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