• How an Annual Mortgage Review Could Help Homeowners at Tax Time

    by Marc Demetriou, CLC, ChFC, CDLP, Guaranteed Rate Inc. | Oct 20, 2021

    With fall in full swing, this is a good time for homeowners to get an annual mortgage review and needs analysis. According to the Consumer Financial Protection Bureau (CFPB), knowing how home loans are calculated can help prospective homebuyers and current homeowners better understand their current or future mortgage loan options. Whether a homeowner is thinking about refinancing or purchasing a new property, having up-to-date mortgage data most certainly helps one revered group of professionals in particular — CPAs.

    Providing the IRS with accurate information on a home’s actual worth can make income tax preparation ahead of April 15 less painful for both the homeowner and their CPA. And with rates still hovering at record-low levels, it makes sense to review mortgage and rate options now. Based on the typical investment time horizon, homeowners should consider using the equity in their homes for one or more of the following financial options:

    • Cash-out refinance for college funding
    • Home renovations
    • Debt consolidation
    • Purchasing a second home or investment property
    • Converting to a shorter-term fixed or adjustable-rate mortgage (ARM) option

    The typical factors that go into a mortgage review are as follows:

    • Current interest rate
    • Current monthly payments
    • Mortgage insurance
    • Estimated value of home (with consultation with an appraiser)
    • Current mortgage product (fixed or ARM and what term)
    • Type of home: condo, single family or multi-family
    • Occupancy type: primary, second home or investment property
    • Approximate credit score
    • State in which the property is located

    The benefits of getting a mortgage review could include:

    • Lower monthly payments (savings, if any, vary based on consumer’s credit profile, interest rate availability and other factors)
    • Shorter loan term
    • Cash out or refinance option
    • Qualifying for another mortgage
    • Peace of mind

    Homeowners who are armed with straightforward and easy-to-understand information about their mortgage can make more-informed decisions on the best financial options that fit their needs.

    Learn more at rate.com/mdemetriou and at Guaranteed Rate's NJCPA member benefit provider page. 

  • The Real Impacts of Cyberattacks: What CPAs and Their Clients Should Know

    by Shekhar Somaiya, CPA, MBA, PMP, CSM, Equus Strategy, LLC | Oct 14, 2021

    October is National Cybersecurity Awareness Month. The FBI’s Internet Crime Report from March 2021 shows that the cost of cybercrimes reached $2.7 billion in 2020 alone. The top three crimes reported were phishing scams, non-payment/non-delivery scams and extortion. Victims lost the most money to business email compromise scams, romance and confidence schemes, and investment fraud.

    Notably, 2020 also saw the emergence of scams exploiting the COVID-19 pandemic. The Internet Crime Complaint Center (IC3) received more than 28,500 complaints related to COVID-19, with fraudsters targeting both businesses and individuals.

    Cyberattack Costs

    The following are some of the most obvious costs and those that can still have a big impact but remain hidden:

    Explicit (visible) costs:

    • Technical investigation
    • Customer breach notification
    • Post-breach customer protection
    • Regulatory compliance
    • Attorney fees and litigation
    • Improving cybersecurity going forward

    Hidden costs:

    • Increase in insurance premium, raising debt
    • Operational disruption/destruction impact
    • Loss of contract revenue
    • Impact on trade name
    • Loss of intellectual property stolen
    • Loss of customer trust and relationship
    • National security/impact to the economy

    Source: Deloitte Webinar -Quantifying Cyber Risk to Chart a More Secure Future

    Small Business Impact

    Information technology and high-speed Internet are great enablers of small business success, but with those benefits comes the need to guard against growing cyber threats. As larger companies take steps to secure their systems, less-secure small businesses are easier targets for cyber criminals. According to a recent Small Business Administration (SBA) survey, 88 percent of small business owners felt their business was vulnerable to a cyberattack. Yet many businesses can’t afford professional IT solutions, have limited time to devote to cybersecurity or don’t know where to begin. The National Cyber Security Alliance reports that 60 percent of small and midsize businesses that face a severe cyberattack go out of business within six months.

    CPAs can assist in keeping clients’ data safe. Implementing a security-first culture helps to keep a company secure. Here are some tips on how to keep small businesses safe from cyberattacks:

    • Learn how to protect your business by paying attention to cybersecurity training and tools.
    • Realize the threats that companies should expect in the hybrid working mode and how to prevent risks.
    • Understand how the importance of security has changed since COVID-19.
    • Recognize the most important steps to take when integrating security into a company’s DNA.
    • Know how Secure Software Development Lifecycle (SDLC) is being implemented by security experts in different industries and companies.

    Avoiding Threats

    Smart cybersecurity has a promising role to play in identifying, filtering, remediating and neutralizing cyber threats. By harnessing the smart automated enterprise tools such as artificial intelligence and machine learning, enterprises will be more readily able to meet future challenges.

    A cybersecurity risk assessment can identify where a business is vulnerable and help clients create a plan of action — which should include user training, guidance on securing email platforms and advice on protecting the business’s information assets.

    Best Practices

    The following best practices can be followed by both CPAs in their own organizations and at their small business clients:

    • Train employees on emails (a leading cause of data breaches for small businesses):
      • Spot a phishing email
      • Use good browsing practices
      • Avoid suspicious downloads
      • Create strong passwords
      • Protect sensitive customer and vendor information
      • Maintain good cyber hygiene
    • Use antivirus/antispyware software and keep it updated
    • Secure your networks
    • Use strong passwords
    • Implement multi-factor authentication
    • Protect sensitive data by:
      • Backing up data
      • Securing payment processing
      • Controlling physical access

    Additional Resources and Tools

    • Consider contracting for dedicated IT support.
    • The Federal Communications Commission (FCC) offers a cybersecurity planning tool to help you build a strategy based on your unique business needs.
    • The Department of Homeland Security’s (DHS) Cyber Resilience Review (CRR) is a non-technical assessment to evaluate operational resilience and cybersecurity practices. You can either do the assessment yourself, or request a facilitated assessment by DHS cybersecurity professionals.
    • DHS offers cyber hygiene vulnerability scanning free for small businesses. This service can help secure your internet-facing systems from weak configuration and known vulnerabilities. You will receive a weekly report for your action.
    • Developed by the DHS’ Cybersecurity and Infrastructure Agency (CISA), the Supply Chain Risk Management Toolkit can be used to help shield businesses’ information and communications technology from sophisticated supply chain attacks.
  • 10 Tips to Successfully Leap from Student to Accounting Professional

    by Eduardo Alay, Wiss & Company, LLP | Oct 08, 2021

    As a college student, there is often confusion on what working in the “real world” is like. Let me be the first to tell you that working in accounting is nothing like taking accounting classes in college. The biggest hurdle in transitioning from college student to an accountant is understanding that, at first, you will have absolutely no idea what you’re doing, yet understanding that is totally okay! As an entry-level staffer, it is not expected that you come into the real world with the entire Internal Revenue Code memorized.

    So, how can you help make a successful leap from student to accounting professional? Here are 10 tips to do just that.

    1. Remember that practice makes perfect. Not understanding what you are doing may be frustrating and discouraging at times but keep trying.
    2. Know that patience is key. This doesn’t come overnight, nothing ever does.
    3. Ask a million questions. There is no such thing as a stupid question, because you want to make sure everything is accurate as can be. Don’t just complete a task and submit it; ask questions to make sure you are understanding the purpose behind what you’re doing (we like to call this “the why”).
    4. Don’t be afraid to mess up. If at first you don’t succeed, try, try again. Use your mistakes as learning opportunities to help ensure that you do it right the next time.
    5. Create a schedule. Creating a list/schedule of your assignments will not only help you to prioritize tasks, but it will also increase your awareness of the value of time management, organization and your ability to keep on track to accomplish your tasks.
    6. Record virtual meetings. Don’t focus on writing everything down. Instead, ask to record a meeting so that you can go back and process what was discussed afterwards.
    7. Get the CPA Exam out of the way ASAP. Working fulltime and studying for the CPA Exam is, by far, one of the hardest things to juggle: but it’s not impossible! As you grow and excel within your career, you gain more responsibility, making it more difficult to find time to study. So even though tackling the CPA Exam right away might seem daunting, there will likely never be an easier time for you to do it.
    8. Take mini breaks. There is something to be said for people with sedentary jobs and multiple computer screens; the struggle is real. Make an effort to take breaks to re-charge — get up, take a walk and grab a cup of joe while you’re at it.
    9. Reward yourself. Working long hours can be dreadful at times, so having something to look forward to after work will help keep the motivation present. Something as simple as treating yourself to a pepperoni pizza and watching a movie on a Friday night can go a long way. Trust me.
    10. Realize there is no one-size-fits-all approach.Ultimately everyone has a different story when starting their career in accounting.

    At the end of the day, remember that it is a marathon, not a sprint, so make sure you stop and smell the roses along the way and enjoy every bit of your transition into the real world.

  • CEO Compass - Fall 2021

    by Ralph Albert Thomas, CPA (DC), CGMA | NJCPA CEO and Executive Director | Oct 06, 2021

    Diversifying the CPA Profession — It Takes a Village

    In a recent episode of the NJCPA IssuesWatch podcast, “Black CPAs: Honoring the Past and Building the Future,” Don Meyer, the Society’s chief marketing officer, interviewed Crystal Cooke, the director of diversity and inclusion at the American Institute of CPAs (AICPA), about the Black CPA Centennial celebration and what firms and individuals can do to enhance the recruitment and advancement of Black CPAs.

    In response to a question about what advice she would offer to Black prospective CPAs, Crystal responded, “We need you! It’s not advice, but we need you.” Crystal’s response struck me as apropos on two levels. First, for decades, the accounting profession has pursued diversity, equity and inclusion (DEI) initiatives to create opportunities for all to feel welcome, valued and critical to serving the public interest. Yet, progress is inconsistent at best.

    There are more than 500,000 licensed CPAs in the United States, but only 2 percent are Black. Unfortunately, diversity in the CPA profession has changed very little in the last 25 years. According to the AICPA, minority hiring in the profession has seen slight improvements but overall stagnation.

    Second, in tandem with the profession’s diversity challenges, we are witnessing a nationwide decline in not just new CPAs but also accounting program enrollments. According to the most recent AICPA Trends Report published in 2019 — a comprehensive biennial report tracking the supply and demand of U.S. accounting graduates — projected bachelor’s, master’s and Ph.D. accounting enrollments were down 4 percent, 6 percent and 23 percent in 2018, respectively, and the number of new CPA Exam candidates hit a 10-year low.

    To be blunt, the profession has a pipeline problem. 

    According to a research report from the Institute of Management Accountants (IMA) and the California Society of CPAs (CalCPA), “Diversifying U.S. Accounting Talent: A Critical Imperative to Achieve Transformational Outcomes,” in order for the profession to continue to grow and succeed with a robust talent pipeline, actions to address DEI issues need to be taken now. This includes bringing in and promoting talented people based on relevant and unbiased factors rather than demographics.

    Although the research highlights the stark reality facing the profession today, it also presents a great opportunity.

    “If we collaboratively work to close the diversity gap, it will not only have a positive impact on the front-end pipeline of candidates coming into the profession, it will work to curb the loss of talent that we are seeing,” said Brad Monterio, CalCPA chief learning officer. 

    However, reversing the CPA credential’s downward growth trajectory will not be without its challenges. The race for relevance is faster and more competitive than ever. Our hope is that by addressing these challenges now we can help all stakeholders ensure the profession’s sustainability and relevance for many generations to come.

    What do you think? Let us know at feedback@njcpa.org.

  • In a World of Gimmicks, Be a Thought Leader

    by John C. Pastore, CRPC®, Integrated Financial Partners | Sep 27, 2021

    We live in a world of short attention spans, social media, 24-hour news and two-minute YouTube clips. Novelties, fads and marketing gimmicks can grab someone’s attention for a moment, but keeping their attention requires substance — it requires true thought leadership.

    As a CPA, your clients deserve and are seeking your expertise and opinions. They need a trusted source of information that helps them cut through the noise of social media and gimmicks. They need you — for help in understanding the current tax landscape, where there are opportunities and pitfalls, and since the current environment is shifting towards a tax planning model. Clients are also getting inundated with information. 

    Thought leadership, therefore, is all about having ideas and not being afraid to share them. It is about seeing beyond the current uncertainty and finding ways to communicate perspectives and points of view so that clients and others can make better financial decisions. Take politics, for example. After the November elections, there was a lot of noise, distraction and some disappointment that clouded decisions for months. As a trusted advisor, CPAs needed to help their clients and organizations stay focused on what they can control. Regardless of who was (and who wasn’t) elected President, clients should understand how the outcome may affect their individual situation and what you are doing as their most trusted advisor to provide what-if planning.

    Your Role

    CPAs need to be prepared for what may come and to show clients opportunities that fit their goals. The truth is, those who act on what they can control and influence, will find the next few years ripe with financial and estate and tax planning opportunities. Those that remain mired in the uncontrollable will miss out.

    For high-net worth clients, estate taxes can be a place to help mitigate their tax exposure. Estate tax is a voluntary tax. As thought leaders we can find simple ways to motivate our clients to take advantage of tax planning opportunities. The planning clients do today can save them in the future. Motivating clients and moving past their concerns is a key role a thought leader plays in their clients’ lives. 

    Here are six simple steps to thought leadership:

    1. Find a topic and own it.
    2. Stay informed: Read. Read. Read.
    3. As you learn something, share it.
    4. Be a thought originator and a thought collector: Repost related content from other sources on this topic.
    5. Stay brief: Less than 1,000 words.
    6. Stay top of mind: Be their thought leader today and reap the rewards tomorrow.

    Your clients need this type of proactive thought leadership. Control what you can control and influence and continue to be both a trusted advisor and a true thought leader.

  • 5 Tips for Landing and Succeeding at Your Internship

    by Nicole Garcia, Traphagen CPAs & Wealth Advisors | Sep 22, 2021

    One of the most important things you can do in college is to find an internship that allows you to reinforce what you’re learning in the classroom in a real-world setting. The purpose of an internship is to allow you to learn about the industry you’re studying and give you a glimpse into what you can expect in the future.

    Looking for an internship can be challenging, given the current COVID landscape, but here are five tips that can help:

    1. Prepare. Prepping for an internship starts long before filling out the application for the position. Your internship preparation should start in the classroom as soon as possible. This simply means start forming meaningful connections with your professors, peers and advisors. Not only will these individuals provide insight into their careers, but they also have relationships with professionals within the industry who could possibly help network an internship or allow for other learning opportunities. These relationships can be formed by staying after class to have a discussion with your professor or by joining different clubs that your university may offer that revolve around your major or a mentoring program. These connections will assist you when it comes to looking for opportunities within the industry.
    2. Apply. When it comes time to apply for internships, it’s best to apply for anything and everything revolving around your major; do not be closed-minded in terms of the size of the company or the industry they serve. With internships, there is no such thing as looking too early. You should always be on the lookout for internship opportunities and seek out roles that suit your current skills or education level.
    3. Experience. After obtaining an internship, the most important things you can do to make the most out of your experience is to ask questions, have a positive attitude and always keep your eyes and ears open! Take advantage of your time with the company and ask questions regarding the projects you’re completing, the company you’re working for and your coworkers’ experiences within the industry. Most of the time, your coworkers will be more than happy to discuss their career paths and eager to give you any guidance that you are seeking. Maintaining a positive and professional attitude throughout your internship is essential to your success within the company. You can display your positive attitude by always accepting the assignments you’re given, no matter how small or large, and by showing you genuinely care about the work you’re completing. You should also always take advantage of any opportunity to help you stand out from the rest of your peers.
    4. Learn. Some of the best learning opportunities during an internship come from being in an environment where more-experienced professionals are working. An intern can benefit greatly from simply sitting in an office and listening to the conversations that are taking place around them. You can learn how to talk to clients, expand your industry-specific vocabulary and hear how professionals handle different challenges. Observe your surroundings and reflect on how you can apply what you’ve learned to your projects or how they can benefit you in the future.
    5. Develop. Overall, internships are an essential part of one’s professional career. They give you the ability to develop in your career, build your resume and get a glimpse of what your future could hold.

    Applying for an internship can be intimidating but, in the end, the experience you receive from it is irreplaceable.


  • Does Risk Management Include Climate Change Risks? IMA Launches New Survey to Find Out

    by Shari Littan, CPA, JD, Institute of Management Accountants | Sep 15, 2021

    Is climate change included in an organization’s environmental, social and governance (ESG) strategy? How about its overall risk management process? The Institute of Management Accountants (IMA) with the New Jersey Society of CPAs (NJCPA) as research contributor, has launched a new survey to understand how accountants and corporate finance professionals are responding to exposures related to climate change and the challenges that they face. You can help, too — take a few minutes to complete the survey by Oct. 14.

    Why it Matters

    Stakeholders are driving businesses to consider and disclose the risks that climate change poses to their organizations. Despite demands for enhanced disclosure, many companies are contemplating these risks for the first time. Global companies are beginning to implement the 11-point recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which  were developed pursuant to the direction of the global Financial Stability Board, and now the Climate Disclosure Standards Board continues the mission of adoption. In his annual CEO letters for 2020 and 2021, Larry Fink, CEO of Blackrock, the world’s largest asset manager, made waves by announcing to the market that all investments would be screened for management and disclosure around sustainable business issues and, more specifically, climate change. In addition, the election of President Biden, along with new cabinet-level appointees and executive branch administrators, brings renewed attention in the United States, including the Securities & Exchange Commission. 

    What it Means

    By way of background, climate change is generally categorized into the following three buckets:

    • Physical risks relate to damage and interruptions from short-term weather events (such as hurricanes, floods and wildfires) and longer-term climate trends (such as water depletion, soil depletion and temperature extremes) that make it unsafe for humans to work productively.
    • Transition risk, which includes stranded asset risk, reflects the impairment of operations and assets as the economy shifts to respond to slow or avoid the consequences of extreme weather changes.
    • Liability risk reflects demands by stakeholders for reimbursement for harms they claim resulted from a business’s action or inaction.Importantly, innovative business leaders look at transition risks as opportunities for rethinking business models.

    Many CFOs and chief risk officers regularly refer to the Committee of Sponsoring Organizations (COSO) Enterprise Risk Management (ERM) Framework or similar models to identify, assess and manage risks within their organizations. These guidelines are applicable to climate-related risks and how to consider the costs of carbon to our economy and our businesses. Applying these specific guidelines can enable organizations not only to identify the negative risks around climate change but also, more importantly, to use their analysis to facilitate innovation, strategy and business models with long-term resilience and viability. 

    This study follows from IMA’s “CFO as Value Creator” series that addresses sustainable business information and management for its constituents in corporate accounting and finance. IMA’s C-Suite report, CFO as Value Creator, Finance Function Partnering for the Integration of Sustainability in Business, and related self-study CPE course, provide a framework for accounting and finance professionals to work collaboratively with other organizational functions, enterprise-wide, to make meaningful, strategic decisions and enhance business sustainability.


  • How I Experienced the Importance of Mentoring First-Hand

    by Arianna Weling, Seton Hall University | Sep 13, 2021

    One of the first things I get asked when I tell people that I’m studying business in college is, “What do you want to do?” The problem with that question is: 1) I have absolutely no idea what I want to do or where to start and 2) I have no idea how to find out what I want to do, given I am only entering my junior year of college. For me, I usually learn by testing different things out; therefore, when I started my internship search, I wanted to have the opportunity to see, hear and try multiple areas of business. Fortunately, I had a mentor through Seton Hall University’s Buccino Leadership Institute — Merryl Richards, former executive director at the New Jersey Society of CPAs (NJCPA) — who helped guide me through this perplexing process. After a few months of searching, she suggested that I look more into associations, specifically, the NJCPA.

    Initially, I had absolutely no idea what an association did. Of course, I knew of the basic responsibilities and mission, such as to bring people together for a certain cause, goal or objective, yet I failed to have a greater and deeper understanding of what exactly associations truly do.

    To find out, she connected me with Don Meyer, the chief marketing officer of the NJCPA. Upon setting up a meeting, I was pleasantly surprised and intrigued at hearing more insight into the association’s role and presence. Not only did he share his experience working with the NJCPA, but he also shared insight into his own career journey; thankfully, and reassuringly, it wasn’t exactly linear. By the end of our meeting, I was both excited and confident that working for an association like the NJCPA would give me the opportunity to truly immerse myself in the world of business and, potentially, even find a future career path.

    Within a few weeks, I applied for the position and was ecstatic to officially become a summer 2021 marketing intern for the New Jersey Society of CPAs.

    Week 1

    During my first week, I could not help but be absolutely mesmerized by just about everything that the office had to offer. In fact, on my very first day, I was greeted with gifts, friendly faces and my very own cubicle and badge. Truthfully, this was my very first glimpse into the business world working as a business “professional.” Granted, I use the term “professional” lightly, considering the first thing I wanted to do was to decorate my cubicle!

    I walked around the office and found myself falling in love with the atmosphere and culture. Although not everyone was able to come to the office on the same days due to the pandemic, I still got an incredible glimpse at the culture here at NJCPA and, presumably, for most smaller associations. Everyone welcomed me with a warm smile and friendly demeanor. It became apparent to me almost immediately that working in a close-knit environment where everyone knows one another, and where birthdays are not only acknowledged but even celebrated, was something I strived to have in the future.

    I cannot believe how much I’ve learned already in just a week with the NJCPA! I may not know just exactly the type of job I want yet, but I do know that I hope to work somewhere with a company culture as welcoming and close as the NJCPA — it truly makes all the difference in brightening any workday and changing the entire day’s dynamic and outlook.

    Week 2

    During the second week, I found myself slowly acclimating to everything in the office. I started to familiarize myself with the commute, hours and where everything is in the office. It was comforting to feel like I was fitting in — I enjoy coming back to my cubicle and see my stuff laid out just like I had left it.

    My wonderful mentor, Merryl Richards, came to visit me this week. As she walked in the office, it was amazing to watch her contagious energy and spirits lift the room. She knew nearly everyone in the office and cheerfully greeted everyone with a warm smile and friendly demeanor. It is no surprise that the company culture is the way it is, considering the individuals here take the time to build genuine connections and relationships with their coworkers.

    As a woman in business, having a mentor, friend and guide is so incredibly beneficial and important. During my internship search, I was so lucky to have Merryl help me during the process and address some questions or concerns, such as “Do I want to work for a small or large company?” and Would I like to have fixed or variable compensation?” Therefore, I knew that I wanted to find another mentor this summer who could help ease the transition from full-time student to working business “professional.”

    My manager, Heather Shostack, quickly appeared as the guide and confidant that I had been looking for. She arranged a few meetings this week and gave me some incredible career advice and guidance, such as her path out of college, numerous different jobs, and, finally, how she landed her position here. Hearing her path and journey was fascinating; she had previously worked as a marketing manager in different companies and even worked as a marketing consultant — a potential job path I am interested in. Similar to Don, her career journey hadn’t been linear, and she reassured me that she needed to have multiple different jobs before she found out what she wanted to do and what she liked doing.

    Having these conversations are irreplaceable; sometimes, I feel like just about everyone at my age has this idea or plan for their career. It’s discouraging to feel confused and unsure, especially halfway through college. In fact, lot of my friends and classmates have their lives planned out up until what age they hope to retire. Yet, after hearing Heather’s and Don’s experiences, I not only feel reassured but also excited and proud to have absolutely no clue! Being unsure now only means I have endless opportunities and chances to venture off into different areas and eventually find the one that fits me the most. I feel myself growing immensely and it has only been two weeks — I cannot wait but see the type of person I grow into within the next eight.

    Week 3

    This week I had the chance to see first-hand just how quick-paced and fast-adapting the business world is. I had the opportunity to watch the filming of IssuesWatch Live broadcast, a program that offers up-to-date information about legislative, regulatory and national issues affecting CPAs and businesses in New Jersey. I couldn’t help but feel afraid that I would knock something over or sneeze and subsequently ruin the live broadcast. Fortunately, I did not; yet I had a glimpse at the team’s management of a slight dilemma that had arose.

    During the broadcast, it seemed that the agenda was running slightly behind schedule, and with less than 10 minutes left in the program, there was over three pages left in the script. I wondered if the chief operating officer, Theresa Hinton, who was the program moderator, would start to increase her pace and rush to finish everything. I remembered thinking, “How did the last hour of the broadcast just slip by?” To my delight, however, the team had already planned for the possibility of this problem arising. Calmly and confidently, the producer adjusted the script on the fly, and the rest of broadcast proceeded without any blips and ended smoothly and on-time.

    I sat in awe at just how quickly the team had pivoted and avoided mistakes or blips. For me, I sat there stressed and nervous, yet the team remained calm and collected — it was admirable and refreshing. This was my first glimpse at slight adversities in the workplace, and the way it was averted was stimulating. The team’s demeanor and calm disposition, despite running behind schedule, is the exact mentality I would love to adopt eventually.

    Weeks 4 and 5

    I sat through my first department meeting this week. It was incredible to see how all the future plans and projects were facilitated, discussed and prepared. I sat there patiently taking notes and listening to each and every team member contribute and the way they bounced ideas off one another. Everyone was encouraged to contribute, which I know is something I want to have in my future job. Having a voice and feeling empowered to participate breeds more productivity, as demonstrated in the department meeting. The proactivity within the NJCPA is truly astonishing — they continue to plan, pivot and adapt.

    I also got a chance to see how marketing worked together with the other departments within the association. I enjoyed seeing the ins-and-outs of departments, such as communications, education, etc. Although I may not pursue careers in those fields, seeing the way they interface with marketing is truly incredible. I got the opportunity to see what an association truly does in each and every sector, which is another perk of working in a smaller company. I can have multiple different mentors and receive insight into the responsibilities and role each department has.

    Weeks 6 and 7

    I started a project conducting research on past scholarship winners. Several of them now work for incredible accounting firms and a few of them even moved up the ranks within their companies. It was refreshing and encouraging to see how those scholarship winners have transcended the same very skills they acquired during their undergraduate years at college into successful jobs and careers. In just five years, most of them made the shift from a full-time college student into a full-time employee seamlessly.

    I love hearing about the diverse experiences and jobs that those around me have had prior to their current position. I am about halfway through my internship, and I don’t quite know what I want to do yet, but I know that I am getting a glimpse into many different opportunities, which will ultimately help me navigate what I can see myself doing in the future. A few weeks ago, I was feeling discouraged that I had not yet figured out what my future career looked like. But today, I am happy that I do not know just yet.

    Weeks 8 and 9

    I had the incredible opportunity to work one-on-one with the senior graphic designer, Diane Espiritu, this week to brainstorm ideas and see those ideas come to life. Initially, I was worried that my ideas were childish or not up-to-par. However, she reassured me that my ideas were not only valued, but also essential for understanding the best way to market towards my generation, Gen Z.

    As I began researching trendy ads and marketing campaigns, it felt exhilarating to feel in charge, powerful and important. This experience truly felt as if it was giving me a glimpse into a potential career opportunity and path. By the following week, I was able to see my research transcend into something bigger: finding sample pictures and creating a “mood board” for the actual event marketing. I felt like a true business professional responsible for conducting research and seeing that research transform into something greater. They treat me with incredible respect — I feel myself flourishing everyday as a much more mature, experienced individual.

    As my time with NJCPA continues, I am so grateful to see how every week I am learning something new about the business world. I get to sit in during meetings, acquire leadership experience, hold myself accountable and responsible, while simultaneously learning more about the career I would like to have some day.

    Final Week

    During my final week, as I finished up some projects, I took a moment to stop and reflect on the person I have transitioned into during the past 10 weeks. Physically, I look the same, but mentally, I feel much more mature and ready for the real world…in two years. Nonetheless, my time at the NJCPA has taught me so much about the type of worker I would like to be, different roles and responsibilities of associations, proactivity, business, conflict management, company culture and, above all, future career aspirations and goals I would not only like to have but fulfill.

    I remember when I first started, I had no idea what to expect. I worried about small things, such as where I was working, handling the workload, what to wear, what to talk about with my coworkers, expectations, etc. Now, I can look back and reminisce on just how tiny those worries seem and how much more confident and ready I have become over the past 10 weeks.

    I truly feel empowered and confident from working here. I learned so much about myself and business from not just observing, but also participating — I even sat in on a meeting featuring marketing and communications representatives from other state CPA societies! I learned what it means to not only exhibit professionalism, but to embody it. I gained valuable hands-on experience mentoring and insight that will be utilized every single day up until the day I retire.

  • 6 Steps to a Workplace Vaccination Plan

    by Sandy Niespodzianski, USI Affinity | Sep 08, 2021

    CPAs and their clients have many issues to discuss before having full workforces return to their offices. Many decisions center around COVID-19 vaccinations, though there is not one office protocol used by all. Employers will need to carefully weigh whether a mandatory vaccine program is right for their organizations. While that decision will depend on a variety of factors, these six steps outline generally how to begin that evaluation process:

    1. Gauge the situation. Employers should always consider their employees prior to making any large workplace policy decisions. In the case of a vaccine policy, employers should reach out to employees to gauge how they feel about their safety. How many feel unsafe at work? Would a mandatory vaccine policy make them feel safer than a voluntary policy? What would it take to get them to receive the vaccination?

      Similarly, employers should look to others in their industry to determine how vaccinations are being handled. If similar organizations aren’t adopting vaccine policies, it’s critical to understand why. While each workforce is unique, following industry trends can help employers with decision-making.

      Lastly, employers must consider the potential for legal liability stemming from their decision. Both mandatory and voluntary vaccination policies come with inherent legal risks. Employers are encouraged to seek legal counsel when evaluating the best course of action for their organizations.

    2. Make the choice. After considering industry trends and surveying employees, employers will need to decide whether to adopt a mandatory vaccine policy, a voluntary policy or no policy at all. Each decision will come with consequences, so it’s important for employers to think carefully before this step and confer with all stakeholders, particularly legal counsel.

    3. Consider incentives. Once a policy is decided upon, employers should consider ways to incentivize employees. Regardless of whether vaccination is mandatory or merely encouraged, incentives could go a long way to getting employees on board. Some organizations are using perks such as extra paid time off to increase vaccinations. That being said, employers must be cautious when choosing to offer incentives. Offering certain incentives could potentially put employers at risk of violating the Americans with Disabilities Act (ADA), which prohibits employers from “coercing” employees to participate in wellness activities.
    4. Ensure resources are in place. Employees will undoubtedly have questions, especially if a vaccination policy is mandatory. HR should be prepared to answer these questions and provide applicable resources. Particularly, HR should know how to handle accommodation-related inquiries if employees seek exemption from the policy.
    5. Communicate everything to employees. A workplace policy of any sort can only succeed with thorough communication. Employers must make employees aware of the policy and its requirements well ahead of implementation. Employers should consider a variety of communication methods to accomplish this goal. Examples include sending mail-home flyers, posting videos on an intranet site or hosting kickoff meetings.

    6. Implement the plan. Finally, employers will need to implement the plan. Details like the rollout timeline and how to handle employee accommodation requests should be decided upon prior to this step.

    Providing Accommodations

    If an employer requires vaccinations (when they are available), they must respond carefully to an employee who indicates that they are unable to receive a COVID-19 vaccination because of a sincerely held religious practice or belief.

    Once an employer is on notice that an employee’s sincerely held religious belief, practice or observance prevents the employee from receiving the vaccination, the employer must provide a reasonable accommodation for the religious belief, practice or observance unless it would pose an undue hardship under Title VII of the Civil Rights Act. 

    Courts have defined “undue hardship” under Title VII as having more than a de minimis cost or burden on the employer. Guidance from the Equal Employment Opportunity Commission (EEOC) explains that because the definition of religion is broad and protects beliefs, practices and observances with which the employer may be unfamiliar, the employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief. If, however, an employee requests a religious accommodation, and an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice or observance, the employer would be justified in requesting additional supporting information.

    If an employee cannot get vaccinated for COVID-19 because of a disability or sincerely held religious belief, practice or observance, and there is no reasonable accommodation possible, then it would be lawful for the employer to exclude the employee from the workplace. This does not mean the employer may automatically terminate the worker. Employers will need to determine whether any other rights apply under the Equal Employment Opportunity (EEO) laws or other federal, state and local authorities.

  • Cloud Versus On-Premise ERPs — Not Just Two Sides of the Same Coin

    by Shekhar Somaiya, CPA, MBA, PMP, CSM, Equus Strategy, LLC | Aug 17, 2021

    In delivering organizational visibility and mission critical data on a single platform while supporting collaboration across remote workforces, enterprise resource planning (ERP) platforms help companies make quick decisions in today’s unpredictable business environment. By putting finance and accounting, customer service, procurement, inventory, supply chain management, warehouse management and order fulfillment on a single platform, ERPs unify core business operations, improve internal controls and enhance visibility into organizational performance, when compared to entry-level accounting software, spreadsheets and other point solutions. Thus, ERPs are a must for a growing business.

    But although many companies may have shifted to ERPs from their more rudimentary accounting software, few have harnessed the power of cloud ERP systems. Organizations using on-premise ERP systems are paying higher annual software maintenance costs and in-house IT salaries than competitors using cloud ERP solutions — and most don’t even have access to the latest features and functionalities.

    Additionally, on-premise ERPs suffer from sluggish system performance and a lack of effective collaboration tools, which leads to an overall decline in productivity. Lack of integrated solutions and difficulty penetrating departmental data silos make it harder to know what is happening in the business when companies need visibility more. Combined with added demands on IT and demand for remote access to a variety of systems, the network capacity of these organizations is strained, and new security concerns are introduced.

    Cloud ERP overcomes these issues by allowing remote users to access the functionality and data anywhere with an internet connection. A cloud ERP system can help transform companies into resilient organizations that can weather any storm. Here are some reasons why cloud ERP works:

    • Enables remote workforce management and collaboration. Accounting (such as closing the books) is collaborative work. Using basic accounting software or an outdated ERP system and its standard approach isn’t feasible with the entire accounting team working from home. Using cloud ERP, the accounting team can review the data, make changes and close the books remotely without having to be in the same physical location.
    • Helps comply with accounting standards and regulatory requirements. Complying with changing rules and regulations has pushed many organizations to reconsider processes typically handled with spreadsheets. Cloud ERPs receive regular feature and capability updates that are automatically passed on to users.
    • Gives all organizational departments a unified and accurate picture of the business. It provides accurate, real-time data that helps teams collaborate more effectively, leading to better-informed decisions, increased revenue and happier customers.
    • Drives quick reaction times. As opposed to IT or finance teams gathering and producing reports pulling data from disparate systems, which are often outdated by the time leadership sees them, Cloud ERPs feature role-based dashboards that give employees immediate access to the data they need to do their jobs and the ability to drill down for further analysis.
    • Reduces operational risk. Cloud ERPs help limit these risks by embedding approval workflows into procurement, accounts payable and other financial processes, as well as by controlling access to system features and data based on user roles and individual permissions.
    • Tracks unit economics, customer and project profitability. Due to the visibility gaps impacting margins that exist in on-premise ERP systems, regularly evaluating revenue and cost on a per-unit basis becomes difficult unlike in cloud ERP.
    • Helps companies scale and adapt. As businesses expand and add new services or products, they quickly outgrow their basic accounting solutions. With growing needs for scalability, visibility and adaptability, the need for a more robust ERP grows exponentially.

    Even with all these benefits and more, some businesses running on-premise ERPs are reluctant to undertake upgrades because of disruptions caused by broken integrations and customizations being overwritten. There are clearly many measured benefits to taking such action, and, overall, the benefits outweigh the short-term costs.


  • The Importance of Data Visualization

    by Susan Firriolo, CPA, CISA, Pet Rescue 990 Project | Aug 11, 2021

    CPAs’ roles are evolving from being historians and compliance police into tactical advisors who interpret stories hidden in data. As Big Data gets bigger, data visualization is becoming increasingly more important for CPAs, who need to understand large data sets and make informed decisions. 

    Data visualization should be user friendly, have a purpose, provide value and use reliable data. When implementing a data visualization project, take the following considerations into account:

    • Start with a plan and identify the users. A plan should define the purpose of using data visualization and take the users’ skills and time into consideration. 
    • Ask how, when, what and why when beginning to observe patterns. For example, how do cost of sales change over time? When do they increase or decrease? Why does this happen and what does it mean? Using this process, the story forms, and then data visualization conveys the story to users. 
    • Use bar and line charts because these methods easily show data differences. Pie charts are the least effective way to present data — because with more than five slices, the visualization becomes useless. It is also difficult to compare slices in one pie chart to slices in another pie chart.

    Some common free data visualization apps are Google Charts and Microsoft Power BI. Both can manipulate data from multiple sources and make graphs quickly, but each comes with its own performance problems. Some popular paid apps are Tableau and Qlik Sense. These apps can present complex data in simple ways and are good for financial reporting. However, these apps require some technical knowledge and can be slow.

    These are just a few of many data visualization apps available. When choosing an app, it’s best to focus on a pleasing user experience, an easy-to-read dashboard, simple visuals and contrasting colors. Also, consider performance before complexity, because sometimes less can be more. 

  • Return-to-Work COVID Employment Tips CPAs Should Know

    by Kathleen Hoffelder, NJCPA Senior Content Editor | Aug 10, 2021

    As offices contemplate a return to more complete work capacities this fall, CPAs in public and private practice need to put in place as many office protocols as possible related to the COVID-19 pandemic. Though information from the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA) keeps changing, CPAs will have to be aware of ways to maintain efficient and safe workspaces, how best to retain employees and what’s needed to avoid costly lawsuits.  

    Standards should be set regarding staff attendance; flexibility on work-from-home plans; mask wearing, whether optional or mandatory in common areas; the use of temperature checks; how to handle visitors; and how to enforce such policies.

    If employers are concerned about what’s acceptable, it’s best to incorporate more than what the law requires, explained Michael N. Morea, Esq., founder and managing member of Morea Law LLC, at an NJCPA Bergen Chapter meeting in July. For businesses that want staff to be fully vaccinated, he explains, there are ways to approach that other than mandatory vaccinations, which might hurt employee morale. Many employers, he says, are using incentive programs. “You can highlight the incentive program. You are not mandating vaccines, you are trying to incentivize your employees to get vaccinated. I like that better; it’s better for morale,” he said.

    Even if employees are part-time or consultants, their consulting agreements should adhere to the same office policies as should guests, once such a policy is established, according to Morea. And that goes both ways. If CPAs are doing onsite audits or visiting clients’ offices, they need to follow their clients’ protocols, not their company’s standards, when they visit.  

    Here are some tips Morea recommends for CPAs to open fully in New Jersey:   

    • Keep written documentation on all protocols for at least three years — don’t end up in a “she said, he said” situation.
    • Have employees sign off on being told the protocols or keep the email showing that it was sent to everyone.
    • Have a COVID-19 safety plan in place on when employees are allowed to go to the office and when they should stay out.
    • Create a separate COVID-19 stand-alone policy. Employee handbooks should be updated.
    • Don’t ask employees whether they are vaccinated — that can create exposure for owners, particularly if an employee discloses a medical issue.
    • Understand employers can require that all employees receive the COVID-19 vaccine but must make exceptions if an employee has a disability, religious or other medical reason for not getting it. If that is the case, an employer has to provide a reasonable accommodation for that employee.
    • Don’t ask “Why not?” if an employee is unvaccinated — it can expose the company to lawsuits and violate an employee’s rights.
    • Be aware that there has to be a documented medical reason not to come back to work, not just “afraid of COVID.”
    • Know that businesses are allowed to require masks indoors even though the mask mandate has been lifted in New Jersey. Unvaccinated employees need to have the ability to wear masks if they want to.
    • Recommend that unvaccinated guests to the office wear a mask.
    • Understand if an employee is not complying in common areas of workspaces once protocol is established, that is a basis for disciplinary action, including termination.
    • Retain the office ventilation system that may have been put in place during the COVID-19 pandemic.

    Office protocols, however, are mainly required to keep the employee safe, not his or her entire family. So, it is not likely to stand up in court if an employee sues over a possible exposure to COVID-19 at work that made their grandmother, who lives at home with them, sick, he explained.  

    For information about the NJCPA Bergen Chapter or other NJCPA chapters, visit njcpa.org/chapters.

  • The Top 10 Misunderstandings Surrounding the ERC

    by Rick Meyer, CPA, MBA, MST, alliantgroup | Jul 30, 2021

    In March 2021, the Employee Retention Credit (ERC) was extended through Dec. 31, 2021, and expanded as part of the American Rescue Plan Act of 2021. But there are many nuances and complexities CPAs need to be aware of to fully educate their clients.

    Here are 10 misunderstandings about the ERC to keep in mind:

    1. My client can’t claim ERC if they’ve already claimed Paycheck Protection Program (PPP) loans or gotten their PPP loans forgiven. Now you can claim both! Congress, in the Consolidated Appropriations Act (CAA) of 2021, removed the limitation on only claiming one or the other. PPP will only account for 2.5 times monthly payroll expenses and is meant to be spread out over six months. This leaves plenty of uncovered wage expenses for claiming the ERC.
    2. My client’s business did not have a drop in gross receipts of 50 percent or more. The CAA has changed the qualifications so that a reduction of 20 percent now qualifies. BUT remember there is also another way to qualify for the ERC — if a business has been subject to a partial or full suspension due to a government order... see the next point.
    3. My client’s business was not shut down during the pandemic. Even a partial suspension order by the government (federal, state or local) of a client’s business could potentially qualify. For instance, a partial shutdown; a disruption in their business; inability to access equipment; having limited capacity; shutdowns of their supply chain or vendors; reduction in services offered; reduction of hours to accommodate sanitation; shut down of some locations and not others; and shutdowns of some members of a business are all scenarios that still potentially qualify for the ERC. The key considerations are: due to the government-ordered partial (or full) suspension, is/was your client’s business not able to continue its activities in a comparable manner, and did that result in a more-than-nominal impact on their business operations? Remember, the partial or full suspension is an alternative way to qualify for the ERC, separate from the reduction in gross receipts test.
    4. My client’s company was deemed an essential business, so they do not qualify because of business suspension. Even if your client’s business is deemed essential, an impact or change in their business may still qualify them. For example, even if they were open but their vendors were closed down or they couldn’t go to their client’s job site, they may still qualify. Or, alternatively, if part of their business was considered non- essential and was impacted by a government-ordered suspension, they may also qualify. The scenarios discussed above in item 3 could apply here as well.
    5. My client’s company has grown during quarantine. The ERC isn’t something they should take. That’s great news! But even if your client’s company has grown during quarantine, there are expenses that may qualify if they experienced a full or partial suspension.
    6. Sales have rebounded for my client in Q1 of 2021; they cannot qualify for this credit. With the introduction of the CAA, you have the option to look at one quarter prior to determine qualification. This means we can determine eligibility based on lost revenue in 2020. Also, if your client was subject to a full or partial suspension, they may qualify regardless.
    7. My client was in losses, or they do not have any tax liability. This is a refundable credit. In practice, this means that any credit overage above tax liability is sent to the taxpayer/business owner as a refund.
    8. My client’s company has grown to more than 500 employees, so they are not eligible for the ERC. The employee count restriction is based on full-time equivalent (FTE) employees, which is a more involved calculation than just counting everyone in the office. We helped a business with 640 employees, and the FTE calculation put them at under 500. Furthermore, if your client paid any employees to NOT work, or to work less than the hours for which they were paid, then the employee count restriction would not apply for those employees.
    9. My client is a charity and the ERC is only for businesses. The ERC also may provide significant benefit to charities — churches, nonprofit hospitals, museums, etc. Charities can be particularly good candidates.
    10. We don’t need to document everything. There are still many tax advisors who think that they can just create their own simple form. They check a few boxes, provide a few sentence explanation and expect the IRS to hand over thousands and thousands of dollars on a silver platter and then play audit lottery? Guess again. To avoid headaches and heartaches down the road, clients need to properly and fully document how their business qualifies for the ERC.
  • Diverse Faculty Attracts Diverse Students

    by Anita Dennis, freelance writer | Jul 22, 2021

    Professors can shape a student’s experiences, influencing whether students take a course or pursue a career because the person at the front of the classroom looks like them. The first Black CPA Ph.D.s have played an important role in attracting generations of future Black CPAs.

    Having diversity in the front of the classroom benefits all students, especially the students of color who may not be used to seeing people like themselves in that position, said Mark Dawkins, CPA, Ph.D., professor of accounting at the University of North Florida and the first Black CPA Ph.D. president-elect of the American Accounting Association.

    Among other things, the person teaching the class can have a significant impact on whether students decide to try a course in that subject — and ultimately make it a career — because they see it is being taught by someone who likely embodies similar life experiences. For that reason, the first Black CPA Ph.D.s, and the professors they mentored or inspired, have played an important role in attracting generations of ambitious Black students to the profession.

    Overcoming Barriers

    The earliest Black people to earn Ph.D.s in accounting faced numerous barriers. In fact, the first five “had no chance at full-time positions in majority-white institutions” when they got their start in the 1950s and 1960s, according to Theresa A. Hammond, Ph.D., accounting professor at San Francisco State University’s Lam Family College of Business and author of A White-Collar Profession: African American Certified Public Accountants Since 1921.

    That was the case for William Louis Campfield (1912-1993), who in 1951 became the first Black CPA Ph.D. He was also the first Black CPA in North Carolina and the first Black person inducted into the Beta Alpha Psi organization. His parents, graduates of the Tuskegee Institute and students of Booker T. Washington, were teachers, according to research by Dereck Barr-Pulliam, CPA, Ph.D., assistant professor of accountancy at the University of Louisville. Campfield and his eight siblings attended a school on the Institute’s campus and then he was sent to live with relatives in Pittsburgh so he could attend a college preparatory high school. He enrolled in New York University, supporting himself by working at a bowling alley, then returned to teach at Tuskegee in 1933.

    When it hired Campfield in 1951, the University of San Francisco had the distinction of being the first majority-white institution in the country to hire a Black Ph.D. in accounting, according to Hammond. However, he was hired as a lecturer, not a professor, even though no other faculty member, including the dean, had a Ph.D. A year later, Campfield returned to working in accounting in a government position and created a practitioner-in-residence program that allowed him and numerous other government accountants to take leave and teach accounting. He retired in 1972 as associate director of what was then called the U.S. General Accounting Office, now known as the Government Accountability Office, and in 2019 became the first Black accountant to be inducted (posthumously) into the American Accounting Association’s Hall of Fame.

    Succeeding Through Persistence

    Another pioneer, Larzette Hale (1920-2015), showed similar determination. Sent to an orphanage at age 11 after her father’s death and when her mother could no longer care for her, she learned bookkeeping when the business office’s accountant took an interest in her. She went on to study business in college, where an accounting professor became her mentor. “Thanks to her, I fell in love with balancing the books and knew I wanted to study accounting in college,” Hale told the Journal of Accountancy in 2009.

    She faced a number of forms of discrimination. Although a resident of Oklahoma, Hale was barred from attending its two state universities because of her race, so she attended Langston University, the state’s only historically Black college. The state of Oklahoma would later pay her tuition to attend the University of Wisconsin for her master’s degree, according to Hammond. While teaching at Clark College in Atlanta, she decided to get her CPA at the urging of her mentor, Jesse Blayton, an influential early Black accounting professor. When Hale took the CPA Exam, she was asked to sit in the back of the room and wasn’t allowed to use the lunchroom. In 1955, she became the nation’s first female Black CPA Ph.D. She ran a solo practice for a decade but was drawn to teaching. Hale ultimately became the head of Utah State University’s school of accountancy and also taught at Langston and Brigham Young. She was appointed a regent of the Utah Board of Higher Education, the first Black person in that role.  

    A First for a New Generation

    Dawkins, who met Hale early in his career, set out to follow the lead of these early pioneers. “There are a lot of prominent and impactful faculty of color who may not have had an opportunity to serve in this role, so I stand on the shoulders of giants,” he said. He said he’s grateful for the chance to highlight issues and concerns related to diversity at a time when attention is being focused on racial injustice and economic inequity.

    Dawkins promotes the advancement of future Black accountants through his involvement in the PhD Project, which aims to diversify corporate America by increasing the number of business professors from underrepresented minority communities and attract more minority students to college business courses. He was in graduate school before the PhD Project started, but he began attending the project’s annual conference as soon as it began. Currently, he co-mentors four junior faculty members involved in the project, discussing questions they may have about research or teaching and helping them build the success they need to gain tenure. When the project began, Dawkins recalled that there were so few faculty of color that they would refer to each other by number based on the order in which they had become Ph.D.s. “Today, we have 1,500,” he said.

    Expanding Students’ Knowledge Base

    To keep the momentum going, efforts are underway to nurture a new generation of diverse CPA Ph.D.s and provide them with the learning and tools they need to succeed. For example, Dawkins served on a task force for CPA Evolution, a joint initiative of the National Association of State Boards of Accountancy and the AICPA to transform the CPA licensure model to encompass the rapidly changing skills and competencies that accountants need now and in the future. That will include changing what is being taught. “I believe accounting schools do a good job of giving students the basic toolkit they need,” he said. “But we will need a combination of schools better preparing students and firms enhancing employee training.” Speaking of his work with the learning process and the PhD Project, Dawkins concluded, “for me, it’s a lifelong commitment.”

    This blog post was originally published by the Illinois CPA Society (ICPAS) and was reprinted with permission. The Black CPA Centennial is a yearlong effort to honor, celebrate and build upon the progress Black CPAs have made in shaping the accounting profession. The celebration is a collaborative effort of the AICPA, Diverse Organization of Firms, Illinois CPA Society, National Association of Black Accountants and National Society of Black CPAs.

  • CEO Compass - Summer 2021

    by Ralph Albert Thomas, CPA (DC), CGMA | NJCPA CEO and Executive Director | Jul 07, 2021

    It’s Time to Move Forward

    During the past year, you have provided more guidance and leadership to your clients, firms and employers than ever before. In such unprecedented circumstances, we were able to come out stronger as a profession and a community. But this shouldn’t surprise anyone. Throughout history, our profession has adapted — it’s how we’ve thrived, and your work in the last year is a continuation of that legacy.

    According to a new report from the Association for Accounting Marketing (AAM), almost half (45.3 percent) of firms say the COVID-19 pandemic has had an overall positive effect on them by accelerating key tech and process innovation within their offices. Of the firms who said the pandemic had a positive effect on them, the top three areas of business positively impacted by the pandemic were increases in service offerings (42.4 percent), cost savings from remote work (18.2 percent) and advancements in technology (15.2 percent).

    At the 2021 NJCPA Virtual Convention in June, we discussed the many ways our members have pivoted to deliver value during disruption and how we at the NJCPA are proud to provide support every step of the way by:

    • Transitioning to 100-percent virtual training and offering more than 250 virtual programs. NJCPA members have taken more than 12,000 free CPE credits through Membership+.
    • Polling our members about their willingness to return to in-person programs. There was roughly a 50/50 split between members wanting to come back this fall and those considering coming back sometime in 2022, unsure or who aren’t coming back at all.
    • Remaining a thought leader on tax and fiscal issues and a go-to resource in the state capitol and among the media. 
    • Carrying on extensive communications with the New Jersey Division of Taxation on issues ranging from extending various tax deadlines to implementation of the Business Alternative Income Tax (BAIT). We also advocated for preventing the state from taxing forgiven PPP loans and for allowing business expense deductions related to those loans. 
    • Working with the New Jersey State Board of Accountancy to resolve problems encountered by individual CPAs and CPA candidates and help with firm licensing renewals. 
    • Launching a live online chat tool to answer member questions.

    Even as we help you respond to today’s demands, we are, as always, looking ahead. 

    Society staff and the NJCPA Education Foundation Executive Committee are developing protocols to ensure that the return to in-person programming in January 2022 is smooth and safe. To help avoid confusion, in-person event protocols will be developed based on best practices. The NJCPA Board of Trustees remains open to amending policies should circumstances change between now and the end of the year.

    To you and all our members, thank you for the tremendous support you have shown us and the value you’ve provided clients, employers and your communities during this extraordinary time. You are true leaders on the path to recovery.

  • 7 Questions Where Your Business Client Will Need Answers About their Finances

    by Bryce Sanders, Perceptive Business Solutions, Inc. | Jun 30, 2021

    When cash flow problems emerge, the business owner probably didn’t accurately estimate anticipated revenue versus anticipated expenses. The estimate of startup costs was too conservative. Clients aren’t paying as quickly as they hoped or sales didn’t follow the anticipated trajectory.

    There are several reasons business clients run into cash flow problems or just simply need more money in a hurry. It’s better to get in front of this problem sooner than later and as their accountant, you need to be able to ask the tough questions. Business owners, especially startups, can be excessively optimistic and not properly plan for the aforementioned scenarios. They are simply convinced their idea will take off.

    Here are seven questions to ask clients in order to better understand their finance needs: 

    1. Why is your business going to succeed? Answering this question requires a robust business plan. Ask your client the following questions:
    2. How much money will you (realistically) need? This should be followed by “How did you arrive at that number?” You want them to walk you through their business plan. They often need exponentially more money as the business ramps up operations. Where will this money come from? Is it from product sales? How have they matched projected sales revenue with the more predictable outflow for expenses? Remind them of the timeless advice people are given when going on vacation: “Bring twice as much money as you think you will need.” That was back when people carried cash. Today the advice would be “Be prepared to spend twice as much as you anticipated in out-of-pocket costs.”
    3. Are you prepared for contingencies? How will they be addressed? When you embark on a construction project such as building a new home, the architect typically builds in a cushion of 10 percent (or more) into the project budget. Why? Because they don’t know what problems they will encounter along the way. If construction is halted, rent still must be paid on equipment. The mortgage needs to be paid. When renovating an older home, contractors usually protect themselves by saying: “We don’t know what we'll find when we open up the walls.” Assume everything will not go according to plan. What cushion has the business owner built in?
    4. Are you borrowing or taking on investors who will own equity? The answer might be “yes” to both options. If the client is borrowing, they'll need that robust business plan that will persuade the bank their venture is a good risk. If they are bringing on investors who will pay to own a slice of the equity, they need to be confident the projected return on investment is sufficient to balance the risk they are accepting. Their investment will likely be illiquid for a long time. What can they expect as a return on investment? When should they be starting to see a return? Regardless, if it’s a loan or equity, the client will need that good business plan.
    5. How much equity are you prepared to give away? It’s been said early money is the most expensive money. If investors are willing to put money into a startup, they are buying into a vision and the business owner who promises to deliver. They are taking a major risk. They want to be adequately compensated. The client wants to retain control of their business, but they must be prepared to part with enough equity to make the risk worthwhile to the investor.
    6. How much of your own money are you putting at risk? How much are immediate family members investing in the business? The client needs to understand that if a bank lends them money, they want to be lending alongside the client. They want them to have “skin in the game.” If a business runs into serious financial trouble, lenders have standing ahead of equity investors. They want the client to have a substantial amount of their own money at risk, so that they are motivated to see their business succeed.
    7. How much are you prepared to pay to borrow money? The return on equity must far exceed the cost of borrowing money. Ask your client to imagine the following scenario: You are confident your business can return 20 percent, yet the only lender you can find wants 35 percent interest and your personal guarantee of the loan. In this scenario, the client shouldn’t be starting or expanding their business at this time. They need to bear in mind that there are costs besides the posted interest rate. Origination fees are a good example. The interest rate will likely be variable, which is dangerous in a rising interest rate environment.

    Ideas can look great on paper. Things get complicated once loans are negotiated and your client signs documents. They need to be aware of the risks they are assuming along with costs and consequences.

    This blog was originally published as a column on AccountingWeb and can be read in its entirety here.

  • Managing Cyber Risk in a Remote Work Environment

    by Stanley D. Sterna, Aon Affinity | Jun 03, 2021

    CPAs have been heavily dependent on the use of technology, especially during the COVID-19 pandemic. Unfortunately, cyber criminals are seizing on this as an opportunity to gain access to confidential databases, using phishing and social engineering schemes. Some cyber criminals seek to sell data on the dark web. Others attempt to commit theft through wire transfers purportedly requested by clients at CPA firms or accounting department staff or by demanding ransom payments. While CPAs are well aware of the need for data security and secure client portals/VPNs, they should also recognize the increased risk due to remote employees using technology in their homes.

    Remote Risks

    Home routers can be especially vulnerable. In a December 2020 ThreatPost.com article, vulnerabilities were discovered in home routers manufactured by D-Link, a key supplier of routers for home use. Routers that are improperly configured or use default settings can be easily breached, so it’s best to ensure that employee home routers are patched with the latest firmware to withstand malware infections.

    Use of employee-owned devices for business can also expose an organization’s data which is why all companies should have a written policy on the use of personal devices to conduct company business and have systems in place to enforce security measures.

    Here are some points to consider:

    • Business conversations should be conducted through the use of secure technology recommended by the company.
    • Avoid using SMS text and voice-based multi-factor authentication systems on cell phones, which Microsoft recently identified as a system security vulnerability, potentially exposing other data stored on phones.
    • Staff should be provided with training on how to secure devices prior to logging into a public WiFi network. Using a company VPN provides additional security when using a public WiFi network, but it isn’t foolproof.
    • Operating virtually also requires an increased focus on providing staff and management with the necessary tools and education. Revisit existing organization policies on the use of technology and maintaining privacy/security over confidential information. As the nature of privacy breaches continues to evolve, training on privacy/security should be continuous, rather than an annual exercise.
    • Given the danger of privacy breaches associated with working remotely, there is also an increased risk of claims against management alleging a breach of fiduciary duty for failure to maintain adequate data security. Individual firm managers can be held personally liable for such claims by a variety of parties, including owners, partners, shareholders, staff, clients, competitors and vendors.  

    Accordingly, organizations need to understand the risks associated with their data security decisions. Management should reach out to known and fully vetted third-party consultants to help construct and monitor data security protocols. Contracts with third-party vendors should contain language that the vendor will maintain cyber insurance coverage throughout the engagement and sometime thereafter and, if you can get it, to defend and indemnify the organization for breaches as a result of their advice. 

    Implementing the aforementioned protocols along with ongoing consultation with a cross section of specialized management, technical, legal and insurance experts can help mitigate cyber risk.

  • The Benefits of Accounting in Real Time

    by Marc D. Mintz, CPA, CITP, CGMA, Marc Mintz & Associates, LLC | May 25, 2021

    Emergent technologies have laid the foundation for financial statements and other business reporting to be distributed in real-time by utilizing live feeds. Artificial intelligence (AI) and internet-based computing (the cloud) have combined to provide financial professionals and other interested stakeholders with transaction information that is updated as it is posted by banks and credit card processors.

    How Feeds Work

    Live feeds enable accounting programs to automatically update transactions directly from their source. Three examples include banking, payroll and credit card activity. QuickBooks Online, for one, can be configured so individual transactions are automatically downloaded into the accounting program. Banking transactions are placed into a holding area and can then be matched with transactions that have already been entered into the system or added to the accounting program if they do not already exist. Transactions are classified (posted) based on established rules which can be refined and edited during the acceptance process.

    Feeds are established for credit card accounts that download individual charges into the accounting program. Default general ledger accounts are set for particular vendors which can always be edited on an individual-transaction basis. Gone are the days of tedious manual analysis of lengthy credit card statements. Just like a bank reconciliation, the credit card statement’s opening balance is already known by the system. Individual charges and payments are cleared based on the statement date and reconciled to the closing balance. As an added advantage, charges can be accumulated by the particular vendor even though the credit card company is the payee.

    AI Advantage

    AI is the breakthrough technology that allows rules-based systems to evolve so less time is required for posting analysis. Processing these workflows via the cloud allows automated updates to occur in near real-time while simultaneously providing authenticated users access to the information as it is processed. If you are already using live feeds, you understand the tremendous time savings and convenience that this technology provides. It is critical that posting rules are established, refined and checked so that source transactions post properly. If you are unfamiliar with this technology, you are justifiably skeptical. But it does work, and it is the future of accounting.

  • What CPAs Need to Know About Small Businesses’ Cybersecurity Needs

    by Mary Anne Schafer, SMI Corporation | May 19, 2021

    The COVID-19 pandemic forced thousands of organizations around the world to become entirely remote seemingly overnight. Many businesses had some experience with mobility and remote access to work from home, but few, if any, were equipped to operate 100-percent remote. Cyber criminals and opportunistic attackers wasted no time targeting insecure home networks and household smart devices like doorbells, thermostats and yes, even fish tanks.

    From credential theft, to email phishing scams to social engineering, cybercriminals sought to exploit any and every aspect of the remote transition of our workforce. Cyber criminals don’t discriminate. They feverishly work to find any and all security vulnerabilities that will allow them to access to the networks of large, small, global, regional and local businesses.

    Small and Midsize Businesses

    These mounting cybersecurity threats are particularly troublesome for small and midsize businesses (SMB). Even before the pandemic, SMBs and their chief information security officers (CISOs), if they had one, faced challenges when it came to limited budgets, complex cyber solution and services offerings, and the challenges and costs of hiring skilled staff. As the pandemic continues to take its toll on the broader economy, tighter budgets, higher prices and greater risks have increased the complexity and cost of securing your business. As SMBs find their footing in the post-quarantine world, they must embrace the critical importance of cybersecurity and scale appropriately.

    The "2021 Survey of CISOs with Small Security Teams," from Cynet finds that companies with small security teams are facing a number of unique challenges, placing these organizations at greater risk than their larger enterprise counterparts. Here are some key findings that SMBs and their CPAs should be aware of:

    • 63 percent of these SMBs’ CISOs feel their risk of attack is higher compared to enterprises, despite enterprises having a larger target on their backs.
    • 57 percent of companies indicated they do not have enough skill and experience to protect against cyberattacks.
    • Almost all small security teams are looking to outsource security mitigation to an external provider with over half focused on outsourcing managed detection and response (MDR).

    SMBs can and should increase their cybersecurity resilience to boost their chances of success. A crucial first step is for owners of SMBs to lead by example and pay attention to their employees’ online habits. They can demonstrate good cyber hygiene and educate their employees.

    Here are some considerations:

    • Identify business-critical assets and data to prioritize their protection.
    • Be proactive, rather than reactive, when protecting against cyberattacks.
    • Access online resources to boost cybersecurity awareness and education. For example, the Small Business Administration offers free access to planning tools, business assessments, cyber hygiene vulnerability scanning and best practices on their website.
  • How to Retain Clients After a Merger or Business Sale

    by Bryce Sanders, Perceptive Business Solutions, Inc. | Apr 28, 2021

    Whether you're ready to retire or are simply preparing to move on to something new, selling your accounting firm can be tricky. One of the top priorities you should keep in mind is retaining the clients you already have so the practice continues to be successful.

    Some sales are easier than others. Take selling a car, for instance: The dealer quotes a price, you negotiate a bit, and then you walk away after making a payment and receiving the vehicle. Your responsibilities are over. Selling a business isn’t as simple.

    The major difference concerns tangible and intangible assets. When selling your car, the vehicle is the asset. When selling your business, your client list and the income stream it provides are the major assets. The buyer has enough desks and staplers. They want the clients and the revenue. The sale of a business isn’t a transaction where you walk away and don’t look back. The owner might be expected to stay involved for a couple of years. The payout is likely structured along similar lines.

    Some of your best clients are loyal to you. Clients are more comfortable when you have a succession plan in place. A considerate client looking forward to their own retirement realizes you want to stop working and enjoy life someday. Their fear is you would suddenly be out of the picture. They would no longer have an accountant and would need to find another. They would prefer a smooth transition, organized and sanctioned by you.

    The sale of the business might start as a merger. In this scenario, two firms become one. You want to notify each client, positioning why this is a net benefit for them. Focus on what will remain the same, not what will change. The staff they’ve gotten to know will still be here. You will still be here, at least for the time being.

    Here are some tips for ensuring your clients feel comfortable remaining with the firm even if you're no longer there:

    • Correspondence should reflect the continuity. Letters and general e-mails should be signed by the heads of both firms. Like a seesaw in the children’s playground, the process starts with each firm at opposite sides of the seesaw. Later, both ends are in the air. Eventually, the opposite side is on the ground. Clients will be grounded, just on the opposite side with the new management.
    • Client meetings should initially proceed with you and your team taking the lead. Also include a team member or two from the other firm and introduce them to the client. During the ensuing conversation, you explain, “We are all one firm now.”
    • The transition becomes more apparent at the next round of meetings. Staff members from both sides are present, but the new team members introduced earlier will now take the lead. They should emphasize that they’ve gotten to know each client through records and conversations with the original staff.
    • The handover occurs by the next meeting. The new team members are taking the lead. There should be at least one person from the original team still involved, because clients are more comfortable with a familiar voice, even if it isn’t yours.

    Then, you can formally announce you are starting your retirement. You feel confident the firm and its clients are in good hands with the new administration. Your name disappears from the website, letters and stationery.

    You can see why the entire process takes a couple of years. The major asset is the client base. It needs to transition over smoothly. The payout on the sale of the firm is structured to reflect this reality.

    This blog was originally published as a column on AccountingWeb and can be read in its entirety here.