MACPA Fall Professional Issues Update (PIU) - Town Hall


Published on

How do CPAs stay ahead of the rapidly changing environment? Maryland Association of CPAs offer free four (4) hour professional issues updates for our members every six months.

These engaging and interactive "town hall" format meetings cover the latest developments facing CPAs. The Fall series features updates on the four mega-trends - Economy, Gobalization, technology and the Workforce. In aaddition the latest developments in Regulations and Standards are covered. This edition features many tax and IRS developments (PTIN, 1099) and the latest on financial accounting standards (IFRS, private companies).

We clsoe with a session on leadership in rapidly changing times.

Published in: Business, Technology

Comments are closed

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

MACPA Fall Professional Issues Update (PIU) - Town Hall

  1. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting CPAs and businesses are feeling overwhelmed by the rapid and turbulent pace of change You would like to be ahead of the waves instead of being crushed by them  The recession is over? Many of our CPAs Today we will show you how MACPA can help  are continuing to see rough seas ahead you survive and thrive these waves of change 3 Photo: Pratt’s surfing page Tom Hood, CPA.CITP CEO & Executive Director 1
  2. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Why we are here and what we are Our agenda  doing about it • What do we see?  – Economy   – Regulations & Standards  – Globalization  C – Technology  – Workforce & demographics  • What are we doing about these issues?  P • Where are the opportunities and how we  can help?  • What does it mean to lead in turbulent  times?  A Ever feel like you need  The Economy  an evacuation route?  “But a time of turbulence  is also one of great  opportunity for those  who can understand,  accept and exploit the  new realities. It is above  all a time of opportunity  for leadership.”      ‐ Peter Drucker,       Managing in Turbulent Times  A useful framework for dealing with  change – strategic thinking using our i2a –  Report from the future…  Insights to Action System  Making sense of What a changing & possibilities complex world do we see? What does it What direction mean to us? should we go? Who do we need to How is the inspire to help us get world there? changing? Tom Hood, CPA.CITP CEO & Executive Director 2
  3. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Where have the jobs gone – 8,000,000  The Economy – Maryland  down  Will we be one of the lucky ones?  5th Lowest unemployment last year • Eds • Meds • Feds Last month unemployment rate 7.3% statewide average Source: Small Business Labs blog – Are we in the “Loch Ness Monster”  Re‐Set, Re‐Think, Re‐Imagine  Economy?  Anticipation of a very large business model  “Characterized by a  change amidst  rapid change – Steve King  series of dips    superimposed on a    There are two recessions – the slow underlying  obvious one and the not so economy thru 2020”   obvious, the end of the industrial    ‐ Business Redefined by Ernst & Young  age where perfecting the model was the key. The new model will be completely different. – Seth Godin #4 Rethinking the Business Model (25)  from AICPA MFG  E&Y report outlines steps to grow in the  Is it a two speed economy?  “new normal”  Global vs Domestic Regional vs National Source: Ernst & Young report – Planning for Growth, Embracing the new “normal” Tom Hood, CPA.CITP CEO & Executive Director 3
  4. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Want to know more? Join us on  The Federal Issues  1/07/2011  Fourth Annual First Friday Economic Outlook  • FTC Red Flags rule –  privacy & identity theft  Forum   • Tax Preparer Registration  Baltimore Marriott Waterfront  & PTIN issue  • Patient Protection Act &  11:00 am – 2:30 pm  1099’s    • Sub S. Employment Tax  Issue  • H.R.5297 ‐ Small Business  Jobs and Credit Act of  2010    Regulations & Standards  The State Issues  • Maryland Privacy Act  • Maryland Tax Preparer  Regulations  • Maryland Consumer  Protection & Debt  Counselors  • Sales Tax on Accounting &  Tax Services  • Combined Reporting  A useful framework to  Massive legislation in a very short time  Patient Protection Act Dodd-Frank Wall Street Small Business Tax Relief understand the CPA profession  Reform & Consumer Act Financial Protection Act The CPA profession is part of the bigger infrastructure that supports the US free market system. Like the pipes under urban streets, it is often invisible until it breaks. Tom Hood, CPA.CITP CEO & Executive Director 4
  5. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Where do major changes come from? Most changes come from regulators and standard setters  Us – Associations Them – Federal & State Infrastructure MACPA & AICPA legislators Our infrastructure for regulating the US financial OR markets has been created from a series of reactions New laws, regulations to crises and changes and & regulators is in need of repair. The (infra) Structure of the CPA Profession What did we do when you were forced to 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 MI • Collaborative effort with AICPA – NE IA *PA CT RI NV OH CPA/SEA – NASBA & State CPA CA UT CO IL IN WV DE NJ VA KS HI Societies MO KY NC MD TN DC • 47 states passed legislation in three AZ NM OK AR SC (3) years MS AL *GA TX LA • Maryland enacted it in 2008 FL Awaiting Governor Signature - 1 PR CPA Mobility Legislation Pending - 2 GU State CPA Statutes (Law) CPA Mobility Enacted 46 U.S. VIRGIN ISLANDS * CPA Mobility Enacted Only for State Boards of Accountancy issue licenses and regulate CPAs Other Mobility States – GA, PA, MA 29 In Process US Treasury An example ‐ CPE Regulations involved all  levels – law, regulations, and procedures  Maryland Senate & Maryland Governor A Bill SB 128 Law From State Board House passes bill signs into law MD Comptroller MD Comptroller MD Comptroller Maryland State Board of Public Accountancy CAQ  Clarify thru regulations And enforce the law Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA Tom Hood, CPA.CITP CEO & Executive Director 5
  6. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting An example of “us” - The 120/150 Recent example – The Dodd – Frank Wall Street  Reform and Consumer Financial Protection Act of 2010  Hour CPA Exam Bill (HB 1137) Crisis hits news 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 Bureau of Consumer hours (and the requirements in Financial Protection group 2) 848 pages! 533 regulations 60 studies 94 reports It’s 7:00 am at a town hall  A tale of two bills – clotheslines  meeting in Aberdeen when the  and 120/150 hours  AICPA alert comes in…  The clock runs out at midnight and we  More than 100 MACPA members call our senators and we  have to come back again next year  defeat the amendment!  Tom Hood, CPA.CITP CEO & Executive Director 6
  7. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Protecting by advocating for members  IRS Tax Preparer Registration  (CPAs) = real results!  Working together with the AICPA and many State CPA Societies achieved these: Retained independent structure of financial  accounting standards (FASB)  Modified provision to audit broker‐dealers  (PCAOB)  Exempted CPAs from CFPA registration due to  existing licensing and oversight  Stopped excessive liability exposure for  auditors (aiding & abetting)  Commented on SOX 404(b) exemptions  The Federal Issues – more waves of  MACPA Fed & State Tax listservs  change  • H.R.5297 ‐ Small Business Jobs and  Credit Act of 2010  • Estate Tax – on again – off again –  on again  • FTC Red Flags rule – privacy  & identity theft  • Tax Preparer Registration &  PTIN issue  • Patient Protection Act &  1099’s  • Sub S. Employment Tax Issue  Remember this? $3,500.00 penalty  applies  Update on PTIN    • Need “new” PTIN before 01/01/2011  • Required for Signing Preparer or preparer of all or  substantially all of tax return (major victory)  AICPA members have 90 Days from the date the court decision is rendered to comply if the FTC wins – all • Fee is $64.25  others must comply by 12/31/2010 • Only Actively Licensed CPAs exempt from exam  • Registering gives your staff up to three years for  exam  • CPAs in industry are exempt from filing for  employers  Tom Hood, CPA.CITP CEO & Executive Director 7
  8. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Health Care & 1099 issue  Health Care & 1099 issue  We are still working on this – will be pushing Congress between now and 2012 to repeal this bad legislation and will need your grassroots support The State Issues – cascading from the  Health Care & 1099 issue  federal level and revenue shortfalls  • Maryland Privacy Act  • Maryland Tax Preparer  Regulations  • Maryland Consumer  Protection & Debt  Counselors  • Sales Tax on Accounting &  Tax Services  • Combined Reporting  Recent Leg / Reg Changes you need to Health Care & 1099 issue  know! New Mobility Law    Maryland Individual Tax Preparer Act  New Corporate Reporting Requirements  Peer Review Requirement – October 1st  New CPA Exam Requirements  New CPE regulations  Mandatory e‐file  New Non‐Profit Audit Requirements > $500,000  MD Independent Contractor Legislation  CPA Day in Annapolis January 19, 2011 Tom Hood, CPA.CITP CEO & Executive Director 8
  9. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Professional Standards are also rapidly  MACPA 2011 Agenda  changing  • Pass 120/150 legislation • Stop Sales Tax on Accounting Services • Exempt CPAs from Debt Counseling Bill • Stop Trial Lawyers attempts at Tort Liberalization – Comparative Fault • Pass Safe Harbor legislation CPA Day in Annapolis January 19, 2011 Help us help you – support our PAC  Another way to look at standards & oversight Public Company Private Company Int’l Company Financial SEC  FASB  IASB  Reporting FASB  PCFRC  IFRS & SME  Audit /Attest AICPA  Performance Standards PCAOB  ASB, ARSC, PRB  IAASB  Code of AICPA  AICPA  Conduct PEEC  PEEC  IFAC  CPA State Oversight & Enforcement of CPA License Licensure Our State Tax Committee takes a  What do these guys have to do with proactive position in General Assembly  accounting standards? A: More than you think Tom Hood, CPA.CITP CEO & Executive Director 9
  10. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Governmental auditors are also  Convergence is happening  experiencing changes and convergence  INTERNATIONAL ORGANIZATION OF • FASB – IASB Convergence Project  SUPREME AUDIT INSTITUTION • SEC IFRS – The Long and winding roadmap  • AICPA Auditing Standards Board ASB Clarity  project  IASB • AICPA Professional Ethics Executive Committee  • Increases in IAASB audits of ARRA – convergence  • Increases in • Private Company Standards  A-133 audits • Green / Sustainability reporting  • Changes in Yellow Book FASB – IASB Convergence Project extends  Maryland ranks in top five states with  deadline by six months to 12/31/2011  highest audit deficiencies with DOL  EBP Audits (401k) & 403(b) Audit Quality must be raised in Maryland MACPA worked with the DOL to put on our first Employee Benefit Plan Conference in May, 2010 Look for the second annual conference in May, 2011 Source: Journal of Accountancy, August 2010 The Blue Ribbon Committee narrows  Sustainability is a growing global trend and  the field down to the final three  showed up a key training needs for finance  professionals  From seven to three options 1. U.S. GAAP with Exclusions for Private Companies 2. U.S. GAAP—Baseline GAAP with Public Company Add-Ons 3. Separate, Stand-Alone GAAP Based on Current U.S. GAAP Tom Hood, CPA.CITP CEO & Executive Director 10
  11. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Can green give you a competitive  5 Forces of Globalization advantage?    1. Growth of consumers in emerging economies  2. Technologies that empower consumers &  70% of consumers are communities  looking for businesses 3. Increase in labor productivity in developed markets  adopting sustainable 4. Shift of economic activity between and within  business practices regions  5. Increasingly global markets for labor & talent    Growth is projected to come from Globalization  overseas for the next five years while the US remains flat As the globe  shrinks,  opportunities  grow for  CPAs Globalization – Chinese auditors visit  Priority #1 Exports by Small to Medium MACPA Towson CPA Center  Enterprises (SME’s) • 33 % shipments overseas by UPS • 25% of small practices had international clients • US targets 100% increase in exports by SMEs Tom Hood, CPA.CITP CEO & Executive Director 11
  12. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting It is not either global or local, it is AND… 72% of Finance Professionals have a  social media account  Glocal Source: Mergis Group Survey Technology  It’s the power of the network  • Cloud  • Mobile  • Location‐based /  Augmented Reality  • Security / Privacy  • Social Media  • XBRL    Are you on Facebook?  It’s the power of the network  Tom Hood, CPA.CITP CEO & Executive Director 12
  13. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Social media = social capital  The IRS is on Twitter are you?  real world examples  The AICPA is on Twitter are you?  The Cost of Social Media Phobia? The MACPA is on Twitter  72% Said it increased productivity by:    72% get answers to questions  68% finding information needed to be  successful  62% know what kind of help is  available  Source: CFO Magazine, July 2010 Tom Hood, CPA.CITP CEO & Executive Director 13
  14. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Could we use $200 million a year for  XBRL & the SEC Mandate   businesses and government in Maryland?  21.4 million people = $800 Million 5.6 million people = $200 Million? MAPCA’s XBRL Project  Trying to learn what it is all about  Workforce & Demographics  Cost of compliance is rising  Workforce & Demographics  Source: US SBA Office of Advocacy Tom Hood, CPA.CITP CEO & Executive Director 14
  15. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting 5 Generations in the workforce  Bottom Line: How to keep your star talent • Engage your top performers Live First, Work Second • Coach tomorrow’s leaders • Manage your Millennials Think AMP • Autonomy Digital • Mastery Natives • Purpose Achieve – enabling our members to deliver high  quality services & achieve success  Are you already missing the next  MACPA’s survival guide to the Tsunami  generation of clients?  of Tax (and other) changes  1. Federal Tax Policy Task Force 2. Federal & State Tax Committees 3. Listservs (federal & State) 4. Blog – They (younger generations) understand the technologies 5. Blog – and values that shape the mind set of the demographic. In short, they hold the answers to what it 6. Support our PAC will take to transform and sustain a firm. - Jim Boomer 7. Attend CPA Day in Strength in Numbers!  Annapolis – January 19th, 2011 Tom Hood, CPA.CITP CEO & Executive Director 15
  16. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting CPAs most profitable small businesses  Bright spot? Despite major challenges, the CPA profession has  Why we are here and what we are maintained its trusted advisor status with the  doing about it public and investor communities   Both Investors and Business Decision Makers rate CPA’s at the top C of all professions, right after physicians. P A Accounting Firms Most Trusted  Connecting our members to their Profession,  Advisors  each other, and the community  • Generally speaking, how believable do you normally find  statements made by someone who works for one of  these organizations or groups  • “Echo Boomers” (18‐34) rated accounting firms highest–  74%  67%    62%  Acctg Firms 55%  51%  49%  Banks 47%  Investment Firms Health Ins. Co. 36%  Mortgage Companies Gov't regulators Credit Card Co. Source: Harris Poll, May 18 Tom Hood, CPA.CITP CEO & Executive Director 16
  17. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting New social media tools allow us to  Connect  connect to more members in more  ways  • Connect to the Profession    • Connect to each other  • Connect to our community  MACPA won 2  out of top 10  • Drive the market to our members  Biz blogs in MD  MACPA social media efforts featured in J of A and won  3rd place in Mobbies,  Top 75 Biz blogs & Top 50 Accounting blogs  Connect to students to fill the pipeline  Protect – the public interest and the and promoting the CPA Career  CPA license and brand New/Young  Tomorrows  MACPA  Professionals Network  Connect – drive the market to our  Finally, the penalty for practicing  members  illegally as a CPA gets serious  11 ½ years in jail Up to $ 11,500 Tom Hood, CPA.CITP CEO & Executive Director 17
  18. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting The history of associations – Why do  Top 10 Issues Facing CPAs  US Constitution we exist?  Bill of Rights 1. Economic Outlook   2. Tax   3. Business Operations   4. Implementation and Execution  of Plans   5. New Business Development   6. Personal/Professional  Development   The First Amendment of the US Constitution allowed 7. Management and Leadership   “associations”: 8. Financial Regulatory Reform   9. Access to Financing and Credit   • freedom of speech • to peaceably assemble 10 New Accounting Standards,  IFRS  • to petition the Government for a redress of grievances Source: CPA Trendlines for AICPA Feb, 2010 Bill of Rights - submitted to the states for ratification on September 25, 1789 and adopted on December 15, 1791 Achieve – our mission is to Top Ten Issues for MFG  help you achieve success in a 1. Regulatory/Legislative (56)  rapidly changing world 2. Private Company Leadership (47)  3. Capital Markets Awareness / Recognition (34)  4. Rethinking Business Model (25)  5. Protect Audit/CPA Franchise (20)  6. Risk Management (Audit efficiencies) (20)  7. Leadership Development / Succession  Planning (19)  8. Global / International (Clients / IFRS /  Branding) (17)  9. Leveraging Technology & Social Media (17)  10. MFG Issues specific forums / focus groups (8)  107 Associations have enduring benefits for both the individuals and organizations that support them “Association members earn, on average, $10,000 more per year than non-members” And are 19% more likely to say they are “very-satisfied” with their Business & Industry Responsibilities jobs than non-members” AICPA Core – 1/3 of B&I AICPA non-Core – 2/3 of B&I Responsibilities Responsibilities Financial accounting Strategic planning Financial reporting Sustainability Audit Budgeting Tax Financial operations management Source: Where the Risk management & internal Winners Meet Study 1/3 Core controls by the William E. Smith Institute for 2/3 Association Research Internal audit Additional Governance HR & benefits IT, legal, purchasing Tom Hood, CPA.CITP CEO & Executive Director 18
  19. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Achieve - Technical skills are not adequate to Top Ten Issues for FEI  keep up with the rapidly changing world 1. Economic Recovery and the U.S. Fiscal Outlook  2. Health‐Care Reform  Top 5 Competencies for the future are: 3. Employee Benefits  1. Communication & 4. Financial Regulatory Reform  Leadership 5. Global Convergence of U.S. GAAP and IFRS  2. Strategic & Critical Thinking 6. Financial Instruments  3. Focus on the Customer, 7. Financial Statement Regulation  Client, and Market 8. Revenue Recognition  4. Interpretation of Converging 9. Business Taxation  Information 10. *XBRL  5. Technologically adept   109 We created our Business Learning Institute to research, develop and teach these skills Grant Thornton report outlines  8 key areas  Achieve – Our own BLI program  at the  for CFOs to focus on  AICPA Leadership Academy  1. Developing soft skills 2. Understanding and applying international accounting standards 3. Understanding complex accounting & auditing standards 4. Adapting to an evolving regulatory framework 5. Addressing new external reporting needs 6. Understanding ERP or IT systems & XBRL 7. Employing quantitative risk management techniques 8. Possessing specialized industry knowledge & company's non-financial business drivers Our “soft” skills are nationally recognized! Top 10 Opportunities for CPAs What is leadership and why  1. Valuation 6. Green / sustainability is it important?  2. Forensics and fraud 7. XBRL 3. Governmental – 8. Tax planning State/local/NFP 9. Enterprise Risk 4. International Management (IFRS and tax) 10. Renewable energy 5. Health care Tom Hood, CPA.CITP CEO & Executive Director 19
  20. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting Leadership defined  How Leadership is changing?  The capacity or power of persons or things  to be a compelling force on or produce  From  To  effects on the actions, behavior, opinions,  • Information Stocks  • Information Flows  etc., of others  • Pyramid  • Network  • Push  • Pull  Leadership has been described as the  process of social influence in which one  • Centralized  • Distributed  person can enlist the aid and support of  • Contractual  • Engagement  others in the accomplishment of a  common task  Leadership = Multiplication  Leadership is DEAD  • 15 X – ROI strategy as process &  • Democratic  alignment  • 8 X – Strengths  • Expertise  • 6 X – Trust & Engagement  • Attention  • 20 X ROI Culture  • Diverse  • 10 X ROI Leadership    How is leadership changing?  Leadership is still about…  • Engagement  • Alignment  • Accountability  • Commitment  “First I get all of my men facing the same direction.” “What got you here won’t get you there.” - Napoleon – Emmanuel Gobillot - Leadershift Tom Hood, CPA.CITP CEO & Executive Director 20
  21. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting The large gap between importance &  effectiveness of boundary spanning  Soft is Hard  leadership skills  Hard is Soft  ‐ Tom Peters “In Search of Excellence”  The Red Queen was optimistic!  Turbulent  times require  "Now, here, you see, it takes all the running you new skills and  can do, to keep in the new thinking  same place. If you want to get somewhere else, you must run at least twice as fast as that!" Source: Chief Learning Officer magazine  Our research shows three major skills:   The Tortoise was right  • Strategic thinking  • Strengths‐based  leadership  • Network leadership  Sometimes you have to go slow to go fast Tom Hood, CPA.CITP CEO & Executive Director 21
  22. MACPA Fall Professional Issues Update & 10/2/2010 Town hall meeting The only question for leaders Elvis was wrong! What we need is Have I made a little more you feel conversation! stronger and more capable? Source: Emmanuel Gobillot - LeaderShift Five Qualities of Extraordinary Leaders Leadership defined 1. Sight - Ability to see emerging patterns and shift perspective when necessary The four most  LC 2. 3. Insight - Ability to learn faster than the rate of change in your industry Create - Ability to think strategically and critically to gain important words  for organizations  insights that create new opportunities are, “what do you  4. Communicate - Ability to collaborate inside and outside your organization and to build think?”  and sustain social networks of people engaged in the work ‐ Tom Peters  5. Inspire – Ability to mobilize support and engage others to join you in ACTION Are you an untouchable? We hope to help you become one… A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. 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 Tom Hood, CPA.CITP  bursting of the credit bubble, that CEO  flow of work just isn’t there. Maryland Association of CPAs  Business Learning Institute  (443) 632‐2301  But those who have the ability E‐mail  to imagine new services, new Web  opportunities and new ways Blog    to recruit work were being retained. They are the new untouchables. Tom Hood, CPA.CITP CEO & Executive Director 22