Gubinsky's CPA Blog

Can Fraud Happen at Your Business?

2011-10-30T13:50:00.005-04:00

Let me introduce to you Ms. LeeAnn Dove. Most likely you have not heard of her. What makes LeeAnn worth noting is she managed to embezzle close to half of a million dollars from her employer Great Falls Landscapes over six years.

According to the Herndon Patch, Dove has been indicted on six counts of wire fraud, one count of mail fraud and eight counts of bank fraud. She faces 20 years in prison for each wire and mail fraud count and 30 years in prison for each bank fraud count. That totals to 380 potential years in prison.

So what happened? Did Dove run into financial difficulties? Did she have a sick child, spouse, or parent to take care of and support? It does not appear so. According to United States Attorney's Office Eastern District of Virginia Dove "added fake employees to the company’s payroll, whose paychecks she deposited into her personal bank account. During her six-year scheme, Dove also used company credit cards for personal purchases, including electronics, furniture, limousine services, concert tickets, and thousands of dollars in gift cards." I know you are asking, how did this go on for six years undetected? It is hard to imagine that the owners did not miss $500k from their profits. There are many potential reasons Dove was able to keep her scheme alive for this length of time including:

Did Dove have check signing authority?
Did Dove write checks and reconcile the bank accounts?
Did any of the owners review the bank statements?
Did any of the owners review the payroll?
Did any of the owners review the credit card statements?
Did Dove ever take vacation or let another employee assume her duties?
Did anyone notice that Dove was living beyond her means?

What happens frequently with a long term trusted employee is they are given to much authority and no one reviews their work. With small organizations it is difficult to maintain strong segregation of duties, but it can be done with owner oversight. The impression given is that Dove was able to purchase items, pay bills, process payroll and have control over financial assets without answering to anyone. Unfortunately, this is a recipe for fraud. Strong internal controls, owner oversight and an intolerance of fraud tone from the top are excellent prevention measures.

Community Service - Giving From Within

2011-08-22T18:07:00.000-04:00

The American Woman's Socity of Certified Public Accountants - DC Metro Affiliate members volunteered at the Capital Area Food Bank distribution center on Saturday morning, August 20, 2011. We were scheduled for three hours on Saturday morning. During that time we helped to pack 550 bags of food for low income students in the DC metro area. It was fun because we were in an assembly line ensuring that each bag had the required number of specific items. Once the last bag was assembled and packed for shipping we then started to unpack donations and sort each item into bins of its respective type.

By the end of the morning, we were hot (no air conditioning), tired, happy and had an all around good feeling inside. So many times we are asked to give monetary donations for worthwhile causes, but we never see where the money goes or how it was used. By volunteering at the food bank we helped to save over $1.7 million in staffing costs annually by volunteering. If you can spare three hours of your day, look into donating your time and effort. It is amazing how giving of yourself makes you feel better about everything. It is an easy feel good remedy.

Pictured above left to right: Comora Brock, Megan Powers, yours truly, and Chau Phan of the AWSCPA DC Affiliate.

Employee vs. Independent Contractor

2011-06-13T17:38:00.000-04:00

The Internal Revenue Service is cracking down on companies that do not classify employees correctly. This area seems to be gray to a lot of people, but if you look closely there are strict guidelines that should be adhered to. You may ask why the confusion or why would a company try to avoid classifying an individual as employee and would rather classify them as an independent contractor? The answer is TAXES! That's right, the employer is responsible for matching the social security and medicare taxes on each employee's wages plus pay the federal and state unemployment taxes on these wages as well. If an individual is deemed to be an independent contractor, the taxes become their responsibility. The company is only responsible for issuing a 1099 stating the gross amount paid during the previous year.

So what exactly distinguishes an employee from an independent contractor? Don't let the term "contractor" fool you. This does not imply what comes to mind for the construction industry. An independent contractor is anyone that you pay for services rendered that is not an employee.

The IRS uses three characteristics to determine the relationship between businesses and workers:

Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
Type of Relationship factor relates to how the workers and the business owner perceive their relationship.

If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.

If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.

Failure to classify workers correctly can cause penalties and interest due. If you have questions regarding the classifications of your workers please review information at IRS.GOV.

The IRS Says "Whoa Nellie"

2011-02-21T15:53:00.000-05:00

The IRS is overwhelmed, or that is what the Council For Electronic Revenue Communication Advancement (CERCA) stated in a press release last week. CERCA was established in 1994 to assist the IRS in building e-file usage. Evidently, the private sector tax preparers have submitted so many electronic income tax returns that the IRS is unable to keep up. In all fairness to the Internal Revenue Service, Congress did make last minute changes to the tax code at the end of the year. However, how long should it reasonably take for the IRS to get their e-filing systems updated? If the software that tax preparers use has been written to include the tax code changes, why is is the private sector so far ahead of the IRS?

What is so ironic about this is that the IRS requires preparers who prepare more than 100 individual, trust and estate income tax returns to e-file. If a client does not want to e-file the tax preparer must obtain a written declaration from the client for their return to be exempt from this requirement. The IRS is becoming stricter on e-filing as time goes forward. The threshold is 11 returns for 2011 to mandate e-filing. You can read information on this new law here.

I understand why many in public accounting are so frustrated. Firstly, it is a very difficult time of year for tax professionals. All are stressed out and working under such time contraints as it is. Secondly, e-filing was prohibited until February 14, 2011 due to the tax law changes and the additional time the IRS needed to update their systems. Therefore, returns that are ready to be filed and taken off the list as "delivered" had to be held in accountant's offices until last week. Once the 14th came everyone wanted to get what they could filed. Thirdly, the IRS is the one that has forced e-filing on all tax preparers and we have acquiesced. Mandatory filing requirements should not be in place if the infrastructure is not there to support it. Tax professionals work non-stop this time of year. Software programmers must have worked a lot of overtime to get the software packages ready so quickly once Congress passed the tax changes. Possbily the IRS personnel should be working weekends, holidays and late into the evenings to keep up with the demand. Just a thought mind you.

Hopefully this is just another bump in the road and things will run smoothly going forward. If you are not e-filing this year you will be next (unless you only prepare 10 returns the entire year) so we might as well grin and bear it.

Maryland CPA's - A Voice To Be Reckoned With

2011-01-23T19:01:00.000-05:00

Is there strength in numbers? If so, 170 Maryland CPA's were a strong group in Annapolis on Wednesday to organize and meet with our respective delegates and senators to discuss issues important to us. This was my second year in attendance and you can read my post about last year here.

This event is sponsored by the Maryland Association of Certified Public Accountants (MACPA). We were in Annapolis by 7 a.m. to be briefed by Tom Hood, the Director of MACPA, on the legislative issues affecting the CPA industry. The legislators are only in session for 90 days so it is important that we meet with them at the beginning of their session before any decisions are made. It just so happened that CPA Day fell on Governor O'Malley's Inauguration, so our time was very limited to spend with our delegates. The issues discussed included:

Sales Tax on Services - CPA's oppose
Retain contributory negligence rule: Defeat efforts to legislate comparative negligence - CPA's support
Educational Requirements for Examination & Licensure (120/150) - CPA's support
Exempt CPA's from Debt Counseling Regulations - CPA's support
Change Definition of "Practicing Certified Public Accountancy" (Safe Harbor) - CPA's support

I was very fortunate to meet with two of my delegates. Mr. Benjamin Kramer invited me into his office and sat down for twenty minutes to discuss my concerns about the issues that could potentially affect the CPA industry. Mr. Kramer was genuinely interested in the topics discussed and offered advice on reaching out the committees that legislate on these issues. Ms. Bonnie Cullison, a first term delegate, welcomed me into her office. Ms. Cullison is so new that she does not have business cards or anything hanging on her walls yet. I was impressed with Ms. Cullison's attentiveness and note taking. She asked good questions which indicated her interest in understanding the importance of these issues to Maryland CPA's.

The best for last. The highlight of the day was meeting Adrienne Gonzalez, aka the Jr. Deputy Accountant, who is someone that I admire and have followed on Twitter and read her website for some time. The Jr. Deputy Accountant is a fan of Maryland CPA's and took time from her busy schedule to be in Annapolis for CPA Day. Above is a picture of yours truly with The Jr. Deputy Accountant at the Governor Calvert House.

SSARS No. 19 Is In Effect

2011-01-08T16:52:00.014-05:00

For periods ending after December 15, 2010 SSARS No. 19 (Statement on Standards for Accounting and Review Services No. 19, Compilation and Review Engagements) must be adhered to by accountants preparing reviewed and compiled financial statements for clients. SSARS No. 19 makes significant changes to compilation and review engagements. These are the first significant changes to compilation and reviewed financial statements in over 30 years.

In December 2009, the Accounting and Review Services Committee (ARSC) issued SSARS No. 19. The standard’s effective date is for periods ending on or after December 15, 2010, with the exception of paragraph 2.21, which may be implemented early. Paragraph 2.21 (AR sec. 80 par. .21) states in part, "The accountant is not precluded from disclosing a description about the reason(s) that his or her independence is impaired." From the AICPA website "The ARSC is the AICPA’s senior technical committee for compilations or reviews and is designated to issue pronouncements in connection with the unaudited financial statements or other unaudited financial information of nonpublic entities. Its mission is to develop and communicate comprehensive performance and reporting standards and practice guidance to enable accountants of nonissuers to provide high quality, objective compilation and review services in the best interests of the profession and the users of compiled and reviewed financial statements, with the ultimate purpose of serving the public interest. "

Another significant change is that this new standard separates the compilation guidance from the review guidance. Other significant changes to SSARSs, as the result of this project, include the following:

A discussion of how the accountant obtains limited assurance through the performance of review procedures.
The introduction of the term review evidence to the review literature.
A discussion of tailoring the review procedures based on the accountant’s understanding of the client’s industry, knowledge of the client, and awareness of the risk that he or she may unknowingly fail to modify the accountant’s review report on financial statements that are materially misstated.
A discussion of materiality in the context of a review engagement.
A requirement that an accountant document the establishment of an understanding with management through a written communication (that is, an engagement letter) regarding the services to be performed.
The establishment of enhanced documentation requirements for compilation and review engagements.

Additional information on complying with SSARS No. 19 can be found on the AICPA website.

The CFE Credential Achieved

2010-12-12T17:26:00.002-05:00

I am pleased to announce that I have earned the CFE (Certified Fraud Examiner) credential. My goal in obtaining this prestigious certification was to assist my clients with any fraud concerns they have. As a CPA, auditors do not audit for fraud during the standard financial statement audit. We do, however, inform those charged with governance of any instances we may become aware of. With this additional credential and skill I hope to assist clients with implementing anti-fraud prevention controls within their organizations.

Many ask what a CFE actually does and what the credential means. The ACFE (Association of Certified Fraud Examiners) "is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with nearly 55,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. The Certified Fraud Examiner (CFE) credential denotes proven expertise in fraud prevention, detection and deterrence. CFEs are trained to identify the warning signs and red flags that indicate evidence of fraud and fraud risk. CFEs around the world help protect the global economy by uncovering fraud and implementing processes to prevent fraud from occurring in the first place."

The ACFE Mission (as listed on the ACFE website):

The mission of the Association of Certified Fraud Examiners is to reduce the incidence of fraud and white-collar crime and to assist the Membership in fraud detection and deterrence. To accomplish our mission, the ACFE:

Provides bona fide qualifications for Certified Fraud Examiners through administration of the CFE Examination
Sets high standards for admission, including demonstrated competence through mandatory continuing professional education
Requires Certified Fraud Examiners to adhere to a strict code of professional conduct and ethics
Serves as the international representative for Certified Fraud Examiners to business, government and academic institutions
Provides leadership to inspire public confidence in the integrity, objectivity, and professionalism of Certified Fraud Examiners

CFEs Are Leading the Fight Against Fraud Worldwide:

Cynthia Cooper, the CFE who discovered the WorldCom fraud, has shared her inspiring story with professionals and students worldwide, through her book and personal appearances.

Harry Markopolos, the CFE who repeatedly attempted to alert the SEC to the Madoff fraud, testified before Congress on how to improve government regulation and oversight of the capital markets.

“Sad as it may seem, fraud will always take place wherever there is opportunity. The feeding frenzy of fraud will not abate unless fraud prevention is embraced and instituted at all levels of a company, especially in the executive suite,” explains Martin Beigelman, CFE, Director of Financial Integrity for Microsoft Corporation.

It has been proven that fraud prevention methods are more successful and are easier to implement than fraud detection. Anti-fraud controls are the responsibility of management and those charged with governance. My role as a CFE will be to assist clients with implementing anti-fraud controls and to assist them with any current fraud concerns that may exist.

Making 24 Hours Go Farther

2010-11-28T21:43:00.000-05:00

During the work week, we each have 24 hours a day to accomplish all that is necessary. Deducting the hours we must sleep, sit in traffic, and take care of personal tasks we are left with eight to twelve hours per day to produce billable work. Depending on what our professions dictate, we have different amounts of wiggle room with which to become more efficient and productive. In reading In Search of Lost Time by Brett Owens I was reminded of daily techniques that we can all implement to decrease our lost billable time and to focus better.

Owens recommends five simple ways, specifically for those of us in an industry where tracking billable time is essential, to increase our productivity and reduce our non-billable downtime. Even if you are not in a billable time industry these ideas can help you as well.

The most simple of recommendations is to invest in a smart phone. You may think that everyone in business today uses one, but there are still some that do not. I at times joke that if I lost my laptop and Iphone I would be in a state of chaos not knowing who to call, where to be, or what to do. My entire life is scheduled in these devices. What this does is eliminate the need for an address book, calendar, logging onto the computer to retrieve email, etc. Not that I recommend texting or emailing while driving, I do read email when at red lights. I read and correspond to email when on the metro, in line at the store and when waiting anywhere outside of my office. It helps accomplish one of my worst pet peeves-wasting time. I do not feel as though I waste nearly as much time as years ago when a phone was simply a phone.

Three of the five suggestions deal with charging your billable time on a current, daily basis. I can attest that if you do not enter your time to your clients account as you are working for them you have a high chance of forgetting. I am a firm believer of entering my time throughout the day. It is an easy way to be finished with the day instead of having to come back days or weeks later to fill in the gaps of lost time.

The final idea is to try and keep your mind free of distractions and clutter by working on one task at a time. This in part relates to a previous post I wrote on this blog entitled Conquering Email Overload in which I discuss not keeping your inbox open all day in order to eliminate the distraction. I have read articles on time management that suggest viewing and responding to email a few times a day; answering and returning phone calls at scheduled times; keeping your desk free of anything not directly related to the task you are currently working on and so on. This is harder than it appears. I like to think of myself as an organized person and I can adhere to keeping my desk free of clutter, but the other two are tough. I have tried to keep my inbox at arms length, and have made some progress. I now only read and respond to email each hour, not constantly throughout the hour. This has helped to retain focus and clarity on the task at hand. I believe that these five suggestions can help us all increase our productivity levels and reduce distractions.

Audited Financial Statements In Relation To Fraud

2010-10-24T19:40:00.000-04:00

As auditors, unless specifically engaged, we are not conducting a fraud examination when auditing a clients' financial statements. I believe this is a public misperception at times. While we do inquire about any existence or knowledge of fraud during our financial statement audits, under SAS 99, we are not responsible for detecting any fraud. Detecting fraud is not the goal of our audits. A financial statement audit is to determine, if in our opinion, that the financial statements are free of material misstatements that could affect a prudent readers judgement. We would, of course, bring any instance of any fraudulent act to the attention of the necessary parties. So what are some differences between financial statement audits and fraud examinations?

As many of you may know I am in the process of obtaining my CFE (Certified Fraud Examiner) designation. Contained within my study materials, provided by the Association of Certified Fraud Examiners is an excellent breakdown determining some main differences between auditing financial statements and a fraud examination.

TIMING

Audit - Recurring, audits are conducted on a recurring basis.

Fraud Examination - Non-recurring, conducted only with sufficient predication.

SCOPE

Audit - General examination of financial data.

Fraud Examination - Conducted to resolve specific allegations.

OBJECTIVE

Audit - Purpose is to express an opinion on financial statements or related information.

Fraud Examination - Purpose is to determine whether fraud has/is occurring and to determine who is responsible.

RELATIONSHIP

Audit - Non-adversarial in nature.

Fraud Examination - Adversarial because involvement is to affix blame.

METHODOLOGY

Audit - Primarily by financial data examination.

Fraud Examination - Conducted by document examination, review of outside data (public records) and interviews.

PRESUMPTION

Audit - Professional Skepticism is a requirement of independent auditors.

Fraud Examination - Resolution is approached by attempting to establish sufficient proof to support or refute allegations of fraud.

I recently wrote an article for my company newsletter about reducing fraud risk within your organization. You can read the full article here.

Conquering Email Overload

2010-09-27T18:42:00.000-04:00

In this day and age it is a common complaint. Many are constantly overwhelmed by their inbox, myself included at times. It is not unusual for us to receive hundreds of emails a day. The digital environment has changed the way we conduct business, keep in contact with friends and family, read professional publications, and receive news alerts. With all of this data constantly bombarding us how do we stay on top of it? In addition to organizing our inbox we also need to be responsive in a timely fashion. I am a huge believer in using the Out of Office Assistant in Outlook and I suggest if you do not already use some type of response notification during your absence that you start. The sole purpose is a notification sent back to the email originator that you will not be responding to emails until a specified date. No one is left hanging waiting for a response.

I have read numerous articles on organizing and keeping current with our inboxes. Many offer realistic solutions but still we don't follow the advice. Why? Is it because that takes time that many of us do not have. Or do we? It is human nature that when things are important to us we get them done. In reading Tony Schwartz's article about email overload he states "But I don't believe it's just about time. Alan Mulally, the chairman and CEO of Ford, arguably has a busy life and he is known for answering nearly every email he receives the same day. That's my experience with him and with a fair share of other CEOs and senior executives. They simply make responding a priority. " The highlighted last sentence says it all. It must be a priority. Schwartz gives three tips to destress your inbox:

Share your email practice with key people in your life. Consider adding something like the following to the bottom of all responses: "I do my best to respond to emails within 24 hours" (or 48, or whatever works for you).
Create a generic acknowledgement for those email exchanges you don't want to continue. Example: "Thanks for writing. I'm inundated and just won't be able to get to this any time soon. Many apologies."
Chunk your responses. Choose specific times to answer emails for a half hour or an hour at a time, so that you're fully focused on getting through them, rather than constantly interrupting yourself throughout the day. You'll be far more efficient, and you'll likely feel less overwhelmed.

Email overload has been a topic of conversation at times. A professional colleague of mine dictates his email responses once per day and his secretary types them in draft form and he reviews, modifies if necessary, and sends out. He swears this is the most efficient method for him. I can attest that his responses are within 24 hours. The key must be to find the solution that works best for you and implement it.

I am going to make an earnest effort to utilize the third suggestion. When in the office I tend to keep my inbox open on one of my monitors all day. This does help me to respond quickly, however, I tend to look each time a new mail alert is sounded. Going forward I will keep my inbox closed and only check every couple of hours and take the time to respond at that time. I will let you know if this helps. Please feel free to comment with any solutions you have that work in dealing with email overload.

MACPA 2010 Technology Conference

2010-09-14T19:31:00.001-04:00

I had the honor of being invited to participate as a speaker at the MACPA 2010 Technology Conference yesterday. My topic to discuss was "Going Mobile" and the impact this has on the CPA profession. It was a pleasure to present with Byron Patrick, CPA and Jina Etienne, CPA.

As the topic was mobility it is no surprise that I was contacted via Twitter by Bill Sheridan to participate. The panel discussion was moderated by Tom Hood. Tom was superb at involving the attendees in the discussions and the session just took off. The crowd was amazing offering their insight and experiences with current technology and asking a lot of questions from the panel. There is nothing worse than speaking to a group of people and everyone sits there with a blank look on their faces. This was not the case as this captive audience maintained a high level of interest throughout the session. The discussion was broad in nature and encompassed everything from smart phones to cloud computing to social media to virtualization and so much more. To all of our surprise we ran past our allotted time because everyone was engaged by the discussions.

A perfect example from yesterday of how going mobile affects our communication processes read on. And I will add that this is a true story. Jina, Byron and myself arrived a bit early to meet and chat prior to our presentation. When meeting we exchanged business cards and Byron did not have any with him. I then asked Byron if he was on LinkedIn. He said that he was and I responded that I would search him out and we could connect. Within the time it took us to get up from our table and walk 20 feet to the presentation room Byron sent me a LinkedIn request.

For another perspective on the conference panel you can read Tom Hood's perspective here. In closing, it was a pleasure to meet James Carroll in person after being Twitter buddies for some time now. Sincere thanks go out to Tom and Bill for allowing me the opportunity to participate at the conference.

CPA Impersonator Busted

2010-08-31T13:39:00.000-04:00

Upon reading the the tweet posted on George Oluwaboro earlier this week I was instantly curious. Who is this person that was accused of felony theft, falsely representing himself as a certified public accountant (CPA) and practicing as a CPA without a license in Maryland? According to the Baltimore Sun Oluwaboro accepted money for performing an independent audit for a client. The problem was, this client was smarter than Oluwaboro realized. This client checked the Department of Labor and Licensing Website to ensure that Oluwaboro was in fact a licensed CPA in the State of Maryland. When this client did not locate Oluwaboro's name on the website he then voiced this to Oluwaboro. According to the DLLR website "After the client informed Oluwaboro that his name had failed to appear in a search of DLLR’s database of licensed CPA's, he maintained that while he would complete the work, a licensed CPA would approve and sign the final audit. The client filed a complaint with the Board of Public Accountancy, part of DLLR’s Division of Occupational and Professional Licensing. " You can read the full news brief here.

What is most upsetting about this is the fact of infringing on the public trust. As CPA's we have a moral responsibility to serve the public in a manner that a prudent individual would find appropriate. For someone to falsely represent themselves as a licensed CPA to the public is morally reprehensible. If anyone is in the process of retaining a CPA take a moment to search their name on the appropriate state licensing website. It is simple and will give you peace of mind.

The proposed penalty is a fine and eleven years in prison. At first the penalty may seem hefty, but not when you think about the severity of the violation.

What Does Your AICPA Membership Mean To You?

2010-08-25T20:02:00.000-04:00

I am a member of the American Institute of Certified Public Accountants (AICPA). If you are a member you have most likely received your ballot in the mail to vote on the new amendment to the Institute's bylaws regarding membership. I encourage you to vote and return the ballot no matter what your decision is. I have sent in my ballot and this has been quite the discussion around my office as of late. With working in public accounting each CPA in my office has their thoughts on this subject. So what exactly does the amendment propose to change? You can read the full disclosure here. In a nutshell, the amendment would allow individuals meeting certain criteria that do not hold a valid CPA license to be full voting members of the Institute.

The criteria taken directly from the AICPA website is as follows:

1. Possess a valid and unrevoked CPA certificate issued by a legally constituted authority, the present requirement for membership.

2. At any time possessed a valid CPA certificate and the certificate was not revoked as a result of a disciplinary action (i.e., the certificate holder allowed the certificate to lapse because they were not providing public accounting services and therefore the certificate was not required by their state board of accountancy).

3. Fulfill the education, examination and experience requirements of the Uniform Accountancy Act (UAA) for CPA certification (see Appendix B) and are of good moral character but have never been granted a right to practice because they do not hold out as CPAs.

The third item is highlighted because it is what is causing the division among the current membership. One person equated it to a physician that has attended medical school, passed the boards, is of good moral character, but never bothered to obtain a license or let it lapse. Should this individual be allowed membership into the American College of Physicians? Maybe it should be phrased this way, would you choose a physician for your medical care who did not hold a valid license to practice medicine?

Many ask why the AICPA board would approve this amendment. The first possible answer is an increase in revenue from additional member dues. A second possibility could be that the membership as it stands now excludes those that have passed the exam but do not have a license and that is not playing nice. We don't want to show favoritism do we? This falls under the same idea that every child sports team should win a trophy even if they come in last place because they played.

Wait, stop right there. Seriously, this is one thing I do not understand. Why would anyone go through the enormous task of taking the CPA exam and pass and then not do the easy part and obtain a license? I do not understand that concept at all, but there must be some of you out there. If you fit into that category and are reading this please write a comment and explain your thought process to me.

An additional sore spot for current members opposed to this amendment is that in order to maintain an active CPA license a required amount of continuing education credit hours is mandatory. For the State of Maryland the State Board of Accountancy requires eighty hours of CPE every two years in order to renew your license. Those without a valid license are not subject to this requirement. Not only is the CPE a scheduling issue at times due to billable client work but it is not cheap. The average cost for eight hours of training is approximately $300.00. The positive note is that the CPE requirement does keep us informed and refreshed.

What do I suggest? Possibly a compromise in which individuals who do not possess a valid CPA license are admitted as associate members. In this case access to resources and support could be obtained but these members would not have voting rights. Why do I feel this way? The AICPA is a membership organization for CPA's. Possibly if the amendment is passed the name of the Institute should be changed to the American Institute of Accounting Professionals (AIAP).

As CPA's our fiduciary duty is to the public. The public places trust in us to act and perform our responsibilities in a manner to which a prudent individual would find appropriate. Upon attaining a license you agree to abide by the code of conduct established by the AICPA. I do not feel having a membership organization for valid CPA license holders which is exclusive is a negative thing. In my opinion it adds merit to the organization as a whole.

As this is a touchy issue among the profession I welcome your comments and thoughts.

Another Glass Ceiling Smashed

2010-08-21T11:01:00.000-04:00

Letitia Long may not be a household name, yet. What is impressive about Long is the fact that she is the first woman to lead any of the United States federal government’s “major” intelligence agencies. The United States has sixteen intelligence agencies. Not sure what they are? You can see the list here.

The National Geospatial-Intelligence Agency's motto is "Know the Earth, Show the Way." But what exactly does this agency do? According to Wikipedia the "NGA is an agency of the United States Government with the primary mission of collection, analysis, and distribution of geospatial intelligence (GEOINT) in support of national security. NGA was formerly known as the National Imagery and Mapping Agency (NIMA) and is part of the Department of Defense (DoD). In addition, NGA is a key component of the United States Intelligence Community. NGA's headquarters are located in Bethesda, Maryland and operates major facilities in the Northern Virginia, Washington, D.C., and St. Louis, Missouri areas as well as support and liaison offices worldwide. In 2011 NGA expects to consolidate many of its regional activities as part of the BRAC in a new campus near Ft. Belvoir in Fairfax County, Virginia, which will become the third-largest government building in the Washington Metropolitan Area. Its budget and number of employees are classified."

Letitia Long joins the elite group of women breaking through the glass ceiling in their particular industry or area of expertise. Each woman that excels opens the door for women coming behind them. Women like Letitia Long serve as an inspiration for all women to never give up on their dreams. We can all achieve our goals as long as we remain realistic, have endurance and strive to be the best at what we do.

Cheers Letitia, we all wish you continued success!

Born To Be Wild, Or An Accountant?

2010-08-15T10:55:00.000-04:00

One of my favorite things about having this blog is receiving emails for future content and comments from readers. I appreciate the time one takes to write to me. I received an email from a reader this week of a possible topic they thought would interest my readers. I review each link I receive. In reading 10 Ways To Know If You Were Born To Be An Accountant I couldn't help but try and see if I fit the signs listed. I am hapy to report that I do fit 9 of the 10 items listed.

However, is that enough? Do you think that we need to have a passion for what we do? I have always thought to truly excel in one's profession we must have a passion for it. What about when we are children? I did not anticipate being a CPA in my youth. I planned on being a veterinarian until I struggled with high school science classes. I saw the writing on the wall at that point. It would have been a difficult uphill climb for me. I still have my passion for animals, however, it is not my career. So possibly the answer is determining what we are good at, while also having a passion for it. Having a passion alone is not going to cut it. We are not all cut out to do everything. One thing I have noticed that is when we enjoy what we are doing or learning it seems to come easier.

Below is an excerpt from The Dark Knight where the Joker credits his work to doing what he does best. Maybe that is what we all should do, find what we do best and do our best at it.

[Joker walks into Harvey Dent's hospital room, disguised as a nurse, and Harvey tries to strike him, but is stymied by the straps holding him down]

Joker: Hi. You know, I don't want there to be any hard feelings between us, Harvey. When you and, uh...

Harvey: RACHEL!

Joker: When you and Rachel were being kidnapped, I was in Gordon's cage. I didn't rig those charges.

Harvey: Your men, your plan!

Joker: [serious, smirks slowly] Do I really look like a guy with a plan? You know what I am? I'm a dog chasing cars. [giddy] I wouldn't know what to do with one if I caught it! You know…I just do things. The mob has plans. The cops have plans. Gordon's got plans. You know…they're schemers. Schemers trying to control their little worlds. I'm not a schemer. I try to show the schemers how pathetic their attempts to control things really are. So when I say… [grabs Harvey's hand, Harvey struggles a little] ah, come here. When I say that you and your girlfriend was nothing personal, you'll know that I'm telling the truth. [starts unstrapping Harvey's wrists from one side] It's the schemers that put you where you are. You were a schemer, and you had plans. And, uh... [starts unstrapping Harvey's other wrist] look where that got ya.

[Once Harvey's other wrist is free, he attempts to grab The Joker, the two struggle with each other until The Joker grabs a hold of Harvey's hands, moving them from side to side]

Joker: I just did what I do best. I took your little plan and [sing-song tone] I turned it on itself! [Harvey stops struggling, The Joker looking down at him] Look at what I did to this city with a few drums of gas and a couple of bullets. Hm? You know–you know what I noticed? Nobody panics when things go "according to plan"… even if the plan is horrifying. If tomorrow I told the press that, like, a gang-banger will get shot, or a truck load of soldiers will be blown up, nobody panics, because it's all part of the plan. But when I say that one little old mayor will die… well, then everyone loses their minds! [lets go of Harvey's hands and pulls out a gun, the barrel facing himself] Introduce a little anarchy. [puts the gun into Harvey's hand, cocking the gun] Upset the established order, then everything becomes…chaos. [guides the gun to his own forehead, smacking his lips] I'm an agent of chaos. Oh, and you know the thing about chaos? It's fair.

[Harvey thinks for a minute, and shows Joker the unscarred side of his coin]

Harvey: You live...

Joker: Mmm-hmm?

Harvey: [turning the coin on its scarred side] You die!

Joker: Now we're talkin'!

Join The Fight Against Breast Cancer

2010-08-09T13:45:00.000-04:00

What are your plans for Monday, October 11, 2010? I hope that you will join me in supporting the Eagle Bank Foundation for the 6th Annual Golf Tournament that raises money to help fight breast cancer. The statistics about breast cancer are sad--at some point during our lives we will likely know someone who will be stricken with this disease. It may be your spouse, mother, grandmother, sister, child, aunt or friend. Current statistics state that 1 in 8 women will develop breast cancer in their lifetime according to BreastCancer.org. That is far too many and why we need to find a cure.

I am a member of the Eagle Bank Foundation Board. This board is a fantastic group of volunteer professionals who work very hard to hold this annual event. All proceeds, less the cost of the golf event, are donated. Since the board is 100% volunteer there are not any overhead costs. The Foundation has held this event for the past 5 years and has donated over $650,000 to local hospitals and recovery centers in the Washington, D.C. Metro Area. Facilities support include Shady Grove Adventist Hospital; The George Washington University Hospital; Washington Hospital Center; and Providence Hospital.

Bottled Water Costs How Much?

2010-07-25T21:01:00.000-04:00

In reading Ernie Smith's article about the cost of bottled water for Congress I was shocked to say the least. Over $600,000 for bottled water in nine months? Do you find that excessive as well? Am I suggesting that Congress should drink tap water? Not necessarily. I would suggest that a water filtering system be installed as most offices in the private sector do. With the economy as it is, not many in the private sector can afford to provide bottled water for everyone. So why should the federal government be different?

I urge you to read the article, it is enlightening. I am sure you will be surprised as well on where your tax dollars went. In addition to bottled water our tax dollars were spend on donuts, vegetarian meals, several catering companies, and even Quizno's for staff. Smith states "House members spent part of their Members Representational Allowances on these items -- and more -- during the nine-month period between late 2009 and early 2010 covered by the Sunlight Foundation's House Expenditure Reports Database. The info is highly enlightening, revealing, for instance, the popularity of Chantilly Donut's sinkers; what it costs to feed hungry congressional pages; and how lucrative it can be to own a part of the cottage industry of keeping our duly elected representatives fed and well hydrated. "

I don't know about you, but this frivilous spending is a bit much to swallow. Working as hard as we do it is upsetting to think of how our taxpayer funds are spent. What about Bo, the first dog, traveling in his own private jet to meet the first family in Maine for their vacation? Don't believe it? Read about it here. Where does it stop? How do we, the taxpayers, get our elected officials to listen to us? How do we get the message across that you cannot run the government without a balanced budget and to stop printing money constantly? The only way a private company stays in business is to spend less than it earns. Our government keeps growing and spending out of control at a time when it is most crucial to cut costs. Is anyone listening to us, the common people who keep the wheels turning in the economy that funds the government? I tend to doubt it.

On a different note, I am happy to announce that this blog has been awarded as one of The Top Women Business Blogs of 2010. Please view my blog to see the badge.

Philadelphia Tax Amnesty Program

2010-06-21T08:40:00.000-04:00

I received an email for a reader requesting that I devote a post to the Philadelphia Tax Amnesty program. Receiving a request from a reader is a huge compliment and I am happy to oblige. The amnesty program will expire on June 25, 2010 so time is limited. This is a great opportunity for individuals and businesses who are behind on their tax payments to get current without paying penalties and having half of the interest waived.

You may be wondering why Philadelphia is having a tax amnesty program for the first time in 25 years. Due to the current economic climate this could be a win-win for everyone. The city needs revenue and this gives taxpayers a chance to pay taxes due without any penalties and only a portion of the interest due. Amnesty programs have proven successful in the past for this reason. If you have any questions about the program you can view the frequently asked questions portion of the website and obtain telephone numbers to call as well by going to the web page Philadelphia Tax Amnesty.

International Women's Day - March 8, 2010

2010-03-07T17:49:00.000-05:00

Monday, March 8, 2010 is International Women's Day. To be honest, I only realized this today when reading the news on the internet. I was looking for something to write about for this blog. I have made a promise to try and write once per week while in tax season. I have worked so hard to get this blog where it is and I don't want to have a huge gap between postings and let anyone down who checks back frequently for updates.

International Women's Day (IWD) is quite the historical event. I have learned a great deal about this day. If you would like to learn the history of IWD read it here. One interesting fact is that IWD is a national holiday in several countries. According to Wikipedia IWD gained so much popularity since its inception in 1911 that the US Congress adopted Women's History Week in 1979. In 1987 Congress expanded the week to a month. March is now known as Women's History Month.

Yesterday Maria Shriver celebrated Women's History Month in California. The purpose of Women's History Month is to increase consciousness and knowledge of women's history: to take one month of the year to remember the contributions of notable and ordinary women, in hopes that the day will soon come when it's impossible to teach or learn history without remembering these contributions.

My Tax Season Explanation

2010-02-28T15:09:00.000-05:00

I don't believe anyone who has never experienced a tax season can understand what it is all about. Most people seem to think CPA's in public accounting spend their days only preparing income tax returns. That is part of it, but only the tip of the iceberg. Believe it or not, I have even heard "just put the numbers in the boxes and move on." Actually preparing the tax return is not the difficult part. Dealing with complex tax cases and understanding the regulations and the applicability to your client is where the difficulty lies. As CPA's we do not only focus on tax, we also perform audits, reviews and compilations, consult and give advice to clients, prepare projections and forecasts, perform tax, retirement and estate planning, and anything else that a client may need. We also spend a great deal of time training entry level employees. I also serve on two not-for-profit boards so my community service does not stop during tax season. I thought for this article it may be interesting for you to experience my life as a CPA in tax season.

My typical day starts at 5:30 a.m., checking my Blackberry for anything that needs immediate attention. As an early riser I prefer to be at my office before 7:00 a.m. Some may think that is insane in itself, but it works for me. Interestingly enough, I am not the first in my office. I like to arrive early and start my day when the office is quiet, the phone is not ringing and I can organize myself for the day. I am a list person. I constantly have a list of what I need to accomplish. Items not completed the prior day are at the top of the list for the next day.

It is not unusual for me to speak with or work on data for more than a dozen different clients within one day. Public accounting is very different from the private sector. We must keep track of numerous different client situations and accounting data. Each client is different and so are their needs. It is expected of us to remember and know their situation upon answering the telephone, even when focused and working on another client. As CPA's in public practice we must be able to switch courses instantly and handle multiple tasks simultaneously. It is not unusual to never finish the first item on the list due to fires that pop up and need immediate attention. To be successful in this industry prioritizing work is a must. We have to be conscious of deadlines and schedule soft deadlines around hard deadlines that must be met. During my day every hour is accounted for.

When my work hours come up in conversation people tend to envision me to be the classic workaholic. I think I may have a mild case, but there are many other things in life I enjoy, so I don't spend every waking hour working during the off season. On the other hand, my career and clients are very important to me. I do work more hours than most of my co-workers, but it is critical to me that I do the best job I can and that my clients receive an exceptional product. To say that tax season is exhausting is putting it mildly. On average I work seventy hours per week February through April 15th. March through April 15th I will work seven days per week. There have been days when the alarm clock rings that I would pay money for someone to let me sleep.

This is my 13th tax season and each year it is different but it always takes everything out of me. It is not uncommon for CPA's to experience situational depression or also known as adjustment disorder. During busy season your adrenaline is running so high and you are on a fast race to get everything completed by April 15th. The workload is overwhelming and at times you wish the clock would stop to give you more time. Many of us feel some relief once tax season is over, but the weeks after your body still wants to be in the race, but your mind knows the race is over. A battle ensues between mind and body and the adjustment period begins. I feel out of sorts until Memorial Day. That is when I seem to bounce back. In the weeks after April 15th it seems to rain a lot, especially when I have weekends off. I tend to sleep a lot, catch up on what has been neglected in my house and start my gardens, and try to see my family and friends.

Hopefully this gave you a bit of insight into tax season and how difficult a time it is. If you have friends or family that work in public accounting be understanding as free their time is limited. Be as supportive as you can and don't take it personally when you do not see them much during this time. Without much free time errands, laundry and domestic duties take up any time off. Tax season is a beast, and we are doing our best to conquer it. D-day is April 15th and it is fast approaching. Once it has passed life will slowly return to normal with a seven month reprieve until tax season 2011.

Women Outnumber Men on Nation's Payrolls

2010-02-14T15:16:00.000-05:00

For the first time in this nation's history women outnumber men within the workforce. There are several factors that play into this, but this is a monumental event worth noting. In reading Catherine Rampell's article in the New York Times in the last quarter of 2009 women outnumbered men on payrolls for the first time in history. With the current economy and the need for two income households being the normal occurrence it makes sense. What I found interesting is the fact that women are holding more professional positions. According to Rampell men are employed in higher percentages in blue collar positions which have been hit harder by the recession. Rampell also goes on to state that "male-dominated industries are actually especially cyclical in two different ways: They are not only influenced by the business cycle, but also by the seasonal cycle. Industries like construction, which tend to employ men, get more work in warmer months."

Economists predict that if manufacturing and construction work see an increase in the spring and summer months that men could slightly dominate the payrolls again. However, it is important to note that according to the statistics in Rampell's article "if you adjust for these regular seasonal factors that affect the job market, women would have held just less than half of the nation’s payroll jobs in January, at 49.9 percent." As a CPA rounding is the norm, so we would be at 50%. Looking forward, with more female college graduates then men and more career minded women, I predict that women will eventually outnumber men in the workforce consistently in the years to come. Another interesting outcome could be that more women will delay starting a family due to the fear of their spouse losing their job. If women continue to hold stable employment we could see an increase in stay at home dads while the woman continues to work outside of the home. As an advocate for women's initiatives and career advancement I look forward to this trend ultimately causing us to see more women in top executive positions and leadership roles in the years to come.

Should Our Commander In Chief Be A CPA?

2010-02-09T20:28:00.001-05:00

When I come across interesting and thought provoking information I will save the link as I may want to write about it at a later date. This was the case when I read William Brighenti's blog post Why Not A CPA As President? in January. What an idea I thought. This could certainly make a difference with some of the executive decisions being made lately. But, I also think that being our Commander In Chief requires additional experience and skill in areas other than accounting. With the other skills such as foreign expertise and military knowledge it could be beneficial to have a strong financial background as well. It seems that having a law degree carries so much weight when running for public office. I respect those with law degrees, but does it make you that much of a better leader? Currently our economy seems to rank at the top of the list of issues that need to be fixed for concerned Americans. It may not be such a bad idea to have a CPA leading us out of this economic crisis. For individuals trying to get out of their debt the main rule of thumb is to stop spending what you do not have. It is very simple logic, you must reduce spending in order to apply more disposable income to reduce debt. No one seems to be convinced that the enormous stimulus packages and daily increasing debt this country owes is helping at all. I also read an article last week that stated we have the largest federal workforce in history at 2.15 Million employees. The responsible answer to a fiscal economic crisis is not to bloat the government. With shrinking tax revenue from high unemployment, how are we to sustain keeping this excessive number of people employed within the government? In order to lower unemployment and stimulate the economy small businesses need to be created. Private businesses employ workers and provide income tax revenue to the government.

This leads me to my next question, what about our Secretary of the Treasury, Timothy Geithner? Should the individual in charge of this country's checkbook be a CPA? I vote yes. Possibly if Geithner were a CPA he would have filed his taxes accurately as CPA's are required under a code to file accurate and timely tax returns. Does anyone really believe that paying your tax debt once it is brought to the public's attention rectifies the wrong doing? Also, employees of the Internal Revenue Service can lose their jobs by not filing accurate tax returns on time. I am not against holding public officials to this ethical level. Our officials are very comfortable spending our tax dollars, so possibly they should be held accountable for filing their own returns. If Charlie Rangel worked for the IRS he would be in the unemployment line.

Hey Taxpayers - Do You Know Where Your Tax Dollars Are Going?

2010-02-01T07:44:00.000-05:00

My main goal when serving my clients is to not only provide them with an exceptional product, but to ensure that I have accurately taken into account all tax deductions and credits that they are entitled to under the IRS Tax Code. At times the reactions I see when informing my clients of their tax liability is disheartening. This is because I understand how they feel. Especially when news comes out of what their hard earned dollars are being used for.

To give you a clear understanding of what I am referring to we can address the spending habits of our Madam Speaker of the House of Representatives, Nancy Pelosi. I read an article this week from the World Net Daily by Bob Unruh on the cost to taxpayers for Pelosi's travels. The first paragraph reads "It reads like a dream order for a wild frat party: Maker's Mark whiskey, Courvoisier cognac, Johnny Walker Red scotch, Grey Goose vodka, E and J brandy, Bailey's Irish Crème, Bacardi Light rum, Jim Beam whiskey, Beefeater gin, Dewars scotch, Bombay Sapphire gin, Jack Daniels whiskey … and Corona beer. But that single receipt makes up just part of the more than $101,000 taxpayers paid for "in-flight services" – including food and liquor, for House Speaker Nancy Pelosi's trips on Air Force jets over the last two years. That's almost $1,000 per week." After reading that aren't you just a little bit disenchanted? I know I am. This is not happening during a time period when everyone is employed and the economy is booming. Right now people do not have jobs, cannot pay their mortgages, and those lucky enough to have gainful employment have seen their salaries remain flat or reduced. This is not a good time for this country and possibly that $101,000 could have been used to reduce this country's enormous debt. Another point of the article mentions the $12,000 of taxpayer dollars Pelosi spent on fresh cut flowers for her office. What is wrong with a $100 plant that can last for years and only needs watering? Could it be when spending other's money the cost isn't as important?

I wanted to write about this article because I find it irresponsible and unethical. I am not aiming for a political blog, Pelosi just happens to be an unethical politician. If taxpayer approval were asked for these types of expenditures I am confident the taxpayers would vote it down. How many times do I hear "run the government like a business?" Many. I do not know of many businesses that are massively in debt and use funds for extravagant items. We are in an election year and with the recent elections in Massachusetts, New Jersey and Virginia maybe they will start to listen and get their acts together and realize the responsibility that comes with public office and to the taxpayers.

1975 Story Worth Revisiting

2010-01-25T07:29:00.000-05:00

In 1975, as a preteen, my two main focuses in life were how I was going to meet and marry David Cassidy and how to be the best tetherball player at Cold Spring Elementary School. Little did I know that Robin Herman was making a huge stride for women. Thirty-five years ago Herman was the first woman to enter a men's locker room while covering the all-star N.H.L game. Herman was then a reporter for the The New York Times, and had worked for a year to be given the same locker room access rights as men to the players when covering a story. At the time not everyone was happy about the decision, but Herman knew she had to follow through after fighting for so long for the opportunity. Herman and Marcel St. Cyr, working for CKLM radio in Montreal, entered the men's locker room on January 21, 1975. In Lynn Zinser's article, Herman is quoted as saying "I found myself forced to muster Supreme Court-worthy arguments for an inane, essentially logistical problem that could easily have been solved by a few big towels.”

Herman was no stranger to breaking barriers for equality. She was among the first class of women admitted to Princeton University. She was brought back into the sports limelight when Sports Illustrated reporter Melissa Ludtke had a run-in of her own. When Major League Baseball Commissioner Bowie Kuhn prohibited Ludtke from interviewing players in the locker room during the 1977 World Series, SI publisher Time Inc., filed a lawsuit. The following year, a U.S. federal judge ruled that male and female reporters should have equal access to the locker room. Ludtke stated "Being in the national spotlight was difficult and a little bit scary, but I was very determined that this had to happen, not for me personally, but for all the young women who wanted to get into this profession. We understood the importance this held.” Ludtke said she continually reminded people that she never demanded to go in a locker room. She demanded the same access that male reporters had. It is the sports leagues and teams that decided interviews were to be done in the locker room, so equal access had to be granted. “If I never went in a locker room, it would have been fine with me,” Ludtke said.

At times we all tend to take certain things for granted, as if it has always been this way. It is good for us to be reminded of those before us who made life today a reality. This is one reason why I always vote. So many fought for my right to vote that not voting seems to be an act of unappreciation. Being a pioneer is hard, and the least we can do is to not forget who made the important changes that benefit us, the ones coming behind them.

CPA Day in Annapolis, Maryland Recap

2010-01-21T07:49:00.000-05:00

Wednesday, January 20, 2010 was CPA Day in Annapolis, Maryland. This is a day where CPA's licensed in the state of Maryland come together to meet with their respective delegates from their districts. This yearly event, sponsored by the MACPA, gives Maryland CPA's a chance for their voices to be heard. Current issues on the minds of CPA's include not passing a proposed sales tax on professional services, allowing CPA candidates to sit for the CPA exam with 120 credit hours but not be licensed until 150 credit hours are obtained and keeping the current legislation in tact for contributory negligence. You can read our legislative agenda here.

The day started early at 7:00 a.m. at the Calvert House for a breakfast meeting hosted by Tom Hood, CPA. If you have never had the pleasure of meeting Tom, he is the epitome of a leader. Tom has been instrumental in helping the MACPA to be the outstanding organization that it is today. At the breakfast meeting I had the pleasure of meeting Bill Sheridan of the MACPA. Bill and I know each other from Twitter, but had never met. Upon meeting Bill it was as if we had been friends for years. As the editor for the MACPA's blog, Bill was busy snapping photos. Meanwhile, Tom led a discussion of the top concerns in the CPA profession and before we knew it we were off to meet with our delegates. I had the pleasure to meet Henry B. Heller, Benjamin Kramer, and Roger Manno from my District 19. Henry Heller was extremely personable and took a great interest in our visit. I was invited into his offices for a twenty minute discussion on my concerns. To be able to walk around the offices of the beautiful, historic buildings was a memorable treat. At 10 a.m. the delegates needed to be in session, so at that time the MACPA conducted a seminar on current and expected trends within the industry. For attending the seminar we received 2 CPE credit hours. After our CPE, our delegates attended a luncheon with us. During the luncheon we were able to continue our discussions. For the delegates to take time from their busy 90 day legislative session to have lunch and listen to our concerns gives true meaning to "representing the people."

If you have not taken the time to attend a CPA Day in the past, I suggest you mark it on your calendar for 2011. Our legislative process is not only interesting, but to view it first hand is an opportunity that should not be passed up. At my firm, Santos, Postal & Company, P.C., we understand this value, and had six CPA's in attendance, including our Managing Partner, Charles Postal, CPA, who also serves on the Political Action Committee for MACPA. If I have convinced you to attend next year be sure to look for me as I am already looking forward to it.

Johnson and Johnson Charged With Paying Drug Kickbacks

2010-01-17T11:01:00.002-05:00

According to a complaint filed Friday by the office of the United States attorney in Boston, Johnson and Johnson has been charged with paying kickbacks to the nation’s largest nursing home pharmacy to increase the number of elderly patients taking the antipsychotic Risperdal and several other medications. Natasha Singer's New York Times Article states that the payments violated the federal anti-kickback statute and led Omnicare, a pharmacy company specializing in dispensing drugs to nursing home residents, to submit false claims to Medicaid. To read the full complaint filed click here. In summary, the complaint states that Johnson and Johnson and two of its subsidiaries paid tens of millions of dollars to induce Omnicare to buy and recommend Risperdal for elderly patients as well as the drug maker’s prescription pain relievers Duragesic and Ultram, and the antibiotic Levaquin. The government's complaint joins a whistleblower charge by two of Omnicare's employees.

The complaint charges that Omnicare’s pharmacists engaged in intensive efforts to persuade physicians to prescribe the drugs from 1999 to 2004, a period in which the pharmacy’s annual purchase of Johnson & Johnson medications nearly tripled to more than $280 million, from about $100 million. In return for Omnicare’s efforts, the drug maker allegedly paid the pharmacy company kickbacks in the form of rebates based on the market share of some Johnson & Johnson drugs, sponsorship of Omnicare meetings, grants and payments for Omnicare data, like the prescribing habits of doctors, of the kind that Omnicare had previously provided the drug maker for free. The more disappointing part of this is that Risperdal, which is approved by the Food and Drug Administration to treat schizophrenia and bipolar disorder, is not specifically approved to treat behavioral problems in elderly people with dementia. Singer states "In fact, in 2005 the F.D.A. required that the labels of certain antipsychotic drugs, including Risperdal, carry a black box label warning that elderly people with dementia-related psychosis treated with such drugs were at an increased risk of death compared with those taking a placebo."

Senator Herb Kohl is quoted as saying "When it sometimes comes to the questionable practice of promoting brand-name drugs to doctors and their patients, this case presents the lowest of the low. Nursing home residents comprise a vulnerable population that should be able to trust their physician's advice based on medical expertise, not financial self-interest." I do not know much about Herb Kohl, but I do agree with his comments on this matter. If I think about my grandparents and how they could have been potential victims by being prescribed a medication that would not help them for someone to gain a profit is very disheartening.

Swimming In A Pond, Lake Or Ocean

2010-01-14T18:46:00.001-05:00

I am fortunate to have been invited to write a guest article for Re:TheAuditors. If you have never been to this website, authored by Francine McKenna, I suggest you take the time and browse through her numerous informative articles. I met Francine on Twitter, and when I decided to try my hand at writing I asked her for advice for this blog. She has been very helpful to me offering tips and what she has learned along the way. Francine has twenty plus years experience with the Big 4 accounting firms and her website is solely devoted to happenings within those organizations. If newsworthy events are occurring within the Big 4 you can rest assured Francine is covering it. As you can imagine, when Francine invited me to write for her website I jumped at the chance. You can read Swimming In A Pond, Lake Or Ocean here.

Taxpayer Fights IRS and Wins

2010-01-11T07:27:00.001-05:00

Lori Singleton-Clarke is a nurse in Maryland who deducted her tuition to the University of Phoenix for her M.B.A on her 2005 federal income tax return. Her journey started when she filed her tax return showing approximately $50,000 in income with a $15,000 tuition expense deduction. Her return was selected to be audited and the tuition deduction was ultimately disallowed by the IRS. Singleton-Clarke used a paid tax preparer to prepare her return and the preparer adivsed her to take the deduction based on their interpretation of the IRS code. In Laura Saunders article Nurse Outduels IRS over M.B.A Tuition she writes "Few taxpayers decide to go toe to toe with the IRS as Ms. Singleton-Clarke did, arguing her case without a lawyer. For good reason: In 2009, individuals won only about 10% of about 300 such cases, according to data from Tax Analysts. Ms. Singleton-Clarke fought her case in Tax Court, a venue where taxpayers don't have to pay the contested tax before going to trial."

The IRS issues Publication 17 which gives guidance on deductions for individual income tax returns in order for the taxpayer to determine if their deduction qualifies. Page 199 of Publication 17 describes tuition deductions in great detail. Qualifiying work related education must meet one of two tests. Firstly, the education must be required by the employer or the law to keep your present salary, status or job. The required education must serve a bona fide business purpose of your employer. The second test states the education must maintain or improve skills needed in your present work. From what I have read it does appear that Singleton-Clarke's case did meet the second requirement. Singleton-Clarke states she held fast to her conviction that she deserved the deduction, she drew on skills she developed as a nurse responsible for dealing with doctors who may have infringed hospital rules. That was why she studied for her M.B.A., she says: "I didn't want to feel outmatched by surgeons who didn't want to talk to me."

If the education does meet one of the previous two tests, it must then pass another level. The education cannot be needed to meet the minimum education requirements of your present trade or business; and cannot be part of a program or study that will qualify you for a new trade or business. Singleton-Clark did pass this level as well.

This ruling will no doubt open the doors for other taxpayer's to qualify for the tuition deduction as this case will set precedent. My opinion is that anyone who tries to better themselves and further their career should be eligible for deductions that are enacted into law by our government. I give Singleton-Clarke all the credit in the world for standing up for herself and making the effort to fight for what is rightfully hers.

Stimulus May Be Lost Taxpayer Dollars

2010-01-08T07:49:00.001-05:00

Why is that when we come across a piece of news it sometimes can send us into orbit? I feel that way right now after reading Phantom Zip Codes Also Found In Virginia by Barbara Hollingsworth. Hollingsworth states "As much as $9.5 million in federal stimulus dollars went to 14 zip codes in Virginia that don’t exist or are in other states." My first thought, is this true? My second thought, how can this be? My third thought, stop the stimulus payments right now until someone gets their act together. Someone has to be accountable for spending yours and my tax dollars. Classic quote by Hollingsworth "But who would give millions of dollars to somebody who doesn’t even know their own zip code?" Those who pay income taxes, which is estimated at 56% of all people living in this country, deserve to have their hard earned money used in a proper manner. In case you did not know that statistic, read about it here. If this happened in private industry heads would be rolling. If someone knows why this is satisfactory with those in charge of our tax dollars please tell me.

At times I wonder if those in charge of our tax dollars understand their fiduciary duty to us. Those charged with governance have an underlying responsibility to act in a manner in which a prudent person would. I like to consider myself to be a prudent individual. I can also say that I would not spend a dime of another person's money without being certain all data was in order. It seems that standards are much higher in the private sector than with our government. The main reason is due to the fact that in the private arena, if you fail you are out of business. With the government, if you fail then you raise taxes to make up for it. At some point the taxes will not be able to be raised because the number of taxpayers will become the minority and can only pay so much.

CPA's Exempt From Mandatory Tax Return Preparer Registration

2010-01-06T07:33:00.000-05:00

If you read my post from November 28, 2008 entitled IRS Imposed Tax Preparer Registrations For CPA's- Are You Kidding Me? then you know my view point on this topic. This is why I was so happy to read IRS Proposes New Requirements for Return Preparers from the Journal of Accountancy. I wonder if the IRS reads my blog?

As I previously stated, I have no problem with the IRS regulating tax preparers, I actually think it is good for the CPA profession. My issue lies with regulating CPA's that are already highly regulated by the AICPA and the state boards of accountancy. The CPA exam has the reputation of being a "beast", the most difficult professional exam to conquer. Anyone who has taken the exam will attest to my opinion. The CPA exam, however, does test so much in addition to tax regulations and laws. In order to pass all four parts of the exam you must know a little about so much. An anlogy could be to know about a foot deep of the entire atlantic ocean. You do not need to be a master at any area, but you must know something about everything. With this being said, once passing the exam it does not mean you are a tax expert. It means you know enough in the AICPA's opinion to be able to practice accounting. With an exam pass rate of 40% it means a lot of people do not know enough to practice public accounting, and it certainly means that they should not be reviewing and signing income tax returns. The typical path for a newly licensed CPA is to be trained extensively, have their work constantly reviewed, and gain the experience necessary to perform the position appropriately. I cannot imagine that a short training class at H&R Block is preparing people for the job at hand. Each year legistlation constantly changes and taxpayer's circumstances change. This is one of the main reasons why CPA's are required to have so much CPE each year.

The proposed regulation would put tough guidelines on tax return preparers. This includes requiring mandatory registration of all paid, signing tax return preparers as well as competency testing and CPE requirements for preparers other than CPAs, attorneys or enrolled agents. If you are interested in reading the IRS Review Report you can read it here. I believe that these imposed regulations will add credit to the CPA profession as a whole. I don't take offense at people who believe all preparers are the same. If you read the article from the Journal of Accountancy referenced above and do a little research you will find that the difference between a CPA and a walk-in preparer is night and day. When you retain a CPA you are paying for their expertise, training and experience. You also build a relationship. You will not receive this type of service walking into a "minute clinic" to have your income tax returns prepared.

AWSCPA DC Metro Region Affiliate

2010-01-03T10:36:00.002-05:00

I am proud to announce that the AWSCPA DC Metro Region Affiliate of the National AWSCPA Organization is up and running. This has been a long time coming. I became aware of the national organization while at a conference in August in Las Vegas for women in public accounting. Members of the AWSCPA were present at the conference and spoke to me about their interest in starting a Washington DC area chapter. From what I learned about the organization I knew immediately it was something I wanted to be involved in. As a woman CPA, I am very interested in promoting the interests of all women in the profession. From looking at the AWSCPA Website the mission is simple while powerful, "AWSCPA is dedicated to serving all women CPAs. The AWSCPA provides a supportive environment and valuable resources for members to achieve their personal and professional goals through various opportunities including leadership, networking and education."

After attending a few preliminary meetings we ended up with a core group of phenomenal women who agreed to start the affiliate and move forward. I am pleased to know that I am a founding member of the DC metro region chapter and have hopefully embarked on what will be an organization that will last well into the future for generations to come. With a lot of hard work we have elected a board, have completed our bylaws and are registered as a NFP with the IRS effective January 1, 2010. I have already made some great contacts and met some dynamic women. Our board consists of women from several CPA firms in the Washington D.C. area, including myself. We have all come together for a common goal - to promote the interests of women in the accounting profession.

All women CPA's in the DC metro area are encouraged to seek us out. You will make some great friends, help your community and promote the CPA profession.

Women In Red Strive For the Black

2009-12-30T10:16:00.001-05:00

It is no surprise that many people have incurred high amounts of debt over the past few years due to the state of the economy and unemployment. We hear countless stories in the news of the struggles of our fellow Americans. Rarely do we hear of the positive that comes from people helping people. This morning I read How to pay off $10 Million in debt by MP Dunleavey. What makes this story different from most I have read is the fact that women are paying down their debt with the help of other women. Not financial help, but supportive help. Dunleavey writes in her article How we paid off $30,000 in debt of her own financial struggles. Dunleavey is a strong advocate of the website Women in Red Message Boards. These message boards allow women to not only post their own stories and situations, but also allows them to seek advice from those who have managed to get out of debt. If you read some of the postings you will find amazing support from women in the same situations helping each other. No one is paying for the debt of others, but what they receive is actually more valuable. The advice they receive from each other gives them the strength to remain on their path to a debt free life.

As a CPA I have a strong financial background and am able to advise my clients on their personal situations. However, not everyone can afford the cost of solid professional financial advice. I applaud Women in Red and MP Dunleavey for providing a place where women can go for help. The advice is simple, what most know already, but what is empowering is the support. As with any goal what is the hard part is staying on course. In life we all know what we should be doing, but actually putting it into action and having the willpower and determination to achieve the goal is where some fall short. With Women in Red available to those seeking to get out of debt it may just be the solution to avoid the temptation of giving up.

History Was Made at the Pizza Bowl

2009-12-27T08:12:00.001-05:00

Sarah Thomas may not be a household name. If you did not watch Marshall play Ohio in the Little Caesars Pizza Bowl you probably have no idea who Sarah Thomas is. If you did watch the game you saw history being made. Sarah Thomas is the first female referee to officiate a college football bowl game. Furthermore, Sarah Thomas is reportedly the only woman officiating college football games period. On her pioneer break through, Thomas is quoted as saying "It was a little uncomfortable at first because you don't really want to make it a big deal, but my husband kept telling me that it's something I should embrace because it's helping open a door that little girls probably thought was forever shut for them." She added, "Playing football requires so much mental focus that I really don't think a lot of the players even realized that a woman is on the field. They don't pay attention to who's making the calls. They're only concentrating on if they got the call right. And that's how it should be. It should only be about working hard to do the job properly."

Thomas may soon join the ranks of Violet Palmer who is the only female referee in the NBA. Thomas, however, hopes to officiate in the NFL. If it does happen, I do agree with MJD in which he writes about the difficult road ahead with the NFL fans. People do not like change. MJD writes "I hope she does not have sensitive ears." Everyone has an opinion and most are not shy about voicing it either.

Being Tan = 10% Sin Tax

2009-12-24T07:53:00.001-05:00

I grew up in the time period in which being tan was "in." To be pale was "not in." As a teenager I was "not in" based on being a redhead with green eyes and the fair skin with freckles. Oh how I envied my blonde friends who could be out in the sun all day and turn golden brown. I turned beet red and looked like a connect the dots game. As an adult I am actually glad that I have the skin I was born with. I had to be careful my entire life and always wore sunscreen. The good news is that I look younger than I am (or so I am told) and I do not have skin that resembles cowhide. I was lucky that I had parents who always made me apply sunscreen when at the pool or beach as a child. So, the thought of going to a tanning bed is so far out of my realm I cannot imagine choosing to go "tanning". But, many do.

In my Is A 5% Cosmetic Surgery Tax Fair? article I discussed the cosmetic tax that was to be included in the healthcare reform bill. News this week states that the cosmetic surgery tax has been dropped and replaced with a tanning sin tax of 10%. According to Catherine Saint Louis in her article You're Going To Pay For That Tan "Dr. David M. Pariser, the president of the American Academy of Dermatology, said his association proposed that an indoor-tanning tax be considered in place of the cosmetic tax, and that it contacted the offices of senators. We made the case this will reduce health care costs by hopefully reducing skin cancer in the future — that’s the point — and also raise a little revenue now". Even though I am not a "tanner" myself, I am not a fan of the "sin taxes." I firmly believe that taxpayers are entitled to spend their disposable income as they wish. I write that believing that the public does need to exercise good judgement in their choices. Anyone who watches the news or picks up an occasional newspaper knows that constant sun exposure contributes to skin cancer. With that being said, when do we draw the line on what people can choose for themselves? The information is provided to the public, big brothers role should stop there. This is no different than the 350 lb. person who eats at McDonalds every day. Is the fast food tax coming next? We know what is healthy for us and what is not. Isn't the consequences of poor health enough of a punishment?

Now onto the effect on the small businesses that operate as tanning salons, or who offer other services but have a tanning bed, such as a gym or hair salon. We cannot think for one minute that the small business owners are going to absorb this tax for you. To be honest, this tax will not affect me. I am more concerned about where this will lead us into the future for additional sin taxes. Will a day arrive in which we are grocery shopping and are paying a sin tax on a steak instead of purchasing tofu which is healthier? What about purchasing regular soda instead of diet? I could go on but I think you get the point.

Whistleblowing - Is It Worth It?

2009-12-20T08:45:00.000-05:00

What are the expected results for a whistleblower? A whistleblower should be protected from losing their job, immune from retaliation and possibly receive a nice reward. The answer is yes to all three if you are informing the IRS of illegal tax practices. The IRS has a Whistleblower Informant Award monitored by the IRS Whistleblower Office that entitles the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects from tax evaders. From reading this it sounds like a nice incentive for doing the right thing. But, things are not always what they seem.

In the case of UBS international banker Bradley Birkenfeld, things were not as they seemed. Birkenfeld is the foundation behind blowing the whistle on UBS on the bank's illegal off-shore tax schemes to the United States Department of Justice, the Securities and Exchange Commission, and the Internal Revenue Service. According to Stephen Kohn in his article Whistleblowing - A Get- Rich Quick Scheme? "The impact of his disclosures has been unprecedented. UBS has entered a deferred prosecution agreement with the United States and has paid a $780 million penalty. More than 14,000 U.S. taxpayers have admitted to holding undisclosed offshore accounts." By all accounts this is a classic case of catching the bad guys. Birkenfeld should be hailed a hero right?

Wrong. Kohn states that the Department of Justice refused to provide him with any whistleblower protections, let alone immunity in light of his substantial and crucial contributions to the case against UBS. Instead, Birkenfeld was personally attacked by the DOJ and indicted for his role in helping one client, Igor Olenicoff, evade taxes. Far from becoming a billionaire, Birkenfeld will commence serving a 40-month sentence on Jan. 8, 2010. He lost his job. He will soon lose his freedom. Birkenfeld has been sentenced to 40 months in prison. I do agree that he needs to be punished for his role in helping clients evade taxes, however, I do think that his actions of coming clean and helping to uncover a huge tax evasion scheme should be taken into account. We cannot forget that Birkenfeld did not have to blow his whistle. And to date he has not seen dime one of his reward. So, I wonder, if Birkenfeld could go back in time, would he blow his whistle again? I am not so sure after how he has been treated. Hindsight is 20/20.

Is a 5% Cosmetic Surgery Tax Fair?

2009-12-17T18:19:00.000-05:00

I am of the old school mind of thought that if you earn your money then you shall be entitled to spend it however you choose. If I choose to add an addition to my home that is not necessary, but that I really want and can afford, then I should be able to have the work performed and pay the price negotiated with my contractor. On the same hand, if I decide that I want a nose job (and no, my nose is not obscenely large) I should be able to have the procedure performed. Granted of course, that I agree to pay my surgeon what my insurance may not cover. Our democratic congress disagrees with my logic. One of the expected provisions in the current health care reform bill (I would have added a link for you to look at the bill yourself, but we are not allowed to view it. We are allowed to pay for it though. ) is that procedures deemed to be "cosmetic" in form will be subject to a 5% tax. It is not clear yet if that is based on the cost of the entire procedure before insurance payments and reductions.

Upon reading the article "Doctors Ask: What Do You Mean, Cosmetic Tax?" Lauren Cox explores the issue of collecting the 5% tax. As the government does not want to be responsible for collecting the tax, the burden is put on the physicians. The physicians will then carry the weight of collecting the tax from their patients and having another filing requirement with the government to remit the tax. Cox goes further and states "If the patients do not pay the tax to their physicians, the government expects the physicians to remit the tax themselves." How is this fair? I fully empathize with the physicians on this. I worked for Georgetown University Medical Center for ten years and I know first hand the enormous documentation requirements physicans are required to fulfill. I much prefer for my doctors to be focused on my health concerns rather than chasing down patients for the luxury cosmetic tax.

Cox also states that this will be a burdonsome tax on more women than men. "The American Academy of Cosmetic Surgery was quick to criticize the tax as an affront to middle-class women. Dr. Patrick McMenamin, the group's president, said 86 percent of cosmetic surgery patients are working women between the ages of 35 and 50, with an average income of $55,000 a year." There is also the issue of who is to determine what is actually cosmetic and what is a necessary procedure for a good quality of life.

A very interesting statistic was released a few months ago. It is estimated that only 48% of American's actually pay any federal income tax. I am confident that the 48% feels as if they are being taxed to death and everytime we turn around we are expected to pay in more. I do understand paying our fair share, but enough is enough. If we pay our fair share, work to support ourselves, why are we not able to spend our disposable income as we wish? Why should we be penalized because we are responsible, law-abiding citizens, who go to work each day and are not a burden on our government?

Actions Speak Louder Than Words

2009-12-14T07:22:00.000-05:00

"How many of the people running the biggest 500 companies are women? In 2009 only 15 were." That is a very sad quote from Shaun Rein's article at Forbes.com entitled Why Men Don't Promote Women More.

Rein admits himself that he has promoted more men and has paid men more than women during his career. Rein replies to this stating "Actually, it is mostly women's fault. They simply don't ask for raises or promotions as often as men do." Upon reading that I thought to myself, what a sexist remark. After reading further my thought then changed to, maybe there is some truth in that statement.

Frequently we base what we read on our own life experiences. I think back on my career at times and think that I am either very lucky and have always been treated fairly by my employers, or I am extremely tolerant. I choose to think the first. I have only had 5 jobs during my career, including my high school job at Roy Roger's. I do not consider myself an extremely vocal individual, however, I do speak up when appropriate. I currently am on the partner track at my my CPA firm and believe that I will achieve this goal in the near future. I should add that upon making partner I will be the first female partner at the firm. This will be significant as the firm has been in existence almost 40 years.

Rein offers some advice for women seeking promotions and/or raises. Firstly he says we must voice our wishes. I agree to a point. If owners do not think you wish to move up or take on more resonsibility they may tend to focus on staff they know does. However, you do not want to be overly pushy and demanding. I suggest informing your employer of your intentions to grow within the firm and then put actions behind your words. Everyone can speak a good line, but what really drives the ball home is your performance. Give you employer a chance to see you perform. Results take time. Do not expect changes overnight. You have to be willing to put in the time and effort. Slow and steady is much more impressive.

Rein then could not resist touching on the appearance topic. I agree that women must look professional without looking trashy. The women I come into contact with do just that. I can't remember the last time I saw a woman dressed for work looking like she is heading out to a nightclub. The majority of firms have dress code policies in effect to eliminate this issue. The cases where a woman has the intellect and work performance down and who lacks the knowledge on appropriate dress code are probably very rare.

Minute Mentoring For Women

2009-12-09T07:07:00.000-05:00

The importance of mentoring. Textbook knowledge goes a long way in preparing us for the professional world. Once we have our degree and are ready to start a new position our textbooks are only going to take us so far. Professors are not around any longer to offer guidance. The choice is to go it alone or seek out someone, a senior in the profession perhaps, to help along the way. Sometimes it is not even a formal arrangement, at times the relationship happens naturally and you find yourself with a mentor. Interesting statistic shows that 91% of female executives had a mentor at some point in their careers and 81% saw their mentors as being critical or fairly important in their career development.

Minute Mentoring is gaining popularity. By having several accomplished females hold quick ten minute sessions with aspiring women seems to go a long way. Women have made huge strides over the years. Part of giving back is to share what you have learned along the way with those coming behind you.

Growing up I always heard "we live in a man's world." What about a Woman's Nation? It is estimated that within the next decade 50% of the world's wealth will be controlled by women. Each year more women enter the workforce and advance to high positions that were previously only held by men. Women mentoring women has helped more women advance to the levels they aspire to.

I am a huge advocate for mentoring. I was fortunate to have a woman take me under her wing early in my career. The knowledge, support and wisdom was priceless. If I could locate her today I owe her a world of thanks. I believe we should all help those coming behind us and let them benefit from our experience. If you do not have a program in place at your company, start one. Of course it is a time commitment, but you get back what you invest.

Can Using Dating Rules Help Your Career?

2009-12-05T06:00:00.056-05:00

I just read "Girl On Top" by Nicole Williams. What intrigued me about this book was the overall theme of applying dating rules to your career goals. If you are successful at dating should that mean that you will be successful in your career? If you are a career dater who never finds their match should that imply you will never be successful at your career or bounce from one job to another continuously? It depends.

Don't give the milk away for free. That line has been around forever. If you feel your milk is so worthy to only be shared with the perfect mate, is the same true for your professional expertise? Williams thinks so. She relates this to knowing your worth to an employer, holding out until you have a good fit. Don't stay forever giving everything you have to a dead end job, or better yet, do not accept a position that is not worthy of you.

Another respectable mention is entitled "Don't Bash Your Ex." No one likes to sit across the table from their date hearing how miserable your ex made your life. The same goes for an employer. The person sitting across from you will not have the empathy you are seeking and they will wonder if it is you that has the issue. Williams advises job seekers to speak of the postiive during interviews when questions arise regarding previous employment. I have always found this to be the road to take. Even if you have nothing good to say, make it up. Speak of what you learned, increases to specific skills and as to why you left, "we outgrew each other." Can't go wrong with that line.

My favorite chapter is "Be Willing to Walk Away." This is excellent advice for both personal and professional lives. Know what you deserve, what you will tolerate and when you have had enough. It is about respect. We must respect ourselves.

The book is a fun read, you will laugh at some quotes and you will find yourself nodding in agreement to others. I especially recommend the book to younger women starting their professional life. Gubinsky says "Two Thumbs Up."

Give Me Protection or I'm Not Blowing My Whistle

2009-12-04T07:00:00.002-05:00

How can we expect employees to do the right thing when we do not look out for them? I am speaking of Marshal Greenberg. In reading the article A Whistle-Blower Says His Concerns About Safety Were Met With Scorn by Charles Bagli you can't help but like Greenberg, if you are an honest employer especially. Greenberg did the right thing. He looked out for his company and his co-workers. He reported happenings that concerned him, which he thought could bring harm. Greenberg is quoted "Everybody has a right to work in a safe environment. I was careful. That's my job." So what went wrong?

Greenberg worked as the elevator operator transporting workers and supplies up and down during the demolition of the Deutsche Bank Building which was damaged during the September 11th attacks. Greenberg suffered "pretty constant" abuse from his employer and co-workers. He was threatened, ridiculed about his large size, his skin condition and his "chatty" way with government regulators. He did not even receive support from the Operating Engineers Local 14 union which he has been a long time member.

For doing the right thing Greenberg was made to feel unwelcome at his job. According to Greenberg "the actual problem was a pervasive atmosphere of secrecy and deceit at the job site." He was told to warn supervisors on his radio when inspectors had arrived saying "Coffee Order Coming Up." He was told not to fraternize with the regulators. When the site started to become hazardous Greenberg informed his superiors of safety violations such as smoking near open gas cans and improper handling of potentially hazardous materials. He was ignored. Upon hearing that Greenberg complained his co-workers retaliated. They called him a rat and a "fat Jew", urinated in his hard hat and sealed him inside a closet with duct tape positioned to form a swastika. That does not describe a harmonious work environment in my book.

Greenberg's worst nightmare came true in August 2007 when a fire started due to a cigarette being discarded. Lucky for one woman who needed Greenberg to get her safely out of the building he was working. Two firefighters lost their lives responding to this fire. A senseless fire that never needed to happen. Had only someone listened to Greenberg and looked into his claims.

How can we expect anyone to make the hard choice to report improper behavior if we do not protect them? It is hard enough for workers to come forward knowing they are being looked after by their employer. So many choose not to say anything, even when the situation is unbearable, to avoid any potential conflict. I cannot imagine anyone going through what Greenberg did and going to work each day in that hostile work environment. I applaud Greenberg, he is the type of person we should choose to work with. He has your back.

The University of Private Business

2009-12-02T06:04:00.002-05:00

Did I ever mention that people have told me I should run for public office? Yes, it's true. The main reason is that I am very business oriented. In conversations about the state of our government I am told to run. I would probably have a dozen votes right now. (Not enough to be serious about running!). But, if I did, I can tell you exactly what my first task would be--totally revamp the budget and cut, cut, cut. Not raising taxes is a no brainer, and we would do much more with much less. Sound familiar? Right, run the federal government like a business. Forget the notion that you have an endless supply of funding, if you spend more than you bring in, oh well. Guess that means no pay raises this year for congress. Money does not grow on trees afterall.

A smart article by John Baldoni on just this topic sparked my interest in writing on this topic. Baldoni's piece entitled What Business Leaders Can Teach Government discusses ways that the government can learn from private industries brightest leaders. Baldoni states "The problems facing our nation today are too big for government to solve; they require the involvement of well-intentioned men and women from every sector, including business people. Business executives who apply the leadership principles they use in the private sector can teach government leaders new ways of approaching, identifying and solving problems that make our nation stronger for all of us."

Being a responsible business owner means you budget, you save where possible, you put away for a unforseen disaster and growing the business, and you do not spend what you do not have. If our federal government were to take this advice, act as if each expenditure mattered and not spend what we do not have we would be in a much better financial position. This is called being fiscally prudent. Baldoni describes it this way "Solutions that do not consider the bottom line will create greater financial headaches in the future. While businesses do face short-term financial challenges provoked by market cycles, most businesses weather these crises with discipline as well as creativity. You need the discipline to tighten the belt, but creativity to think of new ways of doing business. That is something business leaders can teach government leaders."

Our country does not have any savings. Not even a piggy bank. How do we go about changing the mindset of our public office holders? I feel like a mother speaking to her teenager about not spending everything you have. Just because you have it today does not mean you will have it tomorrow. No one knows what the future holds so we have to plan. We plan what to use our personal income for, we plan what to use our business income for, so why can't the government plan as well? As I am writing I realize that I have focused only on the federal government, but as we know from the news many states are in trouble also. Something must be in the water that you drink upon being sworn in that makes you spend like there is no tomorrow. Problem is, probablity states there will be a tomorrow and you and I are forced to dig into our pockets again.

$50M Fraud Scheme In My Backyard

2009-11-30T07:13:00.001-05:00

Are you familiar with John Yeh? Neither was I until last week. John Yeh, a deaf entrepreneur living in Potomac, Maryland is accused of defrauding the federal government of over $50 million dollars. Yeh made his fortune providing phone services to the deaf. I looked at Yeh's profile on LinkedIn to try and find out more information. It appears he was much too busy scheming to work on it.

This is very close to home, my home that is. Potomac is within a few miles of my office, right in my backyard you might say. Yeh, his brother, and 24 others were arrested for allegedly submitting thousands of "false and fraudulent" claims for Video Relay Service (VRS) calls that never involved hearing impaired people. Instead, the government charged, scammers placed millions of dollars of phony calls to pre-recorded radio programs, 800 numbers or podcasts - never translating anything but billing the FCC’s fund nearly $400 an hour for every hour the employee was on the phone. These defendants are alleged to have generated fraudulent call minutes by making it appear that deaf Americans were engaging in legitimate calls with hearing persons, when in reality, the defendants were simply attempting to steal money from an FCC program that is funded by every single American who pays their telephone bills," Lanny A. Breuer, assistant attorney general of the Justice Department's Criminal Division, said in a statement released Nov. 19. The FCC program is funded through a tax on regular telephone service.

Here is what amazes me. Yeh, a deaf man, had to have had some help along the way to achieve his success. Why would he then turn around and throw any morals he had out the window? Yeh had so much admiration and respect from his peers, held an honorable position at Galludet University previously, and was a large contributor to the deaf community. He had made quite a name and career for himself only to toss it out like yesterdays newspaper. To top it off Yeh's company, Viable, Inc. was in negotiations with a New York company that tentatively agreed to purchase the deaf services business. The Maryland Gazette states that a spokesman for the purchasing firm said this week it is now "considering its options." But this is what happens. When the 3 points of the triangle appear you have trouble. I am referring to Cressey's fraud triangle which shows that when you have incentives, opportunity and rationalization you have the mixture for a fraudulent brew. We can see the opportunity and rationalization here, but what were the incentives? Time will tell.

Acorn Can Be Paid for Pre-Ban Contracts

2009-11-29T12:29:00.011-05:00

This bothers me. In an article in The New York Times by Charlie Savage the headline reads “The Justice Department Says Acorn C an Be Paid for Pre-Ban Contracts.” How can this be I thought? I don’t understand. If an organization has been found to be riddled with fraud and corruption doesn’t common sense say quit throwing good money after bad until the problems are solved?

Our justice department has ruled that contracts in effect before being cut-off from taxpayer funding remain intact. Maybe I should rephrase that last sentence; the contracts in effect before the blatant fraud and illegal behavior was exposed by the young journalists going undercover will remain intact. Are you thinking that possibly some unscrupulous behavior may have occurred prior to that huge expose? So am I. I applaud congress for stopping funding to Acorn once the writing was on the wall. I disapprove, however, of David Barron, the acting assistant attorney general for the Office of Legal Counsel on the decision to fork over my/our money for these contracts. I understand that there are legal consequences involved, and any attorneys who wish to chime in feel free

The article states that conservatives are against Acorn. This should not be viewed as a political event. The decision to spend taxpayer dollars on funding a corrupt organization is not a right vs. left option. The decision should be based on right vs. wrong. Ethical behavior is deciding what a prudent individual in this situation would do. I can tell you what they would do. No additional tax revenues supporting an organization that has yet to show how it is cleaning up its act. Still not convinced? What if I told you that Acorn employees were caught throwing thousands of bagged up records into a dumpster? True statement. Read it here.

I am all for assisting people who are honest and really need help. I am against helping those who abuse or conduct fraudulent behavior on the deceptive front of helping the underserved with our tax dollars. In my line of work I see how much taxpayers contribute to the system. Our government needs to act in a fiduciary role and be responsible for how the funds are used. I am not seeing that here. On a closing note, I have added my little buddy to the right as he is quite popular with Acorn.

IRS Imposed Tax Preparer Registrations for CPA’s – Are You Kidding Me?

2009-11-28T08:20:00.006-05:00

Please tell me you know the difference between a CPA and an H & R Block seasonal employee!

In June, IRS Commissioner Doug Shulman announced that he intended to propose recommendations to help the Internal Revenue Service better regulate tax return preparers by ensuring uniform and high ethical standards of conduct for tax preparers. You can read the announcement from the IRS website here - IRS Link . When I first heard this I thought I understood what was meant. I was incorrect. Shulman’s intentions run deeper.

I am a CPA within the state of Maryland. In order to keep my license active I must take 80 hours of CPE every two years. CPA’s are regulated by the AICPA and by each state that issues your license. I can vouch for anyone who has attempted to take the exam that there is nothing like it in this universe. With a pass rate at 40%, many attempt but do not pass. To obtain the CPA certification you are not only intelligent, but have stamina and determination. Both are good qualities for a CPA in practice.

Furthermore, the proposed regulation would require all preparers, CPA's included, to take another exam. The CPA exam encompasses everything from Analytics to Z-Score. Nothing is left out. Starting in 2011 the exam will test on IFRS, which has not even been adopted in the US yet. Extensive time and effort is put into preparing the exams by the AICPA to ensure only the candidates who posess the necessary skills and apptitude are awarded the CPA credential.

I have no problem with the IRS regulating unlicensed preparers, but I do not see the need for them to regulate CPA’s that are already highly regulated. California and Oregon currently have regulations for licensing tax preparers but CPA’s are exempt. The IRS should follow this model. I am happy to report that Robert Harris, CPA, Chairman of the AICPA is fighting this proposed regulation and I am on his bandwagon. In contrast, Allen Bostrom writes in his article in the current edition of Accounting Today “Registration for all tax preparers, including CPAs, attorneys, and Eas, should occur immediately.” Bostrom Article – Bostrom does not elaborate on how he thinks an additional regulation on those already highly regulated will solve the problem of inefficient, incompetent and unethical tax preparers. Possibly the regulation should start with those not certified and see if the statistics on poor preparation change. My guess is that they will.

The 3 “C’s” of Leadership

2009-11-27T08:39:00.014-05:00

While relaxing on Thanksgiving morning, you guessed it, I am not in charge of cooking this year, I was sipping coffee and reading an interview published in the New York Times. William D. Green, chairman and C.E.O. of Accenture, discusses his views on leadership. –Green Interview - Green states “There are three things that matter. The first is competence — just being good at what you do, whatever it is, and focusing on the job you have, not on the job you think you want to have. The second one is confidence. People want to know what you think. So you have to have enough desirable self-confidence to articulate a point of view. The third thing is caring. Nothing today is about one individual. This is all about the team, and in the end, this is about giving a damn about your customers, your company, the people around you and recognizing that the people around you are the ones who make you look good.”

I could not agree more. The cliche – find what you are good at, your niche, and do it well. Competence is just that. In my profession as a CPA, the knowledge we encompass is staggering. My goal is to know a little about a lot, and a lot about my areas of expertise. The rest I can research or consult with my peers. I am constantly reading and researching issues that affect my clients. I have learned over the years it is not a bad thing to tell a client you will have to get back to them on their pressing tax issue that has arisen out of the blue. What clients want is a responsive accurate solution to their situation. I have never had a client become unhappy if I did not know the best solution to their issue at the time of their spontaneous call. What matters is that I find the answer and respond to them quickly. You do not need to know everything, but you do need to have strong research skills and make a point to be responsive to your clients. No one likes to be left hanging.

Confidence and females, more like oil and water? This is the hardest skill for women to learn. For anyone that does not think we are still in a “man’s world” I beg to differ. We have come a long way baby, but we have a longer way to go. Confidence comes with experience, knowledge and achievements. Once you find your niche each accomplishment adds to the confidence level. As we constantly evolve we realize that our opinions do matter and clients seek us out for just that. Being in the professional industry, my clients pay me for my opinions and advice. Would I have ever thought I would be sought out for my expertise while in my twenties? No, I had not experienced enough yet. My point – it takes time.

The third “C” is the easiest for women. We are by nature care-givers, nurturers, and at times selfless. When you love your career it is very easy to care. When you don’t refer back to the first “C”. It is all related. When you love what you do it shows.

Business or Hobby Blogger – Not Always a Different Mindset

2009-11-26T09:26:00.016-05:00

I was just reading an article by Nathan Hangan entitled "The 3 Fatal Diseases That Kill Good Blogs” –Read Here - Hangan writes “If you are serious about blogging, you need to treat your blog like a business. You are the CEO of You Inc., and you’ve got to weigh every single decision as if there were millions of dollars on the line.” This made me think of a phone conversation I had last week.

I am new to blogging and decided to seek out advice from a woman I follow on Twitter that left the public accounting industry to pursue writing. Francine McKenna of Re:theauditors - posts regularly on happenings within the big 4 accounting firms. Francine and I had a great phone conversation and she was very honest and gave me valuable advice on developing and creating traffic to my new blog. Francine and I have different goals, her writing is her passion and occupation, as mine is for enjoyment and possibly gaining exposure as a practicing female CPA. However, the mindset is the same. While my writing is not my livelihood currently, I do receive satisfaction from people finding value in my opinions. In order to obtain regular followers I need to inform my readers, post on a consistent basis, and keep it relative.

Relative, what exactly is relative? I am told it is a constant theme, what do I want my blog’s purpose to be? My theme should not change constantly, my followers should come back to read based on my passions about certain topics. I have given this thought over the past few days…what makes me tick professionally? I am extremely interested in women’s stories and what affects the female entrepreneur, current events and trends that impact the CPA profession, and occupational fraud and abuse with an occasional dose of ethics. So, there we have it…

Women's Initiatives
CPA Industry and Trends
Occupational Fraud/Abuse and Ethics

So, if you find the above topics of interest to you I invite you to return as I will be writing consistently on the above issues. At times, something may just knock my socks off and I will have to write on it that may not exactly fit into the mold above, but you can rest assured that most of my posts will. As I am a practicing CPA, and studying for my CFE credential, I cannot promise that I will be posting each day, however, my goal is to post for you, my readers, at a minimum of three times per week. Oh, if there were more than 24 hours per day…..

Opinion - Gender-Friendly Partnerships

2009-11-23T16:57:00.006-05:00

As a female CPA I am always interested in reading articles on women’s success within CPA firms. I read Paul Finkle’s article “Gender-friendly partnerships” in the Nov. 16 – Dec. 13, 2009 edition of Accounting Today. Read Here While I agree with most points in the article, I do have some insight of my own I would like to share.

While an estimated 52% of accounting graduates are women, the percentage of women partners is estimated at 16%. I have attended conferences in which expert panels discuss the issue. To some, it is a phenomenon of the profession. Those in the profession want to know how some can break through the glass ceiling to owner and others do not. What I have determined from my own experience in addition to experts is that a major factor is the individual and not the profession or their employer. All accounting graduates know that a career in public accounting is extremely demanding and just as rewarding, for some. Public accounting is a beast, years of constant deadlines, tax law changes, auditing standard updates and requirements that can leave your head spinning. As a trusted advisor our clients expect us to be knowledgeable on all issues that affect them. We are constantly being trained on new technology, new pronouncements and regulations. We handle all of this in addition to trying to be as billable as possible.

Women are very prominent in manager positions down to entry level. Moving past manager separates being career minded from job minded. Within my firm we employ more female accountants than male. During the 30 year history of the firm not one woman has made it past manager. Is that a negative fact, no. When I think back over the years of female accountants, I cannot think of one besides myself that had the capability, knowledge, and desire to become a partner. The key word in the last sentence is desire. I can think of two females in my 13 year tenure with the firm that would have been considered for partnership if they were interested. Ultimately, both declined. Both were very intelligent, very dedicated, but neither had the desire to move forward and accept the additional responsibility. Both declined for different reasons. It takes a special woman with a unique makeup to want and achieve the partner level. Not all women want to be challenged, or be leaders and innovators. Many are content staying at the same level for their entire career. Not everyone relishes new opportunities, developing a client base, finding their niche or putting themselves out there hoping not to fail. I write that as a fact, not as a con. Careers are a personal decision based on personal goals in life, what fulfills you and what defines you.

Women entering the public accounting profession are much more dynamic, self confident and career oriented than when I graduated college twenty years ago. The entry level women I train and supervise have the entrepreneurial spirit that was very rare when I started my career. Women have broken barriers in the big 4 and within regional firms. I expect the trend to carry to the smaller firms, but it takes time. I predict that the generation coming into the industry holds many of the future female partners within public accounting.

A Legal IRS Pet Credit?

2009-11-13T10:13:00.010-05:00

Those of us with the four legged dependents have often thought to ourselves, “I should be able to claim Oscar (my 25 lb. orange tabby) as a dependent. He is part of my family.” Oscar has received mail, sees the doctor annually and dines better than some people, but the IRS draws the line. Four legs = no deduction.

Current legislation is being proposed to enable all pet owners to be eligible for a maximum $3,500 tax credit. Known as the "Happy Act" a $3,500 tax credit could offer relief for pet owners in the form of a tax break. Read About The Happy Act Here Nothing is written in stone as of yet and I am sure there will be income limitations among others, but what a thought. I honestly never thought this would ever be up for discussion.

The pet deduction poses both pros and cons in my mind. What do you say we discuss the good first? This could actually promote pet adoptions. Far too many animals are homeless, abandoned and abused. The extra income could help some pet owners to keep their pets when affording their care is a present issue. For the cons, my fear is that people will adopt a pet to claim the credit and not take care of the animal. We have all heard in the news the rampant fraud resulting from the first time homebuyer credit. We know many will claim the credit without owning a pet. What can the IRS due to catch the fraudulent filers? Our pets do not have a social security number, driver’s license or any other type of documentation. The only way to track them would be for all pet owners to obtain a pet license from their state or local government. Sounds like more red tape to me, with an additional fee. However, I am in favor of the credit as I know so many who spend a fortune caring for their ailing pets. Will this pass, I am not overly optimistic. I will not lose all hope as congress has passed items I never thought I would live to see.

I am an avid pet lover, have had all sorts of pets my entire life. I currently have four, which I endearingly refer to as “my boys.” I cannot imagine my life without pets as they bring so much joy, love and humor each day to me.

My Journey Is Published!

2009-10-29T19:43:00.003-04:00

I did it. I went out on a limb, just threw myself out there and tried my hand at writing an article about my path to becoming a CPA. I am a member of the American Society of Women Accountants (ASWA) and received an open request for articles for the certification edition of the monthly newsletter, The Compass.

To all my fellow CPA's, or anyone who has obtained a professional certification, I am sure you can attest to the increase in your self esteem upon notification that you have passed. When you accomplish a significant goal in your life you are embraced with a sense of renewed confidence. So, once I received the request for articles from the AWSA I thought to myself, I can either spend this Sunday afternoon watching the Redskins lose or I can jot down my journey. I opted for the later.

Surprisingly composing the article took only a few hours. The words were flowing out of me onto the screen. Most of the difficulty resulted from editing. My goal in writing my journey was to inspire others that it is never too late to achieve a goal. Members of the ASWA do not need to be CPA's. If one person reads my story and decides to pursue their ambition and become certified based on my journey I have made a difference. Isn't that what we all strive for in one way or another? To make a difference in helping a client through a difficult time, going back to school to finish your degree, making someone smile, helping your community, achieving the greater good.

I hope you get something out of my story and maybe take with you a little inspiration to accomplish whatever you desire.

http://newsmanager.commpartners.com/aswa/issues/2009-10-29/4.html

CPA's and Social Media

2009-10-04T07:57:00.003-04:00

Who says you can't teach old dogs new tricks? Sometimes it takes more than one lesson. My initial impression of Twitter---people telling each other what they are doing at that moment in time. Did I care that someone was curling their daughter's hair or sitting on their deck? Not particulary. But, I thought, just check it out. So I set up an account and before I even get through a tutorial I have eight followers. To be honest, I felt as if I was being stalked. Not for me I thought, so I deleted my account.

August 2009 - I attend the Forum for Women in Public Accounting in Las Vegas. I brought back several ideas and goals, one of which was to give Twitter a second chance. Social media was stressed so heavily at this conference I made a promise to myself I would give it an honest effort.

Second time must be the charm for me. I started to tweet industry specific and current event posts. I searched out CPA's and finance professionals to follow. I built up my network of people I choose to follow and have gained information I find valuable. I have connected with professionals at other CPA firms to share ideas and solutions. I receive links to useful information I might not have otherwise obtained.

Sure, you have the totally social twitters, but if you follow my strategy and keep it professional with whom you follow, it really is a great resource. In my office we only have four professionals who try any form of social media. It is a hard sell to interest some to try new things. But, you can teach an old dog new tricks!

You Too Can Pass the CPA Exam

2009-10-01T15:24:00.002-04:00

I am proof that if you have the desire and determination you can pass the exam that is known in the professional industry as the most grueling exam in the world. How can I make this claim? I can because I passed the exam later in life while working full time, having adult responsibilities, and moving past unforeseen roadblocks, known as life, that just seem to pop up when you least expect them.

I will start with a little about me. I graduated college in 1985 with a B.S. in the hospitality industry. I worked in finance in the hospitality, medical and construction industries before taking a job as the Director of Operations with a local CPA firm, Santos, Postal & Company, P.C. (SPC), Rockville, Maryland, in 1997. Five years ago the partners at SPC approached me about moving to the professional side of the firm from administration. I had to think about this. At this point I was close to forty years old. Did I really want to start over in a new position? Did I want to have to prove myself again? My thought process then led me to my future, my career. I have always had an entrepreneur spirit and am always looking for new challenges. But, what about my ego? What about the potential for failure? I was quite comfortable in my life and position, but something inside yelled out, go for it. The worst thing that could happen is that it does not work out and I go back to where I am now, in my comfortable safe little life. I decided that if I was going to move to the staff accountant position I would put 100% effort into it and the sky was the limit. Some may refer to me as stubborn, but with stubbornness comes determination and the failure to quit, no matter how hard the circumstances.

Roadblock #1 - In order to be eligible to sit for the exam in the state of Maryland, I needed to go back to college and obtain an additional 22 credit hours to reach the 150 hour state requirement. Ok, here I am almost forty and heading back to undergraduate school. At the end of my estimated schedule for passing the exam I will be almost 45 years old. Should I even start this? Well, I thought, you will be 45 anyway, so just do it. Do I even remember how to study? This was an adjustment, but I am proud to say I held a 3.8 GPA for the 22 hours. I finished my last class in May 2007 and applied to the State of Maryland to be a CPA Candidate shortly thereafter. I was approved and sat for the first part of the exam in August 2007.

Roadblock #2 – Shortly after passing the first part of the exam in August I was in a horrific car accident on my way to work which resulted in having surgery on my cervical spine. I had a double disectomy with fusion and plating. In layman’s terms, I had two ruptured discs in my neck that had to be removed and I now have titanium plating in my spine. I must tell you that the accident was not my fault, the other driver was charged with being at fault by the police. So here I am, ready to sit for the next part of the exam, but I am in so much pain that I cannot work, study, drive or function normally. Once I had healed enough from the surgery to resume studying for the second part of the exam, I found myself in tax season.

Roadblock #3 – In case you have not researched the uniform CPA examination requirements, once you pass the first part of the exam you have a window of eighteen months to pass the remaining three parts. If you do not pass the remaining parts within that time frame you lose the credit for the passed parts. My clock was ticking, and fast! For those of you not in public accounting, please realize that your life ceases to exist from January to April 15th. Tax season is all consuming and to think you can study during that time is not realistic. Well, at least not for me as I work approximately 65-70 hours per week during tax season. Once tax season ended I was right back in study mode. I had lost seven precious months and must pass the remaining three parts of the exam before February 2009. Also, remember that the exam is only given eight months of the year and you are advised to study at least 200 hours for each part, so careful planning was a must.

I passed the last part of the exam in January 2009. My five year goal had been achieved. I cannot express into words the sense of accomplishment I felt when I received my final score. I sometimes think that if I knew what was ahead of me when I first decided to venture down this road if I would have not started the journey. Then I think of the old cliché that our parents always told us, you can do whatever you put your mind to. Yes, we can.

Women CPA’s are in demand. If you have the desire and determination this is a great credential to have now and even more in the future. A large percentage of women prefer dealing with other women professionals. I attended a conference for women in accounting in Las Vegas a few weeks ago and learned a great deal. One interesting statistic I would like to share is that in the next decade 50% of the world’s wealth will be controlled by women. Women typically inherit twice, once from their parents and again from their spouses. A lot of these women will be searching out a female CPA to advise them.

In closing, always remember that the only thing standing between you and passing the CPA exam is you. I have no doubt that if you want it bad enough you will achieve it. You just can’t ever give up, no matter how hard or how tired you are of studying and doing the problems over and over again. I wish you good luck in passing the exam. I know you can do it because you have put your mind to it!