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Piu Keeping Up With Accounting Fall, 2009 Draft


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Fall, 2009 1st draft Professional Issues Update for CPAs - focusing on Top 5 Trends: Economy, Regulations/Standards, Globalization, Workforce, Technology

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Piu Keeping Up With Accounting Fall, 2009 Draft

  1. Keeping Up With AccountingProfessional Issues Update2009 Fall Edition<br />Tom Hood, CPA.CITP<br />CEO & Executive Director<br />Business Learning Institute<br />Maryland Association of CPAs<br />
  2. What is the One Thing for CPAs?<br />
  3. What is the One Thing for CPAs?<br />CPAs… Making sense of a changing and complex world.<br />
  4. “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.”<br /> - Peter Drucker, <br /> Managing in Turbulent Times<br />
  5. LC<br />“To keep pace in your industry, let alone excel as a leader, requires your rate of learning to be greater than, or equal to, the rate of change.” -Unknown<br /> We think this means a few things:<br /><ul><li>Skills based training isn’t enough, extraordinary leaders must be able to rapidly shift perspectives and change their own mindset.
  6. Strategic planning isn’t enough, extraordinary leaders must be strategically thinking, all of the time.
  7. Charisma and creativity aren’t enough; extraordinary leaders need to be ambidextrous thinkers – able to think conceptually and sequentially, in the abstract and in the concrete, and able to move quickly between the two.
  8. Extraordinary leaders cannot do it alone; they must be adept at building and sustaining large social networks of people engaged in the work.</li></li></ul><li>Dealing with Change<br />Start Here – strong foundation of core values and public perception<br />Sight – look at the forces outside & inside your organization (and your customers)<br />Insight – what insights do you see, opportunities? What skills do you have and do you need ?<br />Create – What is your desired future, your vision?<br />Communicate – the plan, get approvals<br />Inspire others to join you<br />
  9. What is your line of sight?<br />How far can you see?<br />Look beyond the edges?<br />What patterns are emerging?<br />What insights can be gained?<br />Position<br />Markets<br />Timeframe<br />Company<br />
  10. What do you see?<br />
  11. What’s your vision?<br />
  12. Outcomes for today<br />Understand the trends and issues facing your Profession and your firm<br />Learn about the structure of the CPA profession and how you can influence major trends and issues<br />Gain insights that can help you jump the experience curve as a future leader<br />Learn about a strategic thinking system to deal with rapid & constant change<br />
  13. Our agenda<br />Act 1<br />The one thing all CPAs need to know<br />Economy<br />Regulations & Standards<br />Act 2<br />Workforce<br />Technology<br />Issues facing CPA firms<br />Issues facing Business Industry Government<br />Act 3<br />Image<br />Dealing with Change<br />What’s your one thing & Top five<br />
  14. What will the new normal look like?<br />“It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order.” <br /> – Ian Davis, McKinsey <br /> Quarterly March, 2009<br />
  15. The Formula that blew up our 401(k)s<br />Source: Wired magazine 17.03 March, 2009<br />
  16. Guardians cannot keep up with Commerce<br /> “Even the regulators can&apos;t keep up. A Senate study in 2002 found that the SEC had managed to fully review just 16 percent of the nearly 15,000 annual reports that companies submitted in the previous fiscal year; the recently disgraced Enron hadn&apos;t been reviewed in a decade.&quot; <br />Source: Wired magazine 17.03 March, 2009<br />
  17. A Month to Remember<br />Rescue package fails; Dow takes record<br />plunge<br />U.S. Bails Out Fannie Mae & Freddie Mac<br />Dow Jones plunges 504 pts<br />Dow plunges again; gold sees biggest one-day gain in 10 years<br />Fed proposes bailout package<br />Washington Mutual seized<br />Goldman and Morgan Stanley become bank holding companies<br />Rescue package goes to Congress; Wachovia for sale<br />Lehman bankrupt; Merrill Lynch sold<br />Fed rescues AIG<br />Common Fund Fails<br />9/14<br />9/15<br />9/18<br />9/21<br />9/25<br />9/29<br />9/30<br />10/1<br />9/7<br />9/16<br />9/17<br />Source: New York Times<br />18<br />
  18. Emergency Economic Stabilization Act of 2008<br />Signed into law on October 3, 2008<br />$700 Billion<br />TARP (Troubled Assets Relief Program<br />
  19. ARRA – American Recovery & Reinvestment Act of 2009<br />
  20. We need<br />We got<br />Source: Dr. Anirhban Basu<br />
  21. The new normal – Wall Street?<br />1920 - 2008<br />2008 - ????<br />
  22. How we got here<br />
  23. Now what? I like this approach!<br />Time to get tough.<br />Time to get smart.<br />Time to get going.<br />Who’s with us?<br />
  24. Regulations & Standards<br />
  25. Madoff’s auditor<br /><ul><li> Sole Practitioner
  26. Accused of issuing audits of Madoff Securities
  27. Lied on AICPA membership renewal about peer review</li></ul>David Friehling, CPA faces 105 years in prison<br />For issuing false audit reports<br />
  28. Satyam + PWC<br />Ramalinga Raju – CEO created $40 billion in fake billing and cash <br />PWC auditors missed cash accounts?<br />
  29. Infrastructure<br />the basic physical and organizational structures needed for the operation of a society or enterprise<br />The infrastructure for the free market was found to be in disrepair in this latest market crisis and the CPA profession is a critical component<br />
  30. Three Drivers<br />Fair Market Value (Acctg Standards)<br />Futures & Derivatives<br />Investment Advisors & Broker-Dealers<br />
  31. Fair Market Value – FAS 159<br />
  32. What will a modernized financial services regulatory scheme include?<br />
  33. What is under the CPA Profession?<br />
  34. police power of the states to protect their citizens vs commerce clause<br />
  35. Another View<br />Public Company<br />Private Company<br />Int’l Company<br />Financial<br />Reporting<br />Attest Performance<br />Standards<br />Code of Conduct<br />State Oversight & Enforcement of CPA License<br />CPA<br />Licensure<br />
  36. Should Congress Set Accounting Standards?<br />
  37. The Real Costs of Changing FMV?<br />“Confidence, trust, and numbers that investors can believe in are the stuff that make or break the capital markets. When investors question the validity of numbers, they sell and wait, rather than buy and invest. <br />Yet those charged with building confidence and trust and presenting numbers that can be believed are under sustained attack -- and they are losing.”<br />- Arthur Levitt, Weakening a Market Watchdog in Washington Post – March 26, 20009<br />
  38. First PCAOB now FAOB?<br />New 5 member oversight board proposed by Congress – March 6th, 2009<br />
  39. Changes in our Infrastructure<br />The Infrastructure for the CPA Profession is maintained by your <br />Professional Associations<br />AICPA & State CPA societies (MACPA)<br />
  40. US Treasury<br />MD Comptroller<br />MD Comptroller<br />MD Comptroller<br />CAQ<br />Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA<br />
  41. Standards Changes<br />AS 5 - PCAOB<br />IFRS – SEC International gets legs<br />Fair Value Accounting<br />XBRL – SEC mandatory<br />Codification Project – FASB<br />Clarity Project – ASB<br />Convergence with international<br />Reliability Project (comps & reviews)<br />DOL 403 (b) Plans<br />Internal Control – COSO<br />Fin 48 effective 2009<br />Form 990 Changes<br />Fraud & Forensic SAS 99<br />
  42. Fraud<br />Madoff scandal has created a major focus on fraud<br />Extra attention to identifying fraud opportunities during the planning phase of an engagement<br />Robust SAS 99 work is required<br />Professional skepticism<br />Meaningful brainstorming sessions<br />No “checklist” mentality<br />
  43. “No man’s life, liberty, or happiness are safe when the legislature is in session” <br /> – Mark Twain<br />Section 7216 <br />Circular 230/Section 6694 <br />Proposed regulation/registration of tax return preparers <br />SSTS exposure draft<br />Tax strategy patents legislation<br />Latest developments on e- filing<br />Extended due dates for returns<br />Proposed Consumer Financial Protection Agency legislation<br />Cell phone developments<br />Trust fee deductibility<br />Estate tax developments<br />FTC red flags<br />
  44. Maryland Tax Preparer LawThreats to your CPA License<br />Well intentioned consumer group<br />Solving a problem – low income tax frauds<br />But…creating problems for CPAS<br />Licensed / Certified Tax Preparers would be confusing to the public<br />Tax Preparer Exam using ACAT designation (ATA, ATP) opens door for second tier license<br />Misinformation / confusion<br />
  45. Licensed / Certified<br />Tax Preparer?<br />
  46. Maryland Individual Tax Preparers Act<br />Requires registration and examination of all tax preparers<br />Registered Tax Preparers (cannot use terms licensed or certified)<br />CPAs and staff are exempt (along with other Circ 230 Practitioners)<br />Out-of-state CPAs exempt<br />Independent Regulatory Exam required<br />Safe Harbor disclosure required<br />“I am not a CPA”<br />MACPA seat on State Board<br />
  47. CPA Mobility Legislative Activity 2009<br />45 States in 2 years!<br />WA<br />VT<br />ME<br />MT<br />ND<br />MN<br />OR<br />NH<br />ID<br />WI<br />SD<br />MA<br />NY<br />WY<br />MI<br />RI<br />CT<br />IA<br />PA<br />NE<br />NV<br />NJ<br />UT<br />OH<br />DE<br /> IN<br />IL<br />WV<br />CO<br />CA<br />VA<br />MD<br />KS<br />MO<br />KY<br />DC<br />NC<br />AZ<br />TN<br />OK<br />AR<br />SC<br />NM<br />MS<br />AL<br />GA<br />AK<br />TX<br />LA<br />PR<br />HI<br />FL<br />GU<br />V<br />2009 -2010 Anticipated Legislative<br />Activity<br />Mobility Enacted - 45<br />Legislation Introduced - 1<br />No Formal Activity<br />Mobility Enacted Only for Other<br />Mobility States -2 (GA PA)<br />AICPA March 2009<br />
  48. Leg / Reg Changes you need to know!<br /><ul><li>New Mobility Law
  49. Maryland Individual Tax Preparer Act
  50. New Corporate Reporting Requirements
  51. Peer Review Requirement – October 1st
  52. New CPA Exam Requirements
  53. New CPE regulations
  54. Mandatory e-file
  55. New Non-Profit Audit Requirements > $500,000</li></ul>CPA Day in Annapolis<br />January 20, 2010<br />
  56. Mandated Electronic Filing of Personal Income Tax Returns (SB 96 / HB 810)<br />2009 Returns – if the preparer files more than 300 returns<br />2010 Returns – if the preparer files more than 200 returns<br />2011 Returns – if the preparer files more than 100 returns<br />Comptroller may grant hardship exemption<br />Penalties for noncompliance - $50 each return, $500 max<br />Taxpayer may opt out<br />
  57. Improving Your Infrastructure The CPA License<br />The AICPA & your State CPA Society<br />
  58. CPE<br />New approved fields of study<br />CPE = CPE<br />Changes in rules for accounting educators<br />Effective May 18, 2009<br />
  59. 52<br />History of CPA Legislation<br />Interstate Practice & <br />Uniform Accountancy Act<br />1993 MACPA passes <br />MD LLC & LLP Acts<br />Rise of special interests <br />& non-CPAs<br />MACPA stops several attempts to amend 1924 law<br />Non-CPAs begin attempts at 2nd Tier license<br />MACPA tries to pass CPE Bill in 1974 & 1975<br />KEY <br />In the <br />Beginning...<br />Sarbanes-Oxley<br /> Act of 2002<br />Rights & Recognition<br /><ul><li>Privilege of Self-Regulation
  60. Right to Sole Control over an Area of Practice</li></ul>Max Teichman, Frank Blacklock & William Rogers<br />GOALS/<br />RESULTS<br />AG opinion of 1981<br />Grants rights to non-CPAs for Reviews & Comps.<br />SB 560 Defeated<br />Maryland Corporate Accountability Act<br />MACPA requests reversal of AG Opinion – “This is not an audit” language added<br />HB 1296 Mobility Passes<br />• CPA Bill signed April 10, 1900<br />• MD is 3rd state (NY & PA)<br />MACPA wins use of “consultants” in firm letterhead at State Board<br />PROJECTS/<br />STRATEGIES<br />Maryland Special Session<br />Oct – Nov 07<br />State Board of Accountancy formed<br />Accounting Reform task Force addresses SOX<br />Maryland becomes the 1st state to restrict practice for CPAs<br />MACPA defeats Sales Tax on Services<br />KEY EVENTS<br />HB 1261 re-writes<br />CPA Law - 1986<br />State Board Hearing<br />May 1, 2003<br />Amends Corporate Tax Reporting Bill from special session<br />UAA MACPA passes <br />non-CPA Ownership<br />MACPA amendments to ed requirements fail<br />PEOPLE<br />MACPA Forms Task Force and surveys members<br />88% Sub Equivalency<br />76% Peer Review & Safe Harbor<br />68% Non-CPA Ownership<br />New simpler CPA exam Education Rules<br />State Board<br />passes qualify Peer Review for CPE credit<br />Terry Hancock<br />chairs Legislative Committee<br />Larry Kamanitz chairs Legislative Committee<br />PRODUCTS/<br />SERVICES/<br />SITES<br />Dawson Grove chairs Legislative Committee<br />Allen Deleon chairs Legislative Committee<br />Gov. John Smith signs CPA Bill<br />April 10, 1900<br />Quality Review Legislation fails<br />MACPA first attempt<br />to rights to audit<br />MACPA Passes Mandatory CPE Bill<br />150 Hours Ed Requirement passes<br />Effective date is January 1, 1999<br />MACPA Founded 1901<br />LEARNING<br />MACPA passes 1924 Law<br />UAA MACPA passes 1 yr <br />Experience Requirement<br />HB 1223 Mandatory Peer Review<br />Computerized CPA exam<br />Separate Fund Bill passed<br />Dateline<br />1900<br />1987<br />1974<br />1976<br />1901<br />1922<br />1924<br />1981<br />2005<br />1993<br />2006<br />2003<br />2007<br />2008<br />2001<br />1999<br />Maryland Association of CPAs<br />
  61. Sales Tax<br />
  62. 120 – 150 Hour Proposal<br /><ul><li> 120 hours to sit for CPA Exam
  63. 150 hours required for licensure
  64. Five – Six years to complete
  65. CPE required to stay current</li></li></ul><li>The CPA Agenda<br />Stop MSA repealing Peer Review<br />Stop Sales Taxes on CPA services<br />Stop efforts to liberalize tort laws (lawsuit abuse)<br />State Board 120/150 legislation?<br />Oppose Combined Reporting?<br />CPA Day in Annapolis<br />January 20, 2010<br />
  66. IFRS – International Financial Reporting Standards<br />Not if but when…<br />Goodbye GAAP?<br />Think about this – If SEC timeline is 2014 – what year do you have to convert to show three years of comparable f/s?<br />
  67. SEC Roadmap released<br />
  68. Corporate Conversion Timeline<br />
  69. Convergence ≠ Sameness<br /> US GAAP<br />Rules based<br />Based on a GAAP hierarchy (level A – D)<br />Primary accounting standard setting body is the FASB<br />Accounting guidance and interpretation is provided by FASB, SEC, AICPA and EITF<br /> IFRS<br />Principles based<br />No hierarchy, consists of IASs, IFRSs & interpretations<br />Standards and interpretations approved by the IASB<br />Interpretations of IFRIC and its predecessor the SIC<br />25,000 pages vs 2,000 pages<br />
  70. IASB/FASB Convergence<br />Hope to complete convergence by 2011<br />Outstanding Issues:<br />Revenue recognition<br />Financial statement presentation<br />Leases<br />Financial instruments<br />Liabilities and equity distinctions<br />Consolidations<br />Derecognition<br />Post-employment benefits<br />60<br />
  71. IFRS Readiness Survey: March 2009<br />Organizations have made little progress toward preparing for adoption of IFRS <br />Currently most members do not believe the benefits of IFRS outweigh the costs<br />Members working for foreign-owned companies are the exception<br />Members favor a delay in the currently proposed SEC timeline<br />Again, members working for foreign-owned companies are the exception<br />61<br />
  72. Internationalizing the CPA Exam<br />Expanding locations for U.S. CPA Exam outside of U.S.<br />Application, security & licensure emphasis will model U.S. requirements<br />Next Steps<br />NASBA consensus<br />Parallel implementation planning<br />Contract/Plan approval targeted for August<br />Launch targeted for mid-2010<br />62<br />
  73. Are you ready for International?<br />According to a UPS study, “Roughly 33% of U.S. small businesses participate in cross-border trade“<br />“Almost half of small businesses will be involved in global trade by 2018 “<br />- Intuit’s Future of Small Business Report<br />“Nearly one-third of you (CPA firms &lt; 10) have clients doing business on an international level”<br /><ul><li>Greg LaFollette</li></ul>CPA Technology Advisor<br />
  74. Potential Versions of Private Company IFRS<br />
  75. Workforce / Pipeline<br />
  76. Pipeline - Good News<br />20% avg increase in <br />Graduates & enrollments!<br />
  77. Four Generations in the Workplace<br />Issue: Generational Differences<br />Matures 64 - 100<br />Boomers 45 - 63<br />Gen X 29 - 44<br />Millennials 10 - 28<br />Which one are you?<br />
  78. Staff Shortage + Four Generations in workplace = Trouble!<br />Staff<br />Shortage<br />
  79. &apos;The bottom line is this: if you understand the Net Generation, you will understand the future.&apos; And as my son often reminds me, the future is now.&quot; The New York Times, Book Review, Sunday, December 21, 2008 <br />
  80. A Vision of Students Today<br />
  81. 8 Norms of the Net Gen<br />Freedom of Choice<br />Customization<br />Scrutiny<br />Integrity<br />Collaboration<br />Entertainment<br />Innovation<br />Speed<br />
  82. Deloitte’s Global Workforce Advice<br />• Long-term career development and multiple experiences within a single organization<br />• Sense of purpose and meaning in work<br />• Availability and access to mentors across the company. (The focus should not only be on making senior staff mentor younger associates, but also ensuring that people connect and share experiences across all levels of the organization, and across relevant departments and areas of expertise.)<br />• Work-life flexibility<br />• Tech-savvy work environment (for example, access to online problem-solving and learning tools)<br />• Open social networks that embrace open and honest communication<br />Source Deloitte Global Manufacturing survey<br />
  83. Biggest Issue Facing NYPNs<br />Bridging the Gap between college & real world<br />Under-Developed Skill Sets<br />Leadership & Communication<br />Time Management & Organization<br />Conflict Management<br />Supervisory Skills<br />Work-Life Balance<br />Limited Networking Opportunities<br />Intimidation<br />CPA Exam<br />Lack of a Voice in Profession<br />
  84. Overcoming Downturn-Related Talent Challenges<br />Reassessing business objectives in light of changing market conditions<br />Implementing changes to existing organization models --- and then finding people with the right knowledge & skills<br />Recalibrating headcount while focusing on the pivotal talent needed to achieve business objectives<br />Understanding how the external talent market has & will continue to change<br />75<br />
  85. Are You Asking The Right Questions About Your Talent?<br />Have we aligned our talent priorities to our business objectives?<br />Have we validated our talent priorities?<br />Do we have consensus on the 5 most pivotal positions in each critical area of the business?<br />Do we have an accurate perspective about the competence of our current workforce when measured against business objectives?<br />76<br />
  86. Are You Asking The Right Questions About Your Talent?<br />How much do we really know about the fast-changing external talent marketplace?<br />Are our talent requirements tailored to the values & expectations of our pivotal talent?<br />Do we know what return we’re getting on our investment in talent?<br />77<br />
  87. Motivating Your Staff in a Recession<br />
  88. Technology<br />
  89. Information Security Management<br />Privacy Management<br />Secure Data File Storage, Transmission and Exchange<br />Business Process Improvement / Work Flow<br />Mobile & Remote Computing<br />Training & Competency<br />Identity & Access Management<br />Improved Application & Integration<br />Document, Forms, Content & Knowledge Management<br />Electronic Data Retention Strategy<br />
  90. Transparency Now! – A Wired Manifesto<br /><br />Source: Wired magazine 17.03 March, 2009<br />
  91. Technology & Web 2.0<br />By 2010, Millenials/Gen Y-erswill outnumber Baby Boomers. <br />
  92. Social Media<br />
  93. Name three “change the world” events where social media made a difference?<br />
  94. The New Math<br />Social Networking (Old)<br />Social Media (New)<br />A change in the way we build relationships<br />+<br />=<br />Source: Matt Goddard, CEO R2integrated <br />
  95. Old School vs. New School<br />Chamber of Commerce<br />Class Reunions<br />Friends and Family<br />E-mail<br />Industry Meetings<br />Newsletters<br />
  96. This is a Social Network <br />
  97. and the Network Effect…<br />Metcalf’s Law<br />&quot;states that the economic value of a network increases like the square of the number of its nodes, or the law of increasing returns. Usually, when people share a piece of equipment, the return diminishes. When more people are engaged in the network, more value is returned to the user.&quot;<br />
  98. It’s all about your Whuffie<br />Whuffie is the culmination of your reputation, influence, bridging and bonding capital, current and potential access to ideas, talent and resources, saved-up favors, and accomplishments.<br />- Tara Hunt “The Whuffie Factor”<br />
  99. Five Learning Trends for 2009<br />Mobile Learning<br />DIY - Do-it-Yourself Learning<br />Flexible Learning Environments<br />Virtual Worlds<br />Games & Simulation<br />Chief Learning Officer Magazine – January 2009<br />
  100. FASB is there!<br />
  101. Accounting Educators in Second Life<br />Dr. Mike Kraten<br />Suffolk University<br />Dr. Robert Bloomfield<br />Cornell University<br />Dr. Steve Hornik<br />University of Central Florida<br />
  102. Tools<br />Social Networking<br />Blogs / Wikis<br />Microblogs<br />Video & Content Sharing<br />Second Life<br />
  103. More ways to CONNECT with MACPA<br />Linked-In – MACPA Group<br />Facebook – NYPN Group<br />MACPA on Twitter<br />Tom on Twitter<br />Bill on Twitter<br />Youtube videos from MACPA<br />Slideshare<br />Visit us in Second Life <br />
  104. Issues Facing CPA firms<br />
  105. Say what?<br />“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 <br />“There will be more large firms.” – Marc Rosenberg<br />“Mergers and acquisitions will increase.” – Jeff Pawlow, The Growth Partnership<br />IPA Consultant Predictions – Jan, 2006<br />47,000 to 40,000<br />
  106. PCPS/TSCPA MAP Survey 2009Top Five Issues Facing Firms 21+<br />Client Retention<br />Partner Accountability<br />Succession Planning<br />Marketing / Practice Growth<br />Retaining Qualified Staff<br />
  107. Provided by the Business Learning Institute ©<br />PCPS/TSCPA MAP Survey 2008Top Five Issues Facing Firms<br />
  108. 2009 Top Issues – 21+ Professionals<br />
  109. Top 20 Reasons to Stay with a Firm<br />4 out of top 5<br />13 out of 20<br />Have nothing to do with $$$ and<br />everything to do with culture!<br />
  110. Provided by the Business Learning Institute ©<br />To put it another way – firms are under investing significantly in the things that really make a difference.<br />
  111. Characteristics of Over-Achieving Firms<br />Provided by the Business Learning Institute ©<br />Outstanding Vision, <br /> Leadership / Management<br />Common Focus / Culture<br />Specialized<br />Sustainable<br />Performance Discipline<br />High Leverage of <br /> Highly trained staff<br />
  112. 7 Keys to Success in CPA Firm Management<br />Leadership<br />Technology<br />Learning Organization<br />Marketing & Business Development<br />A great Place to Work<br />Client Service & Satisfaction<br />Strategy Execution<br />105<br />Source: Rick Telberg – Bay Street Group<br />
  113. CPAs in Business, Industry, Government & NFP<br />
  114. The Year of the CFO<br />As financial skills are valued more highly, CFOs will make it to the corner office in greater numbers than before. Recession, credit crunch and the increasingly complex nature of global companies will all play directly into the bean counter’s hands.<br />Source: The Economist Magazine The World in 2009 Nov, 2008<br />
  115. CFO WorriesCFO Magazine/Duke Global Business Outlook Survey – December 2008<br />Consumer demand<br />Credit markets & interest rates<br />Housing market fallout<br />New administration & Congress<br />Financial regulation<br />Volatility of the dollar<br />Cost of nonfuel commodities<br />Cost of fuel<br />Foreign competition<br />Environmental regulation<br />Top Concerns <br />About the <br />Macro Economy<br />
  116. CFO WorriesCFO Magazine/Duke Global Business Outlook Survey – December 2008<br />Ability to forecast results<br />Maintaining morale/productivity during the downturn<br />Balance sheet weakness<br />Cost of health care<br />Attracting & retaining qualified employees<br />Supply-chain risk<br />Managing IT systems<br />Pension obligations<br />Protection of intellectual property<br />Data security<br />Top Concerns<br />About <br />Their Own<br />Companies<br />
  117. A Hard Job in Hard Times<br />“Doing more with less has been the mantra of the last half-dozen years.”<br />VP of Finance<br />“Quite simply, we are being required to do more with less resources.”<br />Director of Tax<br />
  118. Getting the Most from Finance Talent<br />84% say keeping their staff engaged & motivated will be important<br />80% say managing staff workload & managing their own workload will be important<br />31% expect to spend less time on finance & staffing development – an activity critical for building a strong & value-added finance function<br />Influenced by those expecting to move within 2 years<br />75% or respondents said the financial crisis & economic turmoil have changed their on-the-job responsibilities<br />111<br />
  119. Which of the following external factors have had the greatest impact on your company’s function within the past year?<br />Percentage of respondents<br />Note: Percentages may not total 100%, due to rounding.<br />Note: Respondents were asked to select their top three choices.<br />
  120. Compared with the previous year, which activities do you expect your finance staff to devote more time to over the next 12 months? Which activities will your staff spend less time on?<br />
  121. What do you expect you will have to do within the next 5 years<br /> to pursue your career goals?<br />
  122. What challenges do you expect will impact your career <br />the most over the next 12 months?<br />
  123. IFRS Opportunity? – Meet Joe Box, CPA - CFO of Joe Money Machinery<br />“Well, the IASB is coming out with a simplified version for private companies. With IFRS, you mark-to-market more assets. We&apos;re a 72-year-old company that has real estate on our books at historical cost, so there could be a big benefit in IFRS based on the substantially higher fair market value for that property. Any private-company CFO should be knowledgeable about it, to determine whether to consider adoption.”<br />“But even more importantly, it has been my objective that our key bankers consider me knowledgeable in the issues important to their commercial portfolio. XBRL is another one.”<br />
  124. CFO Opportunities<br />Business process efficiency – LEAN<br />Cash flow & Financing<br />Risk Management<br />Budget Scenarios<br />Young Professionals – reverse mentoring<br />IFRS & XBRL<br />Sustainability Reporting<br />
  125. Image of the CPA<br />
  126. The future success of the CPA profession relies a great deal upon public perception of CPAs&apos; abilities & roles<br /> - CPA Vision Project<br />
  127. Image is better than pre-Enron highs<br />
  128. Attitudes toward CPA Credential<br />More confident in a job done by a CPA than if it were done by an accountant not a CPA.<br />Accountants certified by non-U.S. organizations, such as the Association of Chartered Certified Accountants (ACCA), are just as qualified as CPAs.<br />CPA requires more rigorous training and testing than any other financial credential.<br />121<br />
  129. Concern About Accounting Fraud Has Decreased<br />What do you think is the biggest problem <br />facing corporate America today?<br /><ul><li>Top 3 issues among BDMs and investors:</li></ul>Global competitiveness<br />Cost of healthcare benefits<br />Economic growth<br />122<br />
  130. Physicians<br />Certified Public Accountants (CPAs)<br />Financialplanners<br />Taxadvisors<br />Attorneys<br />Chief Executive Officers (CEOs)<br />Chief Financial Officers (CFOs)<br />Commercial bankers<br />Accountants who are not CPAs<br />Insurance agents<br />Investment bankers<br />Auditors<br />Management consultants<br />Stock brokers<br />Mortgage brokers<br />Hedge fund managers<br />Overall Evaluation of Professionals Among Investors<br />123<br />
  131. ...And Business Decision Makers<br />physicians<br />Certified Public Accountants (CPAs)<br />Chief Executive Officers (CEOs)<br />Chief Financial Officers (CFOs)<br />Tax advisors<br />Financial planners<br />Attorneys<br />Accountants who are not CPAs<br />Auditors<br />Commercial bankers<br />Investment bankers<br />Management consultants<br />Insurance agents<br />Stock brokers<br />Mortgage brokers<br />Hedge fund managers<br />124<br />
  132. BDM & Investor Data ConfirmQualitative Findings<br />CPA Attribute Ratings<br />125<br />
  133. ...As Do CPA & Young Professional Data<br />CPA Attribute Ratings<br />126<br />
  134. +<br />Importance of attribute when evaluating business professional<br />-<br />How well attribute describes CPAs<br />+<br />−<br />CPAs Strongest on The Two Most Important Attributes<br />High Importance/<br />Low Descriptiveness<br />High Importance/<br />High Descriptiveness<br />Low Importance/<br />Low Descriptiveness<br />Low Importance/<br />High Descriptiveness<br />127<br />
  135. Investor Satisfaction with CPAs Is High<br />Satisfaction with CPA(s)<br />94%<br />128<br />
  136. CPAs Closely Associated with Core Values<br /><ul><li>“CPAs are the guardians of financial truth.” – Senior SEC Official
  137. “CPAs are not trying to finesse the numbers, they are interested in painting the most accurate picture they can with the information they have.” – Institutional Investor
  138. “I associate CPAs with a high standard of ethics. There’s a certain love of a kind of order.” – Senior SEC Official
  139. “CPAs are the financial experts needed to put their stamp on the financial statements that allow the capital markets to work.” – Senior IRS Official</li></ul>129<br />
  140. Perceptions of CPAs Largely Consistent Across All Audiences<br />Rank<br />
  141. “CPAs ARE the DISCIPLINE in business!”Jim Collins<br />
  142. Dealing with Change<br />Change is the law of life. Those who look only to the past or present are certain to miss the future.&quot; - John F. Kennedy<br />
  143. Q: What is the # 1 Issue facing all CPAs:<br />A: Keeping up with changing standards & regulations<br /> “As it relates to science and technology, the rate of change in the next decade, is likely to be 4 to7 times faster than in the last decade. If it is 4x faster it would be like planning for 2006 in 1890, if it is 7x faster it would be like planning for 2006 in 1670.”<br /> -Expert on Education Panel, The Aspen Institute, 2007<br />
  144. Dealing with Change<br />
  145. CPA Competencies Needed<br />2008 – Deloitte Research<br />1998 – CPA Vision Project<br />Change Management (C)<br />Strategic Ability (S)<br />Critical Thinking (S)<br />Business Perspective (C)<br />Organizational Agility (C)<br />Dealing with Ambiguity (S)<br />Communication & Leadership<br />Strategic & Critical Thinking<br />Focus on the Customer, Client, and Market<br />Interpretation of Converging Information<br />Technologically adept<br />C – Catalyst<br />S - Strategist<br />
  146. What do CPA Leaders look like?<br />
  147. CPA Professional 2.0<br />Learning & staying on the cutting edge<br />Managing my career<br />Doing my work<br />Interacting with peers<br />Becoming a leader in my field<br />
  148. MAP it! think, plan, act, learn…<br />
  149. CPA<br />templates to help you with...<br />24<br />
  150. synthesize information<br />
  151. manage processes<br />
  152. communicate effectively <br />
  153. You cannot stay on the summit forever; you have to come down again. So why bother in the first place? <br />Just this: What is above knows what is below, but what is below does not know what is above. One climbs, one sees. One descends, one sees no longer, but one has seen. There is an art of conducting oneself in the lower regions by the memory of what one saw higher up. When one can no longer see, one can at least still know.<br /> -Rene&apos; Daumal<br />
  154. Create your future!<br />
  155. Connect – Protect - Achieve<br />“Association members earn, on average, $10,000 more per year than non-members”<br />And<br />“are 19% more likely to say they are “very-satisfied” with their jobs than non-members”<br />Where the Winners Meet Study by the William E. Smith Institute for Association Research<br />
  156. Tom Hood, CPA.CITP<br />CEO<br />Maryland Association of CPAs<br />Business Learning Institute<br />(443) 632-2301<br />E-mail<br />