THE OFFICIAL MAGAZINE OF THE VIRGINIA SOCIETY OF CPAs
JANUARY/FEBRUARY 2019
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the data domain
ALSO... Yellow Book revision CPA firm service Center for Innovation Conformity: How you can help
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contents
MASTER THE DATA DOMAIN page 16
Avoid confusion in your organization by getting a handle on Master Data Management.
Features 22 Yellow Book Redlines Are Here
Major changes to government auditing standards mark the first major revision since 2011.
26 Creating a Culture of Service
The new #CPAsGiveBack initiative encourages CPAs and their firms to undertake service projects year-round.
Columns
Departments
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4
President’s Perspective
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Line Items
12 VSCPA2025 Center for Innovation
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Tech Talk
14 Young Professionals Reverse ageism
30 VSCPA News
Professional Development Work-life balance
10 Advocacy 33 Classifieds 34 I Am the VSCPA
CONNECT: connect.vscpa.com TWITTER: @VSCPANews
FACEBOOK: facebook.com/VSCPA
LINKEDIN: tinyurl.com/VSCPALinkedInGroup
INSTAGRAM: instagram.com/VSCPA
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president’s perspective 4309 Cox Road Glen Allen, VA 23060 (800) 733-8272 vscpa.com
disclosures disclosures.vscpa.com disclosures@vscpa.com
JANUARY/FEBRUARY 2019 Volume 32, No. 1 Managing Editor Jill Edmonds disclosures@vscpa.com Contributing Editor Chip Knighton cknighton@vscpa.com Public Affairs & Communications Director David Bass dbass@vscpa.com Editorial Task Force Olaf Barthelmai, CPA Cheri David, CPA Mike DellaRipa, CPA Melisa Galasso, CPA Genevieve Hancock Karen Helderman, CPA Alesia Lewis, CPA Gabriele Lingenfelter, CPA Harold Martin Jr., CPA David Peters, CPA Mark Plostock, CPA Barbara Sukramani, CPA Disclosures is published six times a year by the Virginia Society of Certified Public Accountants (VSCPA). The magazine’s mission is to communicate information of value to VSCPA members, including professional issues and VSCPA initiatives. The materials and information in Disclosures are offered as material only and not as practice, financial, accounting, legal or other professional advice. Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of VSCPA officers, members or editorial staff. Publication of an advertisement in Disclosures does not constitute a VSCPA endorsement of the product or service. Copyright © 2018 Virginia Society of CPAs.
VSCPA Preferred Providers
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Conformity: We need you
W
e need your help to resolve our biggest issue for the upcoming Virginia General Assembly session, an issue with the potential to greatly affect the work of many of our members as well as taxpayers: Tax conformity. Failure to pass conformity in this session will result in widespread delay, uncertainty and complexity. It will severely disrupt filing season for taxpayers across the state. We need you to use our VoterVoice tool (see page 11) to share your story with your legislators and ensure we pass conformity as quickly as possible. Every year, the administration requests standalone conformity legislation with an emergency clause that allows conformity to take effect with the Governor’s signature, rather than the July 1 effective date for non-emergency legislation. This allows changes to go into effect in time for filing season each year. However, emergency legislation requires an 80 percent affirmative vote in each chamber to pass, rather than the simple majority required for nonemergency legislation. We believe it is unlikely any tax reform proposal can hit that 80 percent threshold, so the legislature needs to completely separate conformity from reform to give the conformity bill the best chance to pass with an emergency clause and allow the 2018 tax season to start on time. I want to stress that tackling conformity by itself does not preclude the General Assembly from pursuing tax policy reforms during the 2019 session, and we are not in any way ignoring the issue of reform. In our whitepaper, “Virginia Tax Conformity: 2018 and Beyond,” we presented the idea of setting aside in a separate fund any additional revenues resulting from conformity in 2018 to give the administration and the General Assembly time to negotiate policy reforms — this is similar to the way the last round of sweeping tax reform was
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handled in 1986. (That whitepaper and other conformity resources can be found at vscpa.com/Conformity.) However, our top priority is to ensure conformity legislation is passed in a timely manner, and, we believe standalone conformity legislation is the only way to accomplish that. We truly feel our recommendations represent a neutral solution that will provide certainty for taxpayers and preparers in the upcoming filing season. But we need your help to get the bill through the legislative process. We need our members, who know better than anyone the effects failure to pass conformity legislation could have, to talk to their legislators and impress upon them the importance of passing conformity as quickly as possible. Your voice is the most powerful tool we have in convincing legislators to take up the cause of conformity. Your perspective is vital. Please take the time to contact your legislator on the issue, either in person or through VoterVoice. We can’t accomplish this goal without you. n
Stephanie Peters, CAE, has served as VSCPA president and CEO since 2007.
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speters@vscpa.com @StephPeters connect.vscpa.com/StephaniePeters
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line items
Work skills evolve fast
TICKER AMAZON EDITION
The skills you need to survive — and thrive — in today’s fast-paced economy are rapidly changing, according the Future of Jobs Report 2018 from the World Economic Forum on the top 10 skills needed for 2022. While it might be crazy to see some skills like “technology use” on the declining side, the pace of change is so great that new skills are needed. “The Fourth Industrial Revolution is interacting with other socio-economic and demographic factors to create a perfect storm of business model change in all industries,” according to the World Economic Forum. You can find the report at weforum.org/ reports. Here are the skillsets:
In November, Amazon announced it will split its hotly anticipated — and coveted — HQ2 in two places: Arlington and Long Island City, N.Y. 238 The number of proposals Amazon initially received from communities and cities trying to woo HQ2.
$550 MILLION
GROWING
DECLINING 1. Manual dexterity, endurance and precision
1. Analytical thinking and innovation
2. Memory, verbal, auditory and spatial abilities
2. Active learning and learning strategies
3. Management of financial and material resources 4. Technology installation and maintenance 5. Reading, writing, math and active listening 6. Management of personnel 7. Quality control and safety awareness
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The amount Virginia will dedicate to for five major transportation projects in the region.
$188 MILLION
4. Technology design and programming
The amount Virginia estimates Amazon will bring to the Commonwealth’s general fund by the fifth year of operation.
5. Critical thinking and analysis 6. Complex problem-solving
$7.2 BILLION
7. Leadership and social influence 8. Emotional intelligence
9. Visual, auditory and speech abilities
9. Reasoning, problem-solving and ideation
10. Technology use, monitoring and control
10. Systems analysis and evaluation
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$295 MILLION
3. Creativity, originality and initiative
8. Coordination and time management
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The amount of workforce grants Amazon will receive from Virginia, plus other incentives if more than 25,000 jobs are created. (At press time, incentives were still subject to Virginia General Assembly approval.)
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The amount Virginia estimates will come to the general fund by the 30th year.
50 The approximate percentage of new jobs coming to both HQ2 sites that will be tech-related. The rest will be in administrative, human resource, custodial and other areas.
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Is your employer watching your email? It’s not far-fetched.
CLIENTS HAVE TAX REFORM QUESTIONS? POINT THEM HERE.
At least two-thirds of companies monitor employees’ email use on their email system, according to an article from the Society for Human Resource Management (SHRM). Email conducted on an employers’ system is technically the property of the employer, and the employer can monitor it if it has a valid business purpose — so there is no guarantee of privacy. In addition, employers can (and have) fired employees for email infractions like inappropriate personal use, language or breaking confidentiality.
A new webpage from the U.S. Internal Revenue Service (IRS) can help answer taxpayers’ questions about the Tax Cuts and Jobs Act. The page, irs.gov/taxreform, contains separate areas for individuals, businesses and taxexempt entities. The individuals area discusses the standard deduction increase, child tax credit and more, while the businesses section tackles depreciation and expenses. Scan the QR code with your smartphone to access the page instantly.
So, if you run your own firm, should you monitor your employees’ email? It’s not a cut-and-dried decision. Learn tips from SHRM about when you should and shouldn’t read it at tinyurl.com/SHRMemailtips.
ACCOUNTING AND SUSTAINABILITY:
Standards are here After a six-year process, the Sustainability Accounting Standards Board (SASB) has released industry-specific sustainability accounting standards. The group’s mission is to help businesses around the world identify, manage and report on the sustainability topics that matter most to their investors. With 77 industries covered, the standards could help CPAs conducting reporting for financial filings, sustainability reports, annual reports and corporate websites. Additionally, SASB planned for the standards to be used alongside other sustainability frameworks. A field guide provides investors and companies with a high-level overview of the key characteristics of an industry, and also addresses what related sustainability challenges it faces compared to other industries. The content of each standard contains accounting metrics for each industry-specific disclosure topic. You can search for a specific industry covered in the standards, or download the full document at sasb.org.
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TAX PREPARERS’ DUE DILIGENCE PENALTIES FINALIZED In November, the U.S. Internal Revenue Service (IRS) finalized regulations to impose a penalty on tax return preparers who do not follow certain due diligence requirements when filing returns for taxpayers who claim head-of-household status or various tax credits, such as the child tax credit.
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tech talk
EXCELLENT EXCEL WHAT TO WATCH:
Hotkey to toggle through relative and absolute referencing
TECH DISRUPTORS Wondering what latest tech trends are here now or coming down the pike? The Watchlist from the Association of International Certified Professional Accountants is a semi-annual list of trends, technologies and possibilities. Here’s their current list:
By default, Excel uses “relative referencing” within formulas to make life easier. Relative referencing allows you to copy or move a formula to a new location and the references to other cells within the formula will automatically change relative to the new location. This is helpful if, for example, you auto-fill a cross-footing formula next to a table of amounts.
• Here now: Blockchain and artificial intelligence
On the other hand, you may not want all or part of the formula to change as you copy the formula to new locations. Locking down the part of the formula that does not change is known as “absolute referencing.” Changing to absolute referencing is done by adding a simple “$” in front of the parts of the formula that you do not want to change. For example, if you had a formula written as “=A1” you would just need to add dollar signs so it reads “=$A$1” to lock down the entire formula. Now no matter where you move the formula on the tab, it will always return the value in A1. In this example, if you wanted to just lock down the row or column, you would write the formula as “=A$1” or “=$A1,” respectively.
• Coming soon: Robotics and natural capital concerns • Disrupting eventually: Banking evolution and quantum computing If you’re curious about these trends, check out the Watchlist at tinyurl.com/Techwatchlist and click through each disruptor to learn more.
Now to the fun part. Instead of clicking into the formula and lining up your cursor in just the right locations and typing each dollar sign as needed, just click into the formula and hit the “F4” key. Excel will automatically add the dollar signs in the right locations. With practice, you will find out that each time you hit “F4,” Excel will cycle through the different referencing options in the order of: 1.) Absolute All, 2.) Absolute Row, 3.) Absolute Column, and back to 4.) Relative All. Also, if you highlight the entire formula, the “F4” hotkey will work on the whole formula at once.
GDPR and you In May 2018, GDPR went into effect. Even if you haven’t heard of it, chances are, it’s affecting you now. The General Data Protection Regulation (GDPR) is a European Union (EU) rule that regulates how personal data must be handled by businesses. Because many companies operate far outside the EU, websites and businesses with which you interact are becoming compliant. Companies must be able to explain how and why they collect data, and they must demonstrate strict security practices. As businesses work feverishly to try to prevent data theft and implement new practices like two-factor authentication, consumers will continue to see new ways businesses are securing their privacy.
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To help you recall this hotkey tip, just remember that typically “F4” is just above the “$” key. George D. Strudgeon, CPA, CGFM, is an audit director at the Virginia Auditor of Public Accounts in Richmond. Email him if you have Excel topics you want him to cover. george.strudgeon@gmail.com connect.vscpa.com/GeorgeStrudgeon
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professional development
Balancing it all Yes, you can achieve work-life harmony! satchinanda to describe the titular concept of bliss. The word essentially means that you are aware that you exist. It’s not happiness, but the maintenance of happiness and the awareness of how you feel and how you experience the world around you. That awareness of one’s own feelings is vital because of the constant changes life throws at us. We might be in a good place, but a subtle (or not-so-subtle) change can throw us off our axes and necessitate an adjustment on our end. The practice of maintaining our happiness and self-worth is what Vetter sees as true bliss.
WHAT: VSCPA KnowledgeNOW Conference WHO: 107 in-person attendees, 7 via simulcast WHERE: Hyatt Regency Reston
E
veryone in the accounting field (or any other) is familiar with the term “worklife balance.” It’s a perk that every company trumpets on its website, to the point that it comes standard in many industries.
WHEN: Nov. 5–6, 2018
At the VSCPA’s KnowledgeNOW conference in Reston, TOP THEMES: Work-life balance, opening speaker Amy Vetter, diversity & inclusion, unconscious CPA, used the phrase “workbias, giving presentations life harmony” in her session, “Business, Balance and Bliss: How the B3 Method can Transform Your Career and Life.” Vetter, a bass player, drew inspiration from her music career in developing that concept. “I did that because sometimes work-life balance becomes this stressful term in our lives. Do we have enough of it?” she asked. “Do we look at others and see that they have it mastered and we can’t get there? The research behind work-life balance shows that there is no amount of time that’s the right amount of time. It’s not about the quantity, but the quality of what you do.” Vetter, a yoga practitioner, used the Sanskrit word
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“Too many times in our work day, we let life just come at us, rather than being aware that we exist, that we control some of our day,” she said. “Bliss is the maintenance of happiness. It’s not something that you can ever win. What it is is becoming more aware of how you feel and how you experience the world around you.” This seems like as good a place as any to lay out the three Bs in the B3 Method: Business + Balance = Bliss. Business refers to the stressful situations we find ourselves in every day, while balance is how we deal with those situations and square them with the rest of our lives. Finding that bliss requires understanding why you do what you do. It’s knowing why you’re a CPA, what you want to do with it and aligning your career with who you are. “What happens in our careers isn’t necessarily giving up being a CPA,” Vetter said. “It’s pivoting what we do with the expertise that we have so we can align it with what’s important to us as we’re getting older. We think about what that master plan is, and instead of quitting, we’re pivoting.” Download a whitepaper on the conference, with more information on this topic and summaries on hot sessions like “How to Control Your Unconscious Bias” and “Your 30 Minutes of Fame,” at vscpa.com/KN2018. n
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advocacy
Conformity and more: 2019 session watch Let’s get this out of the way: Tax conformity is the most important issue facing the VSCPA, its members and the CPA profession for the 2019 Virginia General Assembly session, by a wide margin. The passage of the Tax Cuts and Jobs Act offers an opportunity for Virginia to make meaningful changes to its tax policy, but conforming to the U.S. Internal Revenue Code (IRC) is a necessary first step.
Join us this month for CPA Assembly Week. We love when you email your legislators, but it’s even more effective when you can offer them your expertise in person. CPA Assembly Week is your best opportunity to do just that.
That said, conformity isn’t the only issue we’re watching. While we’re committed to keeping conformity legislation separate from reform legislation, we do anticipate that we’ll see tax reform legislation introduced. Regulatory reform could also come up, although that issue may be quieter than in previous years with the creation of a pilot study on the topic last year. Other topics that the VSCPA will likely follow in the 2019 session include redistricting, gambling and certificate of public need, a health care-related topic. These issues aren’t ones we typically weigh in on, but the political climate in which they’re debated will have a trickle effect on tax conformity and reform.
This year’s CPA Assembly Week will be held Monday–Thursday, Jan. 21–24, 2019, with 12 slots open each day for visits from 9–11 a.m. (The slots Tuesday, Jan. 22, are reserved for the VSCPA Board of Directors.) You’ll meet with your legislators or their staff and have the opportunity to attend committee meetings and observe the General Assembly in session. It’s a great opportunity for you to get to know your legislators and pass along your CPA expertise and experiences on conformity and other topics vital to the CPA profession.
One final note on session: Not only is 2019 a short session for our part-time citizen legislature, but all 140 General Assembly seats are up for re-election in November. That means there will be a lot of so-called “brochure bills” and political posturing as legislators gear up for campaign season. We’ll need your help more than ever to help us push the importance of conformity and other issues that truly matter.
Whether you’ve attended CPA Assembly Week in the past or not, we’d love to have you participate! Visit vscpa.com/ CPAAssemblyWeek to sign up.
Because conformity legislation must contain an emergency enactment clause to go into effect for tax season, the bill must pass each chamber with 80 percent approval. We believe it is unlikely that any tax reform proposal will attain that 80 percent. Therefore, the VSCPA’s position is to separate conformity from reform to ensure that conformity will pass and become effective early in the filing season. You can read more about it in our President’s Perspective column on page 4, but we need you to use our VoterVoice tool (vscpa.com/VoterVoice — see information at on next page) to email your legislators to ensure conformity is passed fully and quickly.
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LEGISLATOR VISITS MATTER
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McNamara elected to House
IT’S EASY!
One of those legislators you can visit during CPA Assemly Week is a VSCPA member. Joe McNamara, CPA (R-Roanoke), won his special election against Democrat Carter Turner to claim the 8th District seat in the House of Delegates previously held by Del. Greg Habeeb, also a Republican. McNamara is no longer in active practice and spent several years in corporate finance before choosing an interesting career path. He and his wife, Cheryl, own two ice-cream shops in the Roanoke area. He’s also served on the Roanoke County Board of Supervisors since 1998 (with a gap from 2009–2013). We’d love to have you visit with Del. McNamara during CPA Assembly Week, particularly if you’re one of his constituents from Salem or Roanoke County. (Bonus points if you’ve tried his ice cream.) McNamara is the first CPA in the General Assembly since Sen. Walter Stosch, CPA, retired in 2015. Congratulations to Del. McNamara!
HOW TO USE VOTERVOICE In addition to the issues surrounding conformity this year, the VSCPA is also debuting its new grassroots advocacy platform, launched in tandem with the new VSCPA website in October. VoterVoice provides an easy way to contact your legislators about conformity and other issues important to the CPA profession. Here’s how you can make sure your voice is heard, using conformity as an example: • Visit vscpa.com/VoterVoice.
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Click on the campaign, “Pass Tax Conformity for 2018.”
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Navigate to the “Enter Your Info” panel on the right side of the page and enter your home address to help VoterVoice find your legislators.
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Review the message in the “Compose Your Message” panel above where you entered your information. We have a pre-written message that’s ready for you to send, but feel free to customize it to reflect your relationship with your legislators. Remember that conformity is a complicated issue — if you make any substantive changes to the message, please be sure to clarify which portions of the message reflect the VSCPA’s position and which are your views.
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Click “Send Message” and you’re done!
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innovation
Become future-ready with the new Center for Innovation A new initiative for VSCPA members connects you with resources in technology and talent.
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nnovation is everywhere in the CPA profession and at the VSCPA. It’s in our VSCPA2025 bold strategies, in the title of one of our vice presidents — we’d wager it’s evident in a lot of your company cultures and positions, too — and on everyone’s mind in every meeting we hold. Now innovation has become a key initiative here at the Society aimed at fulfilling our mission: Empower our members to thrive. We’re excited to introduce the VSCPA Center for Innovation, officially launched Nov. 26, designed to be a go-to resource that empowers you, our members, to drive CPA relevance through innovative and visionary
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leadership. The Center offers future-forward resources, learning and engagement programs to help you find solutions for problems in two focus areas: • Technology: Help members adapt to, embrace and leverage rapidly changing technologies • Talent: Help members build leadership skills and grow knowledge of global trends to develop talent and build a thriving workplace of the future “This is a pivotal moment for the CPA profession, as
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innovation
technology advancements, shifting demographics and the rapid pace of change create unprecedented opportunities,” said VSCPA President & CEO Stephanie Peters, CAE. “The Society is committed to helping our members be future-ready by driving innovation in technology and talent development. Through the Center, we aim to provide a roadmap and resources CPAs need to make themselves indispensable in the business climate of the future.” The Center for Innovation’s strategic direction is led by an advisory council of CPAs and other leaders in technology, talent, innovation, change management and the accounting profession. Members of the Center for Innovation Advisory Council are: Chair George Forsythe, CPA, of WellsColeman in Richmond; April Cassada, CPA, of the Virginia Auditor of Public Accountants in Richmond; Anita Collins, CPA, of PBMares in Fredericksburg; Dan Hudgens, CPA, of Deloitte in Richmond; Brian Kush, PCC, CPA, of Intend2Lead, LLC in Austin, Texas; Thad Panik, CPA, of Aronson, LLC in Rockville, Md.; Byron Patrick, CPA, of Network Alliance in Reston; Louise Reed, CPA, of Louise Reed, CPA, PC, in Richmond; Lauren Soles, CPA, of BDO in Richmond; J.J. White of Dale Carnegie in Richmond; and Aditya Yerramilli, CPA, of Google in Mountain View, Calif. The Council helped determine the wide array of resources and partnerships to help you build your knowledge in the technology and talent areas, highlighted by targeted learning opportunities about a variety of topics. We already held a blockchain workshop
in November and our Cybersecurity Summit in December, and we’re developing a new technology showcase next fall. That’s in addition to our wide variety of seminars on topics like cybersecurity, data analytics and artificial intelligence. We’re focused on securing key partners to meet members’ technology needs, like our new partnerships with MindBridge, an artificial intelligence and analytics firm, and Cetrom, a cloud solutions provider. On the talent side, we’re continuing our established suite of leadership development programs, including new leadership certificate partnerships with Dale Carnegie and Frontier Academy. We launched two new awards celebrating innovation and diversity in the CPA profession, the Impact Award and Advancing Diversity & Inclusion Award. We’ve also got innovative learning opportunities such as the new XChange peer-to-peer learning program, designed for executive leadership, and the VSCPA Leading Forward podcast. You can find more information on the Center at vscpa.com/ Innovation, but we’re more interested in hearing how you’re innovating. Email innovation@vscpa.com with any thoughts, ideas or examples of innovation happening at your company or contact the Center’s staff leadership: VSCPA Vice President, Innovation Tina Bates, CAE, at tbates@vscpa.com and Senior Manager, Innovation and Leadership Laura Cobb, CAE, at lcobb@vscpa.com. And don’t forgot to follow us and join the conversation on social media with our #CPAinnovate hashtag. We can’t wait to hear from you! n
VSCPA.com/Inno
R O F R E T CEN N O I T A V O N N I vation
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young professionals
Reverse ageism Ever been perceived as “too young?” Here are 7 things you can do.
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n one form or another, each of us has heard of age discrimination, generally on the older side. But what about on the younger side? What if you excelled and ended up exceeding expectations in a management position or high-level role at a young age? Speaking from experience, I started working young, aged quickly in my teenage years, then seemed to stop aging around the time I hit 23 or 24. There is nothing more aggravating that being talked down to if you have as much or more experience as the person speaking, or having your ideas ignored. Here are seven ways you can help offset any initial perceptions of being too young.
Genevieve Hancock
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Check your emotions. Probably most important, ensure that you can manage your own emotions and not let any naysayers get under your skin. While you can most
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definitely feel irked in this type of situation, and it’s absolutely normal, make sure you outwardly control the perception. You don’t want to undermine your own argument by letting your emotions get the best of you. Persistence, confidence and consistency are key. Don’t doubt yourself.
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Strive high. Make sure you put yourself out there for leadership roles. There are many organizations and volunteer roles that can develop those skills. For accountants, the VSCPA also has many leadership academies to network and connect while enhancing this skillset. Most leadership skills fall on the softer side of the spectrum, with communication and how to handle difficult discussions, so complete trainings and actively apply what you learn.
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Connect. Find a mentor who truly believes in your work and wants you to succeed. Someone once asked me the difference between a mentor and a career coach in your company. At a very basic level, I believe that mentors can come from anywhere and try to put your best interest first, where a career coach may have a vested interest in their own career and in the company. If you are relying only on a career coach alone, then certain major career decisions and pivots which would mean leaving the company or negatively impacting a client or team in the short term may be overlooked. Look for an article on using the VSCPA to find a mentor in the March/April issue of Disclosures. Not only can having a mentor help you gain valuable knowledge and advice quickly, but also they can advocate for you in your career.
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Appearance matters. Make sure you dress and look the part, even if that means dressing more conservatively. Similar to your emotions, you don’t want to add reasons for naysayers to point out that you’re too young. I once had an interviewer for a large company complain to me about the last interviewee because they couldn’t hear over the jingling of bangle bracelets. Personally, I don’t wear them, and I thought it was a bit unprofessional to bring up to the next interviewee, but the thought of “minding your jewelry” has always stuck with me since that interview.
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Investigate. When facing opposition, finding the why of “why we need to do it this way” can help in getting everyone’s support for a project. Explaining why there is a need for change, and how you plan to get there, without too much detail, can help get everyone on board with your plan and help shape the team. Gently remind anyone who that a new and fresh set of eyes helps with process efficiencies. Doesn’t everyone want to get out of work a little earlier? These changes can also help with their roles.
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Learn early. Learn from a process before you try to change it. Things often get overlooked when change management is not valued during an update. Ask for input from your team or from the key stakeholders — especially the ones giving you pushback. Make sure they understand that they and their work are valued. This one can be a bit of a trap, though, so avoid asking questions that make it appear you don’t understand a process. Make it clear that you are asking for their viewpoint and value it, not for training. Also, make sure you communicate the vision for what you are trying to accomplish, and keep communicating that vision.
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Embrace globalization. Young professionals also have the upper hand in that they are more accustomed to recent globalization efforts. Accounting and society are both speeding up when it comes to new technology and communication for global companies and practices, ranging from International Financial Reporting Standards and U.S. Generally Accepted Accounting Standards to international auditing practices. Make sure that your team and your peers know what you have to offer and what you add to the team, and always try to increase your knowledge on new effects to the company and industry. Persistence is key when it comes to any career. Patience is a virtue, but not advocating for yourself and your skill set is not persistence. Make sure that your company knows what value you add and what your skill set has to offer. Have persistence and patience, making sure you are focused on the end result in a task, a department and your career, and properly align those to move forward on the same path. Don’t let others undermine your value, and value others even when they can’t do the same for you. If your reports or your peers still have trouble with your age, set up private one-on-one meeting time to directly address that you feel it is inappropriate and you are asking them to stop in a professional manner. And if it still continues, consider bringing in a mediator to address appropriateness of comments about age in the workplace. n
Genevieve Hancock is a technical accountant specializing in complex modeling and changes in accounting guidance as a manager of financial reporting & audit for Trader Interactive in Norfolk. She serves on the VSCPA Young Professionals Advisory Council (YPAC) and the Disclosures Editorial Task Force. T.Genevieve.Hancock@gmail.com connect.vscpa.com/GenevieveHancock linkedin.com/in/GenevieveHancock
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MASTER THE DATA DOMAIN CPAs are uniquely qualified to help implement Master Data Governance — essential for Master Data Management.
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Thomas E. Schmitt, CPA/CITP, CGMA, CISA
ave you ever been working on a project, performing research or executing analyses, only to find later you wasted days because some of the data is suspect? Perhaps the data was initialized correctly but the maintenance was inconsistent, or it was updated based on varying field definitions. As companies become more data-driven, the risk of bad decisions related to faulty data is increasing. There are significant hard costs and opportunity costs related to detecting and correcting these data inconsistencies. As the data gets worse, so do the consequences.
WHAT IS MASTER DATA MANAGEMENT? Master Data Management (MDM) is the initiative an entity undertakes to structure, formalize and standardize its enterprise database(s). The focus is on data elements that are shared across departments and that are considered essential in processing transactions, analyzing customers and/or competitors and supporting strategic decision-making. This is true for private and public entities, for-profits as well as nonprofits. Often the need for an MDM initiative arises over time. Enterprises in development and start-up stages frequently begin by relying on systems and automated tools that are mostly departmentally controlled and focused. The initial users of these parochial systems are the ones who designed, selected and implemented them, so their underlying data records and model serve fairly narrowly defined purposes. As new records are created and existing records maintained, in the short run the respective fields are clearly understood and properly populated.
But as an entity moves into growth and expansion, and an organization needs to share data across departments or units, problems can arise. Typical scenarios are: • Enhancements are made expanding functionality and adding complexity to the data records/data models • The entity has made acquisitions and must integrate systems and processes • The organization moves to entity-wide platforms
POTENTIAL MASTER DATA CONFUSION Making the changes without a well-thought-out MDM plan risks cross-departmental data and information confusion. The resulting contention easily destroys projected MDM benefits and some elements of the entity’s internal controls can be at risk. Consider the following supply chain situation. Both the buyer and warehouse manager have a field in their respective legacy departmental systems called “Last Ship Date.” When implementing the new comprehensive MDM database, IT only asks one department what data to use to populate a similarly named field in the new enterprise system. Relying on a single answer could result in data confusion. The buyer may see this as the date of the last shipment from the supplier. The warehouse manager may view it as the latest date he or she can send the product to the stores and be assured it remains fresh for the customer — two different uses for what seems to be the same piece of information. u
Know this... • Master Data Management (MDM) and Master Data Governance (MDG) are parallel efforts crucial to ensuring that an organization’s data is consistent. • To bring data governance to life, an organization must undertake three main steps: establish the framework, define key roles and implement the governing structure. • When implementing an MDM solution, it’s best to start with a small working group and begin developing initial governance processes. Over time, the working group(s) can grow into more formalized committees that highlight the need for an oversight board or coordinating council.
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There are different examples where the same data is intended to be in multiple applications, but it is not linked or coordinated updates don’t happen. Questions then arise over which value is correct.
only by those authorized to do so. Validation rules that MDM systems apply are prescribed by MDG.
MASTER DATA MANAGEMENT VS. GOVERNANCE The risks around subpar MDM implementations are exacerbated if it is seen solely as an IT responsibility and not accompanied by a parallel Master Data Governance (MDG) effort. Two different perspectives must be maintained in the overall master data undertaking: the IT view and the business view. Think of the IT view as the data element perspective and the business’s as the data content perspective. Working together, they help deliver master data quality. MDM working in tandem with MDG provides this dual view. The ultimate objective is to present the right corporate information to the many departmental users that need it while eliminating data redundancy — to have a “single version of the truth” for enterprise data. MDM helps to ensure all the right data records and fields are created and presented where needed, and that unneeded or redundant fields are eliminated. MDG helps ensure the records and fields contain the right values, and changes are restricted to valid values. The two work together to ensure records are altered
There are various approaches used to draw out MDM database requirements and manage MDM project scope (which should be approached in phases). Those approaches are outside the scope of this article except to say the MDM and MDG framework is built around first developing a deep understanding of the respective business processes and having a good grasp of Enterprise Information Architecture (EIA) principles (see Figure 1 below). Before building the MDG structure, a few myths must be dispelled: • The first is the myth of “the record.” We sometime refer to “the item record” or “the vendor record,” but seldom is all the relevant item or vendor information contained in a single IT record, nor are all the relevant pieces of information created at one time or by a single department — various fields serve different departments and needs. • This leads to the second myth — that of “the owner of the record.” To fully attribute resources (e.g. item, vendor, customer, etc.), no single department can be responsible for all facets.
FIGURE 1.
EXCERPTS: ENTERPRISE INFORMATION ARCHITECTURE (EIA) PRINCIPLES PRINCIPLE #1: Information architecture shall be driven by clearly articulated and properly documented business processes. PRINCIPLE #3: Any modifications/corrections to master data can be made only according to the rules and policies established by the business, including the rules of resolving data change conflicts; these changes will be made available to all downstream systems based on agreed upon service level agreements (SLA). PRINCIPLE #4: Every data item shall have an identified business owner, a custodian (steward) and a single authoritative source that is used by all enterprise stakeholders (regardless of how many systems may be used to capture and update master data operationally). The authoritative source should obtain all updates in real time and make policy-based decisions about acceptance or rejection of the change for the purpose of enterprise use. PRINCIPLE #12: Information management will include and be based on well-defined data governance rules and policies administered and enforced by appropriately structured and empowered groups, including an Enterprise Data Governance group. Source: “Master Data Management and Data Governance,” 2nd edition, by Berson & Dubov.
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• The third myth is “the department that created the data owns it.” This is the most critical myth to dispose of, but the reason won’t become apparent until better understanding the MDG process. Additionally, there is a division of data responsibilities within a sound MDG structure that provides a valuable set of checks and balances.
FORMALIZING DATA GOVERNANCE To bring effective data governance to life, the entity needs to: • Establish the framework • Define the key roles
FIGURE 2.
• Implement the governing structure
MATURITY LEVELS
It must do it in a way that avoids slipping into “ambiguous bureaucracy” — the risk of making the endeavor about administrative structure building instead of getting data management and governance up and running. As we go through building the governance structure, consider the following (not so) hypothetical situation. A company is under pressure to merge newly acquired stores into their organization so they can become operational as soon as possible. Unique items they sell must be quickly set up in the merchandising system. This requires related vendors new to the acquiring company first be set up in the contract management and accounts payable systems. Once internal vendor approvals are completed, an acknowledgement is sent back to merchandising where they are marked approved and item ordering begins. For any of these vendors delivering directly to the stores (DSD vendors), their “approved” vendor records flow from accounts payable to the store’s back door receiving system. The SVP of Strategic Initiatives pressures the data entry teams in merchandising to “speed up” the item approval process. Not knowing where to turn for process enforcement support, the data entry teams set the flag to “approved” for these new vendors and items. Things come to a screeching halt when DSD deliveries are rejected at the back door. For deliveries made directly to the distribution centers, accounts payable rejects vendor invoices because the vendors are not yet approved in the financial and contract control systems. As you read on, contemplate the following:
LEVEL 1: Initial Ad hoc operations that rely on individuals’ knowledge and decision-making. LEVEL 2: Managed Projects are managed but lack cross-project and cross-organizational consistency and repeatability. LEVEL 3: Defined Consistency in standards across projects and organizational units is achieved. LEVEL 4: Quantitatively Managed The organization sets quantitative quality goals leveraging statistical/quantitative techniques. LEVEL 5: Optimizing Quantitative process improvement objectives are firmly established and continuously revised to manage process improvement. Source: “Master Data Management and Data Governance,” 2nd edition, by Berson & Dubov.
• Who owns the “vendor approved” field in the u
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DATA MANAGEMENT BONUS ARTICLE
merchandising system? • Who produces the data in that field? • Who first consumes it?
Ready to put a Master Data Management plan into action? Check out the second part of this article, “Mastering the Data Domain: How You Can Get Started,” also by Thomas E. Schmitt, CPA/CITP, CGMA, CISA, at vscpa.com/MDGpart2.
• Who should dictate the criteria for setting the flag? • Who is responsible for the initial enforcement of rules? If they are having difficulty with enforcement, where should they turn for help?
Establish the framework
EDUCATION SPOTLIGHT Looking for CPE on this topic? Check out these VSCPA offerings: Jan. 18 — Data Analytics & Business Intelligence: What You Should Know (2-50346) Jan. 25 — Data Analysis & Management (2-35240) Feb. 14 — Analyze Your Business Operations Data With PowerBI (2-52038) Visit vscpa.com/cpe to register.
The framework is interwoven with where the organization tracks, or desires to track, along the EIA information management maturity scale (see Figure 2 on page 19). The ideal objective of EIA maturity is having a proactive process in place with established quantitative performance goals for measuring, assessing and maintaining a high level of data quality. This includes feedback loops to key participants so monitoring and process refinements are continuous. There’s no crime in having an initial target that is shy of the ideal — a practical target also helps in the avoidance of “ambiguous bureaucracy.” To aid in arriving at a practical EIA-driven MDG objective, one of the outcomes of the business process documentation effort is identifying Critical Data Elements (CDE). It’s easy to say all information is critical, but to make the MDG effort manageable and set a reasonable project scope, there must be a priority ranking. The business should be able to identify the data subsets that are most crucial to the basic execution of their respective processes. Tiers can also be assigned to the resulting CDEs. This further enables a logical, phased approach to the MDM/MDG initiative. The ideal governance framework consists of: • Data governance strategy (such as an
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oversight board or council) • Data governance organization (like working groups or committees) • Data governance policies to be based on EIA principles • Data governance process (i.e., how the work will actually get done) • Data investigation and monitoring (response procedures are integrated with the process) • Technology and architecture (an active and accessible library by CDE record and field) Because most organizations realize they need a (or a better) MDM solution as the horses are leaving the barn, the most practical approach is not to embark on instituting the framework top-down; it is best going middle out. Start with a small working group and begin developing initial governance processes. Over time, grow the working group(s) into more formalized committees that highlight the need for an oversight board or coordinating council. A suggested initial goal on the EIA maturity curve is also in the middle: Level 3, in which consistency in standards across projects is achieved, with the aspirational goal of getting to level 4 within a reasonable timeframe. Level 3 provides a target for the first working group that they have a vested interest in achieving. Often a burning platform already exists; you just need to find it. There is usually at least one project relying on MDM that is foundering due to issues around the lack of data governance. I’ve been on IT-driven data clean-up projects in which IT spent considerable time with a group of “assumed” data owners. Decisions are made on valid values for a series of data fields. IT spends numerous days making, testing and implementing the changes.
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Then, unbeknownst to the first group, a second department calls IT, disagrees and has IT undo the changes. At the very least, people begin to see a platform begin to smoke.
overall MDM/MDG project. Eventually this template should become part of the company’s project management playbook.
with each piece of data determines which of the following roles they play with the respective data fields.
Define the key roles
Using an existing project to begin piloting data governance standards yields a far greater return toward enterprise data management maturity then dozens of senior management presentations of governance theory. Work with the project sponsors to begin defining MDG roles for that project. These sponsors will serve as the initial data governance oversight mechanism. Recognize that the end result will serve as the template for the larger
For a data governance process to work, a number of key roles must be put in place. The role names may vary from organization to organization and can be tailored to fit into the organization’s culture. The names are not as important as the functions they serve and their alignment with the business and related business processes. Allow the organization to select terminology that enables them to embrace the substance of role they need to fulfill. Where, when and how various business associates interact
Oversight roles include business data owner and operational process owner. Primary responsibility roles are data guardian, data steward and data custodian. These roles provide the infrastructure for establishing MDG in an organization.
Tax Season Cessation Program Experiencing: • Stress? • Lack of Sleep? • IRS induced Nausea?
Now that you know how MDM and MDG work together, the importance of establishing a framework with the correct stakeholders and how to define the key roles for success, an MDG structure can come to life. Learn how to do it in part two of this article, “Mastering the Data Domain: How You Can Get Started,” available at vscpa.com/MDGpart2. n
Thomas E. Schmitt, CPA/CITP, CGMA, CISA, is managing director of Thomas E. Schmitt & Company, LLC, a public accounting and management consulting firm in Warrenton. His company works primarily in the retail industry, addressing merchandising strategy and tactics, systems implementation and business transformation. Tom@TESchmitt.com connect.vscpa.com/TomSchmitt linkedin.com/in/thosschmitt
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government accounting
BE PREPARED: YELLOW BOOK REDLINES ARE HERE Major changes to government auditing standards from the U.S. Government Accountability Office mark the first major revision since 2011.
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n July 2018, the U.S. Government Accountability Office (GAO) issued Government Auditing Standards, 2018 Revision (GAO-18-568G). Government Auditing Standards go by several names, including Yellow Book, Generally Accepted Government Auditing Standards (GAGAS) and Government Auditing Standards (GAS). While there were many changes proposed in the exposure draft, the final 2018 revision did not end up including many of the proposals. Melisa Galasso, CPA
The GAO received more than 1,700 comment letters in response to its April 2017 exposure draft. The 2018 revision supersedes the 2011 GAS revision as well as 2005 Government Auditing Standards: Guidance on GAGAS Requirements for Continuing Professional Education and 2014 Government Auditing Standards: Guidance for Understanding the New Peer Review Ratings.
AT FIRST GLANCE One of the first things a reader will notice is that chapters are in a new format. Requirements are boxed off and followed by application material, with more boxes of requirements followed by more application material. This will help users understand what are deemed requirements by Yellow Book and what is meant to help them in implementing those requirements. While requirements and application material separation are similar to the AICPA’s Auditing Standards, the layout and look is different. In addition, the numbering is different in Yellow Book. Another noticeable change is related to the number of chapters. The 2011 Revision had seven chapters, while there are nine in the 2018 Revision. The new chapters take guidance that was combined with other materials and separate it into their own separate chapters. Chapter 1 of the 2011 Revision, “Government Auditing: Foundation and Ethical Principles,” is combined with Chapter 2 from the 2011 Revision, “Standards for Use and Application of GAGAS.” However, Chapter 3 of the 2011 Revision is broken out into four chapters: Chapter 2, “General Requirements for Complying with Government Auditing Standards”; Chapter 3, “Ethics, Independence, and Professional Judgment”; Chapter 4, “Competence and Continuing Professional Education”; and Chapter 5, “Quality Control and Peer Review.”
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It makes sense to put CPE in its own chapter given the removal of the 2005 CPE document (discussed below). Those who frequently used the 2011 Revision appendices will also notice that the supplemental guidance from the appendices were either removed or incorporated into the individual chapters.
CHANGES TO AUDIT GUIDANCE The biggest substantive change auditors will likely see as a result of the new guidance is related to independence requirements. The guidance splits nonaudit service independence requirements from other independence threats. In addition, preparation of financial statements from a trial balance or underlying records has been pulled out separately. The GAO provides two new flow charts that auditors should study careful to ensure they are correctly following independence standards. The first path in the flow chart “Generally Accepted Government Auditing Standards (GAGAS) Conceptual Framework for Independence” asks auditors to evaluate if they have identified any threats. You can view the figure online at vscpa.com/ GAOIndependenceFramework. The list of threats identified by GAO did not change from 2011. If the auditor answers yes, the path splits at this point between those threats that are related to nonaudit services and those that are not. For those threats unrelated to nonaudit services, the path is the same as the considerations in the 2011 revision. The auditor would have to evaluate the significance of the threat. If significant, they would have to identify safeguards that are sufficient to either eliminate the threat or reduce it to an acceptable level. Then the auditor would document the threat. However, if the threat is related to a nonaudit service, the guidance changes. The auditor would first have to review the list of services explicitly stated in GAGAS to determine whether or not they are prohibited (i.e., if they automatically impair independence). If the nonaudit service is not prohibited, then the flow chart asks who requested the service. If it was not requested by the entity’s management, the auditor would proceed to the standard flowchart and evaluate the significance of the threat, identify safeguards and document. If the entity’s management requested the nonaudit service, the auditor would have to evaluate the u
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skills, knowledge and experience (SKE) of management. Management does not need to be able to perform the service, but does need the SKE to oversee the engagement. If management does not have the SKE to oversee, then independence is impaired and the auditor should not proceed. If management does have the SKE needed, then the auditor would have to document their knowledge of the SKE. The next fork in the road is related to the type of nonaudit service. If the service is unrelated to preparing accounting records and financial statements, after documenting SKE the auditor returns back to the original path to evaluate the significance of the threat, identify and apply safeguards and then document their considerations. However, if the nonaudit service is preparing accounting records and financial statements, the GAO heavily clarified next steps including a separate flow chart for the auditor to consider. Figure 2, “Independence Considerations for Preparing Accounting Records and Financial Statements,” asks if there is separate preparation of financial statements in their entirety from client-provided trial balance or accounting records from other preparation. Preparing financial statements in their entirety from client-provided trial balances or accounting records is considered to be a significant threat, so no evaluation of the significance is required. The auditor would then identify safeguard to eliminate the threat or reduce it to an acceptable level. It is important to notice that SKE is NOT a safeguard. It is basically a prerequisite to move forward in the process. The auditor must identify another safeguard (i.e., concurring reviewer) to reduce the self-review threat to an acceptable level. Then the auditor would have to assess the effectiveness of the safeguard and document.
PEER REVIEW REVISION The peer review section also received an update. The section separates those audit organizations that are subject to recognized peer review organizations (including the American Institute of CPAs and National State Auditors Association) from those that are not. The 2018 Revision lists recognized programs. If the audit organization is subject to one of the approved organizations, then they would follow that organization’s processes (and certain requirements in the 2018 Revision). However, for those not subject to a recognized program, the revision provides additional requirements for those organizations.
CONTINUING EDUCATION In terms of Yellow Book CPE, many of the proposed changes in this area were removed in the final version. The CPE hour requirement
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stays the same at 24 and 56. However, the GAO did add application guidance that emphasizes the need to obtain GAGASspecific CPE (especially when there are revisions to the standards). One of the biggest changes to CPE is the incorporation of the 2005 Guidance on GAGAS Requirements for Continuing Professional Education. The 2011 Revision left the 2005 document as a standalone resource. This time, the GAO incorporated all CPE guidance into the 2018 Revision to make it easier to ensure compliance with CPE. The guidance expands on various roles or levels that one may have within an organization (nonsupervisory auditors, supervisory auditors and partners and directors) when considering competence. It also defines key terms like planning, directing, performing audit engagement procedures and reporting. One of the areas that received particular attention was related to CPE for audit specialists. External specialists are not subject to GAGAS. However, if an internal specialist performs engagement procedures on a Yellow Book client, they are subject to GAGAS CPE requirements. CPE in their area of specialization does count to the 24-hour requirement.
OTHER CONSIDERATIONS In the exposure draft, the GAO had proposed adding a reporting requirement of waste in addition to abuse. Ultimately, the organization backed away from this stance. In fact, they moved abuse out of the requirements and into application guidance. GAO does provide a definition for waste and gives examples of both waste and abuse, but auditors are not required to perform specific procedures to detect waste or abuse. However, internal control considerations may impact reporting of waste or abuse if it comes to the auditor’s attention. It is important to note that the Uniform Guidance incorporated abuse as a requirement back in 2013. In the 2011 Revision, engagements subject to Yellow Book included financial audits, attestation engagements and performance audits. Yellow Book incorporated by reference the Statements on Auditing Standards (SAS) and the Attestation Standards (SSAE). But the 2011 Revision made no mention of Statement on Standards for Accounting and Review Services (SSARS) engagements. The 2018 Revision adds reviews of financial statements performed under SSARS to the engagement types. The attestation engagements section (a new Chapter 7) is augmented to include Yellow Book guidance when performing a review of a financial statement under SSARS and Yellow Book.
EFFECTIVE DATE The new Yellow Book is effective for financial audits, attestation
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engagements and reviews of financial statements for periods ending on or after June 30, 2020, and for performance audits beginning on or after July 1, 2019. Early implementation is not permitted. Despite the fact that 2020 sounds so far away (it’s NOT), it is important for auditors to remember how the independence rules work. The auditor must be independent for the entire audit period, which means that the beginning of the audit period (July 1, 2019) really kicks off the independence rules. If an auditor performs nonaudit services, they need to be careful of the effective date to ensure they do not accidentally impair independence. n
Melisa Galasso, CPA, is the founder of Galasso Learning Solutions LLC in Charlotte, N.C., where she designs and facilitates courses in advanced technical accounting and auditing topics, including nonprofit and governmental accounting. She is a member of the VSCPA Board of Directors and sits on the Disclosures Editorial Task Force. melisa@galassolearningsolutions.com connect.vscpa.com/MelisaGalasso galassolearningsolutions.com @GalassoLearning
FIGURE 1.
INDEPENDENCE CONSIDERATIONS FOR PREPARING ACCOUNTING RECORDS AND FINANCIAL STATEMENTS Is the nonaudit service preparing financial statements in their entirety from a client-provided trial balance or underlying accounting records?
Evaluate threat for significance
No
Is threat significant?
Yes
No
Document evaluation and proceed
Yes
Identify and apply safeguard(s)
Assess effectiveness of safeguard(s) Is threat eliminated or reduced to an acceptable level?
Independence impairment
No
Do not proceed
Yes Document nature of threat and any safeguards applied
Proceed
Source: GAO | GAO-18-568C
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CREATING A CULTURE OF SERVICE The new #CPAsGiveBack initiative promotes CPAs and their firms who undertake service projects year-round.
Employees of Keiter cleaned up Lewis Ginter Botanical Garden in Richmond in November. Front left: John Michael Haynes; back left: Trey Walker, CPA; front right: Matt St. George; back right: Liam Bates.
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ervice to the community is ingrained in the core description of the CPA profession. It’s right there in the name — “public accountant” calls to mind accountability to the public. CPAs put their names and reputations on the line to assure citizens that financial statements are correct, thereby protecting taxpayers, businesses and markets.
Chip Knighton
To help communities, though, it’s necessary to connect to them. That’s where the more traditional form of community service comes in. For the past decade, the VSCPA has promoted that through its recently discontinued CPA Day of Service, held in September at the end of Virginia CPA Week. The Society ended the standalone Day of Service last year to focus on its year-round #CPAsGiveBack initiative. “It’s an ever-growing focus of ours because it becomes more and more important to give back to the community,” said VSCPA member Bo Garner, CPA, nonprofit team leader and partner at PBMares in Newport News. “It’s something that’s great for building teams. We have a very large nonprofit practice, so we can truly partner with some of our clients. “We don’t take it lightly. We don’t just run through the gamut. We are focused on it.” Garner’s employer runs its own firm-wide event, PBMares Cares Day of Service, where the firm closes business, pays its employees normally and sends them out into the community to volunteer. Each year, in order to maximize impact, the firm chooses a specific issue to focus on with its volunteer efforts. The past two years, that’s been food and hunger in the firm’s footprint. PBMares is just one of many Virginia firms focused on making an impact in the community. Here’s why those firms do what they do and how your own organization can be recognized for the community service it provides.
MAKING AN IMPACT A big part of creating a successful service initiative is making it clear to your employees that you mean what you’re saying. Paying employees to go out and serve during business hours, as PBMares does, is essentially throwing away a day of productivity for your company. Making that kind of commitment is a clear sign that you mean business.
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Another firm with a similar policy is Deloitte, which held its 19th Impact Day on June 8 of last year. A firm as large as Deloitte can obviously make a major difference with that kind of a project — in 2018, 24,000 employees donated nearly 190,000 collective hours on Impact Day projects in 80 cities. Even with those massive resources, the key to the success of Impact Day is the local focus. Impact Day projects are planned in local offices, with junior professionals often tabbed to organize the efforts to gain leadership experience. The local planning means that individual offices can focus on the needs of their particular communities. “If it was driven top-down, maybe it would be ‘These are the five organizations we’re going to support,’ and they would likely be national organizations,” said VSCPA member John Sliman, CPA, a partner in Deloitte’s Richmond office. “There’s nothing wrong with that approach, but we also realize that needs within local communities may vary greatly and so we choose to empower those who live and work locally to identify the organizations that may benefit most from our assistance.” The beauty of community service is that it doesn’t take the resources of a Big Four firm to pull off a successful project. Firms all the way down to sole proprietors were a mainstay of CPA Day of Service throughout its existence, with the VSCPA going so far as to match individual CPAs up with larger projects to help them maximize their impact. (We’d be remiss if we didn’t give our chapters some love here — most of them organize thoughtful, high-impact projects year after year.)
THE BENEFITS OF SERVICE Smaller firms can have just as much of an impact in the community. Fairfax firm Homes, Lowry, Horn & Johnson (HLHJ), like many firms, tended to try to find outdoor projects for CPA Day of Service to take advantage of the pleasant late-September weather. Its professionals cleaned up parks, painted fences for low-income families and volunteered at the Habitat for Humanity ReStore, which takes donations and sells furniture, appliances, building materials and more at affordable prices. Volunteer projects are good for morale for firms of any size, but the benefits are especially noticeable u
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Catina Downey, CPA (right), a sole proprietor from Henrico, and her daughter participated in the Making Strides Against Breast Cancer walk in Raleigh, N.C., in October.
Employees at Updegrove, Combs & McDaniel in Leesburg sorted and organized donations at Mobile Hope Loudoun in October. L-R: Melanie Edmonds, Barbara Jackson, Joseph Miner, CPA, and Teresa Paul Daie, CPA.
for local firms like HLHJ, where everyone knows everyone else. Service efforts shake up existing cliques within the organization and put everyone on equal footing. “It builds camaraderie and takes you out of that office professional working environment,” said VSCPA member Ravann Sowa, CPA, a senior manager at the firm. “You’re talking and finding out more about each other. It’s a combination of team-building and doing something for the community. Doing something to give back, whether it be for a specific person or the planet, makes you feel good and accomplished.” HLHJ started its community-service push in 2008 when its current president, Kathy Poorbaugh, CPA, joined the firm. That kind of buy-in from leadership is important in getting a service initiative off the ground and establishing it as a core tenet of a firm or organization. “Over time, a culture of service becomes ingrained in the organization,” Sliman said. “That doesn’t happen by accident — you need unwavering commitment from leadership to reinforcing the message and championing the benefits. “There’s always been consistent messaging that starts far in advance of Impact Day, reminders of the real difference a day of service can make along with the benefits to both our firm and our communities. We take participation seriously.” But as Sliman intimated, planning and participation has to come from all levels of the org chart.
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“We sought the input of people at all levels of staff, all the way to the top,” Garner said. “If you only keep it at a partner-manager level, you’re not going to have the same vision or ideas as when you solicit everyone’s ideas. We try to get everybody’s fingerprints on what we’re trying to accomplish, whether it’s the success of the firm or a community service project.”
PROPER PARTNERSHIPS Working with regional community service efforts can help provide more bang for smaller firms’ buck, so to speak. When Poorbaugh joined HLHJ and began emphasizing community service, the firm initially partnered with VolunteerFest, a Northern Virginia-wide event held every October by Volunteer Fairfax in conjunction with National Make a Difference Day. Later, the firm changed the date of its event to coincide with CPA Day of Service. PBMares has also taken advantage of partnerships, working with VOLUNTEER Hampton Roads, a huge part of the philanthropy community in the Tidewater area, which honored the firm with a Good Corporate Neighbor award last year for its hunger relief projects. In 2016, PBMares raised more than $5,000 and collected more than 3,000 food donations good for more than 19,000 meals. In 2017, the firm donated 180 volunteer hours toward hunger relief efforts. Garner played a major role in that success through his work as the firm’s nonprofit team lead and says the affirmation he gets from his job is a big reason he took on his role.
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practice management
SHOW US HOW YOUR #CPASGIVEBACK We want to highlight your firm! We’re asking members and firms to share photos, videos and recaps of community activities with us on an ongoing basis. Submissions will be shared on social media and in Disclosures (image quality and space permitting; photos must be high-quality, 300 dpi JPGs). To submit your event, use the #CPAsGiveBack hashtag on Twitter and Instagram or email VSCPA Communications Manager Chip Knighton Fairfax firm Homes, Lowry, Horn & Johnson partnered with Cornerstones Housing Corpration to paint a fence in Herndon.
(cknighton@vscpa.com) and Student & Member Engagement Specialist Lauren Simonetti (lsimonetti@vscpa.com).
“The whole reason I’m still in public accounting and run our firm’s nonprofit team, is the intrinsic value that I get from working with nonprofits,” he said. “At the end of the day, when I get home, I need to realize that I did something for somebody. I want to feel like I’ve helped an organization succeed or get through a difficult situation or achieve their goals. I need to feel like I’ve been part of it.” CPAs are natural fits for organizing service projects because they’re so often involved with nonprofits on a more traditional volunteer basis. The standard request from a local church or charity — “Can you be our treasurer?” — is so common as to be an accounting cliché. But a successful community service day takes your role beyond the traditional finance focus and gives you a chance to try some new things. That was a focus for former VSCPA Board of Directors Chair Jamie Walker, CPA, when he helped push for the launch of CPA Day of Service in 2009. Walker, now a tax partner with Cherry Bekaert in Richmond, said: “Often, certified public accountants are pigeonholed as the treasurer of an organization. But they have so much depth and breadth about them. They have so much more to offer. It is very important as individuals and citizens to give back and for the CPA community to step out of what they would normally do.” Sowa said: “Every first Friday of the month, we do jeans day for charity where you can wear jeans and donate money to the selected charity for the month. I get comments that it’s great to donate money, but it’s better to be out there doing something.
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People prefer to be out there. Either way, everyone at HLHJ is excited to help in some way.” Even if you haven’t taken that step yet, chances are you’re still involved with a charitable cause in need of some help. Maybe you did answer the call as a treasurer or member of an audit committee. Maybe you’ve volunteered yourself and want to bring your coworkers to help. Or maybe, like Garner, you have a practice’s worth of nonprofit clients that could use the help. No matter how you find your community partners, a properly planned service event can boost employee morale, build camaraderie and improve your organization’s reputation. “It helps keep us connected to the community,” Sliman said. “Especially nowadays, our people want to make a larger impact, and they want to be associated with a firm that is making a larger impact and contributing to the greater good. To the extent we can help foster that environment everyone wins; it’s great for the organizations receiving assistance, it’s great for the firm, and it’s rewarding for our people, who are making a real difference.” n
Chip Knighton is communications manager at the VSCPA, as well as contributing editor at Disclosures magazine. cknighton@vscpa.com connect.vscpa.com/ChipKnighton @ChipKnighton
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vscpa news
Congratulations to the following members! NEW HIRES Joe Pennington, CPA, has joined Touchstone Bank in Prince George as senior vice president/chief accounting officer.
award in the Public Practice Professional category. Brian Plum, CPA, CEO of Blue Ridge Bank in Luray, has been elected 2018–2019 chairman of the Virginia Association of Community Banks.
PROMOTIONS Amanda Dearing, CPA, has been promoted to manager in Brown Edwards’ Roanoke office. Bo Garner, CPA, was named partner at PBMares in Newport News.
THE VSCPA’S NEWEST VIRGINIA CPA LICENSEES
Glen Allen firm Keiter has promoted Gary Wallace, CPA, to managing partner and Vince Nadder, CPA, to practice leader of its tax department.
Michael Bolduc, CPA, Richmond Amber Canody, CPA, Charlottesville Amanda Garcia, CPA, Richmond Kayla Huerta, CPA, Norfolk
APPOINTMENTS & AWARDS Morgan Aronson, CPA, director of financial audits at the U.S. Department of the Interior, has been named an ex oficio member of the Governmental Accounting Standards Board’s working group on addressing accounting and reporting issues for tribal governments.
Daniel Long, CPA, Henrico
Virginia Gov. Ralph Northam appointed Nancy Bagranoff, CPA, dean of the University of Richmond’s Robins School of Business, to the Governor’s Advisory Council on Revenue Estimates.
Vrinda Pisharody, CPA,
John Walter, CPA, Arlington
CPE TEST
Three partners from CST Group, CPAs, in Reston were named to the Northern Virginia Magazine 2018 list of top financial professionals: Kendall Coleman, CPA, John Persil, CPA, and Joseph Romagnoli, CPA.
Visit vscpa.com/CPE. Choose “On Demand” from the side filters to find the exam and others from previous Disclosures issues.
Kay Gotshall, CPA, tax senior manager at Keiter in Glen Allen, received the Accounting & Financial Women’s Alliance’s 2018 #WomenWhoCount
First column: Nancy Bagranoff, CPA, Bo Garner, CPA, Brian Plum, CPA, Gary Wallace, CPA. Second column: Amanda Dearing, CPA, Vince Nadder, CPA, Lauren Soles, CPA.
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Ha Le, CPA, Arlington
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Steven Mack, CPA, Fairfax Alyssa Magyar, CPA, Lynchburg Gina Miani, CPA, Arlington Joseph Miner, CPA, Leesburg Sabrina Morton, CPA, Chesapeake Harsh Patel, CPA, Martinsville Bayonne, N.J. Brenda Pryor, CPA, Fairfax John Reilly, CPA, Cockeysville, Md. Jean Schauer, CPA, Richmond Jordan Wool, CPA, Silver Spring, Md. List from October. Compiled Dec. 3, 2018.
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vscpa news
Firm news
STAFF NEWS
CST Group, CPAs, in Reston, received a 2018 When Work Works Award from the Society for Human Resource Management. The award is given to employers that excel at top-rated employee initiatives.
OPEN VOLUNTEER OPPORTUNITIES
The Richmond Chamber of Commerce recognized Dixon Hughes Goodman with an Impact Award, given to businesses that make an impact on the local economy, the community and their employees.
Thanks to all the VSCPA members who have already signed up to volunteer! Visit the Volunteer Manager on Connect to see the full list of current opportunities
Glen Allen firm PIASCIK was named the third-fastest growing CPA firm and one of the top 10 Best of the Best public accounting firms by INSIDE Public Accounting. Virginia Beach firm Stewart & Co. has joined the BDO Alliance, a national organization of small CPA firms.
at connect.vscpa.com/ VolunteerOpportunities. Current opportunities are: • Chapter leadership • Speaking & community
ANNIVERSARIES
engagement
Feb. 17: Vice President, Learning Amy Mawyer, 25 years
MERGERS & ACQUISITIONS
• Media ambassador • CPAs in the classroom
Feb. 7: Vice President, Innovation Tina Bates, CAE, 19 years, and Technology Director Jen Syer, 19 years
Roanoke-based Brown Edwards has acquired Dixon Hughes Goodman’s Newport News office and Harrisonburg firm Yancey & Bowman. Carawan Financial Group in Glen Allen has acquired Ronald A. Mosocco, CPA, PLLC, in Williamsburg. Councilor, Buchanan & Mitchell in Bethesda, Md., has added Washington firms Chaconas & Wilson and May Barnhard Investments.
WE MOURN THE LOSS OF... Clarence Bowling, a VSCPA Life member from Stafford. A graduate of American University, he worked with Derieux, Baker, Thompson & Whitt before founding Bowling, Franklin & Co., where he served as managing partner. He served as the treasury of his local Rotary Club for more than a decade and was honored as the club’s member of the year.
PBMares has acquired Rockville, Md., firm Santos, Postal & Co.
Cathy Castle, CPA, of Virginia Beach. A North Carolina native, she spent a large part of her career with Brock & Beasley before moving to Jacobson Brotman in Virginia Beach.
We want to hear from you! Email disclosures@ vscpa.com if you have exciting news to share.
Gerry Rush, CPA, of Harrisonburg. A graduate of Eastern Mennonite College (now Eastern Mennonite University), she began her professional career as a schoolteacher before obtaining her CPA license and working for PBMares. She served on the VSCPA Professional Ethics Committee and on the boards of Highland Retreat Camp, the Harrisonburg-Rockingham Community Services Board, Gemeinschaft Home, HDPI Inc., VMRC and Eastern Mennonite University.
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vscpa news
VSCPA 100% Member Firms VSCPA 100% Member Firms show their commitment to their employees, the profession and the association. A 100% Member Firm is simply a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA. Interested in being listed as a 100% Member Firm? Contact VSCPA Membership Development Director Julia Henderson at jhenderson@vscpa.com.
A.F. Thomas & Associates, PC Actuarial Benefits & Design Company Adams & Co., PC Adams & Delp, PC Anderson & Anderson CPAs, PC Anderson & Reed, LLP Andrews CPA Associates, PC Atlas Financial Barnes, Brock, Cornwell and Painter Beale & Curran, PC Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC Bishop, Farmer & Co., LLP Black Marlin CPA (Ann Black CPA PLC) Boyce, Spady & Moore PLC Britt & Peak, PC, CPAs Bruce, Renner & Company, PLC Bullock & Associates, PC Burdette Smith & Bish, LLC Burgess & Co., PC, CPAs Burnett & Sneed, CPAs, LLC Cameron, Moberly & Hamrick, PC Charles H. McCoy, Jr., Inc. Charles W. Snader, PC Chesapeake Accounting Group PC Christopher A. Enright, CPA, PLC Cole & Associates CPAs, LLC Coley, Eubank & Company, PC Corbin & Company, PC Craver, Green and Company, PLC Creedle, Jones and Alga CPAs CST Group, CPAs, PC Dalal & Company David L. Zimmer CPA PC Deloitte & Touche, LLP Didawick & Company, PC
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Donald R. Pinkleton, CPA Donald W. Coleman, CPA, Inc., PC DT & Company, PLC DuvallWheeler, LLP Eggleston & Eggleston, PC Elmore, Hupp & Company, PLC Ernst & Young Everett O. Winn, CPA, PLC Fritz & Company, PC, CPAs G.L. Roberson CPA, PLLC G4 CPA Firm, Inc. Garland & Garland, CPAs, PC Garris and Company, PC Graham and Poirot, CPA, PC Gregg & Bailey, PC Gregory & Associates, PLLC Hampton & Everett, PC Hantzmon Wiebel LLP Harris, Hardy & Johnstone, PC Harris, Harvey, Neal & Co., LLP Henley & Henley, PC Hogan & Reed, PC, CPAs Holland & Brown LLP Homes, Lowry, Horn & Johnson Honeycutt & McGuire, PC Hortenstine and McCown, CPAs, PC Hottel & Willis, PC Hughes & Basye, PC Hunt, Calderone & Abbott PC Jay E. Reiner CPA PLLC John M. Watkins, CPA Jones & Company CPA, LLC Jones & McIntyre, PLLC Jones CPA Group, PC Jones, Madden & Council, PLC JS Morlu, LLC Katherine L. Foley CPA, PC Keiter Kositzka, Wicks & Company
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KPMG Kris McMackin CPA L.P. Martin & Company, PC Lane & Associates, PC Larry D. Greene, CPA, PC Lauren V. Wolcott, CPA, PC Lent & Hawthorne, PC M. Lee Winder & Associates, PC Maida Development Company Mallard & Mallard CPA, LLC Malvin, Riggins & Company, PC Martin, Beachy & Arehart, PLLC McCallum & Kudravetz, PC Meadows Urquhart Acree & Cook, LLP Michael B. Cooke, CPA, PC Michael R. Anliker CPA PC Miller Consulting Group, LLC Mitchell, Wiggins & Company, LLP Moss & Riggs, PLLC Mulkey & Co., PC Murray, Jonson, White & Assoc., Ltd. Nicholas, Jones & Co., PLC PBMares, LLP Pearson & Co., PC PricewaterhouseCoopers R.P. Willis, PC R.T. McCalpin & Associates, LLC Renner & Company, CPAs, PC Robb Scott Bradshaw & Rawls, PC Robinson Consulting Group Roger L. Handy PC Rumble & Associates, Inc. Russell, Evans & Thompson, PLLC Rutherford & Johnson, PC Salter & Associates, PC Saunders & Saunders, PC Saunders, Matthews & Pfitzner, PLLC Scheulen, Patchett & Edwards, PC
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Sells Hogg & Associates CPAs, PC Sherman, Spero, Safarino & Co. Spencer, Hager & Mosdell, PC Spitler, Stephens & Associates PLLC Stephen F. Perry, CPA, PC Stephen Merritt CPA, PC Stephen T. Shickel, CPA, PLC Steve Guy & Associates, PC Steve Walls & Associates, PLLC Stokes Office Solutions Sullivan, Andrews & Taylor PC T.L. Pyne, PC Terry L. Jones, CPA, LLC The Davidson Group, PC The Foley Group, Ltd. Thomas Tax & Accounting LLC Thompson Greenspon Tongelidis Consulting, LLC Updegrove, McDaniel, McMullen & Chiccehitto, PLC VanHuss & Associates, PLLC Verus Financial Partners W.D. Sanders & Company, PC Wall, Einhorn & Chernitzer WellsColeman White, Withers, Masincup & Cannaday Wilkinson Consulting & CPA PLC William B. May, Jr., CPA, PC Wineholt & Associates, PC Yancey, Bowman & Helsley, CPA Young, Nicholas, Branner & Phillips, LLP Yount, Hyde & Barbour, PC
Compiled Dec. 3, 2018. Check vscpa.com/100Percent for a complete list.
classifieds
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i am the vscpa
Two minutes with Aaron Peters, CPA
A
aron Peters, CPA, is the founder and owner of Peters & Associates, a Falls Church accounting firm specializing in tax preparation, planning and accounting services for individuals and small businesses in the greater Washington area. He obtained his bachelor’s and master’s degrees in accounting from Marquette University. He serves on the VSCPA Board of Directors and won the Top 5 Under 35 award in 2015.
MY ADVICE TO CPAs IS… to never stop learning. The world and profession will continue to change, and if you don't stay up to date, you'll quickly be left behind.
I AM PASSIONATE ABOUT… the profession and being a part of seeing the profession to continue moving forward.
I WISH CPAs KNEW… that all of the technical knowledge in the world can only take you so far, and a true focus on client relationships is a key to success.
PEOPLE DON’T KNOW THIS, BUT… I wanted to be an accountant as a young child — not the typical career choice for an elementary school student!
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I NEVER LEAVE HOME WITHOUT… a smile. You never know who you might come across that could be a client, so keeping a game face on is important.
I AM A CPA BECAUSE… I enjoy working with clients to better understand their financial life and helping them to make decisions that will help them achieve their financial goals. n
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Looking for a change of scenery?
We will identify suitable candidates to carry on the success of the CPA firm you’ve worked hard to build. When the time comes to breeze into the next phase of life, we’ll be here to support the entire transition with our proven 5-step Seamless Succession™ process.
Thinking of selling? Learn about our unique process by going online to PoeGroupAdvisors.com or by scanning the code with your smart phone. (Download the free Kaywa Reader in the app store.)
PoeGroupAdvisors.com • 1-888-246-0974 • info@poegroupadvisors.com
Virginia Society of CPAs 4309 Cox Road Glen Allen, VA 23060
Change service requested
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