MACPA PIU - Spring 2011
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The document outlines the rapid changes and challenges facing the CPA profession, emphasizing the need to adapt to new risks, legislative changes, and evolving workforce demographics. It highlights the importance of collaboration among CPAs to navigate these shifts and discusses initiatives like CPA mobility legislation and private company standards. Overall, it underscores the necessity of innovation and leadership within the profession to address the complex future landscape.
MACPA PIU - Spring 2011
- 1. Tom Hood, CPA.CITP CEO Maryland Association of CPAs
- 4. 1. Speed – the rate of change will be blinding, comprehensive in scope and touch every aspect of your life 2. Complexity – A quantum leap in seemingly unrelated forces converging on everything 3. Risk – New risks, higher risks, and more risks 4. Change – Drastic adjustments in your work, community & relationships forcing you to adapt quickly to radical changes 5. Surprise – sometimes good, sometimes difficult to imagine, surprise will become a daily feature of your life
- 5. We feel overwhelmed by the waves of change The 5 C’s • Competition • Compliance • Convergence • Change • Complexity
- 6. There is a way out… The tornado of changes from CPA Vision Project circa 2000
- 7. We can to learn how to harness the winds of change, together!
- 8. The Power of We!
- 9. We can become navigators of change “There isn’t the luxury of time. We used to say, ‘Wait until this crisis is over and we get back to normal,’ but that never happens. We have to be ‘change animals.’” - Michele McKenzie, President and CEO, Canadian Tourism Commission
- 10. Let’s break it down • Economic • Political / Legislative / Standards • Social / Workforce Demographics • Technology • The Future of our Profession • MACPA resources
- 11. Economic
- 13. Maryland by the numbers – Unemployment stats 8.5 8.0 7.5 7.0 6.5 6.0
- 15. Climbing out faster than most states 2009 versus 2007
- 19. 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
- 20. Update on PTIN • Need “new” PTIN before 01/01/2011 • Required for Signing Preparer or preparer of all or substantially all of tax return (major victory) • Fee is $64.25 • Actively Licensed CPAs and staff exempt from exam • CPAs in industry are exempt from filing for employers
- 22. 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
- 23. 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
- 24. More than 100 MACPA members call our senators and we defeat the amendment!
- 25. “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.” ‐ Peter Drucker, Managing in Turbulent Times
- 26. 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 26 In Process
- 27. The Federal Issues – more waves of change • FTC Red Flags rule – privacy & identity theft • Tax Preparer Registration & PTIN issue • Patient Protection Act & 1099’s • Tax Strategy Patents • Dodd‐Frank Act • 3% Withholding on Govt Pmts
- 28. 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
- 29. MACPA 2011 Agenda 5 for 5! 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 18, 2012
- 30. How we did it
- 31. Looking ahead to 2012 • Special Session to deal with redistricting (and budget) – will see tax proposals • Sales Tax on Services • Combined Reporting • Comparative Fault = increase liability • Quid Pro Quo for DC mobility
- 32. It all adds up $ per partner / year 1. CFPA $250 2. Tax Prep $150 3. Debt $150 4. Mobility $500 Total $950 Sales Tax est $22,000 per partner
- 34. 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
- 35. The Players SEC FAF BRP FASB GASB PCFRC & State Boards & State CPA Societies
- 36. Additional Background Info 15,000 issuers and 28.5 million private companies but GAAP driven by public company issues Small businesses employ more than half of all private sector workers Private companies and their financial statement users have information needs that are different than public companies
- 37. Similar Issue Outside the US Too
- 38. Concerns About Private Company Financial Reporting Include: Too many GAAP-specific requirements not useful or relevant for private companies Greater FASB emphasis on public companies Increased cost, complexity, time- consuming using full GAAP Use of OCBOA raises the issue of what’s “generally accepted”
- 39. U.S. Answer: Blue Ribbon Panel on Private Company Financial Reporting Address how accounting standards can best meet private company financial statement users’ needs Determine future of GAAP standard-setting process for private companies Sponsored by AICPA, FAF and NASBA 18 panel members: cross-section of financial reporting constituencies, including lenders, investors, owners, preparers and auditors
- 40. Blue Ribbon Panel’s Conclusions A problem exists that needs resolution Recommendation #1 - Enhance GAAP for private companies by making significant modifications, where warranted Recommendation #2 - FAF should create a separate private entities accounting standards board
- 41. Other Key BRP Recommendations Framework for differential decision criteria 3-5 year sunset review to determine effectiveness of new board 5-7 board members $4-5 million annual budget
- 42. FAF “Working Group” FAF created a “Working Group” on March 4, 2011 Comprised of FAF Trustees and FAF Staff Added non-profits to the mix
- 43. 90.87% of MACPA members believe we need Private Company Standards Insights form the Spring & Fall, 2010 PIU / town hall meetings covering 2,000+ members
- 44. Judy O’Dell chair of FASB PCFRC shared her perspective
- 45. MACPA’s response MACPA sent comment letter to FAF on December, 2010 for initial survey MACPA Chair Kimberly Ellison-Taylor appoints special Accounting Standards Task Force Accounting Standards Task Force held meetings from Jan – Mar, 2011
- 46. MACPA Accounting Standards Task Force – The power of “We” Chair: Art Flach Grant Thornton Public accounting firm MACPA Facilitators: Tom Hood MACPA CEO & Executive Director Non-Profit Jackie Brown MACPA COO Non-Profit Skip Falatko MACPA CFO Non-Profit Task Force Members: Ernie Paszkiewicz Gross Mendelsohn & Assoc. Public accounting firm Rob Tuggle BB&T Banking Bill Ziegler BB&T Banking Carl Kampel Ellin & Tucker Public accounting firm Joselin Martin Hayles & Howe Private company Liz Gantnier Stegman & Co. Public accounting firm Bob Tarola Right Advisory Public company consultant Mike Manspeaker Smith Elliott Kearns & Company, LLC Public accounting firm Ken Kelly McCormick Public company Don McConnell KCI Private company Jim Canalichio Dixon Valve Company Private company Jim Jenkins Stout Causey & Horning Public accounting firm Al DeLeon DeLeon & Stang Public accounting firm Debra Busk DeLeon & Stang Public accounting firm Charles Postal Santos, Postal & Co. Public accounting firm Jim McKinney University of Maryland Educator OJ Phillips Small Business Administration Government
- 49. Draft conclusions – Not approved by MACPA Board Private Company Standards need to be addressed (costs, complexity, OCBOA) Current structure is not working – PCFRC recommendations were not addressed, prior studies indicate issue Other jurisdictions around the world recognizes needs of private company users are different
- 50. Next Steps Finalizing whitepaper Approval and position by MACPA Board Distribution and communication
- 51. Maryland ranks in top five states with highest audit deficiencies with DOL EBP Audits (401k) & 403(b) Audit Quality must be raised in Maryland MACPA worked with the DOL to put on our first Employee Benefit Plan Conference in May, 2010 Look for the second annual conference in May, 2011
- 52. Can green give you a competitive advantage? 70% of consumers are looking for businesses adopting sustainable business practices
- 55. 5 Generations in the workforce Live First, Work Second Digital Natives
- 56. Workforce & Demographics These guys are retiring These are the new workers These are making the purchasing decisions Facebook Email Generation Generation
- 57. Are you ready for Gen Y?
- 58. The Gen-Y guy
- 59. Gen Y’s Top Five Ways We Think and Act at Work 1. No expectation of lifetime employment 2. A feeling of entitlement with big expectations 3. A hunger for instant gratification and tangible outcomes 4. A new relationship with technology & communication 5. A need for ongoing feedback
- 60. In defense of Gen Y “The only way we can go wrong is to discourage these kids. They are set to go. They’re smart. They’re motivated. They understand the problems. They are engaged.” - David Gergen – Political Analyst
- 61. New CPAs in Maryland New CPAs 457 383 291 236 194 166 74 04 05 06 07 08 09 10
- 63. Technology • Cloud • Mobile • Location‐based / Augmented Reality • Security / Privacy • Social Media • XBRL
- 65. Social Media According to CFO magazine
- 66. The learning continues by using social media tools to connect the learners
- 67. Surfing Lessons! www.bizlearningblog.com www.cpasuccess.com www.cpalegislativeinsidercom
- 68. Comments on BizLearningBlog include a participant and author of book Jane Bozarth ‐ author
- 69. XBRL – Time to pay attention
- 70. XBRL & SBR
- 71. Turbulent times require new skills and new ways of thinking “You can’t stop the waves, but you can learn to surf” - Jon Kabat-Zinn Photo: Pratt’s surfing page
- 75. Top 10 Trends (and the time to address is now) 1. Pressures on Gov’t & rising deficit 2. Changes in learning – informal & on‐demand 3. The cloud = flex, global, work anywhere 4. Increasing complexity, ambiguity & change 5. Globalization and economic shifts 6. Information overload 7. Shift to consumer power (push to pull) 8. Workforce, demographics, the “she” economy 9. Going mobile 10. Social media = business
- 76. Steve King – Emergent Research & author of Intuit 2020 report
- 77. GT: The Evolving Accounting Talent Profile 1. Developing soft skills 2. Understanding and applying international accounting 3. Understanding complex accounting and auditing standards 4. Adapting to an evolving regulatory framework 5. Addressing new external reporting needs 6. Understanding ERP or IT systems and technological 7. Employing quantitative risk management techniques 8. Possessing specialized industry knowledge and understanding company's non‐financial business drivers
- 78. What’s over the horizon for CPAs? www.macpa.org/forum http://www.aicpa.org/Research/CPAHorizons2025/
- 79. In 1997, the CPA profession crowd‐sourced its future with over 3,500 CPAs in the CPA Vision Project Our core purpose, our reason for being is CPAs... Making sense of a changing and complex world. Here is what they said…
- 80. 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. Combining insight with integrity, CPAs deliver value by: • Communicating the total picture with clarity and objectivity, • Translating complex information into critical knowledge, • Anticipating and creating opportunities, and • Designing pathways that transform vision into reality.
- 81. The DNA of the CPA • Communication & Leadership • Strategic & Critical Thinking • Focus on the Customer, Client, and Market • Interpretation of Converging Information • Technologically adept
- 83. The Decade of the CFO? The best CEOs in the world are a combination of CEO, COO and CFO. They are inspirational, financially literate and know the ins and outs of their business at a sophisticated level.
- 85. Why we are here and what we are doing about it C P A
- 87. The Power of We! Our colleagues are phenomenal. I see it time and time again, both on this website and elsewhere. Not only "resources" but the human creativity, insight and wisdom so freely given. It reminds me of a karate dojo where members at various levels tutor and mentor those "below" them while being tutored and mentored "from above." Makes me proud to be part of the profession. I'm glad so many recognize how unique and very valuable we as a group are, it's truly remarkable and oh so greatly appreciated. Since I appear to be the sole member practicing at the beach, I would like to suggest maybe a little social mixer for listserv participants before, during, or after the MACPA Beach Retreat? Nothing too formal or structured, but so we all can put faces with names, etc. I see these "flash mobs" on the news, lol, something like that. I will be some sort of forward team arranging a place and maybe a drink or food deal with an OC establishment. I feel that I have come to know many of you but couldn't pick you out of a police line up! It's not just the sole practitioner. There are many of us out here with small practices that don't have the manpower resources to maintain in‐house specialized departments. I find it amazing that even at the height of deadlines there are those who "belly up to the bar," to offer words of wisdom and advice for the practitioner in need. Awesome folks here! . I am, too, a sole practitioner, and this year I used listserv for the first time. Every time I have some problems I couldn't figure out and always had to spend more time than "necessary" to look for publications, look for research materials, etc. But this year, any problem or issue I post there, to my surprising happiness, the answer came in within a couple of hours, without spending my own time. I just waited for any answer to come out from you. And especially this year, which I found out I was having more complicated cases than before, how much I was able to deal with, thanks to all of your suggestions, advices, ideas, all of which truly helped me survive this tough season. And yes, finally, I really think our membership dues become worth when we utilize this group's brainstorming. Thank you all for your invaluable advice and comments, suggestions you have given to me, who has been suffering lack of great resources. I could give you unlimited thank‐yous to you all! I agree the listserv is an invaluable resource and it has helped me a great deal during this tax season. Of all the wonderful benefits of being a MACPA member, the value of this one service covers the cost of my membership dues times ten. . With the wealth of experience available here, I can get information that would be difficult to come by anywhere else. I echo the sentiments of some of those before me, I wish I could give as much to the website as I get from it. Thanks to all for your invaluable advice and comments during the past tax season!! Thanks you for the superb quality of this site. I do so few returns, but get (and don’t contribute) so much from it! What a great resource for the sole practitioner!! Thank You for the invaluable support to those in the collective we call the ListServe :) Two things I so much enjoy from this group is 1) always being able to learn something new, and 2) the reminders that the wackiness I encounter in my clients isn't unique to me, and 3) if I wasn't so sleepy I'd remember number 3 …. Lol You all are the best!! I too would like to add my thanks to all the wonderful participants in this list serve. While I am semi‐retired, the information provided is invaluable to assist in the preparation of the remaining clients whom I still service. Best wishes to all for a restful post tax season. Enjoy, before you tackle the extensions. My thanks to everyone that assisted in any and all ways this season. My last return before the clock strikes midnight was just transmitted, so I am off. In the immortal of words of the beloved Truman character, “Good morning, good evening, and good night.” I agree with all. The listserve is a tremendous resource to all. I have learned so much. Almost makes you want to form a new acctg firm ‐‐ MACPA & CO! As one of the many lurkers who receives e‐mails and posts questions very infrequently, I speak only for myself when I say thank you to all who share their knowledge here. For those who run small shops, this is a valuable resource for information. My heartfelt thanks for your generosity. Amen to that…I add my thanks!!! Now…off to a week of NOT coming to the office, answering phones, answering emails, etc…. Many thanks to all those who asked and those who answered. I would like to thank everyone who offered words of wisdom on the list serve. Its amazing how much insight you gain from the collective wisdom of the group. I really appreciate the time and effort that everyone put forth, especially the 10 or 15 ‘heavy lifters’ who seem to respond to any question quickly. Thanks everybody for the additional support and welcomed contributions! Amen. I only wish I could add as much as I get. At the risk of being redundant…I add my thanks for the many timely and helpful replies. It is precisely because I value the input from so many folks brighter and more knowledgeable than I, that I try to take time out and answer on the odd occasion I have something to add. I would argue that, for those of us without a large firm “ivory tower” to turn to, this has become one of the greatest tools/benefits offered by MACPA. THANK YOU ALL AGAIN!! I must get on the band wagon also and thank everyone who utilized the listserve. It has been invaluable. Questions asked reminded me that I may have the same problem and the answers given have been helpful and informative. You all are such a wonderful help! THANK YOU! Another thank you for the listserv especially to: Those of you who are so very generous with your time and expertise. Those of you whose questions make my clients seem not so bad. Those of you who have taught me that the IRS instructions are really very useful and to just try looking it up. Those of you who made me laugh. Certainly this is the best CPE there is, even if we do not get credit for it. Ditto. I couldn't have said it better myself. I hope everyone gets some time to rest and relax! Thanks to all, enjoy the off season. I couldn’t agree more. Thanks particularly to the “heavy lifters” who seem to respond to almost every question with insights, cites and great advice. I must also add my thanks to all who participated on the listserve. Many times answers to questions were provided even before I had time to ask them.
- 89. Key events & dates Gov’t / NFP Conf ‐ Apr 29, 2011 ‐ U of MD Employee Benefit Conf ‐ May 10, 2011 ‐ Columbia MACPA Business & Industry Conference ‐ May 20, 2011 – Turf Valley MACPA Summit ‐ Jun 2 & 3, 2011 ‐ BWI Beach Retreat ‐ Jul 5 – 7, 2011 ‐ OC CPA Day in Annapolis ‐ Jan 18, 2012 ‐ Annapolis
- 90. Executive Level Learning MACPA’s affiliate, the Business Learning Institute (BLI) delivers competency-based curriculum for managers and executives: Strategic Management Business Management Performance Measurement Management Leadership Development Communications Skills
- 91. Resources Products / Services Business Solutions • RJP Insurance • AON • Purchasing Power of the profession – Savings of up to 70% off!
- 92. New CPAs Swearing‐in Ceremony and MACPA Member Reception June 2, 2011 BWI Hilton
- 93. How Leadership is changing? From To • Information Stocks • Information Flows • Hierarchy • Network • Centralized • Distributed • Teacher • Facilitator • Push • Pull
- 94. How to survive the Extreme Future? • A future vision – a clear vision of where you are going • A sound strategy to get you there • Tools to help persuade key people • Effective execution Source: Dr. James Canton, Ph.d – author of the Extreme Future
- 97. “It is hard to plan for the long term future when you don’t know what is going to happen five minutes from now. Today, a competitive edge is thin and temporary; the edge quickly becomes the margin. The ability to define the edge, and the ultimate competitive advantage, is found in the smarts, heart and ingenuity of your people - that's your powerhouse. Tap that, train it, focus it and mobilize it; now you've engaged a network and inspired a sustainable shift. Insight to action, one without the other is either useless or destructive.” -Tom Hood & Gretchen Pisano co-authors of the i2a: Insights to Action Strategic Thinking System http://www.bizlearning.net/live/i2astrategicplanning
- 98. The leaders job is to… Provide hope and inspiration!
- 99. 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