39 posts categorized "Barry Melancon, CPA, CGMA" Feed

Unwavering in disruption: Reflections on an extraordinary year

In this interview, Barry Melancon, CPA, CGMA, President and CEO of the American Institute of CPAs (AICPA) and CEO of the Association of International Certified Professional Accountants (the Association), reflects on an extraordinary year and the steps we must take to prepare for 2021.

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Climate risk and business resilience: How the profession can help

GettyImages-649659849At the beginning of 2020, before the COVID-19 public health crisis severely impacted communities across the globe, the World Economic Forum sounded the alarm about climate risk in its 2020 Global Risks Report. For the first time, the top five long-term risks were all environmental: extreme weather, climate action failure, natural disaster, biodiversity loss and human-made natural disasters. Considering that in 2019 weather disasters cost an estimated U.S.$232 billion worldwide, it’s not surprising that the environment took center stage in their risk assessment. This year, risk has become reality for many. Even as people and economies across the globe struggle with the challenges of the pandemic, we are witnessing the dire consequences of environmental events as fires and floods threaten the economic recovery of impacted communities.

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Small businesses should focus on PPP’s intent, keep using funds

Shutterstock_1717147000When the Department of the Treasury and Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) many businesses saw an opportunity to stay open and their employees paid during this very difficult time.

There is no question that small businesses are the heart of our nation’s economy, and without them our road to recovery will be longer and significantly more difficult. I am inspired every day by the stories I hear about our profession’s tireless efforts to support small businesses everywhere. The AICPA is committed to our economic recovery, and I would like to provide some perspective to advance the understanding of the PPP.

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Reimagining the profession for a vibrant future

Barry Melancon Headshot (1)Barry Melancon, CPA, CGMA, President and CEO of the American Institute of CPAs (AICPA) and CEO of the Association of International Certified Professional Accountants (the Association), reflects on the successes of 2019 and the opportunities ahead.

This year, you’ve talked with members about how we need to reimagine the profession. Can you explain more what you mean by “reimagine”?

In today’s marketplace, virtually all companies are reimagining who they are, what they offer and how they deliver services and products. To meet the changing needs of clients and employers, we, as a profession, are also reimagining what it means to protect the public interest and serve as trusted advisers. We are providing clients and companies with new services and embracing new technologies to enhance the quality, efficiency and value of what we do. Together, we’re creating a future that may be dramatically different from the past but will remain a beacon of trust and opportunity for all accounting and finance professionals and everyone we serve.

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D&I initiatives: A strategic imperative

GettyImages-669854210Ensuring diversity & inclusion remains high on an organization’s agenda is key to long-term success and growth. Because this topic is so important, I have made raising awareness of this initiative my personal goal, and I‘m having conversations like these with key players throughout the accounting and finance profession on tactics they’ve implemented.

Staff is the greatest investment in your firm, and often recruiting, growing and maintaining the best and the brightest talent are critical priorities for firms. It’s also exactly what Michele Meyer-Shipp finds so vital about her role as chief diversity officer at KPMG. No matter how much time and energy firms pour into their recruiting and retention efforts, they will not have access to the full talent pool without committed D&I initiatives.

During a recent LinkedIn Live, I sat down with Michele to discuss observations and advice for firms seeking to strengthen their D&I efforts. Here are the key takeaways from that conversation.

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Reflections on 2018: A year of change and opportunity

Barry MelanconBarry Melancon, CPA, CGMA, President and CEO of the American Institute of CPAs (AICPA) and CEO of the Association of International Certified Professional Accountants (the Association), reflects on the success of the past year and the opportunities ahead in 2019.

Last year, you used one word to sum up 2017: change. How would you sum up 2018?

The change and disruption we saw in 2017 continued in full force into 2018 – it just became faster and more complex. The unprecedented pace of innovation and interconnection of new technologies, unstable business and political environments and changing workforce demographics are transforming the accounting profession and the role we play as trusted advisors to the individuals, businesses and communities we serve.

And as bewildering as change can sometimes seem, I think it’s actually promising for the future. These extraordinary times present nearly limitless opportunities for our profession, allowing us to dramatically reimagine the work that we do to become even stronger, more trusted and more vibrant. But to realize that opportunity, we have to be willing to challenge convention - to go beyond the way we’ve done things, beyond expectations, beyond comfort zones. That’s been a central theme of our work in 2018, as we’ve helped our members prepare for and embrace the opportunities on the horizon.

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Tax Reform and Fairness – A Necessary Balance


We are fast approaching what many believe is crunch time for tax reform. There is a renewed push by the White House and Congress to enact tax reform by year’s end. President Trump is urging Congress to “move fast,” while the House and Senate work to identify a process to make it possible.

As the debate intensifies, policy goals will be fleshed out, trial balloons will be floated in the media, and key lawmakers will get down to business in assembling a package of reforms to the tax code that can pass muster in both chambers.

A mainstay of the tax reform discussions is a call for cuts in the corporate tax rate. Since the vast majority of U.S. businesses operate as pass-through businesses, tax reform plans have also applied the benefits of lower tax rates to certain pass-throughs. These pass-throughs, including S corporations and partnerships, don’t pay taxes themselves, but pass their earnings through to their owners who pay taxes at their individual rates.

Some in Washington have suggested that professional services pass-throughs – such as accounting firms – should not be treated like other businesses because of the mistaken belief they don’t help drive the economy. We know that’s not the case.

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Forging Ahead in Complex Times

Barry Melancon_headshotIn the following interview, AICPA President and CEO Barry Melancon, CPA, CGMA, reflects on the profession’s achievements in 2016, and looks forward to the opportunities 2017 will bring.

1) What do you see as the profession’s most significant accomplishments in 2016?

One of the things that has made our profession so strong and vibrant is our willingness to embrace change and adapt to meet evolving needs of the clients and businesses we serve. Today, change is happening at unprecedented speed and fundamentally reshaping the environment where we operate. That means we have to move faster, look farther down the road and over new horizons to anticipate and get ahead of what’s coming next.

We have met that challenge head on, and I would say that is our most important achievement this year. There are numerous examples – the effort to seize new technologies to evolve audit for the future. The work in cybersecurity to create a consistent approach to examination and report on an organization’s safeguards. The new version of the Uniform CPA Exam, which goes live in April 2017 and tests higher order cognitive skills. The launch of RIVIO clearinghouse, which transforms how private company information is exchanged. Our thought leadership and work with employers through the CGMA program to elevate quality in management accounting. And the new international association that members of the AICPA and The Chartered Institute of Management Accountants approved last spring will provide a broader and more powerful platform to advance public and management accounting around the world.

All of this work is critical to our ongoing relevance and our strong reputation as a beacon of insight and trust in a volatile, complex world. It keeps us moving along a path of progress.

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AICPA President & CEO Highlights Profession’s Successes and Future

BarryAICPA President and CEO Barry Melancon, CPA, CGMA, reflects on the accounting profession’s successes in 2015 and highlights how the profession will continue to adapt to today’s changing environment. Citing initiatives to drive quality; support CPAs’ services in accounting, auditing and tax; and boost the CPA pipeline, Melancon sees a strong profession shaping its opportunities for future success.

1) What were the profession’s most significant accomplishments this year?

The profession enjoyed another tremendous year of achievements on many important fronts. I think the growth and retention of our membership is the best evidence of that, and now we are the professional home for more than 412,000 members. Our membership is broad in scope, with members working in many different types of environments. Whether in public accounting, management accounting, government, education or another area, they all see the value in our efforts to support the CPA reputation and market position, help firms and organizations drive success and advance the profession for the future.

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Technology and International Opportunities Key to Future, Say AICPA Members

One of my greatest joys is talking to members and sharing with them how the profession is evolving. Whether at state CPA societies, conferences or other events, members and I often engage in dialogue about trends and the profession’s path to maintain relevance in an ever-changing marketplace.  

Over the last few months, as part of my presentation, I’ve asked firm leaders, state CPA societies and members of our governing Council a series of poll questions, intended to gauge what members are seeing and experiencing in the marketplace. Are CPAs and the profession’s stakeholders affected by the convergence of macro trends? Do they capitalize on opportunities enabled by technology? What are they doing to attract and retain a talented and diverse workforce? Is their business crossing borders more than ever before?

The answer in each case was a resounding ‘yes.’ Below is a summary of some of the questions and analysis of what the results mean for our profession.

“By 2020, where do you think the profession needs to be on the technology adoption curve?” and… “Where are you on the curve?”

The technology adoption curve was made popular in the 1990s by Dr. Geoffrey Moore and was later referenced again in a whitepaper called “Accounting Services: Harness the Power of the Cloud,” which was based on research conducted by Dr. Moore. Barry polls

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The Importance of Financial Literacy Month

Fin Lit Month 2015 2In a few short months, millions of new college graduates will enter the job market with an average of $30,000 in student loans. Student loan default rates are rising as recent graduates struggle to pay down their debt. The reason? New graduates will have degrees that have prepared them for careers or graduate school, but most will not have the knowledge to make sound financial decisions. That is why financial literacy is so important.

April is Financial Literacy Month and this year the AICPA marks the occasion with a renewed sense of purpose. With CPAs as our champions, the AICPA has advanced the financial literacy cause for over a decade, and we will continue to provide leadership in improving the financial understanding of future generations. It is critical not only for their individual success, but for the financial success of our country. For more than 10 years, the AICPA, its members and state CPA societies have been leaders in financial literacy by providing free programs, tools and resources for consumers, educators and more.  The AICPA’s flagship 360 Degrees of Financial Literacy program is the national volunteer effort of CPAs to help all Americans understand their personal finances through every life stage. The program combines grassroots advocacy with free public resources and tools for CPAs to educate Americans of all ages. In addition, Feed the Pig, the AICPA’s award-winning public service campaign with the Ad Council, provides tools and resources aimed specifically at Americans aged 25-34, an age group that is making major life decisions, often with little financial experience or guidance.

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How the New Congress Might Affect the CPA Profession

Capitol2Meet the new Congress. Same as the old Congress? That remains to be seen. The 114th Congress opened on January 6 with 74 new members of the House and Senate, 104 women – more than ever before, and the largest House Republican majority since 1929. Those are the numbers, but let’s look at what they mean for the CPA profession.

Our profession’s core services are greatly impacted by the legislators and regulators who set policy and standards. The November election brought many changes and several new faces to Washington. One thing that did not change, however, was a strong CPA presence. I was very pleased that nine CPAs were reelected to the House. I know that these nine individuals, as well as other CPAs, whether as elected officials or active constituents, will continue to provide crucial experience and guidance. In light of the new representatives, staff members and committee chairs in the Congress, we have been reviewing our advocacy and education efforts on initiatives affecting the profession and the public.

We expect Congress to focus on certain issues in 2015. Here is a brief summary of the more significant ones.

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AICPA President and CEO Looks Ahead to 2015

In an interview with CPA Letter Daily, AICPA President and CEO Barry Melancon, CPA, CGMA, reflects on the accounting profession’s successes in 2014 and discusses the opportunities and challenges of 2015. Below is an excerpt from the interview; for the full interview, watch the accompanying video.




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Audit Quality Drives Continued Audit Relevance

Business-peopleAuditing is at the very core of our profession; only CPAs are authorized by law to conduct financial statement audits. In today’s business environment, entities are increasingly interdependent and information and accountability have assumed a larger role in society. As a result, the CPA’s independent audit of an entity's financial statements is a vital service to investors, lenders, sureties, businesses, regulators and other participants in the marketplace. Mergers, acquisitions, the capital markets and credit sources depend not only on the information that management provides in financial statements, but also on the CPA’s audit opinion as to whether the financial statements are free of material misstatements, whether caused by error or fraud.

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Q&A with Barry Melancon, CPA, CGMA, AICPA President & CEO

Q&AWhat opportunities and challenges does the head of the AICPA foresee for the CPA profession in 2014? What were the profession’s significant achievements in 2013? Barry C. Melancon, CPA, CGMA, AICPA president and CEO, answers these questions and offers insights on how the profession will continue to adapt to today’s changing environment, addressing clients’ and employer’s needs. Citing successes with regulation, legislation, recruitment and positioning the profession for the future, Barry strongly believes CPAs will build on a solid foundation.

1. What were the AICPA’s legislative or regulatory priorities this past year and what’s in store for 2014?

We continued to have success in the advocacy area in 2013. In one significant victory for the profession and the public, the Securities and Exchange Commission exempted CPAs from registration as municipal advisers when they are providing certain accounting or attest services. We urged the SEC to exempt CPAs from the definition of municipal advisers after it had indicated that anyone performing accounting services for governments would be defined as a “municipal adviser.” It was critical that our voices be heard on this issue because such a broad definition would have made it more difficult for CPAs to serve governments and potential investors without taking on unnecessary and duplicative costs or compliance burdens.

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Will Your Clients or Customers Pay in Bitcoin?

Alternative Currency Could Change Financial Landscape

In celebration of the AICPA’s 125 anniversary last year, we produced a powerful retrospective called Evolution of a Profession. The six-minute video traced the accounting profession’s changes from its origins 8,000 years ago through the present day.

Within that evolution were the notions of currency and exchange. Over time, society has changed the various ways goods and services are purchased. Hard as it may be to believe, at one point the primary currency was clams. The same is true of livestock, land and spices. All eventually gave way to something else as our forms of money have been “refined” over and over again.

Bitcoin Timeline

  • Jan. 2009 - First Bitcoin transaction
  • Jul. 2013 - Thailand officials declare the currency illegal in all its aspects
  • Aug. 2013 - U.S. federal judge rules Bitcoin is a currency
  • Oct. 2013 - $28 million in Bitcoins seized during raid on an online drug marketplace
  • Nov. 2013 - Cyprus’ largest university says it will accept Bitcoin as payment for tuition and school fees
  • Dec. 2013 - China bans the country’s financial institutions from handling Bitcoin transactions

Four years ago, a new alternative currency emerged and the accounting profession needs to watch how it develops going forward. It’s a virtual currency known as Bitcoin. Dozens of virtual currencies exist but Bitcoin has garnered the most attention. The news media has been covering the currency in earnest since the spring, including its growing acceptance among businesses and even a foreign university.

What does that mean for our profession? First, if Bitcoin were to become a mainstream currency option, firms would have to consider clients using Bitcoin as a form of payment for services, and a business might want to accept Bitcoins for purchases of its products.  

More broadly, how might financial statement preparation and assurance on those statements need to adapt? Bitcoin is not only a currency, it is also a commodity – one with a finite supply (currently 12 million units and continually increasing to a maximum of 21 million units).  Therefore, depending on the demand for it at any given time, its value could fluctuate wildly – even within the same day. In 2013 alone, a single Bitcoin unit was valued at less than $20 and hit a high of more than $1,000 in late November. So, how would a CPA value that money, and is it even an asset? And since Bitcoin largely operates through online exchanges, it functions outside of the traditional banking system, where balances and transactions can easily be confirmed.  In terms of taxes, the Internal Revenue Service has said Bitcoin transactions could fall under several categories: property, financial instrument, foreign currency or barter.

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FRF for SMEs Framework Gaining Traction in Marketplace

AICPA Enhances Tools to Assist CPAs with Implementation

AICPA-FRF-for-SMEsPrivate company financial reporting has evolved more in the past year or so than during the previous four decades. In June the AICPA issued an accounting framework for smaller, owner-managed businesses that do not need financial statements based on U.S. generally accepted accounting principles, and the Financial Accounting Foundation’s Private Company Council has proposed alternatives within GAAP for private entities. Both the framework and the PCC have the same goal of improving financial reporting for private companies and both are critically important, as private companies represent the vast majority of the businesses comprising America’s non-governmental economy.

Many owner-managed companies are small or micro in size. They often are called Main Street businesses, mom-and-pop shops or suburbia’s business districts. The AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities was designed to serve this segment. The FRF for SMEs framework presents the small business community with an opportunity for robust and relevant financial statements that are simplified and cost efficient when U.S. GAAP is not required as a basis of accounting.

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CPAs Bring Expertise, Bipartisanship to Congress

Businesses and individuals trust CPAs for their objectivity, integrity and independence. Those characteristics are what the public also values in elected officials, so we are fortunate that a growing number of CPAs are involved in state, local and federal government.

This year, two more CPAs were elected to Congress: Rep. Tom Rice (R-SC) and Rep. Patrick Murphy (D-FL.). That makes a total of 10 CPAs in Congress, plus an additional two accountants in the Senate.

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CPAs Say Reducing Nation’s Deficits Is Job No. 1

Money-bandaidWhen a CPA alerts an individual or an organization to a problem, it’s usually wise to heed the financial advice. CPAs figure out the meaning of numbers every day and are accustomed to giving guidance on complex financial situations.

Once again, CPAs are informing America that the federal budget numbers tell an alarming story. In an online survey conducted by the AICPA in December, three-quarters of CPAs said immediate action is needed to quell spiraling federal budget deficits. More than half identified deficit reduction as the top economic priority for the United States, ahead of creating jobs (23 percent), tax reform (18 percent) and ensuring the long-term stability of Social Security and Medicare (5 percent).

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CPAs to Federal Government: Reduce the Debt

Money-on-fireMost Americans greeted the news that the “fiscal cliff” had been averted with a mix of relief that a worst case scenario had been averted and frustration with the seemingly endless process. What has been lost on some casual observers is that, as a result of the deal, the U.S. deficit will actually increase an additional $4 trillion dollars in the next decade, according to the Centralized Budget Office.

Earlier this week, the AICPA released the results of a survey* asking members questions regarding the economic sustainability of the United States. The survey found that the vast majority are calling on the federal government to demonstrate more fiscal responsibility. In fact, seven in ten U.S. CPAs are concerned that both individuals and families will be severely affected if policy makers are unable to reduce the federal debt.

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An Interview with AICPA President and CEO on 2013


The following is an interview with AICPA President and CEO Barry Melancon, CPA, CGMA. He was asked to share his thoughts about some of the major issues and trends that will affect CPAs in 2013.  


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 only recently began meeting, 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.

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2012 Presidential Election and the CPA Profession

Election 2012The 2012 presidential election is just around the corner. While it’s not clear who will win the White House, there are many reasons you should be paying close attention. And we’re seeing indications that you’re doing just that. In a CPA Letter Daily poll on Oct. 16, 65% of more than 3,200 respondents said they would be watching that night’s presidential debate.

There is no shortage of issues affecting CPAs and our clients or employers. Highlighted below are some of the important financial issues facing our country:

  • “Fiscal cliff.” The uncertainty surrounding potential tax increases and spending cuts, as well as related issues, has brought Washington to a stand-still. Uncertainties include extension of the Bush-era tax cuts, a fix for the Alternative Minimum Tax, tax increases attached to the Patient Protection and Affordable Care Act, and a package of mandatory federal spending cuts totaling $1.2 trillion over 10 years.

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Day 2 of AICPA Governing Council Fall Meeting 2012

The second day of the fall meeting of the AICPA governing Council happened yesterday and featured a professional issues update from AICPA President and CEO Barry Melancon, CPA, CGMA. Follow the "read more" link for a look at the day through the eyes of social media. (If you're viewing this post through our email subscription, please click through to read the entire story.)

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In the News: CGMAs Can Bridge the Gap in Human Capital Management

CGMA logoDavid McCann at CFO.com spoke with Arleen Thomas, CPA, CGMA, AICPA SVP of management accounting, about a recent talent management survey for Chartered Global Management Accountants conducted jointly between the AICPA and the Chartered Institute of Management Accountants by the Economist Intelligence Unit. The report found that 43 percent of the CEOs, CFOs and human resource directors surveyed said their companies have missed financial goals in the past 18 months because of inadequacies in human capital management. Almost the same number, 40 percent, indicated that such shortcomings—which could include insufficient systems, processes or management information—have hindered their ability to innovate. “We believe that talent and the human dimension drive business growth and companies haven’t focused enough on that,” said Thomas. “Too many companies look at talent in terms of what they have to do to comply with labor laws and regulations, rather than understanding that it can be a competitive differential.”

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“Big Data” Presents Big Opportunities for Firms and CFOs

Big data 1950s computerIt is difficult to ignore the tremendous growth in information technology that has been occurring over the last few years and how it is transforming business. Technology is enabling data to be captured at a volume and prevalence never imagined. Among social media sites, websites, smartphones, customer profiles and purchase information, it seems that just about every part of our business or personal lives provides information about ourselves that someone is collecting. But where does it all go? What happens to it? How can you turn this data into something meaningful, and more importantly, profitable?  

Information like this is called “Big Data” and Big Data has been a high-profile topic in business media and even the mainstream press. It refers to data sets that grow so large that they are nearly impossible to work with using traditional database management tools, but yet offer a powerful tool when married with strategic use. Big Data has been called “The next frontier for innovation, competition and productivity.”

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Fostering a More Ethical Business Culture

CGMA logoA few weeks ago, I shared with you my (reasonable and totally understandable) enjoyment of data points and survey results in all their shapes and sizes. I have also always been a huge fan of The Ethicist column in the New York Times Magazine, and put serving as ‘The Ethicist’ near the top of my dream jobs list. Needless to say, the recent results of the global business ethics survey from the AICPA and the Chartered Institute of Management Accountants were right in my wheelhouse.

It’s encouraging to see that four out of five businesses worldwide report that they have committed to ethical performance. But according to Managing Responsible Business, a global survey of almost 2,000 CGMAs, the rhetoric does not always match the reality. While 80 percent of organizations provide a code of ethics to employees, only 36 percent collect ethics information such as the number of employees attending ethics training and actions taken on hotline reports. The report suggests that companies need better processes to really operationalize their ethics programs.

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Why the AICPA Supports FAF’s Creation of Private Company Council

Solve_maze_puzzle_optMany of you have seen news reports and AICPA communications about the Financial Accounting Foundation’s recent decision to create a Private Company Council. Given the serious concerns the AICPA had with FAF’s original proposal released in October 2011, I am providing additional detail as to the structural and process improvements FAF made with the new Private Company Council that enable us to support it.  

The AICPA’s issue with FAF’s proposal centered on the extent of the Financial Accounting Standards Board’s influence on the planned private company body and ratification of its decisions. We and more than 7,000 stakeholders urged FAF to strengthen the original council’s independence and they responded. The final plan is more about collaboration between the PCC and the Financial Accounting Standards Board than the approach outlined in the exposure draft. Now, FASB will be asked to endorse the PCC’s recommendations rather than ratify them and generally will have a limited time frame of 60 days to do so. I would describe the process as one of negative clearance, with a high threshold for a FASB veto. And if FASB does veto the PCC’s decision, the FASB chairman has to explain why in writing – and provide suggestions for obtaining approval – and it will be made public for stakeholders to evaluate.

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AICPA Tells Congress to Keep Oversight of Investment Advisers with SEC

As the AICPA gears up for our 125th Anniversary next week, here’s a wrap up of a few interesting accounting topics recently making the news. You can follow @AICPANews on Twitter to stay on top of all the latest official AICPA news as well as articles impacting the profession.

Barry MelanconCFO.com wrote that the AICPA raised concerns over the Investment Adviser Oversight Act of 2012 and urged Congress to keep oversight of investment advisers with the SEC. Introduced in the House of Representatives on April 25, the bill would transfer oversight of investment advisers from the SEC to a self-regulatory organization."Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser," Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a statement. The AICPA's stance is that the system proposed under the bill would cost advisers much more in fees than current SEC oversight would.

On January 19, 2011, the SEC issued a staff report that found the current SEC-registered investment-adviser examination program faces hefty capacity and funding challenges. Three options were proposed to offset these challenges.  One would be to impose "user fees" on SEC-registered investment advisers to fund oversight. A second would authorize one or more SROs to examine investment advisers, with oversight from the SEC. A third choice would be to authorize the Financial Industry Regulatory Authority, a leading broker-dealer SRO, to examine dual registrants for compliance with the Investment Advisers Act of 1940. All three options require congressional action. "We believe that the SEC's core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public's best interest." Melancon said, "Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public."

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In the News: Accounting named one of the Happiest Jobs in America

We’ve got a lot of big things on the horizon at the AICPA: April Financial Literacy Month (we’ll be releasing survey results on the financial state of Americans) and in mid-May, we’ll be celebrating the 125th Anniversary of the AICPA at our Spring Council meeting in Washington D.C.

Barry Melancon, CPA, Testifying in front of CongressWhich is not to say that we’ve haven’t been busy lately! Just in the last week we released the results of our CGMA Global Economic Forecast and Barry Melancon, CPA, CGMA, president and CEO of the AICPA, testified before the House Capital Markets Subcommittee Accounting and Auditing Oversight Hearing. Melancon told members of the subcommittee that AICPA supports a strong, balanced and independent regulatory structure that protects investors but does not restrict the flow of capital.

During busy season and year-round, you can keep abreast of all the most important AICPA news by subscribing to the Media Relations RSS feed or following @AICPANews on Twitter. On to news of note from the last few days.

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Proposed SOX 404(b) Changes Could Add to Investors’ Risks

House Financial Services committee members sit...Image via Wikipedia

There has been quite a bit of legislative and regulatory activity over the past few months regarding Sarbanes-Oxley Section 404(b), which requires public companies to have an independent auditor attest to management’s assertions on internal controls over financial reporting. I want to bring you up to date on recent developments and the AICPA’s position on the issue.

Currently, an exemption exists for issuers with a public float of less than $75 million, a provision enacted as part of the 2010 Dodd-Frank Act. These smaller issuers were never required by the Securities and Exchange Commission to comply with Section 404(b) since enactment of SOX. However, legislative, regulatory, business and economic influences are combining to apply pressure to extend the exemption to larger public companies, believing it would reduce reporting burdens and spur job growth. The AICPA has consistently urged implementation of Section 404(b) for all publicly held companies. It has led to improved financial reporting and greater transparency, and the AICPA believes all investors in public companies should have equal benefit of the same protections.

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Live Blogging the CGMA Launch

Chartered global management accountant logo

AICPA Insights live blogged from the interactive business forum celebrating the launch of the Chartered Global Management Accountant on January 31. Follow the real-time event as it unfolded in New York and London and was viewed live in other regions around the world. A launch event in Kuala Lumpur took place earlier in the day. The CGMA was established through a joint venture between the AICPA and the Chartered Institute of Management Accountants.

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10 Minutes to Understanding Our Nation’s Fiscal Health

If you’ve watched the news, picked up a paper (or read one on your electronic device) or listened to the radio in the past year, you’ve probably heard about America’s debt, its bond rating and political gridlock.

Instead of telling you what fiscal challenges our country is facing, I think it’s better if you understand them for yourself. Today, I’m encouraging each of you to spend a few minutes taking a short quiz that will test how well you understand the financial matters being discussed in Washington, D.C.

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CPA Horizons 2025: A Roadmap for the Profession’s Future

CPA Horizons 2025During this past year, the AICPA’s Immediate Past Chairman, Paul Stahlin led the call for our members to participate in CPA Horizons 2025, a grass-roots initiative aimed at examining the local and global trends that will have an effect on our profession over the next 15 years. Your response was tremendous. Nearly 6,000 CPAs voiced their opinions and generated more than 75,000 comments. I thank you for all your insights on how to shape our future.

CPA Horizons 2025 built on the knowledge we gained in the CPA Vision Project, a similar effort conducted in the late 1990s. Participants concluded that the core purpose for CPAs identified back in the 1990s—CPAs: Making sense of a changing and complex world—remains relevant now and for the future. The participants also believed that the core values and competencies identified in the CPA Vision Project are still valid, and were updated to reflect changing circumstances. While the CPA Vision Project also identified some core services, CPA Horizons 2025 determined that the knowledge, skill and competencies CPAs have to offer have become so varied and diverse that the concept of core services is no longer valid. 

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Independent Board is Needed for PCGAAP

Solve maze puzzleFor quite a while now, decades in fact, the accounting profession has been discussing the problems faced by private companies and the users of their financial statements because of a lack of relevance and unnecessary complexity in too many places in U.S. GAAP. The Blue Ribbon Panel on Standard Setting for Private Companies made recommendations earlier this year that gave us a greater sense of hope that real change was on the way. The Panel, formed by the AICPA, the Financial Accounting Foundation and the National Association of State Boards of Accountancy, came out with two significant recommendations that would permanently change private company financial reporting. One is differences in existing and future GAAP where warranted; the other is an independent board to set those differences. There is general consensus on the former; I want to focus on the latter.

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Persistence Results in Protecting Taxpayers

Obama signs america invents actIt was a five-year battle, but working together the AICPA and state CPA societies were gratified  when President Obama on Sept. 16 signed into law a bill that includes a provision to prevent the issuance of new patents on tax strategies. We asked so many of you to send letters, and state CPA societies and members responded each time. Details on the harm tax patents could cause are discussed in this AICPA Insights blog post.

Tax strategy patents now become one of only a handful of patent types that the Patent & Trademark Office is prohibited from issuing, which includes medical procedures, nuclear technology and, now, tax strategies. 

I would like to thank each of the AICPA staff, members, states, committees and others who participated in this advocacy effort, which marks a huge victory for both the public and the CPA profession.

It is important to note that existing tax strategy patents remain in effect so tax practitioners still need to remain vigilant. Patent applications pending as of Sept. 16 were discontinued and no new applications are allowed.

This victory shows the positive results that stem from collaborative and persistent efforts when it comes to getting legislation enacted.  Congratulations to those who played a part in this process. On behalf of taxpayers and the profession, I thank you.

Barry C. Melancon, CPA, President and CEO, American Institute of CPAs.


Succession: It’s Not Only About The Golden Years

Polls in CPA Letter Daily offer an insight to the readers’ opinions about topics taking place in today’s world.

Last week’s poll question, with nearly 500 responses: Does your organization have a formal succession plan in place?

  • Yes, my organization has a formal succession plan in place. - 23.71%
  • Yes, but it is an informal succession plan. - 21.99%
  • No, but my organization plans to develop one. - 18.93%
  • No, and we do not have plans to create one.- 35.37%

There’s a saying that the best time to plant a tree is twenty years ago. The second best time is now.

For many years, the AICPA has been encouraging firms of all sizes to take a serious approach to and place a heavy focus on succession planning.  With 44,000 firms in the U.S., combined with an aging population, it’s simply an imperative. I’ve seen many firms that are so busy taking care of “today” that they never get around to planning for tomorrow.

Steve Jobs shows off iPhone 4Image via Wikipedia

Recently, Apple demonstrated the importance of having a succession plan when CEO Steve Jobs stepped down, amid health concerns. His sudden announcement triggered a plan that was put in place well before his health forced him to step down. This preparation allowed Apple to seamlessly transition to new leadership and continued success. This plan was well communicated to employees and investors for months, reducing the potential for negative reactions. Examples like this, unfortunately, are the exception, rather than the rule.

In the last month, another event led me to believe that awareness regarding succession planning is both timely and needed, especially in the case of an unexpected life event.   

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Thinking Globally Makes a World of Difference

Global Diversity CPA The world is getting smaller. It becomes more apparent with each passing day. The ongoing unrest in Libya, the economic crisis in Greece, and our own difficulties with the debt ceiling have each caused global markets to fluctuate wildly. What does this tell us? For one, it makes it increasingly clear the business world is now global.  Second, it shows that most U.S. businesses need to think internationally and integrate that thinking throughout their operations to achieve economic success and long-term viability.

Businesses used to operate within their own cocoon, impervious to events outside their countries’ borders. But now, each of us must implement strategies enterprise-wide that reflect the new environment.   

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Be a Part of Making Historic Change for Private Companies

Private Company Financial Reporting Anytime you have a “first” of anything it’s an important and memorable occasion. With that in mind, my first topical blog post is on a subject I believe is critical to our profession, those we work for and those we serve. I’m talking about private company financial reporting.

Few opportunities exist where a person can say they took part in something truly historic. CPAs, their clients and employers, bankers and other stakeholders have such an opportunity before them today, and it all starts with a letter. For more than 30 years, CPAs, lenders, private company owners, investors and others have said U.S. GAAP mainly reflects the public company environment, resulting in unnecessary complexity and a lack of relevance for private company financial statements. We’re now closer than we’ve ever been to changing this, and you have the ability to push this across the goal line - finally.

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Welcome to AICPA Insights

Barry Melancon, CPA Feedback and exchange are essential components of communications today. And not just between a writer and a reader, but among the readers themselves. Through this interaction, a community is formed. A leader in social media usage by professional organizations, the AICPA has taken another step in providing a community platform among members and others through AICPA Insights, our new blog.

AICPA Insights will provide thoughts and opinions from experts about issues affecting the Institute, CPAs, the clients we serve and the businesses we work for. Our bloggers are members of the AICPA staff, and I’m sure they’ll bring a unique perspective to today’s issues. We’ll also feature guest bloggers covering a wide range of issues.

Later this week you’ll hear about efforts in developing an integrated reporting framework from our Business, Industry and Government team. My next post will focus on private company financial reporting, which I believe is one of the most important issues facing our profession and America’s small businesses and their financial statement users.

I’m excited about our new blog and look forward to all of you engaging in thoughtful discussion. I encourage you to write comments and share posts with colleagues to bring diverse views and experiences that will enrich our knowledge and perspectives.

When I became AICPA President and CEO back in 1995, we could not have imagined the technologies that someday would give us such incredible access to each other. Let’s build on the functionality and develop a robust conversation on everything important to all of us.

Thank you and enjoy.

Barry C. Melancon, CPA, President and CEO, American Institute of CPAs.


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