(With the Help of ChatGPT) In this article, the author provides three versions of a data retention policy that appears compliant with GDPR or NIST. After taking NACVA’s cybersecurity course, a student reached out to me asking for a Data Retention Policy template that would be compliant with the statutes and frameworks discussed in the course, such as the National Institute for Standards and Technology (NIST) Cybersecurity Framework or the EU’s General Data Protection Regulation (GDPR). I thought this may be a good question for large language models because the subject matter is old enough that there is a sufficiently…
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(Part II of II) There are special tax considerations related to the transfer of S corporation stock at the time of the owner’s death. Therefore, owners of S corporation stock must be intentional with regard to the risks (and the tax costs) associated with an inadvertent termination of the subject entity’s S corporation status. S corporation owners—and analysts—should be aware that many states tax S corporations for state corporation income tax purposes. Many states tax S corporations as if they were C corporations. In addition, many other states apply a special corporate income tax rate to S corporations. The second…
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(Part I of II) Analysts are quick to identify and quantify the implicit and explicit S status economic benefits in the S corporation business valuation. The objective of this discussion is to summarize the offsetting economic risks associated with an S corporation ownership interest. Analysts should be equally aware—and intentionally consider the risks as well as the benefits—of S corporation status in the subject private company or professional practice valuation. This discussion summarizes many of these risk factors that analysts, private company/practice stockholders, and the company/practice professional advisers should consider in the valuation of an S corporation ownership interest. Part…
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As the regulatory landscape has evolved, compliance departments and the chief compliance officer (CCO) have become increasingly important, helping organizations to adapt. Many CCOs sit on boards and report directly to the chief executive. They are no longer on the outside looking in on business development; instead, they are a key cog in the machinations of the C-suite. To read the full article in Financier Worldwide, click: The Evolution of Compliance.
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Riding a decade-long bull market, robo advisory firms have proved investors are willing to let complex and proprietary algorithms be at the heart of their investment advice. Assets under management at digital platforms are expected to top $1 trillion in the next few years. To read the full article in Financial Planning, click: Why Regulators Are Taking Aim at Robo Advisors.
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Knowing the Business is Critical to Effective Risk Oversight In this article, the author shares excerpts of a speech he presented to board members regarding the importance of managing risk and sources of risk.
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New duties will require plenty of understanding and good communication. Many experts expect accountants’ work and duties to change fundamentally in the coming years. Technology will allow for a more complete audit that uses all available data rather than samples. And the scrutinizing of anomalies will provide opportunities for auditors to provide more useful information to clients. To read the full article in the Journal of Accountancy, click: Four Skills Accountants Need to Succeed in a Tech-enabled Future.
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FINRA has launched a helpline to provide firms with direct assistance and answers to general and routine FINRA related questions, as well as direct callers to the proper regulatory staff and other departments. The effort is part of its FINRA360 organizational improvement program. To read the full article in FinancialPlanning, click: FINRA Helpline Aims to Aid Smaller Firms, but Concerns Arise.
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Financial advisors face a slew of new regulatory issues in 2018, and when it comes to compliance, they are “better off changing the oil regularly than waiting for the engine to blow up.” That vivid warning comes from Todd Cipperman, founder of Cipperman Compliance Services, a consulting firm specializing in regulatory compliance. To find out what to expect next year according to Cipperman, as well as Bao Nguyen of Kaufman Rossin’s risk advisory services practice, please click through our slideshow. To read the full article in FinancialPlanning, click: Sixteen Compliance Trends to Watch in the New Year.
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What is the purpose of audit planning if the audit may not ultimately follow the carefully thought out plan? As may be inferred from Dwight D. Eisenhower’s words—”Plans are worthless, but planning is everything”—the value of audit planning is not derived solely from the resulting audit plan. Daniel Gartland, risk control consultant at CNA, describes the importance of detailed planning. To read the full article in the Journal of Accountancy, click: The Importance of Audit Planning.
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IRS Division Releases List of Examination Issues The Internal Revenue Service Large Business and International Division has released a list of 13 issues that could be the focus of upcoming examinations. Tammy Whitehouse summarizes the guidance. To read the full article in Compliance Week, click: IRS Identifies 13 “Campaigns” for Tighter Compliance Scrutiny.
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The regulator says the firm had “widespread failures” in its anti-money laundering programs for both its employee and independent channels. This is the largest penalty the regulator has dished out for that type of infraction, describes Andrew Welsch, senior editor of On Wall Street. To read the full article in Financial Planning, click: FINRA Fines Raymond James Record $17M for Compliance Failures.
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How to Safely Harness the Power of Social Media to Promote Your Firm Social media can be the best way to spread the word about your firm’s offerings. However, you may want to develop a policy to establish parameters to meet challenges and satisfy compliance requirements, all while spreading the word about what you can do for your clients. Blane Warrene, guest blogger from MobileGuard, explains what you need to do. To read the full article in AICPA Insights, click: 4 Steps to Creating a Social Media Policy for Your Firm.
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A Meaningful New Year’s Resolution Why is compliance so important to business? What are the reasons and consequences for failing to have a compliance program? In this article, Peter J. Comodeca, Esq. with the law firm of Calfee, Halter & Griswold, LLP discusses the legal reasons to comply and costs of failing to comply.
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A Valuation Principal Takes Issue With Revenue Ruling 59-60: “Does Analysis of Macroeconomic Conditions Add Credibility to My Opinion of Privately Owned Company Value In My Region?” Rick Warner, ASA, AVA, Principal, Great Lakes Valuations writes that “Most of us as appraisers are familiar with Revenue Ruling 59-60 and its prescription for factors to be considered as part of the valuation of the stock of closely held companies . . . And while I agree with most of what 59-60 has to say, I do have a bone to pick . . . with at least one of the…
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There’s Lots We Know about Private Capital. There are Things We Don’t Know, too—and Need to Be Aware of. Robert T. Slee explains in this excerpt several key macro insights—and related themes—that his recent book Private Capital Markets is based on. The macro insights are that corporate finance theory doesn’t predict behavior in private capital markets, and valuation, capitalization, and transfer are not discrete and unrelated areas. Themes include insights on the differences between public and private markets, compliance, relative value, and more.
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Federal Government, Which Makes an ROI of $7.20 for Every Dollar it Invest in Detection and Enforcement of Fraud, Is Increasingly Monitoring Compliance Plans Lucien W. Roberts at Physicians Practice notes that physician practices are increasingly being monitored by federal agencies sensitive to compliance plan violations:
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Appraisers in Violation of 6701 May Face Devastating Consequences. Learn More About Potential Penalties—and How to Stay in Compliance Joel N. Crouch and Joseph D. Brophy discuss the IRS Code’s Section 6701 and the relevant penalties that can be leveraged against violators. While IRS sources say that the number of penalties imposed is still negligible, this number has increased significantly and the trend continues.
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The June issue of Investment Advisor includes a story on practice management that features an interesting graphic:
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A relatively unexplored area of family business research is the role that an active, independent board of directors can play in perpetuating the family business from one generation to the next. David Thayne Liebell reports at Trusts & Estates that a recently published book, Building A Successful Family Business Board, seeks to close that research gap. In fact, according to the book’s authors, an active, independent board can serve as an objective steward, overseeing the creation and execution of a leadership succession plan that works for both the business and the family. Even in the healthiest of families, the leadership succession…