Webinar Recap: Tips to Evolve Your Financial Statement Services... THIS Year

After a recent industry presentation about evolving financial statement services, it was discussed whether workflow and firm portal software had addressed all the key issues and opportunities in engagements. The clear response was, "No."

The other big topic of conversation was how to deliver on the twin mandates at many firms to add value for clients and to innovate through digital transformation. Many people associate transformation with pain and trying to add value to assurance engagements when you’re swamped just completing all the engagements, can seem like just wishful thinking.

All is not lost however, and we have some tips to share and a few potential quick wins for CPA-firms:

Improve Accuracy AND Transparency and Efficiency?

For financial statement services (and all assurance for that matter), accuracy is a must, but improved transparency (a clear understanding of the status of work by everyone involved at the appropriate places where they need to be involved) is incredibly important for quality control (which drives accuracy) as well as for efficiency, and even improved client interaction. The three are quite linked and all can benefit from improvements through new process and tools, this year.

Two newer tools from are examples of innovation which offer immediate CPA firm gains in these areas for preparation, compilation and review engagements, including ways to:

  • Improve accuracy and efficiency around compliance with new and changing standards.
  • Create integrated transparency into collaboration efforts, both internally and with clients.
  • Create safeguards against overworking engagements (and all the additional risk and other things that come with that bad habit).
  • Infuse more transparency, efficiency and value into the review (or audit) report issuance process (and finally wrangle the withdrawal/restatement headache)!

Quick Wins

In looking at typical challenges firms have around attestation and assurance services, there are a few quick wins that you can potentially achieve through technology. For instance, would any of these questions be worth asking about your firm?

  • How do you reduce the chances of missing anything on an engagement?
  • How do you help prevent overworking an engagement?
  • How do you add transparency from engagement wrap-up to delivery on reports?
  • What can you do to truly differentiate your firm as it relates to report delivery and distribution?

Firms who have adopted OnPoint PCR for preparation, compilation and review work for example, have seen a real difference in the process they go through to ensure compliance with quality standards. A significant difference maker within OnPoint PCR comes in its use of intelligent guidance. For instance, once you’ve selected "Preparation," "Compilation" or "Review," as the engagement type, the solution adds or removes entry fields to ensure that questions and procedures adhere to that engagement type (and related standards for that engagement type). That intelligent guidance carries over into intelligent letter drafting, as it uses your responses to questions and procedures to generate the engagement letter and representation letter using the appropriate language.

As for transparency from wrap-up to delivery, many firms struggle a bit with controls over the process. The secure, source-validating RIVIO Clearinghouse is an example of a tool that brings efficiency and control to some of the often-chaotic back and forth between wrap up and delivery to the client.

Ideally, you want to move away from a process that might look like this:

Figure 1 Wrap-up to Delivery to Distribution
Figure 1: Wrap-Up to Client Delivery to Client Distribution to third-party recipients (banks/lenders, regulators, investors, etc.)

Further, firms can leverage this same technology to evolve their delivery process beyond just a portal, similar to how moving from paper to fax to emailed PDFs has had a notable impact to the profession. We are talking about true innovation of the report and document delivery process here; something that goes above and beyond for your clients to differentiate your services and truly add value beyond delivery of the review or audit report.

So how do you get beyond using a portal for delivery? Well, portals don’t allow your clients to automate much on their end. They still have to find a way to take what you have delivered, get it to lenders, shareholders, etc. (who are very interested third-parties), and then keep track of who all has a copy in the first place. RIVIO enables you to securely deliver reports and documents in a way that gives your clients powerful distribution management and controls. They can easily distribute to anyone they want. And best of all – if you ever find yourself in the position of having to withdraw and reissue a report, RIVIO provides an elegant, controlled solution to update reports immediately – straight from your firm to recipients (but without you even knowing with whom your client shared the report). A key takeaway here could simply be to think through how your clients currently manage requests for copies of financial documentation that your firm has prepared. It may be worth asking clients that question if you don’t already.

Hopefully, you’ve got some new things to think about and some options to make progress sooner than later. As stated earlier, a quick win on achieving a corporate (or personal) innovation goal is always a good thing these days, especially if it adds value for clients and improves accuracy, transparency, and efficiency.

About the Author:

Steven A. Menges
RIVIO Clearinghouse Product Lead,

A business-to-business (B2B) innovator and products executive with 20 years’ progressive experience, Steven Menges is a frequent industry author and speaker on enterprise computing, data analytics, managed service providers (MSPs), IT Security, regulatory compliance, EdTech, and buyer’s journey-based engagement. Mr. Menges is also an Adjunct Instructor and Capstone/Thesis advisor at the NYU MS in Management and Systems (STEM) and MS in Integrated Marketing programs and is the co-developer of the Business-to-Business Marketing Maturity Model.

Sales Tax Evolution: South Dakota v. Wayfair One Year Later

June 21, 2019 marks one year since the Supreme Court voted 5-4 in the case of South Dakota v. Wayfair. The ruling favored South Dakota, determining that states can broadly require remote sellers to collect and remit sales and use tax (SUT), even if they lack a physical presence in the state.

"In my 30 years of practice never have I seen a decision come down that has impacted so many clients, and I probably will never see another decision come down like this for the rest of my career."

-Craig Cookle, Partner in Charge SALT, Wipfli LLP

Fast forward to today, a lot has happened. We’ve identified three major implications since the historic ruling: states have responded and expanded economic nexus, businesses (small to large, across different industries) are experiencing an impact and there is an opportunity for CPA firms to help navigate, advise and consult their business clients.

States Respond

The ruling has paved the way for states to establish and enforce new economic nexus guidelines. Since the ruling, 40 states have responded by enacting new or modified economic nexus rules that require out-of-state sellers to register, collect and remit sales tax. Many of these states implemented economic nexus standards that cloned and/or was very similar to the South Dakota law. However, over time there will be different state interpretations as they evaluate how to react to the decision.

Businesses Impacted

The new guidelines and changes following the decision in addition to over 11,000 jurisdictions across the United States, make it even more challenging for business owners to stay up-to-date and ensure they are properly complying with sales tax regulations. Monitoring changing rules, efficiently collecting and remitting accurate sales and use tax and implementing the right solutions, has become more burdensome.

Opportunity to Help

Demand for sales and use tax services is at an all-time high. Businesses need a trusted advisor with the guidance and technology to accurately stay up to date with the complex and changing SUT requirements. CPA firms have an opportunity to offer a spectrum of sales and use tax services to minimize the strain of tax compliance for business clients. CPA firms are helping their clients by offering some of the following services:

  • Nexus Studies and Product Taxability reviews.
  • Identifying and prioritizing states where the client has the greatest economic presence in order to create a plan to register, collect and remit sales tax.
  • Provide compliance technology that calculates correct rates, file and remits payments and maintains exemption certificates.
  • Maintain SUT compliance through ongoing evaluations

Download our whitepaper South Dakota V. Wayfair: What it means for your firm and watch this hot topic video, Wayfair and Sales & Use Taxes to learn more about the impact of the Wayfair decision on both you and your business clients.

Additionally, if your firm is ready to help clients stay in front of a changing SUT environment and interested in building out a high growth SUT practice, we invite you to join us for our two day workshop this summer: Compliance & Advisory: Roadmap to Your Sales & Use Tax Model.

Webinar Recap: Chart Your SUT Business Model

Last year’s Wayfair decision radically altered sales and use tax. In the wake of this important court ruling, there is an opportunity to support clients that need help navigating these changes. Firms are now expanding their sales and use tax (SUT) services, but like most other practice areas, developing a business model and plan is critical for success.

So, where do you start the process? Good news – we’ve laid some of the groundwork. In our recent webinar, Charting Your Sales & Use Tax Business Model, Marianne Fisher, Product Lead – SUT discussed different business models that can be used to establish a sales and use tax offering. Marianne provides a customizable roadmap to build a successful business model and highlights the key points in the process.

We invite you to utilize the webinar content to assist your firm in creating a profitable business model for SUT services. Here’s a summary of what you’ll learn:

  • The initial step for your firm when considering adding a sales and use tax offering is to examine your current capabilities – people, processes and technology. We’ve found that the following questions are helpful to consider:
    • Currently offer any state and local tax as part of client services?
    • Have a state and local taxes (SALT) department? Have a client accounting services (CAS) department? Outsource these services?
    • Have staff knowledgeable of SUT services? Capability of providing education and training for employees?
    • Have technology capable of supporting SALT?
  • Just as with any part of your firm’s business, it is key to develop an actionable business plan to steer you toward growth and a profitable bottom line in your SUT services. Your firm’s plan should include:
    • A defined service area of focus - advisory, compliance, or a combination of both
    • A clearly communicated vision and the plan to achieve it
    • Information on targeted clients
    • A detailed and informed go-to-market strategy
  • Encouraging employee buy in among your firm’s partners helps ensure they are highly engaged, focused and ready to support the sales and use tax business model. Here are some ways to gain employee buy in at your firm:
    • Provide an explanation of your service offering
    • Define the client opportunity – offer a study
    • Lastly, make an effective argument
  • Following employee buy in, focus on staff empowerment by appointing a champion for your firm’s SUT changes and rollout. This person will have an impact on the outcomes of the launch by helping to encourage firm-wide support and advocacy, enhance and drive the service offering and monitor progress of the rollout.
  • In addition to the people factors – employee buy in and staff empowerment- internal firm collaboration helps create a more comprehensive and firm-wide offering. Your firm can accomplish this by doing the following activities:
    • Engage with other departments
    • Schedule time with your peers in other locations and offices
    • Network
  • Lastly, the most efficient SUT strategies involve a technology evaluation. Many firms are using automation to eliminate the manual processes and risk in their SUT practices. Your firm should consider the following when evaluating technology:
    • Scalability
    • Cost efficiency
    • Flexibility
    • Reliability
    • Up-to-date with rules and regulations

Watch our entire webinar, Charting Your Sales & Use Tax Business Model, to learn more details about how your firm can help clients stay in front of the changing sales and use tax landscape. If you need more help getting started, contact us a or call us at 855.855.5CPA.

Marianne has over 10 years of experience working with the tax and accounting profession, guiding and consulting with firms as they embrace technology, evaluate internal processes and expand service lines. She consults with firms across the profession, providing guidance on the changing SUT regulatory environment, the accounting firm opportunity and SUT business development. Marianne has also been a featured speaker at many thought leadership events on these topics.

Reality Star Defrauds Multiple Banks Using False Financial Information

A case involving five banks duped into issuing loans totaling $1.4 million is again highlighting the need for more control and security around private company financial document exchange.

Michael Barrick, an antiques collector, trader and museum operator popularly known as Kentuckyana Jones, pleaded guilty to five counts of bank fraud after forging financial statements to establish the sales of multiple properties, a fraud that stretched over the course of five years.

Barrick had previously gained fame appearing on numerous reality shows, including Storage Wars and Barry’d Treasure, but he is now likely facing a lengthy sentence as each count of bank fraud carries a maximum penalty of thirty years in prison.

According to the plea agreement, schemes identified by prosecutors involved Barrick recruiting associates to purchase business property using falsified documents that substantially inflated assets and income to lenders.

Whenever a loan was in danger of going into default, he would repeat the process, creating further fake documentation to acquire new loans to pay off previous ones.

In one instance, a business partner was recruited by Barrick to obtain a loan in order to buy a wholesale mattress business. The only problem – a McDonalds restaurant was actually located at the address where the purported business was stated.

Once Barrick was eventually unable to pay back any of the borrowed money, these acts finally caught up with him.

The fact that this pattern went undetected on multiple occasions over the course of many years shows how susceptible third-party lending institutions can be to fraud.

That’s why a secure online platform for the exchange of private company financial information, is such a vital need for the accounting profession, their business clients and third-party users. In this case, had the financial institutions required that the financial statements be submitted through a secure platform that verified the financial statements were provided by a valid CPA firm, and that the documents were authentic and unaltered, Barrick would not have been able to get away with such rampant fraud.

To learn how RIVIO Clearinghouse can protect CPA firms, their business clients and third-party users from fraudulent financial document exchange, visit

Follow @rivio_ch on Twitter to stay up to date on important news regarding fraud prevention and the future of auditing and accounting.

What Your Clients Need to Know About 2019’s Top Regulatory Issues

This year, a new class of legislators are making their mark in federal, state, and local governments, progressing legislation on new and existing issues at all levels. It’s imperative for you to help your business owner clients understand current and pending regulations so they can avoid the costly consequences of falling out of compliance. Some of the top issues to keep on your firm’s and your clients’ radar for 2019 are:

  • Sexual harassment prevention. The #MeToo movement resulted in an increase in workplace sexual harassment prevention enforcement and legislation across the country in 2018 and is expected to continue in 2019. The Equal Employment Opportunity Commission reported significantly increased activity around sexual discrimination during the past fiscal year, launching 50 percent more sexual harassment lawsuits than the previous year. State and city legislatures, including California, New York State, Delaware, and New York City, responded with the passage of new legislation and regulations including provisions to implement or expand workplace sexual harassment prevention training requirements.
  • Paid sick leave and paid family leave. Currently, more than 40 state and local jurisdictions have implemented paid leave laws and several more are scheduled to implement leave policies in 2019. Although paid sick leave laws are more prevalent, paid family leave laws are generally more onerous for employers. Many family leave laws are funded by employee and/or employer contributions and might also require the periodic reporting of several elements including payroll deductions, employee hours worked, and employee wages.
  • IRS Enforcement of Employer Shared Responsibility (ESR). The IRS is continuing its ESR enforcement efforts, sending out 226J letters to employers it believes may not have offered required coverage to full-time employees and their dependent children with the preliminary calculations for ESR payments. Applicable large employers should ensure they complete the returns accurately, as the process of responding to 226J letters and follow-up IRS correspondence is time-consuming and onerous, requiring review of complex data gathered across multiple departments including payroll, human resources, and benefits.
  • Form W-4 Changes. Due to the 2017 tax reform law, extensive changes are required to the Form W-4. But due to the complexity of these changes, the release has been pushed back another year and the 2019 W-4 is similar to the current 2018 version. Many state tax agencies are waiting on the IRS to release the federal W-4 to determine if they will modify their withholding processes based on the federal changes.
  • Federal support for retirement savings. In August 2018, President Trump issued an executive order directing the Departments of Labor and Treasury to propose regulations that ease the burdens small businesses face in offering retirement savings plans. Prospects for successful new legislation, which will include components of prior proposals, are promising, potentially enhanced by Rep. Richard Neal (D-MA) as Chairman of the House Ways & Means Committee, who intends to make retirement legislation a priority.
  • Privacy. As Americans become increasingly focused on how well the companies they deal with protect their sensitive data, many states are enacting or broadening privacy regulations, with California’s new rule effective next year perhaps the most prominent. In addition to the usual requirements for a strong data security process, some states are requiring that consumers have the right to know what data companies are collecting on them and the ability to opt-out of that data being sold or distributed without their consent. Many business groups are calling for a federal privacy regulatory standard to avoid the need for alignment with differing state requirements.

It can be challenging for your small business clients to keep up with the constantly evolving regulatory landscape as they prioritize day-to-day operations and business growth. Armed with a knowledge of regulation and an understanding of the unique needs of your clients’ businesses, you can provide them with the information and resources they need to maintain compliance on all of the top regulatory issues this year.

Mike Trabold is director of compliance risk for Paychex, Inc. Paychex is a leading provider of human capital management solutions for small- to medium-sized businesses.