COCPA NewsAccount - 2008 - March/April Issue

CONTENTS

A bi-monthly publication of the Colorado Society of Certified Public Accountants Vol. 53, No. 6 March/April 2008

BOARD OF DIRECTORS Chair Michael D. West Vice Chair Barbara S. Seacrest Treasurer Scott E. Bush Immediate Past Chair Mira J. Finé Secretary Mary E. Medley

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Features 2

Reflections: A Year of Surprises

Directors Stephanie Allen, Marc C. Hendrikson, Angela F. Roberts-Turnbeaugh, Scott K. Sprinkle, C. Travis Webb, and Andrew D. Young ------------------------------

Mike West looks back on his term as CSCPA Chair and his travels across Colorado.

EDITORIAL BOARD John W. Allgood, James M. Boak, Frances J. Coet, Philip W. Debus, Kay R. Dragon, Deanna C. Duell, Mira J. Finé, Lorrie L. Lopez, M. Virginia Parker, Jennifer C. Pitkin, Scott K. Sprinkle, Gregory A. Truitt, and R. Steve Van Meter -----------------------------President/CEO Mary E. Medley

Some people love sports. Some people love one sport. And one of those people loves one sport so much that he created a nationally recognized museum dedicated to that sport. Meet CPA Bruce S. Hellerstein, pictured above as the batting practice pitcher for the Denver Bears.

Deputy Director Elizabeth M. Julin Contributing Writer Natalie G. Rooney Editor/Publisher Jill M. Turner

------------------------------NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7979 E. Tufts Ave., Suite 1000, Denver, Colorado 80237-2847. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. Articles, display advertisements, and classified advertisements are due 30 days prior to publication. The Colorado Society of CPAs assumes no liability for readers’ business decisions in reference to advertisements or other information included in this publication.

Membership dues include a $17.77 one-year subscription to NewsAccount.

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(303) 773-2877 • (800) 523-9082 • Fax: (303) 773-6344 E-mail: cpa-staff@cocpa.org www.cocpa.org

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For the Love of the Game

CPAs and Politics: A Natural Fit

Whether it’s a presidential election year or not, the wheels of local and state politics are always turning. CSCPA members Kermit Allard, Pamela Feely, and Sidny Zink discuss the benefits of being involved in the political arena.

10 Unraveling the Mystery of Peer Review

Peer review is a process for checking the work performed to ensure it meets specific criteria­—and so much more.

12 I ntroducing the CSCPA Board and

Educational Foundation Nominees

Meet the incoming officers, new directors, and new trustees who will assume their CSCPA leadership roles, May 1.

Departments 4 SEC Corner 22 Movers & Shakers 23 Classified Advertising

On The Cover Quintessential baseball fan Bruce Hellerstein and his family grace their own baseball card. Read about his passion for the game on page 6.

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From the CSCPA Chair of the Board

Reflections: A Year of Surprises Michael D. West, CPA

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ou wouldn’t think that a guy who’s been in the accounting profession as long as I have would find surprises during a year as chair of the Colorado Society of CPAs, but I’ll readily admit to being surprised more than once over the past 12 months.

My first surprise came during the chair tour last summer. In all honesty, I wasn’t looking forward to traveling all over the state. I wondered if it would be rewarding, but what an enjoyable experience it turned out to be.

It was great to reconnect with colleagues, see Colorado again, and meet people across the state who reminded me there is a phenomenal amount of diversity within our profession and throughout Colorado. Obviously, there is a lot of similarity in what we do, but rediscovering the differences in our practices and roles from Aspen to Grand Junction to Sterling to Alamosa was a refreshing experience that I enjoyed very much. It was one of the highlights of my year as your Chair.

I also admit to being a bit surprised by the immediacy and seriousness of two “people” issues: succession planning and transition.

Yes, these issues have been staring us all in the face for awhile, but honestly, until I became CSCPA chair, I never even thought

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about them. Now it’s obvious to me that these are the most significant issues facing our profession today. They’re significant to all professions actually. These issues are everywhere and for me, the “surprise” part comes with the concept that we have to deal with these issues—right now. Not next year, not next month—right now.

During the year, I’ve had the opportunity to connect with students at various meetings and events. To me, it’s encouraging and reassuring to see the quality of people who are choosing to enter this profession. If the skills, enthusiasm, and dedication these students demonstrate today holds true, the profession’s future is bright indeed.

I know we have a serious problem with a lack of people in the middle of our profession.

It’s my hope that we can do a great job mentoring the profession’s newcomers, keeping them interested, and helping them want to make the profession better.

I was amazed to see firsthand how much positive effect CPAs can have on legislative issues and the Colorado State Board of Accountancy. We are uniquely qualified with the knowledge and expertise to help influ-

ence the direction of our state via advocacy and education while focusing on what’s best for both our profession and the public. It’s rewarding to see the power of our positive efforts from the local level right on up to our nation’s capital.

We’ve put a lot of positive efforts in place to keep us all on the right track. On the legislative front, we’ve joined forces with the largest CPA firms to move forward with mobility for CPAs. We’ll work to keep that important interaction strong. That doesn’t just happen—we have to work at it.

There will always be important issues for us to work on as a profession and as an organization. I hope you’ll let us know what you need so the CSCPA can help you deal with issues like succession planning, employee recruitment and retention, and regulatory matters.

Sure, I wish I had a crystal ball so I could say exactly what the future holds, but I do have a good feeling—even if that feeling includes being surprised sometimes along the way.

Thanks for an incredible year. s E-mail West at westmd@qwest.net.

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State Board Update

Self-reporting Rule Adopted CPA Mobility Legislation Introduced Rule changes effective, July 31, 2008 The Colorado State Board of Accountancy held a rule-making hearing, Feb. 27, at which it heard public testimony on several proposed rules, including Proposed Rule 7.14 on selfreporting of disciplinary actions taken against a Colorado CPA certificate holder or registered firm. (See the proposed rule in the January/February 2008 NewsAccount, pages 18-19.) Completely revised Chapter 5 rules on certificate status maintenance also were adopted with minor amendments, as was Rule 7.6 on professional standards. All the rules will become effective, July 31, 2008. For details, log on to the State Board Web site at www.dora.state.co.us/accountants/rulemaking.htm.

Mobility legislation pending March 20, House Bill 08-1226, concerning the ability of a certified public accountant from another state to practice accountancy in Colorado, sponsored by Rep. Mike May (R- Parker) and Sen. Jennifer Veiga (D-Denver), passed the Colorado House by a vote of 58 to 7. The bill, which is patterned after the model language of the Uniform Accountancy Act (UAA), would enable a non-Colorado CPA certificate holder whose principal place

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of business is in another jurisdiction to provide professional services under the concept of “no notice, no fee, and no escape” from the jurisdictional authority of the Colorado State Board of Accountancy. The bill now moves to the Senate where it will be considered first by the Senate Business Affairs, Labor, and Technology Committee.

The legislation would enable CPAs from outside Colorado, to provide services to Colorado clients without burdensome regulatory requirements which do not protect the public.

Also on March 20, representatives from the Colorado CPA profession, including Jim Burton of Grant Thornton LLP; Rick Connor of KPMG LLP; Sandy Rothe and Mike Hutchinson of Deloitte & Touche LLP; and Roy Turner and Joe Petito of PricewaterhouseCoopers LLP, along with CSCPA CEO Mary Medley, met with Governor Bill Ritter to seek his support for the legislation.

Fifteen states permit practice mobility based on the UAA model: Idaho, Illinois, Indiana, Louisiana, Maine, Missouri, New Mexico, Ohio, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington State, and Wisconsin. At press time, legislation passed in

Mississippi and West Virginia awaited gubernatorial signatures to become law. Sixteen additional states, including Colorado, have mobility legislation pending: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Iowa, Kentucky, Massachusetts, Maryland, Minnesota, New Jersey, Oklahoma, and Pennsylvania. The model approach is built on the concept of “substantial equivalency” which includes 150 hours of education, passage of the Uniform CPA Examination, and one year of experience. Because Colorado statutes do not require 150 hours of education to become a CPA, Colorado CPAs are not considered substantially equivalent.

The mobility concept has been endorsed by the Colorado State Board of Accountancy, the Colorado Society of CPAs Board of Directors, the National Association of State Boards of Accountancy, the American Institute of CPAs, and The Accountants Coalition, a group which includes the Big Four CPA firms and Grant Thornton LLP and focuses on legislative and regulatory matters.

For more information on the legislative initiative, contact Mary Medley at the CSCPA office, mmedley@cocpa.org, (303) 7418601, or (800) 523-9082, ext. 101. s

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SEC Corner

Bishop’s Blog:

SEC matters to contemplate for the remainder of 2008 What’s going on with SOX 404 for non-accelerated filers (NAFs)? The good news is another delay for the auditors’ report. Some are hoping it will never happen—me included. If and when NAFs have to audit their internal controls, I hope adopting the new AS 5 will substantially reduce the audit cost.

New rules for smaller reporting companies (SRC): If you are a NAF (public float below $75MM at the end of the second quarter), the good news is you can file the Form 10-K with reduced disclosure. I call it Form 10-K Lite. Some of the benefits are no CD&A (compensation disclosure and analysis), no market risk disclosure, no risk factors, no performance graph, no five-year summary, no quarterly data, less MD&A, since only two income statements, and fewer financial statement rules as an SRC need only follow U.S. GAAP instead of Regulation S-X in most cases. A new Article 8 has been added to Regulation S-X that lists the requirements for SRCs. Form 10K-SB and Form 10-QSB are being phased out. The SEC’s Web site has a nice explanation of the new rules at www.sec.gov.

No more mandatory mailing of annual reports and proxy statements: This will save companies money. It will be interesting to see how many companies adopt the e-proxy model.

compass proper and timely reporting of the S-K requirements (MD&A for example) and internal controls to encompass proper reporting of the S-X requirements (the financial statements). Also, the proxy statement, the CD&A, and Form 8-K fall under the umbrella of disclosure controls.

Ask yourself how you would respond to an SEC comment letter that requested evidence of the last evaluation performed to ensure the effectiveness of your disclosure controls.

Most companies have set up disclosure committees to ensure that the SEC reporting requirements are met.

In-house EDGAR: Try it; you’ll like it. It

Web Sites for SEC Information www.sec.gov www.cfodirect.com www.secinstitute.com

Public disclosure of comment letters: SEC staff now are posting comment letters and responses on the SEC’s Web site. Nothing is posted until 45 days after the comment process is complete.

Disclosure controls (not internal controls): As all public companies have been doing for the last five years, the CEO and CFO must render a conclusion and certify as to the effectiveness of their disclosure controls. I consider disclosure controls to en-

SAS 100 quarterly reviews: All public companies must have their 10-Qs reviewed before filing. Consider obtaining the SAS 100 review report from the auditors. The SEC does not require obtaining the report; however, why would you not want written evidence that the work was done? Many audit committees are requesting the written review report for their files, and many companies are including such reports in their filings. This makes sense considering the CEO and CFO are certifying the filing. Companies that have the review report in their 10-Qs include: Alcoa, Pepsi, Gap, Microsoft, Boeing, Yum, Allstate, FedEx, 3M, Sprint, and Denver’s own Western Union.

FAS 131—segments: The staff will challenge large companies with only one or two segments. Aggregation can occur only when all of the requirements of paragraph 17 of FAS 131 have been met. The “similar economic characteristic” requirement appears to be the one that most companies struggle with. Compliance with FAS 131 on segment reporting has long been a focus of the staff.

saves time and money. Doing the EDGAR filings yourself for periodic reports is a snap now. Two well-known service providers are www.edgarease.com and www.edgarfilings. com. For registration statements, it’s best to stick with the Big Three: Bowne, Donnelley, and Merrill.

XBRL—not a radio station: XBRL is the acronym for “eXtensible Business Reporting Language.” It’s not required yet, but I suspect it will be mandatory in 2009. Most likely it will be phased in over several years, similar to the way EDGAR was done 15 years ago.

A few of the voluntary XBRL filers are 3M, ADP, Dow, Pepsi, Pfizer, and Xerox. Check out the Web page at www. xbrl.org/us for the U.S. GAAP taxonomies that were recently posted—only 300 pages long.

Codification of existing standards: The FASB recently posted the book of GAAP on its Web site. It’s in the beta phase but will make life easier when trying to figure out how to make the entry.

IFRS (International Financial Reporting Standards): Just when the FASB finally issued the book of GAAP, it appears Continued on page 5

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that U.S. GAAP is starting to melt away. The SEC no longer requires foreign registrants that follow IFRS to reconcile their financial statements to U.S. GAAP. The new chief accountant for Corp Fin, Wayne Carnall, is an IFRS guru­—maybe that’s a sign of things to come. s W. Anderson Bishop is a member of the CSCPA Public Company Practice Forum. His article is based on information available on Feb. 10, 2008. E-mail him at www.wabcpa@msn.com to chat about SEC happenings.

Check Your Address Colorado CPA Certificate Renewal Deadline May 1, 2008 Colorado State Board of Accountancy rules require that all certificate holders “provide written notification to the Board of any change of status (active or inactive), change of address (business or residence), or employment within 30 days of the change.” Now’s the time to check your information because it soon will be certificate renewal time, and the Board will send your renewal reminder to the address in its database. You can check your information at www.doradls.state.co.us/alison.php. Note that if your address of record with the State board is your home address, only the city, state, and zip code will be listed.

An address change form is available online at www.dora. state.co.us/registrations/addressnamechangeform.pdf.

Note that beginning in 2008, Colorado CPA certificate renewals will be handled online ONLY. The deadline to renew is May 31, 2008, and it’s necessary for all certificate holders, whether active, inactive, or retired. Avoid possible late fees, penalties, and extra work; update your address information today and renew your certificate before May 31.

In addition, Dec. 31, 2007 marked the end of the twoyear cycle for completing 80 hours of continuing professional education (CPE) required of all active Colorado CPA certificate holders who intend to renew their certificates in active status for the next two-year period. If you were unable to complete the required CPE and wish to be considered for an extension of time to complete it, you must request an extension in writing to the Colorado State Board of Accountancy. If the extension is granted, you automatically will be included in the next audit of CPE by the State Board. For complete details on the CPE requirements, go to www.dora.state.co.us/accountants/ cperequirements.htm.

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PROFILE Bruce S. Hellerstein, CPA

For the Love of the Game

By Natalie G. Rooney Some people love sports. Some people love one sport in particular. And one CPA loves one sport so much that he created a nationally recognized museum dedicated to that sport. He loves baseball, and he is CSCPA member Bruce S. Hellerstein, CPA.

The Greatest Game Ever For Hellerstein, baseball is a passion that has been a part of his life since he was a young boy growing up in Denver. “I loved baseball from the moment I opened my eyes,” he says.

“I can’t think of anything that ties me to my youth as powerfully as baseball. It’s the bond between generations.”

Long before the Colorado Rockies were a twinkle in anyone’s eye, Hellerstein became devoted to the local minor league team, the Denver Bears, when a girl from his second grade class gave a show and tell presentation about a trip to Bears Stadium. “I was totally obsessed. I had to go out there,” Hellerstein reminisced. “I’ll never forget the first thing I saw behind the centerfield fence, painted in white with a green background: ‘Bears Stadium.’ It’s the ballparks that really get my blood flowing.”

Hellerstein went to the ballpark every chance he got. “From the time I was six or seven years old, I was the one dragging everyone to baseball games with me,” he says.

Hellerstein didn’t just watch the game; he played it throughout his youth, primarily as a pitcher. Both George Washington High School and a semi-pro team benefitted from his passion. “I loved to pitch because you’re the center of attention and in control of the game,” he said. “I thrived on the pressure.”

After graduating from the University of Denver, he entered public accounting and never looked back, spending 26 years at

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Bruce Hellerstein and his daughters in B’s Ballpark Museum Levine Hughes & Mithuen, Inc. (LHM) as director of estate, gift, and trust. After LHM merged with Clifton Gunderson LLP, Hellerstein started his own firm, Bruce S. Hellerstein, CPA, P.C. The practice is focused on tax with an emphasis on estate, gift, and trust, another passion. Hellerstein even has a pending trademark, Will-Full Planning, which focuses on the positive aspects of estate planning. Hellerstein’s firm is affiliated with Stark Winter Schenkein & Co., LLP.

Building a Collection From his earliest days at the ballpark, Hellerstein was a collector of all things baseball.

It began with baseball card collecting, but it was clear that he wasn’t going to be the average kid collecting cards of his favorite players. “I wanted to have complete sets,” he says. “I look at a card today, and it’s not just a piece of cardboard. It’s the impact and the memories.”

So how, exactly, does one go from collecting baseball cards as a kid to having a baseball memorabilia museum that’s so amazing it has an entire chapter devoted to it in the Smithsonian Institute’s book, Smithsonian Baseball: Inside the World’s Finest Private Collections? “I was in a personal development course, and we were asked to picture a perfect paradise. That’s when I got inspired,” Hellerstein explains. “I wanted it to look like you were walking into a dream ballpark.”

And with that, the seeds for B’s Ballpark Museum, a 501(c)3 tax-exempt organization, were sown. Hellerstein’s collection includes seats from all of the classic ballparks, bricks, photographs, postcards, and a re-creation of

the grand marble entrance to the Brooklyn Dodgers’ Ebbets Field. The Baseball Hall of Fame in Cooperstown, New York, doesn’t have a collection of seats like Hellerstein’s.

The museum is a family venture for Hellerstein, his wife, Lynn, and daughters, Annie and Becky. “This is what happens,” says Hellerstein, “when you have such a supportive family.”

Bringing Major League Baseball to Denver Not content to enjoy America’s favorite pastime from his museum, Hellerstein was instrumental in bringing a major league baseball franchise to Denver. Serving as a member of the Denver Baseball Commission and the Coors Field Design Committee, he created a vision for what would eventually become Coors Field, including an entrance reminiscent of the old Ebbets Field. “I felt like this was my ballpark, and I wanted it done perfectly,” he said.

So who is Hellerstein’s favorite team? “I’m in love with the game, not in love with a team,” he insists. And then he adds, “But the Cubbies really tug at my heart because of classic Wrigley Field and the 100-year gap since they last won the World Series. How can you not root for something like that?”

Explaining His Passion “I’ve been extremely blessed with great health and family, baseball, and my career,” Hellerstein says. “And, I’ve had a lot of baseball dreams come true. The baseball gods have been very good to me.” Batter up! s

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Governmental Issues

Single Audit Changes Proposed In June 2007, the President’s Council on Integrity and Efficiency (PCIE) released its report on the National Single Audit Sampling Project. You may remember reading that only 56 percent of single audits were found to be acceptable, and 30 percent were unacceptable. The study provides important recommendations that need to be considered and implemented.

However, reporting that just over half of single audits are acceptable may leave you thinking there are serious problems in the performance of single audits. It is important to note that the acceptable audits actually encompassed 93 percent of the federal dollars awarded. Less than 5 percent of single audits were unacceptable based on federal dollars awarded. Digging into the details of the report indicates that the majority of the problems, on an awarded dollar basis, occurred in smaller entities that received less than $50 million in federal awards (noted as Stratum II in the report). Also, it would appear that smaller (Stratum II) non-profit entities receive the majority of unacceptable audits. These non-profit entities make up 48 percent of the Stratum II sample but received 53 percent of the unacceptable audits (Appendix D in the report).

The CSCPA Governmental Issues Forum members pondered whether these unacceptable, small non-profit audits might have been done by practitioners who don’t normally do single audits. As was noted in the report, “OMB Circular A-133 sets forth many requirements and procedures that are in addition to, and different from, those applied in an audit of financial statements only. Conducting a proper single audit requires a significant degree of specialized knowledge which must be carefully applied (PCIE report, page 12).”

Many of the issues that caused an audit to be classified as unacceptable were related to documentation. If the audit procedures performed were not documented or if how the conclusions were reached was not documented, these audits were considered unacceptable. Many of these same documentation issues were noted in the Colorado Department of Human Services review of 12 Colorado county audits conducted in 2005. The PCIE review standard was: “If it’s not documented, it’s not done.”

The PCIE report made several recommendations including: • R evising single audit standards to require compliance testing in a manner consistent with SAS 39, Audit Sampling • R evising the AICPA audit guide to: •

describe the minimum audit documentation required on internal control;

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include guidance on how to document risk assessments of individual federal programs;

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include guidance on when audit findings must be reported and examples of properly presented audit findings;

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David O’Farrell, CPA, CGFM

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include guidance on presentation and auditing of Schedules of Expenditures of Federal Awards (SEFA).

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include requirements for management representations about matters related to federal awards covered in single audits; and

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include guidance on how to document materiality determinations in single audits.

• R equiring the audit staff to complete a comprehensive training program as a prerequisite to performing a single audit, with an update every two years; and • R evising Circular A-133 to include sanctions and/or fines for unacceptable audits.

The complete report can be found at www.ignet.gov/pande/audit/ natsamprojrptfinal2.pdf. s David O’Farrell, CPA, CGFM, City of Boulder, Boulder, CO, is a member of the CSCPA Governmental Issues Forum.

Thanks To Tax Line 9 Volunteers This spring marks the 13th year of CSCPA participation in Tax Line 9, Denver’s Channel 9 taxpayer information service (TL9).

With an average of 35 calls answered by each CPA volunteer at each program, more than 1,200 calls are answered during the course of the TL9 season. This year, seven programs air beginning in January and running through April 7.

Channel 9 has the highest viewer audience of the Denver TV stations, has statewide coverage, and is also seen in Wyoming. Each evening news program features three to four promos, and two to four air on the morning programs. During the evening news programs when TL9 is aired, 500,000 viewers on average hear, “CPAs from the Colorado Society of Certified Public Accountants are here to answer your questions.”

The program’s success is due to the dedicated volunteers who participate year after year. Our thanks go to: Bev Beattie, Brenda Clarke, Fran Coet, Mike Field, Larry Fike, Mira Fine’, Paul Gustafson, Sarah Knight, Rick Leaman, Larry Robinson, Allen Rosenbaum, Mark Sanders, Ron Seigneur, Stan Sprinkle, Scott Stauffer, Greg Truitt, and Sharon Worley for taking the calls and answering the questions. s

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By Natalie G. Rooney

CPAs and Politics: A Natural Fit

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or the remainder of 2008, the nation’s attention likely will be focused on the presidential race.

During a presidential election year, even those of us without any political ties or aspirations tend to sit up and take notice. And, whether it’s an election year or not, the wheels of local and state politics are always turning. Colorado CPAs possess the education and business experience to play a key role, and the following CSCPA members have leveraged their skills to make a difference in the political arena.

Getting Involved by Starting Small

Kermit Allard, CPA

Kermit Allard, CPA, comes from a politically active family. His parents worked for various state and national campaigns, and his brother is U.S. Senator Wayne Allard (R-CO). But Allard started his own political involvement at the local level early in his career by becoming a precinct committee person, an elected position, while he was living in Wyoming. “It felt natural for me to get involved,” Allard said. Today, Allard is campaign treasurer for several local campaigns and also for his brother.

We’re the eyes and ears of the business community. We’re on the front lines, and we know what’s happening.

Getting people to the polls, stuffing envelopes, and running the phone bank were among his early contributions to local politics. Allard eventually moved up and worked on Vice President Dick Cheney’s campaign when he ran for Congress in 1978.

“When I moved back to Colorado, I started all over,” Allard said. Once again, he began as an elected precinct committee person before moving on to campaigns and greater responsibilities.

Pam Feely, CPA, says she has always been interested in politics. After a few unsuccessful campaigns in high school and college, she found her niche and has served on the Jefferson County Business Lobby for 10 years.

She is the chair of the Lobby for 2008. Feely says the program has presented her with the opportunity to meet key leaders.

“When you get involved, you start to understand how so many different things are interconnected,” Feely observes. Through her involvement with Leadership Jefferson County, Feely began to make contacts with elected officials. Eventually she was asked to be a campaign treasurer for a state senator.

Pam Feely, CPA

Some CPAs run for office themselves. After a stint on Durango’s city council, Sidny Zink, CPA, became mayor.

“Working in the business community, it became apparent that businesses were under-represented in our city and county government,” Zink says of her decision to get involved. “Business associates encouraged me to run for city council.” In her fourth year on council, she was elected mayor by her city council peers. “It was great fun­—and a significant responsibility—to be able to represent the town that way.”

CPAs Uniquely Qualified CPAs bring a unique set of skills and qualifications to the political arena. Treasurer is the most obvious position for a CPA taking part in a campaign, and it’s probably the first thing people associate with CPAs in politics.

This is a vital role.

“People don’t realize what’s involved in being a campaign treasurer,” says Feely. “Treasurer, or registered agent, is the one position a candidate has to have in order to run for office. Every candidate for a town, city, state board, county, or county board of education position needs to have a registered agent.”

But CPAs’ contributions to politics can, and should, stretch well beyond the treasurer realm. Allard suggests that CPAs use their analytical skills to assist candidates in analyzing the opposition’s campaign report and Sidny Zink, CPA

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not necessarily dive in as campaign treasurer at first. “Get yourself exposed for a year to see how the system functions, how things work, and see if it’s something you want to be involved in,” he says. “There are opportunities for all people.”

“As a CPA, I take a more practical, analytical approach,” says Zink. “That’s what CPAs have to offer—a perspective that tends to be missing in some people and situations.”

Feely agrees, noting that through the contacts she has made and the ability to analyze and distill information, she has the ear of elected officials. “We’re the eyes and ears of the business community. Because we’re on the front lines, we bring a perspective to the system on how certain bills are going to affect individuals and businesses,” she says.

“We can point out unintended consequences of legislation.”

Allard adds that CPAs’ skills play an important role in the lobbying function, too. He has served as an AICPA keyperson, a CPA who has close relationships with legislators and/or members of Congress. “A keyperson trip gets you exposed to how the system works,” he says. “You learn what committees your legislator is on and who the staff is.

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This is important when you need to call an elected official to discuss an issue.”

Zink says that learning the political process also is an eye-opening experience. “To most people, municipal government is frustrating because it moves slowly,” she notes. “But once you’re involved, you see why, and sometimes it’s really for the best.”

Passionate About Politics Although Zink enjoyed her time in office, she admits it wasn’t without challenging moments. She’s not sure if she’d run for office again, but she’s determined to stay involved in the local political scene. “As CPAs we have something important to offer,” she said.

Feely’s passion for politics grows every time she sees the results of her efforts. “I sent something to Cong. Ed Perlmutter (DGolden) about the AMT (Alternative Minimum Tax) in September,” she says. “It ended up going to the House leadership. Our voices are heard if we take the time to know who our elected officials are and call them.”

She reflects that her work in the political arena has changed her thinking over the years. “What’s going on in my accounting

office is a tiny representation of what goes on in our state and the world. It’s the smaller businesses that don’t have the time to be involved, and we can represent them and make sure their concerns are heard. Plus, I find the process fascinating, and it’s important to me to have a voice in it.”

In addition to using his skills and expertise, Allard recognizes he’s been able to do some fun things because of his political involvement. “I’ve attended receptions with the president and vice president, and I’ve met senators and Congresspeople from most of the states.”

But above all, “It’s really important that as a profession, we’re involved,” Allard said. “As a CPA, I’m the one who has to look at information and legislation and think about the effect of the changes on the work I do and the work of my clients.”

To volunteer as a key person contact for a member of the Colorado General Assembly or a Colorado delegation member to Congress, contact Terry McGrail at the CSCPA office, tmcgrail@cocpa.org, (303) 741-8610, or (800) 523-9082, ext. 110. s

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Unraveling the Mystery of Peer Review

By Natalie G. Rooney The accounting profession’s peer review process has existed for decades, but it’s an area of the profession that’s often shrouded in mystery. Only those involved in this confidential process seem to be 100 percent certain of what peer review is, why it exists, and who is required to have a peer review.

Defining Peer Review In 1977, the American Institute of Certified Public Accountants (AICPA) began a selfregulatory program designed to improve the quality of accounting and auditing services provided by CPA firms through a triennial review of these services by qualified individuals from other independent CPA firms.

Standards were established for performing and reporting on these reviews. By 1990, peer review was a mandatory membership requirement of the AICPA and the Colorado Society of CPAs (CSCPA).

Today, to be admitted or to retain membership in the AICPA, as well as in the CSCPA, members who are engaged in the practice of public accounting in the United States or its territories are required to take part in the peer review program.

A peer review is conducted in compliance with the confidentiality requirements of the AICPA Code of Professional Conduct.

Information concerning the reviewed firm, its clients, personnel, and the findings of the review, are confidential.

Simply speaking, peer review can be described as a process for checking the work performed by one’s equals (peers) to ensure it meets specific criteria.

“Basically, every three years an outside party looks over a firm’s accounting or auditing (A&A) practices, or both,” says Bill Lajoie,

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CPA, member of the CSCPA Peer Review Board. “The process provides assurance to outside parties, often to state boards of accountancy, that a CPA or CPA firm is conforming to professional standards.”

“We’re looking at the quality control policies and procedures a firm has as it relates to its A&A practice,” adds Keith May, CPA, who also serves on the CSCPA Peer Review Board. “And the process only applies to firms issuing accounting and auditing reports— no tax practice, consulting, or other service areas are included in the peer review.”

Lajoie notes that the ultimate focus of the peer review program is educational rather than punitive. It’s an opportunity for reviewed firms to find areas for improvement and learn best practices from the reviewers.

In three-quarters of the United States, the state board of accountancy also requires peer review of CPAs. Although Colorado is not one of these states, the CSCPA requires

Colorado Peer Review Results 1990 Unmodified Reports 7% Unmodified Reports with LOC* 53% Modified Reports 26% Adverse Reports 4%

2007 Unmodified Reports 67% Unmodified Reports with LOC* 29% Modified Reports 3% Adverse Reports 1%

*Letter of Comment

peer review and administers the AICPA’s peer review program in the state. Approximately 900 firms are enrolled in the CSCPA program.

The Process With all those firms enrolled in Colorado’s peer review program, coordination and organization are key. Susan Vachereau, CSCPA peer review coordinator, maintains a database of who is due for a peer review each year. Firms or individuals are given a date for when their peer review must be completed.

Four to six months prior to the deadline, Vachereau sends out an administrative questionnaire for reviewed firms to complete.

Firms select the peer reviewer they would like to have conduct their peer review. May says it’s important to find a peer reviewer who understands your firm and your practice. “If you’re a sole practitioner, you don’t want someone from the Big 4 who won’t understand how you operate,” he notes. “And it’s important that the chosen reviewer’s experience dovetails with your firm’s business. Look for someone who has a practice similar to yours and understands how you operate.”

Once a peer reviewer has been chosen, the reviewer will communicate to the firm what information will be needed, along with what engagements will be reviewed and timing for the project. At that point, the peer review can commence.

The AICPA publishes manuals that guide the steps of the peer review process. “Everything is driven from a national perspective to ensure consistency throughout the nation, even though the entities are at a state level,” says May. Continued on page 11 March/April 2008

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Once the peer review is complete, it goes to the CSCPA for a technical review by Dan Cronin, CSCPA technical director. Cronin goes over the reviewers’ documents to ensure everything was done according to standards.

The next step takes the review to the CSCPA’s Peer Review Board where several outcomes may occur. The board can accept the peer review or require follow up action. Over the years, CSCPA members have improved their peer review results as shown in the box on page 10.

Lajoie and May are longstanding Peer Review Board members and former chairs. “We were born on that committee,” Lajoie laughs.

“When Keith and I finally expire, there will be something on our tombstones about serving on this board.”

Being a peer reviewer requires additional continuing professional education beyond what is required for CPA licensure. The courses are specifically directed to individuals who either want to become reviewers or already are, notes Lajoie, a long time peer review instructor.

The Peer Review Board’s Role The CSCPA Peer Review Board includes a chair, vice chair, and 12 additional members.

The board meets six times each year to review issues and new standards and to make sure it is consistent with all firms in all situations.

To join the CSCPA Peer Review Board, an individual must be a peer review team captain. For complete details, contact Susan Vachereau at svachereau@cocpa.org, (303) 741-8605, or (800) 523-9082, ext. 105.

Over the years, the peer review process has become more complex. “The standards for the reviewers have become more voluminous to ensure consistency,” says Lajoie. “If you’re the reviewed firm, all the new A&A standards and statements seem to keep multiplying. The body of knowledge to keep up with is so much greater today.”

The Peer Review Board and the CSCPA peer review staff focus on the quality control aspect of having as many eyes as possible seeing a peer review. “We have three levels of review—the peer reviewer on site, Dan Cronin

at the CSCPA, and the Peer Review Board— to make sure everything hangs together and works,” said Lajoie.

Most of the problems the board encounters result from people missing things, says May. “They’re trying to do a good job. Either they weren’t aware of a standard or they misapplied a standard.”

Changes in the Works May notes that historically peer review reports and letters of comment have been confidential. However, outside parties such as state boards of accountancy and government entities are increasingly asking to see peer review reports and to make the peer review process more transparent. “The increased scrutiny is moving peer review away from its original, educational focus. It’s just going to be a fact of life going forward that peer review, especially in those states which require it of licensees, will become more disciplinefocused. Nonetheless, here in Colorado, we continue to focus on helping practitioners improve their A&A work product. It’s why we exist.” s

Types of Peer Review Reports Unmodified Report An unmodified report is issued when the reviewer finds that a reviewed firm’s system of quality control for the accounting and auditing practice is appropriately designed to meet quality control standards established by the AICPA and provide assurance that the firm complies with professional standards.

An unmodified report may be issued with a letter of comment (LOC). An LOC is issued if there are matters that the review team believes resulted in conditions being created in which there was more than a remote possibility that the firm would not conform with professional standards on accounting and auditing engagements in all material respects but were not of such significance to cause the report to be modified or adverse. The letter also includes comments on such matters even if they did not result in engagement deficiencies on the engagements reviewed, such as when an element of the firm’s quality control could be more suitably designed.

Modified Report A modified report indicates that there are some failures to adhere to professional standards. The reasons for the modified opinion and recommendations are included in the report.

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A modified report also can be issued when the scope of the review is limited, and the reviewer is unable to perform all of the necessary review procedures.

A letter of comment may be issued if the reviewer notes other departures from professional standards that are not significant departures, and therefore not included in the report, but that should be considered by the reviewed firm in evaluating quality control policies and procedures over its accounting practice.

Adverse Report An adverse report is issued when the reviewer finds the firm’s system is not designed appropriately to meet the quality control standards for an accounting and auditing practice established by the AICPA or being complied with during the year under review to provide reasonable assurance that the firm complies with professional standards. An adverse report indicates that there are several significant failures to adhere to professional standards.

The reasons for the adverse opinion and recommendations are included in the report. s

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Barbara S. Seacrest, CPA Chair

Ronald L. Seigneur, CPA Vice Chair/Chair-elect

Michael S. Bearup, CPA Treasurer

Michael D. West, CPA Immediate Past Chair

Introducing the 2008-2009 CSCPA Board The Board of Directors is the CSCPA’s governing body. It controls CSCPA funds and property, supervises CSCPA affairs, and is responsible for statements of position to the public, budget approval, and other major policy matters. The Board consists of 11 members—the Chair, Vice Chair, and Immediate Past Chair who serve one-year terms; the Treasurer and six directors who serve two-year terms; and CEO Mary E. Medley who is the corporate secretary. One director is a non-CPA “public” member. The following new officers and new directors will take office, May 1, 2008.

Ronald L. Seigneur, Vice Chair/Chair-elect Partner, Seigneur Gustafson LLP, Lakewood. B.A., Michigan State University; MBA, University of Michigan. CPA and CSCPA member since 1981. Past Chair, CPE Board; Past Treasurer and Director, Board of Directors; Member, Transitions Committee; Member, 2020 Committee. Member, AICPA Business Valuation Hall of Fame; Fellow, College of Law Practice Management. Everyday Hero Award recipient, 2007.

Michael S. Bearup, Treasurer Michael D. West (who becomes Immediate Past Chair, May 1st) and continuing directors Stephanie Allen, Angela F. Roberts-Turnbeaugh, and Scott K. Sprinkle complete the 2008-2009 Board.

Barbara S. Seacrest, Chair Partner, Lyons & Seacrest PC, Denver. M.S., University of Colorado; B.S., Metropolitan State College. CPA and CSCPA member since 1995. Vice Chair, Board of Directors; Co-chair, Financial Literacy Task Force; Member, 2020 Committee. Mentor in Mentoring Program. Chair, Budget Committee. Past Member, Investment Committee. Past Treasurer. Past Chair, Careers in Accounting Committee. Past Member, Litigation Support Committee. Member, AICPA Virtual Grassroots Panel.

Stephanie Allen Continuing Public Member

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Partner, KPMG LLP, Boulder. B.S., Washington and Lee University.

CPA and CSCPA member since 1988. Past Member, Board of Directors; Member, 2020 Committee. Past Chair of the Board, Urban Peak; Mile High United Way; Colorado Software and Internet Association; Past Chair, Boulder Technology Incubator.

Daniel A. Chenoweth, Incoming Director President, Chenoweth & Associates Business Consulting, Loveland.

B.S., Southern Colorado State College; MBA, University of Denver.

CSCPA member since 1971. Member, Educational Foundation Board.

Membership and Publicity Chair for Northern Chapter.

Angela F. Roberts-Turnbeaugh, CPA Continuing Director

Scott K. Sprinkle. CPA Continuing Director March/April 2008

Daniel A. Chenoweth Incoming Director

Mark T. Solomon, CPA Incoming Director

Tawnya Y. Zimmerman, CPA Incoming Director

and Educational Foundation Nominees Mark T. Solomon, Incoming Director

Dr. John D. Bazley, Incoming Trustee

Controller, St. Mary Land & Exploration Company, Denver. B.S., Lipscomb University. CPA since 1993 and CSCPA member since 1995.

Member, Public Company Practice Member Forum and Editorial Board. Member, Financial Reporting Committee and Board of Directors, Council of Petroleum Accountants Societies.

Professor, University of Denver, Denver. Ph.D., University of Minnesota; B.A. University of Bristol (England). CPA and CSCPA member since 1978. Past member, CPE Board. Various committees of the American Accounting Association and the Federation of Schools of Accountancy. Recipient of the University of Denver Distinguished Teaching Award.

Tawnya Y. Zimmerman, Incoming Director Controller, BRC Investment Management LLC, Greenwood Village.

B.S., National American University. CPA and CSCPA member since 2004. Member, Young Professionals Committee and CPE Board; Chair, Education Subcommittee of Young Professionals Committee; Chair, Mentor Task Force. Member, 2020 Committee.

The Educational Foundation raises funds for scholarships to students pursuing accounting degrees at Colorado colleges and universities. The following trustees will take office, May 1, 2008.

Marc C. Hendrikson, Incoming Trustee Vice President, Commercial Banking, Citywide Banks, Aurora. B.S. and M.B.A., Regis University. CPA since 2000 and CSCPA member since 1994. Member, Board of Directors, Member Connections Committee, and CPAs Make a Difference Celebration Committee. Past member, Small Business Committee.

Mary E. Medley Secretary March/April 2008

Also serving on the Foundation’s Board of Trustees are: President Ronald O. Reed, University of Northern Colorado, Greeley; Secretary/Treasurer Amy M. Bathrick, Fort Collins; Sheila M. Balzer, Holben Hay & Husman LLC, Denver; Sheri L. Betzer, Betzer Critchfield & Co., LLP, Denver; Daniel A. Chenoweth, Chenoweth & Associates Business Consulting, Loveland; Rick L. Crosser, Metropolitan State College, Denver; Paul J. Herz, Fort Lewis College, Durango; Jerald R. Kaiser, GHP Horwath PC, Denver; Steven E. Mithuen, Clifton Gunderson LLP, Denver; Lori D. Nelson, Ehrhardt Keefe Steiner & Hottman PC, Denver; M. Virginia Parker, retired, Hygiene; Clinton B. Randolph, Thomson Micromedex, Greenwood Village; Mark J. Smith, M.J. Smith & Associates, Englewood; Mary E. Medley, Colorado Society of CPAs; and advisory member Michael D. West, Denver.

Marc C. Hendrikson, CPA Incoming Trustee

Dr. John D. Bazley, CPA Incoming Trustee www.cocpa.org

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Peer Review: Behind the Scenes

By Natalie G. Rooney Marcia Hein, CPA, estimates she has been conducting peer reviews for nearly 23 years.

Alan Holmberg, CPA, has racked up about 15 years of peer review experience. And between the two of them, they’ve conducted peer reviews in four different states.

“Peer review chose me somehow,” says Hein, who performs peer reviews in Colorado and California. “I was a member of a firm that belonged to an association of CPA firms which required us to belong to the AICPA’s Public Company Practice Section, which required peer review. We formed teams and did each other’s reviews.”

Holmberg’s firm voluntarily underwent peer review before it was required. “We’ve just always been involved in it,” he says. “I got involved personally because of the opportunities to learn. It’s educational for the reviewer as well as for the reviewed firm. You get a chance to learn the standards behind the practice aids that are used.” Holmberg’s firm performs peer reviews in Colorado, Nebraska, and Wyoming.

Benefits for Everyone Hein sees peer review as an important part of the accounting profession’s self-regulation process. “The peer reviewer will emphasize what you’re doing correctly and point you in the direction for improvement,” she notes.

“The process also can help you be aware of what’s coming on the horizon, which is im-

portant for firms which do only a few accounting and auditing engagements.”

Holmberg observes that the peer review process not only keeps reviewed firms up to date with constantly evolving requirements but also helps them learn best practices. “Sometimes peer review is their only connection to the outside audit world.”

Hein suggests that to achieve the maximum benefit from a peer review, ask your peer reviewer any question that comes to mind— things related not only to the review itself but also about practice management as well.

“An experienced peer reviewer has visited many different firms and has seen how other firms are doing things” she says. For example, if a firm’s interested in going paperless, “Ask what other firms are doing. How are they doing it? What software are they using?

These aren’t technical peer review questions, but the firm can benefit from the reviewer’s experiences with others.”

Maintaining the public’s confidence in the audit process is another reason why peer reviews are so important, says Holmberg. “The peer review is the only outside look most local firms have of their accounting and auditing processes,” he notes. “It’s very important to make sure the public is being served by the work that’s being done. Basically, it’s quality control. The firm is required to have quality controls, and the peer review tests those quality controls.”

Preparing for the Process Holmberg stresses that the most important thing his firm needs to begin preparing for a peer review is a complete and accurate listing of a firm’s audit and accounting engagements in the peer review year. “Peer review is a test of quality control standards, and different standards are selected for review,” he says. “Having an accurate list is a tremendous starting point. If your list isn’t accurate and we’re selecting engagements for review that you haven’t done, that makes it difficult.”

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Holmberg also recommends having up-todate CPE records. CPE is one of the quality control standards, and reviewers will make sure that CPE being taken is relevant to the work a firm is doing.

Firms undergoing a peer review need to have their monitoring or inspection files complete, as well. This is the internal process firms go through in the years they don’t have peer review. “When you make sure you have those files complete, it shows you’re monitoring your quality controls even in the years there isn’t a peer review,” Holmberg says.

These files provide evidence that a firm has done the appropriate monitoring.

Hein first familiarizes herself with a firm’s statements of quality control standards. She goes to the AICPA’s Web site and downloads the team captain’s package and all of the forms she’ll be using and the questionnaire she’ll send to the reviewed firm. Hein sends a planning package, engagement letters, and a list of planning things she needs from the reviewed firm, which includes things like what engagements the firm has done, the type of engagements, who performed the engagements, and industries in which the firm works. She also asks for a quality control document, if the firm has one. “Having the questionnaire completed and prepared, having CPE records up to date—those are the kinds of things that need to be ready,” Hein says. She tells clients two weeks in advance what engagements she’ll be reviewing and then adds one additional engagement when she arrives on site.

Holmberg reviews the engagement listing received from the client to make sure he has received the engagements his firm plans to review. His team decides which offices to visit and which team members from the reviewed firm will be interviewed. Holmberg’s team also does a risk assessment of the practice to make sure the peer review procedures are going to address the quality control risks the reviewed firm may have.

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The length of time an engagement lasts depends on a firm’s size, the number of offices it has, and the amount of accounting and auditing work it does. How much preparation work a firm has done also plays a role.

a concentrated effort to get more reviewers into the system.”

After the review is complete, workpapers are sent to the CSCPA for technical review and then to the CSCPA Peer Review Board which will accept the review without additional action or accept it subject to certain changes or follow up action.

• Be an AICPA member in good standing;

Peer Review Needs You The scope and need for peer review will continue to increase as new regulations, standards, and legislation continue to be applied to the accounting profession. And, the demand for peer reviewers is increasing, too.

“If you were to walk into one of our peer review meetings, all of us would be at least in our 40s, and a lot more of us are in our 50s, 60s, and even 70s,” observes Bill Lajoie, CPA, who sits on the CSCPA’s Peer Review Board.

“The people who have done the vast majority of peer reviews are getting older. We need

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To become a peer reviewer, individuals must:

• P ossess current knowledge of applicable professional standards, including quality control and peer review standards; • H ave a least five years recent experience in accounting and auditing functions; • B e a partner or manager of a firm that is enrolled in the AICPA Peer Review program and have had an unmodified peer review within the last three years; • M eet the minimum CPE requirements in subjects relating to accounting and auditing, under the Standards for Performing Peer Reviews; and • H ave completed one or more courses that meet the requirements for peer reviewers.

Holmberg believes becoming a peer reviewer is an excellent opportunity to learn not only the professional standards but also best practices, audit approaches, and different perspectives on how to meet audit requirements. “It’s an excellent opportunity to learn what others are doing in the profession and pick up ideas about improving your own audit work,” he notes. “It reinforces your understanding of professional standards and gives you insight on how to meet them.”

Hein says she feels fortunate that she’s managed to make an entire career of peer review.

“You meet a lot of good CPAs,” she says of her time on the peer review boards in California and Colorado. “If you have a question, you don’t hesitate to pick up the phone and call any one of them. For me, being a peer reviewer has been a good way to network and make friends, as well as stay at the top of my profession from a technical perspective.”

For more information about becoming a peer reviewer, e-mail Susan Vachereau, CSCPA peer review coordinator, at svachereau@ cocpa.org, or call her at (303) 741-8605 or (800) 523-9082, ext. 105. s

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When Gen-X is in Charge:

How to Harness the Younger Leadership Style For many years, Baby Boomers have held the reins in most companies, leading Generation X workers in the day-to-day activities. However, with members of the Boomer generation ranging in age from 44 to 62 now, in just three short years the oldest of the Boomers will start exiting the workforce. And as the years tick by, more and more Boomers will retire, leaving the leadership reins in many companies up for grabs.

What does this mean for Gen-Xers? Simply put, they’ll be moving into leadership positions rapidly. In doing so, though, they’ll not only be leading their fellow Gen-Xers and the younger Millennial workers, but also they’ll be leading Baby Boomers and possibly some older workers from the Veteran generation who are still in the workplace. It’s a leadership transition the likes of which corporate America has never seen before due to the stark differences in values between the two dominant generations.

For this to be a successful transition, you need to understand both how younger people lead and how to harness their natural leadership style for the company’s best interests. After all, if these young leaders don’t have the right leadership skills in place, the whole company is affected.

At the same time, you need to remember that business and society in general are changing, so it’s only natural that the next generation’s leadership approach will change as well. In other words, Gen-Xers are not going to lead the way Boomers did. They’re working in a

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different economy and business model, and they bring different values and experiences to the table. So, you need to look at the future leadership of corporate America in a different light.

Whether you’re in the position of grooming Gen-Xers for future leadership roles within your organization or you’re suddenly being managed by a Gen-Xer, the following points will help you understand the younger leadership style, how to harness it, and how it affects everyone in the company.

Mentoring matters Gen-Xers are going to require mentoring before they step into leadership roles. Aside from knowledge of how the company runs, they also need to understand what makes people in the different generations tick and what is going to be most effective in terms of leading the various generations. Since many older workers mistakenly believe that GenXers are lazy and don’t know what they’re doing, you need to help new, young leaders learn to come from a place of commonality so they can bring everyone together.

Therefore, in your mentoring process, be sure to go over people skills, not just business processes. Help new leaders understand what environment the Boomers and Veterans grew up in and what values shape their world. This is important because, as the old saying goes, “You can’t always teach an old dog new tricks.” Gen-X leaders need to keep that in mind in their leadership approach.

Truly great leaders know how to balance

By Anne Houlihan

people and processes for the company’s overall good.

Open dialogue is key Gen-Xers want fast results. They’re focused on getting the job done, and to do that they rely heavily on technology and multi-tasking. They’re self-starters who prefer a collaborative environment. Boomers, on the other hand, are used to the leader giving a directive and focusing on that one task until it’s done.

Many still do tasks manually, or if they use technology, they don’t use it very effectively.

However, if a Gen-Xer were to start telling older staff what to do, it probably wouldn’t go over too well. The young leader would get a lot of resistance. Instead, Gen-Xers need to work on building trust. They need to come from a place of empowering older workers by complimenting them on their knowledge and their past experience. Therefore, a good approach is to ask older workers, “How do we want to handle this?” Gen-X leaders need to come from a place of “we” rather than “I.” When young leaders are open and ask older workers their opinions rather than be assertive and tell them what to do, Gen-Xers are seeking to understand rather than to be understood. With open communication, people can overcome most resistance.

Value their values Gen-Xers are family-oriented and place a high value on life balance. As such, they tend to get the job done and leave at five o’clock.

Older workers, on the other hand, believe in

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working late. In their view, the more hours you put in, the more loyal and productive you are. The moral here is: Don’t be surprised when the Gen-X leader refuses to put in 15-hour days on a regular basis. And even though Gen-Xers tend to work only 8- or 9-hour days, they still get the job done because they value results rather than hours.

Additionally, they grew up with technology and are comfortable using it. As such, they are always looking for the quickest way to do something. So rather than view Gen-Xers negatively for going home at five o’clock, see if you or the older workers on staff can learn a faster way to do something from the Gen-X leader. Look at the measurable results GenXers produce and understand the processes they use to achieve them. You might learn a faster way to do something, which would enable everyone to go home at five o’clock occasionally.

Focus on retention In terms of retention, companies face two main challenges:

• O lder workers will leave, believing that the “young kids” have no idea how to lead.

The Next Generation and Beyond

• G en-Xers will leave, feeling that no one at the company is taking them or their new leadership position seriously.

Regardless of what happens, you and everyone on staff always need to come from a place of understanding and humor. Remember that you can’t change people.

Rather, you need to focus on what you can do to bring understanding to the workplace.

When you concentrate on harnessing everyone’s strengths—especially those of the Gen-X leaders—you are helping the company successfully navigate the upcoming leadership transition. And as one generation passes the reins to the next, everyone in your organization will realize that we all can learn something from one another, regardless of age.s

Therefore, as the leadership transition emerges, companies need a retention program in place for both younger and older generations so they can keep the expertise in house and grow future leaders. Remember that Boomers and Veterans have the knowledge and wisdom. They went through a lot of trial and error. Gen-Xers need these people as mentors. If turnover gets too high from either segment, you’ll lose a lot of knowledge and many future leaders, and the company will suffer. That’s why current leadership needs to understand what will keep people on board. For example, older workers tend to like monetary incentives, while younger workers tend to prefer time off. The more perks you can give people to stay, the stronger the company will be in the future.

Anne Houlihan is president of Satori Seal and founder of Golden Key Leadership. For information, visit www.GoldenKeyLeadership.com or call (951) 235-5405.

Young Professionals Celebrate Another Busy Year Once again, the Young Professionals Committee (YPC) had an active and successful year under the leadership of Ben Hrouda, Alliance Commercial partners LLC, and Paul Dickman, Northstar Commercial Partners. The committee spreads its work out among three subcommittees: Social, Charity, and Education.

Social

Educational YPC members participated in an environmental scan in June, and they developed a survey to determine how young CSCPA members are using technology in their work and personal lives.

The survey results and information from the environmental scan have been fodder for YP articles in NewsAccount.

The Second Annual Kickball Tournament was held, Aug. 25, and attracted over 200 young professionals, their families, and friends. This event is held in conjunction with the Colorado Bar Association’s young lawyers group.

The subcommittee also worked with the Junior Achievement program, presenting the JA material at Sagewood Middle School on Dec. 7.

The Second Annual Texas Hold’em Poker Tournament was held on Jan. 28, with 54 members and guests participating.

Year two of the Mentor Program kicked off with the matching meeting on Oct. 16 and a mentoring tips presentation by Caroline Turner on Oct. 30. There are 14 people matched, with a few others still needing a mentor.

Charitable A great time was had by all who participated in the Pie Auction to benefit the Autism Society of Colorado on Nov. 20.

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You’re invited to join in the fun. For details, contact Jill Turner at jturner@cocpa.org or call her at (303) 741-8608 or (800) 523-9082, ext. 108.

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Americans Learning to Feed the Pig™ Since launching a year ago, the Feed the Pig™ campaign has built awareness, not only in the target audience of 25 to 34 year olds but also with Americans of all ages, of the importance of making smart financial decisions. All 50 state CPA societies have joined the Feed the Pig™ campaign and have held events to draw attention to the campaign, its mascot, and message. Following are some successes to date:

• Web

banners have appeared on iVillage, The New York Times, CNET, National Geographic, and CondeNet.

• T he TV PSAs have reached more than 81 million consumers through local TV broadcast and have aired during such programs as Good Morning America, TODAY, Live with Regis and Kelly, Ellen, Dr. Phil, Oprah, Grey’s Anatomy, 24, the Late Show with David Letterman, the Tonight Show with Jay Leno, Dateline NBC, and Saturday Night Live.

• F eed the Pig™ has garnered widespread media coverage, including in Reuters, the Wall Street Journal, Associated Press, USA Today, MSN Money, and Newsweek, as well as by local television stations. The campaign has garnered more than 350 million media impressions since October 2006.

• M ore than 6,000 billboards and bus shelters all over the country are bringing the Feed the Pig™ message to American communities.

• O n Nov. 14, 2006, and April 6, 2007, Feed the Pig™ banners were featured on the home page of MSNBC.com. Last August, MSN featured the ads on facebook.com, in its games section and on the home page on Aug. 23, 2007. These placements increased traffic to feedthepig.org by more than 900 percent.

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• T he Feed the Pig™ microsite averages 2,220 visits a day and 31,000 unique visitors per month while the Weekly Savings Tip receives 1,000 new subscribers each week.

• F eed the Pig™ was selected as one of seven Ad Council campaigns for Radio Disney’s “Move It!” mall tour, attracting more than 200,000 families nationwide.

The American Institute of Certified Public Accountants (AICPA) launched the Feed the Pig™ program as an extension of the 360 Degrees of Financial Literacy www.360financialliteracy.org initiative. A national public service announcement campaign in partnership with the Ad Council, Feed the Pig™ provides steps to help younger Americans proactively manage their money and start saving. For free financial literacy resources, log on to www.feedthepig.org or www.aicpa. org/360financialliteracy. s

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FASB Update

By Timothy J. McCutcheon, CPA

Proposed FSP No. FAS 117-a on Endowment Fund Holdings Issued The Financial Accounting Standards Board (FASB) issued proposed FASB Staff Position (FSP) No. FAS 117-a, Endowments of Not-forProfit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures, on February 22, 2008. The draft guidance seeks to improve the quality and consistency of financial reporting of endowments held by not-for-profit organizations.

If approved as final guidance, proposed FSP No. FAS 117-a would be effective for fiscal years ending after June 15, 2008. Organizations should begin to assess the provisions of this FSP now to avoid delays in the issuance of their financial statement audits later.

Provisions Relating to Organizations Subject to UPMIFA One of the provisions of the draft document proposes that not-forprofits governed by their state’s version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) classify all or a portion of a donor-restricted endowment fund of perpetual duration as permanently restricted net assets. The amount classified as permanently restricted is the amount of the fund (a) that must be retained permanently in accordance with explicit donor stipulations, or (b) that in the absence of such stipulations, the organization’s governing board determines must be retained permanently, if any, under the relevant law.

The statement also indicates that the determination that must be made pursuant to (b) above is a one-time determination and may not be changed from year to year. If the governing board of an organization determines the relevant law requires the organization to maintain the purchasing power of a donor-restricted endowment fund, the amount of permanently restricted net assets should be increased as purchasing power of a dollar decreases (inflationary environment), or decreased if purchasing power of a dollar increases (deflationary environment). Generally, the determined amount is computed independently of (i.e., should not be reduced by) losses on investments or distributions from the fund.

At a minimum, not-for-profit organizations must disclose the following: • A ­­ description of the governing board’s interpretation of the law that underlies the organization’s net asset classification of donorrestricted endowment funds.

• A ­­ description of the organization’s policy(ies) for the appropriation of endowment assets for expenditure (its endowment spending policy(ies)).

• A ­­ description of the organization’s endowment investment policies. The description shall include the organization’s return objectives and risk parameters; how those objectives relate to the organization’s endowment spending policy(ies); and the strategies employed for achieving those objectives.

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• The ­­ composition of the organization’s endowment by net asset class at the end of the period, in total and by type of endowment fund, showing donor-restricted endowment funds separately from board-designated endowment funds. In addition, the organization shall indicate the cumulative amount of investment return, if any, contained in the permanently restricted net asset class because of the organization’s interpretation of relevant law, beyond that required by explicit donor stipulations.

• A ­­ reconciliation of the beginning and ending balance of the organization’s endowment, in total and by net asset class, including, at a minimum, the following line items (as applicable): investment return, separated into investment income (for example, interest, dividends, rents) and net appreciation or depreciation of investments; contributions; amounts appropriated for expenditure; reclassifications; and other changes. In addition, the organization shall indicate how much, if any, of the additions of investment return to permanently restricted net assets are the result of the organization’s interpretation of relevant law, beyond that required by explicit donor stipulations.

• The ­­ organization’s planned appropriation for expenditure, if known, for the year following the most recent period for which the organization presents financial statements.

Provisions Relating to Organizations Subject to UMIFA The statement imposes these disclosure requirements on all not-forprofit organizations regardless of the applicability of UPMIFA or the Uniform Management of Institutional Funds Act (UMIFA) to those organizations.

The FASB has asked that comments be submitted by April 18, 2008, by e-mail to director@fasb.org, File Reference: Proposed FSP FAS 117-a.

Status of Colorado UPMIFA Proposed Legislation House Bill 08-1173 The Colorado State House of Representatives passed House Bill 081173 on January 28, 2008. The Senate Finance Committee amended it and passed it on to the full Senate, March 18. It appears that the bill is headed for approval this session and should be signed into law by Governor Ritter prior to June 30, 2008. The new law will apply to all institutional funds existing on or established after its effective date, but it will apply only to decisions made or actions taken after that date. s Timothy J. McCutcheon, CPA, is a past chair of the CSCPA and partner in charge, Nonprofit Organizations Practice, for Anton Collins Mitchell LLP, Denver. Reach him tmccutcheon@acmllp.com.

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Movers & Shakers Gordon Hughes & Banks, LLP announced several additions: Dave DeZutter as an audit partner in the Golden office; Frank Gariepy as a senior tax manager, Bobby Teo as a tax manager, and Julie Reed as a tax specialist in the DTC office.

Hein & Associates LLP announced the promotion of Tracy Pharis to audit partner and Patrick Hanley to tax partner.

GHP Horwath PC announced the promotion of Angela Kennedy as a new principal in the tax services department. It also announced the following additions: Staci Milton as a senior in the tax services department and Monica Swasey as a manager in the assurance services department.

BKD LLP announced the promotion of Christopher Telli to manager and the addition of JoAnne Bennett to the firm.

SSA, P.C. (formerly Sanden, Seltzer & Anderson, P.C.) announced the admission of Eric G. Bowers as a shareholder and director of the firm.

Hoelting & Company Inc. CPAs announced several new shareholders: Jeffery Bonacquista, Scott Hoelting, and Thomas Sistare. Also, promoted to manager is Mary Ellen Vanderpoorten.

Zarlengo Raub LLP announced its selection as one of 2007’s Colorado’s Best Companies for Working Families. The firm was recognized by Colorado Parent magazine for offering and supporting family-friendly policies, procedures, and work environment.

Jenny Pitkin started Emerson Search, LLC, a recruiting firm that focuses on senior to manager level positions in corporate accounting and finance. E-mail jenny@emersonsearchllc.com.

28th Annual Not-for-Profit Conference May 20, 2008 Hyatt Regency - DTC 7800 East Tufts Avenue, Denver

Featuring

Peter Towle, CPA, Esq. Form 990 Update and Other Relevant Thoughts

Dick Larkin BDO Seidman LLP

Accounting and Auditing Update

Bret Wichert Capin Crouse LLP

Risk Assessment 104—111, 112 and 114

Charley Shimanski Colorado Association of Nonprofit Organizations

Best Practices Guide for NPOs

Tucker Hart Adams The Adams Group Inc.

Economic Update

In Memoriam We regret the loss of the following CSCPA members. We extend our sympathy to their families and friends.

John F. Rhyne Littleton, CO Member since 1985

David A. Ryan Tucson, AZ Member since 1953

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Ed Frado Anton Collins Mitchell LLP

403(b) Retirement Plans

Larry Roipajla Clifton Gunderson LLP

Fraud 101—Trust and the Non-Profit Fraudster For complete details or to register, go to www.cocpa.org, or call (303) 773-2877 or toll free, (800) 523-9082.

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Classified Ads Classified ads are published at the following rates: $3.00 per word. Responses may be sent to a box number and forwarded to the advertiser for an additional $5. Contact Jill Turner, jturner@cocpa.org, (303) 7418608, or (800) 523-9082, ext. 108, to place classified advertising in NewsAccount.

Practices for Sale, Purchase, or Merger Accounting Practice Owners: Don’t Give Away Your Firm! For decades CPAs and accountants have believed the only way to sell a practice was for the seller to guarantee the results over several years’ time. The long-standing myth is that practices must be sold for 20% down and 20% of collections over the next four years. At Accounting Practice Sales, we have buried that century-old thinking. Because of our market know-how, quality lenders, and our large pool of qualified buyers, we are able to sell most of our practices without seller guarantees for all-cash at closing! Call today for a confidential, no-obligation discussion of your situation and to learn the available options. Buyers: We have more accounting and tax practices nationwide than anyone plus new listings all the time. Contact Bill Anecelle, CPA, toll free at (866) 809-8705 or bill@accountingpracticesales.com or www.AccountingPracticeSales.com.

Fred Mehring, Select Business Group, Inc., specializes in the sale, merger, and acquisition of accounting and tax practices. Over 20 years of experience. Confidentiality stressed!

Call Fred Mehring at (303) 771-3100; e-mail: fmehring@selectbg.com, www.selectbg.com.

We sell practices! Confidential, professional, and stress free. Call for a FREE sales package and confidential consultation with our regional director, Rick Harrison, CPA, at (888) 295-3716 or www.prohorizons.com.

Office Space North Boulder (Valmont) Offices: Office share with 2 CPAs. 2 offices, 1 is a larger corner office with great views; underground parking; shared receptionist/assistant, conMarch/April 2008

ference room, kitchen, and copier; partially furnished if desired. Rudy, (303) 817-1198.

Denver Tech Center CPA firm has two furnished executive offices and one workstation cubicle for rent. Offices have excellent window views, conference room, kitchen, and copier. Covered parking. Non-smoking building. Contact Bill: (303) 799-4100 ext.

376 or wschaefer@baileysaetveit.com.

Help Wanted Western Colorado CPAs—Work where you love to play! Dalby, Wendland & Co., PC is the largest CPA firm in western Colorado with offices in Grand Junction, Glenwood Springs, Montrose, and the Vail Valley. We are seeking CPAs. Excellent opportunity for advancement, competitive salary, and benefits package. Please send your resume to DWC, attention: HR, 464 Main St., Grand Junction, CO 81501, fax to (970) 243-9651 or e-mail to hr2006@dalbycpa.com.

CPAs—Bad tax season? We can help—We are looking for exceptional candidates who want to excel and be part of our future. We currently have openings for tax/audit staff positions, as well as a tax manager with a focus on short-term ownership possibilities.

55-hour tax season weeks with paid overtime.

Excellent salary and benefits with advancement opportunities. Pro Systems experience preferred. Monahan, Lampman & Hays PC provides innovative business solutions in the areas of tax, audit, consulting, and technology. Celebrating more than 35 years of offering a high quality of service and personalized client focus, Monahan, Lampman & Hays PC is one of the top public accounting and consulting firms serving clients throughout Glenwood Springs and the Western Slope of Colorado. If you would like to be a part of our team, please submit your resume in confidence to Monahan, Lampman & Hays PC, PO Box 370, Glenwood Springs, CO 81602, fax (970) 945-2398 or e-mail mlhcpa@sopris.net.

Tax/Audit Manger/Partner—Denver-based CPA firm seeks exceptional individual for opportunity to flourish within our growing tax and audit practice. Qualified candidate will possess strong technical and people skills and a desire to be part of a solid team

and firm culture. Opportunity to be part of practice succession and ownership. Replies in confidence to Box 362, Colorado Society of CPAs, 7979 E. Tufts Ave., #1000, Denver, CO 80237-2847.

Controller: Colorado Springs manufacturing company is accepting applications for a self-motivated team player. Responsible for financial statements of multiple entities, supervising accounting staff, budgeting, and cost controls. Reports to the CFO. CPA with 2-5 years of recent public accounting experience. Excellent benefits. Salary DOE. Fax resumes to (719) 572-2674 or e-mail to kgfink@wcmind.com.

Miscellaneous CYMA IV Accounting for Windows. Advanced accounting features at an affordable price. Award-winning software features “non profit” and “for profit” editions. For a free demonstration, call Clay Williams, CPA, (303) 337-0607 or www.cyma.com.

Office Interior Solutions—As your Office Interior Specialist, I can provide space planning, design, furniture, installation, and complete project management whether you are updating or expanding. Indoff is the only nationwide commercial furniture dealership which provides greater buying power from more furniture manufacturers. In addition to furniture, I can assist with office signage, document security level shredders, and filing systems. I believe in delivering personalized service through the entire project—from listening to your needs at the design phase to cleaning the furniture when installed. Carol Eckhoff, Indoff, Inc, PO Box 280243, Lakewood, CO 80228, Phone (303) 995-5272; fax (303) 986-2734.

Situation Wanted Wanted: CPAs looking for flexible, interim, or part-time work. Soccida International is looking for highly skilled CPAs to join our team in providing superior, flexible resource and outsourced finance and accounting solutions. Please contact Raymond Gallegos at (303) 889-5990 or rgallegos@soccida.com to learn more. www.cocpa.org

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You Wouldn’t Believe It . . .

I’d Heard of Counting Sheep, But Cows?

By Daniel J. Cronin, CSCPA Technical Director In the accounting and auditing profession, you have to count inventory—it’s just part of the job. Three or four months after graduating from college, I was assigned to a company with an extensive inventory of cattle. My entire life, up to that point, had been spent in the city. I’d never been on a farm or ranch. I had no experience with animals of any kind, other than a dog.

Now, here I was on a cattle ranch. I had checked the prior year’s workpapers. There were no instructions on counting cattle. At the ranch, I was introduced to a cattlehand. I was told he would take care of my problems.

We walked over to the fence and looked at the cattle. There were a lot. I explained that I had to count those cattle. He couldn’t figure out how I was going to do that. Neither could I. I saw a trough where men were feeding the cattle. I thought I’d count the cattle as they came to eat. But as I watched, I realized they all didn’t come over at the same time, and I would probably miss some or double count some.

Then, the cattlehand mentioned there was a gate they walked the cattle through for inoculations. I asked him to move the cattle through the gate while I counted them.

It took two hours to herd the cows, and I was counting the whole time. Near the end, the ranch manager stormed over and demanded to know what authority I had to move these cattle through the gate. The cattle were going to market soon. He wanted to know if my firm would be reimbursing him for the two or three pounds these cows were going to lose because they were moved.

After the ranch manager calmed down, he asked what lesson I’d learned. I’d made a stupid rookie mistake. I really didn’t need an exact count. I found out later there’s no completely accurate way to keep track of a herd of cattle. Even ranchers don’t keep an exact count. They know generally, not specifically, how many cows they have.

Share Your Story In the next edition of “You Wouldn’t Believe It,” tell us what you do to combat the wear and tear of tax season, month-end, year-end, or whatever causes you stress at work.

Send your stories to Liz Julin at ljulin@cocpa.org.

Bottom line: Rookies are going to make mistakes. This was mine. s

Correction In the January/February 2008 issue of NewsAccount we incorrectly listed the firm name with the following individuals. The announcement should have read: GHP Horwath PC announced several additions: Amy McKean and Karen Krogmeier as associates in the tax department; Greg Norberg, Michael Kalousek, and Lin Zheng as audit associates; Cali Cook, Charles Ely, and Jacob Linstrom as associates in the audit and assurance services department. Michael Raisch has joined the firm as chief operating officer. The firm also announced several promotions: Angela Parsons was promoted to senior manager; Allyson Kolesik was named a senior on the audit and assurance services team; Tom Rigby became a senior manager; Shelley Owens and Crystal Gates became managers on the tax services team; and Travis Yoder was promoted to senior on the valuation and litigation services team.

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