What is over the Horizin for the CPA Profession? Tom Hood covers the latest developments in the CPA Profession and looks to the future in this four hour (Free CPE) session for members of the Maryland Association of CPAs. It covers the latest in the four major trend areas of Economic, Politica;/Legislative/Regulatory, Social/Demographic, and Technology. He finishes with tools and resources to help CPAs thrive in the "Extreme Future".

1. Tom Hood, CPA.CITP
CEO
Maryland Association of CPAs

3. Welcome to the
Extreme Future!

4. 1. Speed – the rate of change will be blinding,
comprehensive in scope and touch every aspect of
your life
2. Complexity – A quantum leap in seemingly
unrelated forces converging on everything
3. Risk – New risks, higher risks, and more risks
4. Change – Drastic adjustments in your work,
community & relationships forcing you to adapt
quickly to radical changes
5. Surprise – sometimes good, sometimes difficult to
imagine, surprise will become a daily feature of
your life

5. We feel overwhelmed by the
waves of change
The 5 C’s
• Competition
• Compliance
• Convergence
• Change
• Complexity

6. There is a way out…
The tornado of changes from CPA Vision Project circa 2000

7. We can to learn how to harness the
winds of change, together!

8. The Power of We!

9. We can become navigators of change
“There isn’t the luxury of time.
We used to say, ‘Wait until
this crisis is over and we get back
to normal,’ but that never happens.
We have to be ‘change animals.’”
- Michele McKenzie, President and CEO,
Canadian Tourism Commission

10. Let’s break it down
• Economic
• Political / Legislative / Standards
• Social / Workforce Demographics
• Technology
• The Future of our Profession
• MACPA resources

11. Economic

13. Maryland by the numbers –
Unemployment stats
8.5
8.0
7.5
7.0
6.5
6.0

14. More bright spots

15. Climbing out faster than most states
2009 versus 2007

17. Political / Legislative / Standards
Most CPAs feel like this with legislative,
standards & regulatory changes

19. The (infra) Structure of the CPA Profession
Federal & State Laws & Regulations
– SEC, DOL, Treasury, GAO, PCAOB
CPA Profession Standards – AICPA &
FASB, GASB, FASAB, IASB
State CPA Statutes (Law)
State Boards of Accountancy issue licenses and regulate CPAs

20. Update on PTIN
• Need “new” PTIN before 01/01/2011
• Required for Signing Preparer or preparer of
all or substantially all of tax return (major
victory)
• Fee is $64.25
• Actively Licensed CPAs and staff exempt from
exam
• CPAs in industry are exempt from filing for
employers

21. Health Care & 1099 issue

22. Where do major changes come from?
Most changes come from regulators and standard setters
Us – Associations Them – Federal & State
Infrastructure
MACPA & AICPA legislators
OR
New laws, regulations
& regulators

23. Recent example – The Dodd – Frank Wall Street
Reform and Consumer Financial Protection Act of 2010
Crisis hits news
Bureau of Consumer
Financial Protection
848 pages!
533 regulations
60 studies
94 reports

24. More than 100 MACPA members call our senators and we
defeat the amendment!

25. “But a time of turbulence
is also one of great
opportunity for those
who can understand,
accept and exploit the
new realities. It is above
all a time of opportunity
for leadership.”
‐ Peter Drucker,
Managing in Turbulent Times

26. What did we do when you were forced
to have a license in every state you file
A
taxes in? WA
MT ME
VT
ND
K
OR MN NH
ID
SD WI
WY NY *MA
MI
• Collaborative effort with AICPA – NE IA *PA CT RI
NV OH
CPA/SEA – NASBA & State CPA
CA
UT
CO
IL IN
WV
DE NJ
VA
KS
HI Societies MO KY
NC
MD
TN DC
• 47 states passed legislation in three
AZ
NM
OK
AR SC
(3) years MS AL *GA
TX LA
• Maryland enacted it in 2008 FL
Awaiting Governor Signature - 1
PR
CPA Mobility Legislation Pending - 2
GU
U.S. VIRGIN ISLANDS
CPA Mobility Enacted 46
* CPA Mobility Enacted Only for
Other Mobility States – GA, PA, MA
26
In Process

27. The Federal Issues – more waves of
change
• FTC Red Flags rule – privacy
& identity theft
• Tax Preparer Registration &
PTIN issue
• Patient Protection Act &
1099’s
• Tax Strategy Patents
• Dodd‐Frank Act
• 3% Withholding on Govt
Pmts

28. The State Issues – cascading from the
federal level and revenue shortfalls
• Maryland Privacy Act
• Maryland Tax Preparer
Regulations
• Maryland Consumer
Protection & Debt
Counselors
• Sales Tax on Accounting &
Tax Services
• Combined Reporting

29. MACPA 2011 Agenda
5 for 5!
 Pass 120/150 legislation
 Stop Sales Tax on Accounting
Services
 Exempt CPAs from Debt
Counseling Bill
 Stop Trial Lawyers attempts at
Tort Liberalization –
Comparative Fault
 Pass Safe Harbor legislation
CPA Day in Annapolis
January 18, 2012

30. How we did it

31. Looking ahead to 2012
• Special Session to deal
with redistricting (and
budget) – will see tax
proposals
• Sales Tax on Services
• Combined Reporting
• Comparative Fault =
increase liability
• Quid Pro Quo for DC
mobility

32. It all adds up
$ per partner / year
1. CFPA $250
2. Tax Prep $150
3. Debt $150
4. Mobility $500
Total $950
Sales Tax est $22,000 per partner

34. Another way to look at standards & oversight
Public Company Private Company Int’l Company
Financial SEC FASB IASB
Reporting
FASB PCFRC IFRS & SME
Audit /Attest
AICPA
Performance
Standards
PCAOB ASB, ARSC, PRB
IAASB
Code of AICPA AICPA
Conduct
PEEC PEEC
IFAC
CPA
State Oversight & Enforcement of CPA License
Licensure

35. The Players
SEC
FAF
BRP FASB GASB
PCFRC
& State Boards & State CPA
Societies

36. Additional Background Info
15,000 issuers and 28.5 million private companies
but GAAP driven by public company issues
Small businesses employ more than half of all
private sector workers
Private companies and their financial statement
users have information needs that are different
than public companies

37. Similar Issue Outside the US Too

38. Concerns About Private Company
Financial Reporting Include:
Too many GAAP-specific requirements not
useful or relevant for private companies
Greater FASB emphasis on public
companies
Increased cost, complexity, time-
consuming using full GAAP
Use of OCBOA raises the issue of what’s
“generally accepted”

39. U.S. Answer: Blue Ribbon Panel on
Private Company Financial Reporting
Address how accounting standards can best meet
private company financial statement users’ needs
Determine future of GAAP standard-setting process
for private companies
Sponsored by AICPA, FAF and NASBA
18 panel members: cross-section of financial
reporting constituencies, including lenders, investors,
owners, preparers and auditors

40. Blue Ribbon Panel’s Conclusions
A problem exists that needs resolution
Recommendation #1 - Enhance GAAP
for private companies by making
significant modifications, where
warranted
Recommendation #2 - FAF should
create a separate private entities
accounting standards board

41. Other Key BRP Recommendations
Framework for differential decision criteria
3-5 year sunset review to determine
effectiveness of new board
5-7 board members
$4-5 million annual budget

42. FAF “Working Group”
FAF created a “Working Group” on
March 4, 2011
Comprised of FAF Trustees and
FAF Staff
Added non-profits to the mix

43. 90.87% of MACPA members believe we need
Private Company Standards
Insights form the Spring & Fall, 2010 PIU / town hall meetings covering 2,000+ members

44. Judy O’Dell chair of FASB PCFRC
shared her perspective

45. MACPA’s response
MACPA sent comment letter to FAF on
December, 2010 for initial survey
MACPA Chair Kimberly Ellison-Taylor
appoints special Accounting Standards
Task Force
Accounting Standards Task Force held
meetings from Jan – Mar, 2011

46. MACPA Accounting Standards Task
Force – The power of “We”
Chair:
Art Flach Grant Thornton Public accounting firm
MACPA Facilitators:
Tom Hood MACPA CEO & Executive Director Non-Profit
Jackie Brown MACPA COO Non-Profit
Skip Falatko MACPA CFO Non-Profit
Task Force Members:
Ernie Paszkiewicz Gross Mendelsohn & Assoc. Public accounting firm
Rob Tuggle BB&T Banking
Bill Ziegler BB&T Banking
Carl Kampel Ellin & Tucker Public accounting firm
Joselin Martin Hayles & Howe Private company
Liz Gantnier Stegman & Co. Public accounting firm
Bob Tarola Right Advisory Public company consultant
Mike Manspeaker Smith Elliott Kearns & Company, LLC Public accounting firm
Ken Kelly McCormick Public company
Don McConnell KCI Private company
Jim Canalichio Dixon Valve Company Private company
Jim Jenkins Stout Causey & Horning Public accounting firm
Al DeLeon DeLeon & Stang Public accounting firm
Debra Busk DeLeon & Stang Public accounting firm
Charles Postal Santos, Postal & Co. Public accounting firm
Jim McKinney University of Maryland Educator
OJ Phillips Small Business Administration Government

47. Our guiding principles

49. Draft conclusions – Not approved by
MACPA Board
Private Company Standards need to be
addressed (costs, complexity, OCBOA)
Current structure is not working –
PCFRC recommendations were not
addressed, prior studies indicate issue
Other jurisdictions around the world
recognizes needs of private company
users are different

50. Next Steps
Finalizing whitepaper
Approval and position by MACPA Board
Distribution and communication

51. Maryland ranks in top five states with
highest audit deficiencies with DOL
EBP Audits (401k) & 403(b) Audit
Quality must be raised in
Maryland
MACPA worked with the DOL
to put on our first Employee
Benefit Plan Conference in
May, 2010
Look for the second annual
conference in May, 2011

52. Can green give you a competitive
advantage?
70% of consumers are
looking for businesses
adopting sustainable
business practices

53. http://www.theiirc.org/

54. Workforce & Demographics

55. 5 Generations in the workforce
Live First, Work Second
Digital
Natives

56. Workforce & Demographics
These guys are retiring These are the
new workers
These are making the
purchasing decisions
Facebook
Email
Generation
Generation

57. Are you ready for Gen Y?

58. The Gen-Y guy

59. Gen Y’s Top Five Ways We Think
and Act at Work
1. No expectation of lifetime employment
2. A feeling of entitlement with big
expectations
3. A hunger for instant gratification and
tangible outcomes
4. A new relationship with technology &
communication
5. A need for ongoing feedback

60. In defense of Gen Y
“The only way we can go wrong is to
discourage these kids. They are set
to go. They’re smart. They’re
motivated. They understand the
problems. They are engaged.”
- David Gergen – Political Analyst

61. New CPAs in Maryland
New CPAs
457
383
291
236
194
166
74
04 05 06 07 08 09 10

63. Technology
• Cloud
• Mobile
• Location‐based /
Augmented Reality
• Security / Privacy
• Social Media
• XBRL

65. Social Media
According to CFO magazine

66. The learning continues by using social media
tools to connect the learners

67. Surfing Lessons!
www.bizlearningblog.com www.cpasuccess.com www.cpalegislativeinsidercom

68. Comments on BizLearningBlog include a
participant and author of book
Jane Bozarth ‐ author

69. XBRL – Time to pay attention

70. XBRL & SBR

71. Turbulent times require new skills and new ways of thinking
“You can’t stop the waves, but you can learn to surf”
- Jon Kabat-Zinn
Photo: Pratt’s surfing page

73. RFTF – Reports from the Future

74. MACPA’s Board focuses on 2025

75. Top 10 Trends
(and the time to address is now)
1. Pressures on Gov’t & rising deficit
2. Changes in learning – informal & on‐demand
3. The cloud = flex, global, work anywhere
4. Increasing complexity, ambiguity & change
5. Globalization and economic shifts
6. Information overload
7. Shift to consumer power (push to pull)
8. Workforce, demographics, the “she” economy
9. Going mobile
10. Social media = business

76. Steve King – Emergent Research
& author of Intuit 2020 report

77. GT: The Evolving Accounting Talent Profile
1. Developing soft skills
2. Understanding and applying international accounting
3. Understanding complex accounting and auditing
standards
4. Adapting to an evolving regulatory framework
5. Addressing new external reporting needs
6. Understanding ERP or IT systems and technological
7. Employing quantitative risk management techniques
8. Possessing specialized industry knowledge and
understanding company's non‐financial business drivers

78. What’s over the horizon for CPAs?
www.macpa.org/forum
http://www.aicpa.org/Research/CPAHorizons2025/

79. In 1997, the CPA profession crowd‐sourced its future with
over 3,500 CPAs in the CPA Vision Project
Our core purpose, our reason for
being is
CPAs...
Making sense of
a changing and
complex world.
Here is what they said…

80. Our Vision Statement for the future is:
( mandates to ourselves for a successful future)
CPAs are the trusted professionals who enable
people and organizations to shape their future.
Combining insight with integrity, CPAs deliver value by:
• Communicating the total
picture with clarity and
objectivity,
• Translating complex
information into critical
knowledge,
• Anticipating and creating
opportunities, and
• Designing pathways that
transform vision into reality.

81. The DNA of the CPA
• Communication &
Leadership
• Strategic & Critical Thinking
• Focus on the Customer,
Client, and Market
• Interpretation of
Converging Information
• Technologically adept

82. IBM Global CFO Study
shows movement to “Value Integrators”

83. The Decade of the CFO?
The best CEOs in the
world are a
combination of CEO,
COO and CFO. They are
inspirational,
financially literate and
know the ins and outs
of their business at a
sophisticated level.

84. www.macpa.org/forum

85. Why we are here and what we are
doing about it
C
P
A

86. Tools: MACPA Fed & State Tax listservs

87. The Power of We!
Our colleagues are phenomenal. I see it time and time again, both on this website and elsewhere. Not only "resources" but the human creativity, insight
and wisdom so freely given. It reminds me of a karate dojo where members at various levels tutor and mentor those "below" them while being tutored
and mentored "from above." Makes me proud to be part of the profession. I'm glad so many recognize how unique and very valuable we as a group are, it's
truly remarkable and oh so greatly appreciated. Since I appear to be the sole member practicing at the beach, I would like to suggest maybe a little social
mixer for listserv participants before, during, or after the MACPA Beach Retreat? Nothing too formal or structured, but so we all can put faces with names,
etc. I see these "flash mobs" on the news, lol, something like that. I will be some sort of forward team arranging a place and maybe a drink or food deal with
an OC establishment. I feel that I have come to know many of you but couldn't pick you out of a police line up! It's not just the sole practitioner. There are
many of us out here with small practices that don't have the manpower resources to maintain in‐house specialized departments. I find it amazing that even
at the height of deadlines there are those who "belly up to the bar," to offer words of wisdom and advice for the practitioner in need. Awesome folks
here! . I am, too, a sole practitioner, and this year I used listserv for the first time. Every time I have some problems I couldn't figure out and always had to
spend more time than "necessary" to look for publications, look for research materials, etc. But this year, any problem or issue I post there, to my surprising
happiness, the answer came in within a couple of hours, without spending my own time. I just waited for any answer to come out from you. And especially
this year, which I found out I was having more complicated cases than before, how much I was able to deal with, thanks to all of your suggestions, advices,
ideas, all of which truly helped me survive this tough season. And yes, finally, I really think our membership dues become worth when we utilize this
group's brainstorming. Thank you all for your invaluable advice and comments, suggestions you have given to me, who has been suffering lack of great
resources. I could give you unlimited thank‐yous to you all! I agree the listserv is an invaluable resource and it has helped me a great deal during this tax
season. Of all the wonderful benefits of being a MACPA member, the value of this one service covers the cost of my membership dues times ten. . With the
wealth of experience available here, I can get information that would be difficult to come by anywhere else. I echo the sentiments of some of those before
me, I wish I could give as much to the website as I get from it. Thanks to all for your invaluable advice and comments during the past tax season!! Thanks
you for the superb quality of this site. I do so few returns, but get (and don’t contribute) so much from it! What a great resource for the sole practitioner!!
Thank You for the invaluable support to those in the collective we call the ListServe :) Two things I so much enjoy from this group is 1) always being able to
learn something new, and 2) the reminders that the wackiness I encounter in my clients isn't unique to me, and 3) if I wasn't so sleepy I'd remember number
3 …. Lol You all are the best!! I too would like to add my thanks to all the wonderful participants in this list serve. While I am semi‐retired, the information
provided is invaluable to assist in the preparation of the remaining clients whom I still service. Best wishes to all for a restful post tax season. Enjoy, before
you tackle the extensions. My thanks to everyone that assisted in any and all ways this season. My last return before the clock strikes midnight was just
transmitted, so I am off. In the immortal of words of the beloved Truman character, “Good morning, good evening, and good night.” I agree with all. The
listserve is a tremendous resource to all. I have learned so much. Almost makes you want to form a new acctg firm ‐‐ MACPA & CO! As one of the many
lurkers who receives e‐mails and posts questions very infrequently, I speak only for myself when I say thank you to all who share their knowledge here. For
those who run small shops, this is a valuable resource for information. My heartfelt thanks for your generosity. Amen to that…I add my thanks!!! Now…off
to a week of NOT coming to the office, answering phones, answering emails, etc…. Many thanks to all those who asked and those who answered. I would
like to thank everyone who offered words of wisdom on the list serve. Its amazing how much insight you gain from the collective wisdom of the group. I
really appreciate the time and effort that everyone put forth, especially the 10 or 15 ‘heavy lifters’ who seem to respond to any question quickly. Thanks
everybody for the additional support and welcomed contributions! Amen. I only wish I could add as much as I get. At the risk of being redundant…I add my
thanks for the many timely and helpful replies. It is precisely because I value the input from so many folks brighter and more knowledgeable than I, that I
try to take time out and answer on the odd occasion I have something to add. I would argue that, for those of us without a large firm “ivory tower” to turn to,
this has become one of the greatest tools/benefits offered by MACPA. THANK YOU ALL AGAIN!! I must get on the band wagon also and thank everyone
who utilized the listserve. It has been invaluable. Questions asked reminded me that I may have the same problem and the answers given have been helpful
and informative. You all are such a wonderful help! THANK YOU! Another thank you for the listserv especially to: Those of you who are so very generous
with your time and expertise. Those of you whose questions make my clients seem not so bad. Those of you who have taught me that the IRS instructions
are really very useful and to just try looking it up. Those of you who made me laugh. Certainly this is the best CPE there is, even if we do not get credit for it.
Ditto. I couldn't have said it better myself. I hope everyone gets some time to rest and relax! Thanks to all, enjoy the off season. I couldn’t agree
more. Thanks particularly to the “heavy lifters” who seem to respond to almost every question with insights, cites and great advice. I must also add my
thanks to all who participated on the listserve. Many times answers to questions were provided even before I had time to ask them.

88. MACPA Leadership Academy
September 18‐20, 2011 Annapolis

89. Key events & dates
Gov’t / NFP Conf ‐ Apr 29, 2011 ‐ U of MD
Employee Benefit Conf ‐ May 10, 2011 ‐ Columbia
MACPA Business & Industry Conference ‐ May 20, 2011 – Turf Valley
MACPA Summit ‐ Jun 2 & 3, 2011 ‐ BWI
Beach Retreat ‐ Jul 5 – 7, 2011 ‐ OC
CPA Day in Annapolis ‐ Jan 18, 2012 ‐ Annapolis

90. Executive Level Learning
MACPA’s affiliate, the Business Learning Institute
(BLI) delivers competency-based curriculum for
managers and executives:
 Strategic Management
 Business Management
 Performance Measurement Management
 Leadership Development
 Communications Skills

91. Resources
Products / Services
Business Solutions
• RJP Insurance
• AON
• Purchasing Power
of the profession
– Savings of up to
70% off!

92. New CPAs Swearing‐in Ceremony and
MACPA Member Reception
June 2, 2011
BWI Hilton

93. How Leadership is changing?
From To
• Information Stocks • Information Flows
• Hierarchy • Network
• Centralized • Distributed
• Teacher • Facilitator
• Push • Pull

94. How to survive the Extreme Future?
• A future vision – a clear vision of
where you are going
• A sound strategy to get you there
• Tools to help persuade key people
• Effective execution
Source: Dr. James Canton, Ph.d – author of the Extreme Future

97. “It is hard to plan for the long term future when you don’t
know what is going to happen five minutes from now.
Today, a competitive edge is thin and temporary; the edge
quickly becomes the margin. The ability to define the edge,
and the ultimate competitive advantage, is found in the
smarts, heart and ingenuity of your people - that's your
powerhouse. Tap that, train it, focus it and mobilize it; now
you've engaged a network and inspired a sustainable shift.
Insight to action, one without the other is either useless or
destructive.”
-Tom Hood & Gretchen Pisano
co-authors of the i2a: Insights to Action
Strategic Thinking System
http://www.bizlearning.net/live/i2astrategicplanning

98. The leaders job is to…
Provide hope
and inspiration!

99. Tom Hood, CPA.CITP
CEO
Maryland Association of CPAs
Business Learning Institute
(443) 632‐2301
E‐mail tom@macpa.org
Web http://www.macpa.org
Blog http://www.cpasuccess.com