What does a career in accounting (CPA) offer? What are the major trends and issues facing CPAs today? This special session for accounting students was presented to Salisbury University's students from Beta Alpha Psi and IMA campus chapters.

1. Keeping Up With Accounting
Salisbury University BAP & IMA
March 9, 2010
Tom Hood, CPA.CITP
Hood CPA CITP
CEO & Executive Director
Business Learning Institute
Maryland Association of CPAs

2. What is a Profession?
status,
Professions enjoy a high social status
regard and esteem conferred upon
them by society. This high esteem
arises primarily from the higher social
function of their work, which is
regarded as vital to society as a whole
g y
and thus of having a special and
valuable nature.
All professions i
f i involve t h i l
l technical,
specialized and highly skilled work.
Training for this work involves
g
obtaining degrees and professional
qualifications without which entry to the Certified
profession is barred Training also
barred. Public
requires regular updating of skills. Accountant
Source: Wikipedia

3. Three Attributes of a Profession
1.A body of knowledge
y g
2.A code of conduct
3 A public interest
3.A
“CPAs ARE the
CPAs
DISCIPLINE in business!”
Jim Collins

4. License > Certification
Certified & Licensed by Certified by an
the government
go ernment organization
organi ation
• CPA • CFP
• Doctors • CFE
• Lawyers
L • CIA
• Teachers • CITP
• Regulated by federal & state law • BVLS
• PFS
• These are credentials not
Responsible to society governed by state law

5. CPAs swear oath to “protect the public
interest”
interest
Maryland DLLR Swearing-in of new CPAs
y g
June 28, 2010
At the MACPA Member Summit

6. How to become a CPA?
The Four E’s - Maryland Example
1.
1 Education – Bachelor’s degree + 30 hours
Bachelor s
2. Examination – Pass the Uniform CPA Exam
3. Ethics – Maryland requires a separate ethics
exam
4. Experience – 1 year of experience working with a
CPA
Thereafter, they are required to complete 80 hours of continuing education every
two years, including four hours of ethics training.
Most states abide by some version of these criteria which are covered in a concept
of “substantial equivalency in the Uniform Accountancy Act by the AICPA-
NASBA

7. The “New” CPA exam
Four Parts
1. Auditing & Attestation
2. Business Environment Concepts
3.
3 Financial A
Fi i l Accounting & R
ti Reporting - h d t
ti hardest
4. Regulation

8. 3rd Annual Investor Education Survey
Level of Investor Confidence in U.S. Capital Markets
60
50
40
30
20
10
0
Great deal
G td l Quite a bit
Q it bit Some
S Very little
V littl None
N
2008 2009

9. Attitudes toward CPA Credential
Attitudes toward CPA Credential
76%
% 74%
66%
60%
43%
Investors
31% BDMs
More confident in a job Accountants certified by non‐
CPA requires more
done by a CPA than if it U.S. organizations, such as the
rigorous training and Association of Chartered
were done by an testing than any other Certified Accountants (ACCA),
accountant not a CPA.
accountant not a CPA financial credential.
fi i l d i l are just as qualified as CPAs.
9

10. Top 5 Attributes of CPAs from the public
(investors & BDMs)
• Has integrity
• Competent
• Objective
• Able to synthesize
information
• Focused on client
needs
10

11. Benefits of being a CPA professional
• S i to others
Service h
and the
community
• Doing work that
matters
• Being on the
cutting edge of
society
• Being in on
what’s happening
• Belonging to a
g g
community of
professionals

12. Our members are feeling a
tsunami of changes
Q: What is the # 1 Issue facing all CPAs?
A: Keeping up with changing standards & regulations
12

13. The Perfect Storm of Trends & Forces
• Economy
• Standards, Legislation Regulation
S d d L i l i &R l i
• Globalization
• Workplace & generations
• Technology
13

14. What are MACPA members saying?
What phrases, images, topics stuck out
p , g , p
for you?
• Generations
• IFRS
• XBRL
• Social Networking
• Transparency
T
• Change!

15. Top 10 Issues Facing CPAs
1. Economic Outlook
2. Tax
3. Business Operations
3 Business Operations
4. Implementation and Execution
of Plans
5. New Business Development
6. Personal/Professional
Development
7. Management and Leadership
8. Financial Regulatory Reform
9. Access to Financing and Credit
9 Access to Financing and Credit
10 New Accounting Standards,
IFRS
Source: CPA Trendlines for AICPA Feb, 2010

16. The economy is uncertain
Which ill be?
Whi h will it b ?
• Pending home sales index rose 6.4% in August to the highest
level since March 2007 (National Association of Realtors)
l l i M h 2007 (N ti lA i ti f R lt )
• Spending by U.S. consumers climbed in August by the most
since 2001 (Commerce Dept.)
( p )
• Unemployment rate climbs to 9.8% (Labor Dept.)
Double
Slow Growth
Slow Growth
Rebound Dip

17. A useful framework to understand
the CPA profession
What does the CPA profession support?
What is under the CPA Profession?

18. 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

19. Another View
Public Company Private Company Int’l Company
Financial SEC FASB IASB
Reporting
FASB PCFRC IFRS & SME
Attest
AICPA
Performance
Standards
PCAOB ASB
IAASB
Code of AICPA AICPA
Conduct
PEEC PEEC
IFAC
CPA
Licensure State Oversight & Enforcement of CPA License

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

21. Standards Changes
• AS 5 - PCAOB
• IFRS – SEC International gets legs (again)
• Fair Value Accounting
• XBRL – SEC mandatory
• Codification Project – FASB
• Clarity Project – ASB
– Convergence with international
• Reliability Project (comps & reviews)
• DOL 403 (b) Plans
• Internal Control – COSO
• Fin 48 effective 2009
• Form 990 C Changes
• Fraud & Forensic SAS 99
• FASB – IASB Convergence Project

22. “the basic physical and organizational
structures needed for the operation of a
t t d d f th ti f
society or enterprise”
The infrastructure for the free market was found to be in disrepair
in this latest market crisis and the CPA profession is a critical
component

23. What happens when the infrastructure
breaks?
• Fair Market Value (Acctg Standards)
• Futures & Derivatives
• Investment Advisors & Broker-Dealers
When is the last time these guys had accounting as the major topic of their agenda?

24. Where do major changes come from?
Us – MACPA & AICPA Them
OR

25. “No man’s life, liberty, or
happiness are safe when
the legislature is in session”
session
– Mark Twain
IRS 7216, FTC Red Flags, Sales Tax on
Services, Tax Preparer regulations, Wall Street
Reform Act Sarbanes Oxley Act
Act, Sarbanes-Oxley Act…

26. An example of “they” - The Consumer
Financial Protection Act
1. Promote robust supervision
and regulation of financial
firms
2. Establish comprehensive
regulation of financial
markets
3. Protect consumers and
investors form financial
abuse
4. Provide the government with
the tools it needs to manage
financial c s s
a c a crisis
5. Raise international regulatory
standards & improve
p
international cooperation
http://www.financialstability.gov/docs/regs/FinalReport_web.pdf

27. An example of “us” - The 120/150
Hour CPA Exam Bill (HB 1137)
H E
Changes the requirements to sit
for the CPA exam to allow you to
sit for the Exam upon
completion of 120 hours (and
the requirements of section 1 &
3) and get licensed upon
completion of the final 30 credit
hours (and the requirements in
group 2)

28. Globalization

29. IFRS – International
Financial Reporting Standards
"Accounting standard setters should take action to
make significant p g
g progress towards a single set of high
g g
quality global accounting standards by the end of
2009.“ – from G-20 Report The Washington Action Plan

30. 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

31. GAAP, IFRS & Private Company standards
2,500 pages 25,000 pages

32. Workforce /Generations

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

34. Staff Shortage + Four Generations in
workplace = 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
10,000,000
0
Matures Boomers X'ers Millenials

35. Four Generations in the Workplace
Issue: Generational Differences
• Matures 65 - 100
• Boomers 46 - 64
• Gen X 30 - 45
• Millennials 11 - 29
Which one are you?

36. Another way of looking at this…
Self Actualization
Esteem Needs
Esteem
Belonging Needs
Safety Needs
Love & Belonging
Physiological Needs
Safety & Physiological
Maslow’s hierarchy of needs

37. Here comes the Net Generation
"There is plenty of cause for alarm and/or optimism
There
when it comes to my generation; even I can see
that. Still I think the negative views of us come from
a fear of the unknown, a fear of change. Our world
is evolving at a rapid rate, and that can be scary for
older generations
ld ti
— Savannah Jones, 17, Portland, Oregon
NGenophobia—the irrational and morbid
fear of youth, especially with regards to
their use of the Internet

38. Generation Gap? Or Generation Lap?
Generations
One third (35%) of American
adult internet users have a
profile on an online social
network site, four times as
many as three years ago, but
still much l
ill h lower than the 6 % of
h h 65% f
online American teens who use
social networks
“In 1997, young people for the first time were recognized by adults as being
authorities on something t l revolutionary – digital
th iti thi truly l ti technology interactive
technology,
media, and collaboration.”
– Don Tapscott “Growing Up Digital”

39. Technology
gy

40. • Information Security • Training & Competency
Management • Identity & Access
• Privacy Management Management
• Secure Data File Storage, • Improved Application &
Transmission and Integration
g
Exchange • Document, Forms, Content
• Business Process & Knowledge Management
Improvement / Work Flow • El t i D t R t ti
Electronic Data Retention
• Mobile & Remote Strategy
p
Computing g

41. The SEC Mandate

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

43. The New Math
Social Networking (Old)
+ Social Media (New)
= A change in the way we build
A change in the way we build
relationships
Source: Matt Goddard, CEO R2integrated

44. Old School vs. New School
Chamber of Commerce
Class Reunions
Friends and Family
E‐mail
Industry Meetings
I d t M ti
Newsletters

45. It s all about your Whuffie
It’s all about your Whuffie
Whuffie is the culmination of your reputation,
influence, bridging and bonding capital,
i fl b id i d b di i l
current and potential access to ideas, talent
and resources, saved‐up favors, and
d d f d
accomplishments.
‐ Tara Hunt “The Whuffie Factor”

46. It’s about the Network Effect
How big is
your
network?
“In a sentence {to recognize a network} means ‘To discover how A, who is in touch with C,
Is affected by the relation between B and C.” – Russ Eckel “Becoming the Eye of the Tiger”

47. Whuffie Example

48. Get found Digital Footprints
Get found – Digital Footprints

49. Use the tools and don’t let the tools use
you!
• Social media requires
loosening the reins on
loosening the reins on
technology platforms and
access
• S i l
Social media management
di
requires constant care and
feeding, as well as
monitoring
i i
• Because social media is
MASS media mistakes
media, mistakes
and missteps are
amplified
amplified

50. nGenophobia is out there…
nGenophobia is out there…
Social Notworking is a
managerial problem, not a
technology problem.
If a salesman spends his day
making personal phone calls
rather than phoning potential
customers, the solution is not
to take away the phone. The
solution is to make clear what
is and is not acceptable
i di t t bl
behavior and…
Discussion at AICPA Leadership Academy
Discussion at AICPA Leadership Academy
Chicago, July, 2009

51. Next steps…
1. Educate yourself –
www.cpalearning2.com
2. Create your digital footprint. Create
y g p
profiles on Facebook, LinkedIn and
Google.
3. Start listening. Use Google Reader or
Bloglines to begin reading thought
to begin reading thought
leaders in your profession or areas of
interest.
4. Continue listening. Create your Twitter
listening. Create your Twitter
account and follow your profession and
areas of interest.
5. Start sharing. Create a blog and record
your thoughts.
h h
6. Share. Recognize and promote the
people you find interesting.

52. What is different about where we are now?
“As it relates to science and technology, the rate of
change in the next decade, is likely to be 4 to7 times
decade
faster than in the last decade. If it is 4x faster it would
be like planning for 2010 in 1890, if it is 7x faster it
would be like planning for 2010 in 1670 ”
1670.
-Expert on Education Panel, The Aspen Institute, 2007

53. The meta map of the I2A™Strategic Thinking System provides an
architecture or framework to structure thinking and conversation as you
engage. When talking about complex issues that aren’t completely
understood, or debating solutions where there are multiple points of view, it is
easy 53 get lost in the conversation and prematurely locked into a solution.
to

54. Five Qualities of Extraordinary Leaders
1. Sight - Ability to see emerging
patterns and shift perspective
when necessary
LC 2.
3.
3
Insight - Ability to learn faster
than the rate of change in your
industry
Create - Ability to think
C t
strategically and critically to gain
insights that create new
opportunities
4. Communicate - Ability to
collaborate inside and outside
you organization and o build
your o ga a o a d to bu d
and sustain social networks of
people engaged in the work
5. Inspire – Ability to mobilize
p
support and engage others to
join you in ACTION

55. What is above knows what is below, but what is
below does not know what is above. One climbs,
one sees. One descends one sees no longer but
sees descends, longer,
one has seen. There is an art of conducting
oneself in the lower regions by the memory of
what one saw higher up. When one can no longer
see, one can at least still know.
-Rene' Daumal
“The faster you go, the further
ahead you have to see.”

56. So what does the future look like for CPAs?

57. The Year of the CFO
As financial skills are valued more highly, CFOs will
make it to the corner office in greater numbers than
before. Recession, credit crunch and the increasingly
complex nature of global companies will all play
directly into the bean counter’s hands.
counter s hands
Source: The Economist Magazine The World in 2009 Nov, 2008

58. Accounting is the quickest path to
the corner office
1. Broader and longer line of
sight (future focus)
2. Network leadership
3. Strong analysis skills
(financial and
operational)
ti l)
4. Communication skills
5. Global perspective
Top 5 skills of the p
p post-recession leader
– CLO Magazine

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

60. 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.
C bi i i i ht with i t
Combining insight ith integrity, CPA d li
it CPAs deliver value b
l by:
• Communicating the total
picture with clarity and
objectivity,
• Translating complex
g p
information into critical
knowledge,
• Anticipating and creating
opportunities, and
• Designing pathways that
transform vision into reality.
t f i i i t lit

61. This means we want to move up the
business value chain & add value by:
Business Infor- Knowl-
Infor Knowl Deci-
Deci
Data
events mation edge sions
Communicating with clarity and objectivity
Translating information into knowledge
Anticipating and creating opportunities
Designing pathways to transform vision to
reality

62. Using these competencies needed for a changing
& complex world
p
2008 – Deloitte Research 1998 – CPA Vision Project
• Change Management (C) • Communication &
• Strategic Ability
St t i Abilit (S) Leadership
• Critical Thinking (S) • Strategic & Critical Thinking
• Business Perspective (C) • Focus on the Customer,
Client, and Market
• Organizational Agility (C)
• Interpretation of Converging
• Dealing with Ambiguity
g g y Information
(S)
• Technologically adept
C – Catalyst
S - Strategist

63. Standing on these core values

65. S what d
So h t does thi mean t you?
this to ?

66. How to avoid the “lost generation” syndrome
66

67. Are you an untouchable?
A Washington l
W hi t lawyer f i d recently
friend tl
told me about layoffs at his firm. I
asked him who was getting axed.
He said it was interesting: lawyers
who were used to just showing up
and having work handed to them
were the first to go because with the
bursting of the credit bubble, that
flow of work just isn’t there.
j
But those who have the ability
to imagine new services, new
opportunities and new ways
to recruit work were being
retained.
retained They are the new
untouchables.

68. Are you indispensable?
Imagine an organization with an
employee who can accurately see
the truth, understand the situation,
and understand the potential
outcomes of various decisions.
And now imagine that this person
is also able to make something
happen.
happen
This is our leader, our marketer,
our linchpin!

69. Six Career Lessons from Johnny Bunko
1. There is no plan
2.
2 Think strengths, not
strengths
weaknesses
3. It s
3 It’s not about you
4. Persistence trumps talent
5.
5 Make excellent mistakes
6. Leave an imprint

70. Who is in charge of your career?
1.
1 Know thyself – what are
your strengths? Passion?
Your hedgehog?
2. Own your attitude &
2 O ttit d
behavior
3. L>C Learn faster than
your profession / industry
4. Use your sight and
insights
g
5. Relationships are the
new “hard” skill
6. Communication,
6 Communication
communication,
communication
7.
7 Use the tools don’t let
tools,
the tools use you

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

72. MACPA resources
• CPA Success, our daily blog
www.CPASuccess.com
• CPA Spotlight, our weekly podcast
www.macpa.org/podcast
• Other MACPA blogs:
• www CPALegislativeInsider com
www.CPALegislativeInsider.com
• www.NewCPAs.com
• CPA Learning 2, a Web 2.0 playground by CPAs for CPAs
www.CPALearning2.com
72

73. Professional Issues Update
Spring, 2010
Spring, 2010
Tom Hood, CPA.CITP
CEO & Executive Director
Maryland Association of CPAs
http://www.MACPA.org
tom@macpa.org
t @
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