MACPA Professional Issues Update - Fall 2010 Edition

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  • http://tarpon.tamug.edu/~chrpratt/
  • In the latter part of 2008, we went through a strategic planning process for our members in business and industry and we came to embrace what we call the 1/3—2/3 slide. Tom Foard was involved with that process as a member of our Business & Industry Executive Committee.Through that exercise we concluded that our members in business and industry focus two-thirds of their time on responsibilities that are not the core competencies of the AICPA: our core is financial accounting and reporting, audit and tax.In order to meet the needs of our members in industry, we have identified four areas in the 2/3 side of this slide that we have to leverage or stretch our competencies. In areas such as strategic planning, ERM, Sustainability, and so forth.***Tom, would this be a good point to put in a poll and ask what percentage of time people spend on Non-Core Responsibilities, those things other than financial accounting & reporting, tax, and audit…. 75%, 66%, 50%, 25% ****
  • MACPA Professional Issues Update - Fall 2010 Edition

    1. Keeping Up with AccountingMACPA’s PIU Town Hall SeriesOn the road again…Fall, 2010<br />Presented by:<br />Tom Hood, CPA.CITP<br />CEO & executive Director<br />
    2. Why we are here?<br />C<br />P<br />A<br />
    3. Are you an untouchable? We hope to help you become one…<br />A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. <br />He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. <br />But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.<br />
    4. What is the # 1 reason leaders (and their organizations) fail?<br />4<br />
    5. Being in business today feels like being in permanent whitewater<br />5<br />
    6. You feel overwhelmed by the rapid and turbulent pace of change and uncertainties in business today<br />
    7. You need new skills and new approaches to ride these waves of change<br />Photo: Pratt’s surfing page<br />
    8. You will learn to become a navigator of change using BLI's I2A - Insight to Action strategic thinking system<br />
    9. It’s not what you look at that matters, it is what you see – Henry David Thoreau<br />“The faster you go, the further ahead you have to see.”<br />
    10. Latest trends and issues facing CPAs<br />Economy <br />Globalization<br />Technology<br />Cloud<br />Social web & social media<br />Workforce & demographics<br />Regulations & standards<br />Is this the perfect storm?<br />
    11. Welcome to the Re-Set economy!<br />The fact of the matter is, this is not a normal downturn, this is a …fundamental re-SET!<br /> - Steve Ballmer – CEO Microsoft<br />
    12. How many of you think changes will slow down in the near term?<br /> “As it relates to science and technology, the rate of change in the next decade, is likely to be 4 to7 times faster than in the last decade. If it is 4x faster it would be like planning for 2010 in 1890, if it is 7x faster it would be like planning for 2010 in 1670.”<br /> -Expert on Education Panel, The Aspen Institute<br />
    13. Globalization<br />
    14. 5 Forces of Globalization<br />Growth of consumers in emerging economies<br />Technologies that empower consumers & communities<br />Increase in labor productivity in developed markets<br />Shift of economic activity between and within regions<br />Increasingly global markets for labor & talent<br />
    15. It is not either global or local, it is AND…<br />Glocal<br />
    16. Technology<br />
    17. Information Security Management<br />Privacy Management<br />Secure Data File Storage, Transmission and Exchange<br />Business Process Improvement / Work Flow<br />Mobile & Remote Computing<br />Training & Competency<br />Identity & Access Management<br />Improved Application & Integration<br />Document, Forms, Content & Knowledge Management<br />Electronic Data Retention Strategy<br />Cloud computing<br />
    18. The SEC Mandate<br />
    19. Technology & Web 2.0<br />By 2010, Millenials/Gen Y-erswill outnumber Baby Boomers. <br />
    20. Here are five major benefits that The Economist report says that social media has created:<br />Trusted online venues where real people can meet up using their real identities. <br />New ways for firms and organizations to reach their customers and those who influence them. <br />Reduced friction in labor markets by allowing employers and prospective employees to find each other and connect. <br />Faster information flow and communication inside companies and organizations. <br />A "free and immensely powerful set of communication and collaboration tools to everyone on Earth who has access to a broadband internet connection." <br />
    21. Social media = social capitalreal world examples<br />8,181 Views<br />Auckland, NZ<br />15 mins<br />
    22. MACPA social media efforts featured in J of A and win 3rd place in Mobbies,Top 75 Biz blogs & Top 50 Acctg blogs<br />MACPA won 2 out of top 10 Biz blogs in MD<br />
    23. Risk Management<br />Educate & train your staff<br />Set security & usage policies<br />Restrict Access during certain <br /> times (if you have to)<br />Monitor – using search & <br /> google alerts<br />
    24. Workforce / Pipeline<br />
    25. 25%<br />Of your high potential employees will leave as soon as they can!<br />
    26. Live First, Work Second<br />Digital Natives<br />
    27. These guys are retiring<br />These are the new workers<br />These are making the purchasing decisions<br />Facebook Generation<br />Email Generation<br />
    28. Generations<br />Generation Gap? Or Generation Lap?<br />“In 1997, young people for the first time were recognized by adults as being authorities on something truly revolutionary – digital technology, interactive media, and collaboration.” <br /> – Don Tapscott “Growing Up Digital”<br />NGenophobia—the irrational and morbid fear of youth, especially with regards to their use of the Internet<br />
    29. Bottom Line: How to keep your star talent<br />Engage your top performers<br />Coach tomorrow’s leaders<br />Manage your Millennials<br />Think A M P<br />Autonomy<br />Mastery<br />Purpose<br />
    30. CPA Profession<br />
    31. The urge to merge?<br />First wave – the public co consolidators<br />Second wave – small practices unite<br />47,000 to 40,000<br />Third wave – super-regionals, national, global<br />2009 – 67 – 821,000,000<br />
    32. Top 10 Issues Facing CPAs<br />1. Economic Outlook <br />2. Tax <br />3. Business Operations <br />4. Implementation and Execution of Plans <br />5. New Business Development <br />6. Personal/Professional Development <br />7. Management and Leadership <br />8. Financial Regulatory Reform <br />9. Access to Financing and Credit <br />10 New Accounting Standards, IFRS<br />Source: CPA Trendlines for AICPA Feb, 2010<br />
    33. Top Ten Issues for MFG<br />Regulatory/Legislative (56)<br />Private Company Leadership (47)<br />Capital Markets Awareness / Recognition (34)<br />Rethinking Business Model (25)<br />Protect Audit/CPA Franchise (20)<br />Risk Management (Audit efficiencies) (20)<br />Leadership Development / Succession Planning (19)<br />Global / International (Clients / IFRS / Branding) (17)<br />Leveraging Technology & Social Media (17)<br />MFG Issues specific forums / focus groups (8)<br />34<br />
    34. Business & Industry Responsibilities<br />AICPA Core – 1/3 of B&I Responsibilities<br />Financial accounting<br />Financial reporting<br />Audit<br />Tax<br />AICPA non-Core – 2/3 of B&I Responsibilities<br />Strategic planning<br />Sustainability<br />Budgeting<br />Financial operations management<br />Risk management & internal controls<br />Internal audit<br />Governance<br />HR & benefits<br />IT, legal, purchasing<br />
    35. The (infra) Structure of the CPA Profession<br />State Boards of Accountancy issue licenses and regulate CPAs<br />
    36. Where do major changes come from?Most changes come from regulators and standard setters<br />Us – Associations<br />MACPA & AICPA<br />Them – Federal & State<br />legislators<br />Infrastructure<br />OR<br />New laws, regulations<br />& regulators<br />
    37. Recent example – The Dodd – Frank Wall Street Reform and Consumer Financial Protection Act of 2010<br />Crisis hits news<br />HR 4173<br />Bureau of Consumer <br />Financial Protection<br />848 pages<br />533 regulations<br />60 studies<br />94 reports<br />
    38. An example of how we protecting CPAs by mobilizing our members<br />Inform & engage members<br /><ul><li>Town Hall meetings
    39. Publications
    40. Web
    41. Social media – blogs, twitter, Youtube, and slideshare</li></li></ul><li>Protecting by advocating for members (CPAs) = real results!<br />Working together with the AICPA and many State CPA Societies achieved these:<br /><ul><li>Retained independent structure of financial accounting standards (FASB)
    42. Modified provision to audit broker-dealers (PCAOB)
    43. Exempted CPAs from CFPA registration due to existing licensing and oversight
    44. Stopped excessive liability exposure for auditors (aiding & abetting)
    45. Commented on SOX 404(b) exemptions</li></li></ul><li>An example - CPE Regulations involved all levels – law, regulations, and procedures<br />Maryland Senate & <br />House passes bill<br />Maryland Governor <br />signs into law<br />A Bill SB 128<br />From State Board<br />Law<br />Maryland State Board of <br />Public Accountancy<br />Clarify thru regulations<br />And enforce the law<br />
    46. Example - CPA Mobility and uniformity achieved through collaboration in profession<br />WA<br /> HI<br />VT<br />MT<br />ME<br />ND<br />OR<br />NH<br />MN<br />ID<br />WI<br />SD<br />NY<br />*MA<br />WY<br /><ul><li>Collaborative effort with AICPA – CPA/SEA – NASBA & State CPA Societies
    47. 47 states passed legislation in three (3) years
    48. Maryland enacted it in 2008</li></ul>MI<br /> RI<br />CT<br />*PA<br />IA<br />NE<br />OH<br />NV<br />NJ<br />UT<br /> IN<br />IL<br />DE<br />CO<br />WV<br />CA<br />VA<br />KS<br />AK<br />MO<br />KY<br />MD<br />NC<br />DC<br />TN<br />AZ<br />OK<br />NM<br />AR<br />SC<br />AL<br /> MS<br />*GA<br />TX<br />LA<br />FL<br />CPA Mobility Enacted 46<br />PR<br />CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA<br />Awaiting Governor Signature - 1<br />*<br />GU<br />U.S. VIRGIN ISLANDS<br />In Process<br />CPA Mobility Legislation Pending - 2<br />42<br />
    49. An example of “us” - The 120/150 Hour CPA Exam Bill (HB 1137)<br />Changes the requirements to sit for the CPA exam to allow you to sit for the Exam upon completion of 120 hours (and the requirements of section 1 & 3) and get licensed upon completion of the final 30 credit hours (and the requirements in group 2)<br />
    50. A tale of two bills…<br />
    51. The clock runs out at midnight<br />
    52. Recent Leg / Reg Changes you need to know!<br /><ul><li>New Mobility Law
    53. Maryland Individual Tax Preparer Act
    54. New Corporate Reporting Requirements
    55. Peer Review Requirement – October 1st
    56. New CPA Exam Requirements
    57. New CPE regulations
    58. Mandatory e-file
    59. New Non-Profit Audit Requirements > $500,000
    60. MD Independent Contractor Legislation</li></ul>CPA Day in Annapolis<br />January 19, 2011<br />
    61. MACPA 2011 Agenda<br />Pass 120/150 legislation<br />Stop Sales Tax on Accounting Services<br />Exempt CPAs from Debt Counseling Bill<br />Stop Trial Lawyers attempts at Tort Liberalization – Comparative Fault<br />Pass Safe Harbor legislation<br />
    62. Increasing changes and complexity in standards & regulations<br /><ul><li>Financial Accounting
    63. FASB – IASB Convergence
    64. Private Company Standards (FAF Blue Ribbon Task Force)
    65. Public Companies – SEC Roadmap
    66. Tax
    67. Tax Preparer regulation – IRS
    68. Tax changes – Estate, 1099s, Tax rates
    69. Sub S employment tax
    70. Other
    71. Convergence – ASB Clarity project
    72. Convergence – PEEC
    73. SSARS 19</li></li></ul><li>Fourinnovations you should know about in the CPA Profession<br />Financial Literacy<br />Sustainability Reporting (CSR)<br />eXtensible Business Reporting Language (XBRL)<br />Learning & Career Management <br />
    74. Is leadership different? <br />“What got you here won’t get you there.” <br />– Emmanuel Gobillot - Leadershift<br />
    75. Turbulent times require new skills and new thinking<br />Source: Chief Learning Officer magazine<br />
    76. The Top Three Training Issues for Companies<br />Training around soft skills (communication, critical thinking and problem solving abilities)<br />Complexity of standards (fair value, risk management)<br />Evolving regulatory framework (IFRS, Convergence, Private company standards)<br />“we were surprised to see soft-skills deficiency to be a more pressing issue”<br />Source: Grant Thornton – The evolving talent profile report<br />
    77. Five Qualities of Extraordinary Leaders<br />Sight - Ability to see emerging patterns and shift perspective when necessary<br />Insight - Ability to learn faster than the rate of change in your industry<br />Create - Ability to think strategically and critically to gain insights that create new opportunities<br />Communicate - Ability to collaborate inside and outside your organization and to build and sustain social networks of people engaged in the work<br />Inspire – Ability to mobilize support and engage others to join you in ACTION<br />LC<br />
    78. Our research shows three major skills: <br />Strategic thinking<br />Strengths-based leadership<br />Network leadership<br />
    79. What possibilities do we see? <br />Making sense of a changing & complex world<br />What does it mean to us?<br />What direction should we go? <br />How is the world changing?<br />
    80. Leadership defined<br />Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen<br />Leadership is to deliver hope and inspiration to help people accomplish more than they thought possible<br />
    81. The only question for leaders<br />Have I made you feel stronger and more capable?<br />Source: Emmanuel Gobillot - LeaderShift<br />
    82. Leadership defined<br />The four most important words for organizations are, “what do you think?”- Tom Peters<br />
    83. Tom Hood, CPA.CITP<br />CEO<br />Maryland Association of CPAs<br />Business Learning Institute<br />(443) 632-2301<br />E-mail tom@macpa.org<br />Web http://www.macpa.org<br />Blog http://www.cpasuccess.com<br />Connect – Protect - Achieve<br />

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