President's Commentary

By Nancy Newman - Limata

The New York State Society of CPAs took a leadership role in opposing the efforts by the American Institute of CPAs to modify the Institute’s bylaws and enable the “granting of an interdisciplinary global credential.” Late last year, approximately 134,000 AICPA members cast ballots that sealed the fate of the credential, which has alternately been referred to as XYZ, Cognitor and Strategic Business Professional. The results were overwhelming. Nearly 63 percent stood opposed while 37.3 percent supported the initiative. In order for the bylaws to have been changed, the credential needed two-thirds of the vote. I personally was surprised but pleased with the wide margin of the credential’s defeat.

Over the last 18 months or so, I often questioned why New York was so strongly opposed to the credential when so many other states seemed at least open to the possibility. As I reflected on this mystery, I would ponder whether there is something unique to New York’s economy or the type of services that New York CPAs provide. But I now realize that the only difference between us and the other states is our conviction. As New Yorkers, we call it as we see it. And as a professional society, we should be proud that we spoke up and expressed our beliefs—that we helped inform other states of the many reasons to oppose the initiative. It seems that an outspoken minority turned out to be a leader of a greater than expected silent majority.

I believe it is to the Society’s credit that we are comfortable debating issues in public. We recognize that we are not always right and we can be persuaded by a different perspective. This sort of approach to issues is democracy functioning at its best. As State Society members we should value the open dialog that this debate has created and work to build on it. To paraphrase Alexis De Toqueville, we participate in associations because they make us greater than we could be individually.

The credential debate has helped reinforce a lesson we already know: we must speak our minds. The CPA profession cannot afford to be part of a silent majority. We must speak out on those issues that affect the profession as well as those issues that affect the public interest and for which we are well suited to express our opinions.

This point brings me to an issue that not only has affected our profession but also the economy at large, the collapse of Enron Corp. Enron is the largest business failure in U.S. history, and the accounting profession is under close scrutiny because of it. Instead of turning a blind eye, we need to be willing to openly admit to our mistakes and make suggestions and recommendations to the AICPA, the Financial Accounting Standards Board and the Securities and Exchange Commission that will help the profession regain the public’s trust.

One of the earliest lessons I learned as a staff accountant was to not only recognize a problem, but also be ready with a proposed solution for it. This is the attitude and approach that we should all have on this matter.

I wish to commend SEC Chief Accountant Bob Herdman and SEC Chairman Harvey Pitt for their vision. They are creating a new environment at the SEC, one that encourages companies and auditors to seek guidance in advance. Their goal is for the SEC to be a constructive resource and sounding board. Suggestions from the relatively new Commission include creating more proactive audit committees, establishing clearer identification and assessment of accounting principles by companies and their auditors, and implementing more comprehensive reporting for retirement plans.

Last month, Pitt, in an op ed piece he wrote for The Wall Street Journal, made several suggestions that I believe could be instrumental in helping restore confidence in the accounting profession. Many of his recommendations concern providing investors with more timely and relevant information. What a novel thought.

How long ago did the AICPA issue the “Jenkin’s Report” that is aimed at improving business reporting? Longer than some of us can remember. But, let’s not leave the future of the profession up to another specially appointed task force or leadership group to figure out. Let’s do the work ourselves.

I believe the Society is making great progress as it seeks to be more responsive to its membership. Over the last few years, the NYSSCPA officers and board of directors have made listening to the members a top priority. That is part of what it means to be a leader: to listen and act on your constituents’ behalf.

The Society strongly encourages you to share your thoughts and ideas with the rest of the members. If you have any recommendations for improving our profession, the Society leadership and myself would like to hear from you. You are welcome to send me an e-mail at the address listed below. We’ll be sure to pass your suggestions on to the SEC.

Let’s work together to build a better profession—one that we can be proud of, one that the public can believe in and one that every student will want to be a part of.

president@nysscpa.org