What's at Stake? The CPA Profession on Federal Fiscal Responsibility

The role of CPAs Serve as trusted advisors to a variety of organizations Help businesses and individuals achieve strong financial standing Protect the public interest Explain complex financial issues

Today Overview of the federal budget Insights into the federal financial statements Nation’s deficit reality

Federal budget Establishes the fiscal goals envisioned by Congress Measured on a cash basis Tool to help guide spending decisions

Federal financial statements Record of what has actually happened Prepared on an accrual basis Provide information about longer-term implications

Revenue = $3.0 trillion Expenses = $3.8 trillion; exceeded revenue by $0.8 trillion FY 2014 financial statements

Assets= $3.1 trillion Liabilities= $20.8 trillion Accumulated deficit= $17.7 trillion FY 2014 financial statements

U.S. financial statements differ from other organizations Most financial statements show obligations or liabilities on balance sheet U.S. government’s financial statements do not include Social Security and Medicare Footnote disclosures Not reflected as liabilities

Reality of future obligations These future obligations equal: Additional social insurance deficit $56.7 trillion Cumulative deficit 17.7 trillion Total deficit $74.4 trillion

Key data in publicly traded company’s financial statements Revenue: how much money the company is bringing in Expenses: how much money the company is spending Earnings Expenses < Revenue = Financially Healthy Company

Accumulated deficit

What’s next Visit: aicpa.org/WhatsAtStake Watch What’s at Stake: The CPA Profession on Federal Financial Responsibility Policymakers: read the Financial Report of the U.S. Government Citizens: read A Citizen’s Guide to the Fiscal Year 2012 Financial Report of the U.S. Government Join the public dialogue to make the county’s fiscal health a national priority

(Optional) (Add information about what you, your firm and/or your state society is doing in this area)

Thank you