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PROFESSIONAL ISSUES

Preparing for the Next Opportunity

New AICPA chairman says the CPA profession should seize opportunities created by emerging trends.

By MATTHEW G. LAMOREAUX and PAUL BONNER
NOVEMBER 2009
Robert Harris

Robert R. Harris takes a large view of the profession. He believes the economic crisis, global convergence of standards, a worldwide concern about the depletion of nonrenewable natural resources, and generational changes all present unprecedented opportunities for CPAs.

 

Harris, who was elected to a one-year term as chairman of the AICPA during the fall Council meeting in October, says he is concerned that young people don’t fully appreciate the innovation and breadth associated with the CPA profession—a view he hopes to foster during his year as chairman.

 

“Throughout my career, I have listened to clients and worked with them to solve their problems and help them meet their objectives,” Harris said. “The knowledge I gain from the exposure to a wide variety of clients provides me with constant learning moments. These last 13 years, I have been fortunate to work with CPAs all over the country who are involved in professional malpractice cases, and the ability to help them has been so very rewarding.”

 

Harris’ appreciation for the profession and his philosophical approach to making a difference in business owe a great deal to an early influence. His grandfather, who was the 13th CPA licensed in Florida, practiced in St. Petersburg, Fla., and had a motto printed on the back of his business card that Harris keeps in his office: “Unless we are wiser today than yesterday, we must expect to fail tomorrow.” Harris, who holds the Institute’s CFF credential in financial forensics, is managing director of the public accounting firm Harris, Cotherman, Jones, Price & Associates, CPAs, in Vero Beach, Fla. He brings to the chairmanship extraordinary experience and insight into the profession from a variety of roles while maintaining a forward-thinking and progressive approach, said AICPA President and CEO Barry Melancon.

 

“He’s served on numerous AICPA and state society committees, including advocating for small firms on the PCPS Executive Committee and overseeing the Institute’s four specialized credentials on the National Accreditation Commission. And his own small-firm practice gives him an incredibly broad knowledge of the profession,” Melancon said. “He’s approachable and listens. He will be a great advocate of members in the greater context of what is right for the profession.”

 

FINANCIAL 9/11

For Harris, doing what is right often starts with a critical ingredient: honest, meaningful communication.

 

The financial crisis, Harris says, has many parallels with the terrorist attacks of Sept. 11, 2001. In the months leading up to both events, information that could have been used to prevent the crises was available but was not sufficiently communicated or acted on.

 

“We all saw what happened when 9/11 occurred,” Harris said. “We all witnessed the effects of poor communication among our intelligence and law enforcement agencies prior to 9/11. During it, we saw the frustration that a lack of effective interagency communications caused for first responders.”

 

In the same way, over this past year it became painfully obvious there had been a lack of communication among the more than 100 federal and state agencies charged with regulating the financial industry in our country. When the transparency needed for smooth operation of worldwide markets was obscured, the result was an abrupt shutdown of those markets and fear among private investors, which in turn caused a further lack of liquidity as investors attempted to convert securities to cash. In the aftermath, calls for stricter regulation of some investing practices and financial instruments mean that CPAs, with their understanding of sound reporting practices, can help fashion solutions, Harris said. And from greater transparency will come confidence, he says.

 

“We must see that reregulation of the financial marketplace not only keeps it transparent, but provides for better accountability,” Harris said. CPAs should play a key role from an auditing and reporting perspective.

 

“The SEC has supported a number of the proposals we delivered to them in April,” Harris said. “These proposals will provide greater transparency and assurance in the financial marketplace. Regulation in our country and around the world has come from crises of the past. We must stay involved and make sure that the regulations that evolve from this crisis are relevant and efficient and provide transparency for the users of financial information. The profession must be involved in this process.”

 

GLOBALIZATION

Restoring confidence to financial markets is not merely a domestic issue. And because the world’s markets and national economies are increasingly interconnected, the consistency of financial reporting is no less important than transparency, Harris said.

 

“Today, investors can trade financial instruments all over the globe, but for analysts and investors to make truly informed decisions, we must have consistency and transparency. Clearly, one common set of standards would enhance the quality of the information and the resulting decisions.”

 

This need provides U.S. CPAs a sterling opportunity to influence the global profession by taking a leadership role in the International Federation of Accountants (IFAC), Harris says, pointing out that the current president of IFAC, Robert Bunting, is a past chairman of the AICPA.

 

Perhaps most critical is the chance for CPAs to step forward in framing the United States’ participation in those worldwide standards, Harris said. The AICPA has been at the forefront of educating CPAs on International Financial Reporting Standards (IFRS), as the nation determines whether and when to adopt those standards or to converge U.S. GAAP with them. In either case, the issue has focused needed attention on standards for private U.S. companies, he said. As the issue is solved for public companies, the way forward for the vastly greater number of privately held enterprises will become clearer, he said.

 

“Once the IFRS movement begins to put U.S. public companies on a course toward international standards, it can’t help but steer the way for even the smallest private companies,” he said.

 

Along with global standards goes a need for a common “language” of financial reporting. Thus, Harris says, XBRL will play a key role not only in transparency but also in analysis. XBRL, often referred to as “interactive data,” is an open information format standard that enables automated sharing of business information as contained in company ledgers and financial statements, as well as textual information included within footnotes and other requirements of business reporting. “Once we get XBRL worldwide, it makes it so much easier for data to be interpreted and looked at in an objective way,” Harris said.

 

Harris reflects on the overall impact of globalization on the profession. “If you look at each trend or event in isolation, you can miss the big picture. There may not be a single worldwide economy, but our national economy and local businesses are part of the general flow of global commerce.” Financial reporting is increasingly standardized globally, and businesses in your own hometown can have international reach. Financial expertise and insight is more critical than ever for the world’s economic health, and Harris is determined that the U.S. CPA will remain one of the top credentials around the world. Thus, the CPA exam is transcending boundaries as well.

 

“If all goes to plan, in 2010, the CPA exam will be delivered internationally,” Harris said. The exam will first be offered in a few select countries and ultimately around the world. The international offering of the exam, according to Harris, is an opportunity to enhance global application of its rigorous standards and the reputation of the U.S. CPA as a foremost financial reporting credential.

 

SUSTAINABILITY

Sustainability, which Harris describes as the intersection between environmental concerns and sound business modeling, is yet another way the CPA profession can make a profound and long-lasting contribution to society, he says.

 

“The industrial age brought about the tremendous use of nonrenewable resources,” he said. “And as those begin to wane, we’ve got to find ways to do things more efficiently, more effectively.” Many CPAs may initially think “sustainable” necessarily entails greater cost.

 

“However, evidence has shown us that business can in fact become more efficient and reduce costs when introducing sustainable processes into its business model,” he said. “Going green can mean more green.”

 

Under Harris’ leadership, the Institute will help CPAs drive this change.

 

“We hope this year to introduce tools for all our members to help them operate more sustainable businesses,” Harris said. “We need to lead the other professions in this area.”

 

CPAs also can lead in new ways of measuring and reporting sustainability. “In the not-too-distant future, we will be the ones who will be responsible for the reporting on these standards and indexes,” he said.

 

“It is my hope that I can look back in 10 years and see that CPAs have made a difference in the area of sustainability, that our businesses and clients have benefited and that CPAs in public practice are enjoying a new practice area. Then I will feel we made the start and we built the foundation.”

 

YOUNG CPAs

With his concern for the future comes a passion for involving more young members in the AICPA’s committee structure, because, he says, “this is where I came from.” He served on his first AICPA committee at age 33 and was the youngest president of the Florida Institute of CPAs at age 36. He wants to make sure today’s young people have similar opportunities and is glad he saw them materialize during his vice chairmanship of the AICPA.

 

Committees during Harris’ year as chairman have 65 volunteer members age 35 or younger, compared with 24 members age 35 or younger in the previous year. Among 78 volunteer AICPA groups, 53 (68%) now have at least one 35-oryounger member, compared with 20 groups (26%) the previous year.

 

Harris also supports the Leadership Academy started by immediate past-Chairman Ernie Almonte. “Ernie started the Leadership Academy to help bring diversity and young people into the leadership of the Institute. It’s something we’re going to continue this year and, hopefully, into future years.” The benefit is mutual: Committees need younger CPAs’ perspectives, but they can’t assume that young people will automatically fill the ranks.

 

“We have an enormous number of people in that category of under 35, and if we’re not providing the tools they need, the organization they need, the network they need, they will find it elsewhere,” he said. Indeed, that network already is flourishing online, where younger members often can introduce committee members to faster and more efficient ways of communicating electronically.

 

“If we look at those who are in their 50s and 60s on committees, most of them have not had a Facebook or MySpace page,” says Harris, 56. “Most of them don’t Tweet. Most of them probably follow the news from The Wall Street Journal or The New York Times or their local newspaper and read magazines, but they’re not as socially interactive with their peers as young professionals, who can have networks that easily top 100. They’re not passing information the way the young people do.” (Follow Harris on Twitter at twitter.com/robertrharris.)

 

He says younger leaders bring a perspective that will help the Institute transition to the younger generation. “They are different, of that there is no question—and that’s our strength. They are the future of the AICPA.”

 


 

Matthew G. Lamoreaux (mlamoreaux@aicpa.org) and Paul Bonner  (pbonner@aicpa.org) are JofA senior editors.

 


 

An Able Member Takes the Helm

New AICPA Chairman Robert R. Harris has served the Institute in many capacities, most recently as vice chairman (2008–2009). He also has been on the board of directors, was a member of the AICPA’s Council for 15 years, and has served on many task forces and committees.

 

He is managing director of Harris, Cotherman, Jones, Price & Associates, CPAs, in Vero Beach, Fla. As a consulting and testifying expert in professional standards and malpractice issues, he educates CPAs and attorneys nationally.

 

Harris received his bachelor’s degree in accounting from Stetson University in DeLand, Fla. He was president of the Florida Institute of CPAs from 1990–1991 and a member of that state society’s Board of Governors from 1985–2001.

 

In the AICPA, besides the previously mentioned roles, he chaired the National Accreditation Commission from 2003–2008 and the 150-Hour Task Force from 1999–2001. Other executive committees he has served on include those for the Private Companies Practice Section, Work/Life and Women’s Initiatives, and Quality Review.

 

He lives in Indian River County, Fla., near the ocean and has always enjoyed watersports including sailing, fishing, scuba diving, and for the past three years, kite boarding. At an early age, his ambition was to become an oceanographer. He also enjoys snow skiing. He is married with two grown children.

 

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