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December 11, 2012
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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, CGMA
      
    Source: AICPA
    AICPA President and CEO Barry Melancon, CPA, CGMA, shares his thoughts about some of the major issues and trends that will affect CPAs in 2013. Read his entire interview on AICPA Insights®.

    In the coming year, we will see the first efforts of the Private Company Council. What changes can CPAs and the companies they serve expect to see?
    The Financial Accounting Foundation's Private Company Council was created to address issues affecting companies that need GAAP-based financial statements. The PCC just had its first meeting last week and will be weighing in on existing standards and ones in development. Private company accounting stakeholders are expecting prompt action by the PCC in modifying GAAP to bring more relevance and simplification to financial reporting.

    The AICPA is developing the Financial Reporting Framework for Small- and Medium-Sized Entities, which is expected to be published in the spring. How will this impact CPAs?
    CPAs should be able to begin putting the FRF for SMEs to work soon after tax season is over, depending on the comments we receive on the proposal that's out until Jan. 30. In terms of how it will impact CPAs, private companies currently have a range of options, from OCBOA reporting to GAAP exceptions, and this framework will provide an additional choice. The FRF for SMEs will be more robust than tax- or cash-basis OCBOA and will be a principles-based framework that can be consistently applied. CPAs should be able to use the FRF for SMEs to prepare financial statements in 2013 and will be able to compile, review or audit those financial statements. We don't expect to see frequent revisions to the framework, which will be a real benefit for smaller CPA firm practitioners. To make the framework easy to use, as soon as the final FRF for SMEs is released we will provide members with implementation guidance and educational materials they can use with bankers or clients' other financial statement users.

    What do you expect to come to fruition in 2013 in terms of regulation?
    We expect the Public Company Accounting Oversight Board to complete its review of mandatory audit firm rotation in 2013, and that we'll see further evolution on implementation issues associated with the audit reporting model. Elsewhere, we're preparing to deal with the uncertainty surrounding implementation issues relating to enactment of many provisions of the Dodd-Frank Act and health care reform. Fiscal issues for the federal government will remain a critical concern in 2013. The profession highlighted the country's precarious financial situation in our What's at Stake video featuring then-Chairman Gregory Anton, and our board of directors recently passed a resolution supporting nonpartisan efforts by Campaign to Fix the Debt and the Comeback America Initiative to promote fiscal responsibility and sustainability.

    As baby boomers move into retirement, how will the AICPA keep attracting both the quantity and quality of CPAs needed to replace them?
    The good news is that since the 1990s, we have been actively working to attract the top-quality young people we will need to balance out the number of retiring baby boomers. For several years, record numbers of people have been majoring in accounting, entering the profession and taking the CPA Exam. Our unique and successful programs continue to attract future accountants and develop young CPAs, such as the Leadership Academy, Start Here. Go Places., This Way to CPA and tailored conferences. Younger CPAs are serving on AICPA and state CPA society committees as well. Overall, when you consider job demand, opportunities and professionalism, this profession is very attractive to the next generation. It's hard work, but with the coordinated efforts of members, state CPA societies, the AICPA and, of course, universities and their faculties, we are achieving success and will continue to do so.

    What does the CPA profession of the future look like?
    We are working to ensure that the profession of the future will be more diverse and international. For firms, I think the burgeoning success of the largest 500 CPA firms will leverage new opportunities, new markets and new services. Among smaller firms, we expect them to address the challenges of an increasingly complex environment by embracing specialization, niche services and partnering arrangements with larger firms. As always, we'll be there to provide the information and resources they need to succeed in their efforts.

    What other important challenges will the profession face in 2013 and what opportunities do you see in them?
    The 2008 financial crisis and its aftermath have underscored our global economic interdependency and how problems on one continent can affect businesses and business confidence around the world. In this fast-moving environment, our challenge will be to embrace new roles rapidly. However, I think the profession is involved in many areas that can contribute to greater business confidence and underscore our role as independent auditors protecting the public and, where nonattest services are involved, as trusted business advisors to clients. Firms might consider expanding their assurance services, such as Service Organization Control reporting, sustainability reporting and IT consulting, including cyber security and Big Data. The Chartered Global Management Accountant® designation provides a phenomenal opportunity for CPAs in organizations to shape the future of the finance function. Regarding advocacy efforts, the AICPA will continue to serve as a resource and voice on behalf of members and the public on legislative and regulatory matters, such as tax reform. LinkedInFacebookTwitterEmail this Story

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  Your Predictions 
  • What do you think is most likely to happen to the U.S. economy in 2013?
    No significant changes, more of the same  29.29%
    Another contested debate over raising debt ceiling  25.17%
    U.S. will fall off "fiscal cliff"  17.79%
    Double dip recession  14.76%
    A wave of new regulations  12.99%
  • What is the most important issue for the CPA profession next year?
    Tax reform/simplification  49.17%
    Changes in GAAP for private companies  24.34%
    Decision on incorporation of IFRS for U.S. public companies  13.75%
    FASB/IASB major convergence projects finalized  8.08%
    New financial reporting framework for owner-managed for-profit entities  4.65%
  • Which of these international events do you think will happen in 2013?
    No significant changes, more of the same  44.86%
    Global economic growth will slow, but only temporarily  24.56%
    Greece will leave the EU  12.72%
    Economist Nouriel Roubini's "Global Perfect Storm"  10.28%
    Widespread financial transaction tax  7.58%
  Planning for the New Year 
  SmartQuote 
Life is unpredictable. If life were predictable, it would cease to be life, and be without flavor."
--Eleanor Roosevelt,
34th first lady of the U.S.


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The American Institute of Certified Public Accountants is the world’s largest association representing the accounting profession, with nearly 386,000 members in 128 countries and a 125 year heritage of serving the public interest. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination and offers specialty credentials for CPAs who concentrate on personal financial planning; fraud and forensics; business valuation; and information technology. Through a joint venture with the Chartered Institute of Management Accountants, it has established the Chartered Global Management Accountant designation to elevate management accounting globally.

 
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