Hartford Business Journal

www.HartfordBusiness.com • March 9, 2020 • Hartford Business Journal 11 FOCUS: ACCOUNTING CPA exam, accounting profession prepare for change Q&A talks to Bonnie Stewart, executive director of the Connecticut Society of CPAs, about the many changes impacting the ac- counting industry. Q. The National Association of State Boards of Accountancy (NASBA) and the American Institute of CPAs (AICPA) have proposed a new CPA licensure model. What can you tell us about this and what should local accountants know about it? A. The model comprises a core of accounting, audit, tax and technology that all candidates would be required to complete — the skills deeply as- sociated with the CPA profession. Candidates would then pursue a discipline in which to acquire deeper skills. The three proposed disciplines are: information systems and con- trols; tax compliance and planning; and business reporting and analysis. The AICPA and NASBA have worked closely with many stakeholders to de- termine how the model should further incorporate the changing world, espe- cially technology. For example, fintech expands its reach daily in accounting and advisory service. An exposure draft has been released on the exam and the com- ment period ends April 30, 2020. Q. What trends are you noticing in terms of the number of accountants in the state becoming CPAs? A. We've noticed the number of candidates sitting for the exam has started to decrease, perhaps in part because accounting grads are also in demand in non-public accounting organizations, i.e., 'industry.' The role of the accountant has expanded significantly there, and accountants need not necessarily be certified. Candidates for certification must complete a fifth year of college. So, to a new four-year grad entering industry directly, saving that addi- tional year of tuition may look pretty good at the time. But both the AICPA and Robert Half put the additional income from the CPA credential at anywhere from 10 to as much as 20 percent more annually over the non-CPA in both public accounting and in- dustry. Over a career, that missed additional income from the CPA credential can really add up, and it's certainly something to consider. Q. Last year, the CPA Society lobbied vigorously against a proposed tax on accounting and tax services. The proposal didn't get passed. What impact would such a tax have and are you worried about it coming up again in 2020? A. Frankly, it's a fundamentally flawed concept, as people would view it as "paying a tax on pay- ing their taxes." Our tax code is so complex that more than half of all taxpayers use a paid preparer to ensure they're compliant, with an additional 30% using software. We don't think it will come up this year, as our legislators seem to understand it's just not good policy. We understand Connecticut's dire fi- nancial straits, but only three states broadly tax services, and we don't want Connecticut to become an out- lier. That said, we remain vigilant. Q. Were there any other state tax changes in 2019 that businesses should be aware as they prepare to file their taxes in 2020? A. Pass-through entities (PTE) should be aware of modifications to their tax obligations. The PTE tax was designed to be a SALT (state and local taxes) workaround to make compa- nies 'whole.' Two years into the tax, however, legislators decided to reduce the credit in an effort to gain some additional revenues for the state. In addition, guaranteed payments from those entities are now included in the base as well. Bonnie Stewart Executive Director, Connecticut Society of CPAs Don't let obstacles get between you and desired results. Wes is one determined and committed individual. Whether hiking up Mt. Killington with concrete cinder blocks (his idea of fun) or figuring out tough inventory questions, Wes is a talented and tenacious accountant. No matter what, Wes will take on hard obstacles and be committed to finishing any difficult task placed in front of him. An audit partner with particular specialties in auto dealerships and product distribution/fulfillment, he has the technical expertise of a seasoned CPA with the perspective of a marathoner. Knowing your business is not a sprint, and technical expertise is not the low hurdles. The challenges of accounting and auditing may not require an ironman on your team, but it never hurts. 231 Farmington Avenue, Farmington, CT 06032 | 860-678-7100 | www.flrcpa.com " " " " My strength is helping businesses large and small navigate complex accounting and auditing challenges. Wesley D. Barnard, CPA

• Cover