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December 19, 2011
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Brought to you by the American Institute of CPAs

  Looking Ahead to the New Year 
  • An interview with AICPA President & CEO Barry Melancon, CPA
    Barry Melancon, CPA, president and CEO
    AICPA President and CEO Barry Melancon shares his thoughts about some of the major issues and trends that will affect CPAs in 2012.

    In the coming year, will we see more relevant and less complex U.S. GAAP for private companies, which would lead to more meaningful financial statements?

    I'm hopeful that we can see some modifications in the Financial Accounting Foundation's process that addresses both the Financial Accounting Standards Board having a veto over any effort to modify U.S. GAAP for private companies, and the urgency for change. Even still, changes are not going to occur overnight. We'll know the answer to this question very soon. Comments on the FAF proposal are due Jan. 14 and we expect a formal decision shortly thereafter.

    What new technological advances will have the biggest impact on the profession?

    Both cloud and mobile technologies will continue to drive major changes in how accounting firms operate, and in the financial reporting process. I think that in a lot of ways we are almost reverting back to the CPA firm environment that existed in the 1970s before the microcomputer, when it was cost-effective for small businesses to outsource certain tasks to firms rather than incur the internal costs to do them. Cloud computing has transformed us back to an environment where you can have the best of both worlds. Small businesses can get better pricing using the firm's leading technologies, so they don't have to be resident in the organization, as well as access the firm's analytical and trusted business advice.

    Overall, technology makes the human factor more important. The more information technology produces, and the more complex the world becomes, the higher the value proposition of the CPA who can analyze and decipher this information.

    How are the demographics of the profession changing, and what impact will that have in the next 12 months?

    I think we went through two years when, because of the economy, people postponed retirement. But to the extent that the economy recovers or stabilizes somewhat, we are going to see this bubble provide opportunity for young people coming up through the ranks.

    We've developed a task force to look into how we can deploy, for the benefit of both the profession and society, people who are at or near retirement who have skill sets and knowledge that can be useful. They can be deployed in a wide swath of activities, including civic and charitable organizations, school boards and local governments. There is scarcely a county in the U.S. that doesn't have significant budget issues, and CPAs are in a unique position to help.

    What other important challenges do you anticipate the profession will face in 2012?

    There will certainly be debates in Washington about regulatory reform, mainly involving the industries we serve, but some targeted at the profession. For the ones centered on us, some will be driven by activities and proposals outside the U.S., especially in the European Union, and by the PCAOB's focus on audit quality. There will also be a lot of discussion about tax reform, and the AICPA will be closely involved with that as we support a simpler, fairer system that is easier to implement and comply with.

    Clearly, 2012 will be a year in which the new CGMA becomes important for CPAs engaged in management accounting. We'll see other changes in our profession's global footprint, including the CPA exam being offered in more locations as part of positioning the U.S. CPA to be one of the key players globally.

    I also think there's going to be an increasing need for CPAs to be involved in enterprise risk discussions and decisions. It's not just about financial reporting risk, it's also about organizational risk, which includes areas like privacy and security. I don't know of any business that shouldn't be focusing on that, because when you think of the changes in the environment that technology is creating for everyone, there is the possibility of significant risks. LinkedInFacebookTwitterEmail this Story
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  Your Predictions 
  • Below are your responses to the reader polls in CPA Letter Daily's Special Report: Looking back at 2011, which was published Dec. 12.
  • What do you think is most likely to happen to the economy in 2012?
    Continue with an uneven recovery  61.80%
    European debt crisis escalates to other countries  21.01%
    A new recession or depression will occur  10.79%
    Increased defaults in student-loan industry  5.68%
    U.S. trade war with China  0.72%
  • Which event had the single greatest impact on you and your firm/company in 2011?
    Financial and business uncertainty  78.89%
    Financial regulatory reform  8.84%
    Implementation of part of health care reform  8.77%
    S&P downgrade of U.S. long-term debt  2.80%
    Economic sanctions on China  0.70%
  • What is the most important issue for the CPA profession next year?
    Staying on top of standards and new tax law  29.94%
    Future of private company financial reporting  22.82%
    Incorporation of IFRS for U.S. public companies  15.10%
    Maintaining or expanding the firm/company  12.04%
    FASB/IASB major convergence projects finalized  11.70%
    Continued implementation of financial regulatory reform  8.40%
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  Planning for the New Year 
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