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State of Being a CPA (in Industry)
May 2011
Paul ParksAICPA Senior Technical ManagerBusiness, Industry & Government
American Institute of CPAs
Topics
Peer review, mobility and substantial equivalencyEthics resources for CPAs in IndustryThe Work We Do: AICPA thought leadership initiatives and resources for CPAs in industryManagement accounting designation – AICPA & CIMA
American Institute of CPAs
AICPA requires its member firms to undergo peer review every three yearsFICPA manages the AICPA’s practice monitoring Florida does not have mandatory peer review, but legislation is activeAICPA.org and FICPA.org to learn more
Peer Review
American Institute of CPAs
Practice Mobility & Substantial Equivalency
Practice mobility • Ability of a licensee to gain a practice privilege outside of his or
her home jurisdiction without obtaining an additional license in another state where he or she will be serving a client or an employer
• The concept of mobility allows licensed CPAs and CPA firms to more readily practice across state jurisdictions.
The provision specifically allows for interstate practice by CPAs whose home jurisdiction or who individually meets the UAA licensure standard.
American Institute of CPAs
Practice Mobility & Substantial Equivalency
Substantial Equivalency• Under section 23 of the AICPA/NASBA Uniform Accountancy
Act (UAA), a CPA with a license in good standing from a jurisdiction with CPA licensing requirements essentially equivalent to those outlined in the UAA is deemed to be substantially equivalent, or a licensee who individually meets the requirements of-
- 150 credit hours with a Baccalaureate - Minimum 1 year of CPA experience - The Uniform CPA Examination
States Boards have jurisdiction over out-of-state CPAs and firms practicing in their stateMyFloridaLicense.com for links to Statutes and Rules
American Institute of CPAs
CPA Mobility Initiative2011
TX
WA
OR
CA
NV
ID
MTND
SDWY
UTCO
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
AKWV
NJDE
DC
MD
*PA
CPA Mobility Enacted 47
CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA
Legislation Expected
*
Awaiting Governor Signature - 1
NH
In Progress
VT
PR
GU
VILegislation Introduced
American Institute of CPAs7
Ethics Resources For CPAs in Industry
American Institute of CPAs
American Institute of CPAs
Ethics Resources for Industry CPAs
American Institute of CPAs
American Institute of CPAs11
The Work We Do
American Institute of CPAs
Business & Industry Responsibilities
1/3 of B&I ResponsibilitiesFinancial accountingFinancial ReportingAuditTax
2/3 of B&I ResponsibilitiesStrategic planningManagement AccountingSustainabilityBudgetingFinancial operations managementRisk management & internal controlsInternal auditGovernanceHR & benefitsIT, legal, purchasing
AICPA Thought Leadership Areas in Business and Industry
American Institute of CPAs
Financial Reporting Landscape
American Institute of CPAs
Financial Reporting
American Institute of CPAs
SEC’s Consideration of IFRS
SEC Work PlanDecision in 2011Earliest Adoption Date 2015Method of incorporation –“Condorsement?”
American Institute of CPAs
Accounting Convergence
Priority Projects:• Revenue Recognition• Leases• Financial Instruments• Fair Value Measurement• Statement of Comprehensive Income• Balance Sheet Offsetting• Insurance Contracts (for the IASB)
Effective Dates• To be determined• Big bang or phased approach• Standard setters are reviewing input from comment letters
American Institute of CPAs
Enterprise Risk Management
American Institute of CPAs
Why ERM?CPAs in industry can take leadership role in ERM initiatives
Website with Briefs, MAGs, Research and other resources to help members with risk management.
American Institute of CPAs
Perceptions About Riskiness of Business Environment Out of 331 executives responding in the US and 264 executives responding Globally
American Institute of CPAs
Risk Oversight Process
Most perceive their risk oversight processes to be immature with…
American Institute of CPAs
Perceived Barriers to ERM
American Institute of CPAs
Partnered for a global view of enterprise risk oversight
•AICPA
•Chartered Institute of Management Accountants (CIMA)
•NCSU ERM Initiative
American Institute of CPAs
Top Ten ‘Next’ Practices for ERM
American Institute of CPAs
Sustainability
American Institute of CPAs
Sustainability
Copyright 2009 Foundation for a Sustainable Community
“Going green” can save you green
American Institute of CPAs
AICPA Sustainability Initiative Sustainability Competency Domains
PublicPractice
American Institute of CPAs
Where are Impacts Found?
American Institute of CPAs
Levi Strauss – Life Cycle of a Jean
Cotton Production
Fabric Production
Garment Manufacture
Transport &Distribution
Consumer Use
End of Life
Recycling1
2
3 4
5
6
7
American Institute of CPAs
Some Findings• Compliance, reputational
risk and cost cutting are drivers
• Finance function contributions to sustainability highly valued, yet underdeveloped
• Large companies have more robust capabilities, yet 33% of smaller companies have sustainability strategy
Evolution of sustainability practices
American Institute of CPAs
Operational Finance & Accounting
American Institute of CPAs
Lead Through Financial Operations Management
American Institute of CPAs
American Institute of CPAs
American Institute of CPAs
Professional Issues/Other AICPA Resources
American Institute of CPAs
Changing Landscape
American Institute of CPAs
AICPA Primer• Consumer Financial
Protection Bureau• Assets under
management threshold• GAO study• Corporate governance,
and accountability• Compensation
Dodd-Frank Act Impact on CPAs
American Institute of CPAs
Health Care Reform Resources for CPAs
Free info cast on tax implicationsPowerPoint, brochure for membersNew webpage
American Institute of CPAs
Support for CPAs Serving Small Business
American Institute of CPAs
Training Grants Resource for CPAs
Whitepaper outlines how: • CPAs can use grants
to increase skill base• Job seekers can
pursue training in growing fields
• Businesses can use grants to fund staff training
American Institute of CPAs
Service Organization Control (SOC) Reports
American Institute of CPAs
Quarterly Survey of B&I C-Suite CPA Executives
Partnership with UNC Kenan-Flagler Business School
B&I 2010 Goal
Economic Outlook Survey
American Institute of CPAs
BusIndNews
Offers the latest news and resources relevant to CPAs especially in business, industry and governmentOther Newsletters:• IFRS Report • CPA Letter Daily• Corporate Finance Insider• CPA Insider• Tax Insider
American Institute of CPAs44
Proposed Joint Venture AICPA and CIMA
American Institute of CPAs
Chartered Institute of Management Accountants
Based in LondonFounded in 1919Largest professional body of management accountants183,000 members and students in 168 countries
American Institute of CPAs
Overview
EXPLORING A JOINT VENTURE TO
Establish and promote a new joint designation as the global standard for management accounting
Leverage the power of over 550,000 members in practice and in business
Advance AICPA position as a global advocate for professional accountants
Provide significantly enhanced benefits for CPAs who practice in business and industry
46
American Institute of CPAs
The New AICPA-CIMA Designation
Delivered through the AICPA in the Americas and to US CPAs anywhere in the world, with the US CPA credential being a preferred entry pathDifferentiated by ongoing competency / relevant knowledge program: Virtual Me
Benefits for members of AICPA and state societiesNext Step: Approval by AICPA and CIMA Governing Councils
47
A Globally Recognized Management Accounting Designation
American Institute of CPAs
A Credential for Business & Industry
Questions with which we wrestled:• How do we respond to the desire of members in business and
industry for a management accounting credential that builds on their CPA certificate?
• How do we improve the quality and scope of resources offered to CPAs in management accounting?
• How can we enhance, deepen and accelerate the CPA’s international influence and reputation?
• Is it in the best interest of the public and the profession for public and management accountants to have a unified professional home?
The answer we arrived at:• A joint venture with the Chartered Institute of Management
Accountants.
American Institute of CPAs
Business & Industry Executive Committee View
Pursuing a B&I credential is a very important competitive strategy for AICPA to considerTarget Entry Level/Early Career vs. Expert Level Model as preferred marketStrategic partnering is preferred approach for entering market (buy vs. build) Availability to non-CPAs is important for broad appeal and size of potential market Chartered Institute of Management Accountants most desirable partner to meet needs
49
American Institute of CPAs
Permanent Joint Venture supported by a contract
GRAPHIC ELEMENT ISILLUSTRATIVE
50
American Institute of CPAs
Thank You!
Contact info: [email protected]