Conferences - ND CPA Society

March 2016 | Volume XXVIII | No. 2
How Internal Audit Can Assess and Support Culture
There is growing consensus that weaknesses in corporate culture have been a
significant factor in a range of corporate
and institutional scandals, so it is not
surprising that culture has come under
increasing scrutiny. Regulators have
treated it as a high priority, and boards
are increasingly keen to embed a sound
corporate culture in their organization.
It is clear that the issue poses a significant risk that cannot be ignored simply
because it is difficult to measure, said
Peter Montagnon, author of a new report
on the subject.
Based on interviews with audit committee chairs, heads of internal audit, and
heads of ethics and compliance departments, the Institute of Business Ethics
briefing looks into what internal auditors
can do to evaluate whether an organization’s culture meets its stated ethical
standards. The briefing suggests that the
function can play a central role in identifying weaknesses of corporate culture
and where hidden risks lie.
Given that the department’s work
involves observing and reporting on
behavior, internal auditors are also
well-placed to join the dots to identify
the root cause of any problems. Through
its work on assurance, internal audit can
help evaluate the health of the company
culture and provide a key line of defense
against risks.
internal auditors and boards, and often a
pointer to where hidden risks lie.
Recommendations
“The task for them is not so much to grade
the overall culture, but more to identify
the particular parts of the organization
where the culture is weak, whether because
divisional management is poor or, perhaps,
because an acquisition has not been very
well-integrated.
There was a consensus amongst the
practitioners interviewed that there is
more mileage to be had in looking at the
cultural aspects of what is being audited
than in separating out culture itself.
“Even if it cannot be measured precisely,” the report said, “it pays to look at the
way culture within the firm affects the
things that are being measured.”
The report outlines some of the indicators that can be used. The objectives that
are set and how they are communicated
throughout the business unit are a critical indicator of culture, as is the way
people respond to basic frameworks.
Indicators of a flawed culture include the
failure of employees to complete relevant
training, or late or grudging reporting of
information.
“Late reporting of a control failure or
a hostile response to a critical internal
audit report doesn’t say anything immediately obvious about ethics, but it does
indicate a state of mind which will readily sweep unpalatable things under the
carpet,” Montagnon said at the London
launch of the report. “And even this is
therefore a good indicator of culture for
In this issue:
1
•Presidents Message 2
•New Members 3
•Foundation Supporters 3
•Member News 3
•Member Profiles 4
by Samantha White
•YP Article 5
•Exec Director Column 6
•Upcoming CPE 8
•BOD Scholarship Recipients 10
•Tax Commissioner 11
continued on page 14
Management Conference
May 23-24, 2016
Fargo Holiday Inn
Variety Pack
June 28-29, 2016
Bismarck Ramkota
annual cpa Convention
September 25-27, 2016
Bismarck Ramkota
Technology conference
Nov. 7-8, 2016
Fargo Ramada Plaza Suites
2016
Conferences
•Classifieds 12
•Exam Passers 14
•Ethics Corner 14
•News from the IRS 15
ndcpas.org
March 2016
In Remembrance
PRESIDENTS Message
Tracee Buethner, CPA
Stan Sandvik is the reason I am back in North Dakota
working in public accounting. He is likely the reason I
even considered studying accounting at MSUM, as my
memories of Stan go back a long way. My grandparents
were his first clients when he left Broeker Hendrickson to
start his own firm. Stan loved to talk about how meticulous my Grandma kept the books of my Grandpa’s business. Eventually my parents quit agonizing for hours on
their own return and my Mom packed up the records in
a box and took them in to Stan. I still have memories of
hearing my Dad say “call Stan” or “take it in to Stan.” My family respected Stan
as a trusted advisor and my grandmother considered him a good friend.
The word “mentor” can have different meanings. Whether it is a wise or trusted
counselor or an influential supporter, Stan was a mentor to many. One CPA in
rural ND indicated that “Stan really taught me what it means to be a CPA.” He
was “The Champion” on giving back to the profession and community and he led
by example. Besides being the past President of the Society (1984), he served
for over 29 years on the ND Peer Review and Quality Control Committees and
was a past member of the AICPA Peer Review Board. He was an AICPA council
representative who always loved to stand up at the FMCPA meetings to give an
update on one issue or another. In 1999, the Society recognized Stan with the
Public Service award and then in 2004, Stan was recognized by being named the
Outstanding Volunteer.
Stan Sandvik
July 31, 1944 – January 28, 2016
Partner with Widmer Roel PC,
Past President of NDCPAS,
Respected colleague and
dear friend to many.
You will be missed.
When I moved back to North Dakota, it seemed like everyone I met knew Stan
and there was a reason for that. With the exception of two years, he attended
every single convention back to at least 1990. He could sit next to someone he
didn’t know and before you knew it, he was engaging that person in conversation
and could remember everything they talked about. Stan treated everyone the
same, whether it was a new associate or seasoned partner in a large firm.
Stan’s love of being a CPA was embodied by his spirit and the way he went about
the day. Recently, when one of our associates passed the exam, it was hard to
tell who was more excited, Stan or the associate. At the banquet that year, Stan
wanted to hoot and holler when she was called up to receive her certificate and
celebrate that she was a CPA! He felt the new CPAs should be celebrated and
why not clap and make some noise to acknowledge the accomplishment?
Approximately 12 years ago, we were in the process of packing up our office to
move to a new building and Stan asked me to come up to his office. With great
fanfare he pulled out a card that he wanted me to read. It was a thank you card I
sent him when I was a student at MSUM. Stan had taken the time to meet with
me while I was a student and he saved my card for all of those years. Even today,
I am amazed he kept the card.
Reflecting back has made me realize how much Stan directly or indirectly has
been a part of my career choices. When I was young, I observed the total respect
my parents and grandparents had of Stan. He was an influence while I was in
college. When I became a partner at Widmer Roel, he was always there to listen.
Stan’s words of wisdom, advice and friendship will continue to influence my
choices into the future. We never know who is going to be that primary mentor in our lives and I was fortunate to have Stan Sandvik as mine even if I didn’t
know it at the time. What I do know is that Stan has made me a better CPA and a
better person. Thank you Stan.
2
ndcpas.org
Welcome
Thanks for your Support
NEW members
ND CPA Society Foundation
Amanda Bieber, Williston
Trevor Ferguson, Grand Forks
Jacob Fisher, Grand Forks
Cole Genetzky, Grand Forks
Rebecca Hackenmueller, Albertville
Brandon Hayes, Fargo
Courtney Holub, Warren
Elizabeth Kinzer, Fargo
Shantel Kramer, Glen Ullin
Robyn Lee, Edinburg
Tracy McBride, Bismarck
Ryan Ottis, Fargo
Kyle Palczewski, Mandan
Adam Regnier, Fargo
Allison Roper, Dickinson
Sierra Serhienko, Bottineau
John Storebo, Grand Forks
Jed Swenson, Fargo
Oakley Thoeny, Dickinson
Allison Walker, Grand Forks
Jonathan Wilma, Bismarck
Gregory Zebro, Grand Forks
Your support of the North Dakota CPA Foundation helps aspiring CPAs
realize their dreams. The following have made an investment in the future
of professional accounting of $50 or more in 2015.
Member News
Widmer Roel
Hires Ragan
as Senior Staff
Accountant
Karina Ragan, CPA,
has joined the tax
department of Widmer Roel, a public accounting and
business advisory firm with offices in
Fargo, Bismarck and Hazen. Ragan
has 3 years of experience providing
tax and consulting services. Prior to
joining Widmer Roel Ragan worked
in a public accounting firm in Great
Falls, MT. She has a bachelor’s degree from NDSU.
Barb Aasen
Laura Adair
Donna Altepeter
Darlys Anderson
Mike Astrup
Kevin Austin
Kate Baron
Scott Berge
Jackie Bergeron
Vince Brekken
Steve Britsch
Tracee Buethner
Kate Campbell
Terri Clark
Terry Delaney
Janessa Delvo
Scott Dennison
Robert Dosch
Dee Ann Ellingson
Sheri Erickson
Vicky Federeer
Jessamy Fornshell
Tammy Gerszewski
Mark Giddings
David Glennon
Vicki Greshik
Ed Grunett
Kevin Hay
Randy Heller
George & Rachel
Hellyer
Pete Hoistad
Mark Holm
Tonya Holmstrom
D Hoverson
Yvonne Hoyt Opoien
Jenni Huotari
Ramona Johnson
Steven Johnson
Len Jones
Maggie Jorgenson
Sheldon Kauk
Patrick Kautzman
Corry Kenner
Dianna Kindseth
Katie Knodel
Joe Kovar
Deb Kraft
Janet Kubisiak
Drew LeClair
Tim LeClair
Heidi Lee
Rick Lee
Jerry Lervik
Tahnee Magnus
Mark Martens
Charmaine McKenzie
Erin Meiers
Faye Miller
Mark Miller
John Mongeon
Dan Monson
Janelle Mulroy
Evelyn Nagel
Greg Nathan
Nikki Nelson
Jerry Nuss
SuAnn Olson
Mike Parke
Donna Remer
Mary Jo Richard
Kevin Ritter
Lyndsey Roemmich
Stan Sandvik
Nikki Schmaltz
Mike Schmitz
Marci Schorsch
Michelle Schumacher
Clarence Sitter
Arvy Smith
Bethany Stockdill
Scott Swanholm
Bob Thibedeau
Kris Thiel
Jody Tibert
Jerry Topp
Tom Tweten
Steve Ulven
Bill Weispfenning
Brian Whalen
Tim Whalen
Harold Wilde
James Wosepka
Thanks to the Following Businesses for Donating Prizes for the
Convention and Management Conference Fund Raisers
Alerus Financial
Bell State Bank
Beverage Wholesalers
Brady Martz & Assoc.
Mary Aldrich
Darlys Anderson
David Rendall
Holiday Inn Fargo
Microsoft
Theodore Roosevelt
Medora Foundation (2)
Wells Fargo
Widmer Roel PC
Spring YP Event
Young Professionals -- mark your
calendars for the spring event. Watch
your email for more details.
April 27
8:00 - 3:00
Bismarck Chamber of Commerce
COLLEAGUES YOU CAN COUNT ON
Schedule:
8:00 - 8:45 am – Breakfast Social
9:00 - 10:30 am – CPE Session
10:45 am - 12:15 pm – CPE Session
12:15 - 1:00 pm – Lunch
1:00 - 2:15 pm – CPE Session
2:30 - 3:00 pm – Round Table
Cost: $50 ($10 for Students)
3
NDCPAS
Member Profiles
Michele Sorenson, CPA
Industry profile
Position: Sr. Loan Officer
Company Name and Location: AgCountry Farm Credit Services – Grand Forks
Job Responsibilities: Provide counsel and solutions to AgCountry customers, by fully understanding
the needs and goals of each customer. Maintain a high level of knowledge of all facets of the agriculture
industry. Manage the AgCountry value proposition and business relationship at the individual customer level on a $45 million loan portfolio. Administer credit. Implement established credit disciplines,
processes and policies through delegated loan decisions, loan servicing, and analysis of loans. Develop
and execute business and sales plans for assigned portfolio/territory. Maintain documented relationship
plans for all key customers and prospects and attain business goals through sales execution. Use a high
level of industry knowledge to establish networking relationships with influencers or enterprise leaders.
Serve as a mentor to other loan officers, credit analysts, loan specialists and financial service specialists.
Company Biography: AgCountry Farm Credit Services is an agricultural lender headquartered in
Fargo, ND, and has managed and purchased assets in excess of 5 billion. AgCountry services 42 ND/MN
counties with 26 branches. Our mission is to provide agriculture financial expertise to help our customers
succeed. The Farm Credit System is a nationwide system of cooperatively owned banks and associations
established by Congress to meet the credit needs of American agriculture and provides more than $217
billion in loans, leases and related services to farmers, ranchers and agribusinesses. Farm Credit is composed of local lenders that serve every county in the U.S. and Puerto Rico and is celebrating their 100th
year anniversary in 2016.
Employment Background: AgCountry 20 years. Prior to AgCountry I worked in public accounting.
Professional Activities: GF Chamber member, Board member of Grand Forks Republican Women,
MN CPA Society Leadership Chamber
Birthplace: Bismarck, ND
Degree: Moorhead State University - B.S. Accounting
Hobbies/Pastimes: Travel, Volunteer for Stephens Ministry, Hospice and Hope Evangelical Care Team
Something most people don’t know about me: In January 2015, I sang in the American Choir at
NYC Carnegie Hall with Casting Crowns
Megan Pederson, CPA
Young Professional profile
Current Position: Accounting Specialist at Harlow’s Bus Service
Where did you grow up? Bowman, ND
First job ever: Honey extractor at a bee farm.
How did you decide to be an accountant? I took my first accounting class as a business elective and
really enjoyed it. Also, I was a junior and needed to decide on a major.
Alma Mater/Degree: University of North Dakota, Bachelor of Science in Accounting
What did you do to celebrate passing the exam? Took a 3 day nap.
4
ndcpas.org
Young Professional Group
top 7 issues facing Young CPAs
Tom is CEO and executive director of the Maryland Association
of CPAs and the Business Learning Institute.
1. Information Overload
First on the list is information overload, including accounting and
tax complexity issues. Tom refers to this as “filter failure.”
“There is so much noise out there, so much content, and so many
things we feel compelled to stay on top of,” he says. “To better
manage the feeling of information overload and to turn it into an
opportunity, be strategic about what you listen to.”
You might need to develop a better filter. Here are 3 examples:
Filter by topic. In other words, specialize. Think about developing expertise in a specific area, so choose to pay attention only to
items that pertain. Filter by source. Find trusted sources and
stick with those. Collaborate. Use social media to reach out to
others to get thoughts and advice when you have questions.
2. Work/Life Balance
Tom’s experience working with young CPAs indicates that they
feel there is no work/life balance. “Smart phones and laptops
mean we are always available, 24-7, and our companies and clients
frequently expect an immediate response,” he says. “The secret
to solving the work/life balance is to know yourself and to create
a work/life integration you can live with.” For some, this means
turning the phone off at a specific time each night; for others it
means better boundaries between professional & personal life.
3. Generational Issues and Communications
Tom has done quite a bit of work around generational issues in
the workplace and has discovered these issues just aren’t going away. “Management, mostly made up of baby boomers who
complain about the millennial employees, who then complain
about the baby boomers; on the other hand, GenXers complain
in every direction! The issue is that none of these audiences are
in the same room talking to one another. The answer to working
together is communications and collaboration.” Each generation
has its own set of beliefs. “With four generations working side by
side, there are a lot of conflicts,” says Tom. “Each of these generations were influenced by various events that impacted who they
are and how they work. There is no right or wrong. We just need
to work together and understand what motivates each group to
move forward. The opportunity in this is to tap the hearts, smarts,
and ingenuity of all of your people to work together toward your
common goals. ”
4. Developing Networking Skills
The old adage “It’s not what you know but who you know” is true,
especially when you are trying to grow your clients or build your
career. Whether using social media or the traditional handshake,
COLLEAGUES YOU CAN COUNT ON
by Tom Hood, CPA.CITP, CGMA
developing networking skills is a key strategy for all young CPAs
hoping to get ahead. Tom suggests making use of local CPA chapters and AICPA social media to build that network.
5. Keeping Up With Technology
Everyone needs a strategy to keep up with technology, but young
CPAs, in particular, need to understand how technology helps
them work better, smarter, and more accurately, and how to use
technology to collaborate with colleagues and clients. According to
Tom, it is especially important to understand how technology can
impact your job. “MIT research shows that new technology can
make some jobs obsolete. For example, the Chicago Sun-Times
eliminated all of their photographers, replacing them with reporters using iPhones as cameras. Young CPAs need to be vigilant to
understand the impact new technologies have on their companies,
their clients, and their career.”
6. Finding Career Guidance
“The key to gaining more responsibility and respect—and rising
in the ranks of an organization—is having the requisite technical
proficiency combined with leadership proficiency,” says Tom.
This means having not only accounting skills, but the ability to
think strategically, collaborate with others, synthesize ideas, and
communicate those ideas.
7. Understanding Social Media Benefits
Social media really combines all of the top issues facing young
CPAs, especially generational issues and communications. Although Tom says the leadership of many organizations see social
media as a waste of time that distracts employees from their workload, research by the Harvard Business Review and a study by
MIT Sloan and Deloitte found social media is a tool for collaboration, innovation, operations, and leadership. “In fact, the Harvard
Business review quotes analysis by McKinsey Global Institute that
found social media has a potential impact of increasing knowledge
worker productivity by 25%. That’s a total economic impact of
$900 billion to $1.3 trillion annually in the consumer packaged
goods, consumer finance, professional services, and advanced
manufacturing sectors.”
“Young CPAs should stay on top of social media by being active in
it and learning to use it in a way that impacts their career, as well
the ability to do their jobs,” he says.
The Crux of It
“In a period of rapid change and increasing complexity, the winners are going to be the people who can learn faster than the rate
of change and faster than their competition. Hopefully, these 7
areas give you a place to start.”
©2013, AICPA. All rights reserved. Reprinted by permission.
5
Inspection Time
Review of CPE and Other Rules
Jim Abbott, Executive Director
701
Once in a while, the North Dakota accounting regulations get an update, and it's that time now. The full set of
regulations will be reviewed by a 3-part workgroup -- with
members of the Accountancy Board, CPA Society, and
Society of Accountants.
Nationally, the CPE climate is changing. A notable change
is the concept of “nano learning,” 10 minute segments of
learning activity. This would allow smaller units of education, such as a “just in time” session to address an immediate issue that arises. The CPE committee did not choose to
pursue this nano change. Other possible changes in the national standards relate
to such areas as independent study, engaging learners, and characteristics of nano
instructional materials.
The CPA Society recently approached the State Board about 3 changes: adding
ethics content within the regular CPE levels, and a change to make it easier for
non-public CPAs to resume holding out (similar to an existing option for public
practice CPAs). These two changes, and removing an outdated paragraph, were
addressed at the February State Board meeting. The discussion included how to
implement the ethics item, and it was decided to have the 3-party team, two from
each group, look over all the rules.
The CPA society is an advocate for its members, and will actively participate in the
review process. If you'd like to be involved, it is open to the public. That includes
access to the meetings and their results, as the process goes along. If you would
like to receive meeting notices, agendas and notes, simply send a note to the office, and we'll make that happen.
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Preseason Pricing
Register by May 15 and Save
Preseason pricing
Map out your CPE early and reap the benefits. Not only will you avoid missing the
classes you want but you will save money! If plans change, you can switch your selection or get a refund. Simply register for any eligible course* by May 15 and save $20
on 8 hour classes and conferences, and $10 on 4 hour sessions.
*Excludes the Management Conference, Tax Practitioner Institutes, YP Events and Web programs
Cancellations: In the event you are unable to attend a class, let us know at least 14 days in
advance and you can switch to another 2016 program or we will refund your money. Any
cancellations received after the 14 day notice period will require a $30 administrative fee.
You can also transfer your registration to another participant. Additional fees will be required if a member transfers to a nonmember.
COLLEAGUES YOU CAN COUNT ON
7
Bismarck Ramkota
Summer CPE Variety Pack
For pricing and registration, please visit our website at www.ndcpas.org/cpe
June 28 - 8:00 am - 11:30 am
June 28 - 8:00 am - 11:30 am
Instructor: Gregory Clark
This course provides you with an overview, update, and
hands-on application for performing compilation, preparation, and review engagements. Learn the ins and outs of
SSARS No. 21, Clarification and Recodification, the most
significant change to the compilation and review standards
since their inception over thirty years ago. Not only will this
course bring you up to date on SSARSs requirements and
guidance, but more importantly, it will provide you with
practical examples to help you effectively and efficiently
perform compilation, preparation, and review engagements.
The course walks you through the content of The Essential
SSARS 21 Implementation Toolkit, which is a comprehensive
resource to help ensure that you satisfy professional, ethical,
and technical requirements for all SSARS No. 21 services -highlighting the changes from SSARS No. 19.
Intended Audience: Accounting practitioners and their
staff performing and managing compilation, preparation, and
review engagement services
Level: Update
CPE Credits: 4 Auditing
Instructor: Steven Wagner
If you are a practitioner who wants the latest information on
tax changes affecting your business clients or employers, then
you should take this enlightening course. Learn invaluable
knowledge, strategies, techniques, innovative tax-planning
concepts, income-generating ideas, and other planning opportunities available to S corporations, partnerships, LLCs,
and LLPs. Updated for impacts of the Protecting Americans
Against Tax Hikes (PATH) Act of 2015.
Topics Discussed:
• Selected Practice and Reporting Issues
• Coverage of all of the business tax changes
• A review of the key cases, rulings, and tax law changes
affecting S corporations, partnerships, limited liability
companies, and limited liability partnerships
• Any late-breaking tax legislation
Intended Audience: All tax practitioners, both those working in public accounting as well as those in private industry,
who need the latest information on tax changes affecting their
business clients or employers
Level: Update
CPE Credits: 4 Tax
Guide and Update to Compilations, Reviews,
and New Preparations (CRU4)
S Corporation, Partnership and LLC Tax
Update (BCP4)
June 28 - 12:30 Pm - 4:00 pm
Preparing Special Purpose Framework
Financial Statements: Cash, Modified Cash
and Tax Basis (CMT4)
Instructor: Gregory Clark
For many businesses, preparing financial statements using a
special purpose framework may provide an alternative to the
complexity of U.S. GAAP. This course provides you with an
overview and hands-on application for preparing financial
statements using a special purpose framework. Learn the
unique measurement and disclosure requirements of various
SPF options using example financial statements and illustrative disclosures. The course also includes common practice
issues encountered when preparing SPF financial statements,
as well as an introduction to the AICPA’s new SPF for small
and medium-sized entities, FRF for SMEsTM.
Topics Discussed:
•An introduction to special purpose frameworks •Authoritative and non-authoritative guidance used to prepare SPF
financial statements •Common issues in preparing SPF financial statements •Cash basis and modified cash basis financial statements •Income tax basis financial statements •The
AICPA’s new special purpose framework – FRF for SMEsTM
Intended Audience: Practitioners and staff involved with
the preparation of cash and tax basis financial statements
Level: Basic
CPE Credits: 4 Accounting
8
June 28 - 12:30 Pm - 4:00 pm
Individual Tax Planning Ideas for 2016 (ITP4)
Instructor: Steven Wagner
This course presents the most important income tax planning
ideas wealthy clients and closely-held business owners need
to consider in 2016 to take advantage of the present and plan
for the future. It highlights areas in the income tax return that
suggest future opportunities for the individual client. Updated for impacts of the Protecting Americans Against Tax Hikes
(PATH) Act of 2015.
Topics Discussed:
•Review current tax proposals •Reading a tax return for
developing client-specific tax strategies •Compensation and
fringe benefit issues •Is the client in the right mix of investment vehicles? •Identify clients with investment income tax
problems and the potential ways to reduce or eliminate them
•All in the family: Tax tactics for spouses, children, and parents •What is new in health care that CPAs need to know
Intended Audience: All practitioners involved in tax planning for individuals who need to go beyond basic tax and
financial planning techniques
Level: Intermediate
CPE Credits: 4 Tax
ndcpas.org
Bismarck Ramkota
Summer CPE Variety Pack
For pricing and registration, please visit our website at www.ndcpas.org/cpe
June 29 - 8:00 am - 11:30 am
June 29 - 8:00 am - 11:30 am
Instructor: Gregory Clark
This course provides an overview of recent FASB accounting
and reporting developments. The course begins by reviewing
recent Private Company Council (PCC) activities and recently
issued Accounting Standards Updates (ASUs), analyzing
guidance that has a major effect on all industries, including those covering revenue recognition and leases. Special
attention is given to standard setters’ activities that affect
small- and medium-sized entities. Examples and illustrations
provide hands-on application to help you assess and implement the new standards and guidance applicable to your
practice and clients.
Topics Discussed:
• Private company standard setting activities
• Recent FASB Accounting Standards Updates (ASUs)
• Revenue Recognition -- ASU No. 2014-09, Revenue from
Contracts with Customers
• Leases
Intended Audience: Practicing CPAs and their staffs, both
in public accounting and business and industry, controllers, accountants, and other financial accounting personnel
involved in financial statement preparation and review
Level: Intermediate
CPE Credits: 4 Accounting
Instructor: Steven Wagner
There are many issues in tax law that have a significant
impact on clients. This course explores those issues that have
wide applicability and importance in 2016. It will deal with
the practical aspects of understanding and planning for these
areas of tax law.
Topics Discussed:
• The 3.8% tax on investment income
• Coverage of any new significant tax law changes or interpretations
• What to do with estate and gift planning in 2016
• Proposed tax law changes and their effects
• What is happening with health care in 2016
Intended Audience: All CPAs who want an in-depth discussion of the current tax issues that affect all clients
Level: Intermediate
CPE Credits: 4 Tax
Annual FASB Update and Review (FUR4)
June 29 - 12:30 Pm - 4:00 pm
Financial Statement Disclosures: A Guide for
Small and Medium-sized Businesses (GSM4)
Instructor: Gregory Clark
A clear and concise set of proper financial statement disclosures can make or break an entity’s financial statements.
Such disclosures are no longer simply additional information
provided by a business; they can be complex in nature and
difficult to both prepare and understand, even for small and
medium-sized businesses. Oftentimes, financial statement
users will first turn to the notes in the financial statements
in order to get a feel for where the business and its numbers
might be heading. This course focuses on key balance sheet
and income statement disclosure as well as those relating
to accounting policies, changes in accounting estimates and
errors, subsequent events, going concern, and related party
disclosures.
Intended Audience: CPAs and other accounting professionals in public practice and business and industry involved
in preparing financial statement disclosures for small and
medium-sized businesses
Level: Basic
CPE Credits: 4 Accounting
COLLEAGUES YOU CAN COUNT ON
The Top Five Tax Topics of 2016 (TTE4)
June 29 - 12:30 Pm - 4:00 pm
K-1 Boot Camp for LLCs (K1L4)
Instructor: Steven Wagner
Schedule K-1 has evolved into the universal correspondent of
tax information to business owners. This course utilizes practical case studies and detailed cases to take a deeper look into the
vastness of Schedule K-1. The course will be advantageous to
those who prepare complicated federal individual income tax
returns, and for those who prepare the underlying Schedules
K-1 for partnership or LLC pass-through entities.
Topics Discussed:
• Review of common and not-so-common line items on
Forms 1065 Schedules K-1
• Numerous examples of special allocation issues of §704,
including economic effect, the “dumb-but-lucky” rule, and
substantiality
• Determining substantiality, with examples of “some help,
no hurt” allocations
• Advanced case for tracking a multitude of Schedule K-1 line
items through Form 6251
• Case study finding “At-Risk” hidden gains within Sched K-1
• Determining self-employment taxable income
• Partners’ capital accounts and method of maintaining them
• and much more
Intended Audience: Experienced CPAs seeking an in-depth
study of this ubiquitous tax schedule
Level: Intermediate
CPE Credits: 4 Tax
9
Congratulations!
Board of Directors Scholarship
Congratulations to the following recipients of the 2015 Board
of Directors scholarships. In order to qualify, applicants had
to be a student member or affiliate of the CPA Society, intend
to write the CPA Exam and become a CPA, and have completed Intermediate Accounting I, by application time. An
application will once again be available this fall. The deadline
is December 31. For more info go to ndcpas.org/scholarships
Frida Ballesteros
Frida is a junior at Dickinson State
University studying Accounting. She is
employed full-time at Dacotah Bank as
a teller and is thankful they are willing
to work around her busy schedule. Frida
and her husband moved from Las Vegas
in early 2013. They love the area and are
happy to call North Dakota home.
Breann Harm
Breann graduated the University of
North Dakota with a Bachelor’s Degree in
Accountancy. She is currently employed
with Eide Bailly as an Audit Associate.
Her hobbies are fishing, camping, and
volunteering within the community.
Chris Johnson
Chris Johnson is the Accounting
Manager at TMI Systems Corporation
in Dickinson. He graduated Magna Cum
Laude from Dickinson State University
with a Bachelor of Science in Accounting.
Danielle Schroeder
Danielle is a junior, with majors in Accounting and Finance at the University of
North Dakota. She grew up on a farm near
Fergus Falls. Danielle has been involved in
organizations such as Cru campus ministry, Nonprofit Leadership Service Assn,
Alpha Kappa Psi professional business fraternity, and Beta Alpha Psi honor society.
Coming into money
can be overwhelming.
Protecting it
shouldn’t be.
Feel safe and secure knowing
the money you’ve earned from
oil and gas is protected by
FDIC-insured banking products.
Get the protection you deserve.
Contact your local financial
advisor today.
The JBRL Group
200 Josephine Street
Denver, CO 80206
110 South Phillips Avenue
Sioux Falls, SD 57104
701.BAKKEN.7
701.225.5367
Lorraine Shepherd-Davis
Lorraine is an enrolled member of the
Sisseton-Wahpeton Dakota Oyate and
descendant of the Arikara of MHA Nation.
She lives in Mandan and is married with
four children. Lorraine is the Founder and
Executive Director of the Native American
Development Center in Bismarck. She has
a Master’s in Business Administration and
a Master’s in Accounting and Financial
Management, CPA emphasis.
10
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ndcpas.org
Revised Revenue Outlook for North Dakota
by Ryan Rauschenberger, Tax Commissioner
The decline in
oil prices and
the resulting
economic slowdown in North
Dakota has
been the subject of national headlines.
For nearly a decade, North Dakota
has been the envy of the nation as our
economy grew at an unprecedented
rate. Our employment, personal income and population grew faster than
any other state in the country; our
unemployment rate was consistently
the lowest. Although it often gets lost
in media reports, it is important to
remember that things are still pretty
good in North Dakota. According to
the Bureau of Labor Statistics, we still
have the lowest unemployment rate in
the nation (2.7 percent in December
2015, compared to a national average
of 5 percent). Although unemployment claims have risen and overall
employment has fallen, Job Service
North Dakota reports that in January 2016, there were still over 13,500
unfilled jobs posted.
The revised general fund revenue
forecast for the 2015-17 biennium,
released on February 1, 2016, projects
a revenue shortfall of over $1 billion
compared to an original forecast of
$5.6 billion. That amounts to a 20
percent decline in overall general fund
revenue – by anyone’s measure, a
huge revision to the state forecast. On
the other hand, the resulting forecast
of $4.6 billion is still over 40 percent
larger than actual revenues during the
2009-11 biennium, just six years ago.
in drilling activity, but also the fact that
companies are building an inventory of
wells drilled but uncompleted (known as
DUCs). Most of the taxable inputs that
go into completing these wells have yet to
take place. Many companies are building
an inventory of DUCs, waiting as long as
they can for a rebound in prices before
moving forward with completion. The
completion of these wells, whenever that
takes place, will result in a surge in state
sales and use tax collections as well as oil
production.
The forecast takes a very conservative
approach to predicting the volatile oil
and gas tax revenue. The price for North
Dakota crude oil is expected to bottom
out around $25 per barrel by mid-year,
then gradually increase to around $37 per
barrel by the end of the biennium (this biennium is from July 1, 2015 through June
30, 2017). A conservative estimate when
you consider that as recently as November
2015, the average North Dakota price per
barrel upon which oil taxes were paid was
over $39 per barrel. Production, which in
November 2015 was still 1.18 million barrels of oil per day, is projected to gradually decline by the end of the biennium
to around 900,000 barrels per day. The
resulting forecast shows a decline from
the $3.4 billion legislative forecast used
to craft the state budget to $2.5 billion,
a decrease of over 28 percent. Compare
that to the $6.0 billion the state actually
collected during the 2013-15 biennium and
you can hardly blame the media for talking
about the “bust” facing the North Dakota
oil industry. But once again, it is important to be aware of the historical perspective. As recently as the 2009-11 biennium,
the state collected less than $1.6 billion in
oil taxes. Even if the conservative projections hold true and production declines to
900,000 barrels of oil per day, production
will still exceed the level from July 2013.
My point is not to discount the severity of
the revenue shortfalls, either for the general fund or oil and gas taxes. The budget
reduction of 4.05 percent ordered by the
governor is very significant and will force
state agencies to look at all areas of their
operations to find savings and efficiencies. The cuts would have been much more
severe were it not for the foresight of the
legislature to establish the state budget
stabilization fund, projected to be tapped
for nearly $500 million to close the budget
gap. My point is simply that if we lose
sight of the historical perspective, we may
reach the wrong conclusion. Although this
slowdown is significant, our state revenue
forecast reflects an economy that is still the
envy of the nation and is poised for continued robust growth in the future.
Nearly half of general fund revenues
are generated from the state’s sales
and use tax, which is 5 percent on
most taxable items. Not surprisingly,
the largest revision in the forecast
relates to sales and use tax, which
was reduced over 25 percent from an
original estimate of $2.9 billion to
$2.1 billion. Sales and use taxes are
generated not only from consumer
purchases, but also from business
activity. A large component of sales
and use tax is related to oil activity
and the taxable inputs that go into
each producing well, such as drill pipe
and frack sand. The new forecast
recognizes not only the slowdown
COLLEAGUES YOU CAN COUNT ON
11
Classified Ads for
march 2016
North Dakota Practices for Sale: Southeast ND CPA
Practice -gross $141K; quality client base, tax (75%), accntng
(8%), audits/reviews (13%), other services (4%), quality client
base, motivated seller. Bismarck CPA Practice -gross $643K,
(59%) tax, (32%) accounting, (9%) payroll & reveiws, experienced staff in place and owner flexible with regards to transition. For more information call us at 800-397-0249. 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 tax and accounting practices in North America. We have a large pool of buyers,
looking for practices to purchase. We also have the experience
to help you find the right fit for your firm, negotiate the best
price and terms and get the deal done. We welcome the opportunity to talk to you about our risk-free and confidential
services. For more information call Trent Holmes with the
APS Holmes Group at 1-800-397-0249 or email
[email protected].
Audit Senior/Supervisor
Widmer Roel, a regional CPA firm, has a full-time opening for
an Audit Senior/Supervisor in our Fargo Office. The position
requires a CPA certificate, bachelor’s degree in accounting and
3+ years of experience, preferably in public accounting. We
offer a competitive compensation package, as well as medical,
dental, disability and life insurance, 401-k plan, flexible spending accounts, and summer hours. Salary is dependent upon
experience. To apply, visit our website, www.widmerroelcpa.
com/careers to complete an on-line application.
YOUR LAST DECISION
IS THE BIGGEST.
When it is time to transition out of your practice you want to
do it right. We are the largest facilitator in North America for
selling accounting and tax practices. We provide a free estimate of
your firm’s value, market extensively, assist in negotiations and
find you the right situation.
Contact us today so your last decision will be your absolute best.
The Holmes Group
Trent Holmes
Toll Free: 800.397.0249
AccountingPracticeSales.com
[email protected]
Senior Tax Accountant
Bank-owned tax preparation service is seeking a qualified leader
to gradually take on management responsibility and progressively
advance into a Managerial role. This Senior Tax Accountant position
at our Jamestown, ND Tax Forward office is primarily responsible for
the compliance, research and planning of tax services and the review of tax returns for individuals, partnerships
and corporations. Experience in agriculture is preferred. Bachelor’s degree in accounting and CPA designation
are required. Must have a minimum of 5-10 years experience with federal, state tax compliance and tax planning/consulting with a public accounting firm. Prior management of staff experience preferred. Top salary and
benefits package includes relocation expense allowance, sign-on bonus and summer hours.
Please send resume to Bank Forward, Human Resources, PO Box 7070, Fargo, ND 58106 or email to
[email protected].
Tax Forward is a proud ESOP company that is widely respected for its commitment to its employees.
12
ndcpas.org
TAX SMART
ND taxpayers can dedu
ct up to
$10,000 in contribution
s if married,
filing jointly ($5,000 if sin
gle) from
their state taxable incom
e
College SAVE: Picture the Future
The tax-advantaged, flexible way for your clients
to invest today in tomorrow’s dreams.
for contributions into
College SAVE!*
Visit collegesave4u.com/CPA
or call 1.866.SAVE.529.
* Rollovers from another state’s 592 plan are not eligible for the state income tax deduction.
For more information about North Dakota’s College SAVE Plan (College SAVE), call
1-866-SAVE-529 (1-866-728-3529) or visit www.collegesaves4u.com to obtain a Plan Disclosure
Statement. Investment objectives, risks, charges, expenses, and other important information
are included in the Plan Disclosure Statement; read and consider it carefully before investing.
Ascensus Broker Dealer Services, Inc. (ABD) is Distributor of the Plan.
The College SAVE Plan (College SAVE) is a 529 plan established by the State of North Dakota. Bank of North Dakota
(Bank) acts as trustee of College SAVE Trust, a North Dakota Trust, and is responsible for administering College
SAVE Trust and College SAVE. ABD, the Plan Manager, and its affiliates, have overall responsibility for the day-to-day
operations of College SAVE, including recordkeeping and marketing. The Vanguard Group, Inc. (Vanguard) provides
underlying investments for the Plan. College SAVE’s Portfolios, although they invest in mutual funds, are not mutual
funds. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.
Investment returns are not guaranteed, and you could lose money by investing in College SAVE. Participants assume
all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state
UIIIND MKT8934C 0216
tax consequences.
COLLEAGUES YOU CAN COUNT ON
13
Exam Passers
The following candidates
passed the CPA exam from
July 1, 2015 thru Dec 31, 2015
Travis Aho, West Fargo ND
Alison Anderson, Valley City ND
Katie Beehler, Grand Forks ND
Erin Berg, Minot ND
Kaitlin Bezdicek, Plymouth MN
Amanda Bieber, Williston ND
Paige Biederstedt, Dickinson ND
Matthew Bluhm, Prior Lake MN
David Burdick, Minneapolis MN
Kristin Canham, Minneapolis MN
Kyle Christensen, Fargo ND
Adam Christianson, Baldwin WI
Yinan Ding, Shenzhen
Kyle Harren, Inver Grove Hts MN
Melanie Hengel, Fargo ND
Jacob Henke, Mandan ND
Levi Kinnischtzke, Bismarck ND
Jennifer Lambert, Fargo ND
Nathan Larson, West Fargo ND
Melissa Mager, Grand Forks ND
Amber Malcolm, Fargo ND
Jacob Miller, Fargo ND
Kari Miller, Bismarck ND
Mohamed Mohamed, Abu Dhabi
Farid Naghipour, Berkeley CA
Nathan Potter, Fargo ND
Matthew Powlish, Oakes ND
Elizabeth Rabon, Grand Forks ND
Adam Regnier, Fargo ND
Allison Roper, Dickinson ND
Andres Sanchez, Grand Forks ND
Rony Saoud, Pierrefonds
Emily Scholz, Melrose MN
Karen Stenehjem, Bismarck ND
Jacob Stevens, Fargo ND
Amanda Streeter, Grand Forks ND
Oakley Thoeny, Dickinson ND
Ryan Thorson, West Fargo ND
Andrew Walker, Minneapolis MN
Mackinzie Wilson, Moorhead MN
Mikka Wold, Fargo ND
Lukas Zahradka, West Fargo ND
In Memory
Wayne Drewes of rural
Hawley/Hitterdal, MN passed
away on January 13th. He had
been a member of the Society for
30 years.
14
Ethics Corner
The Case of Hollin Daysoss’ Temporary Daze
By Charles Selcer, CPA, MBA
Hollin Daysoss CPA is the controller of Suit Yourself, a web
based seller of men’s suits to professional men who are able to
submit all their key measurements using a proprietary system
developed by the Company. The Company has a $7,000,000
line of credit with the 1st National Bank of Twill that requires
the quarterly submission of GAAP financial statements to the lender within 60
days after each quarter. Footnotes are not required. The last quarter was quite
busy and profitable. Up against the deadline, Hollin hurriedly got the financial
prepared and sent them to the bank with his customary cover letter stating.
“Here are the latest quarter’s GAAP financial statements for Suit Yourself. Call
me with any questions . . . Hollin Daysoss.” After he sent them, Hollin realized
he did not adjust the corporate tax accrual for the quarter and taxes are material.
He figured he’d let that slide and get it squared up next quarter.
Q. As an internal controller, did Hollin breach the AICPA Code of Ethics?
A. Yes. Code section 2.320.001 Accounting Principles says that you cannot state
affirmatively that financial statements are in accordance with GAAP if you know
they are not. Also see 2.300.030 on Submission of Financial Statements.
Continued from Page 1 - Internal Audit
“When something goes wrong, most investigations simply lead to the introduction of new bureaucratic processes designed to prevent a recurrence,” Montagnon said. “However, asking about the root causes of a problem may point towards a different solution. This means looking at different things like how targets
are set, how incentives are communicated, and how appraisals are conducted.”
Though it is the role of an organization’s leadership to set the culture, internal auditors can: 1. Help boards answer the question “Are we living up to our
values?” 2. Evaluate whether the corporate culture supports the organization’s
purpose and business model. 3. Ask why something has happened, get to the root
cause, and seek to correct it, rather than simply identify what has happened.
How Boards Can Support This Work
To enable the internal audit department to carry out this role effectively, a
mandate from both senior management and the board is needed, with the latter
usually taking the form of a reporting line and a close working relationship with
the audit committee chair.
Audit committee chairs need to be firm in their commitment to using internal audit to examine culture and be willing to listen to the concerns raised, even when
these are based more on gut feeling than evidence.
An environment in which people are encouraged to speak up so that mistakes can
be corrected rather than tempted to cover them up out of fear of punishment will
also support this work.
The Skill Set Required
Montagnon notes that internal auditors have to strike a balance between being
perceived by other employees as policemen and adopting a more consultative
role that may compromise their objective investigative status.
Ultimately, the report says, internal auditors can be important agents for positive
change. To fulfill this role, “They need diplomatic skills and the ability to make
judgments which command trust at a senior level.”
Samantha White ([email protected]) is a CGMA Magazine senior editor.
Copyright © 2011-2015 American Institute of CPAs. Copyright © 2011-2015 Chartered Institute
of Management Accountants. All rights reserved.
ndcpas.org
And the award goes to . . .
It’s that season again. It seems no matter which TV channel
you view some actor, musician or technical director is getting
an award. Perhaps these accolades are normal for performers
but usually the only CPAs who are mentioned were those who
counted the votes! That’s unfortunate because there are some incredibly giving
CPAs out there who deserve a pat on the back.
So who’s your CPA Champion? Do you know someone who was active in the Society who has retired? Did they inspire you to get involved? Why not nominate them
for a lifetime member award? What about a member who does a lot for your community? That sounds like a perfect candidate for the Making a Difference award.
In her presidents letter, Tracee talked about the impact Stan Sandvick had on her
career. Stan was an incredible CPA Champion. His involvement in the Board of
Directors, Peer Review Committee and YEARS and YEARS of attendance at the
convention was truly remarkable. He was an inspiration to many and his passion for the profession and Society will be missed. Please help to recognize your
colleagues, who like Stan, make you proud to be a part of the CPA profession. You
can find a list of the awards and the nomination process at ndcpas.org/awards
News from the IRS
N-2016-19: Date for Compliance with Consistent
Basis Reporting Between Estate and Person
Acquiring Property from Decedent
Notice 2016-19 provides that statements required under section 6035, regarding the basis of property distributed from
the estate of a decedent, need not be filed or furnished until
March 31, 2016, rather than the current February 29, 2016
deadline. The notice further recommends that executors and
other persons who are required to file an estate tax return
wait to prepare the statements required under section 6035
until the Treasury Dept and IRS issue further guidance.
TIN Matching
Would you like to avoid the costly penalties and expenses
for invalid Form 1099 filings? Check out FSLG’s 4-minute
podcast on the TIN Matching Program. Recent increases to
information return penalties make the proper filing of these
returns essential. While you’re here, learn about backup withholding from the Backup Withholding and Form 1099 Miscellaneous Webinar. You can find these programs and more on
the IRS video portal. Select the Government tab for webinar
topics related to government entities
Can't Find Something on IRS.gov?
If you’re having trouble finding information on our website,
try using our online tools or one of the self-help links. If you
still need help, our IRS.gov Help Desk representatives can
help you find content, forms and publications, and help with
problems on the website. Please Note: When contacting the
IRS.gov Website Help Desk, please don't share your name,
Social Security number, Taxpayer Identification Number or
address. You can find the web site help-desk chat at
https://www.irs.gov/uac/Navigate-IRSgov.
COLLEAGUES YOU CAN COUNT ON
Nominations are due by May 15 for
the following:
The Making a Difference Award is
available to recognize significant contributions in community service or within
education, or service to the CPA Society.
Recipients must be a CPA and Society
member.
Life Membership
This award is to recognize long-standing
Society participation. The recipient must
be a CPA and retired (not employed full
time, and be 60 or older). Generally the
award will be presented to a CPA who
has been actively involved over a number of years. To nominate or apply for
life membership, simply prepare a brief
recommendation letter and email it to
[email protected].
Board of accountancy
A few notes from 2/12 meeting
All board members present. Society President Tracee Buethner
and staffer Mandy Harlow attended part of the meeting.
FINANCIALS were accepted, and the board members heard
a report on the financial oversight performed by a member.
Although the Board has flexibility with its investments, it will
continue to use the current approach of non-risk vehicles.
CPE CHANGES were addressed. ND is one of only three states
that have a lower credit level option (non-public CPAs are expected to have 60 CPE credits/3 years). A three organization
committee will be appointed to work on rule changes; Faye &
Mike will represent the Board. This group will review the full
set of rules, including the 60 credit issue, items not advanced
by the CPE committee, and retired provisions.
REINSTATEMENT was approved for five people. Additional
writing time was approved for one person. Two other situations were addressed, where infractions may have occurred;
in one case, no action will be pursued; in the other, the party
will be notified of future obligations, one of which may be a
roadblock.
OTHER MATTERS were addressed, including a report on a
Jan. 27 application review. Credit card data will no longer
be accepted by paper. Eliminating the application notary was
discussed and will be addressed again in May. Other items
including a score release delay, and elimination of a reinstatement fee for retired accountants.
COMPLAINTS were addressed: an “unwritten” item which will
not be pursued, and an older matter that remains open.
NEXT MEETING: May 4, at 12, at the offices of Brady Martz,
in Grand Forks.
For a full set of meeting minutes, contact the Board office, at
800-532-5904.
15
Dakota CPA is published bimonthly, by the North
Dakota CPA Society.
DIRECTORS
Tracee Buethner, President
Marci Schorsch, President-elect
Clarence Sitter, Secretary
Steve Britsch
Dianna Kindseth
Dave Glennon
Terri Clark
Lyndsey Roemmich
Michelle Schumacher
Robert Dosch
Brittany Dunn
John Mongeon, Past President
3 Year AICPA Council Member, Mike Schmitz
Jim Abbott, Executive Director
Sherre Sattler, CPE and Communications Director
Mandy Harlow, Licensing/Peer Review Coordinator
Connie Holte, Administrative Assistant
Aja Steinfeldt, Bookkeeper
North Dakota CPA Society
2701 South Columbia Road, Ste D
Grand Forks, ND 58201
Toll Free: 877-637-2727
Local: 701-775-7100
Fax: 701-775-7430
Email: [email protected]
Ste D
PRSRT STD
U.S. Postage Paid
Fargo, ND
Permit #1159