iowa cpa - october 2014

Iowa Society of CPAs... Advancing the professional success of our members

Help shape the future of the CPA Exam

Over the past year, the AICPA has been conducting a comprehensive research project known as a Practice Analysis that utilizes interviews, focus groups, surveys

and more to gather information on the next version of the CPA Exam. Initial research shows that the skills required for newly licensed CPAs are rapidly changing in today’s ever-evolving business world. The next version of the Exam will need to ensure continued alignment with the changing profession.

Iowa CPAs are encouraged to share feedback on Maintaining the Relevance of the Uniform CPA Examination. Your com-ments will be combined with other key stakeholders from all areas of the CPA profession to better understand the needs of

employers of new CPAs, and develop and administer an Exam that continues to protect the public interest.

Responses must be submitted by the close of the comment period on Tuesday, Dec. 2. You may access the invitation and submit your feedback via the online survey at http://goo.gl/dliNL4.

The AICPA will report on all comments received in the first quarter of 2015. Thank you for providing input from the Iowa CPA perspective and for contributions to the future of the profession.

October 2014

Newsletter from the Iowa Society of CPAs, your primary source for profession-related information

Perspectives from recently certified Iowa CPAsRandalle Knapp, senior accountantBohr, Dahm, Greif & Associates PC, Cedar RapidsCertified 2013

• Our industry is encouraging new gradu-ates to take the exams when they just get out of college, often before they start their first job. The cost of the exams and the study materials is a little hard to manage at that point. My suggestion would be to reduce or eliminate the $100-150 applica-tion fee that is charged when applying to sit for each exam section.

• Depending on when you take the exam during the testing window, the score reporting can be fairly quick. However, if you take the exam toward the beginning or middle, it can be quite a while before you receive your results, which is a big source of stress and anxiety to candidates who are waiting on scores.

• From a test-taking standpoint, it’s a relief to only have to worry about essay questions on the BEC exam. However, after obtaining some field experience, essays could more usefully be placed in AUD and REG. Practice requires new CPAs to frequently draft tax memos and/

or memos to specific audit or attest files regarding 1) issues to address, 2) research related to addressing those issues, and 3) the conclusions reached on how to address those issues. This would be a practical writing task to be added to the exam.

Nick Anderson, senior associate, audit KPMG LLP, Des MoinesCertified 2012

• The process has significantly improved, but the quicker the results are out, the better.

• Consideration of removing off-months. Perhaps it could be moved to six weeks on/two weeks off. If the off-months are kept the same, consider chang-ing which are on and off. For example, June and Decem-ber are the most convenient months to take the tests.

• The most frequent complaint I hear is about the random-ness of questions asked and their associated difficulty. I understand that’s how it’s done, but I can say firsthand, there are versions that are simply easier than others. It’s frustrating when 25 percent of the questions are used as

Continued on page 13

2 | Iowa CPA | October 2014 www.iacpa.org

In Balance: work/life well-being seriesBy Connie Muell, ISCPA Family and Workplace Issues Committee

Editor’s note: This is the third article in the “In Balance” series featuring a variety of topics to improve your work/life well-being.

If you’re not getting the proper amount of rest your body needs, you’re not alone. Near half of

Americans don’t get enough sleep. This can affect your health, happiness and attitude, and have a negative effect on personal and work relationships.

There are many things that can inter-fere with getting a good night’s sleep: family issues, work deadlines, illness or financial challenges. The trick is to follow some simple tips to help you get through those tough nights. Keep in mind that everyone is different, so do what works best for you.

• Go to bed and get up at the same time every day, even on the week-end and during vacation. It’s best to set your regular bedtime for when you’re actually tired. Typical bed-times range from 9 to 11 p.m. Don’t force yourself to go to bed too early.

• Nap smart. A daytime nap to make up for a few lost hours is ok. Just be sure to limit it to no more than 30 minutes. Longer naps can mess up your sleep routine and make it dif-ficult to fall asleep at night, putting you right back to why you needed a nap in the first place. Cat naps of 5-10 minutes are even better.

• You may enjoy watching late night television, but this kind of light exposure may actually stimulate your brain and keep you awake. Even your iPad, Kindle and smart phone with back light have the same effect as television light. Try reading under soft light or listen to music. Make your sleeping room dark and quiet. Use a fan or other white noise to help if it’s too quiet for you.

• Eat as early in the evening as pos-sible, and no less than two hours before bedtime. Certain fatty foods, and spicy or acidic foods need time

to digest. Any discomfort from your meal will most certainly keep you awake. Of course, this is easier said than done with evening kids’ activities, meetings and late work nights. If you must eat late, choose something light and healthy.

• Avoid alcohol, caffeine, nicotine and excess liquids late in the evening. It can take hours to wind down from the effects of nicotine and caffeine. That evening night-cap may seem to make you sleepy at first, but it tends to wake you later in the night.

• Exercise regularly. Even a little helps. The best rule of thumb is 20-30 minutes a day. Be sure not to exercise too late in the evening. This may keep you awake longer than you want.

Finally, if these helpful tips do not seem to work for you, know when to see your doctor or get professional treatment. You may have a medical condition such as a sleep disorder that requires your doctor’s attention.

Sleep tight! Don’t let the bedbugs bite!

Connie Muell is a man-ager at Tunink Murray Financial Group in West Des Moines.

Issue No. 2014-10

Published eleven times per year by the Iowa Society of Certified Public Accountants (ISCPA). Send address changes, advertising inquiries and all correspondence to:

Iowa Society of CPAs950 Office Park Rd, Ste 300West Des Moines, IA 50265-2548 Email: [email protected]: www.iacpa.orgor, contact the ISCPA office:515-223-8161/800-659-6375

Front page photo: Northeast IowaPhoto by: JIM HEEMSTRA

The Society offers condolences to the families of:

Joseph M. (Mark) Ruzek, Olds, CPA certificate No. O06472. Mark was a member since 1989.

In Remembrance

Congratulate ISCPA on 100 years

Be part of the 100th anniversary edi-tion of Iowa CPA (published April 2015) and reserve your “Congratulations ISCPA on 100 Years” ad space. Submit your ad with your customized message and brand and be seen by over 4,300 ISCPA members. Want us to design your ad for you? We’ve developed a custom 1/8-page option for you to purchase. (See sample above.) Simply send us your logo and contact information and we’ll do the rest. Go to www.iacpa.org for an advertising insertion order and further details. Space is limited - reserve yours now!

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www.iacpa.org Iowa CPA | October 2014 | 3

1-800-397-0249The Holmes Group

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How to avoid identity theftBy Lance Dieleman, ISCPA Taxation Committee

As more personal information is gathered electronically, identity theft continues to be a major

issue. At the Iowa practitioner liaison meeting in May, representatives from the Federal Bureau of Investigation (FBI) briefed attendees on how to prevent identify theft and how the FBI is at-tempting to combat it.

Unfortunately, identify theft is usually first detected one of these ways: credit is denied, foreclosure is initiated without any previous warnings, or a fraudulent tax return has been filed for the taxpayer.

The average loss from identity theft is $4,930, and it can take up to 600 hours to repair identity theft damage. When a person’s identity is stolen, credit cards are opened and/or fraudu-lent tax returns are filed under the vic-tim’s name. All that is needed to open a fraudulent credit card is simply one’s name, date of birth and social security number. The elderly are most suscep-tible to having their identity stolen, as well as individuals with low income and those who do not file tax returns.

Steps to take when the crime is discovered

1. Contact the three major credit bureaus–Equifax, Experian and TransUnion–to report the fraudulent use of your credit cards or account numbers. Have them put a “fraud alert” on all of your accounts.

2. Obtain a copy of your credit report from each credit bureau. Contact the creditors by phone and in writ-ing to explain that you are a victim of identity theft. Request replace-ment cards and new account num-bers for any accounts that were compromised.

3. Contact the local authorities and get a police report issued. Even though filing a report may not lead to an arrest, the report is a means for authorities to gather information on identify theft and assist them in the broad fight against identify theft.

This information allows them to find the trends and avenues criminals are using to steal identities.

How to prevent identity theft People have a tendency to share a lot of personal information on social networks. This creates a database that criminals can use to steal your identity. Do not use your name on social net-works or instances where you provide your name and home address together (i.e., when ordering pizza and subscrib-ing to magazines). Other common pre-ventative measures include: watch for fraudulent emails and websites trying to steal information, keep antivirus and spyware software up to date, and be careful what devices are used for online banking (public computers and mobile devices are less secure).

Additional information for combating identity theft in Iowa can be found on the Iowa Attorney General’s website www.iowaattorneygeneral.gov. The Internet Crime Complaint Center (www.ic3.gov) is a favorite resource of the FBI for collecting information regarding complaints filed for Internet crimes. Identity thieves tend to file fraudulent tax returns early. Therefore, if you have clients vulnerable to having their tax records compromised or their tax re-cords have already been compromised, they can notify the IRS by filing a police report or completing the Form 14039–Identity Theft Affidavit. In addition, they will be required to provide copies of one of the following as proof of their identity:

1. Social security card2. Driver’s license3. Passport

Fun fact: Fraud is the #1 industry for Nigeria’s GDP.

Lance Dieleman is an account manager at Schuring Uitermarkt Sims McCleish & Ver Meer PC in Urbandale.

ISCPA membership: It’s about YOU

Last month, we kicked off our mem-bership renewal campaign. Thank you to the Iowa CPAs and account-

ing professionals across the state who have already renewed your member-ship, and to the many new members coming in each week! We are thrilled that so many of you are dedicated to your profession.

Log on to www.iacpa.org to conve-niently renew today. You might also see some familiar faces you know talking about what membership means to them. It’s a great time to be an Iowa CPA, and we look forward to advancing your professional success.


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Resource

New Members

Krystal K. BaggeDeloitte & Touche LLP

DavenportSandra Balk

Doyle & Keenan PCDavenport

Katelyn CrosserMcGladrey LLP

Des MoinesSteven Cruice

Athene USAWest Des Moines

Melissa R. EversmeyerClinton Engineering

ClintonAmanda S. HansonAmerican Enterprise

Group IncDes Moines

Hollie L. NunnikhovenKonek PCPrairie City

Catherine P. RaesideDoyle & Keenan PC

DavenportJustin C. Salow

First Federal Credit Union

HiawathaLaurie M. Siegel

King Reinsch Prosser & Co LLP

Sioux CitySheila A. SpickermannAnderson Lower Whitlow

PCBettendorf

Exam-Qualified Affiliates:

Emma J. BartleyIP Pathways LLC

UrbandaleDenise M. Darling

Denman & Company LLPWest Des Moines

Michael ElmingDenman & Company LLP

West Des MoinesAllison Harding

Ernst & Young LLPDes Moines

Susan D. HotchkinLatta Harris Hanon &

Penningroth LLPTipton

Nathan J. NeesCasterFrame PC

West Des MoinesJustin Oleson

Bergan Paulsen & Company PC

JohnstonMichael Russell

Denman & Company LLPWest Des Moines

Janice S. Towne, principal at River-view Financial Group PC in Keosau-qua, has been appointed as a member of the AICPA PFS Credential Commit-tee for 2014-15.

Amanda Reynolds, Deloitte Tax LLP, Des Moines, has been promoted to tax senior.

Danielle D. Gratton, Dupaco Commu-nity Credit Union, Dubuque, has been promoted to CFO.

Melissa R. Sisler, McGladrey LLP, Des Moines, has been promoted to assur-ance partner.

Michael R. Holdren has joined First Security Bank & Trust, Charles City, as controller.

David W. Goodman, CPA PLLC, has opened a new office in Ottumwa.

Lucas A. Bland has joined 1Comm Medical Inc in Ankeny as CFO.

Denise A. Wieland, Athene USA, West Des Moines, has been promoted to vice president of general accounting.

The following personnel at Deloitte Touche LLP, Des Moines, have been promoted: Brittany L. Owens to Audit Manager; Chelsea M. Bolander and Leigh C. Howell to Audit Senior.

Please send your members in the news to [email protected].

Members in the News

Student Affiliates

Coe CollegeLogan Barnes

Miranda WhitfieldDes Moines Area Community

CollegeDanielle M. Hill

Drake UniversityZachariah J. Clement

Emily RaeckerBarbara M. SaeuglingIowa State University

Keely A. TaylorChristopher Schminke

Kaplan UniversityAaron M. Fishnick

Loras CollegeMorgan L. DolanSimpson CollegeMarissa K. Busby


Council Corner: A national view of issuesBy Steve Marlow, ISCPA council representative

The AICPA held its 2014 Spring Meeting of Council in Scotts-dale, Ariz., May 18-20, 2014. Bill

Balhoff, chairman of the AICPA board, discussed the energy and passion that he’s witnessed as chairman and emphasized the importance of making things better for future CPAs.

America’s business pulseRichard Davis, U.S. Bancorp chairman, president and CEO, and member of the CEO Roundtable, made up of 150 of the most prominent CEOs in the U.S., reported observations on the role of American business on today’s society.

• 67 percent of members expect “things” to get better.

• The general consensus that eco-nomic growth would remain steady over the next several years.

• The most important things involved in “getting business better” are tax policy, education, global comple-tion and balanced growth.

• The biggest problem in Washington D.C. is an inability to compromise.

Davis discussed the five game chang-ers that America will need to address to maintain its competitive edge: energy, trade competitiveness, big data, infra-structure and developing talent with an emphasis on K-12 education.

Katty Kay, lead anchor of BBC World News America, indicated that America is in the process of trying to figure out where it fits in the world and vice versa. It was her opinion that the biggest prob-lem facing America today is Washington D.C. and that everything (tax reform, medical care, immigration, education, deficit) is fixable if the political situation could be resolved. She indicated that America’s greatest asset is its entrepre-neurial spirit.

Profession issuesAICPA President and CEO Barry Mel-ancon provided a brief description of

issues facing the profession, including comments around general economic instability, legislative and regulatory landscape, and tax complexity and reform. Additional topics:

• Human capital issues• Role of technology• How the definition of the word “out-

sourcing” is changing• Global resourcing• The role of immigration• Need for America to embrace the

STEM initiative• Emerging capital sources• SEC’s new and timely rules around

crowdfunding.• Alternative currencies such as

bitcoin• The possibility of Senate and

House elections changing majority in each of the chambers

• Halliburton case• Delay in any legislation around pat-

ent holding companies• Expectation that the EU will man-

date audit firm rotation by 2016• SEC increased focus on fraud• Support of the recently signed

DATA Act

He concluded his remarks on advocacy by covering tax issues and stating his opinion that tax reform would be highly unlikely in 2014. He discussed recent actions around tax preparer registration and the likelihood that the IRS will go forward with voluntary registration, much to the displeasure of the AICPA, who con-tinue to support the PTIN as a viable so-lution. The AICPA continues to advocate for more IRS resources, but any increase is unlikely in the near term given the is-sues surrounding the nonprofit arena. He noted slow progress around integrated reporting, although Michael Bloomberg and Mary Shapiro have been appointed to lead the Sustainability Standards Board. Auditor reporting continues as a hot topic and partner signing require-ments are still being discussed.

U.S. economic recoveryGreg Ip, U.S economics editor of The Economist talked about America’s economic recovery and its coming chal-lenges. He indicated that demograph-ics have created a lack of workforce availability in many areas and spoke of a need to relax immigration require-ments to resolve a portion of the issue. He discussed the deficit and the need to address entitlements should anyone expect to seriously advance the bal-anced budget idea.

Learning recommendationsAICPA’s Anthony Pugliese and Lawson Carmichael discussed the future of learning. The current mix of learning can be categorized as 10 percent formal, 20 percent informal and 70 percent expe-riential. The task force has a number of recommendations around the future:

• Innovate and experiment• Ignite a passion for learning• Make learning personal• Measure what matters

Carmichael and Tommye Barie (AICPA) presented “Assessing the External Environment and Table Discussions by Council on Strategic Implications for the Profession.” Daniel Berman presented “Looking into the Future: Tax Law and the Accounting Profession.” William Ez-zell discussed the continued progress of the Pathways Commission. The day con-cluded with a joint discussion from Barry Melancon and Charles Tilley, CEO of the CIMA, around the need for accountants to interact within the global economy.

Read the full report at http://goo.gl/oueEih.

Steve Marlow is CFO of Care Initiatives Inc, West Des Moines, and is a past president of ISCPA.


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…Need-to-know news and advice for leaders emerging in the accounting professionLEAP forward

ISCPA’s LEAP Task Force provides education, networking and develop-ment programs across the state

for members 40 and under. Visit www.iacpa.org/AboutISCPA/AboutLEAP.aspx for detailed information about these events and register today.

Lunch with LeadersGrab a bite and make the most of your lunch break. Lunch with Lead-ers is a 90-minute ses-sion offering life, com-munity and career advice

from professionals who are leaders in Iowa’s business community.

Oct. 15 – Des Moines“Becoming Involved and Engaged in your Local Community”

Featured leader: Chris Diebel, man-aging director of public affairs, LPCA Public Strategies, Des Moines

Nov. 6 – Des Moines“The Process, Purpose and Power of Networking”

Featured leader: Adam Steen, owner, 25Connections LLC, Des Moines

Feb. 19, 2015 – Des MoinesChristine Hensley, city council member, Des Moines

Jan. 9, 2015 – Des Moines“Take a LEAP–Live Each Action Purpose-fully”

Featured leader: Sandy Hatfield Clubb, athletic director, Drake University, Des Moines

Iowa CPA Day at the CapitolHosted by the LEAP Task Force

Jan. 29, 2015 – Des MoinesJoin your fellow accounting peers to learn about the many aspects of Iowa’s state government. Hear from top-notch guest speakers, tour Iowa’s Capitol, and have an opportunity to meet and talk directly with lawmakers. This event is hosted by the LEAP Task Force. Break-fast and lunch is included in the registra-tion fee. All members welcome. Visit http://goo.gl/OMnPcu to register.

Regional Alliance events

Join ISCPA at an upcoming Regional Alliance event in your part of the state. You’ll get Professional Issues Updates, and have an opportunity for conversation with other CPAs. Visit www.iacpa.org/AboutISCPA/RegionalAlliances.aspx for detailed

information about each event, and to find your region.Oct. 2 – Carroll2 – 6 p.m.Hosted by the Southwest Regional Alliance

Update from State Auditor Mary MosimanProfessional Issues Update from ISCPA CEO Cindy AdamsWine tasting at Santa Maria Vineyard & Winery with appetizers and one compli-mentary drink tricket

CPE Spotlight

Thank you to everyone who joined us at a recent Common Grounds gathering in your part of the state. There was lively conversation about the profession, shared ideas and concerns, new connections and a few laughs! Your feedback and input are so valuable in helping us plan for your future.There is no cost to attend a Common Grounds event. Simply RSVP to [email protected] or (515)223-8161; (800)659-6375 and we’ll see you there. Watch for future dates in your region of the state.

Common Grounds

Oct. 7 – Burlington4 – 6 p.m.Big Muddy’s Bar & Grill, 710 N. Front StAppetizers/cash bar

Nov. 13 - Windsor Heights (Des Moines)7:30 – 9 a.m.Hy-Vee, 7101 University AveCoffee and rolls


CPE SpotlightExempt Organizations Conference–Oct. 31Register today and join us at The Meadows Events Center in Altoona. This is THE conference for CPAs and others who work in or with nonprofit organiza-tions. Topics include:

• Tax update• University of Iowa Nonprofit Re-

source Center update• Accounting and auditing update• Strategies to help CPAs and fund-

raisers• Internal controls• Healthcare

Bank auditors–Learn from one of the bestAre you an experienced auditor who per-forms audits of financial institutions? Then plan to attend Audits of Banks and Other Financial Institutions, Oct. 17 in West Des Moines. Bruce Shepard, one of AICPA’s 2013 Outstanding Dis-cussion Leaders, will be the course pre-senter. Learn about regulatory issues,

credit losses, investments, hedging, income taxes and more.

Revenue recognition–will you be ready?Earlier this summer, FASB released the new revenue recognition standards, resulting in change for most companies. Even though the standard will take ef-fect for reporting periods beginning after Dec. 15, 2016, companies should be-come adept at the requirements much sooner in order to select the appropriate transition method. ISCPA has adjusted course offerings in several locations in order to provide valuable training on this topic. New and previously scheduled seminars on this topic include:

Interpreting the New Revenue Rec-ognition StandardsOct. 16 – Coralville

Revenue Recognition-Where Are We Headed?Oct. 27 – Sioux CityOct. 29 – West Des Moines

Upcoming Technology Seminars

Protecting Against Technology Based FraudsOct. 8 – Cedar Rapids

Advanced QuickBooks Tips and Techniques Oct. 20 – West Des Moines

Microsoft Access Fundamentals: Tables and QueriesOct. 20 – West Des Moines

Comparing and Contrasting Cloud-Based Solutions: Traditional vs Cloud Accounting and Reporting FunctionsOct. 21 – West Des Moines

QuickBooks for Accountants Oct. 22 – Cedar Rapids

Do you have a suggestion for course topics or instructors? Please send your ideas to Director of Education Kathy Nicholson at [email protected].

For more course listings, see the CPE calendar on the page 8.

Thank you to everyone who attended the Sept. 18-19 Eastern Iowa Fall Conference in Iowa City. A special thank you to these exhibitors for supporting the event and communicating their programs and services to our members.

2014-15 tax tune-upWhen it comes to tax laws and legisla-tion, you live in a world of keeping up with changes and delivering trusted expertise to your clients. Get tuned up and attend an upcoming class in your part of the state.

Get your tax questions answered (before tax season) by national experts Vern Hoven and Ron Roberson at the 2-Day Federal Tax Update for the Year 2014-15: Individual, Business

and Corporate, Nov. 17-18 in Cedar Rapids. You’ll get the practical, real-world solutions you need for successful financial planning and client-centered tax practices.

2014 Individual Income Tax WorkshopNov. 3 – West Des Moines

2014 Corporate/Business Income Tax WorkshopNov. 4 – West Des Moines

Obtain a real-world interpretation of recent federal tax changes, with practi-cal advice on how those developments affect clients’ business and personal in-come taxes at our Tax Advisors Update.

Nov. 10 – CoralvilleNov. 11 – West Des MoinesNov. 13 – Sioux Falls, SDDec. 1 – S. Sioux City, NEDec. 2 – Storm Lake


October1 Skills to Succeed 24/7: Strategies and Techniques for Successful Writing and Speaking (sssc) West Des Moines

1 The Auditors Dilemma: How to Effectively Implement Audit Standards on Smaller Audit Clients (adee)

West Des Moines

2 Professionals Issues Update (piu-sw) Carroll7 Controller or HR Director: Personnel and Regulatory Issues (pri-cr) Cedar Rapids8 Ethics for Financial Managers (efm-cr) Cedar Rapids8 Protecting Against Technology-Based Frauds (ptf-cr) Cedar Rapids9 Critical Skills for Budgeting Success (cscb4) West Des Moines9 Financial Forecasting: Planning for Success (ffmd4) West Des Moines9 How to Be an Effective Corporate Controller (ecc-cr) Cedar Rapids

10 Gaining and Sustaining a Competitive Advantage: Keys to Boost the Bottom Line (gsca-dm) West Des Moines13 Bank Financing and Financial Statement Analysis (bffs-dav) Davenport13 Fraud Alert! Prevention and Follow-up (fa) West Des Moines14 Create Reports that Matter: Turn Information into Action! (crm) West Des Moines14 Financial Statement and Cash Flow Forecasting Modeling (fscf-dav) Davenport

16 Determining How Much Money You Need to Retire, and Tax Ideas and Money Management in Retirement (drmm-sc)

South Sioux City

16 Fraud: Recent Findings, Red Flags and Corruption Schemes (frau4-ic) Coralville16 Interpreting the New Revenue Recognition Standard: What All CPAs Need to Know (inrr4-ic) Coralville16 The Complete Guide to Payroll Taxes and 1099 Issues (cgpt-ic) Coralville17 Audits of Banks and Other Financial Institutions (bank) West Des Moines

17 Shortcuts to Tax Cuts: Individual Tax, Social Security, and Retirement Planning Tools and Strategies (txcu-ic)

Coralville

17 Social Security, Medicare, and Prescription Drug Retirement Benefits: What Every Baby Boomer Needs to Know Now (ssrb-sc)

South Sioux City

20 2014 Accounting and Auditing Update for the Real World (aaurw-ic) Coralville20 Advanced QuickBook Tips and Techniques (adqb) West Des Moines20 Microsoft Access Fundamentals–Tables and Queries (msac) West Des Moines

21 Comparing and Contrasting Cloud-Based Solutions: Traditional vs. Cloud Accounting and Reporting Functions (tas)

West Des Moines

21 Gaining and Sustaining a Competitive Advantage: Keys to Boost the Bottom Line (gsca-cr) Cedar Rapids21 Partnership and LLC Taxation: Advanced Issues (ptai) West Des Moines22 Estate and Gift Taxation: Basic (egtb) West Des Moines22 Fraud in the M&A Environment Webinar (FREE for ISCPA Members) (fmaweb3) Webinar22 Mergers and Acquisitions: Tricks, Traps, and Terrors (mattt-cr) Cedar Rapids22 QuickBooks for Accountants (qba-cr) Cedar Rapids23 2014 Compilation and Review Update: Here Comes A Lot of Change (cruc) Johnston23 Applying OMB Circular A-133 to Not-for-Profit and Governmental Organizations (eoomb-sc) Sioux City23 HSAs, HRAs, and FSAs After the Patient Protection and Affordable Care Act (hsa-ic) Coralville24 Tax Exempt Organizations: Advanced Planning and Compliance for Tax Matters (teoa-ic) Coralville27 Cash and Tax Basis Accounting: A Practical Guide (2014) (ctba-sc) South Sioux City27 Revenue Recognition–Where Are We Headed? (rr4-sc) South Sioux City28 A Practical Ethics Update for CPAs: 2014 Edition (eug-per) Perry

CPE Calendar


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LEAP helps the hungry

On Aug. 27, volunteers from the LEAP Task Force donned hair nets and fighting hunger shirts

for the Meals from the Heartland An-nual Hunger Fight. 14,000 volunteers came to Hy-Vee Hall in Des Moines and packaged 4.3 million meals during the four day event. LEAP’s team helped package more than 6,000 meals for those in need. Way to go!

Meals from the Heartland is a nonprofit organization that provides packaged meals for delivery to starving people around the world, as well as right here in Central Iowa and the U.S. Since 2008, they have provided more than 38 million meals to the hungry in Iowa and around the world.

CPE Calendar Tailgate happy hourThank you to the members, guests and vendors who attended our Sept. 11 tailgate happy hour at Wellman’s Pub & Rooftop in West Des Moines, co-hosted by the LEAP Task Force and Membership Committee. Congratulations to our $25 gift card winners Nick Foster (McGowen, Hurst, Clark & Smith PC), Heidi Kleve (Wells Fargo), and Kelley Ellis (Drake University). Patrick Meyer (Iowa Coalition Against Sexual Assault) was the grand prize winner of two tickets to the Sept. 11 Iowa vs. Iowa State game. A special thank you to our sponsor Palmer Group.


Classifieds

For ad rates and deadlines, visit: www.iacpa.org/Resources/

ClassifiedAds/ad_rates.aspx.

IOWA PRACTICES FOR SALE: Waterloo Practice–gross $246K; SW IA Practice in County Seat Town–gross $570K; Central IA (near Des Moines) CPA Practice–gross $195K; Manchester CPA Practice–gross $550K; NE Iowa (Near Waterloo/Cedar Rapids) Tax & Acctng–gross $240K; Muscatine County EA Tax & Acctng Practice–gross $161K. For more information about these great list-ings or others in your area, call 1-800-397-0249. Also, view listing details and register for free email updates at www.AccountingPracticeSales.com. Thinking of Selling Your Practice? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buyers, both individuals and firms, looking for practices to purchase. We also have the experience needed to help you find the

right fit for your firm, negotiate the best price and terms and get the deal done. To find out more about our risk-free and confidential services, call Trent Holmes at 1-800-397-0249 or email [email protected].

CAREER OPPORTUNITY-SENIOR COR-PORATE INCOME TAX! Highly visible and strategic role with this growing central Iowa company. Apply your knowledge of corporate income tax with responsibility for tax reporting, planning, and compli-ance. Leverage your knowledge of ASC 740 and corporate income tax planning. BA/BS Accounting, CPA, and 3-6 years of related experience required. For confidential inquiry and consideration, contact Miles Morrow, CPC, Iowa Career Connection: 515-282-5823 or [email protected]. We are re-tained by our clients who pay all fees.

AUDIT PROFESSIONAL–Brooks Lodden PC, a large, established West Des Moines based CPA firm is seeking an au-dit professional with 3-6 years of experi-ence for our audit staff. We are looking for individuals with experience working with larger closely-held businesses and nonprofit organizations. CPA designation is required. Excellent compensation and benefit package available, along with advancement potential. Please email resumes to [email protected] or mail to 1441 29th, Ste. 305, West Des Moines, IA 50266, Attn: Recruiting Shareholder.

EXPERIENCED TAX PROFESSIONAL – DeWitt Bank Tax & Accounting Services, a division of DeWitt Bank and Trust Co, is seeking an experienced licensed tax professional to join our team. Position requirements: experience in complex business and personal income tax prep-aration, tax planning, research and con-sulting. Bookkeeping and compilation experience a plus. Qualified applicant should have experience in managing client relationships and new business development, with a strong desire to lead and mentor others. This position may require travel between our DeWitt and Wilton locations. The position also offers the possibility of flexible hours and work days. DeWitt Bank & Trust offers a competitive benefit package which includes medical, dental, vision, 401(k) plan, life insurance and long-term disability, as well as a generous vacation and holiday schedule. DeWitt, Iowa is lo-cated just 20 minutes north of the Quad Cities. Please submit resumes to Tim Gradert, Senior Accounting Manager, at [email protected].

CAREER OPPORTUNITY–Growing SW Iowa CPA firm in need of a CPA with 2-5 years’ experience in tax preparation with governmental in-charge auditing preferred. Immediate opening for quali-fied individual. Future ownership is pos-sible. Salary based on experience. Send cover letter with reference and resume to: [email protected].

Compliance urged for CPAs

Iowa CPA firms are encouraged to review their registration compliance procedures to ensure they are in

compliance with out-of-state registration requirements when performing attest engagements. The push for reviewing and meeting registration obligations stems from a Department of Labor initia-tive to ensure that CPA firms performing employee benefit plan (EBP) audits are in compliance with ERISA requirements for the auditor to be licensed.

To navigate state-by-state require-ments, go to www.cpamobility.org for information on registration requirements depending on the home state of the CPA firm and the state in which the attest service is to be performed for the client.

For additional information on licensing requirements, please contact the Iowa Accountancy Examining Board. For ad-ditional guidance or comments, contact ISCPA CEO Cindy Adams, (515) 223-8161, [email protected].


Classifieds Tangible Property RegulationsBy Ashley Sly and Nick Finkenauer, McGowen Hurst Clark & Smith PC

In September 2013, the IRS finalized the Tangible Property Regulations (TPRs), which are among the most

dramatic tax law changes in recent years and affect any taxpayer who owns a business, rental property or invest-ment property. This mandatory change is effective in 2014, and will necessi-tate a review of a taxpayer’s business and investment property depreciation schedules. At a minimum, the TPRs re-quire that taxpayers adopt new account-ing methods for the tax treatment of tangible property. These new account-ing procedures necessitate additional filings with the IRS to show compliance with the mandatory TPR methods.

The tangible property regulations are broken into several sections. Highlights include:

• The opportunity for taxpayers to review depreciation schedules, write off any items that may qualify under the regulations and make any error corrections or method changes.

• The de minimis safe-harbor capi-talization rules apply for taxpayers with a capitalization write-off policy in place at the beginning of 2014. The “safe harbor” allows taxpayers to expense, rather than capitalize, amounts paid for invoiced items that cost up to a specified amount

per item without being questioned by the IRS. The limit is $5,000 per item if the taxpayer has a capital-ization policy and issues audited financial statements, $500 if no audited financial statements but a policy is in place and $200 if there is no policy.

• The new regulations express the general rule that amounts paid to “improve” a unit of property must be capitalized. On the other hand, the regulations allow a current deduction for repairs and mainte-nance to property. The term “re-pairs and maintenance” is defined as expenses that are deductible if they otherwise are not required to be capitalized under the regula-tions. (See Q&A below.)

• Accounting guidance for “inciden-tal” and “non-incidental” material and supplies. “Incidental” items are allowed to be immediately written off, while “non-incidental” items are expensed in the year used, therefore requiring the items to be inventoried.

• A new rule clarifying when a taxpayer is allowed to write off removal costs related to a building disposition.

• A safe harbor rule for “qualifying small business taxpayers” (busi-nesses with gross receipts of

$10 million or less) to elect not to capitalize improvements or repairs on eligible building property up to a specified limitation amount.

The Tangible Property Regulations are expected to be a challenge for many CPA firms due to the complexity of the regulations, the initial challenge of filing Form 3115s, “scrubbing” depreciation schedules for 481(a) adjustments, and informing clients of the many changes.

Ashley Sly is a senior accountant and Nick Finkenauer is a tax man-

ager with McGowen Hurst Clark & Smith PC in West Des Moines.

Q: Should this repair be written off under the new TPRs?The rubber roof membrane on your company’s retail building begins to leak. A contractor is hired to strip the original membrane and replace it with a new rubber membrane comparable to the original.

A: Prior to the new regulations, this property would most likely have been capital-ized. However, the IRS states that the roof is a function of the building structure and although the membrane was replaced, it does not, by itself, comprise a significant portion of the roof, nor can it be considered a betterment since the replacement was comparable to the original. Therefore the membrane can be expensed.


IRS updatesBy Anna Dehrkoop, Taxation Committee

The Taxation Committee hosted Alan Gregerson, IRS senior stake-holder liaison and Kristy Maitre,

tax specialist with the Center for Agri-cultural Law and Taxation in September 2014, to review activities and updates at the IRS and discuss issues of mutual interest.

Direct deposit – Effective January 2015, the IRS will limit direct deposit transactions to a particular bank ac-count to three per year. After that, the transaction will be flipped to a paper check. The bank account must match the taxpayer’s name on the tax return for the direct deposit to be made.

Individual Taxpayer Identification Numbers (ITINs) – These will expire if not used in the previous five consecu-tive years. Previously, ITINs issued after Jan. 1, 2014, would have automatically expired after five years, even if used properly and regularly by taxpayers. Re-view IRS Release 2014-76 at http://goo.gl/sVP9rK for more information regard-ing this issue.

Circular 230 – Revised in June 2014 and released only in electronic format, which can be found at http://goo.gl/xY2EaX.

Identify Theft – The IRS is warning indi-viduals and businesses to be diligent re-

garding this issue. Business identity theft has become a major area of concern for the IRS. Employer Identification Numbers (EINs) are being stolen, and fraudulent W-2s and 1099s are being prepared and submitted to the IRS. Thieves are then filing fraudulent income tax returns to collect refunds. As a reminder, the IRS never emails information and will never call to request information. The IRS only corresponds via U.S. mail. Deceased individuals are becoming more frequent victims of identity theft. When a client dies, tax preparers should contact the client’s relatives and obtain a death certificate. To help prevent identity theft, send the death certificate to the IRS at the Austin campus to allow them to update their records.

Severance pay – In March, the U.S. Supreme Court in United States v. Quality Stores, Inc. held that severance payments are “wages” subject to Fed-eral Insurance Contributions Act (FICA) taxes. Alan indicated that severance pay is now subject to social security, FICA, and federal unemployment (FUTA).

Affordable Care Act (ACA) – The ACA is a huge issue for the 2015 tax season. Preparer’s will need to be prepared to answer the following questions regard-ing ACA:

• Do penalties apply?

• Is the client eligible for an exemp-tion?

• Was an exemption granted by the Healthcare.gov marketplace?

• Was health insurance available for all members of the family for 2014?

• How many months was health insurance available?

• If there was an interruption in cov-erage, what was the reason?

• Was any Form 1095 received by the client?

The ACA also prompts concerns about due diligence. Preparers are required to determine affordability, whether an exemption applies or a penalty needs to be assessed, if your client does not have health insurance. Failure to care-fully consider the aforementioned could lead to issues relating to sections 10.22 Diligence to Accuracy and 10.37 Written Advice.

Finally, expect tax filing to be delayed again this year. Many extenders expired at the end of 2013, and if Congress de-cides to reinstate the extenders for 2014 in a lame duck session, the IRS will have to reprogram their systems to comply.

Anna Dehrkoop is a financial analyst with Mechdyne Corporation in Marshall-town.

Send us your CPA memorabilia for ISCPA’s 100th anniversary

Do you have old ISCPA photos or photos from your firm or business from 1915 to today? Photos of old office equipment or print publications from the past? How about fashion faux pas photos of Iowa CPAs with big hair,

platform shoes or bad ties? Please share them for our 100th anniversary edition of Iowa CPA (April 2015) and our “100 Wall” at the May 7-8, 2015, ISCPA 100th Anniversary Celebration.

Send your photos to: ISCPA, 950 Office Park Rd, Ste 300, West Des Moines, IA 50265. Include a note and mailing address if you would like your materials returned.


A message from your boardThe ISCPA Board of Directors met Sept. 19, 2014, at the ISCPA office in West Des Moines. The board:

• Approved minutes of the April 17, 2014, board and May 9 and July 29, 2014, Executive Committee meetings.

• Approved memorial resolutions for Lowell A. Swarthout, Brant W. Bruhn, H. Daverne Witt, Marvin Malmin, Stephen C. Conner, Glenn D. Atkinson, Ben D. Givens and Michael A. Scheuermann.

• Appointed K. Dwayne Vande Krol as secretary of the board with the term expiring April 30, 2015.

• Reviewed financial statements for the four months ended Aug. 31, 2014.

• Received a report from Bob Snod-grass, chair of the Iowa Accoun-tancy Examining Board.

• Reviewed written reports submit-ted by committee chairs.

• Received an update on the 2014 Nominating Committee.

• Received a report from ISCPA’s investment manager Miles Capital Holding, Inc.

• Received a report on the spring 2014 meeting of the AICPA Council from Steve Marlow.

• Approved an agenda and legislative retainer for the 2015 legislative session.

• Received a staff stewardship report summarizing activities of the staff since the previous meeting.

• Approved renewal of officers and directors liability coverage for cal-endar year 2015.

• Reviewed approved proposal from Illinois CPA Society for outsourcing ISCPA peer review program effec-tive Jan. 1, 2015.

• Approved investment proposal for new ISCPA website.

• Approved bylaw amendment to Section 3.9.

• Reviewed completed Form 990 for the year ended April 30, 2014.

• Established May 8, 2015, as the date of the next annual meeting.

• Scheduled a meeting for Dec. 4, 2014.

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Visit thesilverlining.com for the name of the one nearest you.

Perspectives from recently certified Iowa CPAsContinued from page 1

an indicator for future questions. I don’t want to waste a lot of time on a question that doesn’t even count toward my score.

• More detail on the statistics if the test was failed, and feedback if there is a particular area that needs improvement.

Benjamin D. Hansen, tax advisorGross & Company, DunlapCertified 2011

• There should be additional focus on the finance aspect of accounting: rates of return, understanding the net present value of a single sum, and a discounted cash flow stream. We are able to handle the accounting aspect of a transac-tion, but our clients really want to know what their options are from an investment prospective and what the transaction is really costing them.

• Writing skills should be tested in more areas. The ability to convey a message in writing is so impor-tant, especially with email. If we can’t communicate effectively with our clients, it’s very difficult to get their approval for services we provide.

• I would lean toward a two-part writing assignment. One address-es the technical aspects of either a tax position or an accounting research issue, and the other communicates these findings to the client or manager.

• Financial statement analysis and trending analysis can never be over tested. It’s a skill people need to have and will rely on daily as a CPA.

• Initially, the cost of the exam is probably a concern for candidates.

• A clear understanding of Excel is essential for new CPAs.


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The future of peer review in Iowa

For over 25 years, ISCPA has admin-istered the peer review program for Iowa CPA firms. For the past

year, ISCPA Board of Directors, staff and Peer Review Committee participated in extensive discussions about the admin-istration process, measured the com-mitment of staff resources to administer the program, and evaluated the future complexity of practice monitoring.

The board determined that the best interest of ISCPA and its members is to outsource the administration of the pro-gram. This will allow ISCPA staff to focus on strategic objectives identified by the board that will benefit our members, now and in the future.

After careful examination of several state CPA societies that administer the AICPA Peer Review Program, the Illinois CPA Society has been selected to administer the peer review program

for Iowa firms. They have dedicated, experienced full-time staff who will offer the kind of assistance to Iowa firms that you have come to expect.

What does this mean for Iowa firms?The transition will be effective Jan. 1, 2015. Firms will continue to select their team captain from qualified Iowa re-viewers, just as they have always done. Iowa firms will work with the Illinois CPA Society staff in all aspects of their review, from scheduling through accep-tance, including payment of fees. Some members of the ISCPA Peer Review Committee may serve on the Illinois CPA Society Peer Review Committee if they so choose.

During the transition, if a firm’s field work commences prior to Jan. 1, 2015,

Iowa will administer that firm’s peer review through acceptance and comple-tion, including any monitoring action (if applicable). If a firm’s due date is on or after Jan. 1, 2015, and the review has not commenced, the Illinois CPA Society will administer the review through ac-ceptance and completion, even if it was originally scheduled through ISCPA. Firms with due dates in 2015 will re-ceive further communications to clarify the transition timing for their particular situation.

We are pleased to partner with the Illinois CPA Society in administering this important program, and will work closely together to ensure a smooth transition for all of our firms. If you have any ques-tions, please contact Judy Chaplin at [email protected], (515)223-8161 or (800)659-6375.

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