MACPA PIU 2012 Fall Edition

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MACPA's CEO, Tom Hood recently named as the fourth most influential person in the Accounting Profession by Accounting Today Magazine is back on the road for the tenth year offering a key update on the trends, issues and opportunities facing CPAs. These engaging and interactive town halls are the cornerstone of the MACPA's "free CPE" initiative that provides members with 24 hours of high quality CPE with their membership.

Tom offers his perspective and insights on the latest mega trends of technology (mobile, social, cloud) and the fast-changing legislative & regulatory environment. He covers the global, national, and Maryland landscape in an effort to help MACPA members thrive in a rapidly changing environment.

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MACPA PIU 2012 Fall Edition

  1. Professional Issues Update / Town Hall By: Tom Hood, CPA, CITP, CGMA CEO Preparing for the Extreme Future Fall, 2012
  2. A  Message  from  our  Chair  
  3. Our SponsorsMACPA Innovation Summit 3 http://cpa.tc/1g8
  4. “People  don’t  buy  what  you  do,  they  buy  why  you  do  what  you  do.”   -­‐  Simon  Sinek  
  5. 5Why MACPA?
  6. Remember this?MANAGING THE SEA CHANGE•  Change•  Complexity•  Compliance•  Convergence•  Competition
  7. What CPAs think about the future 30 Future Forums 1,000 CPAs Identified these top trends http://www.bizlearning.net/live/i2afutureforums
  8. The Black Swan Lives An event that is a surprise to the observer, has a major impact, and often inappropriately rationalized with the benefit of hindsight. Author: Nassim Nicholas Taleb 8
  9. The  Top  100  Most  InfluenFal   •  AICPA   •  SEC   •  PCAOB   •  MACPA!   •  IRS   •  Ron  Baker  –  Value  Pricing   •  FASB   •  Gary  Boomer  –  Tech  Guru   •  The  next  president   •  IASB  
  10. PrevenFng  the  future  “Black  Swan”  •  Technology   – The  Cloud   – Big  Data   – Mobile   – Social    •  Emerging  Leaders  &  Influencers  •  Regulators  •  How  to  thrive  amidst  the  chaos  
  11. Digital Information Created, Captured, Replicated Worldwide Exabytes1,8001,6001,400 10-fold DVD1,200 Growth in 5 RFID Digital TV1,000 Years! MP3 players Digital cameras 800 Camera phones, VoIP Medical imaging, Laptops, 600 Data center applications, Games 400 Satellite images, GPS, ATMs, Scanners Sensors, Digital radio, DLP theaters, Telematics 200 Peer-to-peer, Email, Instant messaging, Videoconferencing, CAD/CAM, Toys, Industrial machines, Security systems, Appliances 0 2006 2007 2008 2009 2010 2011 Source: IDC, 2008
  12. Source:  Lee  Rainie  –  Pew  Internet  Research  
  13. “The  profession  will  need  to  adopt  new   technologies  and  demonstrate  effec6ve   leadership  in  doing  so.”  1.  CPAs  must  stay  current  with,  embrace  and  exploit  technology  for  their  benefit  for  increased  efficiency  and  expansion  of  services.  2.  The  profession  must  find  soluFons  to  offer  investors  and  stakeholders  up-­‐to-­‐date,  real-­‐Fme  financial  informaFon  and  to  increase  transparency.  3.  CPAs  must  embrace  mobile  technologies  and  social  media  to  modernize  and  enhance  interacFon  and  collaboraFon  with  clients  and  colleagues.  
  14. 18
  15. The FAF & XBRL – An Interview with Terri Polley 19
  16. 1998   2004   2006   2008   2011   2012   MDBIZEXPO   Hudson   May  2012   Charlie  Hoffman   MACPA  lemer   Hollister   Eric  Cohen   XBRL   Chairman  Issa   DATA  Act   Walter  Hamscher   sessions   XBRL  France   Data  Act   Mike  Willis  –  PWC   DigitalNow   Second  Life   June  ‘09   MACPA  XBRL   XBRL  US   Advisory  Wayne  Harding   MACPA  Social  Media   Nashville  Louis  Matherne   –  J  of  A  Sep  ‘09     Sept  2011   MACPA/BLI   facilitates   MACPA   MACPA   The  Future  is   InnovaFon   XBRL  Int’l   MACPA  Tags  f/s   Summit   Strategic   Mike  Willis  –  PWC   Now  –  J  of  A   Summit   June  2011   XBRL  arFcle   June  2012   Plan   Chethan  Gorur-­‐  MSFT   Rutgers  –  Nov  08   Taylor  Hawes  –  MSFT   Harm  Jan  -­‐   Skip  Falatko  -­‐  MACPA   Netherlands   Louis  Matherne   Skip  Falatko  –  MACPA   FASB  -­‐  NFP   Eric  Cohen  –  PWC   MACPA  arFcle   Apr  ‘11  Conor  O’Kelly  –  HP   Aug  2012   MeeFng  w/  MD   XBRL  Int’l  presents  to  SU   CPA  Vision  -­‐  2001   Bob  Laux  –  MSFT   Comptroller  on   Mike  Willis  –  PWC   SBR  for  MD  ‘08   Altova  -­‐  MACPA   Altova  -­‐  MACPA   Case  Study   Case  Study  #2   MACPA  XBRL  project   CPA  Island    &  CPE  in  J  of  A   Use  acct  student  to    tag  f/s   June  ‘08   From  CPA  Horizons  2025  Report,  October,  2011  Integrity  –Competence  –  Lifelong  Learning  ObjecFvity  –  Excellence  –  Global  Relevance   1.  CPAs  must  stay  current  with,  embrace  and  exploit  technology  for  their   benefit  for  increased  efficiency  and  expansion  of  services.   2.  The  profession  must  find  soluFons  to  offer  investors  and  stakeholders   up-­‐to-­‐date,  real-­‐Fme  financial  informaFon  and  to  increase  transparency.   3.  CPAs  must  embrace  mobile  technologies  and  social  media  to  modernize   and  enhance  interacFon  and  collaboraFon  with  clients  and  colleagues.   FEI  –  Gartner   Report  2010  
  17. The  Data  Act  hmp://www.youtube.com/watch?v=Bnn3IsOhulE    
  18. The  next  generaFon  
  19. Beloit College’s 2016 Mindset List•  They have always lived in cyberspace, addicted to a new generation of "electronic narcotics.”•  Michael Jacksons family, not the Kennedys, constitutes "American royalty.”•  If they miss The Daily Show, they can always get their news on YouTube.•  They have never seen an airplane "ticket.”•  They cant picture people actually carrying luggage through airports rather than rolling it.•  A significant percentage of them will enter college already some hearing loss. 23
  20. Beloit College’s 2016 Mindset List•  Having grown up with MP3s and iPods, they never listen to music on the car radio and really have no use for radio at all.•  They have had to incessantly remind their parents not to refer to their CDs and DVDs as "tapes.”•  History has always had its own channel.•  They watch television everywhere but on a television.•  They grew up, somehow, without the benefits of Romper Room.•  Bill Clinton is a senior statesman of whose presidency they have little knowledge. 24
  21. Accounting Students Perspectives 25
  22. Top Seven Issues Facing Youngprofessionals 1.  InformaFon  overload  (including   accounFng  and  tax  complexity)   2.  Work  /  life  balance   3.  GeneraFonal  issues  and   communicaFons  (including  upper   management  not  sharing   knowledge  with  the  younger   generaFon)   4.  Developing  networking  skills   5.  Keeping  up  with  technology  -­‐-­‐   especially  the  cloud   6.  Finding  career  guidance   7.  Understanding  social  media   benefits   26
  23. What they want us to do to help 1.  Mentorship  /  Advice  on  Career   Development   2.  Expand  my  Networking  Skills   3.  Young  CPA  entrepreneur  group   4.  Help  bridge  communicaFon  with   staff  &  leadership   5.  Training  on  technology  –  cloud,   social   6.  Informal  roundtable  disucsisons   among  NYPN   27
  24. According to these young professionals, thefuture is one in which CPAs:● are proactive, flexible, adaptive andcollaborative by nature;● have regained the trust of their clients andthe public at large;● have successfully bridged the profession’s“leadership gap” by focusing on successionplanning, personal growth, and generationalcooperation;● have created the profession’s premierglobal industry standards and best practices;● have redefined the profession throughwork / life integration, collaboration, and ateam-first approach; and● have earned a reputation as technologicalinnovators. 28 Wisdom from the MACPA LeadershipAcademy Next class: December 4,5,6, 2012
  25. 29DigitalCPA Conference
  26. Do you have the urge to merge? 31
  27. Are  we  entering  the  age  of  the  small   firm?   1.  Merger-­‐Mania   fall  out   2.  Corporate   downsizing   3.  Technology   leveling  the   playing  field  
  28. What makes a great CFO or Controller?Your  role  as  a  CFO  is  storyteller;  make  the  numbers  tell  the  companys  story.  The  value  of  the  business  is  created  by  employees,  customers,  and  investors  in  that  order  and  alignment  of  vision,  mission  and  strategy  across  all  three.   33
  29. Top Risks facing CFOs Organizations are more likely to achieveSource: Deloitte CFO Signals 2Q 2012 goals when properly communicated risk appetite guides management in setting goals & making decisions 34
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  32. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ  Courtesy of the Maryland Association of CPAs – 2008 edition Drawing byCarol Kirwan, CPA
  33. The (infra) Structure of the CPA Profession Federal  &  State  Laws  &  RegulaFons  –  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
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  37. What’s at Stake? 42
  38. Maryland’s  fiscal  crisis  Is  there  a  third  way?  Not  just  conFnuous  tax  increases;  Not  just  draconian  spending  cuts;  But  accountability  and  efficiency  at  a  program  and  budgeFng  review  level.  
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  43. 48
  44. 49
  45. 50
  46. Mary land - 10 99R - 20 08CPAs in TaxThe increase in IRSactivity is swamping ourtax practitioners andcosting them hundredsof hours in chasingdown IRS notices. 51
  47. 52
  48. Private Company Standards
  49. 55
  50. 56Auditor RotationCascade!
  51. Are  audits  gexng  worse?  Or  are  the  inspectors  gexng   pickier?   Source:  Ny  Times  
  52. PEEC   InterpretaFon  101-­‐3,  "Nonamest  Services.”     The  commimee  is  proposing  that  financial   statement  preparaFon  and  cash-­‐to-­‐accrual   conversions  performed  by  a  CPA  member  for  a   client  should  be  considered  nonamest  services   and  subject  to  the  revised  requirements.     Under  the  proposed  revisions,  the  preparer  is   no  longer  required  to  perform  a  compilaFon   with  respect  to  those  statements  unless   engaged  to  do  so.     The  exposure  dra{  also  considers  the   cumulaFve  effect  that  providing  mulFple   nonamest  services  can  have  on  independence.      
  53. State  LegislaFon  CPA Day in Annapolis – January 16, 2013
  54. CPA State Legislators 61
  55. www.cpamobility.org    •  Collaborative effort with AICPA – CPA/SEA – NASBA & State CPA Societies•  49 + DC states passed legislation in five (5) years•  Maryland enacted it in 2008
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  58. State Legislation and Regulatory •  Accountancy bills (20 states) - 51 •  Auditor Rotation (3 states) - 8 •  Mobility (2 states) - 6 •  Regulation of Tax Preparers (3 states) - 5 •  Tax on Accounting Services (6 states) - 11 •  Peer Review (4 states) - 7 •  State Board Consolidation (6 states) 8
  59. Maryland & Federal Tax Preparer Law Threats to your CPA License•  Well intentioned consumer group•  Solving a problem – low income tax frauds•  But…creating problems for CPAS –  Licensed / Certified Tax Preparers would be confusing to the public –  Tax Preparer Exam using ACAT / H&R Block designation (ATA, ATP) opens door for second tier license –  Misinformation / confusion
  60. CPA  Licensing  FAQs  •  76  Hours  of  CPE  Carryover  –  4  hours  of   Ethics  every  two  years    •  LICENSE  TERMS  DEFINED:  INACTIVE   VS.  EXPIRED    •  Sole  PracFFoners  OperaFng  as  Corps   or  LLCs    •  Acceptable  Use  of  Name  (solo  cannot   use  Group  or  Associates)  
  61. Maryland  fees  effecFve  6/1/2012  •  CPA  Exam   –  (1)  AudiFng  and  AmestaFon  —  $[249]  200;     –  (2)  Financial  AccounFng  and  ReporFng  —  $[237]  200;     –  (3)  RegulaFon  —  $[211]  180;     –  (4)  Business  Environment  and  Concepts  —  $[198]  180;    •  Licensing  Fees   –  Renewal  fee  —  $[80]  50;  for  two  years!   –  ApplicaFon  for  inacFve  status  —  $[40]  25;     –  Renewal  for  inacFve  status  —  $[40]  25;     –  Reinstatement  for  inacFve  status  —  $[60]  50;     –  ReacFvaFon  from  inacFve  status  —  $[80]  50;     –  Reinstatement  of  expired  license  —  $[120]  100;     –  Firm  applicaFon  fee  —  $[80]  60;     –  Firm  permit  fee  —  ${80]  60;     –  Firm  renewal  fee  —  $[160]  120;     –  Firm  reinstatement  fee  —  $240;     –  [Proctoring  fee  —  $75]      
  62. 70New CPA Swearing-in Ceremony – November 1st, BWI Hilton Hotel
  63. Our 2013 Legislative / Regulatory Agenda•  Federal •  Workforce Mobility •  Tax Return Due Dates •  Data Act •  Dodd-Frank – preventing regulatory burdens •  PPACA – preventing regulatory burdens•  State •  Retaining Contributory negligence •  Defeating Sales Tax on Services •  Offering CPA perspectives on State Financials•  State Board •  Build relationships with ne DLLR team •  Work on CPE for smaller units 71 •  Monitor Peer Review implementation •  Monitor CPA Exam application process
  64. Surviving “Black Swans” 1. Have  a  vision  for  your   future   2. Build  on  your   strengths   3. Focus  on  High   Leverage   OpportuniFes   4. Keep  your  L  >  C   5. CollaboraFon  is  key   72
  65. Top ten skills neededSource: IBM 2012 Global CEO Study 74
  66. Staff Principal/ Decision making Director by specification, Leading and/or task specific work developing new practice areas, strategic alliances & talent Critical Turning Senior Point Senior 1st level supervision The on established Bounce Manager guidelines & Assess & understand standards longer-term variables & accomplishing future goals Manager 1st level of strategic thought & focus on boundary spanning activitiesCopyright 2012 – Business Learning Institute 76  
  67. •  The organizations that will become the household names of this century will be renowned for sustained, large-scale, efficient innovation. • The key to that capability is neither company loyalty nor free-agent autonomy but, rather, a strong collaborative community. • HBR, July-August 2011 77 The collaboration curve replaces the experience curve
  68. It really is about this...
  69. What  can  you  do  to  boost  your  odds?   Tipping  point    which  way   will  they  go?   This is your risk point! Inner Circle Informed Pragmatists Skeptics No-Nos Bought-in Leaders I’ll wait & see Prove it to me I don’t like this I support itAdoption of almost everything happens along a bell curve according to Geoffrey Moore.Change and ideas are no different, the key is to tip the odds in your favor and pay attention to the numbers of people in each level of your organization and within each group. www.bizlearning.net  
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  71. A leader sjob is to setcontext andto providehope andinspiration..." 81
  72. Tom  Hood,  CPA.CITP   CEO   Maryland  Associa8on  of  CPAs   Business  Learning  Ins8tute   (443)  632-­‐2301   E-­‐mail  tom@macpa.org   Web  hNp://www.macpa.org  Blog  hNp://www.cpasuccess.com  hNp://www,bizlearningblog.com     82  
  73. www.cpasuccess.com www.bizlearningblog.com Follow me on: ü  Twitter: http://www.Twitter.com/tomhoodü  LinkedIn: http://www.linkedin.com/in/tomhoodü  Facebook: http://www.facebook.com/thoodcpaü Slideshare: http://www.slideshare.net/thoodcpa ü Youtube: http://www.youtube.com/thoodcpa ü Second Life avatar name: Rocky Maddaloni Check our Customized Training Catalog out: http://www.bizlearning.net 83
  74. CPA  Vision    Report,  October,  1999  
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