July 17, 2018

Accounting News Roundup: Higher Salaries and Client-Mandated Diversity | 04.05.17

accounting-news-facebook-diversity-salaries

Salaries

As accountants, you probably think that you’re going to earn more over the course of your career just based on your highly-sought-after skills. And it’s true, your skills allow you to demand more compensation, especially as you gain experience, but interestingly enough, where you work likely makes a big difference too.

Here’s a Bloomberg View column by Peter Orszag that discusses a study that “figure[d] out the wage premium associated with working at different companies” and the employer you choose has an even bigger difference than you think:

High-paying companies, they found, not only pay low- and medium-skilled workers more than others do, but are also significantly more likely to keep such workers moving up the wage distribution.

A low-skilled worker at the top end of the earnings distribution who is employed by a low-paying company earns an average of $67,000, compared with $73,000 at a top-paying firm. For high-skilled workers in the top part of the earnings distribution, the premium associated with working at a top-paying firm is even larger: The average wage is $81,000 at the bottom end and $143,000 at the top.

All companies like to say, “Our pay is competitive,” which might be true. It’s just that they pay competitively in the shallow end.

Diversity

Here’s an interesting article about how Facebook is requiring its outside law firms to be more diverse:

Facebook is requiring that women and ethnic minorities account for at least 33 percent of law firm teams working on its matters.

Numbers alone, however, are not enough, under a policy that went in effect on Saturday. Law firms must also show that they “actively identify and create clear and measurable leadership opportunities for women and minorities” when they represent the company in litigation and other legal matters.

The article also mentions that HP now requires “outside law firms to have at least one diverse so-called relationship partner” or  “[one] woman and one racially/ethnically diverse attorney each performing at least 10 percent of the billable hours worked on HP matters.”

I’ve not heard of companies requiring accounting firms to meet diversity thresholds, but perhaps law firms are whiter and duder? It’s hard to imagine something whiter and duder than accounting firms, particularly partners, but maybe the accounting profession’s lack of diversity pales in comparison to their legal brethren.

Some people might scoff at this idea, but the New York Times article quotes Facebook’s general counsel as saying, “Firms typically do what their clients want,” and he’s not wrong about that.

How’s tax reform coming along?

Well, it appears that it’s in the “all things are on the table until we say they’re not” stage:

The White House on Tuesday disavowed two controversial options for their planned overhaul of the tax code, after two Trump administration officials earlier in the day said the president’s team was exploring a value-added tax to raise government revenue.

One of those administration officials also earlier Tuesday said the White House was considering the creation of a carbon tax, but a Trump administration spokesperson later said that idea was also  no longer under consideration.

It has to be frustrating to work in an environment that constantly undermines what you’re trying to do. Or maybe it’s great! I’m sure some gluttons for punishment would enjoy it.

Previously, on Going Concern…

I wrote about Grant Thornton’s unlimited PTO and also a horrible boss at Fox News.

In other news:

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Non-Profits Are Feeling the Pain

WSJ has a Monday piece “Once-Robust Charity Sector Hit With Mergers, Closings” (the Recession Forces Nonprofits to Consolidate) that may be found here. It tells the story of a “homeless” woman with terminal lung cancer and a charity no longer able to afford to help her out. Sad.

When one charity’s COO says “we’ve had funding cut after funding cut, and we never know when the next shoe is going to drop,” that is a bad sign.

Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits—from arts councils to food banks—are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings.

“Like in the animal kingdom, at some point, the weaker organizations will not be able to survive,” says Diana Aviv, chief executive of Independent Sector, a coalition of 600 nonprofits.

I saw that on the Discovery Channel and it wasn’t pretty.

Note: the Service says the value of your blood is not deductible as a charitable donation but cars are. As of 2005, cars are only deductible at FMV, not Blue Book. Damn you, fair value, foiled by the free market again!

Blame the Service for tightening its charitable donation rules at the worst possible time? Not sure on that one. While you’re reluctant to donate your $200 Toyota (ha) to charity because you could have claimed $2,000 under old rules, find some comfort in the fact that (alleged) terrorist “non profits” can not file for 2 years and somehow get away with it. You wonder why I advocate fixing the system from the ground up?

You can text $10 to Haiti but what about the “Economic Homeless” here in America? asks Young Money.

If this were a survey and you asked me “What do you think the IRS could do to encourage charitable donations?” I would answer “Tax breaks. It isn’t the Treasury’s job to distribute bailouts.” Yet they continue to behave as though it is their duty.

See the problem yet?

Hallelujah! Church Accounting Miracles!

I had no idea how much a minister can make but now I do. Wait a minute, this just tells me how to bypass Service rules by writing checks in the church’s name. I might totally be in the wrong line of work.

Free Church Accounting (I’m not kidding) brings us a question from “Sharon” of Corsicana, Texas:

How much money does a minister have to make in order for money to be reported?

I started my church back up after 12 years vacancy. I do not have very many members. Right now we are 3 active members and other people stop in from time to time. I do not actually receive money. Since the church is striving I use the money to pay the light bill, get the grass moved.


Answer:

According to the IRS website, “Earnings of $400 or more are subject to self-employment taxes.” (that includes qualifying ministers)

If you are a church employee, income of $108.28 or more is subject to SE tax.

It would be better for you, if you opened a checking account in the church’s name and paid expenses out of it. If that’s not possible, just make sure and keep all of the receipts that show where the church funds are going.

Fascinating! I took the preliminary “Are You a Tax-Exempt Church” quiz on their website and failed miserably so I guess I’d make an awful 501(c)(3) but that’s probably for the best.

There are ways to fail at this of course, like the Spokane, WA priest who couldn’t keep his arms and legs (and other parts) inside of the vehicle at all times, financial mismanagement in the University of North Carolina system, and JDA favorite the University of Colorado’s wild credit card user with horrible hair.

I would never imply that more regulation is the answer; I’m merely pointing out that there’s a bit of work to be done in identifying non-profit fraud. Seriously, how can one detect fraud when the core basis of fund accounting is an imbalance between “expenses” and expenditures?

The Church of Jr Deputy Accountant Scientist? I’m down.