Advice from ENGAGE

The ENGAGE 2020 virtual conference offered real-world lessons in accounting, auditing, personal financial planning, technology, and many other topics.

Advice from ENGAGE
(Photo by Sagittarius Pro/iStock)

Like family gatherings, work meetings across the world, and even many school classes, the ENGAGE 2020 conference was conducted virtually this year because the coronavirus pandemic prevented large in-person gatherings.

But while it wasn't possible to physically rub elbows with colleagues during the marquee event sponsored by the AICPA and The Chartered Institute of Management Accountants, the conference provided countless opportunities for professional development and a chance for CPAs to connect with one another while maintaining social distance.

Just a few highlights from the many ENGAGE sessions are presented below in condensed versions of stories that posted to the JofA website during the conference.


Frequent accounting and auditing questions were addressed by Center for Plain English Accounting (CPEA) technical manager Mike Austin, CPA, and Kristy Illuzzi, CPA, CGMA, the AICPA staff liaison to the AICPA Technical Issues Committee.

The following is a sampling of the questions that were answered:

Q: Is an emphasis-of-matter (EOM) paragraph required when an entity adopts the private company alternative for variable-interest entities (VIEs) in Accounting Standards Update No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities?

A: An EOM paragraph is required only if the change is material, Illuzzi said. She cautioned, though, that many times this adoption may be material to the financial statements and that the VIE guidance and consolidation rules in general can be confusing, which is part of the reason FASB issued the alternative for private companies to begin with.

"So an EOM paragraph may be helpful, especially in that initial year [of adoption], letting the users know that the company elected this alternative, and pointing to the note to the financial statements that has the additional required disclosures," Illuzzi said.

Q: Can a firm still issue a compilation, review, or audit opinion for a company that elects to make a U.S. GAAP departure related to adopting FASB's new revenue recognition standard (FASB ASC Topic 606, Revenue From Contracts With Customers)? Essentially, can a firm issue an "except for" opinion in this situation?

A: In this scenario, the CPEA takes the position that revenue is such an important part of the financial statements and so material to users that it would typically not be appropriate to issue an "except for" opinion in most cases.

"Let me just stress, that is just our opinion, and we're not saying that it is the case for every single scenario, as there very well could be companies where the impact of adopting ASC [Topic] 606 is not material or it's only material to one [financial] statement," Austin said. "But the position we suggest you start from is that that type of [qualified] opinion would not be appropriate. So make sure you're really thinking about it carefully before you decide to go down that path."

Austin understands that many private companies are reluctant to adopt Topic 606 because it's difficult to implement. He suggested advising clients who are struggling with this to consider if they need to issue financial statements under U.S. GAAP, or if they could potentially issue their statements under an other comprehensive basis of accounting such as the Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs), cash-basis financial statements, or tax-basis financial statements.

— By Ken Tysiac, the JofA's editorial director. Full story >


Marc Staut recalled the disappointment felt by some of his CPA firm clients as they introduced new information systems about a year ago. The project planning went fine. So did training for the client firms' professionals. The rollout may have been a bit aggressive in its scheduling, but it, too, went off without a hitch, and the new systems were in place, just waiting to be put to use. None of the firms' professionals touched them.

"It turned out they were just exhausted," Staut, the chief innovation and information officer for Boomer Consulting Inc., said during his session on "Managing Technostress."

"They had spent so much time trying to learn some of these new ideas, some of these concepts, that they were feeling overwhelmed."

"Technostress" is not a new term. It has been around since being identified in the mid-1980s during the personal computer revolution's first wave as one of the main obstacles to using information technology productively.

It's not that people can't handle computers, smartphones, and other technologies intended to make their jobs easier. The sticking point is their inability to use the computer in a healthy manner that properly balances their professional and personal responsibilities. The shelter-in-place restrictions prompted some academics and other researchers to examine a challenge that has affected workers during the pandemic — Zoom fatigue.

"It is actually exhausting, more exhausting, to be watching what we call the Brady Bunch view, or all the different squares on a videoconference, than it is to actually be interacting with the same number of people in person," Staut said. "You are trying to focus on each and every one of those boxes. So if there are 16 people on a videoconference, and you can see all of their faces at the same time, your brain is trying to read their body language, all at the same time, and it is exhausting."

Managers need to start with an awareness that technology burnout is real and wreaks havoc on employees. They also need to ask their direct reports about their emotional well-being, and be honest about their own, because of the coronavirus and the stress of technology overload.

Staut also advised accounting firms to make sure they update their workplace policies and processes to accommodate the new technology. "You can't optimize your technology if you haven't defined your processes," he said. "Those two things have to happen simultaneously."

As far as employee training is concerned, firms should recognize that not all employees learn in the same manner or at the same speed, Staut said. Some learn better with one-on-one training. Some are fine with remote learning. Others excel in classroom instruction. Employees also need to be trained on new systems at a pace that matches their ability to absorb the information.

— By Joseph Radigan, a financial writer based in New York. Full story >


When Brooke Salvini, CPA/PFS, started her firm, she decided not to bill clients by using the traditional assets-under-management (AUM) model. The AUM model, she realized, could limit her to accepting only clients whose assets surpassed a certain threshold.

"AUM didn't resonate with me," she said in a panel session on alternative billing methods. "I wanted to find clients that were a good fit and not be restricted by their net worth." Salvini, principal of Salvini Financial Planning in Avila Beach, Calif., chose to charge clients either per hour or on a retainer basis.

Alan Moore, CEO of the XY Planning Network, bills clients using a subscription model. Clients pay different amounts per month, based on their net worth and the complexity of their finances.

Panelist Mark Berg, founding principal of Timothy Financial Counsel in Wheaton, Ill., charges clients hourly rates. The hourly model has the benefit of "flexing with the complexity" of a client's finances, he said. For instance, when a client experiences a major life event, such as the death of a spouse, he will need to do a lot more work on their behalf and bill them accordingly.

The panelists also offered some words of advice for CPA financial planners considering alternative billing methods:

Choose the best billing model for you and your clients

There's nothing wrong with the AUM model itself, Moore said, but it may not be the best fit for the type of clients you want to serve. To choose the right billing model, he said, start by thinking about your niche. Ask yourself what problem you're best at helping clients solve, he suggested.

Know what your state allows

Different states have different regulations regarding how financial services professionals may bill clients, Berg said. In certain states, for instance, financial planners can't charge by the hour for some services. Check with your state regulator to see which billing methods are permitted.

Enlist technology

Technology has made it much easier to use certain alternative fee systems. Berg, for instance, uses software called GetMyTime, which syncs with QuickBooks, to track hours spent on a client, while Salvini uses QuickBooks Timer.

— By Courtney L. Vien, a JofA senior editor. Full story >


Women are underrepresented as partners and top executives in the accounting profession. Changing that requires pulling three levers: talent acquisition, retention, and promotion. Each lever has to be operating, and none can be missing to help women — particularly women of color — advance in the field, speakers at an ENGAGE 2020 panel advised.

"Our profession is still overwhelmingly led by male leaders," said panel moderator Rosie Brammer, CPA, who works at Beemer, Smith & Munro LLP.

Here are questions leaders can ask themselves to help women advance in their organizations:

Do women see future opportunities at the organization?

Organizations need to identify high-performing or high-potential individuals, said Latoria J. "Tori" Farmer, executive director of inclusion and diversity at KPMG LLP. "[E]very organization should assess their talent pipeline and the career life cycle to identify the peaks or trends for where they are losing women and if they are experiencing career stagnation," she said.

Are women provided with the right and adequate career support?

The rise to leadership often requires a sponsor, who plays a different role in a person's career than a mentor does. Mentors provide information and guidance, offering advice on career path and what skills to build, while sponsorship involves someone putting his or her professional reputation and political advantages on the line to advocate for someone else, panelists said.

Do women feel comfortable in the environment?

Women are constantly seeking role models whose life situations are similar to their own and who have successfully navigated the workplace, Farmer said.

Are women held to higher standards for promotions?

Organizations must demonstrate intentionality in performance-management systems, Farmer said.

Are women receiving the critical training they need?

Women need access to on-the-job experiences, executive education, and other leadership development opportunities that validate and showcase their potential. If companies aren't addressing advancement, work/life integration, compensation, and other challenges, women might consider other opportunities.

— By Dawn Wotapka, a freelance writer based in Georgia. Full story >

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