macpa piu 2012 fall edition

Professional Issues Update / Town Hall

By: Tom Hood, CPA, CITP, CGMA CEO

Preparing for the Extreme Future

Fall, 2012

A  Message  from  our  Chair  

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Our Sponsors

MACPA Innovation Summit

http://cpa.tc/1g8

“People  don’t  buy  what  you  do,  they  buy  why  you  do  what  you  do.”  

-­‐  Simon  Sinek  

Why MACPA?

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• Change • Complexity • Compliance • Convergence • Competition

Remember this? MANAGING THE SEA CHANGE

30 Future Forums 1,000 CPAs

Identified these top trends

What CPAs think about the future

http://www.bizlearning.net/live/i2afutureforums

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The Black Swan Lives An event that is a surprise to the observer, has a major impact, and often inappropriately rationalized with the benefit of hindsight.

Author: Nassim Nicholas Taleb

The  Top  100  Most  InfluenFal  

•  AICPA  •  SEC  •  PCAOB  •  MACPA!  •  IRS  •  Ron  Baker  –  Value  Pricing  •  FASB  •  Gary  Boomer  –  Tech  Guru  •  The  next  president  •  IASB  

PrevenFng  the  future  “Black  Swan”  •  Technology  

– The  Cloud  – Big  Data  – Mobile  – Social    

•  Emerging  Leaders  &  Influencers  •  Regulators  •  How  to  thrive  amidst  the  chaos  

Digital Information Created, Captured, Replicated Worldwide

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2006 2007 2008 2009 2010 2011

Exabytes

10-fold Growth in 5

Years!

DVD RFID

Digital TV MP3 players

Digital cameras Camera phones, VoIP

Medical imaging, Laptops, Data center applications, Games

Satellite images, GPS, ATMs, Scanners Sensors, Digital radio, DLP theaters, Telematics

Peer-to-peer, Email, Instant messaging, Videoconferencing, CAD/CAM, Toys, Industrial machines, Security systems, Appliances

Source: IDC, 2008

Source:  Lee  Rainie  –  Pew  Internet  Research  

“The  profession  will  need  to  adopt  new  technologies  and  demonstrate  effec6ve  

leadership  in  doing  so.”  1.  CPAs  must  stay  current  with,  embrace  and  exploit  technology  for  their  benefit  for  increased  efficiency  and  expansion  of  services.  2.  The  profession  must  find  soluFons  to  offer  investors  and  stakeholders  up-­‐to-­‐date,  real-­‐Fme  financial  informaFon  and  to  increase  transparency.  3.  CPAs  must  embrace  mobile  technologies  and  social  media  to  modernize  and  enhance  interacFon  and  collaboraFon  with  clients  and  colleagues.  

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The FAF & XBRL – An Interview with Terri Polley

2012  2011  

Altova  -­‐  MACPA  Case  Study  #2  

MACPA  Summit  June  2011  

XBRL  US  Nashville  Sept  2011  

MeeFng  w/  MD  Comptroller  on  SBR  for  MD  ‘08  

M  MACPA  XBRL  project  Use  acct  student  to    tag  f/s  

2008  1998   2004  

Charlie  Hoffman  Eric  Cohen  Walter  Hamscher  

Wayne  Harding  Louis  Matherne  

Mike  Willis  –  PWC  DigitalNow  

Louis  Matherne  FASB  -­‐  NFP  

Hudson  Hollister  DATA  Act  

MACPA  XBRL  Advisory  

Altova  -­‐  MACPA  Case  Study  

2006  

Skip  Falatko  –  MACPA  Eric  Cohen  –  PWC  

MACPA  Tags  f/s  Mike  Willis  –  PWC  Chethan  Gorur-­‐  MSFT  Taylor  Hawes  –  MSFT  Skip  Falatko  -­‐  MACPA  

MDBIZEXPO  XBRL  

sessions  

MACPA/BLI  facilitates  XBRL  Int’l  Strategic  Plan  

CPA  Vision  -­‐  2001   Bob  Laux  –  MSFT  Mike  Willis  –  PWC  

CPA  Island    &  CPE  in  J  of  A  June  ‘08  

Rutgers  –  Nov  08  Harm  Jan  -­‐  Netherlands  

The  Future  is  Now  –  J  of  A  XBRL  arFcle  

MACPA  InnovaFon  Summit  June  2012  

Apr  ‘11  Conor  O’Kelly  –  HP  XBRL  Int’l  presents  to  SU  

May  2012  MACPA  lemer  Chairman  Issa  Data  Act  

MACPA  Social  Media  –  J  of  A  Sep  ‘09    

MACPA  arFcle  Aug  2012  

XBRL  France  Second  Life  June  ‘09  

FEI  –  Gartner  Report  2010  

From  CPA  Horizons  2025  Report,  October,  2011  

1.  CPAs  must  stay  current  with,  embrace  and  exploit  technology  for  their  benefit  for  increased  efficiency  and  expansion  of  services.  2.  The  profession  must  find  soluFons  to  offer  investors  and  stakeholders  up-­‐to-­‐date,  real-­‐Fme  financial  informaFon  and  to  increase  transparency.  3.  CPAs  must  embrace  mobile  technologies  and  social  media  to  modernize  and  enhance  interacFon  and  collaboraFon  with  clients  and  colleagues.  

Integrity  –Competence  –  Lifelong  Learning  ObjecFvity  –  Excellence  –  Global  Relevance  

The  Data  Act  

hmp://www.youtube.com/watch?v=Bnn3IsOhulE    

The  next  generaFon  

Beloit College’s 2016 Mindset List •  They have always lived in cyberspace, addicted to a

new generation of "electronic narcotics.” •  Michael Jackson's family, not the Kennedys,

constitutes "American royalty.” •  If they miss The Daily Show, they can always get

their news on YouTube. •  They have never seen an airplane "ticket.” •  They can't picture people actually carrying luggage

through airports rather than rolling it. •  A significant percentage of them will enter college

already some hearing loss.

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Beloit College’s 2016 Mindset List •  Having grown up with MP3s and iPods, they never

listen to music on the car radio and really have no use for radio at all.

•  They have had to incessantly remind their parents not to refer to their CDs and DVDs as "tapes.”

•  History has always had its own channel. •  They watch television everywhere but on a

television. •  They grew up, somehow, without the benefits of

Romper Room. •  Bill Clinton is a senior statesman of whose

presidency they have little knowledge. 24

Accounting Students Perspectives

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Top Seven Issues Facing Young professionals

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1.  InformaFon  overload  (including  accounFng  and  tax  complexity)  

2.  Work  /  life  balance  3.  GeneraFonal  issues  and  

communicaFons  (including  upper  management  not  sharing  knowledge  with  the  younger  generaFon)  

4.  Developing  networking  skills  5.  Keeping  up  with  technology  -­‐-­‐  

especially  the  cloud  6.  Finding  career  guidance  7.  Understanding  social  media  

benefits  

What they want us to do to help

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1.  Mentorship  /  Advice  on  Career  Development  

2.  Expand  my  Networking  Skills  3.  Young  CPA  entrepreneur  group  4.  Help  bridge  communicaFon  with  

staff  &  leadership  5.  Training  on  technology  –  cloud,  

social  6.  Informal  roundtable  disucsisons  

among  NYPN  

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Wisdom from the MACPA Leadership Academy

According to these young professionals, the future is one in which CPAs: ● are proactive, flexible, adaptive and collaborative by nature; ● have regained the trust of their clients and the public at large; ● have successfully bridged the profession’s “leadership gap” by focusing on succession planning, personal growth, and generational cooperation; ● have created the profession’s premier global industry standards and best practices; ● have redefined the profession through work / life integration, collaboration, and a team-first approach; and ● have earned a reputation as technological innovators.

Next class: December 4,5,6, 2012

DigitalCPA Conference

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Do you have the urge to merge?

Are  we  entering  the  age  of  the  small  firm?  

1.  Merger-­‐Mania  fall  out  

2.  Corporate  downsizing  

3.  Technology  leveling  the  playing  field  

What makes a great CFO or Controller?

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Your  role  as  a  CFO  is  storyteller;  make  the  numbers  tell  the  company's  story.  The  value  of  the  business  is  created  by  employees,  customers,  and  investors  in  that  order  and  alignment  of  vision,  mission  and  strategy  across  all  three.  

Top Risks facing CFOs

Source: Deloitte CFO Signals 2Q 2012 Organizations are more likely to achieve goals when properly communicated risk appetite guides management in setting goals & making decisions

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MD Comptroller MD Comptroller

CAQ  

US Treasury

MD Comptroller

Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA

Federal  &  State  Laws  &  RegulaFons  –  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

The (infra) Structure of the CPA Profession

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What’s at Stake?

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Maryland’s  fiscal  crisis  

Is  there  a  third  way?  Not  just  conFnuous  tax  increases;  Not  just  draconian  spending  cuts;  But  accountability  and  efficiency  at  a  program  and  budgeFng  review  level.  

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CPAs in Tax The increase in IRS activity is swamping our tax practitioners and costing them hundreds of hours in chasing down IRS notices.

Maryland - 1099R - 2008

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Private Company Standards

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Auditor Rotation Cascade!

Are  audits  gexng  worse?  Or  are  the  inspectors  gexng  pickier?  

Source:  Ny  Times  

PEEC  InterpretaFon  101-­‐3,  "Nonamest  Services.”    The  commimee  is  proposing  that  financial  statement  preparaFon  and  cash-­‐to-­‐accrual  conversions  performed  by  a  CPA  member  for  a  client  should  be  considered  nonamest  services  and  subject  to  the  revised  requirements.    Under  the  proposed  revisions,  the  preparer  is  no  longer  required  to  perform  a  compilaFon  with  respect  to  those  statements  unless  engaged  to  do  so.    The  exposure  dra{  also  considers  the  cumulaFve  effect  that  providing  mulFple  nonamest  services  can  have  on  independence.      

State  LegislaFon  

CPA Day in Annapolis – January 16, 2013

CPA State Legislators

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www.cpamobility.org    

•  Collaborative effort with AICPA – CPA/SEA – NASBA & State CPA Societies

•  49 + DC states passed legislation in five (5) years •  Maryland enacted it in 2008

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•  Accountancy bills (20 states) - 51

•  Auditor Rotation (3 states) - 8

• Mobility (2 states) - 6

•  Regulation of Tax Preparers (3 states) - 5

•  Tax on Accounting Services (6 states) - 11

•  Peer Review (4 states) - 7

•  State Board Consolidation (6 states) 8

State Legislation and Regulatory

Maryland & Federal Tax Preparer Law Threats to your CPA License

•  Well intentioned consumer group •  Solving a problem – low income tax

frauds •  But…creating problems for CPAS

–  Licensed / Certified Tax Preparers would be confusing to the public

–  Tax Preparer Exam using ACAT / H&R Block designation (ATA, ATP) opens door for second tier license

–  Misinformation / confusion

•  76  Hours  of  CPE  Carryover  –  4  hours  of  Ethics  every  two  years  

 •  LICENSE  TERMS  DEFINED:  INACTIVE  VS.  EXPIRED  

 •  Sole  PracFFoners  OperaFng  as  Corps  or  LLCs  

 •  Acceptable  Use  of  Name  (solo  cannot  use  Group  or  Associates)  

CPA  Licensing  FAQs  

Maryland  fees  effecFve  6/1/2012  •  CPA  Exam  

–  (1)  AudiFng  and  AmestaFon  —  $[249]  200;    –  (2)  Financial  AccounFng  and  ReporFng  —  $[237]  200;    –  (3)  RegulaFon  —  $[211]  180;    –  (4)  Business  Environment  and  Concepts  —  $[198]  180;    

•  Licensing  Fees  –  Renewal  fee  —  $[80]  50;  for  two  years!  –  ApplicaFon  for  inacFve  status  —  $[40]  25;    –  Renewal  for  inacFve  status  —  $[40]  25;    –  Reinstatement  for  inacFve  status  —  $[60]  50;    –  ReacFvaFon  from  inacFve  status  —  $[80]  50;    –  Reinstatement  of  expired  license  —  $[120]  100;    –  Firm  applicaFon  fee  —  $[80]  60;    –  Firm  permit  fee  —  ${80]  60;    –  Firm  renewal  fee  —  $[160]  120;    –  Firm  reinstatement  fee  —  $240;    –  [Proctoring  fee  —  $75]    

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New CPA Swearing-in Ceremony – November 1st, BWI Hilton Hotel

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Our 2013 Legislative / Regulatory Agenda •  Federal

•  Workforce Mobility •  Tax Return Due Dates •  Data Act •  Dodd-Frank – preventing regulatory burdens •  PPACA – preventing regulatory burdens

•  State •  Retaining Contributory negligence •  Defeating Sales Tax on Services •  Offering CPA perspectives on State Financials

•  State Board •  Build relationships with ne DLLR team •  Work on CPE for smaller units •  Monitor Peer Review implementation •  Monitor CPA Exam application process

Surviving “Black Swans”

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1. Have  a  vision  for  your  future  

2. Build  on  your  strengths  

3. Focus  on  High  Leverage  OpportuniFes  

4. Keep  your  L  >  C  5. CollaboraFon  is  key  

Top ten skills needed

Source: IBM 2012 Global CEO Study 74

Staff Principal/Director

Senior Senior Manager

Manager

Decision making by specification,

task specific work

1st level supervision on established guidelines & standards

1st level of strategic thought & focus on boundary spanning

activities

Assess & understand longer-term variables

& accomplishing future goals

Leading and/or developing new practice areas, strategic alliances

& talent Critical Turning Point The

Bounce

Copyright 2012 – Business Learning Institute 76  

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The collaboration curve replaces the experience curve

• “The organizations that will become the household names of this century will be renowned for sustained, large-scale, efficient innovation.

• The key to that capability is neither company loyalty nor free-agent autonomy but, rather, a strong collaborative community.” • HBR, July-August 2011

It really is about this...

Inner Circle Bought-in

Informed Leaders I support it

Pragmatists I’ll wait & see

Skeptics Prove it to me

No-Nos I don’t like this

Tipping  point    which  way  will  they  go?  

This is your risk point!

Adoption of almost everything happens along a bell curve according to Geoffrey Moore. Change and ideas are no different, the key is to tip the odds in your favor and pay attention to

the numbers of people in each level of your organization and within each group.

What  can  you  do  to  boost  your  odds?  

www.bizlearning.net  

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A leader’s job is to set context and to provide hope and inspiration..."

Tom  Hood,  CPA.CITP  CEO  

Maryland  Associa8on  of  CPAs  Business  Learning  Ins8tute  

(443)  632-­‐2301  E-­‐mail  tom@macpa.org  

Web  hNp://www.macpa.org  Blog  hNp://www.cpasuccess.com  hNp://www,bizlearningblog.com  

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www.cpasuccess.com www.bizlearningblog.com

Follow me on: ü  Twitter: http://www.Twitter.com/tomhood

ü  LinkedIn: http://www.linkedin.com/in/tomhood

ü  Facebook: http://www.facebook.com/thoodcpa ü Slideshare: http://www.slideshare.net/thoodcpa

ü Youtube: http://www.youtube.com/thoodcpa

ü Second Life avatar name: Rocky Maddaloni Check our Customized Training Catalog out:

http://www.bizlearning.net

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CPA  Vision    Report,  October,  1999  

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