulting from this study, (Return Preparer Review, IRS Publication 4832) is very interesting and can be found at www.irs.gov. As the report notes, currently any person may prepare a federal tax return for any other person for a fee. Due to the lack of registration and inconsistent reporting, the IRS does not know the number of tax return preparers, although it estimates that there are between 900,000 and 1.2 million paid tax return preparers. Although some preparers (e.g. attorneys and CPAs) are licensed by their states and others are enrolled to practice by the IRS, many tax return preparers do not pass any competency requirements before they prepare a federal tax return. Preparers in this last category are not required to have any minimum education, knowledge, training or skill before they prepare a tax return for a fee. Finally, note that more than 80% of all federal individual income tax returns are prepared by paid tax return preparers or by taxpayers using consumer tax preparation software. In December 2009 the IRS released its Return Preparer Review Report, along with its recommendations for improvement. The objectives for the new procedures were to enhance compliance, and elevate ethical conduct. In order to achieve these objectives, the IRS made the following recommendations: •

PTIN—All tax return preparers should have to register with the IRS and obtain a preparer tax identification number (PTIN).

•

Ethics—All tax return preparers should be subject to the ethical requirements of Treasury Department Circular 230. Today only CPAs, attorneys, and enrolled agents are subject to these ethical standards.

•

Testing—All tax return preparers would be required to pass a competency examination prior to being registered as a tax return preparer. CPAs, attorneys and enrolled agents would, at least initially, be exempt from this requirement.

•

CPE—All tax return preparers would be required to obtain 15 hours of CPE annually as specified by the IRS and all qualifying courses would need to be preapproved by the IRS.

Effective January 1, 2011, you will be required to register with the IRS and obtain a PTIN if you prepare any tax return(s) for compensation. This is easily done at www.irs.gov. You must provide some information from your 2009 individual tax return to show that you have complied personally with your filing and tax payment obligations. And you will need to pay the annual registration fee, $64.25.Your employees who are involved in tax return preparation may also be required to register and obtain a PTIN. The rules covering these “non-signing tax return preparers” will be announced in December 2010.

We believe the requirements for all registered tax return preparers to pass a competency test (which is not expected to be difficult) and obtain 15 hours of CPE each year will result in great confusion in the marketplace about the difference between CPAs and registered tax return preparers. Proposed regulations concerning Circular 230 and plans for future Competency Testing and CPE requirements were issued in September 2010 and should be followed to see how these requirements develop in the final regulations. The WSCPA has joined the AICPA in submitting written comments to the IRS about their plans for tax return preparer regulation. We agree with the requirement that all signing tax return preparers should have to obtain a PTIN. We agree that all paid tax return preparers should be subject to the ethical continued on page 14

WashingtonCPA January/February 2011

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Leadership lens

One More Time! Moving Toward Differential Accounting Standards for Private Companies By Jim Ladd, CPA,WSCPA Chair for 2010-11

PAs working for private companies or providing services to them know that GAAP financial statements have become increasingly complex over the years without providing significant additional value to users of those financial statements. In fact many banks and other users convert the financial statements to other forms and standards that they consider more relevant. That’s not to say that GAAP financial statements do not serve a purpose. Investors in the 15,000 public companies in the U.S. and the multitude of advisors and analysts serving them have expectations that the standard setters at the FASB and the SEC are well-prepared to address (although too slowly for some). In the post-Enron world it is not likely that those standards will be relaxed. But the 29 million private companies that constitute 50% of the U.S. economy, and the CPAs who serve them, have long sought relief from the many accounting and financial reporting standards that they consider to be unnecessarily complex and without value to their companies or the users of their financial statements. Thus, for over 30 years there have been calls to adopt differential standards for private business. But, with small exceptions, those efforts have failed to gain adequate support, particularly at the FASB. But now a new strategy for change seems to be getting traction: 1. In December 2009 an 18-member Blue Ribbon Panel was formed by the AICPA, the Financial Accounting Foundation (FAF, the oversight body of FASB and GASB) and the National Association of State Boards of Accountancy to address this issue. •

The panel focused on changing the process of standard setting for private companies rather than changing the standards themselves (a failed strategy in the past).

On October 8 a majority of the panel members voted to recommend that FAF accept a new standard-setting model for private companies and create a separate board to set those standards.

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•

• •

The new standard-setting board would consist of people with private company experience and would report to the FAF in the same way as the FASB and GASB. The new board would start with existing accounting standards and make exceptions for private companies. Some believe separate standalone standards may be developed in the future, but the panel recognized that modifying existing GAAP would provide for faster action.

On October 19 the AICPA Governing Council (including three WSCPA representatives) approved a resolution supporting implementation of “a differential GAAP model for private companies, as determined by a separate private company standards board.”

In January the panel will issue a report with details of its recommendations.

In February the FAF is expected to discuss the recommendations and invite public comment on any changes that it is considering.

The proposals will not succeed without significant public support from owners of private companies and users of financial statements of private companies — banks, insurers, shareholders, suppliers, and financial executives and directors of private companies. CPAs will be encouraged to ask clients and others in the financial community to submit comments to the FAF on this important matter. There will be a direct correlation between the volume of support the proposals receive and their chances of success. Your participation in this process can make a big difference! Watch your weekly Short Form e-Newsletter for the latest information, including an update on how you can provide feedback to the FAF. You can contact Jim Ladd at jladd@systemsbiology.org.

WashingtonCPA January/February 2011

cover story

breakups

Entity Selection Should I Be Concerned about How to Get Out? By Brian Gosline, CPA, JD

wo clients come into your office

all excited about their new business

venture. They begin asking about all the various business entities: “Should I form a cor-

poration?” “How about an S corporation?” “What about a limited liability company (LLC)?” Now imagine there are more than two owners, and their questions will probably double. Then you burst their bubble when you ask, “How do you plan on getting out of this venture?” They inquire, “Why are you concerned about that when we haven’t even opened our doors yet?” But, you respond, it may be one of the most important questions to be answered.

Where to Start

For any new business, especially one with more than one person involved, you need to ask four questions: (i) Who is contributing what, in exchange for how much ownership? (ii) How is the entity to be governed? (iii) How are profits/losses/distributions to be made (including compensation)? (iv) How will your ownership be terminated? Many people ask the first three questions, but never address the final question until it is too late. This article will be the first of two articles exploring those things with which a CPA should become familiar when it comes to entity selection – looking from the “end game” backwards. We will first look at these issues from a legal point

WashingtonCPA January/February 2011

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breakups

of view, while the next article will concentrate on the various federal and state tax consequences. (Look for this second article in the March/April 2011 issue of The WashingtonCPA.)

(iii) Providing for methods of payment.

Triggering events generally state that ownership interests will be transferred upon a death or termination of employFirst of all, Washington statutes for ment of an owner. Valuation mechanism both corporations and LLCs act as can range from agreed-upon values to “default” statutes. In other words, if the full-blown appraisals. Methods of payparties do not agree on certain items, ment can include the use of life insurance state law will fill in the blanks. Later I will or a stream of payments over a period explain the statutory provisions that may of time. apply upon the termination of the entity. But since you are free to enter into some The Nuclear Bomb Provision form of a corporate governance agree- for 50-50 Ownerships Please understand that one of the ment for your corporation or an operatmost difficult business relationships is the ing agreement for your LLC (collectively “50-50 owners.” Although you may feel referred to as an “entity agreement”), we that you have properly drafted an entity will review those items first. agreement, in the event that one owner Buy-Sell Agreements wants out of the business, it is possible for Typically, an entity agreement will one of the owners to become very uncoinclude provisions most commonly operative for various reasons. Therefore,

Please understand that one of the most difficult business relationships is the “50-50 owners.” Although you may feel that you have properly drafted an entity agreement, in the event that one owner wants out of the business, it is possible for one of the owners to become very uncooperative for various reasons. referred to as a “buy-sell.” These provisions require (or grant an option to) an owner to sell, and the entity and/or other owner to buy an ownership interest. Any buy-sell provisions of an entity agreement will include three (3) general things: (i) Naming of triggering events; (ii) Determining a mechanism for valuing the entity; and www.wscpa.org

I recommend incorporating what I refer to as “the nuclear bomb provision.” How does it work? In the entity agreement, you can provide that, upon a deadlock, an owner can “put a number on the table.” The other owner shall then either buy that interest at that amount, or sell their interest at that amount. An owner will not put a

number that is too high on the table as the other owner will sell their interest. An owner will not put a number that is too low on the table as the other owner will purchase that interest. I have found that if you discuss these scenarios when you go through the four questions with your clients, many of these potentially devastating problems can be addressed reasonably and with less emotion.

Dissolution

Under Washington state law, a corporation can generally be dissolved by agreement of the shareholders and directors, administratively (e.g. failure to file an annual report), or judicially (by the court). Obviously, you can control the outcome of the first — you may lose control with the latter two. See RCW 23B.14 et.seq. LLCs are generally dissolved similarly including by agreement of its members. See RCW 25.15.270.

Bottom Line

From a legal stand point, do your best to set out entity termination provisions when you start the entity, not in the end when it may be too late and the parties are in a dispute. Because of your ability to legally control your entity termination, the federal and state tax consequences may be greater determining factors for your entity selection. We’ll explore those in the next issue. Brian G. Gosline, an attorney and CPA in Spokane, is a Past President of the WSCPA and is beginning his 22nd year as an adjunct professor of taxation and business law at Gonzaga University in January, 2011. WashingtonCPA January/February 2011

cover story

breakups

A CPA’s Ethical Dilemma

What to Do When a Client Calls You and Says, ‘We’re Getting a Friendly Divorce’

he WSCPA Professional Conduct Committee is pleased to share with members some advice and counsel from WSCPA member Jim Rigos, JD, LLM, CPA. The Situation: Jim, as a CPA-Attorney and frequent ethics author and Society discussion leader you are well aware of issues confronting your colleagues. One area that the Professional Conduct Committee has been discussing is when longstanding clients approach their CPA and announce that their relationship, whether it be one of marriage or a domestic partnership arrangement, is about to be dissolved, and ask “Can you help us value and split up our community property assets?” The couple usually has a jointly owned business and often the CPA has some level of friendship with the couple, especially when the clients are tenured. The CPA is now faced with a dilemma and conflict issues.

not exist, of course, then there is no duty to breach. But if there was a long term professional relationship between the CPA and the clients (usually if there is a jointly owned business involved) it is hard to rebut the inference that both clients may consider the CPA to be their advocate. And while there is some authority to the contrary, the better view seems to be that preparing a joint tax return for a couple creates duties to both the community and each individual spouse separately. The IRS recognizes this potential loyalty conflict in such tax areas as the innocent spouse provisions, property transfer pursuant to a divorce, etc. Joint tax return preparation is a relatively uncontroversial role unless there are questions involving the allocation of past tax delinquencies or related.

The potential conflict becomes quite ripe when spouses become adverse, such as in a divorce, and one or both of the Please share with our readers your perspective and advice clients want the CPA to give a dissolution opinion on the value for practitioners when faced with this challenging situation. of jointly owned property such as the family community property business. The problem with being designated as the “sole The Response, according to Jim Rigos: We spend some valuation expert” in such a circumstance is that it is usually serious time on the divorce topic in most of the WSCPA’s impossible to be a faithful 100 percent advocate for either ethics classes. The divorce party. Here what is good for engagement expert CPA subone client is bad for the other ject is one of the three types client. Which spouse gets the of conflicts of interest. Here, low basis property? Is the it involves competing clients business going to the husband The threshold question is whether where something the CPA does undervalued? Have you disthe CPA has a professional duty (or does not do in some cases) counted the home value going affects the struggle and adverto the spouse because it is not of loyalty to both clients. This is a sarial proceeding between the saleable? question of fact and courts look two clients. First, one should distinguish this from the noIf a CPA undertakes such an to see if the client had a reasonproblem engagement of when a assignment as the sole expert, able expectation that a professional CPA is hired solely as an expert to whom is the duty owed? advocate by one of the parties Can you be an advocate for fiduciary duty existed. and there is no prior relationboth adverse parties? Perhaps, ship with the other spouse or if there is a written conflict of their jointly owned business. interest disclosure, but even then someone could later The threshold question is whether the CPA has a profes- complain on the basis that the testimony was “not fair” and/or sional duty of loyalty to both clients. This is a question of fact the consent was not sufficiently “informed.” and courts look to see if the client had a reasonable expectation that a professional fiduciary duty existed. Controlling case Informed consent requires that the clients receive full dislaw establishes the creation of a CPA loyalty duty at a low closure and appreciate all the risks and dangers inherent in the threshold level of service and it may continue for even past CPA representing adverse clients before they agree to allow the clients. The question is one of perception and may be implied conflict. “Uninformed consent” is the equivalent to no consent if the other spouse was not separately represented. If it does at all. It is usually quite easy after the fact to argue consent was

WashingtonCPA January/February 2011

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breakups

Good clients will understand the professional conflict CPAs are under and will be there for you when the dust settles on the dissolution. If not, and all they are doing is trying to use our professional credentials to advance their own selfish interest against their spouse, perhaps these are clients we would be better off without anyway.

not sufficiently “informed.” Clearly a simple statement “we have a conflict of interest” is insufficient since the client does not appreciate the details and/or significance of what could happen after they waive the conflict. And my experience is that later it is very easy to say that a particular warning should have been given or a specific item should have been disclosed even if perhaps the item at issue was not reasonably foreseeable at the time. The adequacy of the disclosure details is measured after the fact with the benefit of 20-20 hindsight. If you are going to attempt a waiver, pack it with detailed unpleasantries—all the potential problems and risks—and make sure both clients and their attorneys all sign the document. The situation is usually further complicated because both parties must usually have their own lawyers in a divorce to advocate only their interest. The lawyer’s interest therefore must be strictly toward maximizing the allocation awarded to their own client. Fairness is not usually a lawyer’s concern. As such the lawyers have no duty at all to the CPA and may encourage us to do things that, while benefitting their particular client, operate to the detriment of the other spouse. This adversity nature of divorce is often exacerbated by the fact that ex-spouse animosity frequently lingers after the court dissolution is finalized. Very rarely is everyone happy with the results of a divorce and some aspect of the outcome aggravates www.wscpa.org

Question about Ethics? Call Us! If you call the WSCPA with a question about ethics, you’ll be referred to the Professional Conduct Committee. The purposes of the committee are: •

To be responsible for substantially all matters relating to ethics of WSCPA members;

•

To review complaints made against members for alleged violations under the WSCPA/ AICPA Code of Professional Conduct of the WSCPA. We may also refer certain complaints to the AICPA for violations of its Code of Professional Conduct;

•

To disseminate information to WSCPA members relating to ethics; and

•

To review proposed changes in the AICPA Code of Professional Conduct.

If you should run into an ethical dilemma such as the one outlined here by Jim Rigos, or have questions regarding any other ethical issues, please feel free to contact us through Julie Phipps, WSCPA Manager of Professional Standards, jphipps@wscpa.org or (425) 586-1132. - The WSCPA Professional Conduct Committee

WashingtonCPA January/February 2011

cover story

breakups

one or both of the parties long after the court proceeding is completed. One or both of the spouses may later strike out against the professionals involved. Unlike most business lawsuits where one party pays some money after the trial and they both go their own separate ways, here the anxiety and frustration continues, especially if there are children involved. It is perhaps not surprising that marital dissolution engagements are one of the most fertile areas for complaints with the Washington Bar Association against lawyers. My general advice is that when the first client communication comes in that “we are going to get divorced” the CPA should tell the person inquiring that our CPA firm has a policy against being a divorce expert valuation witness for either or both parties because we have represented them in the past. While it is true that we can be subpoenaed and required to testify, that role is of a fact witness. What is to be avoided is an expert rendering an opinion on valuing jointly owned property. Avoid answering “how much” questions. The posture I recommend is to tell the inquiring spouse, “your self-interests deserve better and you are best advised to have your own expert advocate so that they can take only your side of the dispute. Our CPA firm would have a conflict even if the other client agrees.” I also caution the CPA against meeting with one side’s lawyer without the other being present because even that has been held to be a breach of the duty of loyalty. It might be acceptable to meet with both at the same time. Even there it is better to tell both clients and their lawyers to hire their own valuation experts because CPAs cannot labor under an actual or in appearance conflict of interest.

I might also mention two cases I was involved in where the lawyers blamed the CPA later. If subsequent to the divorce the IRS or State makes a large assessment of a pre-divorce year return, who pays? The divorce decree in those cases did not specify and the lawyers claimed the CPA should have warned the parties since they prepared the joint return in question. Good clients will understand the professional conflict CPAs are under and will be there for you when the dust settles on the dissolution. If not, and all they are doing is trying to use our professional credentials to advance their own selfish interest against their spouse, perhaps these are clients we would be better off without anyway. One last question - If you do decline the divorce valuation engagement, may you later represent only one of the spouses? Yes, but avoid becoming an advocate against the other spouse. This would depend on the circumstances. I have advised CPAs to ask the former spouse if they object and confirm the nonobjection in writing. Still, involvement in a subsequent issue that is substantially related to prior matters involving the client’s former spouse may be problematic if you did their joint tax return. If the matter is totally non-related, there may not be an ethical conflict. This, of course, does not preclude the former spouse and/or attorney filing an ethical complaint. Non-involvement is the safe harbor. One good rule and way of looking at a split-up of joint clients is it makes your continuing representation for either one more difficult, and often the prudent posture is for the CPA to extract yourself from them both. James J. Rigos, is an attorney-CPA-CMA who has written and lectured widely in the area of professional accounting individual and CPA firm ethics and legal liability. He is a frequent ethics instructor for the WSCPA. Plan to attend his next ethics course:

CPE in Ethics: A Requirement in Washington State (CENRW417) with Jim Rigos February 8, 2011 8-11:30 a.m. WSCPA, Bellevue Register today at www.wscpa.org/CPE/catalog. Reprinted and adapted with permission of the Oregon Society of CPAs

WashingtonCPA January/February 2011

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news briefs

Important Notices from the Washington State Board of Accountancy

Do your CPA credentials expire in 2011? Still need CPE hours? If your credentials expire in 2011, you must have

2011 Rule Change That May Affect Your Firm Effective January 1, 2011, firms issuing audit reports

completed your required continuing professional

on financial statements, performance audit reports, or

education (CPE) by December 31, 2010. If you did not

examination of reports on internal controls for non-

fulfill this requirement, your credential will lapse and

public enterprises must participate in a board-approved

you will need to follow reinstatement procedures and

peer review program administered by the American Insti-

pay reinstatement fees.

tute of CPAs (AICPA) or the Washington Society of CPAs (WSCPA). The Board’s Quality Assurance Review (QAR)

If you find yourself in this situation: 1.

Prior to April 30, 2011 advise the State Board of Accountancy staff of the deficiency in CPE hours in writing or through the online renewal system at www.cpaboard.wa.gov, AND

Complete the required CPE credit hours, AND

On or before June 30, 2011 submit to Board staff documentation to support the hours completed in conjunction with complete renewal application information and the

desk review will no longer review these types of reports. If you have any questions regarding the peer review program or to enroll, please contact: Julie Phipps WSCPA Manager of Professional Standards Telephone: (425) 586-1132 E-mail: jphipps@wscpa.org Please note the following: •

Firms which currently issue audit reports should have a peer review within three to five months

reinstatement fee of $480.

following the end of the year to be reviewed. •

ONLINE LICENSE RENEWAL

Firms which decide to perform their first audit engagement are required to undergo a peer review within 18 months from the year-end of that engagement.

Visit the State Board website, www.cpaboard.wa.gov for the latest updates as they become available. If you have any questions regarding the new rule

Effective January 1, 2010, you must renew your individual and/or firm license with the State Board online using CPAOnline. Download instructions for using the new system here: www.cpaboard.wa.gov/files/Detailed_Instructions_w-pics.pdf.

change or how this might affect your participation to the QAR program, please contact Jennifer Sciba, QAR Program Manager at (360) 586-0952 or jennifers@ cpaboard.wa.gov.

To learn more, visit www.cpaboard.wa.gov. www.wscpa.org

WashingtonCPA January/February 2011

news briefs

We “tweet” your firm!

CPA Referral Service

Expand Your Client Base in Time for Tax Season Enroll Now in Find a CPA Referral Service

Would you like to expand your client base? The WSCPA’s online Find a CPA Referral Service is a cost effective way to market your firm’s services to the public. For just $175, you can list your firm with this service. Plus, you can add satellite offices for $50 each. Enroll now and your firm will be in the service through June 30, 2011.

This service is marketed in directories statewide, online directories and, starting this year, via Twitter. Each firm in the referral service is promoted via Twitter to our followers. Hundreds of individuals and businesses statewide looking for CPAs visit this service at www.wscpa.org or call the Society especially during tax season. If you have questions about this

Save the Date

ENROLL TODAY! Visit www.wscpa.org, and click “Find a CPA,” then “Enroll Online Today.” service, please call Jennifer Ayoub, (425) 586-1142 or (800) 272-8273, Ext. 1142 (toll-free in WA), or e-mail memberservices@wscpa.org.

Follow WSCPA

WSCPA Annual Meeting June 1, 2011 Featuring Professional Issues Update with Bob Bunting

Nominate an Outstanding Member Submit your nomination by

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News, events, exclusive discounts, member discussions, and more!

WSCPA Annual Awards John L. O’Brien Lifetime Achievement Award Vincent A. Gervais Public Service Award Business of the Year Award Volunteer of the Year Award Rising Star Award New Professional Award

March 15 at www.wscpa.org. (Enter “awards” in the search box.)

WashingtonCPA January/February 2011

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advocacy

Hot Chocolate ... and Advocacy By Judy Love,WSCPA Director of Advocacy

n a cold Monday morning in late November I headed downstairs for something warm to drink. As the hot chocolate began to brew, a voice boomed from the classroom across the hall: “... independence ... conflict of interest ... SSARS 19 ... liability ... professional responsibility ... liability!” As I wrapped my hands around the warm cup I thought, “You know, it probably wouldn’t hurt to sit in on this class. It might even be interesting.” A quick scan of my calendar showed no meetings or appointments; a quick scan of the room showed at least one seat open. That is how I found myself in the front row of a Compilation and Review Standards Update class. I hope I have picked up a few things in the past 11 years with the Society, but the truth is my undergrad and graduate degrees (English and Organizational Development) were carefully chosen to keep me far from anything to do with numbers, balance sheets, creating or auditing financial statements, – and a work environment where ever-changing and increasingly complex rules, standards and risk factors are the norm. “How do they do it?” I thought, as SSARS and FASB numbers flew around the room as thick as the snowflakes outside. “How do they know their FAS 144 from 157? And what about the preceding 143?” And then there is the AICPA code of conduct.And changes to the IRS Code. By noon I had decided I’d “had enough fun,” as the instructor put it, and scurried back upstairs to the safety of my desk where all I have to worry about is ... 10,000 WSCPA members who must remember, apply and comply with all of the above and much, much more. At the top of that “worry list” for the past two years has been the possibility that the State Board of Accountancy might be moved into the Department of Licensing.Why, many members have wondered, given all of the other issues facing www.wscpa.org

As of this writing it appears unlikely the Governor’s office will introduce legislation to move the State Board into the Department of Licensing. the profession—Red Flags rule, new 1099 reporting requirements, possible changes to S-Corps compensation, IRS tax return preparer registration, sales tax on professional services, differential accounting standards—has the Society cared? Our concern has been driven by the belief that the Board’s ability to protect the public would be diminished. But, of equal importance, it would be considerably more challenging to make changes to the accountancy act necessary to keep pace with and reflect changes in the profession. These concerns were based on observations of those states where accountancy boards are under a larger umbrella agency (for instance, prior to this past year, New York has not been able to enact any changes to its accountancy act for nearly 50 years). We were pleased when the Board chose to hire outside consultants to do a performance review on the agency’s operations, processes and procedures. A provision in the 2010 budget required an additional study to evaluate the “efficacy, economy, and accountability” of

merging the State Board into the DOL. The Performance Review, issued in July concluded the Board “is run properly and capably by the Executive Director and its staff with the guidance of its Board, and operates in full compliance with all applicable laws.” This reinforces what we have consistently heard from the many legislators puzzled by the consolidation proposals, “Why should we be trying to fix something if it isn’t broken?” The second report, the “Merger Report,” was issued on November 30. The 147-page document (on the Board’s website – www.cpaboard.wa.gov – under Performance Review in the “Alerts” box) was sent to key legislative committees, the Governor’s office and Office of Financial Management. To support the clearly stated reasons for keeping the Board as an independent agency, the report includes a number of very interesting comparisons of complaints and investigations as a percentage of licensees in other states and also between Washington state’s engineers and land surveyors (the profession WashingtonCPA January/February 2011

advocacy

closest in size to the 14,000 CPA licensees). Look for a summary of some of that data in the March/April issue of The Washington CPA. The Merger Report’s conclusion is stated in no uncertain terms in this paragraph from the cover letter: “We conclude that a merger would result in a significant decrease in the accountability of WBOA to the public and the profession, and little or no gain in the efficacy or economy of WBOA’s operations and functions. Given the statutorily defined reason for WBOA’s creation and existence, which is to provide public protection and to ensure the reliability of financial information, a merger is not recommended.” As of this writing it appears unlikely the Governor’s office will introduce legislation to move the State Board into the Department of Licensing. That does not mean that a proposal couldn’t come from another source, therefore we remain vigilant as the legislature convenes.The Society is determined to preserve the independence of Washington’s Board of Accountancy while working to promote and insure best practices within that structure. You can contact Judy Love at jlove@wscpa.org.

New Tax Return Preparer Rules— About Half Right continued from page 4 requirements of Circular 230. We suggested that those two changes be implemented and then see if that achieves the IRS’ goals of enhanced compliance and elevated ethical conduct. We believe those two changes would allow the IRS to identify unscrupulous or incompetent tax return preparers. We believe the requirements for all registered tax return preparers to pass a competency test (which is not expected to be difficult) and obtain 15 hours of CPE each year will result in great confusion in the marketplace about the difference between CPAs and registered tax return preparers. If we are correct, this will be

WashingtonCPA January/February 2011

a disservice to the public and to the profession. The vast difference in the requirements to be a CPA and a Registered Tax Return Preparer are summarized in the table below. If you are concerned about how the public may be misled about these differences (and how that will affect the value of your CPA credential or your practice), then please share your views with your federal congressional delegation and the IRS Commissioner. If you need help doing this, please contact Judy Love (jlove@wscpa. org) or me. You can contact Rich Jones at rjones@ wscpa.org.

CPA Requirements College graduate 150 hours of college education Uniform CPA Exam

IRS Requirements Some education required 18 years old IRS exam

120 hours of CPE over 3 years

15 hours of annual tax education

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Accounting Standards

New Strategies Required for CRE Portfolios Will You Be Ready? Forthcoming Changes to Accounting Procedures Will Affect Leases of Real and Personal Property, Plant and Equipment By James T. Saint, CCIM, MRICS, Chartered Facilities Management Surveyor From the View Point of a Corporate Lessee

Accounting of Corporate Real Estate (CRE) leases is about to undergo massive changes that will dramatically alter how senior management view their real estate holdings; and how the CRE professionals in the future will be supporting their respective organizations. On or about January 2012 a new IASB/ FASB Lease Accounting Standard will go into effect, with the results affecting all corporations, large and small, public and private. With the resulting changes in accounting and reporting, leverage and capital ratios may be affected from the striking changes to the balance sheets. These massive changes will affect not only leased commercial real property such as offices, retail facilities and industrial warehouses, but also leases of nonreal or personal property. Beginning in 2012 the IASB / FASB will utilize a completely new model for lease accounting under which the lessee’s rights and obligations under ALL leases, existing and new, would be capitalized on the balance sheet instead of the current methodology of utilizing off-balance sheet financing. 1 When implemented as the new “Lease Accounting Standard,” (LAS) it will eliminate all current operating leases utilizing the existing off-balance sheet accounting rules. With the capitalization of all leases, the newly defined “right-to-use” leased assets and liabilities will be brought onto the balance sheet. Currently corporate real estate leasing accounts for roughly twothirds of all leasing activity, and is estimated by the U.S. Securities www.wscpa.org

A contract in which the right to use a specified asset is conveyed, for a period of time, in exchange for consideration. Such a contract will apply to assets including property, plant and equipment. Additionally, the right to use an asset is conveyed if the contract conveys the right to use and to control the use of the underlying asset. 3 There will be NO “grandfathering” of existing off-balance sheet leases. Any leases in place on the effective date will have to be re-accounted for the remaining lease term. The only exception will be those leases with maximum possible lease terms of fewer than12 months.

This new Lease Accounting Standard affects not only leased real estate, but also affects ALL items leased by a corporation, including manufacturing plant and equipment, furniture and fixtures, vehicles and delivery trucks, just to name a few. Anything that is of a material nature and is leased will be affected. and Exchange Commission (SEC) as $1.0 to $1.3 trillion. Typically, real estate and related facilities expenses account for 20% of an organization’s income statement, and for roughly 60% of all corporations, it is the 2nd or 3rd highest expense. 2 A lease, from the view point of a corporate lessee, will be defined as:

What’s the Financial Impact?

Here is a quick example of the first year financial impact as a result of the new LAS rule changes: Let’s assume a business unit has a 50,000 sf facility leased for 10 years at a flat “net” lease rate of $25 per sf per year equaling $1.25 million per year in rent expense. Incremental borrowing cost is 7%. Under current operating lease accounting rules the above lease has a P&L rent expense deduction in the amount of $1.25 million per year. Under the new LAS rules, this same lease would have a deduction for the “right-to-use” lease depreciation of $877,948 and an imputed interest expense of $614,563 for a total deduction of $1,492,501 the first year. When compared to the current accounting rules, this results in a first year budget increase of more than 19%. If there were any lease renewal options in the lease agreement, and are “likely” to be exercised, the first year’s percentage increase will be much larger as a result of the implied longer lease term. Are your WashingtonCPA January/February 2011

Accounting Standards

Example

How is this actually going to affect the accounting of my corporation’s leased real estate? Financial Statements Cash Flow Statement P&L Statement

P&L Statement Balance Sheet

Length of Lease Term Net Rent per Year Incremental Borrowing Cost Balance Sheet Numbers

Present Operating Lease Accounting Year 1 2 3 4 Rent 12,000 12,000 12,000 12,000 Expense Rent 12,000 12,000 12,000 12,000 Expense

P&L Total

12,000 12,000 12,000 12,000

Asset

Liability

4 years $12,000 per year 7% – (imputed interest rate) As at the beginning of the year

New Capitalized Lease Accounting Year 1 2 3 Rent 12,000 12,000 12,000 Expense Right-to-Use 10,162 10,162 10,162 Depreciation Imputed 2,845 2,204 1,518 Interest P&L Total 13,007 12,366 11,680 % Increase Right-to-Use Lse Asset Right-to-Use Lse Liability

4 12,000 10,162 785 10,947

8.4% 3.1% -2.7% -8.8% 40,648 30,486 20,324 10,162 40,648 31,493 21,697 11,215

NOTE: Lease expenses will be higher in the earlier lease years under the new Lease Accounting Standard.

forthcoming 2012 / 2013 budgets prepared for a 10% to 25% increase in first year lease expenses? As a result of the new LAS being implemented, businesses will need to take a new fresh look at all the factors relating to their corporate real estate strategies. Economic conditions, operational issues, financing abilities, regulatory issues, tax apportioning considerations for international, federal and state facilities, governance and budgetary issues all play a factor in determining whether to lease or own real estate.

A Little History...

In March 2009, the International Accounting Standards Board, (IASB -

www.iasb.org) based in London, England and the Financial Accounting Standards Board, (FASB - www.fasb.org) based in Norwalk, Connecticut began a process of soliciting comments on what was proposed as changes to how worldwide corporations accounted for all leased property. The objective is to create common lease accounting requirements to ensure that the assets and liabilities arising from lease contracts are recognized in the statement of financial position. 4 Under current accounting rules, when a business enters into a lease agreement

1 PriceWaterhouseCoopers (www.pwc.com) white paper, May 2010, “The overhaul of lease accounting: Catalyst for change in corporate real estate.” 2 Bob Cook, Real Estate Consultant, Cook & Associates webinars, June 2010, held on behalf of Tririga, Inc (www.tririga.com) and associated white paper, July 2010, “The New Lease Accounting and You.”

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for any item (real estate, computers, land, copiers, vehicles, etc.) management utilizes a rule called FAS 13 to first determine if the company essentially owns the item in question. If the answer was “yes,” the business capitalized the lease to simulate ownership and a loan, with the appropriate asset and liability entries on the Balance Sheet. If the answer was “no,” the business utilized “off-balance sheet” financing incorporating a simple accrual straightline expense on the P & L Statements. Then comes the IASB and FASB in March 2009 with their Discussion Paper proposing worldwide lease rule changes seeking comments from the public and

3 IASB / FASB Project Update, July 29, 2010, “Leases - Joint Projects of the IASB and FASB.” 4 IASB / FASB Project Update.

WashingtonCPA January/February 2011

Accounting Standards

Member Perspective

What is your reaction to the new Lease Accounting Standard? “I believe the draft rules will not provide investors with additional transparency and may have unintended consequences of lessees forcing the negative economic impact onto the lessor during lease negotiations. “The proposed Leases rule affects the lessee more significantly than the lessor. Since the draft scope includes all leases, not merely real estate leases, the workload to calculate, track, and account will be noteworthy. Lessees will show an asset based upon a “Right-To-Use” (RTU) notion versus the typical benefits, obligation, and risk normally associated with owned assets. Asset-based metrics will skew considerably with the addition of the RTU on the balance sheet. The imputed interest provision has two issues: (1) The lessee may be forced to use the lessor’s rate instead of its own cost of capital or other, and (2) The P&L impact is negative in the earlier years further separating P&L effects from cash flow streams. Ultimately, investors lose transparency of asset title and risk obligations, as well as forcing investors to further reconcile P&L and Statement of Cash flow differences.” Glenn Wisegarver, CPA VP Finance Zetec, Inc.

industry on the principals of the proposal in order to assess impact and determine strategy. The public comment period ended July 2009, leading to deliberations between the principals of IASB and FASB through July 2010. The result is the Project’s Exposure Draft published on August 17, 2010. In the next step in the project process, the public and industry reviewed the proposed details and submitted their comments through December 15, 2010 on the details of the proposal which will establish policies and prepare financial results. The goal of IASB and FASB will be to distill down the accumulated comments, and come to a mutual agreement, resulting in a unified new Lease Accounting

Standard. The target date for this new LAS to be issued is presently estimated to be mid-2011. The actual effective date of the new LAS is currently listed by the IASB and FASB as “to be determined.” Knowledgeable industry personnel are indicating the target effective date could be as early as January 2012, just 12 months away. Or, it could be delayed into 2013, or 2014, depending on when the actual LAS is published by the IASB and FASB.

Practical Applications of New Rules

How is this actually going to affect the accounting of my corporation’s leased real estate? See box on page 17 for an example.

Last point

Don’t wait. January 2012 is 12 months away. Many corporate real estate operations, large and small, are going to be hard pressed to comply with the new LAS, and many organizations are still in denial or think that this does not affect them. And remember, this new Lease Accounting Standard affects not only leased real estate, but also affects ALL items leased by a corporation, including manufacturing plant and equipment,

furniture and fixtures, vehicles and delivery trucks, just to name a few. Anything that is of a material nature and is leased will be affected. As the coming months and available time to gather the information slowly evaporates, anxiety, work overload and even outright panic will begin to develop. Suddenly realization will set in — “your” corporation just does not have the appropriate staff and talent to get the job done. Many corporations are not going to be

WashingtonCPA January/February 2011

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industry voice

able to comply by the anticipated January 2012 effective date.

Will you be ready? If not, now what are you going to do?

As a result of not being ready, the negative financial results of non-compliance will be ... Well, I will leave that to your individual imaginations to determine your own cataclysmic scenario. This article is an excerpt. Read the complete article, as well as definitive illustrative examples comparing current procedures with the new Lease Accounting Standard procedures, at http://www.james-t-saint-ccim.com/ articles/new_strategies_required_for_cre_ portfolios_lessee_viewpoint_jul2010.pdf. James T. Saint is a CCIM, (Certified Commercial Investment Member), one of a network of 9,000 professionals across North America and 30 international countries holding one of the most coveted and respected designations in the industry, and often referred to as the “Ph.D of commercial real estate.” He holds a MRICS designation and is a Chartered Facilities Management Surveyor, as conveyed by the London, England based Royal Institute of Chartered Surveyors (RICS). Mr. Saint specializes in tenant and corporate real estate portfolio advisory services for improvement of the corporate bottom line. He may be contacted at Tel: +1 - 702 - 838 - 4226, or by using our web mail form at: http://www.james-t-saint-ccim. com/contactus.htm. Disclaimer: The educational information contained herein may be subject to change without notice. It is not intended to constitute an analysis of any limiting or qualifying laws or principles, and the information should not be construed as financial or legal advice or similar opinions. No representations or warranties are implied or apply. Use of the information provided herewith this educational presentation, in whole or in part, could have important legal, financial or tax consequences and the parties should consult their appropriate legal, financial, tax or other counsel prior to their use in any real estate decision making process. www.wscpa.org

On Fire CPE For Industry CPAs 2010 Health Care Reform Act: Critical Tax and Insurance Ramifications for You,Your Business and Your Clients (CL4HCRA2) January 5, 2011 | WSCPA, Bellevue

Explore tax ramifications associated with implementation of the Patient Protection and Affordable Care and Reconciliation Acts of 2010. Examine important provisions of the Act relative to expanded insurance coverage, new exclusion restrictions, insurance and health care industry controls, and consumer benefits. Learn how paying for health care will radically change, and identify important planning opportunities associated with the Act for businesses and individuals.

Hands-on Computer Training Choose from dozens of CPE courses: Excel, Crystal Reports, Quickbooks, Access, SQL, PowerPoint, PC trouble shooting, wireless networking and more!

Take Your Pick! March Clusters

Cluster CPE

March 23-24, 2011 | WSCPA, Bellevue 8 classes, each worth 4 CPE credits. Pick four courses from the following lineup of four-hour CPE programs:

Wednesday, March 23 8-11:30 am - Pick one! Beyond Financial Accounting: Budgeting and Costing Techniques for Maximum Profitability (CL4BLMA) New FASB Developments for Business & Industry (CL4FASBI) 12:30-4 pm - Pick one! Analyzing Costs, Productivity and Efficiency: Three Ways to Boost Your Bottom Line (CL4PYPL) Revenue Recognition: Getting it Right (CL4RTBC) Thursday, March 24 8-11:30 am - Pick one! Decision-Making Tips, Tools and Techniques for Today’s Financial Environment (CL4TTMD) Introduction to IFRS: Grasping the Big Picture (CL4IUSA) 12:30-4 pm - Pick one! Cash Flow Statements: Preparation and Presentation Options (CL4FCFS) CPA’s Guide to Improving Communication, Listening and Writing Skills (CL4TLWP) Learn more and register today at www.wscpa.org/CPE/catalog WashingtonCPA January/February 2011

Engagement Letter Essentials By Ronald C. Parisi, J.D., CPA

Where a CPA has carefully defined an engagement with one or more engagement letters, the client will have much more difficulty trying to hold the CPA responsible for matters not encompassed by those letters.

he engagement letter plays a significant role in avoiding and limiting claims and successfully defending CPAs in professional liability disputes. Long-term claims experience shows that the following elements are essential to making the engagement letter so effective as a risk management tool for CPAs.

that perception may be viewed as negligence.When there is no accurate written description of the engagement, claimants can more easily assert that the CPA was responsible for:

An engagement letter should clearly specify: •

The services to be rendered and typical services not to be rendered;

1) Providing services that the CPA did not consider part of the engagement, and 2) Guaranteeing the results of a transaction the claimants initiated while the CPA’s services were engaged.

Engagement letters should be signed by the client. Failure to do so may be interpreted as the client not agreeing to the terms of the engagement. Going forward • Allocation of responsibilities with the work without a signature could between the CPA and the client. also suggest that the CPA completed the engagement under terms different from Many high-dollar claims result from those contained in the unsigned engagethe failure to clarify the CPA’s role and ment letter. Remember, the client you services to be performed.An engagement negotiate with today may not be tomorletter should leave no room for misun- row’s client. Relationships and disposiderstanding or “creative” interpretations. tions change when disputes arise, and significant events may change ownership The general public (i.e., potential or control of the client, including the jurors) perceive CPAs as experts in appointment of a bankruptcy trustee or documentation, and a failure to live up to the death of a family business proprietor. •

Scope of service and limitations of the engagement; and,

WashingtonCPA January/February 2011

Engagement Creep

Clear engagement letters defend against the phenomenon known as “engagement creep.” This involves initially well-defined tasks, or starts with a simple question that does not appear to rise to the level of a new engagement but, over time, creeps outward to encompass significant additional, undefined activities. If there is a change in the engagement, the existing engagement letter should be updated. What may not be as clear is that, even when the terms of the actual engagement have not changed, an engagement letter may need to be updated when surrounding circumstances change, including the introduction of new service providers. For example, CPAs who refer clients to a financial planner or investment adviser might see themselves as “just the CPA” and the planner/adviser as the professional managing the client’s investments. However, a jury may see the CPA as the trusted financial adviser who was responsible for overseeing the client’s entire financial picture, including the activity of the other professionals. A new engagement letter would clarify for www.wscpa.org

Remember, the client you negotiate with today may not be tomorrow’s client. Relationships and dispositions change when disputes arise, and significant events may change ownership or control of the client, including the appointment of a bankruptcy trustee or the death of a family business proprietor. the client and the planner/adviser what the CPA would and would not do (i.e., the limitations of the CPA’s responsibilities) and who would be responsible for which tasks and duties. Where a CPA has carefully defined an engagement with one or more engagement letters, the client will have much more difficulty trying to hold the CPA responsible for matters not encompassed by those letters.

Avoiding Collection Problems

Communicate your billing and collection policies in your engagement letter— the best way to avoid having a collection problem. A stop-work/disengagement clause in the letter may enable a CPA to stop work in the event the client fails to pay in a timely manner. The enforcement of this clause will help prevent your firm from completing too much work without receiving payment from the client. Bill on a timely basis, and do not allow fees to build up to the point where you can no longer walk away from them. If unpaid fees become too large, they may compromise a CPA’s independence and increase the likelihood of malpractice claims.

If the firm decides to disengage from the client, make it official by delivering a disengagement letter. State in the letter that the relationship is terminated as of a specific effective date, list pending due dates (including obvious ones), describe the status of work in progress and the disposition of client records, and state the outstanding fees plus payment terms.

Alternative Dispute Resolution

Include a mediation clause for all disputes and a binding arbitration clause for fee disputes only in your engagement letter. Simple fee disputes are better resolved through mediation and arbitration than through litigation. Mediation is a good first step for almost all disputes, the exception being when the cost of a mediator exceeds the amount of fees in dispute. Binding arbitration—for fee disputes only—is an effective second step, again depending on the amount of fees in dispute. While binding arbitration is effective for simple fee disputes, most other engagement disputes tend to produce complex, high-risk, high-dollar claims that

are better managed through mediation and litigation than through arbitration. An effective legal defense can be restricted and impaired by arbitration, sometimes triggered by a general arbitration clause in the engagement letter. It’s also a good practice to consult with your risk adviser or attorney before suing to collect fees. This enables an expert to assist you in weighing the risks and consequences of suing for fees. Lawsuits and counter-suits almost always result in the CPA spending far more in attorney fees and in lost billable time than is warranted for the fees owed to the CPA. Again, the best way to avoid such problems is to clearly communicate policies, roles, responsibilities, services, and the limitations of the engagement in your engagement letter. Ron Parisi is executive vice president, risk management, for CAMICO (www.camico. com), responsible for executive oversight of the company’s underwriting and claims functions.

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800 - 5th Avenue, Suite 4000 • Seattle, WA 98104 • Telephone: (206) 224-3461 • Fax (206) 224-3459

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WashingtonCPA January/February 2011

Financial Literacy

My Journey to Africa: Empowering Entrepreneurs in Malawi Financial Literacy Lessons Provide Foundation for Africa Start-Up Coursework By John Hirsh As part of its outreach efforts, the Financial Literacy Program works with WSCPA student members in colleges and clubs every year to create or support financial education projects. Many groups work it into their community service efforts. The projects take on a variety of forms and can encourage students to bring financial education to other aspects of their lives. In the following article, a student member explains how he shared his knowledge in a community other than his own. During the spring of 2010 I worked with the WSCPA to present financial literacy lessons to Seattle area high school students. Little did I know that these one hour visits were prepping me for an international experience. The WSCPA materials I used in my financial literacy classes actually provided a foundation for coursework that we would present in Malawi, Africa. It was during a springtime fundraiser for the Seattle University basketball team that Sarah Bee, Senior Lecturer in the Department of Accounting, introduced to me the idea of going to Africa on a business development project with her and recent SU grad Christina Davis. Because she nonchalantly presented the idea to me in passing, I almost didn’t want to take her seriously. I gave her idea some deep consideration and after about 45 seconds of deliberation I sent Sarah a text message that simply said “I’m in, what’s next?” It’s amazing how in the blink of an eye, even the most seemingly insignificant conversation, can change your life forever. The Jesuit tradition upon which Seattle University is founded promotes empowering leaders for a just and humane world. Unfortunately, achieving global

reciprocity in regard to these core values proves quite a challenge, especially during tough economic times. As a Seattle University student and later as co-founder of the Africa Start-Up project, I learned that altruism and generosity have no economic bounds. My journey to Malawi, Africa is a testament to how Seattle University has dedicated and purposefully aligned themselves with their core values. The power of benevolence is unbelievable as long as it’s done right and in a way that empowers others to follow the same path. Africa Start-Up is a project that does both.

knowledge gap and provides an understanding of basic and fundamental business practices, such as budgeting, planning, and record keeping, to help business owners succeed. Upon our arrival in Lilongwe we immediately teamed with the Malawi College of Accountancy and began an intense training schedule. We established a relationship with six of their best and brightest students, and trained them on the curriculum we had been working on all summer, using financial literacy concepts as our guide. Daily challenges would force

“It’s amazing how in the blink of an eye, even the most seemingly insignificant conversation, can change your life forever.” John Hirsh with Sarah Bee (l.) and Christina Davis in Malawi.

Our program, Africa Start-Up, is a global student initiative aimed at alleviating poverty by providing sustainable business training in areas of the world with high unemployment and low educational levels.The pilot of our initiative was implemented in Lilongwe, the capital city of Malawi, a landlocked country of 15 million in Sub-Saharan Africa roughly the size of Pennsylvania. In Malawi most individuals leave school after 8th grade and the country suffers an unemployment rate of more than 85%. Running a successful small business is often the only way people can provide for their families. Unfortunately, many people lack basic business knowledge. Africa Start-Up fills this

WashingtonCPA January/February 2011

the Malawian students, as well as Sarah and me, to adapt our communication skills, patience, and creativity to make the project come together. We were dealing with people from a world where handouts from strangers were the norm and begging was a way of life. It took a good deal of negotiation and steadfast grounding in our project goals and values to convince these students that they were making the world a better place by donating their time by helping these business owners succeed. These were not mere comfort zones or cultural boundaries we were attempting to span. We were attempting a full-on paradigm shift in the minds of the students and people involved in www.wscpa.org

Financial Literacy

Africa Start-Up, is a global student initiative aimed at alleviating poverty by providing sustainable business training in areas of the world with high unemployment and low educational levels.

our program. I’m happy to say that we achieved it, and did so within 30 days. This global learning opportunity is meant to bridge more than cultural gaps and provide for more experiential learning than a glorified pen pal program would. Seattle U accounting students will collaborate with accounting students in Malawi to solve small business problems and respond to case studies taken from real life examples provided by entrepreneurs attending our training sessions. One such example includes a complex record keeping implementation for a horticulturist who attended our first training. These smaller service learning projects have a threefold impact. First, they foster ongoing relationships between Malawi and Seattle U by connecting students across the globe via the web. Second, SU students are provided with the opportunity to affect small businesses across the globe using the knowledge they have gained in school. Third, we promote a sense of volunteerism and civic duty in a world where benevolence and altruism are undervalued. Africa Start-Up is gaining awareness and interest within various groups and

Seattle U accounting students will collaborate with accounting students in Malawi to solve small business problems...

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The first Africa Start-Up graduating class of business owners in Lilongwe, Malawi.

organizations on campus.We are planning a return trip to Malawi for June, 2011. If we are able to raise funds, two students will go back to Lilongwe to track our progress. Based on the program’s success in Lilongwe, future “branches” should be easily portable and duplicable anywhere in the world. Our sustainability plan outlines a recipe for implementation and training, and details our annual operational procedures and costs, which do not exceed $15,000. We have also considered the option of utilizing the Jesuit network of universities to provide hundreds, if not thousands, of additional students the opportunity to get involved in a global learning initiative as outlined in our Africa Start-Up model. So long as this program maintains its posture as a volunteer based program and focuses on providing financial literacy training, rather than providing monetary handouts, it will sustain and eventually thrive. When we returned to Seattle, it was difficult to talk with people about what we saw and experienced in Malawi. For the most part, the experience was a positive one. I learned more about myself than I had anticipated. Recently, I

stopped by Sarah’s office to say hi, and get her reaction to our experience. This is the essence of what she explained and exactly the type of impact we hope that both Africa Start-Up and Seattle University have on students everywhere: In my 12 years at Seattle University, I have been inspired by the Jesuit tradition of social justice. I am motivated to give back to my local, national and global community. I know accounting is universally needed. Just as high school students benefit from financial literacy classes, so the business owners in Malawi Africa benefit from a rudimentary understanding of basic accounting. I am committed to impressing upon my students the concept of social justice and how they may utilize their accounting skills to help reduce poverty on a global level. – Sarah Bee To learn more about Africa StartUp, visit https://sites.google.com/site/ africastartupmalawi. John Hirsh is a graduate student in accounting and Program Manager of Africa Start-Up club at Seattle University. WashingtonCPA January/February 2011

member discounts

WashingtonCPA January/February 2011

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member discounts

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Reserve your copy of the industry’s leading tax guide and save 25% off the list price of $86.60. You pay only $64.95 plus tax and shipping. You will not be billed until after the book ships. (Cancel before shipment without charge.) The 2011 edition will contain timely and precise explanations of federal taxes for individuals, corporations, partnerships, estates and trusts. Plus, save up to 40% on other CCH resources, including e-books, software and research platforms. To order and learn about other CCH resources, visit http://cchgroup.com/members/wscpa and click on the “Member Order Direct Program” tab. To receive your discount, use priority code Y5596 and hit “Apply.”

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WashingtonCPA January/February 2011

Events

Golf Tournament “I’d rather be

golfing!”

WSCPA Golf Tournament May 16, 2011 1 pm

Registration now open In addition to CPAs and their clients, bankers and lawyers, friends and family are welcome to attend. Along with golf, this event includes cart, lunch, dinner, drinks, reception and prizes! Don’t miss this opportunity to golf at Bear Creek, an exclusive club. Registration (425) 644-4800 | (800) 272-8273 (toll-free in WA). $110/person, $210/pair, or $420/team of four Questions? Want to sponsor? E-mail memberservices@wscpa.org.

Circling Raven Golf Club Coeur d’Alene, ID

Bear Creek Country Club Woodinville, WA

Bear Creek Country Club | D2 Productions

If golfing is your game, mark your calendar and plan to attend these 2011 golf tournaments.

www.bearcreekcc.com

WashingtonCPA January/February 2011 www.bearcreekcc.com

WSCPA Spokane Chapter/ RMA Golf Tournament May 26, 2011 Registration opens March 1 Watch your Short Form for registration and event details or visit www.wscpa.org.

www.cdacasino.com/golf www.wscpa.org

Events

20 Networking 11 Events New Professionals

Puget Sound Events May 18 June 16 July 21 August 10 September 15 October 27 November 16

Kickoff Event, Daniel’s Broiler, Bellevue Wine Tasting, Wine World, Seattle Horse Races, Emerald Downs, Auburn Argosy Cruise, Seattle Trivia Night, Rock Bottom Brewery, Bellevue Scavenger Hunt, Hard Rock Cafe, Seattle Bowling, Garage, Seattle

SPOKANE Events April 28 October 20

Mark your calendar and plan to attend! Learn more & REgister: www.wscpa.org/CPE/catalog (enter “NP” in search box)

Trivia Night, Steam Plant Grill, Spokane Casino Night, Hampton Inn, Spokane

happy hours Become a sponsor Contact Amy O’Donnell for details. aodonnell@wscpa.org (425) 586-1140

All Members Welcome! Casual networking. Free light appetizers. Registration not required. Puget Sound 2nd Tuesdays, various locations, 5-7:30 p.m. Find locations at www.wscpa.org/CPE/catalog. (enter HH in search box) Spokane 2nd Tuesdays, CI Shennanigan’s, 5:30-7:30 p.m.

Follow WSCPA www.wscpa.org

www.wscpa.org

WashingtonCPA January/February 2011

member discounts

Photo Album

Casino Night Networking Event November 17, Woodinville

Billiards Tournament Networking Event October 21, Spokane

Happy Hour

November 8, Spokane

Whirly Ball Networking Event October 28 Edmonds

9 - Several student members enjoy hors dâ&#x20AC;&#x2122;oeuvres, a popular feature of every WSCPA networking event. 10 - Elisha Kumar, Bryce Tjossem, and Joel Cambern share a laugh during a networking game. 11 - Janna Waldher and Matthew Reynolds discuss the Seattle Storm game in progress during the reception.

WashingtonCPA January/February 2011

www.wscpa.org

CPE Digest

Conferences................................. page 30 Education and Events................. page 31 Registration.................................. page 37

Final destination? Set a new year's goal? WSCPA CPE can get you to your destination!

3 3 Start my own practice q 3 Gain skill set to q

Find CPE fast! Look for this icon at www.wscpa.org.

Click it to go directly to the CPE/Event Catalog.

q Move up to manager

transition to CFO

You

You pick! pick! You pick! Cluster CPE March 23-24 WSCPA, Bellevue

Winter webcasts d

8 classes, each worth 4 CPE credits You pick four courses from a lineup of 8 four-hour CPE programs. To see a list of classes, search for CL4 at www.wscpa.org/CPE/catalog

Take CPE from the comfort of your office. See page 34. www.wscpa.org

WashingtonCPA January/February 2011

CPE DIgest

2011 Spring Conference Schedule

Thank you! The Washington Society of CPAs Thanks 2010 Customized Training Clients:

Mark your calendar now and plan to attend these essential CPE events! Date

Conference

April 18-19

Governmental Accounting and Auditing Conference

May 4

International Conference Washington State Tax Conference Business and Industry Conference Women’s Conference - new! Emerging Leaders Conference - new!

May 18 May 23 June 2 June 3

www.wscpa.org/conferences

Firms save time and money

with WSCPA customized training programs The same high quality materials and speakers featured in many of your favorite conferences and seminars are available for CPE events for your firm. Choose from: • • •

A full line of ready-made in-house training programs created by nationally recognized Professional Development providers. WSCPA Programs - classes customized by WSCPA instructors based on your ideas or needs. An impressive array of local instructors with statespecific courses.

Bader Martin PS Berntson Porter & Co PLLC The Boeing Company Clark Nuber PS Clark Raymond & Company Clothier & Head PS Dwyer Pemberton & Coulson PC Group Health Cooperative Hagen Kurth Perman & Co PS Hellam Varon & Co Inc PS Hurley Williams Schuessler Cook & Bryan PS CPAs Jacobson Jarvis & Co PLLC Johnson & Shute PS Johnson Stone & Pagano PS Larson Gross PLLC Larson Allen LLP Peterson Sullivan LLP PricewaterhouseCoopers LLP Russell Investments Sweeney Conrad PS Varner Sytsma & Herndon Inc PS

To learn more about Customized Training, please contact:

Miki McLean Customized Solutions Account Manager (425) 586-1136 (800) 272-8273, Ext. 1136 ct@wscpa.org Or visit www.wscpa.org (Education Section).

WashingtonCPA January/February 2011

www.wscpa.org

Education and events Fees

Date

CPE Credits

Course

events by location # WSCPA education and events scheduled for January-May 2011 are listed below, chronologically by location. If you are looking for a program in another location, it may be scheduled for later in the year. Using the online CPE/Event Catalog at www.wscpa.org/CPE/ catalog, you can search by location. Type

Locations in this CPE Digest issue Bellevue

p. 28

Seattle

p. 32

Bellingham

p. 30

Spokane

p. 32

Everett

p. 31

Tacoma

p. 33

Kennewick

p. 31

Vancouver

p. 33

Lynnwood

p. 31

Wenatchee

p. 33

Olympia

p. 31

Yakima

p. 34

Online Webcasts and Webinars

p. 34

LEARN MORE To view complete course details, please visit the CPE/ Event Catalog at www.wscpa.org/CPE/catalog.

Code

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

PFP

SUBJECTS The main subject area is listed for each program.

Ethics GNP MG PD

Need help finding a seminar or webcast? Call (800) 272-8273 or (425) 644-4800.

SK TAX TEC

Estate/Financial Planning Ethics Government / NFP Management Personal Development Specialized Knowledge Taxation Technology

Fees Date

CPE Credits

Subject

details, JanuaryFor - more May 2011 EVENT SCHEDULE search by code at www.wscpa.org/cpe To view the complete schedule of events through May 2011, refer to the CPE/Event Catalog at www.wscpa.org/cpe/ catalog or the 2010-2011 Washington Professional Education Catalog. To request a copy of the catalog, call A&A Accounting and Auditing (800) 272-8273 (toll-free CS Consulting Services in WA) or e-mail cpe@wscpa.org. EB Employee Benefits

Course

NonWSCPA AICPA Code Member Member Member For more details, Fee Fee Discount search by code at www.wscpa.org/cpe

Facility

2010 Health Care Reform Act: Critical Tax and Insurance Ramifications for You, Your Business and Your Clients, 8-11:30 am

CL4HCRA2

WSCPA

Type

Subject

Bellevue ç Jan 5

140

170

Jan 10

Creating Web Pages with HTML, 8 am-4 pm

COMHT1

230

305

WSCPA

TEC

Jan 11

PC Trouble Shooting & Maintenance, 8 am-4 pm

COMPC1

230

305

WSCPA

TEC TAX

Jan 12-13

Tax Staff Training - Level 3 - Advanced Issues, 8 am-4 pm

TSTA

425

540

WSCPA

Jan 12

Using Outlook as a Personal Information Manager, 8 am-4 pm

COMOU2

230

305

WSCPA

TEC

Jan 14

Family Limited Partnerships, 8 am-4 pm

FLP

265

340

WSCPA

TAX

Jan 17

Charting with Excel, 8 am-4 pm

COMEX10

230

305

WSCPA

TEC TAX

Jan 18

Andy Biebl’s Tax Advisor’s Update, 8 am-4 pm

BTAU2

325

400

Meydenbauer Center

Jan 18

Wireless Networking for the Small Office/Home, 8 am-4 pm

COMWN

230

305

WSCPA

TEC

Jan 19

Crystal Reports Introduction, 8 am-4 pm

COMCR3

230

305

WSCPA

TEC

CHBA06

Maggiano’s, Lincoln Sq

AUUR2

295

370

WSCPA

Jan 20 Jan 25

1.5 S Economic Update by the Editor Emeritus of the Marple’s Letter, 7:15-9 am l 8

Auditing Standards Update and Review by Walter Haig, 8 am-4 pm

SK A&A

Jan 25

The Complete Guide to the Preparation of Form 1041, 8 am-4 pm

CG1041

265

340

WSCPA

PFP

Jan 26

GAAP Update and Review for Small and Medium-Sized Entities (SMEs) by Walter Haig, 8 am-4 pm

GURSME7

295

370

WSCPA

A&A

Jan 27

Introduction to Access, 8 am-4 pm

COMAC1

230

305

WSCPA

TEC

Jan 27

Compilation and Review Standards Update and Review by Walter Haig, 8 am-4 pm

CRUR8

295

370

WSCPA

A&A

Jan 28

Introduction to QuickBooks for the Accounting Professional, 8 am-4 pm

COMQB3

230

305

WSCPA

TEC

Feb 1

Crystal Reports Intermediate, 8 am-4 pm

COMCR4

230

305

WSCPA

TEC

Feb 2

Introduction to SQL, 8 am-4 pm

COMSQ2

230

305

WSCPA

TEC

Feb 3

Access Intermediate, 8 am-4 pm

COMAC2

230

305

WSCPA

TEC

Feb 8

CPE in Ethics: A Requirement in Washington State, 8-11:30 am

CENRW417

175

210

WSCPA

Ethics

Feb 9

Excel Intermediate, 8 am-4 pm

COMEX11

230

305

WSCPA

TEC

Feb 10

Word Tips Tricks & Techniques, 8 am-4 pm

COMWO3

230

305

WSCPA

TEC

Feb 11

Excel Functions Tips Tricks Techniques, 8 am-4 pm

COMEX12

230

305

WSCPA

TEC

www.wscpa.org

Networking Event | S Season Ticket and Coupons N/A

WashingtonCPA January/February 2011

Education and events

Fees Date

CPE Credits

# Feb 17 Feb 17

Course

For more details, search by code at www.wscpa.org/cpe

Type

8 1.5 S l

Code

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

Subject

Advanced Controller and CFO Skills, 8 am-4 pm

ACCS3

265

340

-30

WSCPA

NEW TITLE - Fraud: A Growth Industry in a Recession; Approaching $3 Trillion Worldwide, 7:15-9 am

CHBA07

Maggiano’s, Lincoln Sq

Feb 22

Introduction to Microsoft PowerPoint, 8 am-4 pm

COMPP4

230

305

WSCPA

TEC

Feb 23

Charting with Excel, 8 am-4 pm

COMEX13

230

305

WSCPA

TEC

Mar 1

Cash Flow Planning & Management Using Excel, 8 am-4 pm

COMEX14

230

305

WSCPA

TEC

Mar 2

Working Trial Balance with Excel, 8-11:30 am

COMEX41

130

165

WSCPA

TEC

Mar 2

Ratio Analysis with Excel, 12:30-4 pm

COMEX42

130

165

WSCPA

TEC

Mar 3

PC Trouble Shooting & Maintenance, 8 am-4 pm

COMPC2

230

305

WSCPA

TEC

Mar 7

Integrating Microsoft Office Applications, 8 am-4 pm

COMMO

230

305

WSCPA

TEC

Mar 8

Access Working Trial Balance, 8 am-4 pm

COMAC3

230

305

WSCPA

TEC

Mar 9

Excel for Windows Advanced, 8 am-4 pm

COMEX17

230

305

WSCPA

TEC

Mar 16

Excel - Based Dashboards, 8 am-4 pm

EBD2

265

340

WSCPA

TEC

Mar 17

Internal Controls for Small Business Accounting Systems, 8 am-4 pm

ITCB2

265

340

WSCPA

A&A TEC

Mar 17

SAP Business Intelligence Reporting, 8 am-4 pm

SAP

265

340

WSCPA

Mar 22

Controllership: Leading Edge of Corporate Performance, 8 am-4 pm

CLECP2

265

340

-30

WSCPA

Mar 23

Analyzing Costs, Productivity and Efficiency: Three Ways to Boost Your Bottom Line, 12:30-4 pm

CL4PYPL

140

170

WSCPA

Mar 23

Beyond Financial Accounting: Budgeting and Costing Techniques for Maximum Profitability, 8-11:30 am

CL4BLMA

140

170

WSCPA

Mar 23

Revenue Recognition: Getting it Right, 12:30-4 pm

CL4RTBC

140

170

WSCPA

A&A

Mar 23

New FASB Developments for Business & Industry, 8-11:30 am

CL4FASBI

140

170

WSCPA

A&A

Mar 24

CPA’s Guide to Improving Communication, Listening and Writing Skills, 12:30-4 pm

CL4TLWP

140

170

WSCPA

Mar 24

Decision-Making Tips, Tools and Techniques for Today’s Financial Environment, 8-11:30 am

CL4TTMD

140

170

WSCPA

Mar 24

Cash Flow Statements: Preparation and Presentation Options, 12:30-4 pm

CL4FCFS

140

170

WSCPA

A&A

Mar 24

Introduction to IFRS: Grasping the Big Picture, 8-11:30 am

CL4IUSA

140

170

WSCPA

A&A

Mar 28

Excel Pivot Tables, 8 am-4 pm

COMEX18

230

305

WSCPA

TEC

Mar 29

Creating Web Pages with HTML, 8 am-4 pm

COMHT2

230

305

WSCPA

TEC

Apr 4

Importing Data into QuickBooks, 8 am-4 pm

COMQB4

230

305

WSCPA

TEC

Apr 5

Introduction to OLAP (On Line Analytical Processing) Cubes, 8 am-4 pm

COMOL

230

305

WSCPA

TEC

Apr 6

Excel Intermediate, 8 am-4 pm

COMEX19

230

305

WSCPA

TEC

Apr 11

Introduction to Visio, 8 am-4 pm

COMVI2

230

305

WSCPA

TEC

Apr 12

XML: Introduction, 8 am-4 pm

COMXM

230

305

WSCPA

TEC

Apr 13

Excel Visual Basic Macros, 8 am-4 pm

COMEX20

230

305

WSCPA

TEC

Apr 18

Introduction to Access, 8 am-4 pm

COMAC4

230

305

WSCPA

TEC

Introduction to QuickBooks for the Accounting Professional, 8 am-4 pm

COMQB5

230

305

WSCPA

TEC

Happy Hour Networking Event, 5-7:30 pm

HH08

McCormick & Schmick’s Seafood

The Coming IFRS Conversion: Preparing for the Ultimate GAAP Makeover, 8 am-4 pm

IFRSC2

265

340

WSCPA

Social Marketing, 7:15-9 am

CHBA09

Maggiano’s, Lincoln Sq

Build Success as a Professional Manager: Skills for Corporate Financial Executives, 8 am-4 pm

BSPM

265

340

WSCPA

Apr 19

Apr 21

1.5 S

PD A&A

Apr 22

Apr 25

Introduction to XBRL, 8 am-4 pm

COMXB

230

305

WSCPA

TEC

Apr 26

More QuickBooks for the Accounting Professional, 8 am-4 pm

COMQB6

230

305

WSCPA

TEC

May 2

Introduction to Microsoft PowerPoint, 8 am-4 pm

COMPP5

230

305

WSCPA

TEC

May 3

Charting with Excel, 8 am-4 pm

COMEX21

230

305

WSCPA

TEC

May 4

PC Trouble Shooting & Maintenance, 8 am-4 pm

COMPC3

230

305

WSCPA

TEC

May 9

Introduction to Visio, 8 am-4 pm

COMVI3

230

305

WSCPA

TEC

May 10

Using Outlook as a Personal Information Manager, 8 am-4 pm

COMOU3

230

305

WSCPA

TEC

WashingtonCPA January/February 2011

Networking Event | S Season Ticket and Coupons N/A

www.wscpa.org

Education and events Fees

Date

CPE Credits

Course

Code For more details, search by code at www.wscpa.org/cpe

Type

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

Subject

May 11

Word Tips Tricks & Techniques, 8 am-4 pm

COMWO4

230

305

WSCPA

TEC

May 16

Introduction to SQL, 8 am-4 pm

COMSQ3

230

305

WSCPA

TEC

Crystal Reports Introduction, 8 am-4 pm

COMCR5

230

305

WSCPA

TEC

New Washington Tax Developments, 7:15-9 am

CHBA10

Maggiano’s, Lincoln Sq

TAX

May 17 May 19

1.5 S l

May 23

Excel Pivot Tables, 8 am-4 pm

COMEX22

230

305

WSCPA

TEC

May 24

Crystal Reports Intermediate, 8 am-4 pm

COMCR6

230

305

WSCPA

TEC

May 24

Compilation and Review Standards Update and Review by Walter Haig, 8 am-4 pm

CRUR9

295

370

WSCPA

A&A

May 25

GAAP Update and Review for Small and Medium-Sized Entities (SMEs) by Walter Haig, 8 am-4 pm

GURSME8

295

370

WSCPA

A&A

May 25

AICPA Business Solutions Workshop: Delivering on Your Trusted Business Advisor Status, 8:30 am-5 pm

TAW

299

399

WSCPA

May 26

Auditing Standards Update and Review by Walter Haig, 8 am-4 pm

AUUR3

295

370

WSCPA

A&A

Jan 12

Federal Tax Update - Individuals (Form 1040), 8 am-4 pm

FTUI3

265

340

Lakeway Inn & Conf Ctr

TAX

Jan 13

Federal Tax Update - C & S Corporations, Partnerships & LLCs (Forms 1120, 1120S & 1065), 8 am-4 pm

FTUB3

265

340

Lakeway Inn & Conf Ctr

TAX

Insurance Accounting and Control, 7:30-9:30 am

CHPS04

Marie Callenders

Federal Tax Update, 7:30-9:30 am

CHPS05

Marie Callenders

TAX

Federal Income Tax Update, 7-9 am

CHSV08

Marriott Courtyard Totem Lake

TAX

Happy Hour Networking Event, 5-7:30 pm

HH06

The Wilde Rover Irish Pub and Restaurant

Social Security: Mastering the Client Mysteries, 7-9 am

CHSV02

Marriott Courtyard Totem Lake

PFP

International Tax - Taxation of US Persons with Foreign Activities, 7-9 am

CHSV03

Marriott Courtyard Totem Lake

TAX

Fraud Risk - The CPA’s Responsibility in Educating Clients, 7-9 am

CHSV04

Marriott Courtyard Totem Lake

Rock Star Social Media, 7-9 am

CHSV09

Marriott Courtyard Totem Lake

Defense Against the Dark Arts - Managing Department of Revenue Audits, 7-9 am

CHSV01

Marriott Courtyard Totem Lake

TAX

DATE CHANGE: Economic Outlook for Washington State, 12-1pm

CHOM03

Indian Summer Golf

TEC

Accounting and Auditing Update, 8 am-4 pm

AAAU3

265

340

Indian Summer Golf

A&A

Happy Hour Networking Event, 5-7:30 pm

HH05

Daniel’s Broiler

Health Savings Accounts (HSAs), Medicare, Tax Favored Health Care Plans & Medical Expenses, 8 am-4 pm

TFHCP

265

340

Washington State Conv Ctr

Economic and Revenue Outlook, 12-1pm

CHSE02

Women’s U Club of Seattle

4th Annual Bowling Mixer for CPAs and Students - NON STUDENTS, 7-10 pm

CHSK07

Acme Bowling

4th Annual Bowling Mixer for CPAs and Students - STUDENTS ONLY, 7-10 pm

CHSK08

Acme Bowling

Bellingham

Federal Way ç Jan 19

ç Feb 16

S 6 l

Kirkland Jan 18

S l

Feb 8

Feb 15

Mar 22

S l

Apr 26

S l

May 17

Jun 21

S 6 l

S l

Olympia ç Apr 6

S l

ç Apr 25

Seattle Jan 11

Jan 14

Jan 18

ç Feb 5

S 6

PD TAX

S l

www.wscpa.org

Networking Event | S Season Ticket and Coupons N/A

WashingtonCPA January/February 2011

Education and events

Fees Date

CPE Credits

# ç Feb 15

ç Jun 1

Code For more details, search by code at www.wscpa.org/cpe

Type

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

Subject

Employment Law Updates and Best Practices/Controlling Healthcare Costs Through Wellness Programs in the Workplace, 7:30-9:30 am

CHSE06

Women’s U Club of Seattle

Happy Hour Networking Event, 5-7:30 pm

HH07

The Blarney Stone Pub

WSCPA Annual Meeting with Professional Issues Update, 7:30-9:30 am

Washington State Conv Ctr

Economic Update, 12-1:15 pm

CHSP11

The Spokane Club

Andy Biebl’s Tax Advisor’s Update, 8 am-4 pm

BTAU1

325

400

Mirabeau Park Hotel

Health Care Reform: A CPA’s Perspective, 12-2 pm

CHSP14

The Spokane Club

Ethics in the Real World (Not WA State Ethics Compliant), 7:30-9:30 am

CHSP16

Gonzaga University

The Best Estate and Financial Planning Topics of 2011, 8 am-4 pm

BEST

265

340

Hampton Inn Spokane

TAX

Mar 8

Course

Spokane Jan 12

Jan 17

Feb 9

TAX

ç May 19

S l

May 25

Tacoma Jan 6

Preparing Corporate Tax Returns for New Staff and Para-Professionals, 8 am-4 pm

PCTR

275

350

Pacific Grill Events Center

TAX

Jan 7

Preparing Individual Tax Returns for New Staff and Para-Professionals, 8 am-4 pm

PITR

275

350

Pacific Grill Events Center

TAX

Yakima Public Schools, 7:30-9:30 am

CHYK07

Howard Johnson Plaza

State Legislative Update, 7:30-9:30 am

CHYK08

Howard Johnson Plaza

WEBINAR: Tax Practice Regulation and Quality Control: New Rules and Regulations, 9 am-10 am

WAWNR21

Webinar

TEC A&A

Yakima Feb 15

S l

Mar 22

S l

Webcasts and Webinars Jan 5

Jan 5

WEBCAST: Fraud: Essential Audit Tools and Techniques, 8:30 am-4:30 pm

WEB75

255

295

Webcast

Jan 6

WEBCAST: Financial Statement Analysis From an Operational Perspective, 7-9 am

WEB157

109

Webcast

Jan 6

WEBCAST: CPE in Ethics: A Requirement in Washington State, 8-11:30 am

WEB184

149

179

Webcast

Ethics

Jan 6

WEBCAST: Auditing: Practical Application of Current Standards, 8:30 am-4:30 pm

WEB76

255

295

Webcast

A&A

Jan 7

WEBCAST: Cash and Tax Basis Financial Statements-Preparation and Reporting, 8:30 am-4:30 pm

WEB77

305

355

-30

Webcast

A&A

Jan 12

WEBCAST: Tax Planning and Compliance for Multi-National Families, 8:30 am-4:30 pm

WEB79

255

295

Webcast

TAX

Jan 13

WEBINAR: Adobe Acrobat for Accountants III - Tips & Techniques for the Experienced User, 8-10 am

WNR163

Webinar

Jan 14

WEBCAST: Compilation & Review Update, 7 am-3 pm

WEB109

195

225

Webcast

A&A TAX

Jan 17

WEBCAST: Fundamentals of 1031 Exchanges, 8:30 am-4:30 pm

WEB80

255

295

Webcast

Jan 19

WEBCAST: Myths of Budgeting and How to Overcome Them, 11 am-3 pm

WEB158

129

159

Webcast

Jan 19

WEBCAST: Banking Financial and Compliance Update Series - Fourth Quarter 2010, 8 am-12 pm

WEB159

129

159

Webcast

Jan 19

WEBINAR: Self Directed IRA - Retirement Dream or Tax Nightmare?, 9 am-10 am

WAWNR23

Webinar

PFP

Jan 20

WEBCAST: 2010 Accounting & Auditing Update, 7 am-3 pm

WEB110

195

225

Webcast

A&A

Jan 20

WEBCAST: The CPA’s Crucial Role in the Estate Planning Process, 8:30 am-4:30 pm

WEB81

255

295

Webcast

TAX

Jan 21

WEBCAST: Accounts Receiveable Management, 8-11 am

WEB213

129

Webcast

Jan 21

S 6

WEBCAST: Getting Stuff Done When You Don’t Own the Company, 12-3 pm

WEB220

129

Webcast

Jan 21

WEBCAST: Form 1041 Workshop, 8:30 am-4:30 pm

WEB82

255

295

Webcast

TAX

Jan 24-25

DATE CHANGE: WEBCAST: Advanced Estate Planning Institute, 8:30 am-4:30 pm

WEB78

555

645

Webcast

TAX

Jan 25-26

WEBCAST: Top Individual Tax Planning Issues for Your Client’s Financial Well-Being, 8:30 am-4:30 pm

WEB83

395

475

Webcast

TAX

Jan 27

S 6

WEBCAST: Five Clients in Five Days, 8-10 am

WEB225

109

Webcast

WashingtonCPA January/February 2011

Networking Event | S Season Ticket and Coupons N/A

www.wscpa.org

Education and events Fees

Date

CPE Credits

Type

Jan 27

S 6

Jan 27

Jan 28

Feb 8

Feb 9

Course

Code For more details, search by code at www.wscpa.org/cpe

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

Subject

WEBCAST: Make Meetings Matter, 10 am-12 pm

WEB230

109

Webcast

WEBCAST: Pricing on Purpose: How Better Pricing Leads to Better Profits, 8:30 am-4:30 pm

WEB84

255

295

Webcast

WEBCAST: Health Care Conference, 8:30 am-4:30 pm

WEB85

255

295

Webcast

WEBCAST: Budgeting Wars Prevention! How to Ensure Accountability In Your Budget Process, 11 am-1 pm

WEB160

109

Webcast

WEBCAST: Basic Concepts of Governmental Accounting, Financial Reporting and Auditing, 8:30 am-4:30 pm

WEB86

255

295

Webcast

GNP

WEBINAR: Introduction to SAP Business Intelligence Reporting/Business Warehouse, 9 am-10 am

WAWNR11

Webinar

TEC

S 6

WEBCAST: High Road Leadership Strategies for Eliminating Silos, Bureaucracy, or Turf Wars from Your Culture, 11 am-1 pm

WEB162

109

Webcast

Feb 9

WEBCAST: High Road Corporate Governance from the Inside - Out: The CFO Controller’s Tool Kit, 8-11 am

WEB163

129

Webcast

Feb 9

S 6

WEBCAST: High Road Approach to Difficult Conversations: How to Face and Grow from Them, 2-4 pm

WEB164

109

Webcast

Feb 11

WEBCAST: Enterprise Risk Management for Small and Medium-sized Enterprises (SMEs): Big Time Benefits for Non-Public Companies with Limited Resources!, 8:30 am-4:30 pm

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Feb 15

S 6

WEBCAST: Five Clients in Five Days, 8-10 am

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Feb 15

S 6

WEBCAST: Make Meetings Matter, 10 am-12 pm

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Feb 18

WEBCAST: Convergence 2011-Reformatted Financial Statements: Times are a Changing!, 8:30 am-4:30 pm

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A&A

Feb 23

WEBCAST: Communicating with Your Board, 7-10 am

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Feb 24

WEBCAST: Accounts Receiveable Management, 8-11 am

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Feb 24

S 6

WEBCAST: Getting Stuff Done When You Don’t Own the Company, 12-3 pm

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Feb 28

WEBCAST: Myths of Budgeting and How to Overcome Them, 8 am-12 pm

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Mar 3

WEBCAST: Enterprise Risk Management for SMEs - Small to Medium Enterprises: Risk Plays No Favorites, 7-11 am

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Mar 7

WEBCAST: Best Practices for Industry - Understanding Your Liability And How to Secure and Protect Corporate Information, 7 am-3 pm

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Mar 8

Mar 17

WEBCAST: The Accountant’s Responsibility for Fraud, 8:30 am-4:30 pm

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A&A

WEBCAST: Change Management: Making Improvement Happen, 9 am-11 am

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Mar 17

WEBCAST: Cash and Credit Management, 8:30 am-4:30 pm

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Mar 28

S 6

WEBCAST: Five Clients in Five Days, 8-10 am

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Mar 28

S 6

WEBCAST: Make Meetings Matter, 10 am-12 pm

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Mar 29

WEBCAST: Governance - Enhancing Risk Management: Setting The Right Balance Innovation and Controls, 11 am-1 pm

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Mar 29

WEBCAST: Accounts Receiveable Management, 8-11 am

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Mar 29

S 6

WEBCAST: Getting Stuff Done When You Don’t Own the Company, 12-3 pm

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Mar 30

WEBCAST: Budgeting Wars Prevention! How to Ensure Accountability In Your Budget Process, 11 am-1 pm

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Mar 30

WEBCAST: High Road Corporate Governance from the Inside - Out: The CFO Controller’s Tool Kit, 11 am-2 pm

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Mar 30

S 6

WEBCAST: High Road Leadership Strategies for Eliminating Silos, Bureaucracy, or Turf Wars from Your Culture, 2-4 pm

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Mar 30

S 6

WEBCAST: High Road Approach to Difficult Conversations: How to Face and Grow from Them, 8-10 am

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S 6

Apr 7

WEBCAST: Myths of Budgeting and How to Overcome Them, 11 am-3 pm

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Apr 20

WEBCAST: CPE in Ethics: A Requirement in Washington State, 8-11:30 am

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Ethics

Apr 26

WEBCAST: Accounts Receiveable Management, 8-11 am

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WashingtonCPA January/February 2011

Education and events

Fees Date

CPE Credits

Course

Code For more details, search by code at www.wscpa.org/cpe

NonWSCPA AICPA Member Member Member Fee Fee Discount

Facility

Subject

Type

Apr 26

S 6

WEBCAST: Getting Stuff Done When You Don’t Own the Company, 12-3 pm

WEB223

129

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Apr 29

S 6

WEBCAST: Five Clients in Five Days, 8-10 am

WEB228

109

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Apr 29

S 6

WEBCAST: Make Meetings Matter, 10 am-12 pm

WEB233

109

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May 10

WEBCAST: Budgeting Wars Prevention! How to Ensure Accountability In Your Budget Process, 11 am-1 pm

WEB176

109

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May 10

WEBCAST: Governance - Enhancing Risk Management: Setting The Right Balance Innovation and Controls, 2-4 pm

WEB177

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May 11

WEBCAST: High Road Corporate Governance from the Inside - Out: The CFO Controller’s Tool Kit - Part 1, 1-4 pm

WEB178

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May 11

S 6

WEBCAST: High Road Leadership Strategies for Eliminating Silos, Bureaucracy, or Turf Wars from Your Culture, 8-10 am

WEB179

109

Webcast

May 11

S 6

WEBCAST: High Road Approach to Difficult Conversations: How to Face and Grow from Them, 11 am-1 pm

WEB180

109

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May 20

WEBCAST: Myths of Budgeting and How to Overcome Them, 8 am-12 pm

WEB181

129

159

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May 20

S 6

WEBCAST: Five Clients in Five Days, 8-10 am

WEB229

109

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May 20

S 6

WEBCAST: Make Meetings Matter, 10 am-12 pm

WEB234

109

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May 31

WEBCAST: Accounts Receiveable Management, 8-11 am

WEB217

129

Webcast

May 31

S 6

WEBCAST: Getting Stuff Done When You Don’t Own the Company, 12-3 pm

WEB224

129

Webcast

WEBCAST: WSCPA Annual Meeting with Professional Issues Update MEMBERS ONLY, 7:30-9:30 am

WAM

Webcast

ç Jun 1

WashingtonCPA January/February 2011

Networking Event | S Season Ticket and Coupons N/A

www.wscpa.org

Registration

Questions? E-mail cpe@wscpa.org or call (425) 644-4800 or (800) 272-8273 (toll-free in Washington).

Code

Title

Date

City

Fee1

WSCPA CPE policies apply to all programs in the CPE Digest. Review the CPE policies at www.wscpa.org. www.wscpa.org

WashingtonCPA January/February 2011

classified ads

Detailed advertising information is available online at www. wscpa.org. Classified Ads are $40 for 40 words or less and $1 for each additional word.Active E-mail and web site addresses count as two words and are $10 additional each. Positions available ads are for magazine placement only. Contact Sharon Olene-Marander at (425) 586-1138,(800) 272-8273,Ext.1138, or classifieds@wscpa.org for more information. All ads must be pre-paid. See these and any new listings in the Newsroom at www.wscpa.org.

POSITIONS AVAILABLE Established Bellingham CPA firm is seeking experienced auditor to join our team of professionals. 5+ years of audit experience required. Collaborative working environment, excellent advancement opportunities and salary and benefits package. Submit resume and cover letter to Varner Sytsma & Herndon, CPA’s, 2200 Rimland Drive, Suite 205, Bellingham, WA 98226,Attn: H/R Established Bellingham CPA firm is seeking experienced CPA to join our team of professionals. 3+ years of tax experience required. Collaborative working environment, excellent advancement opportunities and salary and benefits package. Submit resume and cover letter to Varner Sytsma & Herndon, CPA’s, 2200 Rimland Drive, Suite 205, Bellingham, WA 98226,Attn: H/R

OFFICE SPACE Redmond CPA has an office for rent, 190 square feet. Call (425) 881-9476 during morning hours. Bellevue CPA office has 2 window offices for rent in Beautiful Bellefield Office Park. 132 and 156 square feet, stunning views, free parking, easy access to I-90 and I-405, high speed internet, tax resources, many amenities. Email anncpa@ normankitto.com.

PRODUCTS & SERVICES JMH and Associates, LLC is a bookkeeping service that offers full charge bookkeeping to small businesses in the Seattle and surrounding areas. If you are busy running and growing your business and find you are spending too much time managing your books and would like to outsource your bookkeeping contact us at (206) 940-8996 or e-mail richardhuntoon@cs.com.

MERGERS & SALES Everett Firm Looking for CPA firm and/or Registered Investment Advisory Company to purchase. We are the second largest CPA firm in downtown Everett,manage $135m and are looking to purchase another firm. Our client base is as broad as the services we offer, as we cater to individuals and small business. Please contact the owner, Brian Evans at 425-252-6909 or email to brian@bauerevans.com. You can review our websites at www.bauerevans.com and www. bondstreetwealth.com. CPA looking for $150,000-$250,000 size practice to purchase in the Bellingham area. Cash purchase. Please respond to Tom by phone, (707) 545-0701 or email,TJTCPA@aol.com. 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.

WashingtonCPA January/February 2011

Practices for Sale Contact Mark Hause atAccounting Practice Sales by e-mail at MARKHAUSE@CONTACTAPS.COM or call 877-3457722 for more information on the following practices: Anacortes CPA Firm for Sale:This CPA firm is a traditional CPA firm with income tax, write-up, along with financial services to round out the practice. The firm revenue mix breaks out 76% tax, 18% write-up, and 6% financial services.The buyer will have the opportunity to retain the current office location indefinitely as the Seller owns the building. With a loyal client base and good fees, this firm offers opportunity to a firm looking to expand or a CPA wanting to be on their own. Bellevue CPA Firm for Sale: This CPA located in Bellevue wants to sell a highly profitable practice. The firm revenue mix is heavily concentrated in the area of tax preparation with over 92% of all fees coming from the rendering of tax services. The future of this firm is further enhanced by a significant number of clients having a high net worth with the need for additional services in a variety of areas. The ideal buyer will be one who has the experience of working with high net worth individuals who can take advantage of the solid fees and loyal practice base. Blaine CPA Tax Firm for Sale: This CPA firm located close to the Canadian border is primed for a new owner and has wonderful potential.The firm is the only CPA firm in town and receives referrals from all types of professionals including banks and real estate agents.The practice revenues are predominantly from tax services with that segment of the business generating approx. 86% of total revenues for the firm. The balance is split almost equally between write-up and consulting. With opportunities for cross border tax and consulting services along with traditional income tax services, this firm is a solid opportunity for any accountant who wants to own their own firm or a firm looking to expand or open a branch office. Bremerton, Port Orchard, Silverdale Area CPA Firm for Sale: This outstanding CPA firm (single location) with an excellent fee structure and solid cash flow is for sale. The firm is a tax practice with no auditing and enough write-up work to balance out cash flow over the course of the year. The firm client base composed of long term loyal clients is the product of the owner’s long term commitment to the community coupled with top of the mind name recognition when seeking professional accounting services. This firm is further enhanced with knowledgeable staff, no concentration of clients either by fees or segment of the local economy. All of the foregoing creates an opportunity for any firm or practitioner to acquire a firm that is a proven entity. Everett Franchise Tax Practice For Sale: The Seller(s) are offering the unique opportunity to own a tax preparation franchise with 3 territories and 3 locations. The locations are turn key, firmly established, with existing clients, and are located in areas that provide for excellent growth prospects. The buyer will benefit from a national brand name, national name recognition, brand awareness, and excellent support. The buyer has everything in place to own this tax preparation franchise or for a current practitioner to acquire a second business. Everett Tax Practice for Sale: The seller of this practice has several locations and wishes to sell two locations whether together or singly and focus on the remainder of the practice. The locations have established clients and have lease’s in place insuring the availability of the current location for several years. Each of the locations were previously national franchise tax preparation locations who are no longer affiliated with the organization. What remains are high visibility locations with staffing in place that would be a profitable addition to an existing firm seeking to expand or a great starter practice(s) for an individual that are located within 15 minutes of each other. North Seattle CPA Firm for Sale: This CPA firm located in North Seattle has been in the business of providing top drawer professional services for over 30 years.

SOLD

The firm is a full service practice offering all traditional accounting services including attestation. The revenue mix breaks out 73% income tax,10% write-up,14% auditing,3% reviews and compilations with excellent per return and/or engagement fees. The practice has a significant number of business returns that will require a good business minded accountant that is comfortable with rendering advice and counsel on a variety of business related matters. The firm has great staff, established methods and procedures which make this a turn key practice. All of these qualities combine to make this firm a must see for any accountant or firm looking for an acquisition. Spokane CPA Firm for Sale: The owner of this accounting practice with an emphasis on tax preparation is ready to retire. The firm revenue mix is 87% tax preparation with the balance being write-up and representation before taxing authorities. The clients of the firm are loyal due to receiving hands on personalized service from the owner. The firm is further enhanced by having a high visibility office location on a heavily traveled thorough fare. All of these qualities add up to create a firm that is an excellent prospect for acquisition whether for an individual who has aspirations of owning a practice or a firm wanting to expand their customer base. Yakima Area CPA Firm For Sale: This CPA firm is a combination of tax and write-up professional services that focuses on providing great service with prompt turnaround of client work which means many happy clients. The professional services provided by the firm are further enhanced by the technical ability of the staff that shares the owner’(s) mission statement of providing excellent client service. The firm’s revenue stream is 65% income tax services and 35% write-up services with good realization rates for the professional services rendered. This dynamic practice with consistent year over year revenue increases along with the Seller(s) desire to provide excellent transition assistance is an excellent addition to any firm or accounting professional looking for professional challenge and opportunity

Volunteer Positions The following organizations need a CPA to serve on the board of directors or provide other guidance on financial matters. Learn more at www.wscpa.org (enter volunteer positions in the search box). Arc of King County Best Little Rabbit Rodent & Ferret House Center for Transgender Health and Wellness - New CENTS Program Community Day School Association Friends of Third Place Commons - New GroundBreakers Institute of Inspection, Cleaning & Restoration Certification (IICRC) One Day’s Wages Open Arms Perinatal Services - New Pacific Harp Institute Pacific Northwest Diabetes Research Institute Pacific Sports Arena - New Port of Seattle Purrfect Pals - New Retired Football Veterans Seattle Area Rowing Association - New Seattle Tilth Theater Puget Sound TisBest Philanthropy Washington Pilots Association Washington Wilderness Coalition – New

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MEMBER profile

The Force Behind a Growing Accounting Program at Centralia College John Fasler, CPA Tell us a little bit about yourself.

I grew up in the California desert and relocated to the Pacific Northwest about ten years ago to be closer to family. My wife, Karen, and I love living in Washington State. We love the clean green environment, the fresh air. Since 2001, I have been Associate Professor of accounting at Centralia College.

What led you to study accounting and become a CPA?

I obtained bachelor’s and master’s degrees in business at the University of California, Riverside in the 1970s. I then worked in banking for a few years before deciding accounting was my true area of interest and where my skills would be best utilized. I then attended the University of Arizona where I obtained bachelor’s and master’s degrees in accounting. I began tutoring other students at the U of A and discovered that I really enjoyed teaching the subject and that I was good at relaying this type of information. I returned to California and began to teach accounting as an adjunct. At the same time I spent time preparing taxes and returned to school to obtain a law degree.

Why did you decide to become an accounting professor?

I found I truly had a gift for teaching accounting when I taught as an adjunct. I love the connection with the students and seeing them grow and develop their own expertise in the subject matter. I believe they recognize my commitment to preparing them as well as I can to help them be successful in their next step up the educational ladder or as they enter the workforce.

What is the most interesting, challenging or rewarding aspect of your job? Why?

The most rewarding aspect of my job is to see students go on to pursue careers in accounting and to pass the CPA exam. I often have students come back to my office or email me to let me know how they are doing as they move on to complete advanced degrees. One of my former students scored 98% on one section of the CPA exam. The most challenging aspect of my job is to find ways to make accounting interesting by adding humor to the subject – because this is so important to developing rapport with my students and helping them to learn the material.

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I am very proud of having grown the Accounting program at Centralia College from four advisees when I started in 2001 to over 70 now. I developed numerous new programs since I began teaching at the College.These include:Accounting ATA;Accounting AAST; Finance ATA; Finance AAST; Business Administration ATA; and Certificates of Completion in Payroll Accounting, Governmental Accounting, and Individual Income Taxes.

What are the highlights of your career, so far?

I recently received a WSCPA Volunteer of the Year award for developing a strong accounting program and for inspiring students to pursue the accounting profession. In 2009, I received the Exceptional Faculty award at Centralia College. For the past three years I have worked with the College Foundation to schedule an Accounting Student Night to bring students together with CPAs to provide networking opportunities (and free pizza!). This year over 60 students attended the event.

What are your hobbies?

I enjoy reading a wide variety of books from autobiographies, to sports, to legal thrillers. I also enjoy taking my dog, the most macho beagle in the world, for long walks.

If you had not studied accounting, what career path would you have chosen?

I probably would have entered the field of law, but am particularly pleased to have pursued accounting because I feel my real expertise and interest is with numbers and accounting. Right now I teach a variety of accounting classes and business law and love it! Know someone who is making a difference in the accounting profession in Washington? Tell the WSCPA! Nominations are being accepted for 2011 Annual Awards. Learn more on page 12 or go to www.wscpa.org (enter “Awards” in the search box). WashingtonCPA January/February 2011

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During the recent political campaign season, WSCPA members delivered nearly 50 CPAPAC checks to legislative candidates. Their discussions about key issues increased the profession’s visibility and enhanced legislators’ understanding of the critical role CPAs play in preserving the state’s business climate. The CPA profession in Washington has a strong political voice and presence in Olympia, thanks to CPAPAC and your contribution!