December 2000

Melancon Explains Proposed Credential at Chapter Meeting

During a recent joint meeting of the New York State Society of CPAs Suffolk and Nassau Chapters, Barry Melancon, president and CEO of the American Institute of CPAs, explained the AICPA’s latest moves in developing the proposed international business credential referred to as either XYZ or Cognitor as CPAs from around New York asked tough questions. Melancon was guest speaker at the Nov. 21 breakfast session, developed to help chapter members learn more about the AICPA’s current initiatives. The meeting took place at the Melville Marriott.

Melancon justified the proposed designation by citing an AICPA-commissioned study by the Taylor Research and Consulting Group that claims enrollment in accounting curricula has decreased over the past few years.

“Today the accounting degree is limiting and, therefore, not as attractive as other degrees,” Melancon said. “The accountant’s degree used to be regarded as broad-based, enabling graduates to do many functions.” In today’s environment, however, the CPA candidate must pass through the “eye of the needle.”

“Cognitor” is the proposed name for an international business credential also known as XYZ. The proposed credential would be available to professionals from a number of disciplines, including accounting, law, and engineering.

At its October meeting in Las Vegas, AICPA Council approved a resolution to continue developing the credential. (See pullout section in the November Trusted Professional.) However, concerns raised by state delegations including California, Illinois, and New York helped pave the way for Council to accept a substitute resolution from the Ohio delegation. The substitute resolution called for the AICPA to prepare a business plan that would include market research results, financial projections demonstrating viability, and an analysis of student enrollment implications.

Melancon’s speech generated a number of questions from those in attendance. Ilene Persoff, a member of the NYSSCPA Future of the Profession Oversight Committee, asked whether the proposed credential would compete with and dilute the CPA brand.

The two can coexist, Melancon said, pointing out that CPA firms now employ a significant number of non-CPAs and that some firms do not call themselves CPA firms anymore.

NYSSCPA Vice President John J. Kearney then read a statement by Robert Israeloff, one of Kearney’s partners at Israeloff Trattner & Co., basically reiterating Israeloff’s comments from the AICPA’s fall Council meeting. Israeloff, a member of the Council’s New York delegation and a past president of the Society, has stated that, before it creates a new brand, the AICPA should try to expand the CPA. Melancon countered that the AICPA must determine what the marketplace wants and that “protectionism” is not good for the profession.

Barry Seidel, chair of the NYSSCPA Annual Leadership Conference and a member of the Furtherance Committee, was more concerned with the possible effect of the United Kingdom’s recent withdrawal from the multinational task force developing the credential. Melancon took the opportunity to blast the British, saying the United Kingdom would like the CA (chartered accountant) to be the global designation.

Michael Rosedale, president and CEO of CPA directory.com and a vocal opponent of the proposed credential, also took the opportunity to query the AICPA president on the issue. Rosedale asked Melancon how a tax-exempt organization like the AICPA could promote a non-CPA credential.

Melancon said the AICPA will do only what its members allow it to do. He also said the Institute is still studying the matter and has not done anything yet. w