Howard’s Inner Circle No. 50: Meaning of E&Y’s $2 Million Penalty?

http://pcaobus.org/Enforcement/Decisions/Documents/Ernst_Young.pdf fosters discussion of why and audit change.

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Above may be reproduced in full if that fact is stated and Howard Wolosky at http://howardwolosky.blogspot.com is credited as the author.
© 2012

Howard’s Inner Circle, No. 33: A Two-Question Rx for Doctors

“Every child has to eat at least a pound of dirt before they grow up” is the wisdom many family doctors imparted to parents years ago. A holistic and humanistic approach that is lacking in many of today’s medical practitioners.
It is understandable as there is more specialization, need for greater efficiencies lower reimbursements, many procedures being performed by third parties, greater use of specialized outpatient centers and labs, increased reliance on test results, and higher malpractice insurance premiums. The skilled and trained professional still exists but something is missing that patients find discomforting.
We can’t go back but let me suggest a simply way of making the patients experience better. It is a simple technique used by an accounting firm in Ohio. Just as work is completed it gives clients a prepaid postcard with two questions regarding the engagement. There is a high-response rate and always any needed follow-up is done.
Doctors could give their patients a similar postcard at the close of each visit asking: ‘What did we do well?” and “What could we do better?” Expected responses might be the doctor didn’t talk about the side effects of a medicine or a particular technician made the patient very comfortable by detailing exactly what the testing machinery would do. Of course, there must be any necessary follow-up and additional patient communication.
Adopting this approach might help in a number of ways including awareness of patients’ areas of discomfort, a testing of implementation of “best practices,” and efficiency without sacrificing effective treatment. In the age of the Internet, online reviews, social networking, e-mail, and text messaging, patients will be sharing their good and bad experiences, so obtaining customer (patient) feedback is an imperative. Doctors are not good at this. The medical establishment, including the AMA, should take notice. Perhaps that two-question prepaid postcard is a good starting point.
© 2011
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The above may be reproduced in full if that fact is stated and Howard Wolosky at http://howardwolosky.blogspot.com is credited as the author.

Howard’s Inner Circle, No. 18: The Subjective Forms of Succession Planning

When I was editor-in-chief at Practical Accountant, I was always intrigued by succession planning at accounting firms.

It seemed to be missing at most small ones. Probably because most practitioners viewed the practices as totally identified with themselves and were busy attending to business. At best, a few had practice continuation agreements with other firms in the case of death or disability.

In the case of the medium-sized firms, especially where the founders were still in control, it seemed like there was an enforced belief that further succession planning wasn’t tolerated or needed. The founders assumed, when they retire shortly, the firm would last long enough to make the payouts under the partnership agreement.

The larger regional firms paid the most attention. I was impressed when there was a smooth transition and the managing partner handed the baton over to a named successor over a stated extended transition period. Then, there were the knockouts of the long-term managing partner closely identified with past successes but seen as an obstacle by rainmaking partners to a needed new direction. My favorite was where the very successful, political savvy managing partner closely guarded his or her power and so ensured he or she had no successor at the firm. Those firms often ended up being acquired by an even larger firm or consolidator.

Perhaps I was so intrigued because I didn’t really understand how subjective succession planning is. Rather than looking at it from the prospective of ensuring the future survival of a firm, my starting point should have been to better understand the individuals, the size of the firm, and the firm’s power players’ interests as they would more likely determine the favored succession plan.

© 2010
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The above is from the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 14: What is a Community?

Some might suggest a dictionary is the best place to find the definition of the word “community.” Others might point to the entry in Wikipedia. After reading, Wikipedia at http://en.wikipedia.org/wiki/Community, it is readily apparent that the definition depends upon the context in which you are using that word.

You no longer have to live in the same town, nor have direct personal and business contacts, or vote in the same local election to be part of a community. The Internet, e-mail, and other technologies have really broadened what constitutes a community and how many members can belong at any particular time. Also a member of a virtual community takes many forms including being an observer, a registered member, an active participant, and a community administrator. The form can change in an instant. Unlike geographic communities, there are often few ties (a job, home, family, etc.) which bind you tightly. You can simply leave that community and go to another if it doesn’t serve you well.

What do you look for in a virtual community? How about a mission statement you feel comfortable with, that the members believe in, and try to follow. Throw in a code of ethics and list of responsibilities for all its members and participants, including advertisers? How about transparency and full disclosure? And like some geographic communities, security, comfort, and diversity. Deep down a community that promotes the common good, while still encouraging, within reason, self-interest.

Much of business is obtained from referrals. In my experience, writing about CPA firms for many years, they were often the result of a CPA’s relationship building skills with clients and other professionals in the immediate geographic area. The problem is those geographic communities don’t have the stability they once had. Globalization, changing economic conditions, and technology are decimating some communities and creating new ones, often at a dizzying rate.

What communities you belong too is an important decision. In the past, it often revolved around the geographic location and great thought and due diligence would occur before joining a particular community. Because of the ready instant access and the need to participate within these virtual communities, I believe similar standards should be applied in selecting all the communities that we “live” in.

© 2010
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The above is from the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 13: Two Diverging CPA Firm Business Models

Being a detached, independently paid and unpaid observer of CPA firms for over two decades allows me to freely comment.

The early successful business model was a firm with a number of rainmakers, often as little as two or three. They were great at business development especially via one-to-one contacts, and also adept at maintaining and working a tight referral network where referrals were expected to go both ways.

Over time, this well-established model has morphed itself into two new distinct business models. One is where those rainmakers have become the executive committee of a CPA firm that runs in a corporate style. Where previously, firm policies and strategies were hashed out in open discussion at partner meetings, decisions are now made at closed executive committee meetings. And no matter how it is sugar-coated, it is understood who are the powers-that-be, and how getting into the inner sanctum, the management committee, is only done by invitation or by a successful power play.

Contrast that with the second business model that also developed from the earlier rainmaker model. These are firms that strive to operate as a team with management building consensus and having a real understanding of the importance of the various individual’s contributions in the firm’s successes.

If I were to predict which of these two models will prove better, I would select the later. This modified team approach:
• Grooms successors;
• Encourages collaboration;
• Has greater multi-disciplinary capacities;
• Rewards innovation
• Promotes a firm-wide project management instead of a capture-what-you- kill mentality;
• Is more susceptible at building real working alliances;
• Taps well into intergenerational resources;
• Promotes widespread mentoring in both directions;
• Supports technology at all levels; and
• Is structured for everyone to be focused on their roles in business development.

In both models relationships remain the key, and referrals are still the main source of new business. The real difference is the lack of community in the corporate model. Although lip service might be given; it exists only in name and spin. The second model, the modified team approach, with a real manager rather than a CEO, truly promotes community. This approach will turn out better in the long run as all indications are technology, globalization, outsourcing and many other factors are permanently changing the rules of the game. Businesses and professional firms will be seeking to become members of various communities and will do so only by building trust and cultivating loyalty as the basis for relationships. Only one of these diverging CPA firm business models lives that.
© 2010
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The above is from the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 10: 2011 Accounting Cover Stories

For many years each month as editor-in-chief of Practical Accountant I decided on what would be the cover story. It wasn’t hard do but for one fact; we had to decide on the subject matter as much as a year and a half before the issue came out. The reason was the editorial calendar had to be in place in July of the preceding year and there was no guarantee that each month there would be a development affecting the accounting profession worthy of cover story coverage.

Because habits are hard to break I decided why not have some fun and pick out 12 possible 2011 cover story candidates now for a magazine for the accounting profession.

Tentative and Very Hypothetical 2011 Editorial Calendar
January--Plethora of Estate Tax Engagements
February--How CCH, RIA, Intuit, LexisNexis, and Others Are Utilizing CPA Firms as Business Partners
March--Reverse Mentoring: Overcoming a Firm Management’s Deep-Grained Aversion
April--Success Stories and Best Practices from Early Social Media Adopters
May--Increasing Revenue and Correctly Positioning a Firm During an Economic Downturn
June--CRM: What Firms and Clients Are Doing Wrong
July--Regionals Replacing Nationals as Auditors of Public Companies
August--Outsourcing Manufacturing and Distribution Functions
September--Walking the Cost-Cutting Walk: Fee Reductions on Modified Engagements Complement Advice
October--Tax Prep--Protecting Against Fee Erosion and Client Flight
November--The Practice Development Joint Ventures Art Form
December--Hidden Benefits of Firm Associations, State Societies, and Trade Groups
© 2010
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The above is from the tenth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 8: Big Four Shouldn’t Be “Too Big to Fail”

Early during the financial crisis, the phrase “too big to fail” received a lot of media play especially with regard to AIG. Similarly, a number of years ago following the demise of Andersen I got the distinct impression that the powers that be viewed the Big Four accounting firms also as “too big too fail,” probably a comfort to those Big Four firms. Rather than blaming the firm, the focus then became one of blaming individuals at the Big Four firms when certain undetected frauds and accounting irregularities came to light.

It will be very interesting to watch what happens regarding Ernst & Young, as the 2,200-page Lehman bankruptcy report by a court-appointed examiner puts E&Y in a very unfavorable light. Lawsuits can be expected but of more interest is what, if any, actions the PCAOB will take. Just as important is whether the PCAOB will publicly address the role that auditors played with regard to the financial crisis and what, if any, regulatory changes need to be made.

My belief is there has to be serious debate on whether the current way that auditors of public companies are employed should be changed. With the bulk of the audits being conducted by the Big Four and employment as an auditor subject to the decision of the executives of the company being audited, it should come as no surprise, auditors at the Big Four are very careful not to ruffle feathers.

In May of last year I urged the AICPA and CPAs to take the lead in closely reviewing and critically evaluating the way in which auditing of public companies is currently performed, beginning with the illusion of independence. See “Auditors: Doing the Right Thing?” at http://howardwolosky.blogspot.com/2009/05/auditors-doing-right-thing.html.

As long as the Big Four perform the overwhelming bulk of the audits of public companies, the marketplace and those firms are positioning those firms as too big to fail. That is great for those firms and their revenue especially if the government regulators are in agreement.

Unfortunately, as we saw with the financial crisis, those who were too big to fail actually profited greatly until the balloon burst and then they were bailed out with public dollars. Andersen wasn’t that lucky and I don’t believe that the any of the remaining Big Four should be.

As with those Wall Street firms, the Big Four has a special revenue-generating mindset. The problem is that this mindset has become quietly synonymous with the auditing of public companies and colors the auditing. The only way that this can be changed is if auditing public companies can be restructured so auditors are truly independent.

© 2010
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The above is from the eighth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 7: Reducing the Divorce Rate of Accounting Firm Nuptials

I have always been intrigued by mergers and acquisitions of accounting firms. The initial exploratory discussions are usually described as “dating,” and if the parties are serious, a due diligence is conducted to see if a “marriage” will follow.” As with most courtships, the parties are on their best behavior and there seems to be a sort of tentative dancing so the parties get to know each other better and see if they’re truly compatible. You might even see some passion as one, or both firms, see their coming together as meeting a deep need that couldn’t be met otherwise. If there is a perceived dealbreaker, the parties go their separate ways and begin dating again with another firm, or swear off dating for a time.

I dislike the dating analogy--but if we’re going to use it, be forewarned that half of marriages end in divorce, and unlike what we read about messy divorces, we see very little about the messy firm demergers that occur or the exodus of incoming partners a few years after the two firms join. My guess is both are more prevalent than we expect and, of course, kept very quiet.

If I was giving advice to a firm that was “dating” another firm, in addition to discussing typical issues such as compensation, buyouts, equity, firm management, etc., I would advise the due diligence to focus significantly on compatibility, and the possible obstacles to, as well as, the details of integration.

I believe the most successful firms with regard to mergers and acquisitions are those that have the most experience with them, and therefore know quickly in discussion with firms if the deal should go forward. They are also very adept at, and understand, the importance of quickly integrating the two firms so the all the firm members have a common firm identity. Firms with less experience with mergers and acquisitions are usually successful because they really know the other firm well, and once they wanted to date, knew whom they wanted to ask.

The firms that don’t do well probably need to be a little more analytical and observant before jumping into marriage. I am not urging a longer courtship only searching for a deeper understanding of what their marriage is likely to be, and how a foundation for a solid marriage can be laid. It requires going beyond agreeing on terms and concentrating on the M&A process and the associated dynamics.

© 2010
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The above is from the seventh issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard's Inner Circle No. 7: A New Kind of Leadership

"A leader must be visionary and paint a compelling picture of the future. The leader has to articulate the vision and attract the kind of people needed to make it happen. To be effective, leaders must be respected and admired. Above all, they must be trusted. Your people must have confidence that, in difficult situations, you will do the right thing.” says Managing Partner Larry Unruh of Hein & Associates in Denver.

I used his quote in a recent presentation to the New York State Society of CPAs Large and Medium-Sized Firms Practice Management Committee on a new emrging style of leadership at a number of regional accounting firms. Although many of the leaders of these firms were rainmakers, they understand because of a constantly changing marketplace, increased competition, and expansion beyond compliance services, a firm had to stand out as providing value-added services and modify the rainmaker business model.

Referrals and personal relationships are still extremely important, but business development is now more of a firm-wide effort. These successful firm leaders also understand the importance in excelling at knowledge, change, risk, talent, and project management. They also recognize the increased need for strategic planning, transparency, application of best practices, a team mentality, the creation and maintenance of trust, consulting with futurists, ending of a book-of-business mentality, and greater non-CPA involvement.

A great firm begins and ends with the leadership. The other basic keys are a shared vision, an ability to promote and distinguish, and providing quality professional services. Too often I have seen firms in which a long-time managing partner molds the firm to reflect that individual’s style. That firm’s success is usually short-lived and ends soon after that managing partner retires. That is why this new style of leadership is so appealing. As these managing partners mold their style to the firm’s needs thus allowing for a smooth transition to the next managing partner and the firm’s continued flourishing.
© 2010
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The above is from the seventh issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 5: Holistic vs. Silo Business Development

When I became editor-in-chief at Practical Accountant a decision was made that shaped the editorial coverage of the magazine for the many years that I was there. The decision was to primarily focus on regional accounting firms, not just those in the various large cities, but throughout the country.

The reasoning was they were reacting best to the significantly changing business climate. Yes, the managing partners and partners of these firms provided the leadership, but what was different from years past was that non-CPAs were playing increasingly more important roles at these firms.

That is why readers saw so many marketing directors on the covers of Practical Accountant. Because of the increased competition and the need to attract business beyond traditional tax and accounting engagements, firms relied on marketers to: develop brochures and other marketing materials, create and publicize a firm brand, formalize the proposal process, get client feedback, accumulate and analyze marketplace information, assist on niche development, focus on new client and staff attraction, create sophisticated client relationship management systems, and help design dynamic firm Web sites.

However in the last few years, I have noticed a disturbing trend, many seasoned and highly respected marketing directors are leaving some of these regional firms. These firms appear to view marketing primarily as a cost center and support operation and have decided that a lower-cost maintenance mode is possible since the primary work of those marketing directors is done.

I believe that is short-sighted and CPA-myopic.

Contrast these firms to others that view and groom marketers to become business developers. They often formally make the marketer a firm principal ensuring they play a key, direct role in executive decisions. I expect these firms will also be transforming their marketing operations as revenue centers advising some firm clients directly on marketing or acting as consultants and advisors to assist in the clients’ marketing decisions.

These enlightened firms understand that the CPA-rainmaker approach is no longer enough. They follow a team approach, work at firm buy-in, and follow firm governance procedures that ensure a more holistic, although still CPA-centric, approach to business development.
© 2010
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The above is from the fifth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 2: Businesses Turning to the Independent Distributor Model

The greatest overhead expenses are often those associated with employees. This is why many companies are reducing severance benefits or eliminating matching contributions to 401(k) plans. Some are being more creative and instead minimizing the size of their workforces by utilizing so-called “independent distributors.”

I have recently seen this with an energy provider to businesses and personal residences as well as a company that sells video telephones. The attraction is savings on guaranteed salaries, payroll taxes, employees’ benefits, and many of the costs associated with supporting inside salespersons. These companies might provide some help on setting up a Web site by providing templates, but the ones I came in contact with didn’t even provide a uniform style for business cards for these independent distributors.

Businesses are doing a great job by promoting this new status, and rather than using the old term “commissions” speak of “residual income” and play up the fact that it is a new industry or a new product subject to exponential growth. In this tough economic environment, any source of potential income draws interest. Because younger individuals might not see the importance or availability of medical insurance and retirement plans benefits and have difficulty finding jobs, independent distributor opportunities have great appeal.

Companies like the fact that underperforming independent distributors won’t hurt their company’s bottom line as much as full-time underperforming employees and are likely to give up after awhile.

There are a number of downsides to relying on independent distributors including the expected government scrutiny asking if these individuals aren’t really employees and should be treated as such for payroll taxes purposes. “Look for an Obama administration to aggressively challenge independent contractor status.” is the prediction (at http://www.webcpa.com/prc_issues/2008_10/29348-1.html?pg=2) from Dean Zerbe, former senior counsel and tax counsel for the Senate Finance Committee and now national managing director for alliantgroup. Another potential disadvantage is the fact that an independent distributor might be working for more than one company at a time and place his or her maximum efforts and loyalty with the product or service that is generating the greatest revenue at the time.

This will be an interesting trend to watch and advisors to businesses especially lawyers and accountants are sure to benefit as they counsel the many businesses who might consider utilizing independent distributors, as well as defend those when federal and state agencies question this status.

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The above is from the second issue of my newsletter, Howard’s Inner Circle, which periodically appears on my blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is given credit as the author.

Neglected and Underdeveloped Knowledge Management

It’s no surprise that CCH recently announced the release of KnowledgeConnect, a knowledge management system for accounting firms. According to CCH, KnowledgeConnect is “a central, indexed, and easy-to-search knowledge management system that will empower staff to make faster and more informed business decisions, avoid work redundancies and reduce project cycle times. KnowledgeConnect will also allow you to, quickly find the best answers for improved customer service, eliminate work redundancies by documenting special knowledge, and easily identify subject-matter experts.”

I first wrote about knowledge management and accounting firms in my August 16, 2005 WebCPA column “Do You Have a Chief Knowledge Officer?” at http://www.webcpa.com/news/14079-1.html.

Knowledge shouldn't just reside with individuals, but needs to be captured and institutionalized within the firm so that it can be accessed easily by all. I gave the following examples in the column: templates for audit engagements, checklists and established procedures for tax return preparation, a sophisticated client relationship management system, and a knowledge database on the firm's Intranet.

You don’t have to be a large regional accounting firm, a business with hundreds of employees, or buy CCH KnowledgeConnect or a similar software application to take advantage of knowledge management. It doesn’t have to cost much as long as time is spent on developing an understanding of how knowledge management can be applied and training those that will utilize it.

I speak from direct experience. With only two-full-time editors and one part-time editor (including myself) working on Practical Accountant, the quality of our editorial content was directly attributable to our ability to take advantage of knowledge management. We used push technologies to keep informed of developments, blast e-mails to pre-qualify article interviewee volunteers, and an Outlook 1,200-plus contact database searchable by subject matter. Running lists of possible coverage for each department, profiled accounting firms, innovation award winners, and what appeared in recurring sections were also maintained.

In today’s world where accounting firms and businesses of all sizes are focusing on reducing costs and improving efficiency, knowledge management is an invaluable tool. Sophisticated software can be helpful, but that’s not the key. What’s necessary for effective knowledge management to work is getting buy-in and participation.

A Vital, Missing Soft Skill

Whether it is a professional firm, a business or a not-for-profit, many in upper management have a common complaint that workers and staff don’t deal with, or want, change. That rationale is often the reason why individuals are laid off or frozen out and not consulted. I wonder if the problem isn’t an opposition to change, but rather that very few people are skilled at managing change.

Interestingly, there is increased attention to the development and perfection of soft skills. Training is provided in such areas as listening better, negotiation, consensus building, project management, etc. However, I haven’t noticed much employee training on developing and perfecting change management skills.
How good are you and others at your organization at:
· Recognizing the need for change,
· Anticipating changes affecting your industry or profession short- and long-term,
· Identifying and evaluating the steps that need to be followed when making a change,
· Adopting to change,
· Encouraging others to change, and
· Making a change quickly?

The impact of new technology, commoditization of good and services, online communities, globalization, and the economic environment are just a few of the factors requiring businesses to be more nimble. By developing change management abilities at all levels, both the entity and the individuals will benefit

Upper management needs to understand that to change isn’t about getting rid of employees and staff, but rather about creating an environment where employees and staff are the contributors to change.

Revisiting My Best Of

Out of the hundred of www WebCPA.com columns I have written, Here are my five favorites and the reasons for their selection.

1. “It's Not What, Rather It's How You Read,” at http://www.webcpa.com/news/21944-1.html stresses the importance of understanding how most people now read.
2. ”A Thought Follower, and Proud of It,” at http://www.webcpa.com/news/25852-1.html points to the advantage of learning from others.
3. “Bothered by the Silo Effect?” at http://www.webcpa.com/news/27603-1.html sees a need to focus more on integration and execution.
4. “Voting for a Two-Question Survey,” at http://www.webcpa.com/news/28178-1.html is a simple way for getting honest customer feedback.
5. “It's Time for an Efficiency Rating,” at http://www.webcpa.com/news/10237-1.html identifies five keys for improving effectiveness.

Online/Brick–and-Mortar Business Development Acumen

“An Educated Consumer Is Our Best Customer®” is how an off-price clothing retailer positions itself. Although not similarly copyrighted, as of late, I have come across a number of other businesses that live by that slogan with a single word change, “An Educated Consumer Is Our Worst Customer.” Unlike that off-price clothier, they don’t publicize the slogan that they actually live by, and, in fact, do their best to hide that fact. Here are two of them:
1. A vitamin chain offers a particular supplement for 10 dollars more than its online price. A clerk at their store refuses to match the price for a regular customer. The manager insists that the customer must go home and print out the proof even though the store has Internet access.
2. A bank automatically renews you two-year CD unless you come in. The rate is one percent, while if you came in, you could obtain a higher rate by renewing the CD for only seven months. Additionally the bank is offering those that open a two-year online CD a much higher rate of 2.85 percent.

Contrast those two examples with a national department store chain advertising that customers can check on computer terminals in their stores for cheaper prices available from competitors on the brand appliances its sells, and that it will match the competitor’s cheaper price.

Clients will be needing help adjusting and prospering in this brave new world where technological advances are overhauling and significantly transforming the rules of the game. Is your firm ready to help? And more importantly, how deep is the firm’s understanding and knowledge of the virtual and brick-and-mortar worlds and the possible interactions.

To find out, how about giving a 12–question test to firm members from every level of the firm--the managing partner, partners, staff accountants, marketers, technologists, and administrative support (if applicable)? One key aspect of this test is that it is an “open-book” test, in which you can use any technological aid and ask anyone outside the firm. There should be a time limit, e.g., three hours or overnight. The typed answer sheets are anonymously submitted and assembled for review by whomever the management of the firm determines is appropriate. There is no marking of individual exams.

The 12 questions are designed to focus on testing knowledge of the use of technology, the ability to obtain competitive intelligence, and business development acumen.

Questions
1. Where on the www.AICPA.org site is a database of firms which is searchable by state, city, and size of professional staff, number of branches, AICPA practice monitoring sections, and AICPA centers?
2. Is it possible in New York and a limited number of other states to buy a long-term care insurance policy that will allow the insured to qualify for Medicaid without spending down their assets? If so, what is the policy commonly called?
3. Webcams are being used more and more by churches, funeral homes, and day care providers as a service? Briefly explain how.
4. Give three examples where enhanced cell phones and other handheld devices are being used to enhance a brick-and-mortar business. Hint: Might involve calling a number with recordings or entering a zip code where there is Internet access.
5. Name a Web site for a company that will give you 250 free business cards or more (except for minimal shipping costs) and lets you pick from over 40 different, distinct designs.
6. Name the tax service that allows the user to search for federal and state and local tax incentives by the address of the business.
7. Give three novel networking techniques used by other firms? Example: One firm offers a day at a spa.
8. How many members are there in the Young CPA Network group on Linkedin, and what are the names of four specific accounting firm alumni groups on Linkedin? (If possible, pick firms in your firm’s region.)
9. Name a well-known site for helping you create and maintain a free blog.
10. How might search engine optimization come into play when a potential employee submits his or her resume electronically?
11. Name five specific strategies being used by businesses and other firms in response to the economic crisis. (Don’t include any strategies you firm is using or advising clients to utilize?)
12. How did you obtain the above answers? Please indicate all methods that you used.
Personal knowledge
Internet search
E-mail
Text messaging
Twittering
Discussion group inquiry
Telephoned someone
Directly talked to someone
Other, please describe

I’m not providing an answer key as the test’s purpose isn’t to determine who scored what or even how well research can be performed; but rather, the purpose is for the firm, as a whole, to focus quickly and in a fun way on their knowledge, the tools available to broaden knowledge, and developing a deeper understanding of changing business trends that will significantly impact clients.

Final thought: I recommend that as soon as the answers are assembled and prior to management reviews, sets of the answers be distributed, as is, to each individual who took the test (better yet, all the firm members). The idea is by that doing this the community aspect of the virtual world is being further explored, instilled, and encouraged in a primarily brick-and-mortar firm.