BDO Mid-Year Tax and Accounting Update Recap

On June 15, BDO USA, LLP’s Tampa Office hosted a Mid-Year Tax and Accounting Update at the Centre Club. BDO provides accounting, tax, consulting, and financial services to a range of industries including manufacturing & distribution, real estate, technology, healthcare, insurance and many more. BDO is ranked the world’s fifth largest accounting and consulting network with over 60 offices within the U.S and 158 countries worldwide.

The Mid-Year Tax and Accounting Update included in-depth presentations from subject-matter experts as well as networking opportunities with other accounting and tax professionals. The event included a panel of experts discussing International Trends and additional presentations on Forensic Accounting and Fraud, Cyber Insurance, along with other hot topics.

Mark Schuette, National Transfer Pricing Leader and CPA at BDO moderated the International Trends panel. The panelists included John Warner, Shareholder at Buchanan Ingersoll Rooney, PC, Ryan Schwartz, Senior Tax Manager at Jabil, as well as Tom Thebes, CFO at Domo Tactical Communications. With the governmental changes that have occurred in 2017, a salient topic to many is legislation and the current issues/trends within the realm of international taxation as well as tax reform.

The panel explained that 100% of executives believe that it is likely for US tax reform to occur. However, a few of the obstacles include congressional gridlock (51%), conflicting legislative priorities (19%), public opposition (13%), and international actions related to multinationals (12%). The panel also delved into the topic of Base erosion and profit sharing (BEPS) as well as which action items generate the most concern.

The next section of the Mid-Year Tax and Accounting Update encompassed a Forensic Accounting and Fraud Update within Internal Investigations. Scott Steadman, Senior Manager in BDO Consulting’s Dispute Advisory Services led the informational update. For those who haven’t been exposed to a Forensic Accountants, the term forensic is “used in or suitable to courts of law”. Therefore, Forensic Accountants are individuals that combine accounting knowledge with investigative skills.

Scott shared what Fraud looks like in businesses. A few key points made included recognizing various types of fraud in the workplace as well as the opportunity to learn more about internal investigation techniques and considerations. That brings us to the question, how are frauds committed? Scott mentioned that the common methods of fraud in companies with less than 100 employees include: corruption, billing, check tampering, skimming, non-cash, expense reimbursement, cash on hand, and payroll.

In addition, Scott pointed out the red flags of a fraudster and how to preempt fraud by being aware of these observations. He went on to explain that once fraud is sensed, there are different types of internal investigations, which includes assets misappropriation, financial statement fraud, and corruption. Asset misappropriation involves cash, which is the most liquid and fungible and easiest to convert whereas inventory and other assets is more difficult liquidate. Because it often occurs off the books, corruption generally identified by top or long-term issues such as bribes, kickbacks, etc. Scott concluded that some of the considerations in developing the internal investigation plan include procedures used to evaluate the concern/allegation resulting in one of the following findings: substantiated, unsubstantiated, and inconclusive.

The last segment of the Mid-Year Tax and Accounting Update featured Judy Selby, National Lead for Cyber Insurance and Data Privacy in BDO Consulting’s Technology Advisory Services. She discussed whether a business should accept, mitigate, or transfer when discussing Cyber Insurance along with its risk. Judy explored recent developments in Captive Insurance Arrangements as well as explained planning opportunities using Captive Insurance Arrangements. She shared that Cyber Insurance policies are all different and unlike traditional insurance policy forms, there are no standard insurance policies. This means that a lack of standardization can create traps for the unwary. She explained that insured and insurance companies often agree on negotiated policy terms and although the market is growing, large companies can have trouble getting sufficient cyber insurance limits.

Judy continued to describe that coverage grants are either First Party or Third Party. First Part includes: damage to digital assets, business interruption, extortion, and privacy break expenses. Third Party coverage includes: privacy liability, networking security liability, Internet media liability, regulatory liability, and contractual liability. She went on to state that the coverage danger zones include: consent requirements, panel professionals, timely notice, liability assumed under contract, failure to maintain minimal cyber security standards, data controlled by Third Parties, Wrongful or Unlawful Data Collection, Regulatory Files, Professional Services, Property, General Liability, Errors and Omissions, as well as kidnap and ransom. In addition to danger zones, Judy concluded with discussing information regarding effective indemnity agreements on cyber coverage.

These specific topics were able to shed light on International Trends, Forensic Accounting and Fraud, Cyber Insurance, alongside other hot topics. All of the topics have an impact on business leaders and their companies. The Mid-Year Tax and Accounting Update was able to highlight provide key takeaways on the tax, accounting, and financial topics discussed, which are salient to public and private companies within the community.

Participants were provided the opportunity to ask subject-matter leaders meaningful questions and join in discussions specific to their business and operational challenges. The attendees are now more equipped to identify recent changes to accounting as well as identifying legislation and current issues and trends in state, federal and international taxation.

Because BDO USA, LLP is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors, BDO was able to offer CPE credit for those in attendance. All participants were rewarded with 3.0 CPE credits: 1.0 for Specialized Knowledge, 1.0 in Accounting, and in 1.0 Taxes.

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