Minority Issues at Forefront
The American Institute of CPAs board of directors approved a diversity commitment statement drafted by the minority initiatives committee. The committee hopes that the statement will become a model for CPA firms and for businesses where CPAs work. "That's how we believe the statement will become important," committee chairwoman Brenda S. Birkett told the Journal . "The AICPA can do only so much itself—the goal is to have some impact on the membership." The statement came out of discussions committee members had while creating a strategic plan, which the board of directors approved in 1997.
Along with the statement, the committee is pursuing related diversity actions, including
- Participating on an AICPA cross-functional team to determine the necessity of diversity training.
- Working with those responsible for AICPA committee appointments to ensure committees reflect the diversity of the membership.
- Encouraging state CPA societies to adopt similar statements.
- Helping AICPA staff attract a more diverse group of speakers at Institute-sponsored conferences.
|AICPA Diversity Commitment Statement|
The American Institute of CPAs is committed to being recognized as the premier national professional organization. To achieve this status, it must lead in encouraging, valuing and fostering diversity in its membership and in the workforce. We have taken the decision to reaffirm the importance of diversifying our profession and promoting workforce diversity by making these objectives among the AICPA's highest priorities. Therefore, in principle and in practice, the AICPA will identify, recognize and support strategies and efforts within the organization and profession that are dedicated to achieving the AICPA's diversity objectives.
The AICPA will begin by increasing its efforts to continue to recruit and maintain a diverse professional staff. In addition, it will continue to actively recruit and maintain diverse membership on all AICPA committees.
The AICPA encourages all state CPA societies and related organizations to adopt similar diversity statements.
"We want to bring diversity to the forefront, so people won't just say, 'That's nice,' and put the issue on the shelf and forget about it," said Birkett. The statement is reprinted on the right.Big Firms Merge; Smaller Ones Ponder
The business press was still publishing news stories on the proposed merger between Coopers & Lybrand and Price Waterhouse (see " And Then There Were Five ," JofA, Dec.97) when Ernst & Young and KPMG Peat Marwick seized the headlines with their own merger plans, which would create an even larger firm. The resulting E&Y/KPMG firm would have
- More than $18 billion in revenues.
- Close to 13,000 partners.
- Philip Laskawy, Ernst & Young's chairman and chief executive officer, as chairman.
- Stephen G. Butler, KPMG's chairman and CEO, as CEO.
Although the pundits did not specifically predict this latest merger when C&L and PW made their announcement, Gary J. Previts, professor of accountancy at the Weatherhead School of Management, Case Western Reserve University, Cleveland, and J. Curt Mingle, a member of Clifton, Gunderson LLC, in Ephraim, Wisconsin, both had told the Journal in last month's article that they were expecting more high-level mergers.
Picking up clients—and staff
The Journal asked several members of the American Institute of CPAs practice group B advisory committee, which serves as a forum for the largest non-Big Six (or Four) firms, to share their personal thoughts on the implications these mergers have for other firms.
"I believe the mergers may cause some of the smaller companies to leave the Big Four and thus give us and similar firms a chance to bring them in as clients," said Lawrence M. Zagarola, a partner of J. H. Cohn in Roseland, New Jersey. Cohn has about 38 partners. William E. Fingland, Jr., a partner of Baird, Kurtz & Dobson, a 119-partner firm in Springfield, Missouri, is also looking for clients. "We hope that certain kinds of clients, that don't want an even bigger firm, will look for an alternative." Even McGladrey & Pullen, one of the largest second-tier firms with 380 partners, sees its relatively smaller size as an advantage. "These mergers—designed to better serve large multinational clients—make it obvious to middle-market clients that they are not part of the Big Four client base," said LeRoy E. Martin, a partner in Bloomington, Minnesota. "Such companies will look to group B firms for the services they need."
But the real competition may be for staff. Cohn, BKD and M&P expected senior managers and partners to leave the newly merged firms; even personnel not actually forced out may find the resulting firms not to their liking. "Amazingly, a lot of really good people who would not be casualties of a merger feel they're going to be and start looking around," said Martin.
Cohn, BKD and M&P have no current plans to merge with other firms. However, Zagarola said second-tier firms would continue to merge, even without the impetus of Big Six mergers. Martin said after the flurry of mergers in the mid-1980s and early 1990s most group B firms had found comfortable regional or industry niches and were not expecting to consolidate further. Fingland echoed this, saying, "I don't see how mergers in firms our size would help our clients. The Big Six apparently believe they have to be larger to perform their consulting services. But I never heard of a Big Six client saying, 'You have to be even larger to serve us.'"Tax Award for Dedicated Committee Member
The American Institute of CPAs tax division presented the Arthur J. Dixon Memorial Award, the profession's highest tax award, to Richard D. Thorsen, a former managing partner of Charles Bailly & Co. Michael E. Mares, chairman of the AICPA tax executive committee, presented the award at the Institute's annual fall tax conference.
Thorsen has had a distinguished international career, working extensively in Russia and the former Soviet Union since 1967. He assisted in the privatization of a Siberian bank, provided consultation to a private brick factory in southern Russia and devised and installed a computerized accounting system for a loghome builder in St. Petersburg. Although retired from Bailly, Thorsen, also a certified valuation analyst, continues to provide litigation, business valuation and tax consulting services.
Thorsen has been a member of about 20 AICPA committees, including the tax and professional ethics executive committees. He has served on the AICPA council and board of directors and was a member of the Internal Revenue Commissioner's Advisory Group. Locally, Thorsen was president of the Minnesota Society of CPAs and chairman of the Minnesota State Board of Accountancy.
The award was established in 1982 to memorialize Arthur J. Dixon, a
former chairman of the tax executive committee with a long record of
service to the tax division.