Tag Archives: PICPA

IRS Getting Some Advice from a Pennsylvania CPA

Freeh, Cheri

PICPA Past President, Cheri Freeh, CPA

Cheri H. Freeh, CPA, PICPA past president and a leader in the efforts to streamline and increase efficiency in local income tax collection, has moved to the national stage with her three-year appointment to the Internal Revenue Service Advisory Council (IRSAC). Twenty members from across the country serve on this advisory body.

Cheri, who just came back from her second meeting, took a few minutes to share impressions on the experience, how she got appointed, and what she hopes to accomplish. Continue reading

Pennsylvania CPAs Predict Revenue Growth in 2014

Respondents cite health care, pensions, and union influence as hindrances to economic growth

PICPA partnered with the New Jersey Society of CPAs and the New York State Society of CPAs to identify the economic, business, and political trends affecting the tri-state region and national economies. The CPA Poll is part of the PICPA’s image enhancement campaign to position CPAs as thought leaders. Here are some of the most compelling results.

The majority of respondents predict that business revenues will go up marginally in the coming year. About half of respondents, however, do not believe job growth (55 percent) or salaries (47 percent) will change.

Workforce-Expectations

When evaluating overall U.S. economic conditions, most CPAs agree that the economy is about the same this year when compared with last and will remain the same in 2014. High unemployment, the Affordable Care Act (ACA), and entitlement spending were identified as the top three hindrances to economic growth.

Graph_hinderance-to-growth

Pennsylvania Results

Even though poll numbers show that CPAs characterize U.S. economic conditions to be stagnant, their opinions on some conditions in Pennsylvania are slightly more optimistic. In 2013, more Pennsylvania CPAs say state economic conditions are better compared to last year (28 percent) than said so in 2012 (21 percent). Forty seven percent surveyed said that revenue this year marginally increased and fifty two percent predict that revenue will marginally increase next year.

Reforming state and government pensions and benefits topped the list of recommendations for what would provide greater economic expansion and job growth potential in Pennsylvania. Second in line was the increased investment in repairs and upgrades to infrastructure such as roads and transportation systems. The PICPA’s Fiscal Responsibility Task Force has highlighted the state’s ongoing pension reform problems and infrastructure funding in both their 2011 and 2013 reports to legislature. The Task Force report included a number of policy options contained in House Bill 1060, a measure funding transportation initiatives, which was approved in mid-November.

Among the three states, Pennsylvania CPAs thought the ACA was affecting company decisions (56 percent). Only 44 percent of New Jersey and New York CPAs responded likewise. The survey also found that fifty four percent of Pennsylvania CPA businesses are re-evaluating their current insurance, one in three (31 percent) are postponing hiring decisions, and increasing part-time employees (30 percent) due to the Affordable Care Act.

Pennsylvania respondents fall between New York and New Jersey when reporting that red tape was worse than ever.

Graph_redtape

This year’s poll also asked CPAs about personal financial planning issues. Pennsylvania CPAs report that 56 percent of their employees are postponing retirement. When asked what the deciding factor was for delaying retirement, 72 percent cited the economy.

When asked what state regulation has the most negative impact on Pennsylvania businesses, PICPA members surveyed felt the influence of unions in pricing and contractor selection was number one (46 percent) with the complexity of the state tax code for businesses (21 percent) and restrictions on which contractors can be chosen for state and municipal projects (12 percent) coming in second and third.

Tri-State Responses and Comparisons

CPAs in New Jersey and New York blame high unemployment (N.J. 54 percent, N.Y. 49 percent) and entitlement spending (N.J.  40 percent, N.Y.  38 percent) for the lack of economic growth in the United States. Forty-three percent of CPAs in Pennsylvania cite the Affordable Care Act as their top reason for negative effect on U.S. economic growth.

One striking difference from New Jersey and New York was CPA opinion on the state’s tax structure. When asked whether Pennsylvania’s tax structure is better or worse than most other states, 81 percent of both New Jersey and New York CPAs rated it as worse. In comparison, only 44 percent of Pennsylvania CPAs rated state tax structure as worse.

Graph_tax-structure

More than 1,900 CPAs serving as CEOs, CFOs, accounting firm partners, and other industry leaders in Pennsylvania, New Jersey, and New York responded to the survey. The data for the survey was gathered during September and October 2013 by the Franklin & Marshall College Center for Opinion Research. Download the full report on the PICPA’s website.

Are these poll results consistent with what you are finding with your clients or in your industry? Did you find it surprising the high marks for Pennsylvania’s tax structure, compared to the responses in New York and New Jersey?

PICPA’s Homecoming has Leaders in Tears

Leadership-triptychThe PICPA hosted its annual Leadership Conference in late September, and someone suggested that it should be renamed “Homecoming.”  As I looked around the room and saw the genuine pleasure members experienced as they welcomed each other to the meeting, I noted the groups that naturally gravitated to each other because of their shared interest in specific PICPA areas (the government relations group) or geographic area (South Central was one of the more rowdy). I thought “homecoming” was a great description of this special PICPA event.

Bob Firely, PICPA president, takes the lead in developing the Leadership Conference, and the participants are PICPA members who serve as officers, committee chairs, and committee members. Many come back year after year to gain insightful lessons on both professional developments as well as leadership trends and techniques. Participants renew friendships with colleagues from across the state while building contacts with others who share interests in promoting, enhancing, and empowering the profession. The final session with Don Yeager even had participants in tears with his inspirational stories about leadership decisions of some great athletes who faced great personal challenges. To me, these are the ingredients of a successful homecoming.

Whatever you call it, it’s an opportunity to escape the day-to-day demands of your business and look at the big issues. Here’s a quick summary for those who weren’t at the conference so you, too, can begin thinking about the big issues:

  • Ron Baker, nationally recognized CPA firm advisor, spent significant time discussing value pricing. Are CPAs selling time, or are they selling wisdom, experience, and results? Baker has been an advocate of value pricing for years. With today’s technology has it’s time finally arrived? There was some interesting discussion on the demise of the time sheet as many CPAs know it.
  • Bill Ezell, former AICPA chair and current chair of the Pathways Commission  lead the discussion on the future of accounting education. While accounting is experiencing success in terms of record-breaking numbers of graduates, projections show that the number of students graduating from high schools is going down, and this trend is not sustainable. Now is the time to be sure that education reflects the future of the profession, and develop a curriculum that allows CPAs to play a critical role in supporting a prosperous society.
  • Ken Bouyer, diversity leader at Ernst & Young, led a discussion on the importance of diversity in the profession. His personal story demonstrated that it’s not just about bringing different types of people into a firm or business, but establishing a culture where diverse people can thrive. Diversity of thought and perspective drives innovation. Does your firm look like innovation?
  • Mike Colgan, PICPA’s CEO and Executive Director, then posed a few questions to the group. First he asked what PICPA does best. Members reaffirmed that we are continuing to support of mission of providing education, advocacy, and image enhancement. When asked what PICPA should address in the future, the responses were for tax simplification, particularly local collections, promoting CPAs in the community, succession planning, technical information and CPE opportunities, to name a few. The PICPA team is reviewing these recommendations as we plan for next year’s strategic direction.
  • Don Yeager, author and former Sports Illustrated editor, ended the day with his take on what it means to be a leader based on his experiences working with famous athletes, particularly as he worked with them to author books telling their stories. In his observations on working with Michael Jordan – and what he has observed as a common trait for most athletes – he found that “they hate to lose more than they love to win.” What resonated with me is that he observed that leaders know that they will never outperform their inner circle, so they strive to increase the knowledge and experience of those that they work with. Isn’t that what the PICPA is all about? Active members continue to expand their network, increase their sphere of influence, and continually grow and learn with their peers.

In addition to the outstanding speakers, I would be remiss if I didn’t recognize that the attendees are a key component of this successful program. A highlight is the recognition of our Young Leaders Award recipients. They are the future of the PICPA and the profession, and that future looks promising.

The most common review from the program was that it’s going to be tough to beat next year. I am confident that we are up to the challenge. Be sure you get an invitation by joining a PICPA committee this year. You don’t want to miss a homecoming that promises to be insightful, productive, and fun!

A Year of “Firsts”

Some of you were unfortunately unable to attend the PICPA 116th Annual Convention last month in Philadelphia. Even though it was the 116th time members gathered to celebrate our change in leadership and recent PICPA accomplishment, there were many notable “firsts” over the 2012-2013 year of Bob Jazwinski’s term as president. Several accomplishments are highlighted below, and I would be interested in any feedback you have on these initiatives.

Governance

Appointment of a Governance & Structure Task Force to evaluate member engagement opportunities and the PICPA’s governance model. PICPA Council accepted the Task Force recommendations regarding member engagement and created a new governance model that will result in expanded member leadership opportunities.

The passage of Act 15 eliminates the mandatory attest experience requirement to become a CPA in Pennsylvania, and moves to a more general experience model.

The passage of Act 15 eliminates the mandatory attest experience requirement to become a CPA in Pennsylvania, and moves to a more general experience model.

Release of our Diversity Committee’s toolkit, Increasing Talent, Clients, and Revenue at Your Organization, to help firms create a more diverse culture within their practice or business.

Release of our Diversity Committee’s toolkit, Increasing Talent, Clients, and Revenue at Your Organization, to help firms create a more diverse culture within their practice or business.

dced

Creation of workgroups with the Department of Community & Economic Development and the Department of Public Welfare to ensure compliance with our members’ professional standards.

Rollout of the CGMA designation in Pennsylvania, resulting in more than 1,200 credential-holders.

Rollout of the CGMA designation in Pennsylvania, resulting in more than 1,200 credential-holders.

Our entry into the CPE on-demand 24/7 marketplace, and the creation of our first offerings to supplement traditional classroom learning experiences.

Our entry into the CPE on-demand 24/7 marketplace, and the creation of our first offerings to supplement traditional classroom learning experiences.

Technology advancements to enhance member value, including the launch of the PICPA mobile website, the Pennsylvania CPA Journal app, and our alliance with the CCH TaxAware Center.

Technology advancements to enhance member value, including the launch of the PICPA mobile website, the Pennsylvania CPA Journal app, and our alliance with the CCH TaxAware Center.

This list could go on and on, especially if you add in accomplishments that were not necessarily “firsts” but were vital to the PICPA and our members, but you get my point. The PICPA, with the backing of our volunteer officers and Council and the support of our talented team of association professionals, does not rest on its laurels. We will continue to be leaders as we strive to deliver the highest value to our members. And we will never tire of trying to achieve more “firsts.”

Do you simply remit your dues payment each year (thank you!) and take advantage of a handful of membership benefits, or do you participate on a committee, in chapter leadership, as a speaker, or among one of many other engagement opportunities? If you are not engaged, we want you to be a part of one of our future “firsts.” I would be thrilled to write about your accomplishments for our Annual Convention!

Good vs Evil: Good Still Wins in My World

Sam Antar, the notorious CFO of the old Crazy Eddie electronics chain, opened the PICPA’s CPA Annual Convention at Philadelphia’s historic Eastern State Penitentiary discussing fraud.

Sam Antar prepares for fraud presentation at Eastern State Penetentiary

Sam Antar prepares for fraud presentation at Eastern State Penetentiary

He’s certainly an expert on the topic since he admittedly understated earnings by skimming while the company was privately held and then inflated inventories when the company went public. He’s an ex-CPA who chose the profession so he could learn how to “beat the system” and help his cousin, Eddie Antar, illegally expand his chain of electronic stores … until he got caught. Then he turned on his family and friends to work out the best deal for him.

Personally I found Antar’s presentation both disturbing and provocative. Disturbing because he seemingly has no remorse for the crimes he committed, and provocative because he raised issues related to fraud and ethics that made gave pause. For instance, he quoted a study that indicated that 10 percent of people have no ethics and readily lie and cheat to get what they want, and 10 percent of people have such strong ethical standards, that nothing can make them waiver from their beliefs. The rest of us are in the 80 percent – sometimes ethical, sometimes not. I found that pretty disturbing. I started doing some research on this and found that clinical psychologist Dr. Joan Pastor states, “we are all capable of committing fraud” in her presentation on “The Psychology of Fraud, Unethical Behavior, and White Collar Crime.” That didn’t make me feel much better.

CPAs are generally skeptical and that’s why they make good auditors; but most of us expect the best of each other. But, it’s an important lesson to learn to be on your guard and we all need to think about fraud and how to protect ourselves. When working with potential fraudsters, think about what benefit they could gain from cheating you. Antar shared some of his “techniques,” including being friendly, which helps to get people to put theirs guard down. He provided insight into the role of empty compliments and creating distractions so fraudsters are no longer suspect. Finally, he talked about when the Crazy Eddie enterprise began to unravel. For Antar, “Getting caught is not about remorse. It’s about selling information to the Feds.” It’s clearly how he’s chosen to lead his life. I left that meeting having lost some faith in the human race.

Thankfully, the next morning, James E. Nevels stepped to the podium and spoke about ethics and their importance in today’s society. If the study Antar quoted about society being set in 10-80-10 ethical pieces, I am convinced Nevels resides in the good 10 percent. Nevels, chair of The Swarthmore Group, has an impressive resume outlining leadership roles in a long list of charitable and civic organizations. He is a person committed to education and service.

James Nevels encourages attendees to follow his father's advice: "Do one thing right every day."

James Nevels encourages attendees to follow his father’s advice: “Do one thing right every day.”

He talked about how CPAs are well-equipped to make a difference in the world because of the CPA traits of ethics, education, and commitment to service. His soft-spoken presentation style and compelling story of his own life had people leaning forward to hear his tale. His journey from Birmingham Ala., to Bucknell University and the University of Pennsylvania taught him that education changes lives. His parents made many sacrifices to help him succeed. He listened, learned, and lives a life committed to making things better. He told us that his dad always said, “Do one thing right every day.”  It’s a credo that he lives by every day. He also challenged us to achieve mortality by becoming a mentor, a parent, or a teacher, roles he highly regards. In his parting at the PICPA’s CPA Convention, he offered these words: “Do your time; do your service. If you don’t do it, we will all be less off. We can all be good citizens together.”

James Nevels brought me back to the world where people care about doing the right thing. He restored my faith in humanity.

Hurry! Grab a Seat at the Table

Are there certain questions your clients keep asking you? Do you ever find yourself thinking, “Why don’t they cover this in the news?” I don’t even have to ask if you wonder about how to keep up with all the professional and technical changes that are going on – that’s a given.

I work closely with PICPA’s Pennsylvania CPA Journal Editorial Board and the CPA Image Enhancement Committee, and these questions are what we talk editorialmeetingabout at the committee meetings. The conversations are interesting, enlightening, engaging, and, believe it or not, fun! Members step away from the day-to-day demands at the office and engage in discussions with their peers. Sometimes members get reassurance that everyone is experiencing the same thing, while other times they learn by the experiences of others. Most importantly, these conversations lead to action steps at the PICPA.

EdBoardTV

Take a look behind the scenes as the Pennsylvania CPA Journal Editorial Board decides the 2013-2014 calendar.

The Editorial Board meets and plans out the journal’s feature stories for a year in a four-hour meeting. To get a sense of what is involved in this process, check out our recent video. At the May meeting, the board literally covered the walls with great ideas about what most interests members. Common themes arose around reform in health care and taxes, as well as the financial reporting framework for small and medium-sized companies. A final list of scheduled features can be found in the Resources section of our website. If you would like to get involved by writing a column or sharing an idea on specific areas of interest, you can contact the column coordinator directly.

What was particularly interesting this year is that many of the technical issues addressed at the editorial board meeting also came up at the CPA Image Enhancement Committee meeting. PICPA’s goal is to support the CPA’s reputation as a trusted business advisor by positioning members of the profession as thought leaders in emerging issues. PICPA’s CPA Image Enhancement Committee helps identify what issues PICPA should be commenting on and develop the resources members use to help their clients, their employers, the business community, as well as consumers and the media. For instance, health care is a big issue for small business owners and consumers. The uncertainty makes planning extremely difficult. The PICPA’s communications team, along with a few members of the committee, will be working to provide resources that can help guide businesses through this maze of new requirements.

Sometimes the discussions lead us to develop programs for very specific audiences. For instance, CPAs and lending institutions often work together to help businesses expand. With the introduction of the new financial reporting framework that could be used as early as 2014 and the increasing request for comfort letters, CPAs and the lenders they work with need to be using the same rule book. Watch for resources and programs to help build relationships with lenders in the coming year.

It’s been a productive few weeks, and it’s probably my favorite time of year at the PICPA because I get so energized by the commitment, knowledge, and passion of our volunteers. The committee members clearly enjoy the meeting experience because many come back year after year. In fact, every seat at our boardroom table was taken this year with others calling in. You shouldn’t miss out on this great experience! Consider joining a committee today so you have a seat at the table. Let me know if we can help guide you to the committee experience that best meets your needs.

Welcome Back!

As the calendar flips from April to May, and “busy season” for many of our members continues to fade from their rear view mirrors, let me be among one of the first to welcome you back to PICPA. During the first quarter of the calendar year PICPA is busy providing networking and CPE events geared to members in industry, creating and responding to media opportunities to position CPAs as thought leaders on tax issues, and planning second semester activities at colleges and universities across Pennsylvania. The end of a busy tax season for our members represents the beginning of a busy season for PICPA networking, and we look forward to re-engaging with members.

leadership1May begins a new fiscal year for PICPA and our chapters. A spring highlight is the upcoming chapter annual meetings to install officers, reveal new strategies, and recognize outstanding volunteers, membership milestones, and successful CPA candidates. PICPA Council will meet and discuss strategic priorities and discuss recommendations from our Governance & Structure Task Force.

The PICPA Foundation kicks-off your CPE reporting year with an expanded list of webinars and on-demand CPE to complement the high quality seminar and conference presentations, and is well prepared to help you meet your new four-hour ethics CPE requirement through a variety of course delivery vehicles. June brings the retooled 116TH Annual CPA Convention back to Pennsylvania, an excellent opportunity to network, learn and grow in Philadelphia with outstanding speakers.

I would be remiss, however, if I did not mention a few highlights that occurred during busy season that you may have missed:

  • DiversityAwardLast week PICPA was honored to receive the 2013 Workplace Diversity Award from the National Association of Black Accountant’s (NABA)Philadelphia Chapter at their annual awards banquet. This award recognized the outstanding effort of our Diversity Committee in the development of their research paper Increasing Talent, Clients and Revenue for your Organization: The Business Case and Toolkit for Diversity. The committee is now working to finalize their student diversity event to be held Oct. 3, 2013 at the Pyramid Club in Philadelphia with NABA, ALPHA, and Ascend. You can find other initiatives of our Diversity Committee in the Get Involved section of PICPA’s website.
  • The Fiscal Responsibility Task Force released their 2013 report in February with a news conference in the Capitol in Harrisburg. The report is designed to provide strategic and technical expertise to help Pennsylvania’s policymakers address the state’s fiscal challenges. The report addressed pensions, financially distressed municipalities, prevailing wage, taxation, efficiencies in streamlining state government, and infrastructure issues. The Task Force did an outstanding job positioning CPAs as thought leaders.
  • PICPA has been at the table working with the Corbett administration to design a comprehensive tax reform package for the 2013-2014 state budget. In addition, we are working closely with the Department of Revenue to reform the Board of Finance and Revenue Appeal Process – this access would not be possible without the high level of regard and respect for Pennsylvania CPAs by the Governor and General Assembly and the tireless work of our State Taxation Committee.

This is a great time of year to remind members of the PICPA Promise:

PICPA preserves the legacy and propels the integrity of the CPA profession. Belonging to PICPA, along with more than 20,000 members, you have the professional and personal support to refine skills, expand knowledge, connect with like-minded people, and achieve bigger and better things at every stage of your professional life.

We look forward to re-engaging with all of our members during the next several months. When you have the opportunity to meet with a member of PICPA leadership or the team at these upcoming events, please share your thoughts on how PICPA can deliver more value to you, and thank you for your commitment to the profession and support of PICPA!