MACPA Professional Issue Update - Leadership Academy
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MACPA Professional Issue Update - Leadership Academy

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Briefing of the major issues facing the CPA Profession. It looks at the macro trends and the specifics inside the CPA Profession....

Briefing of the major issues facing the CPA Profession. It looks at the macro trends and the specifics inside the CPA Profession.

This update includes the latest on the economy, standards & legislation / regulation, workforce, technology, globalization, and the latest research about issues facing CPA firms, Business & Industry CPAs, and young professionals.

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MACPA Professional Issue Update - Leadership Academy MACPA Professional Issue Update - Leadership Academy Presentation Transcript

  • MACPA’s Professional Issues Update Leadership Academy Presented  by:   Tom  Hood,  CPA.CITP   CEO  &  execu;ve  Director  
  • Our  agenda  •  What  do  we  see?   – Economy     – Legisla;ve,  Regula;ons  &   Standards   – Globaliza;on   – Technology   – Workforce  &  demographics   – CPA  Profession  Trends  •  What  is  MACPA  doing  about  it?  
  • Re-­‐Set,  Re-­‐Think,  Re-­‐Imagine   An;cipa;on  of  a  very  large  business  model   change  amidst    rapid  change  –  Steve  King       There are two recessions – the obvious one and the not so obvious, the end of the industrial age where perfecting the model was the key. The new model will be completely different. – Seth GodinGrrrank…  The  economy  is  in  a  big  downshiS,  we  are  going  through  Schumpeter’s  wave  of  crea;ve  destruc;on.  
  • The  next  thing…   Thirty  (30)  years  of  Prosperity?   "Economic  historians  assure  us  that  new   technology  will  eventually  enable  millions  of   ordinary  employees  to  add  more  value  in  the   workplace,  increasing  general  prosperity,"  Snyder   says.  Historically,  he  says,  such  periods  of  economic   prosperity  have  lasted  as  long  as  30  years.      –  Interview  with  Bill  Sheridan  –  MACPA  Chief  Editor  
  • We  can  choose  to  harness  the   winds  of  change   The tornado of changes from CPA Vision Project circa 2000
  • From  feeling  “lonely  at  the  top”  
  • To  the  wisdom  of  the  crowd  
  • What CPAs have said abut the future:1.  Aging population, loss of wisdom, knowledge transfer2.  Global rules & standards –IFRS – complexity3.  Information overload, complexity (Need for critical thinking & filter)4.  Information Security, Privacy & Data Protection5.  Global Competition, Rise of the Rest6.  Work-Life Balance7.  Diversity – Cultural Fusion – Beiging of America8.  Changing Communication (decline of face-to-face)9.  Increased Globalization10. US Deficit11. Education
  • The  Economy  
  • Growth is projected to come fromoverseas for the next five years while the US remains flat
  • CPA  Outlook  
  • Regula;ons  &  Standards  
  • Massive  legisla;on  in  a  very  short  ;me  Patient Protection Act Dodd-Frank Wall Street Small Business Tax Relief Reform & Consumer Act Financial Protection Act
  • Recent  example  –  The  Dodd  –  Frank  Wall  Street   Reform  and  Consumer  Financial  Protec;on  Act  of  2010  Crisis hits news HR 4173 Bureau of Consumer Financial Protection 848 pages! 533 regulations 60 studies 94 reports
  • What did we do when you were forcedto have a license in every state you file A taxes in? WA MT ND ME VT K OR MN NH ID SD WI WY NY *MA •  Collaborative effort with AICPA – CPA/ NE IA MI *PA CT RI SEA – NASBA & State CPA Societies NV OH UT IL IN DE NJ CA CO WV VA HI •  47 states passed legislation in three KS MO KY NC MD (3) years TN DC AZ OK NM AR SC •  Maryland enacted it in 2008 MS AL *GA TX LA FL Awaiting Governor Signature - 1 PR CPA Mobility Legislation Pending - 2 GU CPA Mobility Enacted 46 U.S. VIRGIN ISLANDS * CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA In Process
  • It’s  7:00  am  at  a  town  hall  mee;ng  in  Aberdeen  when  the   AICPA  alert  comes  in…  
  • More  than  100  MACPA  members  call  our  senators  and  we   defeat  the  amendment!  
  • The (infra) Structure of the CPA Profession Federal & State Laws & Regulations – SEC, DOL, Treasury, GAO, PCAOB CPA Profession Standards – AICPA & FASB, GASB, FASAB, IASB State CPA Statutes (Law) State Boards of Accountancy issue licenses and regulate CPAs
  • Professional  Standards  are  also  rapidly   changing   •  SAS 70 TO SOC Reports •  FASB / IASB Convergence •  COSO Integrated Framework (2012) •  ASB Clarity Project (late 2011) •  Ethics Codification (late 2012)
  • Another way to look at standards & oversight Public Company Private Company Int’l CompanyFinancial SEC   FASB   IASB  Reporting FASB   PCFRC   IFRS  &  SME  Audit /Attest AICPA  PerformanceStandards PCAOB   ASB,  ARSC,  PRB   IAASB  Code of AICPA   AICPA  Conduct PEEC   PEEC   IFAC  CPA State Oversight & Enforcement of CPA LicenseLicensure
  • Six  Ways  Convergence  is  happening  1.  FASB  –  IASB  Convergence  Project  2.  SEC  IFRS  –  The  Long  and  winding  roadmap  3.  Private  Company  Standards  4.  AICPA  Audi;ng  Standards  Board  ASB  Clarity   project  5.  AICPA  Professional  Ethics  Execu;ve   Commieee  –  convergence  6.  Green  /  Sustainability  repor;ng  
  • The  ;me  is  now!  Private  Company   Standards    •  MACPA  Task  Force  releases  whitepaper   and  concludes:     –  Private  Company  Standards  need  to  be   addressed  (costs,  complexity,  OCBOA)   –  Current  structure  is  not  working  –  PCFRC   recommenda;ons  were  not  addressed,   prior  studies  indicate  issue   –  Other  jurisdic;ons  around  the  world   recognize  needs  of  private  company  users   are  different  •  MACPA  Sent  comment  leeer  to  FAF  –  we   are  #  1425  (up  to  2,554  leeers)  •  Featured  in  CFO  magazine  &  Accoun;ng   Today  
  • The  Federal  Issues  •  Sarbanes-­‐Oxley  Act  of  2002  •  FTC  Red  Flags  rule  –  privacy   &  iden;ty  theS  •  Tax  Preparer  Registra;on  &   PTIN  issue  •  Pa;ent  Protec;on  Act  &   1099’s  •  Sub  S.  Employment  Tax  Issue  •  H.R.5297  -­‐  Small  Business   Jobs  and  Credit  Act  of  2010  –   1099s  •  Tax  Patents  •  Next  jobs  bill?  
  • Protec;ng  by  advoca;ng  for  members   (CPAs)  =  real  results!  Working together with the AICPA and many State CPA Societies achieved these:ü Retained  independent  structure  of  financial   accoun;ng  standards  (FASB)  ü Modified  provision  to  audit  broker-­‐dealers   (PCAOB)  ü Exempted  CPAs  from  CFPA  registra;on  due   to  exis;ng  licensing  and  oversight  ü Stopped  excessive  liability  exposure  for   auditors  (aiding  &  abeong)  ü Commented  on  SOX  404(b)  exemp;ons  
  • The  Maryland  Story  
  • Legisla;ve  Advocacy  and  the  Power  of   WE!   CPA Day in Annapolis – January 18, 2012
  • MACPA 2011 Agenda 5 for 5!  ü Pass 120/150 legislationü Stop Sales Tax on Accounting Servicesü Exempt CPAs from Debt Counseling Billü Stop Trial Lawyers attempts at Tort Liberalization – Comparative Faultü Pass Safe Harbor legislation CPA Day in Annapolis January 18, 2012
  • Maryland  CPA  Agenda  2011   How  we  did  it  
  • 1.  Extended tax deadline by one week – federal & state2.  Ban on Tax Strategy Patents3.  Clarification on using Social Security Numbers in Maryland (AG opinion)4.  Advocating Private Company Standards5.  Testified against sales taxes on accounting services in summer hearings6.  Maryland license now good in 48 states (NY passes mobility)
  • Looking  ahead  to  2012  •  Special  Session  to  deal  with   redistric;ng  (and  budget)  –   will  see  tax  proposals  •  Maryland  Social  Security   Privacy  Act  –  AG  Opinion  •  Sales  Tax  on  Services  •  Combined  Repor;ng  •  Compara;ve  Fault  =   increase  liability  •  Quid  Pro  Quo  for  DC   mobility  
  • CPE  •  CPE  =  CPE  •  Self-­‐study  allowed  hour  for  hour  &  unlimited  •  4  hour  Ethics  Requirement  every  two  years  •  Peer  Review  qualifies  for  CPE  •  CPE  Audits   –  Sa;sfactory  Compliance   –  Adjusted  Compliance   –  Audit  Failure  
  • An  example  -­‐  CPE  Regula;ons  involved  all  levels  –  law,  regula;ons,  and  procedures   Maryland Senate & Maryland Governor A Bill SB 128 Law From State Board House passes bill signs into law Maryland State Board of Public Accountancy Clarify thru regulations And enforce the law
  • New  CPAs  take  oath  to  Protect  the   Public  Interest   MACPA CPA Summit scheduled for June 11th & 12th, 2012
  • Globaliza;on  As  the  globe   shrinks,  opportuni;es   grow  for   CPAs
  • 5  Forces  of  Globaliza;on  1.  Growth  of  consumers  in  emerging   economies  2.  Technologies  that  empower   consumers  &  communi;es  3.  Increase  in  labor  produc;vity  in   developed  markets  4.  ShiS  of  economic  ac;vity  between   and  within  regions  5.  Increasingly  global  markets  for   labor  &  talent     The counter trend is Localization or think globally, act locally
  • Globaliza;on  –  Chinese  auditors  visit   MACPA  Towson  CPA  Center  
  • Global  CPA  Posi;oning   CGMA  
  • Technology  •  Cloud  •  Mobile  •  Loca;on-­‐based  /   Augmented  Reality  •  Security  /  Privacy  •  Social  Media  •  XBRL  
  • AICPA  Top  10  Technology  Issues      1.  Control  and  Use  of  Mobile  Devices        2.    Informa;on  Security        3.    Data  Reten;on  Policies  and  Structure        4.    Remote  Access        5.    Staff  and  Management  Training        6.    Process  Documenta;on  and  improvements        7.    Saving  and  Making  Money  w/Technology        8.    Technology  Cost  Controls        9.    Budget  Processes    10.  Project  Management  &  deployment  of  new  apps    
  • Are  you  on  Facebook?  
  • It’s  the  power  of  the  network  
  • Social  media  =  social  capital   real  world  examples  
  • XBRL  &  MACPA  &  You  •  SEC  Mandate  –  June  15,  2011  -­‐  third  wave  •  Radical  Transparency  (DATA  Act  of  2011)  •  Libera;on  of  data  for  financial  analysis  •  Reduced  compliance  burden  (SBR)    
  • Workforce  &  Demographics  
  • 5  Genera;ons  in  the  workforce   Live First, Work Second Digital Natives
  • The generation gap is widening
  • What  today’s  workers  want  •  Engage your top performers•  Coach tomorrow’s leaders•  Manage your Millennials Think AMP •  Autonomy •  Mastery •  Purpose
  • The  CPA  Profession   Flat is the new growth 3% average growth Some declines Competition is increasing
  • Accoun;ng  Firms  Most  Trusted   Advisors   •  Generally  speaking,  how  believable  do  you  normally  find   statements  made  by  someone  who  works  for  one  of   these  organiza;ons  or  groups   •  “Echo  Boomers”  (18-­‐34)  rated  accoun;ng  firms  highest–   74%  67%   62%   Acctg  Firms   55%   51%   49%   Banks   47%   Investment  Firms   Health  Ins.  Co.   36%   Mortgage  Companies   Govt  regulators   Credit  Card  Co.   Source: Harris Poll, May 18
  • AICPA  /  PCPS  Survey  Results  
  • AICPA  PCPS  Survey  Results  
  • Top  10  Issues  Facing  BizInd  1.  Communica;ng  effec;vely  (new  tools  vs  face  to  face)  2.  Talent  –  Training  –  Succession  Planning  3.  Economic  environment  4.  Genera;onal  –  Work/Life  balance  5.  Supply  chain  –  rising  costs  6.  Strategic  planning  in  uncertainty  7.  Financial  literacy  about  business  8.  Increasing  government  regula;ons  9.  IT  security  /  privacy  10. Mul;-­‐tasking  and  increasing  workload  
  • What CPAs have said abut the future:1.  Aging population, loss of wisdom, knowledge transfer2.  Global rules & standards –IFRS – complexity3.  Information overload, complexity (Need for critical thinking & filter)4.  Information Security, Privacy & Data Protection5.  Global Competition, Rise of the Rest6.  Work-Life Balance7.  Diversity – Cultural Fusion – Beiging of America8.  Changing Communication (decline of face-to-face)9.  Increased Globalization10. US Deficit11. Education
  • What  do  young  professionals  need  to   be  leaders?  1.  “SoS  skills”  broader  and  more  diverse  knowledge  in  leadership,   management,  change  &  business  development  2.  Ability  to  tap  into  networks  (AICPA,  others)  to  con;nuously  learn   (including  social  media)  3.  Learn  and  teach  collabora;on,  &  leadership  4.  How  to  embrace  change  and  be  flexible  &  adaptable  5.  Learn  how  to  lead  teams  6.  Bridge  the  gap  between  “older  leaders”  and  “younger  leaders  7.  Learn  about  themselves  (Strengths-­‐based  leadership)  so  they  can   be  more  purposeful,  proac;ve  &  mo;vated  
  • The biggest opportunity for CPAs
  • As knowledge moves from stocksto flows, how do we stop our inventory from becoming obsolete?
  • But  first  a  word  from  our  members  
  • Why  we  are  here  and  what  we   are  doing  about  it   C P A
  • Links  •  Strategic  Planning   –  hep://www.bizlearning.net/live/i2astrategicplanning  •  Future  Forums   –  hep://www.bizlearning.net/live/i2afutureforums   –  Leadership  Development   –  hep://www/bizlearning.net/live/i2aleadership  •  Customized  Training   –  hep://www.bizlearning.net/learningcenter/  •  Search  our  Catalog   –  hep://www.bizlearning.net/learningcenter/ customizedtraining/BLI_catalog.cfm  
  • Tom  Hood,  CPA.CITP   CEO   Maryland  Associa8on  of  CPAs   Business  Learning  Ins8tute   (443)  632-­‐2301   E-­‐mail  tom@macpa.org   Web  hNp://www.macpa.org  Blog  hNp://www.cpasuccess.com  hNp://www,bizlearningblog.com