macpa fall town hall / professional issues update - 2015
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CPA FIRM TOP ISSUES DIAGNOSTIC REPORT FOR MACPA TOWN HALL
American Institute of CPAs® Private Companies Practice Section 8
Carter Heim, CPA, MST, CFF HeimLantz, CPAs & Advisors 410-841-557 [email protected]
PCPS Superheroes
Jeanie Price, AAAPM DeLeon & Stang, CPAs & Advisors 301-948-9825 [email protected]
What is PCPS?
3
• $35/CPA, max $700 Add-‐on firm
membership secCon of the AICPA
• Passionate about providing firms support for: • keeping up with changes in standards/regs • strategies in ploLng the firm’s direcCon • the everyday intricacies of running a pracCce
PCPS comprises of a team of experienced
CPAs
• This knowledge is foundaConal to the turnkey tools and soluCons that PCPS delivers
PCPS engages with CPAs to understand the pain points.
PCPS is the Home for Firms at the AICPA
~ 6,300 Firms and over 63,000 CPAs Represented
Sole PracCConers
2-‐5 CPAs
6-‐10 CPAs
11-‐20 CPAs
21+ CPAs
10
PCPS CPA Firm Top Issues Survey
5
• Conducted biannually
• Gathers informaCon from pracCConers across the country represenCng firms of different sizes
• Used to understand the criCcal challenges facing PCPS member firms
PCPS CPA Firm Top Issues
Succession, succession, succession Client retention and client acquisition remain a priority Human capital concerns are back — finding and retaining qualified staff are in the top five for all firm sizes with more than two professionals Keeping up with tax laws and new rules and regulations are the biggest concerns for small firms Seasonality and workload compression is now a concern for all firm sizes Owner/partner accountability and unity remain issues for larger firms
12
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Succession Planning/ Aging of Owners &
Partners
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY &
UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS;
SUCCESSION PLANNING (TIE)
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
4 SUCCESSION PLANNING
5 RETENTION OF CURRENT CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
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15
Succession Planning PCPS Succession Resource Center1
• 54% without written plan
• Leadership development is among the top challenges
• 44% of firms in M&A talks
• Few managing partners have ability to hold partners accountable
Multi-Owner Firms • 94% without
practice continuation agreement
• 39% intend to merge or sell
• Half expect to sell $1 for $1 of billings, actual is likely much less
Sole Owners
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Succession Planning PCPS Succession Survey2
Chapters include: 1. IntroducCon 2. Drivers of Change for the CPA Profession 3. PosiConing Your Firm 4. Selling Your Firm 5. Merging Your Firm 6. Developing New Leaders 7. Turning Out the Lights 8. TransiCon Roles and ResponsibiliCes 9. What is the Value of Your Firm 10. Due Diligence 11. Key Elements to a Partnership Agreement
Available tools
Transfer an Accounting
Practice Checklist
Due Diligence Checklist
Shareholder in Training Checklist
Sample Practice Continuation Agreement
17
Succession Planning Succession Planning Guide & Tools3
Available Tools
Succession Planning Firm inMotion e-Toolkit 4
18
• Expanding upon the CPA Horizons 2025 Report, this toolkit help firms: – Stay on top of new and emerging trends – Embrace generaConal differences – ConCnue to meet client
needs and expectaCons • Five secCons
– Firm Structure & Strategy – Use of Technology – Clients & RelaConship
Building – Staff Development &
Structure – GlobalizaCon
Succession Planning Transition Continuum and Checklist5
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June 2016 at AICPA offices in New York, NY and Durham, NC
Leadership Training Develop the full potential of new and emerging partners by preparing them for responsibility and leadership
Who Should Attend? • Managers on the firm partner track • New Partners/Owners (five or
fewer years of experience) • Practice leaders seeking
partnership skills
Succession Planning Emerging Partner Training Forum
20
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Human Capital Concerns
Finding and Retaining
Qualified Staff
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY &
UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS;
SUCCESSION PLANNING (TIE)
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
4 SUCCESSION PLANNING
5 RETENTION OF CURRENT CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
22
Human Capital Concerns What Are Other Firms Doing?
• Hiring veterans or parents returning to the workforce
• ConnecCng with local schools and beginning an internship process – PCPS Internship Quick Start Guide6
• GeLng involved and parCcipaCng on college boards
• Providing flexible hours and telecommuCng opCons
• Partnering with local firms and sharing CPAs and interns
23
Human Capital Concerns Finding Talent Without Leaving the Office
• PCPS partnership with AccounCngfly provides firms with virtual recruiCng year round
• Build a free firm profile on AccounCngfly’s accounCng-‐specific online job board
• ParCcipate in Meet the Firms Week – October 19-‐23, 2015 – Firms that create profiles are eligible to parCcipate for free – Internships and entry-‐level jobs are promoted to all parCcipaCng students that are interested in working for a local firm
– Webcasts promote parCcipaCng firms and their open posiCons to candidates throughout the week
24
Team Recruitment Action Plan15
Sample Recruitment Promotion16
Firm Needs Assessment
17
Interview Questions18
Firm Value Proposition19
Finding Qualified Staff
Firm Competency
Model20
Six Motivators Calculation
Tool21
Flexibility Program Guide22
Mentoring Guide23
Performance Management Templates24
Retaining Qualified Staff
25
Human Capital Concerns PCPS Human Capital Resource Center7
ASSOCIATE
• Learns and develops technical competence by completing a degree qualification and working toward CPA certificate
• Applies self diligently to learn and understand technical skills and on the job practices and business processes
• Researches technical issues and participates in technical discussions relating to client assignments
• Develops an understanding of client businesses
SENIOR
• Has technical competence (degree qualification) and a relevant professional accreditation
• Has an identified area to specialize and refines skills, knowledge and expertise
• Applies technical knowledge and research in formulating client related recommendations
• Helps to solve complex business problems
MANAGER
• Has a general knowledge and application of relevant professional standards, emerging laws and regulations and corporate governance requirements
• Refines skills, knowledge and expertise as a specialist in an identified technical field and/or industry
• Applies technical expertise and interprets laws, regulations and standards to formulate client related recommendations
• Solves complex business problems
SENIOR MANAGER/DIRECTOR
• Has a good understanding of the prevailing business environment, industry and business processes
• Has a thorough knowledge and application of relevant professional standards, emerging laws and regulations and corporate governance requirements
• Is a specialist in a particular technical field and/or industry
• Abreast of changes in laws, regulations and standards and provides advice on the impact and implications to clients
PARTNER
• Has a thorough understanding of the prevailing business environment, industry and business processes
• Has extensive knowledge and application of relevant professional standards, emerging laws and regulations and corporate governance requirements
• Is a specialist and known leader in a particular technical field and/or industry
• Actively seeks ways to apply knowledge, interpret and anticipate changes in laws, regulations and standards to provide advice to clients on the impact and implications
26
Human Capital Concerns Firm Competency Model (Career Ladder)8
27
Human Capital Concerns RecruiCng Brochures9
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Seasonality/ Workload
Compression
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY &
UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS;
SUCCESSION PLANNING (TIE)
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
4 SUCCESSION PLANNING
5 BRINGING IN NEW CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
29
Seasonality/Workload Compression PCPS PublicaCons10
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Client Disengagement Letter12 Client EvaluationTool11
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Seasonality/Workload Compression Client Evaluations
32
Seasonality/Workload Compression Automated Workflow13
Silver ($X,XXX)
• Preparation of corporate income tax returns
• Preparation of individual income tax returns for owner(s)
• Corporate tax planning • Personal tax planning
for owner(s) • QuickBooks assistance • Annual financial
statement compilations • Two meetings with
practitioner
Gold ($X,XXX)
• All silver tier items, PLUS:
• Semi-annual financial statement compilations
• Four meetings with practitioner
• Unlimited telephone support
• Development of a company strategic plan
• Evaluation or development of the personal financial plan of the owner(s)
Platinum ($X,XXX)
• All gold tier items, PLUS:
• Quarterly financial statement compilations
• Full internal control review and recommendations
• Strategic planning retreat for the company
• An estate planning meeting with the owner(s) and development of a comprehensive estate plan
33
Seasonality/Workload Compression Three Tier Pricing
Excerpted from the Pricing Tool in the TCA Toolbox
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Keeping Up
Changes/Complexity of Tax Laws and
Federal/State Regulations
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY &
UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS;
SUCCESSION PLANNING (TIE)
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
4 SUCCESSION PLANNING
5 BRINGING IN NEW CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
35
• Webcasts – Washington Tax Brief 14 – Tax Power Hour 15
• Resources – Tax PracCce Resources
Webpage 16
• Up-‐to-‐date InformaCon – Tax E-‐Alert 17
Specialized Guidance – Tax IdenCty Thep InformaCon & Tools18
Keeping Up AICPA Tax Section
36
• Health Care Reform Resource Center 19
• PCPS toolkit includes: • Strategy checklist • Customizable brochures for
individual clients and small and large business clients
• Timelines including important provisions and effecCve dates
• ImplicaCons of the law for individuals and business clients
• Ways that CPAs can assist clients • Staff training and client PowerPoint templates
Keeping Up Health Care
37
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Client AcquisiAon and RetenAon
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY &
UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS;
SUCCESSION PLANNING (TIE)
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
4 SUCCESSION PLANNING
5 BRINGING IN NEW CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS CAUSED BY NEW REGULATIONS & STANDARDS
39
• Educate — Preparing you (and staff) to understand and arCculate the value of your tax services – Value-‐Centric Culture Checklist ensures delivery of a consistent message from
everyone in your firm about the value you provide clients – Talking points to overcoming objecCons to fees
• Engage — Engaging with clients to stay top of mind – CPA value and tax blurbs for the web and client newslerers – Tax planning brochures – Extension brochure with FAQs on this filing opCon – PowerPoint on current year topics
• Promote — PromoCng your firm to arract new clients – Sample client lerers – Sample social media posts
40
Client Acquisition and Retention Tax Practitioners Toolkit23
Client AcquisiCon and RetenCon
You Are The Value Online Workshop24
41
Action Result Product Champion Deadline Completed
1 Examine current margins and test various price increase scenarios
Identifies low margin business and identifies opportunities for optimizing pricing to increase profitability; benchmarks your profitability
[Managing Partner]
2 Review client base and determine which clients are buying on price or value; determine what clients really want from your relationship
Identifies clients that may be undesirable for the firm; identifies clients that need more focus to enhance your value to them
[Firm Management]
3 Review your clients and the services you provide. Determine where you are providing core services and where you are providing valuable services
Identifies opportunities to provide more client services to increase profitability
[Firm Management]
4 Discuss how your firm develops its pricing in light of pricing discrimination
Develops justification for high value market pricing…
[Firm Management]
42
Client Acquisition and Retention Pricing & Profitability Strategies Action Plan25
PCPS Practice Growth & Client Service Center
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Owner/Partner Accountability and
Unity
PCPS CPA Firm Top Issues
FIRMS WITH 6-‐10 PROFESSIONALS FIRMS WITH 11-‐20 PROFESSIONALS FIRMS WITH 21+ PROFESSIONALS
1 FINDING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF 1 RETAINING QUALIFIED STAFF
2 SUCCESSION PLANNING 2 FINDING QUALIFIED STAFF 2 FINDING QUALIFIED STAFF
3 SEASONALITY/WORKLOAD COMPRESSION 3 SUCCESSION PLANNING 3 OWNER/PARTNER ACCOUNTABILITY
& UNITY
4 RETAINING QUALIFIED STAFF 4 BRINGING IN NEW CLIENTS 4 SEASONALITY/WORKLOAD COMPRESSION
5 AGING OF OWNERS/PARTNERS 5 SEASONALITY/WORKLOAD COMPRESSION 5 BRINGING IN NEW CLIENTS (TIE)
SUCCESSION PLANNING
SOLE PRACTITIONERS
1 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
2 SEASONALITY/WORKLOAD COMPRESSION
3 THE EFFECT ON FIRMS OF NEW FEDERAL & STATE REGULATIONS
4 SUCCESSION PLANNING
5 BRINGING IN NEW CLIENTS
FIRMS WITH 2-‐5 PROFESSIONALS
1 FINDING QUALIFIED STAFF
2 KEEPING UP WITH CHANGES AND COMPLEXITY OF TAX LAWS
3 SUCCESSION PLANNING
4 SEASONALITY/WORKLOAD COMPRESSION
5 THE EFFECT ON FIRMS OF NEW FEDERAL & STATE REGULATIONS
44
American Institute of CPAs® Private Companies Practice Section
Owner/Partner Accountability and Unity Partner Accountability Guide26
45
The Leadership Development Model is a trademark of and copyrighted by ConvergenceCoaching, LLC.
American Institute of CPAs® Private Companies Practice Section
Owner/Partner Accountability and Unity CPA Horizons 2025 Toolkit27
46
Top Issues — Other Firm Concerns
Identity theft and working with the IRS continue to be a struggle
Technology is rapidly changing and firms are skeptical about the cloud, security and privacy
CPAs are receiving more requests for third-party verification letters (comfort letters)
What are you experiencing?
47
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Financial Benchmarking &
Tracking
DO choose a benchmarking survey DO understand the input methodology and definiCons – Medians, Averages and Percentages – FTE’s DO realize regional differences DO strive to be berer than average DO understand interacCon of KPI’s DON’T focus too much on one KPI and another suffers DON’T set unrealisCc goals
Financial Benchmarking & Tracking Benchmarking Do’s and Don’ts
RealizaCon (net billed/gross work in process) – Measure of billing efficiency/profitability UClizaCon (billable hours/total hours)
– Measure of people management Average partner managed billing
– Measure of partner leverage Revenue per full-‐Cme equivalent
– Measure of staff leverage Billing and collecCon
Financial Benchmarking & Tracking Key Profit Drivers
Financial Benchmarking & Tracking AICPA PCPS/TSCPA NaConal MAP Survey34
• National results segmented by firm size and region are available FREE to PCPS members
• Participating firms get access to personalized
results and dynamic benchmarking platform • Put the benchmarking data to work in your firm
– Analyze costs – Compare billing rates – Examine write-downs
Column1<200K2012
<200K2014
200<500K2012
200<500K2014
500<750K2012
500<750K2014
Partners/Owners 126 125 160 160 180 180Directors * * 124 128 137 150Sr Managers * * 107 113 119 140Managers * * 89 106 109 120Sr Associates * * 87 90 98 100Associates 61 * 74 73 80 85New Professionals * * 63 80 67 85Subcontractors n/a * n/a 120 n/a 132
Column1750K-‐1.5M
2012750K-‐1.5M
20141.5-‐5M2012
1.5-‐5M2014
5-‐10M2012
5-‐10M2014
10M+2012
10M+2014
Partners/Owners 199 197 230 240 259 268 313 312Directors 151 150 192 200 227 250 286 263Sr Managers 135 137 159 165 186 185 231 231Managers 119 120 141 150 160 169 194 175Sr Associates 104 100 117 121 131 136 150 144Associates 84 82 97 100 109 109 118 118New Professionals 72 70 81 85 91 90 105 105Subcontractors n/a 125 n/a 151 n/a 170 n/a *
* unable to measure based on limited responses n/a - not asked in 2012
Financial Benchmarking & Tracking Average Billing Rates from 2014 MAP Survey
Financial Benchmarking & Tracking From the Platform: Billing Rates by position
54
Consider Joining a PCPS Community36
Women’s Networking
Group
Trusted Client Adviser Alumni
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Questions?
THE PCPS CPA FIRM 2013 TOP ISSUES DIAGNOSTIC REPORT
Thank You! Please Contact Us!
PCPS Team [email protected] 800.CPA.FIRM
#AICPApcps
Norfolk pines
Captain Cook & Norfolk Pines on Maui
AICPA Council -‐ Maryland DelegaCon
91%
Of firms expect to con[nue record hiring
levels
16%
Projected accoun[ng job growth between 2010 and
2020
73%
Of investors express confidence in U.S. capital
markets
87%
Of key decision makers say CPAs are valuable to their
orgs
Our Profession stands strong
Maryland NaConal Leadership
1. Lyle Benson 2. Wayne Berson 3. Ed Karl 4. Jody Padar 5. Tom Hood + Vice-‐Chair of AICPA, Kimberly Ellison-‐Taylor CEO of NABA, Jina ECenne
Kimberly Ellison-‐Taylor Chair-‐elect
of AICPA MACPA Past Chair
Lookout Post
Context!Certainty!Capacity!
Competency!Core Beliefs!
Context!
Gradual then Sudden!
Exponential growth fueled by Technology (Moore’s Law)!
Moore’s Law visualized 25,600 Times More Storage
ExponenCal Times Value of Smartphone & Apps
More Uber cars than yellow taxis on the road in NYC
AirBnB Rooms available surpasses Hilton & Marriott
Gradual then Sudden
92% of CPAs are!NOT
Future Ready!!Future Ready is the
capacity to be aware, predictive, and adaptive of emerging challenges, tech innovations, and trends and
changes in business, population, and social
environment.!
Source: CPA.COM 2014 CPA of the Future Study!
'If the rate of change on the outside exceeds the rate of change on the inside, the end is near.’ – Jack Welch
Will your job be done by a machine?
Source: NPR Planet Money, May, 2015
Certainty!
ANTICIPATION Strategic Thinking External Awareness
Vision ConCnuous Learning
InnovaCon CreaCvity
Problem Solving PrioriCzaCon
Business AcumenDecisiveness Influencng/Persuading EmoConal Intelligence Consensus Building
CollaboraCon InspiraCon
Risk Management
AnCcipatory OrganizaCon: AccounCng/Finance EdiCon www.blionline.org/ao
Three Hard Trends: 1. Government RegulaCon 2. Technology 3. Demographics
Legislative / Regulatory / Standards
Federal • Tax Due Dates changes • Mobile Workforce legislation
Federal Regulators • DOL Overtime Standards
Standards • Peer Review Future of Practice Monitoring In Progress • CPE Standards – due October 1, 2015 • CPA Exam Standards due November 30, 2015 • FASB Not-For-Profit Exposure Draft Comments
Mobile workforce
Patent holding companies
* DOL overtime
* Cash basis
* IRS Service Levels
* Top Priorities of Maryland Managing Partners
DOL ALERT
“The DOL will ask for stakeholder support, and will strongly encourage state boards of accountancy to consider more rigorous review of firms performing ERISA audits and examine how licensing requirements might play a role in improving conCnuing educaCon and boost quality. We believe the contents of these lerers to be reasonable under the circumstances.”
-‐ AICPA Regulatory Affairs
Stats from DOL Maryland is 16th in # of plans/parCcipants/assets with 282 firms audiCng 1,614 plans with 3 million parCcipants and $264.12 billion in plan assets 24% of all audits and 22% of all plans
On April 13th at 11:49pm Supersedeas Bond Bill passed the !House of Delegates 118 – 19, the last bill to be heard!
On January 13th, 2016, the 436th Maryland General Assembly will !convene its 90-day session and188 legislators (47 Senators and 141 Delegates) will consider more than 2,500 legislative proposals including the State budget. !The session concludes “sine die” at midnight on April 10th, 2016. !Mark Twain famously said, “no man’s life, liberty, or happiness are safe when the legislature is in session.” This could not be more true for our Profession.!
We defeated this FIVE times in 1997, 2001, 2004, 2007, 2012 !
“Contributory negligence” is negligent conduct on the part of the plaintiff/injured party contributes to the negligence of the defendant in causing the injury or damage. The Pure Contributory Negligence Rule is literally a defense which says that a damaged party cannot recover any damages if it is even 1% at fault. The pure contributory negligence defense has been criticized for being too harsh on the plaintiff, because even the slightest amount of contributory negligence by the plaintiff which contributes to an accident bars all recovery no matter how egregiously negligent the defendant might be. Maryland is one of only four states (AL, VA, NC, MD) plus DC with this doctrine in place.!
The Trial lawyers are beating the drum for their bill to raise or eliminate the cap on non- economic damages. See attached from today’s Daily Record.
We are ready for another battle on this at the 2016 Session. "- Paul Tiburzi DLA Piper & MD Tort Reform Coalition – Nov, 2015!
This opens the door for possible Comparative Fault Legislation which will result in higher professional liability insurance and increased #’s of lawsuits – We have defeated this with the coalition FOUR times 1998, 2000, 2001, 2007!
Defeat Comparative Fault Legislation
Legislative / Regulatory / Standards
State Board • Positioning for Firm Mobility • CPE tracking and audits • Proposing Legislation - Peer Review –
Subpoena Power • Marijuana Industry
State • Offense
- Supersedeas (Appeal Bond) Caps - Tax Return Due Dates
• Defense - Stop Comparative Fault – Liability - Stop Sales Taxes on Services - Stop Nullify NDA & Non-Compete - Stop Excessive Mandatory Leave
Federal vs State laws!State Board Guidance!Resources: aicpa.org/marijuana!MD State Board issued guidance – !October, 2015 at our request !
"The Board compared it to serving gambling or liquor industry and verbalized zero interest in pursuing any sanctions to CPAs serv
ing that industry, if legal in the applicable jurisdiction.”" – MD State Board October, 2015!
Senator Brian Feldman, CPA (D- Montgomery Co.) signed on !to sponsor our Appeal Bond Small Business Cap!
CPA Day in Annapolis – January 21, 2016
“if you don’t have time to participate in the legislative process, be prepared to accept the consequences of those
who do.”
• Closes loophole for non-CPAs to perform attest services!
• Includes all examinations and AUP !• with SSAEs (XBRL, sustainability, gree
nhouse gas emissions and SOC reports!
• Cybersecurity!
SB 536 – HB 878 Passed Unanimously House & Senate April 3, 2015!
Those who build great companies understand that the ulCmate throrle on growth for any great company is not markets, or technology, or compeCCon, or products. It is one thing above all others: the ability to get and keep enough of the right people. -‐ Jim Collins
War for Talent MACPA Pipeline IniCaCves
Bachelor's & Master’s in AccounCng
Source: AICPA 2015 Trends in Supply & Demand
Source: Updated 2015 Trends Report data
What’s driving our pipeline concerns?
MACPA Leadership Academy – August, 2015
Next class – August 24-‐26, 2016
MACPA Student Leadership Academy – June, 2015
Next class – June 2-‐4, 2016
New CPAs Swearing-‐in Ceremony
November 10, 2015 Hilton BWI Hotel 6:30pm – 9:00 pm
Guide for Becoming a CPA www.cpaguide.macpa.org
American Institute of CPAs®
The AICPA Proposal: Joining forces to protect, promote and grow an evolving accounting profession
American Institute of CPAs®
B&I members comprise approximately 40% of AICPA membership • Historically under-served member segment
Seepage • Many CPAs were turning to B&I and/or leaving profession • Fewer accounting grads are entering into public accounting
International considerations • Profession, clients & employers becoming more international • 66% of the work that AICPA members in B&I performed was
outside of traditional audit, accounting, and tax1
Partner vs. build for B&I value creation to reclaim leadership in management accounting space • Identified CIMA as partner
1. Business and Industry Executive Committee (BIEC) 2. 2013 AICPA Accounting Trends report
Identified need to better serve members in business and industry (B&I)
104
American Institute of CPAs®
More can be achieved
By partnering more fully, the AICPA and CIMA believe they can:
Drive greater consistency, quality and relevance of public and management accounting Enhance advocacy, speaking with the voice of 600K+ professionals to help shape policies in the public interest Streamline resources to benefit from economies of scale and scope Achieve a broader platform to talk with students, graduates and professional accountants about CPA and CGMA
American Institute of CPAs®
1 in 3 accounting graduates become CPAs
Sources: NASBA, Bureau of Labor Statistics, Department of Education, AICPA
CPAs: ~550K Other Accounting Professionals: ~650K
Acc
ount
ing
prog
ram
gra
duat
es
82K pe
r year 42K Don’t sit
for exam
Accountants and Auditors in the US: 1,200K
Foreign nationals that return home
14K Don’t pass exam
26K Pass exam
2014 data
American Institute of CPAs®
Top1 accounting firm talent is increasingly becoming broader than CPAs
128K 139K
154K 165K
48K 50K 51K 54K
0
20
40
60
80
100
120
140
160
180
2011 2012 2013 2014
# of
Pro
fess
iona
ls a
nd P
artn
ers Th
ousand
s
Certified Public Accountants3
Total professionals and partners2
3 Year CAGR = 8.9%
3 Year CAGR = 3.6%
1. 23 of the top 30 accounting firms as reported in the 2015 Accounting Today Top 100 Accounting Firms Report. Seven firms were removed due to missing or incomplete information. 2. Total Professionals as reported in the annual Accounting Today Top 100 Accounting Firms Report from 2011-2014 3. AICPA internal data from member data and surveys
Confidential – Internal Use Only 109
U.S. students have greater international exposure
Source: Institute of International Education
Foreign students studying annually in the United States
819,644
283,322
Up 41% since 2002
U.S. students studying abroad annually
Up 76% since 2002
283,322
819,644
American Institute of CPAs®
U.S. influence on the international profession projected to decrease
* Numbers based on organization’s HQ location, with adjustments for ACCA due to global nature and availability of data Sources: International Accounting Bulletin, IFAC, NASBA, ACCA annual report, AICPA membership
13% 7%
29% 55%
28%
15%
25% 14%
5% 9%
Today's Members Current and Future Students
2030
Africa and Middle East
Europe and Russia
Americas (without US)
Asia-Pacific
US
American Institute of CPAs®
International accounting bodies are competing for relevance
Merged to form a combined institute in 2013; effective April 2014
Launched CPA Canada in October 2014, consolidating the three national accounting bodies
Introduced Chartered Accountants Worldwide to promote the CA qualification internationally
Signed a mutual recognition agreement with IMA. Agreement dissolved but continues to operate informally. Recently announced multi-year research initiative with IMA on future of global profession.
Launched first ACCA accreditation program at U.S. higher education institution, Pace University
Signed MOU with Institute of Internal Auditors to allow ACCA members to become CIA certified.
Announced partnership with American University linking ACCA’s qualification program with graduate coursework
American Institute of CPAs®
International accounting bodies are competing for relevance
The Institute of Singapore Chartered Accountants, SAICA (South Africa) and SAC (Singapore) have signed an expression of interest as a first step toward dual membership.
Launched joint public and corporate sector audit qualification in April 2015
The Institute of Management Accountants (IMA) partnered with Penn State University on a curriculum geared toward accounting careers in industry, consulting, and advisory services.
The South African institutes (SAICA and SAIPA) in merger talks
American Institute of CPAs®
CIMA is the right partner
World’s largest and leading professional body solely focused on management accounting Founded in 1919 227,000 members and students in 179 countries Strong relationships with employers such as Shell, Unilever, BP 4-year history of joint venture success
American Institute of CPAs®
Together, the AICPA and CIMA further professionalized management accounting
Performance Value & Growth Positioning
Global interest in the CGMA brand
Imperial Sponsor at
WCOA 2014
Deepening relationships with
employers globally
Created Global Management
Accounting Principles
CGMA Competency Framework
Growing catalog of
thought leadership on key business issues
AICPA | CIMA Competency and Learning website
CGMA exam in U.S.
CGMA website, magazine, newsletter, tools and resources
+150,000 CGMAs worldwide, with >50k
CPAs holding designation
Staff exchanges
Collaboration leading to innovation in public
practice areas
Advocacy
American Institute of CPAs®
Evolving the relationship
Evolution of the JV
American Institute of CPAs®
Next step in the journey
Maintain the two membership bodies – AICPA and CIMA –while integrating their strategies, management and operations
Deliver better and more relevant resources for members
Strengthen advocacy, speaking with the power of more than 600,000 professionals worldwide on critical issues important to you
Recognize and support public and management accounting as critical components of the end-to-end accounting profession
Elevate awareness of the CPA and CGMA and the opportunities they unlock
Requires a membership vote from both AICPA and CIMA
Evolve the existing joint venture into an association that is the voice of professional accounting worldwide.
GeneraCon Z
Belicia Cespedes, CPA Youngest CPA in the Profession
What year is this quote from?
“Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chaBer in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chaBer before company; gobble up their food and tyrannize their teachers.”
Capacity!
The Top 6 Ways to Create Capacity in your Firm
• Maximize software & tools you have• Use the latest and most efficient technologies• Workflow & Process Efficiency• Focus on your best ‘A’ clients• Communicate your services (cross-sell)• Engage your people
• Purpose • Career
Development • Strengths
www.blionline.org
www.blionline.org
The BLI Magnetic Firm Framework
Creating the Magnetic FirmPurpose Driven
Great Leadership
CultureOf Growth
Inspiring Workplace
Vision, Purpose and Values based
Transparent and Inspirational Leadership
Learning Culture- Self and Formal Development
Flexible and Open Work Environment
Focus on Strengths and Positivity
Build Consensus and Commitment
Career & Growth Orientation – Career Paths
Work/Life Balance
Inclusive and Diverse
Leadership Development at all levels
Customer focused Coaching and Feedback
High Performance – Insight to Action
Anticipatory and Proactive
Collaborative and Team based
Effective Technology Tools - mobile
Grow your people, grow your firm! Use learning as a strategic weapon in the war for talent with our BLI Talent and Leadership Development Support.
Now What?!
Competency!
www.blionline.org
Maryland Public Company Collaboration Top Four Issues
1. Learning & Talent Development 2. Global Structure of Finance
Function 3. Managing Risk & Innovation 4. Insight to Action*
* This started our journey to research the competencies needed for accounting and finance professionals to provide “insight to action” and shift from reactive to proactive.
ANTICIPATION Strategic Thinking External Awareness Vision ConCnuous Learning InnovaCon CreaCvity Problem Solving PrioriCzaCon Business Acumen Decisiveness Influencing/Persuading EmoConal Intelligence Consensus Building CollaboraCon InspiraCon Risk Management
AnCcipatory OrganizaCon: Finance / AccounCng EdiCon
CGMA Competency Framework
http://www.blionline.org/ao
Core Beliefs!
Integrity Competence Lifelong learning ObjecCvity Commitment to excellence
Protect the Core
CPAs…Making sense of a changing and complex world
Calendar!
Tom Hood, CPA, CITP, CGMA
• CPA Practice Adviser Accounting Hall of Fame
• Named the Second Most Influential in Accounting by Accounting Today Magazine 2015, 2013
• Top 150 Influencer by Linked-In • Top 25 Influencers in Learning & HR by HR
Examiner • Top 25 Public Accounting Thought Leaders
by CPA Practice Adviser • Working on Learning Management with
AICPA/CPA2Biz, Cloud Curriculum, Performance Management /XBRL, Leadership & Generations
CEO Maryland Association of CPAs (MACPA) www.macpa.org Business Learning Institute (BLI) www.blionline.org
http://www.linkedin.com/in/tomhood/
Hood's greatest aBribute isn't that he consistently glimpses the future more quickly than the rest of us (though he does). It's that he's able to bring it back to the present and serve as its Nreless, inspiring and effecNve champion. – Accounting Today
American Institute of CPAs® Private Companies Practice Section
Visit aicpa.org/PCPS
146
Check out the spotlight section of the PCPS home page, which highlights other important issues
American Institute of CPAs® Private Companies Practice Section
Index of Links 1. Succession Planning PCPS Succession Resource Center
http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/StrategyPlanning/center/Pages/default.aspx
2. Succession Planning 2012 PCPS Succession Survey http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/StrategyPlanning/center/DownloadableDocuments/SuccessionSurveySoloFullResults.pdf http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/StrategyPlanning/center/DownloadableDocuments/SuccessionSurveyMultiFullResults.pdf
3. Succession Planning PCPS Succession Guide & Tools http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/StrategyPlanning/center/guide/Pages/default.aspx
4. Succession Planning Firm inMotion e-Toolkit http://www.aicpa.org/INTERESTAREAS/PRIVATECOMPANIESPRACTICESECTION/
STRATEGYPLANNING/FIRMINMOTION/Pages/default.aspx 5. Succession Planning Transition Continuum and Checklist
http://www.aicpa.org/interestareas/privatecompaniespracticesection/strategyplanning/firminmotion/firmstructurestrategy/downloadabledocuments/transition-continuum-and-checklist
6. Human Capital Concerns PCPS Internship Quick Start Guide http://www.aicpa.org/interestareas/privatecompaniespracticesection/humancapital/teamrecruitment/recruitingandprospecting/downloadabledocuments/internship-quick-start-guide.pdf
American Institute of CPAs® Private Companies Practice Section
Index of Links (continued) 7. Human Capital Concerns PCPS Human Capital Resource Center
http://www.aicpa.org/interestareas/privatecompaniespracticesection/humancapital/pages/default.aspx
8. Human Capital Concerns Firm Competency Model http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/HumanCapital/PerformanceManagement/DownloadableDocuments/FirmCompetencyModel.doc
9. Human Capital Concerns Recruiting Brochures http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/HumanCapital/DownloadableDocuments/SmallFirmRecruiting.pdf
10. Seasonality/Workload Compression PCPS Publications http://www.aicpa.org/interestareas/privatecompaniespracticesection/newsandpublications/pages/default.aspx
11. Seasonality/Workload Compression Client Evaluation Tool http://www.aicpa.org/interestareas/privatecompaniespracticesection/practicegrowth/trustedbusadv/downloadabledocuments/clientevaluationtool.xls
12. Seasonality/Workload Compression Client Disengagement Letter aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/StrategyPlanning/FirmStrategyandPlanning/Pages/Sample%20Client%20Termination%20Letter.aspx
13. Seasonality/Workload Compression Automated Workflow http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/QualityServicesDelivery/TaxResources/DownloadableDocuments/workflow-technology.pdf
American Institute of CPAs® Private Companies Practice Section
Index of Links (continued) 14. Keeping Up Washington Tax Brief
http://www.aicpa.org/interestareas/tax/cpeandevents/pages/washingtontaxbrief.aspx 15. Keeping Up Tax Power Hour
http://www.aicpa.org/interestareas/tax/cpeandevents/pages/taxpowerhour.aspx 16. Keeping Up Tax Practices Resources Webpage
http://www.aicpa.org/INTERESTAREAS/TAX/Pages/TaxHomepage.aspx 17. Keeping Up Tax E-Alert
www.aicpa.org/InterestAreas/Tax/NewsAndPublications/TaxEAlert/Pages/default.aspx 18. Keeping Up Tax Identity Theft Information & Tools
http://www.aicpa.org/interestareas/tax/resources/irsprocedureadministration/pages/idtheftinformationandtools.aspx
19. Keeping Up Health Care Reform Resource Center http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/QualityServicesDelivery/TaxResources/Pages/HealthcareReformToolkit.aspx
20. Client Acquisition and Retention Trusted Client Adviser Toolbox http://www.aicpa.org/interestareas/privatecompaniespracticesection/practicegrowth/trustedbusadv/pages/tbalanding.aspx
21. Client Acquisition and Retention Identify & Prioritize Tool http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/PracticeGrowth/TrustedBusAdv/DownloadableDocuments/IdentifyPrioritizeTool.pdf
American Institute of CPAs® Private Companies Practice Section
Index of Links (continued) 22. Client Acquisition and Retention Practice Growth
http://www.aicpa.org/interestareas/privatecompaniespracticesection/practicegrowth/pages/default.aspx
23. Client Acquisition and Retention Tax Practitioners Toolkit aicpa.org/Career/Marketing/Pages/cpa-value-tax.aspx
24. Client Acquisition and Retention You Are The Value Online Workshop aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/PracticeGrowth/pages/youarethevalue.aspx
25. Client Acquisition and Retention Pricing & Profitability Strategies Action Plan http://www.aicpa.org/interestareas/privatecompaniespracticesection/practicegrowth/downloadabledocuments/pricing%20profitability%20strategies%20action%20plan.xls
26. Owner/Partner Accountability & Unity Partner Accountability Guide aicpa.org/interestareas/privatecompaniespracticesection/humancapital/ownerdevelopment/partneraccountability/downloadabledocuments/partner%20accountability%20guide.pdf
27. Owner Partner Accountability & Unity CPA Horizons 2025 Toolkit http://www.aicpa.org/interestareas/privatecompaniespracticesection/strategyplanning/firmstrategyandplanning/pages/pcpscpahorizons2025toolkit.aspx
28. Technical Developments PCPS Invigorate the Focus on Quality Toolkit
aicpa.org/pcps/Quality
150
American Institute of CPAs® Private Companies Practice Section
Index of Links (continued)
29. Technical Developments Center for Plain English Accounting http://www.aicpa.org/InterestAreas/CenterForPlainEnglishAccounting/Pages/CPEA.aspx
30. Technical Developments Preparation, Compilation and Review Standards http://www.aicpa.org/interestareas/frc/reviewcompilationpreparation/pages/resources-for-ssars21.aspx
31. Technical Developments Revenue Recognition Standard aicpa.org/revenuerecognition
32. Technical Developments Private Company Financial Reporting http://www.aicpa.org/interestareas/frc/accountingfinancialreporting/pcfr/pages/financial-reporting-framework.aspx
33. Technical Developments PCPS Technical Issues Committee aicpa.org/TICAdvocacy
34. Financial Benchmarking 2014 PCPS/TSCPA National MAP Survey aicpa.org/mapsurvey
35. Financial Benchmarking & Tracking Tech Success Tracker http://www.aicpatechsuccess.com/
36. PCPS Communities aicpa.org/pcps/Community
151