Do Mondays (Whether Rainy or Not) Always Get You Down?

Do Mondays (Whether Rainy or Not) Always Get You Down?

• Do you wake up Monday morning and wish the weekend was one day longer?
• When your boss pops into your office, do you think, "What now?"
• Are you working more but enjoying it less because of longer hours and demanding deadlines?

Does this sound familiar? The recession impacts both the employed and unemployed as every top-line and bottom-line dollar is squeezed out of business financial statements. In addition, attrition policies and restructuring may have blocked your career path, overwhelmed you with responsibilities, or even pushed you into a promotion that has you struggling. You used to love your job! Now the lack of options has you feeling desperate.

Before you change your LinkedIn setting to “Actively Looking,” consider one of your best options. In order to succeed in a down economy you may need better or different skills. To obtain those skills you will need training. Unfortunately when an organization tightens its budget belt, training is often the first area to be cut. This is not the time to give up; it is the time to invest in yourself—your career. After all, if your knowledge and skills stay the same, then your skills are falling behind. Staying current with industry standards and expanding your skills will show your employer that you want your job (Let’s be frank, you may feel that you hate your job, but you would hate being unemployed even more!). The benefit to the firm will not be lost on your employer; the investment in yourself should convince your employer that you are a keeper. So how are you going to get this training? Here is how.

Online training can equip you with the skills needed to meet or exceed your client’s expectations. Thomson Reuters has a deal that will knock your socks off—access to hundreds of course for a one year period for one set fee - $299. That is less than $25 a month ($.82 per day). Are you ready to hone your skills or acquire new ones? How many topics could you tackle? Which courses would give you the edge that you need?

The Premier CPE Package (https://checkpointlearning.thomsonreuters.com//Bundle/Index ) provides a terrific range of learning options designed specifically for accounting professionals like you.

So, are you ready to tackle Monday, now?

IRS MID-YEAR RATE INCREASE

IRS mid-year rate increase. Usually, when I hear the term rate increase, I cringe, but this latest one is actually a good thing. The IRS has announced a mid-year increase to the standard mileage rates for tax purposes. They typically revise the mileage rates only once a year, but Congress has been pressuring them to increase the mileage rates in light of the significant increase in the cost of gasoline.

The standard mileage rate for business use of your automobile increases 4.5 cents from 51 cents per mile to 55.5 cents per mile for business miles driven from July 1, 2011 through December 31, 2011. For the period from January 1, 2011 through June 30, 2011 the rate remains 51 cents per mile.

It is interesting to note that this is the first increase in the standard mileage rate since 2008. In both 2009 and 2010 the rate actually decreased. The new rate is only one half of a cent higher than the 2009 rate and is three cents below the 2008 rate. In case you’ve forgotten the average price of gasoline hit an all time high of $4.11 per gallon in 2008. I didn’t remember either. How soon we forget!

The new rate for use of your vehicle related to medical or moving expenses is 23.5 cents per mile, also an increase of 4.5 cents per mile. The rate for charitable purposes remains 14 cents per mile since it is set by statute.

Here is a breakdown of the 2011 rate changes:

PURPOSE: BUSINESS
…January – June Rate: 51 cents
…July – December Rate: 55.5 cents

PURPOSE: MEDICAL/MOVING
…January – June Rate: 19 cents
…July – December Rate: 23.5 cents

Happy motoring!

COMMUNICATING EFFECTIVELY

I like numbers more than words. That’s natural for an accountant, right? Not necessarily. When I graduated from college and began my career in public accounting, I soon learned that understanding numbers was a requirement, but having the ability to communicate well was critical to my success as a professional.

Effective communication can be a challenge, especially for those who are new to the profession. Communication skills are not usually emphasized in most major college accounting curriculums. However, written and oral communication is just as important to the accountant or tax professional as knowledge of tax and accounting rules and regulations. Almost everything you do as a professional accountant results in some form of written or verbal communication to your client or staff. If that communication is not well written or delivered, it reflects poorly on you and the firm you represent. Cultivating effective communication skills will help you advance more quickly than those without good communication skills. Most firms could benefit significantly by providing training to help its professionals develop effective communication skills.

A little over 20 years ago I was hired as a technical editor for Practitioners Publishing Company. I had always thought that I had pretty good communication skills, but I was in for a big surprise. I wrote a chapter about governmental accounting and submitted it to my copy editor (an individual with a journalism degree), expecting rave reviews on my writing skills. When she returned the chapter, I knew she needed a transfusion because she had bled all over my manuscript. I had never seen so much red ink in my life. I was crushed, but I tried to learn from the experience. I never seemed to know where the comma should go or if I should use “which” or “that.” Learning to write correctly is a difficult process, but over the next five years she continued to point out ways to improve my writing and in the process made me a much better writer.

If you want to improve your writing skills, here are some books that I highly recommend:

“The Elements of Style,” by William Strunk, Jr. and E.B. White
“100 Ways to Improve Your Writing,” by Gary Provost
“The Kings English,” by W. Fowler and F. G. Fowler

Speaking in front of an audience has also been part of my job for over 30 years. It has been said that public speaking is feared more than death. Toastmasters helped me to overcome that fear, or at least control it. It taught me to eliminate mannerisms such as continually saying “Uh” to fill my pauses and to look at my audience when speaking. Accountants don’t just sit in their offices crunching numbers. Public speaking is a large part of the job. Accountants must present audit reports and discuss tax findings, among other things. Being able to address a group clearly and with confidence will only enhance an accountant’s professional image. So, if you are interested in improving your oral presentation skills, I recommend joining your local Toastmasters International club. It is one of the best things I ever did.

CARBON ACCOUNTANT – THE NEXT HOT JOB FOR ACCOUNTANTS?

When I first came across the term “Carbon Accounting,” I had no idea what they were talking about, so I looked it up. According to Wikipedia, “Carbon Accounting is the accounting process undertaken to measure the amount of carbon dioxide equivalents that will not be released into the atmosphere as a result of Flexible Mechanisms projects under the Kyota Protocol.” The Kyota Protocol identifies six greenhouse gases that are to be accounted for: carbon dioxide, methane, nitrous oxide, HFCs, PFCs, and sulfur hexafluoride. Carbon accounting consists of the process of using software programs and actual observations to account for the six greenhouse gases noted above. A quick search of the Internet produced some thirty-eight software programs called enterprise carbon accounting (ECA).

So, who sets the standards for the carbon accountant? The American Carbon Registry (ACR) is the standard setter for carbon accounting. They publish standards, methodologies, protocols, and tools for greenhouse gas (GHG) accounting; which are all based on ISO 14064. The process for development and approval of the standards and methodologies is very similar to the process followed by the FASB for setting financial accounting standards.

There are a number of Fortune 500 companies including Coca Cola, Google, and Wal-Mart who already voluntarily track and report their yearly greenhouse gas emissions. Wal-Mart has announced that they also want all of the products they sell to have an eco-label. So, when Wal-Mart’s 100,000 plus vendors start monitoring their CO-2 emissions they will all need carbon accountants and auditors. According to the Greenhouse Gas Management Institute, “The world faces a shortage of greenhouse gas professionals with the skills needed to meet current measurement, reporting and, verification needs. Some industry experts believe that a substantial majority of all U.S. public companies will need at least a part-time GHG accountant or consultant in the near future.

Measuring, accounting, and auditing greenhouse gas emissions potentially have opened up a whole new line of work for accountants. What do you think?

CAN YOU DEFINE “CHURCH” – NEITHER CAN THE IRS

Can You Define “Church” – Neither can the IRS. A church has several tax advantages over other types of publicly supported Section 501(c)(3) organizations. It is automatically tax-exempt without applying for exempt status on Form 1023 and is also exempt from filing any annual information return. In addition, a church can be audited by the IRS only in limited circumstance and only in accordance with specific procedures (IRC Sec. 7611). Finally, a church has 15 years, instead of 10 years for other organizations, to use debt-financed real property for expansion purposes before income is taxable under IRC Sec. 514.

Neither the Internal Revenue Code nor the regulations formally define church. Therefore, the IRS developed and uses a list of 14 criteria to determine whether a religious organization is a church. Those criteria are as follows:

1. Distinct legal existence
2. Recognized creed and form of worship
3. Definite and distinct ecclesiastical government
4. Formal Code of doctrine and discipline
5. Distinct religious history
6. Membership not associated with any other church or denomination
7. Organization of ordained ministers
8. Ordained ministers selected after completing prescribed course of study
9. Literature of its own
10. Established places of worship
11. Regular congregations
12. Regular religious services
13. Sunday schools for the religious instruction of the youth
14. Schools for the preparation of its members

The IRS generally uses a combination of these characteristics, together with other facts and circumstances, to determine whether an organization is considered a church for federal tax purposes. Moreover, the 14 criteria are not of equal importance and all of them need not be met for an organization to be deemed a church. According to the IRS there is not a bright-line test for determining whether a religious organization is a church or simply a religious organization. Rather the determination is made based upon the facts and circumstances in each case. So you might say that trying to define church for tax purposes is similar to trying to define “pass interference.” It’s difficult to describe but the IRS knows it when they see it.

For exempt organization purposes, the term church is applied generically as a place of worship that includes, for example, mosques and synagogues. One thing is clear, an organization’s religious beliefs have no bearing on whether it is a church – any inquiry into those beliefs could run afoul of First Amendment religious protections.

NEW YEAR’S RESOLUTIONS FOR AUDITORS

New Year’s resolutions can be a great way to start off the New Year, but if you are like so many people you may have already broken one or more of your 2011 resolution by now. Even so, with busy season rapidly approaching, I thought that it would be good to give you some things you might want to use to update or revise your list of New Year’s resolutions if you are an auditor. The items listed are frequently found in AICPA peer reviews and PCAOB inspections. I hope they serve as a gentle reminder of things to do, or not do, in your audit, compilation, and review engagements in 2011.

GAAP Departures
• Improperly classifying certain liabilities as long-term rather than current.
• Failing to properly identify a loan as a loan to a related party.
• Improperly classifying a legal settlement as an extraordinary item.
• Failing to properly eliminate intra-entity revenues and the related costs of sales in consolidations.
• Improperly presenting investments in marketable securities at cost rather than fair value.
• Improperly accounting for asset retirement obligations.

Audit Deficiencies
• Failing to adequately test the existence, completeness, and valuation of revenue, including cutoff of revenue transactions.
• Improperly relying only on management representations when testing corroborating information was possible.
• When using substantive analytical procedures, failing to develop appropriate expectations and investigate significant unexpected differences.
• Failing to adequately test the valuation of goodwill and other long-lived assets.
• Failing to identify and evaluate conditions indicating that an entity may not be able to continue as a going concern.
• For entities that use a service organization, failing to consider the effects of the service organization on the entity’s internal control.

Reporting Deficiencies
• No dating of reports or dating them incorrectly.
• Inappropriately referring to GAAP in the accountant’s report when the financial statements were prepared on an OCBOA.
• Failing to disclose a lack of independence in a compilation report.
• Issuing an audit or review report when the accountant was not independent.

Financial Statement Presentation Items
• Failing to disclose all applicable accounting policies, such as significant advertising costs and revenue recognition.
• Misclassifying items on the cash flows statement.
• Failing to clearly segregate supplementary information or to mark it as supplementary.

HAPPY NEW YEAR and here’s to a successful and prosperous busy season.