MACPA 2013 Spring Professional Issues Update

Tom Hood, CPA, CITP, CGMA CEO

MACPA & the Business Learning Institute

MACPA Town Hall & Professional Issues Update for MEMBERS

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Segments  of  our  members  

Genera0ons  

Tech  Tools  

Source:  WTF  What’s  the  Future  of  Business  by  Brian  Solis  

What  I  have  been  thinking  about  

And  this  

• Change • Complexity • Compliance • Convergence • Competition

MANAGING THE “C” CHANGE

What  happens  when  CPAs  are  overwhelmed?  

When  we  need  to  be  doing  this?  

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Our  Sponsors  

MACPA  Innova1on  Summit  

www.SlideShare.net/thoodcpa  

#PIU13  #MACPA  @tomhood  @MACPA  

Download  today’s  slides  at  …  

Message  from  our  Chair  

Be  like  Mike(y)  

Insights  to  Ac0on    

“One  without  the  other  is  either  useless  or  destruc0ve”  

http://www.burrus.com

Inattentional blindness

The  new  “Big  Four”  

• Standards  &  Leg/Reg  

• Technology  • Genera0ons  in  workplace  

• Innova0on  

The  US  Economy  Schumpeter's  Curve  of  Crea0ve  Destruc0on  

Legisla0on  &  Regula0on  

hTp://cpa.tc/1ut  

• Federal  –  Fiscal  Cliff  

• State  •  Budget  Deficit  •  Sales  Tax  on  Services  •  Tort  Reform  

First  the  facts  about  Fiscal  Cliff,  Sequester  and  Fed  Budget  

#CPAsSavetheWorld  

Accoun&ng  bodies  hail  G20  emphasis  on  public  sector  repor&ng  

DATA  Act  &  Financial  Industry  Transparency  Act  using  XBRL  

What's at Stake? The US Government’s Financial Statements and the Country's Fiscal Health

Revenue  =  $2.4  trillion   Expenses  =  exceeded  

revenue  by  $1.3  trillion  

2011 Financial Statements

2011 Financial Statements

Assets=  $2.7  trillion  

Liabili1es=  $17.5  trillion  

Accumulated  deficit=  

$14.8  trillion  

U.S. financial statements differ from other organizations Most financial statements show obligations or liabilities on balance sheet US government’s financial statements do not include Social Security and Medicare

•  Footnote disclosures •  Not reflected as liabilities

Reality of future obligations

These future obligations equal: $46.3 trillion in additional deficit

Plus $14.8 trillion cumulative deficit Total deficit: $61 trillion deficit

$61 trillion is the equivalent of:

Every household in America owing the full cost of two new homes and not getting to live in them

State of Maryland Budget vs Financials

Budget surplus $363 Million vs Financial deficit

$1.2 Billion

2

2011 Financial Statements

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2009 2010 2011

Revenue

Expenses

Deficit

Revenue = $33.5 billion Expenses

exceeded revenue by $1.2 billion

Note: The Financial Statement Deficit is

down from the 2009 highpoint of

$2.9 billion 6

7

www.macpa.org

Net Assets decreased by $7.2 Billion in past 5 years

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www.macpa.org

Maryland’s unfunded Pension obligations of

$28.5 Billion

Source: 2011 CAFR Footnotes 15 & 16 10

www.macpa.org 11

www.macpa.org

MACPA State Budget Task Force

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The  Future  is  Bright  Students  from  U  of  B  

Where  were  you  on  January  16th?  

2014  CPA  day  –  January  15,  2014  

Sales  Taxes  on  Services?  

#MagnumCPA?  

#TaxSimplify  

2013  Sine  Die  

It’s  really  a  numbers  game  

2,500  188  90  3  

#BadBills  

State  Board  of  Accountancy  

 1.  Projec0on  of  status  on  CPA  Board  

fund.    How  it  will  be  monitored  to  determine  when  a  fee  increase  is  needed?  The  fund  must  cover  IT  improvement  costs.  

2.  Review  of  peer  review  process  for  monitoring  fail  and  2nd  pass  with  deficiency  reports.  

3.  Review  of  the  exam  applica0on  process.    Determine  if  processing  should  be  con0nued  in-­‐house  or  contracted  out  to  a  third  party.  

#GoodBills  •  Separate  funding  for  the  State  Board  •  Experience  requirement  to  make  Maryland  CPAs  compa0ble  with  

UAA  (Uniform  Accountancy  Act)  •  Ethics  requirement  for  CPE  •  Mandatory  peer  review  and  prac0ce  quality  •  Exemp0on  for  CPAs  from  Maryland  (and  federal)  tax  preparer  

regula0on    •  Prac0ce  mobility  •  AG  opinion  allowing  CPAs  to  use  Social  Security  numbers  for  tax  

services  •  120/150  CPA  exam  legisla0on  •  Restricted  audits,  reviews,  and  compila0ons  to  CPAs  and  added  

safe  harbor  for  compila0ons  •  State  Board  of  Public  Accountancy  reauthoriza0on  

#BADBills  

•  Sales  tax  on  accoun0ng  and  tax  services  (defeated  several  0mes)  

•  Maryland  corporate  accountability  (SOX  and  404  for  private  companies  and  non-­‐profits)  

•  Debt  counseling  registra0on  by  CPAs  •  Maryland  Tax  Prepapers  •  Compara0ve  fault  (several  0mes)  •  Elimina0on  of  audit  requirements  for  Maryland  cemeteries  

Advocacy  –  If  not  you,  who?  

Standards  

•  Interna0onal  –  IASB  &  IFRS  

•  FASB  &  PCC  •  AICPA  &  FRF  –  

SME  •  ASB  –  Clarity  

(12/15)  •  GASB  Pension  •  PEEC  hTp://cpa.tc/1us  

FAF,  XBRL  and  You  

GASB  Whitepaper  

Form  990  Data  Transparency  

•  NFP  tax  returns  are  public  informa0on  •  And…they’re  not  easily  searchable  (PDFs)  •  30%  of  Form  990s  are  filed  electronically…  •  Then  get  printed  and  scanned  and  loaded  on  disks.  

•  President  Obama’s  2014  budget  calls  for  electronic  filing  of  Form  990,  and…  

•  Requires  IRS  to  publish  data  in  a  machine  readable  format  (XBRL?)  

FASB  Industry  Taxonomy  Project  

•  Develop  industry  specific  taxonomies  •  BeTer  suited  for  each  industry  •  Industries  par0cipa0ng  include:  •  Insurance  •  Banking  •  Brokers  and  Dealers  •  Real  Estate  •  NFPs  

FASB  NFP  Taxonomy  Project  -­‐    Par0cipa0ng  Organiza0ons  

•  AICPA  •  CFA  Ins0tute  • NACUBO  •  Thurgood  Marshall  College  Fund  •  FAF  • MACPA  

The  process…  

•  Iden0fy  elements  and  concepts  unique  to  non-­‐profit  accoun0ng  that  don’t  currently  exist  in  the  US  GAAP  Taxonomy.  

Such  as:  •  Split-­‐interest  agreements  •  Pledges  receivable  •  Temporarily  restricted  net  assets  

#CPATechnology  

#CloudorBust  

Me  and  Geoffrey  Moore  

#Connected  

From:  Systems  of  Record  To:  Systems  of  Engagement  

#4Genera0ons  

GEN SYMP

"The  speed  of  change  makes  you  uncomfortable  on  a  regular  basis,"  he  says.  "That's  so  difficult  for  people  who  are  paying  mortgages,  buying  cars,  trying  to  give  their  kids  the  things  they  had,  to  get  them  through  school.  You  want  to  feel  confident  in  the  last  15  years  of  your  career  that  arer  25  or  30  years  of  effort,  it's  just  going  to  work,"  he  says.  "But  it  isn't  so.  And  I  don't  think  you  ever  get  over  the  fear  of  not  knowing.”                        –  Doug  Gould  Ad  Exec  

Why  should  you  care  about  Social  Media?  

“In-­‐forming  is  the  individual  person's  analog  to  open-­‐sourcing,  outsourcing,  insourcing,  supply-­‐chaining,  and  offshoring.  Informing  is  the  ability  to  build  and  supply  your  own  personal  supply  chain—a  supply  chain  of  informa1on,  knowledge,  and  entertainment.  In-­‐forming  is  about  self-­‐collabora1on—becoming  your  own  self-­‐directed  and  self-­‐empowered  researcher,  editor,  and  selector  of  entertainment.  

             –  Thomas  Friedman  

#SocialCPA  

#SocialMediaforCPAs  

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MACPA’s Social Media Ma

145,714 views

80,568 views

450 members 4,966 followers

2,049 connections

571 connections

Top 50 Business Blogs - 2011

Top Accounting Blogs – 2009, 2010, 2011,

2012

#SocialAccoun0ng  

The  conversa0on  con0nues…  

hTp://cpa.tc/214    

Tipping  the  adop0on  curve?  

#Accoun0ngInnova0on  

Innova0on  for  CPAs  

•  Big  Four  Trends  –  Social  – Mobile  –  Cloud  –  Big  Data  (XBRL)  

•  Innova0ve  Services  –  Value-­‐added  CFO  –  CFO  Advisory  Services  –  FRF-­‐SME  –  Assurance  on  XBRL  Tagging  –  XBRL  for  research  

S-­‐Curves  &  Business  Model  Innova0on  

•  ROA!  •  L>C  •  CC  >  EC  

Three  Rules  for  Success  

1.  BeTer  before  cheaper  (it's  best  to  compete  on  differen0ators  other  than  price);  

2.  Revenue  before  cost  (priori0ze  increasing  revenue  over  reducing  costs);  

3.  There  are  no  other  rules.  

CGMA  –  CIMA  The  global  value-­‐added  financial  professional  

#CPAVision  

Business Events Capture Report Insight Communicate &

Engage Action

•  Historical •  Compliance •  Technical

•  Future •  Reliance •  Leadership

The Information Value Chain •  Communica0ng  the  total  picture  with  clarity  and  objec0vity,  

•  Transla0ng  complex  informa0on  into  cri0cal  knowledge,  

•  An0cipa0ng  and  crea0ng  opportuni0es,  and  

•  Designing  pathways  that  transform  vision  into  reality.  

EBR  

Source:  WTF  What’s  the  Future  of  Business  by  Brian  Solis  

Remember  how  we  started?  

#AdaptorDie  #BendAdop0onCurve  

• Technology  &  Caveman  • Serendipity  • CC  >  EC  • L  >  C  • CPA  as  Ar0st  

The  collaboration curve  is  replacing  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

#CC>EC  

Technology  &  the  Caveman  

#MACPAGROUPS  

“In  a  period  of  rapid  change  and  increasing  complexity,  the  winners  are  going  to  be  the  people  who  can  LEARN  faster  than  the  rate  of  CHANGE  and  faster  than  their  COMPETITION.”  

-­‐  Tom  Hood,  CPA.CITP.CGMA  

#CC>EC # 1 Skill is Collaboration # 2 Skill is Communication according to 2012 IBM Global CEO Study

#theBounce

Corporate Learning Matrix

Are  you  a    Mr.  T-­‐  shaped  Professional?  

#Connect&Collaborate  

#CPAInnovate  

MACPA  Summit  –  May  17th,  2013  Mar0n’s  West  

#Ar0st&CPA  

•  Lots  of  ways  to  mess  up!  

•  Heat  is  needed  to  shape  the  glass  

•  Long  setup  0me  for  quick  finish  

•  Try,  learn  and  adjust      -­‐Tim  McFadden  

Innova0on  adop0on  =  Social  Networks  

 “The  degree  to  which  an  individual  in  a  social  network  is  connected  to  other  individuals  in  the  network  (actor  centrality)  has  been  shown  to  have  a  major  influence  on  that  individual’s  adop&on  of  business  innova&ons.”                  –  Research  Report  by  Associa0on  of  American  Medical  Colleges  

#MDSUMMIT13    Innova0on  thru  Collabora0on  

13  Top  Thought  Leaders  

25  Top  technology  &  Sorware  Vendors  

Terri   Polley,   Gail   Perry,   Teresa  MacKintosh,   Jennifer   Warawa,  Donny   Shimamoto,   Byron  Patrick,   Clarke   Price,   Erik  Asgeirsson,   Tom   Hood,   Ron  Baker,     Jody  Padar,   Joel  Sinkin,  Reggie  Henry  and  more…  

Collabora0on  Technologies  

Membership

Tom  Hood,  CPA.CITP  CEO  Maryland  Associa1on  of  CPAs  Business  Learning  Ins1tute  (443)  632-­‐2301  E-­‐mail  tom@macpa.org  Web  h`p://www.macpa.org  Blog  h`p://www.cpasuccess.com  Blog  h`p://www.bizlearningblog.com      

Follow  me  on:  

ü   TwiTer:  hTp://www.TwiTer.com/tomhood  

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

ü   Facebook:  hTp://www.facebook.com/thoodcpa  

ü Plaxo:  hTp://tomhood.myplaxo.com  

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ü Second  Life  avatar  name:  Rocky  Maddaloni