COCPA NewsAccount - 2016 - March/April Issue by Colorado Society of Certified Public Accountants

NewsAccount March/April 2016 Colorado Society of CPAs

COCPA Leadership Boards to Welcome New Members PAGE 4

Building Future-Ready CPAs PAGE 10

Results Only Work Environment: Can It Work For You? PAGE 13

Contents Features

4 7

Future-Ready is the capacity to be aware, predictive, and adaptive…

10 13 20 28

COCPA Leadership Boards to Welcome New Members Introducing the 2016–2017 nominees for COCPA and Educational Foundation Board positions.

How to Thrive in Changing Times Organizations are turning to the finance function to help deal with changes, complexity, and disruptive ideas. Four prominent executives offer tips on thriving in today’s marketplace.

Building Future-Ready CPAs A look into Bauerle & Company PC's all-staff planning session for success in the new business environment.

Results Only Work Environment: Can It Work for You? It’s 9:30 on a Tuesday morning. Do you know where your employees are? But then again, does it really matter? Not if you operate in a Results Only Work Environment.

Change is Inevitable. Extinction is not. Transformation is the new competitive advantage and the key to renewed relevance.

Gender Diversity in the Accounting Profession: Are We There Yet? Women have composed more than half of accounting graduates entering the accounting profession for the past two decades, yet they make up only 23 percent of the partners in accounting firms. There's still work to do.

Departments

2 32 32

Chair Column Movers & Shakers Classifieds Mar/Apr 2016 • www.cocpa.org •

Chair Column

NewsAccount A bi-monthly publication of the Colorado Society of Certified Public Accountants Vol. 61, No. 6 March | April 2016

Dedication Behind the Scenes BY STEVE R. CORDER, CPA, CGMA

Board of Directors Steve R. Corder Chair Mark T. Solomon, Vice Chair Tawnya R. Ramirez, Treasurer Sheila M. Balzer, Immediate Past Chair Mary E. Medley, Secretary

years), Executive Assistant Terry Cervi (27 years), and Member Services Director Susan Vachereau (33 years). That’s a great track record! And then of course, there’s CEO Mary Medley, who’s been on our side at the COCPA for the past 41 years.

Directors Victor A. Amaya, Craig A. Arfsten, Christine Benero, Kelly G. Boggs, Ann E. Hinkins, Dan W. Soukup Editorial Board Jack Allgood, Alan D. Bennett, Kay R. Dragon, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, R. Stephen Van Meter, Michael D. West Mary E. Medley, President/CEO Natalie G. Rooney, Contributing Writer Blue Ocean Ideas, Design NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7887 E. Belleview Ave., Suite 200, Englewood, CO 80111. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. 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 $9.90 one-year subscription to NewsAccount. Periodical postage paid in Englewood, CO, and additional mailing offices. POSTMASTER: Send address changes to NewsAccount, Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111 Net press run = 8,550 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 8,450; free distribution by mail = 50; free distribution outside the mail = 0; total free distribution = 50; total distribution = 8,500; office use, leftovers, spoiled = 350; returns from news agents = 0; total sum = 8,850; percent paid and/or requested circulation = 99%.

303-773-2877 • 800-523-9082 Fax: 303-773-6344 • cpa-staff@cocpa.org

NewsAccount is available online at www.cocpa.org.

• NewsAccount • Mar/Apr 2016

his is my last column as your COCPA Chair. Over the past year, I’ve written about my opportunity to meet members across Colorado, technical issues facing our profession, our marvelous COCPA members and their service to their communities, and more. Now, I’d like to tell you about what goes on behind the scenes at the COCPA, partly as a thank you for all CEO Mary Medley and her staff have done for me but also to let you know how terrific these folks are and how blessed we all are to have them working for us at the Society. One of my goals this year was to attend and observe some of the COCPA committee meetings of which I’m not a member. What I’ve learned is that our COCPA staff liaisons play a critical role in these committees’ success. Several of the liaisons have been in their roles for many years, and we are lucky to draw upon their vast experience. It’s amazing to me that six COCPA staffers have been at the Society for 23 years or more: CFO Carol Cameron (23 years), Peer Review Coordinator Jill Turner (26 years), CPE Director Rebecca Campbell (27

My themes for the year were Strategy, Opportunity, and Service. The COCPA staff members embraced them all. And, these three words are the perfect descriptors of how they carry out their work every day. Strategy played a big role this past year. The COCPA has been going through a redesign process, looking at what we need to be doing as we go forward. We’re examining every facet of how we deliver service to you. Significant and important changes have been discussed and implemented, and the staff has been open to every one of them. They realize we have an opportunity to change the way we do business, and they’re focused on how we can do it better. The third piece, service, has typically been about CPAs serving our communities. But for the COCPA staff, their service is to us, the members, through committee assignments, day-to-day interaction, and problem-solving. It’s their job, and they do it well. For example, I appreciate Terry Cervi and Member Development Coordinator Leslie O’Donnell and their efforts to connect members to the COCPA with events ranging from wine and beer tastings, Avs and Rockies games, the CPAs Make a Difference celebration, the CFO/Controller Roundtable, and more. I attended many of these, and they were all so enjoyable -and not just because two of them involved adult beverages! These events give members a chance to get to know other CPAs, build relationships, and learn more about the COCPA. Leslie supports 13 chapters across the state and – as is true staff-wide – is so much fun to be around. She and Terry

define what the Society is all about: dedicated, helpful, member-service oriented. They and their colleagues find out what members want and deliver it. Susan Vachereau, who leads the member services team, lives and breathes her work which also includes all things peer review. It's a big role, and she handles it with style and grace. While Carol Cameron is our CFO in title, she’s so much more than that. As executive director of the Educational Foundation – and as Susan Vachereau did before her – she has raised money to help Colorado students pursue a career in accounting. She serves as staff liaison to the Audit Committee and Investment Committee. She wears several hats and wears them well – just as everyone else who works for the COCPA. Rebecca Campbell makes sure the COCPA CPE product is the best of any available in the state or elsewhere. One of our strategic initiatives is focused on innovation, and Rebecca always is looking at new offerings and delivery methods and asking what we need to be doing to meet your education needs and exceed your expectations. Clearly, her dedication is well-placed, as we’re projecting a financially successful CPE year – something practically unheard of in this era of cheap Internet CPE. If you’ve ever walked through the doors of the COCPA office, you’ve probably been greeted by Jana Coté at the front desk. She always has a smile, asks how she can help, and does it all with sincerity. The Society has one chance to make a first impression, and Jana does it so well. When you arrive, she’ll point you in the right direction and help answer your questions. It’s a “Cheers – we’re glad you’re here” moment, thanks to Jana. And then there’s CEO Mary Medley who leads this great team in carrying out our important mission. I work with a lot of membership associations like the COCPA in my professional role as an auditor for nonprofits. Occasionally, I see dysfunction and employees who merely go through the motions. In contrast, it’s wonderful to see how Mary and the COCPA staff go about their business. These individuals have our backs by doing what they do. Their collective longevity at the organization shows they – and the COCPA – are doing something right. This has been an exciting year, filled with uncertainty and change. Everyone on the staff wondered where things were headed. Do I have a future? How does all of this impact me? To put on a smile and do your job when bullets are flying and you’re uncertain about where you’re headed is hard. But they all have done it with grace and humility. I began my year as Chair uncertain about what I was getting into and how it would all turn out. As I reflect on my year, I appreciate how great it’s been – because of Mary and her team. Thanks and kudos to them all! s Email your comments and questions to Steve Corder at scorder@kcedenver.com.

S E E K I N G N O M I N AT I O N S Deadline May 15, 2016 Emerging Leaders

Women CPAs who — while still on the path to the highest levels of advancement — have made significant contributions to the profession and their communities, demonstrated leadership, been involved with their alma maters or other local colleges and universities, and/or created and implemented unique initiatives.

Leaders of Note

Women CPAs who have attained leadership positions within their organizations, made major or unique contributions to the profession, participated in public and community service, been published, and not only help to improve their workplaces but also mentor others.

To request a nomination form, contact Terry Cervi at tcervi@cocpa.org. S AV E T H E D AT E

August 19, 2016 Mar/Apr 2016 • www.cocpa.org •

Leadership News

Mark Solomon, CPA, CGMA

Tawnya Ramirez, CPA, CGMA

Ben Hrouda, CPA, CGMA

Gregory Osborn, CPA, CGMA

Christopher Telli, CPA, CIA

COCPA Leadership Boards to Welcome New Members The following individuals will join the COCPA Board of Directors or Educational Foundation of the COCPA, May 1st. Chair-elect Solomon and Vice Chair/Chair-elect Ramirez will serve one-year terms. Treasurer-elect Hrouda and Directorselect Osborn, Telli, and Turner will serve two-year terms. Educational Foundation Trustees Baca, Clary, and Dixon will serve three-year terms.

Karen Turner, Ph.D., CPA

Diego Baca, CPA

Mark T. Solomon, CPA, CGMA COCPA Board Chair Vice President, Controller, Assistant Secretary, SM Energy Company, Denver Mark currently serves as Vice Chair/Chairelect and Chair of the Budget Committee. His prior service includes two years as Treasurer and former Board member, Investment Committee member, and Chair of the Audit Committee. Active in the energy industry for more than 19 years and in the accounting profession for more than 24 years, Mark is an Ernst & Young LLP alumnus and former COPAS – Colorado Board

• NewsAccount • Mar/Apr 2016

Tobias Clary, CPA, CVA

member. He received his B.S. in Accounting from Lipscomb University, Nashville, Tenn. Mark is committed to implementing the COCPA’s strategy initiatives and to championing the profession, especially to students as an invaluable career choice. He loves the outdoors, fishes, camps with his boys, and especially enjoys early morning drives to school with his daughter. He also loves to figure out how things work and to fix things. He is all about relationships and cares deeply about helping others develop their strengths. Thanks to Mark, many of his SM Energy colleagues have participated in the COCPA

Audra Dixon, CPA

LeadFit leadership development program for young professionals – with invaluable results. Expect to see Mark at every possible COCPA event across the state, encouraging members to “get educated, form your opinion, and vote,” whatever the issue or proposed initiative may be.

Tawnya Y. Ramirez, CPA, CGMA COCPA Board Vice Chair/Chair-elect Vice President of Finance and Administration, Charter School Growth Fund, Broomfield Currently COCPA Treasurer, Tawnya has

served in a variety of volunteer positions for the COCPA and is Treasurer for Roots Elementary, a new charter school in northeast Denver. Prior to joining CSGF, Tawnya was the controller and compliance manager for BRC Investment Management LLC, an institutional money management firm. Tawnya started her career at Comcast as the west division business assurance manager. She obtained her BS in financial accounting from National American University in Denver.

During his term as Treasurer, he hopes to communicate clearly the value the COCPA brings to members, especially through public advocacy. Ben is a fourth-generation Colorado native and lives in Denver with his family and backyard chickens.

Tawnya loves podcasts and audio books. “It’s a perfect medium for me because I spend a lot of time in my car.” She is most concerned about the decreasing ratio of students graduating with an accounting degree who pursue CPA licensure and the increasing need for CPAs to understand and synthesize complex information into a clear, concise, and actionable message. Her intention for her leadership role is straightforward: “The Colorado Society of CPAs provides me access to the resources – knowledge and connections to people – that I need to grow as a professional. I hope to return at least as much as I have received so that others may have the same opportunity.”

Greg joined his predecessor CPA firm in 1981 and has been a partner since 1989. He serves clients primarily in the medical, manufacturing and distribution, real estate, not-for-profit, and agricultural industries. A member of numerous community service organizations, including Colorado Concern and the Denver Metro Chamber of Commerce Board of Governors, he received his B.S. in Accountancy from the University of Northern Iowa.

Benjamin CGMA

Hrouda,

CPA,

COCPA Board Treasurer Vice President, Investment Accounting and Reporting, Sage Hospitality, LLC, Denver Ben has covered a lot of territory in the fifteen years since he graduated with his M.A. and B.S. in Accountancy from the University of Denver (DU), including a stint as an Ernst & Young LLP auditor, DU Adjunct Faculty member, COCPA former Young Professionals Committee Chair, and prior COCPA Board service. Employed in the real estate development arena for three different companies since 2004, Ben leverages his information technology expertise to improve the accounting and reporting functions – one of his many responsibilities as a CPA in industry. One of the top issues facing the profession from Ben’s perspective is maintaining and protecting the value of the CPA brand.

Gregory P. Osborn, CPA, CGMA COCPA Director Tax Practice Leader and Office Resident Manager, RubinBrown LLP, Denver

Greg cites talent, technology, and regulations as three top issues for the profession nationally, locally, and globally. Through his Board service, he hopes the COCPA will help address and better prepare members for these challenges and the profession’s future direction. He also hopes to be a voice from public practice who has experienced many changes – from the small, local firm environment to a large, regional firm experience, post-merger. Greg enjoys family life, Bronco football, and collecting and restoring classic cars from the 1950-1970's era – ask him about the Highlands Ranch Hot Rodders.

Christopher J. Telli, CPA, CIA COCPA Director Partner, BKD LLP, Colorado Springs and Denver Chris has more than 17 years of experience in accounting and auditing, including three years as an internal auditor for a large not-for-profit organization. As a member of BKD's National Not-for-Profit & Governmental Group, he assists not-forprofit and governmental entities with audit,

compliance, and general business consulting, and leads the firm’s governmental practice in Colorado. A regular writer and speaker on a variety of governmental and not-forprofit accounting, auditing, and compliance issues, Chris currently is an advisor to the Government Finance Officers Association’s (GFOA) Committee on Accounting, Auditing, and Financial Reporting. Chris is a former co-chair of the COCPA Governmental Issues Forum and previously served on the COCPA Governmental Conference planning committee. He is Treasurer for the American Red Cross of Southeastern Colorado. Chris received his B.S. in Accounting from Regis University, Colorado Springs, and his MBA from the University of Colorado, Colorado Springs. Chris says, “I believe it’s vital to the health and prosperity of the profession to help new CPAs understand the exciting and rewarding careers they can enjoy, while also developing succession plans and creating career paths to assist existing CPAs with achieving their goals. I hope through serving on the Board I can assist the Society in addressing this and other important issues we face, while giving back to the profession that has provided me so many opportunities.” On a side note, Chris is a huge baseball fan. One item on his bucket list is to visit all the major league baseball parks.

Karen Forrest Turner, Ph.D., CPA COCPA Director Acting Dean, Monfort College of Business, University of Northern Colorado, Greeley Associate professor in accounting, former Colorado State Board of Accountancy member, COCPA/AICPA Woman to Watch, frequent author and speaker, National Association of State Boards of Accountancy western regional Board member, Daniels Fund Board member, Greeley Center for Independence Board of Directors member, just to name a few – Karen Turner’s list of contributions and achievements is long and distinguished. Karen is a CPA in both Colorado and Texas. She is a true Mar/Apr 2016 • www.cocpa.org •

Leadership News learner with four degrees to her name: B.S. in Secondary Education and M.A. in English/Rhetoric and Composition from Texas A&M; M.S. in Accounting from the University of Texas at Arlington; and Ph.D. in Accounting from UT Arlington, as well. For Karen, top issues facing the profession include staying current with the rapid change in business forms and technology and attracting quality students to the major and into the profession. She is dedicated to supporting the accounting profession in its efforts to increase the visibility of accountants as major participants in business decisions for both industry and individuals and to attracting high quality people to its ranks. Something you wouldn’t know from reading her extensive resume: Karen is taking a woodworking class and loves to quilt and to perform in community theatre.

Diego J. Baca, CPA Educational Foundation Trustee Manager, Assurance Services, Ernst & Young LLP, Denver

predominantly Latino household, the CPA profession has been my key into a world that I would not have otherwise known. I want to share my experiences, my knowledge and my passion with others through my volunteer service with the COCPA. I also want to continue to develop my professional skillset so I can continue to expand my giving to even more people into the future. I always tell young mentees that this is the very best profession to build the widest professional skillset, which can help any of us achieve our dreams and chase our passions." Ask Diego about the (positive) rap album he made in 2010, just for fun, and his plans for another album in 2016, with a bunch of individual tracks made in between then and now. “It’s a great way for me to be creative and introspective, while articulating that positive message that inspires me daily.”

Tobias D. (Toby) Clary, CPA, CVA Educational Foundation Trustee Shareholder, Soukup, Bush & Associates, P.C., Fort Collins

Diego was born to be a mentor, as well as a CPA. Whether through his role at the firm or through his many other professional activities, including his service as a Board member of the University of Colorado Latino Alumni Association and the Career Development Advisory Board, Diego couples his accounting expertise with his commitment to the profession. His service is one of the many reasons the COCPA Board of Directors nominated him for the 2015 AICPA Leadership Academy – and the AICPA enthusiastically chose him for the highly selective program. Diego received his B.S. and M.S. in Accounting from the University of Colorado, Boulder.

One of the newest shareholders in the firm, Toby already has distinguished himself, thanks to his leadership abilities and expertise. After receiving his B.S. in Business Administration from Colorado State University in 2001, he joined a small local CPA firm in Fort Collins before moving to Soukup, Bush & Associates in 2007. Toby is a member of the National Association of Certified Valuation Analysts and is a Board member of the COCPA’s Northern Chapter. This past year, he participated in the COCPA LeadFit leadership development program, filling a unique role as the sole male in the group.

Diego never is at a loss for words – spoken or written – when it comes to his passions: retention and recruitment of future CPAs (where mentoring comes into play); maintaining the profession’s relevancy in the everchanging world of technology; giving back to the profession; and music, which he calls his best friend. “Being a first generation college graduate from a single parent home and

Toby highlights the retirement of the older generation of CPAs as a major issue. “There will be a significant shift in the makeup of the profession over the next five to ten years. While this provides ample opportunities for the younger generation of CPAs, it will be a challenge to replace the knowledge base that is retiring.” He hopes to increase COCPA member involvement within the profession

• NewsAccount • Mar/Apr 2016

and to continue in the footsteps of those who have served the COCPA before him. Volunteerism is one of Toby’s passions. “I believe as CPAs, most of us have a natural desire to help others. Because of this, volunteering and being a CPA fit well together.” And socks. He loves fun socks.

Audra Dixon, CPA Educational Foundation Trustee Audit Associate, Anton Collins Mitchell LLP, Denver Audra took an indirect path to becoming a CPA, completing her B.A. in Sociology at the University of Colorado, Boulder, and obtaining her accounting coursework at Metropolitan State University of Denver. In addition to her role with the firm, she is an adjunct instructor in accounting at Red Rocks Community College, a Denver Rescue Mission volunteer, and the volunteer treasurer/bookkeeper for a small, local nonprofit organization. A 2015 graduate of the COCPA LeadFit leadership development program, Audra offers a younger professional’s perspective on the issues facing the profession in embracing technological advances to avoid losing relevancy; addressing the lack of capital and human resources which can hinder firms from growth and profitability; and putting greater focus on mentorship, coaching, training, and communication skills. Audra hopes to “Encourage the accounting profession, public and private, to embrace a more flexible, progressive, and forwardthinking approach to our work. It’s in the perfect position to offer unlimited paid time off, flexible schedules, and availability to work from home to name a few. We can take a page out of the Silicon Valley textbook – make your office a great place to work. Too many firms, especially public, just accept that turnover is a part of the cycle. Making accounting an appealing profession will spur more young people to choose this career path.” A nugget not on Audra’s resume: Her job in college was driving the Zamboni at the campus ice rink. s

Management Accounting

How to Thrive in Changing Times BY CHARLES TILLEY, FCMA, CGMA, AND JACK HAGEL

Organizations are turning to the finance function to help deal with changes, complexity, and disruptive ideas. Four prominent executives offer tips on thriving in today’s marketplace.

This article first appeared in CGMA Magazine. For more articles, sign up for the weekly email update from CGMA Magazine at http://bit.ly/UZ07NC.

n a climate of constant uncertainty, one thing is certain: Organizations are turning to the finance function to help deal with complexity and disruptive ideas. This puts finance professionals in a position of influence – and change. Finance executives increasingly find themselves focused on talent management, risk management, strategic planning, accounting information systems, cybersecurity, corporate governance, and legal and compliance initiatives.

They’re also becoming critical players in the communication of performance and changes in strategy. Four executives, who discussed thriving in disruptive times during a panel at last year’s World Congress of Accountants (WCOA) in Rome, offered these insights during interviews with CGMA Magazine, a publication of the joint venture between the American Institute of CPAs and the Chartered Institute of Management Accountants.

CAROL CALANDRA, CPA, CGMA Group CFO – Markets, EY When managing change, communicate the “why.” It always helps for people to understand why you’re doing something and explaining how the team or organization will benefit from the change. If you don’t explain the “why,” people are left to their own devices to guess. So it’s about explaining, being transparent, and understanding, and leading them Mar/Apr 2016 • www.cocpa.org •

Management Accounting through a change. Change is hard, and we need change leaders to help us through whatever change we are trying to implement. You have to keep talking about it, keep addressing it, keep reinforcing it, and provide the burning platform for the change. Build your toolkit. I always talk to our teams about expanding their toolkit. Constantly pick up new things. Expand broadly what your remit is, so that you learn. So when that job opportunity comes, you’re ready for it. You’re better prepared because you haven’t just been doing your job; you’ve been picking up other experiences along the way. Seventy per cent of learning is through experiential development. You don’t have to talk in front of Parliament or Congress to be better at presenting, for example. You can chair a meeting. You can lead a discussion group and, little by little, get comfortable with presenting. And then, when you’re in a job that requires presenting in front of people all the time, you’re much more developed in the skillset. Volunteer. Volunteer for everything that you can humanly volunteer for. Because you’ll grow, you’ll continue to develop, and along the way, you’re going to meet some really interesting people, and you’re going to help them. They won’t forget that, which will provide interesting opportunities down the road.

TONY CHANMUGAM, FCMA, CGMA Group Finance Director, British Telecom Group Look after your people, and they will look after you. The quality of your people is essential. We limit the use of consultants where possible so that we encourage and grow our in-house expertise. Nurture your talent, and your team will become the catalyst for growth – for driving down the cost base, improving efficiencies, and driving long-term sustainable success. We also encourage our people to learn the different parts of the business. My experience as a COO has allowed me

• NewsAccount • Mar/Apr 2016

to be a successful CFO. If you understand the operational side, you will have a better understanding of the financials. Play a full role in business strategy. Management accountants have never been at such a high premium. Management accounting skills are vital to our success. We need the right people, and they need the right tools, knowledge, and skills to work efficiently. You need effective decision-making, and you want people brave enough to make those decisions. This may mean that someone makes ten decisions, gets eight correct, and makes two mistakes. But he or she learns the most from those mistakes. Remember, innovation fuels growth. When we rolled out our fiber-optic network (beginning in 2009), it cost us £2.5 billion ($4 billion). There was a high degree of concern about cost and take-up, but we were bold and had reasonable confidence we could meet market expectations. We look to safeguard such investments with contingency plans. Be aware of the pessimistic, and try to counter that. You cannot afford to stand still and must always be looking to achieve that next set of aims.

SIMON HENRY, FCMA, CGMA CFO, Royal Dutch Shell Look ahead and avoid complacency. The danger of complacency is always a risk. Falling back to traditional modes of behaviour is something which executives have to consistently be conscious not to allow. Management accountants, with their focus on forward-thinking and sustainable business, are therefore vital to the risk-management process. Shell is clinical in understanding its risks, and the company has a well-structured process for ensuring that all risks are addressed at the executive or management level. Although there are certain events that simply can’t be planned for, it is crucial to have an established process in place to deal with any eventuality.

Be a good corporate citizen. Being a good corporate citizen is not only a necessary core competency for every organization but also is a competitive advantage in many sectors. Industries and organizations must not just wait for regulations to be applied, but get ahead of the curve and be reactive to financial, environmental, technological, and economic change. If you have the correct approach to the role of responsible business by acting in a sustainable way, you can create different regulatory environments in which you can then do better business. Be curious. Part of being a professional is understanding what is required of you and making sure that you get the job done. But being an effective finance leader doesn’t stop there. Having the curiosity to understand exactly your organization’s business model and risks – that is what will catapult you and your business forward. Understanding everything from finance to organizational effectiveness and allocation of resources – coupled with expertise in other parts of the business – can prove to be an extremely powerful asset in the effective management and development of a company’s finance function.

KEN GOLDMAN CFO, Yahoo To stay ahead of disruptive trends, read up and hire young. Bring in new blood, freshly out of school, and really on top of some of the new trends. Another thing we do is acquire companies that are very involved with some emerging trends and use those as leads to what we’re trying to do. Read a lot, and really watch what’s going on. A lot of the new ideas come from people starting companies, so stay very involved with that. Another thing: Network a lot. You have to hang with people who are involved. Grow and nurture talent from within. The recruitment of talent is probably the big-

gest challenge in technology today. Talent is in the critical path of us being able to be successful. I try to hire as many people as I can right out of university and train them ourselves and grow them and mentor them and then develop them as managers. In Silicon Valley, the finance challenge is extreme, as it is for other functional areas, so I find the

best way to do it is just to develop your own when you can. Focus on experience first. Good schooling is the requisite, as is understanding the functional areas of accounting. People underestimate how important it is to really understand accounting and stay

up with it. Part of it is working hard, staying involved and engaged. It’s more important to get experience and learn. Don’t worry about your title or your salary. It’s all about good experience. The ability for finance to really understand fledgling business models is important to understand if it’s sustainable or “are you kidding yourself?” s

Charles Tilley is chief executive of the Chartered Institute of Management Accountants. Jack Hagel is a CGMA Magazine editorial director. Copyright © 2011-2014 American Institute of CPAs. Copyright © 2011-2014 Chartered Institute of Management Accountants. All rights reserved.

May 18, 2016

NOT-FOR-PROFIT CONFERENCE August 19, 2016

WOMEN’S SUMMIT October 20, 2016

GOVERNMENTAL CONFERENCE

SAVE THE DATE 2016 Conferences

October 26, 2016

For details, contact COCPA at 303-773-2877, 800-523-9082, or go to www.cocpa.org.

November 17, 2016

CPAS IN INDUSTRY CONFERENCE November 14–15, 2016

TECHNOLOGY CONFERENCE ACCOUNTING AND AUDITING CONFERENCE December 13, 2016

SEC AND PCAOB CONFERENCE December 15, 2016

MIX AND MATCH CONFERENCE Date To Be Determined

YOUNG PROFESSIONALS LEADERSHIP SUMMIT

Mar/Apr 2016 • www.cocpa.org •

Future Focus

Building Future-Ready CPAs BY NATALIE ROONEY

very January, Bauerle & Company PC, Denver, kicks off its new year with a day-long planning session. The themes and topics differ from year to year but typically focus on technical issues. For 2016, the firm decided to do something different. After hearing Tom Hood, CPA, CITP, CGMA, and CEO of the Maryland Association of CPAs, speak at the 2015 Colorado Society of CPAs planning retreat, managing partner Tom Dosen knew who should facilitate Bauerle’s planning day. “We want to get our folks to operate differently in the marketplace,” Dosen explains. “We want to be future ready.” Hood agreed to help, and the date was scheduled. The entire staff participated. “Designated” seating put a partner, manager, staff member, marketing team member, and administrative staff member at each table for individual, group, and breakout discussions. Hood led the Bauerle team through the process of understanding what a “Future Ready CPA” looks like. Each small group took notes on the topics discussed and created a report. “The session really made people think,” Dosen says. “It was very interesting, especially generationally, to see what people consider as the top challenges facing the profession and how to address them.” According to the 2014 Insight into the CPA of the Future study, only eight percent of CPAs are future ready. “Most people feel like they’re stuck dealing with compliance issues,

• NewsAccount • Mar/Apr 2016

and they don’t get time to think about the future,” Dosen says, much less what a futureready CPA is.

Future-Ready is the capacity to be aware, predictive, and adaptive of emerging challenges, tech innovations, and trends and changes in business, population, and social environment. Hood outlined four “hard trends” – increasing government regulation; constantly evolving technology; shifting demographics; and globalization. He challenged the Bauerle team to consider how it would capitalize on them and what opportunities they present. “That’s where we really found significant differences in our thinking,” Dosen says. Younger staff members focused on technology and globalization while the older group leaned toward demographics and regulation. “It was interesting,” Dosen says. “For example, both groups wondered why I chose demographics. With baby boomers approaching retirement, planning, wealth management, and succession planning all present significant opportunities.” For the younger generation, the opportunity to work anywhere, work in the cloud, and have access to client files, IT security, and work on mobile devices were all cited as their focus for the future.

One of Hood’s strategies was to encourage thinking about questions such as: “Will a computer make CPAs obsolete? What would we do?” He cited the example of IBM WATSON, a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data. The system went up against an elite legal team and solved a complex legal issue in five minutes versus the two weeks it took two teams of lawyers. “The WATSON example really opened my eyes,” says Lisa Storey, CPA, a tax supervisor at Bauerle. “It was a little unnerving to think about what else WATSON could take over in the future.” Hood also presented a survey of private companies that revealed the top services companies want from CPAs are business planning and business strategy. Tax planning and audit were ranked at the bottom of the list. The survey also showed clients are more concerned with the CPA becoming a trusted advisor rather than serving merely as a compliance-oriented person, Dosen says. “That was really telling. In addition, the same audience said the number one reason clients leave their CPA is because the CPA was reactive instead of giving proactive advice. As a profession, we must make the time to plan for the future.” Dosen says he is noticing that older clients seem to be OK with business as usual, but younger clients expect a different type of

service. “We have to start thinking differently and doing more things electronically. It’s a cultural change, and we want to be – really need to be – ready. That’s why we’re investing in our younger and middle-level people for these types of things now.” TAKEAWAYS Storey says the strategic session reinforced her emphasis on developing and building client relationships. “What popped into my mind was TurboTax,” she says. “We welcome new clients who previously used TurboTax, and almost always we find mistakes that were made. I don’t think machines will replace accountants, but the question makes you think about focusing on giving clients the type of service that technology cannot.” Storey says while the firm already emphasizes looking at industry changes that affect clients, she plans to put more emphasis on this area and grow the business advisor aspect. One of Hood’s recommendations was to block out one hour each week to think about becoming future-ready. “You get so focused on staying caught up with compliance that it’s hard to make the time to think about the future,” Storey says. “It’s important to think about how you’re going to become future-ready and how you can implement new things.”

2016 CPAs MAKE A DIFFERENCE

SAVE THE DATE

CPAs Make a Difference 2016 November 2, 2016

Grand Hyatt Downtown, Denver

In her effort to be future-ready, Storey says she identified one of Hood’s five steps as particularly important to her: context – knowing your businesses, their markets, their competition, and being proactive at reaching out to clients about the future. Christine Nibbelink, CPA, an audit supervisor at Bauerle, says finding ways to be more proactive with clients also is on her goal list. “Tom Hood mentioned that for us to show we have value, we have to be proactive versus reactive,” she says. “We have to find ways to help clients meet their goals in the future by finding out their needs and concerns – and addressing them.” Another takeaway for Nibbelink was the changing face of the nation’s workforce. “The number of baby boomers leaving the profession provides opportunities for my generation to step into those roles,” she says. “This applies to our clients as well. If they’re trying to retire, they need to start thinking about a succession plan. We can help them through the process.” Nibbelink says it’s easy to get stuck in the grind and not spend time thinking about the future. “This session got us all thinking,” she says. “It was a little bit of a shock to hear about computers doing all of these jobs. As CPAs, we do add value. A lot of our business is about relationships and understanding our clients’ needs, thoughts, and what they’re trying to achieve. We need to be their trusted advisor.” “The day really gave us an opportunity to see how our people think,” Dosen says. “Everyone, from the partners to staff members, provided valuable feedback. It’s exciting to see more people thinking about the future.” Now, if that computer would pick up the dry cleaning… s

Mar/Apr 2016 • www.cocpa.org •

Making Sense of A Changing & Complex World: The Anticipatory CPA and Organization June 13, 2016 Inverness Hotel & Conference Center, Englewood, Colorado Whether you're a past attendee or a first-timer, this is the year to come! All COCPA members are invited.

OBJECTIVES Find out what’s happened with the COCPA Strategy Initiatives since June 2015. Learn what’s happening on the national and international scenes which affects and challenges you and the CPA profession. Understand what branding is and how to use it successfully. Identify the hard trends which can help guide strategy. Prioritize what’s critical, essential, and significant to be successful as an anticipatory CPA.

AGENDA 7:45 a.m. – 8:20 a.m. Registration and Continental Breakfast 8:20 a.m. – 8:30 a.m. Welcome, Plans for the Day, Introductions Mark Solomon, CPA, CGMA, SM Energy Company, Denver 2016-2017 COCPA Chair 8:30 a.m. – 9:00 a.m. What’s Up with CLIMS? The COCPA launched five strategic initiatives in 2015. This session will cover what’s happened with Content Management & Delivery, Leadership Development, Innovative Culture & Competency, Member & Customer Service, and Sustainability since last June. Tawnya Ramirez, CPA, CGMA, CSGF, Broomfield 2016-2017 COCPA Treasurer 9:00 a.m. – 10:30 a.m. Where Are We and Where In The World Are We Headed? Whether you look at the local environment, the national political scene, or the global stage, the economics are key. Buckle up. It’s already a wild ride, and knowing what to watch and do will make all the difference in how you navigate in this rapidly changing world. Connor Lokar, Economist, ITR Economics, Manchester, NH 10:45 a.m. – Noon The Anticipatory Individual and Organization What can we know? What can we predict? Through large audience and small group discussions, you’ll explore the opportunities both soft trends and hard trends create. Tom Hood, President & CEO, Maryland Association of CPAs and BLI, Towson, MD

1:00 p.m. – 3:00 p.m. Insights Into Action The economic climate, the soft and hard trends, and the issues affecting the profession offer both challenges and opportunities. In this session, pull it all together. Tom Hood and Mary Medley, CEO, COCPA 3:15 p.m. – 4:45 p.m. What Type Are You? A Case Study What is branding? What are its drivers? How can identifying your brand's archetype shape your image and behaviors? Using the COCPA’s experience as a backdrop, explore the ways you can leverage who you already are to be more effective in marketing what you offer. Greg Rittler and Brody Bond, Blue Ocean Ideas, Towson, MD 4:45 p.m. – 5:00 p.m. Reflections and Closing Remarks Mark T. Solomon, CPA, CGMA 5:00 p.m. Networking Reception RECOMMENDED CPE CREDIT AND FIELD OF STUDY: 8 hours in Specialized Knowledge LEVEL: Update DESIGNED FOR: Leaders and emerging leaders in public accounting, business & industry, education, and government. Guests are welcome! FEE: $125 Register by June 6, 2016, at cocpa.org — space is limited.

LEADERSHIP COUNCIL PURPOSE In January, 2001, the COCPA Board of Directors approved creation of the Leadership Council which discusses national and state initiatives and issues, provides feedback on profession-oriented matters, and assists in determining the future direction for the Colorado Society of CPAs and those it serves.

Practice Management

Results Only Work Environment: Can It Work for You? BY NATALIE ROONEY

It’s 9:30 on a Tuesday morning. Do you know where your employees are? But then again, does it really matter? Not if you operate in a Results Only Work Environment.

esults Only Work Environment (ROWE) is a human resource management strategy where employees are paid for results rather than the number of hours worked. Goals are set and then met by the results of individual employees. The theory is that the focus on met or unmet results enables the organization freedom to focus on fewer minute details of employee daily routine and on project completion. On its website, www.gorowe.com, the approach is defined this way: The ROWE system is the proven methodology used to provide ultimate flexibility in the workplace,

while at the same time, ensure the workforce is driven by results. ROWE Certified Organizations are well-positioned to: • Retain good employees from different generations • Effectively Millennials

engage

and

manage

• Approach talent acquisition activities in more creative ways • Start setting measurable objectives tied to the bottom line But does it really work?

Absolutely, says Victor A. Amaya, CPA, partner at ClearPath Accountants LLC, Littleton, who has been phasing in ROWE at his firm. “Our business is very project-oriented, focusing on tax and business consulting,” Amaya explains. “We’re also very deadlineoriented. We use a project management tool to provide due dates. As long as our employees hit their due dates, or meet them early, they’re in a positive situation.” This, of course, begs the question: What happens when employees don’t hit their due Mar/Apr 2016 • www.cocpa.org •

Practice Management dates? “We stress that if they’re not going to meet a due date, they need to communicate why they won’t,” Amaya says. “It helps us manage clients’ expectations, and it teaches young staff to understand project management. Everyone is responsible for the project happening on time.”

For people who question the process, Amaya asks, “Does it really matter how and when the work gets done if you get the quality you need by the time you need it? If you’re getting the production and quality you require, why tie anyone to a certain desk, location, or schedule?”

While ROWE and project management focus on getting the job done on time, sometimes people do forget things. The goal is to preemptively see where problems might occur and shift work around if necessary. If someone is stretched, he or she reaches out to others on the team for help. “We move things around to make sure all client projects are taken care of,” Amaya says. “Communication is very important for ROWE to work.”

A majority of the firm’s employees work from home but can come into the office to work if they would like. Desks are available for use. “They come and go as they need,” Amaya says. “A lot of the process is about managing. You need to manage the work, not the people. We don’t have issues with our employees’ schedules if we’re getting what we need from them.”

RETAINING TOP TALENT One of the key reasons Amaya investigated the ROWE concept was to help with staff retention. “It’s especially helpful for employees who want to start a family and may feel they have to make a choice, especially if they’re in public accounting,” he says. “That can cause really unfortunate decision-making.” “We have the technology and tools to make it so anyone is still an integral part of our business and can continue to be a productive member of our firm. If we can provide the flexibility to care for their families, parents can continue to use their knowledge to help us be successful and accomplish the tasks for our clients. I see it as a win-win.” Amaya says working parents definitely take advantage of the flexible schedule. “They don’t feel the necessity to be in the office from nine to five.” One new mother just set her schedule to work at home in the mornings and in the office in the afternoons. “She wanted to meet our expectations,” Amaya says. “I know she’s great at what she does and takes care of her work. I don’t mind what hours she decides to work.”

• NewsAccount • Mar/Apr 2016

TIPS FOR SUCCESS Interested in trying ROWE? Amaya offers these recommendations: • Ensure everything is accessible to everyone, everywhere. ClearPath operates in a cloud environment. Documents are scanned and uploaded for easy access. Carefully monitor access, passwords, and antivirus software. • Recognize that this model won’t work for everyone; it takes a certain type of person/personality. Self-starters who are good at managing their time and projects excel in this system. Amaya recommends establishing and following a hiring profile. Ironically, Amaya says he himself isn’t good at working from home. “I can’t get things done at home so I come to the office, but a majority of our employees take advantage of the opportunity to work flexible hours and in other locations. We don’t care as long as they produce a quality product, on time.” • Have an accountability system in place. “You’re offering freedom, but there has to be an accountability check so you can catch issues before they arise,” Amaya says. “That’s where the project management aspect is so important. Again, it’s about the paperwork, not the people.”

If you’re concerned about staying connected with your employees, Amaya says technology can resolve that, as well. His team stays in touch via technology. “One of our biggest tools is Skype. We can laugh, joke around, and have fun, even when we’re not all local.” The firm also uses GoToMeeting so everyone can see what everyone else is working on. “Technology is in place for us to accomplish these types of things,” he says. “We can touch base, get updates, confirm everything is completed that needs to be, and people can still pursue their interests. You can have a life and get your work finished, even if that means logging in at two in the morning if that’s what works for you. People can manage themselves.” Will ROWE work for everyone, everywhere? Probably not. Best Buy implemented it in 2012 and then stopped using the concept in 2013, saying in a statement that the company wanted everyone in the office as much as possible to collaborate. And who can forget the uproar when Yahoo’s Melissa Mayer removed the option for employees to work from home in 2013. But ROWE definitely has its supporters, and Amaya says it’s the right thing for his firm right now. “Our profession is so behind the times on a lot of these issues when we could be leading edge,” Amaya says. “Much of it has to do with how we bill the client, which typically is time-based. That system doesn’t encourage people to come up with ideas to streamline processes, because there’s no incentive. In fact it’s a disincentive,” he says. “With ROWE, people are incentivized to find a better way. You give them forty hours a week to work, and they do the job in thirty, highquality hours. Suddenly, they have ten extra hours that are theirs. How they got from A to B doesn’t matter. It’s the result, and that’s the important part. Then we start creating a different perspective in the community about what CPAs do and how they go about their work.” s

Human Resources

Why Hire An Intern? BY NATALIE ROGERS, CPA, MBA, CFE

he question often is asked, “Who benefits from an undergraduate student internship arrangement?” The answer: The benefits are multi-faceted, for the firm or employer as well as the student. If your firm or business has not already done so, consider reaching out to your local educational institution(s) to develop a student internship program. The obvious benefit for the student includes exposure to real world business situations. While classroom or even computer-generated simulations often are offered as a normal part of course work, there is nothing like the real thing when preparing a financial statement or tax return in practice. An internship gives the student an opportunity to restore an actual client’s accounting software file, interpret a cli-

ent-prepared trial balance, and research actual transactions in a client’s general ledger. These are all difficult to experience in the classroom yet are part of being an accountant. An internship also can expose the student to ethical situations such as conflicts of interest or client confidentiality. He or she benefits from the experience and wisdom of senior staff as they provide guidance on how to handle such situations, creating a more meaningful experience than reading about those situations in a textbook. In addition, an internship gives a student the opportunity to experience public accounting and evaluate whether it’s the right fit, career-wise. The benefits for the firm or employer are numerous, including the opportunity to take a

close look at a potential employee. The firm can observe the student’s skill level and work ethic. Consider the cost of an intern compared to an experienced staff member, and the numbers speak for themselves. Internships offer a positive return on investment – and the potential to enhance the bottom line. Finally, employing an intern is a form of giving back to the profession through development of new talent. Whether you’re persuaded by encouraging young people to pursue accounting as a career, offering them real world experiences, or the beneficial economics of an internship program, creating such a program is worth the investment. s Natalie Rogers, CPA, MBA, CFE, is an assistant professor at Adams State University. Contact her at natalierogers@adams.edu.

Mar/Apr 2016 • www.cocpa.org •

Leadership Development

Taking a Leap Forward with LeadFit BY NATALIE ROONEY

onya K. Devers, CPA, was about to become a new partner at Smith, Brooks, Bolshoun & Co., LLP, Denver, when another firm partner approached her with a brochure in hand. It was for LeadFit, the COCPA’s innovative leadership program designed specifically for CPAs and CPAtrack professionals who are looking to grow professionally and personally. While Devers had already been on the partner track at the firm, she stepped into the role a year earlier than expected. Now, through LeadFit, she saw the opportunity to gain valuable leadership experience. LeadFit offers young professionals the opportunity to work with program facilitator Lorrie Blanchard Tietze, founder and manager of Interface Consulting, and explore the following areas: • Relationship Building • Managing a Team vs. Leading a Team • Performance Evaluation and Feedback • Negotiation • Rainmaking • Role Definition • Defining Your “Best Work” Devers says the timing could not have been more fortuitous for her in her new leadership role. She read the description of the classes, realized what a great opportunity this could be, and signed up. “From day one, I knew there was something special about this program,” Devers says. “The skills we learned in just eight hours on day one were unbelievable. And everyone felt the same way. We were exhausted by the end of the day, but we were excited, hopeful, and looking forward to the next sessions.” Devers said she quickly learned how she could become a leader and not just a man-

• NewsAccount • Mar/Apr 2016

ager. “You can help guide your staff to better themselves rather than just telling them which tasks to perform,” she says. “You can help them develop their own careers.” And while Devers said she and her classmates all expected to grow professionally, they discovered the skills they were learning helped them in their personal lives as well. Learning listening skills topped the list. “When you listen to someone, you’re usually thinking about the next thing you want to say. As a result, you’re not fully engaged in the conversation,” she explains. “We did exercises all day long to improve our listening skills. We all got so much out of it.” Since graduating from LeadFit last November, Devers says she now catches herself when she starts to think about her reply instead of focusing on what someone is saying. Another interesting concept for Devers was learning about the differences in how people listen, learn, and deal with conflict. “We told personal experience stories, and other participants had to figure out our true emotions,” she says. “It was interesting to learn these skills so we can pick up different cues from our staff and listen between the lines.” As a new partner, Devers says the conflict resolution skills she built were critical, explaining that she learned she needs to go into a conflict knowing what she wants to get out of it. “I used to approach situations with the mentality that I would see how this plays out,” she says. “At LeadFit, we learned to take a step back and work our way to the end goal before approaching the situation. The process taught me to figure out what I want the result to be – first.” Learning and thinking styles were another valuable takeaway. Devers says the group discussed how people learn – visually, audi-

bly, hands on – and whether they think auditory/sequential or visual/spatial – so they can understand how each individual staff member best takes in information. “It’s hard to put yourself in someone else’s shoes,” she says. “Understanding that someone thinks and learns differently than I do was important.” Devers also lists the discussion of personnel evaluations as a critical component of LeadFit. “We learned that it’s not so much a skill as a means to be better at helping our staff members express how they feel about their work and what they want to get out of it. What motivates them? What are their needs?” she says. “You need to find these things out so you can build better morale throughout the office.” YOU SHOULD GO, TOO Based on Devers's experience, the firm has set a goal to send someone to LeadFit every year. “Once more people at the firm start going through the program, we’ll all be on the same page and have had the same training,” she says. “It will be easier to communicate throughout the entire office.” Devers says Tietze’s style – presenting the information and then repeatedly practicing the new skill – makes the program the success that it is. “The exercises were spot on,” Devers says. “When you only sit through a lecture it’s hard to imagine how to put those skills into practice. The exercises helped us understand and apply what Lorrie was teaching us.” Devers says she values the connections she made through LeadFit, too. “I will be using them as a resource going forward,” she says. While the basic format is focused on building core leadership skills, Tietze says the program continues to evolve, especially through additional concepts about using skills in the

midst of change. “With all the transitions, mergers, and acquisitions going on in the profession, there is so much change happening,” she says. “We wanted to hone in on an area that is really impacting the profession and CPAs.”

LeadFit 2016

Devers suggests that each firm send at least one of its up-and-coming management level staff members each year. “It’s a fantastic program. You get so much out of it,” she says. From her own experience, Devers believes LeadFit has been critical to her success. “Having just stepped into the partner role,

this was all new to me,” she says. “It was nice to learn these skills before going into my first year as partner.” s LeadFit will launch its fifth group in July. For details and an application, contact Terry Cervi, tcervi@cocpa.org.

Perhaps you’ve been wondering where to go to obtain the leadership tools and skills you need. Or, you know someone who’s got great potential and needs additional training in those ever-important interpersonal and supervisory skills to be well-positioned for promotion. Consider LeadFit 2016, sponsored by the Colorado Society of CPAs, a program specifically for CPAs and CPA-track accounting professionals who are looking to grow professionally and personally.

APPLICATION DEADLINE: JUNE 24, 2016

MAJOR SUBJECTS

• Relationship Building – listening and presence; professional and personal • Managing a Team v. Leading a Team – goal setting; conflict resolution • Performance Evaluation and Feedback – acknowledgement; confrontation; resolution; rewards • Negotiation – message tailoring; requesting • Rainmaking – thinking styles; generational styles • Role Definition – qualitative and quantitative • Defining Your “Best Work” – linking to purpose, commitment, and boundaries

LEADFIT FACILITATOR

Lorrie Blanchard Tietze is the founder and manager of Interface Consulting, LLC, Castle Rock, Colo., a consulting firm focused on helping companies enable change and build productivity through process, tools, and skills. She is committed to helping people help themselves and their businesses.

SESSION DATES JUNE 28-JULY 5

Pre-call with each participant to determine individual goals, wants, and needs/Optional call with the participant’s sponsor.

JULY 7

| 6:30 p.m. to 8:30 p.m., Home of COCPA CEO Mary Medley Welcome BBQ for all participants, with LeadFit Facilitator Lorrie Blanchard Tietze and COCPA leadership

JULY 8

| 8:30 a.m. to 4:30 p.m., COCPA Education Center, Englewood. Breakfast and lunch included. Session I: Relationship building, listening, and presence skill building – customer, client, family, supervisor, subordinates, and team applications.

AUGUST 12

| 8:30 a.m. to 12:30 p.m., COCPA Education Center, Englewood. Breakfast included and optional lunch. Session II: Conflict resolution, team commitment.

Lorrie consults with Fortune 500 companies, governmental agencies, and not-for-profit organizations. The COCPA chose her to help create and facilitate LeadFit because she understands the professional services world and the importance of the human dimension in creating meaningful, sustainable relationships. Her high energy approach and commitment to personal growth guarantee that you will not only gain the skills you need for success but that youwill truly enjoy the learning experience.

SEPTEMBER 9 |

Before establishing her consulting practice, Lorrie worked in the manufacturing and engineering fields. She is adept at maintaining strong customer relationships, developing international, multi-functional teams, and working in fast-paced, challenging environments.

NOVEMBER 15 |

8:30 a.m. to 12:30 p.m., COCPA Education Center, Englewood. Breakfast included and optional lunch. Session III: Message communication inside and outside, generational differences, thinking style differences.

OCTOBER 19 |

4:00 p.m. to 6:00 p.m., Home of CEO Mary Medley. Refreshments included. Debrief: An opportunity for you to discuss your experiences in applying what you’ve learned so far. 8:30 a.m. to 4:30 p.m., COCPA Education Center, Englewood. Breakfast, lunch, & reception included. Session IV: Goal and expectation setting, role definition, performance feedback (confrontation, correction, acknowledgment), rewards, and graduation celebration. Mar/Apr 2016 • www.cocpa.org •

Leadership Development

SPECIALTY INSTRUCTION

This innovative leadership development program, created in collaboration with Interface Consulting, LLC, is designed to enable you to gain the knowledge, skills, and practice to achieve your desired professional and personal results including interacting effectively with, leading, and managing people. The program is limited to 16 participants who commit to attending all sessions. You are also encouraged to identify an individual from your firm or company who will serve as your sponsor. Delivered over five months, the program is recommended for 24 hours of continuing professional education credit. It includes two 8-hour and two

TO APPLY/FEES

4-hour group workshops, a special debriefing session, individual coaching, a welcome BBQ hosted by COCPA CEO Mary Medley and COCPA leadership, and a celebration event at its conclusion.

INDIVIDUAL COACHING

Also, you will receive, over the five-month period, up to two hours of optional, individual phone coaching to address your specific needs. Additional coaching time will be available for purchase at a discounted rate. All coaching and group sessions are confidential.

Complete and return the application form by June 24, 2016. You will be notified of your acceptance. Your sponsor will be invoiced for the $1295 program fee, which is payable on receipt and no later than June 30, 2016.

YOU’VE GOT THE SMARTS. NOW GET THE SAVVY.

Contact Terry Cervi for an application: tcervi@cocpa.org 303-741-8610 or 800-523-9082, ext. 110.

INTRODUCING THE CGMA PROGRAM DISCOVER A LIFELONG PROFESSIONAL LEARNING JOURNEY AT CGMA.org/Program ®

CGMA, CHARTERED GLOBAL MANAGEMENT ACCOUNTANT, and the CGMA logo are trademarks of the Association of International Certified Professional Accountants. These trademarks are registered in the United States and in other countries. 18652-326

18652 – CGMA Program - State Society Ad_HALF 2.indd 1

• NewsAccount • Mar/Apr 2016

11/13/15 10:50 AM

Strategic Planning

Change is inevitable. Extinction is not. 3 Steps to Future Relevance BY BILL SHERIDAN, CAE

hat does a 50-year-old theory about transistors and integrated circuits have to do with the future of accounting? Everything, as it turns out. In 1965, Intel co-founder Gordon Moore predicted that the number of transistors that could be placed on each square inch of an integrated circuit would double every year. He later revised that prediction, saying the doubling would take place every 18 to 24 months. In essence, Moore predicted that the speed and processing power of computers would double every year and a half to two years. Smart guy, that Gordon Moore. His theory – popularly known as Moore’s Law – has held true to this very day, and it has brought with it some incredible technological advances. • Computers today are 130,000 times more powerful than they were in 1988. • The iPad Mini is as powerful as the

• NewsAccount • Mar/Apr 2016

But Moore’s Law has given us more than just a slew of cool, new, shiny gadgets to play with. It is fundamentally changing nearly every job on the planet – yours and mine included.

imprint on the CPA profession. National Public Radio recently collaborated with Carl Benedikt Frey and Michael A. Osborne, authors of a white paper titled, “The Future of Employment: How Susceptible Are Jobs to Computerization,” to produce a guide that estimates the probability that certain occupations will be automated within the next 20 years. Among their startling findings: Tax preparation has a 98.7 percent chance of being automated within the next two decades. Accounting and auditing clock in at 93.5 percent.

Need proof? Ask a doctor, or a journalist, or a recording industry executive, or whoever’s in charge of the U.S. Postal Service. The day will come, I swear to God, when filing a tax return – any tax return – will be a completely automated process. Regulators and lawmakers will undoubtedly want a say in how that shakes out, but the technology will be there to make it happen. Moore’s Law will see to it.

The editors at Fast Company agree. A recent article about the future of work included a sidebar titled, “Top Jobs Today That May Disappear By 2025.” Accountants are included on that list. “Any professional who is mainly involved in dealing with information is going to be replaced by algorithms and (artificial intelligence),” futurist Graeme Codrington told Fast Company.

A DISAPPEARING PROFESSION? In fact, Moore’s Law is already leaving its

Corporate finance is taking a hit, too. In “The New Bookkeeper is a Robot,” Wall Street

world’s most powerful supercomputer was in 1985. • The iPhone 6 is 120 million times faster than the Apollo Guidance Computer – the machine that controlled the Apollo space flights in the late 1960s and early 1970s.

Journal Senior Editor Vipal Monga reports that since 2004, automation has driven the number of full-time finance employees down by 40 percent. For white-collar finance workers like accountants, accounts-payable and -receivable clerks, and inventory-control analysts, life as they know it has changed. Many of them have lost their jobs. Those who are lucky enough to work for future-focused organizations, however, have seen their jobs transformed, not eliminated, by technology. They have moved from data management to data interpretation, using the data to tell the story of their businesses and pave the way for future success. In fact, Monga writes that Wolters Kluwer “is hiring more analysts to help sift its data on profits, revenue, and cash flow to help in planning and forecasting.” TRANSFORMATION: A NEW COMPETITIVE ADVANTAGE This type of career reorientation will be absolutely essential to our profession’s continued relevance. The key question each of us must ask is this: How will I continue to add value and relevance to my clients’ lives in a changing and complex world that threatens the very future of my job? One thing is certain: We won’t find the answer by adhering to the same tired, stale, outdated business models we’ve been following for decades. In the words of futurist and leadership expert Emmanuel Gobillot, “What got you here won’t get you there.” In fact, the ability to create and transform business models likely will be a key differentiator for CPAs going forward. In the Journal of Accountancy article, “Models of Success,” Adrian Simmons, a CPA and chief creative designer with Elements CPA LLC, says business model design “is going to become a strategic skill that will become a competitive advantage. CPAs who have a comfort level playing with business models will be the ones who succeed.“

Jason Blumer puts it more bluntly. The chief innovation officer at Blumer CPAs says building the firm of the future starts with two steps: • “Blowing crap up,” which he defines as “the art of saying no to the majority.” It’s a definition grounded in a quote from Mark Twain: “Whenever you find yourself on the side of the majority, it is time to pause and reflect.” • “Making crap up,” which Blumer says centers on this question: “What is the new thing I want to create?” “This stuff won’t kill you,” Blumer told the crowd at the future-focused Xerocon 2015 in Denver. “It means you can have the firm you want.” THREE STEPS TO RENEWED RELEVANCE Doing these things – building the firm you want, designing new business models, remaining relevant in an era of great change and complexity – is not easy. It means that CPAs – professionals who are traditionally tied indelibly to what has happened in the past – must now be focused squarely on what’s to come. It requires a new set of skills that have nothing to do with the profession’s traditional core services. In my mind, it means CPAs must do three things to survive the automated future and be relevant, valuable, and trusted business advisors to their clients going forward. 1. Adopt a mindset that embraces continuous learning. I’m not talking about CPE here. Rather, I’m speaking of a concept that Warren Berger calls “serial mastery.” In his brilliant book, A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas, Berger says today’s workers “are often left to figure out for themselves what new skills will make them more valuable, or just keep them from obsolescence.” This means “the need to constantly adapt is the new reality for many workers.”

Think about it: If Moore’s Law is transforming every job on the planet, we must transform as well. We must relearn what it means to be valued, relevant, and trusted. That means having the foresight to know how our jobs are changing and being able to change along with them. Put another way, to paraphrase Fast Company Editor Robert Safian: The most important skill any of us will possess going forward is the ability to learn new skills. 2. Become early adopters. “Early adopters eat the late,” says Andy Lark, a vice president of marketing at the accounting software company Xero. That’s especially true in a world where technology is advancing at an exponential pace. The problem, as a general rule, is that CPAs are notoriously late adopters. That has to change. “Our job,” says Reggie Henry, chief information officer for the American Society of Association Executives, “is to make the future more comfortable for our members.” He was speaking of associations at the time, but I believe those words apply to CPAs as well. Clients and customers are just as perplexed by the pace of change as we are. They, like us, need help making sense of it all. Imagine how valued and relevant CPAs will be if they are the ones who provide that guidance. Doing so means figuring out the new stuff before anyone else does. What works? What’s valuable? Where do the opportunities lie? The first step is to learn these things on our own. The next step is to help clients and employers learn them. The key, of course, is to spend less time following other people’s footsteps and more time blazing our own trails.

Mar/Apr 2016 • www.cocpa.org •

Strategic Planning 3. Anticipate. Suppose you could know what’s going to happen before it happens. Would you find that a useful skill to have? Who wouldn’t? With that kind of foresight, we could position our organizations to take advantage of opportunities our competitors can’t even see. Predicting the future sounds like science fiction, but futurist and best-selling author Daniel Burrus says it’s a skill anyone can learn. In fact, Burrus says anticipation is the key missing competency in business today. The secret is three-fold: • Identify the “hard trends” (things that will definitely happen) and “soft trends” (things that might happen) that impact our organizations and our clients. • Isolate the opportunities that each of these trends offers, then ask ourselves, “What do we have to do to take advantage of those opportunities?” • Find the time in our already-hectic schedules to do Steps 1 and 2. That third task might be the most difficult of all to accomplish. Who has time for this future-focused work when we’re busier than ever just trying to get today’s work done? The fact, though, is that we make time for the important stuff, and this is the important stuff. Just an hour a week will do. Put it on your calendar. Set an alarm. And when that alarm goes off, shut the door, turn off the phone and the laptop, and start thinking about those hard and soft trends and the opportunities they provide. You don’t have to do this stuff. You can keep doing the same work you’ve always done. You might even make some money at it. But those trends and opportunities aren’t going away. As Burrus likes to say, “If it can be done, it will be done … and if you don’t do it, someone else will.” The hard trend is that these things — automation, transformation, change, complexity, opportunity — are here. They’re real, and they’re here to stay. The soft trend, says Burrus, is this: Will you do anything about it? s

Bill Sheridan, CAE, is chief communications officer for the Maryland Association of CPAs and the Business Learning Institute. This article originally ran in the Maryland Association of CPAs "Statement Magazine" and is reprinted here with permission.

• NewsAccount • Mar/Apr 2016

REVOLUTIONARY NEW LEARNING SYSTEM TEACHES CPAS HOW TO ANTICIPATE FUTURE TRENDS AND GAME-CHANGING OPPORTUNITIES “The Anticipatory Organization™: Accounting and Finance Edition” offers easy-to-apply, job-specific lessons for identifying and acting on transformative change. The most important competency in the business world today – the ability to anticipate future trends and position our organizations to take advantage of them – is a mystery to most of the accounting and finance profession. Daniel Burrus, the Maryland Association of CPAs (MACPA), and the Business Learning Institute (BLI) want to change that. Burrus, a world-renowned technology forecaster, innovation expert, and New York Times best-selling author, has joined forces with the MACPA and the BLI to launch “The Anticipatory Organization™: Accounting and Finance Edition,” a revolutionary new learning system that teaches CPAs how to anticipate future trends and take advantage of the game-changing opportunities those trends offer. The need for future-focused strategies has never been greater. In a recent national survey, 76 percent of small business owners say their CPAs are not proactive, and 75 percent have changed firms because their CPAs are providing reactive services rather than proactive advice. Another recent survey found that only 6 percent of CFOs, controllers and management accountants say they are future-ready. The Anticipatory Organization model, created and developed by Burrus and Burrus Research, Inc., has changed how many of the world’s most successful businesses plan their future and accelerate growth. Now, Burrus is bringing what he calls the greatest missing competency – the ability to anticipate change – to CPAs, CFOs, controllers and management accountants. This model represents a new way of thinking, planning, and acting – a paradigm shift that’s required in a world of accelerating change, competition, and uncertainty.

A JOB-SPECIFIC, COMPETENCY-BASED, ACCELERATED LEARNING SYSTEM The Anticipatory Organization™ model teaches accounting and finance professionals to actively anticipate what will happen, identify related opportunities, and take action to shape the future by becoming an “Anticipatory CPA.” By learning how to identify and take action on fully predictable “hard” trends (trends that will happen) and more easily manipulated “soft” trends (trends that might happen), we can elevate our relevancy in a world of transformational change. The 28 lessons in following competencies:

the

learning

series

include

The group – representing CPAs in small to large firms, CFOs, controllers, young professionals, and other segments across the profession – has worked with the Burrus team to gather accounting- and finance-specific examples that have been built into the learning platform. This transformative learning approach will help CPAs be proactive and anticipatory in less time than traditional professional development programs. The result is a powerful tool that will help everyone on your team know what’s next, develop opportunities, shape the future of the organization, and accelerate its success. s

the

• Strategic thinking • External awareness • Vision • Continuous learning • Innovation • Creativity • Problem-solving • Prioritization • Business acumen • Decisiveness • Influencing / persuading • Emotional intelligence • Consensus building • Collaboration • Inspiration • Risk management

Find complete details about The Anticipatory Organization: Accounting and Finance Edition by visiting BLIonline.org/TheAnticipatory-Organization.“The Anticipatory Organization” is a trademark of Burrus Research, Inc. The program is cosponsored by the Colorado Society of CPAs.

Burrus has been helping stakeholders to see and shape the future for more than 30 years. The Anticipatory Organization™: Accounting and Finance Edition synthesizes his approach into an “accelerated learning system” that includes a series of short, single-concept videos featuring Burrus that presents the model’s core principles. Each video is followed by a job aid and rapid-application activities that teach the learner to apply the concept to everyday activities. This exciting new approach to learning has been customized with a customer co-creation group gathered by the MACPA and the BLI. Mar/Apr 2016 • www.cocpa.org •

FASB Update

Redeliberation of Proposed Changes to NFP Financial Reporting Continues The following highlights of the February and March 2016 FASB meetings were provided by Tim McCutcheon, Eide Bailly LLP, Golden, and reprinted here with permission.

n Feb. 3, 2016, the Financial Accounting Standards Board, (FASB, Board) continued its consideration of feedback received from stakeholders on the April 2015 proposed FASB Accounting Standards Update, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities (the proposed Update). Its redeliberations focused on the following three issues. Reporting of investment return and disclosure of investment expenses: The proposed Update requires not-for-profit entities to report investment return net of external and direct internal investment expenses, with disclosure of internal salaries and benefits included in those internal investment expenses. By a narrow margin of 4-3, the Board voted to remove the requirement to disclose the internal salaries and benefits. Therefore, investment expenses will no longer be required to be disclosed; neither will they be included in functional expenses. The presentation of a single total for net investment return also applies to the rollforward information contained in an endowment rollforward disclosure. While some Board members thought that

â&#x20AC;˘ NewsAccount â&#x20AC;˘ Mar/Apr 2016

internal salaries and benefits information was useful to disclose because NFPs have direct control over those salaries and benefits, others thought that the distinction between internal and external investment management expenses was not particularly helpful. Instead, they thought that net investment return was the most important element in evaluating an organization's performance in regard to its investment management activities. Reporting of expenses by nature and an analysis of expenses by function and nature: While the Board was unanimous in its support of requiring NFPs to report expenses by nature (other than netted investment expenses), it was unable to achieve clarity regarding which entities also should be required to present information by function, and which entities should be required to present information by-nature-by-function in a matrix format. In a wide-ranging discussion, the Board considered whether there were some organizations for which it might make sense to report only expenses by function (e.g., a private foundation with only grant-making and administrative expenses), and whether certain business-like NFPs (e.g., certain health care organizations, certain member organizations and perhaps others) should be exempted from

functional expense reporting, and instead be subjected to business segment reporting requirements, regardless of whether they were a public or private entity (at present, segment reporting is required only of public entities). At one point during the discussion, one Board member seemed to sum up the complexity of the issue by saying, "We're not sure we know what function and nature are." The Board instructed staff to research the implications of having businesslike entities scoped out of functional reporting, or replacing functional expense reporting with segment reporting for those entities and whether or not re-exposure of this issue is advisable. Providing enhanced disclosure about cost allocations and improved guidance on management and general activities: The Board unanimously affirmed its decision to require NFPs to provide enhanced disclosures about the method(s) used to allocate costs among program and support functions, to refine the Accounting Standards Codification's definition of management and general activities, and to provide additional implementation guidance to better depict the types of costs that can be allocated among program and/or support functions and those that should not be allocated.

n March 2, 2016, the FASB redeliberation focused on operating measure disclosures and information useful in assessing liquidity and availability. Operating measure disclosures: Following the comment period for the proposed update, the Board, in its Dec. 11, 2015, meeting, established two Phases for its redeliberations of the Update. As part of that, the Board deferred to Phase 2 the proposed requirement for not‐for‐profit entities (NFPs) to present two intermediate measures of current operations that would be defined on the basis of two key dimensions: a mission dimension and an availability dimension. The Board’s discussion, March 2nd, focused on potential improvements that could be made to the disclosures for NFPs that currently choose to present an operating measure. Current guidance for NFPs neither requires nor precludes an NFP from reporting a measure of operations. The term operating activities is not defined in current Generally Accepted Accounting Principles (GAAP) for NFPs. If an entity chooses to report an operating measure, it also must follow paragraph 958‐225‐45‐12, which states: Pursuant to paragraph 958‐225‐50‐1, if an NFP's use of the term operations is not apparent from the details provided on the face of the statement, a note to financial statements shall describe the nature of the reported measure of operations or the items excluded from operations. NFPs are not required to present any other disclosures about their reported intermediate measure of operations. It should be noted that business‐oriented health care NFPs that follow the guidance in Topic 954, Health Care Entities, are required to present a performance indicator in the statement of operations; however, that measure is not considered a measure of operations. Rather, most of these entities choose to present an intermediate measure of operations within the required performance indicator. If a business‐oriented health care NFP uses the optional operating measure, it too would fall under the scope of the suggested improvements. FASB staff identified as problematic a lack of transparency on governing board designations, appropriations, and similar transfers

(collectively referred to as transfers) shown on the face of the financial statements that affect the calculation of the operating measure. When transfersare presented as a single line item on the financial statements, it is difficult to know if aggregation and netting of multiple transfer transactions are occurring. Based on its review of financial statements, the staff noted that such transfers are often not described in detail in the footnotes. The line items for transfers displayed on the face of the financial statements can be vague and may not paint a complete picture of the transactions that are occurring. To improve the current practice independent of the direction that may be taken by the Board in Phase 2 of its redeliberations, the Board unanimously agreed to add explicit requirements to report transfers appropriately disaggregated and described by type, either on the face of the financial statements or in the notes when an NFP chooses to present a self‐defined operating measure. Staff will create examples of such disclosures and alternative presentations. One Board member wondered if, due to the increased disclosure requirements, some NFPs now reporting an operating measure might discontinue doing so in the future. Information useful in assessing liquidity and availability: Following a wide‐ranging discussion, the Board unanimously agreed to clarify the objective of the qualitative and quantitative disclosures of information useful in assessing liquidity and availability, dividing those two attributes into two separate, but interrelated objectives. a. Communicate information about how an NFP manages its liquid resources available to meet cash needs for general expenditures within one year from the balance sheet date b. Communicate information on the availability of an NFP’s liquid resources at the balance sheet date to meet those cash needs for general expenditures, recognizing the availability may be affected by (i) the nature of those liquid resources, (ii) external limits imposed by donors, laws, and contracts with others, and (iii) internal limits imposed by governing board decisions.

Objective “a” contemplates a primarily qualitative discussion of how the NFP manages it liquidity needs and liquidity risks. For example, an NFP may secure a line of credit to cover seasonal periods of cash flow shortfalls to be made up at a future date. The line of credit fulfills a liquidity need, but also presents a liquidity risk should the line be canceled by the bank. Objective “b” is more of a snapshot of an NFP’s “available” liquid resources at the balance sheet date. While primarily a quantitative measure, qualitative considerations likely will bear on availability. For example, both a donor restriction and a board designation may make a financial asset unavailable, or at least less liquid, than an unrestricted and undesignated financial asset. However, the board‐designated financial asset may be considered to be more liquid than the donor‐restricted financial asset because the board can remove the designation without first having to secure the approval of anyone else. In addition to the Board’s decision to modify the objectives, it decided not to consider explicit implementation and disclosure requirements. Instead, staff will develop examples to illustrate the concepts inherent in the restated objectives. Other operating measure practice issue: In a separate but related matter, staff presented a compliance issue it has observed in practice regarding the exclusion from an NFP’s self‐defined operating measure of the following items: • An impairment loss recognized for a long‐lived asset (asset group) to be held and used, pursuant to paragraph 360‐10‐45‐4 • Costs associated with an exit or disposal activity that does not involve a discontinued operation, pursuant to paragraph 420‐10‐45‐3 • A gain or loss recognized on the sale of a long‐lived asset (disposal group) that is not a component of an entity, pursuant to paragraph 360‐10‐45‐5 s Contact Tim McCutcheon at tmccutcheon@ eidebailly.com. Mar/Apr 2016 • www.cocpa.org •

Retirement Planning

Social Security: Do Your Homework to Optimize Benefits BY SCOTT W. RANBY, CPA, CFP

ne of the most critical decisions facing aspiring retirees is when to start receiving Social Security retirement benefits. Unlike many government programs, Social Security puts the responsibility on the individual to do the homework in order to make an optimal decision. Unfortunately, the Social Security rules are complex and can be a source of confusion for even seasoned financial professionals. Complicating matters further, the federal budget bill passed last fall (Bipartisan Budget Act of 2015) terminated various “advanced” claiming strategies that savvy couples and financial planners have been utilizing over the past several years to boost benefits. The case for making a wise decision on how and when to receive benefits cannot be overstated. The confluence of longer life expectancies, fewer private pensions, and rising health care costs make choosing the right claiming strategy that much more important for ensuring financial security in your golden years. AGE

MALE

FEMALE

41%

53%

20%

32%

SOCIAL SECURITY BASICS Before diving into the upcoming changes to Social Security and discussing how to make a wise choice, let’s review some basics of the system. Workers are generally eligible to receive benefits as early as age 62, though making this election results in only receiving 75% of the benefit than if the worker had waited until full retirement age (age 65-67, depending on year of birth. Find your full retirement age using the calculator at https://www.ssa.gov/planners/retire/ ageincrease.html). You can increase your

• NewsAccount • Mar/Apr 2016

benefit amount by deferring receipt past full retirement age, earning 8% for each year you delay up to age 70.

sands of dollars more over their lifetimes. Below is an example to illustrate how such strategies work.

SPOUSAL BENEFITS Social Security created spousal benefits to provide financial security for spouses who didn’t have their own Social Security earnings record and thus were not entitled to receive benefits. Spousal benefits are also available for people who are entitled to their own benefit, but that amount is less than 50% of their spouse’s. A spousal benefit can be claimed as early as age 62 in most cases, although the claiming spouse would only receive 35% of the covered worker’s benefit. If the spouse delays claiming until full retirement age, he or she would be eligible to collect 50% of the worker’s benefit. If a spouse is entitled to receive both his own and a spousal benefit, he will only be eligible to collect the higher of the two.

PAT AND CHRIS Strategy 1: Let’s assume Pat and Chris have both reached full retirement age (age 66 in this example) and are each eligible for benefits based on their work records. Pat’s own benefit is $1,800 per month and Chris’s is $1,100 per month. If we assume they both live another 20 years, they will collect a total of $696,000 over this period.

ALL GOOD THINGS END This explanation covers how spousal benefits have worked historically. However, for the past 15 years, married couples could use various “advanced” Social Security claiming strategies, referred to as “file and suspend” and “filing a restricted application for spousal benefits,” to receive both one’s own benefit AND a spousal benefit, though not at the same time. Once both partners in a married couple have reached full retirement age, they are no longer bound by the traditional rule of only being eligible to receive the higher of their own benefit or 50% of their spouse’s benefit. Instead, they can tell Social Security which benefit they want to receive and when, thus allowing the couple to turn the various benefits they are eligible to receive “on” and “off” at different times. The result is that the couple can potentially receive tens of thou-

While this is a nice sum, the couple could receive even more by adopting the “file and suspend” and “filing a restricted application” strategies. Here’s how: Strategy 2: • At age 66, Pat files and suspends for benefits, essentially turning them off in order to increase the benefit 8% for each year delayed. • At age 66, Chris is eligible for his own benefit of $1,100 per month or a spousal benefit of $900 per month (50% of Pat’s benefit). • Chris can direct Social Security to pay only the spousal benefit now ($900) and at age 70 turn on Chris’s own benefit that has grown 32% from $1,100 to $1,452. • At age 70, Pat claims her own benefit which has grown to $2,376. By following Strategy 2, the couple’s lifetime cumulative benefits total about $778,000, or $82,000 more than in the original scenario. This strategy is complicated, and anyone interested in pursuing it should consider consulting a tax or financial professional

with experience in Social Security claiming options. Given that these strategies can result in tens of thousands of dollars in additional benefits over a lifetime, the investment in advice is well worth it. It’s important to note that the “file and suspend” and “restricted application” strategies in their current forms will be unavailable starting around April 30, 2016. A small window to potentially execute these advanced claiming maneuvers exists for couples where one spouse will reach full retirement age by late April and whose spouse reached age 62 by December 31, 2015. Again, seeking professional advice is a good idea if you think you might be eligible. SOCIAL SECURITY PLANNING Consider these actionable ideas for your Social Security claiming strategy: • Delay collecting benefits as long as possible up until age 70. Doing so is the equivalent of earning 8% risk-free, a return you can’t find anywhere else. Delaying also will mean your spouse may receive a higher survivor benefit if you die first.

• Use your bonds and cash to pay living expenses while waiting to draw on your Social Security benefits. • Consult a CPA or Certified Financial Planner® professional who can run various claiming scenarios to find the best one for you. This individual also can help you craft a retirement income strategy to pay your living expenses while you wait to collect your benefits. • Married couples in the age range of 62-66 should determine if they qualify to use the “file and suspend” and “filing a restricted application for spousal benefits” strategies. • Make decisions regarding Social Security in light of your entire financial picture and health circumstances. Consider all of the following factors: HEALTH STATUS GOALS IN RETIREMENT CASH FLOW NEEDS AVAILABILITY OF OTHER ASSETS SURVIVOR NEEDS

CONCLUSION Social Security continues to be the cornerstone of most retirement plans, providing anywhere from 20-40% of retirement income for most people. Recent rule changes put even further responsibility on individuals to know which sets of rules apply and how to optimize lifetime benefits with a onetime decision, one that must be calculated using imprecise knowledge of the future. Many pre-retirees would benefit from seeking expert guidance in making this important decision. The cost of such advice is likely to be trivial compared to the dividends one would receive in peace of mind about having made the best decision to promote a financially stable future. s

Scott W. Ranby, CPA, is a Certified Financial Planner® professional at Kuhn Advisors, www.KuhnAdvisors.com, a registered investment advisor with offices in Denver, Colo., and Durham, North Carolina. Contact him at scott@ kuhnadvisors.com.

Mar/Apr 2016 • www.cocpa.org •

In the Workplace

Gender Diversity in the Accounting Profession: Are We There Yet? BY NATALIE ROONEY

Women have composed more than half of accounting graduates entering the accounting profession for the past two decades, yet they make up only 23 percent of the partners in accounting firms. While women have come a long way, it is clear there still is work to do.

elissa K. Hooley, CPA, CGMA, partner at Anton Collins Mitchell LLP, Denver, is chair of the AICPA Women's Initiatives Executive Committee (WIEC). Hooley found her way to accounting thanks to her father’s encouragement. He’d majored in accounting. “I really wanted a career that would offer a lot of different avenues and flexibility,” she says, and she found both through accounting.

Now, after 25 years in the profession, Hooley says she chose to stay in public accounting not only because she enjoyed working with different clients and staff but also because she found it a very flexible and rewarding career. “Some years I worked a lot, and other years I worked less,” she says. “It depended on my daughter’s age. I was really lucky. I had really good coaches and mentors who helped me navigate. I never felt held back.”

• NewsAccount • Mar/Apr 2016

With that said, Hooley also notes that while women are moving up the ladder, too many still are not making it to the highest levels of leadership. AICPA statistics show women are well-represented at entry levels in accounting firms, but their numbers decline as they move up the career ladder, especially at larger firms. In comparison, women make up 26 percent of sole practitioners and 43 percent of partners at firms with 2 - 10 professionals. According to the November 2015 Women’s Initiatives Executive Committee CPA Firm Gender Survey, these numbers may “indicate that women who don’t advance in larger firms may be deciding to set up their own shops or may be moving to smaller firms as an alternative.” These statistics seem to hold true at Kundinger, Corder & Engle, P.C., Denver. As a director, Tiffany K. Knight, CPA, is surrounded by a staff of 16, 12 of whom are women. In fact, four of the firm’s five directors are women. The survey also showed there is still a notable gap between women income partners and women equity partners. While more women are now serving in partner roles, their numbers in firm ownership or influence within those firms remains slow to change.

Hooley says there are plenty of opportunities, but “we’re losing women, mostly at the senior manager level.”

Accountants and Consultants www.acmllp.com

The tipping point may come as baby boomers leave the profession in record numbers over the next 10 to 15 years. Studies show that 78 million baby boomers will retire over the next 17 years, but only 50 million Gen Xers are waiting in the wings to succeed them. “The next generation is much smaller, so there’s going to be a huge gap,” Hooley says. “That gap needs to be filled, particularly in accounting. It’s an incredible opportunity for these women to advance and make it what they want. It’s an opportunity for males in the profession who want something different, as well. Public accounting will morph over time.”

Live Here. Work Here. Play Here.

imagine the possibilities tm ACM is a locally owned, locally committed

accounting firm. We understand why you live here,

WIEC member Kathy Lockhart, CPA, CGMA, VP-controller at Noodles & Company in Broomfield, says opportunities for women in the profession are greater than ever before, but there are troubles at the top. “We know companies are more successful when women are involved, but we’re still not getting that ticket to sit at the C-suite table,” she says. “We’ve made a ton of progress. Women can come in, work their way up, and still be a mom. That’s positive, but we can’t seem to pierce that next level. We have to keep working at it. It won’t happen overnight.” Lockhart says as the profession continues to grow, it’s a great place for everyone who wants flexibility – male or female. “There will be so many accounting jobs, and we’re not going to be able to fill them,” she says, adding that it’s so hard to hire people, companies are realizing they need to be more flexible with schedules if they want to attract and retain the best people, male or female. “We don’t all want the same thing,” she says. “Cookie cutter doesn’t work. People will leave. That’s bad for the profession.” AICPA WIEC Hooley has been involved with WIEC for the last five years. “I’ve always been involved with women’s initiatives at the different firms I’ve worked for,” she explains. Early in her career, she worked at Arthur Andersen where there weren’t many women managers, much less partners. “As a young mother, I was interested in getting the women together and figuring out ways to make things work. It has been a career-long passion.”

why you do business here and what you expect from your advisors. ACM is committed to providing integrated, value-added, assurance, tax and consulting services. How can ACM help you? Contact us to find out: info@acmllp.com

303.830.1120 Boulder ∙ Denver ∙ Northern Colorado ∙ Laramie

Business Valuation School 2016

June 6–10 Colorado Society of CPAs Englewood

WIEC’s vision is to impact the profession by achieving results in the following areas:

Earn 45 CPE Credits

• Increasing the visibility and advancement of women in the profession • Influencing the cultures of firms and organizations to support the advancement of women

Learn more at

AICPAStore.com/BVdenver

• Providing credible statistics regarding the issues that impact women in the profession What started as a “women’s initiative” and looking at women’s programs in a silo, has become a profession-wide effort to make it more

19486-CAP

Mar/Apr 19486-CAP SOC School Print Ad 3.625 x 4.875.indd 1

2016 • www.cocpa.org • 29 3/10/16 7:35 AM

In the Workplace inclusive for everyone. “We’re looking at it in a broader perspective.” As a group, Hooley says WIEC is working to be more cuttingedge in its approach, integrating it into all the different aspects the profession is dealing with. Providing resources for women is one piece. “We’re educating both women and men in this initiative,” she says. “It’s important for sustainability of the profession.” While one focus has been attracting and inspiring women to continue to join the profession, it’s also about the competition for young people from other industries and professions. Overall, there is a drop in the percentage of women obtaining accounting degrees. But it is also as important to keep them in the profession and thriving. “We want to help women through the various life cycles during their accounting careers,” Hooley observes. Hooley says not only is it important to have women – and minorities – in leadership roles to improve diversity, but also there’s a business case for it. A recent study revealed that an even gender split at one company contributed to a 41 percent increase in revenue, while research by Catalyst showed that companies with higher female representation in top management outperform those that don’t by delivering 34 percent greater returns to shareholders. And although only five percent of Fortune 1000 companies have a female CEO, they generate seven percent of the Fortune 1000’s total revenue and outperform the S&P 500 index during the course of their respective tenures.

UNKNOWINGLY OPTING OUT WIEC member Amanda Proctor, CPA, who is currently COO and cofounder of Qwipit, spent much of her career in public accounting. Proctor will be the first to tell you that she’s not an introvert. “I’m not afraid to say something,” she says. “Throughout my career, I was always vocal about what project I wanted.” And she usually got those projects. Proctor says people would ask what her “secret sauce” was. Why did she get the opportunities, and they didn’t? “I asked. I’d like to say that work was given equitably, but it wasn’t,” she reflects. “And that holds for males who were on cruise control as well. They didn’t get the exciting projects. Some of us are too scared to say what we want, and some of us are stuck in the comfort zone.” At one point, Proctor realized of the three levels at the firm, there were no women above the lowest level. When she asked why, the managing director said it wasn’t purposeful, but that he’d never had a woman express the desire to advance. “As women, we unknowingly opt out of things,” Proctor says. “I’ve done it myself. I’ve worked all day, and I don’t want to go to an evening event and network with partners. I want to go home, help kids with homework, and put on my pajamas. So I opt out.” Proctor said she didn’t even realize she was opting out until someone pointed it out to her. “I was just transitioning to my second, unpaid job of parenting,” she says. “I never viewed it as opting out until I realized I was self-selecting to not golf or go to client dinners because I wanted to be with my family.” When she realized what was happening, she started to say yes – but not to everything. She strategically picked and chose, and then she communicated to her kids why her choice was important. Another big moment for Proctor was discovering how powerful it was to have mentors – inside and outside the firm. “When I began seeking out mentorships, saying yes to some opportunities, and not waiting for a partner to ask me to do something, things took off.” She also asked her managing partner to lunch for an informal chat. As a result, the partners got to know her and became advocates for her. “When I went from full to part time, no one batted an eye because I knew them on a personal level,” she says. “They supported me. I still got to lead clients and work on exciting projects, just in half the time.” Proctor credits her involvement with WIEC and attending the annual AICPA Women’s Global Leadership Summit for teaching her to listen for opportunities. Women view work-life balance as really important and the opportunity to achieve that balance continues to grow, Knight says. As women take advantage of opportunities and reach higher positions, it motivates other women to enter the profession, she adds. “When you enter the accounting workforce, it’s important to ask about work-life balance,” she says. “With an accounting degree and the CPA designation, we can afford to be selective. Ensure you get the

• NewsAccount • Mar/Apr 2016

time off to spend with your family. The interview process is the place to find out about an organization’s culture and how important worklife balance is – or isn’t.”

boy toys, and girls played with girl toys. It’s different now. Genders will have smaller gaps. As these girls age and come into various professions, it will get better all around.”

Knight says she continues to observe changes. “The old male stereotype doesn’t exist anymore. When I go to events, there’s now an even split between men and women. Work-life balance has become increasingly important to both genders. Firms that want to attract the most talented professionals should take note and make it a priority.”

Looking at gender diversity as an issue important to both men and women is critical. “I can’t stress enough the importance of men being involved in this initiative, as well,” Hooley says. “It’s a joint effort to get good people to leadership. I think it’s important for men to be involved in women’s initiatives. It’s about the tone from the top.”

CRYSTAL BALL PROJECTIONS Proctor says in her own ecosystem, things are getting better for women in the accounting profession. “But when I see the national statistics of equity ownership of women in public accounting, they’re dismal,” she says. “In my experience, I didn’t see that though. I saw women not advocating for themselves. I think women have to take calculated risks within their personal and professional goals.” Proctor is an optimist. “I think the numbers will start to rise. Right now they’re low because we haven’t had that major baby boomer change yet. In the next ten to fifteen years, there will be at least thirty percent women equity ownership in firms.” She looks at her own children as an example of a hopeful future. “They don’t look at things as boy and girl,” she says. “When I grew up, boys played with

Hooley says it comes down to retaining the best and the brightest. “We need top talent to stay in the accounting profession for the sustainability of the profession,” she says. “Women are leaving the profession in greater numbers than men. We need to find out what causes it and how to put in a support system to target the people who are making the decision to leave.” Hooley says the outlook for women in the accounting profession is good. “Women have an incredible opportunity to move the needle and move into positions of leadership unlike anything we’ve ever had before,” she says. “We have the chance to change the numbers going forward. I think we’ll see big changes for the good. When you bring leadership together with more diversity, you come up with better ways to do things. It’s an exciting time.” s

AICPA WIEC Resources ORGANIZATIONAL STRATEGIES: THE DEVELOPMENT OF WOMEN This brochure offers a compelling examination of the business case — an overview of the barriers to women’s success in organizations and a practical perspective on the factors that promote their success. It also outlines strategies to enhance an organization’s success with women’s initiatives.

AICPA ONLINE MENTORING PROGRAM The newest tool available to women CPAs, the AICPA Online Mentoring Program facilitates relationships between women mentors and mentees, using an online platform that makes interaction easier to fit into busy schedules, creating beneficial and successful outcomes, for a short term or longer. Contact womensinitiatives@ aicpa.org for more information.

AICPA WOMEN TO WATCH AWARDS Be inspired by the success stories of other dynamic women CPAs. The AICPA Women to Watch Awards, developed by WIEC in partnership with state CPA societies nationwide, celebrate achievers and create a platform to discuss and promote the challenges and opportunities for women in the profession. The Colorado Society of CPAs will present its 2016 awards, Aug. 19. For details and to nominate deserving candidates, contact Terry Cervi, tcervi@cocpa.org. Nomination Deadline: May 15, 2016.

AICPA LINKEDIN GROUPS Network with peers. Connect with experienced professionals. Get advice to expand and enhance your skills. Whether you’re looking for community or insights for business development and career management, you’ll find all this and more by actively participating in the Women in the Profession LinkedIn group.

AICPA GLOBAL LEADERSHIP SUMMIT November 2 – 4, 2016, Boston Visit aicpa.org/pcps/wi for more information.

Source: AICPA Mar/Apr 2016 • www.cocpa.org •

Movers & Shakers Kundinger, Corder & Engle P.C., Denver, named Tiffany Knight, CPA, a director.

Smith, Brooks, Bolshoun & Co., LLP, Denver, named Tonya Devers, CPA, a partner.

Stockman Kast Ryan and Co., Colorado Springs, announced the promotion of Trinity BradleyAnderson, CPA, to managing partner. The firm was recognized by Inside Public Accounting as one of the nation’s top 300 accounting firms. Kingsbery CPAs, PC, Boulder, named Christopher Denham, CPA, JD, a shareholder. Colorado Gov. John Hickenlooper appointed Ronny R. Farmer, CPA, Lamar, to the Colorado State Fair Authority Board of Commissioners. Vanderlynn Stow, CPA, celebrated his 50th anniversary with Brock and Company, CPAs, PC, Longmont. The firm celebrates its 60th anniversary this year. COCPA President (1981-82) Thomas P. Brock, CPA, founded the firm in Longmont in 1956. The firm now has offices in Boulder, Fort Collins, Littleton, and Northglenn, as well. Tammy A. Jacques, CPA, former member of the Olympic Mountain Biking Team and United States Cycling teams for road and mountain biking, joined CPA Solutions, Glenwood Springs. The Business Manager, Centennial, and RubinBrown LLP, Denver, merged. Debbi C.Warden, CPA, CGMA, joined RubinBrown as a partner in its Entrepreneurial Services Group. Amy E. King, CPA, CGMA, also joined the firm. R. Waidler & Associates PC, Boulder, joined the Boulder office of Eide Bailly LLP.

American City Business Journals named Deanna C. Duell-Smed, CPA, CGMA (not pictured), and Tracy M. Pharis, CPA, of Hein & Associates LLP, Denver, to its 2015 “Who’s Who in Energy” list. James Brendel, CPA, CFE, was named managing partner of Hein & Associates, LLP, Denver. He succeeds Brian Mandell-Rice, CPA. The firm maintains offices in Denver, Houston, Dallas, and Orange County, California. Causey Demgen & Moore P.C., Denver, announced the promotion of Jamey L. Camp, CPA, to Tax Director.

• NewsAccount • Mar/Apr 2016

Classifieds Opportunity Available Senior Accounting Systems Manager/Consultant Consults with business clients regarding their accounting system needs; develops, installs, and implements their full accounting systems and trains client personnel in the areas of financial management and executive reporting; builds and maintains relationship with current clients as part of their accounting system support; and coordinates with other members of the firm to effectively market these consultation services. Ability to write stored procedures to query financial/ accounting information from various databases such as MySql is a plus, as well as the ability to communicate in Chinese. Minimum of 8 years of experience and B.S. in Accounting required as well as an extensive knowledge of QuickBooks. Travel required. Please send a resume and cover letter to: Middlemist, Crouch & Co. CPAs PC, 2960 Center Green Ct., Boulder, CO 80301. No calls please.

Classified Ad Pricing $50 for 0-50 words, $100 for 51-100 words, $200 for 101-200 words, $300 for 201-300 words, $400 for 301-400 words. Contact advertising@cocpa.org to place an ad.

In Memoriam

We regret the loss of the following Colorado CPAs. We extend our sympathy to their families and friends.

Robert C. "Cal" Bennett Member since 1957 Highlands Ranch, Colo.

Edward E. Bolle Denver, Colo.

Jacqueline S. “Jaci” Koester Member since 1980 Peetz, Colo.

Ervina M. Mattson Member since 1975 Thornton, Colo.

James T. Maxwell Member since 1989 Frederick, Colo.

Thomas E. Naylor Member since 1987 Boulder, Colo.

Elizabeth M. Simpson Member since 2004 Centennial, Colo.

COCPA News

Five Complete New Govt'l Certificate Program Congratulations to Robert Feis and James Pauley, Feis & Company PC, Brighton; Ron Goodrich, McPherson Breyfogle Daveline and Goodrich PC, Pueblo; Mary Jo Lance, Blair and Associates PC, Cedaredge; and Billi Lewis, McMahan & Associates LLC, Avon. All received the COCPA’s new Governmental Certificate of Achievement, introduced in 2015. To earn the certificate, the participant selects and completes five, eight-hour courses from the COCPA governmental course listings (12 offered in 2015) which best meet his or her needs. The 40 hours may be completed over 18 months, and all qualify for Yellow Book credit, as well. All five recipients gained additional knowledge and updates on the latest rules, regulations, and pronouncements; acquired deeper understanding of governmental accounting issues; enhanced their competence in the field; and demonstrated their dedication and commitment as governmental accounting professionals. For information on how you can participate in the Governmental Certificate of Achievement program, contact COCPA CPE Director Rebecca Campbell at rcampbell@cocpa.org.

Thank you, TaxLine9 Volunteers For the 21st year, COCPA volunteers staffed the call-in lines at 9NEWS in Denver and answered a wide variety of tax questions from the public for two afternoons in February and a third afternoon in March. Our sincere thanks go to Brenda Clarke, Larry Fike, Mira Fine', Paul Gustafson, Ron Seigneur, and Greg Truitt for providing this valuable public service to the community.

From left to right: Brenda Clarke, Ron Seigneur, Mira Fine', and Greg Truitt.

In Memoriam

Robert C. “Cal” Bennett Cal Bennett completed his term as Colorado Society of CPAs President in April, 1974, a mere four months before I joined the Society. Nonetheless, I soon came to know him as one of the truly influential CPAs of his time. A gentle man with a quick and easy smile, he also was one of the smartest people in any room. He didn’t tell you so; you just knew. Following his service in World War II, the University of Texas Longhorn with a bachelor’s degree in accounting became a CPA and joined Arthur Andersen’s Houston office. He transferred to Denver and was in charge of the tax practice here for 25 years. In 2002, the COCPA honored Cal with its Distinguished Service Award for his lifetime contribution to the CPA profession. Former COCPA Executive Director Gordon Scheer writes, “I remember Cal as a very caring person with a great sense of humor. He came to Colorado with Arthur Andersen and rapidly established himself as one of the top tax professionals in the state. He was a leader who not only gave his time and talent to the Society but also to his church. What I didn’t realize then was that Cal, during World War II, was a pilot with the Marine Fighting Squadron 441 in the Pacific and was involved as a bomber escort providing close troop support at the battle for Okinawa. As a result, he was recognized for heroism and extraordinary achievement while serving as a pilot. He received the Distinguished Flying Cross and the Air Medal with three gold stars.” A true hero, Cal was born on Aug. 4, 1923, and died, Jan. 1, 2016. Memorial contributions may be made to TRU Community Care, trucare.org, or the Wounded Warrior Project, woundedwarriorproject.org. –Mary E. Medley

From left to right: Larry Fike, Paul Gustafson, and Greg Truitt. Mar/Apr 2016 • www.cocpa.org •

Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111-6076

Periodicals Postage

Mark Kuhn

SOCIAL SECURITY WINDOW CLOSING (CHOOSE ONE)

MAXIMIZE BENEFITS WEEP WITH REGRET

President & Founder

Scott Ranby, CFP®

Financial Advisor STRATEGIES AND SERVICES OFFERED:

“I don’t know, honey. What do you think?”

Investment Management Social Security Planning

SOCIAL SECURITY RULES ARE CHANGING. Is it time to revisit client retirement strategies?

Pre-retirement Planning Charitable Giving

A limited opportunity for married couples to use previous rules expires May 2016. Congress recently terminated certain strategies many folks were counting on to increase their Social Security benefits in retirement. Attend a one-hour complimentary session to learn how these changes may impact retirement plans. Attendees are eligible for a free consultation to discuss retirement income and investment strategies.

KuhnAdvisors.com

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. Kuhn Advisors, Inc. is a registered investment adviser. More information about Kuhn Advisors, Inc., including its advisory services and fee schedule, can be found in its Form ADV Part 2, which is available upon request.

Retirement Income To register for our ONLINE WEBINAR VISIT: kuhnadvisors.com/ investor-education 2373 Central Park Blvd. Suite 100 Denver, CO 80238 303.803.1016 scott@kuhnadvisors.com