Short takes, notes and items of interest

FASB has issued a proposed statement that, if approved, will clarify how United Way and similar NPOs that raise or hold contributions for other charities account for these funds. An organization that supports several community charities, for example, would have to recognize an asset and a liability rather than any contribution revenue when accepting donations for disbursement to specified beneficiaries. Such beneficiaries would then report their interest in these donations as assets and contribution revenue.

The ED also addresses closely related entities, such as a hospital and its affiliated foundation. In this case, the recipient organization (the foundation) would report an asset and contribution revenue when it receives assets from the donor, and the specified beneficiary (the hospital) would report its interest in the net assets in a manner similar to the equity method.

The comment period for Transfers of Assets Involving a Not-for-Profit Organization that Raises or Holds Contributions for Others (product code E146) runs until September 15. To obtain a copy, call FASB at 203-847-0700, ext. 555. FASB also has posted the ED on its Web site, www.fasb.org.

Maybe its having Microsoft as a neighbor, but, for the second year in a row, the AICPA Innovative User of Technology Award has gone to a Washington CPA. An independent panel of technology and accounting experts gave the award, sponsored by Great Plains Software, to Joseph E. Poff, a partner of Shannon & Associates in Kent.

Poff uses technology to make life easier for the firms clients: A lumber company was unhappy with an accounting system using units, not "linear feet," so he changed all the input screens. A port authority needed an elaborate tariff system to determine how much money each ship docking in the harbor owed. "We had to build new modules," said Poff, "including one that allowed the port to share its financial information with the state government. In the end, we made a four-day process a four-hour process. Its rewarding to set up a system like that and see your clients happy."

A Web store is the result of an integration of accounting and inventory systems, with a security component as well, and Poff finds assembling these parts an interesting puzzle. To augment his accounting skills, he became certified in both Windows NT and Microsoft SQL and continues to learn: "I had always assumed the Uniform CPA Exam was my last test, but I find myself taking new ones to get new certifications and maintain old ones."

Shannon & Associates is licensed to perform WebTrust engagements, and Poff said the firm will be marketing the service heavily. He sees CPAs as having a dual WebTrust role: the engagement itself and educating online businesses about the importance of creating a safe environment for customers.

At home, it was more of the same. He helped his wife with her graphic design business by writing programs in C or Visual Basic. "I got a big kick out of that," he said.

Within the firm, Poff is developing an intranet, with billing reports, for example. The firms one constant will be change. "Each new project I get is different from the one before. Wed get bored doing the same thing over and over, and besides, its presumptuous to assume what worked for one client will, of course, work for another."

For more on Shannons technology practice, including a cleverly constructed sample storefront, visit the firm online at www.shannon-cpas.com .

J. Carlton Collins, a partner in K2 Enterprises, lectures widely on technology and is a frequent speaker at AICPA conferences. He was chairman of both the 1990 AICPA Microcomputer Conference and the Georgia Society of CPAs PC advisory committee. For more on what K2 does, and the sophisticated technology it uses to manage its business, see "Ahead of the Curve" , JofA, Feb.98.

Christopher J. MacKenzie is vice-president of Vitale, Caturano and Co., a Boston accounting firm. MacKenzie helped his firm help its clients by first applying technological solutions to internal operations. He then helped create a subsidiary to provide technology consulting. His colleagues at the firm praised his enthusiastic defense of his IT vision, which led to a successful, long-term commitment to technology.

The State of PFP

A survey of 810 accounting firms in Maryland, Virginia and Washington, D.C.,
gives PFP practitioners a sense of the trends in financial planning.

Since 1994, American Express, the state of Florida and thousands of CPAs under the authority of the state board of accountancy have been playing out a regulatory drama — who can "hold out as a CPA." It appears to be in its final act: Florida will now concern itself with what CPAs do, not where they are. What does this mean for Florida CPA practitioners? CPAs in traditional firms will see little change: Theyll still be licensed professionals in licensed firms with all services regulated. But CPA practitioners employed by a nonlicensed entity, such as Amex, to perform tax, consulting and other nonattest engagements will also fall under the authority of the state board. The state will regulate their services, too. And these practitioners will be able to hold themselves out as CPAs."

"I think every state that finds itself in the same position as Florida will be forced to adopt our model," Lloyd A. "Buddy" Turman, executive director of the Florida Institute of CPAs, told the Journal . "If you assume its in the best interest of the public and profession to regulate everything CPAs do, this regulatory arrangement is the solution."

American Express appears satisfied with the extent of the reform. "Is American Express happy? Oh, yes," Amex spokesman Richard DAmbrosio told the Journal . He emphasized that the new regulations maintain the credibility of the CPAs, which is what Amex wanted. When asked if Amex had wanted its CPAs to be able to do SSARS no. 1 engagements, DAmbrosio would only say, "We asked for several things, and were happy with what the state agreed to."

The AICPA is responding to Floridas changes; more on any developments will appear in a future issue of the Journal . Those interested in more details of the Florida regulations and a history of the lawsuits that led to these changes should see "An Agenda of Change: Legislative Victories for Public Accounting," Florida CPA Today , June 1998, page 4. The article is also available free online at www.ficpa.org.

Do you accept commissions? Contingent fees? Is your practice fee-only 
or fee-based—and whats the difference? CPAs can find guidance on key concerns in Compensation and Disclosure Issues in Personal Financial Planning , a white paper issued by the AICPA PFP executive committee. This four-page document discusses various compensation methods, market considerations, regulation and disclosure. Financial planners should note that the Federal Trade Commission issued a staff opinion on the white paper: It does not violate the consent order that generally prohibits the AICPA from advising members against commissions and contingent fees.

PFP executive committee chairman William J. Goldberg said that the Institute asks for disclosure, although it cant recommend one payment or compensation plan over another, because of the consent decree. Different norms apply to different practice niches. "I expect our members will use different methods—a practitioner may use several. But, no matter what method the practitioner uses, at the end of the day the client should have a complete understanding of it." Goldberg is a partner at KPMG Peat Marwick, a fee-only firm, meaning practitioners are compensated solely by fees in all engagements.

The AICPA sent copies to all PFP section members. Others can get copies by calling 201-938-3659.

Do the Big Take Care of the Small?

A 1998 survey asked some 500 small businesses if they believed that large corporations in various industries were responsive to their needs. (The survey covered industries that provide goods and services to at least 60% of those small businesses.) According to this annual survey, which began in 1987, not one industry has broken the 50% satisfaction mark. CPAs working for large corporations should look below to see how their industry fared in the eyes of small businesses. How have large accounting firms met the needs of small businesses? Note the decade-long tumble, below.

Source: Cicco and Associates, Inc., Murrysville, Pennsylvania.