INTRODUCTORY MATERIAL

PPC'S GUIDE TO

• PREFACE
• HOW TO USE THE GUIDE
  • ACKNOWLEDGMENT OF COPYRIGHTS
• LIST OF SUBSTANTIVE CHANGES AND ADDITIONS

CHAPTER 1: OVERVIEW OF PPC'S GUIDE TO MANAGING AN ACCOUNTING PRACTICE

• 100 INTRODUCTION
  • What Makes This Guide Different from Other Management Books on the Market?
• 101 ORGANIZATION OF PPC'S GUIDE TO MANAGING AN ACCOUNTING PRACTICE
  • Chapter 2--Planning for a Successful Practice
  • Chapter 3--Firm Administration
  • Chapter 4--Billing, Collecting, and Managing Cash Flows
  • Chapter 5--Facilities Management
  • Chapter 6--Practice Development
  • Chapter 7--Personnel Management
  • Chapter 8--Scheduling Professional Staff
  • Chapter 9--Ownership Issues
  • Chapter 10--Avoiding Legal Liability
  • Chapter 11--Managing Technology
  • Chapter 12--Performance Measurement
  • Chapter 13--Firm Statistics
  • Chapter 14--Profile Firms
  • Chapter 15--Tax Practice Management
• APPENDIX 1A: Quality Control Maintenance Calendar

CHAPTER 2: PLANNING FOR A SUCCESSFUL PRACTICE

• 200 INTRODUCTION
  • The Importance of the Business Planning Process
  • Strategic Planning and Budgeting
  • This Chapter Will Benefit Firms of All Sizes
  • Organization of the Chapter
• 201 ANALYZING THE CURRENT SITUATION
• 202 OVERVIEW OF THE PLANNING PROCESS
  • Timing of the Planning Activities
  • Who Should Coordinate the Planning Process?
    • Managing Partner.
    • Firm Administrator.
    • Outside Facilitator.
  • Selecting a Location
  • Developing a Timetable
  • Deciding Who Should Participate in the Planning Process
  • Information Gathering
  • Planning Guidance
  • Evaluating the Planning Sessions
  • Firm-wide Meeting
• 203 DEVELOPING A STRATEGIC PLAN
  • How Important Is Strategic Planning?
    • When Should Strategic Planning Be Done?
  • Steps in Developing a Strategic Plan
  • The Vision Statement
  • The Mission Statement
    • The Importance of the Firm's Services and Its Clients.
    • The Importance of the Firm's Growth Prospects.
    • Developing a Mission Statement.
  • The SWOT Analysis
    • Pre-SWOT Procedures.
    • Strengths.
    • Weaknesses.
    • Opportunities.
    • Threats.
  • Objectives and Strategies
    • Objectives.
    • Strategies.
  • Action Plan
  • Completing the Strategic Plan
• 204 THE BUDGETING PROCESS
  • How Important Is the Budgeting Process?
  • The Budgeting Process
  • Assumptions
    • Use of an Assumption List.
  • Cash Versus Accrual Basis
  • Budgets Should Be Based on Current and Historical Operations
  • Budgeting Revenues
    • Revenues Should Be Budgeted by Department.
    • Budgeting Individual Income Tax Return Preparation Revenues.
    • Budgeting Corporate Income Tax Return Preparation Revenues.
    • Budgeting Revenues for Monthly Write-up Work.
    • Budgeting Revenues for Compilation, Review, and Audit Services--Governmental and Nonprofit.
    • Budgeting Revenues for Compilation, Review, and Audit Services--For-profit.
    • Budgeting Revenues for Tax Planning and Other Engagements.
    • Budgeting Revenues for Consulting and Other Nontraditional Services.
    • Marketing Plan.
  • Budgeting Expenses
    • Fixed Expenses.
    • Variable Expenses.
    • Other Expenses.
    • General Considerations for Budgeting Expenses.
  • Budgeting Balance Sheet Information
    • Advantages of Including a Budgeted Balance Sheet.
    • A Logical Approach to Budgeting Balance Sheet Information.
    • Budgeting Unbilled Work in Progress.
    • Budgeting Billed Accounts Receivable.
    • Budgeting Prepaid Expenses.
    • Budgeting Property and Equipment (and Related Depreciation).
    • Budgeting Accounts Payable and Accrued Expenses.
    • Budgeting Notes Payable and Other Debt (Excluding Lines of Credit).
    • Budgeting Cash and Operating Lines of Credit.
  • Budgeting Cash Flows
    • Budgeting Expected Cash Flows.
  • Preparing Budgeted Financial Statements
• 205 THE SUCCESSION PLANNING PROCESS
  • Benefits of Succession Planning
  • Steps in Developing a Succession Plan
  • Identify Key Areas and Key Positions
  • Identify Competencies for the Key Areas and Key Positions
  • Identify Interested Employees and Assess Them Against the Key Position Requirements
  • Identify a Temporary Back-up For Each Key Position
  • Develop and Implement Succession and Knowledge Transfer Plans
  • Implement a Leadership Development Program
  • Evaluate Effectiveness
• 206 PERFORMANCE MANAGEMENT AND INDIVIDUAL PERFORMANCE GOALS
• 207 MONITORING THE EFFECTIVENESS OF THE BUSINESS PLAN
  • Quarterly Reviews
  • Changing Objectives
  • Performance Measurement
• APPENDIX 2A: Preliminary Snapshot--Business Planning
• APPENDIX 2B: Employee Recommendations and Client Feedback
  • APPENDIX 2B-1: Employee Recommendations Survey
  • APPENDIX 2B-2: Client Feedback Survey
  • APPENDIX 2B-3: Employee Recommendations and Client Feedback Recap Form
• APPENDIX 2C: SWOT Analysis Forms
• APPENDIX 2D: Objectives and Strategies Form
• APPENDIX 2E: Action Plan Form
• APPENDIX 2F: Budget Worksheets
  • APPENDIX 2F-1: Budget Preparation Schedules
  • APPENDIX 2F-2: Budget Summary Schedules
    • APPENDIX 2F-2a: Summary Income Statement Budget
    • APPENDIX 2F-2b: Balance Sheet Budget
    • APPENDIX 2F-2c: Statement of Cash Flows Budget
  • APPENDIX 2F-3: Gross Revenue Analysis Worksheet
  • APPENDIX 2F-4: Expense Analysis Worksheet
    • APPENDIX 2F-4a: Salary and Personnel Expense Worksheet
    • APPENDIX 2F-4b: Facilities and General Expense Worksheet
  • APPENDIX 2F-5: Other Income and Expense Worksheet
  • APPENDIX 2F-6: Unbilled Work in Progress
    • APPENDIX 2F-6a: Unbilled Work in Progress Worksheet
    • APPENDIX 2F-6b: Billings and Billing Adjustments Worksheet
  • APPENDIX 2F-7: Billed Accounts Receivable
    • APPENDIX 2F-7a: Billed Accounts Receivable Worksheet
    • APPENDIX 2F-7b: Collections Pattern Analysis Worksheet
  • APPENDIX 2F-8: Prepaid Expense Worksheet
  • APPENDIX 2F-9: Property, Equipment, and Depreciation Schedules
    • APPENDIX 2F-9a: Property and Equipment Worksheet
    • APPENDIX 2F-9b: Accumulated Depreciation Worksheet
    • APPENDIX 2F-9c: Gain or Loss on Asset Disposals
  • APPENDIX 2F-10: Accounts Payable and Accrued Expenses Worksheet
  • APPENDIX 2F-11: Debt Budget
    • APPENDIX 2F-11a: Debt Budget Worksheet (Excluding Lines of Credit)
    • APPENDIX 2F-11b: Interest Income and Expense Recap
  • APPENDIX 2F-12: Cash and Line of Credit Worksheet
  • APPENDIX 2F-13: Budget Assumptions List
• APPENDIX 2G: Succession Planning Checklist
• APPENDIX 2H: Participant's Evaluation--Strategic Planning Sessions
• APPENDIX 2I: Performance Expectations and Evaluation Form

CHAPTER 3: FIRM ADMINISTRATION

• 300 INTRODUCTION
• 301 ANALYZING THE FIRM'S CURRENT SITUATION
  • Using a Diagnostic Approach
• 302 ACCOUNTING ADMINISTRATION
  • Who Provides the Firm's Internal Accounting?
  • Selecting a Basis of Accounting
    • Cash Basis.
    • Tax Basis.
    • Accrual (or GAAP) Basis.
  • Developing a Chart of Accounts
  • Processing the Firm's Payroll
    • Using a Separate Payroll Bank Account.
    • Maintaining Payroll Records.
    • Using Service Providers.
  • Accumulating Time and Expense Information
    • Importance of Capturing Time and Expense Information.
    • Reporting Policies.
    • Reporting Procedures.
  • Automated Accounting Systems
    • Keep the Automated System Simple.
    • Web-based versus Desktop Processing.
  • Reporting Information to Management
    • Determining Information Needs.
    • Designing Effective Reports.
• 303 MANAGING THE OFFICE
  • General Office Appearance
  • Reception Area
  • Telephone Etiquette
  • Office Mail
  • Office Supplies
  • Supervising the Administrative Staff
    • Is a Firm Administrator Necessary?
    • Using a Firm Administrator.
• 304 PROCESSING REPORTS, TAX RETURNS, AND CORRESPONDENCE
  • Producing Reports, Tax Returns, and Correspondence
    • Developing the Firm's Style.
    • Producing the Documents.
  • Delivering the Finished Product
  • Establishing Correspondence Guidelines
    • Formal Correspondence.
    • Informal Correspondence.
  • Establishing an Email Policy
• 305 FILES AND RECORD RETENTION
  • Developing a Filing System
    • File Indexing.
    • Non-electronic File Checkout and Return Procedures.
  • How Long Should Files Be Kept?
    • Disposing of Old Files.
  • Document Imaging
  • Record Retention Challenges for Information in Electronic Form
    • Understanding Electronic Document Retention Risks.
    • Archiving Electronic Information.
    • Retention of Electronic Workpapers.
    • Storing and Disposing of Electronic Files.
    • Email.
• 306 INSURANCE
  • Managing Risks
    • Risk Avoidance.
    • Risk Control.
    • Risk Retention.
    • Risk Transfer.
  • Types of Insurance
    • General Liability.
    • Workers' Compensation.
    • Property.
    • Valuable Papers.
    • Crime.
    • Business Interruption Insurance.
    • Umbrella Policies.
    • Professional Liability Insurance.
    • Key Person Insurance.
    • Group Health Insurance.
  • Purchasing Insurance
    • Selecting an Agent.
    • Obtaining Quotes.
    • Making the Final Decision.
  • Reducing Insurance Costs
    • Periodically Obtain New Bids.
    • Set Higher Deductibles or Self-insure for Limited Risks.
    • Select Appropriate Property Insurance Amounts.
    • Exclude Land Value from Building Property Coverage.
    • Coordinate Umbrella Policies with Underlying Coverage.
• 307 DISASTER RECOVERY PLANNING
  • Developing a Disaster Recovery Plan
    • Define Objectives and Scope.
    • Identify the Disaster Recovery Team.
    • Establish Priorities.
    • Analyze Risks and Alternatives.
    • Document the Plan.
    • Review and Test the Plan.
    • Assistance with Developing the Plan.
  • Protecting Employees
  • Protecting Files and Records
  • Protecting the Computer System
    • Physical Access.
    • User Access.
    • Software Access and Data Security.
    • Telecommunications.
  • Other Considerations
  • Using Consultants for Disaster Recovery Planning
• 308 THE PROFESSIONAL LIBRARY
  • Determine the Firm's Needs
    • Type of Clients.
    • Outside Resources.
    • Usage Level.
  • Building a Tax Research Library
    • Tax Services.
    • Tax Handbooks.
    • Quickfinderr Handbooks.
    • IRS Forms and Publications.
    • Superintendent of Documents.
    • Court Cases and Citators.
    • State Tax Guides and Handbooks.
    • Tax Magazines.
    • Tax Newsletters.
    • Other Reference Books.
  • Building an Audit and Accounting Library
    • Authoritative Pronouncements.
    • FASB Codification Project.
    • Other Resources.
  • Electronic Resources
    • Online Research Libraries.
    • CD-ROM Libraries.
  • Maintaining the Firm's Library
    • File Updates Currently.
    • Cataloging Books.
    • Circulating Periodicals and Newsletters.
    • Conducting a Periodic Review of Library Resources.
• 309 KNOWLEDGE MANAGEMENT
• APPENDIX 3A: Preliminary Snapshot--Firm Administration
• APPENDIX 3B: State Tax Form Ordering Information
• APPENDIX 3C: Suggested Firm Library
• APPENDIX 3D: Employee Payroll Information Sheet
• APPENDIX 3E: Payroll Service Provider Checklist
• APPENDIX 3F: Time and Expense Form
• APPENDIX 3G: Report Processing Routing Slip
• APPENDIX 3H: Production Control Log
• APPENDIX 3I: File Checkout/Return Card
• APPENDIX 3J: Prospective Insurance Agent Evaluation Form
• APPENDIX 3K: Existing Agent or Broker Evaluation Form
• APPENDIX 3L: Firm Asset Listing
• APPENDIX 3M: Technology Infrastructure Summary List
• APPENDIX 3M: Technology Infrastructure Summary List
• APPENDIX 3N: Disaster Recovery Plan Questionnaire

CHAPTER 4: BILLING, COLLECTING, AND MANAGING CASH FLOWS

• 400 INTRODUCTION
• 401 ANALYZING THE CURRENT PRACTICE
  • Using a Diagnostic Approach
• 402 BILLING AND COLLECTING
  • Billing Methods
    • Fixed Fees.
    • Form-based Fees.
    • Time-based Method.
    • Value Billing.
    • Contingent Fees.
  • Determining Fees
    • Establishing Billing Rates.
    • Setting Minimum Fees.
    • Considering Competitors' Fees.
    • Recovering Direct Expenses.
    • Administrative Overhead.
    • Recouping Technology Costs.
    • Special Rates.
    • Considering Prior Year Fees.
    • Quoting Fees.
    • Discounting Fees.
  • Preparing Bills
    • Billing Language.
    • Timing of Bills.
  • Billing Adjustments
  • Collecting Billed Amounts
    • Good Collection Begins with Knowing the Client.
    • Using the Engagement Letter as a Collection Tool.
    • Collecting Bills before They Become Delinquent.
    • Collecting Past Due Bills.
  • Processing Credit Card Payments
  • Evaluating Credit Card Processors
    • Cards Handled.
    • Required Banking Relationships.
    • Fees and Charges.
    • Equipment Requirements.
    • For Users of QuickBooks or Quicken.
  • PayPal
• 403 CONTROLLING DISBURSEMENTS
  • Reducing Expenses
    • Personnel Costs.
    • Insurance.
    • Firm Library and Other Professional Resources.
    • Furniture and Equipment.
    • Stationery, Forms, and Supplies.
    • Travel.
    • Office Rent.
    • Telecommunications.
    • Long Distance Telephone.
    • VoIP.
    • Mail and Express Delivery.
  • Deferring Payments
  • The Effect of the Firm's Form of Organization on Cash Disbursements
    • Sole Proprietorships.
    • Partnerships, LLPs, and LLCs.
    • Professional Corporations.
• 404 MANAGING A CASH SURPLUS OR SHORTAGE
  • Optimizing Idle Cash
    • Repaying Debt.
    • Selecting an Investment.
  • Depository Accounts
    • Operating Accounts.
    • Zero-balance Accounts.
    • Controlled Disbursement Accounts.
    • Money Market Accounts.
    • Brokerage House Money Market Accounts.
    • Automatic Sweep Accounts.
    • Direct Overnight Investment Arrangement.
  • Financing Cash Shortages
    • Lines of Credit.
    • Financial Statement Presentation and Cash Flow Requirements.
    • Personal Guarantees.
    • Alternative Financing.
• APPENDIX 4A: Preliminary Snapshot--Billing, Collecting, and Managing Cash Flows
• APPENDIX 4B: Billing Draft Forms
  • APPENDIX 4B-1: Invoice for Write-up Services
  • APPENDIX 4B-2: Invoice for Progress Billing
  • APPENDIX 4B-3: Invoice for Single Billing
• APPENDIX 4C: Billing Worksheet
• APPENDIX 4D: Stop Work Letters
  • APPENDIX 4D-1: Letter Documenting Intent to Stop Work in Ten Days
  • APPENDIX 4D-2: Letter Documenting Stop Work
• APPENDIX 4E: Collection Letters
  • APPENDIX 4E-1: Collection Letter--30 Days Past Due
  • APPENDIX 4E-2: Collection Letter--60 Days Past Due
  • APPENDIX 4E-3: Collection Letter--90 Days Past Due
• APPENDIX 4F: Client Collection Call Sheet
• APPENDIX 4G: Draft Note Agreement
• APPENDIX 4H: Illustrative Travel and Expense Policy

CHAPTER 5: FACILITIES MANAGEMENT

• 500 INTRODUCTION
• 501 ANALYZING THE CURRENT SITUATION
  • Using a Diagnostic Approach
• 502 PLANNING FACILITY NEEDS
  • Estimating Future Growth
    • Start with the Business Plan.
    • Summarize Projected Office Growth.
  • Comparing Existing Capacity with Projected Headcount
  • Anticipating Technology Issues
  • Assessing Office Equipment Needs
• 503 OBTAINING OFFICE SPACE
  • Location of the Office Space
    • Downtown Locations.
    • Suburban Areas.
  • Leasing Space from a Client
  • Newer versus Older Buildings
  • How Much Space Is Required?
    • Planning the Interior Design of Office Space.
  • Leasing, Buying, and Building Office Space
    • Leasing Office Space.
    • Buying or Building Office Space.
    • Should the Building Be Owned by the Firm or Its Partners?
    • Leasing Office Space to a Client.
  • Leasing Office Space
    • Determining the Initial Lease Rate and Terms.
    • Comparing Net and Gross Lease Amounts.
    • Responsibility for Building-related Costs.
    • Identifying Required Finish-out Costs.
    • Negotiating Key Aspects of the Lease.
    • Lease Term and Renewal Options.
    • Right of First Refusal to Expansion Space.
    • Compliance with Government Regulations.
    • Selection of Contractors.
    • Future Alterations.
    • Sublease Ability.
    • Comparing Proposed Leases.
    • Leasing Alternatives.
  • Buying or Building Office Space
    • Due Diligence Procedures That Should Be Performed.
  • Relocating the Office
• 504 SELECTING OFFICE EQUIPMENT
  • Selecting Office Copiers
    • Types of Copiers.
    • Key Buying Considerations.
    • Making the Final Selection.
  • Selecting Fax Machines
    • Types of Fax Machines.
    • Key Buying Considerations.
    • Making the Final Decision.
  • Selecting Multifunctional Machines
    • Types of Multifunctional Machines.
    • Pros and Cons.
    • Key Buying Considerations.
    • Making the Final Decision.
  • Selecting Document Scanners
    • Types of Document Scanners.
    • Making the Final Decision.
  • Selecting Telecommunications Systems
    • Planning Considerations.
    • Key Buying Considerations.
    • Should a Telecommunications Consultant Be Used?
    • Selecting and Installing a Telephone System.
    • Gain an Understanding of the Types of Systems Available.
    • Identifying System Shortcomings.
    • Defining the Existing System and Its Capabilities.
    • Assessing Telephone System Needs.
    • Consider Upgrading the Current System.
    • Preparing RFPs.
    • Identifying Potential Vendors and Distributing the RFPs.
    • Choosing a System.
    • Negotiating the Contract.
  • Deciding among Long-distance Providers
  • Selecting Cell Phone Equipment and Service
    • Personal Digital Assistants (PDAs).
    • Smartphones.
• 505 BUYING COMPUTER EQUIPMENT AND SOFTWARE
  • Computer Equipment
    • The Processor.
    • Memory.
    • Removable Data Drives.
    • The Hard Drive and Solid State Drive.
    • The Monitor.
    • Printers and Duplicators.
    • Other Computer Peripherals.
    • Desktop versus Notebook Computers.
    • Suggested Computer Configurations.
  • Purchasing a Computer System
    • Choosing a Brand.
    • Price versus Value.
    • Planning for Obsolescence.
    • Types of Vendors.
    • Assessing Vendors.
    • Buying from Local Vendors Rather Than through Mail Order.
    • Warranty Provisions and Technical Support.
  • Should a Firm Network Its Computers Together?
    • LAN Configuration.
    • Transmission Medium.
  • Operating System Software
  • Practice Management Software
    • Features of Practice Management Software.
    • Selecting the Right Software.
    • Relationship to Performance Management.
  • Purchasing Other Computer Application Software
    • Word Processing Software.
    • Spreadsheet Software.
    • Database Management Software.
    • Buying Bundled Software.
    • Tax Return Preparation Software.
    • Trial Balance and Write-up Software.
    • Electronic Engagement Software.
    • Data Extraction Software.
    • Other Software.
• 506 LEASE VERSUS BUY CONSIDERATIONS
  • Performing a Financial Comparison
    • Make Sure That the Lease/Buy Alternatives Are Comparable.
    • Using Electronic Spreadsheets.
  • Example of a Lease/Buy Analysis
    • Data and Assumptions.
    • Conclusion.
    • Additional Factors That Should Be Considered.
• APPENDIX 5A: Preliminary Snapshot--Facilities Management
• APPENDIX 5B: Phone System Vendor Resources
• APPENDIX 5C: Facilities Planning Form
• APPENDIX 5D: Facility Lease Comparison Worksheet
• APPENDIX 5E: Office Relocation Checklist
• APPENDIX 5F: Existing Telecommunications System Form
• APPENDIX 5G: Telecommunications Needs Questionnaires
  • APPENDIX 5G-1: Phone Users' Needs Questionnaire
  • APPENDIX 5G-2: Operators' Needs Questionnaire
• APPENDIX 5H: Computer Vendor Evaluation Form
• APPENDIX 5I: Lease/Buy Cost Comparison Worksheet
• APPENDIX 5J: Present Value Tables

CHAPTER 6: PRACTICE DEVELOPMENT

• 600 INTRODUCTION
  • Analyzing the Current Situation
  • Retaining Existing Clients
  • Expanding Services to Existing Clients
  • Marketing a Firm's Services to New Clients
  • Developing a Formal Marketing Plan
  • Preparing and Presenting Effective Proposals
• 601 ANALYZING THE CURRENT SITUATION
  • Using a Diagnostic Approach
• 602 RETAINING EXISTING CLIENTS
  • The CPA/Client Relationship
  • Developing a Client Service Strategy
    • Not All Clients Are Created Equal.
    • Identify Important Clients.
    • Client Service Planning.
    • Client Service Strategies for All Clients, Regardless of Size.
  • Monitoring Client Satisfaction
    • Ask Important Clients If They Are Satisfied with the Firm's Work.
    • Conduct Client Satisfaction Surveys.
  • Performing Lost Client Analyses
• 603 EXPANDING SERVICES TO EXISTING CLIENTS
  • What Types of Services Should Be Offered?
    • Advantages of Expanding a Firm's Services.
    • Preventive versus "As Needed" Services.
  • How to Expand a Firm's Practice to Include Consulting and Other Nontraditional Services
    • Litigation Support.
    • Divorce Services.
    • Forensic Accounting.
    • Personal Financial Planning and Estate Planning Services.
    • Opportunities Resulting from the Sarbanes-Oxley Act.
    • Internal Control Services.
  • Selling Additional Services to Existing Clients
    • Marketing "As Needed" Services.
    • Marketing Preventive Services.
• 604 MARKETING A FIRM'S SERVICES TO NEW CLIENTS
  • Ethical Considerations
  • Successful Marketing Techniques
  • Public Relations
    • Speaking at Civic and Professional Events.
    • Sponsoring Professional Conferences, Seminars, and Webinars.
    • Cosponsoring a Seminar or Webinar with Another Organization.
    • Writing Articles for Professional and Other Publications.
    • Press Releases.
    • Being Quoted in Newspaper, Magazine, and Other Articles.
    • Sending Firm Announcements.
    • Developing a Mailing List.
    • Sending Newsletters.
    • Purchasing Ready-made Newsletters.
    • Preparing In-house Newsletters.
    • Alternatives to Newsletters.
    • Conducting Surveys and Publishing the Results.
    • Branding.
    • Engaging a Public Relations Firm.
  • Networking
    • Referral Network.
    • Obtaining Referrals from Existing Clients.
    • Obtaining Referrals from Bankers and Attorneys.
    • Developing Alumni as Referral Sources.
    • Community Involvement.
    • Membership in Professional Organizations.
    • Hosting Social Events.
    • Tracking Referrals.
  • Using Other Practitioners as Resources
    • Study Groups.
    • Practice Management Groups.
    • Associations of CPA Firms.
    • Marketing and Niche Associations.
  • Advertising and Other Marketing Tools and Techniques
    • AICPA Rules.
    • IRS Rules.
    • Securities and Exchange Commission Regulations.
    • State Regulations.
    • Direct Marketing Techniques.
    • Firm Brochures.
    • Video.
    • Websites.
    • Trade Journals and Other Media.
    • The Yellow Page Directory.
    • Direct Mail Solicitation.
  • Coordinating a Firm's Marketing Efforts
    • Getting Everyone Involved in the Marketing Effort.
    • Assessing the Need for a Marketing Professional.
    • The Role of a Marketing Professional.
• 605 DEVELOPING A FORMAL MARKETING PLAN
  • Evaluate the Firm's Capabilities
    • Professional Staff.
    • Existing Client Base.
    • Firm Commitment.
  • Assess the Firm's Market Position
  • Analyze the Competition
  • Define Services
  • Identify the Market
    • Niche Marketing.
  • Develop a Marketing Strategy
  • Select Specific Marketing Methods
  • Establish a Budget
  • Monitor the Plan's Effectiveness
    • Marketing Meetings.
  • Checklist for Developing a Marketing Plan
  • Sample Marketing Plan
• 606 PREPARING AND PRESENTING EFFECTIVE PROPOSALS
  • Evaluating Whether to Propose
  • Researching the Request
    • Preparing Winning Proposals.
    • The Initial Meeting with the Prospective Client.
    • Documenting the Results of the Initial Meeting.
  • Types of Proposals
    • Comprehensive Proposals.
    • Proposal Letter.
  • Drafting a Proposal
  • Oral Presentations
  • Following up on Unsuccessful Proposals
• APPENDIX 6A: Preliminary Snapshot--Practice Development
• APPENDIX 6B: Example Copy of PPC's Tax and Business Alert
• APPENDIX 6C: Partial List of Associations of CPA Firms
• APPENDIX 6D: Checklist for Developing a Marketing Plan
• APPENDIX 6E: Simplified Model Marketing Plan
• APPENDIX 6F: Example of a Request to Be Put on Bidder's List
• APPENDIX 6G: Example of a Comprehensive Proposal
• APPENDIX 6H: Example of a Proposal Letter
• APPENDIX 6I: Client Satisfaction Survey
• APPENDIX 6J: Diagnostic Review of a Client's Operations
• APPENDIX 6K: Seminar Planning Checklist
• APPENDIX 6L: Webinar Planning Checklist
• APPENDIX 6M: Market Perception Questionnaire
• APPENDIX 6N: Firm Competition Worksheet
• APPENDIX 6O: Marketing Budget Worksheet
• APPENDIX 6P: New Client Lead Information Sheet
• APPENDIX 6Q: Referral Thank You Letter Drafting Form
• APPENDIX 6R: Additional Information That Can Be Useful in Preparing a Proposal

CHAPTER 7: PERSONNEL MANAGEMENT

• 700 INTRODUCTION
• 701 ANALYZING THE FIRM'S CURRENT SITUATION
  • Using a Diagnostic Approach
  • Preparing a Financial Analysis
• 702 GENERAL PERSONNEL POLICIES
  • Introduction
  • Developing an Employee Handbook
    • Benefits of an Employee Handbook.
    • Risks Associated with an Employee Handbook.
    • How Does an Employee Handbook Differ from a Policy Manual?
    • Procedures for Developing an Employee Handbook.
  • What Topics Should an Employee Handbook Cover?
    • Introduction.
    • Explanation of the Employment Relationship.
    • Expected Employee Conduct.
    • Compensation and Benefits.
    • Leaves of Absence.
    • Separation.
  • Confronting Harassment and Discrimination Issues
    • Harassment.
    • Discrimination.
    • For More Information.
  • Understanding the Implications of the Family and Medical Leave Act
    • Covered Events.
    • Eligible Employees.
    • Which Employers Are Covered by the Act?
    • Penalties and State Laws.
    • What Actions Should the Firm Take to Conform to the Act?
    • For More Information.
  • Complying with the Americans with Disabilities Act
    • Reasonable Public Accommodations.
    • Employment Discrimination.
    • For More Information.
  • Complying with the Immigration Reform and Control Act of 1986
    • Notifying Applicants.
    • Penalties.
    • For More Information.
  • The Health Insurance Portability and Accountability Act
    • HIPAA Privacy Rule.
    • Covered Entities.
    • Business Associates.
    • For More Information.
• 703 RECRUITING
  • The Supply of New and Experienced Accounting Staff
    • Fewer Experienced Professionals.
    • Increased Competition from National and Regional Firms.
    • Improved National and Regional Firm Cultures.
    • Defection of Staff to Industry.
    • Increasing Number of New Graduates Hired Directly into Industry.
    • Young Professionals Starting Their Own Businesses.
    • Professionals Temporarily Leaving the Workforce.
    • Changing Attitudes of Professionals.
    • Traditional Work Environments.
  • What Can Be Done?
    • What Are Job Candidates Seeking?
    • Determining the Types of Candidates to Target.
  • Delivering the Recruiting Message
    • Soliciting Candidates through Advertisements.
    • On-campus Recruiting.
    • Using Employment Agencies and Search Firms.
    • Websites.
    • Direct Contact Methods.
    • Video.
    • Referrals.
    • Other Methods.
    • Rehiring.
• 704 RECRUITING EMPLOYEES
  • Quality Control Considerations
  • Avoiding Discrimination
  • Identifying Staffing Needs
    • Developing a Staffing Plan.
    • SQCS Requirements.
    • Planning for the Firm's Personnel Needs.
    • Documenting the Recruitment and Hiring Plan.
    • Professional Staffing Alternatives.
    • Administrative Staffing Alternatives.
    • Importance of Continuity in Part-time and Temporary Employees.
    • Importance of Retaining Staff.
    • Employee versus Independent Contractor.
    • Benefits for Part-time and Temporary Employees.
    • Determining the Responsibilities of the Position.
  • Screening Candidates
    • Using Resumes.
    • Employment Applications.
  • Interviewing Candidates
    • Preparing for the Interview.
    • Conducting the Initial Interview.
    • Conducting the Follow-up Interview.
    • Documenting the Interviews.
  • Performing Reference Checks and Pre-employment Testing
    • Background Checks.
    • Pre-employment Testing.
    • Pre-employment Drug and Alcohol Testing.
  • Evaluating the Candidates
  • Pre-employment Personality Assessment
  • Making Employment Offers and Rejections
    • Avoid Implied Contracts.
    • Written Employment Offers.
    • Written Employment Contracts.
    • Rejections.
  • Documenting the Hiring Process
  • Welcoming the New Employee
• 705 COMPENSATION AND BENEFITS
  • Observing Wage and Hour Laws
    • The Fair Labor Standards Act.
    • Exemption from FLSA Requirements.
    • For More Information.
    • Recordkeeping Requirements.
    • The Equal Pay Act.
  • Developing a Competitive Salary Structure
    • Establishing Salary Levels.
    • Bonuses.
    • Overtime Policies.
    • Salary Adjustments.
  • Paid Vacation
  • Paid Holidays
  • Sick Leave
  • Retirement Plans
  • Life Insurance
    • Term Insurance.
    • Whole Life or Universal Life.
    • Split-dollar Life Insurance Plans.
  • Disability Insurance
  • Group Health Insurance
    • Types of Plans.
    • Choosing a Plan.
    • Reducing Health Care Costs.
  • Reimbursement of Professional and Business Expenses
  • Other Fringe Benefits
• 706 TRAINING AND PROFESSIONAL DEVELOPMENT
  • Quality Control Requirements
  • CPE Requirements
    • State Boards of Accountancy and State CPA Societies.
    • Are Nonprofessional Staff Members Subject to CPE Requirements?
    • GAO CPE Requirements.
    • Governmental Audit Quality Center CPE Requirements.
    • Employee Benefit Audit Quality Center CPE Requirements.
  • Planning the Firm's Professional Development Activities
    • Create a Professional Development Plan for Each Professional in the Firm.
    • Document the Professional Development Plan.
    • Assess Professional Capabilities and Competencies.
    • Consider Different Types of CPE Programs.
    • Provide On-the-job Training.
    • Provide Information on Changing Professional Standards in a Timely Manner.
  • Maintaining CPE Records
  • Training Nonprofessional Staff
• 707 EVALUATING PERFORMANCE
  • Communicate Expectations before the Evaluation Process Begins
  • Frequency of Evaluations
  • Evaluating Partner Performance
  • Incorporating the Opinions of Others
  • Documenting Performance Evaluations
  • Conducting the Evaluation Meeting
  • Making Compensation and Advancement Decisions
  • Documenting Compensation and Advancement Decisions
• 708 RETAINING STAFF
  • Positive Work Environment
    • Flexible Work Arrangements.
    • Flextime and Telecommuting.
    • Other Flexible Work Options.
    • Permanent Part-time Staff Positions.
    • Seasonal Positions.
    • Part-time Partners.
  • Emphasis on Personal Development
  • Recognition of Performance
  • Emphasis on the Individual as Part of a Team
  • Open Communication
  • Information about the Firm
• 709 SEPARATION
  • Resignations
    • Determine Why Employees Are Leaving.
    • Advance Notice.
    • Forced Resignations.
    • Forced Retirement.
  • Layoffs
    • Legal Risks.
  • Discharges
    • The Model Discharge.
    • Legal Risks.
    • Defending a Discharge.
  • Exit Considerations
    • Conducting the Exit Interview.
    • HIPAA Certificates of Coverage.
    • Continuing Group Health Insurance Benefits.
    • Final Pay.
    • Responding to Reference Checks on Former Employees.
  • Unemployment Claims
    • Who Is Eligible for Unemployment Benefits?
    • Challenging Unemployment Claims.
    • Preventing Meritless Unemployment Claims.
    • Shortening the Duration of Benefits.
• APPENDIX 7A: Preliminary Snapshot--Personnel Management
• APPENDIX 7B: Recruiting Websites
• APPENDIX 7C: Financial Analysis Worksheet
• APPENDIX 7D: Employee Handbook Checklist and Drafting Forms
  • APPENDIX 7D-1: Employee Handbook Checklist
  • APPENDIX 7D-2: Acknowledgement of Receipt Form
• APPENDIX 7E: Assessing the Firm's Staffing Situation
• APPENDIX 7F: Analyzing Alternative Work Arrangements
• APPENDIX 7G: Sample Job Descriptions
  • APPENDIX 7G-1: Sample Job Description--Receptionist
  • APPENDIX 7G-2: Sample Job Description--Administrative Assistant
  • APPENDIX 7G-3: Sample Job Description--Paraprofessional
  • APPENDIX 7G-4: Sample Job Description--Staff Accountant
  • APPENDIX 7G-5: Sample Job Description--Senior Accountant
  • APPENDIX 7G-6: Sample Job Description--Manager/Senior Manager
• APPENDIX 7H: Candidate Screening Form
• APPENDIX 7I: Employment Application
• APPENDIX 7J: Letter Inviting Recruit to Visit Office--Drafting Form
• APPENDIX 7K: Interview and Evaluation Checklist
• APPENDIX 7L: Letter Offering Employment Drafting Form
• APPENDIX 7M: Employment Contract Drafting Form
• APPENDIX 7N: Rejection Letter Drafting Form
• APPENDIX 7O: Independence, Integrity, and Objectivity Questionnaire
• APPENDIX 7P: Independence, Integrity, and Objectivity Representation
• APPENDIX 7Q: Independence, Integrity, and Objectivity Representation Control Log
• APPENDIX 7R: Independence, Integrity, and Objectivity Resolution Form
• APPENDIX 7S: What Does the Firm Culture Say to Employees?
• APPENDIX 7T: New Employee Orientation Checklist
• APPENDIX 7U: CPE Planning Kit
  • APPENDIX 7U-1: CPE Planning Kit--Survey
  • APPENDIX 7U-2: CPE Planning Kit--Individual CPE Plan
  • APPENDIX 7U-3: CPE Planning Kit--Firm Worksheet
• APPENDIX 7V: In-house CPE Documentation Kit
  • APPENDIX 7V-1: Notification Form--In-house CPE Program
  • APPENDIX 7V-2: Qualifications--In-house CPE Program
  • APPENDIX 7V-3: Attendance Record and Course Outline--In-house CPE Program
  • APPENDIX 7V-4: Evaluation--In-house CPE Program
  • APPENDIX 7V-5: Evaluation Summary--In-house CPE Program
  • APPENDIX 7V-6: Instructor's Evaluation--In-house CPE Program
  • APPENDIX 7V-7: Individual CPE Record
• APPENDIX 7W: Performance Evaluation Forms
  • APPENDIX 7W-1: Professional Staff Evaluation Form--Long Form
  • APPENDIX 7W-2: Professional Staff Evaluation Form--Short Form
  • APPENDIX 7W-3: Partner Evaluation Form
  • APPENDIX 7W-4: Administrative Staff Evaluation Form
  • APPENDIX 7W-5: Annual Advancement and Compensation Summary
• APPENDIX 7X: Pre-discharge Checklist
• APPENDIX 7Y: Exit Interview Form

CHAPTER 8: SCHEDULING PROFESSIONAL STAFF

• 800 IMPORTANCE OF PROPER SCHEDULING
  • Introduction
  • Literature Related to Scheduling
    • Audit and Attestation Requirements.
    • Government Auditing Standards.
    • Ethical Requirements.
    • SQCS Requirements.
  • Scheduling Partners and Managers
  • Meeting Client Deadlines and Increasing Client Satisfaction
    • Continuity.
  • Reducing Risk
  • Minimizing Unassigned Time and Overtime
  • Improving Morale
  • Proposing on and Scheduling New Work
  • Practical Considerations for Assigning Personnel
• 801 ANALYZING THE FIRM'S CURRENT SITUATION
  • Using a Diagnostic Approach
• 802 ADVANTAGES OF A DUE DATE MONITORING SYSTEM
  • Monitoring Due Dates
  • Adequate Lead Time
  • Maintaining the Integrity of the Monitoring System
    • Adding New Clients or Engagements.
    • Clearing Completed Jobs.
    • Purging Former Clients and Engagements.
  • Engagements with No Due Date
  • Automating the System
• 803 SCHEDULING AUDIT, TAX, AND OTHER ENGAGEMENTS
  • Introduction
  • Formulating an Annual Staffing Plan
    • Information Needed for the Annual Staffing Plan.
    • Time Budget.
    • Include All Engagements in the Annual Staffing Plan.
    • Documenting the Annual Staffing Plan.
    • Evaluating the Results of the Annual Staffing Plan.
  • Designating a Scheduler
  • Preparing the Annual Schedule
    • Engagement Type, Size, Significance, Complexity, and Risk Profile.
    • Timing and Length of the Engagement.
    • Special Expertise and Experience Required for the Engagement.
    • Continuity and Periodic Rotation of Staff.
    • Personnel Availability and Involvement of Supervisory Personnel.
    • Other Factors to Consider.
    • Documenting the Annual Schedule.
    • Methods to Ensure That All Engagements Are Scheduled.
  • Conducting Scheduling Meetings
    • Initial Scheduling Meeting.
    • Periodic Scheduling Meetings.
    • Approving the Annual Schedule.
  • Monitoring and Changing the Schedule
    • Monitoring Work in Progress.
    • Monitoring Overtime.
    • Making Schedule Changes.
    • Schedule Request Forms.
• 804 MANAGING UNASSIGNED TIME
  • Introduction
  • Selling Work to Existing or New Clients
  • Selling "Loaner" Work at Reduced Rates
  • Accelerating Recurring Work into Slack Periods
    • Offer Incentives to Clients.
    • Preparation Cutoff Dates.
  • Exploring Professional Staffing Alternatives
    • Part-time or Temporary Professionals.
    • Student Interns.
    • Paraprofessionals.
  • Scheduling Other Nonchargeable Activities
• 805 AUTOMATING THE SCHEDULING PROCESS
  • Communication of Scheduling Assignments
• APPENDIX 8A: Preliminary Snapshot--Scheduling Professional Staff
• APPENDIX 8B: Due Date Monitoring System Input Form
• APPENDIX 8C: Annual Staffing Plan
• APPENDIX 8D: Tax Work in Progress Inventory
• APPENDIX 8E: Schedule Request Form
• APPENDIX 8F: Considerations in Assigning Personnel

CHAPTER 9: OWNERSHIP ISSUES

• 900 INTRODUCTION
• 901 ANALYZING THE FIRM'S CURRENT SITUATION
• 902 FORM OF OWNERSHIP
  • Proprietorship
  • Partnership
    • Partnership Agreements.
    • Advantages and Disadvantages of Operating as a Partnership.
  • Professional Corporation
  • Limited Liability Company
    • Limits on Limited Liability.
  • Limited Liability Partnership
• 903 ADMITTING NEW OWNERS
  • Characteristics of a Prospective Owner
  • Income Owners
  • Equity Owners
    • Determining Initial Buy-in Amounts.
    • Paying the Capital Contribution.
  • Non-CPA Owners
    • Statutory, Regulatory, and Legal Issues.
    • AICPA Ethics Rules.
    • Alternative Practice Structures.
    • Nonattest Services.
• 904 OWNER COMPENSATION AND BENEFITS
  • Owner Compensation
    • Owners' Salaries.
    • Profit Allocation Methods.
    • Allocation Factors.
    • Establishing the Owner Compensation System.
    • Owner Draws.
    • Bonuses.
    • Owners' Equity and Interest on Capital.
    • Allocation of Taxable Income.
  • Owner Benefits
• 905 EVALUATING OWNER PERFORMANCE
  • Setting Performance Measurement Goals for Owners
  • Linking Owner Compensation to Performance Goals
• 906 FIRM MERGERS
  • What's the Best Strategy?
    • Immediate Sale versus Selling in Stages.
    • Outright Sale.
    • Partial Sale.
    • Affiliation Prior to Retirement from Full-time Work.
    • Upstream Mergers.
    • Merging with a Smaller Firm.
    • Lateral Mergers.
    • Niche Mergers.
    • Using a Merger to Accomplish Succession.
    • Importance of Firm Culture.
  • Steps in the Merger Process
  • Setting Merger Objectives
  • Formulating a Merger Policy
  • Developing a Merger Candidate Questionnaire
  • Searching for the Right Merger Candidate
  • The Initial Merger Candidate Meeting
  • Performing Due Diligence
    • Evaluating Prospect Firm Clients.
    • Evaluating Prospect Firm Personnel.
    • Reviewing the Quality Control Procedures of a Prospective Merger Candidate.
    • Reviewing Prospect Workpapers.
    • Reviewing Prospect Claims History.
    • Conflicts of Interest and Independence Check.
    • Valuation of the Prospect Practice.
  • Drafting the Merger Agreement
    • Capital Contributions.
    • Compensation.
    • Firm Governance.
    • De-merger Provisions.
    • Assumption of Assets and Liabilities.
    • Indemnity Provisions.
    • Nonsolicitation Provisions.
    • Other Issues.
  • Negotiating, Revising, and Signing the Merger Agreement
  • Post-merger and Transition Considerations
    • Client Notification.
    • Staff Notification.
    • Public Notification.
    • Liability Insurance Considerations.
    • Office Relocation.
    • Other Firm Transition Considerations.
  • Other Merger Issues to Consider
    • Understanding the Role that Clients Play.
    • Developing a Retirement/Succession Plan before the Merger.
    • Naming the Firm.
    • Equity Ownership.
    • The Importance of Continuity.
  • Pre-merger Accounts Receivable and Work-in-process
    • Accounts Receivable.
    • Work-in-process.
  • Getting Professional Help
    • Lawyers.
    • Other Intermediaries.
    • How to Select an Intermediary.
• 907 SUCCESSION PLANNING FOR THE TRANSFER OF OWNERSHIP
  • The Succession Planning Process
    • Making the Firm Attractive.
    • Choosing a Successor.
    • Creating a Personal Technical Development Plan.
    • Implementing a Leadership Development Program.
    • Planning Succession within the Firm.
    • Transitioning Leadership Roles.
  • Establishing an Owner Retirement Policy
    • When Retirement Should Occur.
    • How Retirement Benefits Are Determined.
    • Dealing with Owner Withdrawals Other than at Retirement.
    • Client Transition and Retention Matters.
    • Retirement Payment Guarantees.
    • Retirement Payment Caps.
    • Retirement Payment Funding.
    • Retirement Asset Protection.
    • Owner Retirement Retreat.
  • Practice Continuation Agreements
    • Multiowner Firms.
    • Sole Proprietorships.
  • Restrictive Agreements
    • Noncompete Agreements.
    • Nonsolicitation Agreements.
    • Nonraiding Agreements.
    • Nondisclosure Agreements.
• APPENDIX 9A: Preliminary Snapshot--Ownership Issues
• APPENDIX 9B: Comparison of Various Business Entities
• APPENDIX 9C: Owner Evaluation Form
• APPENDIX 9D: Nonsolicitation Agreement Drafting Form
• APPENDIX 9E: Sample Noncompete Provisions
• APPENDIX 9F: Merger/Acquisition Form
• APPENDIX 9G: Confidentiality Agreement Drafting Form
• APPENDIX 9H: Illustrative Client Announcement Letter

CHAPTER 10: AVOIDING LEGAL LIABILITY

• 1000 INTRODUCTION
  • The Frightening Facts
  • Historical Defensive Measures
    • Quality Control.
    • Professional Liability Insurance.
  • Other Lines of Defense
    • Risk Avoidance.
    • Damage Control.
  • Understanding the Litigation Process
• 1001 ANALYZING THE CURRENT SITUATION
  • Using a Diagnostic Approach
• 1002 WHY IS LIABILITY A CONCERN?
  • Out-of-pocket Costs
  • Intangible Costs
  • Changes in the Law
• 1003 QUALITY CONTROL--THE FIRST LINE OF DEFENSE
  • Quality Control Standards
  • SQCS No. 7
    • Major Provisions of SQCS No. 7.
    • Elements of a Quality Control System.
  • Use of Checklists, Programs, and Other Practice Aids
  • Legal Liability Considerations for Documentation
    • Engagement Documentation.
    • Retention.
    • Correspondence Files.
    • Email Communications.
    • Time Sheets.
  • Importance of Reviews
  • Peer Reviews
    • Applicability of Peer Review Requirements.
    • Peer Review Standards.
    • Types of Peer Reviews.
  • Firms with Adequate Quality Control Systems Still Get Sued
• 1004 LIABILITY INSURANCE--THE SECOND LINE OF DEFENSE
  • Reasons for Buying Liability Insurance
    • No Practice Is Immune from Claims.
    • Protecting the Firm's Economic Viability.
    • Protecting Partner Assets.
    • Attorney Fees.
    • Firm Insurability Issues.
  • Alternatives to Insurance
    • Creating a Liability Defense Fund.
    • Establishing Asset Protection Plans.
    • Undertaking Loss Prevention Efforts.
    • Formation of a Risk Retention Group.
  • Determining the Amount of Liability Insurance
  • Selecting the Right Insurer
  • Limits of Liability
  • Scope of Coverage
    • Definition of Professional Services.
    • Geographic Scope of Coverage.
    • Prior Acts Coverage.
    • Extended Reporting Coverage.
    • Definition of Insured.
    • Predecessor Firm Coverage.
    • Independent Contractors.
    • Definition of Damages.
    • Exclusions.
  • Costs of Liability Insurance
  • Claims Handling
    • Attitude Regarding Coverage.
    • Claims Processing.
    • Selection of Defense Counsel.
  • Financial Viability
  • Loss Prevention and Similar Value Added Services
  • Commitment to the Market
  • Authorized Status
  • Endorsements by CPA Societies
  • Professional Liability Insurance Programs for CPA Firms
  • Negotiating Liability Coverage
    • Choosing an Insurance Broker.
    • An Independent Insurance Broker Should Be Used.
    • The Broker Should Be Experienced in the CPA Liability Insurance Market.
    • Obtaining Multiple Quotes.
    • What Is Negotiable?
    • Price.
    • Limits of Liability and Deductibles.
    • Scope of Coverage.
    • Selection of Defense Counsel.
    • Repurchase of Policy Limits.
  • Completing the Insurance Application
  • Firm Changes
  • Coverage Disputes
    • Reservation of Rights.
    • Disclaimer of Responsibility.
  • Responses to Requests for Information
  • Declaratory Judgment Actions
• 1005 LOSS PREVENTION--THE LAST LINE OF DEFENSE
  • Loss Prevention Measures
  • Limiting the Scope of the Firm's Practice
    • Audits of Public Companies.
    • Audit Engagements in General.
    • Prospective Financial Statement Engagements.
    • Business Valuation Engagements.
    • Investment Advisory Services Engagements.
    • Tax Advisory Engagements.
    • Reducing Risk Exposure.
  • Client Selection and Pruning
    • Joint and Several Liability.
    • New Client Acceptance.
    • Client Retention.
  • Staff Evaluations
    • Documenting Staff Evaluations.
  • Engagement Letters and Disengagement Letters
    • Nature and Scope of the Firm's Engagement.
    • Limitations of the Firm's Services.
    • Responsibilities of the Client.
    • Fee Arrangements.
    • Notification of Report Reproduction.
    • Conflict of Interest Clauses.
    • Undertaking-to-be-truthful Clauses.
    • Statute of Limitations.
    • Loss Limitation and Indemnification Clauses.
    • Collection of Fees and Expenses Relating to Litigation When the CPA Is Not a Party.
    • Alternative Dispute Resolution.
    • Consulting Engagements.
    • Investment Advisory Services Engagements.
    • Tax Engagements.
    • Engagements under Attestation Standards.
    • Litigation Support Engagements.
  • Other Engagement Letter Considerations
    • Timely Issuance of Engagement Letters.
    • Engagement Letters for Personal Tax Return Preparation Services.
    • What If the Client Will Not Sign an Engagement Letter?
    • Is a New Engagement Letter Needed Each Year?
    • Rejection Letters.
    • Resignation Letter.
  • Client Communications and Management Representation Letters
    • Internal Control Related Communications.
    • Other Client Communications.
    • Communicating with Those Charged with Governance.
    • Management Representation Letters.
  • Document Retention Policies
    • Personnel Records.
    • Employee Training Records.
    • Billing Records.
    • Firm Manuals and Practice Aids.
    • Promotional Literature.
    • Engagement Documentation.
    • Audit Documentation--Public Companies.
    • Documentation--NASBA UAA Rules.
    • Regular Workpapers.
    • Permanent File Workpapers.
    • Workpaper Filing Procedures.
    • Importance of a Formal Document Retention Policy.
  • Oral Tax Advice
  • Guarding against Fraud
    • Performing Extended Procedures Designed to Detect Fraud.
    • Advising Non-audit Clients about Internal Control Weaknesses.
    • Complying with SAARS No. 1, as Amended by SSARS No. 12.
  • Other Loss Prevention Considerations
    • Low-balling.
    • Client Communications.
    • Getting Sucked in.
    • Commissions and Referral Fees.
    • Avoiding Conflicts of Interest.
  • Common Affirmative Defenses
    • The Privity Defense and Related Defenses.
    • States That Follow the Privity Doctrine.
    • States That Follow the Restatement Standard.
    • States That Follow the Foreseeability Standard.
    • Privity and Related Defenses May Protect a Firm against a Negligence Claim, but Not Fraud.
    • Protecting the Privity Defense or Related Defenses.
    • The No Reasonable Reliance Defense.
    • Protecting the No Reasonable Reliance Defense.
    • The Statute of Limitations Defense.
    • Protecting a Statute of Limitations Defense.
    • The Effect of Mistakes on the Statute of Limitations.
  • Fee Disputes
    • Can the Client Afford to Pay?
    • Has the Firm Committed Any Errors?
    • Has the Client Suffered Any Business Reversals?
    • Are the Unpaid Fees Significant Enough to Warrant a Suit?
    • A CPA Firm Should Rarely Sue for Fees.
    • Suits against Bankrupt Entities.
• 1006 PERSONAL ASSET PROTECTION
  • Protective Actions at the Firm Level
    • Form of Ownership.
    • Compartmentalization of a CPA Firm.
  • Protective Actions at the Individual Level
    • Assets That Are Already Protected.
    • Federally Protected Pension Plans.
    • Homesteads.
    • Joint Tenancy with Rights of Survivorship.
    • Asset Transfer Strategies.
• 1007 DAMAGE CONTROL
  • Subsequent Discovery of a Mistake
    • Subsequent Discovery of a Financial Statement Misstatement.
  • The Client Threatens a Claim
  • When a Client Declares Bankruptcy
    • Reviewing and Modifying a Firm's Workpapers.
    • Rule 2004 Examinations.
    • Adversary Proceedings in a Bankruptcy Proceeding.
    • Protecting against Prepetition Claims.
  • When a Client Is Sued Based upon Financial Statement Misstatements
  • When a Client Is Assessed by Taxing Authorities
  • When a Client Is Victimized by an Employee Embezzlement
  • When a Client Is the Subject of a Criminal or Regulatory Investigation
  • When a Client Sustains a Large Investment Loss
  • Other Situations That Might Lead to Claims
    • When a Firm's Workpapers Are Subpoenaed.
    • When Two Clients Have a Dispute Involving Financial Matters.
    • Termination of a Client.
  • How Should the Firm Respond to a Potential Claim?
    • Seek Professional Help.
    • The Role of the Firm's Attorney.
    • Form a Damage Control Team.
    • The Role of the Damage Control Team.
    • Do Not Admit Responsibility.
  • Communications with a Claimant
  • When a Summons Arrives
    • Involvement of the Malpractice Insurer.
  • Evaluating a Claim
    • How Is a Claim Evaluated?
    • Identify Causes of Action and Legal Theories and Group Causes by Legal Theory.
    • Determine the Probabilities.
    • Analyze the Damage Components.
    • Calculate the Estimated Recovery Amount.
    • Updating the Evaluation.
• 1008 LITIGATION OF CLAIMS
  • Reporting a Claim to the Insurer
    • What Is a Claim?
    • Notifying the Insurance Company.
    • Communications with Others.
    • The Firm's Answer.
  • Counterclaims
    • Countersuits for Unpaid Fees.
    • Countersuits for Malicious Prosecution.
    • Counterclaims for Libel and/or Slander.
    • Counterclaims for Legal Fees.
    • Offers of Judgment.
    • Third-party Claims.
  • Motions
    • Motions to Dismiss.
    • Special Rules for Fraud Claims.
    • Dismissing a Case "With Prejudice."
    • Filing a Motion to Dismiss.
    • Summary Judgment Motions.
  • The Discovery Phase
    • Document Requests.
    • Interrogatories.
    • Depositions.
  • Pretrial Phase
  • Trial
    • Jury Selection.
    • Opening Statements.
    • Plaintiff's Case.
    • Motion to Dismiss.
    • Defense Case.
    • Closing Arguments.
    • Judge's Charge to the Jury.
    • Jury Deliberations.
  • Problems Posed by Jury Trials
  • Appeals
  • Settlements
    • Settlements Where There Is More Than One Defendant.
    • Global Settlements.
• 1009 ALTERNATIVE DISPUTE RESOLUTION
  • Types of ADR Procedures
    • Arbitration.
    • The Arbitration Process.
    • Mediation.
    • The Mediation Process.
  • The ADR Agreement
    • Pre-dispute Agreements.
    • Post-dispute Agreements.
• 1010 CONCLUSION
• APPENDIX 10A: Preliminary Snapshot--Avoiding Legal Liability
• APPENDIX 10B: Malpractice Liability Insurance Companies
• APPENDIX 10C: Insurance Rating Company Grading Summary
• APPENDIX 10D: Statutes of Limitations
• APPENDIX 10E: Example Letter When a Client Has Failed to Return a Signed Engagement Letter
• APPENDIX 10F: State Protection for Jointly Held Property
• APPENDIX 10G: Additional Engagement Letter Paragraphs Designed to Reduce a Firm's Liability Exposure
• APPENDIX 10H: Engagement Letter Transmittal Drafting Form
• APPENDIX 10I: Rejection Letter Drafting Form
• APPENDIX 10J: Resignation Letter--Drafting Form
• APPENDIX 10K: Example Third-party Privity Letter--Audit Engagement
• APPENDIX 10L: Predecessor Firm Letter Granting Successor Auditor Access to Workpapers Drafting Form
• APPENDIX 10M: Mediation and Arbitration Organizations
• APPENDIX 10N: Evaluation of a Claim--Example Case Study

CHAPTER 11: MANAGING TECHNOLOGY

• 1100 INTRODUCTION
• 1101 THE IMPORTANCE OF TECHNOLOGY
  • Technology Costs
• 1102 ANALYZING THE FIRM'S CURRENT SITUATION
  • Using a Diagnostic Approach
• 1103 KEY ELEMENTS OF TECHNOLOGY MANAGEMENT
  • IT Governance
    • IT Governance Institute.
    • Policies and Procedures.
  • Hardware
    • Computers.
    • Printers.
    • Network Equipment.
  • Software
  • Communications
  • The Internet
    • Bandwidth.
    • Internet Service Contract.
    • Internet Connections.
    • Router.
    • Browser.
    • Internet Uses.
    • Internet Security.
    • Internet Terminology.
  • Technology Training
  • Personnel with Technology Expertise
    • Large Firms.
    • Medium-sized Firms.
    • Small Firms.
    • Outsourced Services.
  • Disaster Recovery Planning
• 1104 THE DIGITAL ENVIRONMENT
  • Digital Environment Advantages
    • Access.
    • Organization.
    • Security.
    • Storage.
  • Digital Environment Disadvantages
  • Digital Transition Process
    • Selecting Which Production Processes to Digitize.
    • Paper Conversion.
    • Digital Document Archival.
  • Knowledge Management
    • Principles.
    • Resources.
• 1105 IMPLEMENTING A TECHNOLOGY PLAN
  • Create the Technology Committee
    • Owner.
    • Departmental End Users.
    • Integrator.
    • Technician.
    • Facilitator.
  • Analyze Current System and Needs
    • Owner Perception Survey.
    • Equipment Inventory.
    • Software Licenses and Users.
    • Wiring Scheme and Procedural Map.
    • Overview of Specific System Needs.
    • Employee Input and Buy-in.
  • Develop the Plan Document
    • Technology Plan.
    • Technology Budget.
    • Recouping Technology Costs.
  • Implement the Plan
    • Start with the Plan and Budget.
    • Sell the Complete Concept.
    • Pick the Right Vendor Partner.
    • Keep Communication Open.
    • Implement in Phases.
    • Provide Training.
  • Follow Through and Review the Plan
• 1106 AICPA TOP TECHNOLOGY ISSUES
  • Top 10 Technology Issues
    • Information Security Management.
    • Privacy Management.
    • Secure Data File Storage, Transmission, and Exchange.
    • Business Process Improvement, Work Flow, and Process Exception Alerts.
    • Mobile and Remote Computing.
    • Training and Competency.
    • Identity and Access Management.
    • Improved Application and Data Integration.
    • Document, Forms, Content, and Knowledge Management.
    • Electronic Data Retention Strategy.
• APPENDIX 11A: Preliminary Snapshot--Managing Technology
• APPENDIX 11B: Self-evaluation of Computer Skills and Needs Assessment
• APPENDIX 11C: Suggested Minimum Technology Training Requirements by Job Function
• APPENDIX 11D: Example Technology Job Descriptions
  • APPENDIX 11D-1: Example Job Description--Director of Information Systems
  • APPENDIX 11D-2: Example Job Description--Network Administrator
  • APPENDIX 11D-3: Example Job Description--Training Coordinator
  • APPENDIX 11D-4: Example Job Description--Help Desk Support
• APPENDIX 11E: Owner Perception Questionnaire
  • APPENDIX 11E-1: Owner Perception Survey
  • APPENDIX 11E-2: Owner Assessment Summary
• APPENDIX 11F: Technology Inventory Form
• APPENDIX 11G: Example Technology Plan
• APPENDIX 11H: Example Technology Budget
• APPENDIX 11I: Technology Budget Worksheet

CHAPTER 12: PERFORMANCE MEASUREMENT

• 1200 INTODUCTION
  • The Importance of Performance Measurement
  • Obstacles to Implementing Performance Measurement
    • Not Enough Time.
    • Lack of Technical Skills.
    • Concerns about Cost.
  • Organization of the Chapter
• 1201 ANALYZING THE CURRENT SITUATION
• 1202 OVERVIEW OF THE PERFORMANCE MEASUREMENT PROCESS
  • Defining the Strategy
    • Developing a Mission Statement.
    • Analyzing the Market.
    • Identifying Other Key External Factors.
    • Analyzing the Firm.
    • Identifying Critical Success Factors.
    • Determining the Firm's Objectives and Strategies.
    • Communicating the Strategies throughout the Firm.
  • Developing Performance Measures
    • Determining Action Plans.
    • Considering the Need for Process Improvement.
    • Determining the Framework for Measures.
    • Selecting the Right Measures.
    • Considering Commonly Used Performance Measures.
    • Establishing Targets.
    • Performing Sanity Checks.
    • Communicating Measures throughout the Firm.
  • Implementing a Performance Measurement System
    • Considering Data Collection Methods.
    • Determining the Frequency of Measurement.
    • Assigning Responsibilities for Performance Data.
    • Reporting Performance Measurement Results.
  • Monitoring the Results of the Performance Measurement System
    • Considering How to Analyze Performance Data.
    • Obtaining Feedback from Report Users.
    • Deciding What Actions to Take If Anticipated Results Are Not Being Achieved.
  • Overview of Benchmarking
    • Planning.
    • Measuring the Firm's Own Performance.
    • Gathering External Data.
    • Analyzing the Data.
    • Implementing Improvements.
    • Maintaining the Ongoing Process.
• 1203 DEFINING THE STRATEGY
  • Overview
    • Procedures Checklist.
  • Developing a Mission Statement
    • What Is a Mission Statement?
    • Considering Core Values.
    • Characteristics of Effective Mission Statements.
    • Who Are We?
    • Where Are We Going?
    • How Will We Know When We Get There?
  • Analyzing the Market
    • Market Size and Share.
    • Competition.
    • Overall Market Trends.
  • Identifying Other Key External Factors
    • Professional and Governmental Regulatory Environment.
    • Social Trends.
    • Other External Factors.
  • Analyzing the Firm
    • Competitive Advantage.
    • Core Competencies.
    • Current Operating Conditions--Performing a SWOT Analysis.
    • Client and Employee Surveys.
  • Identifying Critical Success Factors
  • Determining the Firm's Objectives and Strategies
    • Determining Objectives.
    • Developing Strategies.
  • Communicating the Strategies throughout the Firm
    • Linkage to Firm Success.
    • Overcoming Resistance to Change.
    • Communication Methods.
• 1204 DEVELOPING PERFORMANCE MEASURES
  • Determining Action Plans
    • Designating Responsibility.
    • Documenting the Action Plan.
  • Considering the Need for Process Improvement
  • Determining the Framework for Measures
    • PPC's Framework for Measures.
    • Considerations for Smaller Firms.
  • Selecting the Right Measures
    • Considering the Characteristics of Good Measures.
    • Linkage to Actual Performance.
    • Linkage to Firm Strategy.
    • Relevance and Reliability of Measurement Data.
    • Quantification of Measurement Data.
  • Considering Commonly Used Performance Measures
    • Financial Measures.
    • Client Measures.
    • Business Development Measures.
    • Employee Measures.
    • Internal Systems and Process Measures.
    • Vendor Measures.
  • Establishing Targets
    • Considering Factors Affecting Targets.
    • Revising Strategies and Targets.
  • Performing Sanity Checks
  • Communicating Measures throughout the Firm
    • Cascading Measures to Individual Departments.
    • Cascading Measures to Individual Employees.
    • Linking Employee Compensation to Performance Measures.
• 1205 IMPLEMENTING A PERFORMANCE MEASUREMENT SYSTEM
  • Introduction
    • Practice Aid.
  • Considering Data Collection Methods
    • Developing a Data Collection Plan.
    • Determining Measurement Systems Needs.
    • Considering the Reliability of Measurement Data.
    • Additional Considerations for Smaller Firms.
  • Determining the Frequency of Measurement
  • Assigning Responsibilities for Performance Data
  • Reporting Performance Measurement Results
    • Determining the Content of the Report.
    • Considering the Format of the Report.
    • Determining the Frequency of the Report.
    • Deciding on the Recipients of the Report.
• 1206 MONITORING THE RESULTS OF THE PERFORMANCE MEASUREMENT SYSTEM
  • Introduction
  • Considering How to Analyze Performance Data
    • Level of Performance.
    • Performance Trends.
    • Variability in Level of Performance or Trends.
  • Obtaining Feedback from Report Users
  • Deciding What Actions to Take if Anticipated Results Are Not Being Achieved
    • Selecting Different Measures.
    • Revising Targets.
    • Making Operational Improvements.
    • Revising Firm Strategies.
    • Additional Considerations for Smaller Firms.
• 1207 BENCHMARKING
  • Introduction
    • Benefits of Benchmarking.
  • Planning
    • Identifying What to Benchmark.
    • Identifying Who or What to Benchmark against.
    • Establishing a Benchmarking Team.
    • Determining How Frequently to Benchmark.
    • Determining the Data Gathering Methods.
  • Measuring the Firm's Own Performance
  • Gathering External Data
  • Analyzing the Data
    • Determining the Current Performance Gap.
    • Estimating Future Attainable Performance.
    • Identifying Reasons for Current and Future Gaps.
    • Identifying Actions Necessary to Close Gaps.
  • Implementing Improvements
    • Reporting the Findings and Action Plans to Firm Owners.
    • Implementing the Action Plans.
  • Maintaining the Ongoing Process
    • Measuring Progress toward Goals.
    • Revising Goals.
    • Updating Benchmarks.
• APPENDIX 12A: Preliminary Snapshot--Performance Measurement
• APPENDIX 12B: Defining the Strategy Procedures Checklist
• APPENDIX 12C: Risk Assessment Questionnaire
• APPENDIX 12D: Questionnaire to Identify Firm Owners' Concerns about the Business
• APPENDIX 12E: Client Satisfaction Survey
  • APPENDIX 12E-1: Client Satisfaction Survey Form
  • APPENDIX 12E-2: Client Satisfaction Survey Recap Form
• APPENDIX 12F: Employee Satisfaction Survey
  • APPENDIX 12F-1: Employee Satisfaction Survey Form
  • APPENDIX 12F-2: Employee Satisfaction Survey Recap Form
• APPENDIX 12G: SWOT Analysis
  • APPENDIX 12G-1: SWOT Analysis Overview
  • APPENDIX 12G-2: Internal Strengths and Weaknesses Form
  • APPENDIX 12G-3: External Opportunities and Threats Form
  • APPENDIX 12G-4: SWOT Recap
• APPENDIX 12H: Objectives Identification Worksheet
• APPENDIX 12I: Strategies by Objective Form
• APPENDIX 12J: Developing Performance Measures Procedures Checklist
• APPENDIX 12K: Performance Measurement Action Plan
• APPENDIX 12L: Measurement Definition Form
• APPENDIX 12M: Performance Measurement Reports
  • APPENDIX 12M-1: Scorecard Template
  • APPENDIX 12M-2: Daily Performance Measurement Report
  • APPENDIX 12M-3: Weekly Performance Measurement Report
  • APPENDIX 12M-4: Monthly Performance Measurement Report
• APPENDIX 12N: Commonly Used Performance Measures
• APPENDIX 12O: Implementing a Performance Measurement System Procedures Checklist
• APPENDIX 12P: Data Collection Worksheets
  • APPENDIX 12P-1: Data Collection Plan
  • APPENDIX 12P-2: Source of Data and Frequency of Reporting Worksheet
• APPENDIX 12Q: Monitoring the Results of the Performance Measurement System Procedures Checklist
• APPENDIX 12R: Benchmarking Procedures Checklist

CHAPTER 13: FIRM STATISTICS

• 1300 2008 NATIONAL PCPS/TSCPA MANAGEMENT OF AN ACCOUNTING PRACTICE SURVEY
  • Introduction
    • PCPS.
    • For More Information.
    • Categories of Firms.
  • Definitions Used in the Survey
• National PCPS/TSCPA MAP Survey
• 
  • Introduction
    • For More Information.
  • How the Survey Data Is Sorted
    • Key Statistics and Ratios by Size of Firm.
    • Key Statistics and Ratios by Population Size of Market.
    • Selected Statistics by Region.
    • Same Store Sales.
  • Definition of Terms
  • Rosenberg Survey
• APPENDIX 13A: 2008 National PCPS/TSCPA MAP Survey
• APPENDIX 13B: 2008 Rosenberg Survey

CHAPTER 14: PROFILE FIRMS

• 1400 2008 NATIONAL PCPS/TSCPA MANAGEMENT OF AN ACCOUNTING PRACTICE SURVEY
  • Introduction
    • Information from the National PCPS/TSCPA MAP Survey.
    • Basis of Determining Profile Firms.
    • Definitions Used in the Survey.
  • Key Financial Information and Ratios
  • Profile Firms
• 1401 2008 ROSENBERG NATIONAL MAP SURVEY OF CPA FIRM STATISTICS
  • Information from the Rosenberg Survey
• APPENDIX 14A: Financial Information for Profile Firms--2008 National PCPS/TSCPA Managment of an Accounting Practice Survey
• APPENDIX 14B: Financial Information for Profile Firms--2008 Rosenberg National Map Survey of CPA Firm Statistics

CHAPTER 15: TAX PRACTICE MANAGEMENT

• 1500 INTRODUCTION
• 1501 COMPLYING WITH PROFESSIONAL STANDARDS
  • Circular 230
    • Incompetent or Disreputable Conduct.
    • Solicitation.
    • Return Preparation Standards.
    • Contingent Fees.
    • Conflicts of Interest.
    • Other Obligations.
    • Best Practices.
    • Written Tax Advice.
  • AICPA Statements on Standards for Tax Services
  • Other Professional Standards
• 1502 EXERCISING DUE DILIGENCE
  • Circular 230
  • The Internal Revenue Code
• 1503 TAX PRACTICE LOSS PREVENTION
  • Negligence and the Standard of Due Care
  • Use Engagement Letters
  • Track Due Dates
  • Evaluate Client Acceptance and Retention
• 1504 SYSTEMATIC APPROACH TO TAX PRACTICE ADMINISTRATION
  • Taking a Systematic Approach
  • Pre-engagement Administration
  • Engagement Initiation and Planning
    • Set the Engagement Scope [Step 1].
    • Confirm the Understanding with the Client [Step 2].
    • Assign Personnel [Step 3].
  • Engagement Conduct and Control
    • Prepare Work Program [Step 4].
    • Gather Relevant Data [Step 5].
    • Perform the Engagement [Step 6].
  • Engagement Review, Reporting, and Follow-up
    • Review and Approve the Work [Step 7].
    • Deliver the Work Product [Step 8].
    • Bill the Client [Step 9].
  • Post-engagement Administration
• 1505 TAX RESEARCH
  • Introduction
  • Control The Research Process
    • Planning the Research Project.
    • Developing and Using Budgets.
    • Estimating Fees.
    • Divide Compliance and Planning Projects into Separately Billable Engagements.
    • Supervising the Research.
    • Reviewing the Research.
  • Develop A Standard Research Strategy
    • Five Steps in Effective Tax Research.
  • Step One--Determine The Facts
    • Tax Compliance Research.
    • Tax Planning Research.
    • Ask Additional Questions.
  • Step Two--Formulate The Question
  • Step Three--Locate And Evaluate Applicable Authorities
    • Read the Applicable Materials.
    • Review Applicable Code Sections.
    • Review Applicable Regulations.
    • Review Other Applicable Sources.
    • Check a Citator.
    • Leaving a Trail.
  • Step Four--Answer The Question
    • Legal Questions.
    • Factual Questions.
    • Reaching a Conclusion.
  • Step Five--Document The Answer
    • What to Include in the Documentation.
    • Communicate Research Results to the Client.
  • Penalties Related to Tax Preparers
    • Section 6694 Preparer Penalties for Understatements of Tax.
  • Privileged Communications with Clients
• 1506 DISCLOSURE AND USE RULES
  • The Basic Rule
  • Exception to the Rule
• APPENDIX 15A: Sample Engagement Memorandum
• APPENDIX 15B: Tax Return Engagement Letter for Business Entities
• APPENDIX 15C: Tax Return Engagement Letter for Individual Clients
• APPENDIX 15D: Sample Letter to Inform a Client about a Return Going Delinquent
• APPENDIX 15E: Checklist of the Circular 230 Advertising and Solicitation Requirements
• APPENDIX 15F: Checklist for Due Diligence Review
• APPENDIX 15G: New Tax Client Acceptance Form
• APPENDIX 15H: Tax Client Evaluation (Continuance) Form
• APPENDIX 15I: Tax Return Fee Estimate Worksheet
• APPENDIX 15J: Client Tax Data Sheet
• APPENDIX 15K: Sample Short-form Tax Engagement Review Checklist
• APPENDIX 15L: Interim Tax File Review Form--Individual
• APPENDIX 15M: Interim Tax File Review Form--Business Clients
• APPENDIX 15N: Tax Research Request Form
• APPENDIX 15O: Tax Research Documentation Form
• APPENDIX 15P: Checklist for Determining Whether Written Tax Advice Is a Covered Opinion
• APPENDIX 15Q: Checklist for Meeting the Due Diligence Requirements for Covered Opinions
• APPENDIX 15R: Sample Consent to Disclosure of Form 1040 Tax Return Information
• APPENDIX 15S: Sample Consent for Use of Form 1040 Tax Return Information to Provide Firm Information

Continuing Professional Education

CPE & Training Solutions

INDEX