November 2000

By P. Gerard Sokolski, CPA

As we go to press this month, the New York Delegation of the American Institute of CPAs Council has just returned from the fall meeting in Las Vegas.

On Tuesday morning after hearing briefings from President Barry Melancon and Chair Robert Elliott, the AICPA Council overwhelmingly, but not unanimously, passed a resolution to continue the development of a proposed global professional credential. This resolution is printed in its entirety in this issue.

The AICPA stated that the proposed new global credential presents an extraordinary opportunity. They went on to say that we are now considering a credential that essentially defines a new profession. Its holders can be characterized as rooted in strategy, facilitators of organizational change, savvy in performance measurement systems, entrepreneurial in nature, globally aware and grounded in knowledge integration.

The new profession’s promise is that those with the credential will have the skill and experience to serve clients in a variety of disciplines which in turn will help create wealth for their clients and employers. There will be a broad range of disciplines in a new credential including those from accounting, law, information technology, consulting, marketing, and human resources.

The AICPA goes on to say that the proposed credential has been carefully and intentionally devised so that it is separate from the CPA credential and will be one that meets the needs of a diverse profession; claim a highly active, lucrative, currently unclaimed market space; preserve and protect the integrity and services of the CPA; create a credential that can adapt swiftly to the global market demands and change; and allow its holders to move and provide services seemingly across international borders. The Council was told that the new global credential rose from the grassroots “Vision” of the profession started several years ago when division projects attempted to determine what direction CPAs wanted the profession to take, what CPAs of the future would be like, and what qualities they need to successfully compete in a marketplace of tomorrow. The current message received from the “Visioning” experience was that CPAs enthusiastically supported chartering a new direction for the profession, one that continues to increase the value provided to clients and employers to expanded services in competencies. The Council was told that, after considering the services that were targeted by the vision process, the next step is to formulate initiatives to take a lead position in claiming the market space surrounding “management consulting and performance management” and "international services."

The key questions that influence the creation and development of the new global credential were stated:

Do CPAs currently possess the competencies to compete in the global, knowledge and technology-driven marketplace?

How do the buyers of these services perceive the CPA profession relative to their market's place?

Are CPAs the dominant service providers in this market?

Is the profession poised to react quickly enough to the ever-changing market demand this service arena necessitates?

Council members were also informed that about 85% percent of AICPA members currently practice in areas other than our "franchise area." We were told that stretching the CPA brand is still important and the AICPA will continue to commit resources to support this effort, but that this alone will not move market perception far or fast enough. This leads to a separate credential where the ground rules and conditions are created by the CPA profession and work best to meet the diverse needs of all the members.

The Council was also told that the holder of this new credential would be able to move more freely, both geographically and corporately, because the credential will be recognized for its globally consistent ethics, competency, and performance standards. For additional information presented to the Council, see the related articles in this issue of the Trusted Professional on pages 9–12.

After the presentation by Robert Elliott, many members of the Council approached the microphone and gave their views on the Cognitor concept. Almost all of the views were positive and in favor of the Cognitor concept. Several of the New York delegation gave their views, which were not in favor of the Cognitor concept. For more details on my remarks, see the separate insert in this issue.

The resolution on the Cognitor passed by the AICPA Council, among other things, authorized the board of directors and management of the Institute to design and implement a program to inform AICPA members on the continued development of the new global credential. Members will be notified about how it will benefit CPAs and how to obtain member and state society responses. Additionally, the resolution directs the Institute management to prepare a business plan to include financial projections demonstrating the viability of the endeavor as well as the market research results and an analysis of the implications for student enrollment in the accounting profession. Finally, the resolution directed the Institute’s general council to prepare for consideration by the Council at its May 2001 meeting the next phase in the development of the global credential: any bylaw amendment to be presented to the membership for approval or any other documentation required to permit the Institute to create a separate organization or affiliate in order to implement the new global credential in the United States.

On the first day of the meeting, the Council members were briefed on the results of a student and academic research study that the AICPA commissioned the Taylor Research and Consulting Group to conduct. The purpose of this research was to identify factors causing a downturn in accounting majors and CPAs and to identify means to reverse this trend.

The study consisted of a qualitative and quantitative phase. The qualitative phase of the research consisted of nine focus groups among high school and college students in four cities nationwide. The quantitative phase consisted of 2,174 telephone interviews that lasted approximately 20 minutes. These interviews were conducted nationwide with high school and college students.

Phase 1 of the research suggests that the AICPA faces the challenges of student perceptions and systemic barriers in reversing the downward trend of interest in accounting majors and CPAs. The main challenges include ignorance, misinformation, and negative perceptions. The Phase 1 research identified seven attributes that make careers attractive to students. Students want their careers to be lucrative, rewarding, limitless, creative, and multidisciplinary and to include travel and group work.

I think it is apparent from the results of the research study that we have a lot of work to do to entice students to enter the accounting profession.

One final comment on the AICPA fall Council session, relating to the Securities and Exchange Commission's independence rules. The Council was addressed by SEC Chair Arthur Levitt on Tuesday afternoon. It would appear from his comments that he was holding out an olive branch to CPAs and asking for their cooperation in attempting to bring a correct solution to the independence issue, one that would continue the CPA’s role as the protector of the public interest.

As we continue our chapter visitations, we look forward to the opportunity to answer your questions and address your concerns regarding a portal, the Cognitor, the SEC independence rules, and where we should be heading with the Uniform Accountancy Act. On November 21 Barry Melancon will be addressing a joint meeting of the Nassau and Suffolk Chapters to bring them up to date on the portal and Cognitor issues.