Presentation to Accounting Educators at the Pearson - Presentice-Hall Accounting Symposium in 2009. Includes update of three major trends facing Profession - Globalization - Workforce - Technology

1. KEEPING UP WITH ACCOUNTING
From Globalization to Web 2.0
Tom Hood, CPA.CITP
CEO & EExecutive Director
ti Di t
Maryland Association of CPAs

3. “CPAs ARE the
DISCIPLINE in business!”
Jim Collins

4. Economic Outlook
 National Outlook is not
bright
g
 Economists estimate 3Q
2009 – 1st Q 2010 for
recovery
 Maryland outlook is much
better
 T 5 states to recover the
Top tt t th
fastest
 CPA Career one of the Top p
10 recession-proof careers
 CPA firms below Top 8 are
continuing to see growth

5. the basic physical and organizational
structures needed for the operation of a
society or enterprise
The Infrastructure for the CPA Profession is maintained by your
Professional Associations
AICPA & State CPA societies (MACPA)
Globalization
Pipeline – Workforce
Technology – W b 2.0
T h l Web 2 0

6. What is under the CPA Profession?

7. Federal Laws & Regulations – SEC,
DOL, Treasury, GAO, PCAOB
CPA Profession Standards – AICPA
& FASB, GASB FASAB, IASB, IFAC
FASB GASB, FASAB IASB
State CPA Statutes
police power of the states to protect their citizens vs commerce clause

8. Another View
Public Company Private Company Int’l Company
Financial
SEC
SC FASB
S IASB
S
Reporting
Attest
PCAOB AICPA IAASB
Performance
Standards
Code of
AICPA AICPA IFAC
Conduct
CPA
State Oversight & Enforcement of CPA License
Licensure

9. US Treasury
MD Comptroller
MD Comptroller
MD Comptroller
CAQ
Courtesy of the Maryland Association of CPAs – 2008 edition
Drawing by Carol Kirwan, CPA

10. Scandals & CPA Profession

11. CPA Profession in the Spotlight

12. Changes in our Infrastructure

13. Massive Changes in our Regulatory Structure

14. The Obama Cabinet
The year of the REGULATOR
Timothy Geithner, Paul Volcker, Mary Schapiro,
Secretary of the Chair, Economic Recovery SEC Chief
Treasuryy Advisory Board
y
Gary Gensler
Gar Gensler,
Ben Bernanke,
Sheila Bair,
Chair, Federal Chair, Commodity Futures
Chair, FDIC Trading Commission
Reserve Board

15. Standards Changes
• AS 5 - PCAOB
• IRFS – SEC International gets legs
• Fair Value Accounting
• XBRL – SEC mandatory
• Cod cat o
Codification Project – FASB
oject S
• Clarity Project – ASB
– Convergence with international
– Risk-based standards already in int’l format
(SAS 104-111)
• SAS 112 Communication
Comm nication
• Internal Control – COSO
• Fin 48 delay
• Delay of SOX 404 for “small” caps

16. US Treasury
MD Comptroller
MD Comptroller
MD Comptroller
CAQ
Courtesy of the Maryland Association of CPAs – 2008 edition
Drawing by Carol Kirwan, CPA

17. IFRS – International
Financial Reporting Standards
Not if but when…
Goodbye GAAP?
Think about this – If SEC timeline is 2014 – what year
do you have to convert to show three years of
comparable f/s?

18. SEC Roadmap released
Early adopters Large
can file using Accelerated
IFRS Filers Small-caps
2010 2014 2016
2011 2015
Official SEC Accelerated
decision filers –
point second
wave

19. Corporate Con ersion Timeline
Conversion

20. Convergence ≠ Sameness
US GAAP IFRS
– Rules based – Principles based
– Based on a GAAP – No hierarchy, consists
hierarchy (level A – D) of IASs, IFRSs &
IASs
interpretations
– Primary accounting
standard setting body – Standards and
is the FASB interpretations
approved by the IASB
– Accounting guidance
and interpretation is – Interpretations of IFRIC
provided by FASB
FASB, and its predecessor the
SEC, AICPA and EITF SIC
25,000 pages vs 2,000 pages

21. Private Company Reporting
1. IFRS with Private Entities Option
2. U.S. Adapted version of Private
Entities
3. IFRS with differential reporting
4. S
Separate U.S. Private C G
S Co. GAAP -
Revised
5. Separate U.S. GAAP- Maintained
and Updated for Private
Companies

22. Questions?
Q ti ?
• What happens when FASB moves to
IASB?
• FAF Funding goes t IASB
F di to
• Who funds GASB?
• Who funds US private company
standards (GAAP)?

23. And if that is not enough…
CPA Pipeline Quality
CPA Exam Audit Quality
– –
Young CPAs Auditing Standards
– –
Student Recruitment Clarity Project
y j
– –
Minority Initiatives Reliability Project
– –
PhD Creation & Support Audit Committee
– –
Effectiveness
150 hour
–
– Peer Review
Regulatory Forces
g y
– Ethi
Ethics
SEC Changes
–
Fair Value Report
–
Advocacy
Regulatory Restructuring
–
Economic Recovery and
– – Federal/State Legislation &
g
Response
R Regulation
– Enhanced Business Reporting – Tax
– XBRL
– Uniformity & Mobility
– Private Company Financial
– Public Policy Issues
y
Reporting
Financial Literacy
International
– Feed the Pig
– International Convergence
– 360 degrees of Financial
– IASB
Literacy
– Internationali ation of E am
Internationalization Exam

24. Pipeline - Workforce

25. Pipeline - Good News
p
20% avg increase in
Graduates & enrollments!

26. Pipeline - CPAs are SEXY!
The surprise in BusinessWeek's
BusinessWeek s
second annual ranking: Accounting
firms have raced to the head of the
pack k
In fact the article included an
interview with the CEO of
Universum Communications who
talked about the quot;sexiness of
accounting,
accounting the popularity of tech
tech,
and the workplace stereotypes
attached to a misunderstood
millennial generation.quot;
ill il ti quot;

27. Maryland Pipeline
Primary College CPA Exam CPA MACPA Engaged
MACPA CPA
School Student Candidate CPA Retiree
Career Paths
Student NYPN
1,373 1,818 399 8,047
•Drive to
CPA Exam
•Reach
h
employment
influencers
•Career
changers
h

28. Four Generations in the Workplace
I
Issue: G
Generational Diff
ti l Differences
• Matures – 1909-45
• Boomers – 1946-64
• Gen X – 1965-80
1965 80
• Millennials - 1981
+ up (
p (Y2K, Netgen,
, g,
Echo-boom,
Gen Y)
Which one are you?

29. Staff Shortage + Four
Generations in workplace =
p
Trouble!
90,000,000
80,000,000
Staff
70,000,000 Shortage
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
20 000 000
10,000,000
0
Matures Boomers X'ers Millenials

30. Why won’t they sit?

31. CPA Exam changes
Then: Now:
• Paper-based • Computerized
• 2 x year May & • Anytime
November • 2 months per quarter
• 5 sections • Pass all sections in 18
months (to keep passed
sections)
• 4 sections
• 70% new content!

32. Steps to become a CPA
1. Get Accounting Education – 150 hours
2. Sit for & Complete CPA Exam
p
3. Take AICPA Ethics self-study & report
grades to State Board
4. Complete 2,000 hour experience
requirement (interning counts) RPE
form
5. Take the official oath at the Swearing-in
Ceremony

33. Promote the CPA license
Maryland DLLR Swearing-in of new CPAs
June 16, 2009
At the Maryland Business & Accounting Expo

34. Biggest Issue Facing NYPNs
• Bridging the Gap between college & real world
gg p g
• Under-Developed Skill Sets
– Leadership & Communication
– Time Management & Organization
– Analytical Skills
– Technical SSkills
• Work-Life Balance
• Limited Networking Opportunities
• Intimidation
• CPA Exam
• Lack of a Voice in Profession

35. Deloitte s
Deloitte’s Global Workforce Advice
• Long-term career development and multiple
experiences within a single organization
• Sense of purpose and meaning in work
• Availability and access to mentors across the
company. (
p y (The focus should not only be on
y
making senior staff mentor younger associates,
but also ensuring that people connect and share
experiences across all levels of the
organization,
organization and across relevant departments
and areas of expertise.)
• Work-life flexibility
•T h
Tech-savvy work environment (f example,
k i t (for l
access to online problem-solving and learning
tools)
• Open social networks that embrace open and
honest communication
Source Deloitte Global Manufacturing survey

36. Technology & Web 2.0
By 2010 Millenials/Gen Y-ers will outnumber
2010, Y ers
Baby Boomers.

37. “If you think about the media
environment an average American
teenager lives in, to walk into a classroom
(or one of our Associations) that doesn’t
have any of that media must be like
walking into a desert.”
– Steve Maher, High School teacher PBS
Special “Growing Up On line”
Growing On-line

38. Meet the Gaming Generation
•GGames make it easier t understand difficult
k i to d t d diffi lt
concepts – 51%
• I would be more e gaged in the subjec – 50%
ou d o e engaged e subject
• I would learn more about the subject – 46% (56%
of students in K-2 chose this as their #1 reason)
• It would be more interesting to practice problems –
44%
Source: Project Tomorrow – Speak Up 2007 report

39. Meet our future members?
“over 64% of students in
grades K-12 play online
and/or electronics based
g
games regularly”
g y
“Downloading music is #1
activity by middle and high
school students”
students
“40% of middle school students
and 67% of high school
students have a personal
website (Facebook, MySpace,
Xanga)”
Source: Project Tomorrow – Speak Up 2007 report

40. Five Learning Trends for 2009
1.Mobile Learning
2.DIY - Do-it-Yourself
Learning
3.Flexible Learning
Environments
4.Virtual Worlds
5.Games & Simulation
Chief Learning Officer Magazine – January 2009

42. So what?

43. Accounting Educators in Second Life
Dr. Mike Kraten
Suffolk University
Dr. Robert Bloomfield
Cornell University
Dr. Steve Hornik
University of Central Florida

44. FASB is there!

45. Even our members are already there!
IBM Financial Analyst Accounting Assistant
Member of NJSCPA

46. Benefits of Virtual Worlds for Education
• The sense of self
• The death of distance
• The power of presence,
sense of space &
capacity to co-create
• The pervasiveness of
practice
• The enrichment of
experience
Another Life: Virtual Worlds as Tools for
VW Sensibilities - eLearn Magazine
Learning, Jay Cross – eLearning Magazine

47. Accounting for Second Life
Journal of Accountancy
J
June, 2008
University of Florida Report - Winter 2008
y p
The study found that 93% of college
instructors using Second Life in
classes were satisfied enough to do
it again and felt it enhanced the
learning experience.
quot;Post-secondary school instructors
who conduct classes fully in Second
Life are significantly more satisfied
than those who use Second Life as
only a small supplement to a real-
world classes.”
Professors Richard Johnson & Joyce
Middleton of Frostburg University,
Maryland

48. 4 tips to cross the digital divide
1. Start Gaming and take a
session in Second Life
2. Do our 33 things in 15
minutes a day
www.cpalearning2.com
www cpalearning2 com
3. Get an iPod and listen to
our cool podcasts – CPA
Spotlight
S tli ht
4. Check out our blogs and
p
post a comment or
subscribe in a blog reader
(RSS)

49. You can…Ignore it
Fight it or
Harness it’s power

50. Maryland Association of CPAs – founded 1901 to
promote and protect CPAs and help them thrive in
the rapidly changing environment – 10 000
10,000
members
Business Learning Institute – founded in 2000 with
a mission to help organizations deliver competency-
based curriculum, courses, content and community to
enhance learning and grow intellectual capital for
organizational and executive leadership
Second Life Association of CPAs – founded in
2006 With 238 members and two islands (CPA
Island & CPA Island 2) with a mission of building a
community of people interested in exploring the
possibilities of CPAs in Second Life

51. For more information

52. Tom Hood, CPA.CITP
CEO
Maryland Association of CPAs
Business Learning Institute
(443) 632-2301
E-mail tom@macpa.org