The Tax Restructuring Act is changing the way many CPAs practice. The profession is examining the way CPAs get their training and continuing education. U.S. standard setters are facing pressure from both critics at home and supporters of international standards worldwide. And through all this, CPAs in business and industry are coming into their own as leaders in corporations from coast to coast. Taking over the leadership of the Institute as chairwoman of the board of directors during these turbulent times is Olivia F. Kirtley, emblematic of change herself: She is the first elected AICPA leader from business, rather than public accounting, at a point when Institute members in business and industry have become the single largest membership segment. But Kirtley is by no means just a symbol, as she showed when she discussed the major issues, and her major plans, for her administration.
A BALANCED PERSPECTIVE
Olivia Kirtley spent the first decade of her career in public accounting. But for the last 20 years, she has worked at the Kentucky-based Vermont American Corp., a privately held $500 million manufacturer of power tool accessories. Originally director of taxes, she is now vice-president of finance and CFO. Does her background give her a special perspective? It gives me a balanced perspective as chairwoman, she said. I think that's valuable right now as we try to unify the entire profession behind the Vision Project.
Kirtley will need her balanced perspective as she leads the Institute. With all the changes the profession is going through now, its imperative we keep the communication lines open with all the groups, constituencies, that have a vested interest in what CPAs do, such as the SEC, the ISB, NASBA, FASB, GASB, IFAC and the IASC. She promised to make building and maintaining relationships a key goal during her year in office. Honest, open dialogue is pivotal in avoiding misunderstandings and in gaining insights we might otherwise overlook. Kirtley is confident about the power of open dialogue: If we maintain an open forum where everyone can express concerns, we will ensure that stakeholders in our profession are never caught off-guard by our actions or decisions. We want everyone to understand that whatever we change and however we change, we will not alter our commitment to the public interest.
A CPAs TRAINING
Part of changing the face of the profession is changing the education of those who enter it. To attract the best and the brightest, we have to offer an educational foundation that prepares them to be broad-based business professionals, said Kirtley, who plans to visit business schools over the next year. She wants to talk with educators about the curricula for CPA-track business students. Are schools covering strategic thinking, communication and leadership skills? Kirtley said she developed her leadership skills at Florida Southern College, a private liberal arts school in Lakeland, Florida. (Kirtley noted the 110-year-old school is famous for its collection of Frank Lloyd Wright buildings.) I enjoyed a terrific accounting and business curriculum, but my involvement in extracurricular activities, from student government to the yearbook, helped me develop leadership and management skills. Her achievements are literally cast in stone; her name is inscribed in the schools honor walk as outstanding student leader for the class of 1972.
Kirtley also is interested in lifelong education for CPAs (see CPE Is Broke; Lets Fix It, page 77). The CPE competency model is a win-win situation because CPAs are truly interested in continuing education. But they want to learn something that can have a positive and immediate impact on their current job function or new work aspirations.
Vermont American is a multinational company with operations in Europe, Asia, Australia, Canada and Mexico. Global issues are a concern of the company and also will be Kirtley's concern as AICPA chairwoman. She emphasized that U.S. accounting standards are among the highest in the world and have contributed to the strong capital markets we have today, but that increasingly, there is a global push for universal adoption of IASC standards. National agendas are no longer enough. It is impossible to pave a path to the 21st century without being globally astute and a globally involved profession. SEC Chairman Arthur Levitt has encouraged our vigorous involvement in the international arena. We will work diligently with the SEC and FASB to address issues that international standards create for the U.S. economy and accounting profession. We will strive to find ways to make financial reporting the common cross-border language.
International pressures are not the only factor affecting U.S. accounting standards; the argument over the FASB derivatives standard highlighted some dissatisfaction with the standard setting process. Nevertheless, Kirtley remains committed to it. The FASB needs to remain independent, free from the political process and special-interest groups. The guiding principle needs to be what standard is best for the investing public; that's who FASB and its standards are there to protect.
Kirtley also champions the traditional financial statement audit, which many in the profession have all but given up for dead as consulting niches grow. Although she expects that audits will move from historical financial statements to a more real-time assurance, she said the traditional audit still plays a valuable role for both the company and the investors.
In the tax arena, however, she had hoped for more in the taxpayer confidentiality privilege in recent legislation that gave CPAs confidentiality rights with their clients, similar to what lawyers have with theirs. Congress excluded tax shelters from the confidentiality provision for corporations, she said. The Institute will have to provide education in this area so practitioners know what they can and cannot do. It's unfortunate that taxpayers have to worry about confidentiality; I was very disappointed with the changes in the bills final hours before it was enacted into law.
LARGER ROLE IN D.C.
Some members are more enthusiastic than others about the new act. But, however members feel about the new regulations, the AICPA will be taking a stronger stance in Washington. Kirtley announced the creation of the AICPA Political Leadership Cabinet, with Jake Netterville, one of her predecessors, as chairman. It includes 20 of the most politically savvy individuals in our profession, said Kirtley. Their political leadership, activity and effectiveness will give the profession valuable political guidance. The Cabinet will serve as an advisory panel to the board of directors, the Institutes PAC and the Washington office. The Cabinet plans to advise the Institute on the Federal Key Person Program, which encourages CPAs to effectively communicate the professions position on various legislative and political issues. It will involve itself not only in matters affecting the profession but also in public policy issues in which the profession can contribute.
According to Kirtley, the Cabinet will build a two-way path between the profession and Capitol Hill. We want to have easy access to Congress when it is debating issues important to the profession, and we also want to serve as a resource to Congress when it is addressing complex financial matters. Our public interest tradition requires us to speak out on public issues where our valuable and unique insight can guide the debate with unbiased facts and objective analysis.
STATE CAPITOLS, TOO
This year, the AICPA will be reaching out more than ever to state legislatures, in addition to Capitol Hill. The main reason is the Uniform Accountancy Act, a model law for the regulation of CPAs that the AICPA and NASBA are encouraging all 54 jurisdictions to adopt. This model bill proposes
- Protection of the public interest by bolstering provisions relating to the most critical service area, attest, and ensuring that all who use the CPA title adhere to an appropriate level of professionalism.
- Promotion of equality among licensees by ensuring that all who wish to use the CPA or PA title are licensed and subject to state board regulations regardless of their field of employment.
- Ease of mobility across state lines so CPAs can more easily serve clients and employers outside the states where they are licensed.
- Response to the marketplace by removing barriers that unnecessarily impede licensees and their firms from competing effectively to provide a broad range of professional services.
In fact, Kirtley is coauthor of an article about the UAA with NASBA Chairman Milton Brown. See Regulations for a New World, JofA, Nov.98, page 65, for details on this revolutionary approach to regulation of the profession.
CPA AS CORPORATE LEADER
Not all changes are external; CPAs are changing themselves. According to Kirtley, CPAs are not thinking about becoming leaders in their companies; they already are leaders. Look around; you'll see a lot of CPAs who are key decision makers. The CPAs core competencies are a wonderful springboard for those who want to be in operations management. The CPA has the knowledge and insight to bring together all the company's information, financial and nonfinancial. Kirtley pointed out that Vermont Americans president came to the company from the Big 6 and the head of one of the company's subsidiaries started out in the company's internal audit division. Accounting has been a common managerial background in our company; I think that's true throughout corporate America. She pointed out that Douglas Ivester, a CPA and a former colleague of hers at Ernst & Whinney in Atlanta, is chairman and CEO of The Coca-Cola Company.
Consider, too, a CPAs well-deserved reputation for objectivity and integrity. This reputation is very much central to who we are and as important in the corporate world as our core competencies.
Kirtley also is the first woman to head the Institute, at a time when the profession is seeing more women entering the profession. I'm delighted to see so many more women CPAs now than there were when I started, she said. But although I was definitely in a minority back then, I think that, except for some early work-life balancing issues, I've had the same career path as my male colleagues. She makes it clear that today family and women aren't always paired together. Kirtley pointed out that men, too, often modify their career paths to accommodate family life. Either sex may take time off or opt for flex time or telecommuting to resolve daycare issues. The AICPA women and family issues executive committee should really be the family issues committee. As we've seen at Vermont American, managing a career and family life is everyone's issue, not just women's.
About her position as the first chairwoman, she said, We're so fortunate to have so many talented woman leaders in the Institute right now. I'm particularly honored to be the first among this group to chair the Institute.
A BUSY YEAR
Of course, the most important internal change to the profession is the Vision Project (see CPA Vision Project 2001 and Beyond: Focus on the Horizon, page 25), which will be continuing through her year in office. I'm sure its going to be an invigorating challenge to translate the vision into strategy. She reflected on all the issues and tasks of the upcoming year. It's an exciting time to be involved with the profession.
RICHARD J. KORETO is senior news editor of the Journal . Mr. Koreto is an employee of the AICPA and his views, as expressed in this article, do not necessary reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.