While many controversial provisions of the health care reform bill passed by Congress in March were loudly debated in the media, there's one provision with enormous implications for companies that got little attention. Currently, businesses are required to report payments to a vendor for business-related services over $600 via the Form 1099-Misc. However, the Senate Finance Committee buried a rule deep within the thousands of pages of legislation to offset costs, requiring businesses to report payments of more than $600 a year to any vendor, beginning in 2012.
The major change is that, in addition to services, companies will need to track and report expenditures to every single vendor they use for goods, from paperclips to cell phones. Any vendor receiving more than $600 from a company will require a 1099-Misc to be sent to the IRS by that company.
In a recent article, Bloomberg Business Week noted that the IRS says approximately 85 million 1099-Misc forms are filed annually. That number could skyrocket in 2012, given that "the National Small Business Association estimates that the average company will have to file 95 of the forms under the measure, up from fewer than 20 today."
If you are a tax preparer, you should advise your clients as early as possible to begin tracking their expenditures. The accounting systems at most large corporations should be able to extract detailed accounts payable data to assist them in determining which vendors will require them to file a form. However, many small businesses may be caught off guard by the new rule, making it difficult to compile the data they need to prepare their forms.
As a CPA, you are the first line of defense for clients when new regulations such as these become a record keeping nightmare. By preparing clients and proactively assisting them in collecting the data they need, you'll be an invaluable ally when they face the IRS each year.
Monday, July 26, 2010
Friday, July 23, 2010
Center for Audit Quality Releases 2Q10 Checklist
In July, the Center for Audit Quality released their second quarter 2010 Accounting and Auditing Update. This has a been a particularly busy quarter for the FASB, so the checklist is a helpful way of tracking what regulatory guidance may have taken effect recently impacting you or your clients. There were also a few pronouncements from the SEC and PCAOB as well this past quarter. I've provided a summary of the updates below.
Recent FASB Accounting Standards Updates (ASU) include a March update on Foreign Currency Issues, specifically those related to investments in Venezuela. The Board is of the opinion that Venezuela has met the threshold for consideration as a highly inflationary economy, resulting in the recommendation that companies holding Venezuelan investments recognize valuation differences in the income statement rather than as a cumulative translation adjustment.
The FASB also amended a pronouncement related to oil and gas activities and subsequent event disclosures, as well as updated income tax guidance for the consideration of the recent Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act recently passed by Congress, as well as a pronouncement related to convertible debt issuances.
The PCAOB was less active than the FASB, issuing some changes to registered firms' reporting forms.
The SEC finalized their decision to require public companies and foreign private issuers that prepare their financial statements in accordance with US GAAP to provide their statements to the SEC using the interactive data format XBRL. Most companies have been preparing for this data conversion for some time.
An SEC extension for non-accelerated filers expired during the second quarter of 2010, requiring these companies to now provide auditor attestation reports in their annual reports for fiscal years ending on or after June 15, 2010. Lastly, the SEC made updates to their Compliance and Disclosure Interpretations and Disclosures Checklist during the past quarter, which are available at their website.
The Center for Audit Quality Second Quarter Checklist also notes that several key financial reporting matters are to be considered by the FASB in the near future, including those relating to pooled loans accounted for as receivables, revenue recognition, accruals for casino jackpot liabilities, financial services insurance, stock compensation, derivatives and hedging, and software revenue. It looks like the latter half of 2010 will be even busier than the second quarter.
Stay up to date on recent accounting pronouncements by subscribing to the Center for Audit Quality. Even if all of the updates do not apply to you or your clients, you are likely to come across some important information you should know about. To read the entire second quarter update, visit http://www.complianceweek.com/s/documents/CAQAlert2Q210.pdf. To subscribe to the Center for Audit Quality, visit http://www.thecaq.org/.
Recent FASB Accounting Standards Updates (ASU) include a March update on Foreign Currency Issues, specifically those related to investments in Venezuela. The Board is of the opinion that Venezuela has met the threshold for consideration as a highly inflationary economy, resulting in the recommendation that companies holding Venezuelan investments recognize valuation differences in the income statement rather than as a cumulative translation adjustment.
The FASB also amended a pronouncement related to oil and gas activities and subsequent event disclosures, as well as updated income tax guidance for the consideration of the recent Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act recently passed by Congress, as well as a pronouncement related to convertible debt issuances.
The PCAOB was less active than the FASB, issuing some changes to registered firms' reporting forms.
The SEC finalized their decision to require public companies and foreign private issuers that prepare their financial statements in accordance with US GAAP to provide their statements to the SEC using the interactive data format XBRL. Most companies have been preparing for this data conversion for some time.
An SEC extension for non-accelerated filers expired during the second quarter of 2010, requiring these companies to now provide auditor attestation reports in their annual reports for fiscal years ending on or after June 15, 2010. Lastly, the SEC made updates to their Compliance and Disclosure Interpretations and Disclosures Checklist during the past quarter, which are available at their website.
The Center for Audit Quality Second Quarter Checklist also notes that several key financial reporting matters are to be considered by the FASB in the near future, including those relating to pooled loans accounted for as receivables, revenue recognition, accruals for casino jackpot liabilities, financial services insurance, stock compensation, derivatives and hedging, and software revenue. It looks like the latter half of 2010 will be even busier than the second quarter.
Stay up to date on recent accounting pronouncements by subscribing to the Center for Audit Quality. Even if all of the updates do not apply to you or your clients, you are likely to come across some important information you should know about. To read the entire second quarter update, visit http://www.complianceweek.com/s/documents/CAQAlert2Q210.pdf. To subscribe to the Center for Audit Quality, visit http://www.thecaq.org/.
Thursday, July 15, 2010
Free Webcasts to Keep You Up To Date
Just because you work in a specific industry, say government, financial reporting, or non profit, does not mean you shouldn't keep up to date on what's going on in the wider world of accounting. I am currently taking a break from a full time accounting career to raise my child, but I still find it vitally important that I keep abreast of some major changes to the profession, such as evolving technology, the convergence of U.S. GAAP and IFRS, and a host of new regulations that are being passed by Congress having a significant impact on public companies in the US. Webcasts are a great resource for keeping current, and there are some free ones that I find particularly useful. You can also earn continuing professional education (CPE) credits for attending the following webcasts.
- The CPA Technology Advisor offers regular webcasts on new software products, web resources, and technological solutions for accounting professionals. The topics are primarily geared toward those in public practice, but many of the topics are also relevant to any type of business looking to maximize technological efficiency. The webcasts are usually conducted by consultants, and can be viewed at http://www.cpatechnologyadvisor.com/webcasts/.
- KPMG has some informative resources known as the KPMG Institutes. These forums are a collection of industry-specific resources, and tend to be highly technical. Depending on your interest, you could choose to follow the IFRS Institute, the Energy Institute, the CFO Institute, or a whole host of other groups. Each Institute generally offers webcasts on a monthly basis. The quality of the content is very high, and many of these webcasts have between 1,000 and 2,000 attendees. You can follow any of these Institutes at http://www.kpmginstitutes.com/.
- PricewaterhouseCoopers also offers PwC Open University, with free webcasts on various topics that can provide you with CPE credits. Recent topics include IFRS and US GAAP convergence and international tax briefs. For more information, visit http://www.pwc.com/us/en/open-university.
Whether you need continuing professional education credits toward your CPA license, or just want to stay informed of current professional developments, webcasts are a great way to get the information you need.
Monday, July 12, 2010
Rules of Networking at the Bar
When I began my career in public accounting, I had not spent much time in bars. I was uncertain of the protocol of ordering, the environment, or even when to leave. This unfamiliarity was magnified into great discomfort when I began working and realized that a lot of important business and networking takes place over casual drinks. I had to learn the rules fast, or my awkwardness at the bar might have handicapped me professionally.
The first thing I did was to follow the cues of my colleagues who seemed quite at ease conducting business at the bar. These were not the co-workers who boasted about how much they could put down, or got sloppily drunk every time alcohol was present, but those that ordered their drinks with ease, were able to recommend wines, and seemed to bring up appropriate non-work related conversations in a comfortable manner.
I soon realized that less importance was placed on what I drank, but how I drank it. It was always awkward to finish a drink a bit sooner than you intended, then have someone immediately offer you another. Before you know it, you're drunk. Sip slowly and controlled, and don't go for a second, third, or fourth if you know you can't handle it. Perhaps switch to a ginger ale in between, just to keep yourself steady.
As far as topics of conversation, if you are at a networking or social event, don't stick to business just because you think it's the only thing you have in common with your co-workers. Try and get to know someone without getting too personal. Find a common interest or share something interesting about yourself that you can talk about for some time. If the purpose of your meeting at the bar is business, perhaps an initial meeting with some out-of-town team mates, don't talk business until after the first drink. The restaurant or bar environment is quite different from the conference room, so if someone called a meeting in a more casual environment, it indicates that perhaps they are looking to get to know you and your colleagues before getting down to business.
If you don't drink alcohol, or have a very low tolerance, don't be ashamed to order a non-alcoholic mojito or other sophisticated drink without alcohol. You don't have to stick to water. Once everyone has their drink in hand, no one will remember that you technically aren't drinking.
The cover story of the July 2010 issue of Entrepreneur magazine is dedicated to the topic of conducting business at the bar. Along with some of the rules I have already shared, they also mention that standing at the bar is better than sitting, because you are in a position to receive others, you are more approachable, and you can more easily move to a more engaging conversation if your neighbor isn't the most beneficial person for you to be networking with among a group. Drinks should be ordered confidently, explicitly, and specifically. Have an idea of what you want before you step up to the bar. Check out what's on tap from across the room so you don't have to ask the server what is on tap. Also, don't order anything off the cocktail menu. You risk getting a fancy glace with fruit and umbrellas or a novelty mug. You don't want to be the one at the table with a stupid drink. At some point, order and pay for a round of drinks. And of course, don't get too drunk.
As far as when you should leave the bar, Entrepreneur suggests that about 30 minutes after you've deemed business has been taken care of is a good rule if the purpose of your drinking is to accomplish something professionally. If you are there simply to network or after work with your colleagues, leave after everyone has gotten comfortable and enjoyed themselves, but before the overtime sets in and people start drinking a little more than they should. You want to quit while you're ahead and sober. Even if you get along remarkably well with your colleagues, remember that these aren't your life-long buddies. You still have to work with them on Monday morning, so the last thing you want to be thinking of when you walk into the office Monday is how much you regret what happened at the bar Friday after work.
The first thing I did was to follow the cues of my colleagues who seemed quite at ease conducting business at the bar. These were not the co-workers who boasted about how much they could put down, or got sloppily drunk every time alcohol was present, but those that ordered their drinks with ease, were able to recommend wines, and seemed to bring up appropriate non-work related conversations in a comfortable manner.
I soon realized that less importance was placed on what I drank, but how I drank it. It was always awkward to finish a drink a bit sooner than you intended, then have someone immediately offer you another. Before you know it, you're drunk. Sip slowly and controlled, and don't go for a second, third, or fourth if you know you can't handle it. Perhaps switch to a ginger ale in between, just to keep yourself steady.
As far as topics of conversation, if you are at a networking or social event, don't stick to business just because you think it's the only thing you have in common with your co-workers. Try and get to know someone without getting too personal. Find a common interest or share something interesting about yourself that you can talk about for some time. If the purpose of your meeting at the bar is business, perhaps an initial meeting with some out-of-town team mates, don't talk business until after the first drink. The restaurant or bar environment is quite different from the conference room, so if someone called a meeting in a more casual environment, it indicates that perhaps they are looking to get to know you and your colleagues before getting down to business.
If you don't drink alcohol, or have a very low tolerance, don't be ashamed to order a non-alcoholic mojito or other sophisticated drink without alcohol. You don't have to stick to water. Once everyone has their drink in hand, no one will remember that you technically aren't drinking.
The cover story of the July 2010 issue of Entrepreneur magazine is dedicated to the topic of conducting business at the bar. Along with some of the rules I have already shared, they also mention that standing at the bar is better than sitting, because you are in a position to receive others, you are more approachable, and you can more easily move to a more engaging conversation if your neighbor isn't the most beneficial person for you to be networking with among a group. Drinks should be ordered confidently, explicitly, and specifically. Have an idea of what you want before you step up to the bar. Check out what's on tap from across the room so you don't have to ask the server what is on tap. Also, don't order anything off the cocktail menu. You risk getting a fancy glace with fruit and umbrellas or a novelty mug. You don't want to be the one at the table with a stupid drink. At some point, order and pay for a round of drinks. And of course, don't get too drunk.
As far as when you should leave the bar, Entrepreneur suggests that about 30 minutes after you've deemed business has been taken care of is a good rule if the purpose of your drinking is to accomplish something professionally. If you are there simply to network or after work with your colleagues, leave after everyone has gotten comfortable and enjoyed themselves, but before the overtime sets in and people start drinking a little more than they should. You want to quit while you're ahead and sober. Even if you get along remarkably well with your colleagues, remember that these aren't your life-long buddies. You still have to work with them on Monday morning, so the last thing you want to be thinking of when you walk into the office Monday is how much you regret what happened at the bar Friday after work.
Sunday, July 11, 2010
Accountants Ranked as One of the Best Jobs in America
CNBC recently rated the ten best jobs in America for 2010, with accountants claiming 9th place. With continual changes to personal and corporate income tax laws, increased scrutiny of companies by regulators, and an evolution of the US GAAP and IFRS convergence, accountants are more in demand than ever. Now is a great time to get into the field of accounting, whether it be tax preparation, financial planning, auditing, governmental accounting, or managerial accounting, job security is sure to increase in this financially complex economy. You picked a great career!
Thursday, July 8, 2010
Do You "Click" With Your Co-workers?
A recent article in Bloomberg Business Week highlighted the immense importance of fitting in with your co-workers in the office social network. This is a topic of particular importance, as I have touched upon it numerous times in my recent book Engagement: Jump Start Your Audit Career in Public Accounting. The article sites various studies that indicate people with a high self-monitoring ability (a.k.a. ability to click with others) can get to the core of their office networks and promote their careers within an average of 18 months, compared with a jaw-dropping 13 years for some introverted workers who did not easily connect with their colleagues.
My book relates this discovery to your career in public accounting. It is extremely important to begin networking with firm recruiters as early as possible in your academic accounting career, even as a freshman. The more familiar the firms' employees are with your face and name, the more likely they are to recommend you for an interview or job. This is confirmed by researchers at the University of Pittsburgh, who found that "encountering a stranger on 10 occasions instead of five makes us find that individual more attractive, intelligent, warm, and honest."
One of the key things new associates are advised to do upon entering a firm is to get involved and raise their profile among peers. Join internal committees, volunteer for new projects with people you may not have worked with before, and network at regional or national training events. When promotions and bonuses are considered, your name will rise to the top of the list if you have made a significant number of connections with colleagues throughout your firm who can recommend you.
It's also important not to dodge social events or occasional office chit-chat with co-workers. If you keep yourself pent up in your cubicle all day long without making a personal connection with your co-workers or clients, they will likely assume you are unsocial, proud, or can't be trusted, simply because you made no effort to reveal your real self.
Do not underestimate the significance of social interactions in advancing your career. Yes, it's important to be good at your job and prove yourself a competent accountant, but if you want to get promoted in 18 months rather than 13 years, get to know the people around you, from administrative assistants to partners. You never know whose opinion of you may be the key to open your door to the opportunity of a life time.
To read the Bloomberg Business Week article entitled "Etc. Social Studies," see the June 14-June 20, 2010 issue, page 72.
My book relates this discovery to your career in public accounting. It is extremely important to begin networking with firm recruiters as early as possible in your academic accounting career, even as a freshman. The more familiar the firms' employees are with your face and name, the more likely they are to recommend you for an interview or job. This is confirmed by researchers at the University of Pittsburgh, who found that "encountering a stranger on 10 occasions instead of five makes us find that individual more attractive, intelligent, warm, and honest."
One of the key things new associates are advised to do upon entering a firm is to get involved and raise their profile among peers. Join internal committees, volunteer for new projects with people you may not have worked with before, and network at regional or national training events. When promotions and bonuses are considered, your name will rise to the top of the list if you have made a significant number of connections with colleagues throughout your firm who can recommend you.
It's also important not to dodge social events or occasional office chit-chat with co-workers. If you keep yourself pent up in your cubicle all day long without making a personal connection with your co-workers or clients, they will likely assume you are unsocial, proud, or can't be trusted, simply because you made no effort to reveal your real self.
Do not underestimate the significance of social interactions in advancing your career. Yes, it's important to be good at your job and prove yourself a competent accountant, but if you want to get promoted in 18 months rather than 13 years, get to know the people around you, from administrative assistants to partners. You never know whose opinion of you may be the key to open your door to the opportunity of a life time.
To read the Bloomberg Business Week article entitled "Etc. Social Studies," see the June 14-June 20, 2010 issue, page 72.
Thursday, July 1, 2010
Recent Release of the Ultimate Big Four Career Guide
My new eBook has just been released and is available for download. Engagement: Jump Start Your Audit Career in Public Accounting is the first career field guide to empower accounting students to not only land a job as an auditor with one of the Big Four firms, but to also equip them to succeed in this fast-paced, highly competitive environment.
Engagement: Jump Start Your Audit Career in Public Accounting is the quintessential reference tool that should be the companion of every accounting student and new audit professional.
By providing a thorough overview of widespread terminology used within the Big Four, a detailed discussion of the recruiting process, practical recommendations and warnings for new audit professionals, as well as an evaluation of what it takes to succeed in the profession, Engagement: Jump Start Your Audit Career in Public Accounting is an invaluable resource to the thousands of accounting students hired by the Big Four each year.
The book incorporates personal anecdotes from my tenure with KPMG as well as the recommendations and cautionary tales of Big Four senior managers and senior associates I have interviewed. Engagement is intended to mentor new accounting practitioners to build a solid professional foundation, thereby unlocking your career potential.
Download your copy of Engagement: Jump Start Your Audit Career in Public Accounting before the fall 2010 Big Four recruiting season begins at
An iPad version of the book will also be available soon.
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