CPA Cafe: June 2011

Thursday, June 30, 2011

Wilkerson Was Prepared for Virginia CFO Honor

VSCPA member Michael Wilkerson, CPA, was honored with a nomination for the 2010 Virginia CFO Awards, presented by Virginia Business magazine and the VSCPA. He didn’t win, but he did learn something from the experience.

“I was there at the event last year, so I prepared some remarks in case I won,” Wilkerson said. “Like the lady sitting next to me at the table, she won last night. … She stood up and said ‘I’m supposed to say something?’ She was taken completely off guard. You go once and you learn. I was going to have something to say.”

It’s a good thing Wilkerson came to the June 23 awards ceremony prepared. He was honored as the top winner in the “Small Private Company” category for his work with Ashland-based Richmond Group, LLC, and Dominion Equipment Parts, LLC.

Not bad for a guy who didn’t expect to stick very long at his company. But under Wilkerson’s steady hand, the Richmond Group has grown into a force to be reckoned with in the heavy equipment industry.

“It turned into something that I really didn’t expect. I expected it to be kind of a stepping stone,” he said. “Now it’s four companies with 30 employees and has gone from 4 million in revenue to about 30 million in revenue.”

Wilkerson, a Chesterfield native, majored in finance at Radford University after graduating from Monacan High School. He decided, along with two friends, to sit for the CPA Exam — “Misery loves company,” he says — and began taking accounting classes at Virginia Commonwealth University. He received his CPA license in 1996.

Before joining the Richmond Group, he spent eight years as a bank examiner with the Federal Reserve Bank of Richmond and five years with the Markel Corporation as an internal auditor and manager of accounts receivable.

Wilkerson’s favorite part of his job is getting a big-picture look at his company.

“The biggest thing I like about it is that it gives you an overall view of how a company is performing, how it runs,” he said. “Everything is based off of numbers, whether it’s sales, whether it’s operations or new products. Everything comes down to accounting and ‘Does it make sense?’”

Wilkerson lives in Mechanicsville with his wife, Tami, and his children, Brandon and Brittany. He’s active in coaching youth baseball and basketball, including his children’s teams, and he’s a board member of the Atlee Little League.

He takes time to lend his financial expertise to the community as well, teaching personal finance classes at the Richmond Technical Center. It’s that kind of dedication to his craft that meant he got to deliver that speech to his fellow CFOs.

Friday, June 24, 2011

Thursday, June 23, 2011

IAESB Proposes Revised Education Standards for Accountants

The International Accounting Education Standards Board (IAESB) has proposed revisions (PDF) to the entry requirement standards for a professional accounting education.

The revised standard is intended to establish fair and proportionate entry requirements and ensure that requirements for entry to professional accounting education are not misrepresented. Read a supplement (PDF) featuring tracked changes to the standard.

Approved in 2004, International Education Standard (IES) 1 currently prescribes the principles used by professional accountancy organizations when setting entry requirements for professional accounting education and practical experience. The IAESB is involved in a project to redraft all eight of its IESs in accordance with its new clarity drafting conventions.

The proposed standard includes:

Specification of entry requirements for professional accounting education
Explanation of the rationale behind those requirements
A requirement that excessive barriers to entry are not put in place
A requirement to make relevant information publicly available to help candidates assess their chances of completion

The IAESB had previously proposed revisions to IES 7, Continuing Professional Development: A Program of Lifelong Learning and Continuing Development of Professional Competence; IES 4, Professional Values, Ethics and Attitudes; and IES 6, Assessment of Professional Competence.

“The proposed revisions reflect the IAESB’s view that the overall objective of accounting education is to develop a competent professional accountant,” IAESB Chairman Mark Allison said in a statement. “Further, the IAESB acknowledges that there are different processes and activities that contribute to achieving such competence. These revisions to IES 1 are intended to ensure that entry requirements for professional accountancy education are designed fairly for aspiring professional accountants.”

Stakeholders are invited to comment on the proposals. Comments are due Sept. 21, 2011.

Wednesday, June 22, 2011

U.S. Retirement Confidence Hits Record Low

Only half of Americans believe they will have enough money to enjoy a comfortable retirement, according to Country Financial’s Security Index.

The index dropped one point to 63.7 in June, partly because confidence in retirement reached an all-time low at 51 percent.

Just 45 percent of Americans were able to set aside money for savings and investment, a three-point drop from April. Only 37 percent rated their overall level of financial security positively, a one-point increase, and there was a two-point decrease in respondents who say their families would live comfortably if they died or became disabled.

For the first time in the four years of the index, women are more confident than men in most aspects of their financial security, with 53 percent of women indicating they are confident they will be able to enjoy a comfortable retirement, compared to 49 percent of men.

Friday, June 17, 2011

Thursday, June 16, 2011

Survey: Students Likely to Accept Job Offer from Internship Employers

A survey from the National Association of Colleges and Employers (NACE) says that nearly two-thirds of students who completed an internship indicated they “definitely would” (36 percent) or “probably would” (26 percent) accept an offer for a full-time position from their most recent internship employers.

Out of those who responded to NACE’s 2011 Student Survey, 18.7 percent of students who had an internship said they would likely turn down an offer of full-time employment with their latest employers.

“Typically, if the intern’s work experience is substantive and the individual is engaged in meaningful work, chances are greater that individual will want to join the organization on a full-time basis,” NACE Executive Director Marilyn Mackes said. “If the work is more clerical or not related to professional goals, it is more likely the intern will reject the job offer and look for work elsewhere, regardless of whether the internship was offered by a for-profit, nonprofit, federal government, or state/local government employer.”

Student interns who would reject offers of full-time employment spent more than one-third of their time, on average, on clerical or nonprofessional tasks. Those who would accept offers spent an average of just over one-fifth of their time on such tasks.

Friday, June 10, 2011

Thursday, June 9, 2011

Several Takes on Social Media

Social media has become an important tool for businesses to secure new customers, and accountants and firms can reap the benefits of a sound social media strategy. Here are several recent articles on ways to use social media to get more business for you or your firm.

Have you or your firm had success in using social media to expand your client base? Let us know in the comments.

Friday, June 3, 2011

Thursday, June 2, 2011

Guest Blogger: Disability Exclusion for Military Retirees

By Monique Valentine, CPA

Monique T. Valentine CPA

As most of you know, many military retirees receive disability benefits from the Veterans Administration and receive these benefits tax-free. These benefits are in addition to the regular retirement benefits that the retiree receives from Defense Finance and Accounting Services (DFAS).

Military retirees with service-related injuries or sickness will typically apply for service-connected disability benefits from the Department of Veterans Affairs (VA) or even apply for an increase in disability benefits after an award has been granted. Once the VA receives the application for initial benefits or increased benefits, it will review the application and issue a disability rating to the retiree based on the extent of the injuries or disabilities sustained, which can take months to receive. Once a determination is made by the VA, the retiree must sign a waiver, pursuant to section 1005 of the Veterans’ Benefit Act of 1957, 38 U.S.C. 3105, agreeing to have the taxpayer’s future retirement pay reduced in an amount equal to the disability benefits to be received from the VA.

In the meantime, during the time the application is being reviewed by the VA and before a disability rating is awarded, the retiree is continuing to receive their full monthly retirement benefits from DFAS. Once a retroactive award is made by the VA, per Revenue Ruling 78-161, based on the Strickland decision, military retirees may reduce their taxable retired pay from DFAS by the amount of the retroactive VA award for that year.

Once the waiver has been signed by the retiree, future disability benefits will be paid to directly from the VA and the retired pay received from DFAS is reduced accordingly. Therefore, no future adjustments are necessary to the amounts received from DFAS.

Recently, there has been some misinformation circulating in the military retiree community regarding the further reduction of military retirement benefits from DFAS based on an assigned VA disability rating. The documentation that is circulating indicates that retirees can further reduce their retirement benefits from DFAS to the full extent of their disability rating from VA, based on a memorandum issued by the Chief, Branch 2, Employee Benefits and Exempt Organizations Unit on March 31, 1999. The information that is circulating indicates that if the retiree received a disability rating, then they can file amended returns to claim additional reductions in their taxable retired pay from DFAS based on a re-computed net disability exclusion until they reach age 65.

Please be aware that this is not a correct interpretation of the Chief Counsel Memorandum. We have spoken with the Chief Counsel’s office and have confirmed that these claims of additional reductions in DFAS retired pay are not an accurate interpretation of the Memorandum and that the reduction in DFAS retired pay is only allowed when an initial VA award has been received or an amended award has been approved for which a retiree did not receive the benefits from the VA.