MACPA Spring 2012 Professional Issues Update for Biz/Industry CPAs

Professional Issues Update For BIEG Professionals By: Tom Hood, CPA, CITP, CGMA March 21, 2012 Crowne Plaza Hotel Timonium, MD

THE MAP IS USELESS "The map keeps getting redrawn,because its cheaper than ever to go offroad, to develop and innovate and remake what we thought was going to be next. Technology keeps changing the routes we take to get ourprojects from here to there. It doesnt pay to memorize the route, because its going to change soon." - Seth Godin

Welcome to the “New Normal”“…an indisputable leadership challenge that ul3mately requires new models, bold ideas and personal courage to ensure that this century improves the human condi3on rather than capping its poten3al.” – World Economic Forum

In our hyper-networked, mobile, social, global world, the rules and plans of yesterday are increasingly under pressure; the enterprises and individuals that will thrive will be those willing to adapt in a disciplined, unsentimental way.Generation Flux is a term that describes all of this -the chaotic business era that we have moved into - aswell as the people who are poised to thrive in thisenvironment. - Robert Saﬁan - editor FastCompany

NAVIGATORS OF CHANGE

1. Sight - Ability to see emerging patterns and shift perspective when necessary2. Insight – Ability to think strategically and critically to gain insights 3. Create – Seek high leverage opportunities that build on your strengths4. Communicate - Ability to make your thinking visible to others and the ability to collaborate inside and outside your organization5. Inspire – Ability to mobilize support and engage others involved in doing the work to join you in ACTION 10 Five Qualities of Extraordinary Leaders

OUR GYROSCOPE!

What CPAs think about the future 30 Future Forums 1,000 CPAs Identiﬁed these top trends http://www.bizlearning.net/live/i2afutureforums

Surﬁng lessons! http://www.macpa.org/Content/26336.aspx

How are you doing?

MANAGING THE SEA CHANGE • Change • Complexity • Compliance • Convergence • Competition

Complexity the biggest challengefacing enterprises fromhere on will be theaccelerating complexityand the velocity of a 79%world that is operatingas a massivelyinterconnectedsystem. 51% 20

Compliance

Professional Standards Federal Laws State Laws & & Regulations Regulations

Private Company Standards

State Legislation Next CPA Day in Annapolis - January 16, 2013

State Legisla3on

Maryland Legisla3ve update •  Sales Tax on Services – No vote yet from CommiKee (House Ways & Means) •  Digital Download – wai3ng for CommiKee (House Ways & Means CommiKee) •  Combined Repor3ng -‐ we oppose due top compliance complexity •  Recoupling Deprecia3on & Estate Tax

Maryland Legisla3ve update Other Issues: •  Across the Board Income Tax hike + Surcharge for $500,000 + •  Possible across the board Sales Tax increase •  Possible extended or special session State Board of Accountancy •  CPA Exam applica3ons delayed 90 days •  PTIN rush to reinstate & Industry CPAs

State Legislation and Regulatory •  Accountancy bills (20 states) - 51 •  Auditor Rotation (3 states) - 8 •  Mobility (2 states) - 6 •  Regulation of Tax Preparers (3 states) - 5 •  Tax on Accounting Services (6 states) - 11 •  Peer Review (4 states) - 7 •  State Board Consolidation (6 states) 8

31Tsunami of 1099K and info returns

dAct rkpla ce Frau MD WoCPAs in TaxThe increase in IRSactivity is swamping ourtax practitioners andcosting them hundredsof hours in chasingdown IRS notices. 32

33Convergence

Public Private Int’l Company Company Company Financial Reporting Auditing Ethics State Boards of Accountancy

35Sarbanes-Oxley Act of 2003

CPAs required to register as debt settlement advisors 36Dodd-Frank - the bill that keeps on giving

37Cascade fromacross the pond!

Federal Accounting Standards?

So what? What does this mean to BIEG CPAs? 39 39

Our new research bears outthat the human dimension –relationships with customers,employees, partners andcommunities – will be key togetting things moving againand sustaining success overthe long run.CGMA & Business & Industrymembers

What do young professionals need to Drivers of Value be leaders?

Transparency & Accountability

"For Gen Y, training and development is the most highly valued employee benefit. The number choosing training and development as their first choice of benefit is THREE times higher than those who chose cash bonuses." Generation Y Born btw 1980 – 2000 (12 to 32) Generation X Born btw 1965 – 1979 (33 – 47) Boomers Born btw 1946 – 1964 (48 – 66) Traditionalists Born prior to 1945 (67 & older)

•  Transparency & Performance Management = Accountability•  Free the Data & Free Skip•  Outside in vs Inside Out•  CPA as interpreter & business guide 45 Summing it all up…

Moneyball

1. Ask the naive question2. Be the house (measure, odds,risk)3. A willingness to try anything4. look around (especiallyoutside)5. Conﬁdence matters - believein yourself Paul DePodesta - VP of Player Development for the New York Mets formerly Asst GM of Oakland A’s 47 Adopt a moneyball mindset

MANAGING THE SEA CHANGE Captain of your own ship! •  Continuous Learning •  Competency •  Collaboration = Career Success

49 Picture: John Drake - Flickr ...where the most important skill is the ability toacquire new skills.

It really is about this...

3 CriticalWorkforce"PrioritiesRapidly developingworkforce skills andcapabilitiesFostering collaboration& knowledge sharingDeveloping futureleaders 51

OUR GYROSCOPE!

In 1997, the CPA profession crowd-‐sourced its future with over 3,500 CPAs in the CPA Vision Project That was re-‐validated in 2011 by 8,000+ CPAs Our core purpose, our reason for being is CPAs... Making sense of a changing and complex world. Here is what they said…

The DNA of the CPA as CFO Values & Competencies •  Leadership •  Communica3on •  Strategic Thinking •  Collabora3on & Synthesis •  Technologically Savvy

Our Vision Statement for the future is: ( mandates to ourselves for a successful future) CPAs are the trusted professionals who enable people and organizations to shape their future. Combining insight with integrity, CPAs deliver value by: •  Communica3ng the total picture with clarity and objec3vity, •  Transla3ng complex informa3on into cri3cal knowledge, •  An3cipa3ng and crea3ng opportuni3es, and •  Designing pathways that transform vision into reality.

MACPA Priori3es 1.  Connect & Collaborate2.  Span Generational Divide3.  Alignment w/ Committees4.  Legislative Task Force5.  Leadership Development6.  Connect Pipeline

Reﬂec3ons from BLI Thought Leaders

Critical TurningEntry-level Point CFO Staff Supervisor Controller Manager

The Idea Store is open! Mail Suggestions to ideastore@macpa.org

MACPA Special Task Force •  Annual cost of Federal Offer CPA expertise to the state to Compliance $1.75 trillion help overcome budget issues in bi- •  Federal burden exceedpartisan, objective manner in order to costs of health care per bring about efﬁciency, transparency person by 50% and ﬁscal discipline. •  Cost per employee = $8,086 •  For SMB < 20 = $10,500 per employee

According to these young professionals, thefuture is one in which CPAs:● are proactive, flexible, adaptive andcollaborative by nature;● have regained the trust of their clients andthe public at large;● have successfully bridged the profession’s“leadership gap” by focusing on successionplanning, personal growth, and generationalcooperation;● have created the profession’s premierglobal industry standards and best practices;● have redefined the profession throughwork / life integration, collaboration, and ateam-first approach; and● have earned a reputation as technologicalinnovators. 63 Wisdom from the MACPA LeadershipAcademy

Leadership Academy May 7-9, 2012 Crowne Plaza Timonium, MD

MACPA Your Trusted Filter

Providing a unique interface betweenmembers of the organizationDelivering unique creativityManaging a situation or organizationof great complexityLeading customersInspiring staffProviding deep domain knowledgePossessing a unique talent 67Become a Linchpin

A leader sjob is toprovidehope andinspiration..." 68

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

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MACPA Spring 2012 Professional Issues Update for Biz/Industry CPAs

by Tom Hood

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