CPA Success

There's no ROI in social media. Now start socializing.

Social media ROI has taken on urban legend status. It's like Bigfoot: Every now and then you hear about a sighting, but mostly, it's just a myth.

I think it's time to bury it once and for all.

Michelle Golden wrote a brilliant blog post recently in which she said the whiners who complain that they're not getting any return on their social media investment simply aren't doing it right.

"How have they been using social media?" Michelle asks. "Did they define their purpose? Specify goals? Once that was done, did they use the right tools? In the right way? With the right groups or people? And for how long? Did they track the right success metrics? ... Social media isn't the problem. Lack of planning and spotty execution are the problems."

I'll take it a step further. The whiners themselves are the problems.

In "Linchpin," Seth Godin puts forth a pretty radical idea: Generosity generates income.

Godin believes in giving stuff away -– giving away our knowledge, our resources, adding value to other people’s lives and not expecting anything in return. That’s how we become indispensable.

Pretty radical idea. It flies in the face of everything that capitalism stands for, right? The classic business model that we've all grown up with was all about product and profit. Make something and sell it for more. People were merely cogs in the production machine.

Here’s the thing, though: That business model? It’s dying. It’s been dying for probably five years. The rules have changed. We’re living in an era in which people are at the center of everything we do. Tom Hood likes to say we’ve moved away from an era of command-and-control to one of communicate-and-collaborate, of building communities and relationships. That takes people, trust, and a commitment to serving others, not just making money. People first.

Back to the concept of giving stuff away. Godin says there are three "circles" of gift-giving.

• The first is a circle of true gifts -– stuff we willingly share with friends, family and co-workers. You invite a friend over and give her a meal. You don’t charge her for it.


• The second is a circle of commerce. People in this circle willingly pay us for what we produce –- our consulting services, our financial advice, the books we write, the widgets we make.


• Now, the Internet has given us a third circle, and it’s kind of a combination of the first two. It consists of people who might one day pay you for what you do, but first they need to know you and trust you and be comfortable interacting with you.

Social media is part of that third circle. It's a place where we give away stuff, share what we know, add value to people’s lives. It's where we build trust, credibility, and relationships.

Do that, and you stand a decent chance of moving your followers into that all-important second circle. Fail to do that, and you're a relic in a changing world.

And still, the social media naysayers spout their nonsense: “Where’s the ROI? How come we’re not making any money on this stuff? I’ve been on Twitter for a week and nobody’s bought anything yet.”

There is no ROI in Twitter, or blogs, or Facebook. Not if you do it right. Those things are simply the tools we use to build relationships in a social world.

What's the ROI of social media? As Michelle Golden says, that's like asking, "What's the ROI of my phone?"

The ROI isn't in the tools. It's in the relationships you build through the use of those tools.

The irony is, the more we give away, the more we’ll make in return.

That’s today's business model. In a people-first world, maybe our organizations need to become more human.

Top eight challenges facing finance executives

Our friends over at Financial Executives International recently shared this list from FEI's CEO, Marie Hollein. 

1. Controlling the U.S. deficit
2. Tax reform
3. Health care uncertainty
4. Dodd-Frank Act implementation and revision
5. Employer-provided retirement plans
6. XBRL
7. Convergence of U.S. GAAP and IFRS
8. Private company accounting

Last August, the MACPA had a group of CFOs and controllers in for a roundtable on what was keeping them up at night and came up with this list:

1. Communicating effectively (new tools vs. face-to-face)
2. Talent / training / succession planning
3. Economic environment
4. Generational / work-life balance
5. Supply chain / rising costs
6. Strategic planning in uncertainty
7. Financial literacy about business
8. Increasing government regulations
9. IT security / privacy
10. Multi-tasking and increasing workload

Then there's the latest top trends to watch in 2012 from the CPA Horizons Future Forum process. And here are the lists from 2009 and 2008 from our CFO roundtables.

What I find interesting is that the current list from FEI is focused purely on the business finance and economics issues, whereas our group of CFOs (and the CPA Horizons 2025 research) included much more of the general business, talent, and leadership issues. 

We have been gathering resources for CPAs in the form of training, articles, and podcasts to help them deal with these major issues. Here is a page with each major future trends and links to resources. We also have plenty of programs available for almost all of these topics, either in our conferences and public seminars or available to your firm or organization through our Customized Learning Team. 

Here is our "future trends" resource center. Click on each trend link to see all of our resources for you.

The other interesting insight I take away from all of this is the change from 2009 (in the thick of the recession) from the other years. Three of the seven issues -- layoffs, capital spending cuts, and access to credit) -- have disappeared. Does that mean we are seeing bright posts on the horizon?

Here are upcoming events just for our Business & Industry members:

• Don't miss our special town hall / professional issues update for our business and industry members on March 21 in Timonium (free to MACPA members). Register here.
• Our Business and Industry Conference will be held on April 20 at Turf Valley in Ellicott City. Register here.
• The MACPA's CPA Summit features lots of programming around these big issues. It will be held on June 12 at the BWI Hilton in Linthicum, Md. Get details here.
• Leadership development with our 2012 Leadership Academy is scheduled for May 7-9.

What do you think? Are the big issues of leadership, generations, talent, and communication bigger than the more technical economic issues and why or why not? 

See the top 5 skills of the post-recession leader.

State of the union: Taxes and politics prevail

So there you have it -- just your ordinary, run-of-the-mill, election year State of the Union Address and opposition responses. Nothing at all political there. Nudge-nudge, wink-wink.

It's almost impossible to scrape the politics off your shoes after one of these things, isn't it? You can never quite get it all.

Still, let's give it a shot by taking a glance at some of President Obama's tax proposals.

• He called for a longer-term extension of the payroll tax cut -- not a terribly bold move, since Congress was likely to do that anyway after passing a short-term extension in December.


• He called for "lowering corporate taxes and providing incentives for U.S. manufacturers to bring overseas jobs back to America, while ending tax breaks for businesses that continue to outsource." That's a direct quote from CNN's coverage. "At the same time, Obama said, every multinational company should pay a basic minimum tax, while giving American manufacturers a tax cut."


• And here's the big one: He endorsed the so-called "Buffett Rule" by calling for a tax code overhaul that includes a 30 percent tax rate on people who make $1 million or more per year. In addition, Obama believes that people impacted by such a provision "should not receive tax deductions for housing, health care, retirement and child care," the New York Times reported.

As if any of this stands a snowball's chance of seeing the light of day anytime soon. What happens when a divided Congress enters an election year? Nothing. Absolutely nothing.

Still, let the debate begin. Here's a sample of some of the analyses that have surfaced in SOTU's wake.

Take it all with an extremely large grain of salt -- and watch where you step.

• Taxes and the State of the Union (from TaxGirl)
• Obama backs tax reforms (from Accounting Today)
• Tax policy references in the State of the Union (from the Tax Foundation)
• GOP response: State of the union is 'grave' (from MSNBC.com)
• Fact checks: FactCheck.org | USA Today | Washington Post | ABC News | Fox News | NPR
• Obama's State of the Union in a word cloud (from Reuters)
• Obama's State of the Union address in under 60 seconds (Washington Post video)

CPAs make a righteous (and record-breaking) noise

Question: How big of a deal was the 2012 edition of CPA Day in Annapolis?

Answer: A year ago, more than 150 MACPA members attended the annual legislative event -- 20 percent more than the previous record. This year, we pulled in about 170 members. That's about 13 percent than last year's record.

That's huge.

We've been saying it for years, but here it is again: The more CPAs who make their voices heard, the louder our message becomes.

This year, we were absolutely deafening.

"CPAs have enormous credibility, and what you're doing is absolutely crucial," said Maryland Comptroller Peter Franchot, who stopped by the event to talk with those attending. "There's an old saying in politics: If you're not at the table, you can often end up on the menu. Maryland CPAs should have a place at the table. They should have a higher visibility on fiscal responsibility and fiscal discipline and why those things leads to social responsibility and the ability to pay for the things we want. The fact that you're here in Annapolis is very commendable, and all of your members should support that."

They did that in record numbers this year, including more than 60 first-time attendees who offered this plea to those who weren't there:

"Absolutely get involved," said Kelly Bugg of Bieger and Waller in Columbia. "Understand the impact that we're making and what would happen if we didn't do this. If we weren't here, the result would be things the CPA community wouldn't be happy about."

Scary thought, indeed. But the word is getting out. CPAs are learning a huge lesson: In a changing and complex world, collaboration is usually the answer. During legislative season in Maryland, that means collaborating with lawmakers. That's what happened on Jan. 18, and it may have made all the difference.

• Check out photos from CPA Day.
• Read our position papers: Oppose sales taxes on services | Retain contributory negligence rule

We'll be following the progress of CPA-related bills throughout the 2012 session of Maryland's General Assembly at our sister blog, Legislative Insider. Be sure to follow along.

And be sure to check out the Maryland Chamber Action Network as well. Run by the Maryland Chamber of Commerce, the blog tracks important legislation at both the state and federal levels.

Happy reading. As always, it's going to be an interesting session.

Top 10 criteria for effective tax legislation

We thought we would offer this advice to our legislators as we enter the 2012 session of the Maryland General Assembly. Three of the top four Issues facing CPAs in the General Assembly relate to taxes (and this is true at the federal level as well).

Here are the top 10 Criteria for effective tax legislation:

1. Simplicity: The tax law should be simple so that taxpayers understand the rules and can comply with
   them correctly and in a cost-efficient manner.
2. Fairness: Similarly situated taxpayers should be taxed similarly.
3. Economic growth and efficiency: The tax system should not impede or reduce the productive capacity of the economy.
4. Neutrality: The effect of the tax law on a taxpayer’s decisions as to how to carry out a particular transaction or whether to engage in a transaction should be kept to a minimum.
5. Transparency: Taxpayers should know that a tax exists and how and when it is imposed upon them and others.
6. Minimizing non-compliance: A tax should be structured to minimize noncompliance.
7. Cost-effective collection: The costs to collect a tax should be kept to a minimum for both the government and taxpayers.
8. Impact on government revenues: The tax system should enable the government to determine how much tax revenue will likely be collected and when.
9. Certainty: The tax rules should clearly specify when the tax is to be paid, how it is to be paid, and how the amount to be paid is to be determined.
10. Payment convenience: A tax should be due at a time or in a manner that is most likely to be convenient for the taxpayer.

Today marks our 112th CPA Day in Annapolis -- yep, we were there (not me, of course) when Gov. John Smith signed the legislation for Maryland's CPA statute on April 10, 1900. Maryland was the third state to create the CPA designation in the U.S.

We have record attendance of almost 200 CPAs who will visit with their legislators to discuss the issues that are important to our profession. We will also be asking for ideas about how we can help Maryland's economy and business environment (See the grand opening of our Idea Store).

Here is our flyer produced by our State Tax Committee that we are distributing to our 188 Maryland legislators at CPA Day.

The No. 1 job of a leader is ...

“A person can perform only from strength. One cannot build performance on weakness, let alone on something one cannot do at all.”  ― Peter F. Drucker 

Know thyself (and your team). Pictured is the MACPA Leadership Academy mapping their strengths.

Leadership is about being self-aware, knowing your strengths and those of your team, and maximizing the use of those strengths.

The research is clear: Focus on opportunities (not challenges) and build on strengths (not fix weaknesses). This is true for organizations as well as individuals.

So where do you start?

With yourself. Gallup has been researching leadership and strengths for over 50 years and interviewed over 10,000 people about the best leadership traits. Here is what they found. (Click here for Gallup's research):

• The most effective leaders invest in strengths: There is an eightfold increase in engagement when leaders focus on and invest in people's strengths.
• The most effective leaders surround themselves with the right people and then maximize their team: The strengths of the leader are not important; it is the strengths of the team that make the leader. Gallup found 34 strengths spread over four domains of leadership -- executing, influencing, relationship building, and strategic thinking. 
• The most effective leaders understand their follower's needs: It is not about you, it is about your followers. All followers have four basic needs -- trust, compassion, stability, and hope.  

I am going to use me as an example of applying "strengths-based" leadership. Using the book, "Strengths-Based Leadership," by Tom Rath and Barry Conchie, I took the online test with the access code at the back of the book. I received two customized reports about my strengths and how they work with leadership (about 22 pages' worth).

Here are my top five strengths and their associated "leadership domain":

The Strengths-Based Leadership report maps your top five (of the 34) strengths to the four domains of leadership and outlines a dominant strength domain (if there are two or more in one domain). My dominant strength is in Strategic Thinking, as three of my strengths are in that domain. I have none in Relationship Building. My COO, Jackie Brown, has a dominate strength in the Relationship Building domain, which exemplifies exactly what Gallup talks about. It is not the strengths of the individual, but the team's that count most.  

Here are my top five strengths and how they fit:

Input (Strategic Thinking)
People strong in the Input theme have a craving to know more. Often they like to collect and archive all kinds of information. 

Maximizer (Influencing)
People strong in the Maximizer theme focus on strengths as a way to stimulate personal and group excellence. They seek to transform something strong into something superb. 

Strategic (Strategic Thinking)
People strong in the Strategic theme create alternative ways to proceed. Faced with any given scenario, they can quickly spot the relevant patterns and issues. 

Achiever (Executing)
People strong in the Achiever theme have a great deal of stamina and work hard. They take great satisfaction from being busy and productive. 

Futuristic (Strategic Thinking)
People strong in the Futuristic theme are inspired by the future and what could be. They inspire others with their visions of the future. 

The report is personalized to me and includes strategies for addressing the needs of your followers in addition to major insights about how you naturally work best. I have used lots of personaility tools (Kolbe -- long green; Myers-Briggs -- INFP; DISC -- S) and what I like most about this tool is that it really is about how business works -- executing, influencing, relationship building, and strategic thinking -- and deals with the business leadership context. 

So in my case, without strength in relationship and execuion, I should (and regularly do) seek out team members who have the strengths that I do not. Fortunately, my discipline as a CPA allows me to get into the details and execute when necessary, although I find it takes incredible energy and is not fun for me. Therein lies the secret of working to your strengths; it is energizing and natural, which leads to higher engagement and more discretionary effort. 

We have mapped our entire organization to the strengths matrix and even our Board of Directors. It is great way to increase communication, engagement, and trust. 

 Here are five ways you can start using strengths to your advantage:

1. Find your strengths: Buy the book Strengths-Based Leadership book and use the access code in the book to take the strengths-finder test (the code is also in the e-book edition on Kindle).
2. Explore what they mean to you: Read the report and share with your colleagues and listen to their reactions. Do they represent you? Which ones do you rely on the most? Is there a shadow side to your strength?
3. Align your work with your strengths: What areas of your work do your strengths help with most? What are the areas that don't fit your strengths well?
4. Understand your team's strengths: Create a map of your team's strengths and see if you are balanced across the four domains. Any areas that you are lacking in? Who in your organization can help round out the team. How can you draw on those strengths to accomplish more?
5. Start focusing and investing in strengths: Use it with your teams to map strengths to critical projects, consider mapping your board and strategic partners. I have seen some organizations use it for screening new hires. Begin trying to reallocate work to people's strengths. 

We have found this to be one of the favorite exercises and discoveries of young professionals in our work with the AICPA, Maryland, and Utah leadership academies.

What are you going to do in 2012 to maximize your strengths and those of your organization?

In a collaborative world, SOPA is doomed

How do I abhor SOPA? Let me count the ways.

If you haven't been paying attention (and if you have a web site, you need to start paying attention), SOPA is the Stop Online Piracy Act. It sounds innocent enough: SOPA aims to "expand the ability of U.S. law enforcement and copyright holders to fight online trafficking in copyrighted intellectual property and counterfeit goods."

So far, so good. Stop online piracy? I'm on board. Creators should get paid for what they've created.

But let's not break the Internet in the process.

SOPA could do just that. It looks like the poster child for unintended consequences.

Against all odds, there's some common sense seeping from the White House on this one, so that's promising. Even so, there are plenty of reasons to be concerned.

I'm not going to dive into the fine print here -- Inc.com's Eric Schurenberg and CNET.com's Declan McCullagh do a better job of that than I ever could. Please -- please -- read their excellent and frightening summaries for the big (as in Big Brother) picture.

So yes, if you value your current online experience, there's a lot at stake here.

As bad as all of that is, though, there's something that bugs me even more, and here it is:

The folks behind SOPA seem hopelessly lost in a changing and complex world. They're bent on doing things as they've always been done, unaware that the rules have changed. They're the United States  Postal Service of the Internet, and they're destined for extinction.

Why? Because they're all about command and control. "Do it this way," they're saying, "or we'll legislate and litigate you into submission."

Here's the thing, though: You can't command and control anything these days. The crowd won't let you.

Business has changed radically over the past decade. Leadership is no longer about hierarchy; it's about collaboration. Learning is no longer about classrooms; it's about leveraging our networks and following the right people. Strategy is no longer about planning. You can't plan for constant change -- and constant change is what we have. Today's strategy is about recognizing the weak signals of disruptive change and being nimble enough to take advantage of those changes.

The line of reasoning behind SOPA, though, seems to be this: Why bother changing when you can just legislate to maintain the status quo?

Business today is about everything except the status quo.

That's why SOPA is doomed. Even if it becomes law, it won't survive. It can't survive. It's a relic from a long-lost world.

And if that doesn't convince you, check out these related resources:

• White House voices concern over online piracy legislation (from MSNBC)
• Help stop SOPA / PIPA (from the Ohio Society of CPAs)
• Kill the demon copyright law from hell (from CNET)
• SOPA: It doesn't sound delicious and might arm dogs (from The Bloggess)

Will they listen this time?

This is our third comment letter in the last two years and we hope the third time is a charm.

The time is now for a separate Private Company Standards Board that is solely focused on the financial reporting needs of the US small business community.

It should be structured as indicated in the FAF's own Blue Ribbon Panel when released in their report dated January, 2011. It should be distinct but linked to FASB and beyond a FASB veto. The latest recommendation from FAF to create a PCSIC is too similar to the PCFRC which was formed several years ago and did not work (see FIN 48 & 46(r)). That is the gist of our comments and those of thousands more CPAs representing CFOs, controllers, bankers, and auditors of America's middle market companies.

We (MACPA) created an Accounting Standards Task Force and responded to the FAF BRP in our whitepaper here. We also exposed this issue and its almost forty year background to thousands of CPAs across Maryland over the past year. They overwhelmingly agreed with us (and the FAF BRP).

The deadline for comment closed this past Saturday with almost 6,500 comment letters asking for the Financial Accounting Foundation (FAF) to nix its latest plan to create a Private Company Standards Improvement Council (PCSIC) in favor of the recommendations from its own Blue Ribbon Panel. 

Here is the latest from the Journal of Accountancy. You can see the comment letters here and the AICPA letters from their Private Company Standards site are listed seperately here. Even Congress weighed in with a letter from Senator Levin (MI) that was noteworthy (in a bad way!) and reported on in CFO Magazine here.

We applaud the FAF for its efforts to start this conversation (again!). We appreciate their efforts to get widespread input. We hope they are listening, this time.

Gen Y lapping the field in financial literacy

There's nothing like an economic downturn to bring out the frugality in all of us, is there? After all, when times are tight, people tend to spend less and save more.

Still, I have to wonder if anyone saw this one coming. Here's a quote from Reuters:

"A new survey from TD Ameritrade found that one in four 20-somethings funnel money into not one, but two different types of retirement accounts, a 401(k) or 403(b) as well as an IRA.

"But the news isn’t all good, especially for older Americans. The survey also found that just 16 percent of baby boomers are putting money into both types of retirement accounts, and fewer than one in three boomers are making 'catch-up' contributions, or contributing an additional $5,500 into employer-sponsored accounts."

Then there's this: An AICPA / Ad Council survey has found that 94 percent of 25- to 34-year-olds are "at least somewhat likely" to make saving a priority in 2012, "more than those who said the same about living healthier (90 percent), or losing weight (78 percent)." 

To recap: Gen Y -- those allegedly short-sighted, impatient, impetuous folks the generational experts keep warning us about -- are lapping the rest of us in the savings arena.

Chalk up another one for Benjamin Bankes, the Ad Council and the AICPA's "Feed The Pig" crew.

Speaking of whom, they've released a ton of new financial literacy resources with a common theme: Save. Then save some more. They include:

• A series of new TV and radio PSAs. My favorite is at the right.


• An infographic on how to balance saving and splurging.


• A pretty cool, info-intensive, savings-centric Facebook page.


• Lots of other stuff to look for, including a mobile website (it's m.feedthepig.org on your mobile device) and QR codes that will drive consumers to the mobile site. In fact, according to the AICPA, Feed the Pig is the first Ad Council campaign to include QR codes.

Your job, CPAs, is to keep spreading the personal finance message. If the last few years have taught us anything, it's that we all need to get smarter about money.

Grand opening of the CPA Idea Store

Penny for your thoughts?

The Idea Store is actually a work of art we have commissioned from Athena Robles and Anna Stein, two Brooklyn (and D.C.) artists who we learned of in a post by Dan Pink, "Take a trip to the Idea Store." (Photo by Dan Pink.) He finished his post with this thought:

"Maybe something like an Idea Store could be a feature of your organization’s next offsite or your association’s next conference. ... Maybe having one in your office lobby could generate suggestions and trigger conversations."

That is our idea for the Idea Store.

Combine this with the brainpower of an association of almost 10,000 CPAs, the most trusted advisers to business, tap their collective wisdom to help solve some of the wicked problems we are facing today, and you have an idea (store) whose time has come.

As a professional association that has been around since 1901, we were built on the idea of associating and collaborating to make our community and our profession better. Recently a group of partners from our Major Firms Group expressed concern about the increasing rhetoric about high taxes and draconian cuts in services and are asking,"How can we help?" and "Is there a better way?"

So we do what associations do -- tap our membership for a task force to begin to address the issue.

Then I saw Dan's post about the Idea Store and thought: What if we could take that store to our MACPA events and ask our members for ideas about these issues? We could collect, sort and categorize them and truly tap the wisdom of the crowd.

Isn't that what associations are really about?

So come out and see the grand opening of our Idea Store at CPA Day in Annapolis next Wednesday, Jan. 18 at the Governor Calvert House, where we will be open for business. The artists will be on hand to teach us how to run the store and to share the spirit of collaboration.

What ideas do you have to help Maryland solve our structural deficit and get our economy moving?

And thanks, Dan, for providing the inspiration and challenge.

I learned all I need to know in 4th grade basketball

My daughter is playing 4th grade basketball this year. It's her first foray into team sports, and she's learning all of the really important stuff -- how to dribble with one hand, the virtues of boxing out, the bizarre randomness of the 3-Second Rule. This is a girl who won't watch anything on TV that doesn't involve teen rock stars, and I actually caught her paying attention to a Mizzou basketball game the other day.

Here's the deal, though, and I mean this: Some of life's most important lessons are being taught to 4th grade girls' basketball players.

• This game's not about you. There are a bunch of other folks who have a stake in this thing, too. Work together and you can perform miracles. Work alone, and you'll die.


• Learn the fundamentals. Dunks and no-look assists might land you on SportsCenter, but you won't get there unless you learn how to dribble and pass first.


• Improvise. We all have set plays that we like to run. Our opponents want to stop us. Sometimes we have to ditch the game plan and try something else. Don't be afraid to do that. Life is all about rolling with the punches.


• Be aggressive. You won't get what you want by sitting around watching someone else drive to the hoop. Go after the ball. Give and go. Set the tempo, or it will get set for you.


• Cheer on your teammates. A little encouragement goes a long way. This is a team, after all: When one of us wins, we all win, right?


• Be a good winner ... and a good loser. A few nice-games and way-to-go's will go a long way. You're going to be on the other side of every result eventually. How you react in every situation will define you.

Finally -- and I can't stress this enough -- plant that pivot foot. I don't care if you are in 4th grade. I will call you for traveling.

What am I missing? What's the best lesson you learned in grade-school team sports?

Bridging the tax gap: Is reporting the key?

News flash: Some people still aren't paying their taxes.

As breaking news goes, that ranks right up there with "The Sky Is Blue."

Still, some interesting stats related to the tax gap are seeping out of Washington, courtesy of the IRS.

You remember the tax gap, right? That's the difference between what people owe and what they actually pay. In 2006 -- the most recent year for which data is available -- that number was $385 billion, a full $95 billion more than the IRS's last tax gap numbers from 2001.

That's a pretty big number, and the growth from '01 to '06 seems alarming.

But consider this: According to the IRS, the compliance rate remained statistically unchanged -- 85.5 percent in 2006 vs. 86.3 percent in 2001.

What's the difference?

"On a relative basis, the tax gap is largely in line with the growth in total tax liabilities," the IRS reports. "In addition, some growth in the tax gap estimate is attributed to better data and improved estimation methods."

The question remains, though: What do we do about it?

I think the IRS answered that question for us. The agency's report cited "underreporting of income" as the biggest contributor to the tax gap. How big? It accounted for about 84 percent of the gross tax gap in 2006.

"Compliance is highest where there is third-party information reporting and / or withholding," the IRS reports. "For example, most wages and salaries are reported by employers to the IRS on Forms W-2 and are subject to withholding. As a result, a net of only 1 percent of wage and salary income was misreported. But amounts subject to little or no information reporting had a 56 percent net misreporting rate in 2006."

So how is the IRS responding?

In this Forbes article, Ashlea Ebeling says the response begins with the IRS's bid to register and oversee all paid tax return preparers.

The next step, though, centers on information reporting -- or, rather, a lack thereof. "Cost basis reporting ... new merchant card reporting requirements ... and new reporting requirements for U.S. individuals with financial accounts oversees will help the IRS keep an eye out for offshore tax avoidance," Ebeling writes. "Despite all the complaints from the business community about information reporting, it’s a friendlier way to combat the tax gap than through increased enforcement efforts."

We'll see how friendly all of this is once it hits the election spin cycle. Friendly or not, it'll certainly be interesting. And by "interesting," I mean "nauseating."

In the mean time, what, if anything, do you think we need to do to close the tax gap?

What are your three watchwords for 2012?

What are your three watchwords for the new year?

Mine are connect, focus, and smooth.

In keeping with Chris Brogan's 3 Words tradition, I have adopted his approach, which is to abandon the sometimes fuzzy, easy-to-abandon new year's resolution for three watchwords. Here is how he describes it in his post, My 3 words for 2012 :

"I challenge you to dig deeper, to find three words that could be used as lighthouses to guide you through stormy seas, that can be used as flags on the battlefield of your challenges, words that will bolster you and give you a direction that goes beyond the goals you might attach as a result of these words."

A great example is another post (from 2009) from Principled Innovation, by Jeff DeCagna, titled Serious, Simple, Social. Where he talks about the need for "serious" conversations to deal with the challenges we face, "simple" solutions that people can understand, and "social" for using social media to bring our communities together to solve problems. We adopted Jeff's words in 2009 (with his permission) in the thick of the recession. He even visited with our team to talk about it.

So here are my three watchwords for 2012:

Connect
Connection is all about social and relationships. It's the high tech-high touch approach. It's physical and virtual. In 2012, we will strive to connect with and enable more connections among our members, customers, strategic partners, and our team. Social strategies will amplify our professional issues updates / town hall meetings (free CPE!), and our website will finally integrate our social media tools into one spot for simple and easy access by members and others.

Focus
This means making sense of what we have on our plate and fitting the pieces together in a way in which they leverage and amplify our value (this is the next step after last year's messy, integrated, there-is-no-manual approach). We will be focusing on evaluating our high-leverage opportunities against our strategy and prioritizing them. It's about being more disciplined about new opportunities and being more data-driven in how we look at our strategic portfolio. 

Smooth
This came from a participant at our recent i2a certification who comes from a military leadership position. She says slow is smooth and smooth is fast. This fits one of our favorite sayings: Sometimes you have to go slow to go fast. Smooth means making time to "create the manual" and standardize many of the new innovations of the past few years. It means taking more time to plan and less "winging it." I know this one will be hardest for me.

By the way, we have even done this for our organizations:

• MACPA: Connect - Protect - Achieve
• Business Learning Institute: Knowledge - Innovation - Leadership

What are your three watchwords for 2012? Reply with your comments so we can create a master list.

What will be your touch points to guide you through the year?

Social media and the role of the chief executive

Communicate. Connect. In-form. Collaborate. Learn. Inspire.

Communicating and connecting to your team, customers and prospective customers. In-forming (in the Tom Friedman / "World is Flat" notion). Collaborating. Learning. Inspiring people. This why I do social media and every CEO should think about adding this to their tool set.

I still remember vividly the response from members of Marriott's Finance and Accounting team when I asked them for their perspective on their CEO, Bill Marriott, and his blog, Marriott on the Move. They said they felt more connected to the company than ever and that his blog helped them understand the view from the top. 

I had my own epiphany while attending an MACPA CFO conference. I overheard one of our team at the registration table engaged in a conversation with a CFO about lean accounting. She had never opened an accounting book, much less heard of lean, or so I thought. When I asked her where she heard about it, she said, "Oh, it was on our blog."

These are some of the stories I shared with my fellow CEOs at the CPA-SEA mid-winter meeting. This post is for them (and any other CEOs interested in social media). 

Consider the MACPA Beach Retreat, where we had a session in leadership and extended the conversation from a classroom of 35 to 45,600 people around the world, including several leading authors (Tom Peters and Emmanuel Gobillot).

Also consider the Forbes article "Social Power and the Coming Corporate Revolution," which shows a dire future for organizations that reject social media (and its consequences) for the old school command-and-control methods.

Bottom line: It is time for CEOs to embrace social media and start rethinking how these tools can help them shape their organizations in a much more human way. We are moving from command and control to connect and collaborate, from PUSH to PULL.

Social Media for CEOs

View more presentations from Tom Hood

Still not convinced? In The Corporate Blogging Book, Debbie Weil has this quote from Jonathan Schwartz, former CEO of Sun Microsystems:

“In ten years, most of us will communicate directly with customers, employees, and the broader business community through blogs. For executives, having a blog is not going to be a matter of choice, any more than email is today.”

Resources:

• Jumpstart Your Social Media Strategy (a BLI course)
• Build Your Social Media Schedule for 2012
• CPA Success posts on social media
• Social Media for CEOs and CPAs: A series of interviews and stories
• How to Leverage Social Media (from the Journal of Accountancy)
• Using social media to help you Learn
• MACPA's social media policy, which ties in the AICPA Code of Conduct and MACPA core values.

Join our MACPA online communities:

• MACPA Facebook group
• Business Learning Institute (BLI) group
• MACPA LinkedIn group

Recommended books:

• The Corporate Blogging Book, by Debbie Weil. (She was our blog coach who got us started! www.twitter.com/debbieweil)
• Crush It!, by Gary Vaynerchuk (www.twitter.com/garyvee)
• The Power of Social Networking: Using the Whuffie Factor, by Tara Hunt (www.twitter.com/missrogue)

Five things accounting educators need to know

1. The top trends facing the CPA profession (almost none are technical).
2. The profession has a vision (and students like it).
3. There are more career opportunities than just the Big Four (business and industry, not-for-profits, government, and 40,000 firms).
4. Students want to understand the expectations and realities of the workplace.
5. Data (XBRL) is the new plastics -- career advice for students and young professionals.

This post is for our accounting educators who are responsible for laying a strong foundation for the CPA profession's future, and it is no easy job!

Today I am delivering a keynote on the latest issues facing the CPA profession at our annual educator's conference while attending the CPA-SEA (State CPA Society Executives) meeting with the AICPA senior leadership at our annual mid-winter meeting. Thanks to video and webcasting capabilities, I can actually be in two places at one time!

My presentation is not the typical PIU (professional issues update). This one is about the future -- the future of the CPA profession and the top trends identified by the CPA Horizons 2025 Project.

Here are some resources:

• The CPA Horizons 2025 Report (downloadable), which captures the major trends and what CPAs should be thinking about.
• The in-person Future Forum process designed and facilitated by MACPA's Business Learning Institute.
• Perspectives from educators, young professionals, students, and CPAs in short video interviews.
• Background and research from the AICPA and leading futurists about future trends.
• Our whitepaper from our Leadership Academy about what leadership in the CPA profession will look like in 2023.

Here are three videos you may want to use in the classroom for talking about the future of the CPA profession:

• AICPA's Global Forces Video -- the short trip to the future based on the research from AICPA.
• Futurist David Pearce Snyder talking about the future, change, and the future CPA.
• The Future Forum video -- giving insights from grassroots particpants.
• Interview with Steve King of Emergent Research, who was lead futurist for Intuit's 2020 Project.

Downloadable documents you can use in class:

• The PIU slidedeck from our 2012 Educator's Conference.
• Our young professionals' whitepaper on leadership in the future.
• The CPA Horizons 2025 project on a page.
• The CPA Vision 2011 on a page.
• The CPA Horizons 2025 report.
• The CPA Vision 2011 report.

 So for all you accounting educators, this post is for you.