OFFICIAL PUBLICATION OF THE NEBRASKA SOCIETY OF CPAS 2024Scholarship & Award Winners
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BOARD OF DIRECTORS JONI SUNDQUIST NESCPA PRESIDENT & EXECUTIVE DIRECTOR joni@nescpa.org KELLY EBERT VICE PRESIDENT kelly@nescpa.org MICHELLE LYONS STAFF ACCOUNTANT & OFFICE MANAGER michelle@nescpa.org LORI VODICKA MEMBERSHIP & CPE ASSISTANT lori@nescpa.org OFFICERS BOARD MEMBERS NESCPA STAFF BRIAN M. KLINTWORTH CHAIRMAN HBE LLP Lincoln JODI M. ECKHOUT CHAIRMAN-ELECT Woods & Durham Chartered CPAs Holdrege HEATHER E. BARR SECRETARY Endicott Clay Products Co. Fairbury GRANT H. BUCKLEY TREASURER Buckley & Sitzman LLP Lincoln KELLY J. MARTINSON IMMEDIATE PAST CHAIRMAN Lutz Omaha SHARI A. MUNRO AICPA ELECTED REPRESENTATIVE Frankel LLC Omaha LORRAINE A. EGGER AICPA ELECTED REPRESENTATIVE NOMINEE CyncHealth La Vista KELLY A. MANN AICPA AT-LARGE REPRESENTATIVE AuditMiner Gretna DERRICK J. BLUM DIRECTOR Iron Horse CPAs & Advisors PC Norfolk LAUREN E. BOND DIRECTOR Deloitte & Touche LLP Omaha LAURIE ANN J. BUHLKE DIRECTOR Contryman Associates PC Grand Island NICOLE L. COOPER DIRECTOR Project Harmony Omaha JUSTIN M. HOPE DIRECTOR Eide Bailly LLP Elkhorn JILL R. TRUCKE DIRECTOR University of Nebraska-Lincoln Lincoln RICHARD D. GIFFORD WEST NEBRASKA CHAPTER PRESIDENT Richard D. Gifford, CPA Scottsbluff With more than 50 years of experience in the intricacies of Estate Planning, the team at Endacott Timmer knows the importance of getting the details right. endacotttimmer.com 402-817-1000 If you fail to plan, you plan to fail. Call the Estate Planning professionals. 4 Nebraska CPA
Once again, The Best Lawyers in America® has recognized 46 McGrath North attorneys in the full range of specialty practice areas key to supporting businesses of all sizes across a broad range of industries, and 27 attorneys have been recognized for 10 years or more! McGrath North invests time, energy and resources to build a culture of professional excellence and integrity that produces results for our clients to make lives better. INSPIRED BY EXCELLENCE. COMMITTED TO SUCCESS. SEE THINGS DIFFERENTLY. Collaborating with companies and CPA firms on: State Tax Audits • State Tax Appeals • State Tax Planning • State Tax Incentives State Business Incentives • Site Development Incentives • Property Tax Appeals Nick Niemann, JD State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-1489 nniemann@mcgrathnorth.com www.mcgrathnorth.com | www.nebraskastatetax.com | www.nebraskaincentives.com Matt Ottemann, JD, LLM State & Local Tax & Incentives Attorney Partner, McGrath North (402) 633-9571 mottemann@mcgrathnorth.com
22 16 C O N T E N T S 8 ©2025 The Nebraska Society of Certified Public Accountants (NESCPA) | The newsLINK Group LLC. All rights reserved. Nebraska CPA is published six times per year by The newsLINK Group LLC for NESCPA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of NESCPA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska CPA is a collective work, and as such, some articles are submitted by authors who are independent of NESCPA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. ISSUE 6, 2024 EDITORIAL: The Nebraska Society of CPAs seeks to reflect news and relevant information to Nebraska and other news and information of direct interest to members of the Nebraska Society of CPAs. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Nebraska Society of CPAs. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the Nebraska Society of CPAs. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, a bi-monthly publication, is included in membership fees to the Nebraska Society of CPAs. PRESIDENT’S MESSAGE 7 Investing in Nebraska’s Future Accounting Stars $128,950 in Scholarships Presented to 97 Nebraska College Students By Joni Sundquist, Nebraska Society of CPAs 8 Walt Radcliffe A True Legend in Nebraska’s Legislative Landscape 10 Potential Tax Changes Under the Trump Administration By Hannah Fischer Frey & Steve J. Koo, Baird Holm Law Firm 12 Nebraska Data Privacy Act By Maureen Fulton & Mikaela Witherspoon, Koley Jessen 14 Buying a Business 10 Things It Takes to Make the Leap By Accounting Practice Sales 16 Is Your Firm’s New Quality Management System on Target for December 2025? By the Association of International Certified Professional Accountants 22 2024-2025 NESCPA Scholarships 26 Congratulations, New CPA Certificate Holders! 28 2024 Award Winners 32 Honor Roll for the Foundation of the Nebraska Society of CPAs Thank You for Supporting Future CPAs! 34 100% Membership Firms 36 100% Membership Program Support the CPA Profession & Become a 100% Membership Organization Today! 37 Welcome New Society Members 38 Who Are Your Future Stars? Let’s Keep the Best & Brightest in Nebraska 39 Advertiser Index
PRESIDENT’S MESSAGE $128,950 in Scholarships Presented to 97 Nebraska College Students BY JONI SUNDQUIST, NEBRASKA SOCIETY OF CPAs SINCE 1976, THE FOUNDATION OF THE Nebraska Society of CPAs has championed the future of the CPA profession by funding scholarships for talented accounting students across the state. We’re not just investing in education—we’re investing in tomorrow’s business leaders, innovators, and financial problem-solvers! Fast forward to today, and our commitment is stronger than ever. This year alone, the Foundation awarded an incredible $128,950 in scholarships to deserving students from 14 Nebraska colleges and universities. That’s 97 ambitious accounting students who are now one step closer to their dreams, thanks to scholarships ranging from $1,000 to $3,000. BUILDING BRIDGES TO SUCCESS We understand the challenges of meeting the 150-hour education requirement, so we’ve prioritized helping students at pivotal moments in their academic journeys. Of the 97 scholarships awarded: 24 scholarships went to students in their final year of completing the 150‑hour requirement. Four scholarships celebrated the achievements of our 2024 Society award recipients. Two scholarships honored the legacies of former Society executives: Arnold Magnuson, who served the Society from 1958 to 1990, and Dan Vodvarka, who served from 1990 to 2018. 28 Pipeline Scholarships were made possible by the generosity of our amazing members and firms, encouraging students to join the CPA journey. 39 General Accounting Scholarships supported students earlier in their academic pursuits. HONORING EXCELLENCE A big CONGRATULATIONS to all the 2024-2025 scholarship recipients! These individuals are among Nebraska’s best and brightest, and we can’t wait to see the incredible impact they will have on the CPA profession. We also applaud Nebraska’s outstanding accounting instructors and administrators. Educators are the mentors and motivators shaping the next generation of CPAs. Their dedication makes all the difference, and we deeply appreciate everything they do to empower our students and strengthen the profession. BE PART OF THE IMPACT! Let’s keep the momentum going! Your support can make a huge difference in a student’s journey toward becoming a CPA. Consider making a donation to the Society’s Foundation today at www.nescpa.org/scholarships/donate and help us continue to invest in Nebraska’s accounting stars of tomorrow. Flip to page 22 to meet our 2024-2025 scholarship winners and see the faces of Nebraska’s CPA future. We’re building something extraordinary together! Joni Sundquist is president and executive director of the Nebraska Society of CPAs. You may contact her at (402) 476-8482 or joni@nescpa.org. Thank you to the Foundation of the Nebraska Society of CPAs Board of Trustees for 2024-2025. Daniel Wells, President Koski Professional Group PC, Omaha Kristian Rutford, Vice President Labenz & Associates LLC, Lincoln Christopher Lindner, Secretary Forvis Mazars LLP, Lincoln Michelle Thornburg, Treasurer Koski Professional Group PC, Omaha Ryan Burger GBE CPA PC, Seward Neal Lyons UNICO Group Inc., Lincoln Patrick Meyer HBE LLP, Lincoln Erica Parks Forvis Mazars LLP, Omaha Linda Scholting Doane University, Crete John Sehi Iron Horse CPAs & Advisors PC, Norfolk INVESTING IN NEBRASKA’S Future Accounting Stars 7 nescpa.org
Radcliffe Gilbertson & Brady has deep roots in Nebraska politics. In 1977, Walt Radcliffe (center) co-founded what has become Nebraska’s oldest lobbying and governmental relations firm. Korby Gilbertson (left) joined the firm as an attorney and lobbyist in 1996 after being part of the support staff for seven years. Justin Brady (right) joined the firm as an attorney and lobbyist in 2003 after being part of the support staff for five years. Radcliffe passed away on Dec. 26, 2024, at the age of 77. WALT RADCLIFFE A True Legend in Nebraska’s Legislative Landscape NEBRASKA LOST A REMARKABLE INDIVIDUAL WITH THE passing of Walter “Walt” Radcliffe on Dec. 26, 2024, at age 77. A revered lobbyist and legal mind, Radcliffe left an indelible mark on the state through decades of service, advocacy, and mentorship. “Lots of people claim to be legends, but few truly are. Walt truly was a legend. The impact he has had on our state is immeasurable,” said Nebraska Society of CPAs Past Chairman Jim Greisch, echoing the sentiments of many who knew Radcliffe. Walt served as the Society’s chief lobbyist for nearly 50 years, noted Nebraska Society of CPAs President and Executive Director Joni Sundquist. “He leaves behind an extraordinary legacy. We will miss his unparalleled insight and wisdom on all things legislative but, most of all, his friendship.” Born Sept. 11, 1947, in Lincoln, Neb., Radcliffe graduated from Lincoln Southeast High School in 1965, where he was a member of the Knights golf team and Key Club. He went on to earn a bachelor’s degree in 1969 and a law degree in 1972, both from the University of Nebraska. While a student at UNL, Radcliffe pledged Chi Phi, later serving as the fraternity’s chapter president. His early career included service in the Reserve Officers’ Training Corps (ROTC) and as a First Lieutenant in the U.S. Army. Radcliffe was a member of the Nebraska Bar Association and Lincoln Bar Association. He also served as president of the Nebraska Golf Association and on the board of directors for the Nebraska Club and Hillcrest Country Club. Radcliffe developed deep roots in Nebraska law and politics early on. In college, he organized a student service project to take more than 100 disabled and elderly voters to the polls on election day. In the 1970s, he practiced law with Max Kier, a former speaker of Nebraska’s bicameral Legislature in the early 1930s, and Roland Luedtke, former speaker, lieutenant governor, and mayor of Lincoln. His decades-long involvement with the Nebraska Unicameral began when he served as a legislative page in 1969. Over the years, he held several pivotal roles, including assistant clerk to the Legislature, counsel to the speaker, counsel to the Judiciary Committee, and counsel to the Banking, Commerce, and Insurance Committee. In 1977, in partnership with David Tews, Radcliffe co-founded what has today become Nebraska’s oldest lobbying and governmental relations firm. He became the sole owner and chief partner of the firm in the 1980s, renaming it Radcliffe and Associates in 1989 and then Radcliffe Gilbertson & Brady in 2019. Radcliffe remained a registered lobbyist until his death. His firm represents a diverse collection of clients from every corner of Nebraska and across the country, tackling everything from complex business matters to civil rights through an integrated and multidisciplinary approach. Radcliffe has been at the forefront of dozens of initiatives since the 1980s, leaving an indelible mark on Nebraska statutes, case law, and the Nebraska Constitution. Countless careers of Nebraska politicians have been launched with a visit to Radcliffe, who served as a friend, confidant, strategist, and counselor to numerous Nebraska thought leaders. “He was a steady hand that educated governors, state senators, lobbyists, and clients on how to get things done in our state. We all benefited from his immense knowledge and talents,” said Nebraska Society of CPAs Past Chairman Ryan Parker, CEO of Endicott, headquartered in Fairbury, Neb. “Nebraska lost a true statesman,” said Korby Gilbertson, a partner in Radcliffe Gilbertson & Brady and lobbyist for the Nebraska Society of CPAs. “The Unicameral and the Capitol will never be the same without him.” In Radcliffe’s obituary, Gilbertson described him as a “one-of-a-kind, larger-than-life personality who lived life to the fullest,” whether he was roaming the halls of the magnificent State Capitol, enjoying a friendly round of golf, cheering on the Huskers, or enjoying the finer things in life like a signature Nebraska steak, an extraordinary bottle of wine, or a distinctive cigar. He participated in countless social and cultural events and was a generous benefactor to causes 8 Nebraska CPA
he was passionate about, all aimed at making a positive impact on the people and places in Nebraska he cherished and sought to strengthen for future generations, noted Gilbertson. Radcliffe frequently shared his consummate knowledge of political history, the law, and literature with “prescient modern applications that were always delivered with his signature smile, brilliance, razor-sharp wit, and searing sense of humor,” said Gilbertson. He was a highly sought-after political commentator and speaker, recognized as one of the most frequently quoted experts on Nebraska law and politics for more than five decades. Former journalist Martha Stoddard called Radcliffe an “institution” at the Capitol, sharing his insights with uncommon generosity and a touch of irreverence. U.S. Sen. Deb Fischer remembered him as a “wonderful storyteller” and a “guardian of Unicameral history.” “He was bigger than a lobbyist,” said U.S. Rep. Mike Flood, a former speaker of the Legislature. “He was just part of the fabric of the Legislature.” Radcliffe’s passion for the legislative process, coupled with his strategic acumen, earned him widespread respect. “Nebraska lost a giant with the passing of Walt Radcliffe,” Nebraska Congressman Don Bacon said. “For over a generation, Walt represented the interests of countless Nebraskans. He was an advocate with integrity who was known for breaking down complex problems and helping others find meaningful solutions.” Beyond his professional life, Radcliffe’s personal relationships were deeply meaningful. He is survived by his life partner of 40 years, Mary Pack, and remembered fondly by former spouse Vickey Thayer, with whom he maintained a lifelong friendship. Walt Radcliffe was preceded in death by his parents, Wesley and Zora “Doogie” (Horner) Radcliffe. He is survived by his life partner Mary Pack, Korby (Pack) Gilbertson and Mark Munger and Hunter Gilbertson of Lincoln, Paul and Julie Pack of Lexington, Connor Pack of Omaha, and Kaelyn and Edwin Hooper and Elias Hooper of Seattle, and countless friends whom he treasured. As Nebraskans gathered to celebrate his life at Hillcrest Country Club on Jan. 3, they honored not just a lobbyist but a statesman and mentor whose legacy will continue to inspire. Walt Radcliffe was, indeed, a legend. Sources “Walt Radcliffe’s friends say lobbyist was part of State Capitol’s ‘fabric,’” Nebraska Examiner, Dec. 26, 2024. Available at https://nebraskaexaminer.com/2024/12/26/ walt-radcliffes-friends-say-lobbyist-was-part-of-state-capitols-fabric. Walter Horner Radcliffe Obituary by Korby Gilbertson, Lincoln Journal Star, Dec. 29, 2024. Available at https://www.legacy.com/us/obituaries/journalstar/name/ walter-radcliffe-obituary?id=57120111. “Nebraska lobbyist Walter Radcliffe remembered as irreplaceable institution of Legislature,” Lincoln Journal Star, Dec. 30, 2024. Available at https://journalstar.com/ news/state-regional/government-politics/nebraska-lobbyist-walter-radclifferemembered-as-irreplaceable-institution-of-legislature/article_71411778-48a5-5062864a-eced94212273.html. “Nebraska lobbyist Walter Radcliffe remembered as irreplaceable institution of Legislature,” Omaha World-Herald, Dec. 30, 2024. Available at https://omaha.com/ news/state-regional/government-politics/nebraska-lobbyist-walter-radclifferemembered-as-irreplaceable-institution-of-legislature/article_6bfe029e-c6ba-11ef82b1-7f838dec22c5.html. 9 nescpa.org
AS DONALD TRUMP PREPARES FOR A SECOND TERM IN THE White House, tax policy is again set to be a significant focus of his administration. While a formal, comprehensive tax plan was not released during the 2024 campaign, Trump did outline several key tax policy proposals during the campaign. These tax proposals were largely geared toward stimulating economic growth, encouraging domestic production, and providing tax relief to U.S. individuals and businesses. The major components of his tax agenda included: CORPORATE TAX RATE REDUCTIONS AND TARIFFS Lowering the Corporate Tax Rate: Trump has proposed reducing the corporate federal income tax rate from the current 21% to 20% for all corporations, and further reducing the effective corporate tax rate to 15% for companies that manufacture products within the U.S. The reduction in rates aims to encourage domestic production and increase the competitiveness of U.S. companies in the global markets. Reinstating the Domestic Production Activities Deduction (DPAD): By reinstating the DPAD to 28.5%, Trump would further reduce the effective tax rates for U.S.-based manufacturers, providing an incentive for investment in domestic facilities and job creation. Tariff Proposals: Trump also proposed to aggressively increase tariffs on all U.S. imports. The proposal would have widespread effects by imposing a universal tariff on all U.S. imports to 20% and an increase on current tariffs on China to 60%. Trump also proposed a foreign retaliation of 10% on all U.S. exports plus additional in-kind tariffs on U.S. exports to China. INDIVIDUAL INCOME TAX CHANGES Individual Tax Rates: Another key proposal is to make permanent several individual tax cuts established under the TCJA, including maintaining the top marginal tax rate of 37%, which is scheduled to increase to 39.6% in 2026. Child Tax Credit Expansion: The former president has also proposed extending the child tax credit of $2,000 per child or potentially increasing the credit to $5,000. State and Local Tax Deduction (SALT): Trump has proposed eliminating the $10,000 SALT deduction cap. If Trump’s POTENTIAL TAX CHANGES UNDER THE TRUMP ADMINISTRATION BY HANNAH FISCHER FREY & STEVE J. KOO, BAIRD HOLM LAW FIRM 10 Nebraska CPA
SALT proposal is passed, taxpayers would be able to deduct 100% of their state and local taxes paid. This proposal would offer a significant benefit to taxpayers in states with high state and local tax liabilities. Exemptions from Federal Tax: Trump proposed exempting certain types of income from federal taxation, including tips, overtime pay, and Social Security benefits. These exemptions would reduce taxable income for many Americans, particularly those in lower- to middle-income brackets. BUSINESS TAX INCENTIVES Bonus Depreciation: Trump has proposed the reinstatement of 100% bonus depreciation for qualified property, which would allow businesses to immediately deduct the full cost of eligible property in the year they are placed in service. Under current law, bonus depreciation is in process of phasing out, with the deduction reduced to 40% in 2025, 20% in 2026, and 0% in 2027. Qualified Business Income Deduction (QBI): The 20% QBI deduction for pass-through entities is also on Trump’s agenda for extension. This extension would provide tax relief primarily to small business owners and self-employed individuals. Research and Development (R&D): Trump has proposed to eliminate the TCJA’s mandatory capitalization and amortization treatment for R&D expenditures, and to restore the option to immediately expense such costs. Immediately expensing such costs would significantly benefit businesses, especially in the technology industry. Business Interest Deduction: Trump has proposed reverting the limitation on business interest deduction to be calculated on earnings before interest, tax, depreciation, and amortization (EBITDA) rather than earnings before interest and taxes (EBIT), thus increasing the interest expense businesses could deduct. EXPIRING TAX PROVISIONS AT THE END OF 2025 Several key provisions from the TCJA are set to expire at the end of 2025, creating angst for many taxpayers. If these provisions are not extended, or made permanent, many taxpayers could face significant increases to their tax liabilities starting in 2026. Individual Income Tax Rates: As previously noted, the individual income tax rates established by the TCJA are scheduled to revert to pre-TCJA levels after Dec. 31, 2025. Standard Deduction Increase: The standard deduction nearly doubled under the TCJA to $15,000 for single filers and $30,000 for married couples filing jointly. If this provision expires, the standard deduction will revert to approximately $8,350 for single filers and $16,700 for joint filers. Child Tax Credit Reduction: Under current law, the child tax credit would decrease from $2,000 per child back down to $1,000 if not extended. Furthermore, the refundability of the credit could be narrowed significantly. Qualified Business Income Deduction: As previously mentioned, the QBI deduction is also set to expire at the end of 2025. This deduction has been significant for many small business owners and self-employed individuals as it REACH OUT TODAY TO GET STARTED! Let’s get creative and find new ways to increase your revenue and profitability. Results Business Advisors 12020 Shamrock Plaza #200 Omaha, NE 68154 402.913.9080 www.resultsba.com Scan the QR code to watch the Explore New Worlds video. https://www.resultsba.com/explore-new-worlds/ allows them to deduct a significant portion of their income from taxation. Estate and Gift Tax Exemptions: The lifetime estate and gift tax exemption was significantly increased under the TCJA. If these provisions expire as scheduled, individuals would see their exemption drop from approximately $13.61 million in 2025 per person back down to around $7 million in 2026, increasing potential estate taxes for high-net-worth individuals. As former President Donald Trump steps into his second term as President, his proposed changes to tax laws could have significant implications for both individuals and businesses. With several key provisions set to expire at the end of 2025, Congress will need to act quickly to avoid significant tax increases for millions of Americans. Given that Republicans will be in control of both the House and Senate, the upcoming legislative session shows promise that Trump will be able to pass his tax policy objectives. Hannah Fischer Frey is a partner at Baird Holm Law Firm, focusing on corporate transactions, federal and state tax planning issues, and tax-exempt matters. Steve Koo is an experienced corporate and tax advisor specializing in providing counsel to private equity and strategic multinational clients. For more information, call (402) 344-0500 or email hfrey@bairdholm.com or skoo@bairdholm.com. 11 nescpa.org
NEBRASKA DATA PRIVACY ACT BY MAUREEN FULTON & MIKAELA WITHERSPOON, KOLEY JESSEN THE NEBRASKA DATA PRIVACY ACT (NDPA) went into effect Jan. 1, 2025, creating new data privacy rights for Nebraska consumers and new obligations for businesses. Under the NDPA, a “controller” is a business that determines the purpose and means of processing personal data. A “processor” is a third-party business distinct from the controller that processes personal data on behalf of the controller. “Processing” includes the collection, use, storage, disclosure, analysis, deletion, or modification of personal data. “Personal data” is information that is linked or reasonably linkable to an identified or identifiable individual. The NDPA applies to entities that conduct business in Nebraska or produce a product or service consumed by Nebraska residents; process or sell personal data of Nebraska residents; and are not a small business as determined under the federal Small Business Act. The NDPA does not include a threshold based on an entity’s annual revenue or volume of personal data collected. The NDPA includes applicability exemptions consistent with other state privacy laws, including exemptions for non-profit organizations, higher education institutions, entities subject to the Gramm-Leach-Bliley Act (GLBA), and data subject to the GLBA, as well as HIPAA covered entities. Like all state privacy laws other than the California Consumer Privacy Act, “consumer” does not include employees or business-to-business contacts. PRIVACY NOTICE Controllers must provide consumers with a comprehensive privacy notice containing information regarding categories of personal data processed, including any sensitive data; purpose for processing personal data; disclosure of sale of personal data or processing of personal data for targeted advertising; instructions on how consumers can exercise their rights; and categories of personal data the controller shares with third parties and the categories of such third parties. The privacy notice must be reasonably accessible to consumers and is typically provided on the controller’s website. CONTROLLER AND PROCESSOR Controllers must limit their collection of personal data to what is reasonably necessary for the processing purposes disclosed to the consumer. Controllers must also maintain data security practices appropriate to the volume and nature of personal data. Processors must adhere to the controller’s instructions, including by assisting the controller in responding to consumer requests; assisting the controller with security of processing; and providing information to the controller for data protection assessments. The controller and processor must enter into a contract that includes processing instructions and details, confidentiality obligations for the processor, a requirement that the processor delete or return personal data once processing has ended, and a requirement for the processor to flow down these terms to any subprocessors. DATA PROTECTION Under the NDPA, controllers are required to conduct a Data Protection Assessment (DPA) prior to processing personal data for targeted advertising; selling personal data; processing personal data for profiling where the profiling presents a reasonably foreseeable risk of unfair or deceptive treatment of or harm to consumers; processing sensitive data; and processing personal data that presents a heightened risk of harm to consumers. The DPA must assess the potential benefits and risks of the processing for the controller, the consumer, and the public. The DPA must be provided to the Nebraska Attorney General upon request. OPT-IN CONSENT/SENSITIVE DATA The NDPA defines sensitive data as data revealing racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, citizenship or immigration status, genetic or biometric data, children’s data, or precise geolocation data (location within a radius of 1,750 feet). Companies must obtain the consumer’s consent prior to processing sensitive data. CONSUMER RIGHTS Consistent with many state privacy laws, the NDPA provides consumers with the following rights regarding their data: 1. Right to Access 2. Right to Correct 3. Right to Delete 4. Right to Obtain a Copy of Personal Data 5. Right to Opt-Out of targeted advertising, the sale of the consumer’s data, or profiling in furtherance of a decision that produces a legal or similarly significant effect concerning the consumer Controllers must respond to consumer requests within 45 days of receiving the request. The controller may extend this period once by an additional 45 days. The controller must respond to the consumer within a 45-day period with an explanation of any requests denied by the controller. Consumers may designate “authorized agents” to submit the consumer’s request to opt out, including through an opt-out mechanism on an Internet browser setting or extension. ENFORCEMENT Exclusive enforcement authority is granted to the Nebraska Attorney General. There is no private right of action. The Attorney General may recover a civil penalty or seek an injunction for violations of the NDPA. Controllers are granted a 30-day cure period following a violation notice from the Attorney General. Violations after the cure period has elapsed will be subject to a penalty of $7,500 per violation. Maureen Fulton, chair of Koley Jessen’s Data Privacy and Security practice, and Mikaela Witherspoon, a privacy-focused attorney at the firm, advise clients on navigating U.S. state and international privacy regulations, including the Nebraska Data Privacy Act, as well as comprehensive frameworks like the GDPR and CCPA. Both are members of the International Association of Privacy Professionals and hold privacy certifications. They can be reached at maureen.fulton@koleyjessen.com and mikaela.witherspoon@koleyjessen.com. 12 Nebraska CPA
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BUYING A BUSINESS 10 Things It Takes to Make the Leap BY ACCOUNTING PRACTICE SALES SINCE STATISTICS INDICATE THAT ONLY ABOUT ONE OUT OF 15 interested buyers actually buy, it is important to be able to separate the serious buyer from the others. These points offer a good indicator of whether a person is really a buyer: 1. People who are serious about being in business for themselves must realize that they really will be the proverbial “chief cook and bottle washer.” Too many prospective business owners want to be the CEO of the business. Being the CEO of your own business doesn’t mean you sit behind the big desk and plan on how to increase the price of the business’ stock. It means you will be changing light bulbs, emptying the trash, stocking shelves, and everything else that needs to be done in running a business. That’s what it takes to own and manage one’s own business. 2. Prospective business buyers must understand they will be buying someone else’s “baby.” This is a business another person has built, nurtured, and developed. It is a business in which the owner has spent many, many hours—one that has supported the owner and his or her family. It will be important to the present owner that he or she feels comfortable with a potential new owner. 3. There is a famous line from a mid-1990s hit movie that goes, “Show me the money.” Buyers shouldn’t begin the business‑buying process unless they have the necessary funds or know exactly where the funds will come from. Buyers need to be able to “show the money.” 4. Buyers think that when businesses are enjoying good times, they are overpriced. When economic times aren’t so good, they want to buy a business for way less than it is worth. Timing works both ways. There is a right time to buy and a right time to sell. When it is right for both the buyer and the seller, it is the right time. 5. There are no sure things. There is always a risk in buying a business. If a buyer is looking for a sure thing, buying a business is not it. 6. Owning one’s own business is a big responsibility. There are usually employees to consider, customers or clients to attend to, and suppliers and vendors to work with. There is also the financial responsibility. 7. Buying the right business generally takes time. Patience is required. However, one can’t be a procrastinator. When the right business comes along, one must be able to act. 8. Those who are considering the purchase of a business should have a viable reason for doing so, have discussed it with those who are involved, and have a willingness to do what it takes. 9. Too many potential business buyers don’t have the courage to make that “leap of faith” necessary to actually pull the trigger and purchase a business. Many get to the edge but can’t make the leap. Buying one’s own business is a serious step; if you can’t make the jump, there is no sense in going any further. Unfortunately, many don’t realize they can’t until the process is about to begin. 10. Buyers and sellers, too, should seek professional help. The professional business broker has been there and can assist in making the transition a lot easier. The experts at Accounting Practice Sales are here to help with all aspects of buying and selling accounting practices. To learn more, contact Trent Holmes at Accounting Practice Sales at (800) 397-0249 or trent@aps.net. 14 Nebraska CPA
Delivering Results - One Practice At a time 800-397-0249 www.APS.net Trent Holmes Trent@APS.net Experiencing: •Stress? • Lack of Sleep? • IRS induced Nausea? Tax Season Cessation Program Ready To Sell Your Practice? WE CAN HELP YOU! Scan Here
TIPS TO CATCH UP ON IMPLEMENTING THE NEW QUALITY MANAGEMENT STANDARDS THAT FIRMS OFFERING AUDIT AND ACCOUNTING SERVICES NEED TO PUT INTO PRACTICE IS YOUR FIRM’S NEW QUALITY MANAGEMENT SYSTEM ON TARGET FOR DECEMBER 2025? BY THE ASSOCIATION OF INTERNATIONAL CERTIFIED PROFESSIONAL ACCOUNTANTS 16 Nebraska CPA
FIRMS THAT OFFER AUDIT AND ACCOUNTING SERVICES STILL have time to successfully implement the new quality management standards, but they must start now to be ready when the standards take effect Dec. 15, 2025. Keep in mind that firms whose peer review year ends after this date (many reviews are to be performed starting in 2026) will have their systems reviewed under the new quality management standards—firms that fail to comply may not pass their peer review! You may be feeling overwhelmed and unsure of where to begin and how to bridge the gaps from the current policy-based quality control standards to the new risk-based quality management standards. (See “Overview of the New Standards” section.) There is a lot to do and limited time to do it—now is the time to start if your firm hasn’t already. So, how do you make this significant task achievable? This article provides advice on how to do that in several key areas. DEVELOPING AN APPROACH TO IMPLEMENTATION There is no one correct answer in developing an approach to implementation. Some practical approaches include: Component-by-component — Start with a component that your firm feels is already well established and develop the quality objectives, quality risks, and responses for that component before moving on to another component. Step-by-step — Develop all quality objectives first, assessing all quality risks, and then design and implement responses to quality risks. Caution: One response could address multiple quality risks across various components, and one quality risk could require more than one response. Implementation of the quality management standards will be iterative and may require reevaluating the risk assessment, gap analysis, and responses. DETERMINING A DOCUMENTATION APPROACH The form, content, and extent of documentation may be influenced by the complexity of the firm and the nature and circumstances of its practice areas and organization. Documentation of the firm’s system of quality management should: Support a consistent understanding of the system of quality management by personnel, including their roles and responsibilities when performing engagements. Support consistent implementation and operation of the responses. Provide evidence of the response’s design, implementation, and operation to support the system of quality management by the responsible individual(s). The AICPA developed an Example Risk Assessment template that firms may use to facilitate the documentation of quality objectives, quality risks, and responses during the implementation of the quality management standards as part of the practice aid, Establishing and Maintaining a System of Quality Management for a CPA Firm’s Accounting and Auditing Practice. The Risk Assessment Process The risk assessment process is a new component that firms will design and implement as part of their system of quality management. It consists of establishing quality objectives, identifying and assessing quality risks that could adversely affect achieving quality objectives, and designing and implementing responses to address the assessed quality risks. Establishing Quality Objectives Statement on Quality Management Standards (SQMS) No. 1, A Firm’s System of Quality Management, specifies quality objectives that the firm should establish. To access the statement, scan the QR code. Quality objectives are the desired outcomes in relation to the components of the system of quality management to be achieved by the firm. Firms should establish specified quality objectives for: Governance and leadership. Relevant ethical requirements. Acceptance and continuance of client relationships and specific engagements. Engagement performance. Resources. Information and communication. The quality objectives required to be established by the firm are considered sufficiently comprehensive such that it is unlikely that the firm would need to establish additional quality objectives. A firm may establish sub-objectives to enhance the firm’s identification and assessment of risks and responses. What Is a Quality Risk? A quality risk is a risk that has a reasonable possibility of: Occurring, and Individually, or in combination with other risks, adversely affecting the achievement of one or more quality objectives. Quality risks should be specific to your firm; therefore, obtaining an understanding of the conditions, events, circumstances, actions, or inactions that may adversely affect the achievement of the quality objectives is imperative. Consider a firm brainstorming session to kick-start the documentation of identified risks. Write down what your firm does and what could go wrong in the absence of controls. If your firm is a small practice with less complex clients, don’t assume you don’t have any risks. Think about the procedures you perform during client acceptance and continuance to mitigate client risk, how you stay up to date with professional standards, how you shield yourself from self-review threats, and how you exercise professional skepticism. https://www.aicpa-cima.com/ resources/download/aicpa-statementon-quality-management-standards-no-1 CONTINUED ON PAGE 18 17 nescpa.org
Designing & Implementing Responses The nature, timing, and extent of responses should be based on the reasons for the assessments given to the quality risks. Your firm’s current quality control policies and procedures are a good place to start when designing and implementing responses. Based on the identified quality risks, map your current controls or, as SQMS No. 1 calls them, “responses to quality risks.” Modify the policies and procedures as necessary to appropriately respond to the identified quality risks. Perform a gap analysis to identify quality risks without appropriate responses and responses without corresponding quality risks. Then, evaluate whether all quality objectives are appropriately addressed and determine whether all specified responses from paragraph 35 in SQMS No. 1 have been included. Based on the gap analysis, create new policies or procedures to address quality risks, as needed, and consider eliminating any policies or procedures that are not effective. TIPS, TRAPS & INSIGHTS BY COMPONENT Most of the necessary components are not new to your firm’s system of quality control, but when your firm transitions to a system of quality management, you will need to consider new and more robust requirements during implementation. Governance & Leadership The governance and leadership component, commonly referred to as the “tone at the top,” is not a new element of firm quality control, but the new quality management standards have more robust requirements. There is a focus on the firm’s environment and culture that supports quality, including an expectation that leadership will demonstrate a commitment to quality and that the firm will deploy resources consistent with its commitment to quality. Engage with your firm’s staff and discuss the following: How does your firm assign individuals to engagement teams? Does your firm have a tracking mechanism to ensure personnel, including partners, have the competence and capacity, including time, to complete their assigned roles? When making strategic decisions, how does the firm account for audit and accounting quality? Does your firm clearly inform all personnel of their responsibilities to the system of quality management? Relevant Ethical Requirements Under this updated component, the firm is required to specify an individual who is responsible for ensuring compliance with independence requirements. This individual will need the right knowledge, skill, ability, capacity, and authority to address these issues—not just be a senior person in the firm. Joe Lynch, CPA, managing director at Johnson Global Accountancy and AICPA Quality Management Implementation Task Force member, suggests firms consider these questions as they explore how to adapt current processes: How is your firm dealing with relevant ethical requirements now, and will you need to make changes to comply with the quality management standards? Do you have a system in place for personnel to report any violations? Do you have someone in your organization who is an expert on applicable independence and ethics rules and can take on this role? If your firm hasn’t started the transition from a system of quality control to a system of quality management, you’re late to the game, but you still can finish on time. CONTINUED FROM PAGE 17
Should there be two separate roles in the quality management function—one for the creation of the policies and procedures and the other for monitoring the compliance of those policies and procedures? How is your firm determining the existence and completeness of firm relationships (e.g., with vendors)? Acceptance & Continuance of Clients & Specific Engagements Some firms have said they don’t have any risks because their client base is not risky. Let’s turn this comment into a question: Why do you think your clients are not risky? Some potential answers to this question could be that your firm only accepts clients in an industry it has the competence to specialize in, your clients’ organizational structures or business models are not complex, or your clients have good business reputations and ethical values. These are all examples of acceptance and continuance criteria to include in your firm’s policies and procedures. Some other questions to consider include: Is your firm’s approval over acceptance and continuance aligned with risk assessment and tone at the top? What could have changed with the client from previous acceptance or continuance decisions to next year’s decisions (which could be harder to know during economic turbulence)? What if information becomes known after your firm’s acceptance decision has been made that could’ve impacted that decision if it had been known at the time? What kind of information would that be? Engagement Performance This may be a good component to start with since your firm likely has a good understanding of the engagement performance component’s objectives. Take stock of your current engagement performance policies and procedures and evaluate what is or is not working for your firm. Several new or enhanced requirements can help tailor your policies and procedures. For example, there’s a new requirement that engagement teams understand and fulfill their professional responsibilities, including an engagement partner’s overall responsibility for managing and achieving quality and being sufficiently and appropriately involved throughout an engagement. Increasing partner involvement throughout the engagement has proven to enhance audit quality. Consider how your firm can improve its current supervision and review policies to be clear, concise, and actionable. Resources The resources component in a firm’s system of quality management now includes requirements related to technological and intellectual resources, in addition to enhanced human resources requirements. Technological resources are essentially IT applications the firm uses to support the system of quality management and engagement performance. Depending on the complexity of the firm, the processes could be relatively simple and focus on authorizing access and processing updates to the IT application. In more complex firms, the processes could cover multiple IT resources and programming considerations. Intellectual resources include a firm’s methodologies, accounting guides, and written policies or procedures. Here are some questions to assess whether the firm meets the resources objectives: How does your firm evaluate personnel performance? Does it include recognition for positive actions or behaviors? Does your firm require the use of certain software applications in performing engagements? How does your firm archive engagement files? How does your firm train personnel in the use of intellectual or technological resources? Does your firm have policies and procedures for organizing engagement files (e.g., a numbering convention)? Does your firm use a service provider to support the applications? Information & Communication The information and communication component is new under the quality management standards, but your firm likely has communication procedures in place. You may also find you have policies and procedures in other components that could be responsive to risks in this component. For example, as part of relevant ethical requirements, your firm should have a policy or procedure describing how your firm’s system of quality management is documented and communicated throughout the firm. To develop quality risks and responses related to information and communication, consider the following questions: How is information shared within the firm? If your firm has a website, who is responsible for the information conveyed and how frequently is it updated? How does your firm communicate information to engagement teams, so they understand and perform the engagement in compliance with applicable professional standards? How does your firm track required external communications? If you use resources from service providers, how do you communicate each other’s responsibilities? For example, how often does your firm receive updated quality control materials? THE MONITORING & REMEDIATION PROCESS The operation of the responses and monitoring activities is required to be implemented by Dec. 15, 2025. Firms then have another year to perform the evaluation of the system of quality management. There is expanded and enhanced guidance throughout this component. Key changes include a focus on monitoring the entire system of quality management, a new framework for evaluating findings, identifying deficiencies and evaluating identified deficiencies, and more robust remediation. Monitoring activities for the monitoring and remediation process may differ in firms of different complexity. For example, a sole practitioner’s monitoring activities may be simpler because the CONTINUED ON PAGE 20 19 nescpa.org
practitioner interacts with the system of quality management frequently and information may be more readily available. Tip: A new requirement in SQMS No. 1 is for a firm leader to evaluate, at least annually, whether the system of quality management provides reasonable assurance that the objectives of the system of quality management are being met. The effective date for this evaluation is within one year of Dec. 15, 2025. Firm leadership is required to make this evaluation even in a peer review year. It is comparable to management’s assertion about its system of internal control over financial reporting (ICFR), which remains management’s responsibility regardless of whether an audit of an entity’s system of ICFR is performed. RESOURCES TO HELP YOU If your firm hasn’t started the transition from a system of quality control to a system of quality management, you’re late to the game, but you still can finish on time. Implementation of the new QM standards is required by Dec. 15, 2025, which is around the corner. (See the “How to Keep Implementation of the Quality Management Standards on Track” section.) Resources and information to support quality management implementation are available at aicpa-cima.com/auditqm. Among other content, you’ll find: A free interactive practice aid with an accompanying Example Risk Assessment template tool to help you implement SQMS No. 1 (AICPA membership is needed to unlock this content). A document mapping the current system of quality control (SQCS No. 8) to the new system of quality management (SQMS No. 1). Quality management standards and related guidance. A to-do checklist for firms. HOW TO KEEP IMPLEMENTATION OF THE QUALITY MANAGEMENT STANDARDS ON TRACK Every firm that performs engagements in accordance with the Statements on Auditing Standards (SASs), Statements on Standards for Accounting and Review Services (SSARSs), and Statements on Standards for Attestation Engagements (SSAEs) should have some understanding of the new quality management standards. To keep implementation on track: Prioritize your firm’s efforts. Schedule time to read the standards. Add a recurring meeting to your calendar and invite others in your firm to participate. Consider attending webinars or perusing industry publications to learn from other firms and hear different perspectives on how firms are implementing the new requirements. Engage in conversations internally and externally. OVERVIEW OF THE NEW STANDARDS The new standards will apply to all firms that conduct any audits, attest examinations, financial statement or attest reviews, compilations, or agreed-upon-procedures engagements. Here’s a rundown of the new standards with a brief description of each: Statement on Quality Management Standards (SQMS) No. 1, A Firm’s System of Quality Management, introduces a new risk-based assessment process and requires firms to design, implement, and operate a system of quality management customized to their practice and engagements. This includes establishing quality objectives, assessing the specific risks to quality, and designing and implementing responses to address those risks. In addition, firm leadership is required to evaluate annually whether the firm’s system of quality management is meeting its objectives. This approach calls for continuous improvement and ongoing remediation over time. SQMS No. 1 supersedes Statement on Quality Control Standards No. 8, A Firm’s System of Quality Control. To access the statement, scan the QR code. SQMS No. 2, Engagement Quality Reviews, applies when a firm decides that an engagement quality (EQ) review is an applicable response to address its engagement performance quality management objective. This new standard addresses the appointment and eligibility of the EQ reviewer (whether inside or outside of the firm) and performance of the EQ reviews. To access the statement, scan the QR code. SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews: » Amends QM sections 10 and 20 to conform certain terms to language used in SAS No. 149, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors and Audits of Referred-to Auditors). https://www.aicpa-cima.com/ resources/download/aicpa-statementon-quality-management-standards-no-1 https://www.aicpa-cima.com/ resources/download/aicpa-statementon-quality-management-standards-no-2 CONTINUED FROM PAGE 19 20 Nebraska CPA
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