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Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
Professional Issues Update   Nov 2007 Ver2
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Professional Issues Update Nov 2007 Ver2

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  • Gain an understanding of the biggest changes in the CPA Profession at the international, national, & state levels Identify the major State Legislative & Regulatory threats to your business and your CPA License and what you can do about them Share your thoughts and insights in a "town hall" discussion of these and other issues with your colleagues and your Association In addition you will get practical answers and insights to burning issues facing CPAs like: o Understanding the latest developments in compliance, CPA licensing and mulit-state practice issues o How to manage four generations at work and dealing with this "new" twenty-something workforce o What you can do to win the talent war - recruiting & retaining top talent o Learn how FASB's new Private Company Financial Reporting Initiative affects your firm or company This year we will have several special guests join in the presentation: Judith O'Dell - Chair of FASB's New Private Company Financial reporting Task Force; Ed Ben - Chair of MACPA's State Tax Committee and other committee members; Karen Syrylo - Legislative Consultant to the Maryland Chamber of Commerce and others (Special guest speakers will be based on their availability) Details will be available shortly. Register early so you don't miss this opportunity!
  • First, let me take a moment to outline the “big picture” of today’s business environment.
    Clearly, the economy is moving toward globalization at an accelerated pace. This move is causing huge growth in business overseas. In fact, in the fourth quarter of 2006, U.S. companies increased their global capital expenditures by nearly 20% while growth in domestic business investment nudged up only 8%.
    Moreover, the share of U.S. IPOs has been dropping precipitously, particularly in the small cap, emerging growth sector. Throughout the 1990s (not just during the bubble at the end of the decade), there were an average of 157 technology IPOs per year in the U. S. For the last six years, the average has been only 27 per year. In total, across all industry sectors, venture-backed IPOs have dropped from an average of 178 per year during the 1990s to 50 per year in the last six years. This has serious long-term implications.
    At the same time, there are growing pressures on local and state governments and the Federal government. This pressure is largely related to increasing budget deficits and the rising costs of entitlement programs due to the demographic bulge of Baby Boomer retirement.
    And the workforce is shrinking– by 10% in the next 20 years. Between 2002-2012, an estimated 35 million people will leave their occupations and need to be replaced.
    America’s ethnic profile is also shifting. While 20% of Americans age 60 and older are Hispanic, Black or Asian, the newest generation– those 0-19– are 40%.
    Of course, technology is changing all of our lives. There are more than 150 million Internet users in the U.S. alone. Across the globe: an astounding 250 million people are online.
    And new Web technology is opening new opportunities. Last year, MySpace users called up an average of 31.5 billion unique page views per month. That is as though everyone on the planet visited the site once a week.
    These forces are quickly shifting the world in which CPAs work and changing nearly every aspect of the profession.
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  • I’ve dubbed these forces the “5 Ps”.
    They stand for:
    Pipeline of accounting graduates and new CPAs
    Professional legislation and regulation– key issues such as the patenting of tax strategies, Sarbanes Oxley and mobility
    Public and professional accountability
    Private company financial reporting
    And Performance which largely includes member service areas such as PCPS.
  • A reminder of how we started the year…very gray
  • And a look again at how we look today, with a future glance into ’08 and beyond
  • Group I—27 semester hours in accounting subjects, including 3 hours each in auditing, cost accounting (now managerial) , and U.S. federal income tax; 9 semester hours in financial accounting; and 9 hours of accounting electives.
    21 semester hours in at least five of the following subjects: economics, statistics, corporation or business finance, management, U.S. business law, marketing, or business communication
    One course in ethics
  • Much higher regard for internal control and fraud prevention has affected every entity, large and small
    Largest firms are exiting their smaller and higher risk accounts, and that is rippling through all size firms
  • The good news is that the profession’s outlook for recruitment is better than it has been in at least 16 years.
    Accounting is currently the number one major on college campuses.
    And college freshmen are increasingly designating accounting as their college major because of its tremendous– and according to the National Association of Colleges and Employers, it’s “sexy”– appeal.
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  • http://www.cpasuccess.com/2007/05/top_5_issues_fa.html
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    A useful description of XBRL is provided in this slide.
    XBRL is organized as an International not for profit entity with established jurisdictions (franchises) in over 26 countries plus the IASB. Many other countries are showing interest as growth accelerates around the world.
    Where does XBRL International gets it market permission? It is a consortium of standard setters and market participants as outlined in the countries recognized on the following slide.
  • <number>
    Narrative:
    A useful analogy for understanding the benefit of putting financial data in XBRL is the barcode. The barcode was created to electronically identify different products. Like a barcode, applications that consume XBRL data can automatically identify each piece of data and specific information about it, such as value, type, currency, date, source, and its relationships with other data.
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  • The My Space Generation - Dec 12, 2005 . This cover appeared actually a little over a year ago and brought to the greater public attention this social networking phenomona that has literally grown over night. In August 2006, it was reported that the 100 millionth account being created on August 9, 2006[4] and within a month 6 more million accounts had been added. Today, MySpace on September 8, 2006,[5] the site reportedly attracts new registrations at a rate of 230,000 per day. This past month, in December there was little scuffle in the news media when ComScore, a globle internet information provider reported that MySpace had edge out the #1 site Yahoo in the number of pages views/month My Space - 39.5 million to Yahoo - 38 million. The Neilson ratings countered back with their findings a few days later to say that Yahoo was still top dog and that ComScore had neglected to factor in the impact to page refreshes that the use of new technologies such as Ajax were creating. Over all, though it really doesn’t matter whose on top because there is no denying that MySpace made a huge impact on society this year so much so that the house of representatives passed the DOPA legislation in an effort to delete online predators ( and I use the term “delete” just as loosely as the legislation is was designed – loosely) for as most us of within the library profession know, the legislation really didn’t address the problem of online predators, it just tried to keep a leash on accessing social networking sites (both good and bad) by teens & kids.
    Anyway, the good news is for those of you who haven’t been following the DOPA trail, the bill died with the new start of the congressional year.
    IPOD:
    OK- enough with MySpace, Let’s look at the other cover stories for this year. Steve Jobs and the ever popular iPod made more headway this year and the most popular portal player on the market. From podcasts to vblogs ( or videoblogs), the iPod has revolutized the music industry and developed a whole new channel of communication. During 2006 several libraries jumped into the podcasting arena by offering podcasts of book talks, library news items and my personal favorite – teen book reviews. In fact my own library PLCMC offers podcasts by teens and I think one of the firsts was a podcast of teens cell phone ring tones creating by teens at the library’s Teen Loft hangout at the ImaginOn branch. Not exactly an a the most exciting podcast we’ve ever done, but the teens loved it and it was a novel way to engage them in helping us develop a new library communication channel.
    Newsweek_ Puuting the “we” in the web
    From here we move to the cover image in the lower right hand of your screen – Newsweek – Putting the We in the web. If you can’t read the fine print on the tag line, it reads From Myspace to Flickr and YoutTube, User generated sites are rocking the Internet. And I always like to think of it as even more. Not only are they rocking the internet, but they are rocking every single business and organization out there, including libraries, hence our get together for this webinar today. This story, which appeared in the April 3rd 2006 edition is a excellent story and if you haven’t read it, do. Just google it and you should be able to access it for it was talked about a lot this past year.
    On top of Newsweek, is WIRED magazine, one of my favorite reads with a cover story titled YouTube grows up and it’s pretty clear that this 2006 was indeed YouTube’s year. In October, the founders Chad Hurley and Steve Chan sold less than 20 month old company (launched in Feb 05) to Google for 1.65 million dollars in stock options. And in December, Time magazine hailed YouTube the invention of the year. The popularity of this exploding video sharing site serves up over 100 million videos a day. In fact in August 2006 it was estimated that if a person was to watch every video that had ever been uploaded tot the site, you would need to spend over 9000 consecutive years glued to your computer screen. I don’t know about you, but even the thought of 9 hours (which seems to be less than my typical work day these days) in front of computer screen is too much for me, let alone 9000. But you get the point – YouTube is big!
    And finally, the cover of the Dec 25th issue noting Time’s Person of the Year – YOU! In recognition all nearly all the over cover issues that I've just talked about – YOU, ME, US – we control the information age. We control the information channels that it travels through and through the use of social networking tools we have become active participates in its creation.
    Wow! Have I covered enough cover stories from 2006 yet… we’ll before we move on let me share one more…
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    CALIFORNIA
    Retention of workpapers
    Cooling off period
    Rotation of firms that audit state agencies or schools
    Disclose any restatements of financial statements
    Board of Accountancy have majority of public members
    NEW JERSEY
    Introduced bill for separation of services for privately held companies
    NEW YORK
    Hearing in October on Separation of services
  • Transcript

    • 1. Professional Issues Update Fall, 2007 Edition Tom Hood, CPA.CITP CEO & Executive Director Maryland Association of CPAs
    • 2. CPA Redux Re-dux - adj. brought back, resurgent
    • 3. “CPAs ARE the DISCIPLINE in business!” Jim Collins
    • 4. CPA Redux - What is a Profession? Professions enjoy a high social status, regard and esteem conferred upon them by society. This high esteem arises primarily from the higher social function of their work, which is regarded as vital to society as a whole and thus of having a special and valuable nature. Source: Wikipedia
    • 5. CPA Redux - What is a Profession? All professions involve technical, specialized and highly skilled work. Training for this work involves obtaining degrees and professional qualifications without which entry to the profession is barred. Training also requires regular updating of skills. Maryland CPAs are required to achieve the 4 E’s to qualify for licensure 1. Education – bachelor’s degree + 30 hours 2. Examination – Pass the Uniform CPA Exam 3. Ethics – Maryland requires a separate ethics exam 4. Experience – 1 year of experience working with a CPA Thereafter, they are required to complete 80 hours of continuing education every two years, including four hours of ethics training. Source: Wikipedia
    • 6. Welcome – Tom Foard, CPA MACPA Chair of the Board
    • 7. Learning Objectives • CPA Redux – revisit what a CPA is in today’s global economy • Gain an understanding of the biggest changes in the CPA Profession at the international, national, & state levels • Understand the latest developments in compliance, CPA licensing and multi-state practice issues • Identify the major State Legislative & Regulatory threats to your business and your CPA License and what you can do about them • How to manage four generations at work and dealing with this "new" twenty-something workforce • What you can do to win the talent war - recruiting & retaining top talent • Learn how FASB's new Private Company Financial Reporting Initiative affects your firm or company
    • 8. First Up: The Big Picture… • Increased economic globalization • Growing fiscal pressures on governments • Escalating health care costs • Shrinking workforce • Changing U.S. demographics • Growing focus on knowledge-based work • Lightning-fast technological shifts • The rise of Web 2.0 social media
    • 9. Right now…
    • 10. History of the Profession IRS OIG Regulatory Structure of CPA Profession
    • 11. SOX is the driver… Editorial Reviews Book Description A simple guide to the complex new accounting rules under Sarbanes-Oxley CPAs, lawyers, business owners, and corporate managers of all kinds are currently dealing with the biggest change in corporate governance since the 1930s. As full implementation of the Sarbanes-Oxley Act gets under way-bringing large changes in corporate accounting and disclosure-managers everywhere need a plain-English guide that explains the legislation simply and practically. Sarbanes-Oxley For Dummies provides an implementation framework for firms as they struggle to come into compliance; explains key provisions in the legislation; and identifies specific actions needed to achieve compliance. In addition, this straight-to-the-point guide presents a summary of best practices, smart business policies, and invaluable compliance checklists. Jill Gilbert, JD, CPA (Milwaukee, WI) is a former tax consultant, and an attorney who runs her firm's Sarbanes-Oxley consulting division. She is also the author of two For Dummies technology titles.
    • 12. 12 500 convictions 30 CEOs
    • 13. The Professions - Top Five Issues 1. Professional Legislation and Regulation Tax Strategy Patents, Mobility, SOX, Maryland changes 2. Pipeline – Next Generation CPA Recruitment / Retention / Staffing / Generational Issues 3. Public/Professional Accountability 4. Private Company Financial Reporting (FASB) 5. Performance Trends in CPA Firms and Business, Industry, Government, NFP & Education So what are we doing about it? – MACPA’s Agenda
    • 14. Professional Legislation / Regulation Professional Legislation / Regulation Update 2007
    • 15. What you need to know • Federal level (congress) – Tax patents – SBWOTA of 2007 & new Preparer Penalties – Tax-preparer licensing / regulation (federal & state) • State Legislation - Maryland – Sales Tax on Professional Services – Mobility – Tax Preparer Licensing and Attack of Accountants – Civil Liability Reform
    • 16. Say what?
    • 17. Tax Return Preparer Standards • Raises reporting standard for preparers (“more likely than not”) above the standard for taxpayers (“substantial authority”) – potential conflicts of interest - preparer & client – affects nature of representation of taxpayers & taxpayer’s right to representation. • “More likely than not” standard results in a fundamental change in the role of the preparer – advocate to advisor.
    • 18. Need to turn back these preparer rules
    • 19. S 2369 – Tax Patents Major Elements of our legislation •Allows the granting of patents for tax strategies •Immunity from infringement for tax payers and preparers •Software carve out •Allows for continued innovation in the development of tax preparation software – TurboTax, TaxCut •Other Bills – Patent Reform of 2007 •Tax Shelters UPDATE -Passed HR 1908
    • 20. Sales Tax on Services March 9, 2007 “Expect states to focus on sales taxes. They’ll target service Industries… everything from accounting to beauty salons…many of which aren’t taxed at all right now.”
    • 21. Sales Tax on Services Special interests target CPA Services – League of Women Voters & Progressive Maryland
    • 22. MACPA took a Proactive Approach MD Chamber Sales Tax Study • All taxes are not created equal • Sales Tax on Services will costs jobs • Business is paying its fair share (and then some) • Meet w/ Gov, Speaker, Senate President, and Tax writing Committees before special session
    • 23. Educate legislators/Mobilize members Ten Criteria for Evaluating Tax Law • 1. Simplicity: The tax law should be simple so that taxpayers understand the rules and can comply with them correctly and in a cost- efficient manner. • 2. Fairness: Similarly situated taxpayers should be taxed similarly. • 3. Economic Growth and Efficiency: The tax system should not impede or reduce the productive capacity of the economy. • 4. Neutrality: The effect of the tax law on a taxpayer’s decisions as to how to carry out a particular transaction or whether to engage in a transaction should be kept to a minimum. • 5. Transparency: Taxpayers should know that a tax exists and how and when it is imposed upon them and others. State Tax Committee Chair Bev Richard & Andy Bareham on tour to inform MACPA members
    • 24. Educate legislators/Mobilize members Ten Criteria for Evaluating Tax Law • 6. Minimizing Noncompliance: A tax should be structured to minimize noncompliance. • 7. Cost-Effective Collection: The costs to collect a tax should be kept to a minimum for both the government and taxpayers. • 8. Impact on Government Revenues: The tax system should enable the government to determine how much tax revenue will likely be collected and when. • 9. Certainty: The tax rules should clearly specify when the tax is to be paid,how it is to be paid, and how the amount to be paid is to be determined. • 10. Payment Convenience: A tax should be due at a time or in a manner that is most likely to be convenient for the taxpayer.
    • 25. 70 + Bills in special session How do you win? • 4 MACPA Committees – Legislative Executive Committee – CPA Committee for Political Action – State Tax Committee – Board of Directors • Inform & mobilize members – CPA Legislative Insider – Keyperson alerts – E-mail • Activate Grassroots – 300 + letters & e-mails
    • 26. Tax Reform Act of 2007 • Sales Tax increase to 6% • Sales Taxes expanded to computer consulting • Corporate Income Tax Rate from 7% to 8.25% • Extensive new reporting requirements (2007) • Individual Income Tax Rates new brackets – 5.00% for $200,000 – 5.25% for $350,000 – 5.50% for $500,001 and up • Increase in car titling tax to 6% • Tobacco Tax + $1.00 per pack UPDATE – Defeated SalesTax on CPA services!
    • 27. MD Rate 11.5% What would happen if we weren’t there? UPDATE – Defeated SalesTax on CPA services! "There's no strong voice of landscaping, computer services and arcade owners. …that's one of the reasons they got picked.” - former Senator Barbara Hoffman "An old adage among politicians is that if you don't holler at tax- raising time, you'll get hurt." – Lou Panos
    • 28. State Boards of Accountancy: Regulation of Interstate Practice • TREND: Aggressive application and enforcement by some states • TREND: Historic agreement & effort by NASBA, AICPA, State CPA Societies • Only 4 States with real mobility (OH, VA, WI & MO) at start of 2007 • New Principles of UAA: – No notification – No fees – No add-on requirements – Automatic jurisdiction over licensee
    • 29. Mobility
    • 30. WA OR CA NV ID MT ND SD WY UT CO AZ NM AK HI TX OK KS NE MN IA MO AR LA MS AL GA FL WI IL MI IN KY TN SC NC VA WV OH PA NY VT ME NH MA RI NJ DE MD CT The Start of 2007 Sessions (December 2006) DC Mobility Mobility & Practice Privilege
    • 31. WA OR CA NV ID MT ND SD WY UT CO AZ NM AK HI TX OK KS NE MN IA MO AR LA MS AL GA FL WI IL MI IN KY TN SC NC VA WV OH PA NY VT ME NH MA RI NJ DE MD CT Looking Forward to ‘08 DC Legislative ActionMobility Board Support NH Mobility First Steps Targets for 2008 Safe States: MO, OH, WI, VA, TX, LA, TN, IL, RI, MN, IN
    • 32. Next Steps in Maryland State Board of Public Accountancy voted to support Section 23 of UAA Get bill sponsor • Seek approval from Secretary Perez & DLLR (in progress) • Introduce in Jan, 08 • Mobilize grassroots Montgomery County CPAs meet with Delegate Brian Feldman (third from left) to discuss private sponsorship of mobility legislation
    • 33. Maryland Tax Preparer licensing This bill would create a MD Certified / Licensed Income Tax Preparer
    • 34. Tax Preparer Licensing • This letter was sent to MACPA by concerned members • Beware of misinformation by unlicensed Accountants (MSA) • Their agenda is showing…
    • 35. •The current licensing of P.A.s results in a second tier professional that is not functionally different than a CPA • The public would benefit from the licensing of a second tier of accounting professional who has proven ability through education, examination, ethics and experience, but is more limited in their scope of practice than a CPA. • The second tier of licensing would be more meaningful to the public and give them a true choice in the matter of choosing a professional. Tax Preparer Licensing – version 2.0 Oklahoma – HB 1752
    • 36. Tax Preparer Licensing – Risk to CPAs? Unlicensed Accountants Unlicensed accountants are using tax preparer legislation as step to second-tier accounting license. Accredited Business Accountant Alert to State CPA Society Executives: CPA VS
    • 37. • Problems with Licensing Tax Preparers – Costly – Confusion of public with CPA services that have higher public interest – May not stop unethical/illegal preparers • Continuing work with consumer group & state to find reasonable approach – Consumer education approach – Protect low-income taxpayers – Emphasis on enforcement first – More fiscally responsible • Already Successful in … – Exempting CPAs from any proposed licensing & CPE requirements, and – getting a seat on the proposed State Board Our Approach – Consumer Education Protect the CPA License & Public Interest
    • 38. MACPA & the State Board MD Regulations – uniformity & simplicity  CPA Self-study requirements modernized & uniform  CPE for Peer review – effective 12/01/07  CPA Exam Educational Requirements  Meeting held with educators – May 5, 2007  Proposal voted by board  Published in MD Register – comments due by 11/15/07  Should be effective as of January 1, 2008  Mobility technical corrections – Proposed for 2008  4 in 10 (removing out-of-state requirement)  Educational Requirements retroactive for reciprocal Update
    • 39. PipelinePipeline 2007 ISSUE • Staff Shortage • Generational Issues • Talent Management • Training Trends • Training Opportunities
    • 40. Demand Continues to be Great The need for CPAs in the U.S., post- Sarbanes-Oxley, is at an at all-time high, resulting in aggressive competition between firms and companies for their services.
    • 41. a CPA Accounting is Hot! • Accounting is the new No. 1 major on college campuses – Publication: Central Penn Business Journal: Date: May 13, 2005 • Based on the number of college freshmen who are making it their career choice, accounting is the new 'sexy' college major. Yes, accounting. – 2005 survey: National Association of Colleges and Employers.41
    • 42. And CoolAnd Cool CPA – Cool People Apply
    • 43. Staff Shortage + Four Generations in workplace = Trouble! 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 Matures Boomers X'ers Millenials Staff Shortage
    • 44. Another view…
    • 45. Generational Differences 45
    • 46. Four Generations in the Workplace • Matures – 1909-45 • Boomers – 1946-64 • Gen X – 1965-80 • Millennials - 1981 + up (Y2K, Netgen, Echo-boom, Gen Y) Which one are you? Issue: Generation Differences
    • 47. The Matures (born prior to 1946) • Duty, honor, country • Dedication, sacrifice • Conformity, blending, unity – “We First” • Patience • Hard, hard times then prosperity • National pride • Doing a good job was most important • Age = Seniority
    • 48. The Baby Boomers (’46 to ’64) • Work ethic = Worth. “Workaholic” • Competitive • Success is largely visible – trophies, plaques, certificates, etc. • Optimistic • Consumers • Defined by their work • We are the world, We are the children
    • 49. Generation X (’65 to ’79) • Question authorities. • Their heroes are people they’ve met; that they know. • Raised as their parent’s friends. • Saw lifelong employment end – don’t believe it will happen to them. • Can be cynical. Can be pessimistic. • Time horizons are shorter than the Boomers or Matures. • Time is a currency. • Carpe Diem approach – Seize the day! • “Prove it to me.”
    • 50. Millennials (Since 1980) • Individuals w/ a group orientation (team?) • Optimistic • Programmed. Coddled. Well looked after. • Hard time focusing on anything. • Busy & stressed at a young age. • Like “X”, raised as their parent’s friends. • Are not adults. Are not adolescents. “Adultolescent” phase. • “Future” is very short term. • Huge goals. Clueless on the execution.
    • 51. The way it is supposed to work… • A senior generation assumes they know what the younger generations want (or should want) for themselves; how they should define “success.” • The senior generation then prescribes a “pay your dues” process to achieve that “success.” • The senior generation thinks, in the back of their mind, that the younger generations will never have to work as hard as they did to become “successful.
    • 52. Consider the following: “What happens when generations define success differently?” “How do the conflicting definitions of success affect how we motivate, coach and encourage in the workplace?”
    • 53. What the New/Young Professional is saying The Context Map was used to capture the trends and issues facing the New / Young Professional. Staff Shortage + generational differences = crisis
    • 54. And they get it… If I were managing partner… • Invest in training whole firm on consultative selling • Change expectations – make the investment in people and training • Supervisory training & Conflict resolution • Get the wrong people off the bus • Fire the “D” clients to match resources with workload • Implement specialization to give us better focus and client service Source: MACPA Leadership Academy Participants, Sept, 2006
    • 55. Critical Turning Point Success Factors in H igh Perform ance O rganizations
    • 56. Top 20 Reasons to Stay with a Firm AICPA PCPS
    • 57. Retention and Recruiting - Bottom Line • They want to be “engaged” in the firm mission , vision and values. • They want to be more involved with the client • They are accustomed to real time communication • They want career growth opportunities and greater clarity of what it looks like • They want personalized “one fits one” policies • They want interesting, challenging projects
    • 58. Tom’s Top 5 Workplace Tips 1. Be the right person – versus the right organization 2. Be specific and don’t assume anything 3. Define roles and career path (in easy increments and steps) 4. Invest in training – it has high ROI, and is a retention tool 5. Offer challenging work and reward even small steps
    • 59. According to the Generational Experts “It’s easy to say that these simple demonstrations shouldn’t be necessary. Many people say that employees should enter the workforce ready to work. Blame the parents, the schools, the media or something else. But that won’t change the outcome” “So deal with it” Motivating the “What’s In It For Me” Workforce - Cam Marston
    • 60. Public / Professional Accountability (Standards) Public / Professional Accountability (Standards) 2007 ISSUE
    • 61. Lots of changes on the horizon… • AS 5 - PCAOB • IRFS – SEC International gets legs • XBRL – SEC mandatory? • Codification Project – FASB – Convergence with international • Clarity Project – ASB – Convergence with international – Risk-based standards already in int’l format (SAS 104-111) • SAS 112 Communication • Internal Control – COSO • Fin 48
    • 62. Standards Convergence
    • 63. PCIE Report - OMB A-133 single audits “Based on numbers of audits, the results show significant percentages of unacceptable audits and audits of limited reliability.” 1. Revise & improve standards & guidance 2. Establish minimum requirements on training (16-24 hours CPE) 3. Processes to address unacceptable single audits 4. Next up GAO study Failed
    • 64. CPA Profession in the spotlight
    • 65. International
    • 66. Private Company Financial Reporting Private Company Financial Reporting 2007 ISSUE
    • 67. Big GAAP – Little GAAP? 67
    • 68. Private Company Financial Reporting www.pcfr.org http://www.pcfr.org
    • 69. PCFRC’S Agenda for Existing GAAP • FIN 48 • FIN 46R • FASB 123R • FIN 48 was selected first because of the upcoming effective date. Recommendation - The PCFRC recommends that the FASB delay the effective date of FIN 48 for private companies. The effective date should be delayed until 1) clarification and guidance is issued on FIN 48’s for pass-through entities, and 2) further consideration is given to the usefulness of FIN 48’s disclosure requirements for private companies. Further, this delay will allow for a higher level of awareness and education about FIN 48. APPROVED
    • 70. Performance Trends & Issues Performance Trends & Issues 2007 ISSUE
    • 71. IPA Consultant Predictions – Jan 2006 • “An increase of larger firms will result from an increase in mergers. Accounting firms will look more like law firms in terms of size.” -Marc Rosenberg • “There will be more large firms.” – Marc Rosenberg • “Mergers and acquisitions will increase.” – Jeff Pawlow, The Growth Partnership Trends Facing CPA Firms
    • 72. PCPS / TCPS 2007 MAP Survey 1. Tax complexity & changes 2. New regulations & standards 3. Keeping up with standards 4. Keeping up with Technology 5. Work/Life Balance 1. Finding qualified staff 2. New regulations & standards 3. Tax complexity & changes 4. Keeping up with standards 5. Retaining staff Sole Practitioners Firms 2 to 5
    • 73. PCPS / TCPS 2007 MAP Survey 1. Finding qualified staff 2. New regulations & standards 3. Retaining Staff 4. Keeping up with standards 5. Succession planning 1. Finding qualified staff 2. New regulations & standards 3. Retaining Staff 4. Succession planning 5. Developing new partners Firms 6 to 10 Firms 11 to 20
    • 74. PCPS / TCPS 2007 MAP Survey 1. Finding qualified staff 2. Retaining staff 3. Developing new partners 4. Work . Life balance initiatives 5. Management of human resources - workload Firms 21 or more Running these firms is like…
    • 75. Top Ten Issues facing Large CPA firms • Finding and retaining quality staff • Succession planning • Attaining and managing growth • Technology implementation • Training • Leadership development • Profitability • Client retention and development • Government regulation • Risk management Source : Inside Public Accounting – January, 2007
    • 76. Top 5 Issues facing CPAs in Business & Industry 1. Lack of Time 2. Standards & Regulatory Overload 3. Staff Shortage 4. Dealing with Technology 5. Competition & the Speed of Business
    • 77. Top Five Issues facing their companies 77
    • 78. Managing Financial Statement Preparation and Auditor Relations: In your opinion, has the service provided by your firm’s auditors in each of the following areas, improved, worsened or stated the same since accounting reforms of recent years? 78 Improved Same Worse Don’t know Quality of work 39% 52% 1% 8% Communication and/or responsiveness to the audit team 34% 56% 1% 9% Interpretation of accounting regulations 30% 59% 3% 8% Tactical implementation 29% 61% 1% 9% Strategic Guidance 27% 62% 2% 9% Ability to adequately staff engagements 22% 67% 2% 9% CFO – Auditor relations Public Accounting firms are improving
    • 79. Overwhelmed? • Maybe you need “Breathing Lessons” – How CFOs can thrive under pressure • “CFOs today find themselves scrambling in more directions than a good bartender on New Year’s Eve. And no wonder, pressures for accountability and performance have never been higher.” • Lesson # 4 – “Focus on specific decisions that must be made then work backward to determine what information you need” 79
    • 80. Business & Industry CPA Hats in the Belfry Courtesy of Tom Foard
    • 81. The Four Faces of Finance
    • 82. Business & Industry & NFP • SAS 104-111 & SAS 112 • New Risk-Based standards will change audits – significantly • Webcast scheduled for mid-December • Townhall resource page has SAS 112 toolkit • Get up-to-speed on internal control (COSO), etc.
    • 83. Emerging Trends / Issues • Enterprise Risk Management • LEAN Accounting • Supply Chain Management • GREEN / Sustainability • Enhanced Business Reporting / SEC Simplification
    • 84. AICPA Top 10 Technologies 84 1. Information Security Management 2. Identity and Access Management 3. Conforming to Assurance and Compliance Standards 4. Privacy Management 5. Disaster Recovery Planning and Business Continuity Management 6. IT Governance 7. Securing and Controlling Information Distribution 8. Mobile and Remote Computing 9. Electronic Archiving and Data Retention 10. Document, Content and Knowledge Management NE W NE W NE W NE W THIRD YEAR AT #1
    • 85. What is XBRL? • eXtensible Business Reporting Language • International platform for business reporting • An information standard that enhances the quality and efficienc of business information for internal and external consumers • Supply chain understanding of a standardized way to communicate business information • Provides information with identity and context that can be understood by a range of software applications allowing seamless interface with databases, business reporting systems and spreadsheets • Can be used to enhance compliance processes 85 Special session on XBRL at Maryland Business & Accounting Expo on June 17 & 18, 2008 Baltimore Convention Center
    • 86. XBRL: The Bar Code of the Business Reporting World Efficiency Savings Quality 86
    • 87. XBRL: What can you do? • Educate yourself and your team – XBRL conferences and sessions – Talk with others who have implemented • Investigate/target process areas • Develop Project plan and ROI assessment • Assess tooling needs, availability, fit • Implement and assess cost/benefit realities87
    • 88. Web 2.0 is here…
    • 89. “Web 2.0 generally refers to a second generation of services available on the WWW that lets people collaborate and share information online.” - Wikipedia.com Shared Pictures = Shared Knowledge = Shared Bookmarks = Shared News = Shared Videos = Shared Everything = Web 2.0 & You
    • 90. Web 2.0 continues to grow Try this professional networking site Coming Soon – MACPA training on Web 2.0 www.linkedin.com
    • 91. MACPA has a Second Life… CPA Island
    • 92. Connect - MACPA Blogs, listservs • www.cpasuccess.com • www.newcpas.com • www.cpalegislativeinsider.com Using Web 2.0 to connect and inform our members and connect to the next generation CPA Fed & state tax, PFP, practice & industry, & NFP listservs Subscribe by E-mail here
    • 93. What is your Association doing about this? Connect – Protect - Achieve What is your Association doing about this? Connect – Protect - Achieve 2007 ISSUE
    • 94. Promoting the CPA License! Filling the pipeline… 1. Student members 2. CPA Candidates 3. New/Young Professionals 4. Leadership Academy 1. Recruit Students 2. Promote CPA License 4. Fast Track Career 3. Build CPA Skills Issues addressed: •Retention •Recruitment •Succession Planning •Leadership •Staffing •Generational Issues
    • 95. 1. Student Members www.tomorrowscpa.org
    • 96. Student Recruitment is paying off! www.cpasuccess.com
    • 97. 2. Promote the CPA license The “New” CPA Exam
    • 98. 2. Promote the CPA license • 150 Hours of Education • Group I – 27 semester hours in accounting subjects – Auditing (3 hours) – Managerial Accounting (3 hours) – US Federal Income Tax (3 hours) – Financial Accounting (9 hours) – Accounting Electives (9 hours) Maryland Educational requirement Uniform & Flexible
    • 99. 2. Promote the CPA license • Group II - 21 semester hours in business subjects (at least five of the following subjects: – Economics – Statistics – Corporation or business finance – Management – US Business Law – Marketing – Business Communication • Ethics – Business, accounting, philosophy of ethics or a course that examines a framework for ethical decision making Uniform & Flexible Maryland Educational requirement
    • 100. What are the four parts of the “new” CPA Exam? 1. Auditing & Attestation 2. Business Environment Concepts 3. Financial Accounting & Reporting 4. Regulation The “New” CPA exam update
    • 101. CPA Exam changes • Paper-based • 2 x year May & November • 5 sections • Computerized • Anytime • 2 months per quarter • Pass all sections in 18 months (to keep passed sections) • 4 sections • 70% new content! Then: Now: update
    • 102. 2. Promote the CPA license Next date : June 17, 2008 At the Maryland Business & Accounting Expo Maryland DLLR Swearing-in of new CPAs
    • 103. Swearing-in Ceremony
    • 104. What you can do to promote the CPA? • Understand the “new” CPA Exam • Encourage MACPA candidate membership • Use CPA Exam tracking tool to track employees progress • Support the swearing-in ceremony • Create / reinforce firm/company culture that celebrates CPAs
    • 105. 3. New / Young Professionals NYPN All member holiday party Maryland Zoo (in Baltimore) December 13, 2007 6-10pm “CPE - Certified Penguin Extravaganza”
    • 106. Defeated Sales Tax on Services 5x Defeated Comparative Fault Legislation 13x Defeated Tax Preparer Licensing Defeated Increases in Filing Fees 3x Prevented MD SOX for private cos. - SB 560 Passed Separate Funding for our State Board Passed Mandatory Peer Review & Regulations Passed Ethics CPE Requirement Connect – Protect - Achieve Why we need a seat at the table? Come help us “holler” “An old adage among politicians is that if you don't holler at tax-raising time, you'll get hurt." - Lou Panos
    • 107. • Numbers Count – 188 Legislators • Regulators in “hyper-active” mode • 2,000+ bills in 90 days • Other State Activity aimed to correct problems in accounting profession • Special interests targeting CPAs • Federal, State, Regulatory levels are all active CPA Day in Annapolis – January 23, 2008 Protect - Legislative Advocacy “our best defense is a strong offense” “No man’s life, liberty or property are safe when the legislature is in session.” - Mark Twain
    • 108. 2008 Advocacy Agenda • Stopping Sales Tax on Services • Preventing Trial Lawyers from making it easier to sue CPAs & Business • Preventing unnecessary Tax Preparer Licensing • Enabling your right to interstate practice - Mobility – Section 23 of UAA http://www.cpalegislativeinsider.com/ Keep up-to-date with our legislative insider blog:
    • 109. Connect - Financial Literacy – Promoting the CPA • Financial Fitness calendars • Serving those who serve – National Guard • Taxpayer Questions • Legislative Tips
    • 110. Protect your license & Differentiating the CPA • BBJ Supplement • Smart CEO • Articles & PR • Managing our Brand
    • 111. Connect – you to your Profession • CPA Communities – Chapters, Committees, New Young Professionals, Tomorrow’s CPAs, Task Forces • Professional Development – public and in-house, technical to executive development • Updates – e-newsletter, Statement, Web, member call center • Business & Industry Conference • Annual Meeting • CPA Day • Quality – Ethics & Peer Review • Swearing-in Ceremony for New CPAs June 17, 2008 Baltimore Convention Center
    • 112. Achieve Success – Compliance & Reliance NASBA CPE Tracker Skills for the CPA of the Future - Leadership, Strategic & Critical Thinking, Focus on the Customer, Client & Market “MACPA leads the nation in on- site custom training for CPAs” - John Toman VP AICPA Multiple jurisdiction CPEOn-site Training
    • 113. Achieve! Top CPE in Nation • Maryland Business & Accounting Expo – 16 hours of CPE - $250 • MACPA1040 Fast Track “it’s better than Gear-Up!” • Self-study – AICPA CPE Express
    • 114. Achieve! Member resources MACPA’s Trusted Partners • Provident Banking • RJP Insurance • AON • Purchasing Power of the profession – Savings of up to 70% off!
    • 115. CPA Redux - the Maryland CPA!
    • 116. What STuck out for you? Questions & Discussion Learning Questions Feedback Form
    • 117. MACPA Connect-Protect-Achieve! Fast tracking your road to success
    • 118. Resources from today’s program Available at www.macpa.org • MACPA’s Town Hall Resource Page http://www.macpa.org/Content/Content/23456.aspx • Websites & Blogs www.tomorrowscpa.org (high school & college students) www.bizlearning.net (On-site catalog of programs) • MACPA’s Blogs www.cpasuccess.com CPA Success tips www.newcpas.com Fast Track your career here www.cpalegislativeinsider.com Legislative/Regulatory news www.cpaisland.com CPAs on Second Life
    • 119. Save these dates… • Technology Conference – December 3, 2007 • Don farmer Tax Update – December 6, 2008 • Member Holiday Party – December 13, 2007 Maryland Zoo in Baltimore • CPA day in Annapolis – January 23, 2008 • Maryland Business & Accounting Expo – June 17 & 18, 2008 • MACPA’s Fast Track 1040 Tax – get in “high gear” next year!
    • 120. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632-2301 tom@macpa.org www.macpa.org www,bizlearning.net

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