Spring 2007 issue of Horizons

INTERNATIONAL NEWS Baker Tilly International USA

North America Meets in Santa Fe The independent firms that comprise Baker Tilly USA held their North American Conference this past June in Santa Fe. Member firms from North America gathered to discuss a number of issues, not the least of which included thedevelopment of an optional international audit methodology, as well as the new IFAC independence rules and procedures to be put in place across the network. A record number of delegates were in attendance. More than 100 attended, with 20 from outside the continent and approximately 50 guests. Guest speakers at the conference included U.S. Congressman John Linder; John Bachmann, senior partner from Edward Jones; Todd Buchholz, White House advisor on economic policy; and Patrick Barron, vice president, Atlanta region of the Federal Reserve. Linder shared the House Ways & Means Committee’s tax ideas to address the change in the American taxpayer from worker to retiree. He believes repealing the income tax code and replacing it with a Federal sales tax could better support a population with a declining workforce.

Bachmann addressed the regulation of capital markets in the 21st century. The United States continues to lose leadership as the financial center to London and other emerging markets like Shanghai because of the enabling effect of technology and the impact Sarbanes-Oxley legislation has had on the cost of capital for U.S. firms (see article “An Insiders View…” by speaker Barry Melancon, president and CEO, AICPA). Buchholz offered up his observations on the U.S. economy from the White House’s point of view. Changes are occurring, driven by today’s consumer. Buchholz describes the “scissors economy,” inwhich themiddleman is being driven out by purchasers, who are demanding complete solutions – one-stopshopping fromproducers. In addition, the economy is experiencing the transformation from a “brawn” system of manufacturing to a “brains” system of leadership in innovation and creativity, which is the current driving force behind our economic success. And, in turn, it is the reason U.S. wages continue to grow despite the decline in manufacturing employment. From the Federal Reserve, Barron offered a similar assessment of the U.S. economy. Trends over the past few quarters continue to indicate that although manufacturing employment has decreased all over the world due to increases in productivity, U.S. salaries have risen significantly. The biggest potential impact on the economy today is the cost of energy. Increasing demand from China and India will keep prices for oil high and will have an impact on both disposable household income from increases in energy costs and distribution costs as a percentage of the price of goods to consumers.

7 u summer 2007 issue

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