Spring 2016 issue of Horizons

A publication by RubinBrown LLP

Spring 2016

T alent: attracting , developing & retaining

FEATURING u A Talent Powerhouse: RubinBrown Works Hard to Recruit and Retain the Best and Brightest

u R&E Tax Credit: Newly Made Permanent & Expanded

u Social Engineering: Is Your Business Opening the Door (Literally) to Cyber Security Attacks?

TABLE OF CONTENTS

Features

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A publication by RubinBrown LLP Spring 2016

Welcome from the Managing Partner

Chairman’s Corner

Chairman James G. Castellano, CPA, CGMA

RubinBrown News

Managing Partner John F. Herber, Jr., CPA, CGMA

A Talent Powerhouse: RubinBrown Works Hard to Recruit and Retain the Best and Brightest

10 16 61 18 22

Denver Managing Partner Michael T. Lewis, CFA

R&E Tax Credit: Newly Made Permanent & Expanded

Denver Resident Manager Gregory P. Osborn, CPA, CGMA Kansas City Managing Partner Todd R. Pleimann, CPA, CGMA

Social Engineering: Is Your Business Opening the Door (Literally) to Cyber Attacks?

What the St. Louis Cardinals & RubinBrown’s Wealth Management Services Have in Common

Editor Dawn M. Martin

Timely Reminders

Art Director Jen Chapman

Designer Brendan Coleman

Industry-Specific Articles

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39

50

Horizons , a publication of RubinBrown LLP, is designed to provide general information regarding the subject matters covered. Although prepared by professionals, its contents should not be construed as the rendering of advice regarding specific situations. If accounting, legal or other expert assistance is needed, consult with your professional business advisor. Please call RubinBrown with any questions (contact information is located on the back cover).

transportation & dealerships

not - for - profit Succession Planning for Not-For-Profits

construction Recruiting and Talent Retention in the Construction Industry

How Dealerships and Trucking Companies Hire and Retain Talent

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life sciences & technology

29

manufacturing & distribution

53

Obtaining Top Talent with the Help of Equity Compensation Plans

real estate Low Income Housing Tax Credit: Legislative Update

To Find Skilled Labor, Look Ahead

32

45

public sector Avoiding Burnout in the Public Sector

private equity Talent Retention Post- Acquisition: Strategic vs. Private Equity

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

57

gaming U.S. Gaming Industry Surpasses $70 Billion

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Readers should not act upon information presented without individual professional consultation.

law firms Is Your Firm Doing

48

healthcare Trends in Physician Employment

Everything it Can to Retain Its Associates?

WELCOME FROM THE MANAGING PARTNER

Be Your Best For Others

Devotion to the people of RubinBrown.

This is one of our core values…and one that we, as a firm, take very seriously. Several years ago, we began work on creating an employment brand. Development of the brand was a lengthy process as it was important to us that our brand conveys our people-centric culture as well as communicates our servant leadership way of life. We’ve all heard about the concept of servant leadership. The servant leader focuses primarily on the growth and well-being of people and the communities to which they belong. At RubinBrown, we’re all leaders and we’re all committed to serving each other. We believe that when we are being our best for both our clients and our fellow team members, we are being our best for ourselves. We also demonstrate “being our best” by serving our communities, as well as the accounting profession. There’s nothing more rewarding for me than to hear my fellow team members speak of our employment brand in their daily conversations. We have encouraged each other with this brand and we reflect on it in making our most important and ethical business decisions. After many hours of brainstorming and debate, we unanimously settled on the brand, “Be Your Best For Others”.

John F. Herber Jr., CPA, CGMA Managing Partner

RubinBrown Core Values Posted in every office, workstation and conference room are our 9 core values. 1. Superior quality & service 2. Devotion to the people of RubinBrown 3. Teamwork 4. Objectivity & integrity 5. Competence 6. Devotion to our community & profession 7. Innovation & continuous improvement 8. Vision 9. Having fun

It is a privilege to get up every day and be my best for others!

Pleasant reading,

www.RubinBrown.com | page 1

CHAIRMAN’S CORNER

With Talent, the Sky is the Limit by Jim Castellano, CPA, CGMA

I always ask our business unit leaders during strategic planning sessions the question, “What is the one thing that will prevent you from achieving the vision you have for your business unit?” Invariably the answer most recited is, “Failure to attract, develop and retain talent.” Not creating value for clients, not providing superior quality and service, not winning new work…the number one thing that will hold them back is lack of sufficient talent. My guess is that you may answer the question in the same manner for your business. The challenges of talent recruitment, development and retention have reached a level of crisis for many businesses. The economic recovery continues at a steady pace resulting in employment levels near full strength. Couple this with the fact that, in many instances, we now have five generations in the workplace (Traditionalists, Baby Boomers, Gen X, Millennials and now entering the workforce, Gen 2020). This multi-generational workforce presents unique talent planning challenges. Each generation has its own attributes, likes and dislikes. All of this requires a disciplined talent planning process, lest your best laid plans are likely to fall short of their full potential. One facet of our vision at RubinBrown is to have inspired team members. This is undoubtedly a lofty goal, but an essential one for us to achieve the ambitious business plans charted by our business unit leaders and their teams. We believe a key success factor enabling us to have an inspired team is our rigorous and disciplined talent planning process. While our talent planning process is quite elaborate, there are several key elements that might be useful for you as you assess the process in your business.

Jim Castellano, CPA, CGMA Chairman

Jim Castellano is Chairman of the Board of RubinBrown LLP. He joined RubinBrown in 1973 and has served at the helm since 1989. Jim’s influence extends beyond the firm to the accounting profession as a whole. In addition to his leadership role at RubinBrown, he also serves as Chairman of Baker Tilly International, the world’s eighth largest network of independent accounting firms.

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Devote as much time to planning for your talent as you do for planning your business strategy. Schedule regular talent planning meetings with your key executives to assess your talent. Identify people with advancement potential and develop specific plans for their advancement. Those plans may include special training and development opportunities, assignment of senior mentors, enrollment in programs with outside coaches, and challenging on-the-job experiences, among others. Most importantly, be sure someone senior in your organization develops a personal relationship with your top performers. Assign senior mentors and hold them accountable for the growth and development of their protégés. Use your talent planning meetings to identify needs for additional talent and develop action plans to fill those needs. Finally, when despite your best efforts, someone chooses to leave your organization, celebrate the person’s service to your company. Treat them on the way out of your organization with as much attention as you did when they joined. You will be amazed at the positive impact this approach has on your culture. Minimizing the trauma people feel when they choose to move on has enormous positive impact on the trust and respect those who stay have for your organization. At RubinBrown, our highly experienced and talented human resources team leads the way on all of our talent initiatives. This team leads our recruitment efforts, training and development, performance management, coaching and counseling. An investment in highly qualified human resource leadership will provide significant return, enhancing the chances that your organization will achieve its vision. In the final analysis, we believe our people want to be valued members of a successful organization. Likewise, recognizing them for their value to our firm ensures the success of our firm.

A rigorous and disciplined talent planning process ensures the sky is the limit .

www.RubinBrown.com | page 3

RUBINBROWN NEWS

RubinBrown Announces Senior Leadership Succession & Retirement RubinBrown is proud to announce several top leadership changes effective June 1, 2016. The changes reflect implementation of the firm’s long-term succession plan to support the expansion and growth of the 64-year-old firm.

Jim Castellano

John Herber

Fred Kostecki

Felicia Malter

RubinBrown Chairman Jim Castellano announced that he will step down as Chairman of the firm when his term expires on May 31st and will continue as a Partner in a senior advisory role to the board and to clients until his retirement from the firm on May 31, 2017. Firm Managing Partner John Herber will succeed Castellano as Chairman. Fred Kostecki will move into the role of Managing Partner of the St. Louis Office and Felicia Malter will succeed Kostecki as the Partner-In- Charge of Assurance Services. Todd Pleimann and Michael T. Lewis continue as Managing Partners of the Kansas City and Denver offices, respectively. Castellano announced these changes resulting from the firm’s extensive succession planning efforts conducted over the past several years. “RubinBrown has enjoyed remarkable, consistent growth, and we are blessed to have outstanding leaders at all levels of our firm. I have utmost confidence in this leadership team’s ability to continue our track record, focused on totally satisfied clients and inspired team members,” said Castellano. Castellano has served as Chairman since 2004, when John Herber succeeded him as the firm’s Managing Partner. Castellano had served as Managing Partner since 1989, when he took the reins from the late Mahlon Rubin, who had led the firm since its founding in 1952. In addition to his leadership roles at RubinBrown, Castellano continues as Chairman of Baker Tilly International, the world’s eighth largest network of independent accounting firms. Castellano served as Chairman of the Board of Directors for the American Institute of Certified Public Accountants (AICPA) during 2002, restoring public confidence during the accounting profession’s fallout from the Enron scandal. The J ournal of Accountancy named Castellano one of the 125 People of Impact in Accounting in 2012 and the AICPA bestowed the accounting profession’s highest honor on him, the Gold Medal for Distinguished Service. More recently, Castellano was named to Ingram’s Magazine 50 Missourians You Should Know. Currently, he serves on the board of governors for the Cardinal Glennon Children’s Hospital Foundation and is a member of the St. Louis Regional Business Council.

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John Herber will succeed Castellano as Chairman and will be responsible for leading the firm to continued growth through strategy and team member development, oversight of firm operations, and representation of the firm in the community and profession. “We are fortunate to have grown to become one of the fifty largest accounting firms in the country by our never ending focus on providing superior quality and service to clients of all sizes in many industry sectors. Expect no changes in our passionate commitment to those values from this leadership team,” said Herber. Herber joined RubinBrown nearly 30 years ago and was named the firm’s Managing Partner in 2004. In 2001, Herber was named as one of St. Louis Business Journal’s 40 Under 40. He was also named one of the Most Influential St. Louisans by the St. Louis Business Journal in 2011 and 2012. Herber has also held various leadership roles within the AICPA including a member of the AICPA Council, chairman of the AICPA Professional Liability Insurance Program Committee, and most recently as a member of the AICPA Women’s Initiative Executive Committee. Herber is also active in the community serving as a board member of the St. John’s Mercy Hospital Foundation, member of the United Way de Tocqueville Society, and former president of St. Patrick’s Center. Fred Kostecki will become Managing Partner of the St. Louis Office. Kostecki will be responsible for the leadership, reputation, client service, civic involvement, business development, and business operations of the St. Louis office. Kostecki joined RubinBrown in May 2002 and has led the firm’s Assurance Services Group since 2004. Kostecki is an active leader in the AICPA and Baker Tilly International. He also devotes time to the community, serving as a board member of the Missouri Baptist Healthcare Foundation, past president of the ALS Association-St. Louis Regional Chapter and board member of St. Louis Children’s Choirs. Kostecki was also named one of the St. Louis Business Journal’s 40 Under 40. Succeeding Kostecki as Partner-In-Charge of Assurance Services is Felicia Malter . In this role, Malter will be responsible for the growth, client service, operations and team member development of the firm’s Assurance Services Group. Malter joined RubinBrown in August 2003. She was promoted to Partner in 2006. In 2008, Malter was named one of the St. Louis Business Journal’s 40 Under 40 and the Missouri Society of CPA’s Women-to-Watch, Experienced Leader. Malter is the president of the Ronald McDonald House Charities-St. Louis, as well as vice president of the Jewish Community Center.

www.RubinBrown.com | page 5

RUBINBROWN NEWS

RubinBrown Manager Named 2016 Young Leader The St. Louis American honored Aisha White as one of the 2016 class Salute to Young Leader award recipients. The diverse group is comprised of 20 accomplished African-American professionals under age 40.

RubinBrown Chairman Named Outstanding Visionary by Missouri Society of Certified Public Accountants The Missouri Society of Certified Public Accountants (MSCPA) awarded Jim Castellano , chairman of RubinBrown, with its Outstanding Visionary Award. Part of the MSCPA’s Impact Awards Program, the Visionary Award celebrates the achievements, innovation and leadership of members in the accounting industry who are working to advance the CPA profession.

Castellano has served at RubinBrown for more than 40 years and has led the organization since 1989. In addition to his leadership role at the firm, he also serves as Chairman of Baker Tilly International, the world’s eighth largest network of independent accounting firms.

The Business Manager Joins RubinBrown The Business Manager, LLC, a Denver-based outsourced accounting services firm, joined RubinBrown in January 2016. The Business Manager was founded in 1996 as a one-person accounting and bookkeeping shop. The boutique firm had grown to host a seasoned staff of six employees with client relationships in a wide range of industries, including construction, not-for-profit, manufacturing and real estate.

Specializing in outsourced accounting for small businesses, the firm offered bill pay, payroll, general ledger accounting, accounting consulting, controller services and executive advisory services. The addition of The Business Manager team adds significant strength and resources to RubinBrown’s existing outsourced accounting service offerings. The Business Manager founder and leader, Debbi C. Warden, CPA, CGMA will serve as a partner in RubinBrown’s Entrepreneurial Services Group. She has more than 25 years of accounting, business and management experience. In addition to Warden, five staff accountants and associates of The Business Manager have also joined RubinBrown.

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RubinBrown Sponsors St. Louis Regional Chamber Arcus Awards RubinBrown proudly served as presenting sponsor for the third annual Arcus Awards. The Arcus Awards are presented to one company in each of the economic clusters that has demonstrated an exceptional commitment to advancing the St. Louis region’s global strength. RubinBrown Managing Partner John Herber presented the first annual People’s Choice Award to Eugene Redmond for the establishment of the Redmond Center at Southern Illinois University – Edwardsville.

John Herber presents the first annual People’s Choice Award to Eugene Redmond.

Connect with us on Social Media

Connect with RubinBrown Recruiting

www.RubinBrown.com | page 7

RUBINBROWN NEWS

New RubinBrown Talent PARTNERS

Jim Anderson, CPA , recently joined RubinBrown as a tax partner in the firm’s Kansas City office. He has more than 20 years of experience providing tax compliance and consulting services for clients in the professional services, financial institution and manufacturing and distribution industries. Debbi Warden, CPA, CGMA, joined RubinBrown as a partner in the firm’s Entrepreneurial Services Group. Prior to joining RubinBrown in 2016, Debbi founded the Denver-based firm, The Business Manager, LLC. She has more than 25 years of accounting, business and management experience. Steve Wisniewski recently joined RubinBrown as a partner in the firm’s Wealth Management Services Group. Steve provides clients with family succession planning, estate and retirement planning, gift tax planning and financial and investment advisory services.

MANAGERS

Dennis Lazaroff, CPA , recently joined RubinBrown as a tax manager. He focuses on providing state and local tax compliance planning and consulting services to clients.

Dominic Pisoni, CPA is a new manager in the firm’s Entrepreneurial Services Group, providing assurance, business advisory and tax services.

Curtis Smith, CIA, CISA is a new manager in RubinBrown’s Business Advisory Services Group. Curtis works with clients in various industries with a focus on manufacturing and distribution.

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September 20, 2016 Denver The Ritz Carlton 7:30 – 10:00a

September 21, 2016 Kansas City The Gallery 7:30 – 10:00a

September 22, 2016 St. Louis Donald Danforth Plant Science Center 7:30 – 10:00a

Chris Kuehl Domestic & International Economic Overview

Jack Shaw The Future of Manufacturing & Distribution

For more information, visit www.RubinBrown.com/Summit

FEATURE

A TALENT POWERHOUSE RUBINBROWN WORKS HARD TO RECRUIT AND RETAIN THE BEST AND BRIGHTEST

At the heart of RubinBrown’s vision are inspired team members who work together as one firm that is highly respected and nationally prominent to ensure totally satisfied clients.

It’s important to note that the core, the nucleus of RubinBrown’s vision is its team members. It’s a people-centric vision, and as a result, the firm is dedicated to recruit, retain and inspire its team members. RubinBrown is consistently identifying the best talent to join the firm. RubinBrown hires entry-level and experienced candidates who live the firm’s mission, values and culture.

RubinBrown first considers internal candidates for transfers into positions that enhance their professional goals in conjunction with the overall strategic success of the firm. The firm also promotes from within as much as possible to provide our current team members opportunities for advancement. RubinBrown’s recruitment philosophy and process also applies to the selection and treatment of independent contractors, personnel employed by temporary agencies and any other persons or firms doing business for or with RubinBrown. Campus Recruiting RubinBrown actively recruits candidates through a variety of resources including business schools, government agencies, job fairs, classified advertising, colleges, universities and other related organizations. The firm hosts open houses for qualified applicants to tour our office and meet with team members. RubinBrown also participates in job fairs and other related recruiting activities to enhance the opportunity for relationship development. In addition, RubinBrown has created two programs to help those entering the workforce learn more about public accounting and the unique culture of the firm. RubinBrown’s GOAL (Greater Opportunity for Advanced Learning) Program The GOAL Program is designed to give students early insight into public accounting. The diverse two-day schedule includes the following:

∙ Shadowing team members

∙ Observing meetings

∙ Visiting client offices

∙ Meeting face-to-face with staff, managers and partners

The GOAL Program is a truly unique experience designed for accounting and finance students following their sophomore or junior year of college.

www.RubinBrown.com | page 11

FEATURE | A Talent Powerhouse

Entry-Level Recruiting RubinBrown offers full-time entry-level

positions each year. New graduates will be exposed immediately to complete client engagements, assignments, and projects including direct communication with clients. They also have the opportunity to perform fieldwork, prepare financial statements and tax returns, participate in the budget process and attend training and orientation. Full time entry-level positions are offered to accounting and finance students graduating as CPA-eligible candidates (or other applicable certifications) beginning in January or the fall of each year, depending on graduation dates. Experienced Recruiting RubinBrown is always seeking qualified full- and part-time professionals to join our team, as well as professionals who want to work only during our “prime time” (January through April each year). The firm sources talent from LinkedIn, the firm’s expansive network and circles of influence. One of the greatest sources of talent is referrals from the firm’s own team members. RubinBrown posts open positions on its website and averages approximately 40 open positions per month. Inspired RubinBrown Team Members At RubinBrown, team members are empowered to have equity in their career development. Every career is unique and our programs allow individuals the flexibility to design their own path. Building career equity is how professionals and firms are able to achieve mutual growth. Career equity allows individuals to take control of their career development to reach their highest potential.

RubinBrown’s Internship Program This immersive program gives students the opportunity to experience working as a first- year staff team member, while also being mentored for future full-time opportunities.

The extensive internship schedule includes:

∙ Completing client engagements, assignments and projects in the office and at client sites

∙ Attending technology and department training

∙ Participating in teambuilding

∙ Internship project with fellow interns (summer program)

The internship program is offered during tax season and during the summer. In addition, RubinBrown offers part-time and full-time internships during the winter/spring and full- time internships during the summer. The internship program is designed for accounting and finance students following their junior or senior year of college.

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How Engaging Work Inspires One RubinBrown Team Member by Jimmy Young

D ata analytics is changing the world of auditing.

By utilizing large sets of data and the tools available to us, we are able to look at clients’ businesses in a different way than before. This provides us insight into what is going on with our clients and enables us better understand how they do business. Doing so allows us to collect vast amounts of knowledge on different accounting systems, different processes and different revenue streams. By taking in this new information, we can apply it to each of our clients in order to provide value and strengthen our relationship. Each and every day, I am inspired to go out to clients’ offices and learn more about their businesses. Being able to take data that may not have always been available to us and use the tools provided by the firm in order to learn more about company has taught me much more about the client, and has provoked new conversations that I am able to discuss. It is one of the most exciting moments in our profession, to share this analysis with a client and see how truly interested and invested the client is in what we are doing. Seeing that gives me a sense of self importance and inspiration that what I am doing makes a difference. I am especially excited about the new testing and new products that the firm makes available for our use. RubinBrown is looking to be a leader in data analysis, and we currently own some of the most cutting-edge tools available. I feel inspired that I have been given an opportunity to pursue one of my passions and I know that we are only scratching the surface of the possibilities. Possibly the most important factor in all of this is the understanding that an idea on how to improve our audit through the use of data analysis can come from all levels within the firm. It comes from the partners and managers who know the client, and it comes from the in-charges and staff who are working on the audit on a day-to-day basis.

I am extremely inspired to be a part of an amazing organization that listens to all ideas and provides opportunities from the bottom up.

Jimmy Young is a staff accountant in RubinBrown’s Assurance Services Department. He joined the firm in September 2013 after graduating from Rockhurst University.

www.RubinBrown.com | page 13

FEATURE | A Talent Powerhouse

To accomplish career equity, professionals strive to accumulate assets in their career. According to the book, Building Career Equity by Jan Torrisi-Mokwa, there are five career equity assets:

New Team Members

1. Challenging or engaging work 2. Meaningful relationships 3. Learning and growth

Applications Submitted

4. Community involvement 5. Recognition and rewards

At RubinBrown, career equity is a vital part of career development. The firm offers career equity training annually, led by Jan Torrisi-Mokwa to instruct and inspire team members on how to leverage the tools and resources available at the firm. RubinBrown’s Culture The RubinBrown culture enables and encourages high-performing individuals to work together as one firm. The teamwork within the firm makes all team members approachable and responsive which promotes a sense of belonging. Our culture inspires all of us to grow through our shared experiences in an entrepreneurial, open, caring and family environment. We are proud of our integrity, professionalism and an open door atmosphere, which form the foundation of our success. In assignment: We do our best to coordinate schedules and travel with personal interests and commitments, providing opportunities to travel the world. In clients served: Through diversified services and products, RubinBrown has become an industry leader. Our client base consists of individuals privately-held companies, family-owned businesses, not for profits, public sector entities and publicly traded corporations.

Referrals from Team Members

Student Interns

19 College & University Campuses with Active Recruiting Presence

Student GOALies

140 Team Members Involved in Campus Recruiting

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In people: Our team members are professionals with interests uniquely their own, and we treat each other with dignity and respect. We realize the importance of diversity – it is part of our values and our culture. Integrity, teamwork, mutual respect, enthusiasm and commitment are all key to our business strategy and our personal growth. We are committed to maximizing individual contributions, valuing uniqueness and respecting differences. In atmosphere: More relaxed and less structured than most traditional accounting firms, RubinBrown encourages teamwork. A group of team members are elected semiannually to form our Advisory Board, which represents the views of team members to management. A series of roundtable meetings are also held throughout the year whereby the views and ideas of team members are solicited. In community: We encourage all team members to become involved in our community. Many members of the firm are active participants in civic, charitable and social organizations. In fun: Our team members enjoy participating in sporting activities such as volleyball, basketball, softball, soccer, racquetball or golf and the many social events during the year.

RubinBrown’s Employment Brand

Two years ago, RubinBrown introduced an employment brand to help communicate the unique people-centric and service culture of the firm. “Be Your Best For Others” demonstrates RubinBrown’s commitment to its team members, high caliber performance and giving to others. Whether it’s for clients, the community, or each other, the 500+ team members of RubinBrown work hard everyday to “be their best for others.” Team members are their best for themselves when they are giving to others.

RubinBrown’s Campus Recruiting Group RubinBrown actively recruits candidates through a variety of resources, including business schools, government agencies, job fairs, classified advertising, colleges, universities and other related organizations.

Brent Stevens Partner-In-Charge Campus Recruiting 314.290.3428 brent.stevens@rubinbrown.com

www.RubinBrown.com | page 15

FEATURE

R&E TAX CREDIT Newly Made Permanent & Expanded

by Rich Wile

Plastics

Medical Devices

Transportation

Construction & Architecture

Food & Beverage

Biotechnology & Agricultural

Computer Hardware & Software

Environmental & Structrual Engineering

Pharmaceutical

Energy

Metals

Life Sciences

Electronics

Electrical & Mechanical

Tool & Die Machine Building

Automotive

Chemicals

The Research & Experimentation Tax Credit, also referred to as the “R&E” or “Research” tax credit, incentivizes companies to invest in people and technology that can lead to growth in revenues and profitability, as well as to promote job retention and expansion.

The credit focuses on three types of expenditures: qualified wages, supply costs and contract research.

Since its inception in the 1980s, the research credit (along with other so-called “tax extenders”) has existed on a renewable basis, usually for two years, but only for one year in 2014. This made it challenging for companies to track the eligible expenditures for the credit, since it was not known if the credit would be in place when it came time to file for it. The Protecting Americans from Tax Hikes Act of 2015 addresses this issue. Along with other business and personal tax incentives, the Research & Experimentation Tax Credit has finally been made permanent; this means the credit will continue to be in effect for 2016 and beyond. 1. Previously (except for a one-time exception in 2010), the research credit could offset “regular” tax, but not the alternative minimum tax (AMT). Although this does not usually affect C corporations, the owners of flow-through entities including S corporations and LLC’s often pay the AMT, and could not utilize these credits (although they could be carried forward for up to 20 years). The new provisions allow eligible small businesses to use research tax credits to offset both the regular tax and AMT. Generally, eligible small businesses are defined as those with average annual gross receipts of less than $50 million for the 3-year period prior to the taxable year. 2. Under the new regulations, a qualified small business may elect to apply the research credit as a payroll tax credit against its OASDI (social security) liability instead of its income tax liability. The research credit can offset up to $250,000 in payroll taxes per year and may be elected up to five times. For this purpose, a qualified small business is defined as a corporation or partnership with gross receipts of less than $5 million for the taxable year, and a company with no gross receipts for any taxable year preceding the five-year taxable period ending with the taxable year. Additionally, there were two significant enhancements to the credit for tax years beginning after December 31, 2015:

RubinBrown’s Research & Experimentation Tax Credit Services Group RubinBrown’s Research & Experimentation Tax Credit Services Group specializes in helping companies take advantage of R&E Tax Credits and developing the processes to continue doing so in the future.

Richard Wile Partner-In-Charge R&E Tax Credit Services Group 314.290.3367 richard.wile@rubinbrown.com

Rich Pickett Manager R&E Tax Credit Services Group 314.678.3610 richard.pickett@rubinbrown.com

www.RubinBrown.com | page 17

FEATURE

Cyber criminals will use any means available to get your information, or money or both if possible. They are performing technical attacks against every device connected to the internet, probing for vulnerabilities, bad configurations or poor security. But the cyber criminals are also using another kind of attack, one that takes advantage of our natural tendency to trust. Cyber security professionals refer to these attacks as social engineering attacks, but they are really the same confidence scams that are as old as human history. What Social Engineering Looks Like Most of us are familiar with the use of “phishing” emails. These are emails designed to get you to click on a link, launch an attachment, call a phone number or make contact with a con artist. “Spear phishing” is a form of attack targeting a specific person or position in an organization, leveraging social media and public information to gather details on the target—which make the emails even more believable to the victim. But, did you know social engineering can involve phone calls, fake websites, emails asking you to wire money, and even in-person visits to your workplace?

Other forms of social engineering include:

Tailgating: This is where someone will wait outside a company’s secured door and once an employee uses a security card or ID to get inside, the tailgater will follow them inside. That way, the thief can physically access your computers or paper files.

Shoulder Surfing: The thief will look over victims’ shoulders and watch as they enter their passwords or PINs.

Pretexting: Criminals will pretend to be someone with a legitimate need for the victims’ information. They could pose as a vendor, potential client or even the pizza delivery man. This can happen online, in person or over the phone. Business Email Compromise: This is a growing problem whereby fraudsters will either take control of a business person’s email account or create an account that closely resembles the real one: johndoe@xyzcompany.co instead of johndoe@xyzcompany.com. Then the attackers will email a customer or employee (an executive’s accountant, for example) and request a wire transfer. In some cases, they can use email access to change the passwords to victims’ bank accounts and completely hijack them. Baiting or Quid Pro Quo: The victims are offered something they cannot resist – for example, a free song download or help with an IT problem – in exchange for their personal information or access to their systems. One of the most popular methods of attack: free USB drives, which carry malware that allows the cyber criminal to access a victim’s system.

www.RubinBrown.com | page 19

FEATURE | Social Engineering: Is Your Business Opening the Door (Literally) to Cyber Attacks?

What You Can Do Most of the major breaches reported in the press during the last three years can be traced back to a social engineering attack. If major retailers, entertainment companies, healthcare organizations and service companies with millions of dollars invested in technology can be compromised, what can you do? A lot, actually. Social engineering takes advantage of human trust, and often smaller organizations have an easier time addressing training and trust issues. The following are a few ideas for reducing the risk from social engineering. Knowledge: Half the battle is knowing what kind of sensitive data your company possesses, from employees’ social security numbers to customers’ credit card information. You should know where this information is stored, who can access it and what protections are in place. Internal Controls: Implement internal controls to protect your financial systems from fraudulent transactions, or at least detect them if they occur. For example, many businesses use some form of dual control in their payment systems. One employee might prepare a payment or wire transfer, but it requires the approval of another person inside the company – in some cases, the owner. Training: Take time to train your team about social engineering. Not just the daily phishing

emails, but all forms of social engineering. Encourage them to be skeptical about callers asking for information, and train them to verify a contact’s identity. Don’t just accept that a caller is from your bank – call your bank directly and confirm the call is legitimate. Let your team know how and when to report suspicious activity as soon as possible. Culture: Encourage a culture where it is standard to report potential attempts, including “I may have clicked on something” reports, so you can reinforce training and identify issues early. Technology: Many technology solutions exist to help with everything from inspecting emails for attachments and links, blocking connections to malware sites, requiring strong authentication and logging security events. The key thing to remember is that technology is part of the overall solution. Vigilance: Make the effort to evaluate your security, test user knowledge and assess your organization’s environment on a regular basis to determine where updates or new solutions may be needed. An ongoing process is critical to maintaining security. The dangers of social engineering are real. You can reduce your organization’s risk by using the right combination of people, process and technology.

RubinBrown’s Cyber Security Advisory Services Group RubinBrown has a dedicated team specializing in cyber security services designed to meet each client’s requirements. We provide experienced security professionals for executive consulting, security risk assessments, vulnerability and penetration testing, vendor risk management and specialized security consulting.

Rob Rudloff, CISSP-ISSMP Partner Cyber Security Advisory Services Group 303.952.1220 rob.rudloff@rubinbrown.com

Audrey Katcher, CPA, CISA, CITP, CGMA Partner Business Advisory Services Group 314.290.3420 audrey.katcher@rubinbrown.com

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2016 ETHICS SEMINAR FEATURING COOPER CYNTHIA ETHICAL LEADERSHIP FOR THE 21 CENTURY ST

Denver November 8, 2016 University of Denver Kansas City November 9, 2016 Location Forthcoming St. Louis November 10, 2016 Saint Louis Art Museum

Former Vice President of Internal Audit at WorldCom and Whistleblower

In 2002, Cooper and her team of auditors investigated and unearthed $3.8 billion in fraud at WorldCom, which to date represents one of the largest corporate frauds in history.

For more information visit, www.RubinBrown.com/Ethics

FEATURE

WHAT THE ST. LOUIS CARDINALS & RUBINBROWN’S WEALTH MANAGEMENT SERVICES HAVE IN COMMON by Steve Wisniewski

This is the time of the year when major league baseball teams have kicked off regular season play. The last couple months have been primarily used to evaluate talent and improve skills for the upcoming season. Any one team can get hot and succeed once in a while, but teams that succeed year after year have a proven process that is continually improved and repeated. With RubinBrown’s corporate headquarters in St. Louis, we will take the liberty of using the St. Louis Cardinals as an example. In an interview with KTVI TV station in October 2014, Bill DeWitt III, the President of the Cardinals, credits consistency and discipline for the organization’s success. DeWitt said the biggest challenge is balancing short-and long-term goals. The Cardinals have maintained discipline and consistency from scouting to player development and from drafting to free agent signing. DeWitt also said, “We have consistency up and down the organization with respect to teaching and to developing players.” It obviously works. The Cardinals have won 11 World Series, with 18 Pennants and 37 Hall of Famers. The critical importance of talent management in major league baseball is analogous to RubinBrown’s Wealth Management Services. Fans/Clients Fans support a winning franchise that offers fairly priced entertainment value. The Cardinals’ success is evident in the fact that they have drawn 3 million fans for 12 straight seasons.

Wealth management clients come to and stay with the advisors that provide a comprehensive, personal service at a fair price.

We help our clients identify, prioritize and achieve their financial goals and objectives utilizing an experienced group of professionals that integrate your income taxes, estate planning and investment advice all in one place. Discipline & Consistency Success requires a repeatable process that promotes discipline and consistency. The wealth management process is a disciplined, highly successful methodology that includes these steps:

∙ Establishing and defining the relationship with the client

∙ Gathering relevant data and facilitating the establishment of client financial goals

∙ Analyzing the data and assessing the client’s financial position

∙ Developing accommodations for achieving the goals

∙ Implementing recommendations in collaboration with the client

∙ Monitoring the progress of the recommendations and their results

www.RubinBrown.com | page 23

FEATURE | What the St. Louis Cardinals and RubinBrown’s Wealth Management Services Have in Common

Talent Development Every member of the RubinBrown’s Wealth Management Services team strives to improve their skills every day. Experience, designations and licenses are all important components of a talented wealth management team. For example, the majority of team members have their CPAs. Other designations include JD (Attorney), LLM (Master of Laws), CFP (Certified Financial Planner), CTA (Commodity Trading Advisor), and PFS (Personal Financial Specialist). So just like professional baseball players, talented RubinBrown Wealth Management professionals want to play for a winning club where their talents can contribute to the team’s continued success.

The execution of this methodology can only happen with a team of talented professionals that are trained and committed to winning for the client.

RubinBrown’s Wealth Management Services Group The mission of RubinBrown’s Wealth Management Services Group is to assist and advise you in achieving both your personal and financial goals.

Bob Jordan, CPA, PFS — St. Louis Partner-In-Charge Wealth Management Services Group 314.290.3221 bob.jordan@rubinbrown.com

Ed Warren, CPA, CFP ® — Kansas City Partner Wealth Management Services Group 913.499.4410 ed.warren@rubinbrown.com

Brian Frevert, CPA, CFP ® , CGMA — Denver

Steve Wisniewski — St. Louis Partner Wealth Management Services Group 314.678.3560 steve.wisniewski@rubinbrown.com

Partner Wealth Management Services Group 303.952.1231 brian.frevert@rubinbrown.com

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Accounting & Business Professionals

ABACUS Recruiting , an affiliate of RubinBrown, can help. Our specialty includes both permanent and temporary placements in the following areas:

Tamara Tucker President 314.878.5522 tamara.tucker@abacusrecruiting.com

∙ Accounting/Financial Management

∙ Marketing

∙ Operations

∙ Bookkeeping

∙ Information Technology

∙ Administrative

ABACUS Recruiting’s reputation for quality service stems from our industry knowledge, commitment to personalized service, confidentiality and dedication to maintaining the most ethical standards in the recruiting industry. Having successfully placed financial and business professionals in positions at Fortune 1000 companies, regional businesses and entrepreneurial firms, ABACUS Recruiting has become one of the most respected names in our industry. Whether you are a company in search of high caliber professionals or a candidate searching for a job change, ABACUS Recruiting is uniquely qualified to assist you.

Paul Iadevito Recruiting Manager 314.878.5522 paul.iadevito@abacusrecruiting.com

Visit us at www.AbacusRecruiting.com

ABACUS RECRUITING IS AN AFFILIATE OF RUBINBROWN LLP

CONSTRUCTION

Recruiting and Talent Retention in the Construction Industry by Ken Van Bree, CPA, CGMA

W ith the experienced worker shortage being felt throughout the construction industry, recruiting and talent retention is more important than ever. RubinBrown has identified four strategies that construction firms should consider when it comes to improving talent retention and team member development. The four characteristics that should be addressed while interviewing candidates (field and office) consist of the following:

A candidate that scores high in these areas is a keeper. Consider the following for each characteristic. Ownership You may have heard the saying “think like an owner,” which is important, but to take it a little further, we’re suggesting that you build your team with team members that take ownership of work assigned to them. Take it and run with it, so to speak. It’s not fun to micro-manage or babysit a team member that will not complete an assignment without you nudging them along. Team members that take ownership of projects or jobs assigned to them and who stick with the project until completion are a joy to work with and good role models to have within your organization.

1. Ownership

2. Communication

3. Service oriented

4. Have fun

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Communication The ability to communicate is important in all aspects of life, but a team member that is all over communication will usually succeed. Surprises late in a project are rarely good, so your team members must communicate engagement status often to avoid surprises. Encourage your team to think at the end of every day, “What did I do today and who needs to know about it,” and then send out status updates accordingly. Service Oriented We’re all in the business of serving others. Someone that has a service-oriented mindset is much more likely to be a good representative of your organization and keep clients happy! Serving others is not only important with clients but is equally important internally with other co-workers. Here at RubinBrown we are encouraged to be our best for others at all times. This applies to both our internal and external relationships. Building your team with service-oriented thinkers will better your entire organization! Have Fun Having a little fun at work improves team member morale and should be encouraged. Team members that are “all business” 100% of the time are not fun to work with day in and day out. Having a culture and core values that allow team members to be themselves and have some fun in the meantime is important. The hope should be that your team members build friendships with their co-workers. Statistically, team members that have a friend at work are happier.

While these four characteristics are important to consider during interviews, we’d also recommend having a formal mentoring or coaching program in place at your organization for team members already employed. The Importance of Mentoring The goal of mentoring is to transfer as much knowledge from your experienced team members to your new team members. Competition is alive and well in the construction industry, so this is easier said than done. Oftentimes, experienced team members might be threatened by newer team members and not want to share tips or information that will help the younger team members succeed. This attitude is not healthy in your organization and must be addressed when encountered. Working as a team and providing great quality and service to your customers has to be the top priority for your entire workforce. A mentoring program should be structured with experienced team members mentoring new team members. Informal mentoring meetings should occur as often as necessary, but formal meetings should occur at least twice per year.

www.RubinBrown.com | page 27

CONSTRUCTION

The formal meetings should be documented with mentoring notes or an evaluation summary. These mentoring notes can be used to follow up on areas identified for improvement. In summary, addressing the four characteristics with your interview candidates will help drive the right type of people to your organization. Encouraging your experienced team members to mentor the younger team members and then rewarding them for it, will help your organization grow, be more profitable and create a better culture!

RubinBrown’s Construction Services Group We provide services to general contractors, specialty subcontractors and related companies in the construction industry.

Ken Van Bree, CPA, CGMA — St. Louis Partner-In-Charge Construction Services Group 314.290.3429 ken.van.bree@rubinbrown.com

Zach Fritz, CPA — Kansas City Manager Construction Services Group 913.499.4416 zach.fritz@rubinbrown.com

Matt Beerbower, CPA — Denver Partner & Vice Chair Construction Services Group 303.952.1252 matt.beerbower@rubinbrown.com

Graham Ryan, CPA — Kansas City Manager Construction Services Group 913.499.4441 graham.ryan@rubinbrown.com

Mark Jansen, CPA, CGMA — St. Louis Partner & Vice Chair Construction Services Group 314.290.3208 mark.jansen@rubinbrown.com

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