vgfoa fall conference 2012 · subject to fasb ratification . rejects blue ribbon panel, aicpa calls...

Professional Issues Update

John Montoro, Chair,

Virginia Society of Certified Public Accounts

VGFOA Fall Conference 2012

Copyright © 2012 American Institute of CPAs

• CPA Horizons 2025 Results

• National issues

• Private company financial

reporting

• The CPA reputation

• VSCPA Update

• State and local issues

Topics to Cover Today


CPA’s: Making sense

of a changing and

complex world.

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

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

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

FAF Trustees’ Plan

Issued Oct. 4, 2011

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

More Than 7600 Supportive

Comment Letters

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…

CPA Reputation Stands Strong

Overall evaluations of professionals among Business Decision Makers (BDMs)

0%

10%

20%

30%

40%

50%

60%

59% 52% 47% 44%

33% 28% 25% 24%

Positive Perception

CPA Most Valued Credential Among BDMs

How valuable are the following credentials within your organization?

0% 20% 40% 60% 80% 100%

CFA

CFP

MBA

CPA

8%

17%

44%

56%

14%

24%

39%

31%

14%

31%

10%

8%

64%

28%

7%

4%

Very

Somewhat

Not at all

DK/NA

CPAs Feel Valued, BDMs Agree

CPAs: The CPA credential

is valued and respected at

my workplace

BDMs: How valuable is the

CPA credential within your

organization?

95%

3% 2%

Agree

Disagree

Don't Know

56% 31%

8% 4%

Very

Somewhat

Not at All

Don't Know

Perception of CPAs’ Skills Increased for BDMs

62%

62%

50%

49%

37%

68%

67%

56%

55%

42%

0% 20% 40% 60% 80%

Integrity

Competent

Objective

Focused on client's needs

Communicates effectively

2011

2008


Tax Issues

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

5500 (Employee Benefit Plan) 7/31

(10/15*)

TD F 90-22.1 (FBAR) 6/30

1040 (Individual) 4/15 (10/15*)

1065 (Partnership) 4/15 (9/15*)

1041 (Trust & Estate) 4/15 (9/15*)

1120S (S Corporation) 3/15 (9/15*)

1120 (C Corporation) 3/15 (9/15*)

5500 (Employee Benefit Plan) 7/31

(11/15*)

TD F 90-22.1 (FBAR) 6/30 (10/15*)

1040 (Individual) 4/15 (10/15*)

1120 (C Corporation) 4/15 (10/15*)

1041 (Trust & Estate) 4/15 (9/30*)

1120S (S Corporation) 3/31 (9/30*)

1065 (Partnership) 3/15 (9/15*)

CURRENT PROPOSED

*Extended Due Date

Chartered Global Management Accountant

Designatory letters

Affiliation with world-leading

accounting organizations

Tools for self-promotion

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

Chartered Global Management Accountant

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.

CGMA pathway


What is the CGMA?

CGMAs are part of a new,

worldwide network of

management accounting

professionals, working in

the world’s leading

corporations, private and

public organizations, small

businesses and start-ups

Code of ethics and

enforcement

Financial and non-financial expertise

Continuous professional development

Powered by joint venture

between AICPA and

CIMA CGMA.org

New email service for CPAs

Professional alternative to

more consumer-oriented

email services

Launch suite of services in

C2B offerings

CPA.com

.

.

.

.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

Katherine Covino, College of William and Mary

2011 F. ilson Brown Scholarship recipient

2012 VSCPA Educational Foundation

Scholarships Adrienne Essiaw, College of William & Mary

Candice Owens, Longwood University

Fatima Sbai, George Mason

Phillip Stucki, Virginia Tech

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

So what’s next?

Next up…

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

[email protected]

vgfoa fall conference 2012 · subject to fasb ratification . rejects blue ribbon panel, aicpa calls...

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