Transcript Slide 1
August / September 2013 Gary M. Bolinger, CAE President & CEO
1. Introduction 2. Information Technology 3. Ethics 4. Legislative, Regulatory & Legal Developments
a. Washington, around the country and Indiana
5. Financial and Business Reporting
a. Information, financial , international
6. The Most Valuable Asset
a. People, productivity , competence and knowledge Throughout program – Share what we learned last year
Steve Eichenberger, CPA – Chairman of the Board BGBC Partners, Indianapolis
Transformation?
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Change:
– doing something in an incrementally different way. • Wax cylinders to acetate discs to LPs to CDs
Transformation:
– Doing something drastically different • CDs to MP3s • Suddenly entire music library on digital music player – happens to be smart phone, GPS, videos, and much more – no moving parts unless you count electrons.
Daniel Burrus / July 30, 2013
Change
Transformation
Transformations
Auditing • Technology, automation & Audit Data Standards Financial reporting • Private Companies Accounting Education • Pathways Commission Human Resources • Supply & Demand • Diversity
“Insight into how the profession is conducting and will conduct business, serve clients and employers, attract and retain employees and new business and remain competitive in the marketplace throughout the next 15 years.”
Forces shaping the business environment
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Global economy
– Continued globalization • persistent economic turbulence and uncertainty • growing pressure to rethink the entire global economic and financial governance infrastructure
Business environment
– Growing business and regulatory complexity • intensified global competition • shortening business cycles
Forces shaping the business environment
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Innovation and change
– Rapid advances in science and technology are: • driving disruptive innovation • overhauling industry structures • challenging and reinventing business models • spawning new sectors
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Forces shaping the business environment
Society and work
– Changing social values & expectations of work • increasing global population & an aging society working well past current retirement age • Creating Challenges – How IT is managed & leveraged to integrate a diverse multigenerational, multicultural and multinational workforce
Learning and development
– Structure, techniques, distribution channels and costs of providing education and training are being transformed • growing trend towards online courses & accelerated learning
Five imperatives for business
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Assume and plan for volatility
– Uncertainty as the new normal • factor in turbulence as a very real possibility • develop strategies for a range of different economic and market scenarios
Build the radar
– Systematic, organization-wide approaches required for scanning the future external environment. – Prepare for a wide range of possibilities – Tolerance of uncertainty, curiosity and ‘seeing round corners’ are becoming critical development priorities for managers and leaders alike.
Five imperatives for business
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Pursue technology leadership
– The pace and disruptive potential of information and communications technology (ICT) development • placed technology at the heart of strategy & operations of businesses of almost every size – New mindsets and approaches to technology management are required to exploit and extract full value from the next decade of advances.
Five imperatives for business
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Prepare for true globalization
– Development of a truly global operating model becoming a priority – Clear emphasis required on leveraging technology effectively – Capability of management to work with, adapt to and get the best out of a multi-location, multi-cultural and age-diverse workforce
Five imperatives for business
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Develop a curious, experimental and adaptable mindset
– Critical success factor in an increasingly complex & fast-changing environment / a ‘curious’ culture – Nurture an environment: • That is open to external ideas • That encourages participants to forge a network of strong working relationships across the entire business ecosystem.
Forces driving change in the accountancy profession
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Trust and reporting
– Pressures increasing to • • Strengthen public image Go beyond current financial reporting practices • Provide more transparent, simplified but holistic picture of a company’s health and prospects
Regulatory expectations
– Increasing regulatory burden could drive up cost of compliance
Standards and practices
– Drive to globalize standards & practices
Forces driving change in the accountancy profession
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Intelligent systems and big data
– Potential to use intelligent systems, data mining and predictive analytics to exploit the repositories of ‘big data’ • transform operational & interpretative elements of accountancy
Organizational remit
– Increasing expectations that the CFO & accountancy function should play a far greater role in everything • strategic decision making to the design of new revenue models
Five imperatives for the profession
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Embrace an enlarged strategic & commercial role
– As businesses adapt to a turbulent environment, opportunities are emerging for accountants to assume a far greater organizational remit. – Potential exists to leverage capabilities of the accountant across all aspects of corporate decision making: • from strategy formulation through to defining new business models.
Five imperatives for the profession
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Establish trust and ethical leadership
– Profession needs to be seen to be addressing clear public concerns. • there is a perception that the profession could do more to highlight and prevent everything from small scale financial irregularities through to the major systemic failures that helped cause the global financial crisis and the ensuing economic uncertainty.
Five imperatives for the profession
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Focus on a holistic view of complexity, risk and performance
– Growing consensus on the need for reporting to provide a wide view of organizational health, performance and prospects – Must acknowledge complexity of modern business • encompass financial & non-financial indicators
Five imperatives for the profession
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Develop a global orientation
– The pace of global expansion • developed and developing markets – Spotlight the profession’s ability to master • • technical language • cultural challenges of cross-border operations
Five imperatives for the profession
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Reinvent the talent pool
– The diverse range of demands and impacts on the profession is forcing a rethink of everything • From training and development to the type of people being recruited • Characteristics such as: – – – entrepreneurial spirit curiosity creativity and – – strategic thinking skills far more significance in the selection
Scenarios: Future of the Profession
An account of a projected course of action, events or situations.
Widely used by organizations to understand different ways that future events might unfold.
Scenarios: Future of the Profession
• Buccaneer (Perceived as ‘part of the problem’,
broad organisational remit)
– Many in the profession are playing a more central role in value creation activities. – There is public concern, however, that accountants have compromised their ethical financial stewardship role in the pursuit of profit. – This scenario may be considered too unstable by many because a short-term, profit-driven focus is not tempered by ethical financial stewardship, or entrepreneurship for long-term performance.
Scenarios: Future of the Profession
• Survivor (Perceived as ‘part of the problem’, narrow
compliance focus)
– Survival seems the priority for many in the profession, who focus on a relatively narrow technical and strict regulatory – – – remit. Society perceives the profession to have failed in its duty of care to highlight and help prevent the issues that caused the global financial crisis of 2007–9 & the subsequent decade of financial and economic uncertainty. Might be considered an unstable scenario due to perceived lack of integrity. A goal for those in this scenario may be to evolve to the positioning of those in the Safehands scenario.
Scenarios: Future of the Profession
• Safehands (Perceived as ‘guardians of integrity’,
narrow compliance focus)
– Profession has succeeded in re-establishing public faith – – in its role over the last decade For many this has been achieved by deliberately maintaining a focus on the largely technical elements of the role while seeking to ensure compliance with both the spirit & full regulatory requirements of the law Perceived as a stable scenario, particularly in turbulent times where CPAs want to demonstrate exemplary financial stewardship.
Scenarios: Future of the Profession
• Changemaker (Perceived as ‘guardians of
integrity’, broad organizational remit)
– Over the decade since 2012, many in the profession have succeeded in balancing public expectations for responsible financial management with enlarged & more entrepreneurial stance – Need to ensure sound & ethical practice has been a key driver in the gradual assumption of a wider remit by the CFO and accountancy function • seeking to encourage performance with accountability – Key challenge … maintaining balance between encouraging entrepreneurial behavior & ensuring highest standards of financial stewardship
It’s the 100th Anniversary!
16th Amendment to the United States Constitution.
Established modern federal income tax law.
Ratified & enacted into law 100 years ago.
February 25, 1913 Ratification by the requisite 36 states was completed on February 3, 1913 Ratification by Delaware. Indiana was 15 th to ratify.
THE PENALTY FOR FAILURE TO HAVE THIS RETURN IN THE HANDS OF THE COLLECTOR OF INTERNAL REVENUE ON OR BEFORE MARCH 1 IS $20 TO $1,000.
(SEE INSTRUCTIONS ON PAGE 4.)
My, how you have grown …
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Government does not publish a stand alone Internal Revenue Code separate from Title 26 of the United States Code.
– 1913 tax law (evolved to become tax code): • estimated 27 pages – 2011 CCH Winter Edition of the United States Internal Revenue Code: • 5,296 pages
1913 Income Tax Service: 400 pages 2013 CCH Standard
Federal Tax Reporter:
73,954 pages