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Piu Keeping Up With Accounting Spring 2010 Salisbury


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What does a career in accounting (CPA) offer? What are the major trends and issues facing CPAs today? This special session for accounting students was presented to Salisbury University's students from Beta Alpha Psi and IMA campus chapters.

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Piu Keeping Up With Accounting Spring 2010 Salisbury

  1. Keeping Up With Accounting Salisbury University BAP & IMA March 9, 2010 Tom Hood, CPA.CITP Hood CPA CITP CEO & Executive Director Business Learning Institute Maryland Association of CPAs
  2. What is a Profession? status, Professions enjoy a high social status regard and esteem conferred upon them by society. This high esteem arises primarily from the higher social function of their work, which is regarded as vital to society as a whole g y and thus of having a special and valuable nature. All professions i f i involve t h i l l technical, specialized and highly skilled work. Training for this work involves g obtaining degrees and professional qualifications without which entry to the Certified profession is barred Training also barred. Public requires regular updating of skills. Accountant Source: Wikipedia
  3. Three Attributes of a Profession 1.A body of knowledge y g 2.A code of conduct 3 A public interest 3.A “CPAs ARE the CPAs DISCIPLINE in business!” Jim Collins
  4. License > Certification Certified & Licensed by Certified by an the government go ernment organization organi ation • CPA • CFP • Doctors • CFE • Lawyers L • CIA • Teachers • CITP • Regulated by federal & state law • BVLS • PFS • These are credentials not Responsible to society governed by state law
  5. CPAs swear oath to “protect the public interest” interest Maryland DLLR Swearing-in of new CPAs y g June 28, 2010 At the MACPA Member Summit
  6. How to become a CPA? The Four E’s - Maryland Example 1. 1 Education – Bachelor’s degree + 30 hours Bachelor s 2. Examination – Pass the Uniform CPA Exam 3. Ethics – Maryland requires a separate ethics exam 4. Experience – 1 year of experience working with a CPA Thereafter, they are required to complete 80 hours of continuing education every two years, including four hours of ethics training. Most states abide by some version of these criteria which are covered in a concept of “substantial equivalency in the Uniform Accountancy Act by the AICPA- NASBA
  7. The “New” CPA exam Four Parts 1. Auditing & Attestation 2. Business Environment Concepts 3. 3 Financial A Fi i l Accounting & R ti Reporting - h d t ti hardest 4. Regulation
  8. 3rd Annual Investor Education Survey Level of Investor Confidence in U.S. Capital Markets 60 50 40 30 20 10 0 Great deal G td l Quite a bit Q it bit Some S Very little V littl None N 2008 2009
  9. Attitudes toward CPA Credential Attitudes toward CPA Credential 76% % 74% 66% 60% 43% Investors 31% BDMs More confident in a job  Accountants certified by non‐ CPA requires more  done by a CPA than if it  U.S. organizations, such as the  rigorous training and  Association of Chartered  were done by an  testing than any other  Certified Accountants (ACCA),  accountant not a CPA. accountant not a CPA financial credential. fi i l d i l are just as qualified as CPAs. 9
  10. Top 5 Attributes of CPAs from the public (investors & BDMs) • Has integrity • Competent • Objective • Able to synthesize information • Focused on client needs 10
  11. Benefits of being a CPA professional • S i to others Service h and the community • Doing work that matters • Being on the cutting edge of society • Being in on what’s happening • Belonging to a g g community of professionals
  12. Our members are feeling a tsunami of changes Q: What is the # 1 Issue facing all CPAs? A: Keeping up with changing standards & regulations 12
  13. The Perfect Storm of Trends & Forces • Economy • Standards, Legislation Regulation S d d L i l i &R l i • Globalization • Workplace & generations • Technology 13
  14. What are MACPA members saying? What phrases, images, topics stuck out p , g , p for you? • Generations • IFRS • XBRL • Social Networking • Transparency T • Change!
  15. Top 10 Issues Facing CPAs 1. Economic Outlook  2. Tax  3. Business Operations  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  9 Access to Financing and Credit 10 New Accounting Standards,  IFRS Source: CPA Trendlines for AICPA Feb, 2010
  16. The economy is uncertain Which ill be? Whi h will it b ? • Pending home sales index rose 6.4% in August to the highest  level since March 2007 (National Association of Realtors) l l i M h 2007 (N ti lA i ti f R lt ) • Spending by U.S. consumers climbed in August by the most  since 2001 (Commerce Dept.) ( p ) • Unemployment rate climbs to 9.8% (Labor Dept.) Double  Slow Growth Slow Growth Rebound Dip
  17. A useful framework to understand the CPA profession What does the CPA profession support? What is under the CPA Profession?
  18. Federal Laws & Regulations – SEC, DOL, Treasury, GAO, PCAOB CPA Profession Standards – AICPA & FASB, GASB FASAB, IASB, IFAC FASB GASB, FASAB IASB State CPA Statutes police power of the states to protect their citizens vs commerce clause
  19. Another View Public Company Private Company Int’l Company Financial SEC FASB IASB Reporting FASB PCFRC IFRS & SME Attest AICPA Performance Standards PCAOB ASB IAASB Code of AICPA AICPA Conduct PEEC PEEC IFAC CPA Licensure State Oversight & Enforcement of CPA License
  20. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA
  21. Standards Changes • AS 5 - PCAOB • IFRS – SEC International gets legs (again) • Fair Value Accounting • XBRL – SEC mandatory • Codification Project – FASB • Clarity Project – ASB – Convergence with international • Reliability Project (comps & reviews) • DOL 403 (b) Plans • Internal Control – COSO • Fin 48 effective 2009 • Form 990 C Changes • Fraud & Forensic SAS 99 • FASB – IASB Convergence Project
  22. “the basic physical and organizational structures needed for the operation of a t t d d f th ti f society or enterprise” 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
  23. What happens when the infrastructure breaks? • Fair Market Value (Acctg Standards) • Futures & Derivatives • Investment Advisors & Broker-Dealers When is the last time these guys had accounting as the major topic of their agenda?
  24. Where do major changes come from? Us – MACPA & AICPA Them OR
  25. “No man’s life, liberty, or happiness are safe when the legislature is in session” session – Mark Twain IRS 7216, FTC Red Flags, Sales Tax on Services, Tax Preparer regulations, Wall Street Reform Act Sarbanes Oxley Act Act, Sarbanes-Oxley Act…
  26. An example of “they” - The Consumer Financial Protection Act 1. Promote robust supervision and regulation of financial firms 2. Establish comprehensive regulation of financial markets 3. Protect consumers and investors form financial abuse 4. Provide the government with the tools it needs to manage financial c s s a c a crisis 5. Raise international regulatory standards & improve p international cooperation
  27. An example of “us” - The 120/150 Hour CPA Exam Bill (HB 1137) H E 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)
  28. Globalization
  29. IFRS – International Financial Reporting Standards "Accounting standard setters should take action to make significant p g g progress towards a single set of high g g quality global accounting standards by the end of 2009.“ – from G-20 Report The Washington Action Plan
  30. SEC Roadmap released Early adopters Large can file using Accelerated IFRS Filers Small-caps 2010 2014 2016 2011 2015 Official SEC Accelerated decision filers – point second wave
  31. GAAP, IFRS & Private Company standards 2,500 pages 25,000 pages
  32. Workforce /Generations
  33. Pipeline - Good News p 20% avg increase in Graduates & enrollments!
  34. Staff Shortage + Four Generations in workplace = Trouble! 90,000,000 80,000,000 Staff 70,000,000 Shortage 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Matures Boomers X'ers Millenials
  35. Four Generations in the Workplace Issue: Generational Differences • Matures 65 - 100 • Boomers 46 - 64 • Gen X 30 - 45 • Millennials 11 - 29 Which one are you?
  36. Another way of looking at this… Self Actualization Esteem Needs Esteem Belonging Needs Safety Needs Love & Belonging Physiological Needs Safety & Physiological Maslow’s hierarchy of needs
  37. Here comes the Net Generation "There is plenty of cause for alarm and/or optimism There when it comes to my generation; even I can see that. Still I think the negative views of us come from a fear of the unknown, a fear of change. Our world is evolving at a rapid rate, and that can be scary for older generations ld ti — Savannah Jones, 17, Portland, Oregon NGenophobia—the irrational and morbid fear of youth, especially with regards to their use of the Internet
  38. Generation Gap? Or Generation Lap? Generations One third (35%) of American adult internet users have a profile on an online social network site, four times as many as three years ago, but still much l ill h lower than the 6 % of h h 65% f online American teens who use social networks “In 1997, young people for the first time were recognized by adults as being authorities on something t l revolutionary – digital th iti thi truly l ti technology interactive technology, media, and collaboration.” – Don Tapscott “Growing Up Digital”
  39. Technology gy
  40. • Information Security • Training & Competency Management • Identity & Access • Privacy Management Management • Secure Data File Storage, • Improved Application & Transmission and Integration g Exchange • Document, Forms, Content • Business Process & Knowledge Management Improvement / Work Flow • El t i D t R t ti Electronic Data Retention • Mobile & Remote Strategy p Computing g
  41. The SEC Mandate
  42. Technology & Web 2.0 By 2010 Millenials/Gen Y-ers will outnumber 2010, Y ers Baby Boomers.
  43. The New Math Social Networking (Old) + Social Media (New) = A change in the way we build  A change in the way we build relationships Source: Matt Goddard, CEO R2integrated 
  44. Old School vs. New School Chamber of Commerce Class Reunions Friends and Family E‐mail Industry Meetings I d t M ti Newsletters
  45. It s all about your Whuffie It’s all about your Whuffie Whuffie is the culmination of your reputation,  influence, bridging and bonding capital,  i fl b id i d b di i l current and potential access to ideas, talent  and resources, saved‐up favors, and  d d f d accomplishments. ‐ Tara Hunt “The Whuffie Factor”
  46. It’s about the Network Effect How big is  your  network? “In a sentence {to recognize a network} means ‘To discover how A, who is in touch with C, Is affected by the relation between B and C.” – Russ Eckel “Becoming the Eye of the Tiger”
  47. Whuffie Example
  48. Get found  Digital Footprints Get found – Digital Footprints
  49. Use the tools and don’t let the tools use  you! • Social media requires  loosening the reins on  loosening the reins on technology platforms and  access • S i l Social media management  di requires constant care and  feeding, as well as  monitoring i i • Because social media is  MASS media mistakes media, mistakes  and missteps are  amplified  amplified
  50. nGenophobia is out there… nGenophobia is out there… Social Notworking is a  managerial problem, not a  technology problem. If a salesman spends his day  making personal phone calls  rather than phoning potential  customers, the solution is not  to take away the phone. The  solution is to make clear what  is and is not acceptable  i di t t bl behavior and… Discussion at AICPA Leadership Academy Discussion at AICPA Leadership Academy Chicago, July, 2009
  51. Next steps… 1. Educate yourself – 2. Create your digital footprint. Create  y g p profiles on Facebook, LinkedIn and  Google.  3. Start listening. Use Google Reader or  Bloglines to begin reading thought to begin reading thought  leaders in your profession or areas of  interest.  4. Continue listening. Create your Twitter listening. Create your Twitter account and follow your profession and  areas of interest.  5. Start sharing. Create a blog and record  your thoughts.  h h 6. Share. Recognize and promote the  people you find interesting. 
  52. What is different about where we are now? “As it relates to science and technology, the rate of change in the next decade, is likely to be 4 to7 times decade faster than in the last decade. If it is 4x faster it would be like planning for 2010 in 1890, if it is 7x faster it would be like planning for 2010 in 1670 ” 1670. -Expert on Education Panel, The Aspen Institute, 2007
  53. The meta map of the I2A™Strategic Thinking System provides an architecture or framework to structure thinking and conversation as you engage. When talking about complex issues that aren’t completely understood, or debating solutions where there are multiple points of view, it is easy 53 get lost in the conversation and prematurely locked into a solution. to
  54. Five Qualities of Extraordinary Leaders 1. Sight - Ability to see emerging patterns and shift perspective when necessary LC 2. 3. 3 Insight - Ability to learn faster than the rate of change in your industry Create - Ability to think C t strategically and critically to gain insights that create new opportunities 4. Communicate - Ability to collaborate inside and outside you organization and o build your o ga a o a d to bu d and sustain social networks of people engaged in the work 5. Inspire – Ability to mobilize p support and engage others to join you in ACTION
  55. 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 sees descends, longer, 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. -Rene' Daumal “The faster you go, the further ahead you have to see.”
  56. So what does the future look like for CPAs?
  57. The Year of the CFO 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. counter s hands Source: The Economist Magazine The World in 2009 Nov, 2008
  58. Accounting is the quickest path to the corner office 1. Broader and longer line of sight (future focus) 2. Network leadership 3. Strong analysis skills (financial and operational) ti l) 4. Communication skills 5. Global perspective Top 5 skills of the p p post-recession leader – CLO Magazine
  59. In 1997, the CPA profession crowd-sourced its future with over 3,500 CPAs in the CPA Vision Project P j t Our core purpose, our reason p p , for being is CPAs... CPAs Making sense of a changing and complex Here is what they said… world. world
  60. Our Vision Statement for the future is: ( mandates to ourselves for a successful future) CPAs are the trusted professionals who enable people and organizations to shape their future. C bi i i i ht with i t Combining insight ith integrity, CPA d li it CPAs deliver value b l by: • Communicating the total picture with clarity and objectivity, • Translating complex g p information into critical knowledge, • Anticipating and creating opportunities, and • Designing pathways that transform vision into reality. t f i i i t lit
  61. This means we want to move up the business value chain & add value by: Business Infor- Knowl- Infor Knowl Deci- Deci Data events mation edge sions Communicating with clarity and objectivity Translating information into knowledge Anticipating and creating opportunities Designing pathways to transform vision to reality
  62. Using these competencies needed for a changing & complex world p 2008 – Deloitte Research 1998 – CPA Vision Project • Change Management (C) • Communication & • Strategic Ability St t i Abilit (S) Leadership • Critical Thinking (S) • Strategic & Critical Thinking • Business Perspective (C) • Focus on the Customer, Client, and Market • Organizational Agility (C) • Interpretation of Converging • Dealing with Ambiguity g g y Information (S) • Technologically adept C – Catalyst S - Strategist
  63. Standing on these core values
  64. S what d So h t does thi mean t you? this to ?
  65. How to avoid the “lost generation” syndrome 66
  66. Are you an untouchable? A Washington l W hi t lawyer f i d recently friend tl 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 bursting of the credit bubble, that flow of work just isn’t there. j But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. retained They are the new untouchables.
  67. Are you indispensable? Imagine an organization with an employee who can accurately see the truth, understand the situation, and understand the potential outcomes of various decisions. And now imagine that this person is also able to make something happen. happen This is our leader, our marketer, our linchpin!
  68. Six Career Lessons from Johnny Bunko 1. There is no plan 2. 2 Think strengths, not strengths weaknesses 3. It s 3 It’s not about you 4. Persistence trumps talent 5. 5 Make excellent mistakes 6. Leave an imprint
  69. Who is in charge of your career? 1. 1 Know thyself – what are your strengths? Passion? Your hedgehog? 2. Own your attitude & 2 O ttit d behavior 3. L>C Learn faster than your profession / industry 4. Use your sight and insights g 5. Relationships are the new “hard” skill 6. Communication, 6 Communication communication, communication 7. 7 Use the tools don’t let tools, the tools use you
  70. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632‐2301 E mail tom@macpa org E‐mail Web Blog
  71. MACPA resources • CPA Success, our daily blog • CPA Spotlight, our weekly podcast • Other MACPA blogs: • www CPALegislativeInsider com • • CPA Learning 2, a Web 2.0 playground by CPAs for CPAs 72
  72. Professional Issues Update Spring, 2010 Spring, 2010 Tom Hood, CPA.CITP CEO & Executive Director Maryland Association of CPAs t @ • Follow me on:  Twitter:  LinkedIn:  Facebook: http://www facebook com/thoodcpa Facebook:  Plaxo:  Slideshare:  Youtube:  Second Life avatar name: Rocky Maddaloni