• Cybercrime is a significant threat to businesses; accountants especially need to be prepared to combat phishing scams and other hacks.
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• Under the Patient Protection and Affordable Care Act, individuals will be required to pay a penalty to the IRS if they are not covered by health insurance plan. This provision and other tax provisions contained in the act will mean sweeping changes for tax professionals over the next few years.
Thomas Marino -- CEO, J.H. Cohn
The most important issue facing the accounting profession today is succession planning and knowledge transfer. In some cases, industries could see approximately 50 percent of the workforce leave by the end of the decade. When these workers leave, the knowledge that they have acquired through the years will leave with them. In addition to the challenges of gathering and sharing the knowledge, another challenge will be in mentoring those employees who follow in the footsteps of the retiring workers.
Brian McGuire -- Associate dean, College of Business, University of Southern Indiana
Adapting to significant change -- change in demographics impacting succession, leadership, recruiting and retention in the profession, inevitable change in accounting standards and the structure used to set standards, change required by escalation in regulatory activity, and continuing change to adapt to a challenging growth environment.
Krista McMasters -- CEO, CliftonLarsonAllen LLP
There are huge opportunities and challenges for the profession. Complexity is both our biggest opportunity and challenge. Clients and employers are turning to CPAs for help in understanding the business and regulatory environment today. While that's an opportunity, remaining competent with all the complexity will remain a challenge.
In the short run, an economy that fosters business activity will remain the biggest issue facing the profession.
Barry Melancon -- President and CEO, AICPA
I think the most important issue would have to be Private Company Financial Reporting -- we are seeing some real progress on this issue. I think the decisions that come out of the Private Company Council will be watched closely by all key stakeholders in the profession, and for good reason, as it looks like there may finally be systemic change to GAAP that would help private companies.
Additionally and relatedly, the AICPA is developing an Other Comprehensive Basis of Accounting (OCBOA) -- a standalone Financial Reporting Framework intended to be used by private small and medium-sized entities in preparing their financial statements. We expect to develop the framework through 2012 and expose it for public comment before issuing it at some point in 2013 -- it should really help many of the 29 million small businesses in the USA and the small firms that serve them.
James Metzler -- Vice president of small firm interests, AICPA
The possibility that the Mayan calendar is wrong and there will be a 2013 busy season.
Caleb Newquist -- Founding editor, Going Concern
Among the most important issues confronting the profession today, I see (1) growth due to a stagnant economy and an insecurity or uncertainty regarding the near future. Business is not expanding, very few IPOs are occurring and clients are selling, dissolving or struggling, making it difficult for firms to raise or even maintain existing fees. (2) Low-balling on fees is again a prevalent nemesis, which I thought was a part of history. However, it seems like a difficult lesson for this profession to learn. (3) Baby Boomer retirements or requirement to continue to work is playing havoc with good strategic planning initiatives. Fortunately many agreements cap payments to retiring partners or limit the number of partners that can retire in any one year. (4) Succession planning is a critical concern since I see a very limited confidence level by retiring or senior partners in the bench of partners behind them. This is striking fear into many partners that they may never see their retirement benefits completed and causing the merger mania environment so prolific at the moment. (5) Finally, there is a myopic regulatory environment in a highly unfriendly political environment propagated by a present administration antagonizing the profession causing serious insecurity by many CPA partners.
Jay Nisberg -- President, Jay Nisberg & Associates
What the SEC will decide about convergence/condorsement with international accounting standards. Their lack of a decision has created uncertainty and with this being an election year, I doubt if any conclusion will be announced in 2012.
Judith O'Dell -- Chair, FASB Private Companies Financial Reporting Committee
The most important issue in my eyes is the slow pace of firm transition to next-generation status. That is, moving to a more efficient, social, and collaborative way of conducting business. And not just because it's a better way of working internally, but because clients are demanding it. The era of the digital client is here -- those that demand online options for ease of use and convenience, not to mention heightened security. Today's clients are also socially driven, many choosing to communicate via social media channels and other collaborative forums. This means that a radical change in firm culture is required to meet the needs of both a technologically advanced client base, as well as our new generation professional staffers. For firms that refuse to makes the proper changes in technology, workflow, and overall culture, it's certain they will soon be obsolete. That is the big issue.?
To support today's digitally minded clients (and staff), there are so many innovations available to the profession. Firms need to adeptly implement cloud technologies, social media, advanced practices, and other innovative operational methods. The profession must change with the needs of our clients. And today's clients are digital and social, and desire a way to collaborate with their trusted advisors, not just be advised.
My firm has made the transition to a next-gen firm. We’re different because we’re cloud-based -- using technology to make documents and data accessible remotely. This allows staff to have an interactive, real-time, and collaborative relationship with clients. With traditional practices, we were limited to a manual, static process -- using paper and pencil and some accounting software. This also meant manual delivery of documents and a slow, cumbersome processes. But no more. With technology, we can serve our clients much more efficiently. And having created a socially driven culture within our firm, we are working with clients collaboratively on a day-to-day basis. This is where the profession needs to be.
There’s a whole new generation of accountants coming out with a new state of mind. Small-business owners that demand online service and the ability to work in partnership with their accounting professionals are searching for digital accountants with this advanced mind set. Those who don't get on board will be left behind.
Jody Lee Padar -- CEO and principal, New Vision CPA Group
The increasing pace of globalization is creating new challenges for governments and corporations, as well as the professional accounting firms that serve them. Tax regulations around the world are evolving rapidly to adapt to the new global economy, and at the same time, corporations have increasingly global footprints and supply chains.
Brian Peccarelli -- President, the Tax & Accounting business of Thomson Reuters
In a word: complexity. All of us are challenged to keep up in a complex world. We live in uncertain political and economic times, nationally and globally, which affect all stakeholders in the accounting and financial reporting supply chain. From the FAF perspective, we must continue to ensure that we hear from and listen to those stakeholders during the standard-setting process. While the messages we hear are diverse -- and therefore complex -- those messages are critical to our ability to distill the information and develop standards that provide users the information that is most relevant and useful to them.
Terri Polley -- President and CEO, FAF
Whether it's within firms, corporate practice or the volunteer organizations that serve the profession, we're beginning to experience a significant rollover of leadership and the implications can be far-reaching. The Boomer departure from leadership in CPA firms, as well as corporate leadership roles, is significant. But perhaps more significant is the departure of the Boomer generation as leaders in the volunteer organizations serving the CPA profession. In many instances, the trailing generations have not demonstrated an interest in pursuing volunteer engagement or leadership opportunities/roles and there likely will be an impact on those organizations as they find it more challenging to identify strong leaders who are willing to tackle tough issues. A void in strong leadership can present a significant challenge to all of these firms, employers and organizations.