New Horizons for the Accountant v2.0
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New Horizons for the Accountant v2.0

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The CPA of the (not too distant) future looks different that today’s CPA. Tax preparation is not a core CPA service. Increased specialization and collaboration among specialists will be necessary ...

The CPA of the (not too distant) future looks different that today’s CPA. Tax preparation is not a core CPA service. Increased specialization and collaboration among specialists will be necessary to service clients and work on internal organizational issues. Scared yet? Get yourself ready for this change through a glimpse of how the CPA profession is expected to evolve as we share with you the results of the AICPA’s CPA Horizons 2025 research study and key insights from thought leaders in the profession.

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New Horizons for the Accountant v2.0 New Horizons for the Accountant v2.0 Presentation Transcript

  • New Horizons for the Accountant November 21, 2013 Washington Society of CPAs Not-for-Profit Conference Donny C. Shimamoto, CPA.CITP, CGMA v2.0-CPA
  • Speaker Biography Donny C. Shimamoto,    CPA/CITP, CGMA Donny is the founder and managing director of IntrapriseTechKnowlogies, a CPA consultancy focused on organizational development and advisory services for the middle market and nonprofits. Donny is a recognized national expert in IT management and international author/speaker on business intelligence initiatives. Donny helps many nonprofits by bridging accounting and IT to strengthen organizational governance and risk management, improve business processes through technology, and increase the effectiveness of decision through business intelligence and evidence-based management. In addition to being a frequent speaker for the Nonprofit Technology Network (nten.org), Donny is a member of the AICPA Governing Council and is the chairman of its Information Management & Technology Assurance Executive Committee. Donny was recognized as one of the Top Thought Leaders in Public Accounting by CPA Practice Advisor in 2012 and 2013, received the 2009-2010 President’s Award from the Hawaii Society of CPAs, was named to CPA Technology Advisor’s 40 Under 40 list in 2007 & 2009, and was also a Hawaii Top High Tech Leader in 2004. Donny works with a variety of nonprofits including foundations, social service agencies, educational institutions, and membership associations. © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.
  • New Horizons for the Accountant  CPA Horizons 2025 Research Study – Horizons 2025 Video – Research Study Overview – Core Purpose, Core Values, Core Competencies – Key Insights for CPAs   The Changing Role of the Accountant  3 Horizons Example: Sustainability Evolution of a Profession Video © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.
  • CPA Horizons 2025 Research Study Donny’s Disclaimer: • The facts herein are from the AICPA’s research study. • The interpretations are my own. 4 Adapted from a presentation from the CPA Horizons 2025 presentation by the AICPA, and based on information and data from the CPA Horizons 2025 Report, AICPA, 2011 © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.
  • Are you ready for the future?  Tax preparation is not a core CPA service… –  Audits are becoming increasingly complex… – –  More regulations + more electronic data + non-financial measures = greater risk for the auditor Increasingly requiring the use of specialists Business reporting is moving beyond finance –  But being a trusted advisor for financial planning is Sustainability, green house gasses, conflict minerals, slave labor, fare wage practices…the list goes on… You must prepare now to be ready for the future!
  • Research Study Overview PLANNING DATA GATHERING DATA ANALYSIS RESULTS Detailed Planning Volunteer Committees Website Interactive Survey Open Forums Advisory Panel Synthesis Advisory Panel May – Aug 2011 Sept – Oct 2011 Deliverable Development 4th Q – Jan. 2011 Feb. – July 2011 Board Review More Than 5,600 Participants About 6,300 Cumulative CPA Feedback Hours More than 75,000 comments
  • Research Study Results  Core Purpose –  Core Values –  evolved and updated Core Services –  substantially unchanged Core Competencies –  withstands the test of time Vision Project core services removed—broad array of new and existing services possible 10 Key Insights – emerged 7
  • Core Purpose The CPA Core Purpose withstood the test of time (originally established in 1998): CPAs … making sense of a changing and complex world 8
  • Core Values Core Values were substantially unchanged:  Integrity  Competence  Lifelong learning  Objectivity  Commitment to excellence  Relevance in global marketplace 9
  • Core Competencies Core Competencies evolved:  Communications skills  Leadership skills  Critical thinking and problem-solving skills  Anticipating and meeting needs  Synthesizing intelligence to insight  Integration and collaboration Core Competency removed:  Technologically adept – No longer a differentiator – Now woven into all that we do 10
  • Key Insights  Technology  Demographic Shifts  Pre-Certification and Lifelong Learning  Trusted Advisor  Marketplace  Value Proposition  Worldwide Profession  Market Permission Trusted Attester  Pride in the Profession 
  • Technology Understand and leverage relevant technology in conjunction with CPA Core Competencies to deliver superior services “Changes will continue to make data easier to access and compare. Electronic communication has already become the norm rather than the exception.” 41 year old CPA who works as a Controller in Business & Industry 8 out of 10 respondents agreed that technology can replace or automate products and services on the lower end of the value chain.
  • Pre-Certification and Lifelong Learning “CPAs have to be both the teacher and the learner in the profession for a lifetime.” Evolve the educational framework to keep pace with the changing dynamics of business, government and our profession ”Always look to learn new ideas and new ways of doing things. Keep an open mind and be able to adapt and reinvent yourself as time goes on.” 68 percent of survey A young CPA working in respondents agreed that warehousing and logistics “accounting education should focus on compliance as well as effective application of judgment.”
  • Worldwide Profession Position the CPA as a premier designation of the accounting/finance profession throughout the world 90% percent of CPAs agreed with the following: “It will be increasingly important for the accounting profession to have awareness of international business issues and trends in the future.” The CPA designation provides a strong foundation and should be recognized as a premier accounting and finance designation throughout the globe. On January 31, 2012, the AICPA and CIMA launched the Chartered Global Management Accountant (CGMA) designation 14
  • Market Permission Leverage the strengths of the profession to expand market permissions Services around data privacy and security, sustainability, and developing business strategies are just a few examples “The changing business environment will offer new areas of services that CPAs can jump into since the CPA is well-educated, well-trained, and well-respected to take advantage of those opportunities.” A CPA working at a not-for-profit 15
  • Trusted Attester Preserve the role of the CPA as the trusted attester of financial and other information  One of the foundational roles for CPAs is the role of trusted attester. There is no other profession that is qualified to fulfill the role of auditor. –  “The profession must increase its independence and remain a viable source of financial truth in a world of increasing complexity and global commerce.” CPAs are able to expand our market permissions in part because of our reputation for objectivity and integrity that has been built on our role as trusted attesters.
  • Pride in the Profession Thousands indicated pride in the resilience of their reputation and the rigorous preparation and values that the CPA credential represents. • The profession must be vigilant in upholding this well-earned reputation – a key competitive advantage Encourage pride among CPAs in the profession and in the value CPAs create throughout society “I am most proud of the idea that our professionals have been able to occupy diverse jobs at high levels from accounting to sales, from operations to HR, from consulting to management.” – CPA at a small consulting firm
  • Demographic Shifts Continue to offer opportunities that enhance the appeal of the profession and be proactive in addressing both U.S. and global demographic shifts Differences in the needs, wants and work Convergence of Baby Boomers, styles of these generations create Generation X, Generation Y and numerous challenges and also Millennials is transforming the workplace opportunities
  • Demographic Shifts  There is an increasing percentage of minorities in the profession –  And the globalizing nature of business which will be reflected in the changing demographics of clients and business owners –  But the diversity in the profession is still not representative of the general population Who want to be serviced by CPAs similar to themselves: speaks their native language and understands their cultural values 3/4 of respondents agreed with the statement – “The profession must work to reflect a modern workforce and generational differences in values and work styles”.
  • Trusted Advisor Promote the CPA as the trusted advisor who, in addition to providing core CPA services, develops solutions to complex problems by integrating knowledge, expertise and resources from multiple disciplines “CPAs symbolize a trusted business advisor…..we will be called on even more often to be the business consultant for our clients.” –CPA in their 30’s CPAs increasingly will be called upon to help solve complex and challenging business problems. • Serving as an integrator for multiple professional disciplines and subject matter experts • Delivering an integrated and multi-faceted business solution Increasing demand for CPA specialists both within the profession and crossing into other disciplines
  • Marketplace Address continual changes in the marketplace, economy, businesses and regulations CPAs must not only demonstrate competence and commitment to excellence in their particular area of practice, but also demonstrate knowledge of business and the evolving marketplace. • CPAs agreed that the pace of change is accelerating • Regulations and standards are evolving and increasing in complexity • The increasingly globalized world introduces an international component to the rate of change. • Technology continues to transform the business and social environment.
  • Value Proposition Increase the visibility of the profession’s value proposition by demonstrating the profession’s core values in multiple areas of business and society • “Integrity, independence, and our focus on the blend of duty to our client and to the public is unique to our profession. It cannot be compromised for ANYTHING.” • The integrity, objectivity and commitment to excellence demonstrated by CPAs lead the public to trust CPAs. • CPAs are dedicated to lifelong learning, competence and relevance in the global marketplace. • The profession will continue to evolve and innovate to meet the changing needs of business and society …how will YOU? 22
  • Key Insights  Technology  Demographic Shifts  Pre-Certification and Lifelong Learning  Trusted Advisor  Marketplace  Value Proposition  Worldwide Profession  Market Permission Trusted Attester  Pride in the Profession 
  • Horizons Example: An opportunity for the CPA profession with Sustainability Adapted from a presentation to the AICPA Assurance Services Executive Committee by: Bob Bunting, CPA Chair, Sustainability Services Group Moss Adams LLP 24 © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.
  • Sustainability: A Sustainable Enterprise Source: Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP Sustainable Enterprise Strategy Planet CPA Services? People Profits GHG Energy Water Waste Community Fair Wage Slave Labor Diversity Financial Supply Chain Codes of Conduct
  • Sustainability: Why Companies Care Source: December 2010 study by AICPA/CIMA/CICA. “Evolution of Corporate Sustainability Practices” via Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP           Value set of company and/or its leaders Efficiency and cost savings Compliance with legal and regulatory requirements Achieving competitive advantage and long-term profitability Managing risk to the reputation of your company/brand(s) Customer demand for green/sustainable products/services Employee attraction and retention Government grants or other incentives Public scrutiny over labor, sourcing, or other business practices Supply chain vendor requirements
  • Sustainability: Potential Issues Source: Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP A Supply Chain Reporting Problem?       Finance Department frequently does not even know the company is “reporting” HR or Sales is the reporting department. No formal data collection system. No controls over accuracy or puffery (valuation) Audits are growing because misrepresentation is common. Misreporting is causing “probation”, expensive corrective actions and even loss of customer relationships.
  • Sustainability: Donny’s Interpretation Sustainability…  Is an emerging opportunity for the profession – – –  Is an area where we must defend our role as trusted attester –  For business reporting…on non-financial metrics & measures For compliance reporting…and vendor certification not related to internal control over financial reporting For service reporting…the next generation of SOC reports AICPA proposed UAA change to definition of assurance Will be part of the future of our profession… …and helps CPAs to play a critical role in the future of our world
  • The Changing Role of the Accountant • • • 29 Spectrum of Accountants’ Roles Accounting Organization Evolution Accountants’ Role in Achieving Impact
  • Spectrum of Accountants’ Roles Source: CIMA, 2012 30
  • [Accounting] Organization Evolution Source: McKinsey & Company, via CIMA, 2012 Expectations have increased for [Accounting] organizations • Focused on process and risk minimization • Focused on decision support • Provides sound financial analysis to management for making financial and operating decisions • Integral part of management team to support value/wealth creation • Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions • Dominated by reporting and compliance functions Stage Role Key Capabilities Challenge Transaction 1 Management Bean Counters • Financial accounting Number of transactions 2 Controlling the Business Planning & 3 Analysis Integrated Functional 4 Excellence Process Managers Business Partners Value Managers • Management reporting • Tax • Audit • Treasury • Performance management • Analysis • Superior decision support to invest wisely • Business Development • Enterprise risk management Consistent process excellence Talent and insight into valuable drivers Leadership and performance management
  • Accountants’ Role in Achieving Impact © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.   32 Accountants often stop at the Analysis stage (which is where technology will also take you). We need to go all the way through to IMPACT!
  • How are YOU achieving Impact?  Consider all the sessions that you attended during the conference –  Look at the evolution of your department’s role in the organization –  What do you need to increase the dept’s impact? Take some time for yourself – – 33 Choose 3-4 things to do when you go back that will have a current benefit for yourself or your department Go back to the CPA Horizons 2025 key findings What do you need to do to ensure that YOU are ready for the demands of the future? © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.
  • Thank you for your attention and participation! Any Questions? Donny C. Shimamoto, CPA.CITP, CGMA INTRAPRISETECHKNOWLOGIES LLC email: donny808@cpa.com voice: (808) 735-8324 twitter: @donnyitk Blog: www.donnyitk.com See also: • CPA Horizons 2025 Report: http://www.aicpa.org/Research/CPAHorizons2025/Pages/CPAHorizonsReport.aspx, AICPA, 2011