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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 ].
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