CPA Leadership Report

Expanding Your Knowledge While Conserving Your Time

Vol. 9 No. 12, December 2011

CPA Leadership Report is the monthly review of the most important management and leadership

articles in the accounting press. It includes electronic links to publishers’ websites, where you

can find the original complete articles. Our editors review more than 35 publications every

month.

Members of CPA Leadership Institute can access the reviews below. Nonmembers can become

familiar with CPA Leadership Report by reading the articles marked with an *.

Click here to learn about the comprehensive benefits of membership and the extraordinary value

of our Professional program level, which allows you to attend all our webinars at no cost.

Practice Management

*Partner Compensation Programs That Work Allan Koltin offers his insights into what makes a partner compensation program work.

CPA Practice Management Forum

Grow Your Business in Good Times and Bad

Characteristics of growing firms.

Accounting Today

Stuck in a Rut? Ideas for Moving Your Firm Forward.

Find out if your firm is stuck, and learn how to break free from unproductive patterns.

Accounting Today

Measuring Partner Performance

A key to Baker Tilly’s success is its adherence to the precept “you get what you measure.”

The Marc Rosenberg Blog

How Innovators Innovate

The top five skills for successful innovation.

CPA Success

Effective Performance Management

Six steps for developing a more productive and accountable team.

CPA Trendlines

Transforming Plans Into Actions

Many CPA firms fail to implement their strategies. This is by far the number one obstacle to

success.

RedZone, Play of the Month

Is Your Firm Innovative?

Gary Boomer suggests five areas in your firm that could benefit significantly from innovation.

CPA Trendlines

How to Improve Your Net Billing Rate

Tips from Gary Adamson.

The Managing Partner Advisor

Technology Resellers Shifting to Cloud-Based Solutions, Consulting The leading accounting and ERP value-added resellers are moving away from traditional on-

premise systems.

Accounting Today

Partners

Providing a Path to Partner

Consultant Jack Lee looks at why firms may not have a path to partnership in place – and why

they should.

Convergence Coaching, LLC Inspired Ideas

Succession Planning and M&A

Four Ways to Sell a CPA Firm

Seller financing with a client retention guarantee isn’t the only way to sell a firm.

AICPA CPA Insider

*Mergers: Tips for Doing It Right Suggestions from a former managing partner who’s been through five of them.

The Managing Partner Advisor

Marketing

*The Right Way to Use Social Media

Social media foster depersonalized, surface interactions that can erode trust. Yet the same

breadth of interaction can leverage reputation gains.

RainToday

Increase Your Firm’s Visibility

Practical ideas for increasing interest in your firm in order to attract and retain clients.

Solutions for CPA Firm Leaders

Raise Your Firm’s Social Media Profile

Make a lasting impression with your firm’s online presence.

Solutions for CPA Firm Leaders

Client Services

Test Your Fraud Smarts

This quiz reveals your fraud IQ.

Journal of Accountancy

Protecting Affluent Clients

Practical tips for protecting the wealthy from the sophisticated criminal.

AICPA CPA Insider

Risk Management

Should You Inform on Your Clients?

The Dodd-Frank act provides generous cash rewards for whistleblowers. Does that include

accountants?

The CPA Journal

Books

101 Marketing Strategies

In this month’s issue we present Chapter 19 of 101 Marketing Strategies, by Troy Waugh. The

book – designed for senior associates and partners of accounting, legal, consulting, and other

professional business service firms – offers Waugh’s proven process model for selling

professional services. We present one chapter per month, or you can order the book now at 888-

797-RAIN (7246) or via mail@therainmakeracademy.com.

Practice Management

Partner Compensation Programs That Work Source: CPA Practice Management Forum

In this interview, consultant Allan Koltin offers his insights into what makes a partner

compensation program work. According to Koltin:

The primary cause of conflict among partners is a gap between partners’ views of their

own talents and performance and the views of other partners. Exercises designed to help

partners recognize and close this gap are invaluable.

Goal setting is critical. The most harmonious firms are those that “have done an

exceptional job of setting very specific, measurable, and attainable goals for the partners

up front.”

It’s not enough to set goals at the beginning of the year and then wait until the end of the

year to see how a partner measured up. To be successful, there should be quarterly

coaching and mentoring, as well as an effective accountability structure.

Two common mistakes can cause even a well-designed compensation program to fail.

One is to pay year-end bonuses to everyone without a meaningful difference between

those paid to high performers and those paid to underperformers. The other is rewarding

partners without a clear link between bonuses and their achievement of specific goals.

A balanced scorecard approach may not be an effective way to compensate partners.

Some firms get so bogged down by formulas and percentages that they lose the flexibility

to reward partners for the achievements that truly matter.

Compensation programs often fail to measure important indicators of partner success,

including individual scores on client satisfaction surveys, recruiting of new talent, results

of upward evaluations, and involvement with new initiatives or ventures.

There’s a trend among CPA firms toward closed compensation systems, which minimize

the disruptive effects of sharing information about peer compensation.

For the complete article, read “Common Characteristics of a Successful Partner Compensation

Program.” [ http://bit.ly/sYHKDy ]

From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, November 2011, p.

16.

Grow Your Business in Good Times and Bad

Source: Accounting Today

In this article, Danielle Lee provides insights from leaders who are growing their firms in spite of

a challenging economy. These growing firms:

1. Develop niche services that are supported by staff with legitimate expertise in those

niches and willingness to pursue those markets.

2. Set goals and expectations high, strategically working toward growth at all times.

3. Expect to gain clients from competitors.

4. Are committed to consistent marketing and business development.

5. Utilize social media to promote the firm, educate, and connect.

6. Recruit the best young talent.

For the complete article, read “Revving up your revenue.” [http://goo.gl/IUauo]

From Accounting Today, November 1, 2011, SourceMedia Inc., One State Street Plaza, 27th

Floor, New York, NY 10004, 800-221-1809.

Stuck in a Rut? Ideas for Moving Your Firm Forward.

Source: Accounting Today

In this article, August Aquila and Angie Grissom offer insights about lackluster partner

performance and ideas for how to move your firm forward.

Your firm might need a shift in leadership perspective if you’re experiencing the following:

1. You identify issues or needs, and begin to address them (perhaps via a committee),

but are not seeing real results or change.

2. Partners are over-involved in the day-to-day business, and under-occupied with

larger-picture strategic planning, training and leadership.

3. Partners are unfocused and unsuccessful at leading the firm in accordance with the

identified purposes and initiatives.

4. Partner expectations are unclear.

5. Employees are provided with insufficient and/or ineffective feedback on their

performance.

How to move your firm forward:

1. Ensure that partners and firm leaders coordinate to create a clear picture of your

firm’s future.

2. Clarify partner expectations.

3. Develop a plan for assigning, accomplishing, and measuring the effectiveness of tasks

so that team members clearly understand responsibilities and are held accountable.

4. Create a direct connection between income and job performance.

5. Develop an effective system for consistent, constructive feedback on job

performance.

6. Make accountability a part of your firm culture.

For the complete article, read “Stop spinning your wheel.” [http://goo.gl/T0abX]

From Accounting Today, November 1, 2011, SourceMedia Inc., One State Street Plaza, 27th

Floor, New York, NY 10004, 800-221-1809.

Measuring Partner Performance

Source: The Marc Rosenberg Blog

The following blog post by Marc Rosenberg is reproduced in its entirety with permission.

Jeff DeYoung, managing partner of the Chicago and Minneapolis offices of Baker Tilly, the 16th

largest CPA firm in the U.S., gave a marvelous presentation to my Chicago roundtable group.

A few years ago, the former Virchow Krause boldly changed its name to Baker Tilly. “We really

like the international brand name – there are only eight or 10 in the world. Our marketing studies

show that with a 30 percent increase in brand awareness comes a 20 percent increase in new

clients.”

BT’s overarching marketing philosophy: “We go to market by industry,” standard practice for

firms over $20 million, but strangely missing among most smaller firms.

One of the keys to Baker Tilly’s success is its adherence to the precept “you get what you

measure.” When you decide what to measure, you predetermine what is going to be important.

Among other things, BT measures its partners according to:

Achievement of formal, written goals.

Upward evaluations by the staff.

Getting a Net Promoter Score (a measure of client service excellence evidenced by

getting client referrals) of at least 90 percent.

Mentoring staff.

“It’s all about growth and leadership,” says DeYoung.

CPA firms in the Midwest experience one of the lower levels of female partners in the country

(only 10 percent in the latest Rosenberg MAP Survey), but Baker Tilly bucks that metric. Its

Minneapolis office has 30 percent female partners, and Chicago is at 22 percent. “We put a wall

around our female staff and have a special program for women.”

DeYoung shared with us a dramatic new trend: “Almost overnight, big firms are hiring huge

numbers of college graduates.”

Baker Tilly has merged in roughly two dozen firms in the past 10 years. “We are particularly

attracted to firms with quality partners having industry specializations. But don’t come to us to

solve your problems.”

For the original post, read “You Get What You Measure.” [http://goo.gl/iEC2I]

From The Marc Rosenberg Blog, blog.rosenbergassoc.com, October 24, 2011.

How Innovators Innovate

Source: CPA Success

The following includes experts, reproduced with permission, from a blog post by Tom Hood.

We think it is being an ambidextrous thinker, being able to think critically and creatively. That is

what I take away when reading this Harvard Business Review article, “How Do Innovators

Think?” [http://goo.gl/TQbnp]

The article is based on research into the “innovator’s DNA” and was based on interviews with

some of the top innovators in the market today.

Here are the top five skills of innovative leaders:

1. Associating – the ability to make connections across seemingly unrelated questions,

problems, or ideas.

2. Questioning – the ability to ask “What if,” “Why,” and “Why not.”

3. Observing – the ability to closely observe details, especially people’s behavior.

4. Experimenting – the willingness to try new experiences and ideas.

5. Social networking beyond your profession – a curiosity and an ability to learn from

multiple social networks outside your primary discipline.

We see a lot of similarities with our own research on leadership skills from our Business

Learning Institute. Here is what we see as the top five qualities of extraordinary leaders:

1. Sight – the ability to see emerging patterns and shift perspective when necessary.

2. Insight – the ability to learn faster than the rate of change in your industry.

3. Creation – the ability to think strategically and critically to gain insights that create

new opportunities.

4. Communication – the ability to collaborate inside and outside your organization and

to build and sustain social networks of people engaged in the work.

5. Inspiration – the ability to mobilize support and engage others to join you in action.

We have turned this into a leadership development program called i2a: Insights to Action: A

Strategic Thinking System, which is also the basis for our i2a: Leadership Academy.

For the complete blog post, read “The top five skills of innovators.” [http://goo.gl/hKjtV]

From CPA Success, the blog of the Maryland Association of CPAs, http://www.cpasuccess.com,

October 31, 2011.

Effective Performance Management

Source: CPA Trendlines

The following includes excerpts, reproduced with permission, from an article by Steve Erickson.

Improving partner and staff accountability is essential in these economic times. Here’s how you

can immediately improve accountability and performance in your firm:

1. Communicate your expectations clearly.

2. Discuss the plan to accomplish the goal.

3. Make sure the plan is understood and agreed to, and that success is defined.

4. Use direct or supportive coaching/supervision techniques appropriately.

5. Give timely feedback.

6. Celebrate success.

What is needed is a formalized process to communicate the requirements for a specific task or

position and how success will be measured.

The Cycle of Accountability, Performance, and Success

To begin the cycle of accountability, performance, and success (CAPS™) the person in the

supervisory role must clearly communicate the ultimate goal and help develop a plan to achieve

that goal. Whether the task is doing a tax return, auditing cash, responsibility for an entire client

engagement, or annual job performance, the time needed to complete the cycle will vary

significantly, but the CAPS™ process follows the same flow.

Direct and Supportive Supervision

Staff accountants with less experience need more direct supervision because they haven’t been

exposed to the complexities of public accounting before. Specific instructions concerning the

steps to be performed, the time expectations, and frequent checking and feedback are needed to

make sure you get the result you want rather leaving it to chance.

Supportive supervision techniques are used with those individuals who have more experience.

General instructions are given as to expectations, and we generally tell experienced accountants

that if they have any questions to please let us know.

For the complete article, read “6 Steps to Improving Accountability in Your Firm.”

[http://goo.gl/DxOV1]

From CPA Trendlines, http://cpatrendlines.com, November 3, 2011.

Transforming Plans Into Actions

Source: RedZone, Play of the Month

The following includes excerpts, reproduced with permission, from an article contributed by

Accountants Advisory Group.

Many CPA firms fail to implement their strategies and business plans or do so in a painfully

slow manner. This is by far the number one obstacle to success and an issue that is fueling the

volume of mergers taking place across the nation. To overcome this obstacle, firms should:

Assign partners specific action items together with start dates and completion dates, and

make sure partners are accountable. Too many firms reward partners for short-term

accomplishments that take a back seat to more important long-term objectives.

Have the managing partner or executive committee review and assess short- and long-

term strategic action items monthly.

Make leaders available as resources, role models, and mentors to drive progress and

completion of action items.

Ensure that partners delegate action item tasks and projects to reliable, capable staff and

manage their progress.

For the complete article, read “Lack of Implementation – The #1 Obstacle to Success.”

[http://bit.ly/vRR4Wh]

From RedZone, Play of the Month, Accountants Advisory Group,

http://www.AccountantsAdvisory.com, November 2011.

Is Your Firm Innovative? Source: CPA Trendlines

The following includes excerpts, reproduced with permission, from an article by L. Gary

Boomer. Boomer suggests that a focus on “delivery skills” rather than “discovery skills” stifles

innovation and offers several suggestions for improvement.

Here are five areas where innovation will produce significant results.

1. Billing and collection policies. Use technology to improve cash flow (ACH

payments and credit cards). This requires different thinking and change management.

Too many firms allow clients to treat them as interest-free or “cheap” banks. Turn

this around with improved engagement letters that specify payment terms leveraging

monthly bank drafts.

2. Tax return preparations processes. Avoid loops and focus on one-way workflow.

There are better ways to train than sending work back to the preparer. You can use

technology to grade performance and report errors. Current workflow software has its

roots with outsourcing companies.

3. Client accounting in the Cloud. Provide transactional as well as value-added

services such as bill payment, payroll, controller, HR, IT, and CFO-related services

on a monthly basis. Private-labeled software that can be centrally updated and

supported will allow firms to take back control of accounting. It will also allow your

firm to become hardware-agnostic. It works the same on a Mac as it does on a

Windows-based PC via a browser.

4. Portals. Use portals to aggregate client data for auditing and accounting as well as for

tax return preparation. Avoid false starts and wasted time. Portals provide security,

are inexpensive, and clients like them. Most of the resistance I see is within the firm.

5. Focus groups. Conduct client focus groups with marketing, tax, and technology

expertise present. This will provide innovation at the intersection of multiple

perspectives. Listen to clients and provide the services they want.

For the complete article, read “Is ‘Expertise’ Blocking Innovation at Your Firm?”

[http://goo.gl/PBHTS]

From CPA Trendlines, http://cpatrendlines.com, October 27, 2011.

How to Improve Your Net Billing Rate

Source: The Managing Partner Advisor

In an earlier blog post, Gary Adamson explained that the most profitable firms have considerably

higher leverage ratios and net firm billing rates. In this post, he offers tips for improving your net

firm billing rate. They include:

Keep upward pressure on billing rates and raise them when realization hits the upper-80-

percent-and-higher range.

Look for opportunities to make processes more efficient.

Take steps to avoid “scope creep.”

Work with partners to improve their overall realization percentages.

For the complete post, read “Making Money in CPA Firms – Follow Up.” [http://goo.gl/DhoQr]

From The Managing Partner Advisor, the blog of Gary Adamson, CEO of Adamson Advisory,

http://adamsonadvisory.com/blog, September 12, 2011.

Technology Resellers Shifting to Cloud-Based Solutions, Consulting Source: Accounting Today

Accounting Today’s “Technology Pacesetters” – leading accounting and ERP value-added

resellers – are exploring what they view as significant future revenue sources: Cloud-

based/hosted solutions and consulting services.

The move toward hosted software is being driven in part by the struggling economy. Clients are

pressuring advisors to reduce costs, and a software rental model helps clients avoid the

significant upfront investments associated with traditional on-premise systems. Firms like

McLean, Va.-based SSI consulting, believe that providing hosted solutions will help them

“increase volume, reduce sales costs and generate more recurring revenue.” SSI says that this

segment of its business has been growing at an annual rate of one hundred percent.

Other firms are emphasizing business intelligence and other consulting services over software

sales to help clients find new ways to remain competitive.

For the complete article, read “Moving in new directions.” [http://goo.gl/XmGjp]

From Accounting Today, November 1, 2011, SourceMedia Inc., One State Street Plaza, 27th

Floor, New York, NY 10004, 800-221-1809.

Partners

Providing a Path to Partner

Source: ConvergenceCoaching, LLC Inspired Ideas

The following includes excerpts, reproduced with permission, of a blog post by Jack Lee. Lee

outlines three reasons why firms don’t have an official path to partnership.

1. They don’t understand the need for a path to partner.

2. They don’t understand what is required to have an effective [path].

3. They recognize the need for a clear path to partner but are fearful or unwilling to

provide one.

Is a “path to partner” really important? Developing your firm’s partner track is essential to

long-term sustainability from both a retention and succession standpoint.

What does an effective path to partner look like? It starts by defining the key skills,

experiences, and behaviors expected of your current partners. These must be detailed for all

performance levels in your firm, including goal setting to move from one phase to another.

Three reasons for the apparent “dread” around providing a path to partner, along with a more

hopeful “flipside”:

1. Fear of exposure – Current partners are not performing at the level expected for new

partners and don’t want to make this evident by providing clear expectations in their

path-to-partner documents.

Hopeful flipside – Trusted leaders lead by acknowledging their need to get better and

demonstrating their leadership in doing so.

2. Fear of falling short – Current partners are afraid of providing a path to future

partners and of not being able to follow through.

Hopeful flipside – Laying out the path to partner provides a foundation for the

development of your people, not a guarantee of partnership.

3. Fear of being pushed out.

Hopeful flipside – What about having no one capable to replace you, and no one to

care for your clients and sustain the firm into the future?

For the complete post, read “Lead, Follow, Or …” [http://goo.gl/UzJMN]

From Convergence Coaching, LLC Inspired Ideas, http://blog.convergencecoaching.com,

November 2, 2011.

Succession Planning and M&A

Four Ways to Sell a CPA Firm

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article contributed by

Accounting Practice Sales.

Historically, practices have been sold with a seller-financing arrangement, usually involving

some type of client retention guarantee by the seller. But practices sell today in different ways

and on different terms. There are four basic ways firms are sold.

With seller guarantees:

1. Collection Pricing. A seller-financed transaction in which the seller receives payments based

on what the buyer collects (or, perhaps, bills) over a period of time. Buyers like it because it

gives them easy cash-flow payments and shifts most of the risk of client retention to the seller.

Sellers don’t like assuming the risk in a manner that requires them to guarantee the buyer’s work

and abilities down the road.

2. Look-Back Pricing. The buyer looks back after a period of time (typically, one year) at how

much has been collected (or, perhaps, billed) and the total sales price is then adjusted up or

down. This pricing is similar to collection pricing in that seller guarantees are involved, but it can

be used with both cash and seller financing. It’s not nearly as common as collection pricing, but

sellers are more comfortable because they’re at risk for a shorter period of time.

Without seller guarantees:

3. Cash Pricing. The seller receives the full price at closing. The buyer finances the purchase

with personal funds or, more often, with a loan. A loan creates a win-win situation because the

seller receives cash and the buyer can often obtain favorable payout terms. This option has

become more common, especially with solid firms in desirable locations.

4. Fixed Seller-Financed Pricing. This includes any fixed price, without a client retention

guarantee, paid to the seller over a period of time, with or without interest. This method is often

misunderstood because “seller financing” is often used to describe methods 1 and 2 above.

Sellers prefer fixed financing over seller guarantees, but they still worry about collecting.

Sufficient down payments, good credit on the part of the buyers, and strong buyer experience

and credentials can alleviate their concerns.

For the complete article, read “Show Me the Money: How CPA Firms Are Sold.”

[http://goo.gl/IBwLk]

From AICPA CPA Insider, October 24, 2011, http://www.CPA2biz.com.

Mergers: Tips for Doing It Right Source: The Managing Partner Advisor

Based on his experience completing five mergers as managing partner, Gary Adamson offers

these five tips:

1. Use average billing rate as a litmus test. It can tell you a lot about a practice.

2. Ask the seller up front for a written list of “sacred cows” – that is, processes and

people it’s unwilling to change.

3. Create a business case for the merger – including strategies, goals, and expectations –

before you sign a letter of intent.

4. Trust your gut – don’t pursue a deal if it doesn’t “feel right.”

5. Include a “divorce agreement” that establishes an orderly process for undoing the

merger if things don’t work out.

For the complete post, read “Five Merger Tips to Help You Seal the Deal.”

[http://goo.gl/597XU]

From The Managing Partner Advisor, the blog of Gary Adamson, CEO of Adamson Advisory,

http://adamsonadvisory.com/blog, November 11, 2011.

Marketing

The Right Way to Use Social Media

Source: RainToday

The following includes excerpts, reproduced with permission, from an article by Charles H.

Green.

Social media are a double-edged sword. On the one hand, they foster depersonalized, surface

interactions that can erode trust. Yet the same breadth of interaction can leverage reputation

gains. At the same time that social media can lower trust, the fact of that lowered trust increases

the opportunity for differentiation. If you become less and less trustworthy, and I don’t change at

all, then I begin to look more trustworthy – at no particular cost to myself.

I’d suggest that reputation is the repeated personal experience of trust – or of its absence. We

don’t trust companies (with the exception of reliability or track records); we trust the people with

whom we interact. Or we do not. This view of reputation suggests it is best achieved as a

byproduct of trust; specifically, as a byproduct of acting in a consistently trustworthy manner. By

this view, trust drives reputation – not the other way around.

Also by this view, the best way to manage reputation through social media is not by attempting

to harness the “power” of social media in service to a “good” message. The method inevitably

swamps the message. Trust-based reputation – the only kind with staying power – comes from a

consistent customer experience (ditto for the employee experience). If that experience is to be

one of trust, then the people engaged in all aspects of the company, including social media, must

behave in trustworthy ways.

The power of social media, for those willing to see it, lies in making the world more personal,

not less so. You do that by simply behaving personally in a trustworthy manner, online as in

everywhere else. Your reputation will rise in comparison to those who don’t.

For the complete article, read “How Social Media Can Help – or Hurt – Your Reputation.”

[ http://bit.ly/ttNeja ]

From RainToday, www.raintoday.com, October 19, 2011.

Increase Your Firm’s Visibility

Source: Solutions for CPA Firm Leaders

The following includes excerpts, reproduced with permission, from an article by Rita Keller.

How do you bring in new clients and retain current clients? Create a buzz about your firm. You

and your team members can do it yourself and it doesn’t have to be extremely expensive.

Here’s a way to use old-fashioned networking to be more visible and to create a buzz about your

firm. Identify the major business networking events being held in the next six months in your

city or town. Do the same for the charitable fundraising events.

Create a schedule identifying your partners and team members who will attend each event. If you

are a firm leader specifically identify a less experienced team member to shadow you at the

event. Often, less experienced team members are more anxious to talk about the positives of your

firm than the seasoned team members.

Make sure you have several people in attendance, even if you need to request that a member of

the administrative team represent the firm. Depending on the size of the firm and the size of the

event, strive to have four, six, or eight people in attendance.

Several times during my years at a growing regional firm, people would come up to me at a

business networking event and remark, “Your firm must really be growing, I just met three other

people from your firm.” Did that mean that we were growing? No. It just meant that we were

able to create a buzz about the firm.

Look ahead for each three- to six-month period and create a schedule for being visible, in

significant numbers, at business and community events.

For the complete article, read “Create a Buzz About Your CPA Firm – Networking Events.”

[http://goo.gl/DO4Yo]

From Solutions for CPA Firm Leaders, Rita Keller’s CPA MAP Newsletter, www.ritakeller.com,

November 2011.

Raise Your Firm’s Social Media Profile

Source: Solutions for CPA Firm Leaders

The following includes excerpts, reproduced with permission, from an article by Rita Keller.

Professional services is a word-of-mouth business. You want people in your business community

talking about your firm and making referrals. While physically being visible is extremely

important, being wildly visible with social media is a must.

What happens when someone hits your homepage? Your website is an important asset. It is not

just an online brochure any longer. Every potential client will thoroughly explore your website

before even talking to you. You won’t have to verbally explain the firm history when you meet

them face-to-face, they will already know it.

What do potential clients and potential new hires see when they first hit your website? Please

make sure they immediately see the social media badges. Set up your business Facebook page

and then keep it current. Check out Fluence in Portland, Oregon, for an example.

Are you blogging as part of your recruiting activities? Check out this great post by Eric

Majchrzak, on Freed Maxick’s career site, titled “Why Social Media Matters in Accounting.”

[http://goo.gl/GtQ5n]

Are you blogging about tax to keep clients and potential clients informed on such matters?

Check out “My Two Cents – Thoughts on Tax and Financial Planning,” [http://goo.gl/2okVO],

by Brett Friedman.

Make sure all of your people are on LinkedIn. Many firms are bringing in local social media

experts to train the entire team on how to set up their profiles properly and use LinkedIn for

business.

How about Quick Response codes? [http://goo.gl/EY4rN] Do you have one to send people to

your website? Last month I received my first business card from a person at a firm that had the

QR code on the back of the card.

For the complete article, read “Create A Buzz About Your CPA Firm – Social Media.”

[http://goo.gl/8iCvO]

From Solutions for CPA Firm Leaders, the blog of Rita Keller, president of Keller Advisors,

LLC, rkeller@ritakeller.com. Visit http://ritakeller.com/blog/.

Client Services

Test Your Fraud Smarts Source: Journal of Accountancy

Two research specialists with the Association of Certified Fraud Examiners (ACFE) put together

a 10-question “fraud IQ quiz” to help professionals test their knowledge of fraud prevention,

detection, and investigation. Here’s one example:

“2. Which of the following is the LEAST likely to result in a data breach?

a. Compromised passwords

b. Thefts of encrypted laptops

c. Unsecured wireless networks

d. Outdated network security systems

[Answer:] (b) The mobility of laptops makes them especially vulnerable to data breaches. One

measure organizations can take to reduce their exposure is to encrypt laptops. Encryption

encodes data so that it can be accessed only with special passwords and keys. For encryption to

be effective, employees must be educated about its use and held accountable if they fail to use

it.”

For the complete article, read “What’s Your Fraud IQ?” [http://goo.gl/AikoU]

From Journal of Accountancy, American Institute of Certified Public Accountants, November

2011, http://www.journalofaccountancy.com/Issues/2011/Nov.

Protecting Affluent Clients

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Douglas Kane

and Paul Michael Violis, Sr., PhD.

One of the most important facts for the affluent community, as well as for advisors, to remember

is that this population does not attract the low- to moderate-level criminal. Your adversaries are

sophisticated criminals, including cyber hackers, identity thieves, con artists and those who

perpetrate home invasions and burglaries.

Prevalent risk probability factors include:

Wealth – The more you have, and the more information the world has about it, the greater

the threat.

Family office use – A true one-stop shop for the 21st century intruder.

Celebrity status – Your location and tastes will forever be public knowledge.

Neighborhood – Every affluent neighborhood is a playground for the diligent intruder.

Understanding the Culture Time-measured trust is key in formulating a successful relationship with the affluent client.

Provide the client with a nondisclosure agreement illustrating the advisor’s commitment to

protecting all information to which the advisor is exposed.

Protecting Privacy

The following precautions should be taken on a regular basis:

Take note of all suspicious persons loitering in the vicinity of the family.

Put trash identifying the client or his or her family, or containing confidential

information, through a cross-cut shredder.

Immediately address lost identification or confidential information.

Discuss family information on a need-to-know basis.

Ensure that employees immediately report any arrests or civil litigation, which may make

them a target for compromise.

Ensure that all new hires are subject to background investigations.

Ensure that all employees who are terminated or who resign have an exit interview and

are instructed that the confidentiality agreement they originally signed will remain

in force.

For the complete article, read “The 21st Century Intruder.” [http://goo.gl/2IzTW]

From AICPA CPA Insider, October 17, 2011, http://www.CPA2biz.com.

Risk Management

Should You Inform on Your Clients?

Source: The CPA Journal

The Dodd-Frank act provides generous cash rewards for whistleblowers – including, in some

cases, accountants – who report suspected misconduct directly to the SEC. But just because

accountants can report a client’s misconduct to the SEC doesn’t mean they should. This article

reviews the rules governing an accountant’s duties to keep client information confidential and to

disclose fraud and other wrongdoing under certain circumstances. In some situations, disclosure

can be made without liability for breach of confidentiality, in others it cannot.

Dodd-Frank protects whistleblowers, including in-house accountants, against retaliation by their

employers. But it offers no protection to accountants in public practice against liability for

breaching a client’s confidence. On the other hand, the act doesn’t prohibit rewards to

accountants who disclose confidential information, except in certain cases in which a

whistleblower submission would conflict with other duties to disclose that information to the

SEC.

Public accountants faced with client wrongdoing should consult their states’ professional

conduct rules to see if there are exceptions to client confidentiality that allow them to disclose

client crime or fraud.

For the complete article, read “The Accountant as Whistleblower.” [http://goo.gl/ktdMQ]

From The CPA Journal, A Publication of the New York State Society of CPAs, November 2011.

Books

101 Marketing Strategies

By Troy Waugh

In this month’s issue we present Chapter 19 of 101 Marketing Strategies, by Troy Waugh. The

book – designed for senior associates and partners of accounting, legal, consulting, and other

professional business service firms – offers Waugh’s proven process model for selling

professional services. We present one chapter per month, or you can order the book now (see

below).

Waugh’s selling process includes three levels: (1) development of the relationship, (2) the buying

process of the client, and (3) the selling process of the professional. Tested and found highly

effective in hundreds of successful firms, this process is used throughout The Rainmaker

Academy’s courses and in its leadership and business development programs for accounting

professionals.

Troy Waugh, CPA, MBA, CEO of The Rainmaker Academy, and author of two books, was

selected by Accounting Today as one of the “100 Most Influential People in the Accounting

Profession.”

To order the book, call 888-797-RAIN (7246) or e-mail mail@therainmakeracademy.com.

To read this month’s chapter, see [ http://bit.ly/w473Jv ].