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.

1. MACPA’s PIU Town Hall Series
Finding Opportunities Amidst
the Turbulence
Fall, 2010
Presented by:
Tom Hood, CPA.CITP
CEO & executive Director

5. The recession is over? Many of our CPAs
are continuing to see rough seas ahead
5

6. CPAs and
businesses are
feeling
overwhelmed by
the rapid and
turbulent pace of
change

7. You would like to be ahead of the waves
instead of being crushed by them

8. Today we will show you how MACPA can help
you survive and thrive these waves of change
Photo: Pratt’s surfing page

9. Our agenda
• What do we see?
– Economy
– Regulations & Standards
– Globalization
– Technology
– Workforce & demographics
• What are we doing about these issues?
• Where are the opportunities and how we
can help?
• What does it mean to lead in turbulent
times?

10. Ever feel like you need
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

11. A useful framework for dealing with
change – strategic thinking using our i2a –
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?

12. Why we are here and what we are
doing about it
C
P
A

13. The Economy

14. Report from the future…

15. Where have the jobs gone – 8,000,000
down
Source: Small Business Labs blog – Fidelity.com

16. Are we in the “Loch Ness Monster”
Economy?
“Characterized by a
series of dips
superimposed on a
slow underlying
economy thru 2020”
‐ Business Redefined by Ernst & Young

17. Is it a two speed economy?
Global vs Domestic
Regional vs National

18. The Economy – Maryland
Will we be one of the lucky ones?
5th Lowest unemployment last year
• Eds
• Meds
• Feds
Last month unemployment rate 7.3% statewide average

19. Re‐Set, Re‐Think, Re‐Imagine
Anticipation of a very large business model
change amidst rapid change – Steve King
There are two recessions – the
obvious one and the not so
obvious, the end of the industrial
age where perfecting the model
was the key. The new model will be
completely different. – Seth Godin
#4 Rethinking the Business Model (25)
from AICPA MFG

20. E&Y report outlines steps to grow in the
“new normal”
Source: Ernst & Young report – Planning for Growth,
Embracing the new “normal”

21. Want to know more? Join us on
1/07/2011
Fourth Annual First Friday Economic Outlook
Forum
Baltimore Marriott Waterfront
11:00 am – 2:30 pm

22. Regulations & Standards

23. Massive legislation in a very short time
Patient Protection Act Dodd-Frank Wall Street Small Business Tax Relief
Reform & Consumer Act
Financial Protection Act

24. The Federal Issues
• FTC Red Flags rule –
privacy & identity theft
• Tax Preparer Registration
& PTIN issue
• Patient Protection Act &
1099’s
• Sub S. Employment Tax
Issue
• H.R.5297 ‐ Small Business
Jobs and Credit Act of
2010

25. A useful framework to
understand the CPA profession
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.

26. Our infrastructure for
regulating the US financial
markets has been created
from a series of reactions
to crises and changes and
is in need of repair.

27. The (infra) Structure of the CPA Profession
Federal & State Laws & Regulations
– SEC, DOL, Treasury, GAO, PCAOB
CPA Profession Standards – AICPA &
FASB, GASB, FASAB, IASB
State CPA Statutes (Law)
State Boards of Accountancy issue licenses and regulate CPAs

28. Where do major changes come from?
Most changes come from regulators and standard setters
Us – Associations Them – Federal & State
Infrastructure
MACPA & AICPA legislators
OR
New laws, regulations
& regulators

29. What did we do when you were forced
to have a license in every state you file
A
taxes in? WA
MT ME
VT
ND
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
U.S. VIRGIN ISLANDS
CPA Mobility Enacted 46
* CPA Mobility Enacted Only for
Other Mobility States – GA, PA, MA
29
In Process

30. 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
Maryland State Board of
Public Accountancy
Clarify thru regulations
And enforce the law

31. An example of “us” - The 120/150
Hour CPA Exam Bill (HB 1137)
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)

32. A tale of two bills – clotheslines
and 120/150 hours

33. The clock runs out at midnight and we
have to come back again next year

34. Recent example – The Dodd – Frank Wall Street
Reform and Consumer Financial Protection Act of 2010
Crisis hits news
Bureau of Consumer
Financial Protection
848 pages!
533 regulations
60 studies
94 reports

35. It’s 7:00 am at a town hall
meeting in Aberdeen when the
AICPA alert comes in…

36. More than 100 MACPA members call our senators and we
defeat the amendment!

37. Protecting by advocating for members
(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

38. The Federal Issues – more waves of
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

39. Remember this? $3,500.00 penalty
applies
AICPA members have 90 Days from the date the court
decision is rendered to comply if the FTC wins – all
others must comply by 12/31/2010

40. IRS Tax Preparer Registration

41. MACPA Fed & State Tax listservs

42. 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)
• Fee is $64.25
• 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

43. Health Care & 1099 issue

44. Health Care & 1099 issue

45. Health Care & 1099 issue

46. 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

47. The State Issues – cascading from the
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

48. Recent Leg / Reg Changes you need to
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

49. MACPA 2011 Agenda
• 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

51. Help us help you – support our PAC

52. Our State Tax Committee takes a
proactive position in General Assembly

53. Professional Standards are also rapidly
changing

54. What do these guys have to do with
accounting standards?
A: More than you think

55. 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

56. Six Ways Convergence is happening
1. FASB – IASB Convergence Project
2. SEC IFRS – The Long and winding roadmap
3. Private Company Standards
4. AICPA Auditing Standards Board ASB Clarity
project
5. AICPA Professional Ethics Executive
Committee – convergence
6. Green / Sustainability reporting

57. FASB – IASB Convergence Project extends
deadline by six months to 12/31/2011
Source: Journal of Accountancy, August 2010

58. The Blue Ribbon Committee narrows
the field down to the final three
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

60. Governmental auditors are also
experiencing changes and convergence
INTERNATIONAL ORGANIZATION OF
SUPREME AUDIT INSTITUTION
IASB
• Increases in
IAASB
audits of ARRA
• Increases in
A-133 audits
• Changes in
Yellow Book

61. Maryland ranks in top five states with
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

62. Sustainability is a growing global trend and
showed up a key training needs for finance
professionals
www.integratedreporting.org

63. Can green give you a competitive
advantage?
70% of consumers are
looking for businesses
adopting sustainable
business practices

64. Globalization
As the globe
shrinks,
opportunities
grow for
CPAs

65. Globalization – Chinese auditors visit
MACPA Towson CPA Center

66. 5 Forces of Globalization
1. Growth of consumers in emerging economies
2. Technologies that empower consumers &
communities
3. Increase in labor productivity in developed markets
4. Shift of economic activity between and within
regions
5. Increasingly global markets for labor & talent

67. Growth is projected to come from
overseas for the next five years while the
US remains flat

68. Priority #1 Exports by Small to Medium
Enterprises (SME’s)
• 33 % shipments
overseas by UPS
• 25% of small
practices had
international clients
• US targets 100%
increase in exports
by SMEs

69. It is not either global or local, it is AND…
Glocal

70. Technology
• Cloud
• Mobile
• Location‐based /
Augmented Reality
• Security / Privacy
• Social Media
• XBRL

71. Are you on Facebook?

72. 72% of Finance Professionals have a
social media account
Source: Mergis Group Survey

73. It’s the power of the network

74. It’s the power of the network

75. Social media = social capital
real world examples

77. The Cost of Social Media Phobia?
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

78. The IRS is on Twitter are you?

79. The AICPA is on Twitter are you?

80. The MACPA is on Twitter

81. XBRL & the SEC Mandate

82. MAPCA’s XBRL Project
Trying to learn what it is all about

83. Cost of compliance is rising
Source: US SBA Office of Advocacy

84. Could we use $200 million a year for
businesses and government in Maryland?
21.4 million people = $800 Million
5.6 million people = $200 Million?

85. Workforce & Demographics

86. Workforce & Demographics
These guys are retiring These are the
new workers
These are making the
purchasing decisions
Facebook
Email
Generation
Generation

87. 5 Generations in the workforce
Live First, Work Second
Digital
Natives

89. Are you already missing the next
generation of clients?
They (younger generations) understand the technologies
and values that shape the mind set of the
demographic. In short, they hold the answers to what it
will take to transform and sustain a firm. - Jim Boomer

90. Bottom Line: How to keep your star talent
• Engage your top performers
• Coach tomorrow’s leaders
• Manage your Millennials
Think AMP
• Autonomy
• Mastery
• Purpose

91. Bright spot?

92. Despite major challenges, the CPA profession has
maintained its trusted advisor status with the
public and investor communities
Both Investors and Business Decision Makers rate CPA’s at the top
of all professions, right after physicians.

93. Accounting Firms Most Trusted
Advisors
• 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% Banks
49% 47% Investment Firms
Health Ins. Co.
36%
Mortgage Companies
Gov't regulators
Credit Card Co.
Source: Harris Poll, May 18

94. CPAs most profitable small businesses

95. Why we are here and what we are
doing about it
C
P
A

96. Connecting our members to their Profession,
each other, and the community

97. Connect
• Connect to the Profession
• Connect to each other
• Connect to our community
• Drive the market to our members

98. Connect to students to fill the pipeline
and promoting the CPA Career
New/Young
Tomorrows CPA.org MACPA
Professionals Network

99. Connect – drive the market to our
members

100. New social media tools allow us to
connect to more members in more
ways
MACPA won 2
out of top 10
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

101. Protect – the public interest and the
CPA license and brand

102. Finally, the penalty for practicing
illegally as a CPA gets serious
11 ½ years in jail
Up to $ 11,500

103. The history of associations – Why do
US Constitution
we exist? Bill of Rights
The First Amendment of the US Constitution allowed
“associations”:
• freedom of speech
• to peaceably assemble
• to petition the Government for a redress of grievances
Bill of Rights - submitted to the states for ratification on September 25, 1789 and
adopted on December 15, 1791

104. Achieve – our mission is to
help you achieve success in a
rapidly changing world

105. 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
jobs than non-members”
Source: Where the
Winners Meet Study
by the William E.
Smith Institute for
Association Research

106. Top 10 Issues Facing CPAs
1. Economic Outlook
2. Tax
3. Business Operations
4. Implementation and Execution
of Plans
5. New Business Development
6. Personal/Professional
Development
7. Management and Leadership
8. Financial Regulatory Reform
9. Access to Financing and Credit
10 New Accounting Standards,
IFRS
Source: CPA Trendlines for AICPA Feb, 2010

107. Top Ten Issues for MFG
1. Regulatory/Legislative (56)
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

108. Business & Industry Responsibilities
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
Risk management & internal
1/3 Core controls
2/3
Internal audit
Additional
Governance
HR & benefits
IT, legal, purchasing

109. Top Ten Issues for FEI
1. Economic Recovery and the U.S. Fiscal Outlook
2. Health‐Care Reform
3. Employee Benefits
4. Financial Regulatory Reform
5. Global Convergence of U.S. GAAP and IFRS
6. Financial Instruments
7. Financial Statement Regulation
8. Revenue Recognition
9. Business Taxation
10. *XBRL
109

110. Grant Thornton report outlines 8 key areas
for CFOs to focus on
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

111. Top 10 Opportunities for CPAs
1. Valuation 6. Green / sustainability
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

112. Achieve - Technical skills are not adequate to
keep up with the rapidly changing world
Top 5 Competencies for the future are:
1. Communication &
Leadership
2. Strategic & Critical Thinking
3. Focus on the Customer,
Client, and Market
4. Interpretation of Converging
Information
5. Technologically adept
We created our Business Learning Institute to research, develop and teach these skills

113. Achieve – Our own BLI program at the
AICPA Leadership Academy
Our “soft” skills are nationally recognized!

114. What is leadership and why
is it important?

115. Leadership = Multiplication
• 15 X – ROI strategy as process &
alignment
• 8 X – Strengths
• 6 X – Trust & Engagement
• 20 X ROI Culture
• 10 X ROI Leadership

116. How is leadership changing?
“What got you here won’t get you there.”
– Emmanuel Gobillot - Leadershift

117. How Leadership is changing?
From To
• Information Stocks • Information Flows
• Pyramid • Network
• Push • Pull
• Centralized • Distributed
• Contractual • Engagement

118. Leadership is still about…
• Engagement
• Alignment
• Accountability
• Commitment
“First I get all of my men facing the same direction.”
- Napoleon

119. Soft is Hard
Hard is Soft
‐ Tom Peters “In Search of Excellence”

120. Turbulent
times require
new skills and
new thinking
Source: Chief Learning Officer magazine

121. Our research shows three major skills:
• Strategic thinking
• Strengths‐based
leadership
• Network leadership

122. The Red Queen was optimistic!
"Now, here, you see, it
takes all the running you
can do, to keep in the
same place. If you want
to get somewhere else,
you must run at least
twice as fast as that!"

123. The Tortoise was right
Sometimes you have to go slow to go fast

124. Elvis was wrong!
What we need is
a little more
conversation!

125. Five Qualities of Extraordinary Leaders
1. Sight - Ability to see emerging
patterns and shift perspective
when necessary
2. Insight - Ability to learn faster
than the rate of change in your
industry
3. Create - Ability to think
strategically and critically to gain
insights that create new
opportunities
4. Communicate - Ability to
collaborate inside and outside
your organization and to build
and sustain social networks of
people engaged in the work
5. Inspire – Ability to mobilize
support and engage others to
join you in ACTION

126. The only question for leaders
Have I made
you feel
stronger and
more capable?
Source: Emmanuel Gobillot -
LeaderShift

127. Leadership defined
The four most
important words
for organizations
are, “what do you
think?”
‐ Tom Peters

128. Tom Hood, CPA.CITP
CEO
Maryland Association of CPAs
Business Learning Institute
(443) 632‐2301
E‐mail tom@macpa.org
Web http://www.macpa.org
Blog http://www.cpasuccess.com