New Horizons for the Accountant v2.0

November 21, 2013

Washington Society of CPAs

Not-for-Profit Conference

Donny C. Shimamoto, CPA.CITP, CGMA

New Horizons

for the Accountant

v2.0-CPA

Speaker Biography

Donny C. Shimamoto, CPA/CITP, CGMA

Donny is the founder and managing director of IntrapriseTechKnowlogies, a CPA consultancy focused on organizational development and advisory services for the middle market and nonprofits. Donny is a recognized national expert in IT management and international author/speaker on business intelligence initiatives. Donny helps many nonprofits by bridging accounting and IT to strengthen organizational governance and risk management, improve business processes through technology, and increase the effectiveness of decision through business intelligence and evidence-based management.

In addition to being a frequent speaker for the Nonprofit Technology Network (nten.org), Donny is a member of the AICPA Governing Council and is the chairman of its Information Management & Technology Assurance Executive Committee. Donny was recognized as one of the Top Thought Leaders in Public Accounting by CPA Practice Advisor in 2012 and 2013, received the 2009-2010 President’s Award from the Hawaii Society of CPAs, was named to CPA Technology Advisor’s 40 Under 40 list in 2007 & 2009, and was also a Hawaii Top High Tech Leader in 2004.

Donny works with a variety of nonprofits including foundations, social service agencies, educational institutions, and membership associations.

© 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

New Horizons for the Accountant

CPA Horizons 2025 Research Study

– Horizons 2025 Video

– Research Study Overview

– Core Purpose, Core Values, Core Competencies

– Key Insights for CPAs

Horizons Example: Sustainability

The Changing Role of the Accountant

Evolution of a Profession Video

© 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.3

Donny’s Disclaimer:

• The facts herein are from the AICPA’s research study.

• The interpretations are my own.

CPA Horizons 2025 Research Study


Adapted from a presentation from the CPA Horizons 2025 presentation by the AICPA, and based on information

and data from the CPA Horizons 2025 Report, AICPA, 2011

Are you ready for the future?

Tax preparation is not a core CPA service…

– But being a trusted advisor for financial planning is

Audits are becoming increasingly complex…

– More regulations + more electronic data + non-financial measures = greater risk for the auditor

– Increasingly requiring the use of specialists

Business reporting is moving beyond finance

– Sustainability, green house gasses, conflict minerals, slave labor, fare wage practices…the list goes on…

You must prepare now to be ready for the future!

Research Study Overview

Detailed Planning

Deliverable Development

4th Q – Jan. 2011

PLANNING

Volunteer Committees

Website

Interactive Survey

Open Forums

Feb. – July 2011

DATA GATHERING

Advisory Panel Synthesis

May – Aug 2011

DATA ANALYSIS

Advisory Panel

Board Review

Sept – Oct 2011

RESULTS

More Than 5,600 Participants

More than 75,000 comments

About 6,300 Cumulative CPA

Feedback Hours

7

Research Study Results

Core Purpose

– withstands the test of time

Core Values

– substantially unchanged

Core Competencies

– evolved and updated

Core Services

– Vision Project core services

removed—broad array of

new and existing services

possible

10 Key Insights

– emerged

8

Core Purpose

The CPA Core Purpose withstood the test of time

(originally established in 1998):

CPAs …

making sense of a changing

and complex world

Core Values

Core Values were substantially unchanged:

Integrity

Competence

Lifelong learning

Objectivity

Commitment to excellence

Relevance in global marketplace9

Core Competencies

Core Competencies evolved:

Communications skills

Leadership skills

Critical thinking and

problem-solving skills

Anticipating and meeting needs

Synthesizing intelligence to insight

Integration and collaboration

Core Competency removed:

Technologically adept

– No longer a differentiator

– Now woven into all that we do

10

Key Insights

Technology

Pre-Certification and

Lifelong Learning

Worldwide Profession

Market Permission

Trusted Attester

Pride in the Profession

Demographic Shifts

Trusted Advisor

Marketplace

Value Proposition

Understand and leverage relevant

technology in conjunction with CPA Core

Competencies to deliver superior services

Technology

“Changes will continue to make data

easier to access and compare. Electronic

communication has already become the

norm rather than the exception.”

41 year old CPA who works as a

Controller in Business & Industry

8 out of 10 respondents agreed that technology can replace or automate

products and services on the lower end of the value chain.

Evolve the educational framework to keep pace with

the changing dynamics of business, government and our

profession

“CPAs have to be both the

teacher and the learner in

the profession for a

lifetime.”

Pre-Certification and Lifelong Learning

”Always look to learn new ideas and new ways of doing things. Keep an open mind and be able to adapt and reinvent yourself as time goes on.”

A young CPA working in warehousing and logistics

68 percent of survey respondents agreed that

“accounting education should focus on compliance as well as

effective application of judgment.”

14


Position the CPA as a premier designation of the accounting/finance profession throughout the world

90% percent of CPAs agreed with the following:“It will be increasingly important for the accounting

profession to have awareness of international business

issues and trends in the future.”

The CPA designation provides a strong

foundation and should be recognized as a

premier accounting and finance

designation throughout the globe.

On January 31, 2012, the AICPA and CIMA launched the

Chartered Global Management Accountant (CGMA) designation

15

Market Permission

Leverage the strengths of the profession to expand market permissions

Services around data privacy and security, sustainability, and developing business strategies are just a few examples

“The changing business environment

will offer new areas of services that

CPAs can jump into since the CPA is

well-educated, well-trained, and

well-respected to take advantage of

those opportunities.”A CPA working at a not-for-profit

Trusted Attester

Preserve the role of the CPA as the trusted attester of financial and other information

One of the foundational roles for CPAs is the role of trusted attester. There is no other profession that is qualified to fulfill the role of auditor.

– “The profession must increase its independence and remain a viable source of financial truth in a world of increasing complexity and global commerce.”

CPAs are able to expand our market permissions in part because of our reputation for objectivity and integrity that has been built on our role as trusted attesters.

Encourage pride among CPAs in the

profession and in the value CPAs create

throughout society


Thousands indicated pride in the resilience of

their reputation and the rigorous preparation

and values that the CPA credential represents.

• The profession must be vigilant in

upholding this well-earned reputation –

a key competitive advantage

“I am most proud of the idea that our professionals have been able to occupy

diverse jobs at high levels from accounting to sales, from operations to HR,

from consulting to management.” – CPA at a small consulting firm

Continue to offer opportunities that enhance the appeal of

the profession and be proactive in addressing both U.S. and

global demographic shifts

Demographic Shifts

Convergence of Baby Boomers,

Generation X, Generation Y and

Millennials is transforming the workplace

Differences in the needs, wants and work

styles of these generations create

numerous challenges and also

opportunities

Demographic Shifts

There is an increasing percentage of minorities in the profession

– But the diversity in the profession is still not representative of the general population

And the globalizing nature of business which will be reflected in the changing demographics of clients and business owners

– Who want to be serviced by CPAs similar to themselves: speaks their native language and understands their cultural values

3/4 of respondents agreed with the statement

– “The profession must work to reflect a modern workforce and generational differences in values and work styles”.

“CPAs symbolize a trusted business advisor…..we

will be called on even more often to be the business

consultant for our clients.” –CPA in their 30’s

Promote the CPA as the trusted advisor who, in addition to

providing core CPA services, develops solutions to complex

problems by integrating knowledge, expertise and

resources from multiple disciplines

Trusted Advisor

CPAs increasingly will be called upon to help solve

complex and challenging business problems.

• Serving as an integrator for multiple professional

disciplines and subject matter experts

• Delivering an integrated and multi-faceted

business solutionIncreasing demand for CPA

specialists both within the profession

and crossing into other disciplines

Address continual changes in

the marketplace, economy,

businesses and regulations

Marketplace

CPAs must not only demonstrate competence

and commitment to excellence in their

particular area of practice, but also

demonstrate knowledge of business and the

evolving marketplace.

• CPAs agreed that the pace of change is

accelerating

• Regulations and standards are evolving

and increasing in complexity

• The increasingly globalized world

introduces an international component to

the rate of change.

• Technology continues to transform the

business and social environment.

22

Value Proposition

Increase the visibility of the profession’s value proposition by demonstrating the profession’s core

values in multiple areas of business and society

• “Integrity, independence, and our focus on the blend of

duty to our client and to the public is unique to our

profession. It cannot be compromised for ANYTHING.”

• The integrity, objectivity and commitment to excellence

demonstrated by CPAs lead the public to trust CPAs.

• CPAs are dedicated to lifelong learning, competence and

relevance in the global marketplace.

• The profession will continue to evolve and innovate to

meet the changing needs of business and society

…how will YOU?

Key Insights

Technology

Pre-Certification and

Lifelong Learning


Market Permission

Trusted Attester


Demographic Shifts

Trusted Advisor

Marketplace

Value Proposition

Adapted from a presentation to the AICPA Assurance Services Executive Committee by:

Bob Bunting, CPA

Chair, Sustainability Services Group

Moss Adams LLP

Horizons Example:An opportunity for the CPA

profession with Sustainability


Sustainability: A Sustainable Enterprise

Sustainable Enterprise

Strategy

Planet People Profits

GHG

Energy

Water

Waste

Community

Fair Wage

Slave Labor

Diversity

Financial

Supply Chain

Codes of Conduct

CPA Services?

Source: Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP

Sustainability: Why Companies Care

Value set of company and/or its leaders

Efficiency and cost savings

Compliance with legal and regulatory requirements

Achieving competitive advantage and long-term profitability

Managing risk to the reputation of your company/brand(s)

Customer demand for green/sustainable products/services

Employee attraction and retention

Government grants or other incentives

Public scrutiny over labor, sourcing, or other business practices

Supply chain vendor requirements

Source: December 2010 study by AICPA/CIMA/CICA. “Evolution of Corporate Sustainability Practices” via Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP

Sustainability: Potential Issues

A Supply Chain Reporting Problem?

Finance Department frequently does not even know the company is “reporting”

HR or Sales is the reporting department.

No formal data collection system.

No controls over accuracy or puffery (valuation)

Audits are growing because misrepresentation is common.

Misreporting is causing “probation”, expensive corrective actions and even loss of customer relationships.

Source: Bob Bunting, CPA, Chair, Sustainability Services Group, Moss Adams LLP

Sustainability: Donny’s Interpretation

Sustainability…

Is an emerging opportunity for the profession

– For business reporting…on non-financial metrics & measures

– For compliance reporting…and vendor certification not related to internal control over financial reporting

– For service reporting…the next generation of SOC reports

Is an area where we must defend our role as trusted attester

– AICPA proposed UAA change to definition of assurance

Will be part of the future of our profession…

…and helps CPAs to play a critical role in the future of our world

• Spectrum of Accountants’ Roles

• Accounting Organization Evolution

• Accountants’ Role in Achieving Impact

The Changing Role of the Accountant

29

Spectrum of Accountants’ Roles

30

Source: CIMA, 2012

Stage Transaction Controlling the Planning & Integrated Functional

Management Business Analysis Excellence

Role Bean Counters Process Managers Business Partners Value Managers

Key Capabilities

Challenge Number of Consistent process Talent and insight Leadership and

transactions excellence into valuable drivers performance

management

[Accounting] Organization Evolution

Expectations have increased for

[Accounting] organizations

• Dominated by

reporting and

compliance

functions

• Focused on process

and risk minimization

• Focused on decision

support

• Provides sound

financial analysis to

management for

making financial and

operating decisions

• Integral part of management

team to support value/wealth

creation

• Identifies opportunities and

provides critical information

and analysis to make superior

operating and strategic

decisions

• Financial

accounting

• Management reporting

• Tax

• Audit

• Treasury

• Performance

management

• Analysis

• Superior decision support to

invest wisely

• Business Development

• Enterprise risk management

Source: McKinsey & Company, via CIMA, 2012

1 2 3 4

Accountants’ Role in Achieving Impact

Accountants often stop at the Analysis stage (which is where technology will also take you).

We need to go all the way through to IMPACT!

32

© 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

How are YOU achieving Impact?

Consider all the sessions that you attended during the conference

– Choose 3-4 things to do when you go back that will have a current benefit for yourself or your department

Look at the evolution of your department’s role in the organization

– What do you need to increase the dept’s impact?

Take some time for yourself

– Go back to the CPA Horizons 2025 key findings

– What do you need to do to ensure that YOU are ready for the demands of the future?


Donny C. Shimamoto, CPA.CITP, CGMA

INTRAPRISETECHKNOWLOGIES LLC

email: [email protected]

voice: (808) 735-8324

twitter:@donnyitk

Blog: www.donnyitk.com

Thank you for your attention and participation!

Any Questions?

See also:

• CPA Horizons 2025 Report:

http://www.aicpa.org/Research/CPAHorizons2025/Pages/CPAHorizonsReport.aspx, AICPA, 2011

http://www.aicpa.org/Research/CPAHorizons2025/Pages/CPAHorizonsReport.aspx