• High Cybersecurity Risks Demand a Proactive Defense

    Cybercrime and data breaches are now major threats for CPA firms and their leaders. Since 2018, the incidences of breaches that featured ransomware or extortion increased more than 40%. Globally, cybersecurity breaches sparked business losses of $1.5 trillion per year and hits to revenue of up to 25%.
  • Tax Pitfalls Associated with Closely Held Businesses

    Most tax practitioners are familiar with the fundamentals of structuring closely held businesses, but important structuring considerations are sometimes overlooked. This column highlights some pitfalls that might not always come to the attention of practitioners structuring business arrangements.
  • State Income Tax Implications from Federal R&D Law

    Effective for tax years beginning after Dec. 31, 2021, research and experimental (also known as research and development) expenditures are not fully tax deductible in the year incurred. Under the 2017 Tax Cuts and Jobs Act (TCJA), taxpayers who incur research and experimental (R&E) expenditures and expense these costs under generally accepted accounting principles (GAAP) are required to capitalize and amortize these expenditures.
  • IAASB’s Plan for Audits of Less Complex Entities

    The International Auditing and Assurance Board (IAASB) issued the exposure draft Proposed International Standard on Auditing of Financial Statements of Less Complex Entities to address the challenges related to less complex entities (LCEs) and develop a separate standard for audits of LCE financial statements.
  • Filtering for Clarity: PCC’s Efforts to Clean Financial Reporting Requirements for Private Companies

    The Financial Accounting Foundation (FAF) established the Private Company Council (PCC) in 2012 to improve the process of setting accounting standards for private companies. The principal assertion underlying the foundation of the PCC was that users of private company financial statements are significantly different than users of public company financial statements, therefore the accounting language should be tailored accordingly. With 10 years under its belt, now is a good time to review what the PCC has been doing and where it should be going.
  • COVID-Era Evolution of Elder Fraud: Know the Red Flags

    According to the U.S. Census Bureau, the 65-and-older population has grown rapidly since 2010, and, according to forecasts, by 2040 the older population in the United States will reach almost 81 million. Subsequently, elder fraud and abuse will increase with the growing demographic. It’s up to all of us to try and stem the tide of exploitation.
  • The Many Hats of the Small-Business CFO

    It could be said that being a small-business CFO is the greatest job in the world – at least it is a claim that I often make! Do you have what it takes to be a small-business CFO? Do you look good in hats? This feature provides thoughts on successfully navigating the transition to a small business, including examples of the attributes you’ll likely need and the many hats you’ll likely wear as a small-business CFO.
  • Pennsylvania’s General Election: Big Deal Statewide and Nationally

    The race to succeed Democratic Gov. Tom Wolf, who will leave office in January 2023 after serving the maximum of two four-year terms, is dominating the 2022 election cycle in Pennsylvania. With Pennsylvania’s unique position as a battleground state, this year’s election has caught national attention too.
  • Disposing of IRC 197 Intangibles: It’s All or Nothing

    In a column published in last summer’s Pennsylvania CPA Journal, we discussed why we anticipated seeing more asset deals among mergers and acquisitions as a result of certain changes brought on by the Tax Cuts and Jobs Act of 2017. This includes deemed asset purchases via an Internal Revenue Code Section 338(h)(10) election. Taxpayers would receive the benefit of getting a stepped-up basis in the assets acquired and resulting depreciation (including immediate expensing via bonus depreciation) and amortization deductions to follow.
  • Using an LLC for Ownership of a Vacation Home

    I am frequently asked if a limited liability company (LLC) should be used to purchase a second residence. It is often an excellent choice for clients. There are many benefits of owning a residence in the name of an LLC.
  • Consider Section 962 to Mitigate GILTI Inclusions

    Individuals from the United States who are shareholders (including estates and trusts) of controlled foreign corporations (CFCs) face a difficult path in how to structure these investments in a tax-effective manner. The Tax Cuts and Jobs Act of 2017 (TCJA) treats U.S. corporate shareholders more favorably than U.S. individuals with regard to investments in CFCs. The TCJA has a new global intangible low-taxed income (GILTI) inclusion as part of the U.S. Subpart F anti-deferral rules that expands inclusions from CFCs to individual shareholders who are federally taxed at up to 37%. It also creates a double taxation event because individuals are not entitled to a credit for underlying foreign taxes paid in the income included.
  • PICPA’s Pivotal Role in Addressing Federal Tax Issues

    Because the PICPA is a state-based organization, the government relations team keeps Pennsylvania and local tax policy issues at the core of our efforts. However, when the COVID-19 pandemic ravaged the world economy, attention to federal issues took on a new urgency
  • The Convertible Debt Interest Disallowance Dilemma

    Many companies – and almost all start-up companies – heavily rely on some form of financing to keep their businesses on track to meet goals and objectives. In fact, we have seen a surge recently in the use of convertible debt instruments as a way to accomplish this, likely due to continued low interest rates (despite some recent inflation) and volatility within the market.
  • How to Prepare a Business for Strategic Sale

    Business successions are generally accomplished in one of three ways: transition to next-generation family members, sale to key management or employees, or sale to an outside party. There are many considerations, both financial and nonfinancial, when deciding on a transfer of ownership. But when maximizing the net proceeds from the sale is a priority and ensuring that the majority of the proceeds are up-front cash, a sale to an outside party is the most viable option.
  • Solicitor Agreements Are Key to CPA, Wealth Adviser Team Ups

    Certainly, CPA firms can offer wealth advisory services, but many choose not to based on compliance complexities, operational and employment costs, and parameters around maintaining independence. So, for those CPAs who opt to work with a wealth adviser on client matters, a solicitor agreement may be needed.
  • Has the Great Resignation Altered Your Retention Plans Yet?

    As the world health crisis started to unfold in 2020, financial service firms observed the growing desolation among our clients watchfully. As part of the aftermath, the way people work has been transformed. In 2022, there is now a better view of what happened and what lies ahead. The economic storm, it seems, washed away a fair number of workers with the Great Resignation that followed the health crisis. Now employers are scrambling to evaluate their methods of recruitment and retention.
  • Your Greatest Malpractice Risks and How to Mitigate Them

    Many CPAs don’t realize how everyday tasks can easily expose them to malpractice litigation. Think about it. CPAs work hard at collecting client financial information, analyzing it to answer questions, and preparing government filings and crafting statements. This is complicated, time-intensive work that must accurately hit the mark. When it doesn’t, malpractice lawsuits can ensue.
  • The Finance Department: Make It a Place Where Everybody Knows Your Name

    What if colleagues shouted your name every time you entered the office? You’d probably feel a lot like Norm Peterson in the classic TV comedy series Cheers. Having rewatched the show recently, I began to see parallels with the functionality of a modern finance or accounting department.
  • Protecting Trade Secrets in a Remote Work Environment

    As more companies offer hybrid or fully remote work environments, the effort to protect trade secrets will grow as a concern. Since March 2020, legions of employees have been working from home with nearly unfettered access to company information. Some of that information may be regarded as trade secrets. Much has been written about the general cybersecurity threat remote work creates, but the exposure of trade secrets and other strategic company information poses an equally serious threat.
  • Identifying and Communicating Reportable Findings

    Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, requires auditors to communicate in writing reportable findings from audit procedures to management or those charged with governance on a timely basis. Prior to SAS 136, these items may have been communicated verbally or in a separate report discussing internal control related matters.
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