Maryland Major Firms Group meeting - May 2012

Maryland Association of CPAs Managing Partner Briefing

May, 23, 2012

Welcome – Allen DeLeon – Chairman of the Board

Tom Hood, CPA.CITP -‐ CEO / Executive Director

Outcomes:

• Update on important legislative / regulatory changes that affect CPA firms • Development of priorities from managing partners • How you can help us continue our success • Share the latest in trends facing CPA firms (CPA Horizons 2025)

Today’s Agenda

• Setting context – background on legislative / regulatory environment (infrastructure)

• Update on past and present advocacy efforts and results

• What’s next – our 2011 -‐ 2012 Legislative Agenda

• How you can help us make a major difference

• Trends facing CPA firms the latest from AICPA/PCPS & CPA Horizons 2025 Projec

Setting Context & Update on Past & Present Advocacy Efforts & Results

The Five C’s

Change

Complexity

Compliance

Convergence

Competition


May, 23, 2012

The CPA Profession continues to be in a rapid state of change

Infrastructure – the pipes under your firm’s practice

1. Professional Standards

2. Federal Legislation & Regulation

3. State Legislation & Regulation

4. State Board of Accountancy – Legislation, Regulation, Examination, Licensing, Enforcement

Infrastructure -‐ Update

1. Professional Standards – decision expected 5-‐24-‐12

Private Company Financial Standards – MACPA Task Force whitepaper

FASB-‐IASB Convergence becomes Condorsement

2. Federal Legislation & Regulation Successes

Sarbanes-‐Oxley Act of 2002

Dodd-‐Frank – Consumer Financial Protection Act of 2010

a) Prevented Congress takeover of FASB

b) Exempted CPAs from registration as Financial Planners

c) Prevented Specter Aiding & Abetting amendment

FTC “red flags” – exempted CPA firms

Healthcare & 1099’s – instrumental in repeal

Tax Strategy Patents (stopped enforcement – e.g. Roth IRA Conversion)

IRS Notices up 700%

DATA Act of 2011 (Digital Accountability & Transparency Act & XBRL)

Workforce Mobility (passed House)


May, 23, 2012

3. MACPA’s State Legislative Agenda –

a) 2011 5 for 5 + 2 3! i) Passed State Board 120/150 CPA Exam legislation – effective 10/01/11 ii) Passed “Safe Harbor” legislation for Compilations (Reviews restricted to CPAs) iii) Stopped Debt Counselor registration ($250 per CPA) iv) Stopped sales Tax on Accounting & Tax services v) Stopped efforts to liberalize tort laws (lawsuit abuse) vi) Plus Two Three!

(1) Opposed combined reporting due to complexity & time to implement (2) Opposed Cemetery Bill to stop requirement for audited financials (3) Obtained Attorney General Opinion allowing use of Social Security #’s

for Maryland Tax Preparation (Clarification of Maryland SS Privacy Act)

b) 2012 4 for 4 i) Stopped Sales Tax on Services ii) Stopped e-‐filing tax in Governor’s BRFA Bill iii) Stopped Combined Reporting iv) Passed e-‐filing of credits

4. State Board of Accountancy – Legislation, Regulation, Examination, Licensing, Enforcement

• CPA Exam applicants at record levels – long delays 90 – 120 days

• Mobility legislation – Maryland license accepted in 48 states (NY just signed into law & DC in for Mayor signature)

• CPE Regulations

o Revised in 2009 under leadership of Terry Hancock

o CPE enforcement – biggest issue is four (4) hour ethics requirement

• Peer Review oversight committee


May, 23, 2012 • Appointments to Board

o Ray Speciale – Educator member of Board (left MACPA Board) o Liz Gantnier – Stegman (PCAOB & AICPA Instructor) o Tim Murphy – Southern Maryland o Mac Claxton – PG County (MACPA/MSA member) o Losing Terry Hancock – (Clifton Gunderson) State Board Chairman o Art Flach (Grant Thornton) is our next selection for 2013

What’s next – our 2012 -‐ 2013 Legislative Agenda

• Lots of tax legislation

• Election year (Governor & major part of 188 legislators)

• Expected $1.1 billion state deficit

• Changes in DLLR and State Board of Accountancy appointments

How you can help us make a major difference

1. Support of membership – 100% membership initiative

2. Support of Swearing-‐in Ceremony (prior & future) – Fall, 2012

3. Support of CPA Day in Annapolis – January 16th, 2013

4. Support of PAC (contributions allowed up to $4,000 per firm

The “new” math

Federal CFPA registration $ 250 MD Tax Preparation 100 MD Debt Counseling 150 Mobility (2 States) 500 Total Savings per CPA / year $1,000

What do you think about our results? Our priorities?

Additional Economic Impact on Firms Sales tax on services Partner Revenue $1,000,000

X 6% $60,000 per partner $6,000 per employee

Liability (Tort reform) Increase in professional liability insurance Increase in lawsuits, claims & settlements


May, 23, 2012

Share the latest in trends facing CPA firms

Top trends to watch and the time to address is now (CPA Horizons 2025)

1. Aging population, loss of wisdom, knowledge transfer 2. Global rules & standards –IFRS – complexity 3. Information overload, complexity (Need for critical thinking & filter) 4. Information Security, Privacy & Data Protection 5. Global Competition, Rise of the Rest 6. Work-‐Life Balance 7. Diversity – Cultural Fusion – Beiging of America 8. Changing Communication (decline of face-‐to-‐face) 9. Increased Globalization 10. US Deficit 11. Education

AICPA / PCPS Top trends for firms > 21

1. Partner Accountability / Firm Unity 2. Bringing in New Clients 3. Retention of Existing Clients 4. Fee Pressure / Pricing of Services 5. Succession Planning

Resources for Major Firms:

CPA Horizons 2025 – future research and trend analysis http://www.aicpa.org/research/cpahorizons2025/pages/cpahorizons2025.aspx

MACPA’s Business Learning Institute: Conduct a future firm to align and inspire your partners and create firm unity http://www.bizlearning.net/live/i2afutureforums Strategic Planning http://www.bizlearning.net/live/i2astrategicplanning Customized Learning aligned with your firm strategy, Comprehensive Insurance (Liability & Health), curriculum development with our in-‐house nationally recognized customized learning consultants – Contact Pam Devine p 443-‐632-‐2321 e [email protected] or

Maryland Major Firms Group meeting - May 2012

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Transcript of Maryland Major Firms Group meeting - May 2012