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AICPA Council Holds Fall Meeting NEW ORLEANS—A shifting business and regulatory landscape prodded the American Institute of CPAs’ Governing Council last month to pass initiatives that support auditors of public companies, while enhancing standards for non-public engagements. The action came during the Council’s Oct. 21-22 meeting in New Orleans, where it approved the Center for Public Company Audit Firms which replaces the AICPA’s SEC Practice Section (SECPS), much of whose responsibilities have been absorbed by the Public Company Accounting Oversight Board. The Council also expanded its Auditing Standards Board membership to add non-CPA members, including representatives from the user, regulatory and public communities, to write standards for non-public engagements. The Council also approved two new audit quality centers for volunteer firms to share and develop guidelines for government audits and employee benefit plan audits. Along with the Council’s actions were announcements that the AICPA membership approved bylaw changes on ethics enforcement and that the Council renewed its support for three specialty credentials based on a proposal from the Institute’s Board of Directors. “We, as leaders of the profession…have had to rethink how we can best serve our members and drive positive, reasoned change,” newly-appointed AICPA Chairman S. Scott Voynich said in his inaugural speech. “Over the past year…the AICPA’s senior leadership has been wrestling with core questions.” Voynich, a Georgia-based CPA who succeeds William F. Ezzell, described the Council’s actions as “catalysts for the AICPA to examine its professional role,” according to a statement released by the AICPA. Standards and Measures The Center
for Public Company Audit Firms will be a voluntary membership
organization to enhance “the quality of performance of members
who audit public companies and provide support for them,”
according to an AICPA statement. According to the AICPA, the center will now develop “technical and educational guidance, serve as a forum for member firms to express their views…and administer a peer review program that will focus on audits of nonpublic entities.” The center’s peer review program will focus on non-SEC audit engagement requirements under Sarbanes-Oxley and state regulations. The center will begin operating next January. Meanwhile, the modified Auditing Standards Board will continue to set standards for non-public audit engagements, with a new mission to develop auditing and quality control standards on a national and international level, and to offer guidance on implementing them. The ASB’s 19 members will include representatives from state boards of accountancy, federal regulators, practitioners and representatives from the “user community,” and public, according to the AICPA. Both the Employee Benefit Plan Audit Quality Center and the Government Audit Quality Center will have voluntary membership. The AICPA expects members to participate in enhanced peer review, while developing firm-wide training and quality control programs, the AICPA reported. Credentials Abide; Ethics Bylaws Pass The Council approved a recommendation from the AICPA Board of Directors to retain the Personal Financial Specialist, Certified Information Technology Professional and the Accredited in Business Valuation credentials. The proposition allots separate funding for each credential, including $4.6 million in excess of revenues through 2006 for the PFS, $5.6 million in excess of revenues through 2008 for the CITP and $5.75 million in excess of revenues through 2008 for the ABV. The money will finance development of marketing tools to promote the designations in local markets, and further support will be contingent on revenue-generation and enrollment thresholds by certain dates. For example, the PFS designation’s 3,188-holder enrollment will have to increase to 3,600 by July 31, 2006. Later dates were set for the CITP and ABV, which are newer credentials. The AICPA also announced that members voted to change the organization’s bylaws governing the AICPA’s disciplinary process for members who violate ethics codes. Among other things, the bylaw changes permit the AICPA to disclose more information about disciplinary matters, such as the results of all cases to an individual or body filing a formal complaint with the AICPA. The Institute currently does not disclose such information when private remedial action is taken against members. Letter from Ezzell The NYSSCPA Board of Directors last month submitted a letter to Ezzell, while he was still chairman, regarding the future of the AICPA. The letter arose from a special meeting with Ezzell in September when he asked the NYSSCPA whether it wanted the AICPA to be a trade or more of a professional organization. The letter (see page 2 for full text) fell firmly on the side of a professional organization, but while Council did not bring up the issue at the meeting, Ezzell responded with a letter dated Oct. 17, in which he defended the AICPA as taking steps to “restore trust and confidence in our profession,” partly referring to action the AICPA Council would take at its meeting several days later. Ezzell pointed to ethics bylaw changes, work the AICPA did with the SEC to reform audit committees and other initiatives to illustrate how the organization was working for the profession, but the letter didn’t address the question of whether the AICPA was a trade organization or a professional one. Subsequent to both the Society’s letter and Ezzell’s letter, Accounting Today published an op/ed piece by the California Society of CPAs. Based on a survey the California Society commissioned, California CPAs regard improving the image of the profession, followed by increased government representation, as the most important issues facing the profession, the op/ed states. “We take these results as a clear mandate for the future,” the piece states. “CPAs aren’t afraid of change, they understand the importance of solid representation to ensure that the change is fair, and they want their professional associations to take the lead.” |
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