Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m here again with Ryan Istre, one of our audit directors here at PKF Texas. Ryan, welcome back to the Playbook.

Ryan: Thanks for having me, Jen.

Jen: So, how has the process of the PCAOB inspections of auditors of broker dealers impacted us and what we’re doing with our broker dealer clients?

Ryan: That’s a good question. About four years ago, the PCAOB began inspecting auditors of broker dealers. What that means for us is that there’s a new level of rules that we have to play by, however, if you were a client of ours, you would probably not even know the difference. Over all of the previous years that we’ve been doing audits, we’ve been under inspections for AICPA rules, PCAOB rules and various other organizations that ensure our audit quality is up to par. So, from a client’s perspective, you probably wouldn’t even notice a difference.

Jen: So, has anything changed at all then?

Ryan: There are a few changes that have happened. With the PCAOB being the official body over this inspection process for broker dealers, one of the rules has been changed recently is that there’s a concept of what’s called an “engagement quality reviewer.” That is not the lead partner on an engagement, but it’s the second partner to ensure quality control. The PCAOB rules specifically disallow partners who’ve participated in the previous two engagements as the lead partner from turning into that engagement quality reviewer. So, that basically allows for new sets of eyes to happen with regard to the quality controls over the audit.

Jen: So, does any other information come out of the PCAOB’s inspection process?

Ryan: There’s been some good information that’s come out of it. PCAOB is in what they consider their interim inspection period right now. So, while they’re not posting auditor-specific reports as they do with their normal public companies, they’re going to be posting general guidance around what they’ve learned from the inspection process. Unfortunately, there’s been several deficiencies that they’ve found in their audit inspection process – probably higher than I’d like to let onto – but it’s going to be a good thing, because a lot of the infractions that they’ve noticed probably were fairly minor. But there have been some that have been more serious, such as independence infractions and partner rotation rules for some of the smaller firms that may not have been super familiar with the PCAOB’s rules.

Jen: Well, good. And I know our audit team really sticks on to those PCAOB rules.

Ryan: Absolutely. You have to, you have to.

Jen: Perfect. Well, we’ll get you back to talk a little bit more.

Ryan: Yep, sounds good.

Jen: Thank you. This has been another Thought Leader production brought to you by PKF Texas Entrepreneur’s Playbook. Tune in next week for another chapter.

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Danielle Supkis Cheek, one of our directors, as well as one of our Certified Fraud Examiners. Danielle, welcome back to The Playbook.

Danielle: Good to see you again, Jen.

Jen: So as a CFE I know you work with attorneys on the fraud investigations. Now, attorneys have attorney/client privilege; does that extend to your work with their clients?

Danielle: In certain circumstances it can. CPAs traditionally – as rank in file CPAs – we have confidentiality with our clients, which means I can’t go blabbing your business out and about anywhere I want to. But I can be compelled to testify with a judge-signed court order.

In short, we’ll keep this simple. The difference is… privilege is a higher level. Attorney/client privilege that’s not an Attorney CPA client privilege, but there are certain circumstances where that attorney/client privilege can pass down to the CPA if the attorney manages the engagement correctly and puts proper procedures in place.

And what the benefit of that really is is if you’re doing a corporate investigation and you don’t necessarily know what you don’t know yet, and you have potential brand risk on the line, a lot of times you’ll want those investigations under privilege until you determine what to do or what is the result of those investigations. So many times we’ll be asked to work under privilege running through the attorney. Clients can wave the privilege if they want to; we’ve had ones where entities want to self-report a particular situation. Disclosing to the auditor actually does create disclosure to the third-party, which then can create privilege problems.

And so, working with the attorney to make sure we understand what is the scope, how the privilege is working. There’s also some tax controversy if you have some tax concerns; it’s called “Kovel,” where the privilege does move down as well. It’s a best practice to try to put the engagements in the type of engagement that they should be in for protecting the client. This is really a client protection matter, because you want to trust your CPA and be able to actually disclose information to your CPA that they can help you with.

Jen: Speak freely, give you all the information you need to help them out.

Danielle: Exactly. And I once had a client ask me, when this was just a regular confidentiality matter, they said, “Well, does that mean you’re going to sing like a canary?” And I go, “Well, that means I’m going to have to tell the truth if I’m asked the truth.” We can’t claim the 5th amendment, because it’s not self-incrimination, so making sure you bring in the attorney to manage that is really important.

Jen: Perfect, sounds good. We’ll get you back to talk some more fraud – interesting stuff always. For more about this topic, visit This has been another Thought Leader production brought to you by PKF Texas The Entrepreneur’s Playbook. Tune in next week for another chapter.

We are excited to share two of PKF Texas’ Directors have been recognized within the Houston community and the accounting profession.

Chief Culture Officer and Audit Director, Sonia Freeman, CPA, was named as one of the Houston Business Journal’s “Women Who Mean Business.” She will be honored with the award on October 18, 2018 at the Hilton Americas-Houston, followed by a special edition of the HBJ weekly edition on October 19.

In addition, Entrepreneurial Advisory Services (EAS) Director, Danielle Supkis Cheek, CPA, CFE, CVA, was recognized by CPA Practice Advisor, as well as Accounting Today. CPA Practice Advisor named Supkis Cheek as a “40 Under 40” honoree, and Accounting Today named her as a “Top 100 People: Ones to Watch,” which landed her a featured spot at the top of the website’s home page.

As Sonia and Danielle continue to see success in their careers, they’re paving a prosperous career path for fellow team members at PKF Texas.

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Danielle Supkis Cheek, a director and one of our Certified Fraud Examiners. Danielle, welcome back to the Playbook.

Danielle: Thanks for having me, Jen.

Jen: Certified Fraud Examiner – clearly handle fraud for our firm – what happens if a company has fraud?

Danielle: The first step if somebody in a company finds fraud is you really should follow your internal procedures on what to do about fraud if you have some. So, if you’re a rank and file employee or even at the higher levels, if you have a hotline, you should follow your procedures to report that to the hotline first. And actually having a hotline reduces the median loss for profit by about half so have a hotline.

After that it gets a little bit harder and more confusing of what do you do once you’re the person receiving the tips from the hotline or if there is no hotline. Assuming you’re in the position to be the head of the company or up there really the first call needs to be your attorney. It really needs to be your attorney. I realize I’m the CPA, but the first call really should be the attorney. Getting the attorney involved on the front end really can help prevent some missteps through the investigation process. The investigation process – you can accidentally do some illegal things as you investigate the fraud.

Jen: Yikes, okay.

Danielle: You could also put your company at more risk than you already were just being subject to the fraud by mishandling your investigation. You could also put in jeopardy the ability to prosecute or go after from a civil side your potential fraud situation if you don’t have an attorney helping guide you on the proper steps.

Jen: So at what point do the CPAs or the forensic accountants come in?

Danielle: After the lawyer. Usually it’s the lawyer that comes in first, assesses the situation, gives us a call or the client brings us in. We actually get a fair amount of calls directly from clients wanting to investigate the fraud right away without their attorney, and we usually try to push back and say get your attorney first. We’re gonna probably spend the most time because financial fraud… they think we need a CPA – and you do – but you also need a whole team together, because the CPA is just one piece of the team. There’s also computer forensics, private I’s; honestly corporate security sometimes gets involved. There are some really sensitive HR matters that you sometimes need even just an HR specialist that’s a consultant, and then of course that kind of pinpoint person of the attorney.

Jen: Now do you recommend – and it’s probably based on the attorney advice – that some of these people be in-house to the company and some of them be external, or do you recommend them all be external?

Danielle: I think it can depend on the situation. A lot of times if a company has really strong HR resources there’s no need to bring in another HR consultant. Sometimes a lot of companies have some very strong accounting resources and the fraud doesn’t necessarily occur within the – or the risk of fraud or the concern of fraud – doesn’t happen within a particular team, so that team may be able to help on the investigation. But if that’s the team that you’re concerned about, you may not want to use them. So, I think it really depends on the facts and circumstances of a particular situation.

Computer forensics, though, is one that’s usually always external to the company. Your IT team at your company may be the best of the best of the best, the problem with it is the evidence collection technique; you are usually not set up for that at a company, and you probably don’t have the right software and the right imaging devices to get that forensic quality image of the computer and be able to have that chain of evidence go through. So, computer forensics is probably the one that you almost always want to use an outside firm for.

Jen: Sounds good. Well, we’ll get you back to talk some more about fraud, because it’s a really interesting topic.

Danielle: Of course. I would love to.

Jen: Thank you. For more on this topic, visit This has been another Thought Leader production brought to you by PKF Texas the Entrepreneur’s Playbook. Tune in next week for another chapter.

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m here with Brian Baumler, the Energy Practice Leader at PKF Texas and the Chair of the 16th annual Houston CPA Society Energy Conference. Also with us is Jennifer Poff, the Executive Director of the Houston CPA Society. Welcome to The Playbook, Jennifer and Brian.

Brian: Thank you, Jen.

Jennifer: Thank you.

Jen: So, Jennifer, tell us a little bit about the Society.

Jennifer: The Society has been around for 90 years, and one of the things we’ve done for 90 years is we’ve been the local organization for CPAs to get their continuing education, to share ideas with other people in the profession and just to have an area where they can come network together. One of the things we do for our continuing education is the Energy Conference, and we’re in the 16th year of doing that. With 7,700 members, we have about 350 who attend this conference, making it one of our larger events.

Jen: That’s really great. So, Brian, you’re the Chair and you’ve been the Chair for the past several years. Tell us what you’ve got planned for this year.

Brian: We have a great lineup. As we’ve had in the past, The Big Four are all represented, giving various presentations on technical topics – accounting and reporting, SEC compliance. We’re also covering M&A trends and also taxation. It’s going to be a great event and is going to be well attended.

We also have various panels throughout the day. One is covering the E&P and trying to give everybody perspective on what’s going on in that space. We also have a panel that’s discussing capital markets; we have Tudor, Pickering, Holt & Co. and other home-grown folks represented in that panel. We also have an exciting panel on technology and what trends are shaping the industry within technology and also changing us in our workforce.

Jen: Perfect. Now, I know you’ve had several really big name keynotes in the past. Who is your keynote speaker this year?

Brian: We have Ryan Sitton, who is the Texas Railroad Commissioner. He’s got a lot of energy, is a great presenter and I’m sure is going to have everybody’s attention.

Jen: Perfect. So, when is this conference, where is the conference and what time does it start?

Brian: This year, the conference is going to be on August 29th. It’s going to be at Hilton Americas downtown. The registration starts at 6:45 a.m., the conference actually kicks off at 7:45 a.m. and lasts until about 5:00 p.m. We have a special session at the end – we have John Garrett, who is a recovering CPA, and he’s actually going to talk to us about how we brand ourselves outside of the workforce.

Jen: Perfect. I’ve seen his Green Apple talk – it’s really great. Now, Jennifer, where would somebody go to register for the conference?

Jennifer: They can go to our website

Jen: Is there an energy page that they should be looking for?

Jennifer: There are two ways to get the energy page: you can access it through the course catalog, or it’s right on the homepage. When you see the banner at the top, just click the arrow and you’ll see the Energy Conference right there.

Jen: I know you guys can’t do this all by yourselves with the Society. Are there sponsors this year?

Brian: Yes, we have almost 30 sponsors this year. Our underwriting sponsor is WG Consulting, so we’re very excited to have them this year.

Jen: Perfect. Well, thanks, and we’ll see you guys on the 29th.

Brian: Thank you.

Jen: This has been another Thought Leader Production brought to you by PKF Texas The Entrepreneur’s Playbook. Tune in next week for another chapter.

With the April 17 individual income tax filing deadline behind you (or with your 2017 tax return on the back burner if you filed for an extension), you may be hoping to not think about taxes for the next several months. But for maximum tax savings, now is the time to start tax planning for 2018. It’s especially critical to get an early start this year because the Tax Cuts and Jobs Act (TCJA) has substantially changed the tax environment.

Many Variables
A tremendous number of variables affect your overall tax liability for the year. Looking at these variables early in the year can give you more opportunities to reduce your 2018 tax bill.

For example, the timing of income and deductible expenses can affect both the rate you pay and when you pay. By regularly reviewing your year-to-date income, expenses and potential tax, you may be able to time income and expenses in a way that reduces, or at least defers, your tax liability.

In other words, tax planning shouldn’t be just a year-end activity.

Certainty vs. Uncertainty
Last year, planning early was a challenge because it was uncertain whether tax reform legislation would be signed into law, when it would go into effect and what it would include. This year, the TCJA tax reform legislation is in place, with most of the provisions affecting individuals in effect for 2018 – 2025. And additional major tax law changes aren’t expected in 2018. So there’s no need to hold off on tax planning.

But while there’s more certainty about the tax law that will be in effect this year and next, there’s still much uncertainty on exactly what the impact of the TCJA changes will be on each taxpayer. The new law generally reduces individual tax rates, and it expands some tax breaks. However, it reduces or eliminates many other breaks.

The total impact of these changes is what will ultimately determine which tax strategies will make sense for you this year, such as the best way to time income and expenses. You may need to deviate from strategies that worked for you in previous years and implement some new strategies.

Getting started sooner will help ensure you don’t take actions that you think will save taxes but that actually will be costly under the new tax regime. It will also allow you to take full advantage of new tax-saving opportunities.

Now and Throughout the Year
To get started on your 2018 tax planning, contact us. We can help you determine how the TCJA affects you and what strategies you should implement now and throughout the year to minimize your tax liability.

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, this week’s guest host, and I’m back with Chip Schweiger, one of our Audit Directors here at the firm.  Chip, welcome back to the Playbook.

Chip: Thanks, good to be here, Jen.

Jen: Now, if someone’s looking for an audit, take us through what that discussion would look like.  What types of things would you ask? How would you get that discussion started?

Chip: Sure, yeah. Normally somebody will reach out if they’re thinking about an audit. We’d encourage them to call PKF Texas, and we would come out and talk with them about their business; directionally, where is it going? But one of the most important questions that I ask prospective clients is, what do you want this business to be? Do you want to sell it to your children? Do you want to sell it to somebody else? Would you like to take it public? Or, would you like to get a private equity investor involved? That way, we can help calibrate our compliance services to also meet the needs directionally of where the company is going.

Jen: So, we’re really kind of co-developing a solution with them once we find out what their needs are.

Chip: Yeah. I like how you said that. It’s a great approach, and it really helps our clients, in the long run, get to where they want to be.

Jen: Now is there anything beyond that initial discussion they can expect once they decide, yes, I do need an audit?

Chip: We’re going to talk with them, certainly, about what the effort is involved, and which gets the fees. We’re going to talk with them about the service team, and the types of experts that we’re going to put on that engagement.

Jen: Perfect.  Well, thank you so much. I appreciate you being here.

Chip: Great.  Good to be here again.

Jen: This has been another Thought Leader production brought to you by the PKF Texas Entrepreneur’s Playbook.  Tune in next week for another chapter.

Russ: Hi, I’m Russ Capper with The BusinessMakers Show and I’m here to talk about the 13th annual Houston CPA Society Energy Conference, and I’m joined by Brian Baumler, Audit Director and head of the energy practice at PKF Texas, and Chair of the conference; Brian, good to see you.

Brian: Good to see you too, Russ. Thank you.

Russ: You bet, and also David Butler, the Manager of Energy Valuations at HSSK, the Vice Chair of the conference; David, good to see you as well.

David: Glad to be here, Russ.

Russ: Ok, tell us about the conference.

Brian: Well Russ, as you know this is the 13th annual conference we’ve had. Attendance has over the years has grown substantially. The focus of the conference is really geared towards energy and energy related businesses, focusing on really trends in the industry and where things are going. It’s going to be an interesting dialogue this year with the change in the economics going on in the space here recently. It’s focusing on both upstream, midstream, and also downstream perspectives on what’s going on in the industry but also introduces the CPA profession by offering up a number of the Big Four representatives and the energy practices that they lead.

Russ: Ok, who should attend and why should they attend?

David: I think anybody who’s involved in accounting, or finance, taxation, and even valuation ought to attend because this, first and foremost, is a conference for grownups. We’re not going to sugarcoat things, we’re not going to give you a rosy crystal ball that will assure you that everything in the future is gonna be fine. We don’t know that. What we do know is that the industry is facing some pretty significant challenges; we’re seeing a lot of resilience and creativity, and how companies manage their call structure and how they manage their drilling program and so forth. So, that’s the sort of thing that people should expect to hear and hopefully they’ll be able to take some of that back to their jobs, and we’ve made sure that we’re covering topics in financial reporting, SEC reporting, taxation, as well as the interaction of the energy industry with the capital markets.

Russ: Ok. When is it and where is it?

Brian: Well, it’s actually going to be held this year on Tuesday, August 25th, 2015. It will be at the Norse conference center located over in the City Center.

Russ: Ok. So I guess when you said a while ago it’s been growing every year just like the industry has, but I suspect also that this whole cost accounting thing could be real important this year, and to think the event is really well attended, right?

Brian: Absolutely. Last year we were very fortunate, we were sold out. We had about 325 attendants, in attendance; represented across both the industry spectrum as well as a number of the representative CPA firms and practices in the energy space here in Houston and we’re expecting at least that this year.

Russ: Ok, sold out, wow. Ok, so how do you register?

Brian: Well, I think you can register in a number of different ways. One is, you can go to the website at; register online. There’s also a form you can download. You can go ahead and fill out the form and send that in. It’s $300 for non-members, $250 for members and if you want to send a small group then we’re offering also some discounts for small groups. You can also call directly and use your credit card online; it’s 713-622-7733.

Russ: Ok, Brian, David, thanks a lot; August 25th, Norris Center, City Center.

David: Absolutely.

Brian: That’s correct Be there.

Russ: Be there.

Wednesday’s Highlights

Doug Kennedy, Vice President, Microsoft Dynamics Partners, opened the final keynote presentation with a summary of our previous days’ events (including a recap of conference attendees’ volunteer efforts to give back to the local community), followed by an energetic performance by Dance Houston, and an advance welcome to next year’s event in New Orleans, Louisiana, host city for Convergence 2013.

General Colin Powell, (Ret.), shared his insights on how to remain focused, take responsibility and work towards improving processes, organizations and people. With the learning of what it takes to be a great leader, our time with General Powell was, for most, a once-in-a-lifetime opportunity and for all, unforgettable.

Today, we wrapped up our offering of over 400 breakout sessions. It’s been our goal to fill your head with new ideas, tips, tricks and expertise so that you become the newfound Microsoft Dynamics expert in your organization. With over 400 presenters and subject matter experts sharing their time, their knowledge and their expertise, we are delighted with the turnout in our breakout sessions. If you get a chance, please share your appreciation with any of our Convergence presenters. Representing customer organizations, partner organizations and Microsoft product, development and support teams, we couldn’t do this without them.

I’m on the ground here at Convergence 2012. For those of you on Twitter, the hash tag is #CONV12. It started yesterday and there has been much to see and do. It’s been easier for me to tweet than live blog, so be sure to follow me @fromgregshead for real time thoughts. Yesterday, heard some excellent NAV costing best practices from Tom Blaisedale. I’m looking forward to several sessions this afternoon:

  • NAV the Overview at Room 342 BCEF this afternoon
  • Warehousing in NAV Room 350 DEF and seeing this functionality in NAV 7.
  • Tips and Tricks for Financial Mgmt. in NAV Room 350 DEF
  • NAV Mfg. Setups and Processing in Room 342 D

Also, if you’re at the conference, I will be at the Expo at the Partner Power booth (#2148) on and off during the day, stop by,  introduce yourself and learn about our capabilities.