CalCPA Leadership Institute Program Dates Announced
Leadership comes in many forms. Gain insight into what type of leader you are by taking part in CalCPA Leadership Institute.

Discuss, analyze, reflect and build your leadership skills through this program, during which you’ll learn leadership fundamentals and identify personal leadership styles, as well as gain insight on strategic planning, goal setting and client management, among other topics.

The 2017-18 program will be held Nov. 9-10 in San Diego, Dec. 6-7 in Burlingame and Jan. 16-17 in Sacramento.

Interested? Grab more information and an application online. Applications are due Aug. 31.

CAMICO Tip of the Month: EmbezzlementsThe Low Hanging Fruit
Embezzlement claims against CPAs are often the easiest to avoid, yet CPAs often miss the red flagsembezzlement prevention isn’t necessarily part of their job. However, public or “jury standards” dictate that CPAs uncover fraud in all engagements, advise the client of all significant matters, document and “get it right.”

Most small business clients have inherent embezzlement risks stemming from small, unsophisticated accounting functions that lack segregation of duties. Often the owner doesn’t know how to combat these risks. Upon accepting the client, and biannually, send a short letter to all small-business clients warning them about embezzlement risks, suggesting the steps they can take to reduce the risks and offering your services to help them. Always document such warnings and advice. Without documentation, it’s more difficult to defend the CPA in a dispute or claim.

Also, perform due diligence on your firm’s own internal financial and security controls, especially if your firm’s CPAs or staff have signatory or check-writing authority over client funds. This will help minimize the exposure to a firm employee embezzling funds from a client, from the firm, or from both.

For more information and guidance about CPA firm insurance issues, visit

New Phishing Email Targeting Tax Pros
The IRS, state tax agencies and the tax industry are warning tax professionals to beware of phishing emails purporting to be from a tax software education provider and seeking extensive amounts of sensitive preparer data.

The email’s origin is unknown but likely issued by cybercriminals who could be operating from the U.S. or abroad. The email is unusual for the amount of sensitive preparer data that it seeks. This preparer information will enable the thieves to steal client data and file fraudulent tax returns.

All tax professionals should be aware that their e-Services credentials, the Electronic Filing Information Number (EFIN), the Preparer Tax Identification Number (PTIN) and their Centralized Authorization File (CAF) number are extremely valuable to identity thieves. Anyone handling taxpayer information has a legal obligation to protect that data.

Scope of 2017 Inspections of Auditors of Broker-Dealers
The Public Company Accounting Oversight Board issued a staff inspection brief detailing the scope, focus and objectives of its ongoing 2017 inspections of auditors of brokers and dealers.

Inspections staff is focusing on the following broker-dealer audit areas and attestation procedures in 2017:

  • Auditor independence;
  • Financial statement audit areas where deficiencies were identified in past inspections, including revenue, the assessment and response to risks of material misstatement due to fraud, financial statement presentation and disclosure, fair value measurements, and related party transactions;
  • Audit procedures on the supporting schedules to the financial statements;
  • Procedures for the attestation engagements, the examination of compliance reports and the review of exemption reports; and,
  • Engagement quality reviews.

New Guidance for Attestation Engagements
The AICPA Auditing Standards Board has issued a new interpretation that will allow practitioners to perform and report on an attestation engagement according to two attestation standards: The AICPA’s and another set of standards, provided that both are followed completely.

Attestation Interpretation No. 4 to AT-C Section 105, Concepts Common to All Attestation Engagements, offers examples of additional language to use in attestation reports to indicate that the engagement was done according to AICPA standards and another set of attestation standards.

FTB’s Contacting Business Entity Tax Nonfilers
The FTB recently sent letters to more than 41,000 California businesses that have not filed their 2015 state income tax returns.

The FTB gives business nonfilers 30 days to file a tax return or show why one is not required. Businesses that disregard the letter will get a tax assessment based on income and other information reported to us. The tax assessment includes interest, fees, and penalties.

If you have a client that received a letter, go to Request/Demand for Tax Return online. Businesses can request more time to respond, retrieve information that can help them file a return, sign up to receive an email reminder to file, and more. Information is also available by phone at (866) 204-7902.