KEEPING UP WITH ACCOUNTING
  From Globalization to Web 2.0




            Tom Hood, CPA.CITP
          CEO & EExecutive D...
“CPAs ARE the
DISCIPLINE in business!”
       Jim Collins
Economic Outlook
            National Outlook is not
           bright
              g
            Economists estimate 3...
the basic physical and organizational
       structures needed for the operation of a
                society or enterpris...
What is under the CPA Profession?
Federal Laws & Regulations – SEC,
  DOL, Treasury, GAO, PCAOB

   CPA Profession Standards – AICPA
   & FASB, GASB FASAB, ...
Another View
              Public Company   Private Company    Int’l Company


Financial
                 SEC
            ...
US Treasury




MD Comptroller
 MD Comptroller




MD Comptroller




                                                    ...
Scandals & CPA Profession
CPA Profession in the Spotlight
Changes in our Infrastructure
Massive Changes in our Regulatory Structure
The Obama Cabinet
The year of the REGULATOR




 Timothy Geithner,        Paul Volcker,    Mary Schapiro,
  Secretary of t...
Standards Changes
•   AS 5 - PCAOB
•   IRFS – SEC International gets legs
•   Fair Value Accounting
•   XBRL – SEC mandato...
US Treasury




MD Comptroller
 MD Comptroller




MD Comptroller




                                                    ...
IFRS – International
Financial Reporting Standards




            Not if but when…
            Goodbye GAAP?
Think about ...
SEC Roadmap released
Early adopters                    Large
can file using                  Accelerated
     IFRS        ...
Corporate Con ersion Timeline
          Conversion
Convergence ≠ Sameness

      US GAAP                       IFRS
       – Rules based                 – Principles based
 ...
Private Company Reporting
1. IFRS with Private Entities Option
2. U.S. Adapted version of Private
   Entities
3. IFRS with...
Questions?
Q   ti   ?

• What happens when FASB moves to
  IASB?
• FAF Funding goes t IASB
      F di         to
• Who fun...
And if that is not enough…
    CPA Pipeline                        Quality
           CPA Exam                          Au...
Pipeline - Workforce
Pipeline - Good News
  p
                    20% avg increase in
                  Graduates & enrollments!
Pipeline - CPAs are SEXY!

           The surprise in BusinessWeek's
                              BusinessWeek s
       ...
Maryland Pipeline

Primary  College  CPA Exam   CPA   MACPA                  Engaged
                                     ...
Four Generations in the Workplace
               I
               Issue: G
                      Generational Diff
       ...
Staff Shortage + Four
Generations in workplace =
                   p
Trouble!
 90,000,000
 80,000,000
                   ...
Why won’t they sit?
CPA Exam changes

  Then:                 Now:
• Paper-based      • Computerized
• 2 x year May &   • Anytime
  November  ...
Steps to become a CPA
1. Get Accounting Education – 150 hours
2. Sit for & Complete CPA Exam
                 p
3. Take AI...
Promote the CPA license
   Maryland DLLR Swearing-in of new CPAs




               June 16, 2009
At the Maryland Business...
Biggest Issue Facing NYPNs
 • Bridging the Gap between college & real world
        gg         p             g
 • Under-De...
Deloitte s
Deloitte’s Global Workforce Advice
• Long-term career development and multiple
   experiences within a single o...
Technology & Web 2.0
By 2010 Millenials/Gen Y-ers will outnumber
   2010,               Y ers
             Baby Boomers.
“If you think about the media
    environment an average American
teenager lives in, to walk into a classroom
 (or one of ...
Meet the Gaming Generation
•GGames make it easier t understand difficult
             k        i to d t d diffi lt
concept...
Meet our future members?
                                       “over 64% of students in
                                 ...
Five Learning Trends for 2009

1.Mobile Learning
2.DIY - Do-it-Yourself
  Learning
3.Flexible Learning
  Environments
4.Vi...
So what?
Accounting Educators in Second Life
Dr. Mike Kraten
Suffolk University
Dr. Robert Bloomfield
Cornell University
Dr. Steve ...
FASB is there!
Even our members are already there!


IBM Financial Analyst   Accounting Assistant
Member of NJSCPA
Benefits of Virtual Worlds for Education
• The sense of self
• The death of distance
• The power of presence,
  sense of s...
Accounting for Second Life
Journal of Accountancy
J
June, 2008


University of Florida Report - Winter 2008
         y    ...
4 tips to cross the digital divide

1. Start Gaming and take a
   session in Second Life
2. Do our 33 things in 15
   minu...
You can…Ignore it
    Fight it or
Harness it’s power
Maryland Association of CPAs – founded 1901 to
promote and protect CPAs and help them thrive in
the rapidly changing envir...
For more information
Tom Hood, CPA.CITP
            CEO
Maryland Association of CPAs
 Business Learning Institute
       (443) 632-2301
   E-ma...
Keeping Up With Accounting   Phase
Keeping Up With Accounting   Phase
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Keeping Up With Accounting Phase

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Presentation to Accounting Educators at the Pearson - Presentice-Hall Accounting Symposium in 2009. Includes update of three major trends facing Profession - Globalization - Workforce - Technology

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Keeping Up With Accounting Phase

  1. 1. KEEPING UP WITH ACCOUNTING From Globalization to Web 2.0 Tom Hood, CPA.CITP CEO & EExecutive Director ti Di t Maryland Association of CPAs
  2. 2. “CPAs ARE the DISCIPLINE in business!” Jim Collins
  3. 3. Economic Outlook  National Outlook is not bright g  Economists estimate 3Q 2009 – 1st Q 2010 for recovery  Maryland outlook is much better  T 5 states to recover the Top tt t th fastest  CPA Career one of the Top p 10 recession-proof careers  CPA firms below Top 8 are continuing to see growth
  4. 4. the basic physical and organizational structures needed for the operation of a society or enterprise The Infrastructure for the CPA Profession is maintained by your Professional Associations AICPA & State CPA societies (MACPA) Globalization Pipeline – Workforce Technology – W b 2.0 T h l Web 2 0
  5. 5. What is under the CPA Profession?
  6. 6. Federal Laws & Regulations – SEC, DOL, Treasury, GAO, PCAOB CPA Profession Standards – AICPA & FASB, GASB FASAB, IASB, IFAC FASB GASB, FASAB IASB State CPA Statutes police power of the states to protect their citizens vs commerce clause
  7. 7. Another View Public Company Private Company Int’l Company Financial SEC SC FASB S IASB S Reporting Attest PCAOB AICPA IAASB Performance Standards Code of AICPA AICPA IFAC Conduct CPA State Oversight & Enforcement of CPA License Licensure
  8. 8. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA
  9. 9. Scandals & CPA Profession
  10. 10. CPA Profession in the Spotlight
  11. 11. Changes in our Infrastructure
  12. 12. Massive Changes in our Regulatory Structure
  13. 13. The Obama Cabinet The year of the REGULATOR Timothy Geithner, Paul Volcker, Mary Schapiro, Secretary of the Chair, Economic Recovery SEC Chief Treasuryy Advisory Board y Gary Gensler Gar Gensler, Ben Bernanke, Sheila Bair, Chair, Federal Chair, Commodity Futures Chair, FDIC Trading Commission Reserve Board
  14. 14. Standards Changes • AS 5 - PCAOB • IRFS – SEC International gets legs • Fair Value Accounting • XBRL – SEC mandatory • Cod cat o Codification Project – FASB oject S • Clarity Project – ASB – Convergence with international – Risk-based standards already in int’l format (SAS 104-111) • SAS 112 Communication Comm nication • Internal Control – COSO • Fin 48 delay • Delay of SOX 404 for “small” caps
  15. 15. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA
  16. 16. IFRS – International Financial Reporting Standards Not if but when… Goodbye GAAP? Think about this – If SEC timeline is 2014 – what year do you have to convert to show three years of comparable f/s?
  17. 17. SEC Roadmap released Early adopters Large can file using Accelerated IFRS Filers Small-caps 2010 2014 2016 2011 2015 Official SEC Accelerated decision filers – point second wave
  18. 18. Corporate Con ersion Timeline Conversion
  19. 19. Convergence ≠ Sameness US GAAP IFRS – Rules based – Principles based – Based on a GAAP – No hierarchy, consists hierarchy (level A – D) of IASs, IFRSs & IASs interpretations – Primary accounting standard setting body – Standards and is the FASB interpretations approved by the IASB – Accounting guidance and interpretation is – Interpretations of IFRIC provided by FASB FASB, and its predecessor the SEC, AICPA and EITF SIC 25,000 pages vs 2,000 pages
  20. 20. Private Company Reporting 1. IFRS with Private Entities Option 2. U.S. Adapted version of Private Entities 3. IFRS with differential reporting 4. S Separate U.S. Private C G S Co. GAAP - Revised 5. Separate U.S. GAAP- Maintained and Updated for Private Companies
  21. 21. Questions? Q ti ? • What happens when FASB moves to IASB? • FAF Funding goes t IASB F di to • Who funds GASB? • Who funds US private company standards (GAAP)?
  22. 22. And if that is not enough… CPA Pipeline Quality CPA Exam Audit Quality – – Young CPAs Auditing Standards – – Student Recruitment Clarity Project y j – – Minority Initiatives Reliability Project – – PhD Creation & Support Audit Committee – – Effectiveness 150 hour – – Peer Review Regulatory Forces g y – Ethi Ethics SEC Changes – Fair Value Report – Advocacy Regulatory Restructuring – Economic Recovery and – – Federal/State Legislation & g Response R Regulation – Enhanced Business Reporting – Tax – XBRL – Uniformity & Mobility – Private Company Financial – Public Policy Issues y Reporting Financial Literacy International – Feed the Pig – International Convergence – 360 degrees of Financial – IASB Literacy – Internationali ation of E am Internationalization Exam
  23. 23. Pipeline - Workforce
  24. 24. Pipeline - Good News p 20% avg increase in Graduates & enrollments!
  25. 25. Pipeline - CPAs are SEXY! The surprise in BusinessWeek's BusinessWeek s second annual ranking: Accounting firms have raced to the head of the pack k In fact the article included an interview with the CEO of Universum Communications who talked about the quot;sexiness of accounting, accounting the popularity of tech tech, and the workplace stereotypes attached to a misunderstood millennial generation.quot; ill il ti quot;
  26. 26. Maryland Pipeline Primary  College  CPA Exam CPA MACPA Engaged MACPA CPA School  Student Candidate CPA Retiree Career Paths Student NYPN 1,373 1,818 399 8,047 •Drive to   CPA Exam •Reach  h employment   influencers •Career  changers h
  27. 27. Four Generations in the Workplace I Issue: G Generational Diff ti l Differences • Matures – 1909-45 • Boomers – 1946-64 • Gen X – 1965-80 1965 80 • Millennials - 1981 + up ( p (Y2K, Netgen, , g, Echo-boom, Gen Y) Which one are you?
  28. 28. Staff Shortage + Four Generations in workplace = p Trouble! 90,000,000 80,000,000 Staff 70,000,000 Shortage 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 20 000 000 10,000,000 0 Matures Boomers X'ers Millenials
  29. 29. Why won’t they sit?
  30. 30. CPA Exam changes Then: Now: • Paper-based • Computerized • 2 x year May & • Anytime November • 2 months per quarter • 5 sections • Pass all sections in 18 months (to keep passed sections) • 4 sections • 70% new content!
  31. 31. Steps to become a CPA 1. Get Accounting Education – 150 hours 2. Sit for & Complete CPA Exam p 3. Take AICPA Ethics self-study & report grades to State Board 4. Complete 2,000 hour experience requirement (interning counts) RPE form 5. Take the official oath at the Swearing-in Ceremony
  32. 32. Promote the CPA license Maryland DLLR Swearing-in of new CPAs June 16, 2009 At the Maryland Business & Accounting Expo
  33. 33. Biggest Issue Facing NYPNs • Bridging the Gap between college & real world gg p g • Under-Developed Skill Sets – Leadership & Communication – Time Management & Organization – Analytical Skills – Technical SSkills • Work-Life Balance • Limited Networking Opportunities • Intimidation • CPA Exam • Lack of a Voice in Profession
  34. 34. Deloitte s Deloitte’s Global Workforce Advice • Long-term career development and multiple experiences within a single organization • Sense of purpose and meaning in work • Availability and access to mentors across the company. ( p y (The focus should not only be on y making senior staff mentor younger associates, but also ensuring that people connect and share experiences across all levels of the organization, organization and across relevant departments and areas of expertise.) • Work-life flexibility •T h Tech-savvy work environment (f example, k i t (for l access to online problem-solving and learning tools) • Open social networks that embrace open and honest communication Source Deloitte Global Manufacturing survey
  35. 35. Technology & Web 2.0 By 2010 Millenials/Gen Y-ers will outnumber 2010, Y ers Baby Boomers.
  36. 36. “If you think about the media environment an average American teenager lives in, to walk into a classroom (or one of our Associations) that doesn’t have any of that media must be like walking into a desert.” – Steve Maher, High School teacher PBS Special “Growing Up On line” Growing On-line
  37. 37. Meet the Gaming Generation •GGames make it easier t understand difficult k i to d t d diffi lt concepts – 51% • I would be more e gaged in the subjec – 50% ou d o e engaged e subject • I would learn more about the subject – 46% (56% of students in K-2 chose this as their #1 reason) • It would be more interesting to practice problems – 44% Source: Project Tomorrow – Speak Up 2007 report
  38. 38. Meet our future members? “over 64% of students in grades K-12 play online and/or electronics based g games regularly” g y “Downloading music is #1 activity by middle and high school students” students “40% of middle school students and 67% of high school students have a personal website (Facebook, MySpace, Xanga)” Source: Project Tomorrow – Speak Up 2007 report
  39. 39. Five Learning Trends for 2009 1.Mobile Learning 2.DIY - Do-it-Yourself Learning 3.Flexible Learning Environments 4.Virtual Worlds 5.Games & Simulation Chief Learning Officer Magazine – January 2009
  40. 40. So what?
  41. 41. Accounting Educators in Second Life Dr. Mike Kraten Suffolk University Dr. Robert Bloomfield Cornell University Dr. Steve Hornik University of Central Florida
  42. 42. FASB is there!
  43. 43. Even our members are already there! IBM Financial Analyst Accounting Assistant Member of NJSCPA
  44. 44. Benefits of Virtual Worlds for Education • The sense of self • The death of distance • The power of presence, sense of space & capacity to co-create • The pervasiveness of practice • The enrichment of experience Another Life: Virtual Worlds as Tools for VW Sensibilities - eLearn Magazine Learning, Jay Cross – eLearning Magazine
  45. 45. Accounting for Second Life Journal of Accountancy J June, 2008 University of Florida Report - Winter 2008 y p The study found that 93% of college instructors using Second Life in classes were satisfied enough to do it again and felt it enhanced the learning experience. quot;Post-secondary school instructors who conduct classes fully in Second Life are significantly more satisfied than those who use Second Life as only a small supplement to a real- world classes.” Professors Richard Johnson & Joyce Middleton of Frostburg University, Maryland
  46. 46. 4 tips to cross the digital divide 1. Start Gaming and take a session in Second Life 2. Do our 33 things in 15 minutes a day www.cpalearning2.com www cpalearning2 com 3. Get an iPod and listen to our cool podcasts – CPA Spotlight S tli ht 4. Check out our blogs and p post a comment or subscribe in a blog reader (RSS)
  47. 47. You can…Ignore it Fight it or Harness it’s power
  48. 48. Maryland Association of CPAs – founded 1901 to promote and protect CPAs and help them thrive in the rapidly changing environment – 10 000 10,000 members Business Learning Institute – founded in 2000 with a mission to help organizations deliver competency- based curriculum, courses, content and community to enhance learning and grow intellectual capital for organizational and executive leadership Second Life Association of CPAs – founded in 2006 With 238 members and two islands (CPA Island & CPA Island 2) with a mission of building a community of people interested in exploring the possibilities of CPAs in Second Life
  49. 49. For more information
  50. 50. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632-2301 E-mail tom@macpa.org
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