A message from Arleen R. Thomas, senior vice president of management accounting | Decision on private-company reporting could come in May | AICPA panel seeks further revenue-proposal work from FASB, IASB
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March 21, 2012
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Letter from Arleen R. Thomas, CPA, CGMA
A message from Arleen R. Thomas, senior vice president of management accounting
Source: AICPA
Source: AICPA
Like many CPAs, among my top-five professional moments is the day I learned I passed the Uniform CPA Examination. Also in my top five? The day I hung my CPA certificate on my office wall. At the time, as a firm auditor at Peat Marwick Mitchell (KPMG), the CPA signified my arrival into a profession in which strict ethical standards; fast, intelligent thinking; and accounting and auditing mastery were revered and rewarded.

My CPA is at the core of my career. It has allowed me to migrate from public accounting to not-for-profit management and given me the skills and acumen on which I rely to help the AICPA set corporate strategy, communicate its value across all business units and ensure we best meet the needs of our members.

Now, with the creation of the Chartered Global Management Accountant, a designation released by the AICPA and the U.K.'s Chartered Institute of Management Accountants, I can shine a spotlight on my management-accounting expertise. The skills that I honed at KPMG were my ticket to moving into management accounting. That transition was a time of gradually relying less on my accounting and auditing skills, enthusiastically taking on responsibilities and ultimately rising to business-unit vice president. Getting out of my comfort zone and learning skills outside of Financial Accounting Standards Board standards was that first step. The CPA, CGMA recognizes my original technical skills and my current accountability using information to solve big-picture challenges.

I'm proud to be a CGMA, and if you're a CPA working in business, industry and government, the CGMA is your opportunity to show the world how much you do in the broader dimension of strategy, organizational development and success, risk management, and human capital. I hope you'll try on your CGMA letters, wear them with pride and show the world what you're made of. You'll also get access to valuable articles and spotlights on how management accounting is influencing business, through CGMA Magazine. Take advantage of the free trial offer and confirm your CGMA designation.
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Accounting and Reporting Update
Decision on private-company reporting could come in May
Financial Accounting Standards Board Chairwoman Leslie Seidman said trustees of FASB's parent organization, the Financial Accounting Foundation, hope to vote on a final structure for private-company financial reporting at their meeting May 22 and 23. Journal of Accountancy online (3/12)
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AICPA panel seeks further revenue-proposal work from FASB, IASB
The AICPA's Financial Reporting Executive Committee sent a letter to the Financial Accounting Standards Board and the International Accounting Standards Board saying further consideration and deliberation are needed on a joint proposal on revenue from contracts with customers. The AICPA's expert panels on health care and investment companies also offered observations related to questions about the revenue-recognition proposal that have arisen in their industries. Journal of Accountancy online (3/13)
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Emerging Trends
7 factors that put your company at risk of disaster
London's Cass Business School studied nearly 20 examples of business disaster to identify common causes of corporate breakdown. The school found seven risk factors among companies including BP, Arthur Andersen and American International Group. The No. 1 factor is a weak board of directors that doesn't police senior executives effectively. CGMA Magazine online (1/31)
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4 ways Coke is shrinking its water footprint
Coca-Cola is using a four-pronged strategy to reduce water consumption, according to a company-produced report from 2011. The soda giant pledges to reduce its water-use ratio by 20%, recycle all water used at manufacturing facilities and replenish water to an extent equivalent to its global output volume. "Because responsible water management is at the heart of a sustainable future, overcoming today's water challenges calls for extraordinary action," Chief Sustainability Officer Bea Perez wrote. TriplePundit.com (2/14)
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Expert: Smart philanthropy multiplies
Many donors have become more active in seeking effective charities and driving those charities' agendas, but "they're squandering the real and massive potential of their capital," writes nonprofit innovation expert Dan Pallotta. Philanthropists who invest in fundraising multiply their donations many times over, but many prohibit their donations from being used to raise more funds, he writes. Harvard Business Review online/HBR Blog Network (2/17)
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Labor costs cause foreign firms to rethink Chinese supply chain
Rising labor costs in China are making it harder for foreign companies to do business cheaply there. The trend has forced some companies to rethink the location of their manufacturing operations. Many are looking for less-expensive alternatives in other countries or in China's less-developed inland. The Economist (free content) (3/10)
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How to prepare your company to weather a disaster
Finance chiefs are spearheading the development of continuity plans to ensure their companies can continue to operate during an emergency. Some common strategies include bolstering supply chains, migrating to virtualized computer systems and tapping into social media to coordinate disaster-response efforts. More companies also report developing organizationwide "business resilience" plans in case of major disasters. Learn more about business-continuity management and enterprise risk management in the Business, Industry & Government interest area. CFO Magazine (3/2012)
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Other News
Tax Corner
KPMG: Cloud computing raises novel tax issues for businesses
Moving to the cloud can have important and unexpected tax consequences for companies, according to a paper from KPMG. "With cloud transactions, determining what is actually being traded, between whom and where is becoming a real challenge," partner Mike Camburn said. The issue can have special considerations for global companies that need to decide where value is being created and which jurisdiction controls it for tax purposes. AccountingWEB (3/8)
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IRS issues guidance on repair regulations
The Internal Revenue Service issued two revenue procedures detailing steps taxpayers must take to change their method of accounting to conform to December's temporary regulations on repair and maintenance costs and other expenses related to tangible property. The guidance provides procedures for obtaining the IRS' automatic consent to various accounting-method changes to conform to the regulations. An AICPA tax task force is evaluating these rules to determine their impact and what further guidance or changes might be needed. See the AICPA's Tax interest area for more information. Journal of Accountancy online (3/8)
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Other News
Leadership Lessons and Tips
COSO explores 6 judgment traps and how to avoid them
Failing to consider opposing points of view and improperly defining problems are two key traps that lead to poor business judgment, according to a white paper by the Committee of Sponsoring Organizations of the Treadway Commission. The paper defines six traps and offers advice on how to avoid them. It also outlines a five-step process for decision making. CGMA Magazine (3/2012)
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What does strategy mean to you?
Executives often have a hard time defining "strategy." Strategy is distinct from other business concepts such as mission, values or goals, according to this article. "It is the result of choices executives make, on where to play and how to win, to maximize long-term value." Truly strategic executives never stop looking for ways to create long-term value for their companies. Strategy+Business online (free registration) (3/5)
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Other News
Tech Topics
2012 top technology priorities for business and industry
"Securing IT environment" is a top technology priority as reported by CPAs in business and industry, according to the AICPA's 2012 Top Technology Initiatives survey. More than 60% of respondents are confident about their firm's information technology security. However, only one-third said employees could tap into fresh technology to improve performance. Journal of Accountancy online (3/14)
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BIG News and Events
Apply to be AICPA volunteer: Applications are accepted until May 15
If you are interested in contributing to the profession and networking with your peers, consider applying for the Business and Industry Executive Committee or the Government Performance and Accountability Committee. The application is brief and involves a simple point-and-click process. Applications are being accepted for the next volunteer year, which runs from October 2012 to October 2013. If you have questions regarding the application process, or volunteerism in general at the AICPA, e-mail volunteerservices@aicpa.org.
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Applications for 2012 AICPA Leadership Academy are due May 15
The 2012 AICPA Leadership Academy will let a select group participate in a program that exposes them to a strong ethic of leadership and service, while providing them with a foundational set of tools and relationships that will help them expand their leadership competency and empower them to become leaders within their organizations, their communities and the CPA profession. Apply online or nominate a promising colleague before May 15, and help shape the future of the CPA profession.
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OMB issues advance notice of proposed changes to Circular A-133 and cost principles
As further described in GAQC Alert No. 189, on Feb. 28, the Office of Management and Budget issued for comment Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements (Including Single Audit Act), which describes reform ideas for audits of federal funds, also referred to as single audits. Comments are due to the OMB by March 29. See the AICPA's Governmental Audit Quality Center website for more information.
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Yellow Book independence practice aid is issued
As further described in GAQC Alert No. 188, the AICPA's Governmental Audit Quality Center released a practice aid, 2011 Yellow Book Independence -- Non Audit Services Documentation Practice Aid. The aid includes a step-by-step template that walks auditors through the independence thought process and includes detailed appendices that include real-life examples of actual non-audit service scenarios. AICPA members may download a flat PDF of this practice aid for free. A version of the aid that can be prepared and saved as audit documentation is available for purchase. See the AICPA's GAQC website for more information.
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Save the date for these conferences!
Strengthening Your Enterprise's Risk Oversight for Strategic Benefit
March 29 and 30 in New York City

AICPA Small Business Practitioners Tax Conference co-located with the NEW AICPA Conference on Tax Controversy
May 2 to 4 in Las Vegas

AICPA CFO Conference
May 17 and 18 in New Orleans

AICPA Controllers Workshop
May 17 and 18 in Las Vegas

AICPA International Business Conference
June 11 and 12 in Washington, D.C.

AICPA Not-For-Profit Industry Conference
June 21 and 22 in Washington, D.C.

AICPA National Governmental Accounting and Auditing Update Conference EAST
Aug. 20 and 21 in Washington, D.C.

See all conferences!
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Life is ours to be spent, not to be saved.
D.H. Lawrence,
British writer
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About the AICPA
The American Institute of CPAs is the world’s largest member association representing the accounting profession, with more than 400,000 members in 128 countries, and a history of serving the public interest since 1877. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations and federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. Through a joint venture with the Chartered Institute of Management Accountants, it has established the Chartered Global Management Accountant designation, which sets a new standard for global recognition of management accounting.
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