CPA Now Blog

Artificial intelligence (AI) is becoming more common in the CPA’s work life. It often shows itself in predictive, suggestive, and consultative tools that can improve your work product. This blog focuses on some of the AI in Microsoft Excel and how it offers opportunities for productivity gains.

Finding and keeping good people is always a top concern for CPA firms, but the last year and a half has taken a toll on many small practices. Consider these three steps firms can take moving forward to tackle staffing issues in a way that will make it easier to recruit and retain talented people.

Clients today have the potential to engage in transactions all over the world, especially via the internet. Because of easy access to the global marketplace, CPAs should be in tune with the realities of the Foreign Corrupt Practices Act when conducting audits, reviews, and even bookkeeping for clients doing business internationally. Insist on an appropriate level of substantiation for transactions and obtain additional documentation for transactions that do not make sense.

Act 116 of 2020 permits boards and commissions under the Bureau of Professional and Occupational Affairs to allow licensees who earn continuing education credits in excess of the amount required for license renewal to carry over excess credits and apply them to the next biennial renewal period. Unfortunately that does not include CPAs.

Sometimes hiring is crazy busy; sometimes the pace is slower and you can work with the team you have. Regardless, your company needs a plan of attack to bring talent into the organization and maintain a reasonable pace of hiring. There are unexpected highs and lows in recruiting, and it is hard to turn the hiring engines back on to full speed at a moment's notice.

Cryptocurrency transactions have become an important IRS priority. For example, it added a question to page 1 of Form 1040: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” In addition, through “John Doe” summonses, the IRS is taking significant proactive measures to collect cryptocurrency trading information.

According to an American Institute of Certified Public Accountants’ recent Business and Industry Economic Outlook Survey, 91% of firm leaders are participating in a mix of on-site and off-site operations, and they plan to continue to do so into 2022. But a smart hybrid model is about so much more than simply employees having some flexibility in work location.

Commercial co-ventures, also known as charitable sales promotions, are an increasingly popular form of cause marketing. One common arrangement is when a portion of every retail sale (for a contractually specified time) is donated to a not-for-profit. For many nonprofits, a well-planned promotion such as this can provide substantial income and increased visibility.

Jennifer L. Cryder, PICPA’s executive vice president and chief operating officer, has unanimously been selected as the PICPA’s new CEO and executive director by its Board of Directors. The selection marks the first time in PICPA’s 125-year history that a woman will helm the association.

The uncertain economic environment during the COVID-19 pandemic has called into question many of the inputs historically used by business valuation practitioners. The pandemic has enhanced the focus on risks associated with cash flow realization, factors affecting cost of capital (discount rate), and growth. The legwork for identifying the “known or knowable” as of the valuation date has increased as more sources of information, aggregate views, and sensitivity analysis may be required to arrive at an unbiased conclusion.

When a CPA and financial adviser work together, their mutual client benefits from the expertise of both. Because of the regular interactions CPAs and financial advisers have with their clients, they may be in the best position to recognize estate planning opportunities or other actions that can help clients carry out their wealth transfer intent.

For those in the accounting profession to thrive and not just survive, a switch from a compliance mindset (helping clients comply with tax codes) to an advisory role may be necessary. As trusted advisers, CPAs can demonstrate superior tax expertise as they help clients accomplish their strategic business goals. To help transition into a greater advisory role, consider bringing on offshore talent for time-consuming routine work to free up senior staff to focus on high-value, client-facing advisory efforts.

A CPA firm looking toward an external succession via merger wants to know what they should expect to be paid for the firm. Conversely, a firm looking to acquire an accounting practice wants an estimation of what it will pay in today’s M&A market. For both players, firm value hinges on several factors.

The plan sponsors of employee benefit programs have a fiduciary responsibility to those plans and the participants. With an ever-changing regulatory landscape it can be tough to keep up with the rules. Three areas in particular -- late elective deferrals, plan terminations vs. plan mergers, and fidelity bonds vs. fiduciary liability insurance -- often confuse plan sponsors and could be traps that result in errors.

The state and local tax considerations of a remote workforce can be vast, extending to sales and use taxes, corporate income taxes, withholding taxes, and more. During the pandemic, states took varying approaches to tax nexus: some waived general nexus provisions, others overtly stated that they were not changing their positions, while others remained silent. Of the states that issued nexus waivers, such as Pennsylvania, those waivers were never intended to be indefinite. In fact, Pennsylvania’s nexus waiver ended June 30, 2021. So, as we stand, remote workers in Pennsylvania will now trigger nexus for state tax purposes.

The elimination of the lifetime “stretch” beneficiary IRA option has been much more than a minor inconvenience. The change calls for more surgical planning around a beneficiary’s cash flow needs and their tax bracket.

This year, we experienced a political unicorn in Harrisburg. Not only were the 2021-2022 state budget negotiations relatively painless, but also everything was voted on in an expedient fashion and the budget was wrapped well before the start of the new fiscal year on July 1. Adding to the overall ease of the process – and probably another political unicorn – was the state’s revenue surplus and unused funds received from the federal government for COVID relief.

Auditors, internal and those in public practice, had to find ways during the pandemic to complete their work without leaving home. They accomplished more than expected despite the limitations. In fact, because their effectiveness in providing assurance was better than expected, the savings have not gone unnoticed. Though there may be a temptation to embrace remote auditing, we shouldn’t. There is no substitute for being there.

A CFO should be an adviser, counselor, and confidant to the CEO – a consigliere or chief of staff. What are the attributes that make CFOs good advisers? Find out as this blog discusses those attributes as highlighted in Richard Hytner's Consiglieri: Leading from the Shadows and Chris Whipple's The Gatekeepers: How the White House Chiefs of Staff Define Every Presidency.

The Employee Retention Tax Credit (ERTC) was established to help businesses retain employees during the massive economic downturn of the COVID-19 pandemic. The Consolidated Appropriations Act 2021 and the American Rescue Plan Act extended ERTC deadlines, making it available for businesses to claim until Dec. 31, 2021.