FAST FORWARD Building the Profession of Tomorrow

Assessing the External EnvironmentLawson CarmichaelSenior Vice President – Strategy, People, & InnovationSpring Council | May 18-20, 2014

Questions for considerationWhat risks and opportunities to the profession exist as a result of shifting economics and globalization?

What challenges and opportunities for CPA firms and industry are created by technology’s increasing impact on compliance-related services?

As a leader in the profession, what are your three main conclusions from the Future of Learning report?

What other trends present significant risks and opportunities for the profession?

Emerging markets will outpace mature economies, but both will begin to slow

Emerging Economies

Mature Economies

0% 2% 4% 6% 8%

20142014-192020-25

Rate of GDP growth Source: The Conference Board, McKinsey

China

India

USA

Latin America

Middle East

South East Asia

EU

2014 202520190% 8%4%

7%5.9%3.5%

4.8%4.4%3.6%

2.4%2.3%1.7%

1.3%1.4%1.1%

2.7%2.9%

2.0% 2.9%

4.8%4.2%4.6%

Large shifts will occur in key markets

Source: The Conference Board, McKinsey

By 2025, emerging regions will headquarter 46% of $1B+ companies

2010 New large companies

2025

Series 4 Series 38K

7K 15K

27%

73%

68%

32%

46%

54%

Source: McKinsey, Oxford Economics Research

More small and medium-sized enterprises (SMEs) will operate in global markets

33%

67%

No global operations

Global operations

20%

80%

2014 2017

Source: International Trade Administration

More SMEs will generate revenue from global markets

25%

75%

Without global revenue

With global revenue

17%

83%

Source: International Trade Administration

2014 2017

0%

50%

100%

White Minority

The accounting profession is poised for increased ethnic diversity…

CPAsAcct Grads

WorkforceAll Grads

Source: AICPA, UNC

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

40%

45%

50%

55%

60%

Accounting Grads Male Accounting Grads Female Total Grads Male Total Grads Female

…as well as gender diversity…

59%

52%

48%

41%

Source: AICPA, UNC

…and generational challenges still exist

2000 2012 20250%

20%

40%

60%

80%

100%>6555 - 6541 - 5431 - 4025 - 30<25

(projected)Source: AICPA

New technologies give rise to new revenue opportunities and disruptions

Expe

ctat

ions

Innovation trigger

Peak of inflated expectations

Trough of disillusionment

Slope of enlightenment

Plateau of productivity

Cognitive analytics

Cloud3D

printing

BiometricsPredictive analytics

Time

Wearable computingBig data

Source: Gartner

Number of financial regulations increasing

Enforcement and compliance costs skyrocketing

Trust in the financial industry remains low

Financial regulations are increasing, but public trust is still low

Source: Heritage Foundation, Thomson Reuters

Advisory and specialty services driving growth within public accounting

46%

35%

16%2%

A&A

Tax

Advisory

Other

Revenue$94B

Core accounting services remain the central focus…

…and advisory services offer growth opportunities

Advisory service GrowthRisk 6.5%Business valuation 3.5%Forensic accounting 6.8%Financial planning 3.1%IT/S&P consulting 6.0%

Source: IBISWorld

The evolution of management accounting drives a need for learning and development

Three key needs of finance organizations• Act as a strategic business partner • Provide insights from increasing volumes of data• Operate in a globalized world`

Data Capture

Analysis Insight Decision Influence Impact

Traditional responsibilities Emerging responsibilities

Reports

Source: CIMA, AICPA

Employment “branding” more strategic than ever

Retention worries reappear

Generation Flux workers well positioned to thrive in dynamic work conditions

Businesses will find it increasingly difficult to attract, retain, and develop their people

Source: PwC,

Questions for tabletop discussionsWhat risks and opportunities to the profession exist as a result of shifting economics and globalization?

What challenges and opportunities for CPA firms and industry are created by technology’s increasing impact on compliance-related services?

As a leader in the profession, what are your three main conclusions from the Future of Learning report?

What other trends present significant risks and opportunities for the profession?

2014 AICPA Spring Council

Scottsdale, ArizonaMay 18-20, 2014