3. Learning Objectives Understand the structure of the US CPA Profession Understand the role of US Professional Associations Understand the latest trends, issues, and innovations in the CPA profession
4. A profession has three major attributes A distinct 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
5. How to become a Certified Public Accountant? The four E’s (State of Maryland Example) Education – (150 hours) Bachelor’s degree + 30 credit hours Examination – Pass the Uniform CPA Exam Ethics – Maryland requires a separate ethics course and examination Experience – 1 year of experience working with a CPA And CPE – - 80 hours of Continuing Professional Education reported every two (2) years, including four (4) hours of ethics training Certified & Licensed by the State
6. A useful framework to understand the CPA profession 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.
7. 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. Dodd-Frank Wall Street Reform and Consumer Protection Act Sarbanes-Oxley Act Financial Regulatory Reform Single audits DOL audits Audit quality
8. US Treasury MD Comptroller MD Comptroller MD Comptroller CAQ Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA
9. Despite major challenges, the CPA profession has maintained its trusted advisor status with the public and investor communities Both Investors and Business Decision Makers rate CPA’s at the top of all professions, right after physicians.
10. Accounting Firms Most Trusted Advisors Generally speaking, how believable do you normally find statements made by someone who works for one of these organizations or groups “Echo Boomers” (18-34) rated accounting firms highest– 74% Source: Harris Poll, May 18
11. The (infra) Structure of the CPA Profession State Boards of Accountancy issue licenses and regulate CPAs
12. Another way to look at standards & oversight Public Company Private Company Int’l Company Financial Reporting Audit /Attest Performance Standards Code of Conduct State Oversight & Enforcement of CPA License CPA Licensure
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15. Where do major changes come from?Most changes come from regulators and standard setters Us – Associations MACPA & AICPA Them – Federal & State legislators Infrastructure OR New laws, regulations & regulators
18. to petition the Government for a redress of grievancesBill of Rights - submitted to the states for ratification on September 25, 1789 and adopted on December 15, 1791
19. 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 sentiment 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 actions serve as an example; a power that speaks, and to which one listens. – Alexis de Tocqueville Alexis de Tocqueville 1835
25. founding member of MACPAMaryland was the third state to enact CPA legislation and first state in 1928 to restrict audits to CPAs
26. The Profession’s Associations The CPA Profession Associations The Standard Setters & Regulators The American Institute of CPAs (AICPA) 450,000 + members CPA/SEA – State Executives Association 50+ State CPA Societies The Maryland Association of CPAs (MACPA) 9,000 CPAs + 3,000 students FASB GASB AICPA National Association of State Boards of Accountancy (NASBA) 54 Licensing jurisdictions
27. What do we do for our members? Connect Protect Achieve
35. New social media tools allow us to connect to more members in more ways MACPA won 2 out of top 10 Biz blogs in MD MACPA social media efforts featured in J of A and won 3rd place in Mobbies,Top 75 Biz blogs & Top 50 Accounting blogs
36. Protect – the public interest and the CPA license and brand
37. Remember this? Advocacy on behalf of our members is a major value to our members Us – MACPA & AICPA Them – Federal & State Infrastructure OR New laws, regulations & regulators
40. Maryland enacted it in 2008MI RI CT *PA IA NE OH NV NJ UT IN IL DE CO WV CA VA KS AK MO KY MD NC DC TN AZ OK NM AR SC AL MS *GA TX LA FL CPA Mobility Enacted 46 PR CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA Awaiting Governor Signature - 1 * GU U.S. VIRGIN ISLANDS In Process CPA Mobility Legislation Pending - 2 28
41. An example - CPE Regulations involved all levels – law, regulations, and procedures Maryland Senate & House passes bill Maryland Governor signs into law A Bill SB 128 From State Board Law Maryland State Board of Public Accountancy Clarify thru regulations And enforce the law
51. Achieve – enabling our members to deliver the highest quality services and achieve success Public Seminars, Chapters & Committees (over 300 programs) Conferences (9 major programs) In-house Training Web self-study – AICPA CPE Express iTunes – Podcasts on breaking issues Blogs – CPA Success, New CPAs, Legislative Insider, CPA Island Webcasts on breaking topics
52. Achieve - Technical skills are not adequate to keep up with the rapidly changing world Top 5 Competencies for the future are: Communication & Leadership Strategic & Critical Thinking Focus on the Customer, Client, and Market Interpretation of Converging Information Technologically adept We created our Business Learning Institute to research, develop and teach these skills
53. Achieve – Our own BLI program at the AICPA Leadership Academy Apply online at http://www.aicpa.org/leadershipacademy Our “soft” skills are nationally recognized!
54. Associations have enduring benefits for both the individuals and organizations that support them “Association members earn, on average, $10,000 more per year than non-members”Andare 19% more likely to say they are “very-satisfied” with their jobs than non-members” Source: Where the Winners Meet Study by the William E. Smith Institute for Association Research
55. Latest trends and issues facing CPAs Economy Globalization Technology Cloud Social web & social media Workforce & demographics
68. Financial Literacy – National and state CPA associations are committed to making a difference www.feedthepig.org www.360financialliteracy.org
69. The CPA Profession is getting involved in Sustainability Reporting at national and state levels
70. XBRL is mandatory for US Public Companies and ushers in a new age of transparency and financial reporting efficiency MACPA has been advocating XBRL for Maryland business reporting to Government and is working on a non-profit XBRL financial reporting and a non-profit taxonomy
78. Like the medieval carpenters who built the Great Hall at Oxford University in 1529 We are planting the seeds for the future of our Profession
79. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632-2301 E-mail tom@macpa.org Twitter www.twitter.com/tomhood Web http://www.macpa.org Blog http://www.cpasuccess.com Blog http://www.bizlearningblog.com Connect – Protect - Achieve
Editor's Notes
US GAAP went from 25,000 pages to 17,000 with Codifcation (compared to 2,500 for IFRS)According to the US Government Printing Office, it's 13,458 pages in total. The full text of Title 26 of the United States Code (the part written by Congress--available for an additional $179) is a mere 3,387 printed pages, bringing the adjusted gross page count to 16,845.
Note: 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
The current U.S. financial regulatory system has relied on a fragmented and complex arrangement of federal and state regulators—put into place over the past 150 years—that has not kept pace with major developments in financial markets and products in recent decades. As the nation finds itself in the midst of one of the worst financial crises ever, the regulatory system increasingly appears to be ill-suited to meet the nation’s needs in the 21st century. Today, responsibilities for overseeing the financial services industry are shared among almost a dozen federal banking, securities, futures, and other regulatory agencies, numerous self-regulatory organizations, and hundreds of state financial regulatory agencies. Much of this structure has developed as the result of statutory and regulatory changes that were often implemented in response to financial crises or significant developments in the financial services sector. For example, the Federal Reserve System was created in 1913 in response to financial panics and instability around the turn of the century, and much of the remaining structure for bank and securities regulation was created as the result of the Great Depression turmoil of the 1920s and 1930s.
New Harris Poll issued May 18Generally speaking, how believable do you normally find statements made by someone who works for one of these organizations/groups” -- Accounting firms, banks, investment firms, health insurance companies, mortgage companies, government regulators, credit card companies?Accounting firms ranked highest number believable responses -- 67% “Echo Boomers” (18-33) rated accounting firms the highest-- 74%
Two Marylanders are credited with the formation of the CPA Profession in the United States – Edward C. Cockey as the first president of the AICPA and Henry Harney as the source of the concept of a Certified Public Accountant.
In 2009, there were more than 100 companies in the U.S. alone that have submitted sustainability reports (as per the Global Reporting Initiative). This number increases every year. Internationally, there are more than 1300 companies that have submitted sustainability reports in 2009 (as per the Global Reporting Initiative). And they’re not just Fortune 500 companies, but across all sectors of industry, geographic region and size.These companies in the U.S. include:3MAppleBank of AmericaBest BuyChevronCiscoCitigroupCoca-cola CompanyColgate-PalmoliveConocoPhillipsDell Deloitte Dow ChemicalExxon MobilFordGeneral Electric (GE)H.J. Heinz CompanyHewlett-Packard (HP)IBM IntelJohnson & JohnsonJohnson ControlsLenovoMattelMcDonaldsMicrosoftMotorolaOffice DepotOwens CorningPfizerPG&EProcter & GambleQualcommSara LeeStarbucksSun MicrosystemsSunoco TargetTexas InstrumentsThe Walt Disney CompanyU.S. Postal ServiceUPSXerox
