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1. How to value a CPA firm for sale  

BY Joel Sinkin and Terrence Putney, CPA
One of the key components of a CPA succession plan is the sale or transfer of the retiring CPA’s ownership interest. How is the value of that interest determined? In most circumstances, the value of an owner’s interest is different when selling to an external buyer than it is in an internal transaction.EXTERNAL SALESThe most common question about accounting firm sales the authors are asked when teaching CPE courses is “What is the multiple (of billings)?” The multiple is determined by four main factors:1.

2. A two-stage solution to succession procrastination  

BY Joel Sinkin and Terrence Putney, CPA
The 2012 PCPS Succession Survey, a joint project of the AICPA Private Companies Practice Section (PCPS) and Succession Institute LLC, found nearly 80% of CPA firm owners expect succession to become a major issue for their firms in the next 10 years (see “Succession Planning: The Challenge of What’s Next,” JofA, Jan.

3. When is a partner "retired"?  

BY Stanley D. Sterna, J.D.
When a longtime partner or employee retires from a CPA firm, a sense of loyalty often compels the existing partners to allow the individual to have a symbolic role at the firm. This can include a courtesy title, office space, and invitations to company soirees. While this may seem like a small reward for decades of hard work, it can pose significant risks to the firm from a legal standpoint.

4. The long goodbye   CPEDirect

BY Joel Sinkin and Terrence Putney, CPA
The best time for an accounting firm to start work on a succession plan is the day the firm is formed. Of course, most firms don’t do that. The question in many cases has become: “How quickly can I put together a succession plan and head into retirement?” The answer depends on a number of factors.

5. Is this client the right fit for your firm?  

BY Deborah K. Rood, CPA
A contentious divorce. Clients who want to file delinquent tax returns. The new client who represented himself as an upstanding businessman but has been indicted—for the third time. After malpractice claims are resolved, CPAs often say, “I never should have taken this client.” But there is a way to help prevent this type of regret.

6. Mergers emerge as dominant trend  

BY Joel Sinkin and Terrence Putney, CPA
Powerful forces are transforming the accounting profession in the United States. The Baby Boomers are heading into their retirement years. Baby Boomer CPAs are in charge of most U.S. accounting firms. And most U.S. accounting firms don’t have a signed succession or practice-continuation plan in place. These realities are rewriting the rules for U.S.

7. Preparing for disaster   CPEDirect

BY Jeff Drew and Ken Tysiac
One CPA firm is still recovering from a “superstorm” that damaged nine of its 14 offices. Another has constructed a safe room in its new office, which was built after a tornado destroyed its previous office. A third firm is adjusting to the “new normal” in a city forever changed by widespread flooding.

8. Clients: The end is near  

BY Amy Waldron, CPA
Evaluating clients annually is good practice management for a professional services firm. A firm’s strategies, areas of practice, and risk profile change over time. As a result, certain clients may no longer be a desirable fit for the firm. Similarly, some client behaviors become problematic and can harm the staff’s morale, creating issues for partners, and causing lost opportunities to serve clients who complement the firm’s business model.

9. When parties come knocking for client records  

BY Joseph Wolfe
CPA firms either maintain or have access to numerous types of client records and related working papers. Requests for access to copies of such records can arise from multiple sources, including current and former clients, lawyers, civil and criminal investigators, lenders, and others. All requests should be made in writing.

10. How to drive partner accountability and unity  

BY Dom Cingoranelli, CPA, CGMA, Jennifer Wilson and Bill Reeb, CPA/CITP, CGMA
Partner accountability and unity are essential for accounting firms to maximize their productivity and profits. Unfortunately, partner harmony is hard to find, especially at larger firms. Consider the findings of the most recent CPA Firm Top Issues Survey conducted by the AICPA Private Companies Practice Section. The biennial poll of U.S.
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