Accounting Career & Professional Issues Update for Students - 2014

Tom Hood, CPA, CITP, CGMA

Towson University March 1, 2014

Tom Hood, CPA, CITP, CGMA!

Tom Hood, CPA, CITP, CGMA CEO MACPA www.macpa.org and Business Learning Institute (BLI) www.blionline.org!

http://www.linkedin.com/in/tomhood/!

If there is a conversation about the future of the profession, you're bound to hear Hood's name mentioned as one of the people leading the way.

– Accounting Today Magazine!

•  Named the Second Most Influential in Accounting by Accounting Today Magazine 2013

•  Linked-In Top 150 Influencer •  Top 25 Influencers in Learning & HR by HR

Examiner •  Top 25 Thought Leaders in Public Accounting

by CPA Practice Adviser •  Working on Learning Management with

AICPA/CPA2Biz, Cloud Curriculum, Performance Management !

http://macpa.cnf.io!!

Respond to a Poll!

Ask a Question!

Select the session: NABA Baltimore/MACPA Professional Issues Update

Download today’s slides at … www.SlideShare.net/thoodcpa

Insights  to  Ac,on    

“One  without  the  other  is  either  useless  or  destruc,ve”  T  

CONFERENCES.IO  POLLS  

CONFERENCES.IO  POLLS  

CONFERENCES.IO  POLLS  

CONFERENCES.IO  POLLS  

What  do  you  want  from  your  employer?  

What  are  you  looking  for  in  your  associa,on?  

“If content is king, context is the kingdom” – Will Avgerakis

Business Landscape

Main Street Owner begins to

delegate “Focus on growth”

Bu26 Million U.S. Small Businesses

Mid-Market Delegation: departments

“System thinking”

.6M businesses

24 million

employees

3.2 million businesses 26 million employees

22 million businesses 27 million employees

Personal Businesses Consumer & Business blur

0-5 Employees

Wall Street Public Companies

Total 15,000 Listed 5,008

Public Accounting

Business, Industry, Government & NFP

44,000 Firms – 250,000 CPAs

250,000 CPAs

Big Four

Top 100 > 70 CPAs

400 > 22 CPAs 800 > 10 CPAs

10,000 > 2 CPAs 33,000 Sole CPAs

CFOs, Controllers, Analysts

A  profession  has  three  major  aJributes  

•  A  dis,nct  and  evolving  body  of  knowledge  •  A  commitment  to  the  public  interest  –  licensed  by  the  government  

•  A  code  of  conduct  and  ethics  

State of Maryland CPA License

How  to  become  a  Cer,fied  Public  Accountant?  

           The  four  E’s  (State  of  Maryland  Example)    1.   Educa,on  –  (150  hours)  Bachelor’s  degree  +  30  

credit  hours  2.   Examina,on  –  Pass  the  Uniform  CPA  Exam  3.   Ethics  –  Maryland  requires  a  separate  ethics  

course  and  examina,on  4.   Experience  –  1  year  of  experience  working  with  a  

CPA  

And  CPE  –  -­‐  80  hours  of  Con,nuing  Professional  Educa,on  reported  every  two  (2)  years,  including  four  (4)  hours  of  ethics  training  

The CPA profession is part of the bigger infrastructure that supports the US free market system. Like the pipes under

urban streets, it is often invisible until it breaks.

A useful framework to understand the CPA profession!

Our infrastructure for regulating the US financial markets has been created from a series of reactions

to crises and changes and is in need of repair.

Single audits

Audit quality

Financial Regulatory Reform

Sarbanes-Oxley Act Dodd-Frank Wall Street Reform and Consumer

Protection Act

The history of associations – Why do we exist?

The First Amendment of the US Constitution allowed “associations”:

•  freedom of speech

•  to peaceably assemble •  to petition the Government for a redress of grievances

Bill of Rights - submitted to the states for ratification on September 25, 1789 and adopted on December 15, 1791

US Constitution Bill of Rights

Associations in America were seen as unique from the foreign perspective

As  soon  as  several  of  the  inhabitants  of  the  United  States  have  conceived  a  sen4ment  or  an  idea  that  they  want  to  produce  in  the  world,  they  seek  each  other  out;  and  when  they  have  found  each  other,  they  unite.      From  then  on,  they  are  no  longer  isolated  men,  but  a    power  one  sees  from  afar,  whose  ac,ons  serve  as  an  example;  a  power  that  speaks,  and  to  which  one  listens.    

 –  Alexis  de  Tocqueville  

Alexis de Tocqueville 1835

Maryland played an important role in the formation of the CPA Profession in the US

•  Edward Cockey - First President of AICPA

•  Henry Harney - concept of CPA

• Max Teichman - founding member of MACPA

Maryland was the third state to enact CPA legislation and first state in 1928 to restrict audits to CPAs

The  Profession’s  Associa,ons  The  Standard  Se6ers  &  Regulators  

•  The  American  Ins,tute  of  CPAs  (AICPA)  –  450,000  +  members  

•  CPA/SEA  –  State  Execu,ves  Associa,on  

•  50+  State  CPA  Socie,es  •  The  Maryland  Associa,on  of  

CPAs  (MACPA)  –  9,000  CPAs  +  3,000  students  

The  CPA  Profession  Associa@ons  

•  FASB  •  GASB  •  AICPA  •  Na,onal  Associa,on  of  

State  Boards  of  Accountancy  (NASBA)  –  54  Licensing  jurisdic,ons  

“People  don’t  buy  what  you  do,  they  buy  why  you  do  what  you  do.”  

-­‐  Simon  Sinek  

Why MACPA?

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The Future

30 Future Forums 1,000 CPAs

Identified these top trends

What CPAs think about the future

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

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  Values  &  Competencies  

•  Leadership  •  Communica,on  •  Strategic  Thinking  •  Collabora,on  &  Synthesis  •  Technologically  Savvy  

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

•  Communica,ng  the  total  picture  with  clarity  and  objec,vity,  

•  Transla,ng  complex  informa,on  into  cri,cal  knowledge,  

•  An,cipa,ng  and  crea,ng  opportuni,es,  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:

CPAs  are  trusted  advisors  who,  combining  insight  with  integrity  deliver  value  by:  

T  

Communica@ng  the  total  picture  with  clarity  and  objec,vity  Transla@ng  complex  informa,on  into  cri,cal  knowledge  

An@cipa@ng  and  crea,ng  opportuni,es    Turning  insights  into  ac@on  to  transform  vision  into  reality    

Current State!The Shift Change!

The New Normal - VUCA

Historical Context – The Perfect Storm

•  Web 2.0 •  Globalization •  Generations

Source: Don Tapscott - Wikinomics

T

Dealing with the Shift Change – MACPA Young Professionals

The Next Gen CPA Leaders… 1.  are proactive, flexible, adaptive and collaborative by nature;

2.  have regained the trust of their clients and the public at large;

3.  have successfully bridged the profession’s “leadership gap” by focusing on succession planning, personal growth, and generational cooperation;

4.  have created the profession’s premier global industry standards and best practices;

5.  have redefined the profession through work / life integration, collaboration, and a team-first approach; and

6.  have earned a reputation as technological innovators.

How? 1. Professional unity 2. Work / life integration 3. The evolving nature of leadership and new leadership models

4. Proactive, goal-focused planning

5. Networked collaboration

6. Embracing and adopting new technologies

From: To: Hierarchy Network Transactions Relationships Efficient Effective Well managed Well led Command & Control Connect &

Collaborate Push Pull Good Great

Regulations & Standards!

•  Interna,onal  –  IASB  &  IFRS  

•  FASB  &  PCC  •  AICPA  &  FRF  –  

SME  •  ASB  –  Clarity  

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

#Accoun,ngStandards  Public  &  Private  Companies  

Private  Companies-­‐  Small  Business  

Public  &  Private  Companies    

Private  Companies    

Private  Companies-­‐  Small  Business  

Financial  Repor@ng  

IFRS  (IASB)    

IFRS-­‐SME  (IASB)    

GAAP  (FASB)    

GAAP-­‐PCC  (FASB)    

FRF-­‐SME  (AICPA)    

Audi@ng   IAASB   IAASB   PCAOB  ASB  (AICPA)  

ASB  (AICPA)    

ASB  (AICPA)    

Ethics   IFAC   IFAC   PEEC  (AICPA)  

PEEC  (AICPA)    

PEEC  (AICPA)    

Happy  40th  Birthday  FASB!  

3/3/14   T  

Federal  Agenda  •  Mobile  Workforce  •  Tax  Due  Dates  •  What’s  at  Stake  •  Tax  Simplifica,on  •  Amended  1099s  (de  minimis)  •  DATA  Act  •  Keep  accrual  basis  for  personal  service  companies  (S  Corps  &  Partnerships)  

“It  is  more  important  to  stop  bad  bills  than  pass  good  ones.”  -­‐  Calvin  Coolidge  –  President  

•  Sales  tax  on  accoun,ng  and  tax  services  (defeated  several  ,mes)  1997  -­‐  HB  580  ,2001  HB  1337,  2004  HB  1364,    2007  -­‐  HB  448  ,  2012  HB  1051  

•  Maryland  corporate  accountability  (SOX  and  404  for  private  companies  and  non-­‐profits)  2003  –  SB  560  

•  Debt  counseling  registra,on  by  CPAs    2011  -­‐  SB  741  

•  Maryland  Tax  Preparers  2007  -­‐  HB  998  •  Compara,ve  fault  (several  ,mes)  1998  SB  618  ,  

2000  -­‐  SB  779,  2001  SB  483  ,    2007  -­‐  HB  110  •  Elimina,on  of  audit  requirements  for  Maryland  

cemeteries    2011  –  SB  352  •   AG  opinion  allowing  CPAs  to  include  Social  

Security  numbers  on  documents  for  tax  services  –  8/30/2011  

•  Got  Exemp,on  from  MSP  Private  Inves,gator  Registra,on  

If  not  us,  Who?  

Building  and  Maintaining  the  CPA  Infrastructure  

•  Separate  funding  for  the  State  Board  2006  -­‐  HB  103  

•  Experience  requirement  to  make  Maryland  CPAs  compa,ble  with  UAA  (Uniform  Accountancy  Act)  2001  -­‐MD  COMAR  09.24.03.1      

•  Ethics  requirement  for  CPE  2006  -­‐MD  COMAR  09.24.02.02  

•  Mandatory  peer  review  and  prac,ce  quality  2005  –  HB  1223  

•  Exemp,on  for  CPAs  from  Maryland  (and  federal)  tax  preparer  regula,on  2008  -­‐  SB  817  

•  Prac,ce  mobility  2008  -­‐  HB  1296  •  Expanding  acceptable  CPE  methods    2009  -­‐  HB  69  •  120/150  CPA  exam  legisla,on    2011  -­‐  SB  287  •  Restricted  audits,  reviews,  and  compila,ons  to  

CPAs  and  added  safe  harbor  for  compila,ons    2011  -­‐  HB  328  

•  State  Board  of  Public  Accountancy  reauthoriza,on  2013  -­‐  SB  238  

The CPA Career

Expects a 13% growth rate in accounting and auditing jobs from 2012

to 2022

49

Demand for accounting reaches all-time high

2013 AICPA Trends Report

Accounting education records broken

2013 AICPA Trends Report

40,350 CPA firm new hires 82,177 graduates

CPA credential in high demand!

Source: Wall Street Journal, 8/13/13

25%

38%

0

5

10

15

20

25

30

35

40

2006 2013

CFOs who are CPAs

Employers: Most desired credential

Solid salary growth

Entry-level demand also strong

Robert Half 2014 Salary Guide

The CPA Brand

The

A Young Professionals Story

Information Overload

“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting-how to read and interpret financial statements-you really shouldn’t select stocks yourself.” Warren Buffett

The CPA Exam

�  Start early

�  Don’t give up!

�  Plan

�  Suffer together

The Career Path

Lombard Street, San Francisco http://images.nationalgeographic.com/wpf/media-live/photos/000/597/cache/lombard-street-san-francisco_59769_990x742.jpg

Rebekah  Brown,  CPA  Maryland  Associa@on  of  CPAs  Business  Learning  Ins@tute  (443)  632-­‐2320  E-­‐mail  [email protected]  Web  h6p://www.macpa.org          h6p://www.blionline.org    Blog  h6p://www.cpasuccess.com  Twi6er  @RJBrownCPA  LinkedIn  Rebekah  Brown,  CPA      

Click here to read all the blog posts this presentation was based on

The only career advice you’ll ever need…

You  are  in  a  race…!

Caused by this guy…!

It’s really a math problem…!

2006!

Picture: John Drake - Flickr!

“…where the most important skill is the ability to acquire new skills…” - Robert Safian - FastCompany!

T!

“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!

6/24/13!

You can’t beat the machine…!

But you can win if you work with the machine…!

The  five  C’s!

• Creative & Critical Thinking!• Contextual Awareness!• Connections & Relationships!• Communication!• Collaboration!

Career  Advice    Winning  the  race  against  the  machine!

1. Know Yourself - Strengths, Values & Passions!2. Create & Protect your brand - You are the CEO

of You, Inc."3. Keep your L>C!4. Work like an immigrant!5. Think like an artist!

Connect  &  Collaborate!

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

Tomorrow’s CPA The Maryland Association of CPAs’ Student Group

�  Benefits – � Discounts on MACPA programs � Connect with other students and

CPAs in the Mentor Center � MACPA Scholarship �  Internship/Job Database � Discounts on many CPA Exam

review programs

@tomorrowscpa

www.facebook.com/TomorrowsCPA

www.macpa.org/Content/students.aspx (Join here: www.tomorrowscpa.org)

[email protected] // [email protected]

How to join & get involved

Tom  Hood,  CPA.CITP  CEO  

Maryland  Associa@on  of  CPAs  Business  Learning  Ins@tute  

(443)  632-­‐2301  E-­‐mail  [email protected]  

Web  h6p://www.macpa.org  Blog  h6p://www.cpasuccess.com