2/1/2019 TSCPA OVERVIEW – JANUARY 2019 26,371 members in 20 chapters Professional IssuesUpdate 2,328 members in San Antonio Stephen Parker, CPA| TSCPA Chairman January 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 1 2 3 1
2/1/2019 GUIDING PRINCIPLES PILLARS OF SUCCESS MEASURING OUR SUCCESS COMMUNITY & PROFESSIONAL ADVOCACY EXCELLENCE CONNECTION Provide members with opportunities Provide resources to assist members Be the voice of our members before and resources to connect, in the achievement of policy makers and the public. serve and lead. professional and personal success. TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 4 5 6 2
2/1/2019 SUNSET REVIEW Launched last November 5 TSCPA EXCHANGE Nearly 1,500 discussion posts to date ENGAGE AND GROW AREAS OF COMMUNITY& More than 16,000member logins in the first FUEL OUR CHAPTERS GET INVOLVED year FOCUS CONNECTION RE-ENERGIZE OUR BRAND New communities focused on tax issues and practice management OUR CHAPTERS Update your bio, add a photo andget FUTURE OF LEARNING started! 7 8 9 3
2/1/2019 TSCPA EXCHANGE UPDATE YOUR MEMBER PROFILE FUTURE TRENDS Tell us what’s important toyou! WAYFAIR DECISION Ensures you receive communicationsbased on your interests and preferences PROFESSIONAL PEER REVIEW EXCELLENCE Syncs with your TSCPA memberdata CYBERSECURITY Gives us a better understanding of the needs of ourmember population MEMBER RESOURCES Updates can be made online at tscpa.org TSCPA Professional Issues Update – Austin, June 26,2018 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25,2019 10 11 12 4
2/1/2019 IMPACTS OF TECHNOLOGY ROLE OF FINANCE & RISK OF AUTOMATION Robotics is predicted to automate or eliminate up to … 1.1billion 49% Assemble Analyze Advise Apply workers affected 40% of work activities It translates to … worldwide Artificial intelligence Blockchain could be automated with current technology Information Insight Influence Impact $15.8 trillion of basic accounting work by 2020. In wages Data analytics Cybersecurity Works withothers Works inisolation Source: McKinsey Global Institute, January 2017 Source: Deloitte | Accenture TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 13 14 15 5
2/1/2019 SOUTH DAKOTA V. WAYFAIR WAYFAIR IMPLEMENTATION • On Aug. 20, the Comptroller’s Office held a combined meeting of his • Overturns prior Supreme Court precedent that required retailers to 1. Business Partner Business Advisory Group and the Tax Advisory Group to discuss have a physical presence in the state before a state could require the Wayfair implementation plans. seller to collect sales tax from that state’s customers. • Comptroller is considering: 2. Data and Analytics • Decision doesn’t require states to collect tax from out-of-state retailers, but many are expected to take advantage of the potential • amending the definition of “engaged in business” in Rule § 3.286(a)(4) windfall. 3. Business Solutions • deleting current Rule § 3.286(b)(2) regarding out-of-state sellersand • replacing it with a “safe harbor” provision for remote sellers by setting an in- Creates ramifications for consumers, brick-and-mortar retailers, Architect state sales volume threshold below which there would be no use tax online retailers, accountants, state balance sheets and technology SKILLS GAP IN FINANCE collection responsibility companies that develop accounting software. Source: American Institute of Certified Public Accountants, 2018 • using a fee in lieu of local tax provided in Tax Code § 151.059, which provides for imposing local tax at a weighted average rate TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 16 17 18 6
2/1/2019 WAYFAIR IMPLEMENTATION PEER REVIEW IN TEXAS PEER REVIEW IN TEXAS • Comptroller proposed new rules related to Wayfair in October 2018 2,500 Firms 83% • Rules will likely be finalized and issued in early 2019 CHANGES & CHALLENGES • Comptroller will also be proposing changes to the legislature to help implement average pass rate Wayfair PEER REVIEW DOCUMENTATION • Legislature would need to adopt these statutory changes before the Firms passed their initial peer review Comptroller could then adopt rules to implementWayfair at a 73 percent rate and passed • Won’t have a clear picture of how Wayfair will be handled in Texas untilafter RISK ASSESMENT subsequent reviews ata much higher the legislative session 86 percent rate • Official state responseis still a moving target and likely will be until summer RESOURCES TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 19 20 21 7
2/1/2019 PEER REVIEW CHANGES AND CHALLENGES To obtain sufficient audit evidence, you are required to document: Nationally, the Peer Review Program is helping firms improve their work after New technology platform quality issues are identified. DOCUMENTATION Nature, timing and Focus has become morepunitive COUNTS extent of procedures than educational 86% Over 50 percent of non- Results of those Changing reporting and procedures conformity relates to lack documentation expectations of firms improved in their peer review when the peer review of documentation program required a third-party review of their engagements or Any significant findings, quality control documents. issues or professional Reduced number of peer reviewers judgments TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 22 23 24 8
2/1/2019 RISK ASSESSMENT The four most common risk assessment violations Firm Resources INTERNAL CONTROL INSUFFICIENT RISK NO LINKAGE IMPROPER CONTROL ONLINE ASSESSMENT RISK 40% of identified 14% of issues related 24% of issues related 13% of issues related RESOURCES AT issues related to failure to incomplete or to auditors not linking to auditors assessing to gain an understanding nonexistent risk their risk assessmentto control risk as less than Reviewer Search and of internal control when their response. assessment. high without appropriate TSCPA.ORG identifying the client’s tests of controls. Resources CYBERSECURITY risk. If an auditor doesn’t Auditors shouldconsider if their standardized assess the client’s risks,it Auditors can only reduce Without understanding could lead toinsufficient practice aids respond to control risk below the nature of the client’s identified risks and over-auditingor, more maximum when they controls, auditors can’t seriously, a failure to modify the aids where have tested controlsand identify related risks or obtain sufficient needed. are relying on their Helpful links and design appropriate appropriateaudit operatingeffectiveness. connections responses. evidence to supportthe opinion. TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 25 26 27 9
2/1/2019 AICPA CYBERSECURITY RISK MANAGEMENT IRS REQUIRING MORE INFORMATIONFROM TAX SEASON AND PRACTITIONERS CYBERSECURITY 90% 1/3 • IRS is reviewing procedures to better protect sensitive taxpayerdata • The last income tax filing season broughtparticular • Taxpayer representatives are now being asked for their SS number and DOB in cybersecurity risks addition to their Centralized Authorization File (CAF) number when they callthe • IRS received reports of cybercriminals attemptingto of executives believe board expect to adopt the SOC Practitioner Priority Service or toll-free numbers steal employees' W-2 forms by posing as company requests for cybersecurity for Cybersecurity • Result of an updated version of Internal Revenue Manual Section 21.1.3.3, which took executives and targeting people who work in HR risk management program departments effect Jan. 3, 2018 framework reporting will increase in • IRS warned accountantsand other tax professionals • IRS also made an update to Form 2848 and Form 8821 requiring practitioners to the next 12 months that they are targets of thieves looking to steal inform clients if they are using an Intermediate Service Provider to access client personal information and identities during tax transcripts via the TranscriptDelivery System season Source: Deloitte poll, June 2018 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 TSCPA Professional Issues Update – San Antonio Chapter, Jan. 25, 2019 28 29 30 10
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