COCPA NewsAccount - January/February 2022 by Colorado Society of Certified Public Accountants

NEWSACCOUNT

Making a Difference: The 2021 Everyday Heroes and Heroines PAGE 5

Preparing for the Single Audit Tsunami PAGE 14

COLORADO SOCIETY OF CPAs • JANUARY/FEBRUARY 2022

THE CRYPTOCURRENCY EXPLOSION: What You Need to Know

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NewsAccount | January/February 2022

Contents

Features 4

Roberts to Become Chair; Baca Tapped for Vice Chair/Chair-elect The Nominating Committee presents the slate for COCPA leadership positions beginning May 1, 2022.

Making a Difference: The 2021 Everyday Heroes and Heroines On Nov. 11, 2021, the profession gathered, in person, at the Westin Denver Downtown to recognize five individuals for their service to their communities and colleagues. See what good works they’ve done.

The Cryptocurrency Explosion: What You Need to Know Just over a decade ago, the world’s first cryptocurrency, Bitcoin, came into existence. What do CPAs need to know as cryptocurrency markets continue their meteoric growth? Preparing for the Single Audit Tsunami As a result of receiving funds from the Coronavirus Aid, Relief, & Economic Security Act and the American Rescue Plan, many nonprofit organizations are finding that they may be required to have a single audit for the first time. What does that mean for CPAs who provide services to these clients? The Workforce/Skillset Mismatch: Is the Four-Year Degree an Anachronism? Businesses want to hire new employees. People are looking for work. And yet, businesses can’t fill their job roles. Where’s the disconnect? Advice from an Autistic: Part Two In this second article of the series, Caitlyn O’Neil offers advice for supporting autistic individuals in their everyday lives, especially in the workplace.

22 Departments 2

Chair Column

Movers & Shakers

In Memoriam, Classified Ads

CONNECT WITH COCPA

January/February 2022 | www.cocpa.org

CHAIR COLUMN

NEWSACCOUNT

Making an Impact in a Virtual World

A bimonthly publication of the Colorado Society of Certified Public Accountants Vol. 67, No. 5 January/February 2022

Officers

Randy L. Watkins, Chair Angela Roberts, Vice Chair Peter J. Derschang, Treasurer Sharon S. Lassar, Immediate Past Chair Mary E. Medley, Secretary

Directors

Diego J. Baca, James N. Brendel, Jim Gilbert, Mary-Margaret Henke, Amy King, Kelly A. Kozeliski

Editorial Board

Jack Allgood, Steve Corder, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, Steve Van Meter, Michael D. West, Charlie Wright

Mary E. Medley, President/CEO, Editor Natalie G. Rooney, Contributing Writer Ariana Cassard, 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 $14.00 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 = 5,609 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 5,555; free distribution by mail = 0; free distribution outside the mail = 20; total free distribution = 20; total distribution = 5,575; office use, leftovers, spoiled = 38; returns from news agents = 0; total sum = 5,609; percent paid and/or requested circulation = 99%. 303-773-2877 • 800-523-9082 Fax: 303-773-6344

NewsAccount is available online at www.cocpa.org.

BY RANDY L. WATKINS, CPA, CGMA, CCIFP

s we continue – personally and professionally – to operate in a hybrid world of in-person and virtual activities, we’ve learned that it is possible to serve our clients, support our staff members, and advance our profession even when we aren’t physically together. Each spring and fall, the American Institute of CPAs (AICPA) brings together several hundred state society leaders from around the country for the meeting of its governing Council. Every other spring, the meeting is held in Washington, D.C., when we visit Capitol Hill and meet with lawmakers to discuss the accounting profession’s advocacy agenda. Since spring 2020, our Council meetings have been virtual, but that doesn’t mean our efforts to educate our legislators and advocate for our profession have been on hold. Last November and December, a group of COCPA leaders virtually journeyed to Capitol Hill to connect with our Colorado legislators and their staffs, including Reps. Ken Buck, Joe Neguse, Jason Crow, and Ed Perlmutter. We discussed several important issues with our Colorado Congressional delegation members, including: • COVID-19 tax penalty relief • Enabling the IRS to declare disaster relief based on a state governor’s declaration of a disaster rather than waiting for the federal government • Including accounting as a STEM profession Another initiative we’ve been championing since COCPA member Greg Anton’s term as AICPA Chair in 2011-2012 is the bipartisan Fiscal State of the Nation Resolution. It would require the U.S. Comptroller General to present the Financial Report of the United States annually before a joint hearing of the House and Senate Budget Committees, and open to all members of Congress. The House of Representatives

passed the measure on Nov. 3rd, following our virtual visit with Congressman Buck, who had signed on as a co-sponsor. This proposed resolution is designed to improve fiscal responsibility and accountability in our federal government. Now, we await passage of the Senate concurrent resolution.

We will continue to advocate for issues impacting our clients, employers, and the profession, even in a virtual environment. Our legislators and their legislative staff members were open and receptive to our input. It is heartening to know that even when we can’t visit in person, they want to hear from us. We will continue to advocate for issues impacting our clients, employers, and the profession, even in a virtual environment. ESG INVOLVEMENT OPPORTUNITIES The COCPA ESG Working Group has begun its efforts by laying the groundwork for how the Society wants to move forward on environmental, social, and governance issues as they impact our organization. This group will identify objectively measurable metrics we can monitor and then report. As a professional organization, we want to help identify the risks we need to be monitoring from an ESG standpoint. If you would like to be a part of this exciting new initiative, please reach out to Mary E. Medley, mary@cocpa.org. Happy New Year to all! Email Randy Watkins at rwatkins@bdo.com.

MEMBERSHIP SERVICE

COCPA Launches New 100% Membership Program

e’re pleased to announce this new program aimed at helping your organization keep your team up-todate with the latest opportunities in the accounting profession as well as simplify membership maintenance.

HELP STUDENTS BECOME

#CPASTRONG Your support made a difference on Colorado Gives Day 2021.

THANK YOU.

When you register all of your eligible CPAs, you’re entitled to exclusive benefits, including:

You helped raise

• Streamlined group dues billing process

$38,650

• Recognition on the COCPA website and in COCPA member publications like NewsQuick and NewsAccount • A digital badge to show off your 100% Membership status • Discounts for on-site training from COCPA’s learning catalogue • Complimentary access to COCPA annual issues update Becoming a 100% Membership firm or organization isn’t only easier for your administrator. It also shows your staff that you’re invested in their professional development and success. Several firms already have taken advantage of the new plan and are recognized as Charter 100% Members. “Plante Moran is honored to be a charter member of the COCPA’s new 100% Membership program. Not only do all of our CPAs now have access to the valuable resources COCPA offers, but also our support helps strengthen our profession’s voice at the legislature and in the marketplace. We couldn’t be happier to be part of this new program.” Kelly Kozeliski, Partner, Plante Moran and COCPA Board of Directors member

Your gifts helped unlock MATCHING FUNDS from:

- The Davisson Family - The Mark and Victoria Smith Family Foundation

- Kundinger, Corder & Engle, P.C. - Greg Anton, CPA, CGMA - Mira J. Finé, CPA

CHARTER COCPA 100% MEMBERS • BKD, LLP • Causey Demgen & Moore, PC • Cherry, Ogle & Quinn, PC • Haynie & Company • Johnson and Associates, CPAs, PC • Marrs Sevier & Company LLC • Plante Moran • Reese Henry & Company, Inc. • Rubin Brown, LLP • WhippleWood CPAs, PC If you and your organization are interested in joining the COCPA 100% Membership program, contact Derrol Moorhead, Director of Member and Business Development, at derrol@cocpa.org or phone him directly at 303-741-8624.

January/February 2022 | www.cocpa.org

LEADERSHIP NEWS

Roberts To Become Chair Baca Tapped for Vice Chair/Chair-elect

he Nominating Committee, chaired by COCPA immediate past chair Sharon Lassar, CPA (Florida), presents the following slate for COCPA leadership positions beginning May 1, 2022. The chair and vice chair serve for one year, and the treasurer and directors serve for two years. Watch for the March/April 2022 NewsAccount in which you’ll find biographical information on these nominees. Congratulations to officer nominees Chair Angela Roberts, Aclivity, Denver; Vice Chair/Chair-elect Diego Baca, EY LLP, Denver; and Treasurer Amy King, RubinBrown, Denver. Randy L. Watkins, BDO LLP, Greeley, continues on the Board as immediate past chair. COCPA CEO Mary E. Medley is the Board secretary. Directors to begin a two-year term are: Ronald L. Goodrich, McPherson, Goodrich, Paolucci & Mihelich PC, Pueblo; David Loucks, Opportune LLP, Denver; and Heidi M. O’Neil, Denver International Airport, Denver. Alexandria Romero, Pueblo City/County Library District, Pueblo, will serve a one-year term, filling the unexpired term of Diego Baca. Continuing on the Board are Jim R. Gilbert, Jim Gilbert CPA LLC, Highlands Ranch; and Community Member Amy King, MEDI Leadership, Denver. The Board of Directors thanks for their service the following directors who will complete their terms on April 30, 2022: James N. Brendel, Moss Adams LLP (retired), Denver; Mary-Margaret Henke, Denver; and Kelly A. Kozeliski, Plante Moran LLP, Denver.

The Nominating Committee presents the following nominees for the Educational Foundation Board of Trustees for a three-year term: Jeffrey Damm, SM Energy, Denver; Stephanie Daniels, RubinBrown, Denver; and Matthew Ogaz, CoBank, Castle Rock. Caitlyn O’Neil, CBIZ/MHM, Denver, has been nominated to complete the two-year unexpired term of Ronald L. Goodrich. Currently serving on the Foundation Board are officers Laura Theiss, Moss Adams LLP, Denver, President; Lisa Kutcher, Colorado State University, Fort Collins, Vice President; Ingrid Stiver, PwC LLP, Denver, Treasurer; Patrick Lytle, SM Energy Company, Denver, Immediate Past President; Kathleen “KED” Davisson, University of Denver,

NewsAccount | January/February 2022

Denver; Lora L. Finley, Littleton; Ronald L. Goodrich, McPherson, Goodrich, Paolucci & Mihelich PC, Pueblo; Tiffany K. Knight, Kundinger, Corder & Montoya, PC, Denver; Judy A. Thomas, Regis University, Denver; Alexandra “Alexie” Tune, Deloitte LLP, Denver; and Mary E. Medley, COCPA. Alicia Gelinas serves as executive director of the Foundation.

COMMUNITY SERVICE

Making a Difference The 2021 Everyday Heroes and Heroines BY KELLI DAVIS

On Nov. 11, 2021, the profession gathered, in person, at the Westin Denver Downtown to recognize five individuals for their service to their communities and colleagues. We applaud their accomplishments and appreciate their commitment, especially in these challenging times, to making our world better. In their honor, the COCPA made a donation to the charity of each one’s choice. CONTINUED ON PAGE 6

January/February 2022 | www.cocpa.org

COMMUNITY SERVICE CONTINUED FROM PAGE 5 LAURIE B. ANDERSON, CPA Partner (Retired), Kundinger, Corder & Engle, P.C., Denver Laurie Anderson’s fingerprints – in the form of expertise and experience combined with compassion and kindheartedness – are all over the Denver-area nonprofit community. For more than 30 years, she has shared her gifts by volunteering, teaching, and leading. Beyond her work with specific charities – such as the Women’s Bean Project, where she served as a board member and treasurer in support of the organization’s mission to help Denver-area women break the cycle of poverty through employment – Laurie has also shared her knowledge and expertise on a wider scale to help countless other charitable organizations launch their mission work. As a board member and past chair of the Colorado Nonprofit Development Center (CNDC), Laurie – who recently retired as president of Kundinger, Corder, & Engle, P.C. (KCE), Denver – has helped leverage the Center’s nonprofit management expertise and technical assistance to equip nonprofit organizations for faster success and strengthen their ability to significantly impact the communities they serve. As a presenter for the Foundation Accounting Group, of which she’s been a member for more than 20 years, she’s shared her knowledge at speaking engagements, helping community organizations to better understand not-for-profit financial statements and tax returns. And, as a columnist for the Colorado Nonprofit Association newsletter, she’s provided technical expertise to nonprofit leaders as well as fellow CPAs. A COCPA member since 1990, Laurie has headed up the Not-for-Profit Conference Planning Committee. In that role, “Laurie’s significant knowledge and insights gained from working in the not-for-profit arena added greatly to the depth of the conference’s educational content, which really benefited attendees,” says COCPA COO/CLO Rebecca Campbell, CAE. “In turn, conference attendees were able to put their newly widened perspectives to work when helping their not-for-profit clients, and perhaps in their own volunteer activities as well.” Complementing the wisdom and technical knowledge that Laurie has shared with others over the years is the caring spirit with which she does so. In nominating her as an Everyday Heroine, KCE Managing Director Steve Corder describes Laurie as “a humble, unsung community heroine. She approaches her civic endeavors with compassion, wisdom, humor, kindheartedness, and thoughtfulness.” Given her new retired status, Laurie may find herself with more time on her hands, but it seems certain that she won’t spend too much time in idle mode. We congratulate Laurie on an amazing career of professional accomplishment and public service from which scores of colleagues and community members have benefitted. JAMIE J. KILCOYNE, CPA Partner, K Financial Inc., Louisville Jamie Kilcoyne has played an integral role in supporting, advancing, and bettering his community since opening his CPA firm, K Financial, also known as Kfi, in Louisville in 2003. And he’s not just interested in helping on his own; he’s often bringing along the Kfi team, too. As part of his mission to help Kfi employees improve their community and their world by assisting those in need, Jamie created the K Financial Foundation, which partners with both local and international nonprofit organizations. Locally, Jamie and the Kfi staff have given their time, talents, and resources to organizations such as There With Care, dedicated to supporting families with critically ill children; Roundup Fellowship, whose focus is children and adults with intellectual and developmental disabilities; and Urban Peak, which helps Colorado youth exit homelessness. Notes Kfi Senior Auditor Matt Huntley, who nominated him, “Jamie and his employees spent many hours each month providing food, clothing, and other necessities to local community members, as well as dedicating the time to make genuine, quality connections with the people the Foundation serves.” 6

NewsAccount | January/February 2022

Although the COVID-19 pandemic required a shift in how the Foundation was able to serve locally – particularly given the at-risk nature of some of the populations that benefit from its work – Jamie has encouraged his staff to assist the community in whatever ways they can through activities such as preparing bagged meals and delivering toys to families with critically ill children. “His real passion is the hands-on component of helping other people,” Matt writes, adding that Jamie “seeks to work with those who are most in need and doesn’t shy away from the emotional or physical challenges that many of these organizations present. Instead, Jamie chooses to do the difficult but important hands-on work of supporting these people and their families in their time of need.” In 2018, Jamie took the Kfi show on the road when he, his 14-year-old-son, and two Kfi team members traveled to Petit Trou, Haiti. During the seven-day trip, the team cleared and prepped an overgrown field and then planted 21 plantain trees for the benefit of an agricultural school serving kindergarten through 9th-grade students. In a blog detailing the Haiti experience, Jamie wrote of the connections that the group formed with Haitian locals through extended meals, sports, and ocean swims. He was struck by the endearing, deep relationships among locals and their willingness to help even a stranger in need. “It’s a lesson I am going to try to remember when I get home – always be on the lookout for opportunities to go out of the way to help coworkers, clients, family members, and strangers,” he wrote. “Stop and help like a Haitian.” LYNNE A. LEHR-BUCK, CPA President, IntraScope Accounting Services, Highlands Ranch The show must go on, even in the face of a pandemic, and thanks to the guidance of Everyday Heroine Lynne Lehr-Buck, president of IntraScope Accounting Services in Highlands Ranch, the Littleton Town Hall Arts Center (THAC) has emerged from the uncertainty brought by the COVID-19 pandemic not only alive but financially thriving. Lynne, who joined the Littleton THAC Finance Committee in 2019, spurred by her enjoyment of the Center’s entertainment offerings, was elected to the Board in 2020 as its treasurer. In the face of the pandemic, she assumed responsibility for THAC’s financial management strategies and created a robust budgeting process to help the organization survive the various lockdowns and revisions to its theatrical and educational offerings. She worked with THAC staff to adjust the organization’s bookkeeping practices and led the successful procurement of Paycheck Protection Program (PPP) 1 and PPP2 loans, while also securing a Shuttered Venue Operators Grant. In nominating Lynne as an Everyday Heroine, THAC Vice President Sam Cheris notes that as a result of Lynne’s guidance, “THAC was able to sustain operations without impacting staffing or our employment programs overall, and we could continue working toward the goal to provide theater and arts education to the community during the pandemic,” while also complying with changing COVID-related protocols as dictated by various governmental agencies. Several other organizations have benefited from Lynne’s willingness to share her professional expertise. She has served on the Board of the Raymond Wentz Foundation, dedicated to helping patients deal with financial hardships brought on by cancer; as both president and treasurer of the Littleton Soccer Club, where she helped the organization install appropriate internal controls and designed processes to improve operations, growth management, budgeting, and strategic planning; and as treasurer for the Urban Design Forum, dedicated to improving the functionality and quality of our cities and towns. Lynne’s contributions to the profession are significant as well, both locally and nationally. A past COCPA chair, she has served on numerous task forces and CONTINUED ON PAGE 8 January/February 2022 | www.cocpa.org

COMMUNITY SERVICE

CONTINUED FROM PAGE 7 committees. She was a Colorado delegate to the National Future Forum and was one of six CPAs nationwide to serve on the AICPA’s CPA Vision and Change Management teams. Sam Cheris notes that Lynne’s enthusiasm for sharing her expertise “has been felt across multiple organizations over the years and exemplifies how CPAs can have a positive impact on the community.” Brava, Lynne, for your numerous contributions to our community and the profession. CAITLYN R. O’NEIL, CPA Senior Tax Associate, CBIZ MHM, Denver There is something refreshing about Everyday Heroine Caitlyn O’Neil that’s apparent the moment you meet her. In addition to being an exemplary tax professional who is well respected by her colleagues at CBIZ MHM, where she is a senior tax associate, she radiates positivity, has an instantly welcoming demeanor, and conveys confidence right alongside vulnerability. In a recent NewsAccount article, Caitlyn described herself as “your everyday millennial who happens to be autistic.” As a founding member of the COCPA’s Diversity, Equity, and Inclusion (DE&I) Working Group, launched in 2021 to develop strategies and programming to address DE&I challenges and promote inclusivity within the accounting profession, Caitlyn openly speaks of her journey as an autistic person in the professional world. In July, she took things beyond the (Zoom) walls of the DE&I meetings, sharing her story, “Not a Puzzle Piece. Being Autistic in the Work World,” as part of the COCPA webcast series, “See Me: Stories of Diversity, Equity, and Inclusion.” 8

NewsAccount | January/February 2022

CBIZ colleague Sarah Jackson, who nominated Caitlyn as an Everyday Heroine, writes that Caitlyn “bravely showed her vulnerability to the profession while showing how we can become more inclusive. I continue to be in awe of her strength.” But autism doesn’t define Caitlyn – not by a long shot, and her contributions to her community are numerous. She serves on the CBIZ Personal Client Services Task Force, where she apprises others of key developments within the profession and collaborates on solutions to clients’ issues. She is active within CBIZ Women’s Advantage (CWA), which provides training, development, mentorship, recognition, and career enhancement opportunities to women within the firm, and has twice chaired CWA fundraising events to benefit Dress for Success, a nonprofit organization focused on empowering underprivileged women and preparing them to enter the workforce. Caitlyn is also passionate about helping students become strong, assertive leaders, and to that end dedicates hundreds of hours in her role on the Colorado Future Business Leaders of America (FBLA) Board of Directors. As part of her commitment to empowering collegiate women to become great leaders, Caitlyn serves as Alumnae Relations and Intramural/Activities Advisor for the Epsilon Gamma Chapter of Alpha Omicron Pi (AOII) and acts as a liaison between the Denver AOII Alumnae Chapter and the Epsilon Gamma Chapter. “While humble about her achievements, she is known as a behindthe-scenes leader who takes action and drives results,” Sarah writes. “We are incredibly proud of her growth and how she represents both herself and our company. In a short period of time, she has impacted many and is undoubtedly deserving of this recognition.” We couldn’t agree more.

RYAN M. SANGER, CPA Tax Partner, BDO USA, LLP, Greeley Ryan Sanger’s passion for assisting his community’s younger generations shows in the numerous Northern Colorado service opportunities with which he’s engaged. A tax partner with the Greeley office of BDO USA, LLP, he has served on the Junior Achievement ( JA) Northern Colorado/Wyoming Executive Advisory Board of Directors, including as chair, where he works to educate kids on the importance of smart financial choices. His work on the board and in the classroom helps JA graduates develop skills they can use throughout life, boosting confidence and setting the stage for personal and professional success. Ryan is a past member of Northern Colorado United for Youth, also known as NOCO Unify, which is composed of business leaders ages 20 to 39 and serves as a fundraising catalyst for charities serving disadvantaged and special-needs children in Northern Colorado. He is one of 50-plus past-active members. Through its activities, NOCO Unify drives $200,000-$300,000 annually to the charities that benefit from its funding.

Ryan is the current chair of the Windsor Chamber of Commerce Board of Directors and also belongs to the Optimist Club of Windsor, a community service organization whose members are dedicated to bringing out the best in children, communities, and themselves. The club works to develop optimism as a life philosophy amongst its members and those it serves, and supports and encourages youth in the area. Additionally, Ryan serves on the Colorado State University Business School Accounting Advisory Board, which he notes “allows me to have input on what will make students successful in the future when they begin their careers.” “It feels really good to be able to provide a service and help these nonprofits accomplish their missions, whether it’s serving youth or giving back in some other way to the community,” he says. BDO colleague Greg Anton writes, “Ryan truly is an everyday hero. His work for the organizations with which he volunteers has directly impacted and improved the lives of hundreds of children – thousands indirectly, in fact. CPAs often are recognized for their efforts in larger communities. Ryan has made a difference in Northern Colorado. He has done his work in a humble way, and his community is better for him being part of it.”

Members of the Colorado Centennials Baseball Association also appreciate Ryan’s commitment to volunteerism both on the diamond and off, as he serves as both a youth coach and a board member.

January/February 2022 | www.cocpa.org

FINANCIAL INSTRUMENTS

The Cryptocurrency Explosion: What You Need to Know BY NATALIE ROONEY

Just over a decade ago, the world’s first cryptocurrency, Bitcoin, came into existence. It remains the most highly valued cryptocurrency, but hundreds of other “altcoins” have been launched with varying degrees of success. What do CPAs need to know as cryptocurrency markets continue their meteoric growth? PANDEMIC DRIVEN POPULARITY Eric Alston is the Scholar in Residence in the Finance Division and the Faculty Director of the Hernando de Soto Capital Markets Program in the Leeds School of Business at the University of Colorado Boulder. He says cryptocurrency is growing at a jaw-dropping rate, but he doesn’t consider it mainstream. Yet. “Far more people are aware of and are using cryptocurrencies than at any other point,” he says. “It exploded during the pandemic because people were spending more time online. There was unemployment, government, and monetary uncertainty. People who were previously seen as ‘weirdos with their digital currencies’ were seemingly, suddenly as rich as heck. All of these elements have led people to be more interested.”

NewsAccount | January/February 2022

CRYPTO 101 Here’s a quick primer if you didn’t happen to spend the pandemic researching digital currencies. A cryptocurrency is a medium of exchange but is digital in format and uses encryption techniques to control the creation of monetary units of account and verify the exchange of money. Transactions on the most widely used cryptocurrency networks are peer-to-peer with no centralized control or middleman, such as a bank.

In traditional financial deals, two parties use fiat money (government-issued currency not backed by a physical commodity, such as gold or silver, but rather by the government that issued it), and a third-party organization — usually a central bank working through its closely aligned financial intermediaries — assures the security of monetary transfers. The transaction is recorded. With cryptocurrencies, a chain of private computers — a network — is constantly working towards authenticating the transactions by solving complex cryptographic puzzles. For solving the puzzles, these systems are rewarded with cryptocurrencies. This process is called mining. At the backend of all of these transactions is blockchain technology. Bitcoin is currently the world’s best-known cryptocurrency followed by Ethereum. Other altcoins such as Litecoin, Solano, Cardano, Binance coin, and Dogecoin (raise your hand if you thought that was actually a name your kids made up) may also ring a bell. While cryptocurrency prices (and their volatility) are often the focus of conversation, transaction counts show how much a network is being used as a medium of exchange. In just over five years, daily transactions across the Bitcoin, Ethereum, and Litecoin networks increased sixfold, from just 250,000 to more than 1.5 million transactions a day. (Source: CoinPayments) Another fun fact: There are currently more cryptos in circulation than U.S. dollars. June 2021 data from Finder.com showed that in the last year, the number of Americans who own a cryptocurrency has jumped from 7.95% in 2018 and 14.4% in 2019 to 23.16% in 2021, an increase of 61% in two years. That means roughly 59.1 million Americans own some form of crypto. Of those holding a type of cryptocurrency in their digital wallets, the average total in crypto is $1,003. However, roughly three-quarters of respondents actually held less than this amount, which is probably why the median amount of cryptocurrency in survey respondents’ wallets was actually $191.

Will any of the current privately produced cryptos survive and make it to the stage of serving our future global digital economy? Alston says he believes strongly in the increasing importance of reliably scarce digital units of account as part of the economic future. Will any of the current privately produced cryptos survive and make it to the stage of serving our future global digital economy? “It’s one thing to say people are making a mint from crypto today, but if you look at the dot.com boom, how many people understood the internet or email back then,” Alston asks. “Effectively, a lot of those enterprises crashed and burned, but it was a fundamentally transformative time. Some people are making informed bets on crypto, but most are highly speculative on the idea that these digital units of account may prove of major economic significance in the future.”

Cryptocurrency Investing: One CPA’s Third Career After retiring from Arthur Young’s tax practice and running his own investment business, Mike Sargent is on his third and most important career: grandpa. As part of that career pursuit, he started studying cryptocurrencies. For decades, Sargent coordinated lunch meetings with a guest speaker for Arthur Young retirees. He’d been hearing about Bitcoin and other cryptocurrencies and decided to invite an expert to speak to the group. “I’ve been a finance guy my whole life, and that presentation really triggered my curiosity,” he says. “Then COVID created an opportunity for me to spend more time researching cryptocurrencies.” Sargent wondered: Is cryptocurrency a “www event” which brought us the internet and changed the world or is it a “dot com event” that would go bust? “There are a lot of smart people on both sides of the fence, and I try to listen to both,” he says. Sargent also wonders if he were still managing other people’s money, would he be interested in crypto investing for his clients’ accounts? “I would make it a voluntary decision with clients,” he says. “I would provide the pros and cons and for those who were interested, I would invest a small amount, then average in more over time.” Personally though, Sargent is investing – mindfully. He has segregated his investments into what he and his wife, Donna, need to live on for the rest of their lives. They are both in their 80s. The excess is what their kids and grandkids will inherit. “This excess has a long time horizon and can be invested more aggressively,” he says. It includes equities and investment real estate. In addition, precious metals provide a measure of defense, and cryptocurrencies and DeFi (decentralized finance) provide offense like venture capital. WHY CRYPTO Sargent invests in individual cryptocurrencies as well as an index fund containing the top 10 cryptocurrencies. Why is he such a crypto fan? It’s global. “Anybody in the whole world can invest in it,” Sargent says. CONTINUED ON PAGE 12 January/February 2022 | www.cocpa.org

FINANCIAL INSTRUMENTS CONTINUED FROM PAGE 11 The list of countries restricting cryptocurrencies or banning them outright is growing. In 2013, China began restricting the use of cryptocurrency. In September 2021, the Chinese government made crypto mining and crypto transactions illegal as it prepares to release its own digital currency – the digital Yuan.

Digital property is the future. “Every generation has a favorite asset,” Sargent says. “When I was born, the WWII generation’s store of value was gold. Then the baby boom generation’s major source of wealth was their personal residences. Then it was internet stocks. And now, for the millennials, it’s crypto.”

CRYPTO GOES TO COLLEGE It’s still relatively uncommon for U.S. universities to have a course devoted entirely to blockchain and cryptocurrency, but such classes are starting to be offered more frequently, including at the Leeds School of Business. In Alston’s financial markets course, the subject is covered over three class sessions. In CU Boulder’s Engineering School, the topics are covered in computer science classes. “It’s a marriage of computer science and finance, and it’s receiving increasing treatment at top universities

No intermediary required. Sargent points out that almost two billion adults in the world don’t have bank accounts, but they do have smart phones where they can conduct transactions and eliminate the need for a bank account. “I look at Bitcoin not as currency, but more as a store of value, similar to gold,” he says. “It is an asset that can be immediately transferred all over the world at pennies on the dollar and doesn’t require intermediate banks or brokerage houses to process the transaction.”

“The pandemic changed interest levels.”

It’s a scarcity asset. Only 21 million Bitcoin will ever be issued – that has been built into its system – and more than 18 million coins already have been issued. “This is a scarce asset,” Sargent says. “It’s not the U.S. dollar which the government prints like crazy. It’s another hedge against future inflation.”

like Wharton, MIT, Harvard, and NYU, but not yet as part of the mainstream curriculum around the country,” Alston says. In previous years, Alston’s course struggled to make enrollment numbers, but by spring of 2021, the course was overenrolled. “The waiting list filled, and students were still trying to get in,” he says. “The pandemic changed interest levels.” This was the fourth year Alston’s course was offered at CU. He has been writing and publishing in the crypto space for almost five years. “That’s a long time in crypto time,” he says. THE DARK SIDE OF CRYPTOCURRENCY While compliance issues are being sorted out, Alston says the specter of criminal activity in the crypto space needs to be taken seriously. “These pseudonymous networks provide a strong incentive for tax evasion,” he says. “They also provide, on certain margins, incentives for the worst criminal activity like terrorism and drugs.” He cites a study by the National Bureau of Economic Research that shows three percent of activity on the Bitcoin network is likely highly criminal. While Bitcoin leaves a visible trail of transactions on its underlying blockchain, Monero, an opaque coin, was specifically designed to obscure the sender and receiver, as well as the amount exchanged. As a result, criminals are using it to thwart law enforcement. “It’s important to recognize that these cryptocurrency networks aren’t identical,” Alston says. “The largest networks by market capitalization are considerably more transparent than the Monero network, which disguises transactions for third parties, to the obvious approval of those with criminal motives.” In late October 2021, the Paris-based Financial Action Task Force, an international body that coordinates government policy on illicit finance, released guidelines that could force cryptocurrency firms to make a greater effort to combat money laundering. The task force called on governments to broaden regulatory oversight of crypto firms and force more of them to take measures such as checking the identities of their customers and reporting suspicious transactions to regulators.

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It’s gaining acceptance. Major companies and college endowment funds such as Harvard and Yale are investing in Bitcoin. Boulder has had Bitcoin teller machines (BTMs) since 2015. In October, cryptocurrency hit the New York Stock Exchange via a new Bitcoin-linked exchange-traded fund (ETF). It quickly grew to over $1 billion in assets, becoming the quickest ETF to reach that threshold, according to Bloomberg data. In addition, regulators are starting to look at cryptocurrency more carefully. “That’s a good thing,” Sargent says. “It will give people a greater sense of security.” The newly allowed ETF is based on Bitcoin futures contracts, and Sargent is hopeful the SEC will approve spot ETFs for Bitcoin and other cryptos. RESOURCES Sargent says people should do their own research to determine if cryptocurrency investing is right for them. For those who want to dig deeper, he suggests two resources: • Cryptoassets: The Guide to Bitcoin, Blockchain, and Cryptocurrency for Investment Professionals by Matt Hougan and David Lawant (www.cfainstitute.org/en/research/ foundation/2021/cryptoassets) • Bitcoin at the Tipping Point, a report by Citi Global Perspectives & Solutions (www.citivelocity.com/citigps/ bitcoin/) • The following companies offer good crypto webcasts: Bitwise, Grayscale, Osprey, and VanEck.

WHAT IN THE WORLD ARE NON-FUNGIBLE TOKENS? As Bitcoin and other cryptocurrencies have boomed in popularity over the last year, non-fungible tokens (NFTs) have also boomed — growing to an estimated $338 million in 2020 (Source: Coinbase). “Non-fungible” simply means something is unique and can’t be replaced with something else. A dollar bill is fungible — you can trade one for another, and you’ll have exactly the same thing. A one-of-a-kind trading card or a piece of art, however, is considered non-fungible. If you traded one of them for a different card or work of art, you’d have something completely different. NFTs can be anything digital (drawings, music, a baseball card), but there is a lot of buzz around using the tech to sell digital art and serving as a certificate of authenticity.

Representatives of the crypto industry criticized the guidelines, saying they would undermine privacy, stifle innovation, or simply not work in the context of blockchain and digital-asset technology. “CPAs shouldn’t be afraid of crypto’s criminal element with the exception of Monero,” Alston says. “Cryptocurrency traders, and their CPAs, should be more worried when converting to dollars and depositing those gains, due to the capital gains liability this will create.” CRYPTO & YOUR CLIENTS Based on the results of the Finder.com survey, it’s highly likely that most CPAs have clients who are invested in crypto.

“Those who cash out will want to be compliant with the tax liability.”

Each NFT is stored on an open blockchain (most often Ethereum’s blockchain), and anyone interested can track it as it’s created, sold, and resold. Because they use “smart contract” technology, NFTs can be set up so that the original artist continues to earn a percentage of all subsequent sales. More and more mainstream artists, especially musicians, are jumping on the NFT bandwagon. Last year, Nashville band Kings of Leon announced its next album would arrive in the form of multiple NFTs. Depending on which a fan buys, various perks will be unlocked — like alternate cover art, limited-edition vinyl, or a “golden ticket” to a VIP concert experience. In just two weeks, the band generated $2 million from NFT sales of the new album (Source: Rolling Stone).

For now, Alston says because the U.S. government has relationships with banks and financial intermediaries already in place, the extent to which people can evade taxes on crypto mining or capital gains from investments is fairly limited. “These individuals need to have an on-ramp into our system,” he explains. Until more retailers accept crypto – especially for things like houses or luxury vehicles – crypto transactions are subject to reporting. “If you want to move this money, it will trigger reporting,” he says. “Don’t get me wrong; there will be people sitting in restaurants and bars frittering away their $20,000 in gains, but that’s not who the IRS is concerned with. That type of behavior has been taking place since time immemorial. In this world, it’s the $1 million going into a property and $10,000 weekly deposits.” As for the coming tax season, Alston says if you’re not asking about clients’ crypto holdings yet, it’s time to do so. “My CPA has a line in the packet he sends me asking about holdings in crypto. It’s no longer a nominal number.”

The IRS already requires investors to disclose yearly cryptocurrency activity by checking a box on their tax returns, but many filers don’t know which transactions to report. Buying cryptocurrency doesn’t create a tax event, but converting it to cash, trading for another coin, or using it for purchases may. Alston says from an individual tax liability perspective, crypto is an area where CPAs should be more focused on the near-term because of regulatory clarity. If an investor is holding crypto for the short term, capital gains will be paid as traditionally construed. “Those who cash out will want to be compliant with the tax liability,” he says. “If they cashed out this last year, the gain will be significant.”

January/February 2022 | www.cocpa.org

AUDIT ISSUES

Preparing for the Single Audit Tsunami BY NATALIE ROONEY

The past two years have presented nonprofit organizations with unprecedented challenges. Through COVID-19 and its economic aftermath, many nonprofits relied on increased levels of federal funding to keep their doors open and continue to provide services that are more in demand than ever before. Now, a record number of nonprofits — and for-profits for that matter — are finding themselves in the unique position of having to undergo a single audit for the first time. Here are a few things to know about this specialized and complicated type of audit.

be required to have a single audit because they don’t even know they received federal funds and the requirements related to those funds.

As a result of receiving funds from the Coronavirus Aid, Relief, & Economic Security Act (CARES) and the American Rescue Plan (ARP), many nonprofit organizations are finding that they may be required to have a single audit for the first time.

While federal funds can come directly to a nonprofit, many times, the funds go to a state or a city before being disbursed to a nonprofit organization. When that happens, the funder must let the nonprofit know where the funds are coming from, but it isn’t always straightforward. “We’ve seen grants an organization has always received being federally funded this year. That’s because state and local governments are receiving their own allocations of CARES and ARP funds, then passing those funds to our nonprofit clients,” Flischel explains.

he IRS does not require nonprofits to obtain audits, but the federal Office of Management and Budget (OMB) requires any nonprofit that spends $750,000 or more in federal funds, grants, or awards in a year (whether received directly from a federal agency or passed through from a state or local government or other nonprofit) to obtain a “single audit” to test for compliance with federal grants management standards.

Note: Some states require nonprofits of a certain annual revenue size to be audited if they solicit funds from their state’s residents. The revenue thresholds vary from state to state. Colorado does not require annual audits for nonprofits. SURPRISE! YOU’VE GOT FEDERAL FUNDING Kundinger, Corder & Montoya, P.C. (KCM) in Denver provides audit and tax services exclusively for nonprofit clients. Director Sarah Flischel, CPA, says many nonprofits might not even be aware they’ll 14

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How is it possible a nonprofit doesn’t know it received federal funds? The situation is complicated.

Flischel says KCM has been in regular communication with clients to make them aware of the sources of new funding and grants. She recommends that nonprofits reach out to funders and specifically ask if an award is funded with federal dollars. She recounts the story of a client which received grant money from the State of Colorado. Because Colorado had received so much CARES Act money, the state

in turn funded the client nonprofit’s grant with that money. “So, this nonprofit is now subject to those federal regulations even though it never was before.” Flischel says Colorado typically does a good job of informing nonprofits that funds are coming from the federal government, but cities aren’t always as diligent. “This confusion about where money comes from has always been a problem, but it’s far more prevalent now. And it will continue for several more years as federal funds continue to be disbursed.”

“This confusion about where money comes from has always been a problem, but it’s far more prevalent now. And it will continue for several more years as federal funds continue to be disbursed.” KCM has been communicating with clients to alert them that a single audit could be coming. “A lot of our clients who already receive state and local government funds are pretty attuned to compliance audits, so finding out something is federally funded hasn’t made a huge difference to them,” Flischel says. “But certainly, communication has been needed to make everyone aware.” THE COMPLEXITY OF THE SINGLE AUDIT When nonprofits use federal funds, specific rules called Uniform Guidance must be followed. For the audit, auditors must use the Compliance Supplement to ensure their audit procedures are designed appropriately by each major program. The Compliance Supplement is a work in progress because of the new programs that were the result of CARES and ARP. The current version was issued in August 2021, but an addendum is expected so be aware that new information may be provided when the new version is released. “Organizations need to comply with Uniform Guidance and also the grant agreement,” Flischel says. “The federal agency providing the funds might have more information about a specific program that also should be followed.” In turn, auditors need to ensure the Schedule of Expenditures of Federal Awards (SEFA) is complete and accurate. An incorrect SEFA could result in an organization concluding that a single audit is not required when it should, in fact, be performed. While Flischel says the SEFA is technically the client’s responsibility, auditors have to test that it’s complete and accurate before beginning work on it. “We’ve been going through that process, looking at new agreements, and asking our clients if they confirmed with the government if there is a shift in who funded a grant.” Flischel stresses that there are specific requirements when nonprofits receive federal dollars. “They’re stewards of public money, but during the pandemic, and especially in the spring of 2020, clients

were frantically applying for the Paycheck Protection Program, and they didn’t have a lot of time to focus on their day-to-day activities. They were reacting as the rest of the world did. This money was available, and they were applying for it without taking the time to think through the rules and regulations with which they would need to comply.” PPP funds are not required to be reported on the SEFA, but the Shuttered Venue Operators Grant (SVOG), which became available in 2021, is a good example of funds that are triggering single audits. The program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act. The program included over $16 billion in grants to shuttered venues, to be administered by SBA’s Office of Disaster Assistance. “Organizations were excited to receive SVOG money,” Flischel says. “We met with clients about the award agreements early on to discuss the documentation of how the money could be spent. It’s critical for auditors to inquire about any new funds the organization has received and talk through the possibility that those funds could contain federal dollars.” As an auditor, Flischel says she always asks to see a nonprofit’s award agreement which should indicate the assistance listing number – information on what the program is all about and what costs are allowed. “I make sure the client can find that same information I’ll be using in the audit,” she says. She then lets the organization know if the amount were over the $750,000 threshold and looks for the dates on the agreement. “They could need a single audit for one year or two,” she says. “I walk through the documentation needed to retain as support.” Additional important points: • With federal funds, organizations cannot ‘double dip.’ “You can’t charge the same expenses, such as salary, to multiple funding sources,” Flischel cautions. “That may seem like common sense, but some organizations might need to be reminded of that.” For example, an organization can’t charge the same salaries to the PPP and then again to a federal grant agreement. • Nonprofit organizations aren’t required to have a single audit until they hit $750,000 of expenditures in a fiscal year, but they’re still responsible for being in compliance. PROCEED WITH CAUTION Performing single audits is a specialized practice, and if auditors don’t typically perform this type of audit, Flischel urges caution. “These audits are based on a specific grant program, so I audit a totally different program for every single one of my clients,” she explains. “Homeless veterans’ money is under one set of rules. Children and family services are under another completely different set of rules. You need to put your brightest people on these audits to ensure the client’s SEFA is complete before you start your detailed testing.” Planning is essential, which includes ensuring the SEFA is complete and accurate. The SEFA is the trial balance for the Single Audit. For low-risk auditees, auditors only need to select major programs to test to meet 20% total coverage of the amount on the SEFA. For highrisk auditees, that percentage increases to 40%. That could mean testing multiple programs. If you complete your major program determination and then discover a program should have been on the SEFA but was missed, you have to walk through the major program CONTINUED ON PAGE 16 January/February 2022 | www.cocpa.org

AUDIT ISSUES CONTINUED FROM PAGE 15 determination again. This could result in having to test an additional program. “For an auditor, it’s the worst thing to realize you didn’t select enough major programs, so it’s key to make sure the client’s SEFA is complete and accurate to avoid surprises later.”

The challenges will continue into 2022 and maybe even beyond depending on the new infrastructure bill. “How many years does it take to spend $1.7 trillion?” Flischel asks. “This will continue as long as nonprofits keep spending federal funds.”

Flischel says, “Programs with spending in excess of $750,000 in one year must be tested once every three years. That means new programs in excess of this threshold must be tested in the first year since they were not tested in the prior two years. An auditor without single audit experience might miss this.”

For more information on single audits, visit the AICPA Governmental Audit Quality Center (GAQC) at https://us.aicpa.org/interestareas/governmentalauditquality.

Flischel also notes that auditors are required to test controls over compliance in addition to testing compliance. “Financial statement auditors aren’t always required to test controls,” she says. “This lack of testing controls during a single audit is one of the biggest peer review deficiencies.” ONGOING CHALLENGE Flischel says the last couple of years have been a bit of a madhouse. “I think the most challenging part of being an auditor has been that funds were flying off the shelves before guidance was issued. We couldn’t provide guidance to our clients because the federal government hadn’t provided any guidance.” The Governmental Audit Quality Center recently estimated that there would be up to 10,000 new single audits for the fiscal year ending Dec. 31, 2020, and later.

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SINGLE AUDIT CPE REQUIREMENTS CPAs performing single audits are subject to additional CPE requirements under Government Auditing Standards. Every two years, each auditor performing work under Government Auditing standards must have 24 hours of CPE that DIRECTLY relates to government auditing, the government environment, or the unique environment in which the audited entity operates. An additional 56 hours of additional Yellow Book CPE is required every two years in topics that enhance the auditor’s professional proficiency to perform audits.

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Why CAMICO? • For 35 years, CAMICO has been protecting CPAs with insurance solutions tailored to the professional services and concerns faced by CPA firms every day.

• Policyholders can call CAMICO as often as needed and consult with in-house experts on loss prevention, tax, and accounting and auditing issues — all at no additional cost.

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• Unlimited access to a Members-Only Site with unique tools and resources such as sample engagement letters, articles, newsletters, advisories, eAlerts, FAQs and more.

These are just some of the reasons why COCPA selected CAMICO as the Society’s sponsored provider of Professional Liability Insurance. Alpa (Keily) Evans Account Executive T: 800.652.1772 Ext. 6720 E: aevans@camico.com W: www.camico.com

Accountants Professional Liability Insurance may be underwritten by CAMICO Mutual Insurance Company or through CAMICO Insurance Services by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. © CAMICO Services, Inc., dba CAMICO Insurance Services. All Rights Reserved.

RISK PREVENTION

Malpractice Risks Increase During Difficult Economic Times BY SUZANNE M. HOLL, CPA

Economic conditions have long had a significant impact on CPA professional liability claims. In light of the current economic challenges, now more than ever, CPAs will need to be prepared and vigilant to minimize the potential of additional liability exposures.

ury research shows that the public, including clients, perceives that the CPA’s fundamental job is to “advise and warn” — to advise clients of opportunities and to warn them about risks. Juries believe the CPA’s “advising and warning” antennae should be hyper-sensitive during economic downturns. Some even believe “anyone can do a CPA’s job when times are good, but during difficult times — that’s when the CPA really needs to bear down.” In other words, expectations are elevated when economic times are challenging. For example, when something goes wrong with a business during difficult economic times, behaviors begin to change, sometimes to the point where clients will perceive the CPA as having failed to advise and warn. Clients may deflect blame and rationalize, “What occurred isn’t necessarily my fault ... Is it possible someone else allowed this to happen? ... Maybe I can blame someone else, and possibly recover our loss ... Yeah, I think it was their fault.” Also, looking at events in hindsight means history can be rewritten to benefit the client: “Why didn’t my CPA warn me about what was going to happen? I was relying on my CPA’s expertise for financial help.” When economic times are challenging, professional skepticism must increase, not just to protect yourself and your client, but to protect other key stakeholders (e.g., the readers of the financial statements, lenders). History has proven that desperate times will cause some clients to take desperate measures, leading to deceit. Loss Prevention Tip: Do not carry the burden of your client’s problems and permit yourself to become a victim for your clients. Loyalty to a client doesn’t take precedence

over maintaining your professional standards of integrity, independence, and objectivity. It is not worth jeopardizing your reputation or your own financial security in an attempt to mitigate or minimize client dilemmas. RISK OF FRAUD The struggling economy in the aftermath of the COVID-19 pandemic has placed many entities and individuals under financial strain. Increased financial need increases pressure and rationalization for fraudulent behavior (e.g., “My line of credit has been canceled.” “My retirement funds shrank.” “I need this money.”) Understanding the gravity of these pressures is crucial to effective fraud prevention and detection. For example, organizations in nearly every sector are cutting expenses and laying off workers. Furloughs and reduced expenditures can compromise existing internal controls and lead to fewer fraud prevention measures. CAMICO’s claims experience has

fraud,” regardless of the limitations of the engagement. The expectation that CPAs will detect fraud is extremely difficult to meet, but the expectation to advise and warn is much less difficult. By advising and warning clients of their fraud/defalcation exposures and responsibilities, CPAs can minimize liability stemming from the expectation CPAs will detect fraud.

Fraud can have a devastating impact on CPAs as well if firms don’t embrace due professional care. shown that when people perceive an opportunity to commit fraud and get away with it, they are more inclined to defraud. Fraud can have a devastating impact on CPAs as well if firms don’t embrace due professional care (a foundation of our profession’s general standards) in defining the scope of their services and properly responding when fraud is identified or suspected. Public perception is that CPAs are expected to have a “nose for

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Exercising professional skepticism goes hand-in-hand with the expectation that CPAs have a duty to advise and warn. Regardless of the services performed, CPAs cannot provide absolute assurance that fraud has not been committed. CAMICO recommends that CPA firms address difficult economic times by: • identifying clients that may pose higher risk;

• increasing the level of professional skepticism; and • prioritizing defensive documentation, including the engagement letter. Significant client meetings should be followed up with a written memorialization of who was present, what was discussed, action items agreed upon, and who was responsible for each. A written memorialization of the meeting is probably the most important tool you can use to communicate with your client and to ensure that both you and the client are proceeding with the same expectations and assumptions. SOCIAL ENGINEERING SCAMS/FRAUDULENT WIRE TRANSFERS CPAs continue to be at high risk of social engineering attempts due to the type of information firms gather and store, and CAMICO has observed an uptick in the frequency of these attempts. “Phishing” is one of the more common social engineering scams. The goals of the hacker/thief in this type of scam are to: • procure even a small bit of information that may be leveraged to hack the system while appearing to be a legitimate user, • send phishing emails that appear to be from a client to convince an organization to authorize payments, • commit some other fraudulent act under the guise of legitimacy, or • download malware such as ransomware. CAMICO also has observed a rise in fraudulent email requests for wire transfers. Fraudulent wire transfers frequently cause large dollar losses. If the fraudster controls the client’s and the firm’s email, commonly referred to as a “man in the middle” attack, and the fraudulent request mimics previous legitimate requests, it is very difficult for the firm to identify the request as illegitimate. When the fraud is discovered after the transfer, the funds are usually not recoverable. Domestic banks are often not helpful in preventing fraudulent transfers, as laws tend to limit their risk exposure and enable them to deny responsibility. Use your professional skepticism to avoid being lulled into a false sense of security. Any requests for money to be transferred to a bank account unfamiliar to you should be a red flag, especially if the new account is in another country. If the firm’s protocol with clients is to permit requests for wire transfers to be made via email, then establish and follow procedures to confirm requests using a mechanism other than email and proceed with the transfer only after confirming with the client (ideally by phone or in person) that the request is legitimate. This includes, but is not limited to, confirming the dollar amounts, the name of the financial institution, and the bank account number. To validate the authenticity of the request, confirm information only known to the client (ask questions to which hackers would not know the answers).

Whether working in the office or remotely, take the time necessary to validate suspicious or unexpected email. Practical loss prevention tips to minimize fraudulent wire transfer exposure include: • Slow down. Whether working in the office or remotely, take the time necessary to validate suspicious or unexpected email. • Establish written protocols. The firm should establish written protocols with clients for handling client funds, especially related to handling wire transfer requests. Consider establishing dollar thresholds above which verbal consent would be required if clients do not want to be “bothered” to approve each request. In addition, document who the authorized client representative(s) would be for providing such consent if/when the client is not available. • Proceed with caution. With the increased number of claims related to fraudulent wire transfers, best practice in the absence of any written protocols to the contrary would be to verbally confirm all wire transfer requests with clients to minimize risk. Suzanne M. Holl, CPA, is senior vice president of loss prevention services with CAMICO (www.camico.com). With almost 30 years of experience in accounting, she draws on her Big Four public accounting and private industry background to provide CAMICO’s policyholders with information on a wide variety of loss prevention and accounting issues.

AFFECTED BY THE MARSHALL FIRE? The AICPA Benevolent Fund was created in 1933 to provide short-term assistance to members struggling with daily living expenses. Please consider applying to the Fund if you are experiencing hardships due to unemployment, accident affecting personal or family health, medical expenses exceeding insurance coverage, natural disaster, or the loss of a primary source of family income. Learn more at bit.ly/AICPA-Benevolent.

January/February 2022 | www.cocpa.org

ADVISORY SERVICES

Introduction to Tax Advisory: Year-round Proactive Planning is Key BY NADIA RODRIGUEZ, CPA

hen it comes to delivering the return to our clients, we often have the conversation with them about minimizing their tax liability for next year, which seems to align with the offering of a tax planning service. The primary goal of tax planning is to project taxable income, adjust the tax estimates, and avoid penalties or surprises at tax time. However, one of the challenges we face with traditional tax planning is that it does not communicate tax savings or your expertise as an advisor. Tax advisory standardizes tax strategies, communicates the tax savings, and, most importantly, empowers your clients to reach their financial goals. When we think about traditional tax planning, we usually start with a tax prep mindset, then follow up with a reactive search for tax deductions, and meet with our clients once a year. However, with

Today’s legislative and business environment creates a perfect opportunity to add tax advisory to your practice. tax advisory, we start with understanding our clients’ goals, identify proactive strategies that power prosperity, and meet with our clients throughout the year. Today’s legislative and business environment creates a perfect opportunity to add tax advisory to your practice. The Internal Revenue Code had not changed in 20 years. As a result, the model in accounting has been compliance, first, with firms often neglecting to deeply develop their planning and advisory capacities. However, with all of the recent tax law changes, taxpayers have increased communication with their tax preparers. They simply have more questions. We are realizing how much work we are already doing that falls into the “advisory” category, and this is why advisory is valuable to your business and clients. The result? Today’s environment creates an opportunity to add tax advisory and is the perfect time to start empowering clients. Firms that add tax advisory are not only focused on improving the bottom line or striving to be on the cutting edge, but adding tax advisory also benefits the tax professional. The work-life balance in the tax and accounting profession during tax season is not the 20

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best. We have long working hours, hundreds of clients, compressed workflows, and tight deadlines – and it doesn’t allow for much of a life outside of work. Generally, today’s generation is determined to carve out a balance that not only allows them to have a life outside of the office but also to focus the time they do spend in the office – or remotely – on truly meaningful work and having an impact on their community. Advisory models naturally lend themselves to a narrower client base, with tax professionals providing more service to fewer clients instead of the other way around. This approach requires more specialization and building a partnership with your clients. As a result, this provides tax professionals with the work-life balance they need and ultimately drives up the bottom line. When you add tax advisory to help your clients reach their financial goals, you still will do compliance, preparation, sales, and other practice management activities, but now you will be able to monetize your expertise instead of just your time. This is the pivotal component that starts with this mind shift to advisory – and tax advisory is a great place to start. Adding a new service to your business model should be done in a strategic, planned, and organized way. A great tool to add a new service is by building an Alignment Triangle to help you build your business model when you add tax advisory.

MISSION VALUES

STAKEHOLDERS

GOALS

STRATEGIES

METRICS

To create your Alignment Triangle, follow these six steps: 1. Start with creating your mission statement, or revising it if you have one in place. A mission statement helps an organization define its purpose. A good mission statement should be concise, clear, and easy to articulate what’s unique about the organization. 2. State your values. The values are those that connect with you personally and are part of the culture you want to drive in your organization. Your values will set the tone of what clients you want to attract, or maybe the business industry you would like to specialize in. 3. Communicate your mission statement and values to your stakeholders. The stakeholders are the people involved in your business, which could be your employees, the owners of your firm, and your clients. 4. Set the goals for your firm. When setting these types of goals, think in terms of one to three years. You want to capture statements that outline what your firm wants to achieve, aligned with the mission, values, and outcomes for the stakeholders. Examples might be growing revenue, developing your expertise, or carving out a niche or a specialty.

5. Develop your strategies to achieve your goals. Having a plan on how to achieve your goals is crucial. An example of a strategy is to segment your clients and steer them to the right package for advisory. 6. Finally, identify the metrics that are directly aligned to your strategies and goals. These should be specific. Have direct and reasonable metrics you can track. When your busy tax season is over, start planning to begin the conversation about the most important things to your firm. Instead of focusing on the transactional elements of processing tax returns or using tax planning engagements to simply predict tax liability, go beyond that! This is what your clients need from you. At the end of the day, we can agree that empowering our clients to help them reach their financial goals is a win for them and our profession. This article was originally published on the Intuit® Tax Pro Center, proconnect.intuit.com/taxprocenter. Nadia Rodriguez, CPA, a tax analyst 2 at Intuit®, is part of the team that builds Intuit ProConnect™ Tax Online and Lacerte™ content for tax professionals who serve individuals and small businesses.

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HUMAN RESOURCES

The Workforce/Skillset Mismatch: Is the Four-Year Degree an Anachronism? BY NATALIE ROONEY

Businesses want to hire new employees. People are looking for work. And yet, businesses can’t fill their job roles. Where’s the disconnect? DATA FOR THOUGHT A recent Bureau of Labor Statistics (BLS) report said there were 7.4 million potential workers who were unemployed and a record 10.9 million job openings. The rate at which unemployed people are getting jobs is lower than it was pre-pandemic. The BLS Job Openings and Labor Turnover Survey indicates employers are finding it more difficult to hire now than at any time since 2001. Job seekers say they’re actively looking and applying but are getting screened out before they ever have a chance to demonstrate their skills.

Many factors are at play in this mismatch of jobs and seekers. Dr. Shannon Block, CFE, Executive Director and Chief Digital Officer for the Markle Foundation, says the core of the problem, which was true prior to the pandemic as well as now, is that 70 percent of America’s workforce doesn’t have a fouryear college degree. That’s over 100 million people. Block helps to lead the Rework America Alliance which is working to open opportunities for people without a degree, particularly those from low-income circumstances, to move into good jobs. “This ‘degree inflation,’ when jobs require a four-year degree just to get in the door, screens everyone else out,” Block says.

NewsAccount | January/February 2022

“People can’t even get in front of the human resources person.” She offers computer programming jobs as an example. “You don’t need a four-year degree. You need to demonstrate competency. For some people that’s a degree, but for others, it’s skills they built elsewhere.” Block offers an example of an individual who worked as a cashier at Old Navy during the pandemic while studying Python (a computer programming language). “We asked her competency-based questions, and on testing, she performed better than those with formal training.”

Block says she isn’t anti-degree. “I love lifelong learning; it needs to happen throughout our lives and be stackable. We come and leave and come back as life happens, but unfortunately, our system doesn’t work that way right now.” BREAKING DOWN BARRIERS TO WORK Companies often look for people who fit best with the existing culture when they should be looking for someone who can add something new, help fill blind spots, push boundaries, and expand the horizons in ways that will equip the organization for future success. It’s a concept Block describes as “culture add” versus “culture fit.” The market is changing so fast, and more than ever, diversity, equity, and inclusion (DEI) issues are in play, which is critical because people of color and women have been especially impacted by the pandemic. In Colorado, white people are over two times more likely to have a four-year college degree. “So, if we’re still using that four-year degree as a proxy, we’re not going to get the diverse slate of candidates we’re looking for,” Block says. “We need to be thinking differently. Hiring organizations need to break down why they list a four-year degree as a requirement. Why do you think it matters? Some people see it as demonstrating grit and determination, the ability to stick with something. But there are better ways to demonstrate those things. State the skills needed, and let job seekers demonstrate the ways they can perform those skills.” Problems can start early in the interview process when an interviewer attempts to bond with an interviewee simply by making small talk. “As humans, we’re looking for validation, similarity, and culture fit,” Block says. “There’s a tremendous amount of bias in the interview process. If someone is from another country, they look and sound different. If someone is too informal at the beginning, the interview can be too focused on similarities not related to the job. Skillsbased hiring, and reflecting that in the interview process, provides a more objective way to find the candidate with the needed skills.” All of this is to say, think about how your talent management practices are working, Block observes. “There is risk as everything moves to digital. If we embed our biases into the process, we’re going to accelerate that bias.”

RESOURCES The Rework America Alliance is a unique partnership of civil rights organizations, nonprofits, private sector employers, labor unions, educators, and others focused on opening up opportunities for workers without a college degree who have built capabilities through experience - particularly for people of color who have been disproportionately impacted by the current economic crisis. The Rework America Alliance offers a free job-posting generator at www.markle. org/job-posting-generator-employers. Users type in the name of the position and its characteristics, and the generator produces a skills-based job posting. Block offers a tactical tip for hiring organizations: If you do have a four-year degree requirement, consider changing it to “preferred.” The Alliance also offers a “Skill My Resume” tool, www.markle.org/rework-america-alliance-resume-builder, for job seekers who want to get noticed. Users can take a job description, cut and paste it into the tool, and then the tool will break the description down and tell job seekers what to emphasize so they can get noticed. “If there’s a job you have your heart set on, but there’s a skill you don’t have, Skill My Resume will show you ways to acquire that skill so you can differentiate yourself,” Block says. Another resource for job seekers is the United States’ existing infrastructure of free career coaching centers – the next generation of the traditional workforce center. “Anyone can go into one of these centers for free to talk to someone, access the internet, use the computers, and view labor market data,” Block says. Colorado has nearly 50 centers across the state (cdle.colorado.gov/wfc).

WIDENING THE APERTURE Global companies with big data centers all over the world need a standard for filling their pipeline quickly with high quality talent. They are looking for creative ways to demonstrate the skills needed for jobs and creating an equal opportunity space for people to compete. These companies are

employer. These job seekers are willing to compete.” Job seekers also are able to demonstrate their skills through free online training programs offered by Google, Amazon, and Microsoft, and platforms like Coursera and edX. “The library has always been a place

Instead of limiting a search to four-year colleges, Block suggests partnering with a community college or organizations like Goodwill, Unidos, or the Urban League. asking how they can access more job seekers in a timely and efficient manner. Traditionally, employers traveled the college fair circuit to seek out the best students. Now, that pipeline is changing. Instead of limiting a search to four-year colleges, Block suggests partnering with a community college or organizations like Goodwill, Unidos, or the Urban League. “These organizations are competing by helping employers find the talent they need,” Block says. “Job seekers are assessed and then connected with an

to learn for free, but it lacked a validation system to show you had read, learned, and applied the information,” Block says. Now, these free, online programs are organizing themselves, grouping content, and offering training related to specific jobs. “These provide more value in the marketplace because they’re tailored to specific skill sets for specific jobs.” Online training companies also are starting to compete by offering guarantees to job CONTINUED ON PAGE 24

January/February 2022 | www.cocpa.org

HUMAN RESOURCES CONTINUED FROM PAGE 23 seekers. If a job seeker passes a particular set of courses, the candidate is guaranteed an interview with a hiring manager. “It’s interrupting the market,” Block says. She adds that of the certifications currently being offered – and there are many – only 15 percent are recognized by employers. “Watch this space carefully in the next five years to see how the winners and losers sort out.” Another challenge for the hiring side is how quickly jobs continue to change – the digital transformation. “Take, for example, a building custodian or janitor. In that role I might get my daily instructions from a mobile app on my phone that I need to interact with,” Block says. “The nature of jobs themselves is changing, but we have this outdated mindset that someone needs 15 years of manufacturing experience in this specific subset of the field. Someone’s years of experience might not even be relevant to the jobs today.” When we break down jobs by skills – and skills are transferable – we start to understand a human capital strategy more holistically, Block says.

As we move toward automation, people assume everything will happen in a box and be the same, but when the World Economic Forum looked at a variety of labor market data and emerging trends, the third most needed skill was creativity. “Creativity is a unique human trait that robots can’t replicate,” Block says. “When we think about DEI, it is also about who has a seat at the design table, so we can start to be truly innovative and bring creativity to our automated systems.”

When we break down jobs by skills – and skills are transferable – we start to understand a human capital strategy more holistically.

Blocks says outcomes for those with fouryear degrees tend to be pretty good, but the challenge is that the majority of people don’t end up going the degree route for a variety of reasons. “A four-year degree is one way to develop critical thinking and problem solving capabilities. But when employers are saying they can’t find talent, we might need to widen the aperture of how people are demonstrating skills in this new world.”

People will eventually move on from companies for a variety of reasons, but they’re also more driven to work than ever before. “Make sure you’ve created avenues for your top talent to be exposed to different parts of the organization so you don’t lose them.” Block recommends.

All events are virtual and will take place on Wednesdays from noon to 1:15 pm MT.

January 26

L IVI NG AUT HE NT I CA L LY PR O F E S S I O NA L LY A ND PE R S O N A L LY

February 23

T HRO U G H DACA EYE S

March 23

I T ’ S NOT HOW YO U G E T T HE R E , I T ’ S WHAT YO U B R I NG

April 27 Engaging personal experiences with diversity, equity, and inclusion. SPONSOR ED BY 24

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M Y J O U R NEY F RO M D EVA STAT I N G G R I E F TO M E NTA L HE A LT H

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HUMAN RESOURCES

Advice from an Autistic: Part Two BY CAITLYN O’NEIL, CPA

his is the second article in my Advice from an Autistic series. My goal with each article is simple: To help others better support Autistic individuals in their everyday lives and especially in the workplace. As a refresher, according to the Autistic Women and Nonbinary Network, Autism is “a pervasive developmental disability that impacts communication, movement, and sensory processing.” Let’s continue! LISTEN TO AUTISTIC PEOPLE While this may be surprising to some, historically, many non-autistic people and organizations have ‘talked over’ Autistic people. To ‘talk over’ an Autistic person, in this case, is to make decisions for an Autistic person without including him or her in the conversation. A prime example of an organization doing this is Autism Speaks. Its top leadership consistently has been composed entirely of non-Autistic people throughout the years. To me, this is akin to the 2013 “Women in Society” conference that was held in Saudi Arabia in which the only attendees were men. Autism Speaks has historically promoted Autism as a disease or monster that destroys everything in its path. An example of this dehumanizing strategy is the 2009 Autism Speaks advertisement entitled, “I Am Autism.” The commercial can be found on Youtube, if you are interested in viewing it. Autistic people know best what supports we need, so let us be the voice of Autistic advocacy. DO NOT REFER TO AUTISTIC PEOPLE AS “HIGH FUNCTIONING” OR “LOW FUNCTIONING” Autism is complex and manifests itself in numerous ways. The Autism spectrum is not linear. Throughout my life, I’ve been called “high-functioning” because I am verbal and did well in school. However, despite doing well academically in college, my room was a disaster, and I always was losing something. I do not consider that to be “highly functioning.” The term “Low Functioning” usually is used to describe nonverbal individuals. Unfortunately, these terms were often synonymous with whether or not you could attend “normal” classes in school. The words are outdated for many reasons, as every autistic individual is different and uses different supports. Many nonverbal autistic individuals, such as notable activist Amy Sequenzia, utilize other means of communication to speak with those around them. Additionally, nondisabled people have different levels of productivity as well, but we do not use ‘functioning’ labels for them. We shouldn’t do it to disabled people either. RESPECT AUTISTIC PEOPLE’S PRIVACY This may seem obvious, but it is amazing to me how many people feel entitled to post a video of an Autistic child’s meltdown on the internet. For those who do not know, an autistic meltdown is when the individual is overstimulated and breaks down. I have experienced this myself, and it is a very scary experience I would never consent to have filmed. These children do not consent to have their images uploaded to the internet. I understand that raising an Autistic child can be hard on parents, but the parent’s right to spread “awareness” does not override an individual’s right to privacy. While such videos

may intend to spread “awareness,” they actually contribute to the stigma against Autism. Autistic individuals, even children, deserve privacy. DO NOT TREAT US AS INSPIRATIONAL FOR LIVING AN ORDINARY LIFE Stella Young gave a wonderful TED Talk about this issue, which she calls “Inspiration Porn” (bit.ly/3pfJeQg). Disabled lives are not tragedies; many of us have great lives. We can date, get married, watch TV shows, and do other ordinary things. Our lives are not litmus tests for how much worse your life could be. These videos do not challenge the barriers disabled people face in society. I like to think that I have a great attitude most of the time, however, having a good attitude does nothing to make places accessible for me. As I talked about in my COCPA See Me Series presentation, I struggled in the beginning of my career because there weren’t any accommodations for me. However, once proper accommodations were put in place, I was able to flourish. BE RESPECTFUL If you see an Autistic person stimming, which is self-stimulatory behavior that is marked by a repetitive action or movement of the body, please leave her or him alone. Stimming is common amongst disabled and nondisabled people and can include anything from tapping a pen to chewing gum. Stimming behaviors that are associated

Autism is complex and manifests itself in numerous ways. The Autism spectrum is not linear. with Autism include flapping one’s hands, rocking back and forth, or playing with fidget toys. These behaviors are often looked down on in public, but to be frank, for many disabled/Autistic people going out in public often involves a lot of planning. Many of us, especially we adults, have developed strategies to help us complete our day-to-day activities without a meltdown. As I said before, having a meltdown is not pleasant, to put it lightly. We do whatever we can to avoid it. Strategies may involve wearing headphones to lessen stimulations, using mobility aids if there is a comorbidity of other conditions, stimming, and others. Overall, unless the stimming is causing actual harm, please leave the individual alone. Caitlyn O’Neil, CPA, MT, is a senior tax associate with CBIZ & Mayer Hoffman McCann P.C., Denver. She shared her story, “Not a Puzzle Piece: Being Autistic in the Work World,” as part of the COCPA See Me: Stories of Diversity, Equity, and Inclusion webcast series. She received a COCPA 2021 Everyday Heroine Award for her community service work. Contact her at coneil@cbiz.com. January/February 2022 | www.cocpa.org

MANAGEMENT ACCOUNTING

Finance Transformation: How Exactly Do You Start? BY C.F. WONG, ACMA, CGMA

Getting internal stakeholders’ buy-in is the first and often most challenging hurdle in kick-starting a finance transformation. Here are three strategies to consider. Editor’s note: This is the first article of a three-part series on finance transformation. Subsequent articles will cover tips on automation vendor selection and strategies to build business partnering skills in a finance team.

usinesses today face many of the same challenges: commoditization of products; eroding margins and sales volume due to continuous price wars; and customers’ failure to see differentiated value beyond price, customer relationship, and service reliability. To stay competitive, companies become “consumer-centric” by building close relationships with customers and solving customers’ pain points and problems. As such, it is important that finance and accounting (F&A) be part of the business value-creation process and provide business advisory solutions on top of debits and credits, knowledge of accounting standards, and financial management. I’ve found in my time observing high-performing F&A teams that successful companies expect the finance function to do more than just the basics and to develop business partnering capabilities. F&A teams are expected to (1) identify value-creation activities (What kinds of activities create value and what activities don’t?); (2) develop future strategies (Where should the business be headed?); and (3) suggest ideas to execute and drive those goals (How can the business achieve its goals?). However, many F&A departments fall short as advisers. Two common features prevent them from doing so: being backward-looking and relying too heavily on spreadsheets. • Backward-looking. In the F&A departments I’ve worked in, there was much criticism that the function was backward-looking and thus didn’t add any real business value. The F&A departments provided past-month historical reports and explained what happened in the past month versus last year and versus budget, financial ratio, and so on. Variance analysis explanation is based on 26

what already happened. It’s like reading last month’s newspaper today. • Overreliance on spreadsheets. Spreadsheet programs like Excel are very powerful and user friendly. However, when all of a company’s financial information is compiled using Excel and spreadsheets are used to consolidate business results, employees have to spend a lot of time sieving through data and performing regular reconciliation to check for possible errors. And these Excel files tend to grow in size and complexity as the business grows. If F&A departments are to spend a huge amount of time compiling historical financial information using a clunky and ineffective method, it is just a matter of time before existing competitors or new entrants eat up the differentiated value created by the business. Understanding these problems, how does one transform traditional F&A into a function with business-partnering capabilities?

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Drawing from my past experience, I found these three strategies useful. Dive deep to understand the value-creation process. In a transformation project I was part of, I examined the internal value-creation process of the organization. I knew I needed to understand who our customers were, the key activities to generate customer value, and how the business delivered such value to its customer. An example of this is in an article I wrote about an instant noodle manufacturer. First, I identified that students were the primary customers of the business. Then I learned how the business processes along the entire supply chain worked to make the product. Lastly, I identified how the business delivered its product to its customers via its distribution network, from factory to distributors or retail store to customers. You can find more details and examples of how to leverage this perspective in the CGMA Business Model Framework and value-chain analysis.

Gather information and build trust and empathy. The next step is to collect information from other internal stakeholders and build trust and empathy in those relationships. This information collection exercise can help to identify fresh issues.

options could not bring significant enough impact to the business and move F&A closer to being a finance business partner. Research shows that 70% of finance transformation projects fail to deliver forecasted benefits to the business.

For instance, in one finance transformation project, I learned that the F&A function was tied up with daily routine tasks using spreadsheets and constantly preparing many reports. There was no time to invest in improvement projects. F&A also didn’t have the right tools to reduce these daily workloads. There was a general fear of job security as well; if spreadsheet work were to be automated, would some staff be retrenched?

Finance transformation projects are really change management projects that will not yield results if you’re working on an easy option. Finance transformation projects are multifaceted, and a project manager must first secure senior management support, plan the implementation in phases, and ace the people factor that comes with project implementation.

I concluded that the general readiness was very low to embark on a finance transformation journey. I figured I had to first build relationship and trust by: • Establishing myself as a reliable person within the organization who would do what I said and deliver results. It’s very important to demonstrate reliability and gain trust especially if you are new to the business. • Listening without passing judgment and understanding the challenges that they faced from their point of view. • Building relationships by offering help and gaining “social credit” that I could use further down the road. These three points, simple as they may seem, are difficult to implement in real life. It’s key to persevere, exercise patience, and cultivate a never-say-die attitude. Look beyond internal business model and value creation. It’s important to look externally beyond the business model and the value-creation process of the business. In the same transformation project, I compared business models and value-creation processes of direct competitors and top global companies to identify emerging trends. This helps identify where the organization has done well and where there are opportunities to improve. I call this “state-of-the-art” information gathering. Knowing emerging trends will help raise discussion pointers as a finance business partner and key considerations for the business in its strategic plans. WHAT DOESN’T WORK Many textbooks and models advocate for going after the “low-hanging fruit.” However, the idea of going after the easiest option and hoping to produce results did not work in my experience. Many such

Let me share a more concrete example of what didn’t work from a transformation project. I started a project with engagement sessions with the finance team. I tried to create a sense of urgency by sharing a vision for the finance department and where the business wanted the F&A to go. I used some best-performing companies and competitors as examples and hoped that the team would see the vision and the future we should be aiming for. However, key F&A managers pointed out that the function was too busy with routine work, that business partnering was not the culture of the organization, and that the finance team did not know enough about the other functional areas to give strategy recommendations. That was when I realized that implementing finance business partnering is a change management project. So, I asked myself, How do I get support? Who can I approach? How can I get the team on board? MANDATE FROM THE TOP Support from the top is crucial to kick-start a transformation in F&A, and I realized this the hard way. The background research and preparation using the three strategies above need to be in place, and when the right time comes along, you will be ready to present your ideas. In my case, an opportunity came when a member of the senior leadership asked if there were any improvement pointers for the company shortly after I joined the organization. I had done my homework beforehand and prepared short points to share. My ideas resonated in his mind, and an executive committee meeting was called shortly after. I sat in to present my idea. A steering committee was swiftly set up to drive the finance transformation, and I

was appointed as the project manager. The powerful key stakeholders were also on the steering committee to give direction and support. I learned that the concept of low-hanging fruit does not work in practice. Tailoring finance transformation to what the business wanted, especially to powerful stakeholders in the organization, enabled me to move mountains. FINAL WORD ON THE PEOPLE FACTOR Building relationships with internal customers and gaining their trust is crucial in getting buy-in for any transformation. Such projects must create value and provide services to solve their pain points, in the same way any business provides products or services to their customers, before internal stakeholders see the benefit of a finance transformation. One way to respond to managers who need to see how a finance transformation would benefit them is to show them the possibilities for higher efficiency. You could identify a more powerful IT tool besides spreadsheets that will help reduce both routine and ad hoc report preparation workload. (The second article in this series will cover more details on the vendor selection process and implementing automation.) I once listed all routine and ad hoc reports prepared by various F&A teams and focused on reports that took the longest time to prepare. Through this exercise, I concluded that about 20% to 40% of reports could be eliminated, automated, or simplified. The F&A teams saw how they would benefit from a transformation and how their workload could be lightened. I hope the points shared here will be useful for the scoping phase of your F&A transformation project. In upcoming articles, I will share the specifics of implementing automation and building business knowledge to enable finance business partnering. C.F. Wong, ACMA, CGMA, is a member of the North Asia regional advisory panel for CIMA and a principal–Greater China at the CFO Centre in Hong Kong. He has more than 20 years of experience in finance, including strategic finance business partnering and mergers and acquisitions. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at AlexisSeeTho@aicpa-cima.com.

January/February 2022 | www.cocpa.org

SPECIALTY ACCREDITATION

The Experienced CPA Pathway to Becoming a Personal Financial Specialist WHAT IS THE PFS CREDENTIAL? The AICPA’s Personal Financial Specialist (PFS) credential is for CPA financial planners and CPA tax practitioners who want to formally demonstrate their knowledge and expertise in personal financial planning for individuals, families, and business owners. There are several ways to earn the PFS credential, including the new Experienced CPA Pathway for CPAs who qualify with significant experience. This pathway presents a more streamlined exam and demonstrates the same level of overall rigor and competency as the other approaches. A CAREER BOOST The PFS credential can bring confidence and reassurance to the client relationship, particularly as the impact of myriad uncertainties ripple through clients’ tax and personal finance decisions. In addition, research indicates that people recognize CPAs as trusted advisers and prefer a financial planner who could manage a range of services for them. A PFS also boosts a CPA’s career options and opportunities for a firm’s growth. In fact, in 2018, the U.S. Bureau of Labor Statistics projected a 27% growth in the need for personal financial advisers over the next six years and 30% over the next 10, saying the best prospects are for those with certifications. To help you meet the important financial planning needs of the market, the AICPA is offering limited-time discounts to facilitate this opportunity for your career and for firms. THE PATH TO PFS The Experienced CPA pathway requires applicants to hold a valid and unrevoked CPA license and meet the following requirements within the 7 years preceding their application for the credential: • 7,500 hours of experience. A minimum of 7,500 hours of PFP-related experience (up to 2,000 of this can be tax compliance work). The information noted in Step 1 will help estimate your qualifying personal financial planning-related experience.

NewsAccount | January/February 2022

• 105 hours of education. A minimum of 105 hours of PFP-related CPE which must include the AICPA’s 13-hour online PFS Experienced CPA Education • Experienced CPA assessment for PFS. Pass this streamlined online case study-based exam. Check off these steps to get started on the path: 1. Assess your experience level. • Do you work with individual, family, or business owner clients on any of the following topics included in the PFP Body of Knowledge? - Tax Planning - Estate planning - Retirement planning - Investment planning - Risk management and insurance planning - Cash flow planning - Charitable planning - Elder and special needs planning - Education planning - Employee benefit and business owner planning • When you review your work experience over the last 7 years, have you accumulated a minimum of 7,500 hours in these areas? Remember 2,000 hours of this total can be tax compliance work. • If your answer is yes, then you qualify for this pathway to the CPA/PFS credential.

2. Review your education.

4. Complete the required education and pass the assessment.

• Education in any of the topic areas listed here counts. The 105 hours of PFP-related CPE comes out to 15 hours per year, a number that CPAs exceed to maintain their CPA license. 3. Purchase both the required education and assessment. • The Experienced CPA Education and Assessment are both available online. These products will show as list price but are discounted during the introductory period with the reduced price showing in your cart. - PFS Experienced CPA Education - PFS Experienced CPA Assessment • The PFS Experienced CPA Education includes modules on the following topics: - Professional standards and responsibilities - PFP regulatory and fiduciary landscape - Personal financial planning process - Cash management strategies - PFP in Practice – Case studies applying the standards, planning process, and technical topics. • If you have already taken the PFP Practical Applications Certificate education, it qualifies. Just review your materials and purchase the PFS Experienced CPA Assessment.

• Completing the PFS Experienced CPA Education both prepares you to sit for the PFS Experienced CPA Assessment and grants 13 hours of CPE and a digital badge that can be used on your website, client communications, and social media. • The PFS Experienced CPA Assessment is a psychometrically valid exam offered and proctored online for your convenience. • It tests the application of the PFP Body of Knowledge to the case studies discussed in the PFS Experienced CPA Education you have just completed. • It is 60 questions long, and you will have 100 minutes in which to complete it. Once you have completed these steps you can apply for the PFS credential. The PFS presents an opportunity to strengthen your credibility with your clients as you deepen and add value in your relationships. If you are a CPA who has worked with individuals for many years, you know that many of these PFP topics are a regular part of your client relationships, making you likely to qualify. What better time than now to get your PFS credential and be your client’s rock! For more information, contact the PFP team at financialplanning@aicpa.org.

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MOVERS & SHAKERS

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ALEXANDRIA ROMERO, CPA Alexandria Romero, CPA, was named CFO for the Pueblo City/County Library District, Pueblo, Colo.

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DAVID GANTOS, CPA David Gantos, CPA, joined FS Vector, Washington, D.C., as Director of Finance and Accounting.

TYLER LINNEBUR, CPA Tyler Linnebur, CPA, joined EY LLP, Denver, as a staff accountant in audit.

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CLASSIFIEDS PRACTICES FOR SALE, PURCHASE, OR MERGER Selling your practice or looking to purchase a practice? Selling your firm is complex! ACCOUNTING BIZ BROKERS can help! We have been selling CPA firms for over 17 years, and we know how to simplify the process. We have a large database of active buyers. We work with industry specific lenders ready to assist buyers with financing. Contact us today to receive a free market analysis or to start the sales process. Current Listings: New: Fort Collins Gross $109k; Colorado Springs Gross $610k; Boulder Gross $186k-Sold; Fort Collins Gross $85k; Garfield County CPA Firm Gross $340k; Fort Collins Gross $88k; Central Mountains CPA Firm Gross $80k. Kathy Brents, CPA, CBI, at 866-260-2793 or Kathy@AccountingBizBrokers.com, or visit our website at www. AccountingBizBrokers.com. OPPORTUNITIES AVAILABLE TAX MANAGER WANTED: With over 150 years of combined experience serving as CPAs to the Denver community, Bender & Lang has provided tax and accounting services and advice to thousands of individuals, families, corporations, S corporations, partnerships, estates, and trusts. We also provide payroll and sales tax services, as well as QuickBooks set up, maintenance, consulting, and recording. We have been located at 7472 South Shaffer Lane, in the Ken Caryl Business Park behind the fire station, for over 20 years.

TAX STUDY GROUPS Boulder/Longmont Tax Study Group WEDNESDAYS, VIRTUAL ONLY NOON-1:00 P.M., MT

Wednesday, Jan. 12, and Wednesday, Feb. 16 Additional 2022 dates: Mar. 16, May 18, Jun. 15, Jul. 20, Aug. 17, Sep. 21, Oct. 19, Nov. 16, Dec. 14. For more information, contact Lynn M. Mitton, CPA, MT, MPA, 303-499-7445, or email lmitton@tandemcpas.com.

Denver Tax Study Group TUESDAYS, VIRTUAL ONLY NOON-2:00 P.M., MT

Tuesday, Jan. 25 Additional 2022 dates: Feb. 22, Mar. 29, Apr. 26, May 24, Jun. 28, Jul. 26, Aug. 30, Sep. 27, Oct. 25, Dec. 6. Register at www.cocpa.org.

We are looking for a Tax Manager to join our team! We offer a competitive salary, commensurate with experience, plus unlimited bonus potential based on production! The position is on-site, based in our office in Littleton, Colo. Desired Skills/Experience • Proven work experience in public accounting preparing and reviewing tax returns • Excellent client service and communication skills • Lacerte tax software experience desired • Knowledge of accounting and bookkeeping procedures • QuickBooks desktop experience desired • Microsoft Office literacy

Connecting Top Employers with Premier Professionals.

cocpa.org/talent

• Excellent organizational and time management skills • High level of integrity • Strong attention to detail • Excellent analytical skills • 5+ years experience in public accounting • Degree in Accounting, Finance, or relevant subject; Active CPA and PTIN Please visit www.linkedin.com/jobs/view/2674162400 or call Chris Posey at 303-217-8028.

IN MEMORIAM

We extend our sympathy to the families and friends of the following member and former member: Hayes R. Ullemeyer Montrose, Colo., Member since 1962 Lyle L. Shanks Lakewood, Colo. 32

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Show the world you mean business. The CGMA® Finance Leadership Program — your career accelerator Ready to master the hottest finance, business, technical, people and leadership skills? The CGMA Finance Leadership Program is designed for you. We recognize your expertise and experience as a CPA by giving you a fast track to the world’s most widely held management accounting designation.

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January/February 2022 | www.cocpa.org

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Tax Season Cessation Program Experiencing: • Stress? • Lack of Sleep? • IRS induced Nausea? Sell your practice and RELIEVE it all... CONTACT US TODAY!

Delivering Results - One Practice At a time Kevin Overberg, CPA/PFS, CFP Kevin@aps.net

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(720) 988-4334 www.APS.net