VGFOA Fall Conference 2012
Professional Issues Update
John Montoro, Chair,
Virginia Society of Certified Public Accounts
Topics to Cover Today
• CPA Horizons 2025 Results
• National issues
• Private company financial
reporting
• The CPA reputation
• VSCPA Update
• State and local issues
Copyright © 2012 American Institute of CPAs
CPA’s: Making sense
of a changing and
complex world.
Copyright © 2012 American Institute of CPAs
CPA Horizons 2025
10 Key Insights emerged
Core Purpose standing the test of
time
Core Values substantially
unchanged
Core Competencies evolved
Broad array of new and existing
Core Services
Core Values
Integrity
Competence
Lifelong learning
Objectivity
Commitment to
excellence
Relevance in global
marketplace
Core Competencies
Communications skills
Leadership skills
Critical thinking and
problem-solving skills
Anticipating and meeting
needs
Synthesizing intelligence to
insight
Integration and collaboration
National issues
• Private company
financial reporting
• PCAOB –
Mandatory Firm
Rotation
• Professional
reputation
• Due Dates
• Mobile Workforce
Private Company Financial Reporting
Copyright © 2012 American Institute of CPAs
Background on Financial Reporting
15,000 issuers vs. 28.5 million private companies
but GAAP driven by public company issues
Small businesses employ more than half of all
private sector workers
Private companies and their financial statement
users have information needs different from
public companies
This leads to…
Unnecessary costs
More GAAP exceptions
System not attuned to
needs of all parties
Conclusions of a Blue Ribbon Panel
Resolved: A systemic problem exists that needs
solving
Supermajority recommendation #1:
> Enhance GAAP for private companies by making
significant modifications, where warranted
Supermajority recommendation #2:
> FAF should create board whose decisions are not
subject to FASB ratification
FAF Trustees’ Plan
Issued Oct. 4, 2011
Rejects Blue Ribbon Panel,
AICPA calls for
independent board
Rejects 3,000+ letters from
constituents
Sets up new Private
Company Standards
Improvement Council,
with FASB ratification
Relies heavily on enhanced
FAF oversight
More Than 7600 Supportive
Comment Letters
7400+ comment letters
through AICPA resource
299 additional comment
letters
> Most favor
independent board
> Many others want
stronger, more
independent PCSIC
FAF roundtables concluded
March 1
Decision expected late May
FAF Decision: AICPA Press Release
On May 23, 2012, the Financial
Accounting Foundation announced its
decision to make process and structural
improvements by creating a new Private
Company Council. The AICPA believes
FAF has taken solid steps in the right
direction and is encouraged by this
approach.
FAF Decision: AICPA Press Release
In addition, the AICPA announced
development of a non-GAAP financial
reporting framework for privately held
small- and medium-sized entities that
do not need U.S. GAAP financial
statements. FAF called the OCBOA
effort "important and complementary."
PCAOB Activities
Auditor’s report
> June 2011 – PCAOB concept release
> Proposed standard likely issued in Q3 2012
Mandatory audit firm rotation
> PCAOB public meeting held March 21-22
> Roundtables to be held at venues nationwide
AICPA testifies at House hearing
> AICPA addresses various issues, including
opposing PCAOB’s concept release on audit
firm rotation
Professional Reputation
Let’s first take a look back a few years…
Copyright © 2012 American Institute of CPAs
ENRON
CPA Reputation Stands Strong
Overall evaluations of professionals among Business Decision Makers (BDMs)
Positive Perception
60%
50%
40%
30%
20%
10%
0%
59%
52%
47%
44%
33%
28%
25%
24%
CPA Most Valued Credential Among BDMs
How valuable are the following credentials within your organization?
56%
CPA
31%
44%
MBA
17%
CFP
8%
CFA
0%
39%
24%
14%
20%
10% 7%
31%
14%
8% 4%
28%
64%
40%
60%
80%
100%
Very
Somewhat
Not at all
DK/NA
CPAs Feel Valued, BDMs Agree
CPAs: The CPA credential
is valued and respected at
my workplace
3%
2%
BDMs: How valuable is the
CPA credential within your
organization?
8%
31%
95%
Agree
4%
56%
Very
Somewhat
Disagree
Don't Know
Not at All
Don't Know
Perception of CPAs’ Skills Increased for BDMs
2011
42%
37%
Communicates effectively
2008
55%
49%
Focused on client's needs
56%
50%
Objective
67%
62%
Competent
68%
62%
Integrity
0%
20%
40%
60%
80%
Tax Issues
Copyright © 2012 American Institute of CPAs
Today’s Tax Issues
Tax Preparer Registration
Advocating Sound Tax Policy
Tax Return Due Date Project
IRS Preparer Compliance Visits
Tax Preparer Registration – Now
CPAs exempt from IRS testing and CE
Non-signing staff of CPAs exempt from IRS testing & CE
Marketplace confusion remedies
•
•
•
•
•
Narrow exam, basic 1040
Tagline for advertisements that leads to disclaimer
Database will distinguish between CPAs and non-CPAS
360 Degrees of Taxes campaign
Evergreen issue
Fingerprinting
“Suitability”
morphed into
fingerprinting
Immediate
engagement
with IRS
Less costly,
burdensome
alternative for
“Supervised
employees”
Adamant
support of
CPA
exemption
Advocating Sound Tax Policy
Simple tax system may not be possible; less complex
one is
AICPA actions
> Congressional testimony and resources
> Policy white papers
> Comprehensive review of simplification positions
AICPA tax reform task force framing our
advocacy
> 2011 and 2012 extenders including estate tax
> Deficit reduction pressures
> Presidential election year
Tax Return Due Date Project
Background
> Members concerned about late-arriving K-1s
> Expiration of temporary regulations
> Change in Form 1065, Extended Due Date
AICPA looked at “big picture”
Proposed changes to Congress last fall
Two bills introduced
Improving Chronology of Filing Due Dates
CURRENT
1120 (C Corporation) 3/15 (9/15*)
PROPOSED
1065 (Partnership) 3/15 (9/15*)
1120S (S Corporation) 3/15 (9/15*)
1120S (S Corporation) 3/31 (9/30*)
1041 (Trust & Estate) 4/15 (9/15*)
1041 (Trust & Estate) 4/15 (9/30*)
1065 (Partnership) 4/15 (9/15*)
1120 (C Corporation) 4/15 (10/15*)
1040 (Individual) 4/15 (10/15*)
1040 (Individual) 4/15 (10/15*)
TD F 90-22.1 (FBAR) 6/30
TD F 90-22.1 (FBAR) 6/30 (10/15*)
5500 (Employee Benefit Plan) 7/31
(10/15*)
5500 (Employee Benefit Plan) 7/31
(11/15*)
*Extended Due Date
Chartered Global Management Accountant
Chartered Global Management Accountant
Designatory letters
Affiliation with
world-leading
accounting
organizations
Tools for selfpromotion
Commitment to
inform market of
CGMA value
Commitment to
global management
accounting
Website (cgma.org)
Online social
community
Affiliation with
leaders in business
Inaugural print
magazine
Online magazine
Thought leadership
papers
Global Economic
Outlook Survey
Advocacy voice of a
half-million
accounting
professionals
around the world
Certificate
Professional
Development
CGMA pathway
Available to AICPA voting members with specific
qualifying experience
• 3 years financial/management (may include
internal auditing in BIG), OR 2 years plus
1 year public accounting; or
• 3 years financial/management consulting; or
• 3 years management accounting focused on
management and operation of a CPA firm.
What is the CGMA?
CGMAs are part of a new,
worldwide network of
Code of
management accounting
ethics and
professionals, working in
enforcement
the world’s leading
corporations, private and
public organizations, small
businesses and start-ups
Continuous
professional
development
CGMA.org
Copyright © 2012 American Institute of CPAs
Financial
and nonfinancial
expertise
Powered by
joint venture
between
AICPA and
CIMA
CPA.com
New email service for CPAs
Professional alternative to
more consumer-oriented
email services
Launch suite of services in
C2B offerings
.CO
M
.
.
.
AICPA Total Tax Insights.com
Focus on Our Vision
VSCPA will be a dynamic and innovative community
serving CPAs and society at large.
Top Strategies
Advocacy
Knowledge
Engagement
Technology
2012 Virginia Legislative Priorities
• Protecting the CPA
designation
• Promoting certainty
in your work
• Preventing
burdensome
requirements for
members
• Advocating for
sound policy
decisions
State Issues
• Tax conformity
• Reducing failure to pay penalties on tax
return extensions
• Weighing in on BPOL study
• Reviewing Thomas Jefferson Institute
Study on Tax Restructuring
• Debit card tax refunds to begin in 2013
Auditor of Public Accounts
Virginia Office of Inspector General
•
•
•
•
•
Michael Morehart, CPA
Appointed July 1, 2012
Four year term
Consolidated several IG offices
Prevent, detect and investigate fraud,
waste and abuse in state government
CPA Assembly Day — January 17, 2012
New Board of Accountancy Members
• Marc Moyers, KPMG
Partner, Richmond
• Stephanie Saunders,
Saunders & Saunders
CPAs, Virginia Beach
VA CPA Licensing Fees on the Rise
Enforcement
VBOA Proposed Legislation
• Statute of limitations on complaints or investigations
against CPAs
• Within 3 years of the act, omission or occurrence
• Within 2 years of the date a criminal charge is filed
or of discovery of act
• Required participation in Facilitated State Board Access
for Peer Review firms
• Board already has authority to request peer review
documents
• VBOA authorization for summary suspension
• VBOA seeking authority to suspend prior to a
completion of hearing
Variety of Educational Offerings
• Fall Conferences
• Professional Development –
Chantilly
• CPA2Biz Cloud User – DC
• Gov’t Contracting – Fair Oaks
• Technology – Richmond
• Essential CPA Issues Richmond
• Online courses
• Quality in-person seminars
• VSCPA Spotlight Series for members to
meet and hear from notable speakers
• Former AICPA Chair and 2014 Rhode
Island Gubernatorial Candidate
• Sept. 25, 5:30 p.m.
• CPA Center, Glen Allen
• Free for VSCPA members
VSCPA Communications
Young
professionals
initiatives:
• YP Advisory Council
• CPA Inauguration
• Leadership Training
2012 VSCPA Educational Foundation
Scholarships
Adrienne Essiaw, College of William & Mary
Candice Owens, Longwood University
Fatima Sbai, George Mason
Phillip Stucki, Virginia Tech
Katherine Covino, College of William and Mary
2011 F. ilson Brown Scholarship recipient
VSCPA Student Resources
Leaders’ Institute May 31 - June 2, 2013
D
D
d
Associations
are all about
Connections.
Connect by…
• Creating a personalized profile
• Connecting with colleagues
• Joining or creating special interest communities
• Sharing resources, including Word documents,
PowerPoints, webinars, URLs and more
• Interacting with volunteer groups on a more personal level
• Opening select profile information, blogs and other info to
the public
Next up…
So what’s next?
Pathways Commission
• Created by the American
Accounting Association
and AICPA
• Study the future structure
of higher education for
the accounting profession
• Seven broad
recommendations
AICPA National Commission on Diversity
& Inclusion
• The 15-member Commission
• Minority professional advocacy groups,
CPA firms, state CPA societies, and
leaders from business and industry,
government, and education
• Focus: Recruitment, retention and
promotion of minority CPAs
Questions?
Thank you for your support!
Contact:
John Montoro
jmontoro@cpa.com