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MACPA Managing Partner Update - 11-15-18

  1. Managing Partner Update Mid-Term Election Update November 15, 2018 1
  2. 76% 9% 10% 5% What is the size of your firm? 1 - 49 50 - 100 101 - 300 301 - 500 501 - 1,000 1,001 - 5,000 > 5,000 Another 30 participants joined from all size firms, Big 4, National, Regional, and local n ot recorded on this poll.
  3. 5/2/18 Tom Hood, CPA, CITP, CGMA 3
  4. Agenda • Advocacy & Legislative Update • Elections - Legislative Consultant - Nick Manis • 2019 Agenda • CPA day in Annapolis - January 24th, 2019 • State of the Profession • #FutureReady Resources • Skills & Curriculum • AI in Accounting & Auditing - Dec 5th • CPA Summit - Dec 6th • Insights
  5. Swearing - In Ceremony
  6. 2019 Legislative Update • Governor Hogan Re-elected • Record Turnover 31% or 58 New Legislators - 17 Senators and 41 Delegates • 3 CPAs + 1 Arthur Ellis (D - Charles County) - 1 Gail Bates (R - Howard County) • Brian Feldman, CPA appointed to Vice Chair of Senate Finance Committee • Significant changes in Key Committees • Senate EHEA new Chair & Vice-Chair - Accountancy legislation is heard • Senate Judiciary - New Vice-Chair and significant turnover • House Economic Matters - New Vice-Chair - 30% Turnover • House Judiciary - New Chair & Vice-Chair - 33% Turnover • Ways & Means - New Vice Chair - 35% Turnover
  7. Defense • Comparative Fault - High Risk • Sales Tax on Professional Services • State Deregulatory Risk - State Board & CPA License - New • Increase in employment issues and laws • More complex tax issues (TCJA Impact) • Impact of Supreme Court Wayfair ruling on Sales Tax Offense • CPA Firm License Mobility 2019 Legislative Update
  8. 0% 10% 20% 30% 40% 50% 60% 70% 80% Rank our Most Important Legislative Priorities (Top 5) 1. Stop Comparative Fault (Tort) Liability 2. Stop Sales Taxes on Services 3. Support State Tax Reform TCJA& Wayfair 4. Pass CPA Firm Mobility Licensing 5. Stop onerous Mandatory Paid Leave 6. Protect State Board of Public Accountancy from de-regulation + 1 Data Privacy Legislation (e.g. GDPR & California Top Legislative Priorities from Managing Partners
  9. 2018 CPA day in Annapolis CPA Day 2019 – January 24, 2019
  10. Arthur Ellis, CPA - District 28, Senate - Democrat CPA and disabled Air Force veteran defeated incumbent, Mac Middleton a six-term senator from Charles County and Chair of Senate Finance Committee. Another major surprise was defeat of Senator Joan Carter Conway (Balto City 43rd District) by Mary Washington. Senator Conway was Chair of Environment, Health & Education Committee where most of our CPA legislation goes through. She is replaced by Senator Paul Pinsky (22nd District in Prince George's County).
  11. Risk Alert! CPE Audit & Enforcement $5k fines Felony Offenses including DUI/DWI Offense • CPA Exam Applicant Process Improvement • Accepting AP on College Transcripts - Passed w/ Board Policy • Remove College Ethics Course requirement - Decided No Action • Firm Mobility - Passed State Board • 10 minute CPE - DONE! • Competency based CPE - emerging issue Defense • DOL & Peer Review – continue to work with Board and AICPA • A-133 and single audits • Watch regulatory process for issues Art Flach, CPA Chairman Maryland State Board of Public Accountancy MACPA Past Chair #MACPA Regulatory Update
  12. 0% 10% 20% 30% 40% 50% 60% 70% What are your biggest challenges as a firm? (pick top 5) 1. Finding the right talent 2. Impact of new technologies 3. Adapting to the rapid pace of change 4. Partner Alignment 5. Keeping the right talent 6. Changing our firm's mindset about the Future 7. Impact of Tax Cuts and Jobs Act Maryland Managing Partner’s Top Challenges Based on Accounting Today Research and Maryland Managing Partner Poll on 11-15-18
  13. Profession’s Biggest Challenges Staffing, succession planning, tax reform, cybersecurity, merger mania, commoditization of core services, the demand for more CPAs, and the search for relevance — as important as all these issues are to accountants, they pale in comparison to two overarching concerns in the minds of the profession’s leaders: the impact of new technologies, and accounting’s ability to adapt to the rapid pace of change.
  14. • Change will accelerate due to emerging technologies. • I believe we are underestimating the profession’s understanding of the trends or efforts to understand and employ technology and train people • Technology will disrupt the accounting profession to the bottom and very quickly. • CPA profession seems so far behind in the automation area. I do agree that the accounting function as we know it today can be replaced entirely. One major barrier may be something like fraud. • We need to catch up as a profession so we are not left behind. FromFrom our presentation of trends and facilitation of the PCAOB Standing Advisory Group on June 5, 2018
  15. 83% of SMBs (CFOs & Controllers) are feeling moderate to severe disruption - up from 71% last year Clients switch firms because they do not get proactive advice, only reactive (historical) services.
  16. The skills finance and accounting professionals will need in the future and the emergence of the T-shaped professional. #FutureReady T-Shaped Professional Future Ready Competency Matrix © Copyright Business Learning Institute 2017
  17. Our ‘Ask’ ● Your continued leadership & support • Membership 100% • CPE & Learning ● CPA Day in Annapolis - Jan 24th, 2019 ● PAC - $250 per Partner up to $4,000 per firm ● Special events - Leadership Academy, Swearing-In, Women to Watch, CPA Summit If not you, who will help us protect our Profession? And if not now, when?
  18. 100% 68% 63% 58% 53% 53% 42% 42% 0% 0% 20% 40% 60% 80% 100% 120% What are you certain about (future facts)? Top 5 1. Technology will continue to accelerate exponentially 2. Proactive anticipatory skills in higher demand 3. Increased automation of accounting technical knowledge 4. Increasing shortage of talent 5. Clients & employers demanding more proactive insights from CPAs 6. Strong culture required to innovate fast enough What are you certain about? Hard Trends & Future Facts facing the CPA Profession * Based on our research with Futurist Daniel Burrus
  19. Legislative representative changes Question: How do we get our line partners up to speed with these issues and motivated to make changes? There is a need to improve the public's perception of the importance of the CPA profession. The long term potential of our county's (Charles) new state senator CPA. Changing profession, legislative changes and impact of election results to us locally. What role do we play. Biggest challenges to firms. MACPA advocacy. Technology will continues to be extremely important. High risk from Tort Reform - Comparative Fault Very good update, regulations and legislative issues very important. Change in Maryland elections Biggest Challenges for the future Talent pipeline continues to be major challenge - glad to see MACPA is working on it We need to support CPA Day in Annapolis and Swearing- in Ceremony for good of our Profession MACPA has resources to help with technology like the AI Conference and CPA Summit What is your takeaway/insight from this update?
  20. 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 Tom Hood, CPA, CITP, CGMA • CPA Practice Adviser Accounting Hall of Fame • Named the Second Most Influential in Accounting by Accounting Today Magazine 2011-present • Top 100 Influencer by LinkedIn (700,000+ followers) • Member of the Forbes Finance Council • Top 25 Influencers in Learning & HR by HR Examiner • Top 25 Public Accounting Thought Leaders by CEO Maryland Association of CPAs (MACPA) Business Learning Institute (BLI)