AICPA NATIONAL ISSUES


Expect the unexpected, says AICPA expert

When it comes to dealing with Mother Nature, it is best to expect the unexpected.  That’s the advice given by Tommye E. Barie, CPA, Vice Chair of the American Institute of CPAs Board of Directors and partner with Mauldin & Jenkins, LLC in Bradenton, Florida.

Barie has seen the results of nature’s wrath in Florida a number of times and can empathize with small business owners in southern New England.
 
If small businesses do not properly prepare for natural disaster, the potential monetary impact can be devastating, and at times, lethal.

“My recommendation is to make this a priority when budgeting and to determine if the small business is properly positioned to weather the storm,” said Barie.
 
Using a hurricane as an example, Barie explained that business owners must make sure the building in which they operate is up to code.  Investments such as installing new windows or hurricane shutters often represent money well spent.  She also emphasized the importance of reviewing insurance policies.
 
“Review insurance for adequacy, not only property insurance, but business interruption insurance, flood insurance, renters insurance and umbrella liability should be considered,” said Barie.  “From a financial records standpoint, backups of all critical data should be kept in a safe place.”

Barie believes that these are the type of messages that CPAs need to convey to their clients regularly.

“Proper preparation is critical for being resilient,” she said. “Recovery will occur much quicker with resources and a plan to set in motion.”

A part of that plan should include tapping into resources, such as those offered through AICPA.  For example, AICPA makes “Disaster Recovery – A Guide to Financial Issues,” available online at aicpa.org.  It is structured in three separate sections: (1) “first days;” (2) “next weeks and months;” and (3) “moving on.”  Section one addresses emergency housing and cash flow, while the concluding section addresses job retraining and education, estate planning, and preparedness for other potential disasters.     
It is a sobering topic to confront, but Barie believes that while Mother Nature deserves our respect, she is not something to fear.

“We must not be paralyzed by potential natural disasters, but we must be cognizant of the unpredictability of such a force and prepare to the best of our ability,” said Barie.  “I have to believe that astute small business owners, regardless of location, have always had this on their radar.  Having spent my entire career in Florida, it has certainly always been a concern of mine.”