Professional Issues Update For BIEG Professionals

By: Tom Hood, CPA, CITP, CGMA

March 21, 2012 Crowne Plaza Hotel

Timonium, MD

THE MAP IS USELESS "The map keeps getting redrawn, because it's cheaper than ever to

go offroad, to develop and innovate and remake what we thought was going to be next.

Technology keeps changing the routes we take to get our

projects from here to there. It doesn't pay to memorize the route, because it's going to

change soon." - Seth Godin

“…an  indisputable  leadership  challenge  that  ul3mately  requires  new  models,  bold  ideas  and  personal  courage  to  ensure  that  this  century  improves  the  human  condi3on  rather  than  capping  its  poten3al.”      –  World  Economic  Forum  

Welcome to the “New Normal”

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

NAVIGATORS OF CHANGE

Five Qualities of Extraordinary Leaders

1. Sight - Ability to see emerging patterns and shift perspective when necessary

2. Insight – Ability to think strategically and critically to gain insights

3. Create – Seek high leverage opportunities that build on your strengths

4. Communicate - Ability to make your thinking visible to others and the ability to collaborate inside and outside your organization

5. Inspire – Ability to mobilize support and engage others involved in doing the work to join you in ACTION

10

OUR GYROSCOPE!

30 Future Forums 1,000 CPAs

Identified these top trends

What CPAs think about the future

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

Surfing  lessons!  

http://www.macpa.org/Content/26336.aspx

How are you doing?

MANAGING THE SEA CHANGE

• Change

• Complexity

• Compliance

• Convergence

• Competition

20

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.” 79%

51%

Compliance

Federal Laws & Regulations

State Laws & Regulations

Professional Standards

Private Company Standards

State Legislation

Next CPA Day in Annapolis - January 16, 2013

State  Legisla3on  

Maryland  Legisla3ve  update  

•  Sales  Tax  on  Services  –  No  vote  yet  from  CommiKee  (House  Ways  &  Means)  

•  Digital  Download  –  wai3ng  for  CommiKee  (House  Ways  &  Means  CommiKee)  

•  Combined  Repor3ng    -­‐  we  oppose  due  top  compliance  complexity  

•  Recoupling  Deprecia3on  &  Estate  Tax    

Other  Issues:    •  Across  the  Board  Income  Tax  hike  +  Surcharge  for  $500,000  +  

•  Possible  across  the  board  Sales  Tax  increase  •  Possible  extended  or  special  session  State  Board  of  Accountancy  •  CPA  Exam  applica3ons  delayed  90  days  •  PTIN  rush  to  reinstate  &  Industry  CPAs  

Maryland  Legisla3ve  update  

•  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

31

Tsunami of 1099K and info returns

32

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

MD Workplace Fraud Act

33 33

Convergence

Public Company

Private Company

Int’l Company

Financial Reporting

Auditing

Ethics

State Boards of Accountancy

35

Sarbanes-Oxley Act of 2003

36

Dodd-Frank - the bill that keeps on giving

CPAs required to register as debt settlement advisors

37

Cascade from across the pond!

Federal Accounting Standards?

39 39

So what? What does this mean to BIEG CPAs?

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 & Business & Industry members

What  do  young  professionals  need  to  be  leaders?  

Drivers of Value

Transparency  &  Accountability  

"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."

Generation Y Born btw 1980 – 2000 (12 to 32) Generation X Born btw 1965 – 1979 (33 – 47) Boomers Born btw 1946 – 1964 (48 – 66) Traditionalists Born prior to 1945 (67 & older)

Summing it all up…

•  Transparency & Performance Management = Accountability

•  Free the Data & Free Skip •  Outside in vs Inside Out •  CPA as interpreter &

business guide

45

Moneyball  

47

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

Adopt a moneyball mindset

1. Ask the naive question 2. Be the house (measure, odds, risk) 3. A willingness to try anything 4. look around (especially outside) 5. Confidence matters - believe in yourself

MANAGING THE SEA CHANGE���Captain of your own ship!

• Continuous Learning

• Competency

• Collaboration = Career Success

49

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

Picture: John Drake - Flickr

It really is about this...

51

3 Critical Workforce"Priorities Rapidly developing workforce skills and capabilities Fostering collaboration & knowledge sharing Developing future leaders

OUR GYROSCOPE!

In  1997,  the  CPA  profession  crowd-­‐sourced  its  future  with  over  3,500  CPAs  in  the  CPA  Vision  Project  

That  was  re-­‐validated  in  2011  by  8,000+  CPAs  

CPAs... Making sense of a changing and complex world.

Our core purpose, our reason for being is

Here is what they said…

The  DNA  of  the  CPA  as  CFO  Values  &  Competencies  

•  Leadership  •  Communica3on  •  Strategic  Thinking  •  Collabora3on  &  Synthesis  •  Technologically  Savvy  

Our  Vision  Statement  for  the  future  is:  (  mandates  to  ourselves  for  a  successful  future)  

•  Communica3ng  the  total  picture  with  clarity  and  objec3vity,  

•  Transla3ng  complex  informa3on  into  cri3cal  knowledge,  

•  An3cipa3ng  and  crea3ng  opportuni3es,  and  

•  Designing  pathways  that  transform  vision  into  reality.  

CPAs are the trusted professionals who enable people and organizations to shape their future.

Combining insight with integrity, CPAs deliver value by:

MACPA  Priori3es  1.  Connect & Collaborate 2.  Span Generational Divide 3.  Alignment w/ Committees 4.  Legislative Task Force 5.  Leadership Development 6.  Connect Pipeline

Reflec3ons  from  BLI  Thought  Leaders  

Entry-level Staff

Supervisor

Manager

Controller

CFO Critical Turning

Point

The  Idea  Store  is  open!  

Mail Suggestions to ideastore@macpa.org

MACPA  Special  Task  Force  •  Annual cost of Federal

Compliance $1.75 trillion •  Federal burden exceed

costs of health care per person by 50%

•  Cost per employee = $8,086

•  For SMB < 20 = $10,500 per employee

Offer CPA expertise to the state to help overcome budget issues in bi-

partisan, objective manner in order to bring about efficiency, transparency

and fiscal discipline.

63

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.

Leadership Academy

May 7-9, 2012 Crowne Plaza Timonium, MD

MACPA Your Trusted Filter

67 67

Become a Linchpin

Providing a unique interface between members of the organization Delivering unique creativity Managing a situation or organization of great complexity Leading customers Inspiring staff Providing deep domain knowledge Possessing a unique talent

68

A leader’s job is 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