Tuesday, August 30, 2011

IRS Releases Summer 2011 Statistics of Income Bulletin

The U.S. Internal Revenue Service (IRS) has released the summer 2011 issue of the Statistics of Income Bulletin (SIB).

The agency’s Statistics of Income Division produces the SIB each quarter and includes updated data from various tax and information returns filed by U.S. taxpayers.
Among the details included in the bulletin, which can be found on the IRS website:
  • In tax year 2009, roughly 22.7 million individual income tax returns reported non-farm sole proprietorship activity, turning a reported profit of $244.8 billion
  • For tax year 2008, almost 67,000 foreign-controlled domestic corporations reported combined profits of $21.8 billion
  • For tax year 2008, corporations formed for the purpose of providing limited incentives to small exporters of U.S. products and certain services reported $36.5 billion in export gross receipts
  • For tax year 2007, 6,675 corporations claimed a total foreign tax credit of $86.5 billion against their U.S. income tax liability
  • Approximately 37,000 estate tax returns were filed for decedents who died in 2007 with total gross estates of $2 million or more, reporting a combined $224.8 billion in total assets

Thursday, August 25, 2011

VSCPA Student Feature: Accounting Students Speak Up

The Virginia Society of CPAs (VSCPA) caught up with six top Virginia accounting students and quizzed them about their college experience and career goals via email. Here’s a little information about our panel:



Katherine Covino, 21
The College of William & Mary
2011–2012 F. Wilson Brown Scholarship recipient
Hometown: Chantilly
Expected graduation date: Spring 2012
Major: Accounting

Adrienne Essiaw, 20
The College of William & Mary
2011–2012 VSCPA Minority Scholarship recipient
Hometown: Warrenton
Expected graduation date: Spring 2012
Major: Accounting with concentration in Finance

Kelly Miller, 21
Lynchburg College
2011–2012 VSCPA Undergraduate Scholarship recipient
Hometown: Charlottesville
Expected graduation date: Spring 2012
Major: Accounting

Becky Perron, 22
University of Virginia
2011–2012 Yount Hyde & Barbour Scholarship recipient
Hometown: Williamsburg
Expected graduation date: Winter 2011 (Master’s degree)
Major: M.S. in Accounting

Fatima Sbai, 34
George Mason University
2011–2012 VSCPA Minority Scholarship recipient
Hometown: Alexandria
Expected graduation date: Spring 2013
Major: Accounting

Why did you decide to pursue a degree in accounting?

Katherine Covino: I thought that accounting was one of the most valuable business majors that was offered. Accounting provides students with a background that enables them to work in any area of business, because as long as you understand what is happening in the background with the numbers, you can be successful in any business venture.

Adrienne Essiaw: I was always interested in business, and when I became a junior in high school, I enrolled in an introductory accounting class. A week into my first business class, I knew that I wanted to get into the field of accounting. I was intrigued by the fact that accounting represented the language of business and explained the overall processes of our everyday financial transactions. After doing some research and speaking to several advisers and faculty members, I discovered that the career options for an accountant were limitless.

Kelly Miller: I have always liked working with numbers. It is something I just understand. As I grew older, I enjoyed keeping my checkbook, helping people budget. I always knew I wanted to be in the business field as a career. I took a class in accounting my freshmen year in college and loved it. I cruised through it, I just got it. It was something I could see myself doing for the rest of my life.

Becky Perron: I had trouble finding one interest to pursue in college, but as soon as I began to take accounting classes, it clicked. After I completed my internship and realized that accounting was more than simply crunching numbers, I knew it was the right place to start for me.

Fatima Sbai: As a mother and an older student, I was looking for a career that will allow me to have a flexible schedule to spend time with my family. I also wanted a career challenging enough to keep me interested.

What are your career goals?

KC: In the short term, I hope to secure a full time job before graduation. My long term goal is to eventually become a partner at one of the Big Four accounting firms.

AE: After completing a master’s degree in accounting, I will prepare for the CPA Exam in hopes of becoming more qualified in the field of accounting. I would like to work for an accounting firm that offers various lines of services such as assurance, tax, and advisory. Given the opportunity to work at a firm that offers many services for their clients, I will be able to expand my knowledge in areas of accounting that may differ from what I would specialize in.

Ultimately, I hope to be able to give back to others in the form of guidance and mentoring. I would like to develop a mentoring program for young women who are interested in pursuing a career in business, but may not have the resources or individuals in their lives to make it possible. I believe that if someone is passionate about what they want to do, and have the right people around to encourage them to follow through with their goals, nothing is out of reach.

KM: I plan to become a CPA and CMA [Certified Management Accountant] after graduation. I want to start in the public sector of accounting and possibly move to the private side further in my future.

BP: I plan to start in public accounting with KPMG in January of 2012. Whether or not I stay in public accounting forever, I know that I want to make a difference in whatever I am doing. As long as I am being challenged and feel like my work is somehow helping others, I will be happy.

FS: My ultimate career goal is to have my own firm and expand it to North Africa. For my immediate goals, I am planning to work the first 10 years after graduation, for one of the Big Four as well as a regional firm. This will give me a broader view and the experience to advance in the accounting profession.

Do you plan to sit for the CPA Exam?

KC: Absolutely! I plan to sit for the CPA Exam next summer and hopefully pass all four sections the first time around. I think that many opportunities will come my way as a CPA.

AE: Yes, I plan to sit for the exam after I complete my Master’s of Accounting in spring 2013.

KM: Yes, without a doubt!

BP: Yes, I am currently spending my summer studying and sitting for the CPA Exam. There are no post-graduation vacations here! I took a Becker FastPass course at William & Mary and sat for my first section this past Friday [July 8]. The other three are scheduled periodically throughout the remainder of the summer.

FS: Absolutely. I plan to sit for the CPA Exam right after a master's degree in accounting.

What has been the biggest challenge in your accounting education?

KC: My biggest challenge was a research project that I participated in for one of my accounting classes this past spring. Accounting research projects are a lot of work and can be very frustrating at times, but they do produce some very important insights.

AE: The biggest challenge in my accounting education has been trying to come to terms with the fact that there is not always a correct answer.

You cannot approach accounting with the idea that there is only one way to do things. Accounting is somewhat subjective and is constantly changing. As an accounting student, I have been pushed by professors to provide the reasoning behind all of my conclusions, whether or not there was a correct answer. This skill will become very useful when trying to solve accounting problems that may be unique to specific users of financial information.

KM: The biggest challenge I've had in my accounting career has been pushing through the upper-level classes when things seem to get a little more challenging. As hard as it may be, sometimes it is always a very rewarding payoff.

BP: The McIntire [School of Commerce] business program puts a lot of emphasis on teamwork and we complete two semester-long team projects during our third year. Learning how to work with people with different work ethics, styles and motivations was the most challenging part of my undergraduate education. Nevertheless, I believe I learned a lot from that semester that I can take with me when I enter the workforce.

FS: My biggest challenge in my accounting education is the lack of time to network with potential employers. To build a network, it is essential for accounting students to stay visible by taking parts in career fairs and school activities outside the classroom. This is challenging for me because I commute to GMU. If I am not in class or at the library, I am most likely on the road or at home helping my daughter with her homework.

What are your proudest accomplishments?

KC: In the academic world, my proudest accomplishments include being selected as a VSCPA Scholarship winner and helping other William & Mary students revamp the Wayne F. Gibbs Accounting Society. Outside of academics, I am very pleased that I secured a summer internship and that I will be serving on the Executive Board for the Alan J. Bukzin Bone Marrow Drive.

AE: My proudest accomplishments are getting accepted into The College of William & Mary and being inducted into the International Honor Society, Beta Gamma Sigma. As a child, I knew that William & Mary was a historic institution with an outstanding academic reputation, but I never imagined I would be able to get into such a school. My academic journey was not always easy, as I struggled with English after having lived in Ghana for a few years as a child. I was able to overcome the language barrier with the unconditional love and support of my family.

When I was accepted into William & Mary, it was a blessing for my family and I. The opportunity to go onto college not only represented an opportunity to further my education, but also a chance to take advantage of the privilege of being able to receive an education which many are denied due to their life circumstances.

Throughout my life, and especially in college, my parents have been my main source of inspiration. Nothing makes me happier, than to know that my parents are proud of the person I have become. Getting inducted into the International Honor Society, Beta Gamma Sigma, is a great accomplishment that comes with the lifelong commitment of personal and professional excellence, as well as the advancement in the values of society. When I was inducted into Beta Gamma Sigma, I was not only humbled and honored to be a part of such a distinguished honor society, but happy to know that I had made my parents proud. I hope to contribute to Beta Gamma Sigma's mission by living a personal and professional life that reflects the values my parents have instilled in me and applying that to the advancement of society.

KM: My proudest accomplishments are: making the Dean's List four of my six semesters so far at LC, sticking with accounting when I started to second-guess myself when an intermediate became challenging, and being invited to the VSCPA's Leaders' Institute as a rising junior last summer at Virginia Tech and being selected to attend the Dixon Hughes Goodman Learn Grow Go Leadership Conference this summer!

BP: One of my proudest accomplishments is completing my first marathon during my third year at UVa. I have since completed another and am training for my third, but I will always remember crossing the finish line for the first time. It took a lot of time and effort during training to get up early and get the miles in. Another would be simply graduating from UVa. I still can't believe that the four years went by this fast. I am also looking forward to being able to say that one of my proudest accomplishments is becoming a CPA!

FS: My proudest accomplishment is getting my associate’s degree in business administration with a 4.0. I am also proud to say that I passed my first accounting class with a perfect score in all exams.

What advice would you offer prospective accounting students?

KC: I recommend sitting down and looking at all the CPA requirements before your senior year of college. It is important to decide how you want to obtain the 150-credit hour requirement. Do you want to attend a Master’s of Accounting program, or do you want to do a summer session? It is really up to the student to determine how they want to achieve the 150 credit hours, but it is often difficult to achieve if students wait until it is too late.

AE: If you have the slightest interest in accounting, I recommend taking an introductory course to see if this is something you may be interested in. Accounting is such a broad field that you can do so much with, and you may not realize that until you have invested the time to learn more about the field and the opportunities that are available for accounting majors. If accounting does not come easy for you, that does not mean you cannot be an accounting major. With the right attitude, work ethic and drive, you can accomplish anything in life. It is also important to surround yourself with mentors, friends and individuals who encourage you and push you to reach your greatest potential.

KM: The best advice I would give accounting students is read and do your homework. Also, stick with it ... if you enjoy it, even just a little, it is a wonderful profession to go into!

BP: Remember to work hard, do lots of practice problems, and don't forget the importance of people skills in accounting! The best thing I did during my internship was be helpful, hardworking and personable. Also ask questions if you don't understand. No one should be expected to know everything.

FS: My advice would be not be intimidated by accounting. Some students think that they have to be good at mathematics in order to succeed in accounting. While an analytical mindset is a plus, being great at calculus is not a prerequisite. I saw some students give up quickly. Students should take full advantage of any tutoring sessions that schools often provide for free.

Wednesday, August 24, 2011

Survey: 42 Percent of CFOs Say Employee Morale Has Improved

According to an Accountemps survey, 42 percent of chief financial officers (CFO) say that employee morale has improved at least somewhat in the last year.

The majority (53 percent) of more than 1,400 respondents said that there had been no change in employee morale over the past 12 months. Just 5 percent said morale had worsened.

“Companies have been taking steps to increase job satisfaction and boost employee motivation among teams that have been through a difficult few years,” Accountemps Chairman Max Messmer said. “Businesses that recognize and address the concerns of staff members during the extended recovery can instill greater loyalty over the long term.”

In the telephone survey, CFOs were asked,” How has employee morale in your organization changed, if at all, from 12 months ago?”

Monday, August 22, 2011

IRS Offers Tax Tips for Charitable Donors

Taxpayers who donate to charities may be eligible to take a deduction for their donations on their 2011 tax return. On Monday, the U.S. Internal Revenue Service (IRS) offered guidelines for taxpayers who want to deduct charitable donations:
  1. Make sure the organization qualifies. Only donations to qualified organizations are deductible. You can ask any organization if it is qualified or search on the IRS website.
  2. You must itemize deductions. Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
  3. You can only deduct certain contributions. You generally can deduct cash contributions and the fair-market value of most property you donate. Special rules apply to certain types of donated property, such as clothing, household items, cars and boats.
  4. Receiving something in return changes deductions. If your contribution entitles you to receive merchandise, goods or services in return, including admission to events, you can deduct only the amount of your contribution that exceeds the fair-market value of the benefit.
  5. Keep track of your contributions. Keep good records of any contributions you make, regardless of amount. For cash contributions, you must maintain a record of the contribution, such as a cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity that contains the date and amount of the contribution, as well as the name of the organization.
  6. Timing of payments is important. Only contributions actually made during the tax year are deductible. For example, if you pledge $500 in September but only pay the charity $200 by Dec. 31, only $200 is deductible. However, include late-in-year credit-card charges and payments by check in the year you give them to the charity, even if you don't pay the credit-card bill or have your bank account debited until the next year.
  7. Keep records of large contributions. For contributions of $250 or more, you'll need a written acknowledgement from the organization that includes the amount of cash and whether or not the organization provided any goods or services in exchange. If you donated property, the acknowledgement must include a description of the items and a good-faith estimate of their value. For items valued at $500 or more, you must attach a completed Form 8283, Noncash Charitable Contributions, to your return. If you claim a deduction for contribution of noncash property worth more than $5,000, you generally must obtain an appraisal and complete Section B of Form 8283.
  8. Organizations can lose their tax-exempt status. Approximately 275,000 organizations automatically lost their tax-exempt status recently because they did not file required annual reports for three consecutive years. Donations made prior to an organization's automatic revocation remain tax-deductible, but going forward, contributions to these companies that are not reinstated are not eligible for tax deduction. Click here for a list of organizations who lost their tax-exempt status.

Tuesday, August 16, 2011

Buffett: Tax Code Is 'Coddling the Super-Rich'

Warren Buffett, chairman and CEO of Berkshire Hathaway, said in a New York Times editorial Monday that those making over $1 million and $10 million per year should be taxed at higher rates.
The editorial, “Stop Coddling the Super-Rich,” argued that the income of investment managers and stock futures index traders is taxed at only 15 percent. Buffett, who has an estimated net worth of $50 billion and is No. 3 on the Forbes list of the world’s richest people, estimates that he is taxed at a rate of 17.4 percent.

“Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744,” Buffett wrote in the editorial. “That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

Buffett wrote that many wealthy Americans pay a relatively low percentage of their income in payroll taxes, compared to the middle class, and that higher tax rates on capital gains, dividends and income would not hurt investment or job creation. He contended that most investors do not avoid investment based on tax rates.
Buffett said that he would leave tax rates for 99.7 percent of taxpayers unchanged and continue the current payroll tax cut of 2 percent. He argued for higher tax rates for those making over $1 million and over $10 million, including higher rates on their dividends and capital gains.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett wrote. “It’s time for our government to get serious about shared sacrifice.”
 
What do you think? Tax rates have taken center stage since this summer's debt ceiling debate. Does Buffett have a point, or do the wealthy pay enough in taxes as it is?

Monday, August 15, 2011

NASBA, AICPA Propose Revisions to CPE Provider Standards

The National Association of State Boards of Accountancy (NASBA) and the American Institute of CPAs (AICPA) issued proposed standards Monday to the Statement on Standards for Continuing Professional Education (CPE) Programs (Standards), the framework for the development, presentation, measurement and reporting of CPE programs.

The updated Standards, last revised in 2002, would provide flexibility for innovation in learning techniques and allow for future considerations around outcome-based learning.
 
Get more information at http://www.vscpa.com/.

Friday, August 12, 2011

Top 5 Most Popular Articles: Aug. 6–12, 2011

Here are the five most-read news articles on www.vscpa.com/! Articles are taken from the VSCPA News and Professional News sections and are ranked by unique page views.
Check back each Friday for updated rankings of the top stories on www.vscpa.com/.

Wednesday, August 10, 2011

Tips for Part-Time Employees and Their Managers

A recent post on AccountingWEB details ways part-time employees and their managers can get the most out of their working arrangement. Deanna Cox, herself a part-time employee and college student, offers five tips for a successful part-time arrangement:
  1. Prioritize projects with deadlines
  2. Flexible hours
  3. Necessary company meetings
  4. Laser focus time
  5. Redistribution of job tasks
Click here to read Cox's post on ways to make part-time work more productive. And click here to read "The Real Housewives of Accounting," an article from the July/August 2011 issue of Disclosures magazine where VSCPA member Clare Levison, CPA, discusses her own part-time work experience and how she made it work.

Monday, August 8, 2011

Guest Blogger: How Your Talent Management Programs Can Make You a Top Employer

By Sean Conrad
Halogen Software
 
Qualified, skilled accountants are always in high demand. To attract and retain top performing employees, your organization needs to distinguish itself from the rest. So how do you become a top employer?
If you look at some of the questions in a typical "top employer" survey, or even questions used to gauge employee engagement and satisfaction, some common themes emerge. Among other things, employees are looking for:
  • clear direction
  • the tools/authority/support/resources they need to accomplish their work
  • feedback on their performance
  • a sense of purpose or connection to the organization's mission
  • a good relationship with their manager 
  • opportunities for development and career progression 
  • recognition and rewards for their performance
If you think about it, all of these needs can and should be addressed by your organization's talent management programs. But you need to ensure your organization adheres to best practices if you want to support employee engagement and retention. For example:
  • Every employee should have a clear, up-to-date job description that they can easily access and consult. Their job description should align with their performance appraisal, and goals, so they are be fairly evaluated.
  • Every employee should receive a regular performance appraisal, where their manager gives them feedback on their performance of goals and competencies. The performance appraisal process should also include coaching and development planning so performance gaps or learning needs are addressed. But most importantly, your performance appraisal process should foster an ongoing dialogue about performance between the manager and employee; the formal performance appraisal should merely summarize and capture the ongoing discussion so the employee is getting the ongoing feedback, coaching, direction and development they need to improve and succeed.
  • If employees work on projects or engagements, they should receive feedback from the leader at the end of the project/engagement. This feedback should also be communicated to their manager and rolled up into their annual performance appraisal. This ensures the employee gets timely feedback from the person who most closely supervised their work.
  • Employee should be given goals that are clear, specific and measurable. The old "SMART" (specific, measurable, achievable, relevant, time-bound) approach is still acknowledged to be a best practice; they ensure employees are set up for success. Every employee goal should also be linked to or aligned with a high-level organizational goal, so the employee has a context for their work, and sees how their efforts contribute to the organization's success.
  • Employees should be given the opportunity to broaden and deepen their knowledge, skills and experience and prepare for career progression. They should discuss development needs and interests as well as career aspirations with their manager. Then their manager should work with them to put in place a development plans that include a variety of activities appropriate to their learning needs and learning style. High potential employees in particular should be identified and groomed for advancement. Investing in employee development is a key way for the organization to show that it values its employees and is committed to their long terms success. Development planning can be rolled into the performance appraisal process or managed as a separate process, but needs to be formally addressed.
  • Compensation and rewards should be tied to performance so they are fair, and effectively recognize and encourage high performance. Recognition needs to come in many forms, not just monetary, and needs to reinforce organizational values and culture as well as high performance. 
By adopting talent management best practices like these, you ensure your employees are engaged, satisfied, and reaching their full potential. These really are the keys to being a top employer who can attract high performing employees with scarce skills.

Sean Conrad is a Certified Human Capital Strategist and Senior Product Analyst at Halogen Software, one of the leading providers of talent management software. For more of his insights on talent management, read his posts on the Halogen Software blog.

Friday, August 5, 2011

Top 5 Most Popular Articles: July 30 – Aug. 5, 2011

Here are the five most-read news articles on VSCPA.com! Articles are taken from the VSCPA News and Professional News sections and are ranked by unique page views.

Changes to Virginia License Fees Under Review
Teach Children to Save Day Is April 27
VSCPA, Virginia Business Sponsor 2011 Super CPA Awards*
AICPA, NASBA Launch CPAmobility.org
Congress Examines IRS Oversight of Tax Preparers

*If you're reading this during business hours Friday, Aug. 5, there's still time to vote! Check your email for a ballot or visit virginiabusiness.com.

Check back each Friday for updated rankings of the top stories on VSCPA.com.

Guest Blogger: IFRS 'Condorsement'

Note: VSCPA Board of Directors member Jamie Wohlert, CPA, recorded a VSCPA Video Update on the Accounting and Auditing Advisory Committee's decision to support the Securities and Exchange Commission's (SEC) "condorsement" approach to the transition to International Financial Reporting Standards (IFRS). She also prepared an explanatory post going into more detail on "condorsement."



By Jamie Wohlert, CPA
Navigant Consulting, Inc.

SEC Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers - Exploring a Possible Method of Incorporation

On May 26th, the SEC issued a Staff Paper describing a possible framework for the incorporation of IFRS. This approach has been colloquially referred to as "condorsement" since the concept was first introduced in an SEC Staff speech in December 2010. The SEC has previously sought comments on other possible means of incorporating IFRS including (a) full adoption of IFRS on a specified date without any endorsement mechanism, (b) full adoption of IFRS following a multi-year staged transition, and (c) allowing an option for U.S. issuers to apply IFRS.

The "condorsement" approach discussed in this Staff Paper is a combination of the terms convergence and endorsement. During the proposed transitional period, the framework would have aspects of the convergence approach. FASB would remain active as differences between IFRS and U.S. GAAP would continue to be addressed and IFRS would be incorporated into U.S. GAAP over an approximate five to seven year period. At the end of this period, the goal would be for U.S. issuers to be compliant with IFRS. Going forward, the FASB would then incorporate new and revised IFRS into U.S. GAAP through a method called endorsement. Under endorsement, the FASB would retain the authority to modify or add to the requirements of IFRSs incorporated into U.S. GAAP although such modifications would be subject to an established protocol and the expectation is that modifications would be rare and generally avoidable.
Decisions excluded from the scope of this Staff Paper include the following:
  1. whether to incorporate IFRS and the timing thereof,
  2. whether an early-adoption option will be permitted for U.S. issuers to apply IFRS, and
  3. whether and to what extent there should be modifications to FASB's standards for privately-held companies.
The VSCPA's Accounting and Auditing Advisory Committee has decided to express support for this SEC Work Plan, primarily because it would reduce the cost burden of converting to IFRS and would permit time for U.S. CPA's to educate themselves on changes to accounting standards over the transition period.

Wednesday, August 3, 2011

R. Kelly Faces IRS Tax Lien

According to the Detroit News, the Internal Revenue Service (IRS) has filed a tax lien against singer R. Kelly for $837,442.59.
The IRS filed the lien in January 2010, but recently lifted an earlier tax lien on Kelly — whose real name is Robert Sylvester Kelly — for $1,036,858.

Kelly is also facing a $2.9 million foreclosure lawsuit against his Chicago-area mansion, according to Crain’s, for allegedly not making mortgage payments since June 2010.

Kelly has had numerous hit singles and won three Grammy Awards in 1998 for his song “I Believe I Can Fly.” He has also faced several arrests and lawsuits.