CPA Success

The No. 1 issue facing the CPA profession

The No. 1 issue facing the CPA profession is a lack of leadership.

Listen to AICPA past Chairman Paul Stahlin as he facilitated an i2a: Insights to Action session with Maryland CPAs from our 2010 CPA Summit.

He specifically addresses the issue identified by the group as, "The impact on our profession of the lack of young professionals' expression of desire to take leadership positions." 

Paul says, "That is one thing the profession is changing right now and has changed significantly in the last few years with the work of the AICPA and many state CPA societies."

I could not agree more!

Through leadership academies and young professionals' networks (see our own NYPN), we are all working to develop the next "varsity" squad of leaders for the profession.

Having worked with the AICPA team to design their Leadership Academy and our own in Maryland and another in Utah, I am in awe of the talents, enthusiasm, and willingness to step up to leadership by these young professionals. But they will not just show up; we have to ask. As Paul says in the clip, we, as current leaders, are responsible for cultivating the next crop of leaders in our profession.

Is it working? Since Paul made these remarks, look at what these young leaders are saying and doing:

• The AICPA's Leadership Academy Doesn't Sound So Awful After All, by Going Concern blogger Adrienne Gonzalez


• Then there is our own MACPA's 2011 Leadership Academy's whitepaper on the future of leadership in the CPA profession and Adrienne's take here, where she says:
  
  "The interesting part about the MACPA's project is that opinions and visions are a dime a dozen in this industry, but Leadership Academy participants went beyond postulating about the future to map opportunities from a future CPA leader's point of view complete with action plans, timelines and desired results. This isn't simply a report on the state of the industry at some point in the future but a report on how young leaders can get us there in the here and now."


• The MACPA Leadership Academy video story, by Bill Sheridan


• Reflections on the AICPA Leadership Academy from Joshua Partlow, partner at Johnson & Lambert


• Then there are the numerous Facebook postings, links, and e-mails talking about how these young leaders are actually applying their new skills at work to inspire and mobilize their colleagues. 

Listen to the Season 1 graduates of the AICPA Leadership Academy in their own words, then tell me: Do they sound like they don't want to lead?

Another myth busted!

Applications are being accepted for Maryland's spring 2012 Leadership Academy, scheduled for May 7-9, 2012 in Timonium. Get details and apply here.

For more information about bringing a Leadership Academy to your organization, see our BLI information page.

MACPA panel: Private company standards are essential

Maryland CPAs have a message for the folks who have been debating private company accounting standards:

Let's get on with it already.

The time is right to establish a separate private company accounting standards board that will develop exceptions and modifications to GAAP for private companies, an MACPA task force has concluded in a new white paper.

The paper, "Private Company Standards: Responding to the Reporting Needs of Private Companies and the Users of Their Financial Statements," was produced by the MACPA's Accounting Standards Task Force and released as part of the association's 2011 Maryland CPA Summit in Baltimore.

“We have studied this issue for more than 30 years, and the small business community needs relief from onerous financial standards,” said Arthur Flach, CPA, managing partner of Grant Thornton LLP’s Baltimore office and chairman of the task force. “We urge the Financial Accounting Foundation to move forward with its Blue Ribbon Panel report and get started on separate private company standards.”

Created in October 2010 to respond to recommendations from the FAF's Blue Ribbon Panel on Standard Setting for Private Companies, the MACPA task force developed a series of recommendations for how standard setters can best meet the unique needs of private companies.

Specifically, the task force found that:

1. The current structure does not properly address private company standards and needs to be improved.
2. A separate board for private companies is warranted. The principle of “distinct but linked” with a parallel and joint process to avoid unnecessary divergence was viewed as critical to the process.
3. A “sunset” provision of five years would be appropriate, with the understanding that the five-year term begins with the formation of the new board.
4. The development of a differential framework for developing exceptions and modifications to extended GAAP is an essential element of the new board’s work and critical to the successful development of private company standards.
5. A proper cost-benefit balance is critical to the success of the new private company standards while taking into account the relevance to the financial statement users.
6. A single source of GAAP is imperative and would be codified in the same manner for private and public companies, with private company exceptions noted and contained within the respective pronouncements.

"It is clear private company stakeholders see a need to improve standards for private companies," the white paper concludes. "... Any further studies should be limited to determining how the recommended changes can be implemented and not continuing to study whether changes are needed."

The task force's findings mirror the opinions of a vast majority of MACPA members. The private company standards issue has been reviewed and discussed with more than 1,500 MACPA members at a series town hall meetings throughout Maryland over the past year. More than 90 percent of members polled at those meetings believe GAAP modifications and exceptions for private companies are the best solution to the problem.

• Read the white paper in its entirety.
• Check out "Private Company Standards: Is It Time?" The presentation was part of the 2011 Maryland CPA Summit in Baltimore.

What do you think: Is it time for a separate set of private company standards?

Surfing lessons! Riding the waves of change

"You can't stop the waves, but you can learn how to surf." -- Jon Kabat-Zinn

That is how I am starting today's first professional issues update for our CPAs in business, education, industry, government, and not-for-profits in Towson.

The pace of change, proliferation of standards and regulations, and the permanent whitewater economy are calling for new skills and new approaches.

We have been on the lookout for resources, tools, and tips to help give our members the edge on the latest ways to ride these waves of change.

Here are some things to think about:

 As we look out into the future, we think the five key skills you must have (think surfing techniques!) are:

1. Broader and longer line of sight
2. Network leadership
3. Strong analysis skills
4. Communication skills
5. Global perspective

Read more about this in our post, The 5 skills of the post-recession leader.

Here are some of our resources we are sharing with our members:

MACPA PIU 2011 - Special B&I edition

View more presentations from Tom Hood

Here are details about RFTF: Report From The Future -- research about the 15 years into the future we used in the MACPA's Board Planning:

• Deloitte's Measuring the Forces of Long Term Change: The Shift Index.
• Intuit's report is profiled in Bill's post Business in 2020: Opportunities abound.
• AICPA Horizon's Project has some great resources (video and reports) on future trends here.

Then there are a series of reports about the changing role of the CFO that just came out:

• Grant Thornton's study on "The Evolving Accounting Talent Profile"
• IBM's global CFO survey and report, "The New Value Integrator"
• E&Y's latest report, The DNA of the CFO (registration required to get report)

And here are several upcoming events that you won't want to miss:

• Our Business and Industry Conference on May 20, 2011 at Turf Valley (Ellicott City, Md.), featuring the latest accounting updates and a special keynote session with Ian MacMillan, co-author of Discovery-Driven Growth: A Breakthrough Process to reduce Risk and Seize Opportunities. (Listen to Bill's interview with Ian's co-author, Rita McGrath on Business Growth in Uncertain Times), followed by the latest economic update by Anirban Basu.
• The MACPA Summit will be held on June 2-3 at the BWI Hilton with our reception for the profession to welcome newly licensed CPAs in our swearing-in ceremony. The event will feature special sessions on social media, XBRL and strategic planning, along with the latest updates on accounting, tax, and auditing.
• And don't forget to put CPA Day in Annapolis on your calendar -- Jan. 18, 2012!

Learn about the latest trends facing CPAs and participate in shaping the future of the CPA profesison by signing up for our spring future forums (and free CPE!) and don't forget to take the online survey from the Horizons Project.

And don't miss these related resources:

• Business solutions for MACPA members.
• MACPA's podcasts for staying on top of the breaking issues in the CPA profession.
• See our upcoming BLI courses for the "hard edge of soft skills."

What's over the horizon for the CPA Profession?

As the fog begins to lift in the aftermath of the Great Recession of 2008 (and 2009 and 2010), many CPAs are asking what comes next?

What is out there over the horizon? What are the trends and issues that will have an impact on the CPA Profession as a whole? Our organizations, firms, clients?

The AICPA has an answer - to involve YOU!

What if we crowd-sourced the answers to all of us? That is what CPA Horizons 2025 is really about. Fifteen (15) minutes of your time about the next fifteen (15) years. A combination of high tech surveys, high touch, randomly selected members for in-person future forums, and focus groups at major events, getting to the answer of what is our vision for the CPA Profession in 2025.

One of my career highlights was I was being a volunteer on the first CPA Vision Project, circa 1998 where we worked on a future vision for the year 2011. Without much help from technology, we got almost 3,500 CPAs in future forums all over the US along with students, regulators, and thought leaders to help come up with a Vision, Purpose, Core Values, Core Competencies, and Core Services. The Top five issues facing CPAs came out as follows:

• The future success of the CPA profession relies a great deal upon public perceptions of CPAs' abilities and roles
• CPAs must become market driven and not dependent upon regulations to keep them in business
• The market demands less audit and accounting and more value-adding consulting services
• Specialization is critical for the future of the CPA profession
• The marketplace demands that CPAs be conversant in global business practices and strategies

Hmmm, sounds like these are still pretty relevant...

Well it is 2011 and time to renew and refocus that vision.

The AICPA has put together some great resources to get us thinking about the future. Start by scanning the research and background assembled from their work with several "futurists" and published reports about the world in 2025. The Global Forces video put together by the AICPA video team is a must see (about 8 minutes)!. Then take the survey and join the conversation to help create the vision for the Profession in 2025.

What I really like about this is that it can be used to inform your own vision and strategic planning activities. In fact we used this as a background with our own Board Planning back in January, 2011 and again with our volunteers at our Maryland CPA summit on June 2nd. We use it to develop a "line of sight" to the long-term vision of the Profession and the MACPA. We will also be holding in-person future forums all around the state to talk about the future together. I hope you can join us (and of course it qualifies for four (4) hours fo free CPE!).

You can see highlights of our session when we "tested" this out with the AICPA incoming chair, Paul Stahlin, a member of the original CPA Vision team from our summit last year.

I still remember the words of futurist, Watts Wacker when he was talking about vision at our centennial in 2001, "If you don't have a vision for your organization, or yourself, you will just get stuck in somebody else's vision."

What's your take on the original vision?

Top seven growth areas for CPAs

"But a time of turbulence is also one of great opportunity for those who can understand, accept, and exploit the new realities. It is above all a time of opportunity for leadership." -- Peter Drucker

One of my favorite sayings when navigating severe downturns is, "You can't cut your way to success." While there is no question you have to carefully manage your business (or firm) to stay solvent, once you're stable, it is time to come out of the storm cellar and plan for what's next.

Having spent the last six months with CPAs all across the U.S., here is what I am consistently hearing about opportunities to get you thinking:

1. Valuation
2. Forensic and fraud
3. Governmental
4. International (IFRS and tax)
5. Health care
6. Green / sustainability
7. XBRL

The next step is to assess whether these (and others you come up with) are what we call "high-leverage opportunities." We recommend asking these four questions:

1. Are they a source of passion for us? (Do they fit your strategic plan, values and purpose?)
2. Do they leverage our resources (customer base, talent, capabilities, etc.)?
3. Do they create value in excess of the time, effort and resources needed to accomplish?
4. Can they be accomplished?

We incorporate this into our I2A: Insights to Action strategic planning process and leadership development. The two things all of the greatest management thinkers seem to agree on is that we must build on our strengths and focus on opportunities. (We would add highest-leverage opportunities.)

The questions are:

• Do you (and your team or partners) know your strengths?
• How are you focusing and getting your team to agree on opportunities?
• How will you align your partners and organization around those strategic priorities? (We call this the Action phase.)

More resources:

• Save the date! These leading opportunities and more will be featured at the MACPA Member Summit (formerly the MDBizExpo) on June 29 at the BWI Hilton Hotel.
• Top 5 qualities of extraordinary leaders
• I2A: Insights to Action -- A strategic thinking system (presentation to the AICPA Leadership Academy)
• Managing in Turbulent Times, by Peter Drucker (one of my "must reads" for these turbulent times)

Talk back: Where do you see the opportunities?

How are CPAs using social media?

Want to get on the front page of the Wall Street Journal with your story? Just use free social media tools like Facebook and Twitter.

That is exactly what Verasage value pricing evangelist Dan Morris says happened when he got published on the front page of the Wall Street Journal.

Dan says, "I think today demonstrated the value of the social networks (Facebook, Twitter, etc.) and their ability to spread the word.  Encouraging others to read our materials and help us with our mission to Bury the Billable Hour." See Rick Telberg's post about it, "CPA credits Facebook, Twitter for Wall Street Journal front page story."

Then there is the Maryland story about Naden/Lean and how Twitter launched a CPA firm into the top Google rankings.

And our own story at the MACPA. See my interview with Rick Telberg about Why CPAs Twitter (and other social media uses) and join us by completing the first social media survey for CPAs. Rick presented the results of his survey at our Maryland Business and Accounting Expo in June.

We hosted a Maryland Tweetup last February, which featured some of the top social media gurus in the CPA profession (see our photos on Flickr). Pictured are Chris Jenkins, Tom Hood, Bill Sheridan, Jeff De Cagna, Edith Orenstein, Francine McKenna and Rick Telberg. Most of this crew plus a couple of others were also featured on a panel at the Expo. See videos of their session: Part 1 | 2 | 3 | 4 | 5 | 6

If you are worried about the disadvantages of social media, check out this recent study from Melbourne Australia that concludes Twitter, Facebook, and office Web surfing can actually improve productivity.  

Resources:

Here are two interviews I did with the Journal of Accountancy on social media and CPAs:

How to leverage social networking

Social media tips (video)

Accounting for Second Life

We have created a special program to jump start your social media efforts. Contact Pam Devine if you are interested in details and the dates of upcoming sessions.

Still not convinced? Come see my session at CCH's User Conference on Tuesday, Oct. 27 at 10:30 a.m. at the Gaylord National Harbor, Maryland, where I will talk about "Social Media: Passing Fad or Valuable Tool?"

PCAOB's Olson: Crisis puts CPAs in spotlight

Global business is a glass-half-empty or glass-half-full proposition. Those who play in the global arena are either worried about the challenges it presents or drooling over its opportunities.

As chair of the Public Company Accounting Oversight Board, Mark Olson gets paid to focus on the challenges. As its name suggests, the PCAOB oversees the accountants and auditors who keep watch over the nation's public companies. Olson's job is to find the broken stuff in that system and fix it.

At the Maryland Business and Accounting Expo, though, he was all about the opportunities.

In a speech before Maryland's newest CPAs, Olson said the globalization of business and efforts to converge accounting standards via IFRS "have turned the CPA credential into a global asset."

"The complexity of accounting in a global economy highlights the importance of applying professional skepticism by the CPA," said Olson, who will step down as PCAOB chair on July 31. "The same factors that create complex ethical challenges are also creating an environment where new opportunities abound. An increasing global economy, rapidly changing technology and the depth of our capital markets are driving new opportunities for CPAs and changing existing jobs at a remarkable rate."

In other words, he told the new CPAs, it's a great time to be joining the profession.

But it's not just about career development. The recession's global reach has brought unprecedented complexity to the investment, credit and regulatory functions and placed renewed importance on the role CPAs play in the global economy.

"The public looks to the technical skills of the CPA to untangle the complexities inherent in the financial crisis. Companies and investors look to CPAs to provide critical insight and strategic thinking when faced with the challenges of operating in today's environment," Olson said. "The current global economic crisis demonstrates the vital role CPAs play in the effective operation of financial markets and the financial regulatory regime."

Olson had lots more to say, not only about the global business environment but about ethics and CPAs' responsibility to protect the public interest as well. Listen to his speech in its entirety in this CPA Spotlight podcast.

• Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.

What opportunities are you seeing on the global stage these days?

Protect the public? You have their word.

CPAs don't have to take an oath before launching their careers. Someone must have figured that a college degree, a tough exam, a year of experience and lifelong learning were plenty of requirements without tacking on a ceremonial oath as well.

In Maryland, though, they take an oath anyway.

Sure, it's ceremonial. It's also a hugely important and powerful reminder of a CPA's responsibility to protect the public interest.

On June 16, following Day 1 of the Maryland Business and Accounting Expo, nearly 100 new Maryland CPAs vowed to "uphold the honor and dignity of the accounting profession and abide by the rules of professional conduct" during the third annual swearing-in ceremony for Maryland's newest members of the profession.

Earning a CPA license "truly is a major accomplishment," MACPA Executive Director Tom Hood told the new CPAs, "and we think it's probably more important now than in any other recent time, because of what's going on in the marketplace. This event puts the exclamation mark on our public-interest responsibilities, and that goes for all CPAs."

Mark Olson agrees. The outgoing chair of the Public Company Accounting Oversight Board, or PCAOB, was on hand to congratulate the new CPAs ... and to drive home the purpose of the event one last time.

"In joining the profession, you have an obligation to uphold the highest ethical and professional standards and are responsible for ensuring that trust in the CPA profession continues," Olson said. "Taking this oath is a reminder of the trust that the public places in CPAs and your commitment to uphold that trust."

• View some more photos from the event.

I love this event. Not only does it give new CPAs and their families an opportunity to celebrate their accomplishments, but it forces those attending to actually verbalize their commitment to serving the public. Earning your license is one thing. Actually standing in front of state and federal regulators, raising your right hand and promising to do the right thing is a powerful step. I'd be willing to bet it's one they'll remember when faced with professionally and morally difficult decisions.

Welcome to the profession, folks. Now make us proud.

Missed the Expo? Here's a taste.

Here's the problem with an event like the Maryland Business and Accounting Expo, which wrapped up yesterday in Baltimore: There is so much great content to share with you that it takes me forever to go through my notes, transcribe recordings, write blog posts, etc.

Rest assured, I'm working on it. You've got to hear about some of this stuff, and I'll be writing about it over the next few days.

In the meantime, you can get a taste of what the Expo was like by checking out the fantastic MDBizExpo Live! site created especially for the Expo by the folks at R2Integrated. The site, a multimedia mashup of sorts, features video interviews with thought leaders, speakers, vendors and sponsors; a stream of Twitter tweets related to the Expo; and a running gallery of photos from the event.

Here are some other post-Expo resources to tide you over:

• Complete MDBizExpo Live! photo gallery
• More photos from the Expo
• A call for health care transparency (Expo coverage from The Daily Record)
• Collaborate. Innovate. Grow. (Expo coverage from Financial Executives International)
• Live from the Maryland Biz Expo (Expo coverage from AccountingWeb)
• Institute revamps CITP credential, gives Second Life demo (Expo coverage from WebCPA)

Forget best practices. Think next practices

I have been wanting to write this post for awhile, and a recent event has inspired me to actually put digital pen to "paper" and write it.

The picture at right shows me (in avatar form) with Philip Rosedale (founder of the virtual world Second Life) and Byron Patrick (of the MACPA's New / Young Professionals Network and CEO of Hosted Solutions) on stage live to three places -- Las Vegas (for AICPA Tech Plus), Baltimore, and on CPA Island in Second Life.

Some may say it looks like a cartoon, some may say a kid's game. I say it may be the future of education. Philip Rosedale said as much in his talk of the uses of Second Life and his vision for where it is going. Think next practices, not best practices.

That is what one of our BLI instructors, Karl Alrichs, said at 2009 Business and Industry Conference and it had me thinking ever since. Karl said the problem with best practices is that once you you hear about them, they are old news. Things are simply moving too fast. After hearing Philip and our panelists  and talking with our thought leaders at dinner, I think Karl is onto something.

This week is our second Maryland Business and Accounting Expo. As I listened to our speakers and sponsors introduce themsleves at dinner, I kept hearing one thing -- next practices. That is what we will see and hear over the next two days. You will see leading-edge next practices from thought leaders in the field, from Main Street to Wall Street. Among the hot topics featured will be fair market value accounting, enhanced business reporting, XBRL, leadership for high-potential employees, finding opportunities in Maryland, new SBA programs, BRAC, accounting, taxes, technology, and a big dose of social media that you can use right now to get ahead and stay ahead.

I am excited that we could get all of these thought leaders in one place at one time. Our gratitude to them and the brave sponsors and exhibitors who helped us finance such high-quality thought leadership. I Hope to see you there!

As hockey great Wayne Gretzky used to say, "You need to skate to where the puck will be, not where it is."

Here is how you can take advantage of the Expo:

• Follow the action on our social mashup site MDBizExpo Live, featuring video, photos and a Twitter stream from the Expo.
• Join the conversation using the Twitter hashtag #MDBizExpo or tag your photos and content with MDBizExpo.
• Check out the MDBizExpo blog.
• View our Second Life session photos here and here, and read about the SL events on our blogs, CPA Island and CPAs in Second Life.
• Go to www.dubmenow.com and get started with electronic business cards.
• If you want a discount on the new CPA edition of MindManager, use code MACPA when purchasing.