Download - MACPA 2012 PIU / Town Hall Leg / Reg Update
MACPA Professional Issues Update
Regulatory Edition
By: Tom Hood, CPA, CITP, CGMA
May 3, 2012 Columbia, MD
The history of associations – Why do we exist?
Bill of Rights - submitted to the states for ratification on September 25, 1789 and adopted on December 15, 1791
The CPA • Education (150 hours)
• Examination – Uniform CPA Exam
• Ethics – Separate Ethics Exam
• Experience – 2,000 hours of practical experience
And CPE – - 80 hours of Continuing Professional Education reported every two (2) years, including four (4) hours of ethics training
30 Future Forums 1,000 CPAs
Identified these top trends
What CPAs think about the future
http://www.bizlearning.net/live/i2afutureforums
• Change • Complexity • Compliance • Convergence • Competition
MANAGING THE SEA CHANGE
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What is the #1 reason organizations fail?
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Complexity “the biggest challenge facing enterprises from here on will be the accelerating complexity and the velocity of a world that is operating as a massively interconnected system.” 79%
51%
6,000 pages 500 Million words
17,000 pages
The CPA Profession and CPE
How is your knowledge inventory?
Compliance
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When do we think about infrastructure?
Federal Laws & Regulations
State Laws & Regulations
Professional Standards
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.
Single audits
Audit quality
Financial Regulatory Reform
Sarbanes-Oxley Act Dodd-Frank Wall Street Reform and
Consumer Protection Act
MD Comptroller MD Comptroller
CAQ
US Treasury
MD Comptroller
Courtesy of the Maryland Association of CPAs – 2008 edition Drawing by Carol Kirwan, CPA
Cascade
“a series of steps or stages that, once initiated, continues to the final step because each step is triggered by the preceding one, resulting in amplification of the signal, information, or effect at each stage.”
Where do major changes come from? Most changes come from regulators and standard setters
Us – Associations MACPA & AICPA
OR
Them – Federal & State legislators Infrastructure
New laws, regulations & regulators
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Sarbanes-Oxley Act of 2003
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Dodd-Frank - the bill that keeps on giving
CPAs required to register as debt settlement advisors
• Accountancy bills (20 states) - 51
• Auditor Rotation (3 states) - 8
• Mobility (2 states) - 6
• Regulation of Tax Preparers (3 states) - 5
• Tax on Accounting Services (6 states) - 11
• Peer Review (4 states) - 7
• State Board Consolidation (6 states) 8
State Legislation and Regulatory
Maryland & Federal Tax Preparer Law Threats to your CPA License
• Well intentioned consumer group • Solving a problem – low income tax
frauds • But…creating problems for CPAS
– Licensed / Certified Tax Preparers would be confusing to the public
– Tax Preparer Exam using ACAT / H&R Block designation (ATA, ATP) opens door for second tier license
– Misinformation / confusion
Example - CPA Mobility and uniformity achieved through collaboration in profession
TX
WA
OR
CA
NV
ID
MT ND
SD WY
UT
CO
AZ NM
HI
OK
KS
NE
MN
IA
MO
AR
LA
MS AL *GA
FL
WI
IL
MI
IN
KY
TN
SC
NC
VA
OH
NY
ME
CT RI
*MA
AK
WV
NJ DE
DC
MD
*PA
CPA Mobility Enacted 48
CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA
*
In Process
NH
CPA Mobility Legislation Pending - DC
VT
PR
GU
U.S. VIRGIN ISLANDS
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• Collaborative effort with AICPA – CPA/SEA – NASBA & State CPA Societies
• 48 + DC states passed legislation in four (4) years • Maryland enacted it in 2008
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Tsunami of 1099K and info returns
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CPAs in Tax The increase in IRS activity is swamping our tax practitioners and costing them hundreds of hours in chasing down IRS notices.
Maryland - 1099R - 2008
Maryland joins AICPA & States supporting government employee meeting attendance
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More than 100 MACPA members call our senators and we defeat the amendment!
The DATA Act
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State Legisla+on
CPA Day in Annapolis – January 16, 2013
An example - CPE Regulations involved all levels – law, regulations, and procedures
Maryland Senate & House passes bill
A Bill SB 128 From State Board
Law Maryland Governor signs into law
Maryland State Board of Public Accountancy
Clarify thru regulations And enforce the law
State Legisla+on
Maryland’s fiscal crisis
Maryland Regulatory Update
• CPA Exam Applica+ons – delays up to 120 days
• CPA Exam Applica+ons – reasons for decline • New safe harbor regula+ons for complila+ons • Record reten+on • Commissions & referrals fees • CPA licensing Fee reduc+ons
Top reasons for CPA Exam denial 1. Not reading and following the direc+ons for submiLng the applica+on (#1 reason for DELAY) 2. Not comple+ng the applica+on completely and accurately 3. Not lis+ng ALL names the applicant has used in the past and present. 4. Not lis+ng ALL transcripts on the online applica+on. 5. Not having ALL official transcripts sent directly from ALL schools the applicant has aWended. We DO NOT
accept transfer credits; we must have the official transcripts from EACH school. 6. Not reques+ng transcripts for other credits/exams taken-‐ AP, CLEP, DANTES ACE etc. These credits must
ALSO appear on a regionally accredited schools transcript listed with +tle and credits granted for the exam. If they are listed in a lump sum we must receive a leWer from the school explaining the course(s) the exams were accepted for.
7. Not submiLng course descrip+ons and course syllabi, especially for courses taken from out of state schools. If the +tle of the course doesn’t match a +tle shown on our educa+on requirements we must have the course descrip+on and/or syllabi from the catalog for the year you took the course.
8. Not comple+ng the curriculum checklist completely or not comple+ng it accurately. 9. Not having a course by course evalua+on done for the purpose of taking the Uniform CPA exam in
Maryland by a current NACES member of any and all foreign educa+on. 10. Income tax not taken in the US does not qualify for US Federal Income Tax. 11. You have not taken a three semester credit hour course devoted en+rely to ethics. NOTE***A U. S.
Business Law course, a Law and Ethics course, an audi+ng and ethics course, etc. does not meet the requirements for ethics.
12. Have not received a conferred bachelor’s degree. 13. Filing an applica+on before you have completed all of the requirements will result in a denial of your
applica+on.
Safe Harbor = 6/1/2012
.10 Compila,on Repor,ng Language. A compila*on does not cons*tute the prac*ce of cer*fied public accountancy if the compila*on report: • Includes the statement “The preparer of this report has not
undergone and is not required to undergo peer review”. B. Does not reference the Statements on Standards for Accoun*ng and Review Services issued by the AICPA.
Record Reten+on Furthermore, the interpretation now allows a member to contract with a client in advance as to which member-prepared records or member’s work products constitute client records and therefore will be returned to the client. Finally, guidance pertaining to electronic records was revised to clarify that members are to provide records in a requested format if such records are available in that format and are within the member’s custody and control. However, if an electronic record contains formulas, the member can elect to provide the record without formulas unless the member was engaged to provide such formulas with the work product.
Your license – inac+ve vs expired • One of the most essen+al things you should know about your Maryland
CPA license is that your license expira+on date never changes. Once it's set, it stays with you throughout your professional life as a CPA. Even if your license is placed on inac+ve status, or if you haven't renewed on +me, the month and day of your expira+on date will always remain the same.
• Therefore, it is very important to consider your license expira+on date if you have an inac+ve or an expired license. If you apply to the Board to reac+vate or reinstate your license, your fees and 80 CPE hours will only apply to the remaining length of your current two-‐year term. So if you apply to the Board three months before your term is set to expire, you will only be covered for those three months.
• Firms Permit -‐ as a sole prac++oner is not required to hold a permit, even if the individual chooses to organize the business as a corpora+on or a limited liability company.
Maryland fees effec+ve 6/1/2012 • CPA Exam
– (1) Audi+ng and AWesta+on — $[249] 200; – (2) Financial Accoun+ng and Repor+ng — $[237] 200; – (3) Regula+on — $[211] 180; – (4) Business Environment and Concepts — $[198] 180;
• Licensing Fees – Renewal fee — $[80] 50; for two years! – Applica+on for inac+ve status — $[40] 25; – Renewal for inac+ve status — $[40] 25; – Reinstatement for inac+ve status — $[60] 50; – Reac+va+on from inac+ve status — $[80] 50; – Reinstatement of expired license — $[120] 100; – Firm applica+on fee — $[80] 60; – Firm permit fee — ${80] 60; – Firm renewal fee — $[160] 120; – Firm reinstatement fee — $240; – [Proctoring fee — $75]
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KEY
GOALS/ RESULTS
PROJECTS/ STRATEGIES
PRODUCTS/ SERVICES/
SITES
PEOPLE
KEY EVENTS
Dateline 1900 1987 1974 1976
In the Beginning...
MACPA stops
several
attempts to
amend 1924
law
Maryland becomes the 1st state to restrict
practice for CPAs
1901
Larry Kamanitz chairs
Legislative Committee
MACPA tries
to pass CPE
Bill in 1974
& 1975
AG opinion of 1981 Grants rights to non-CPAs for Reviews &
Comps.
Max Teichman, Frank Blacklock & William Rogers
Interstate Practice &
Uniform Accountancy Act
HB 1296
Mobility Passes
• CPA Bill signed April 10, 1900 • MD is 3rd state (NY & PA)
1922 1924 1981
Non-CPAs begin
attempts at 2nd
Tier license
2005
HB 1261 re-writes CPA Law - 1986 MACPA amendments to ed requirements fail
Dawson Grove chairs
Legislative Committee
Allen Deleon chairs
Legislative Committee
1993 MACPA passes
MD LLC & LLP Acts
Rights & Recognition • Privilege of Self-
Regulation • Right to Sole Control
over an Area of Practice
History of CPA Legislation
1993 2006 2003 2007 2008 2001 1999
SB 560 Defeated Maryland Corporate
Accountability Act MACPA requests
reversal of AG Opinion – “This is not an audit”
language added
Terry Hancock chairs
Legislative Committee
MACPA Forms Task Force and surveys members
88% Sub Equivalency 76% Peer Review & Safe
Harbor 68% Non-CPA Ownership
State Board of Accountancy
formed
Maryland Special Session
Oct – Nov 07
MACPA defeats Sales Tax on
Services
Amended Corporate Tax Reporting Bill
MACPA wins use of “consultants” in firm letterhead at State
Board
Accounting Reform
task Force addresses
SOX State Board Hearing
May 1, 2003
MACPA passes new simpler CPA exam
Education Rules
Maryland Association of CPAs
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Convergence
Public Company
Private Company
Int’l Company
Financial Reporting
Auditing
Ethics
State Boards of Accountancy
Private Company Standards Decision Due May 24th
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Auditor Rotation Cascade!
Federal Accounting Standards
The CPA Brand
The
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Why MACPA?
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Connect – Connecting you to your Profession
Connecting the pipeline of CPAs
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http://www.facebook.com/TomorrowsCPA
Students CPA Candidates CPAs
Protect – Protecting the CPA License & Public Interest since 1901
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Achieve – Achieving Success as a CPA
It really is about this...
MANAGING THE SEA CHANGE���Be the Captain of your own ship!
• Continuous Learning
• Competency • Collaboration =
Career Success
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3 Critical Workforce"Priorities Rapidly developing workforce skills and capabilities Fostering collaboration & knowledge sharing Developing future leaders
Entry-level Staff
Supervisor
Manager
Controller
CFO
Critical Turning Point
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The collaboration curve replaces the experience curve
“The organizations that will become the household names of this century will be renowned for sustained, large-scale, efficient innovation.
The key to that capability is neither company loyalty nor free-agent autonomy but, rather, a strong collaborative community.” HBR, July-August 2011
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
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A leader’s job is to set context and provide hope and inspiration..."
Tom Hood, CPA.CITP CEO
Maryland Associa8on of CPAs Business Learning Ins8tute
(443) 632-‐2301 E-‐mail [email protected]
Web hNp://www.macpa.org Blog hNp://www.cpasuccess.com