The Journal Entry - April 2014

1the journal entry | April 2014

www.uacpa.org

The Herculean Task of Taming Your Risk Monster

April 2014, Vol. II | Enterprise Risk Management

Thomas G. Green, MBA, CIA James Andrus, CPA Sam Belnap

2 the journal entry | April 2014

Mission

The UACPA Leadership supports and challenges members through advocacy, professional education, leadership develop-ment, networking, and community service, to help them succeed in a competitive and changing world.

Vision

At the UACPA, our vision is to be a world-class professional association essential to our members.

We unite a vibrant community of CPAs to enhance the success of our members and champion the values of the profession; Integrity, Competency, and Objectivity.

Values

AdvocacyThe UACPA represents the profession at the legislature and other regulatory bodies and promotes the value of the CPA to employers, the business community, and the public at large.

Leadership & ServiceThe UACPA provides leadership and service within the profes-sion, within the UACPA and within the community.

Professional DevelopmentThe UACPA supports and encourages continuing education and leadership development.

Professional CommunityThe UACPA reinforces peer accountability to encourage mem-bers to maintain integrity and high ethical standards. We provide member to member networking opportunities and networking opportunities with other professions. We value belonging to a distinguished organization and believe that we serve as the primary resource and point of contact for Utah CPAs.

Diverse Population OutreachThe UACPA believes in reaching out to under-represented populations, those returning to the profession or choosing it as a second career, and other professions.

president ................................................ Paul O. Skeen

president-elect .................................... Jonyce Bullock

vice president .................................... Hollie S. Andrus

secretary .................................................. Mark Palmer

treasurer ................................................ Kyle J. Pexton

member-at-large ...................................Larry A. Deppe

immediate past president ................. Kent L. Thomas

AICPA Council .........................................Dan Griffiths

ceo ........................................................ Susan A. Speirs

editorial staff ....................................... Amy Spencer

The Journal Entry is published quarterly, by the UACPA1240 E. 2100 South, Suite 500Salt Lake City, UT 84106tel: 801-466-8022 toll-free in Utah: 1-800-676-2776e-mail: [email protected]

Send address changes toUACPA1240 E. 2100 South, Suite 500Salt Lake City, UT 84106email: [email protected] log on to www.uacpa.org to update your address and member profile online Cover photo by Kristan Jacobsen, kristanjacobsen.com (l-r) Thomas G. Green, MBA, CIA, James Andrus, CPA and Sam Belnap of Piercy Bowler Taylor & Kern

UACPA Statement of PolicyCPAs have common problems and interests. This magazine has been

created to share information relating to the practice of accounting.

The opinions, views and articles expressed in this magazine are not

necessarily those of the Utah Association of Certified Public Accoun-

tants. This magazine should not be deemed an endorsement by the

UACPA or its committees or editorial staff of any views, opinions or

positions contained herein. Because of the complexity of tax laws and

accounting transactions and the changing status of the law, as well as

variations in practices and procedures among accountants, informa-

tion in the magazine should not be used, acted or relied upon, as a

substitute for independent accounting or legal research and advice.

Mission,Vision,Values ExecutiveBoard


in this issue | April 2014

New Members ...........................................................................................4

Movers & Shakers .....................................................................................5

President's Message .................................................................................6

Message from the CEO ............................................................................7

Cover Story: Elements of Enterprise Risk Management .....................8

By the Numbers: Financial Literacy ..................................................... 14

A Different View of Risk ........................................................................15

Do You Believe You Will Never be Sued? ............................................19

Accounting Challenges for Regulated Public Utilities .....................21

Managing Risks with Telecommuting .................................................27

Social Media and CPAs: Curse or Bonanza ........................................29

SMEs Driving & Adopting Sustainable Business Strategies .............33

UACPA Members Celebrate 25 Years .................................................36

Top UACPA Supporters .........................................................................37

Photos, Financial Literacy Day on the Hill .........................................38

Meet a Member: Jared Mair ..................................................................39 Meet the Executive Board .....................................................................40

Board Bullets ........................................................................................... 41

Meet the UACPA Staff ............................................................................ 41

Education .................................................................................................42

12

feature story

Enterprise-wide Risk Management

Meet a Member: Jared Mair

Accounting Challenges and Public Utilities

7

40

21

39

Board Bullets: News from the UACPA


Congratulations to the following individuals/CPAs who were approved for membership or affiliate status in the UACPA as of February 20, 2014.

Fellows Jeffrey Adams Security Nation Life Ins. Co.

Bryan Auernig Bountiful, UT

Jarom Casey PricewaterhouseCoopers LLP

Kyler Cheesman Tanner LLC

Andrew Cooper Barrick Gold of North America, Inc

Jennifer Cowley HJ & Associates LLC

Trenton Doman Defense Contract Audit Agency

Krey Ellis Farr West, UT

Ashton Ferrin Niederhauser & Davis LLC

Thomas Fishler HJ & Associates Tax Accountant

David Gertsch HintonBurdick CPAs & Advisors

Tyler Hall Savage Esplin & Radmall, PC Accountant

Duke Heninger Tanner LLC

Adam Jowers Christensen & Company, PC Senior Accountant

Jacob Mangum Lehi, UT

Tory Norman Squire Accountant

Jihye Park Wisan, Smith, Racker & Prescott, LLP

Brett Redd Squire Manager Business Advisory

Steven Sheffield No Employer Listed Alpine, UT

Tarrence Warenski Kenworth Sales

Jeremy Wilkey Hawkins & Cloward & Simister, LC Audit Staff

Brian Winegar Heber City, UT

Student AffiliatesDixie State College – 2

Stevens Henager – 1

University of Phoenix – 1

University of Utah – 9

Utah State University – 1

Utah Valley University – 2

Weber State University – 1

Western Governors University – 1

Westminster – 7

NewMembersNew Members/ Movers & Shakers


Movers & Shakers

Movers&Shakers

Jayme McWidener

Shane Grant

Daniel Capener

HJ & Associates has announced Jayme McWidener, CPA as a partner at their firm. McWidener joined the firm in 2004 as a member of their Audit and Assurance team. In her 10 years with HJ & Associates, Jayme has demonstrated her technical

expertise, created a firm-wide training program and has been a valuable resource to her clients. She received her bachelor’s and master’s degrees from Drake University in Des Moines, IA.

Shane Grant, CPA, Partner has been announced as the new tax department head at Mantyla McReynolds, replacing Ken Oveson who is stepping down in preparation for his retirement. “Ken has given so much to the company for the past 16 years and will be greatly missed,” says Kim McReynolds, CPA, Managing Partner. Grant acknowledges that Oveson has “left big shoes to fill,” adding that “he has been an excellent tax department head, and we will continue to rely upon his experience and expertise to allow us to continue to provide great service, skill, and knowledge to our

clients.”

Douglas Woodbury, a graduate of Brigham Young University and Tyson Irwin, a graduate of Utah State University, have received the 2013 Elijah Watt Sells Award. These individuals were among the 55 candidates who received the highest scores across all four sections of the Uniform CPA/Examination. They scored a cumulative average above 95.50 and among more than 94,000 individuals. Woodbury is employed with Ernst & Young in Salt Lake City and Irwin is employed at PricewaterhouseCoopers in Salt Lake City.

Eide Bailly has announced Daniel Capener, CPA is joining as consulting manager for the Technology division in the Ogden office. Capener brings more than 20 years of experience in implementing and maintaining enterprise accounting system. The

Weber State University graduate and Microsoft Certified Database Administrator will work on the Business Applications team.

Robert J. Cole, CPA has been named Tax Practice Leader for the Utah office of CBIZ MHM, LLC. Cole has served as Managing Director for 14 years at CBIZ MHM, LLC and is a Shareholder at Mayer Hoffman and McCann P.C. With nearly 30 years of experience, Cole has contributed significantly

to the growth of the tax practice and will be responsible for the financial health of the tax practice segment, including revenue growth tax, personnel development and client service delivery. Cole received his Bachelor’s and Master’s degrees in accounting from Utah State University.

Mary Kay Griffin, CPA was honored with the Pathfinder award during the Salt Lake Chamber’s 37th Annual Women & Business Conference and Athena and Pathfinder Awards Luncheon. The Pathfinder Award was given to five honorees in recognition of their

community leadership and history of support for women and women’s issues. Griffin is the managing director of CBIZ MHM, LLC and a shareholder of Mayer Hoffman McCann, P.C.

Grant Thornton LLP and Mantyla McReynolds were among 35 businesses of "Best Companies to Work for" in Utah Business magazine. Both were featured in the small companies category.

Ken Oveson

Mary Kay Griffin

Robert J. Cole


President's Message

I would like to begin my first official written remarks as President of

the UACPA with a sincere thank you to Kent Thomas. His leadership has been critical in navigating the UACPA through some monumental changes which supports the profession more effectively. His focus on ethics, com-petency and diversity will continue to drive discussion for years to come.

I hope to engage our membership on discussions surrounding two topics: Diversity and Inclusion and Education. By educating ourselves on these two topics, we can take a proactive ap-proach in addressing the staffing crisis our profession is sure to face moving forward.

The 2013 Private Companies Practice Section (PCPS) CPA Firm conducts surveys to decipher the issues firms in our industry face. More than 1,000 respondents represent various practice types and sizes. The results were broken into the following categories: Sole prac-titioners, Firms with 2–5 professionals, Firms with 6–10 professionals, Firms with 11–20 professionals and Firms with 21 or more professionals.

Interestingly enough, the concern of “finding qualified staff (at all levels)” ranked in the top five for all size catego-ries except for sole practitioners. Also ranking in the top five for all categories except sole practitioners was “retaining qualified staff (at all levels)” and “suc-cession planning.”

Studies vary widely on the numbers of impending retirements for accounting professionals, some estimating that as many as one-third of all CPAs could retire within the next 10-15 years. Regardless of statistics, one could walk around the halls of accounting firms, or better yet, attend a UACPA confer-ence and see that a large number of our membership may be leaving the profes-sion soon. We need to address this and find ways to introduce and diversify the next generation of accountants. Diversity and InclusionThis header alone may have caused a few to stop reading, but for the brave souls, who continue to read on, please know that the discussion of diversity and inclusion doesn’t need to be scary. Diversity is simply being different from one another and inclusion is finding ways to embrace and leverage the dif-ferences for the benefit of the group. I hope to focus discussions on what we can do to retain and promote the tal-ented women and minorities entering the accounting profession. EducationRecently, I had the opportunity to participate in a 7th grade career fair at my daughter’s junior high. In prepara-tion for this event, I spent some time on the AICPA’s “Start Here, Go Places” website — www.startheregoplaces.com. If you’ve ever had a difficult time selling why accounting is a great profession,

spend a little time on this website. Here you will find highlights of the oppor-tunities and key selling points for the profession. I hope to see a few future accountants from my daughter’s class.

In closing, it is a great honor to have the opportunity to serve as the UACPA President for the coming year. I look forward to engaging as many of you as possible in meaningful discussions on the topics of diversity and inclusion and education and awareness. If you have any suggestions or ideas on how we can better prepare ourselves, our industry or the future of the profession, please let me know.

Thank you and see you soon.

Paul O. Skeen, CPA UACPA President

President's Messagepaving the way for diversity, inclusion and education within utah's professional network

paul skeen, cpa


CEO’s message

As another dues cycle begins for the 2014-15 year, the UACPA is excited to announce our 100% Membership

Program. Firms and companies with an eligible staff of 10-or-more individuals are recognized for their enrollment in the UACPA. Our programs are strengthened when companies reach 100% participation and CPAs demonstrate their commitment to the highest professional standards as the public experiences our aim to improve our communities. If you would like to enroll in the 100% Membership Program, please contact UACPA Membership Coordinator Tisha Smith, [email protected] or call 801-466-8022.

By renewing your membership, you increase your clout, letting clients and colleagues know you adhere to a high level of professional standards. The UACPA offers networking opportunities through conferences and events and provides a place for CPAs to meet likeminded individuals through committees and task forces. Not only does your UACPA membership help you advance in the profession, but you will save time and money through special offers selected exclusively for members.

Additionally, the UACPA frequently receives calls from companies who need CPA board members or fields requests from our legislative members seeking CPAs for committees. Maintaining your membership lends you additional possibilities to serve the public. As the UACPA continues to serves its members through advocacy, below are some examples of where we have

worked during the legislative session. • Utah State Tax Commission: SB19 addresses appointment and qualifications of members of the Utah State Tax Commission specifically requesting that one or more members be CPAs licensed to practice in Utah. • Nonprofit entity receipt of money: HB283 addresses the audits of nonprofit entities and enacts the Nonprofit Entity Receipt of State Money Act which defines terms, imposes requirements on a nonprofit entity’s receipt of state money and authorizes the issuing state entity to seek return of state money if the nonprofit entity fails to comply with requirements set forth as well as technical changes. Thanks to the UACPA’s Nonprofit Committee for overseeing changes to the language that could have hurt smaller nonprofit entities. • Financial Literacy: SB40S1 addresses the funding of financial and economic literacy. The UACPA partnered with the Utah Jump$tart Coalition for Financial Literacy to push this bill through the legislature. The bill requires end-of-course assessment for the financial literacy course, adopts course standards that are to be updated bi-annually and implements a teacher endorsement stipulatingqualifications needed to effectively teach the course. Your investment in your future serves as a reminder of your dedication to the profession. You worked hard for your license and we work hard to protect it. Renew your dues and get involved by calling us at 801-466-8022.

CEO's Messageinvest in the future of the profession when you renew your membership

susan speirs, cpa



Feature storyIt's All Greek To Me

In Greek Mythology, the Hydra was a gigantic serpent-like monster with many heads, which haunted the lake in

ancient Lerna, a region of springs near Argos. What made the Hydra so dangerous was to destroy it one would have to decapitate it. However, as one head was dispensed with, two or three more sprung up, and one head was immortal. For his Second Labor, Hercules was sent to destroy the Hydra. Knowing he could not destroy it alone, Hercules employed the assistance of his nephew, Iolaus, even though he was specifically prohibited from doing so. Through a careful strategy and important team work, the Hydra was ultimately defeated.

Modern business owners can face risks as overwhelming and multi-headed as the inhabitants of Ancient Lerna. Just as one calamity seems to be averted or controlled, two or three more often come from out of nowhere. Identifying a strategy to overcome the business-Hydra is a constant prob-lem facing business leaders. Over the years, frameworks and approaches have been developed to help organizations attack their risk monsters, not by a single person or through simple brute strength, as was initially contemplated by Hercules, but strategically and as a group. One approach has been Enterprise Risk Management (ERM).

ERM is roughly defined as a framework with methods and processes used to take advantage of opportunities and man-age risks. This is typically accomplished with the assistance of various stakeholders — including the board, manage-ment and others — in setting a risk-reducing strategy across the enterprise. This effort is designed to identify risks to the entity and manage these risks.

Organizations, in the past, have often relied on internal audit or the external auditors to help identify and slay all serious threats. Or they have relied on various, uncoordi-nated efforts throughout the organization to help tame the beast. ERM has suggested a team-focused approach. By their very nature, uncoordinated risk-managing functions will often include some efforts that are better than others. By coordinating efforts, and working as a team, an organiza-tion can accomplish the Herculean task of identifying risks and effectively decapitating them.

In this article, we will address ERM principles from a financial reporting, Information Technology and business operations (internal audit) perspective. We recognize there are other perspectives, but covering it from these perspec-

utilizing your external auditor, it department and internal audit function in your erm process

thomas g. green, mba, cia sam belnap james andrus, cpa Photos by Kristan Jacobson


tives cover a significant amount of the overall risks facing many organizations.

Financial Reporting Risk assessing and ERM have progressed in recent years as organizations see value in identifying which risks they can live with, which risks must be mitigated and which risks can provide a strategic advantage or opportunity to the organization.

Various frameworks have come into vogue in recent years attempting to provide tools for organizations grappling with the multi-headed monster, RISK. One prominent frame-work is the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) Enterprise Risk Manage-ment — Integrated Framework (Framework).

This Framework focuses on achieving an organization’s objectives, set out in four categories:

• Strategic – high-level goals, aligned with and support-ing its mission

• Operations – effective and efficient use of its resources

• Reporting – reliability of reporting

• Compliance – compliance with applicable laws and regulations

Strategic and Operational Objectives are generally the purview of the board and management. And, of course, the board and management also have a responsibility for the Reporting and Compliance Objectives.

However, as the Framework’s Executive Summary states “[a] number of external parties, such as customers, vendors, business partners, external auditors, regulators, and finan-cial analysts often provide information useful in effecting enterprise risk management, but they are not responsible for the effectiveness of, nor are they a part of, the entity’s enterprise risk management.”

The external auditor’s primary concern is on the risk of material misstatements in financial reporting and, thus also, have a direct and an indirect role with the Reporting and Compliance Objectives as set forth in the Framework.

Unlike Hercules’ directive to perform his Labors without

assistance, ERM encourages cooperation among many interests. And, although the external auditors are generally prohibited from being a formal part of an organization’s ERM process, they often “provide information useful in effecting enterprise risk management.” ERM also requires a holistic and comprehensive view of risks, otherwise the effort cannot truly be categorized as enterprise-wide.

The risk of material financial reporting misstatements has seen significantly more press in the past several years. This trend is not likely to subside any time soon. Consequently, the risk of a material misstatement goes beyond the actual dollars of the misstatements and reaches into the very heart and soul of an organization. Indeed, the very existence of an organization can be called into question if the misstatement is both material and fraudulent. Recent history provides many examples of this.

The board and management of any organization would be terribly remiss if they did not view all interested out-side parties of their organization as partners in providing information pertaining to risks that ought to be addressed. External auditors often have risk insights well beyond their primary role of auditing an organization’s financial state-ments. To disregard or diminish the insight of an organi-zation’s external auditors may be at the very peril of the organization itself.

Wise boards, audit committees and management will be receptive to all input regarding risks faced by their organi-zation. External auditors stand in a unique position to see risks beyond their formal obligations. Placing significance credence on their insight can tend to only benefit an organi-zation as it does battle with the business Hydra, Risk.

the board and management of any organization would be terribly remiss if they did not view all interested outside parties of their organization as partners in providing infor-mation pertating to risks that out to be addressed.

It's All Greek To Me


Information TechnologyGreek Mythology reaches back many millennia. The prac-tice of accounting reaches back almost as far. Evidence of accounting can be found in the ancient Mesopotamian culture as documented in a 2005 article from Redorbit.com. “In fact, the first known writing system emerged some 5,000 years ago in Mesopotamia in the form of written accounting records.” The next great evolution in accounting took place 4500 years later during the Renaissance when Luca Pacioli published “Summa de arithmetica, geometria, proportioni et proportionalità” in 1494. Heralded as the father of account-ing, Pacioli popularized the double entry booking standard we know today. Nearly 400 years later, in 1868, modern accounting was born with the inception of the balance sheet “as a way to summarize the results of double entry ac-counting,” according to Kirk Loury in an article featured on wallstreetb2b.net.

By contrast, the information technology age has just be-

gun, moving into business processes with the invention of ENIAC (Electronic Numerical Integrator and Computer) “The world's first electronic digital computer” in the fall of 1945. When computers were introduced to businesses, the concept of auditing around the system was also introduced. The risks, then involved in computers, was considered trivial.

A short 70 years after the introduction of ENIAC, comput-ers are the center of nearly every accounting and business process. Organizations now rely on machines, rather than humans for virtually all transactions, storage of records, and development of financial statements. Because of this it is critical that IT systems are fully integrated in the ERM programs.

Imagine hand writing every credit card number for every transaction manually or consolidating all accounts to gener-ate financial statements, or printing and mailing catalogs to all customers, and hand pressing each of those catalogs on

Feature Story

(l-r) James Andrus, Thomas Green, and Sam Belnap bring a Herculean attitude to PBTK.


printing presses. This should provide an insight into the im-pact the sudden loss of all information technology systems would have on ones organization.

The past 50 years have seen an integration of technology processes into nearly every aspect of nearly every business. This pervasive use of technology has never before been seen, and we may never see it again. ERM can no longer ig-nore the technology risks, or auditing requirements, around any business process using technology. Instead of relying on a separate IT risk program, organizations should embed IT risk assessments within and throughout the ERM program.

To begin, every organization needs to consider how IT, in general, impacts risk. A common, but serious mistake made by many organizations is defining who owns IT risks. Too many organizations place all accountability directly on the IT department and absolve themselves from responsibility. ISACA’s COBIT (Control Objectives for Information and related Technology) framework states that “Senior manage-ment and governing bodies collectively have responsibility and accountability for … the risk in accomplishing those objectives.”

Second, align accountability, and then define the risk culture of IT. A 2009 Businessweek article entitled What’s Your Company’s Risk Culture? explains that “Risk culture influences the decisions of management and employees, even if they are not consciously weighing risks and benefits.” When the tone at the top approach does not understand the impact of technology it significantly increases the organiza-tion’s risk.

Also, when a culture exists that thinks of IT only as a sup-port organization, and not as a critically essential depart-ment, risk is often overlooked. For example, new initiatives don’t involve IT, security equipment and systems often run on aged equipment, industry regulations such as PCI (Pay-ment Card Industry), GLBA (Gramm-Leach-Bliley Act), or Sarbanes Oxley are downplayed, etc. When this occurs, critical technology risks are often not fully understood and may not even be included in ERM.

Although the risk culture and the tone at the top for tech-nology is critical, the same concepts apply to both risk ap-petite and tolerance. A clear understanding of how technol-ogy supports the organization, likelihood and impact of an external threat, and internal risks to technology failure is required to fully define the risk appetite and risk tolerance.

In many organizations, IT is both their best competitive advantage as well as their greatest risk. Developing an ERM that fully address IT allows the maximization of the benefit and mitigation of the risk.

Internal Audit Internal auditing is defined as an independent, objective, assurance and consulting function designed to evaluate the risk management effectiveness of an organization. Indeed, it may be said that without risk, internal audit would not be needed. Consequently, the role of the internal audit function in ERM would naturally seem comprehensive and perhaps even the ones championing ERM. But, as ERM principles and the definition of internal audit indicate, internal audit’s role needs to be limited.

All agree that it is everyone’s responsibility in an organiza-tion, in some fashion or another, to identify and manage risks. But ultimately, the board has overall responsibility to ensure risk is managed, and management has day-to-day risk management responsibilities. So what role can and should internal audit play?

Independence of the internal audit function implies an abil-ity to report failings at the highest level of the organization without fear of retribution. Objectivity implies the inability to implement controls. This is so because once the internal audit function implements what should be management functions and decisions, it cannot later go back and evaluate those functions and decisions without, at the very least, the appearance of foregoing objectivity. However, the internal audit function lives and breathes in the fiery breath of risk and they have a consulting function built into their defini-tion. So what role can the internal audit function play?

in many organizations, it is both their best competitive advantage as well as their greatest risk. developing an erm that fully addresses it allows the maximization of the benefit and mitigation of the risk.

It's All Greek To Me


In an article by the Institute of Internal Auditors (IIA) in 2009 entitled IIA Position Paper: The Role of Internal Auditing in Enterprise-wide Risk Management, a spectrum of internal audit’s activities and roles in ERM are listed. As the spectrum moves from left to right, the role of internal audit in ERM requires greater safeguards to ensure the principles of inde-pendence and objectivity are maintained.

Some of the activities that are most clearly appropriate for in-ternal audit in its ERM role include giving assurance on and evaluating management’s risk management processes and activities, and evaluating how management reports on key risks. Certain other activities such as facilitating how man-agement identifies and evaluates risks, coordinating the ERM process and championing the ERM process are more of a consulting role for internal audit and should only be engaged in if there are proper safeguards to make sure internal audit is not engaged in a managerial role for these activities and does not exert undue pressure to implement ERM.

Taking accountability for or implementing ERM are much more clearly prohibited activities for internal audit with regards to ERM. Likewise, setting an organization’s risk ap-petite or imposing a particular risk management process also fall within the prohibited activities if internal audit is to stay within its proscribed definition of remaining independent and objective.

The definition of internal audit also states that the function can and should “add value and improve an organization's operations.” For internal audit, combining the principles of independence and objectivity in its assurance and consult-ing activities, and adding to the value of an organization can be as tricky as slaying a multi-headed beast. But with careful planning, proper team work, adherence to time-proven prin-ciples and a firm understanding of the benefits of ERM to the organization and the internal audit function allow internal audit to be a full partner with management and the board in establishing ERM.

At the end of the day, ERM responsibility ultimately re-sides with the board of an organization. But both parties inside and outside have a role to play in assisting this effort. Understanding these various roles, restrictions and limita-tions will greatly assist any organization in taming the Risk Monster. n

Feature Story

Thomas G. Green, MBA, CIA is a Principal and Director of Internal Audit for PBTK. The Utah native graduated from BYU and has more than 17 years experience. Green has served as president of the Institue of Internal Auditors for the Salt Lake City Chapter and is currently the Advisory Board Chairman for Utah Valley University's Internal Audit Program. Green has taught internal controls, auditing, accounting and fraud classes at the University of Phoenix since 2004.

Sam Belnap focuses on IT risk assess-ments, audits, strategic planning, business alignment, process improve-ments, and thought leadership. Belnap unifies the separate strategies of IT, business, and external compliance requirements into a single, simple, and sustainable approach. His experience crosses the public, private, government, and reservation-based organizations.

James A. Andrus, CPA is an Audit Partner and leads the Utah office for Piercy Bowler Taylor & Kern (PBTK). After graduating from Southern Utah University, Andrus began his career at a national CPA firm in Las Vegas where he spent 10 years in public accounting. He returned to Utah to develop a franchised food operation and returned to public accounting in 2000.

Piercy Bowler Taylor & Kern (PBTK), founded in 1990, is a full-service CPA firm with qualifications ad resources that are frequently compared to those of the Big 4. In addition to providing the highest level of audit, tax and consulting services, the firm's goal is to identify profit enhance-ment opportunities for clients. With approximately 100 professionals between Salt Lake City and Las Vegas, clients include publicly-traded companies (including accelerated filers), privately-owned businesses, governments, not-for-profit organizations, professional firms, and high net work individuals.


Numbersby the

These numbers reflect a 2013 Financial Literacy Survey from the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association (NBPCA) where 2,037 adults were surveyed.

April is Financial Literacy Month

78 percentage of U.S. adults who feel they could benefit from additional advice and answers to everyday financial questions from a professional

40percentage of adults who gave themselves a grade of C, D or F on their knowledge of personal finance

26 percentage (61 million people) who say they are worried about servicing their debt commitments

18 percentage of individuals (42 million Americans) who indicated fear of job loss as a major concern.

57 percentage of Americans indicated they are worried over a lack of savings.

19 percentage who were worried about their credit score and/or lack of access of credit overall.


Enterprise Risk Management: A Different View of Risk

Enterprise Risk Management (ERM) has become a part of our everyday vocabulary, yet it remains chal-

lenging to explain. From a strategic decision-making perspective, ERM allows us to view risk in a different light.

Boards of directors now want a more transparent view of risk and to know how it is being managed. In a more aggressive regulatory environment, larger financial institutions and insurance companies are being told by regulators that they must implement ERM. Third par-ties are also now interested in the ERM process. Rating agencies are looking at how a company’s ERM program affects business and financial risk, which may impact their credit rating.

The definition and implementation of ERM varies by the industry, size and complexity of the organization seeking to embrace the concept.

To break down ERM into a simplified outline, we begin

with the definition of risk:• Risk is typically thought of as encountering a loss, danger or hazard• Risk is the deviation from what is expected; the effect of its uncertainty on objectives• Risk includes looking at the upside, or consideration of what can provide opportunity

Historically, the evolution of ERM began with the root of risk management. Today, ERM has become the vehicle as to how an organization decides to respond to its risks, both the upside and the downside.

Due to the nature of risk, we must continually look at risk from different perspectives and with a wider lens.A commonly used definition of ERM from COSO (Com-mittee of Sponsoring Organizations):

“Enterprise risk management is a process, effected by an entity’s board of directors, management and other person-nel, applied in a strategy setting and across the enterprise,

by mary peter


A Different View of Risk

designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.”

The definition of ERM from the Risk Insurance Manage-ment Society (RIMS):

“A strategic business discipline that supports the achieve-ment of an organization’s objectives by addressing the full spectrum of its risks and managing the combined impact of those risks as interrelated risk portfolio.”

The key to a value-driven ERM program is how you build the foundation and create a risk culture. Structuring the foundation and framework includes:

• Top level executive and board support• Defined roles and responsibilities• Establishing risk appetite and risk tolerance• Determine risk criteria to measure risk in an aggregated manner• Establish a sustainable process

Advantages to ERM is that it takes a holistic, cross func-tional and top-down look at risks and how it impacts an

organization’s strategic objectives. This provides a view of internal and external risks. How the organization chooses to prepare and respond to these risks will span the choices of accept, mitigate, manage, transfer or exploit the opportunity the risk brings.

The graphic on the opposite page is the ERM view of a sample risk universe:

Corporate Risk UniverseRisk appetite and risk tolerance can be the most challenging elements to establish. Using the analogy of eating an apple, your risk appetite is how much you are comfortably able to eat (or risk that you are able to take on) in pursuit of nutrition and enjoyment. Risk tolerance is the amount and number of apples you absolutely can tolerate in pursuit of nutrition and enjoyment (aggregate amount of risk before risk of loss).

The risk criteria is how you are going to measure the risk; in terms impact and probability; inherent and residual; as well as velocity and significance. Determining risk criteria allows you to customize the manner which you rank, measure and display risk data. Most organizations utilize some type of data warehouse or risk matrix where

Historical View Today

Hazard Risk ManagementInsurable �nancial risks

Enterprise Risk ManagementOperational, strategic, �nancialreputation and insurable risks

Focus on preservation oftangible assets

Recognition of the value oftangible and intangible assets

Silo ApproachEach department/function manages

its risks independently

Holistic approachCoordinated at the highest level

within the organization

Risk management - separate function

Risk management is a corporate wide daily concern and is

embedded in the operations

Risks are threats - Focused on avoidance of negative events

Risks can be threats and opportunities


Enterprise Risk Management

Mary Peter is Director of Enterprise Risk Management at Eide Bailly LLP and leads the ERM Consulting Practice for the firm. She is a member of the U.S. Technical Advisory Committee and is a frequent speaker on the topic of ERM. Peter has more than 25 years of experience in risk management and insurance industries as well as 10 years as a risk manager. She can be reached at [email protected]

the risk information is stored and complied.Keeping ERM in a step by step process helps break down the tasks to build and sustain the activities of risk identi-fication, assessment, evaluation, response and monitor-ing. Recognizing the existing and good risk management practices currently in place is a key to tailoring ERM to fit your culture. Building upon this foundation will encour-age the engagement of those in cross functional areas to work together.

Listed below are ways to be sure an ERM program is strategic:

• Value & opportunity focused• Emphasis on a few key risks that drive disproportionate gains or losses• Risk-taking to maximize and preserve the value of the organization• ERM is a key part of strategic and operational decisions• Top management is engaged and encourages everyone to practice risk management

ERM may not become a requirement as expansive as Sarbanes-Oxley; however, the pressure is mounting from regulators, rating agencies, boards and third party vendors for organizations to implement an ERM process. Enterprise Risk Management is here to stay and organiza-tions that link strategic planning and ERM are creating a competitive advantage for continual improvement of their ERM process. n

External ExternalMarket

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Regulatory

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Hazards & Third Party Actions

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Governance Legal Code of Conduct Compliance Fraud Reputation

Operations Value Chain Sales and Marketing People Recruiting Product IT

Strategic Strategy & Initiatives Mergers & Acquisitions Management Oversight Stakeholders

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Some CPAs believe that they will never be sued and therefore believe they do not need professional liability

or other forms of insurance. The reasons I’ve heard for this position vary, but some common ones include, “I don’t make mistakes,” “All of my clients are friends,” or “I do tax work only.” The problem with this approach is that it is not effec-tive risk management and could put even the most cautious CPA firm at risk.

It is important, of course, for CPAs to take every precau-tion feasible to ensure error-free work, but that may not be enough to ensure a firm’s security. In our litigious society a firm should be prepared for any unexpected bump in the road.

To shed more light on this point, the following are some responses to five common reasons CPAs cite for not having insurance:

1. “I have a low-risk practice” Having a lower-than-average risk profile still leaves you vulnerable. For example, claims stemming from tax work,

perceived as lower risk, occur more frequently than other types, representing about 60 percent of all claims (see chart on page 20, “Claims by Frequency vs. Severity”). Tax claims can also be severe (i.e., in large dollar amounts) when triggered by issues such as estate taxes or foreign financial interests. You may be sued for damages you never antici-pated, such as a client losing funds from embezzlement in their offices.

2. “I’ve known my clients for years" Good working relationships with clients don’t always hold up if the client becomes disappointed for any reason, even if it is unrelated to the CPA’s work. Any significant loss can lead to a dispute. Claims files are brimming with cases of good CPA-client relationships souring due to a variety of problems.

3. “I don’t make mistakes" Even when the CPA is doing everything by the book, an unfavorable jury verdict can still put the firm or CPA in jeopardy. Public expectations of CPA responsibilities have

Do You Believe You Will Never be Sued?

by ronald c. parisi, cpa, jd

taking precautions for unexpected events in your firm


Do You Believe You Will Never Be Sued?

risen significantly over the years, putting even the best and most cautious CPAs at risk.

4. “I don’t have insurance in order to avoid being sued” A CPA who avoids insurance coverage does not always avoid a lawsuit. The party filing a lawsuit won’t even know whether the CPA is covered, and a CPA’s lack of insurance won’t stop an attorney from going after the CPA’s personal assets. The CPA in a claim situation sometimes needs to be defended in a court of law, and professional liability insurance pays for that defense as well as any legal counsel designated by the insurance company to defend the CPA.

5. “All of my assets are in my spouse’s name" With technology so thoroughly integrated into society, it’s easier than ever to track down someone’s assets. Putting assets in a spouse’s name will not make them immune from a lawsuit.

A prudent approach to risk management begins by having a reliable insurance program that includes comprehensive risk management resources designed specifically for CPAs. When the firm fully engages in utilizing those resources, it is well on its way to a more secure future. n Ron Parisi is executive vice president of risk management for CAMICO.

Get Involved!

The Utah CPA PAC works to enhance the image of the profession and

increase the incluence of the Association with decision makers in Utah.

With support from members of the UACPA, our

goals are to:

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through good government

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table on taxation, business policy

and other relevant community issues

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Government when needed

Learn more by searching "PAC" at uacpa.org

21the journal entry | April 2014 21

Accounting Challenges for Regulated Public Utilities

Accurately portraying financial information in a Company’s 10-K report can be a challenge for any

company. Regulated energy utility companies face an even greater challenge as they try to meet financial reporting requirements established by state regulators and the Federal Energy Regulatory Commission (FERC)1. “Sets of books” takes on a whole new meaning for many regulated energy utility companies. In addition to the GAAP books and tax books which are often spoken of, a utility may have several other sets of books which are needed for various regulatory reporting purposes. PacifiCorp (which operates as Rocky Mountain Power in Utah) for example, has at least seven sets of books in addition to the tax and GAAP books already kept — one each for the FERC and the six states that it operates in. A utility’s set of books may include a Results of Operations (ROO) report for each state in which the utility operates as well as a report for the FERC (FERC Form 1 for electric utilities, FERC Form 2 for natural gas utilities). The ROO is used by regulators to assess whether or not a utility is over or under earning its commission authorized rate of return,

as well as review compliance with various commission accounting and other regulatory orders. The FERC Form 1 “is a comprehensive financial and operating report submitted for Electric Rate regulation and financial audits.2” While there are several accounting similarities

by matthew a. croft, cpa, charles e. peterson, crra and j. robert malko, ph.d., crra

TABLE 1: RETURNS ON EQUITYCY 2012

Questar Gas Company Paci�Corp10.24%

8.48% 8.62%

7.18%

8.90%8.46%

10-k ROOTotal

Company

ROOUtah

10-K ROOTotal

Company

ROOUtah


between a regulated energy utility and a non-regulated business, there are differences. Accounting differences can also exist between the three types of utility reports (10-K, ROO, FERC Form) mentioned previously. As can be seen in Table 1, these accounting differences can lead to significant differences in return on equity for Utah’s two largest state regulated energy utilities: Rocky Mountain Power (division of PacifiCorp) and Questar Gas Company.

A high level review of these accounting differences, including examples, will be given in terms of presentation, recognition and measurement.

Background

As a background, it is important to understand the rate setting process for a regulated energy utility. While the process can be different for each utility in each state, there are some common themes. Rates are typically established through general rate cases and/or other rate recovery

mechanisms such as fuel adjustment clauses or balancing accounts. When a utility files a general rate case with a state public service commission, its application is based on a revenue requirement that will be needed to recover both expenses3 and a reasonable return on rate base4 over a given time period (test year) which can be historical based or forecasted5.

Presentation

As mentioned previously, a ROO report is typically filed with a state in which a regulated utility operates. At a first glance of the ROO, one would immediately notice a difference in the type of “statements” presented when compared to a 10-K report. A ROO report includes a form of an income statement but does not include a cash flow statement or a balance sheet. However, a ROO report does include a statement of rate base which includes many of the same liability and asset elements that are found on a

Accounting Challenges for Regulated Public Utilities

TABLE 2: FINANCIAL REPORTING FOR REGULATED PUBLIC UTILITIES

FERC FORM1 SEC 10-K State ROO

Income Statement Income Statement Income From Operations

Balance Sheet Balance Sheet

Rate BaseAssets & Liabilities Assets & Liabilities

Stockholder’s Equity Stockholder’s Equity

Cash Flow Cash Flow

RegulatoryAdjustments





FERC Chartof Accounts







accounting & Assurancebalance sheet. The values of these assets and liability elements can be the same as, but are often times different, than the values included in the 10-K report. The nature of these “adjusted” elements will be discussed later. (See also Table 2) The net amount of these adjusted assets and liabilities constitutes a rate base value that represents “the investor-supplied plant facilities and other investments required in supplying utility service to customers.6” ROO reports do not typically classify items as long or short term and there is generally more line item detail as opposed to a 10-K report which includes aggregated “other” categories.

The FERC Form report includes a more traditional income statement and balance sheet but they are formatted and classified to conform to FERC’s chart of accounts7. A FERC Form includes the same notes to the financial statements as a 10-K report but also includes extensive detail of many of the FERC accounts as well as operating statistics such as generation by plant or load data. As such, a FERC Form 1 for a utility like PacifiCorp can be hundreds of pages long. Several classification differences also exist between the 10-K and FERC Form, many of which can also carry through to a state’s ROO. For example, working capital balances between the FERC Form and 10K can be very different due to classification differences between current assets and current liabilities.

Recognition

The matching principle requires revenues to be matched to related expenses. In the world of regulated

energy utilities, such matching is not always possible in the traditional sense. This is due to the rate setting process. A regulated utility cannot immediately change rates (prices) to recover certain costs incurred. The process of changing rates can take several months to occur and several more months or years may pass before that change in rates will fully recover certain incurred costs. Given this unique circumstance, US GAAP (FAS 71, ASC 980) allows regulated energy utilities to recognize regulatory assets (future cost recovery) and liabilities (future refund to customers). For example, a utility may incur a significant, unexpected cost from a storm or change in tax law.

The utility could apply for recovery of such costs with its state regulatory commission. Assuming a commission order is granted to recover such costs, the utility would recognize a regulatory asset on its books and begin to amortize the asset over a period of time. The recovery of that

amortization expense would likely begin when rates are established in a general rate case. However, it should be noted that even with a commission order to establish a regulatory asset, the related amortization expense may or may not be included in future rates. Rates determined in a general rate case or other rate recovery mechanism are often settled without a line item detail of which costs are going into such rates (“black box settlement”). Therefore, while the theory behind FAS 71 (ASC 980) may consider the “matching” of revenues and expenses as probable, the reality may be problematic.

While the recognition of regulatory assets and liabilities is something unique to regulated utilities, there are other recognition differences that exist between a regulated energy utility’s 10-K Report and its state ROO. Many items which are recognized under GAAP are not recognized in the ROO. As a general rule, items are not included in the ROO unless

Balance Sheet ItemsCY 2012

(in millions)

Questar Paci�Corp

1,278

18,057

7,478

460 888 859

12,913

5,737

Property, Plant, & Equipment (Net)

Shareholder’s Equity

Total Rate Base Utah Rate Base


Accounting Challenges for Regulated Public Utilitiesthey are considered recoverable and are the same types of costs, revenues and rate base items that were included in rates established in a previous general rate case. To complicate matters even more, each state has its own “rules” or past commission orders that specify what costs or revenues should or should not be included. As such, there can be a complicated sifting process that goes on between the GAAP data and a utility ROO for each state in which a utility operates. Many expenses and revenues recorded under GAAP may be removed from a ROO because they relate to activities not established through a general rate case or similar proceeding or, they may be items specifically disallowed by the regulator such as costs determined by a commission to be imprudently incurred.

Other items may be recognized for ROO purposes but not under GAAP. For example, utilities are often allowed to recover a return on a cash working capital balance (i.e. a rate base item). This balance can be determined in several different ways, one of which is through a lead-lag study. At a simple level, a lead-lag study attempts to calculate the difference between the average time it takes to collect revenues and the average time it takes to pay expenses. This difference is then multiplied by the average daily expenses to arrive at a cash working capital balance which is included in rate base. Assuming that revenues lag behind expenses, shareholders would receive a return on this rate base item. The process of developing a lead lag study can take considerable time. As such, new studies are often only conducted once every few years.

While GAAP serves as a starting point for the ROO, many adjustments must be made in order to properly present financial results of operations for state regulators.

Measurement

A utility’s 10-K and FERC Form balance sheet will show property plant and equipment at year end values. For ROO purposes, property, plant and equipment (“plant in service”) may be measured using an averaging methodology that covers a historical 12 month period. This concept ties back to how rates are established in a general rate case. The general idea is that rate payers pay for plant that is in service and providing benefit to customers. If a $100 million capital addition is forecasted to go into service during the last month a test year, rate

payers should pay for the one month of service received rather than for the full 12 months of a test year. Thus, when actual plant in service balances are reported they can be reported as an average for the 12 month period. This same averaging methodology can also be applied to other rate base items.

Another item that may be measured differently for ROO purposes is interest expense. Interest expense may be recalculated based on a utility’s rate base being applied to a utility’s average cost of debt. A utility rate base may not include interest expense related items that would otherwise be found on a balance sheet such as capital leases for equipment.

A third item that can cause considerable complication is the calculation of state income taxes. This is especially the case when a utility provides service in multiple jurisdictions. The general concept here is that a given state should only be responsible for its “share” of income taxes. For ROO purposes, questions often arise as to how that share should be determined. Should total state income taxes for the utility be re-allocated back to the states or should each state’s income taxes be calculated independently of other states? Such calculations can involve complex and often controversial cost and revenue allocation methodologies. PacifiCorp for example, operates in six different states including Utah. A multi-state process (MSP) has been established whereby representatives from the states meet several times a year to discuss these allocation issues.

Revenues and IncomeCY 2012

(in millions)

Questar Paci�Corp

862

4,882

53747 68 66

935

402

Revenues(10 K)

Net Income (10 K)

Total Reg. Oper. Rev.

(ROO)

Utah Reg. Oper. Rev.

(ROO)


accounting & Assurance

Charles Peterson, CRRA is a Techni-cal Consultant at the Utah Division of Public Utilities. Charles holds a M.S. in Economics and M.Stat degrees both from the University of Utah. He has more than 30 years of financial analysis and economic consulting experience.

J. Robert Malko, Ph.D is a Professor of Corporate Finance at the Jon M. Huntsman School of Business at Utah State University. He has served as Chief Economist at the Public Service Commission of Wisconsin and as a Program Manager at the Electric Power Research Institute. Malko has served as President of the Society of Utility and Regulatory Financial Analysts.

Matt Croft, CPA is a Utility Technical Consultant for the Utah Division of Public Utilities. He has testified before the Utah Public Service Commission in several cases on topics that include plan addition accounting and fore-casting, pollution control equipment approvals and others. Croft graduated from University of Utah. He can be reached at [email protected]

ConclusionGiven the provisions of FAS 71 (ASC 980) regulated energy utilities are unique in that they record regulatory assets and liabilities. In addition to the 10-K report, a regulated utility’s financial reporting requirements may include a ROO report for each state in which the utility operates as well as a FERC Form. Although based on the same GAAP data, each report has its own variation of how financial information is presented, recognized and measured. Preparers of these reports face the challenge of sifting through all the differences and ensuring that the users of the reports are given accurate and timely information to perform their regulatory functions. State regulators need such information in order to address the interests of both rate payers and investors. Without careful attention to and understanding of specific details, the analyst, who is attempting to interpret and utilize financial information from the different reports, can be “so close, yet so far away.” n

Sources

1 See Jonathan A. Lesser and Leonardo R. Giacchino, Fun-damentals of Energy Regulation, Public Utilities Reports, Vienna, Virginia, 2013, page 192.

2 http://www.ferc.gov/docs-filing/forms.asp#1. Note, not all state regulated energy utilities file a FERC Form. In Utah, PacifiCorp (Rocky Mountain Power) files a FERC Form (FERC Form 1) while Questar does not.

3 Expenses include depreciation, income taxes, operation and maintenance and general and administrative costs. See J. Robert Malko and William J. Evans, “An Economic Exam for Energy Utilities,” The Journal Entry, January 2013, pg. 15-16. See also James E. Suelflow, Public Utility Accounting: Theory and Application, Michigan State University, Institute of Public Utilities, East Lansing, Michigan, 1973, pg. 18-19, Chapters 4-6.

4 As discussed in the Presentation section, rate base is the net value of certain assets and liabilities (some of which are adjusted) that can be found on a Utility’s balance sheet.

5 A test year is the period, usually 12 months, for which the new rates from a rate case are assumed to apply to. For more discussion on test years see Joni S. Zenger, Charles E. Peterson, J Robert Malko,“The Utah Test,” Public Utilities

Fortnightly, May 2010, pg. 36-40.

6 Robert L. Hane and Gregory E. Aliff, Accounting For Public Utilities, Sec.4.0, 4-1 (Matthew Bender)

7 See Charles F Philips, Jr., The Regulation of Public Utilities: Theory and Practice, (Arlington, Virginia: Public Utilities Reports Inc., 1988), Chapter 6. See also Marvin P. Reeser, Introduction to Public Utility Accounting, Chapters 5-6.


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Fundamental building blocks that all firms must have to mitigate risk include 1) firewalls, 2) spam control and

3) anti-virus protection. The bad news for 2014 is that each of these three major product classes doesn’t do as good or comprehensive job as they did last year or in many of the years before that. Why? The intruders and bad guys are getting more sophisticated at writing their code and creat-ing effective attacks. Even the best of the firewall, spam and AV providers are now routinely letting more attacks, bad messages and malware through.

Firewall vendors such as Cisco, WatchGuard and Sonic-WALL are the best options for protecting your firm to-day, and entry level versions of these products should be considered for use by telecommuters. Home vendors like DLink, Belkin and Linksys have no chance of protecting your firm, and little chance of protecting telecommuters. As more firms choose to use hosting companies as a public cloud strategy, and more firms allow telecommuting using private cloud technologies like Citrix, Microsoft Remote Desktop Protocol (RDP, the former Terminal Services),

GoToMyPC, LogMeIn Pro or other remote access prod-ucts, you will need to manage the risks of the remote users and home environments.

The best anti-virus products have been debated among technical suppliers and network administrators on a regular basis. Products that work well when used with CCH, Thomson and Intuit products include GFI Vipre, and McAfee. Products that tend to cause more issues include Symantec, Kaspersky, and Panda. It is still wise to use different anti-virus products on your desktop and server computers than you do on your firewalls. In prior times, we recommended a third different product for your servers, but this strategy is much harder for an IT team to execute properly today. Further, the end-point protection suites don’t seem to do a better job AND they run slower. One final note: with Windows 8, the built in Microsoft Security Essentials anti-virus isn’t perfect, but it may be “good enough,” which should reduce your need to license AV on every desktop.

Managing the Risks That Come with Working Remotelyby randy johnston


Getting Mobility Right for Telecommuters Many of you have invested in tablets, smartphones and of course portable computers to improve the productivity of your team members, professionals and firm. Have you protected your firm properly by managing all of these mobile tools? Our fundamental advice is to encrypt all mobile devices.

Managing mobile devices properly is difficult. There are many technologies involved from 1) hosting software such as Citrix XenApp, Citrix XenDesktop or VMware View, to 2) wireless and cellular data connections to 3) the de-vices themselves. If a computer is used on a team member’s home network, other users in the home can infect the team member’s machine and access to your office can be granted via these other home machines. 4) We recommend isolating telecommuter’s business computers from other home users using a hardware firewall. Finally, it is wise to have 5) soft-ware that can manage all of your firm’s mobile resources.

Remote workers must be savvier and understand how to use cellular data cards or shared cellular wireless access points (MIFI) or WIFI. Remote users frequently find that MIFI is not quick enough to provide satisfactory performance although this is improving with the new 4G coverage in the larger cities in South Carolina. Your firm should have control procedures for using wireless. Some firms do not allow the use of any public wireless, which is a reasonable safety posi-tion. Wireless access in most people’s homes is not secure enough to prevent unauthorized access, so you may want to consider a wired connection from homes mandatory.

For your mobile devices, make sure that every device is encrypted. Further, for tablets and smartphones, make sure your IT team has required PIN codes or swipe codes re-quired through Microsoft Active Directory. You do not want any user on a portable device without at least a PIN code. For portable computers, require user IDs and strong pass-words.

A more recent innovation is mobile management software to control and secure mobile devices. Example products in this category include AirWatch, MobileIron, Good, MaaS and Level Platforms. These software products control the soft-ware that can be installed, remotely update the devices and can wipe the device clean if it is lost or stolen. This ability

to wipe a device is important for controlling risk for breach reporting law compliance or when someone leaves the firm.

Another risk element to the firm is any portable USB hard drives or thumb drives that are not encrypted. Consider pur-chasing drives that are encrypted full-time like those made by IronKey, or simply enforce a policy for using Microsoft Bitlocker on all removable USB drives. For client and team member convenience, you may want to leave a small section of the USB drive that is not encrypted for temporary transfer of files. Alternatively, use your portal for transferring files, and continue to eliminate the use of USB drives everywhere.

Other Considerations In this article, we have tried to cover the big risk items on telecommuting: firewalls, spam, anti-virus, risk of using wireless, remote access, PIN codes, remote device control, management software as well as encryption. These items are the highest risk items, and there are many other fine points in a comprehensive telecommuting plan and risk mitigation. For example, note that we did not talk about having a formal telecommuter policy, secure email, physical security of the computers including security locks, two factor authentica-tion, phone/voice quality, video conferencing, web confer-encing, intellectual property theft, password managers, VPNs, Direct Access, intrusion detection tests or the need to keep all of this technology updated on a regular, almost daily basis.

When telecommuting is done right, team members can work as effectively at home or at a client site as they do at the office. Speed and the use of multiple monitors should be comparable, too. The main things you give up are wasted time spent around the water cooler and on commuting. It is also more difficult to keep engaged, personal relationships. You’ll have to have a plan to keep team members engaged with others in the organization to keep them from being susceptible to predatory hiring by other companies who use telecommuters. n

Randy Johnston and his K2 Team provide CPE courses through the State Society offices, in-house at your firm or via webinars. If you have questions on any hardware, software procedures or IT strategies for your firm, contact [email protected] with your questions.

Managing the Risks that Come with Working Remotely


Communication through social media is here to stay. Anyone with a teenager will agree that you never see

them without some type of communication device. At one time we might have thought this was a fad and only the young would need to participate. However, today the ma-jority of young, old and professionals of all types use social media as a communication tool to reach family, friends, colleagues, prospects and other community connections. Some of the more popular sites include LinkedIn, Face-book, Twitter, and Pinterest.

You have a choice, see this as an opportunity to participate, engage and communicate instaneously or stay in the past and only communicate and network face to face. I wonder what the horse and buggy shop was thinking when the automobile was invented, just a passing fad? I am not sug-gesting you never communicate in person, in fact, we need to continue to do this, but with our busy schedules, social media allows us to conveniently stay connected and engage with a diverse audience.

LinkedIn is part of your professional practice and everyday life. For the most part, LinkedIn offers a space to commu-nicate and network with other professionals about business related topics. This is not an article with a lot of technical detail on the proper set up and use of Linked In but rather

I want to address the question many have asked “Why do I need to get involved with LinkedIn?" If you want to stay connected with your clients, referral sources, potential cli-ents and colleagues with a limited amount of time invest-ment, read on.

First, create a profile on LinkedIn including your normal biographical information (name, rank, school, employer) but also an enhanced description and summary of the work you do. When you write your summary or what some would call the “about you section,” make sure it is written in way that allows someone to read and actually understand what you do. Because LinkedIn is a network-ing site, think about what you would say to someone that you met, in person, at a networking reception about what you do and why. Show passion about your work, how long you have been doing it, why you do it, how you help your clients and what they say about working with you. Some professionals have really creative titles rather than just the normal CPA. Try and reflect within your title what you do in your everyday work, such as, “Business Advisor and CPA” or “Advisor to Start-ups and high growth companies”. Remember to consider what the reader is looking for and not just your formal title. Try and complete as much of the profile as possible and by all means include a recent pic-ture. My experience when helping others with their profiles

Social Media and CPAs: Curse or Bonanzaby richard d. wagner, cpa


is we tend to find out how much or how little they have done to network or make themselves famous. This gets back to an old marketing saying I use all the time, “You might be the best CPA in the world, but if you don’t tell someone, you could be the poorest”. If your profile lacks information, use this as a wake-up call to get involved.

Now that your profile is updated, it’s time to network. Think about walking into a networking reception with thousands of possible contacts, what do you do? Stand there and wait for all of them to rush up to you and want to be in your network? Might work for some folks, but I was never that popular; you will need to invite others to join your LinkedIn network. I don’t subscribe to the theory that more is better and invite the world in hopes of creating lots and lots of contacts. Think about what your purpose is in networking. For me, I want to stay in contact with clients, potential clients, referral sources and individuals I work with in the business community. When I create a post, either of my own writing or share a post of possible interest to my network, I always think about the audience and my network. If you have increased your connection numbers just by including co-workers and your competitors, you are not sharing information with the people who need it, clients, referral sources, etc. What is the right number of connections? Everyone’s will be different based on what you do and the area you cover. Maybe you work in a niche with only a few others in the whole country or maybe you are still a generalist and want everyone to know what you do and how you can help. The number doesn’t matter as much as the quality of the connection.

Now you have the basics, a good profile and a network of the right people. There are books and classes you can at-tend that will give you all the technical how to's and tips to

make your page better. You can now begin to communicate on a daily, weekly or monthly basis based on what fits your schedule. LinkedIn should not be viewed as a curse where you MUST use it daily, but rather a bonanza of a tool to communicate with clients, referral sources, etc. with a limited amount of time away from work. Personally, I take a few minutes a week and never have to leave my desk to find out who has changed jobs, written new articles, passed on information I might be interested in and I can commu-nicate out to my connections as well. In today’s fast-paced world, we need a way to maintain our charge time but still stay in contact with everyone outside the office; your com-petitors will if you don’t.

LinkedIn also offers a great opportunity to view other connections and see who might be in your six degrees of influence. If you are going to talk with a potential client or referral source who else in your network knows them that might be able to give you a good reference? In the old days we would call others and try and see who might know them, but with LinkedIn, all you need to do is type in their name and up pops who in your network also knows that same person. This one tool has assisted me in win-ning proposals just by having a good network that is tied into my own work area.

Let’s face it, in today’s world it is all about communica-tion and more importantly timely communication. It has become an expectation that you will stay in contact with your clients, referral sources, potential clients, etc. on a consistent basis. Using social media allows us a way to supplement in-person meetings to create more contact. I will never let social media take the place of in-person communication, but it certainly allows me to keep in closer contact with those I need to be in front of every month. Get involved, participate in the bonanza and don’t allow yourself to travel by way of horse and buggy. n

Richard D. Wagner, CPA is the firm wide director of marketing/business development at Eide Bailly in Colorado. His client service work includes more than 30 years of experience in the healthcare industry. He can be reached at [email protected]

in today's world it is all about communication and more importantly, timely communication. it has become an expectation that you will stay in contact with your clients, referral souces, potential clients, etc. on a consistent basis.


Ryan PannellToll Free: 800.397.0249

[email protected]

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Congratulations Elijah Watt Sells Award Winners

Douglas R. Woodbury

and Tyson P. Irwin

The UACPA is proud of Utah's

newly licensed CPAs who were

among the 55 candidates who

scored a cumulative average

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first attempt on the CPA exam.

More than 94,000 individuals

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Connect with the UACPA.

Follow us for the latest in the profession and with your membership

SMEs Driving & Adopting Sustainable Business Strategiesby cgma

Have you wondered why accounting has become so entwined with sustainability? They actually have a

lot in common. With rising energy prices and growing consumer demand, there are increasing reasons for small and medium-sized enterprises (SMEs) to adopt sustain-ability strategies.

Emphasizing Sustainability Improves Profitability & Much More

Reasons for adopting sustainability may vary from company to company, but all have found that emphasiz-ing sustainability improves their profitability, generates greater loyalty and commitment from employees, and cements relationships with customers and suppliers. In fact, a recent Lloyds TSB survey found that 70% of SMEs are adopting a sustainable approach in order to secure new business, while 54% are becoming sustainable to save money.

The AICPA and CIMA, under the Chartered Global Management Accountant® (CGMA®) designation have released Top Ten Key Elements to Sustainable Business Practices in SMEs, which draws together case studies and key lessons from small businesses across the UK,

US and Canada. The report provides a real-life picture of how sustainability impacts the bottom line and shows how finance can harness sustainability strategy to achieve commercial benefits.

Below is a snapshot of the major points in the report:

Top Ten Key Elements

1. Take a broad view of sustainability. Engage outside expertise to ensure that your company considers every aspect of sustainability, not just environmental issues. You can achieve this by having open discussions with all stakeholders, including customers and suppliers, and be-ing willing to share information to come up with innova-tive solutions to reduce emissions and increase efficiency.

2. Define in detail what sustainability means to your company. Embrace industry-wide initiatives by engaging with peer organizations to achieve sustainable goals and sharing best practices with organizations that face the same challenges. However, don’t limit it to peers; con-sider engaging all stakeholders in your drive to improve sustainability, including suppliers and customers, to get everyone on board.


3. Engage all stakeholders. Give employees ownership in the company and a direct role in defining sustainable activities like charitable giving. Keep a long-term per-spective on the balance between sustainability and profit-ability, and trust that sustainable business practices are bringing benefit to the company — even if those benefits are intangible and hard to measure.

4. Remember that you are not alone. While that’s often difficult, getting involved in community or industry ini-tiatives to kick-start a sustainability drive can help. Con-sider codifying practical measures for sustainability in a document that everyone in the organization can access and understand. Creating metrics to measure the perfor-mance of employees and the organization as a whole on sustainability can do the trick.

5. Establish responsibility and communicate widely. Look at industry-wide initiatives that build on the knowl-edge of other companies and industry associations. You can achieve this by mapping official accreditation for en-vironmental management and sustainable process quality to your own business processes. However, you can go even further by considering sustainability not only within your own company, but across your network of suppliers as well.

6. Take it step by step. Identify and build on the elements of your existing business model that promote sustainable activities and practices. Make clear links between sustain-ability and efficiency and efficiency and cost savings. You can achieve this by keeping up with the latest research on how to improve sustainability in key areas of business, such as fuel efficiency and the reduction of packaging materials — and then apply those lessons in practical ways in your own organization.

7. Walk the talk. Assess the benefits of sustainability projects from a long-term perspective and then engage senior management in defining a sustainability strategy that looks beyond the next quarter’s financial results. Walking the talk means leading by example and engag-ing customers, partners and suppliers in your journey towards becoming a more sustainable business.

8. Tie sustainability to profit. Identify how everything you use or create in your business, even waste, might be turned into a value-added product. Consider how sus-tainable business practices can increase efficiency and dif-ferentiate your company from competitors, then network with local organizations that share sustainable goals so that you can pool that knowledge and coordinate efforts.

9. Measure, monitor and review. Keep in step with ecological initiatives your customers and/or suppliers may undertake. Look at innovative interpretations of the term ‘recycling,’ including the use of material as a source of biomass fuel. Consider calling in external consultants to give an objective view on how your company can adopt more sustainable practices.

10. Invest in the future. Embrace industry-wide ini-tiatives and engage with peer organizations to achieve sustainable goals. Share best practices with organizations that face the same challenges in regard to sustainability and engage all stakeholders in your drive to improve sustainability.

Case Studies

Download the full report to read about real life case stud-ies from the following organizations on how they have been able to successfully integrate many, if not all, of the above elements into their operations, the challenges they faced and how they were able to overcome them:

• Atropex• Aéroports de Montréal (ADM)• Cirtronics• UKOS plc• Billington Structures• Rainbow Nightfreight• Zions Bancorporation• Rocky Mountain Flatbread• Ecological Fibers, Inc.

The CGMA designation recognizes the most talented and committed management accountants with the discipline and skill to drive strong business performance. CGMAs can download the full report, Top Ten Key Elements to Sustainable Business Practices in SMEs, at CGMA.org. n


The UACPA Awards Task Force is gearing up to select members who deserve recognition at our Membership Summit in September. While many CPAs are overly modest and prefer to remain unrecognized, it's important for us to recognize our best professionals and pay tribute to them as role models for those who are early in their careers. It also serves to promote the vital roll CPAs play in the community.

The UACPA wants your help in identifying candidates worthy of recogni-tion. Please nominate the UACPA members who consistently go above and beyond what is necessary to serve their clients, employers, employ-ees and communities.

Any UACPA member that has contributed to the profession and/or community can be nominated. Nominations should be submitted by letter and provide relevant information in support of the nominee. Please send nominations to the UACPA Awards Task Force, 1240 E. 2100 South, Suite 500, Salt Lake City, UT 84106 or email them to Tisha Smith, [email protected]. All nominations should be received in the UACPA office by July 10, 2014. Please take time today to nominate your employee, boss or colleague for their accomplishments.

Award Categories Distinguished Service • Demonstrated superior professional competence • Served in a key leadership role providing a significant and meaningful service • The service provided is beyond that normally expected in any Associa-tion or career position • The nominee must have achieved a broad based recognition for the service or contribution • May also be used to give recognition for outstanding public service • The nominee shall be from the general UACPA membership

Outstanding CPA in Public Practice • A member of the UACPA in public practice who has made a signifi-cant contribution to the growth and success of his/her employer’s firm • Demonstrated superior professional competence • Provided exemplary leadership through prominent UACPA positions • Made significant contributions to the growth and enhancement of the profession. Their achievement shall have created important positive changes in the public accounting environment. The contribution must have been made at considerable personal sacrifice beyond that normally

expected. • Achieved a broad based recognition and respect for the contribution.

Outstanding CPA in Business & Management • A member of the UACPA in industry or business and management who has made a significant contribution to the growth and success of his/her employer’s company • Demonstrated superior professional competence • Provided exemplary leadership through prominent UACPA positions • Made significant contributions to the growth and enhancement of the profession. Their achievement shall have created important positive changes in the business environment. The contribution must have been made at considerable personal sacrifice beyond that normally expected. • Achieved a broad based recognition and respect for the contribution.

Outstanding Educator • Teaching: course development, teaching load, research, supervision, student motivation, and perception • Research and Publication: number, type, and quality • Academic Assignments: administrative, committee, special appoint-ments • Professional Development: professional association offices held, services rendered, seminar, or conference participation • Professional experience and public or civic service

Women to Watch: Emerging Leader* • A professional who has made significant contributions to the profes-sion and her community, but who has not yet reached the highest levels of advancement • Demonstrated leadership, public/community service, contribution to the profession, creation and implementation of unique initiatives, involvement with alma mater or other local colleges and universities

Women to Watch: Experienced Leader* • One who has advanced to a higher level or leadership position – including partners, owners, executives, elected officials • Authorship of articles, major or unique contribution to the profes-sion, public and/or community service, mentoring other professionals, improvement to the workplace, involvement with alma mater or other local colleges and universities

*Presented by the AICPA. Nominees must be AICPA members to be considered.

Recognize Successnominate a uacpa member to be honored at the annual awards luncheon

Understand the Strengths of Others“Know thy self” is an important first step in becoming an exceptional leader, but understanding the strengths of your organization and your team members is equally important. As you learn to identify areas of strength in others, it will allow your team to achieve maximum results and will inspire people to follow you as you work to build consensus. The Insights to Action curriculum teaches you critical and creative thinking skills that facilitate collaboration and a shared vision.

Create a Network of ProfessionalsThe benefits of the ProNet Leadership Academy don’t stop when the training ends. Academy alumni will leave with a network of other top professionals and future business leaders that will help accelerate your opportunities and career. Through formal and informal networking, your academy network of alumni will serve you well into the future.

Nominate a Young CPA or Apply to AttendThe ProNet Leadership Academy accepts just 30 new professionals each year to participate in this exclusive opportunity.

Learn to Leverage Your Unique Leadership Strengths

Insights to Actions from the Business Learning Institute (BLI) is the next evolution in strategic planning and leadership skills and represents the

intersection of solid strategic planning processes, powerful visual tools and evidence-based practices in motivating people. You will identify and learn

to leverage your unique leadership strengths and to conquer your leadership challenges.

Visit www.uacpa.org and and apply online Search “Leadership Academy” to learn more

Succeed with ProNet Leadership Academy

To keep pace in your profession, let alone excel as a leader, requires your rate of learning to be greater than, or equal to, the rate of change. And given the rate of change today, this means

that you must have future-minded flexible thinking skills, the tools to rapidly adapt to new circumstances, the ability to make your ideas

clear to other people in a way they can easily grasp and the personal influence to inspire others throughout your network.


UACPA Members Celebrate 25 Years

congratulations to the following individuals who have been with the uacpa for 25 years

Denise J. Achelis Kenneth A. Acker Standard Optical

David S. Ahlstrom Davis & Bott, CPAs, L.C. Russell V. Baird Baird, Blackburn & Associates, PC Bruce J. Barker J. Bruce Barker, CPA, P.C. Stephen M. Bunker Donald E. Cannon Dixie REgional Medical Center Gordon F. Carmen Church of Jesus Christ of Latter Day Saints Robbie S. Chidester CFO Advantage Consulting, LC Brent E. Christensen John T. Cook PacifiCorp Gordon L. Crabtree Sarah Dansie RJ Masonry, Inc. Geri A. Douglas Larson & Company, PC Jerilyn, Evans

Roger E. Farnsworth

Steven K. Flint Steve Flint Custom Homes Russell Florence Matthew C. Gardiner Rhonda H. Gardner Cathlreen C. Gilbert David R. Grow Western Governors University Brent Halliday Halliday & Co. Daniel J. Harps Michael S. Hartle Hartle & Rees LLC Robert H. Hunter Robert H. Hunter & Associates Russell L. Jenson K B. Keller Dan Landvatter Eddie Lee E-Corp. Scott B. Livingston Lawrence M. Mauck Jay H. McNamara DHI Computing Service, Inc.

Craig S. McQuarrie CBIZ MHM, LLC Stephen R. Morgan Mark Shawn Morley Gary J. Myers Eide Bailly, LLP Jeff L. Nilsson Steven C. Penrose Finance & Records Dept Michelle L. Phinney Kolin M. Porter Gary L. Prince Prince Hansen Gray & Associates PLLC William E. Pyper Mitchell J. Rasmussen Gina M. Reel Indiana University Foundation John C. Reidhead State of Utah - Div. of Finance David S. Ricks Ricks & Company, LLC David W. Roberts Crowe Horwath LLP

Gary L. Robinson Robinson, Burnett & Associates, Inc. Clair A. Rood CBIZ MHM, LLC Steven M. Serdar Ricky L. Smith Deseret Power Susan A. Speirs David M. Sperry Tanner LLC Patricia H. Stewart Haynie & Company Stan J. Vincent Brian V. Vinchur Clark A. Warnick Nu Skin Enterprises, Inc. H. John West Robert M. Whatcott Whatcott & Associates, PC Bob H. Wiser LDS Business College Kristy S. Woodward City Creek Reserve, Inc Jeffrey A. Worthen Church of Jesus Christ of Latter Day Saints


Harold Smith Dec. 28, 1917 — Feb. 25, 2014

UACPA Member since 1947

UACPA President, 1966-67

William Edward Bowen, Jr.

Sept. 10, 1939 — March 3, 2014


Evan Ray Terry March 15, 1918 — Aug. 18, 2013


IN MEMORIAM

Arnold James "Jim" Larson

July 21, 1944 — Oct. 5, 2013


Top Supporters/In Memoriam

Number of Members

1 Church of Jesus Christ of LDS 632 Tanner LLC 493 Ernst & Young 414 Wisan, Smith, Racker & Prescott 36 5 Squire 346 Deloitte & Touche LLP 327 Eide Bailly 31 8 PricewaterhouseCoopers LLP 299 Hawkins Cloward & Simster, LLC 2810 Jones Simkins LLC 27

Number of Leadership/Council/Committee Volunteers

1 Eide Bailly 122 PricewaterhouseCoopers LLP 83 Ernst & Young LLP 54 Squire 55 Tanner LLC 56 KPMG LLP 47 State of Utah 48 Wisan, Smith, Racker & Prescott, LLP 49 CBIZ MHM, LLC 310 Grant Thornton LLP 311 Mantyla McReynolds LLC 3

Amount of Personal/Organization Contributions to the Utah CPA PAC and Utah CPA Foundation

1 Ray O. Westergard $550 2 F. Lynn DeBry $5003 W. Val Oveson $260 4 Weslee A. Klein $2005 Gordon L. Haycock $1406 Mark W. Stevens $100

TopUACPASupporters

The UACPA extends our thanks to the top supporters of the Association. Through membership applications and renewals, support of our continuing education program, volunteer services, and monetary contributions to the Utah CPA PAC and Utah CPA Foundation, these firms and organizations provide great value to the work of the Association and to the CPA profession in Utah.


Photos, UACPA Activities1

2

1 ) UACPA CEO Susan Speirs talks with Amanda Dickson on KSL News-Radio for "A Women's View." 2 ) Sen. Pat Jones speaks at the rally for Fi-nancial Literacy Day on the Hill. 3) The UACPA has been delivering Tax Snacks to various firms throughout the state. 4 ) The audience hears about the importance of Financial Literacy during Financial Literacy Day on the Hill on Feb. 12. View more photos on our Facebook Page: www.facebook.com/UtahAssociationofCPAs

4

3


Five Minutes with Jared Mair

meet a uacpa member

Jared Mair is the Corporate Controller for School Improvement Network. The Brigham Young University graduate spent four years in public accounting before joining School Improvement Network in 2012. Mair became certified in 2010 and is an alumnus of the 2012 Leadership Academy. Mair and his wife Christine have two children — William and Ellie — and will welcome a third addition this spring. As Co-chair of ProNet, what can you tell us about the activities and events for this year? The ProNet Council will be working closely with the chapters to plan activities to support the development of young professionals. The ProNet Council is excited about the upcoming CPA Inauguration and Leadership Academy events and look forward to events that allow networking between young professionals and CPAs across the state.

What led you to become a CPA? Throughout my childhood, I spent many hours working side by side with my

grandfather, learning the values of hard work and modesty. The long hours were often rewarded with lunch or dinner and lead to discussions about business and money. These discussions were often mapped onto the back of napkins and fueled my future interest in business. I loved these discussions about how businesses strategized, planned and operated. Finance and accounting provided the perfect avenue to under-stand and participate in the future growth of business.

What have been your proudest mo-ments as a CPA? My career to date has been filled with moments of pure satis-faction and joy. I have found happiness in being able to shape the business world and having the ability to influence busi-ness processes and practices. However, the greatest joy of all is the hour in which I learned I passed all four parts of the CPA exam. Significant effort was put forth to pass the exam, and significant satisfaction was achieved in knowing the goal had been accomplished.

What do you like to do outside of the profession? Without a doubt, I have a passion to compete and love to partici-pate in all competitive activities includ-ing sports. I closely follow the Denver Broncos and continue to this day to feel the bitterness of a stunning Super Bowl loss earlier this year. I also love spend-ing time with my family, traveling, and watching movies. What advice do you live by? Invest in yourself and others. Learn to grow through education and life experience. Learn to listen to advice and feedback that will stretch and grow you person-ally and professionally. Value feedback and don’t fear the need to change and improve. Surround yourself with men-tors, friends and family that demand you stretch and grow and don’t accept anything less. Finally, learn to give back to others by providing the same mean-ingful advice and friendship requested by you of them. n


Meet the Executive BoardQ: How do you survive busy season?

Paul Skeen, CPA President Work hard and play hard. Although time to play is limited, playing hard during those brief periods makes it so I can focus and work even harder during those not so brief times. I also live by the mantra that I can always make time to do the things that are most important to me.

Jonyce Bullock, CPA President-Elect The key for me is planning. First, I always try to plan something at the end of busy season that I will have to look forward to. I also plan a few nights a week that I will be home, focused on family. This helps the whole family feel more balanced during busy times. Finally, I make sure to plan a few

strategic breaks during the day to refocus.

Kent Thomas, CPA Immediate Past President I have to maintain balance when I have a stressful schedule. I exercise every morn-ing and I like to plan my day early, prioritiz-ing the most important tasks. I try to make the day “top heavy” (i.e. weighty items first). I drink plenty of water, take periodic breaks to reenergize and plan some time to deal with the unexpected.

Hollie Andrus, CPA Vice President Giving your mind a break from numbers helps you refocus and have energy when you get back to the job.

Mark Palmer, CPA Secretary Everything has a give and a take. Keep-ing those in balance requires scheduling. Sometimes I need to take from the family and give to the company to ensure a budget is completed on time, or closing deadlines are met. However, it is just as important to give to the family on important events and take a moment from the company.

Dan Griffiths, CPA AICPA Council Representative It’s all about psychological resilience. I have to gear up for the stress by identifying bite-sized, high impact activities that quickly refill those reservoirs of resilience. For me, that includes things like morning exercise, 5-minute breaks at regular intervals, and setting aside 30 minutes to spend with my

family at the end of a long day.

Larry Deppe, CPA Member at Large When feeling exhausted, exasperated, frus-trated, disgusted, or disheartened, remem-ber the role that your knowledge and services play in our economy, client businesses, and personal lives of those who own or manage client entities. Where would your clients be without you? If none of these ideas help, consider going to night school to become a

plumber and make some real money!

(Not Pictured) Kyle Pexton, CPA - Treasurer

Susan Speirs, CPA CEO When I was in public practice one of my best stress relievers was to schedule time to go to the gym a or go for a jog, strategi-cally, so that I wouldn’t have appointments afterwards which helped clear my mind and re-focus. In my new capacity as your CEO, I’m still trying to figure that out —

any ideas?


UACPA staff

Tisha Smith Membership Coordinator We have been doing campus outreach by visiting all of the college campuses in Utah. Campus ambassadors work with the UACPA to put on events for their peers and the staff visits with professors and answers questions about becoming a CPA.

Kathy Romero Finances and Admin Manager We all know how exciting the financial department is! We are upgrading the equipment and financial programs and implementing a semi paperless system for the accounting reporting processes to become more efficient. Plus, I'm going through the budgeting process, forecast-ing cash flow for the next two years.

April Deneault CPE Manager I’m working on building the chapters and committees so that each has succession planning in place. I am also working on two new conferences for 2014. The Tax Sympo-sium will be changed to the Practitioners Conference and we are also going to hold a conference in St. George this November.

Amy Spencer Marketing & Communications Manager My focus is on improving the UACPA website to strengthen the communica-tion between members. Changes you can expect this year include a blog, a private social network and an easy-to-use class schedule. Plus, the website is getting a new look that will make it easier to navigate.

Q: What are you currently working on at the UACPA?

Meet the UACPA StaffBoard Bullets

The UACPA Board of Directors has been active in the final quarter of the UACPA's fiscal year. Here is a glance at what has been happening:

• Fiscal year March 31, 2015 budget was approved

• Monies have been provided in budget to enable CPE to be broadcast across the state. Additionally, conferences can be accessed online as they are currently happening in the UACPA Education Center.

• The UACPA will sponsor a conference in St. George

• Students will continue to have free membership

• Financial Ready Utah will have its first initial board meeting and run separately from the Association

• There will be a vacancy in the State Board of Accoun-tancy with the expiration of Gordy Haycock’s term in June. The UACPA will submit three names, preferably from industry for approval from the State Board.

• Legislative update – SB40S1 regarding financial literacy in the education system has passed and is awaiting funding. SB19 requesting that one of the members of the Utah State Tax Commission be a CPA has met no resistance. HB283 regarding non-profits and perjury statements has undergone revisions with the help of our NonProfit Committee. A big thanks to our committee members for understanding the implications and limits to future board members if the original language was left unchanged.

• A vote was taken to create an ethics committee to be chaired by Kent Thomas allowing the UACPA to address issues the Division of Professional Licensing via our State Board of Accountancy.

News from the UACPA Board


CPECourseScheduleRegister online at uacpa.org, then Education & Events or call the UACPA office at (801) 466-8022.

June

6/16/14 8 Advanced Excel TBD K2 Enterprises $248* $275 $330

6/17/14 8 Technology for CPAs - Don't Get Left Behind TBD K2 Enterprises $248* $275 $330

sept

9/4/14 8 Excel Based Dashboards TBD K2 Enterprises $248* $275 $330

9/12/14 8 Revenue Recognition Marty Van Wagoner AICPA $248* $275** $330**

9/15/14 8 AICPA Peer Review Program Advanced Course Thomas Newell AICPA $248* $275** $330**

9/16/14 8 Annual Update for Compilation and Review Engagements Thomas Newell AICPA $248* $275** $330**

9/22/14 4 Advanced Quick Books Tips and Techniques AM TBD K2 Enterprises N/A $155 $185

9/22/14 4 iPad - An Effective Business Tool PM TBD K2 Enterprises N/A $155 $185

9/23/14 8 Budgeting, Forecasting and Business analytics TBD K2 Enterprises $248* $275 $330

9/24/14 8 FASB Review for Business & Industry Marty Van Wagoner AICPA $248* $275** $330**

9/25/14 8 Forensic Accounting: Fraudulent Reporting and Concealed Assets

Robert Walter AICPA $248* $275** $330**

9/26/14 8 Advanced Business Law for CPAs Robert Walter AICPA $248* $275** $330**

9/29/14 4 Word, Outlook and PowerPoint - Tips and Tricks for Enhancing Productivity PM

TBD K2 Enterprises N/A $155 $185

9/29/14 4 Microsoft Office 365 - Your Office, Your Way AM TBD K2 Enterprises N/A $155 $185

9/30/14 8 Excel PivotTables for Accountants TBD K2 Enterprises $248* $275** $330**

oct

10/2/14 8 Governmental and Not-for-Profit Update Michael Morgan AICPA $248* $275** $330**

10/3/14 8 Studies on Single Audit and Yellow Book Deficiencies Michael Morgan AICPA $248* $275** $330**

10/8/14 8 Group Audits Clarifying the Complexities Marty Van Wagoner AICPA $248* $275** $330**

10/9/14 8 Gaining and Sustaining a Competitive Advantage: Keys to Boost the Bottom Line

John Cox AICPA $248* $275** $330**

10/10/14 8 Annual Update for Controllers John Cox AICPA $248* $275** $330**

10/16/14 16 Slashing Taxes for Your Small Business Clients: Corporations, Partnerships & LLCs

Norman Soloman AICPA $248* $275** $275**

10/17/14 8 Advanced Tax Strategies for LLCs an Partnerships Norman Soloman AICPA $248* $275** $275**

10/20/14 4 Health Care Reform Act: Critical Tax and Insurance Ramifications

Michael Blackburn AICPA N/A $155 $185

10/20/14 4 Social Security and Medicare: Maximizing Retirement Benefits

Michael Blackburn AICPA N/A $155 $185

10/21/14 8 Form 1041: Income Taxation of Estates and Trusts Michael Blackburn AICPA $248* $275** $330**

10/22/14 4 Capitalized Costs and Depreciation: Key Issues and Answers Dennis Riley AICPA N/A $155 $185

10/22/14 4 Cancellation of Debt for Individuals and Businesses Dennis Riley AICPA N/A $155 $185

10/23/14 8 Cut Your Client's Tax Bill: Individual Planning Tips and Strategies

Dennis Riley AICPA $248* $275** $330*

10/27/14 8 Advanced Tax Strategies for S Corporations Peter Towle AICPA $248* $275** $330**

10/28/14 8 AICPA's Annual Federal Tax Update Peter Towle AICPA N/A $180 $330**

10/31/14 8 Public Company Update: SEC, PCAOB and Other Developments

Marty Van Wagoner AICPA $248* $275** $330**

FIELD OF STUDY

CREDIT HOURS COURSE TITLE INSTRUCTOR VENDOR

EARLY MEMBER REGISTRA-TION

MEMBER FEE

NON MEMBER FEE

* UACPA Members receive a 10% early registration discount on these courses when registering at least TWO WEEKS before the date of the course. ** AICPA Members receive an additional $30 off the price of each 8 hour course, $50 for 16 hour courses.


nov

11/3/14 8 Audits of 401(k) Plans Melissa Critcher AICPA $248* $275** $330**

11/4/13 8 Common Frauds and Internal Controls for Revenue, Purchasing and Cash Receipts

Melissa Critcher AICPA $248* $275** $330**

11/5/14 8 Advanced Controller and CFO Skills Anthony LaRusso AICPA $248* $275** $330**

11/6/14 8 Financial Statement Analysis: Basis for Management Advice

Anthony LaRusso AICPA $248* $275** $330**

11/7/14 8 Toolkit of Best Practices for Today's Controller and Financial Manager

Anthony LaRusso AICPA $248* $275** $330**

11/10/14 8 Annual Tax Update: Corporations and Pass-Through Entities

Michael Blackburn AICPA $248* $275** $330**

11/11/14 8 Basis/Distributions for Pass-Through Entities: Simplifying the Complexities

Michael Blackburn AICPA $248* $275** $330**

11/17/14 16 Annual Accounting and Auditing Workshop Marty Van Wagoner AICPA $405* $450** $540**

11/19/14 8 Financial Reporting Framework for SMEs Marty Van Wagoner AICPA $248* $275** $330**

11/20/14 8 Tips and Tricks for Handling IRS Disputes Michael Blackburn AICPA $248* $275** $330**

11/21/14 8 Annual Tax Update: Individuals and Sole Proprietors Michael Blackburn AICPA $248* $275** $330**

11/24/14 8 Advanced Excel TBD K2 Enterprises $248* $275 $330

dec

12/1/14 8 Annual Update for Accountants & Auditors Marty Van Wagoner AICPA N/A $180 $330**

12/2/14 8 Smart Strategies to Slash Taxes for Closely Held Businesses Michael Frost AICPA $248* $275** $330**

12/3/14 8 Taxation for Individuals Living Abroad Michael Frost AICPA $248* $275** $330**

12/4/14 8 Accounting and Reporting for Not-for-Profit Organizations Brian Sheets AICPA $248* $275** $330**

12/8/14 8 Applying OMB Circular A-133 to Not-for-Profit and Governmental Organizations

John Georger, Jr. AICPA $248* $275** $330**

12/9/14 8 Governmental Accounting and Reporting John Georger, Jr. AICPA $248* $275** $330**

12/15/14 8 Construction Contractors Advanced Issues Bruce Shepard AICPA $248* $275** $330**

12/16/14 8 Audits of Banks and Other Financial Institutions Bruce Shepard AICPA $248* $275** $330**

CPECourseScheduleRegister online at uacpa.org, then Education & Events or call the UACPA office at (801) 466-8022.

May 23, 2014 State & Local Government Conference Little America Hotel June 6, 2014Accounting & Auditing Conference

September 18, 2014CPAs in Business & Management Conference South Towne Exposition Center September 26, 2014Annual Member Summit

November 6, 2014 Southern Utah Conference November 13-14, 2014Tax Symposium November 2014 Business Valuation Conference December 11 - 12 Winter Conference Salt Palace Convention Center December 18-19, 2014 Technology Conference South Towne Expo Center

2014 UACPA Conference LineupExhibitor and Sponsorship

Opportunities

Do you have products or services that need exposure to CPAs and other

accounting professionals? Become an exhibitor or sponsor for any of these conferences! For more information

contact Amy Spencer [email protected]

CPE Where You Want It, When You Want It! The UACPA and our partners deliver fast and convenient CPE to your home or office.

With just a click you can earn 2 to 8 hours of CPE credit from the most experienced CPAs across the country from wherever you have a computer and Internet connection. To view a list of upcoming Webcasts log on to uacpa.org, Education & Events and click on “Webcasts,” keyword search “Webinar.”

Date: May 23, 2014

Location: Little America Hotel & Towers 500 S Main Street Salt Lake City, UT

Cost: $243 UACPA Members Registered by 5/9/14; $270 for UACPA Members Registered after 5/9/14; $330 for Nonmembers

CPE: 8 Hours

State & Local Government Conference

Session Topics Presenters

GASB Update Scott Reeser, CPA - GASBAffordable Care Act Susan Grassli – GBS BenefitsDeferred Inflows/Outflows (GASB 63/65) Scott Reeser, CPA - GASBPensions - URS Kim Kellersberger – Utah Retirement SystemsSampling 1 Hollie Andrus, CPA – Utah State Auditor’s Office Ethics Paul Skeen, CPA – Eide BaillyGovernance Responsibility Compliance Issues David Church – Blaisdell & Church, PCPensions - Audit Van Christensen – Utah State Auditor’s OfficeSampling 2 Hollie Andrus, CPA – Utah State Auditor’s OfficeTooele County Case Study Jeremy Walker – Tooele County TreasurerEconomic Update Vincent Mikolay – Utah Governor’s Office of Economic Development

Register by vis it ing uacpa.org or by calling 801 .466.8022

46 the journal entry | January 2014

Accounting IssuesWhen UACPA members have questions about accounting issues, help is available from the UACPA Accounting Issues Committee. Each month, a member of the committee is assigned to answer accounting questions and help you interpret the rules as they apply to your particular situation. The following members may be contacted during the months listed.

April

Ted Rokich 801-263-3090

[email protected]

July Mark Anderson 801-532-2200

[email protected]

May

Larry Deppe 801-626-7838

[email protected]

AICPA Ethics HotlineThe AICPA Ethics Hotline provides non-authoritative guidance to members on questions related to ethics including independence. Each year it responds to more than 4,000 inquiries. The Ethics Hotline is open from 9 a.m. to 5 p.m. ET on weekdays and a staff members may be reached by dialing either (888) 777-7077, menu option #5, followed by menu

option #2, or by e-mail at [email protected].

CPE Approval – Does This Qualify?When UACPA members have questions regarding CPE Approval and whether something may or may not qualify, they can turn to the UACPA CPE Approval Committee for answers. Each month, committee members are assigned to answer member questions related to CPE approval, and below are those mem-bers’ names that may be contacted with your questions.

April - June

Steve Avis 801-532-2200

[email protected]

Scott L. Robinson 801-990-5918

[email protected]

Tax IssuesThe Tax Issues Committee focuses on legislative and regulatory issues and does not answer technical questions. For assistance with a technical matter, please refer to the UACPA referral tool at uacpa.org. Direct questions related to legislative or regulatory issues to [email protected]

ContactList

Classified Ads

To place your classified advertisement and reach Utah CPAs, contact the UACPA at [email protected], THINKING OF SELLING YOUR PRACTICE? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buyers, both individuals and firms, looking for practices now. We also have the experience to help you find the right fit for your firm, negotiate the best price and terms and get the deal done. To learn more about our risk-free and confidential services, call Ryan Pannell with The Holmes Group at 1-800-397-0249 or email [email protected].

Interested in Buying a Practice? See local and nationwide listings at www.AccountingPracticeSales.com and register for free email updates. Or call us at 800-397-0249.

CPE Where You Want It,

When You Want It!

To view a list of upcoming webcasts log on to uacpa.org,

Education & Events and click on “Webcasts,” keyword

search “webinar.”

UACPA Committee/Task Force Volunteer FormVolunteer online at uacpa.org — keyword search "committee"❑ I would like to volunteer to serve on a UACPA committe or task force

Committee/Task Force descriptions can be found online at uacpa.org, under Member Connection, Committee & Task Force where you can also volunteer. Identify the committee or task forces below. Check all that you would like to serve on (maximum 3). We will make every effort to assign you to the committee(s) of your choice. Send completed form to: UACPA, 1240 E. 2100 South, Suite 500, Salt Lake City, UT 84106; email: [email protected].

Name: ___________________________________________________________ UACPA#:_________________________________________________ Firm/Company: __________________________________________________ Phone:__________________________________________________ Address:________________________________________________________________________________________________________________ City/State/Zip: ___________________________________________________ Email:_____________________________________________________

❑ Accounting Issues/Conference Task Force

❑ Business Valuation Conference Task Force

❑ CPAs in Business & Management (BAM)

Conference Task Force

❑ CPE Approval

❑ Editorial Committee

❑ Event Planning Committee

❑ Federal Key Person

❑ Financial Literacy Task Force

❑ Financial Ready Utah

❑ Golf Tournament Task Force

❑ Non-Profit

❑ ProNet Council Sub-committees

❑ K-12 Committee

❑ K-12 Volunteers

❑ ProNet Campus Ambassadors (Collegiate)

❑ ProNet Communications

❑ ProNet CPA Inauguration

❑ ProNet Leadership Development

❑ ProNet New Professionals

❑ State & Local Government Task Force

❑ Tax Issues

❑ Tax Symposium

❑ Winter Conference Task Force

Nonprofit Org.

U.S. Postage

PAIDSalt Lake City, UT

Permit No. 1996

Utah Association of CPAs

1240 E. 2100 South, Suite 500

Salt Lake City, UT 84106

Address Service Requested

Do you have clients looking for a health plan AND a tax break?

For a No-Obligation Price Quote, have your clients visit www.UnitedHealthOne.com/CPA or call (800) 358-9728

For more resources about HSAs, visit www.HSACenter.com/CPA

UnitedHealthOneSM is the brand for personal health and related insurance products underwritten by Golden Rule Insurance Company and UnitedHealthcare Life Insurance Company. These health plans from UnitedHealthcare Life Insurance Company are guaranteed issue during Open and Special Enrollment periods only. Product availability varies by state. © 2014 United HealthCare Services, Inc. 42878a-UL-0214

Show your clients a healthy, financial option with a Health Savings Account (HSA). Open enrollment period is still underway for Affordable Care Act health insurance plans. There’s time for your clients to sign up and take advantage of an HSA for tax year 2014. Advantages to HSAs include:

• Tax-deductible — Contributions to the HSA are 100% deductible (up to the legal limit) — just like an IRA.

• Tax-free — Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed.

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• HSA money is the clients’ to keep — Unlike a flexible spending account (FSA), unused money in the HSA isn’t forfeited at the end of the year; it continues to grow tax-deferred.

If you or your clients might benefit from an HSA, act today. Open enrollment period ends on March 31. (Special enrollment periods for qualifying events available throughout the year.)

42878a-UL-0214 CPA-HSA Ad 8.375x10.875-UT.indd 1 3/3/14 11:31 AM

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The Journal Entry - April 2014

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