Barry C. Melancon, CPA

President and CEO, American Institute of CPAs

By Louis Grumet

Can you share with us what you and the AICPA are doing to help small firm members meet the challenges of the new millenium?

First let me say that I feel very close to the small firm. My entire career in public practice was with a firm of fewer than 20 professionals in a city of about 50,000 people, so I have made it a priority that the AICPA strengthen efforts for small firms. Our Private Companies Practice Section has been restructured to focus on services to smaller firms and to be a small firm resource. It now operates as Partnering for CPA Practice Success, the AICPA Alliance for CPA Firms. And, through our image-enhancement campaign, the AICPA essentially is providing the advertising muscle for small firms lacking the resources to market their broad-based skills. We've also set up a technology advisory program to aid smaller firms in their attempts to build technology consulting practices, we're enhancing our services in the management consulting area, and we're building a knowledge network that will provide online knowledge smaller firm CPAs can convert into services for clients.

Is all this helpful as well to the sole practitioner in Great Falls, N.Y., or the small firm in Syracuse? What does the future hold for them--how do you see them
progressing?

Despite all the changes in the profession and what some perceive to be threats, I can confidently say that small firm practitioners will continue to exist and be successful for years and years into the future. What services small, local firms will offer will evolve--and evolve quickly--but the direct services they provide to local businesses will remain important. To be truly successful, however, those firms will be more strategically aligned with the businesses they serve. To meet these challenges, many smaller firms will focus on niche markets as well as partner with other CPA firms or other professional service providers.

A lot of resources have been devoted to the AICPA's launch of CPA WebTrust^sm. Can small firms be in this market profitably? How is the AICPA helping firms get started?

CPA WebTrust^sm certainly presents a fresh opportunity for small firms--an overwhelming majority of the firms licensed to date are smaller firms. In fact, we know of a sole practitioner who has a WebTrust engagement for a Fortune 500 company that is audited by a Big 5 accounting firm. We are supporting the assurance service with national print, radio, and online advertising. To help CPAs get into the game, we are providing training and promotional material.

How will the new Uniform Accountancy Act, jointly prepared by the AICPA and NASBA, affect small firms?

The new UAA is designed to be a new regulatory model that reflects today's world. By that I mean, when adopted, CPAs will be able to move across state lines on a temporary basis either physically or electronically on the basis of a CPA license in the state of predominate employment. In essence, the need for multiple state licenses would be eliminated once the UAA is adopted by all jurisdictions. In addition, the act works to preserve the attest function for firms to focus on the public interest, addresses commissions and contingent fees in a manner consistent with the AICPA rules, clarifies that a CPA working in industry or other nonpublic accounting environments can use the term CPA, and adopts the 51% ownership rule for CPA firms. In states such as New York, the ability to move across state lines will be of particular benefit.

Since technology is critical to the profession's future, does this simply mean that small practitioners need to buy the latest hardware or software? How would small firms capitalize on technology opportunities now?

While being up to date with technology as a user is critical, the real message is that CPAs must be knowledgeable about technology and able to tap sources of technology knowledge so that firms-- clients--are more profitable because of the use of that technology. I truly believe that small firm practitioners are uniquely positioned with most clients to be able to see the entire picture of the business, and thus are prepared to make thoughtful, well-communicated recommendations on how to use technology better in that specific business.

Lifelong learning emerged as a top value from the CPA Vision Project. For sole practitioners and small firms, already tight on resources, what will help them meet learning challenges presented by technical and professional issues?

The top value in the CPA vision process was a commitment to lifelong learning. We have a project near completion that will provide members with an online self-assessment tool to take stock of their competencies in various areas and then provide information on how to fill gaps from a variety of learning alternatives. Those alternatives not only include traditional CPE, but such nontraditional methods as reading, CD-ROM research, on-the-job training, and numerous others that may be less expensive and time-consuming. Once this is in place, we will begin working with states to suggest that CPE regulatory rules should be made more flexible to accommodate the numerous ways adults learn today. The CPA profession is committed to continuous learning--it is the only way we can be successful--but that does not mean that the only way CPAs can learn is in a traditional classroom environment. CPE too must change with the times. *