Nine Locations | Four CPE hours FREE for SCACPA Members Get current on the most significant issues affecting the CPA profession in these interactive, multimedia programs held exclusively for members of the South Carolina Association of CPAs. Providing four hours of FREE CPE, these events will give you up-to-date information, insight and analysis.

1. President Eddie Brown, CPA and Executive Director Erin Hardwick, CAE

2. Today’s Schedule Two hours – Professional Issues Update One hour – Corporate Sustainability One hour – Local Legislative Panel

3. What We’ll Cover in First Session News & Headlines Top Profession Issues IFRS Private company financial reporting Federal legislation Tax Reform/complexity Registration of tax preparers Financial services reform Health care reform State legislation State budget impact Tax reform Tax conformity BOA independence BOA regulation changes Election season Top Management Issues CPA Firm issues CPAs in Business and industry Human capital SCACPA Update

4. Accounting for the 2009 PIU Series Nine communities 707 participants 18.5% of SCACPA members 2,800 CPE hours provided free of charge $140 value for each member “Good update and discussion of topics that we see out there but have little time to explore.” “Just the right mix of legislative updates, international tax spotlights and an informative session on social networking.”

5. What Should Be SCACPA’s Biggest Priority? Protecting the image of the CPA Professional education Protection and advancement of our profession Keeping members informed

6. News & Headlines

7. How Greece’s Crisis Could Become Our Crisis Are Jobs Really Coming Back?

8. What’s Up with the Economy? U.S. Federal ReserveChairman Ben Bernanke and President BarackObama agreed that the economy is strengthening, but continued jobs weakness and the situation abroad remain top concerns.

9. The Economists Can’t Agree Economists offer a wide range of predictions... Source: Banham, R. (2010 Mar 1). The shape of things to come. CFO Magazine. 9

10. Economic Recovery: Impact on Profession? Will employment pick up, stay flat or decline? Will we see a rise of microbusinesses --- single owner with no employees, very specialized, internet driven? Will we see a rise in new accounting firms? Have we entered the age of the “hired gun” ---the knowledge worker as contractor rather than employee? 10

15. South Carolinians in the news…

16. Who will be our next governor?

17. Challenging times… Emerging opportunities

18. International Financial Reporting Standards Private Company Financial Reporting Profession issues

19. STATE POLICY International Financial Reporting Standards

20. Who Are the Key Players? IASB: International Accounting Standards Board FASB: Financial Accounting Standards Board SEC: Securities & Exchange Commission Roadmap Strategic Plan: 2010-2015 AICPA: American Institute of CPAs IFAC: International Federation of Accountants

21. Who Are the Key Players? Sir David Tweedie, Chairman, International Accounting Standards Board Mary Schapiro, Chair, U.S. Securities and Exchange Commission Robert Herz, Chairman, Financial Accounting Standards Baoard

22. Video Mary Schapiro, chair, SEC

24. What’s Happening Today? Waiting on the SEC to finalize it’s position 117 countries have adopted IFRS IFRS for SMEs continues to gain ground Adoption vs. convergence . . . that’s the issue on the table FASB and IASB continue to explore how to work together Progress report issued on March 31, 2010

25. FASB & IASB ContinueWork on Convergence March 31, 2010 announcement “…achieved substantially all of the milestone targets for first quarter of 2010” By mid-2010 expect to issues exposure drafts that would achieve substantial convergence of U.S. GAAP & IFRS in 5 major areas

26. Video Arleen Thomas AICPA Sr. VP, member development and competency

28. The Reality IFRS is coming for public companies --- the SEC will likely approve the current timetable with a switch effective by 2015 or 2016 IASB will likely be the big dog in standards setting with FASB playing an initial role. IFRS for SMEs will continue to gain traction and adoption may eclipse public company adoption of IFRS IFRS has already entered through the back door & will continue to grow CPAs will need to become “bilingual” in IFRS

29. IFRS & IFRS for SMES:What’s different?

30. How do you prepare for IFRS? CPE Read Conversations & Networking Web sites www.ifrs.com

31. IFRS for Small & Medium-Sized Entities (SMEs) A great resource from AICPA as you explore IFRS for SMEs http://wiki.ifrs.com www.ifrs.com

32. Abundance of Info – Free! www.pwc.com/en_US/us/issues/ifrs-reporting/assets/ifrs_usgaapsep09.pdf www.deloitte.com/view/en_US/us/3391e6545eea2210VgnVCM200000bb42f00aRCRD.htm www.ey.com/Publication/vwLUAssets/IFRS_v_GAAP_basics_Jan09/$file/IFRS_v_GAAP_basics_Jan09.pdf www.kpmgglobalenergyinstitute.com/ifrs-institute/index.aspx

33. STATE POLICY Private Company Financial Reporting

34. Renewed Efforts on this Front AICPA/FAF/NASBA “Blue Ribbon Panel” on Standard Setting for Private Companies CHARGE: How can U.S. accounting standards best meet the needs of users of private company financial statements? The panel will provide policy, not technical, recommendations on the future of standard setting for private companies, including whether separate, stand-alone accounting standards for private companies are needed

35. Who Makes up This New Panel? Lenders Investors Business owners Preparers Auditors Regulators

36. WhatComes Next? 3 meetings held; 2 more meetings scheduled (October & December) Not sure what to expect Interesting to see if/when/how discussion of IFRS for SMEs comes into the mix QUESTION: Who benefits from discrete U.S. standards for private companies?

37. Issues to Consider Who are the actual users of private company financial statements? What is the key, decision-useful information that the various users need from GAAP financial statements? Are current GAAP financial statements meeting those needs? Why or why not? Are the benefits of GAAP financial statements outweighing the costs of preparing those statements for private companies?

38. Issues to Consider How does standard setting for private companies in the U.S. compare to other countries, both those that have adopted IFRS for SMEs and those that have not? To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives for private company standards (e.g., separate, stand-alone standards; base-level standards for all entities with additional disclosure requirements for public companies) and what are the implications for standard-setter structure and/or processes?

39. Tax reform/complexity Registration of tax preparers Financial services reform Health care reform Red Flags Rules FEDERAL POLICY

40. Regulatory Overview

41. Washington’s Been Very Active …SCACPA’s Been Active Too! Controller General/CPA legislation Financial Regulation SOX section 404 b – Aiding and Abetting Red Flags S Corp Payroll Tax Issue Creation of SCACPA’s “Rapid Response Team”

42. FEDERAL POLICY TAX REFORM AND TAX COMPLEXITY

43. The Volcker Task Forceto Overhaul the Tax Code March 2009: President Obama announces plans to study the U.S. tax code under the leadership of Paul Volcker The Volcker Committee’s charge was to review the tax code, develop recommendations to close loopholes, rebalance the tax system, streamline the law & generate revenue. Initial deadline was December 2009 Not sure when it will happen now! 43

44. Tax Reform Alternatives for the 21st Century AICPA updated it’s 1995 & 2005 studies as a resource for the Volcker Committee & Congress AICPA presents recommendations to improve the current system without changing its fundamental character as an income tax having significant consumption elements 44

45. Tax Reform Alternatives for the 21st Century AICPA’s key issues affecting federal tax revenues: The baby boom generation is starting to retire, replacing burdens on already strained entitlement programs The 2001 & 2003 tax cuts will expire in 2010, generating additional revenues without corresponding examination of appropriate & fair tax burdens The AMT reach will continue to grow Revenue needs will increase substantially to address historic levels of debt & deficits 45

46. Tax Reform Alternatives for the 21st Century www.aicpa.org/download/news/2009/PERAB_AICPA_Tax_Reform_October_2009_FINAL.pdf 46

47. USA Today – April 14, 2010 64% of individual tax returns filed through April 2 were done by tax professionals But the number of electronically filed, self-prepared returns was up 6.7% over last year H&R Block & Jackson-Hewitt reported sharp drops in business through February TurboTax saw 10% rise in sales through March 13 “Despite the complex tax code, more are going it alone” 47

48. Mind-numbing Complexity 48

49. Heavy Reading Number of pages in the instruction booklet for the 1040 tax form

50. 50

51. Tax Extenders Bill

52. FEDERAL POLICY Registering All Tax Preparers

53. IRS Report, January 2010 2 GOALS Enhance compliance Elevate ethical conduct 4 ELEMENTS PTIN Circular 230 CPE Testing/Exam CPAs are exempt from CPE and testing

54. IRS Plans to Register andTest All Tax Preparers IRS would require all paid tax preparers to use Preparer Tax Identification Numbers (PTIN) on all returns they prepare Preparers who already have a PTIN will be revalidated and reassigned - $50 user fee Additional fee to third party vendor that will administer the application and renewal processes 54

56. Elevate the ethical conduct of preparers55

57. What Does It Mean? CPA Requirements College graduate 150 hours college education Uniform CPA exam 120 hours CPE over 3-year period IRS Requirements High school graduate 18 years old IRS exam – levelunknown 15 hours annual tax education 56

58. Non-Signing Preparers Issuing PTIN proposed regulations Would require CPE and testing Pushed by the IRS National Taxpayer Advocate Supported by commercial preparers Fails to recognize public protection by current regulation Could greatly impact CPA firms/staff Are there non-signing preparers in your firm? What will be the impact? !

59. SCACPA Weighs In SCACPA sent letter June 29 to SC Congressmen stating concerns with two aspects of the IRS proposal: (1) exempt CPA firms from the requirement to register persons working in CPA firms who do not sign a tax return (non-signing preparers), and (2) delay implementation of the IRS preparer examination, particularly with regard to the non-signers.

60. Underlying Issue Registered Tax Preparer? Licensed Tax Preparer? Approved Tax Preparer? Registered with the IRS to prepare federal taxes? What Will Tax Preparers Be Called? 59

62. Including policy makers in discussions

64. Pressing for a favorable outcomeTwo- Tiered Approach

65. Timeline Changes to Program 2011 Returns Filed January 1 Expected Implementation September 1

66. FEDERAL POLICY Financial Services Reform

68. What’s in the Bill? Expanded governmental authority for oversight and regulation needed prevent and manage financial crises A tighter leash on large financial institutions Protecting Investors from deals gone bad: Raises standards on broker-dealers, revamps credit-rating industry, tightens rules on hedge funds and gives SEC expanded oversight powers 64

70. Allows states to impose stricter rules on banks and give state AGs more power

71. Permanently increase the federal deposit insurance to $250,000

73. Health Care Reform 67

74. Health Care Reform A myriad of new tax deductions, fees & subsidies 3 million fewer Americans will have employer-sponsored insurance by 2019 State insurance exchanges arrive in 2014 Every employer should review its benefits strategy in light of the changes brought about in the new law Opportunityfor CPAs to offer value added consulting Resource in your e-mail 68

75. Health Care & Taxes

76. Health Care Reform Resources for CPAs AICPA/SCACPA offering tools to help members: Make informed decisions for their own firms Advise clients and offer services in employee education

77. “Red Flags” Rule

78. Gauging Public Satisfactionwith Washington By almost every measure, Americans are less positive & more critical of government A new Pew Research Center survey finds a perfect storm of conditions associated with distrust of government A dismal economy An unhappy public Bitter partisan-based backlash Epic discontent with Congress & elected officials 72

79. State budget impact Tax reform Tax conformity BOA independence BOA regulation changes Election season STATE POLICY

80. State Budget Woes The worst recession since the 1930s caused the steepest decline in state tax receipts on record Legislature struggled to create a FY11 budget In 2010, SC budget writers had to make up a shortfall of $1 billion, or 25% of budget 2011 promises to be an even tougher year, due in part to declining federal assistance Projected 2012 gap is another $1 billion or 26% Consider: Impact on all citizens, esp. state employees and users of state services

82. Ben Kochenowner, CPA (Gaffney) and

83. Brian Moody, CPA (Charleston)Analyzing sales tax exemptions, tax on services, tax on e-commerce, accommodations and local option taxes, etc. etc.

84. SC TRAC In July meeting TRAC subcommittee proposed repealing most tax exemptions It would also lower the sales tax rate by a comparable amount In draft proposal the average consumer will have groceries taxed, pay more sales tax on cars and pay more on Internet purchases Final report expected by November 2010

86. 2009 – split out as separate legislation

87. 2010 – passed as stand-alone on March 31 after two months of diligent lobbying

88. SCACPA key contacts essential to early passage

90. State Board of Accountancy Nine member board (5 CPAs, 2 APs, 2 public members) Serves as the regulator of the profession Manages licensing and renewals; hears cases Housed under the state agency -- Labor, Licensing and Regulation (LLR) Concerns about LLR operational structure and use of license/renewal fees

91. Independence for the BOA SCACPA, in partnership with the BOA, led efforts with sister regulating board of other technical professions (physicians, dentists, pharmacists, etc.) Legislation, H.4565, sought pilot project for semi-independent, self-directed status Effort was ultimately defeated in House over concerns about the state budget

93. Self study credit not available for carry-over

94. No more than 10 CPE hours earned in one day

95. Guidelines on “lunch and learns”

96. Guidelines for CPE for teaching college accounting coursesEffective June 25, 2010

97. STATE POLICY Profession Advocacy

98. is profession advocacy important to you? Discussion Question

100. CPA PAC ($)

102. 2010 is an Election Year State Constitutional Officers Governor Lt. Governor Treasurer Attorney General Comptroller General Superintendent of Education All House Members - 124 SC Congressmen Census and Redistricting (affects balance of power) *

103. Census and Redistricting Affects balance of power Occurs every 10 years 2011-legislature required to redistrict to ensure fair and accurate representation Computer models draw line Politics play a significant role Majority party controls the process Could result in a new 7th congressional district for SC Could change who is your representative or senator

104. Key Person Contacts (KPCs) Legislative Key Person Contacts – 160+ CPA volunteers who take the profession’s message on specific matters to THEIR local legislator Letter writing, emails, phone calls and personal one-on-one meetings Building relationships with your legislator positions you as a resource and an expert that legislators can call upon for the advice and feedback they often seek

105. SCACPA’SAdvocacy Activities 6th annual CPA Day @ the State House, May 4, 2011 Annual Tax Guide for Legislators Annual IRS-DOR meeting with practitioners (October) Ad hoc committee with SC DOR Monitor meetings of the SC Board of Accountancy Opportunities to meet policymakers

106. Advocacy for the Profession Sign-up to become a Key Person Contact (KPC) Contribute annually to South Carolina CPA/PAC Vote on November 2 Participate in the May 2011 “CPA Day” event Complete 2010 IRS/DOR survey What you can do…

107. Trends in Public Accounting Trends in Corporate Practice Leadership Strategies PEOPLE AND PLACES

108. People and Places Trends in Public Accounting

109. Which Professional Advisor do you Consult for Business Help? 93

110. Are you satisfied with your CPA’s help in making your business more profitable? 94 Survey sponsored by George S. May International

111. Are you satisfied with your CPA’s help in making your business more efficient? 95 Survey sponsored by George S. May International

112. Accounting Today’sTop 100 Firms No surprise: “2009 was a tough year”’ Survey of the 100 largest firms in the U.S. Includes one South Carolina firm Growth was the result of flexibility, vision, nimbleness & “tough calls” Firms are now focusing on rebuilding business and growing as the economy recovers 96

113. Niche Services Grow 97

114. Niche Services Grow 98

115. Niche Services Grow 99

116. Client Growth Trends 100

117. Client Growth Trends 101

118. 102

119. The Top Issues Facing Firms Client Retention Tax Law Complexity and Changes New Regulations and Standards for Small Firms Keeping up with Standards Work/Life Balance Sole Practitioners & Small Firms 103 Source: PCPS

120. The Top Issues Facing Firms Client Retention Retaining Qualified Staff (at all levels) Tax Law Complexity & Changes New Regulations & Standards for Small Firms Marketing/Practice Growth: Bringing in New Clients For Firms 11-20, add: Keeping Up With Standards Firms with 6-10 CPAs 104 Source: PCPS

121. Private Company Practice Sectionwww.PCPS.orgPractical resources for firmsDues: $35/CPA, not to exceed $700 105

122. People and Places Trends in Corporate Practice

123. The Recession’s Impact on CFOs & Their Finance Organizations The economic downtown has put a spotlight on CFOs and their organizations Urgent needs for capital acquisition, cash flow management and revenue challenges demanded swift action and creativity IBM’s 2010 Global CFO Study – based on input from 1,900 CFOs & senior financial leaders – finds that CFOs are emerging with far more influence at the enterprise level 107

124. Top Concerns of CFOsCFO Magazine, April 2010 Concerns About the Macro Economy Consumer Demand Federal/Government Policies Price Pressure from Competitors Credit Markets/Interest Rates Federal Budget Deficit Concerns About Their Own Companies Ability to Maintain Margins Ability to Forecast Results Maintaining Morale/Productivity Working-Capital Management Attracting & Retaining Qualified Employees 108

125. CFOs are Emergingas Key Players in All Businesses CFOs have become the key company leaders CEOs and Board are turning to for answers More than 70% of CFOs are advising or playing a critical decision-making role in: Risk mitigation Business model innovation Selecting key metrics linking performance to strategy “These are the times when the CFO role is the most important in the company” 109

126. CFOs are Becoming the Strategy Gurus Source: IBM Global CFO Study 110

127. Finance Must Provide Insights That Look Back & Forward 111

128. CFO as Value Integrator It’s no longer “good enough” to excel at core finance activities The finance operation needs to advise on strategic and operational issues too The “integrator” role involves “efficiency” and “insight” The Value Integrator’s mission should be to help the company “think as an overall business instead of individual areas” 112

129. www.ibm.com/cfostudy 113

130. Economic recovery & the U.S. fiscal outlook Healthcare reform Employee benefits Financial regulatory reform Global convergence of U.S. GAAP & IFRS Financial instruments & how to account for them Financial statement presentation Revenue recognition Business taxation 2010 Top Challenges for Finance Executives

131. People and Places Leadership Strategies

132. D. Michael Abrashoff, former Navy Commander author of “It’s Your Ship” What are the attributes of leadership that can make a difference for any organization? What do leaders need to do to make a difference? Rule #1 --- focus on the things you can influence, not the things you can’t How to Lead Througha Recovering Economy 116

133. How to Lead Througha Recovering Economy Lead by Example Create a Climate of Trust Listen Aggressively Communicate Purpose and Meaning Look for Results, Not Salutes Take Calculated Risks Go Beyond Standard Operating Procedures Strengthen Others Generate Unity Cultivate Quality of Life www.grassrootsleadership.com 117

134. Hiring the Right People The economy has kept people in their jobs with current employers As the economy improves, people will move One study found 54% of currently employed workers said they plan to change jobs as the economy improves What should managers be thinking about as we prepare for this mass migration of staff? 118

135. Career Management as a Retention Tool How do you help employees plan for their future? Do you have a conscious plan to help your employees? Pay increases, bonuses & other financial incentives have been the typical retention tools Towers Perrin’s “Global Workforce Study” found non-monetary incentives work best after a few years on the job 119

136. Career Management as a Retention Tool External career opportunities – or lack of internal opportunities – is among the top 5 reasons people leave An option to consider is cross-functional training Beneficial to both the employee & the company The Towers Perrin study found 76% higher retention when a cross-functional training strategy was in place 120

137. What Keeps People on the Job? The challenge is not just to keep people on the job ---- it’s to also engage them in the organization’s mission Leaders/managers as coaches Make talent management a top priority It’s not possible to over-communicate with your employees Awareness of generational attributes is a key to success 121

138. Video Valuing Today’s Youth

140. THE NEW & SOCIAL MEDIA

143. LinkedIn: 47 50 million users

144. Twitter: 32 million users… and growing.

145. Social Media is a Business Changer Social media is changing the business of your profession, long-standing industries, marketing and communications People trust the opinions of other people as much as, or sometimes more than the “experts” – and definitely more than spokespeople Relationships are an important part of today’s commerce “The Net Gen’s eight norms provide a manifesto for change that will revolutionize the workplace of tomorrow. These norms will also provide competitive advantage to companies that embrace these norms today.” – Don Tapscott “Grown Up Digital”

146. And what about CPAs? 54% are on LinkedIn 48% are on Facebook 21% are on Twitter 61% attend webinars 36% read blogs 28% listen to podcasts

147. Marketing Strategy 2.0 Source: MACPA & Business Learning Institute

148. Boo! Don’t let fear drive your social media decisions. Inform yourself!

149. Emerging Leaders Women in Leadership SCACPA Web site 95th Anniversary Top 5 for SCACPA

150. New Strategic Plan2011-2016 Continuing education Communication Advocacy Young CPAs Governance and structure 30 members created Charts course for next six years

151. Thanks for coming today! Erin Hardwick 803-791-4181 x 104 ehardwick@scacpa.org