DIGITAL CPA WEBCAST SERIES:

ACCELERATING BPO PRACTICES IN 2016January 19, 2016

TODAY’S PANELISTS

Erik Asgeirsson

President & CEO, CPA.com

Mike Glynn, CPA, CGMA

Sr. Technical Manager, AICPA

Tom Hood, CPA, CGMA

President & CEO, MACPA

Al Anderson, CPAFounder, Account-abilityPlus

Eric EnserProduct Manager, Paychex

CPA.com, an AICPA company

• Empowering CPAs and Businesses for the Digital Age

Erik Asgeirsson, President and CEO, CPA.com

• Industry leader with over 20 years of experience leading

technology organizations

• Consistently recognized as one of Accounting Today’s

“Top 100 Most Influential People”• BS Electrical Engineering, George Washington

University, and MBA in Finance, NYU Stern School of

Business

Host & Moderator

Guest Panelists

Michael P. Glynn, CPA, CGMA

Senior Technical Manager, Audit and Attest

Standards Group, AICPA• Serves as staff liaison to the Accounting & Review

Services Committee (ARSC)

• Supports the activities of Auditing Standards Board

(ASB) and its subcommittees by assisting members in

drafting and deliberating authoritative professional

standards and interpretations

• Member of New York State Society of CPA’s Accounting

& Review Services Committee

• Worked at Ernst & Young

• Graduate of Pace University with BBA in public

accounting

5ACCOUNT-ability Plus, LLC Achieving Accounting and Auditing Excellence

Alan W. AndersonAl has over 25 years of experience in the accounting

profession. After working primarily as a partner and

National Director of Audit in the firm of McGladrey and

Pullen, LLP and with the American Institute of CPAs as

Senior Vice President of Member and Public Interest,

Al founded ACCOUNT-ability Plus headquartered in

Minneapolis.

Al’s experience in the world of auditing reaches far and

wide. This includes helping to standardize the global

audit approach of McGladrey and Pullen, overseeing

the AICPA’s technical audit and accounting standards,

including self-regulation and the CPA examination and

implementing paperless solutions.

Al represented the AICPA on –

Financial Accounting Standards Advisory Council

(FASAC)

Committee of Sponsoring Organizations (COSO)

International Federation of Accountants (IFAC)

International Innovation Network (IIN)

Enhanced Business Reporting Consortium (EBRC)

Al also has been frequent speaker at conferences nationally

and internationally

Tom HoodPresident, CEO, MACPA

• CPA Practice Adviser Accounting Hall of Fame

• Named the Second Most Influential in Accounting by

Accounting Today Magazine 2015 (11th year in Top 100)

• Top 150 Influencer by Linked-In

• Top 25 Influencers in Learning & HR by HR Examiner

• Top 25 Public Accounting Thought Leaders by CPA

Practice Adviser

• Working on Learning Management with AICPA/CPA.com,

Cloud Curriculum, Performance Management /XBRL,

Leadership & Generations

Eric EnserProduct Manager – Health Care Solutions, Paychex

• ACA regulatory expert; in constant communication with IRS

• Product Development leader driving payroll and benefits

technology solutions

• 15 years with Paychex including

• 12 years leading software development organization

• Graduate of St. Bonaventure University with a BS in Computer

Science

• Published in AccountingToday.com

• Contributing author to Entrepeneur.com, and others, on various

ACA topics

SSARS21 STANDARD

New Thinking Required Due To SSARS21

• New Financial Preparation Standard

driven by cloud accounting

• Most significant non audit standard

change of past 35 years.

• BPO Firms Need To Think Through

How To Implement

EFFECTIVE

DATE

HAS

ARRIVED!

DECEMBER

15

2015

SSARS 21 – Four Sections

SSARS No. 21 is formatted into four separate sections:o Section 60, General Principles for Engagements Performed in Accordance With

Statements on Standards for Accounting and Review Services

o Section 70, Preparation of Financial Statements

o Section 80, Compilation Engagements

o Section 90, Review of Financial Statements

These sections will be codified with the prefix “AR-C” to denote

them from the pre-clarified standards.

10

When does Section 70 apply?

Section 70 – Preparation of Financial Statements

Does not require the accountant to consider whether he or she

is independent

Requires an engagement letter signed by both the accountant

and management/those charged with governance

Can be applied to financial statements with or without

disclosures

Section 70 – Preparation of Financial Statements

Report is not required – even if financial statements are expected to be used by a third partyo Not prohibited from including a cover sheet with the firm name

Requires a legend on each page of the financial statement stating that no assurance is being provided• Normally placed on the bottom of each page of the financial statements – including

related notes

• Not precluded from including accountant’s or accountant’s firm name in the legend

• Accountant is not precluded from including positive statements in the legend

SSARS21 IMPLEMENTATION DISCUSSION

Starts With Engagement Letter

Compilation Engagement Letter

Financial Statements Preparation Engagement

Letter

Transaction Processing Only – Not engaged to

prepare fin statement or perform a compilation

engagement

List services to be provided (A/P, Account

reconciliations, etc.)

Service Levels & Fees

SSARS21 Legend Implementation

16

Firms Need to Think About How to Best Implement Header and Legend

Requirement

Firms are discussing with their compliance departments

o When would they want to include firm name and positive statement about service along

with “no assurance is provided statement”

o How will the controls be managed

Accounting Software Report Writer and Page Header and Footer Controls are

very Important

Discussion Around Legend Examples

No assurance is provided on these financial statements.

These financial statements have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them.

No assurance is provided by ABC CPAs on these financial statements.

ABC CPAs & “Potentially Name of Service” prepared these financial statements for Company XYZ. No assurance is provided on these financial statements.

ABC CPAs & “Potentially Name of Service” performed a financial statement preparation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. No assurance is provided on these financial statements.

Ensure Compliance Through Permission Controls

18

Can the Financial Report Writer Be Set To View Only For Clients?

• Turn off ability for clients to add, edit, or delete reports

Ensure Compliance Through Permission Controls

19

• Is There An Accountant’s Footer?

• Do the page footer character limits present an issue?

Sample Financial Statement with Legend language 20

Smith and Jones CPAs Outsourced Client Accounting Service prepared these financial statements for XYZ. No assurance is provided on these financial statements.

2016 AFFORDABLE CARE ACT FILINGSEric Enser, Product Manager – Health Care Solutions, Paychex

ACA – What Firms Need to Know

When and how do I have to know I’m an ALE?o Determined in 2015, measuring NOW for 2017

Who are my full time employees THIS year?o Determined in 2015, measuring NOW for 2017

Am I offering adequate and affordable coverage?o Setup during 2016 Open Enrollment and monitor throughout this year

How and when do I file the information?o Typically lines up with W2s, delayed with 12/28/15 IRS announcement

Measurement Period(4/15/2014 – 10/14/2014)

Stability Period(1/1/2015 – 12/31/2015)

Admin Period

(10/15 – 12/31/14)

20152014

Measurement Period(10/15/2014 – 10/14/2015)

Stability Period(1/1/2016 – 12/31/2016)

Admin Period

(10/15 – 12/31/15)

2016 2017

Tax Filing (1/1/16-3/31/16)

Tax Filing (1/1/17-3/31/17)

ALE Determination Period for Calendar Year 2015(1/1/2014 – 12/31/2014)

ALE Determination Period for Calendar Year 2016(1/1/2015 – 12/31/2015)

ALE Determination Period for Calendar Year 2017(1/1/2016 – 12/31/2016)

Tax Reporting - FAQs

Q: What forms does my business have to file?

Applicable Large Employer (ALE) – the “C” forms

o All ALEs must file a Form 1094-C and file/furnish Forms 1095-C (IRC 6056)> Each FEIN with a controlled group must file their own forms

ALE but provide self-insured medical coverage – the “B” forms

o All plan issuers must file a Form 1094-B and file/furnish Forms 1095-B (IRC 6055)

o Includes carriers and self-insured employers

ALE AND you provide self-insured medical coverage – the “C” forms

o Combined reporting is allowed for such ALEs – Part III is required on 1095-C for any covered individuals

Not an ALE and do not provide self-insured coverage – No forms for employer mandate

Q: If I had between 50 and 99 full-time employees and equivalents in 2014, do I have to do anything for 2015 tax year?

YES – if you qualify for transition relief from penalties, you are required to complete 1094-C and 1095-C reporting requirements for certification

Important Filing Dates for 2015 Taxes

2/1/2016:

o 3/31/2016: employees must be provided copies of their Form 1095-C

2/29/2016:

o 5/31/2016: paper submissions of 1094-C and 1095-C(s) must be

postmarked for delivery to IRS

3/31/2016

o 6/30/2016: deadline for electronic filing of 1094-C and 1095-C(s)

Filing Penalties

Regular information return’s penalties apply to Section 6056

o Note: Updated information may be forthcoming given recent reporting delay

Ge

ne

ral I

nfo

rmat

ion

Re

po

rtin

g R

etu

rn P

en

alti

es

Correctly filed within 30 days of the due date

• $50 per form• Maximum penalty is $500,000/year

($175,000 for small business)

Correctly filed more than 30 days after the due date, but by August 1

• $100 per form• Maximum penalty is $1.5 million/year

($500,000 for small businesses)

Correctly filed after August 1, or not filed

• $250 per form• Maximum penalty is $3 million/year

($1 million for small businesses)

Employer Transmittal:1094-C

Basic demographic information

1095-Cs attached to THIS 1094-C

Because an FEIN may file 1 or more

1094-Cs

All 1095-Cs filed for this FEIN (1 or more

1094-Cs)

Controlled ownership group

affiliation

Simplified reporting

eligibility

Employer Transmittal: 1094-C

Monthly ALE Member Information

Aggregated ALE Group Members

Employee Statement: 1095-C

Section 6055 Reporting Only

9 possible codes – generally what was offered and to

whom?

Lowest cost employee share, regardless of

enrollment

9 possible safe harbor codes

Employee and all dependents covered

under the enrollment. DOB can be used in

absence of SSN

Basic demographic information

What Data is Needed for 1095-C?

Completing 1095-C requires benefits information for nearly every data point

29

Payroll BenefitsFully Insured Applicable Large Employer OR ALE Without Medical Group Plan

Self-Insured Applicable Large Employer (ALE)

1A Qualifying Offer

1B MEC with MAV offered to EE only

1C MEC with MAV offered to EE plus dependents, not spouse

1D MEC with MAV offered to EE plus spouse, not dependents

1E MEC with MAV offered to EE plus spouse and dependents

1F MEC but not MAV offered to EE or EE plus spouse, or EE plus dependents or EE plus spouse and dependents

1G EE not full-time for any months of the year, but enrolled in self-insured coverage at least 1 month

1H Employee Not offered any coverage

1I Qualifying Offer Transition Relief

$###.## Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage

2A EE not employed in month

2B EE not full-time or coverage ended last day of the month only because of termination

2C EE enrolled in coverage

2D EE in Limited Non-Assessment Period (LNAP)

2E Multiemployer interim rule relief - EE covered by union plan

2F W-2 Affordability safe harbor test passed

2G Federal Poverty Level Affordability safe harbor test passed

2H Rate-of-Pay Affordability safe harbor test passed

2I Non-Calendar Year Transition Relief applies to this EE

MEC - Minimum Essential Coverage met by plan

MAV - 60% Minimum Actuarial Value met by plan

LNAP - 6 different scenarios requiring up to 24 months of payroll AND benefits data

1A, 1I, 2I - Transition Relief codes only available in 2015 (for now)

Line 16 -

Section 4980H Applicable

Safe Harbor Code

Calculated Form Information (per month)Calculations RequiredShould the employee receive a

1095-C?

Line 14 -

Offer of Coverage Code

Line 15 - Employee Share of Cost

BECOMING AN ANTICIPATORY TRUSTED BUSINESS ADVISOR

Source: Insight into the CPA of the Future Study 2015, produced by CPA.com & Institute of Global Futures

Only 8% of CPAs are Future Ready

Future Ready is the capacity to be aware, predictive, and adaptive of emerging

challenges, tech innovations, and trends and changes in business, population, and

social environment.

0 2 4 6 8

Poor reputation

No personal relationship

Inadequate staff to meet needs

Not using state-of-the-art technology

Fees were too high

Expertise of former CPA was lacking

Referral to a new firm from someone I trust

CPA had poor responsiveness

CPA didn’t give proactive advice, only reactive service

Why SMBs Leave Their CPA / Accountant

Source: What SMBs Want, 2014, produced by The Sleeter Group

What does it mean to be “anticipatory”?

Know What’s NextHARD TRENDS will happen, they are future facts – they provide Certainty. SOFT TRENDS might happen – they can be influenced. The Three Digital Accelerators provide accurate timeframes. Transformation becomes your advantage.

Develop OpportunitiesEvery HARD TREND provides a new opportunity. Learn to use the Eight Hard Trend Pathways to Innovation and how to anticipate disruptions, problems and customer needs, to identify game-changing opportunities.

Shape the FutureElevate and accelerate plans by using Hard Trend Opportunities to drive transformational innovation. Use certainty to sell your ideas, transform how you Communicate & Collaborate, and become the Disruptor.

Accelerate SuccessWhen your entire team shares the Anticipatory Organization™ mindset that’s based around the certainty of HARD TRENDS, it will drive your organization’s strategic velocity and accelerates success.

33

Power of Certainty – In Technology Trends

New Program

• Dan Burrus Training Program with

MACPA & BLI

Understanding Future Trends

• Hard Trends – Things that will happen

• Soft Trends – Things that may

happen

Stay ahead of the game

• Predict future trends instead of

reacting to disruptions

Digital CPA Webcast Series –Building a community of digital CPAs who embrace change and the transformational effects of technology on today’s practice

•Hot Topics & Advisory ServicesMay 3, 2016

• Strategic Planning DiscussionJuly 2016

•Modern Day Cloud FinancialsSeptember 2016

Resources

SSARS21 Resources

o www.aicpa.org/ssars21

Digital CPA Webcast Series

o Quarterly through 2016

o Archives of DCPA Webcasts: www.DigitalCPA.com/Webcasts/Archive

CPA.com Blog

o www.CPA.com/blog

Follow @CPAcom on Twitter

o #DigitalCPA

36

38

Thank you!

#DigitalCPA