The 205th Pennsylvania General Assembly was seated Jan. 5, 2021. Swearing-in day, typically a festive affair, had a decidedly different feel, and not just because of restrictions brought on by the pandemic.

The AICPA Auditing Standards Board (ASB) issued a new opinion and reporting standard for employee benefit plan audits. SAS No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans, addresses the auditor’s responsibilities to form an opinion on the financial statements in addition to the form and content of the report issued as a result of an audit of the financial statements.

Factors such as specialized core competencies, expanded CPA skill sets, and advancing technology are bringing significant changes to the CPA Exam. According to the AICPA, the percentage of nonaccounting graduate degree hires in public accounting firms increased from 20% in 2016 to 31% in 2018. This reflects how the evolving business environment is affecting the profession and the CPA licensure model.

Value-added taxes, which have gained wide acceptance throughout the world, have many complexities for U.S. businesses that may be unfamiliar with this type of levy. Understanding key aspects of the tax can help to boost the bottom line and mitigate or eliminate potential liabilities.

The Governmental Accounting Standards Board’s (GASB) Financial Reporting Model Improvements exposure draft, issued in June 2020, proposed new requirements for key components of the Comprehensive Annual Financial Report (CAFR). The new model eliminates the modified accrual basis of accounting used by government funds and replaces it with what is called the short-term financial resources measurement focus and accrual basis.

The financial plan roadmap typically covers strategies for income planning, wealth management, tax minimization, legacy planning, and more. Leveraging all these capabilities requires a “big-picture perspective.” For many CPA firms, particularly smaller firms, integrating the services of other professionals will enhance and support this holistic approach.

The AICPA’s Private Companies Practice Section consistently finds that the recruitment of qualified staff is a top concern for CPA firms. In its 2019 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits, the AICPA reports a decline in CPA candidates, yet the U.S. Bureau of Labor Statistics projects employment for accountants and auditors to grow by 6% from 2018 to 2028. These opposing trends have important implications for the public and profession, especially considering the high number of CPAs expected to retire soon.

Financial services are critical to the long-term viability of an organization, yet the global pandemic and the resulting economic uncertainty presents a challenge even to the most well-established banking relationships. Over the past year, lenders and borrowers contended with the introduction, and regulatory evolution, of new federal programs – such as the Paycheck Protection Program – and the frustrations of maintaining operations amidst public health regulations. Here are a few tips for fostering productive communications with your lender during difficult times and beyond.

Pressures are put on CPAs from many sources. An unfortunately common source is from banks and other lenders pressuring them to provide assurance regarding a client’s financial strength. Many CPAs have shared their frustrations regarding veiled threats from aggressive brokers and lenders, alleging that the CPAs’ clients will not qualify for a loan without receiving a letter supporting the clients’ loan qualifications. Some brokers even suggest that the client should seek a “more cooperative” CPA.

Owners of investment property are acutely aware of the double-edged sword that awaits a sale. The owners will finally be able to realize the benefit from years of hard work maintaining the appreciated property, but they also could face a substantial tax liability on the sale of the investment property. For taxpayers who wish to continue holding an investment rather than cashing out, Internal Revenue Code (IRC) Section 1031 provides a strategy that allows for tax deferral whereby the taxpayer exchanges the investment property for like-kind property. There have been some major changes to Section 1031 in recent years. Notably, the Tax Cuts and Jobs Act (TCJA) made only exchanges of real property eligible for Section 1031 exchanges, and the Treasury Regulations that were issued in November 2020 provide a revised definition of real property for purposes of Section 1031. However, understand that President Joe Biden’s tax plan, mentioned during the 2020 election, referenced eliminating tax breaks for real estate investors; thus, Section 1031 could be eliminated as a strategy in the future

The AICPA Auditing Standards Board (ASB) issued SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements in May 2019. It was originally effective for audits of financial statements for periods ending on or after Dec. 15, 2020, but implementation was delayed for one year until Dec. 15, 2021.

The Tax Cuts and Jobs Act of 2017 (TCJA) reformed many aspects of the Internal Revenue Code of 1986, but the $10,000 state and local tax deduction limitation (SALT cap) has remained one of its more controversial aspects. The SALT cap prevents many individuals from being able to fully deduct their state and local income and property taxes on their federal individual income tax returns. This is further exacerbated for individuals filing in multiple states through their ownership interests in partnerships, S corporations, and certain limited liability companies.

The onset and spread of COVID-19 taught us that the ability to adapt and adjust has never been more critical. For college educators, the virus created what at times seemed like insurmountable obstacles and uncertainties. Would courses resume in person, move to virtual, or be a combination of both? If virtual or hybrid, how would faculty ensure that students are learning? What modalities could be implemented to help the transition process? How did COVID-19 impact how students would complete requirements such as internships or externships?

To meet the rapidly changing demands of the accounting profession, the next generation of CPAs must have a digitally focused skill set and a strong portfolio of soft skills in communication, critical thinking, and collaboration, among others. It is critical for organizations of all sizes to engage in upskilling initiatives to ensure CPAs continue to thrive in the future. Accounting programs at colleges and universities can also play an important role by integrating essential digital competencies and soft skills into the curriculum.

In this issue: Pennsylvania House Budget Hearings; PICPA Testifies to Lawmakers on Tax Proposals; PICPA Committee Reviewing Tax Legislation; and more.

In this issue: Pa. Lawmakers, Revenue Officials Spar Over Tax Proposals; PICPA to Testify Before Pennsylvania House Policy Committee; Bill Proposed to Change Pa. Corporate Tax Return Date; and more.

In this issue: Connect with Pa. Lawmakers at PICPA Advocacy Updates; Pennsylvania Budget Hearings Set to Get Underway; Pa. Hospitality Relief Funding Ready for Distribution; and more.

In this issue: Pennsylvania PPP Loan Forgiveness Heads to Governor; Wolf's 2021-2022 Pa. Spending Plan; Boockvar Out at Pennsylvania Department of State; and more.

In this issue: COVID-Relief Package Approved by Pa. Senate; Wolf to Outline Pennsylvania Legislative, Budget Priorities; Dunbar Joins Pa. House Republican Leadership Team; and more.

In this issue: Bill Exempts PPP Loans from Pennsylvania Tax; IFO Provides Five-Year Pa. Economic Outlook; Pennsylvania Row Officers Sworn In; and more.