Author: Christina Lane

A Pair of Senators are Trying to Get the Kiddos Hooked on Accounting in Grade School

Christina Lane

Do you guys remember those after school specials of the 80s that made it seem like drug dealers hiding around every corner offering free drugs was going to be something one would have to be concerned about as we got older? I imagine I’m not the only one who was tremendously disappointed to find out there are no such drug dealers. Having to pay for our drugs aside, there was a lesson in there somewhere: the grown-ups were warning us to be cautious because kids are dumb and impressionable and people who want to take advantage of that will be lurking around every billboard and TV commercial.

Well, in the spirit of gettin’ em started when they’re young, a pair of senators have introduced a new bill that hopes to get kids hooked on accounting in grade school. Let’s check it out:

Today, U.S. Senators Jacky Rosen (D-NV) and Susan Collins (R-ME) introduced their STEM Education in Accounting Act, bipartisan legislation that would designate accounting as a STEM (science, technology, engineering, and math) subject, strengthening education and career pathways for the accounting profession and promoting diversity within the field.

The bill would amend the Every Student Succeeds Act to add accounting education programs as an allowable use of K-12 grant funding and promote high-quality accounting instruction for members of groups underrepresented in accounting careers. This bipartisan legislation comes at a time when the accounting profession, like many sectors of the economy, is struggling with a shortage of talent to fill available jobs. While the pandemic has exacerbated the problem in many sectors, the accounting profession has long faced such a shortage.

The Every Student Succeeds Act replaced the notorious No Child Left Behind law of the Bush era and was signed into law by President Obama in 2015. Here is a thorough read on what it means for K-12 public education in the United States should that be something you’re interested in learning more about on a quiet Monday before Christmas.

Including accounting in STEM education is a no-brainer according to Senator Collins because math. You know, the M in STEM. Also known as that thing most of you never do at work but whatever, let’s roll with it anyway.

“Mathematics is a critical skill that can help students unlock countless doors to high-paying, in-demand fields. One of those doors leads to the accounting profession whose work plays a key role in providing capital markets with confidence and assurance in financial reporting,” said Senator Collins. “Our bipartisan bill would designate accounting as a STEM subject. I encourage all of my colleagues to join me in promoting accounting education, improving students’ finance skills, and strengthening the pipeline of future accountants, who play such a vital role in our financial system.”

High-paying you say? That’s about as believable as the lie about shady drug dealers passing out joints on the playground. But I digress…

You’ll note the accounting pipeline shout-out at the end there. Which leads us to this comment from the AICPA gleefully rubbing their hands together at the idea of exposing kids to accounting:

“For years, the AICPA has championed the inclusion of accounting in STEM programs and we are grateful to Senators Collins and Rosen for their leadership in recognizing the connection between accounting and technology,” said AICPA President & CEO Barry Melancon, CPA, CGMA. “The technological skills CPAs learn help them make informed decisions, solve complex problems and enhance the delivery of services throughout the audit, finance and tax arenas. As the profession continues to evolve its services in areas like cybersecurity, information integrity and systems controls and its use of emerging technologies and techniques, such as blockchain and data analytics, the integration of this knowledge with quantitative reasoning skills enhances accountants’ value to their clients, to the profession and to the finance and tax industries. This bipartisan legislation is a recognition of the value the accounting profession provides and will help to diversify and expand the profession.”

Comments like these are exactly why the ‘Smithers Fetch Me the CGMAs’ meme exists.

As fun as it is to point and laugh at the AICPA’s desperation to stuff the pipeline with warm bodies, there’s nothing wrong with introducing kids to accounting when they’re young. Surely there are worse things to expose them to. Like… you know what, let’s not go there.

A similar bill was introduced in the House earlier this year. We’ll keep you posted on any developments. Personally I’m looking forward to the potential for T account coloring pages!

Further reading:
AICPA Supports STEM Education in Accounting Act [CPA Practice Advisor]

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CCAB releases Economic Crime Manifesto calling for more measures to ‘maintain the UK’s resilience’

Christina Lane

The Consultative Committee of Accountancy Bodies (CCAB) publishes its manifesto today outlining what more must be done to build and maintain the UK’s resilience against economic crime.

The Manifesto calls for four clear areas for change including SARs (Suspicious Activity Reporting) reform and intelligence sharing, ongoing funding of the UK’s Economic Crime Plan, more action to eliminate modern day slavery from supply chains and the need for public education on fraud risk and personal finance.

Angela Foyle, Chair of the CCAB Economic Crime Panel says: ‘Our first economic crime manifesto was launched 5 years ago, and since then progress has been made in key areas, including proposed reforms to Companies House to introduce identity verification for company directors, and a raft of initiatives from the UK’s Economic Crime Plan. However, we remain mindful of the challenges, especially as Covid-19 and Brexit present complex scenarios that can be exploited.

‘Economic crime is damaging and widespread, and we believe that our manifesto

presents actions which the UK, Scottish and Welsh governments need to address. These are sensible reforms and actions to ensure the progress already achieved in the UK’s Economic Crime Plan with the aim of maintaining the UK’s resilience against economic criminal activity.’

Also commenting on the manifesto, Paul Henry, chair of CCAB and director of property consultancy Osborne King adds: ‘The leaking of the Pandora Papers is a timely reminder of the need to strengthen our AML defences. SARs reporting is clearly one important tool in the fight against money laundering but further reform is needed to make intelligence sharing more effective including a two-way intelligence sharing mechanism to enable law enforcement to share new and emerging intelligence with professional body supervisors. As we say in the manifesto, intelligence sharing between the accountancy profession and law enforcement is essential.’

CCAB’s Economic Crime Panel will send the manifesto to policymakers and government officials to highlight these areas of concern and to reinforce the vital role of the professional qualified accountancy profession in mitigating these economic crimes.

To find out more, download the CCAB Economic Crime Manifesto here.

The CCAB is comprised of five bodies – ICAEW, ACCA, ICAS, CIPFA and
Chartered Accountants Ireland. CCAB provides a forum for the bodies to work together collectively in the public interest on matters affecting the profession and the wider economy.

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Strategic Resourcing: Solving Staffing Issues and Driving Transformation through Outsourcing  

Christina Lane

It is a tough job. Not just finding the right talent but also retaining them. And it’s not just you. Accounting firms across the country are facing capacity challenges like never before. Globally, accounting and finance roles ranked seventh out of 10 positions that are the hardest to fill. This staffing issue is especially aggravating during the tax season when you have a million things to do and not enough time for meaningful work such as client meetings and advisory. The mundane, repetitive work, extra hours, and the nightmares of missed deadlines can put you and your team under intense pressure.

So how can you create added value for your clients and speed up your firm’s growth adding to you?

There is no magic lever that you can pull to create more capacity at your accounting firm suddenly. The only way for resolving staffing issues and ensuring the firm’s growth is through careful capacity planning and strategic resourcing.

Key Capacity Challenges

Finding skilled accounting professionalsIntense competitionFinding the time to hire the right professionalCost of recruitment – training, salary, loss of fee-earning timeRisks of hiring – Workload, what if they leave, etc.

Outsourcing Accounting and How to Make it Work

Outsourcing your accounting and taxation services can be an ideal solution for supplementing your team and scaling up the business. Instead of just “getting the job done,” you and your team can focus on strategic high-margin work. Apart from increased capacity, efficiency, and profitability, you’re able to employ highly skilled professionals and achieve a better work-life balance.

Of course, you need to consider certain factors, including your motivations for outsourcing, whether it’s a good match for your firm, and finding a global team that can deliver in terms of quality and quantity.

Identifying these objectives can help you select the perfect accounting provider and provide a perspective on how outsourcing fits into your overall business plan. Here’s how you can make outsourcing work for you.

Understand your motivations to outsource

Why are you planning to outsource? Whether you want to reduce operational costs, fix the staffing issues, get more clients on board, or achieve peace of mind, you need to understand your pain points and how outsourcing can help you fix them.

Defining your objective will also provide your team with the right direction. Outsourcing does not mean replacing local staff with remote teams. It means that you’re simply delegating work, so your local staff add more value to clients with additional higher-value services and focus on business growth.

Determine the tasks you want to outsource

Based on your objectives, figure out which activities to outsource and your firm’s benefits from doing so. It’s best to outsource repetitive and laborious tasks such as self-assessment tax returns and payroll that usually take a toll on your team during the busy season.

Pick the right partner

Is the outsourced accounting company that you would be working with a good fit? Not only should the outsourcing provider be able to provide proper technical support, but they should also have good communication skills, a faster turnaround time, and an easy onboarding process. They should have a complete understanding of the business needs and then deliver an outsourcing strategy to suit your firm. This will ensure that you get the support you need when you want it.

Define the scope and the goals

It is essential to communicate your expectations and the steps included in the tasks for the accounting firm. When the requirements and expectations are laid initially, the outsourcing service provider can perform better and provide timely delivery.

Even with the current challenging situation, every day, we’re hearing stories of accounting teams who are using outsourcing as an opportunity to learn and scale.

QX Accounting Services is a reliable and professional outsourcing company that caters to more than 500 clients in the UK, USA, and Canada. It has been ranked as the Top 100 Outsourcing Firms in the World by IAOP. With over 1000 experienced accountants and 5+ years of experience, QXAS is a trusted partner that can help your firm scale and reach the heights you always envisioned.

If you are an accounting practice owner looking for strategic solutions to the capacity challenges, call +44 208 146 0808 or click here.

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A Few EY Partners Didn’t Get the Auditor Independence Rules Right

Christina Lane

The SEC on Dec. 10 decided that two EY partners and one principal didn’t take the auditor independence rules seriously and doled out a few fines and sanctions. And like many of these auditor independence violations that get firms in hot water with the SEC or the PCAOB, the flagrant rules bending by EY had to do with providing non-audit services to an audit client. In this particular instance, the audit client was Cintas Corp:

This matter involves aiding and abetting and causing violations of the auditor independence rules arising from Ernst & Young LLP (“EY”), a public accounting firm, performing non-audit services for its audit client Cintas Corporation (“Cintas”) on a contingent fee basis.

EY billed and received payment from Cintas on invoices calculated on a contingent fee basis for tax credit and incentive services (“C&I services”) performed between July 2009 and August 2018. An audit firm is not independent of its audit client if it provides any non-audit services to the audit client for a contingent fee. As a result, EY was not independent of Cintas during that time period, and Cintas filed annual and quarterly reports with the Commission that were not audited or reviewed by an independent public accountant, as required by Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.


Philip Hurak

During that time period, Philip Hurak, Alan Greenwell, and Adam Bering also blissfully ignored Rule 2-01(c)(5) of Regulation S-X which says “[a]n accountant is not independent if, at any point during the audit and professional engagement period, the accountant provides any service or product to an audit client for a contingent fee … or receives a contingent fee … from an audit client.” The SEC also found out that EY’s policies and procedures also prohibited billing audit clients on a contingent fee basis.

As Cintas’s auditor, EY had to obtain pre-approval from the company’s audit committee in order to provide non-audit tax services to Cintas, according to the SEC administrative order. In obtaining pre-approval from the audit committee to provide those services, EY said it would bill for C&I services on a time and materials basis. The audit committee gave its blessing.

But …

Despite EY’s … representations that EY would perform C&I services for Cintas on a time and materials basis, in fact EY improperly billed Cintas for C&I services based on a percentage of the relevant tax credit or incentive secured. Specifically, from July 2009 through August 2018, EY charged, and Cintas paid, fees of approximately—sometimes exactly—10% of the benefit Cintas received for federal tax credits and 15% of the benefit Cintas received for state and local tax credits resulting from EY’s C&I engagements.

For example, from 2009 through 2018, EY assisted Cintas in obtaining certain federal tax credits related to hiring. Initially, EY billed Cintas for this work annually at exactly 10% of the credits Cintas obtained. In later years, EY billed Cintas for this work on a quarterly basis and reconciled the bills at the end of the year so that EY’s annual fees were approximately 10% of the total credits Cintas obtained for that year. Certain EY bills to Cintas summarized the amount of each credit and then stated the applicable charges. It was clear on the face of the invoices that the charges were 10% of the amount of the tax credits.

During that time period, Greenwell, who was the tax account leader for tax services EY provided to Cintas, including C&I services, failed to investigate red flags indicating that EY was billing Cintas on a contingent fee basis for C&I services, according to the SEC.

For example, in February 2016, Respondent received an email from Cintas indicating that, for 2014 and 2015, EY had billed Cintas estimated amounts for federal tax credit work and that a reconciliation would occur once the precise amount of the federal tax credits was known. The email suggested that the final fee would be contingent on the amount of credit Cintas received for the work, which Respondent failed to investigate.

Similarly, in March 2017, Respondent was copied on several emails regarding an EY invoice to Cintas for certain state tax credits. In the emails, EY managers told Cintas that the final invoice would be calculated and sent to the company once Cintas had secured the expected incentives. This suggested that EY’s fees would depend upon the final amount of the tax credits, and Respondent again failed to investigate.

During the relevant period, Respondent completed audit work papers certifying that EY complied with applicable auditor independence requirements. Respondent also verbally told Cintas’s audit committee that there were no issues that impacted EY’s independence. As described above, EY was not independent of Cintas. Respondent failed to investigate red flags indicating that EY was performing certain C&I services for Cintas on a contingent fee basis, which violated the auditor independence rules.

Hurak, who was an engagement manager for certain C&I services that EY provided to Cintas from April 2013 to August 2018, reviewed and approved certain EY invoices sent to Cintas for C&I services, including those services provided to Cintas on a contingent fee basis.

For example, in November 2016, Respondent approved billing Cintas for obtaining a large federal hiring-related tax credit. The invoice listed both the amount of the credit and the amount of the fee. The amount of the bill was almost exactly 10% of the credit amount that Cintas received. Cintas paid the invoice in January 2017.

Similarly, in September 2017, Respondent emailed Cintas an invoice for C&I services relating to three federal tax credits. The email also summarized the amount of each federal credit and the charges for each credit. Those charges were approximately 10% of the tax benefit Cintas received for each credit. Cintas paid the invoice in October 2017.

Bering, who was the engagement partner for C&I services that EY provided to Cintas from July 2009 through June 2018, failed to perform a reasonable inquiry in response to information that EY staff under his supervision were billing Cintas for C&I services on a contingent fee basis, according to the SEC.

By at least 2016, Respondent became aware of information that EY staff under his supervision were billing Cintas for C&I services on a contingent fee basis. In March 2016, in response to questions he raised to EY staff about Cintas invoices, an EY manager emailed Respondent that “[h]istorically [Cintas] has agreed to pay us fees that reflect the amount of benefit we bring.” In that same email, the EY manager included a chart showing Cintas’s tax credits and EY’s corresponding fees, which were a percentage of the tax credits. Respondent failed to investigate the information in the email suggesting that a contingent fee arrangement existed between EY and Cintas.

In January 2017, Respondent did not respond to an email from an EY manager specifically raising concerns that EY had been invoicing Cintas on a contingent fee basis for C&I services. When the manager followed up during a phone call, Respondent directed the manager to discuss the issue with the person responsible for invoicing Cintas and otherwise failed to perform a reasonable inquiry as to the manager’s concerns.


Alan Greenwell

Hurak, an attorney licensed in the state of Ohio who became an EY principal on July 1, 2018 before resigning from the firm in February 2019, agreed to pay a $20,000 fine and to cease and desist from future violations of auditor independence rules. He is also suspended from appearing or practicing before the SEC as an attorney for two years. He is currently a shareholder with accounting and advisory firm Clark Schaefer Hackett, according to his LinkedIn profile.

Greenwell, a partner throughout the relevant time period who left the firm involuntarily in March 2019, agreed to pay a $15,000 fine and to cease and desist from future violations. In addition, he is barred from appearing or practicing before the SEC as an accountant for two years. Greenwell currently is a shareholder and Cincinnati markets leader at tax and accounting firm Brixey & Meyer, according to his LinkedIn profile.


Adam Bering

Bering, an attorney licensed in the state of Ohio and current principal at EY, agreed to pay a $10,000 fine and to cease and desist from future violations. He also is suspended from appearing or practicing before the SEC as an attorney for one year.

In addition, Scott Clark, an accountant and former vice president of corporate taxation for Cintas, had his wrist slapped by the SEC for negotiating and approving payment of EY’s contingent fee invoices on Cintas’s behalf. He was fined $30,000 and agreed to cease and desist from future violations. Clark was also suspended from appearing or practicing before the SEC as an accountant for one year.

Related article:

EY Learns the Hard Way Not to Screw Around with the SEC’s Auditor Independence Rules

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How can firms remain competitive alongside cloud-native practices?

Christina Lane

Like many other industries, the pandemic forced practices to think on their feet and adapt. Many adopted digital, automated cloud-based tools tailored specifically to the needs of accountants to consolidate their operations. The ease of use and scalability of these tools also gave rise to hundreds of new firms. In just the month of March 2020, a record 636 new accountancy practices were founded.

These ‘cloud-native’ firms can streamline lengthy processes and tasks, becoming the de facto standard of any practice starting out due to their affordable pricing, ease of use and efficiency. All of which enables accountants to focus on offering clients higher-value advisory services. Many established firms have moved their operations either fully to the cloud or are in the process of migrating from desktop. In fact, over 70% of our customers are in the cloud, despite the pandemic and continued economic uncertainty. With this tsunami of migration, competition in the accountancy profession is as fierce as ever.

Join the cloud-native party

To keep up with competition and stay ahead in the market, change doesn’t have to be big, audacious, or even expensive. Making incremental adjustments can lead to a world of difference.

The starting point should always be providing clients with better informed advice and insight. This could be as simple as tweaking current processes to provide clients with services they didn’t even know they needed.

Small changes can also have a big impact on culture and recruitment. If practices want to stand out as a desirable place to work in today’s job market, they need to consider evolving internal operations and working styles to attract the best talent. Not only will attracting and retaining top candidates positively impact clients through the services they provide, it will also help practices plan for the future in the knowledge they have the best people best placed within their organisation.

To successfully deliver the best services and advice to clients, all the while enhancing culture in the process, accountants need digital-first solutions that access real-time and accurate data across every aspect of their firm.

Life on the cloud

Powered by the cloud, real-time data enables accountants to metaphorically ‘look over the shoulder’ of clients and gain a thorough understanding of what’s happening in their business. This increases the touchpoints between both parties, widening the scope for additional collaboration.

The cloud provides actionable data that helps accountants give forward-looking advice rather than just completing year-end tax filings – the general bread and butter. It also provides aggregated insights from across a firm’s client base, amalgamating the data and performance of businesses in the same sector. These services are now essential as accountants deal with the busy festive period, Making Tax Digital (MTD) and rebuilding from the pandemic.

The benefits of cloud-based tools aren’t even strictly restricted to servicing clients – practices can also benefit internally. Post-pandemic, employees now expect different working experiences and styles. The cloud enables employees to work from anywhere, provided they have a laptop and an internet connection. Not only is this appealing for Millennials and Gen Z who seek greater flexibility in the way they work, it helps other employees with commitments, such as single parents who can choose the hours they work to fit in with their life using cloud-based tools and systems.

For Becky Homer at Farnborough-based practice Jones & Co., access to flexible accountancy software opened up the possibility of effectively managing being a parent with a heavy workload. Becky said, “I’ve even been to Thorpe Park for the day, and the kids have gone off on the rollercoasters and I’ve sat in a coffee shop and been able to work as if I’m in the office…”.

In a world of digitisation, the accountancy profession is sometimes guilty of being slow to innovate – I know a number of firms that still use outdated technology. This reluctance to modernise is harmful and damaging the value proposition of accountants. Ultimately life on the cloud simplifies long drawn out and inefficient processes, so it’s no wonder firms that have already adopted these tools are thriving.

Take one step to the right

Accountancy professionals are a critical part of every business, helping them stay on track and grow in good times and bad. However, to remain competitive and stave off competition from cloud-native new-comers, they need to successfully deliver the best services and advice to clients. To do this, accountants need digital-first solutions.

Using real-time, accurate data across every aspect of their firm to create workflow efficiencies, accountants can ensure they have the tools needed to thrive and transform their firms and clients’ businesses today, and tomorrow.

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Steps for Initiating Your Startup Business

Christina Lane


Starting your own business is a daunting task. So how can you get your startup off the ground?

Starting your own business is a daunting task. Entrepreneurs will need the proper planning and strategizing to get any business off the ground successfully. There are a few key steps that any new business owner will need to tackle before launching their own business. No matter what type of business it is, these steps will usually be quite similar. Here are the initial steps that any entrepreneur needs to take to thrive in the business world as an owner. 

Conducting Market Research

Knowing your industry is one thing. But, knowing what your clients or audience needs and wants become integral to any successful business. Market research is a great way to find more information on your demographic and how your service or product fits within the industry or field itself. The reality is, understanding what potential customers need and want is the best way to provide those things to your future consumers. This instantly gives you a much better competitive advantage as you step into the business world as an entrepreneur. 

Writing A Proper Business Plan

Executing and writing down your business plan becomes increasingly important for any successful business. Your business plan will serve as the foundation for your business — so you’ll want to make sure that it is effective and thorough. The reality is, even if you are new to the business world, there are so many resources available to you to help execute a business plan effectively and efficiently.

dequate Funding For Your Business

Within your business plan, you’ll need to dedicate space to determine how you plan on funding it. There are various options available to people when it comes to starting their own business and gaining access to capital to help it grow and thrive. Looking at all your options is just a phone call or Google search away. As a result, getting in touch with professionals who understand the nuances associated with starting your own business can make the process much easier than you may have thought! 

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

 

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Your Guide to Decoding Complex Cryptocurrency and Crypto Tax Concerns

Christina Lane


Irrespective of your feelings on the matter, crypto could very well prove that it is here to stay.

There’s little doubt that cryptocurrency represents one wave of the future. Bitcoin and Blockchain have changed the way we see traditional paper-based money and metallic coinage. Savvy investors are getting in “on the bottom floor,” as the saying goes. Virtual currencies don’t need to feel like a gamble or a fade. Irrespective of your feelings on the matter, crypto could very well prove that it is here to stay. All kinds of cash – even the offline ones – go through cycles of boom and bust. Inflation can change everything, and so can fluctuating tax codes. What is the IRS looking for, and how can you avoid running afoul of their regulatory agents? 

Closer Look at Cryptocurrency Itself 

According to federal tax rules, cryptocurrency is classified as property and not a financial asset. By the IRS’ reckoning, it is a capital asset as well. So the gains and revenue you generate from selling or trading capital assets are indeed taxable. Other types of capital gains are stocks, bonds, houses, and widgets. Recent investment innovations such as Dogecoin and Bitcoin also fall under this category. So if your income is higher than your baseline, you receive a capital gain. Conversely, if you end up losing money, that is clearly a capital loss. 

Gains Help Diminish the Associated Taxes

Taxes are a certainty in life. However, taxes have been collected throughout human history via various foodstuff resources such as wheat and rice. Reducing your tax bill takes some careful planning and plenty of patience. Keep your short-term gains until they convert into long-term gains instead. This process should take about a year, so you will be richly rewarded if you can resist the urge to sell. 

Wager Gains and Losses Against Each Other 

Investments come with some inherent risks. They might not work out the way you wanted. Even so, be bold enough to pit prospective gains against potential losses. Subtract your crypto losses from the gains you made—additionally, factor value appreciation into your calculations. Please be advised that you’ll inevitably run into strict limits if you play it this way.  

Capitalize on The Seller’s Market

Low-income years are perfectly normal. Despite the loss of revenue, your small business (or S-Corporation as well) can still stay afloat. Selling at the right time decreases the amount of taxes you have to pay. This scenario benefits you the most after you’ve retired because you won’t be bumped into a higher tax bracket. 

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

The post Your Guide to Decoding Complex Cryptocurrency and Crypto Tax Concerns appeared first on The Harding Group.

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Is Accounting an Obsolete Major?

Christina Lane

Is accounting an obsolete major? That’s the question posed by John “Jack” Castonguay, PhD, CPA, in the August/September 2021 CPA Journal. He writes:

Accounting — at least as an independent field of study — is becoming obsolete in today’s technology- and analytics-focused world. Its value lies in its interdisciplinary applicability and position as a foundational business curriculum. In recognition of that reality — and to maintain a pipeline of candidates open to CPA licensure, increase the number of engaged accounting students, and keep the profession relevant to the next generation — this author believes that colleges and universities should eliminate the accounting department as a stand-alone department and reorganize accounting under finance and information systems departments.

It’s long been established — and we here at Going Concern have nearly 13 years of evidence littered throughout our archives to prove it — that the accounting profession has a recruitment problem. A decade ago, the profession’s efforts were honed in on increasing diversity, but nowadays it’s about getting people in the door.

The most recent AICPA Trends report [PDF] — published in 2019 — tells us that accounting enrollments are down overall, though it does look like there’s some positive movement on the diversity side:

Total projected accounting enrollments are down 4% from the highs of 2016, but are still among the highest on record. Master’s enrollments are down 6% from 2016. Racial/ethnic diversity has increased in the 2017-18 academic year. Universities have reported increases in Hispanic or Latino enrollees of 3 and 8 percentage points at the bachelor’s and master’s levels, respectively. Seventy-two percent of bachelor’s of accounting programs and 65% of master’s of accounting programs expect to have the same or higher enrollment in 2019.

We are anxiously awaiting the newest AICPA Trends report, which is published every two years and therefore should show up anyday now. Until then, we can only guess on what the next batch of numbers will look like and hand-wring over the data we do have.

The Bureau of Labor Statistics forecast employment of accountants and auditors to grow 13.1% from 2012 to 2022; current BLS data projects 7% growth for this segment from 2020 to 2030, about as fast as the average for all occupations.

About 135,000 openings for accountants and auditors are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Let’s talk about retirements while we’re on the topic. A few years back, the AICPA estimated that a whopping 75% of its members (read: CPAs) would be eligible for retirement in 2020. When you combine this figure with waning interest in accounting as a major, more and more accounting graduates foregoing the CPA exam, an accounting professor shortage, and the pressures of a traditionally reactionary profession to take proactive steps to adapt to new technology, well, it doesn’t look pretty.

The CPA Evolution project aims to address that last issue, and the AICPA and NASBA recently released a revised CPA Evolution Model Curriculum upon which university accounting programs can build their curricula but are by no means required to. I’m hearing grumblings from deep within the bowels of academia that some professors are less than thrilled about this project, but no one is willing to go on record, so if you’re an accounting professor with an opinion on CPA Evolution good or bad and willing to put your name on it, please do reach out.

The problem with this approach, writes Castonguay, is that the new curriculum fails to address the “jack-of-all-trades” problem; early-career accountants in particular are expected to know a little bit about a lot of stuff, essentially.

Even though the CPA Evolution Project is aligning the credential with practice, it is also underscoring that the value in the license lays not within the accounting curriculum that has existed for decades; the new value is the technology, the analytics, the systems, and the tax research. But I believe the curriculum realignment anticipated by the CPA Evolution Project will only lead to an even faster decline in enrollments if accounting remains siloed as a stand-alone major.

As the profession gets more specialized, the accounting curriculum is expanding to include more information, more courses, more skills, and more tracks—but students are less skilled at each one. It’s a cycle that can’t be fixed by repackaging existing courses. It can only be fixed by eliminating the accounting major and unlocking accounting’s interdisciplinary value and specialization within finance, information systems, or other departments.

In order to better recruit future accountants (or should we start calling them accounting analysts?), Castonguay suggests a total rehaul of accounting education, rolling existing accounting curriculum into other departments. This, he says, is preferable to trying to cram technology content into existing accounting programs instead, which seems to be the current plan.

[T]he accounting department itself should be eliminated and reorganized predominately under finance and information systems departments. In the author’s opinion, this approach will unlock the value in the fast-evolving accounting roles that accounting firms and future employers seek from graduating students.

So what do we think? Is accounting a dead major? Is the solution to the profession’s pipeline problem as easy as parasitically latching onto other business majors hoping to snag a couple future CPAs with the captivating glitter of accounting fundamentals?

I’ll say this: the next few years are going to be very, very interesting.

Photo by Ana Arantes from Pexels

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How Are You Supposed to Dissolve an S-Corporation?

Christina Lane


So how do you dissolve an S-Corporation?

Ending your business is an unfortunate experience. Every entrepreneur fears their venture failing. Even if it was thriving before, your business model might be outdated. A sole proprietorship can only go so far. But even with a solid core of partners, coworkers, or employees, termination could be your company’s ultimate fate. So how do you dissolve an S-Corporation? 

Why Does This Become Necessary? 

Even though your S-Corporation has gone under, you’re still on the hook. The IRS will still demand you pay your fair share. Thus, you must inform the IRS and your relevant state authorities of the situation. Otherwise, you’re obligated to file inactive business annual reports with the state. Beyond that, you are required to continue filing tax returns and submitting them to both state and federal authorities. Maintaining your business license is also essential, but all of these steps come at a cost. Since you are not generating any more revenue from your business, it’s time to cut ties. Continuing to pour money into it is a losing battle.

How Do I Know When It’s Time? 

Terminating the business as early as you can (once you know you are going to fold, that is) is the best move you can make. Complete the process by the end of the tax year. Suppose this scenario unfolds at the start of your tax years. In that case, there is a deadline for your paperwork. This deadline falls on the 16th day of the third month within your relevant tax year. But if it is at some other point, you can choose any date you want to declare your S-Corporation as defunct. That said, send all of your related documentation to the IRS before this date arrives.

So How Do I Do It?

The first step in this process is to find your Articles of Incorporation. This document is the one you sent to the state when you first opened your business. As you read it again, keep an eye peeled for the language describing the dissolution of the S-Corp. After that, initiate proceedings to dissolve the LLC or corporation. Co-owners and other shareholders must vote on this matter, as well. Be sure to record the outcome of the vote in the meeting minutes or draw up a written consent form. In other words, put it down in writing. The Articles of Dissolution (or Certificate of Termination) kick in at this point. Send these forms with the Secretary of State serving your state. There is more to it, but we will have to explain more later! 

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

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Grant Thornton Is Trying to Keep Heinies In Seats By Giving Raises Enhancing Benefits

Christina Lane

Aw, better luck next time, GTers. Maybe some good news on Dec. 17? Anyway, here’s what Grant Thornton sent out on Dec. 1:

Grant Thornton has further embraced the changing nature of benefits by taking its traditional benefits package — which includes items such as retirement plans and medical insurance — and layering on a host of newer offerings, including:

Flexible work arrangements such as reduced-work schedules, compressed work weeks and flexible days — regardless of level;Flexible time off that allows employees to disconnect from work as needed instead of tapping into a predetermined set of paid days off;Expanded family-care benefits, including enhanced parental leave and access to childcare, eldercare, pet care, meal planning, housekeeping and other resources to support quality of life;Subsidized meal-delivery services;40 hours of chargeable time annually to engage in volunteer activities;Flexible career-development and learning opportunities that work with people’s real-world schedules;Quiet hours and other measures to reduce the fatigue of video conferences and remote work;Lifestyle accounts that offer reimbursement for wellbeing expenses, such as fitness equipment purchases.

Further, Grant Thornton believes that offering ample and forward-thinking benefits also means doing so affordably. For this reason, the firm is absorbing employee premium increases for its medical benefits for the 2022 calendar year.

GT did an OK job of spreading the wealth around last summer, and now we have these enhanced benefits which Mike Monahan, national managing principal of people and community, said creates “total wellbeing across multiple dimensions: emotional, physical, career, social and financial.”

Will last summer’s raises and these new souped-up benefits keep GTers from leaving for the Big 4 or industry? Who knows. But if employees are planning on handing back their purple roses next year, giving them a mid-year salary adjustment before Jan. 1 would at least give them a third reason to stick around.

Related articles:

Compensation Watch ’21: Grant Thornton Is Dragging Its Feet On Announcing Mid-Year Raises

Compensation Watch ’21: Did Grant Thornton Give Employees Briefcases Full Of Money This Year?

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