All it takes is one individual—like you—and less than one day to make a difference at CPA Day at the Capitol. Meet with California legislators to discuss issues that impact you, the public and the profession, such as preventing sales tax on services and promoting financial literacy.

Once you register, we’ll handle the logistics of scheduling the appointments and providing you with talking points. Make your voice—and the voice of the profession—heard at CPA Day at the Capitol in January.

Look for registration information soon.

Study Hits Critics of SOX Internal Controls Provision 

A study in a recent issue of Auditing: A Journal of Practice & Theory, an American Accounting Association publication, concludes that Sarbanes-Oxley Sect. 404(b) provides “an early warning system” for company fraud. The research finds “a statistically and economically significant association between material weaknesses (in internal controls) and the future revelation of fraud.”

This result, the paper says, “is driven entirely by instances where the internal control issue reflects a general opportunity to commit fraud.”

According to the research, the incidence of fraud disclosures at companies previously found to have material weaknesses is about 80 percent to 90 percent greater than is the case among companies generally. Further, of the 127 fraud cases identified by the study, nearly 30 percent were preceded by auditor reports of material weakness in internal controls.

CalCPA Committees: Build Leadership Skills, Share Expertise

Want to use your talents at the statewide level? Your opportunity awaits—the application period will soon open to serve on our statewide committees for 2018-19. From estate planning to technology, and from personal financial planning to taxation, there’s a committee meeting your interests and expertise.

Please note: If you serve on a state committee and would like to continue, reapplication is necessary.

Serving on state committees allows you to work with your peers on projects that increase members’ technical knowledge, enhance the profession’s image and draw the best and brightest into accounting—all while you build leadership skills and make valuable contacts.

Keep an eye out for details about the application process. Committee appointments will be made in early 2018 and the committee term is May 1–April 30.

Report: College Accounting Enrollment Continues at Historic Pace

Enrollment figures for college and university accounting programs continue to show strong interest in the profession as a new generation is graduating and entering the workforce.

Colleges and universities are now filled with members of Generation Z, the successors to the millennials, and the number of students enrolled in bachelor’s degree accounting programs grew to a record high of 216,482 in 2015-16, according to an AICPA report. The data presented in the report for the overall number of enrollments, graduates and hires are based on statistical projections.

But at the same time, enrollment in master’s degree accounting programs slid. The report, which describes the supply of accounting graduates and the demand for public accounting recruits, showed that the number of master’s degree enrollees fell 21 percent from 2014-15 to 35,620.

Nov. 1 Deadline for CalCPA Health Trustee Nominations

CalCPA Council annually nominates candidates to serve three-year terms as trustees of CalCPA Health (The Group Insurance Trust). Additionally, participating employers in CalCPA Health may nominate candidates to be placed on the ballot by submitting supporting petitions by Nov. 1 from at least 20 firms participating in one or more of CalCPA Health’s group health and welfare plans.

For more information, contact Genna Armanini at (800) 556-5771, ext. 3257, or via via email.

FTB Releases Common Audit Issues and Audit Tips 

Over the past few years, the FTB has identified common personal income tax audit issues, which typically involve substantiation or interpretation of the facts:

  • Gains and Losses from Sales of Stock: When shares of stocks are sold, the FTB will ask for substantiation for the gains/losses. Adjustments are typically found in the computation of stock basis.
  • Real Property Sales: The FTB will typically ask for substantiation of purchase costs, improvements and repairs. Adjustments are made when the documentation provided does not reconcile to the amounts claimed.  
  • Like-kind Exchanges: The FTB looks at all aspects of the exchange. Common adjustments are for certain requirements not being met, when there is a difference in the calculation of boot, or when the property basis is unsubstantiated. 
  • Charitable Contributions: The FTB will ask for appraisal reports for large non-cash donations to support the claimed fair market value of donated items. Adjustments occur when the FTB finds that fair market value is overstated.