Mark Koziel, CPA, CGMA. Executive Vice President, AICPA January 2019

Transcription

1 Mark Koziel, CPA, CGMA Executive Vice President, AICPA January 2019

2

3 2,500,000,000,000,000,000 bytes of data are created every day. Source: DOMO

4 S&P 500 CONSUMER-CENTRIC COMPANIES Since % have been acquired or gone out of business Source: Accenture, 2018

5 TOP ACCOUNTING 39% FIRMS Source: AICPA Major Firm Group member firms from 2000 no longer exist as standalone firms

6 Merger and Acquisition Activity December 31, 2018 Non-CPA Firm Acquisition Merge in MFG Merge in G400 Merge in Smaller Than G400 Merge in Piece of Practice Total 2018 Total 2017 Total 2016 Total 2015 Big MFG G * MFG activity up 15% over 2017

7 Top 10 declining roles by 2022 Source: World Economic Forum Future of Jobs, Data entry clerks Accounting, bookkeeping and payroll clerks Administrative and executive secretaries Assembly and factory workers Client information and customer service workers Business services and administration managers Accountants and auditors Material-recording and stock-keeping clerks General and operations managers Postal service clerks

8 TAKE A STEP. TRUST Build on your expertise. TALENT Think broader. TECHNOLOGY Master it before it masters you. 8

9 TRUST

10 Increasing Firm Value Opportunity Bookkeeping Write-Up CAS Virtual CFO Tax Compliance Integrated Services Traditional Audit AI Driven Audit with Insights CPA Profession Total Market: $110 billion *IBIS 2018 report

11 Trust in auditors is strong Investors: 80% confidence in independent audit committees 81% confidence in public company auditors Source: Center for Audit Quality 2018 Main Street Investor Survey

12 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 Data integrity aicpa.org/eaq

13 Innovating the audit Technology Methodology Standards New skills

14 Vision for Auditing in the Future Efficient, effective, high-quality audits. Scalable applicability of standards and technology. Continued evolution of audit to continue to meet enhanced business needs and client expectations. Retain trust and enhance relevance in audits

15 Emerging assurance areas Cybersecurity Risk Management Cybersecurity Risk Management Reporting Framework Certificate programs SOC for Supply Chain Blockchain SOC1 and SOC2 (including guidance on smart contracts) A&A guide on cryptoassets Certificate program Integrated Reporting Certificate program Sustainability Attestation guide

16 Tax & Integrated Services

17 How Americans file their taxes Source: 2018 HR Block presentation based on IRS Data

18 Planning & tax advisory services Market demand is soaring Client needs are changing Tax reform presents opportunity New online resource center & planning certificates aicpa.org/growadvisoryservices

19 Continued evolution of client accounting services

20 Firm Value Chain Lower Value & Historical Focus Higher Value & Future Focus Input Data Assemble & Verify Report Analyze & Interpret Advise & Consult

21 CGMA Business Model Framework 21 CGMA Business Model Consultation Framework

22 TALENT

23 Growing skills demand By 2022, everyone will need an extra 101 DAYS OF LEARNING Source: World Economic Forum Future of Jobs, Analytical thinking and innovation Active learning and learning strategies Creativity, originality and initiative Technology design and programming Critical thinking and analysis Complex problem-solving Leadership and social influence Emotional intelligence Reasoning, problem-solving and ideation Systems analysis and evaluation

24 Learn. Technical skills Business skills Unlearn. Digital skills and mindset Relearn. Leadership skills People skills Ethics, integrity and professionalism

25 Steps Learn fundamentals. AICPA resources to help: Free learning: Facebook Lives Blogs Podcasts Watchlist Become an expert. Conferences and webcasts Certificate programs Learning labs Apply to practice. Guidance Frameworks Checklists Toolkits

26 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 Accounting and Finance rated top 10 college degrees with best job prospects Uniform CPA Exam Source: CareerCast

27 TALENT INCLUSION STRATEGY: MAINTAINING A CPA CULTURE 300K Top 100 CPA firms 262K # of Professionals and Partners 250K 200K 150K 100K 50K Other client service professionals CPAs 7yr CAGR: 10.4% 76K 7yr CAGR: 4.9% 0K Source: Accounting Today Top 100 Accounting Firm Survey 2018; AICPA CAGR=Compound Annual Growth Rate

28 CPA Evolution Technological innovation CPA core services Changing hiring practices New client demands

29 Progress thus far Preliminary concept shared with stakeholders Feedback received Understanding and support for taking action Skepticism and questions regarding approach Next steps Evolve concept Gather more input throughout 2019

30 MAKE THE MOST OF YOUR PEOPLE Embrace diversity and inclusion CEO Action for Diversity Recruitment and Retention toolkit D&I Communications toolkit Mentor and be mentored Online mentoring program WIEC activities Women s Global Leadership Summit Possible firm recognition process aicpa.org/diversity

31 TECHNOLOGY

32 Gartner Hype Cycle EXPECTATIONS Source: Gartner, 2018 Smart Workspace Brain-Computer Interface Autonomous Mobile Robots Smart Robots Deep Neural Network ASICs AI PaaS Quantum Computing 5G Volumetric Displays Self-Healing System Technology Conversational AI Platform Autonomous Driving Level 5 Edge AI Blockchain for Data Security Neuromorphic Hardware Human Augmentation Knowledge Graphs 4D Printing Artificial General Intelligence Innovation Trigger Digital Twin Biochips Peak of Inflated Expectations Deep learning Carbon Nanotube IoT Platform Virtual Assistants Silicon Anode Batteries Blockchain Connected Home Autonomous Driving Level 4 Mixed Reality Augmented Reality Trough of Disillusionment Slope of Enlightenment Plateau of Productivity TIME

33 CPA.com Accounting Profession Megatrends, 2019 EXPECTATIONS Deep Learning Smart Robots Conversational AI Virtual Assistants Blockchain Bots Big Data OCR Software as a Service Predictive Analytics Robotic Process Automation Innovation Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity TIME Source: 2019 CPA.com Identified Megatrends Plotted on the Gartner Hype Cycle Framework

34 Cloud (SaaS) Big data and analytics Artificial intelligence (machine learning, virtual assistants) 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

35 FORGING THE PATH

36 Strong voice in advocacy INTERNATIONAL International auditing standards Audit-only firms Apprenticeships Global survey U.S. FEDERAL & STATE Capital markets reform Mobile workforce Copyright Beneficial ownership Occupational licensing Tax conformity Marijuana U.S. TAX Tax reform implementation IRS reform IRS Commissioner Regulation of tax preparers aicpa.org/advocacy

37 Advocacy forward UK, South Africa, Hong Kong International auditing and ethics standards Taxation of Digital Economy Potential above the fold news

38 2019 Political Environment

39 116th Congress: Major Turnover, Loss of Institutional Knowledge Exiting house members during midterms

40 Legislative activity 2016 Occupational Licensing Activity WA MT ND ME VT OR ID WY SD MN IA WI MI NY PA CT NH MA RI AK CA NV Thank You UT CO NE AZ NM OK AR KS MO IL IN KY TN OH WV VA NC SC DE DC NJ MD CNMI GU TX LA MS AL GA HI FL PR Introduced legislation USVI Passed legislation 2016 American Institute of CPAs. All rights reserved.

41 Legislative activity Occupational Licensing Activity WA MT ND ME VT OR ID WY SD MN IA WI MI NY PA CT NH MA RI AK CA NV Thank You UT CO NE AZ NM OK AR KS MO IL IN KY TN OH WV VA NC SC DE DC NJ MD CNMI GU TX LA MS AL GA HI FL PR Introduced legislation USVI Passed legislation 2016 American Institute of CPAs. All rights reserved.

42 Legislative activity Occupational Licensing Activity WA MT ND ME VT AK CA OR NV MN ID SD WI WY Thank You UT CO NE AZ NM OK AR KS IA MO IL MI IN KY TN OH NY PA WV VA NC SC CT DE DC NH MA RI NJ MD CNMI GU TX LA MS AL GA HI FL PR Introduced legislation USVI Passed legislation 2016 American Institute of CPAs. All rights reserved.

43 GO BEYOND

44 Thank You!!! Optional photo Follow me on Contact me: Phone: For additional information on AICPA services or resources: Phone: CIMA services or resources: Phone: +44 (0)