ProfessionalIssuesUpdatefor CPEProfessionals

By: Tom Hood, CPA, CITP, CGMA

2012 North East CPE Conference

February 20, 2012Clearwater, FL

1Monday, February 20, 12

2

2Monday, February 20, 12

3

“# 1 reason organizations fail is that they miss the weak signals of disruptive change.”

– Andrew Zolli

What is the #1 reason organizations fail?

3Monday, February 20, 12

Re-Set, Re-Think, Re-Imagine - 2011

Anticipation of a very large business model change amidst rapid change – Steve King

There are two recessions – the obvious one and the not so obvious, the end of the

industrial age where perfecting the model was the key. The new model will be completely different. – Seth

Godin#4 Rethinking the Business Model (25)

from AICPA MFG

4Monday, February 20, 12

In our hyper-networked, mobile, social, global world, the rules and plans of yesterday are increasingly under pressure; the enterprises and individuals that will thrive will be those willing to adapt in a disciplined, unsentimental way.

Generation Flux is a term that describes all of this - the chaotic business era that we have moved into - as well as the people who are poised to thrive in this environment. - Robert Safian - editor FastCompany

5Monday, February 20, 12

The tornado of changes from CPA Vision Project circa 2000

6Monday, February 20, 12

Remember the good old days?

7Monday, February 20, 12

“What got you here, won’t get you there.” - Emmanuel Gobillot - Leadershift

This time it is different.

8Monday, February 20, 12

You ain’t seen nothing yet!

The idea of a hierarchy that fundamentally empowers the few and disempowers the many is more or less dead. - Gary Hamel Forbes

“Command and control hierarchical structures are being disintegrated” - Danah Boyd - Microsoft Researcher

9

9Monday, February 20, 12

10Monday, February 20, 12

If Content is kingContext is the kingdom!

- Will Avgerakis - AICPA

11Monday, February 20, 12

12Monday, February 20, 12

1.  Changing demographics - Aging workforce, diversity, 4 generations in the workplace

2.  Increased globalization, economic shifts and increasing competition 3.  The technological revolution - cloud, social, big data & XBRL 4.  Issues around information security, privacy & data integrity 5.  Shift to consumer and employee power (from push to pull) 6.  Changes in the way we communicate - mobile, txt, skype 7.  Work-life challenges or conflict - "do more with less", 24/7 work 8.  Information Overload - filter failure 9.  Increasing complexity of rules and standards (IFRS, GAAP, PCAOB,

SEC) 10. Economic uncertainty - deficit, debt and pressure on government

13Monday, February 20, 12

1. Partner Accountability

2. Bringing in New Clients

3. Retention of Current Clients

4. Fee Pressure / Pricing of Services

5. Developing a Succession Plan

Top Five Issues Facing CPA Firms (PCPS)

14Monday, February 20, 12

Top$Seven$Issues$Facing$CPA$Firms$Issues$Facing$CPA$Firms$

1.  Succession$planning$2.  Accountability$and$buy>in$3.  Communica@on$(lack$thereof)$4.  Managing$millennials$5.  Work$/$life$balance$6.  Leadership$development$7.  Managing$change$

15Monday, February 20, 12

16Monday, February 20, 12

Top$10$Issues$–$Maryland$CFOs$

1.  Communica:ng$effec:vely$(new$tools$vs.$faceBtoBface)$

2.  Talent$/$training$/$succession$planning$3.  Economic$environment$4.  Genera:onal$/$workBlife$balance$5.  Supply$chain$/$rising$costs$6.  Strategic$planning$in$uncertainty$7.  Financial$literacy$about$business$8.  Increasing$government$regula:ons$9.  IT$security$/$privacy$10. Mul:Btasking$and$increasing$workload$

17Monday, February 20, 12

Our new research bears out that the human dimension – relationships with customers, employees, partners and communities – will be key to getting things moving again and sustaining success over the long run.

CGMA & your Business & Industry members

18Monday, February 20, 12

• Change• Complexity• Compliance• Convergence• Cascade• Competition 19

The Letter for today is “C”

19Monday, February 20, 12

20

4x=1890 7x=1670

Change

20Monday, February 20, 12

Complexity“the biggest challenge facing enterprises from here on will be the accelerating complexity and the velocity of a world that is operating as a massively interconnected system.”

21

79%51%

21Monday, February 20, 12

6,000 pages500 Million words

17,000 pages

The CPA Profession and CPE

22Monday, February 20, 12

How is your knowledge inventory?

23Monday, February 20, 12

Compliance

24Monday, February 20, 12

When do we think about infrastructure?

25

25Monday, February 20, 12

Federal Laws& Regulations

State Laws & Regulations

ProfessionalStandards

26Monday, February 20, 12

• 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

27Monday, February 20, 12

28Danger

28Monday, February 20, 12

Tsunami of 1099K and info returns

29

29Monday, February 20, 12

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

30

30Monday, February 20, 12

31

Convergence31Monday, February 20, 12

SEC$FASB$

FASB$PCFRC$

IASB$IFRS$&$SME$

PCAOB$ AICPA$ASB,$ARSC,$PRB$

IAASB$

AICPA$PEEC$

AICPA$PEEC$

IFAC$

PublicCompany

Private Company

Int’lCompany

FinancialReporting

Auditing

Ethics

State Boards of Accountancy

32Monday, February 20, 12

Cascade

“a series of steps or stages that, once initiated, continues to the final step because each step is triggered by the preceding one, resulting in amplification of the signal, information, or effect at each stage.”

33Monday, February 20, 12

Sarbanes-Oxley Act of 2003

34

34Monday, February 20, 12

Dodd-Frank - the bill that keeps on giving

35

CPAs required to register as debt settlement advisors

35Monday, February 20, 12

Cascade!

36

36Monday, February 20, 12

34

MACPA�s Social Media Map

82,027 views

80,568 views

450 members 3,570 followers

1,251 connections

450 connections

Top 50 Business Blogs - 2011

Top Accounting Blogs – 2009, 2010, 2011

37Monday, February 20, 12

The generation gap is widening

"For Gen Y, training and development is the most highly valued employee benefit. The number choosing training and development as their first choice of benefit is

THREE times higher than those who chose cash bonuses."

38Monday, February 20, 12

39

“You can’t stop the waves, but you can learn to surf”- Jon Kabat-Zinn

39Monday, February 20, 12

• Continuous Learning

• Collaboration• Competencies

= Career Success! 40

The Letter for today is still “C”

40Monday, February 20, 12

“...where the most important skill is the ability to acquire new skills.”

41

Picture: John Drake - Flickr

41Monday, February 20, 12

2"It really is about this...

42Monday, February 20, 12

3 Critical WorkforcePriorities1.Rapidly developing workforce skills and capabilities2.Fostering collaboration & knowledge sharing3.Developing future leaders

43

43Monday, February 20, 12

44Monday, February 20, 12

Wisdom from the MACPA Leadership Academy

45

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.

45Monday, February 20, 12

46Monday, February 20, 12

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 201147

47Monday, February 20, 12

How to increase your Complexipacity

1.Improved forecasting methods2.Better risk mitigation3.Making tradeoffs4.Ensuring diversity of thought (collaboration)

48

48Monday, February 20, 12

■ Companies increase training to fill skill gaps

■ Training groups gain efficiencies■ Extending the reach of the training

organization■ Changing roles with the L&D

function■ Making it stick - reinforcement■ Social learning becomes

mainstream■ Outsourcing for efficiency 49

Trends in Learning & Development

49Monday, February 20, 12

Training Spending is back on the rise

50Monday, February 20, 12

Our$Challenge$

Tradi/onal$Training$

E2Learning$25%$

New$Compe//on$

Google$search$for$CPE$shows$42,500,000$results$1,260,000$in$Maryland$alone!$

51Monday, February 20, 12

Our$Distribu*on$Channels$

Public$ On4site$ e4Learning$

52Monday, February 20, 12

!"!!!!

!500!!

!1,000!!

!1,500!!

!2,000!!

!2,500!!

!3,000!!

2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011!

MACPA%&%BLI%*%CPE%Course%Revenue%by%Fiscal%Year%

Public!Course!Revenue!

In"House!Course!Revenue!

Webcast!Revenue!

e"learning!

53Monday, February 20, 12

Haven’t we been here before?

1992 2001

2001 2011

CPE$Profession$–$Training$0Environmental$Scan$

20092006

54Monday, February 20, 12

Paul DePodesta - VP of Player Development for the New York Mets formerly Asst GM of Oakland A’s

55

Adopt a moneyball mindset

1. Ask the naive question2. Be the house (measure, odds, risk)3. A willingness to try anything4. look around (especially outside)5. Confidence matters - believe in yourself

55Monday, February 20, 12

56

56Monday, February 20, 12

57

Become a Linchpin

1.Providing a unique interface between members of the organization2.Delivering unique creativity3.Managing a situation or organization of great complexity4.Leading customers5.Inspiring staff6.Providing deep domain knowledge7.Possessing a unique talent

57Monday, February 20, 12

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

58

58Monday, February 20, 12

Tom Hood CPA, CITP. CGMA CEO

Business Learning InstituteMaryland Association of CPAs

http://www.bizlearning,net

(800) 888-481-3500tom@bizlearning.net

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

LinkedIn: http://www.linkedin.com/in/tomhood Facebook: http://www.facebook.com/thoodcpa

Plaxo: http://tomhood.myplaxo.comSlideshare: http://www.slideshare.net/thoodcpaYoutube: http://www.youtube.com/thoodcpaSecond Life avatar name: Rocky Maddaloni

59Monday, February 20, 12