Serving members' interests: an update on AICPA initiatives.
Addressing Private Company/Small Firm Issues
* The AICPA and the Financial Accounting Standards Board are seeking comments on a proposal that explores the concept of financial reporting standards for privately held companies. The proposal outlines process changes in how the FASB sets standards and describes a new committee that would review existing and prospective GAAP for relevance to non-issuers. In the end, the goal is to provide the information that the country's 20 million private companies and their financial statement users need, while reducing costs where possible and minimizing unnecessary burdens on CPAs. The proposal may be found at www.pcfr.org. Comments are due Aug. 15.
* How can members learn which issues are the most challenging for other practitioners? According to the "PCPS Top Issues in Practice Management" survey, finding and retaining qualified staff once again was foremost on the minds of firm leaders. PCPS publishes one list of key issues for all firms, and then breaks down the data to highlight concerns for practices of various sizes, from small practitioners to much larger firms. Practitioners can use the information to benchmark general trends against their own experiences. In addition, the AICPA uses the survey results to customize programs that meet the needs of firms of all sizes. To learn more, go to www.aicpa.org/pcps.
* As part of its efforts to help members grapple with staffing and succession issues, the Institute has created a series of resources specially tailored for members in smaller firms. At the upcoming Emerging Partners Training Forum (www.northstarconferences.com/conferences.asp?code=67EP T01), for example, promising future leaders will be able to learn specifically what makes a CPA firm leader successful. In addition, the white paper, Best Practices in Recruiting and Retaining Talented Staff (http://pcps.aicpa.org/Resources/ Staffing/Recruiting+and+Retention/Best+Practices+in+Recru iting+and+Retaining+Talented+Staff.htm), provides further practical insights into those issues. For firms looking for guidance on succession, PCPS has created a variety of resources, including a book, white paper and Web casts (http://pcps.aicpa.org/Resources/Succession+Planning/Succe ssion+Planning+Product+Overview.htm).
* Small firms have a lot going for them, and the AICPA intends to help them maximize their benefits. A new PCPS initiative is based on the principle that despite their modest size, small firms have considerable advantages that they can leverage to give them a competitive edge in recruiting, retention, client service and other vital business areas. Small firms will gain invaluable insights and support from PCPS's many new efforts, including its rededication to initiatives and publications that highlight the Small Advantage. Among them are a new logo that can help members quickly locate related resources and an article describing the initiative in the July Journal Accountancy.
Speaking Up for the Public Interest
* A special task force of the AICPA Board of Directors has called for revising the peer review reporting model to be shorter and more understandable and usable. The AICPA task force was formed to evaluate the results of an online poll conducted as a part of the AICPA's peer review transparency member awareness initiative and recommend enhancements to the profession's peer review programs. Although the primary purpose of the poll was to assess members' desire to provide greater transparency of peer review results, many of the comments from respondents, regardless of their attitudes toward greater transparency, expressed the need for clarification of or revisions to various aspects of the AICPA peer review programs. As a result of its evaluation and obtaining input from various users of peer review information, the task force developed its report (www.aicpa.org/transparency/ index.htm).
* As part of Institute efforts to enhance the usefulness and relevancy of financial reporting, AICPA President and CEO Barry Melancon testified before Congress in Mar. on the need for a new financial reporting model that would enable investors to make decisions based on current rather than historical data. Melancon told a House subcommittee that, coupled with enabling technologies such as XBRL, enhanced financial reporting could provide investors with an improved range of more timely, accessible information. To learn more, go to www.aicpa.org/download/news/2006/AICPA_House_ Capital_Markets_Subcommittee_Testimony_3_29_06.pdf. In a recent step, a strategic merger of the support for the Institute's Enhanced Business Reporting and XBRL initiatives will improve coordination between the two efforts.
* Ongoing updates in professional standards that reflect the changing business environment make it possible for CPAs to continue to offer valuable financial information to the public and their clients. To that end, the new "Risk Assessment Standards," a suite of eight statements on auditing standards, provide enhanced guidance concerning the auditor's assessment of the risks of material misstatement in private company financial statements. The standards also focus on design and performance of audit procedures that address assessed risks; audit risk and materiality; planning and supervision; and audit evidence. More information on the standards can be found at www.aicpa.org/risk. Elsewhere, to update and clarify guidance in another area, the Auditing Standards Board issued SAS No. 112, Communicating Internal Control Related Matters Identified in an Audit, which replaces SAS No. 60, Communication of Internal Control Related Matters Noted in an Audit. More information can be found at www.aicpa.org/members/div/auditstd/ index.htm.
* The CPA profession has always been proud of its work to help those in need. As part of the profession's ongoing commitment to public service in an emergency, the AICPA teamed with the Internal Revenue Service to offer free assistance to taxpayers affected by Hurricanes Katrina, Rita and Wilma. In recognition of hurricane-related and other efforts, the IRS gave the Institute a citation of excellence in serving the small business community. In response to Katrina, the AICPA last year created the Disaster Recovery Resource Center, a central, online resource that included a news center, business and personal financial recovery resources, tax tools and information and related resources. To help individual CPAs and firms in the affected areas, PCPS, with the assistance of the AICPA audit quality centers and other membership sections, created a firm volunteer center that matched CPAs in need with firms willing to offer assistance, including office space, technology or even temporary assignments. In addition, the AICPA worked with the IRS and with volunteers from Ernst & Young and the Mississippi State Society of CPAs to assist VITA clinics in the Gulf Coast prepare complex tax returns for low-income taxpayers who had casualty losses. Over 200 families were helped by CPA pro-bono volunteers. Other firms and individuals were also active in providing extensive pro-bono services in the region.
On the technical side, the AICPA Tax Section updated its Disaster Area Practice Guide to reflect recent guidance and legislation for victims of Hurricanes Katrina, Rita and Wilma. Technical guidance issued for members grappling with disaster-related issues included practice aids on the auditor's responsibilities when disaster affects an audit client's operations after field work is completed, accounting and disclosures from natural disasters, and the destruction of documents.
* Several initiatives provided members with the information and resources they need to promote financial literacy and the profession's commitment to it. A poll conducted for the AICPA by Harris Interactive under the auspices of the 360 Degrees of Financial Literacy program examined the gap between Americans' expectations for retirement and the related financial realities, while another study found that young adults have grave doubts about Social Security and pensions. Focusing on children, the AICPA's Academic and Career Development Team sponsored a special issue of the Weekly Reader for fourth graders that spotlighted the value of savings. The AICPA and Weekly Reader Research also conducted a survey on the financial attitudes of "tweenagers" between the ages of 9 and 12 to see if they were aware of the importance of saving money.
In a sign of its value and importance, the award-winning 360 Degrees of Financial Literacy consumer Web site (www.360financialliteracy.org) has received 12 million hits to date and 300 million media impressions.
Providing Professional Tools and Guidance
* The AICPA-hosted XBRL initiative continues to gain momentum. The Securities and Exchange Commission, for example, has begun a program offering incentives to public companies that commit to regular participation in the XBRL Voluntary Filing Program. The Federal Financial Institutions Examination Council and its member agencies launched their XBRL-based Call Report program last Oct. and report quantifiable improvement in the accuracy of reported information and increased efficiency in processing the submitted reports. The FFIEC white paper (www.xbrl.org/us/us/FFIEC% 20White%20Paper%2002Feb2006.pdf) says the use of XBRL in call reports "plays a significant role in enabling technology throughout the supply chain, delivering significant benefits and value to each stakeholder." More information about XBRL is available at www.xbrl.org/us.
* Guidance to assist plan sponsors and other stakeholders in hiring qualified auditors for their employee benefit plans is provided in the Employee Benefit Plan Audit Quality Center's checklist, Obtaining Quality Employee Benefit Plan Audit Services: The Request for Proposal and Auditor Evaluation Process (http://ebpaqc.aicpa.org/Resources/Tools+and+Aids/ RFP+and+Auditor+Evaluation+Process+Checklist+for+Plan+ Sponsors.htm).
* To help practitioners identify and evaluate and report on the effectiveness of internal control over financial reporting, a proposed standard was issued. The revision of AT 501, Reporting on an Entity's Internal Control Over Financial Reporting, also reflects definitions in PCAOB Auditing Standard No. 2 (www.aicpa.org/members/div/auditstd/ Internal_Control_Financial_Reporting.htm). This standard does not require an internal control examination; rather, it sets forth the standard if a CPA is engaged by an entity to examine the effectiveness of internal control over financial reporting.
* Regulations under Treasury Department Circular 230 apply to many AICPA members, prompting the Tax Team to undertake numerous member educational and informational initiatives. (More information can be found at http://tax.aicpa.org/Resources/Professional+Standards+and +Ethics/Treasury+Department+Circular+No.+230/.) The team also submitted two sets of comments to the Internal Revenue Service and Treasury on the proposed and final regulations.
* In a further effort to help members combat fraud, the AICPA along with the Association of Certified Fraud Examiners co founded the Institute for Fraud Prevention, an organization formed to fund academic research on fraud and to be a repository of fraud information. Partners in the IFP include accounting firm Grant Thornton, as well as the Government Accountability Office, Federal Bureau of Investigation, U.S. Postal Service Inspectors, Better Business Bureau and others. IFP is conducting research projects on financial statement fraud, focusing on management override of controls; procurement fraud; and identity theft. Members will receive updates on the results of these projects to enhance their knowledge of the issues.
* Demonstrating its popularity among and value to CPA financial planners, the Personal Financial Planning Specialist credential surpassed a key target requirement set by AICPA Council ahead of schedule. There are now almost 3,700 CPAs who hold the PFS designation. The AICPA will continue to build awareness of PFS holders in the marketplace through media outreach and other efforts, and position CPA-PFS holders as the most trusted advisers. For further information about the PFS, visit www.aicpa.org/pfp.
* CPAs continuously seek timely information and tools to help them expand their practices. To do just that, the Institute has arranged for members of the Business Valuation and Forensic and Litigation Services Membership Section to have discounted access to the Daubert Tracker online database to help them provide expert witness testimony. For more information, go to www.aicpa.org/bvfls.
* In another step to broaden members' opportunities, CPAs holding the Certified Information Systems Auditor designation are now automatically eligible to receive the AICPA's Certified Information Technology Professional credential if they are Institute members. The arrangement makes it possible for CPAs to hold a complementary set of credentials that demonstrates their broad technology expertise to employers and clients. More information can be found at www.aicpa.org/infotech.
* The Institute's audit quality centers continue to offer member firms the tools they need to conduct high-quality effective audits, including providing them with timely updates and comprehensive technical and educational information. And their enrollment numbers demonstrate their value. The Employee Benefit Plan Audit Quality Center (www.aicpa.org/ebpaqc or 202/434-9253) has more than 1,140 member firms, representing over 75% of the ERISA audits performed. The Governmental Audit Quality Center (www.aicpa.org/gaqc or 202/434-9272), which covers audits of not-for-profits, state and local governments and certain for-profit entities receiving governmental assistance, has over 530 member firms. Those firms audit approximately 80% of the total federal expenditures covered in single audits performed by CPA firms.
* The AICPA Library Service at the University of Mississippi has created a new Web-based resource to offer members greater access to research resources. As part of its mission to provide access to its accounting collections, the Library Service has begun a digitizing program called the Digital Accounting Collection (DAC). Over 290 noncurrent exposure drafts published by the AICPA from 1977 through 2005 have been posted, along with other current and historical materials. The entire DAC database, which is growing daily, is searchable by keyword, author and/or title. It can be accessed through the "AICPA Library" link from the AICPA home page or by going directly to www.olemiss.edu/depts/general_library/aicpa/.
Recruiting and Retaining the Best
* To gather valuable insights for members into the attitudes of the most promising young professionals, PCPS recently updated its landmark 2000 "Top Talent Study," which examines talented young staff members' hopes for growth opportunities, job benefits and firm culture, and how these elements affect their decisions to join or stay with a firm. PCPS will use the results to create programs that will benefit all CPAs. A brochure to be released this fall will describe the survey results and discuss best practices used by firms that have been particularly successful in attracting and retaining top professionals.
* Excitement surrounds the expected launch of the Young CPA Network, which will offer resources tailored to CPAs with less than seven years' experience, including a newsletter and Web site. It will help them better understand the development opportunities available to them and provide the tools they need to become the profession's next generation of leaders.
* Research into work/life needs for men and women and into women's professional advancement provides an important tool to be used in firms' ongoing efforts to attract and retain the best and the brightest. A recent study, "A Decade of Changes in the Accounting Profession: Workforce Trends and Human Capital Practices'--conducted under the aegis of the AICPA Work/Life and Women's Initiatives Executive Committee--explored a wide range of related topics, including career advancement, turnover and mentoring. The report can be obtained at www.aicpa.org/worklife. In addition, the WLWIEC has released a new DVD, Staff Retention: The New Face of the CPA Profession. Top experts in the field of professional staffing and leaders of the CPA profession provide insight about workforce shortages and what it will take to attract and retain the best and brightest workers in the future. Free copies are available by e-mailing firstname.lastname@example.org. For solutions to practical problems, the AICPA is offering a robust online toolkit that is ready for use by professional service firms and corporations. FlexWise[TM], developed by Rupert and Company, is a comprehensive set of online flexibility tools that include policy and procedure guidelines, orientation training and best practice training in telecommuting, job sharing and compressed schedules. For more information on FlexWise[TM], visit www.CPA2biz.com/flexwise or e-mail email@example.com.
* The Turnaround Game, a new online business simulation developed by the AICPA that offers high school and college students a taste of what it is like to run a company, won the Best Non-Profit Interactive Application in the Internet Advertising Competition Awards. The game, which allows players to develop a winning proposal to save a failing record company, can be found at www.turnaroundgame.com. It is a part of the institute's comprehensive, multifaceted Start Here. Go Places. CPA student recruitment campaign, which is currently in its fifth year.
Promoting Members' Expertise
* There were many successful efforts to promote the profession as resources to the media this year, particularly in the tax area, to showcase CPAs' expertise. Tom Ochsenschlager, AICPA Vice-President--Taxation, appeared on numerous news programs giving the profession's perspectives on hot-button issues such as the alternative minimum tax and other tax-related topics. He made appearances on the three major networks' evening news programs as well as on Fox News, and he or the Institute were used as sources for stories in the Wall Street Journal, BusinessWeek, USA Today, the Washington Post, Marketwatch.com, the Associated Press, Bloomberg, the Boston Globe, the Miami Herald, and numerous regional papers. The tax and accounting trade press also extensively covered the AICPA's technical comments to regulators and legislators. In addition, an Institute public interest press release on 10 common tax mistakes received wide media attention.
* The AICPA's ongoing media relations efforts keep the national and business press informed about the profession and related issues, as well as the outstanding work of CPAs. In a recent quarter, for example, the AICPA was quoted in more than 100 media outlets, including national and regional publications, radio and television, Web sites and business and accounting trades. The AICPA's new Online Media Center (www.aiepa.org/MediaCenter/homepage.htm), designed to educate and update the press about the AICPA's mission, programs, initiatives and leadership, as well as issues affecting the CPA profession, is proving popular with the media and has drawn praise from users. The many resources include an electronic press kit, issue briefs and research reports.
* Leading personal finance author Jane Bryant Quinn spotlighted the Personal Financial Specialist credential in her new book and Newsweek column. The PFS credential was also recommended in the Wall Street Journal's personal finance section as well as other prominent publications, including the Washington Post, Reuters, Dow Jones, CFO Magazine, Kiplinger's, the Chicago Tribune, Miami Herald and Charlotte Observen Such exposure goes a long way in helping to increase awareness of the credential and demonstrate the knowledge and skill of those who have earned it.
Advocating Legislative/Regulatory Reform
* CPAs who practice across state lines will benefit from the work of the new Special Committee on Mobility. The committee will identify unnecessary burdens and requirements that make it difficult for CPAs to practice across state lines and that do not help protect the public. It plans to provide resources for states addressing mobility provisions in their own laws. More information can be found at www.aicpa.org/download/news/2006/AICPA_Forms_Special_Committee.pdf. The Institute also earlier this year wrote to the California State Board of Accountancy (www.aicpa.org/download/news/2006 /AICPA Practice_Privilege_CA_Response.pdf) expression concern about potentially onerous new practice private requirements for out-of-state CPAs. More information on licensing can be found at www.aicpa.org/statelicensing, including the free AICPA State Mobility Licensing Guide and links to individual state information.
* To reinforce the importance of audit excellence, the AICPA made comments that were reflected in the Federal Financial Institutions Examination Council's Final Advisory on the use of limitation of liability provisions in external audit engagement letters. The advisory can be found at www.ots.treas.gov/docs/4/480217.pdf.
* Tax reform, in terms of both fairness and simplicity, is an important concern for members and their clients. To serve as a key resource in the ensuing debate, the Institute issued Understanding Tax Reform: A Guide to 21st Century Alternatives. This report, which can be found at www.aicpa.org/taxreform, offers an unbiased review of proposals and discusses the issues and alternatives.
* To provide the profession's perspective, the chair of the AICPA Tax Executive Committee testified before Congress about Internal Revenue Service performance during the recent tax season and on the value of tax simplification. More information can be found at www.aicpa.org/download/news/200 AICPA_Testimony on 2006_Tax_Filing_Season.pdf. On the whole, the profession thought this past tax season went smoothly.
* After comments from the AICPA about the potential burden imposed on tax practitioners, the Internal Revenue Service released a statement clarifying the Form 1040, Schedule D instructions involving capital gains transaction reporting. This advocacy made tax compliance easier for taxpayers and preparers alike.
* Speaking on behalf of S corporations, the AICPA recommended to the Senate Finance Committee provisions to be included in the S Corporation Modernization Act of 2006 that were designed to help the small businesses that frequently use this form of organization to remain competitive. The AICPA provided nine specific recommendations on Subchapter S reform.
Where to Turn for Member Services
The AICPA Member Service Center offers assistance with updating mail and e-mail addresses, revising membership information paying dues, registering for conferences, Web support (including www.cpa2biz.com), placing/inquiring about purchases or subscriptions, and general membership or service inquiries,
[telephone] 888/777-7077 (9:00 a.m.-6:00 p.m., ET)
[telephone] Feedback on service, 201/938-3070
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|Date:||Jul 1, 2006|
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