Barry Melancon, CPA, CGMAPresident & CEO, American Institute of CPAs

CEO, Association of International Certified Professional Accountants

Spring Council 2018

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2,500,000,000,000,000,000bytes of data are created every day.

Source: DOMO

Since 2000

41%S&P 500CONSUMER-CENTRIC COMPANIES

have been acquired orgone out of business

Source: Accenture, 2018

39%TOP ACCOUNTING FIRMS

Source: AICPA

Major Firm Group member firms from 2000 no longer exist as

standalone firms

Top 10 decliningroles by 2022

Source: World Economic Forum Future of Jobs, 2018

1 Data entry clerks

2 Accounting, bookkeeping and payroll clerks

3 Administrative and executive secretaries

4 Assembly and factory workers

5 Client information and customer service workers

6 Business services and administration managers

7 Accountants and auditors

8 Material-recording and stock-keeping clerks

9 General and operations managers

10 Postal service clerks

TAKE A STEP.TECHNOLOGYMaster it before it masters you.

TRUSTBuild on your expertise.

TALENTThink broader.

7

AI PaaS

Gartner Hype CycleEXPECTATIONS

Digital Twin Biochips

Smart Workspace

Brain-Computer Interface Autonomous Mobile Robots

Smart Robots Deep Neural Network ASICs

5G Volumetric

Displays Self-Healing System Technology

Conversational AI Platform Autonomous Driving Level 5

Edge AI Blockchain for Data Security

Neuromorphic HardwareHuman Augmentation Knowledge Graphs

4D Printing Artificial General Intelligence

Deep learning

Carbon Nanotube IoT Platform Virtual Assistants Silicon Anode Batteries

Blockchain

Connected Home Autonomous Driving Level 4 Mixed Reality

Augmented Reality

Innovation Trigger

Source: Gartner, 2018

Peak of Inflated

ExpectationsTrough of

DisillusionmentSlope of

Enlightenment

Plateau of Productivity

Quantum

TIME

Megatrends for the profession, 2018EXPECTATIONS

Machine Learning

Blockchain

Big Dataand Analytics*

Software as a Service*

Innovation Trigger

Peak of Inflated

ExpectationsTrough of

DisillusionmentSlope of

EnlightenmentPlateau of

Productivity

TIME

Virtual Cognitive Expert Advisors (AI)

Source: CPA.com hype curve from Gartner and other sources

Cloud(SaaS) Blockchain

Client Accounting Services

Virtual CFO

Data analytics guide

Virtual CFO solutions

Digital CPA

Dynamic Audit Solution

Thought leadership

Wall Street Blockchain Alliance

Thought leadership

Cryptocurrency

SOC1 and SOC2

Artificial intelligence(machine learning, virtual Big data and analytics

Steps AICPA resources to help:

Learn fundamentals.

Become an expert.

Free learning:• Facebook Lives• Blogs• Podcasts• Watchlist

• Conferences and webcasts• Certificate programs• Learning labs

Apply to practice.

• Guidance• Frameworks• Checklists• Toolkits

TRUST

TRUST

ACCOUNTING AND AUDIT

Don’t forget the basics• Enhancing audit quality• Standards

– Revenue recognition, leases, credit losses

Optimize processes and insights with technology• Audit data analytics• RIVIO Clearinghouse• OnPoint Preparation, Compilation & Review tool• Dynamic Audit Solution

Explore one adjacent opportunity• Expansion of SOC reporting• Cybersecurity risk management• Integrated reporting and sustainability

aicpa.org/EAQ

Investors:

81%confidence in publiccompany auditors

80%confidence in independentaudit committees

Source: Center for Audit Quality Main Street Investor Survey, 2018

Guided engagements Integrateddata

Cloud platform

TRUST

ACCOUNTING AND AUDIT

OnPoint PCR main features

Intelligent checklists

Interactive methodology

Automated financialstatements

Data visualization

Real-time collaboration

Security

Technology Methodology Standards New skills

TRUST

ACCOUNTING AND AUDIT

Innovating the audit

October 2018Kickoff

TRUST

ACCOUNTING AND AUDIT

Next phase: Dynamic Audit Solution

MVP Release 1 Release 2 Ongoing

EstateRetirement

EducationRisk management

Investment

Tax

TRUST

PLANNING AND TAX ADVISORY SERVICES

Provide strategic guidance• Tax Reform Resource Center

– Quick reference guide and FAQs– 199A Flowchart and Tax Reform Chatbot– Impact of Tax Reform on Planning Toolkit

Maximize your time and value with technology• Integrated financial planning and tax prep platforms• Client dashboarding for holistic view• Integration financial aggregator tools• Life planning scenario forecasting

Meet broader planning needs• Roadmap to Planning and Tax Advisory Services• Planning and Tax Advisory Services web page

aicpa.org/taxreform | aicpa.org/growadvisoryservices

TRUST

PRACTICE MANAGEMENT

Understand the environment• MAP survey• Networking groups• New Small Firm Philosophy podcast series• PCPS Succession Planning Resource Center

Stand out• Financial Reporting Framework for Small-

and Medium-Sized Entities• New finance thinking for clients

Re-align strategy for the future• CGMA Business Model Framework• PCPS Firm inMotion e-Toolkit

aicpa.org/pcps | aicpa.org/smallfirms

Small Firm Philosophy podcast series

Topics:

Strong firm culture

Virtual firms

Niche services

Succession planning

and more…

TRUST

M&A ACTIVITY CONTINUES TO RISE

120 mergers and acquisitions in largest US firms in 2018

14% YoY

of firms acquired non-CPA firms56% YoY

As of October 12, 2018. % increase is as of same period in 2017.

35

TRUST

CYBERSECURITY

Protect yourself• Cybersecurity Risk Management Reporting Framework• New 2018 CPA Cybersecurity Checklist

Build your knowledge• Free learning: Facebook Live, blogs, podcasts• Webcasts and conferences• Certificate programs

Expand your services and promote your value• PCPS Exploring Cybersecurity Toolkit• Reporting on an Entity’s Cybersecurity

Risk Management Program and Controls• CGMA Cybersecurity Risk Management Tool• New Resources for firms to talk to your clients

aicpa.org/cybersecurity

IT leaders:

82%predict unsecured IoT deviceswill cause a breach in theirorganization

80%say such a breach would becatastrophic

Source: Ponemon Institute, 2018

TRUST

MANAGEMENT ACCOUNTING

Understand the changing landscape and impact• Future of Finance research

– 4 thought leadership papers• Improving government performance

Move from cost center to value driver• Connecting value generation for the long-term• Business model concepts

Build trust in business• Managing the Trust P&L: A toolkit for boards• Implementing sustainability development goals• Integrated reporting

cgma.org

TALENT

Growing skills demand

By 2022, everyone will need an extra

101 DAYS OF LEARNING

Source: World Economic Forum Future of Jobs, 2018

1 Analytical thinking and innovation

2 Active learning and learning strategies

3 Creativity, originality and initiative

4 Technology design and programming

5 Critical thinking and analysis

6 Complex problem-solving

7 Leadership and social influence

8 Emotional intelligence

9 Reasoning, problem-solving and ideation

10 Systems analysis and evaluation

Learn. Technical skills

Business skills

Unlearn. Digital skills and mindset

Relearn. Leadership skills

People skills

Ethics, integrity and professionalism

TALENT

Human Intelligence series

2.8 million+video views since October 2017

Go beyond disruption+ series

379,000+video views since July 2018

10,500podcast downloads since June 2018

aicpa-cima.com/disruption

TALENT

MAKE THE MOST OF YOUR PEOPLE

Embrace diversity and inclusion• CEO Action for Diversity• Recruitment and Retention toolkit• D&I Communications toolkit• Women’s Global Leadership Summit

Mentor … and be mentored• Online mentoring program

aicpa.org/diversity

TALENT

CPA PIPELINE

Attraction• Honors program• Dual Student Recruitment program• CPA Academic Champions pilot program• Firm CPA Culture Toolkit

Influence• New Accounting Accreditation Practitioner Engagement Program

– Prepares CPAs to serve in a consultative role on accreditation peer review teams

Uniform CPA Exam

Accountingand Financerated top 10 college degrees with best job prospects

Source: CareerCast

7yr CAGR: 10.4%

Other client service professionals

76K

CPAs 7yr CAGR: 4.9%

TALENT

TALENT INCLUSION STRATEGY: MAINTAINING A CPA CULTURE

Top 100 CPA firms 300K

262K

250K

200K

150K

100K

50K

0K2011 2012 2013 2014 2015 2016 2017 2018

Source: Accounting Today Top 100 Accounting Firm Survey 2018; AICPA CAGR=Compound Annual Growth Rate

# of

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F O R G I N G T H E

PAT H

FORGING THE PATH

REPUTATION & AWARENESS OF CPA

5.5 billionreached worldwide throughmedia outreach

41 millionbusiness owners exposed toCPAs through CPApowered

1.2 millionconsumers reached throughfinancial literacy efforts

FORGING THE PATH

ADVOCACY

Tax• Section 199A• Meals and entertainment• IRS service• Tax technicals / Extenders / Reform 2.0• IRS transcript process changes

Disaster relief• Fairness• Certainty• Consistency

FORGING THE PATH

COMPREHENSIVE DEFINITIONOF ATTEST WA

MT ND

ORID

SDWY

NENV

UT

CA COKS

MN

WI NY

MI

IAPA

IL IN OH

WVMO VA

KYNC

TN

ME

MA

CT

DE NJ

AZ NM OK AR SC

MS AL GA

TX LA

HI FL

Currently have Active legislation Do not have

NH

MD

USVI

P

GUCNMI

DC

R

VT

FORGING THE PATH

STATES WITH FIRM MOBILITY

WA

MT ND

ORID

SDWY

NENV

UTCA CO

KS

MN

WI NY

MI

IAPA

IL IN OH

WVMO VA

KYNC

TN

ME

MA

CT

DE NJ

AZ NMOK AR SC

MS AL GA

TX LA

HI FL

Currently have Active legislation Do not have

NH

MD

USVI

P

GUCNMI

R

VT

DC

TRANSFORMING

OUR ORGANIZATIONValue Growth Innovation Capabilities Relevancy

Reimagining how, where and what services we provide to support the profession and members – today and tomorrow.

FORGING THE PATH

ENHANCING MEMBER EXPERIENCE

More intuitive, personalized web site

Facebook Messenger chatbot

Alexa flash briefing

GO BEYOND