INSIGHT Magazine March / April 2009

REARVIEWECONOMICS

In this issue

Will the OFS soften the economic blow?

Shotgun mergersboom around the world

Looking for a job?Uncle Sam is hiring.

Protect yourinvestments fromthe taxman

CFOs take on the HR role

Take a GIAnT step in decision-making

Protect your clientbase in tough times

Student ambassadorslead in the job game

Exchange of debt forequity points you inthe right direction

Plus, 2009-2010ICPAS Board ofDirectors announced

The Magazine of the Illinois CPA Society www.icpas.org/insight.htm | March/April 2009

Finding the road tofinancial stability

indexMarch/April 2009 Vol.58 No. 6

www.icpas.org /insight.htm

features

columns

regulars

26 Heavy BurdenBy Carolyn Tang

The Office of Financial Stability promises to lift us from the rocky

economy and place us safely on even ground. But can it deliver on

the promise?

30 Firesale M&ABy Sheryl Nance-Nash

A distressed economy sparks a rash of hasty M&A deals.

34 Government AgentBy Derrick Lilly

As financial woes weigh on the country, finance professionals are in

high demand from the US government.

10 Investing Relax Your Tax BurdenBy Derrick Lilly

Tired of your earnings being eaten away by taxes?

14 CFO Hire LearningBy Meta Levin

CFOs are sharpening their soft skills to better handle the world of HR.

16 Risk Recession-Proof ClientsBy Janet Haney

Technology and face time help to foster client relationships in an

economic downturn.

18 Strategy Take a GIAnT StepBy Ted Santos & Edward M. Petrosky

A new tool promises to assess your organization’s readiness to take

on large-scale initiatives.

20 Students Student AmbassadorsBy Derrick Lilly

Want to impress recruiters straight out of college? This is how to do it.

22 Tax Debt NavigatorBy Harvey Coustan, CPA

Exchange of debt for equity gives partnerships a route to certainty.

40 2009-2010 ICPAS Board of Directors

4 First Word

6 Seen+Heard

38 Classifieds

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The economy has thrown a left curve at

everyone’s plans, and the Securities and

Exchange Commission’s (SEC) roadmap

for International Financial Reporting Standards

(IFRS) is no exception.

Financial woes and a change in leadership at the

SEC may have complicated the shift to IFRS from

US GAAP, but they haven’t stopped it. And a vari-

ety of lively discussions have resulted from efforts

to grapple with issues such as fair market value,

mark-to-market accounting, required costs and

training, educational readiness and the onslaught

of globalism.

According to an AICPA survey conducted last fall, 55 percent of CPAs at firms and companies

nationwide are preparing for IFRS, up from 41 percent in April 2008. Global convergence of

US GAAP and IFRS, in fact, is one of the top concerns for CEOs in 2009, according to Finan-

cial Executives International.

Yet another survey, this time conducted by Deloitte, indicates that 42 percent of the 200

finance professionals surveyed would consider implementation of IFRS sooner than 2014 if

permitted by the SEC. Currently, if certain milestones are achieved, the SEC’s proposed

roadmap could lead to required use of IFRS in 2014. However, consideration is being given

to permit use by a limited number of companies as early as 2010.

The changing economic and political climate may have put the pause button on IFRS imple-

mentation, but we still need to pay attention. Newly appointed SEC Chairman Mary Schapiro

has said she does not feel bound by the existing IFRS roadmap that’s out for public comment

and plans to proceed with caution. Yet whether it arrives fast or slow, it will be a part of our

lives. At some point in the not so distant future we’ll find ourselves in uncharted territory—

namely, an accounting world with IFRS in it.

The Illinois CPA Society continues to monitor the impact and implementation of IFRS, among

other issues relevant to the profession. We will stand by you ready with information and assis-

tance for wherever it is we’re headed. The journey is a little less intimidating when you have

someone along for the ride.

ICPAS President & CEO

ICPAS OFFICERS

Chairperson, Sheldon P. Holzman, CPAVirchow Krause & Company LLP

Senior Vice Chairperson, Lee A. Gould, CPAGould & Pakter Associates LLC

Vice Chairperson, James P. Jones, CPAEdward Don & Company

Vice Chairperson, Michael J. Pierce, CPARSM McGladrey Inc.

Vice Chairperson, Ray Whittington, CPACollege of Commerce Depaul University

Secretary, Charles F.G. Kuyk III, CPACrowe Horwath and Company LLP

Treasurer, Sara J. Mikuta, CPAThe Leaders Bank

Immediate Past Chairperson, Debra R. Hopkins, CPANorthern Illinois University CPA Review

ICPAS BOARD OF DIRECTORS

Brent A. Baccus, CPA Washington Pittman & McKeever

Therese M. Bobek, CPAPricewaterhouseCoopers LLP

Robert E. Cameron, CPACameron Smith & Company PC

Will iam J. Cernugel, CPAAlberto-Culver Company (Retired)

Anthony FullerGrant Thornton LLP

William P. Graf, CPADeloitte & Touche LLP

Cara C. Hoffman, CPABlackman Kallick LLP

Charlotte A. Montgomery, CPAIllinois State Museum

Gerald A. Olsen, CPAIllinois Wesleyan University

Annette M. O’Connor, CPARR Donnelley Logistics

Mary Lou Pier, CPAPier & Associates Ltd.

Marian Powers, PhDNorthwestern University

Daniel F. Rahill, CPAKPMG LLP

Lawrence H. Shanker, CPAShanker Valleau Accountants Inc.

4 INSIGHT www.icpas.org/insight.htm

FIRST WORD

PublisherICPAS President & CEO

Elaine Weiss

Editor-in-ChiefPublications Director

Judy Giannetto

Creative Services Director Gene Levitan

Creative Services ManagerRosa Garcia

Publications SpecialistDerrick Lilly

National Sales & Advertising Janis L. Mason

[email protected]:�773-325-1804Cell:�312-560-3081

Information Systems ManagerJim Jarocki

[email protected]

Editorial Office550 W. Jackson Blvd., Suite 900,

Chicago, IL 60661

Advertising Sales Office3711 N. Ravenswood Ave., Suite 146,

Chicago, IL 60613INSIGHT is the official magazine of the Illinois CPA Society,550 W. Jackson, Suite 900, Chicago, IL 60661, USA. Its pur-pose is to serve as the primary news and information vehiclefor some 23,000 CPA members and professional affiliates.Statements or articles of opinion appearing in INSIGHT arenot necessarily the views of the Illinois CPA Society. The ma-terials and information contained within INSIGHT are of-fered as information only and not as practice, financial, ac-counting, legal or other professional advice. Readers arestrongly encouraged to consult with an appropriate profes-sional advisor before acting on the information contained inthis publication. It is INSIGHT’s policy not to knowingly ac-cept advertising that discriminates on the basis of race, reli-gion, sex, age or origin. The Illinois CPA Society reserves theright to reject paid advertising that does not meet INSIGHT’squalifications or that may detract from its professional andethical standards. The Illinois CPA Society does not necessar-ily endorse the non-Society resources, services or productsthat may appear or be referenced within INSIGHT, andmakes no representation or warranties about the products orservices they may provide or their accuracy or claims. The Illi-nois CPA Society does not guarantee delivery dates forINSIGHT. The Society disclaims all warranties, express or im-plied, and assumes no responsibility whatsoever for dam-ages incurred as a result of delays in delivering INSIGHT.INSIGHT (ISSN-1053-8542) is published bimonthly exceptmonthly in July and August by the Illinois CPA Society, 550W. Jackson, Suite 900, Chicago, IL 60661, USA, 312-993-0393 or 800-993-0393, fax 312-993-0307. Subscriptionprice for non-members: $30 U.S., $40 Canada and Interna-tional addresses, $42 Mexico. Copyright © 2008. No partof the contents may be reproduced by any means without thewritten consent of INSIGHT. Permission requests may be sentto: Editorial Director, at the address above. Periodicalspostage paid at Chicago, IL and at additional mailing of-fices. POSTMASTER: Send address changes to: INSIGHT,Illinois CPA Society, 550 W. Jackson, Suite 900,Chicago, IL 60661, USA.

ControllersMarch 17 - Rosemont, IL

GovernmentApril 29 - Rosemont, ILApril 30 - Springfield, IL

Business ValuationMay 5 - Chicago, IL

International IssuesMay 12 - Chicago, IL

Forensic AccountingHalf-DayMay 13 - Chicago, IL

Taxation onReal EstateMay 14 - Chicago, IL

Business TaxMay 19 - Springfield, IL

Estate & Gift TaxMay 21 - Chicago, IL

Employee BenefitsMay 27 - Chicago, IL

Corporate TaxMay 28 - Rosemont, IL

2009 SPRING CONFERENCES

Mark Your Calendar!

Dates and locations are subject to change. All conferences offer CPECredit; check our website for info on CLE and other specialty credits.

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Licensed CPAs need 120 hours of CPE*by September 30, 2009.*Must include 4 hours of Ethics CPE

For the most current info or to register,visit www.icpas.org.

www.icpas.org/insight.htm MARCH/APRIL 2009 5

INSIGHT AWARDS2008 Apex Award, Magazine & Journal Writing

2007 Magnum Opus Award, Best All-aroundAssociation Publication

2006 Apex Award, Magazines & Journals

2006 Apex Award, Magazine & Journal Writing

2004 Apex Award, Magazines & Journals



2002 Chicago Women in Publishing ExcellenceAward, Writing/Editing

2001 Apex Award, Feature Writing

2001 Apex Award, Best Redesigns


2000 Apex Award, Best Rewrites


SEEN HEARDNEWS BYTES, SOUND ADVICE AND PRACTICAL BUSINESS TIPS

Enter Financial ServicesSo you want your CPA firm to expand into investments? Here arefour ways to do it:

1.Acquire a f inancial services firm. This allows you to expand

services to the existing clients of both firms while increasing the size

of your client base.

2.Establish your own financial services practice. This is a

much less expensive option, and allows you to tailor services to your

overall goals, maintain your existing clients, and keep control over

your practice.

3.Partner with an investment firm. This doesn't require you to

expand your payroll or infrastructure, maintains control of your

clients, and allows you to expand your services and client base.

4. Implement a referral program. Although requiring little time

and no investment, you face the risk of losing both your clients and

your control over the services being offered.

Source: Frankle, N., CFP. (2008, December 18). “Offering Finan-cial Services to Clients in This Market? Are You Nuts?” WealthManagement Insider.

$68 billionDecline in FY 2008 corporate tax revenue collected by the US Government due to theweakening economy. Source: Government Accountability Office report, A Citizen's Guide to the 2008 Financial Report of the US Government.

Retention a Big WorryA recent survey developed by Robert Half International suggeststhat today’s senior executives are increasingly worried about hang-ing on to good employees and bringing in new ones. Thirty-ninepercent of the 150 participating executives from some of thenation’s largest companies cited employee retention as their great-est worry, while 22 percent cited recruitment. Productivity andemployee morale were each named by 17 percent of respondents.Source: Robert Half International [www.rhi.com].

“A recession is when your neighborloses his job. A depression is when youlose yours.” (Ronald Reagan, 1982)[ ]

$1,009,100,000,000US Government’s FY 2008 budget deficit. Source: Government Accountability Office

report, A Citizen's Guide to the 2008 Financial Report of the US Government.

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The Work WeekJust Got LongerThe recently released results of a Robert HalfInternational (RHI) study commissioned in 2007reveal that financial professionals around theworld have significantly different work hour prac-tices. The report of this study, Working Hours: AGlobal Comparison, includes the opinions of2,283 financial managers in 17 countries.

While the average number of work-week hoursvaries from country to country, globally manyfinancial professionals (52 percent) are workinglonger hours than they did in previous years.Reasons include increased responsibility, com-pany growth, increasing globalization, the needto accommodate international clients, and im-proved technologies, which keep employeesconnected to work 24/7.

Financial professionals in Luxembourg, Japanand Ireland lead in hours worked. In fact, 60percent of Japanese workers say they work 46or more hours per week, and 19 percent saythey log over 55 hours a week (compared to12 percent in the United States, 11 percent inthe United Kingdom and 9 percent in France.)Forty-seven percent of respondents from Ire-land say they work between 46 and 55 hoursa week—17 percent above the global average.The average number of hours worked in Lux-embourg is 47.6.

For more on this report, visit www.rhi.com.

10 Tips for Surviving Career BlipsCareer expert Ford R. Myers, president of Career Potential LLC and author of Get the JobYou Want, Even When No One's Hiring, says, "Even in this difficult economic climate, jobseekers have more control over their career circumstances than they might think. There arespecific strategies and tactics that consistently generate strong results in a bad job market."

Myers offers the following 10 tips to get you through these tough times:

1. Maintain your momentum. Stay busy, get active and be productive in both job searchand non-job search related pursuits.

2. Seek help. Get career support from a professional career coach who can better pre-pare you for your next position. Consult a counselor if you are struggling emotionally.

3. Read career books and attend career seminars. Staying informed of industry trendswill help you gain greater knowledge of the careers poised for future growth.

4. Leverage technology. Utilize websites, online services and social networking sites likeLinkedIn to keep in touch with peers and colleagues.

5. Differentiate yourse lf. Get involved in professional organizations and position your-self as an expert by writing articles, giving presentations and teaching classes.

6. Use off time wise ly. Gain more education by participating in classes and seminars,work towards a certification or attend professional conferences.

7. Pursue a temporary, part-time or contract position. Volunteer, offer pro bono workor take part in an internship/apprenticeship, especially when considering a change in industry.

8. Take care of yourself. Eat well, exercise, get plenty of rest, keep in touch with friendsand family, and keep up with hobbies and favorite activities.

9. Relocate. Consider shifting industries and/or being more geographically flexible toexpand your career options.

10. Enhance all the documents in your career portfo l io. Practice interviewing andnegotiation skills. Focus your message on the tangible results you can produce.

Source: Career Potential, 2008. Ford R. Myers can be contacted at [email protected] or www.careerpotential.com.

3.4 percentOverall salary increase projected for finance and accounting

staff in 2009. Source: Robert Half International 2009 Salary Guide.

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INVESTING

Relax Your Tax BurdenTired of your earnings being eaten away by taxes?

By Derrick Lilly

Sadly, we’ve all had to accept thefact that money doesn’t grow ontrees, which means alternative

methods for growing and protecting wealthare essential to long-term financial stability.

Regardless of whether you already ownor are thinking of purchasing bonds, ETFs,mutual funds, individual stocks, or all of theabove, the long-term implications of payingfederal and state taxes on earned interest,dividends and capital gains can significantlyerode overall investment returns.

However, tax-advantage investing offersthe means to dull the taxman’s axe.

Uncle Sam Borrows a BuckBy purchasing US Treasury securities andsavings bonds, you are essentially making aloan to the government over a fixed period,ranging from a matter of weeks to 30 years.Because Treasury securities are backed bythe “full faith and credit” of the govern-ment—which can raise tax revenues tocover debts—this type of investment is con-sidered to have no credit risk.

“All investors should consider the appro-priateness of Treasuries for some portion oftheir portfolio,” says Mark J. Gilbert,CPA/PFS/MBA, principal at Reason Fin-ancial Advisors Inc. “For investors in stateswith high marginal income tax rates,developing a tax-conscious investmentportfolio should consider both federal andstate income taxes. Therefore, Treasuriesbecome an increasingly important part ofan investor’s portfolio.”

In terms of savings bonds, federal taxescan be deferred until redemption, and maybe redeemed fully tax-free if used for qual-ifying education expenses.

Consider Your Municipal Pals“If a client is willing to take on relativelysmall risk, he or she could invest in AAA-rated municipal bonds in order to earninterest that is free of federal income taxes,”says Gilbert

Municipal bonds, or “munis,” are debtobligations issued by local and state govern-ment entities to finance the building ofschools, hospitals, roads, utilities and otherpublic projects. Munis typically offer higheryields than Treasury securities, carry a creditrating to determine quality and risk, andoffer interest that is generally exempt fromfederal income tax. However, the intereston some munis may be subject to the alter-native minimum tax. What’s more, as longas you live in the offering locale, interest issometimes free of state and local incometaxes as well.

Munis do carry some risks, however. Forone, they are increasingly sensitive to inter-est rate changes in the markets and their val-ues fluctuate based on market conditions.

“Ordinarily, in an environment of risingincome taxes, tax-free municipal bondswould climb in value,” says Gilbert. “How-ever, the current financial crisis has de-pressed municipal bond prices as investorsworry over the ability of issuers to eitherrepay or refinance outstanding bonds. Idon’t believe municipals will rise in valueuntil investors believe that the financial cri-sis is under control.”

Credit ratings can impact valuations aswell. Generally, a bond issuer with a lowercredit rating will offer a higher yield, but therisk of default may be greater.

“As the client is willing to take on greaterrisk, he or she could invest in lower-ratedmunicipal bonds to earn higher amounts oftax-free income,” says Gilbert. However, ageneral risk-aversion practice is to only pur-chase “investment-grade” bonds—bondsthat rating agencies, Moody's, Standard &Poor's and Fitch rate as BBB, Baa or better.

Bond with a Fund ManagerTax-free bond funds and tax-managedincome funds (i.e. mutual funds that prima-rily invest in government and municipalbonds and securities) can be a great way toenter bond investing without the hassle of

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evaluating individual bonds and their tax policies. Funds require

much less money in order to establish a diversified portfolio, and

commonly make monthly or quarterly dividend distributions as

opposed to the semi-annual or annual interest payouts of many

individual securities.

However, unlike individually purchased bonds, a fund’s holdings

are determined by the will of its manager, who may move in and

out of different positions. The fund’s yield or dividend rate fluctu-

ates based on its earnings and holdings at the time of payout.

What’s more, a fund’s shares are issued to several investors,

meaning that the share value fluctuates based on the fund’s asset

value, the number of outstanding shares and other liabilities. Sub-

sequently, there is no guarantee that the redemption price will be

the same or greater than the initial purchasing price. Management

fees, commissions, or purchasing and redemption limitations also

may be involved.

“I would pay close attention to factors you'd look at in analyz-ing any fund. Ask yourself, is the manager experienced? Are feeslow? How does long-term performance look on an after-tax basis?”says Christopher Davis, mutual fund analyst at Morningstar Inc.“Overall, tax-managed funds are very underutilized. They can offeryou the tax benefits of investing in a Roth IRA, but you have noneof the restrictions.”

A Piggy Bank Can’t Hold it All

Aside from employer-matched retirement plans like the 401(k), twoaccount types are most often considered when it comes to invest-ments and retirement money: A traditional IRA and a Roth IRA.

Gilbert stresses that, “All investors, regardless of their income taxbracket, should be encouraged to invest through 401(k), IRA andRoth investment structures where permitted by the tax code. Thesevehicles provide current or future income tax savings, which resultsin more investment principal to grow on a tax-deferred or possibly

tax-free basis.”A significant difference between the tra-

ditional IRA and Roth IRA is the way taxesare handled. In a traditional IRA taxes aredeferred, so if $10,000 is earned over theyear and $1,000 is contributed, the contri-bution amount will be deducted from tax-able income. However, all contributionsand capital gains, dividends and interestearned over the years will be subject to tax-ation once withdrawals are made. If a lowertax rate is in effect by the time withdrawalsbegin, this may not be a deal-breaker, but ifa higher tax rate is in place, values maydecrease significantly.

In the case of a Roth IRA, the same$10,000 would be fully taxed as regularearned income. While the initial incometax deduction is lost, a $1,000 contributionmade after taxes could be withdrawn inretirement with any gains paid tax-free (aslong as the contributions have been held inthe account for at least five years).

“A Roth can be very beneficial over thetraditional IRA and 401(k) if the employeefinds they’re in a higher income tax bracketin retirement than at the time the contribu-tions were made,” says Gilbert.

“It makes sense to be invested in bothvehicles as a way of diversifying your futuretax exposure,” Davis notes. “You neverknow what your tax situation will be inretirement, especially if it's decades—oreven years—away.”

If you’d like more information on tax-sensi-tive options in investing, pay a visit towww.usbonds.gov, www.morningstar.com,www.investinginbonds.com, or www.rea-sonfinancial.com.

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Hire LearningCFOs are sharpening their soft skills to better handle the world of HR.

By Meta Levin

Small and mid-sized company CFOsare taking on responsibilities that,traditionally, aren’t exactly the pro-

vince of finance executives. Often, in fact,they’re delving into the softer side of busi-ness, more commonly known as HR.

“CFOs now are expected and required tobe more well-rounded as professional peo-ple,” says Cal Stuart, CFO of Elk Grove Vil-lage, Ill.-based Aquion® Water TreatmentProducts LLC. “The days of the bean coun-ter are gone.”

Stuart took over responsibility for humanresource functions at Aquion last year. Thetransition has been smooth for several rea-sons. First, he served as CFO of other com-parably sized companies before joiningAquion two years ago, which means he hashad contact with and experience in variousareas of business. In addition, he knew fromthe start that HR eventually would report tohim, and worked closely with the head ofhuman resources prior to the change.

Often in an effort to streamline an organi-zation’s processes and free up the CEO’s

valuable time, departments such as HRbecome the domain of either the CFO orlegal counsel. Recruiting firm Robert HalfInternational has noticed the trend.

“The current regulatory environmentmay have a lot to do with the shift,” saysMike Shapow, Chicago regional VP. “It isincumbent on the CFO to be more involvedin human resources.”

“Of the seven CFO positions I held, I hadHR reporting to me in five of them,” saysCindie Jamison, national managing directorof CFO Services for Tatum™, an executiveservices firm focused on creating and sup-porting the office of the CFO. “I was alwaysvery careful to hire strong HR people to runthe show,” she notes.

Tatum has pushed its CFOs to get trainingin what Jamison calls “the softer skills,”including communications and negotiation.“Any CFO who runs human resources hasto be strong in these areas,” she says.

Professor Arup Varma, PhD, of Chicago’sLoyola University Human Resource andEmployment Relations master’s degree pro-

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gram, explains that accounting and finance MBA students in hisPerformance Management class are “somewhat uncomfortablewhen I talk about perception, feelings and emotions, but relaxwhen I connect it all to the bottom line. I tell them that as they gohigher in the corporation, they are going to be managers and theywill have people working for them,” he says. “That’s HR. They aregoing to need HR.

“In the last 10 to 15 years the emphasis in HR has been that itis not just a cost center; the emphasis is on measuring and doinga cost-benefit analysis,” he adds. “The CFO will want to track andmeasure that.”

Those who head HR functions have mixed feelings about theCFO trend. “In some cases this helps streamline activities,” saysVarma. “But it can be negative if the numbers become too impor-tant and the emphasis on employee development is pushed aside.”

Human resources has reported to Bob Cantwell, VP of Finance/CFO of B&G Foods, Inc. in Parsippany, NJ, since the early 1990s.“It allows us to handle situations such as insurance and employeeissues much quicker,” he says. “The VP of HR and I communicateregularly and discuss solutions together.”

Cantwell, who has worked for B&G Foods since 1983, tookover HR when he moved up from company controller to CFO. Inretrospect, he believes his position as company controllerhelped to familiarize him with the HR function. That and hiscollege minor in psychology, he says, have served him wellwhen working with HR issues. “A CFO needs more than just afinancial background,” he explains. “He or she needs a well-rounded education.”

Cynthia Wojcek, VP of Human Relations at B&G Foods, notesthat the relationship has had its upside. “It has made me moreaware of the financial aspects,” she says. Wojcek has learned tospeak the language of finance in order to better communicatewith her boss. And, in fact, to better prepare for the current busi-ness environment, Varma encourages his HR students to take anaccounting and finance course, and emphasizes the importanceof being able to justify wants, needs and activities in businessterms. “I tell them that they have to be able to demonstrate thatthey understand,” he says.

“In the best-case scenario, HR sits at the table with other keyplayers,” says Kathy Lunsky, a former corporate HR director. “Thechallenge in reporting to the CFO is that you don’t have a placeat the table and you are relying on someone whose prime back-ground and focus has been finance to represent HR. That canmean that HR gets reduced to ‘how costly are you?’”

One of the eternal struggles, says Lunsky, is to ensure thathuman resources is seen as a business partner. You have to be“much more focused on numbers,” she says. “There’s definitelymore pressure to make sure that you thoroughly articulate issuesin those terms.”

“Typically the people costs—salary, benefits and training—comprise 35 percent of a company’s costs,” says Shapow. “It’s asignificant expense item, so HR people have to become num-bers-savvy.”

True enough, CFOs tend to be bottom-line, results-orientedcommunicators, while human resource leaders tend to be allabout people. Their shared goals, however, center on costs, whichis what makes the pairing so logical.


RISK

Recession-Proof ClientsTechnology and face time help to foster client relationships in an economic downturn.

By Janet Haney

While individuals carefully watchtheir personal portfolios duringthe current recession, account-

ing and finance professionals continue tocater to their primary investment—theirclients. Keeping up with changes in theglobal economy isn’t enough anymore.Companies have to dig deep to stay on topof their clients’ changing business needs.

Turn to TechKPMG is doing a variety of things to keepclients informed, says Dan Rahill, CPA/JD/LLM, tax partner at KPMG in Chicago.Efforts include inviting them to tune in towebinars, listen to weekly podcasts, watchrelevant webcasts, and attend an ongoingseminar series. The firm offers discussions

on topics such as tax implications in arecession, maximizing tax flow, and theimpact of Sarbanes-Oxley. KPMG's ThisWeek� in�State�Tax podcasts, for example,aim to help state and local tax specialistskeep up with the latest legislative, regula-tory and judicial state and local taxchanges. Firms even offer CPE credit forsome discussions.

A recent Forrester Research report, TenWays�to�Recession-Proof�Market�Research,

offers ideas that can be applied to variousindustries trying to reach customers in adownturn. The report’s findings emphasizethe importance of utilizing Web 2.0 tech-nologies to get the word out about marketintelligence, studies, syndicated researchaccess and how-to guides.

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“Distribution starts with a publishing mentality—preparing information for mass dis-tribution—and a portal strategy,” writes the report’s author, Ted Schadler. “The valueof market research to the business is directly related to the number of business deci-sions affected by it. The best way to increase the value of a study or report is to get itinto the hands of more people.”

Forrester Research also recommends turning to wikis, internal blogs and RSS feedsto extend information even further, noting that such technologies push data into users’inboxes and browsers. In essence, this method creates a self-service distribution cen-ter with all the relevant text information and graphics in one location. Companies typ-ically rely on email alerts and website postings to get the word out about what theyare currently offering.

E-News Spreads the WordJamshed B. Gandi’s firm Bertorelli, Gandi, Won & Behti saw the need for a client e-newsletter some years ago. Gandi, CPA/CFP®/CVA/Ms.Tax, says this format allows thefirm to make announcements and provide pertinent prepackaged and original contentto approximately 450 clients on a weekly basis.

“This is an extra value-added service we give out. It’s a great marketing tool,” hesays. “The articles are in line with the times. Anytime there is something significanthappening, you have to make sure the client has the information.”

Rather than being a tool for new business, says Gandi, the e-newsletter adds to thefirm’s overall visibility and timeliness. Instead of having to seek out industry-wide andgeneral information elsewhere, clients can simply click on links provided in the bodyof the email, log on to a webinar or attend a short panel discussion in person. To keeptrack of the firm’s e-newsletter effectiveness, Gandi receives an email every time some-one opens up an article.

Forrester Research agrees that email communication is a valuable means of dissem-inating information to current clients, particularly in uncertain times.

“Email targets your existing customers, a group far more likely to listen to your mes-sages in a recession than new prospects,” writes author Josh Bernoff in Strategies�forInteractive�Marketing�in�a�Recession. “A recession is likely to increase email market-ing volume.”

Face TimeOften, though, the personal touch really matters most when the economy is in the tankand people are concerned about their company’s financial future.

“When it comes to selling your services, a webinar can’t replace face-to-face com-munication,” says Shawn Kane, a state and local tax executive for Crowe Horwath LLP.

Although his firm relies on both webinars and e-newsletters to reach clients, Kanefeels that partnerships are imperative. “Clients are having a tough time and want us topartner with them,” he says. “If it’s a company we’ve had a strong relationship with,we’re willing to make that investment.”

Kane admits that the nature of the partnership is determined on a case-by-casebasis—maybe they’ll investigate keeping the client’s fees flat or explore above-the-linesavings options—and sometimes the firm’s service model has to change to fit theclient’s requests.

“Our business is based on personal interaction with our clients,” says Kim Rice,CPA/MST, partner at R&M Consulting LLC. “You make that effort up front then in tougheconomic times you don’t have to change.”

Part of R&M Consulting’s strategy is to invite clients to lunches, dinners and net-working opportunities. Rice notes that her executive-level clients understand thepower of face-to-face interaction. “Our focus is always to be engaged with our clients,”she says. “When our clients need help they continue to call us.”

It takes a vigorous balance of face time, technology and marketing savvy to keepcurrent clients. As Schadler writes, “In a downturn, companies will focus more on theircustomers than on their prospects for the simple reason that it’s easier to make moneyfrom existing customers than to spend money acquiring new ones.”


STRATEGY

Take a GIAnT StepA new tool promises to assess your organization’s readiness to take on large-scale initiatives.

By Ted Santos & Edward M. Petrosky

The future success of an organizationoften depends on disruptive initia-tives that drive new revenues and

position the organization as a marketleader. While it’s the Board of Directors’ jobto intentionally create strategic problemsfor the CEO to solve, board members aresometimes reluctant to use this approachfor fear of overwhelming or disrupting theCEO and staff. The result: Many great ideasare never attempted.

But wait. What if the Board and CEO hadsome way of measuring the organization’sreadiness to execute large-scale initiatives?What if it was possible to prepare an entireorganization to execute initiatives thatappear to be disruptive to the existing busi-ness model? What if the Board and CEOcould assess the unspoken objections andconcerns that might derail a particular ini-tiative before it’s even launched, and couldtake the necessary steps to avoid them?

The Great Idea Alignment Tool (GIAnT) wascreated to do just that. This is how it works.

The GIAnT is an organizational satellitethat provides a comprehensive vertical andhorizontal picture of your organization. Itindicates who is prepared for an initiative,how prepared they are, and what it willtake to get staff ready for the initiative.

The GIAnT consists of more than 200items that measure 18 human factors thatwill drive or derail an initiative, such asurgency, innovation, ownership, commit-ment, trust and sabotage. These items arebased on a combination of cutting-edgeresearch, organizational and leadershipdevelopment theory, and the collectivecoaching and consulting experience of thetool’s creators.

The GIAnT is unique in several ways.First, it is individually tailored to assess pre-paredness for a specific organization initia-tive (i.e. the “great idea”). Second, whereasmost comprehensive assessments focus onindividual executives, the GIAnT assesses

the organization as a whole. Third, many ofthe companies that use assessment tools toinform decision-making limit themselves toemployee feedback surveys. These toolsoften indicate what people are saying butnot what caused them to feel the way theydo. The GIAnT, on the other hand, indicatesnot simply if people believe in an initiative,but why they do or don’t. Finally, theGIAnT corrects for positive and negativeimpression management; in other words,the degree to which respondents portrayedthemselves or their organization in an exag-geratedly favorable or unfavorable light.

The GIAnT is administered online toeach employee. The resulting report isorganized in a top-down format, beginningwith a broad snapshot of the organization at50k feet, and then drilling down by vari-ables of interest. The GIAnT indicates thepercentage of the organization as a wholeand the percentage of each business unitwithin the organization that is aligned,resistant, conflicted/ambivalent, and apa-thetic towards the initiative.

Leadership can take this information anduse it to decide whether the organization isready for a costly initiative. Since results arealso provided for each business unit, com-pany leaders are able to determine wherethe most and least support lies. Once theyhave this information in hand, they candecide which geographical or functionalunit would be optimal for the disruptive ini-tiative’s launch.

Perhaps most importantly, the GIAnTindicates why staff members are eitheraligned with or pushing back against theinitiative. Company leaders can use thisinsight to exploit the factors supportingalignment and to correct the factors causingpush back.

The entire assessment process spansabout 4 weeks, and includes aligning lead-ership on an initiative and individualizingthe GIAnT accordingly, a proprietary solu-

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tion to maximize the rate of employee GIAnT completion,experientially based feedback sessions to leadership and staff,and action plan development and execution.

Cheryl S. Wilson, CPA, principal of Wilson-Heidrich Associ-ates, Financial Accounting Advisors, serves on a board thatrecently used the GIAnT to launch a new initiative. As sheexplains, “A major capital improvements program along withthe related financing has been approved for this corporation bythe Board of Directors. Millions of dollars are to be spent overthe next three years. The additional debt service and continualincrease in operating costs make improved operating efficiencyand new revenue streams an imperative. A focused, expeditiouslaunch of a new initiative was called for and the Board didn’thave the time or skill sets to obtain the information we neededto evaluate our options or determine the probability of success.

“I thought if we could obtain the organizational reasons whycertain past initiatives were never fully launched or, if launched,were not successful, then this insight would provide the Boardwith the necessary information to modify our strategy and itsexecution to allow us to achieve our desired growth objec-tives,” she explains. “The organizational assessment we chose,the GIAnT, could provide objective information we otherwisecould not obtain.”

Wilson goes on to explain that, in essence, the GIAnT providesa virtual walk around the entire organization—a walk around thatleadership would never have the time to take on its own. It alsoprovides a data-driven basis for predicting whether an initiative islikely to succeed and what needs to be done to increase the like-lihood of success.

“We interacted with the entire organization in less than twomonths and increased engagement throughout all levels of thecorporation, therefore achieving alignment of the Board, CEOand management and staff on an innovative initiative,” saysWilson. “Involving the entire organization in the assessmentemphasized the importance of the project, instilled urgency andenergized the management and staff.”

Today, the Board and CEO are taking action much more rap-idly than they have in the past, says Wilson. “Board memberattendance and participation at meetings has increased. Theentire Board is engaged and aligned on new initiatives with tar-geted outcomes and completion dates. Communication hasimproved significantly and members of the Board are workingas a team to address issues.”

Ted�Santos,�CEO�of�Turnaround�Investment�Partners�(TIP),�part-

ners�with�CEOs�and�board�members,�serves�as�a�trusted�advisor

to�companies�going�through�change,�and�coaches�executives�to

uncover�and�penetrate�untapped�markets,� shift�corporate�cul-

tures�and�align�staff�and�management�to�the�corporate�vision.

Dr.�Edward�M.�Petrosky,�a�psychologist�by�training,�focuses�on

organizational�alignment,� retention,�executive�development,

succession�planning,�outcome�measures�and�hiring.�He�has�pre-

sented�at�national�professional�conferences,�published�in�peer-

reviewed�scientific�journals,�and�taught�11�different�psychology

courses� to�undergraduate�and�graduate�students.�Dr.�Petrosky

maintains�a�private�consulting�practice�in�Forest�Hills,�NY.

Visit�www.turnaroundip.com�for�more�information�on�GIAnT.


STUDENTS

Student AmbassadorsWant to impress recruiters straight out of college? This is how to do it.

By Derrick Lilly

Hello, I’m a Student Ambassador.”Sounds impressive, right? It seemslike a nice title to include on a

resume or grad school application. But forthose chosen to represent the accountingprofession, it’s more than just a title.

The Illinois CPA Society (ICPAS) StudentAmbassador Program was launched in con-junction with the CPA Endowment Fund ofIllinois in August 2008, with six studentsserving five campuses—College of DuPage,Eastern Illinois University, Illinois State Uni-versity, Southern Illinois University andWestern Illinois University.

The initiative’s mission is to increaseawareness of the importance of finance inour lives, encourage students to consideraccounting as a career choice, and publi-cize ICPAS benefits such as scholarship oppor-

tunities, CPA Exam awardsand student memberships.

Being a student ambassa-dor means interacting withfriends and colleagues, dev-eloping marketable profes-sional talents, garnering sup-port from seasoned profes-sionals and establishing net-works for future success. Inother words, it means bridg-ing the gap between studyand the real world.

“Serving as a student am-bassador has given me manyexperiences to pull from dur-ing job interviews, and Ibelieve it has added value tomy resume. Being one of thefirst ambassadors, I thinkemployers are impressedand curious about the pro-gram. It gives me a chance totalk about the ways I havebeen investing in my career,”says Heather Koertge, 21, anaccounting undergraduate

and student ambassador at Eastern IllinoisUniversity.

“Many students at College of DuPage areunsure of their future careers,” says StaceySams, 19, an accounting undergraduateand student ambassador. “I want to exposeothers to the opportunities available inaccounting and hopefully help them find apassion within the field,” she explains.

Brandon Vagner, 22, an accounting grad-uate student at Southern Illinois University,Carbondale, adds, “Having the ability toimpact a student’s life in a positive way isextremely important to me. It gives me thechance to give back to my university andthe accounting profession in general.”

“The ambassadors are given the respon-sibility to present programs and events fortheir fellow students,” explains Kathy Hor-ton, CPA/CMA/MBA, professor of account-ing at College of DuPage and chair of theICPAS Student Outreach Task Force, underwhose umbrella the student ambassadorprogram resides. “These experiences willadd immensely to their personal and profes-sional growth. They will be so much furtheralong than their peers when they start theircareers. Not only does the student, theircampus and the ICPAS benefit, but the pro-fession as a whole benefits from the positiveexposure...It is truly a win-win situation.”

What’s more, the ICPAS grants studentambassadors a stipend and academic finan-cial aid through its Endowment Fund. TheSociety awards more than $126,000 annu-ally in scholarships to students workingtowards their CPA certification.

Commenting on plans for the futuredevelopment of the Student AmbassadorProgram, Horton says, “My hope is that itcan be extended to more and more schoolsin the state.”

If�you�would�like�to�help�in�developing�the

Student�Ambassador�Program,�contact�Kelly

E.�Slay,� ICPAS�students�and�young�profes-

sionals�specialist,�at�[email protected].�

“

Give back to the profession that’s been good to you

Your support means a great deal to me and will help me achieve my goal of becoming a CPA.

THE CPA ENDOWMENT FUND OF ILLINOISProvides Scholarships for Accounting Students | Funds Career Awareness Programs

Promotes Diversity in the Profession | Develops New Leaders

The CPA Endowment Fund of Illinois, working in cooperationwith the Illinois CPA Society, raises philanthropic support tofund programs that nurture and sustain the CPA profession.

Paving the Way for Tomorrow’s CPAs

For more information or to make a tax-deductible gift:Julie Lenner, Director of Development, 312.993.0407, ext. 290or go to www.icpas.org.

Give back to the profession that’s been good to you

Your support means a great deal to me and will help me achieve my goal of becoming a CPA.

THE CPA ENDOWMENT FUND OF ILLINOISProvides Scholarships for Accounting Students | Funds Career Awareness Programs

Promotes Diversity in the Profession | Develops New Leaders

The CPA Endowment Fund of Illinois, working in cooperationwith the Illinois CPA Society, raises philanthropic support tofund programs that nurture and sustain the CPA profession.

Paving the Way for Tomorrow’s CPAs

For more information or to make a tax-deductible gift:Julie Lenner, Director of Development, 312.993.0407, ext. 290or go to www.icpas.org.


TAX

Debt NavigatorExchange of debt for equity gives partnerships a route to certainty.

By Harvey Coustan, CPA

Tax considerations often mitigate theeffects of an economic downturn.Pass-through entity owners who

have loaned money to their businesses overthe years are now looking for ways tospruce up their balance sheets and reducetheir debt service where cash is short.

In the past, there was some uncertaintyconcerning the federal tax treatment of anexchange of debt for equity in a partnershipsetting. However, Section 108 of the Inter-nal Revenue Code lists situations whereincome from cancellation of indebtedness(COD income) is excluded from taxableincome, and the American Jobs CreationAct of 2004 extended a limitation on inclu-sion to partnership debt that previouslyapplied only to corporate debt.

After amendment, if a partnership trans-fers capital or profit interest in the partner-ship to a creditor to satisfy debt, the part-nership is treated as having satisfied thedebt with an amount of money equal to theinterest’s fair market value. So, if that valueis less than the amount of debt satisfied, the

COD income reported is limited to theexcess amount of debt satisfied over thetransferred interest value. The COD incomeis allocated to partners who were partnersimmediately before the transaction.

Proposed regulations interpreting thestatute change were issued last fall, andhearings were held in February. In additionto repeating the statutory language, the pro-posals provide a method for valuing the part-nership interest transferred to satisfy the debtif four requirements are met. The methodresults in a “liquidation value,” representa-tive of the amount of cash the creditor wouldreceive if the partnership liquidated all of itsassets at fair market value immediately afterthe interest for debt transfer.

The four requirements are: (1). Maintenance of capital accounts

under Regs. §1.704-1(b)(2)(iv). (2). The creditor, debtor partnership, and

its partners treat the value of the debt asequal to the liquidation value of the debt-for-equity interest for purposes of determin-ing the exchange’s tax consequences.

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(3). The exchange is an arms-length transaction, and(4). Subsequent to the exchange, the partnership does not

redeem and no person related to the partnership purchases thedebt-for-equity interest as part of a plan principally intended toavoid COD income.

Absent of compliance with these requirements, all facts and cir-cumstances will be considered to determine the debt-for-equityinterest’s fair market value for purposes of applying IRC §108’sCOD rules.

If the partnership maintains capital accounts in accordance withthe regulations for determining the presence of “substantial eco-nomic effect” of partnership allocations [Regulations §1.704-1(b)(2)(iv)], the creditor partner’s capital account will be increasedby the fair market value of the indebtedness exchanged.

The proposed regulations also indicate that, with some excep-tions, certain other rules applicable to an exchange of property foran interest in a partnership should apply to the debt-for-equityexchange. Under this application, neither the creditor nor the part-nership will recognize gain or loss on the debt’s contribution forequity in the partnership. Unpaid interest (including accrued origi-nal discount), rent, or royalties are not eligible for this treatment.

Under the proposal, the creditor’s tax basis in the partnership inter-est is increased by the creditor’s tax basis in the debt transferred (SeeIRC §721). Therefore, the creditor does not report a tax loss equal tothe excess of the transferred debt’s basis over the value of the part-nership interest received. Consistent with this, the holding period forthe debt-for-equity interest includes the period during which thecreditor held the debt [See IRC §§722 and 1223(1)].

The proposed regulations include an example: AB partnershipowes C $1,000. In an arms-length transaction, C agrees to cancelthe debt in exchange (debt-for-equity exchange) for an equity inter-est (debt-for-equity interest). The four requirements are satisfied.The fair market value of the debt is $700. This is based on the liq-uidation value of the debt-for-equity interest AB transfers. C’s capi-tal account is increased by $700. AB is treated as satisfying the debtfor $700. Although this example doesn’t specifically indicate it, theCOD income recognized by AB should be $300.

If adopted as presently written, the proposals should provide aroadmap for determining the tax consequences that flow from atransaction that likely will become more common in these troubledeconomic times. A method for determining transferred interest fairmarket value that can be used in valuing debt provides certainty ina sometimes difficult calculation.

By applying the non-recognition rules for the exchange, a poten-tial mismatch is avoided. If the creditor partner was a partner beforethe transaction, and the non-recognition rules did not apply, a lossmight be where the value of the debt-for-equity interest receivedwas less than basis in the debt. It’s likely that the loss would be acapital loss, and the creditor partner would have ordinary incomeon his share of the partnership’s COD income.

I’ll keep an eye on this topic as it unfolds. In the meantime, mysuggestion is that you don’t rely on the proposed language.

Harvey�Coustan�is�an�Ernst�&�Young�retired�partner.�He�is�presently

consulting� on� substantive� technical� and� professional� standards

issues�and�has�been�an�expert�witness�in�a�number�of�cases.

The best and brightest internsare at your fingertips.

The Illinois CPA Society has made it easier than everto identify the up and comers in the accountingprofession. Just visit the Illinois CPA Society’s Career Center and search student resumes to fillyour next internship.

All across the state, Illinois CPA Society studentmembers have uploaded their resumes for you toview online. These students represent the future ofthe profession and your guidance as a seasonedmember of the profession can put them on the righttrack. These students are available for summer, fallor spring internships.

Search by various criteria, including:

Geographic Location

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Visit www.icpas.organd click on the Career Center.

appointed

committees & task forces

For more information about specific committee or task forceactivities and experience requirements, please contactJennifer Schultz at 312.993.0407, ext. 211 or visit us onlineat www.icpas.org.

shareyour skills & talents

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Opportunities are availablein the areas of:

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Illinois CPA Society 2009-2010


October 10, 2007. The Dow Industrial Averageclosed at 14,078.69. NASDAQ stood strong at 2,811.61. Analystswere, for the most part, optimistic as the domestic economyentered the fourth quarter.

October 10, 2008. The Dow Industrial Averageclosed at 8,451.19, a drastic 40-percent drop in value comparedto the previous year. Stalwart stock AIG was removed from theIndex and replaced with Kraft. NASDAQ stood in tatters at1,649.51, a 41-percent reduction in value. Analysts scrambled tokeep up with the unraveling banking and finance sector.

HEAVYBURDEN

The Office of Financial Stability promisesto lift us from our rocky economy andplace us safely on even ground. But can it deliver on the promise?

By Carolyn Tang


You could see the first fissure back in August, if you knew whereto look. The FDIC took over XYZ Bank, then, within months, thegiants began to fall. When one fell, another was shaken. First, agovernment takeover of troubled siblings, Fannie Mae and FreddieMac. Then, investors helplessly watched as prestigious LehmanBrothers’ frenzied calls for help went unanswered. WashingtonMutual and AIG followed soon after, banking bastions no longer.

Such change in the span of a year. Could we have avoided thiscrisis? In hindsight, the temptation was too great. Interest rateswere at such a record low that banks were almost incentivized toextend subprime loans to less-than-qualified borrowers. Manyconsumers, both at the personal and the commercial level, weresufficiently enticed by free-flowing credit that they underestimatedtheir security and overextended their spending.

But as in every fairytale, doomsday finally came. Foreclosedhomes, a rash of bankruptcies, and complicated derivatives that,when unraveled, yielded nothing. The castle in the clouds col-lapsed, and at the end of the day, there was nothing on the booksbut empty, extended capital. The economy grinded to a halt ascredit froze and all forms of lending ceased.

“Imagine that you were driving down the road on a two-lanehighway,” explains Gerry Sparrow, portfolio manager of SparrowGrowth Fund. “You trust that the other guy is going to stay in hislane, but that doesn’t always happen. And if you see an accidentlike that, you start driving a little bit better, keep your eyes open,and you’re more careful about speed and such. Right now, withthe mortgages that went bad on the books of all the financial insti-tutions, you can see why they’re a little reluctant to loan money.”

The US economy is reliant on the flow of credit. For the systemto work, banks must lend to businesses, consumers, and evenother banks. However, when there is no trust in the system, thereis no lending.

“The credit freeze up was a terrible problem for financial insti-tutions. They simply were unable to understand valuations onassets, and weren’t willing to lend to each other even. That wasa huge, terrible problem for those institutions and for our econ-omy as a whole,” says John Douglas, a partner with the law firmof Paul Hastings.

With banks fearful at the crossroads, consumers and busi-nesses clamped down on spending even harder. “It is a viciouscycle,” says Dan Sondhelm, partner of SunStar, a finance indus-try consulting firm. “There is significant fear and lack of confi-dence in the marketplace. As a result, businesses and individualsare paralyzed in terms of earning and spending. It’s difficult forAmericans to get the credit they need to pay bills, buy cars, reno-vate or buy homes. At the same time, it‘s difficult for businesses toget paid from these services and expand,” he explains.

And so, in October 2008, the US government passed the Emer-gency Economic Stabilization Act, which authorized the Treasury toestablish a troubled asset relief program (TARP). Seven-hundred bil-lion dollars was earmarked to lubricate the country’s economicgears: $250 billion was allocated upon enactment, with an addi-tional $100 billion disbursed if the President certifies its need toCongress. A final $350 billion will be disbursed upon presidentialrequest, unless Congress disapproves. To administer this kitty, theAct established a new Office of Financial Stability (OFS), headed byInterim Assistant Secretary for Financial Stability Neel Kashkari.

“The law gives the Treasury Secretary broad and flexible author-ity to purchase and insure mortgage assets, and to purchase anyother financial instrument that the Secretary, in consultation with theFederal Reserve Chairman, deems necessary to stabilize our finan-cial markets—including equity securities,” Kashkari stated in aspeech to the Institute of International Bankers in Washington, D.C.

Indeed, such a statement gives the Treasury significant leewayin determining how to apply the funds. However, regardless of thevehicle, the OFS’ main charge is to provide the financial systemwith the resources necessary to jumpstart stalled markets.

“This $700 billion is really designed to get our financial marketsworking again. Otherwise, economic activity as we know it mayslow down dramatically, with severe repercussions in the econ-omy,” says Douglas.

Joseph Ament, professor of accounting and taxation at RooseveltUniversity, Chicago says the creation of the OFS is necessary inorder to provide the financial system with the resources necessaryto help alleviate the serious circumstances the domestic economyis facing in many of its basic and major sectors. “In recent past

“The volatility and volume of

trading on the exchanges, and

the deep drops and steep climbs

in markets daily, sometimes sev-

eral times up and down each

day, are a continued indication

of the great uncertainties preva-

lent in the economy.”


decades, there hasn’t been a perceived need for such an agencyin the US government. With the international and national finan-cial crisis, such a requirement has been determined by our Con-gress and our Treasury,” Ament comments.

In conjunction with the OFS, the Treasury also announced theappointment of several key interim TARP leaders, including TomBloom as interim CFO, Jonathan Fiechter as interim CRO, DonnaGambrell as interim chief of homeownership preservation, DonHammond as interim CCO, and Reuben Jeffrey as interim CIO.

No doubt an experienced cohort. But will it be enough? “Doesanyone have the experience and knowledge to deal with the cata-strophic set of circumstances that is now being faced?” Ament asks.

Initially, the program was established to purchase troubled assetsfrom financial institutions, in essence removing them from the sys-tem. However, this proved to be a difficult task. “It’s actually veryhard, and very complicated,” Douglas explains. “It’s tough to fig-ure out the pricing. Once you buy assets, you’ve got to figure outwhat to do with them. If you’re buying problem assets, you’ve gotto figure out how to manage them. The government is not a partic-ularly good manager of private-sector assets, so it would morelikely try to sell them. Selling them might exacerbate losses.”

So instead the US government used the bailout funds to purchasepreferred stock in some of the nation’s largest banks: GoldmanSachs, Morgan Stanley, JP Morgan Chase, Bank of America, Citi-group, Wells Fargo, Bank of New York Mellon and State StreetCorp. The government is also expected to purchase additionalequity from potentially thousands of other insured financial institu-tions; raise the FDIC cap on deposit insurance for certain types ofbank accounts; and restrict executive compensation, bonuses,“golden parachutes” and other incentives at institutions participat-ing in TARP.

“I think what happened is that the government decided that thebest bang for the buck would be simply to take institutions thatreally are the lifeblood of our economy and strengthen those insti-tutions through the capital program. Perhaps this approach wouldbe easier, better and, in the long run, more effective. I hope they’reright,” says Douglas.

While many institutions have queued up for their share, therewill be a small number of financially strong institutions that willchoose not to apply for government funds. “Frost Banksharesdown in Texas is one example,” Douglas explains.

“There also will be a number of institutions that won’t get themoney because they are so financially weak that the Treasury isjust not going to do it, and the regulators won’t support it. Those

institutions will either have to find new capital, find a merger part-ner, or fail. That’s going to be pretty dramatic,” says Douglas.

And with that, Douglas also notes the subtle irony of the bailoutprocess. “This money was put in place to strengthen the financialsystem, and yet it will accelerate the failure or consolidation of anumber of institutions.”

“This is an experimental process—an indicator of whether thebusiness community is supportive of the steps that the Administra-tion is taking in the financial markets,” Ament explains. “Thevolatility and volume of trading on the exchanges, and the deepdrops and steep climbs in markets daily, sometimes several timesup and down each day, are a continued indication of the greatuncertainties prevalent in the economy.”

It’s not as though the government has been entirely hands offwith the nation’s economy. In fact, the current level of involvementrivals that of the Great Depression. Additionally, with the purchaseof equity, the government has in effect intertwined the fates of thebanking sector with that of US taxpayers.

“The levers the government is using on the fiscal and monetaryside are normal levers, but I think that the degree is different,” saysSparrow. “The magnitude is much larger than people expected,and bigger than anything in recent memory.”

The nature of the stimulus aside, the resulting impact is textbookeconomics. “Once credit begins to flow again, you get lending.That lending will spur job growth. And when there are more jobs,the economy will begin to grow. You’ll get housing starts again.Car sales go up. Consumer spending goes up. Then the stock mar-ket will respond. The stock market will go higher, people will feelmore secure in their retirement and their spending, and it’ll looparound again,” says Sparrow.

He goes on to explain that by guaranteeing credit instruments,the OFS is essentially providing a safety net for the US economy.“For example, GE is getting guarantees on its commercial paper,so when institutions loan GE money, they know that GE is backedby the government and their fears are assuaged.”

And, in fact, the government may help to boost the economywith aid to the auto industry, a sector that employs a large percent-age of the population, and whose failure would likely counteractany fiscal bailout activities.

“As the media headlines die down, people will spend more, andbusinesses will once again grow,” says Sondhelm. “There will benew winners in the business community, and it will be interestingto see who makes it to the top.”

“To survive you eat or are eaten,” says Greg W. Needham, VP of marketing & businessdevelopment at NorthShore Capital Advisors.

These days, the appetite for mergers and acquisitions is generally lukewarm. In2008 the number of transactions was down almost 30 percent and the value of thosedeals down nearly 35 percent. The economy has quieted the urge to merge. Not justhere, but around the world. Through early November 2008, the global M&A dealvalue was approximately $2.7 trillion, down from a record $4.4 trillion in 2007.

If distressed financial institutions are excluded from the $2.7 trillion figure, the dropis even more precipitous. “What is interesting about 2007 is that a record for M&Adeal value was set, even though M&A activity slowed in the second half of 2007 dueto the beginning of the credit crunch,” says Bill Baxley, a partner in the corporate lawpractice of King & Spalding.

“The limited availability of debt financing, uncertainties about the financial impactof the impending recession and the increasing desire to preserve liquidity are part ofthe reasons the market is down sharply,” explains Scott George, managing director,P&M Corporate Finance.

That said, the economy has also sparked an increase in shotgun mergers and acqui-sitions—nuptials between companies without much time to date before the big day.FIR

ES

ALE

M&

A

A distressed economy sparks a rash of hasty M&A deals.By Sheryl Nance-Nash



“About the only type of deals getting done are those that werearranged a long time ago or the distressed deals that are being donehastily because they have no choice,” says Bill Kirsch, chair of theglobal private equity practice at the law firm of Paul, Hastings, Janof-sky & Walker.

The number of hostile deals increased in 2008. With stock mar-ket prices at lower levels, strategic buyers are looking for attractivelypriced opportunities. On the other hand, many target companies arereluctant to sell when they are undervalued, says Baxley.

It’s not just small and mid-sized companies that have cometogether out of necessity. “The acquisitions of Washington Mutual,Merrill Lynch and Wachovia are high-profile examples of largecompanies that needed to be acquired in order to avoid becominginsolvent,” says George.

These deals grabbed headlines. “Wells Fargo’s acquisition ofWachovia was pretty interesting because it could be viewed as ashotgun wedding, but one where they were aggressively courtedby multiple suitors. Bank of America’s acquisition of Merrill Lynchwas another very interesting deal due to the speed of negotiationsand immediate impact it had on Bank of America’s plans tobecome the national leader in each of its primary lines of busi-ness,” George explains.

When Hewlett Packard bought Electronic Data Systems for $14billion, it more than doubled its services revenue, making it morecompetitive with IBM, says Needham. “The acquisition of EDS willprovide additional diversification that likely will help the companyweather economic storms,” adds Bill Venema, a member of thebusiness law practice at Epstein Becker Green.

While many financial institution acquisitions are completelyshotgun, companies in other sectors are being forced to becomeacquisition candidates by steep declines in revenues and a sharpdecline of credit availability, says Jay Chatzkel, co-author ofBeyond� the�Deal:�Mergers�&�Acquisitions�That�Achieve�Break-

through�Performance�Gains. “Companies across the spectrum areunder pressure to keep adequate profit margins and to eliminateany business units, or even put themselves up for sale, if strategicrequirements are not met. This crisis is not solely involving finan-

cial institutions. It is a global economic one affecting all sectors,”says Chatzkel.

“Companies that are less exposed to major losses, have goodbalance sheets and strong acquisition readiness capabilities will bein a position to acquire these struggling but often undervaluedmajor firms,” he continues. “These acquiring companies may bedomestic US firms, but a sizable number of acquisitions will be bynon-US firms based in Europe or Asia. These pressures will con-tinue until the current economic disruption eases.“

The Ideal UnionAs in matters of the heart, a rush to the altar can make for a pair-ing of less-than-perfect partners. Ideally, says Chatzkel, everymajor enterprise has a strategic planning component that scansacquisition and combination opportunities. Preferably, each of thecompanies involved has a high level of acquisition readiness.

However, he adds, only a few companies have cultivated thecritical set of capabilities required to rapidly seize acquisitionopportunities and complete the acquisition/integration process ina thoughtful, highly integrated and extensive manner.

“Few acquiring companies have a playbook at the ready toguide these acquisitions,” says Chatzkel. Mostly, there are knee-jerk reactions with the emphasis on “the deal,” and even then, onthe financial side of the deal. “There is a real question of whatthese acquiring firms are buying, what legacy issues they need todeal with and how these acquisitions mesh with strategic goalsthat can be brought in line with organizational cultures, opera-tional practices and any real chance for significant transforma-tional change.”

Moving quickly puts a lot of pressure on the due diligenceprocess. When you undertake an M&A deal, you have to have asolid understanding of the company you are acquiring—its busi-ness model, earnings capability and risks, assets, liabilities, andmore. “If you move too quickly, there is greater risk that you maymiss key issues in the due diligence process that could affect thesuccess of the deal,” says Baxley.

How do you know when you’ve nailed down your due dili-gence? “When you reach diminishing returns. When you start hear-ing the same answers, you know you’re getting close,” says Kirsch.

Deals to Be HadBecause corporate valuations have been significantly pushed down,buying opportunities for cash-rich corporations, private equity (PE)firms and sovereign wealth funds (SWFs) wanting to scoop up strate-gic assets at bargain prices are on the rise. According to a recent Ernst& Young (EY) poll, companies currently performing at successful lev-els are trying to assess supplier stability, optimize their portfolios andexecute opportunistic acquisitions. EY suggests that now is the timefor well-capitalized companies with strong balance sheets to consideracquisition opportunities, because valuations are low and some well-run companies can be had for pennies on the dollar.

Bargains can also be found in stressed and distressed companies wish-ing to divest business units that are not aligned with core business prac-tices. Because of the frozen credit markets and financial crisis spurringrisk aversion, the days of leveraged transactions are ending andgreater cash and equity to fund deals is becoming a prerequisite. Thismeans that even corporations with cash on hand and strong balancesheets are expected to face greater competition from PE firms, SWFsand other foreign buyers. Source: Ernst & Young LLP..

$3.3 trillionTotal volume of global mergers and acquisitions announced in 2008. Source: Dealogic


Another danger is failing to begin with the end in mind; in otherwords, not having a clearly defined objective. “Transactions thatare done well require careful planning, which should start withhow the transaction will satisfy desired goals,” says Venema.“Detailed planning should begin with how the integration of thetarget will take place and then work backwards in the M&Aprocess to its beginning and due diligence phase. In this way theparties will have a better idea of what needs to be done and a real-istic idea of when it can be accomplished.”

Historically, 70-80 percent of acquisitions fail to deliver theirintended benefits. With a global recession, there’s a danger that syn-ergies will not be realized soon enough to justify the premiums paid.

Quite simply, “With moving too quickly, the opportunity tomake mistakes grows exponentially,” says Michael Fixler, manag-ing director, CM&D Capital Advisors in Chicago.

Are You Ready?When is it a good time to merge? For the company being acquired,the answer is at the peak of its earnings potential. Alternatively, agood time is when the company needs an infusion of capital tocontinue to grow or maximize its growth potential, says Steve Fer-rara, Midwest regional business line leader for assurance servicesin the Chicago office of BDO Seidman.

An acquiring company should have management resourcesavailable to properly integrate the acquired company and maxi-mize both the growth opportunities and synergies of the merger.Merging also makes sense if it promises more pricing power in themarketplace, alleviates competitive pressure, or if the two com-panies “have similar products but completely different distribu-tion channels, effectively increasing your distribution power andreach, without directly overlapping with your customer base,”says Brian Boyle, senior managing director, McGladrey CapitalMarkets in Chicago.

What’s more, merging is a viable option if you have the opportu-nity to reduce operating costs. For example, you create overlaps inyour sales force and reduce redundancies, or scale back overheadand streamline processes. With high energy costs, merging for geo-graphic sakes can make a difference, too. And it makes sense tomerge if you sell similar products in different parts of the country,and combining resources will help to save money on freight andlogistics. You can then pass those savings on to your customers.

An Error-free MergerThese guidelines will help to avoid pitfalls in the M&A process.First, assemble a strong team. “Deals are about mitigating risks,and that’s the role of the deal team. You must open all doors andlook deep to uncover potential issues. I know of acquisitions thatwere quickly closed without performing the needed due diligenceby qualified people, and the result cost the acquiring company,”says Needham. Pull together a group of advisors. An investment bank, for exam-ple, can help you deal with sensitive issues. Both sides will bereluctant to share confidential information. The investment bankcan spoon out that information in pieces, says Boyle. It also canassist with valuations and help to complete the deal in stages sothat confidence is instilled and neither side is giving away toomuch information in the process. Get experienced M&A professionals involved. “It’s difficult toundertake successful M&A transactions on a part-time basis and

without the experience that allows for an understanding of thecomplex issues that arise in these deals,” says Baxley.Have an integration plan. Thoughtfully develop and relentlesslyexecute an integration plan that ensures a seamless transition fol-lowing the completion of the transaction. “Execution of the inte-gration process is viewed by most people as where most of themistakes are made. People underestimate the integration time.Cultures must be compatible,” says George.Jilt if you need to. “Never fall in love with a potential deal. Alwaysbe prepared to walk away from it if the price and other key termsare not right, if due diligence reveals major issues, or the targetcompany’s fit with the buyer’s corporate strategy is not what wasexpected at the outset. It’s okay to get cold feet,” says Baxley. InOctober 2008, more than any other month on record, 142 dealsworth $120 billion were withdrawn, says Kirsch.Don’t overpay. “Even if debt is available, exercise restraint. Don’tover-leverage the transaction. Be sure you have adequate cashflow after the closing. In particular, have a cushion againstunknown liabilities,” says Kirsch.

A Cloudy VisionWhat’s the judgment on the deals being done? With so manymergers still in the honeymoon phase, the jury is still out.

Truth is, says Chatzkel, “The acquiring firms are taking on com-panies with serious and often severe problems. If the acquired firmwere healthy they wouldn’t be forced to make themselves avail-able for acquisition. These are not ideal acquisitions and demandfar more imaginative and extensive treatment than the norm. It’sreasonable to expect that a few of these acquisitions will have apositive outcome, some will be a wash value wise at best, andmany will cost more than the purchase price in the end.”

Over the long term, George expects some deals to be game-changing transactions that significantly enhance the acquirer’scompetitive position in the marketplace. He does have one caveat,however: “It’s too early to know whether the liabilities those insti-tutions assumed in their acquisitions were properly valued.”

As for the 2009 M&A outlook, traditional M&As may be aboutthe same or may experience a decline, depending on the econ-omy. “But expect a lot of buying opportunity in the distressedspace,” says Kirsch.

Shotgun M&As are not likely to fade into the sunset. “There’s alot of private equity money on the sidelines that can take advan-tage of prices. There’s an opportunity to get good companies thathave long-term value. It’s a great time to have cash,” says Kirsch.

In fact, some suitors from overseas, particularly from Europe andAsia, are likely to enter the US M&A marketplace as exchangerates make US companies particularly attractive, Venema predicts.Take, for example, the $52 billion Inbev acquisition of Anheuser-Busch. Anheuser-Busch shareholders got a substantial cash pre-mium for their shares and Inbev completed an important strategictransaction, says Baxley.

And while there are elements of the current financial cycle thatare unique in recent times (particularly the dramatic effect on well-recognized, major financial institutions), in many ways the currentpattern is similar to downturns historically, says Baxley. Ultimately,increased M&A activity will return when there is credit to supportacquisitions, greater certainty in stock market valuations and moreconfidence in the direction of the economy.

“History suggests that when these factors turn positive,” saysBaxley, “M&A activity will return in a very substantial way.”


Over the last year the nation has witnessed the failures of house-hold names like AIG, Bear Stearns, Countrywide Financial,Fannie Mae, Freddie Mac, IndyMac Bank and Lehman Broth-

ers. And turmoil among the remaining big name institutions is constantlystreaming across media headlines. With our nation’s financial backbone ina fragile state, major layoffs at financial institutions across the United Stateshave added to accelerated unemployment levels, meaning that a careermove is a disheartening and daunting task just now.

But, despite the seemingly unending doom and gloom engulfing our finan-cial world, there may be a safe haven—the US government.

“The federal government (is) now assuming additional oversight andmanagement responsibility for financial institutions, (meaning that) newfederal positions will undoubtedly become available for individuals withfinance backgrounds and experience,” says Tim McManus, vice presidentof Education and Outreach with the Partnership for Public Service.

Even before the current economic downturn, a Partnership for Public Serv-ice survey, Where�the�Jobs�Are—Mission�Critical�Opportunities�for�America

(2007), reported that accounting, budgeting and business jobs within gov-ernment entities would increase significantly through September 2009. Theyestimated 21,248 new hires in the positions of accountant, auditor, budgetand financial analyst and manager, and contracting specialist.

“Most people don’t think about specialized fields within the government,”says McManus, “yet our government is the nation’s single largest employer.”

Who, then, offers the most opportunities?

governmentagent While financial woes plague the country,

financial pros remain in high demand among

US government agencies. By Derrick Lilly

Where the Jobs AreNearly every government department, agency and entity requiresthe skills of financial professionals; however, certain branchesoften require a greater concentration of employees in the field.

The Department of the Treasury is projected to be at the top ofthe hiring list, with the Internal Revenue Service (IRS) planning toadd around 4,600 tax examiners and 3,350 revenue agentsthrough the end of FY 2009. Opportunities with the IRS range fromentry-level internal revenue agents to senior-level domestic andinternational agents, tax examiners and audit specialists.

The Treasury is responsible for printing the nation's money; set-ting domestic financial, economic and tax policy; managing thepublic debt; collecting taxes; and combating terrorist financingdomestically and internationally.

An organization well worth looking into is the Securities andExchange Commission (SEC). Although the SEC is considered asmall federal agency with just over 3,000 employees, its role as theprimary regulatory entity responsible for managing and enforcingthe federal securities laws that protect investors in our securitiesmarkets is a major task. The SEC regulates and oversees marketprofessionals, broker-dealers, investment advisors, investmentcompanies, transfer agents and clearing agencies, as well as secu-rities exchanges and other self-regulatory organizations. The Divi-sion of Corporate Finance, the Division of Enforcement and theOffice of the Chief Accountant are the three branches within theSEC responsible for hiring the most accountants.

Corporate finance accountants work directly with corporateofficers, underwriters and outside public company accountantsand counsel, in addition to SEC lawyers and financial analysts toensure compliance with regulations under Sarbanes-Oxley, GAAP,GAAS and other accounting standards. These accountants alsofocus on improving the quality and timeliness of financial disclo-sures to investors.

Division of Enforcement accountants essentially take on a polic-ing role for the US securities markets and its participants. This divi-sion’s primary focus is battling fraudulent financial reporting by pub-lic companies and their accountants and auditors. According to theSEC, accountants working in this division have played importantroles in high-profile investigations at major US companies. Theseinvestigations have led to fundamental changes in accounting stan-dards, financial reporting, auditing and corporate governance.

The Chief Accountant is the primary advisor to the SEC onaccounting and auditing securities laws. Accountants within theOffice of the Chief Accountant review domestic and internationalprivate accounting and auditing standard setters, processes andproducts; advise the various SEC divisions on regulations andrestraints; monitor registered SEC auditors; and develop supple-ments to private-sector accounting standards. In addition to full-time accountants, this division also hires Fellows who work withthe Chief Accountant on the development and proposal of securi-

ties laws over a two-year term. The SEC also places economistsand financial examiners in its other divisions.

If you’re interested in politics and federal government actions,then a position within the Government Accountability Office

(GAO) may be the right option. The GAO is an independent, non-partisan agency that works for Congress. Often referred to as the“congressional watchdog,” it investigates how the federal govern-ment spends taxpayer dollars. Through the agency’s auditing andevaluation duties, reports and testimonies are prepared to adviseCongress on methods to achieve a more efficient and effectivegovernment. In fact, officials from the GAO testify before Congresssome 200 times a year on a number of domestic and internationalissues that impact government services to the population.

GAO financial auditors perform a variety of tasks in order tostrengthen the accountability of the federal government’s assetsand operations. Auditors typically perform financial analyses, pro-mote better management practices, assess internal controls, anddevelop ways to improve the government’s financial managementand infrastructure. They also conduct audits of the government’sconsolidated financial statements and financial statements pre-pared by major federal agencies.

Like the SEC, the GAO is considered a “small” entity, witharound 3,200 employees. Despite its size, the GAO’s workforceconsists of very diverse and highly skilled professionals—morethan half of the employees have doctoral or master’s degrees.Researching and auditing government agency operations to deter-mine whether federal funds are being spent efficiently and legallyis the GAO’s primary focus, but the agency also researches andreports on many significant issues like national defense, interna-tional affairs, energy, education, the environment, healthcare,homeland security, transportation, financial management andinformation technology.

Another option is to support the US military might in the ranksof the Department of Defense (DOD). The DOD is the nation’sleading employer, with more than 2.4 million active duty andreservist positions, and more than 669,000 civilian personnel posi-tions around the world. When a finance pro thinks of employmentopportunities, the armed forces are probably not the first to cometo mind, but the military employs various finance professionals inits civilian personnel ranks.

Finance Officers with the DOD oversee a variety of tasks, includ-ing budgetary and fiscal matters, and program analysis and evalua-tion that improves general management within the Air Force, Army,Marines, Navy and other defense entities. Large numbers of con-tracting specialists, accountants and auditors also play an active rolein business operations that ensure the DOD has the funds andequipment necessary to maintain America’s military standing.

The Central Intelligence Agency (CIA) also employs finance pro-fessionals as part of its efforts to provide the United States with intel-ligence on the infinite changes in political, social, economic, tech-nological and military environments around the globe. The agencyrelies on its analysts, auditors, economists and finance officers to



monitor CIA programs and activities, keep operations running effi-ciently and within budget, and actively protect the United Statesfrom global threats.

Specifically, economists within the CIA assess foreign economicpolicies and foreign financial issues that affect the security of theUnited States. According to the careers section of the CIA website[www.cia.gov/careers], there is a particular need for economistswith knowledge of China, the Middle East and South Asia, andspecialists in international banking systems, financial markets,transactions and instruments. Economic analysts assess illicitfinancial activities, including terrorist networks and criminalgroups, financing and procurement of weapons of mass destruc-tion, money laundering, and corruption among foreign govern-ments and companies.

These agencies are only a few of the high-profile governmententities offering finance-related employment opportunities. Othergovernment agencies that anticipate the need to hire financial pro-fessionals include the US Agency for International Development(USAID), the Department of Education, the Department of Energy,the Department of Homeland Security, the Department of Hous-ing and Urban Development, the Department of Transportation,the Department of Veteran Affairs, the Federal Bureau of Investi-gation (FBI), the Federal Deposit Insurance Corporation (FDIC),the General Services Administration and NASA.

What About the Perks?At this point, you may be asking what benefits a federal govern-ment job will offer. The answer is many.

“Working for any governmental entity, federal, state or local ora not-for-profit can be an extremely rewarding career choice,whether it be in education, healthcare, justice administration orgovernment financial management,” says Peter Aliferis, deputyexecutive director of operations and director of professional certi-fication with the Association of Government Accountants. Headds that, “The variety of jobs is immense, and the rewards of pub-lic service can often go far beyond opportunities offered in the pri-vate sector.”

McManus explains that, “Federal service does as well if not bet-ter than the private sector in ‘lookout benefits’ like vacation time,healthcare and even retirement plans.”

As a full-time employee with the federal government you canexpect challenging work that offers opportunities for advance-ment, good pay and performance bonuses, and excellent benefitspackages that commonly include immediate health and life insur-ance coverage; pension plans, social security and an employer-matching 401(k)-like retirement account; annual paid vacation,national holidays, and sick leave that can be transferred betweengovernment agencies; flexible work schedules and possibletelecommuting opportunities; student loan repayment and tuitionassistance programs; public transportation subsidies; and fitnessand child-care services.

Just as benefit offerings span a wide range, so too do pay scales.An entry-level accountant within the Navy Field Offices may start

with a salary of around $19,000, while a senior-level accountantwith the SEC can earn well over $120,000. Like any job, govern-ment salaries are determined by factors such as the scope of theagency and its location, seniority, security or military clearance (ifapplicable), qualifications and skills level required, etc. Keep inmind that the government also personally trains many of itsemployees or provides career development support and guidance.

“The government does a great job of supporting and mentoringits employees so they are encouraged to stay with the job,” saysMcManus, adding that, “This offers employees mobility withintheir agency and growth opportunities throughout the governmentas well. Whether you are college age looking for a first career, orretiring from the private sector and seeking an encore career, thefederal government is a great place to consider.”

The Certified Government Financial Manager (CGFM) designa-tion is a good idea if you’re interested in pursuing a governmentjob. “The CGFM designation is growing in value and recognition,and indicates to a potential employer that the candidate knowsand understands the field of government financial management,”says Aliferis. “The opportunities in government for people withdemonstrated financial management skills such as the CPA and theCGFM are great. I would always suggest that the candidate withthe best credentials is the most valuable. If you wish to do attesta-tion work for a government then I would recommend that you pur-sue both credentials. More is better,” he explains. (Informationabout the CGFM is available at www.agacgfm.org/cgfm.)

Get the Job“There is no best way to secure government employment as thereare over 88,000 units of government in the United States,” saysAliferis. But there are a few easy ways to go about narrowing downyour options.

First, you can visit the Partnership for Public Services atwww.ourpublicservice.org and www.makingthedifference.org.These sites provide resources to help you determine employmentcandidacy, and to aid in researching training programs, internshipsand career profiles.

Another resource is the Best Places to Work in the Federal Gov-ernment website [www.bestplacestowork.org], where you canreview surveys and rankings from more than 283 federal agenciesand subcomponents. This website breaks down the data even fur-ther to help you find the best agency by matching agency charac-teristics with your personal profile.

A must-have resource is www.USAJOBS.gov, the official job siteof the US Federal Government. Here, you can search throughthousands of job postings from nearly every government agency.The site offers a variety of categorized search options, numerousresources to help you create a resume accepted by the agencies,and the means to identify the right government job for you.

And, of course, each agency has a dedicated website that willprovide you with a complete overview, including information oncareers, candidacy requirements and application processes.


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19 Accounting Practice Sales accountingpracticesales.com15 Alliant Credit Union alliantcreditunion.org/ilcpa8 Audimation Services Inc. audimation.com

Back Cover CCH cch.com21 CPA Endowment Fund of Illinois icpas.org23 Center for Corporate Financial Leadersnip ccflinfo.org12 College of Business, Illinois masterintax.com7 Garelli Wong garelliwong.com24 ICPAS Career Center - Internships icpas.org25 ICPAS Committees & Task Forces icpas.org

Inside Back Cover ICPAS Career Center icpas.org39 ICPAS Chapters icpas.org19 ICPAS Onsite Learning Programs icpas.org1 Institute of Management Accountants imanet.org11 Marsh Affinity Group Services cpainsure.com13 Member Buying Advantage Program icpas.org9 National City nationalcity.com/businesschecking

Inside Front Cover Robert Half International rhi.com3 Sage sageaccountantsnetwork.com 17 University of Wisconsin - Milwaukee uwm.edu

MERGER/SALESBUSINESS SERVICES MERGER/SALES MERGER/SALES

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HIGHLAND PARKDeluxe: private entrance office

space. Ready to move in.

Landscaped courtyard, public

transportation excellent

parking. Aprox 807 SF on up

190-A Skokie Valley Road

Woodridge Center Crossroads

area

847-853-8811

BUY OR SELL AN

ACCOUNTING

PRACTICE

ILLINOIS PRACTICES FOR

SALE

Southern IL(Jackson & Perry Counties)

gross $150K;Springfield Area gross $126K;

SW Suburbs ofChicago gross $618K.

See listing details and registerfor free updates at

www.accountingpractice

sales.com.

THINKING OF SELLING

YOUR PRACTICE?

Accounting Practice Sales is theleading marketer of accounting

and tax practices in NorthAmerica. We have qualifiedbuyers waiting and cash-out

financing available to sell yourpractice quickly and get you

the best deal possible. To learnabout our risk-free and

confidential services, call TrentHolmes with The Holmes

Group at1-800-397-0249 or email

trent@accountingpractice

sales.com.

OWN YOUR OWN

PRACTICECentral Illinois sole-

practitioner seeks to sell

practice grossing $134,000.

Sale includes all office

furniture and equipment and

long-term lease or purchase of

existing building. Practice

consists of 28% accounting,

15% auditing, 52% income tax

and 5% financial planning.

Reply to email

[email protected].

CH

AP

TE

RS

1st Wednesday Fox Valley Chapter 7:30 –.9:30 AM Panera Bread – 1600 16th Street, Oak Brook, IL

1st Friday North Shore Chapter 7:30 – 9:30 AM Panera Bread – 2512 Waukegan Road, Glenview, IL

2nd Tuesday Fox Valley Chapter 7:30 – 9:30 AM Peoples First Bank – 3100 Theodore Street., Joliet, IL

2nd Wednesday Fox Valley Chapter 7:30 – 9:30 AM Panera Bread – 1191 East Ogden Avenue, Naperville, IL

2nd Friday Fox River Trail Chapter 7:00 – 9:00 AM Panera Bread – 730 Northwest Hwy, Fox River Grove, IL

3rd Friday O’Hare Chapter 7:00 – 9:00 AM Panera Bread – 90 Biesterfield Road, Elk Grove Village, IL

3rd Monday Chicago Metro Chapter 7:00 – 9:00 AM Boston Blackies – 120 South Riverside, Chicago, IL Cost: $10 – Breakfast included

Next to Chicago South Chapter 7:00 – 9:00 AMLast Wednesday Panera Bread – Harlem and 159th, Orland Park, IL

3rd Thursday Chicago South Chapter 7:00 – 9:00 AM Panera Bread – 2314 West 95th Street, Chicago, IL

Last Wednesday Chicago South Chapter 7:00 – 9:00 AM Panera Bread – Harlem and 159th, Orland Park, IL

CPE Credits: 0 hours

For info on monthly Networking Breakfasts and

other upcoming Chapter Events, visit

www.icpas.orgQuestions: Contact: Becky Whitehurst, Chapter Relations Coordinator

Email: [email protected] or call 312-993-0407 ext. 221

ILLINOIS CPA SOCIETY

CHAPTER NETWORKING BREAKFASTS

2009-2010 ICPAS Board Nominees

Visit www.icpas.org for nominee bios

December 4, 2008

Charles F. G. Kuyk lll

Secretary, Board of Directors

Illinois CPA Society

550 W. Jackson Blvd.

Suite 900

Chicago, IL 60661

Dear Mr. Kuyk: As provided in Article V of the

Illinois CPA Society's Bylaws, the Nominating

Committee hereby presents its unanimous nomi-

nations for Officers, Directors and Affiliate/Public

Members. We are also indicating our nominee for

AICPA Council State Society Representative.

OFFICERS

(To hold office for one year, June 1, 2009-May 31, 2010)

CHAIRPERSON

Lee A. Gould To succeed Sheldon Holzman

VICE CHAIRPERSON

Sara J. Mikuta To succeed Lee Gould

SECRETARY

Charles F. G. Kuyk lll 2nd year of an original 2-year term

TREASURER

Robert E. Cameron To succeed Sara Mikuta

CONTINUING DIRECTORS

(To hold office for the second year of a two-year term, June

1, 2009 – May 31, 2010)

Brent A. Baccus Charlotte A. Montgomery

Therese M. Bobek Daniel F. Rahill

Cara C. Hoffman Lawrence H. Shanker

CONTINUING DIRECTORS

(To hold office for a new 2-year term, June 1, 2009 – May

31, 2011)

William P. Graf

Annette M. O’Connor

James P. Jones

DIRECTORS

(To hold office for three years, June 1, 2009 – May 31, 2012)

Elizabeth A. Murphy

Michael J. Pierce

Kelly J. Grier

Edward H. Stassen

Sheldon P. Holzman, Chairperson, becomes a Director for one year

beginning June 1, 2009, in accordance with Section 4.2 of Article IV

of the Bylaws.

In accordance with Section 4.2 of Article IV of the Bylaws, an affili-

ate member or a representative of the public may be elected as a

director.

PROFESSIONAL AFFILIATE DIRECTORS

(To hold office for one year June 1, 2009 – May 31, 2010)

Marian Powers

RETIRING DIRECTORS

William J. Cernugel, Mary Lou Pier, Gerald A. Olson, Anthony Fuller,

Ray Whittington and Debra R. Hopkins

AICPA COUNCIL

(To serve for three years October, 2009 – October 2012)

Lee A. Gould

Michael J. Pierce

Mary Lou Pier

AICPA COUNCIL

STATE SOCIETY REPRESENTATIVE

(To serve for one year October 2009 – October 2010

Sara J. Mikuta

All of the aforementioned nominees have consented to serve if

elected. The Nominating Committee has ascertained that all nomi-

nees to be elected are qualified in accordance with the provisions of

Section 4.4 of Article IV of the Bylaws, and information on nominees

for the membership as required by Section 5.3 of Article V thereof,

is set forth following this report.

SUBMITTED BY THE NOMINATING COMMITTEE:

DEBRA R. HOPKINS, Chairperson

Daniel P. Broadhurst Kimberly R. Rice

Wayne R. Ebersberger Michelle M. Scheffki

Lester H. McKeever Jr. Joyce M. Simon

Sheldon Holzman, ex-officio

keep your career on track [ in today’s job market ]

Career CenterA benefit of your Illinois CPA Society Membership

Search Job Listings | Post Your Resume | Locate Search FirmsExplore Career Resources | Find a Career Coach*

Check out the Career Center today at

www.icpas.org*fee-based service

INSIGHT Magazine March / April 2009

Documents

Transcript of INSIGHT Magazine March / April 2009