November 2000

AICPA Council Approves Modified Cognitor Resolution

LAS VEGAS—The American Institute of CPAs fall Council meeting in Las Vegas approved a resolution to continue the development of the global professional credential, which is tentatively named “Cognitor,” but requires the AICPA to conduct further research and prepare a business plan including financial projections.

Because of calls for more research and a better understanding of the bottom line for the Cognitor endeavor from state delegations, including New York, Illinois, and California, the AICPA Fall Council approved a substitute resolution offered by the Ohio delegation on Oct 24.

Cognitor is the proposed name for an international business credential formerly known as XYZ. The credential would be used by professionals from a number of disciplines, including accounting, law, and even engineering.

Council’s vote came after a discussion period, where some delegates, including New York’s P. Gerard Sokolski, called for more disclosure of information about Cognitor.

“It appears that a majority of the members in New York have no knowledge or understanding of the Cognitor concept,” said Sokolski at the Council meeting. “It would be difficult to support this resolution unless it answers the following questions.”

Sokolski then posed a number of questions including queries of how government regulatory bodies would view the designation, what effect it would have on independence rules, and whether Cognitor would compete with the CPA designation.

The substitute resolution calls for the AICPA to prepare a business plan, including financial projections that demonstrate the viability of the endeavor, as well as market research results and an analysis of the implications for student enrollment.

The Institute plans to answer the questions posed by Sokolski and other state delegates before the credential goes before the Council at its May 2001 meeting.

The Las Vegas resolution comes at a time when opposition to Cognitor seems to be growing and becoming more vocal.

“Why does it make sense to have an organization where hundreds of thousands of competitors have credentials equal to ours?” said Harvey Sonnen-berg during the Council meeting.

Sonnenberg, the managing partner at New York-based M.R. Weiser & Co. and a member of the Society’s Furtherance Committee, said he did not believe that Cognitor was the answer.

“Is the fear of further erosion in the AICPA membership the reason for pushing it [Cognitor]? Then this should be addressed by being more responsive to the needs and wants of the members,” said James F. Morrell, another member of the Furtherance Committee.

“Creating a new designation will only confuse and weaken the public’s perception of what a CPA is,” said Michael Rosedale, president and chief executive of CPAdirectory.com in Wantagh, N.Y.

Rosedale has actually started a campaign against the Cognitor designation, where he is trying to stir up grassroots support among the members of CPAdirectory.com and has openly urged the AICPA to drop its pursuit.

Comments were also made by Neil A. Gibgot, partner-in-charge at Gibgot Willenbacher & Co., and Robert Israeloff, partner-in-charge at Israeloff Trattner & Co. (see comments on page 11).

Cognitor critics have become more vocal since the defection of the three institutes of chartered accountants in the British Isles in early October.

The Irish, Scottish, and English Institutes of Chartered Accountants opted out of the task force citing a lack of support for the credential in the British Isles and doubts that the new credential would add value to the existing CA designation.