To date, approximately one percent of the CPAs who are AICPA members have been accredited in these areas. Having a specialty designation gives the accredited CPA practitioner unique competencies, special recognition, skill sets to "get the job done" and a marketing edge.

Although the AICPA considered a new international designation, based on the underlying idea that other specialties would branch from it, that proposal was defeated and probably will not resurface anytime soon. The AICPA also is currently reviewing its existing accreditation programs and may change how those designations are handled. However, several things will remain the same: improving our skills and developing a niche can only enhance our value to our firms and our clients, while adding new energy to our professional lives.

With additional competencies, a CPA can begin to market specialized services to distinguish his or her practice from other firms. For example, experienced tax practitioners with special expertise in the tax treatment of complex transactions can assist their clients in complex merger and acquisitions transactions, while CPAs with expert knowledge in a specific industry can assist their clients in areas ranging from automation, budgeting, marketing, human resources, cost containment, disaster planning and corporate finance.

A Growth Area for CPAs
Business succession planning is another area where CPAs are well positioned to develop a niche. Approximately 90 percent of all U.S. businesses are closely held. Unfortunately, about 70 percent of those businesses fail to survive a transfer to the next generation. For those that do survive, the succession into the third generation generally runs smoothly, proving that practice makes perfect. A still largely untapped market for CPAs is to help more first-generation businesses make that first transfer to the next generation.

Business succession -- or, more simply, succession -- has a couple of meanings. It describes a process by which one person succeeds a property or position to another. It also means a process for continuance of a corporate culture. Although the latter may not be an obvious niche opportunity, it does provide CPAs interested in human resources with a platform for serving as advisors in the areas of hiring, retaining and training key employees.

Whether the situation involves transferring the business to new owners, maintaining the corporate culture, or both, the goal is to ensure the ongoing success of the business. Aaron Smolin, CPA, a founding partner of our firm, used to say, "It is your obligation to train your successor" and "You want your successor to be better than you."  It is our obligation to train our successors so that the business continues with or without us. The same principle applies when developing succession plans for clients.

The Succession Plan Process
Most of our clients are proud of what they have accomplished and would like their successful businesses to become family legacies. Yet developing and implementing a succession plan forces business owners to face issues that involve highly charged emotional decisions involving their family members. Typical concerns for owners include maintaining financial independence in retirement, handling the loss of control, and turning their dependents into business-savvy individuals.

When we design a succession plan, our client's needs and desires are the main concern. However, the client's objectives alone are not enough. They must be balanced with the needs of the successor(s). The goal is to protect the goose that lays the golden eggs; the challenge is to determine how the business can both afford the owner's retirement and provide a succession deal that is fair to everyone involved.

Let's look at a hypothetical situation. Through careful planning, a family business started by a grandfather passes to the father. Years later, the father develops a plan to transfer control and ownership to his two sons, who are interested in running the business and have demonstrated an ability to do so. Simultaneously, the father establishes a plan to move his other investments to his daughter, who has no interest in the business. At each stage, the succession plan involves setting goals and objectives, then structuring and implementing the process. The plan must identify the successors and make sure they receive the necessary education, on-the-job training and coaching. The plan must cover gift and estate planning strategies to minimize the transfer taxes, such as including the annual transfers of minority interest subject to a lack of both marketability and control discounts. And the plan must handle the financial interests of all parties in the most advantageous way possible by, for instance, combining the gifting plan with an accrual for deferred compensation to the retiring owner.

For the CPA interested in helping businesses pass to the next generation, a number of professional guides are available. The three-volume "Guide to Business Ownership and Management Succession," published by Practitioners' Publishing Company, includes a narrative of the issues and solutions, along with worksheets for gathering and analyzing information. It describes transfer options including gifting, selling, redemption, sale of assets, ESOPs, stock options and stock compensation. Some other resources are "Effective Succession Planning: Ensuring Leadership Continuity" and "Building Talent From Within," by William J. Rothwell, "Passing the Bucks," by Norman A. Pappas, and "ESOP: The Ultimate Instrument in Succession Planning," by Robert A. Frisch.

As the most trusted advisors, CPAs have access to critical information and key people in the businesses they serve. Leveraging their knowledge, experience and client relationship, CPAs are uniquely qualified and positioned to guide their clients in effective succession planning.

HENRY RINDER, CPA/ABV, CFE, DABFA, is a Principal at Smolin, Lupin & Co., P.A., with offices in Fairfield, Red Bank, New York City, and Jupiter, FL. He is a frequent lecturer on audit and accounting standards, taxes, fraud detection and business valuation issues to professional and business audiences. He can be reached at 973-439-7200, or hrinder@smolin.com.