May 2000

Society Raises Questions About Proposed Global Credential

Leadership Votes to Take No Action

After deciding that a number of questions remain unanswered, the NYSSCPA Executive Committee voted to take no action on the proposal from the AICPA and seven other accounting organizations to create a new global business designation.

The Executive Committee reached its decision at a special meeting on May 7 following several weeks of communication between AICPA and NYSSCPA staff. AICPA Chair Robert K. Elliott first presented the idea of the new credential at the March 30 regional Council meeting. On April 6, the consortium of eight accounting organizations formally announced a task force to study the designation.

In addition to the AICPA, task force members include the Canadian Institute of Chartered Accountants, the Institute of Chartered Accountants in Australia, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants in Ireland, the Institute of Chartered Accountants of New Zealand, the Institute of Chartered Accountants of Scotland, and the South African Institute of Chartered Accountants.

The AICPA stated that the new designation--referred to as the XYZ credential until the task force selects a final name--would be an international designation not only for CPAs and chartered accountants but also for other business professionals. Elliott said the new designation would reinforce, not replace, the CPA credential, which he pointed out is primarily a license to audit, review, or compile financial information. Marketplace demands, he said, dictate the need for a global credential that better addresses the additional services that the public needs and many CPAs already provide.

In deciding not to take a position on the proposal, the Society's leadership expressed the need to learn more details on the credential's requirements and other issues.

According to the AICPA, CPAs with an as yet undetermined number of years in practice would automatically receive the credential. The NYSSCPA raised questions about the designation's specific requirements for CPAs; other regulated professionals such as attorneys, certified life underwriters, and enrolled agents; unregulated but credentialed professionals such as certified financial planners, certified management accountants, certified tax accountants, and certified tax preparers; and lay persons such as MBAs, unlicensed accountants, and the general public.

The Executive Committee also expressed concern about the AICPA's and the Society's commitment to their missions to further the CPA profession, the level of support for the credential among CPAs and at the AICPA and any successor organization, and the regulatory impact. The AICPA stated that the XYZ credential would not require regulatory oversight.

"Regulators may not yet be aware of it," Elliott said, "but it should have no effect on their regulatory mission, which is to protect the public relying on the attest function. There is no reason for them to regulate the new designation."

The Executive Committee stated that questions remain regarding regulators' responses to the proposed credential. The committee questioned both the impact on the regulation of CPAs and regulators' and the public's acceptance of the profession's self-regulatory approaches.

The AICPA plans to present the task force's proposal to Council at its October meeting; Council would then vote to submit the proposal to the AICPA membership for its final approval in spring 2001. AICPA bylaws require a two-thirds membership vote for passage. If AICPA members embrace the new credential, the first XYZ could be awarded by summer 2002. *