Why We Oppose the CPA Credential

Why We Oppose
the Proposed Global
Business Credential

BY HERBERT SCHOENFELD AND ROBERT GOLDFARB
SCHOENFELD, MENDELSOHN, GOLDFARB LLP, N.Y.,
CERTIFIED PUBLIC ACCOUNTANTS

Only a complete understanding of XYZ will result in an intelligent vote.

ur relationship with the AICPA has been a good one and we want it to continue in the future. Our intention here is not to criticize but to clarify the information being disseminated to the AICPA members who will be voting on probably the most critical issue facing our profession in many, many years. Is XYZ good? Is XYZ bad?

Only an informed constituency, enlightened by the proper pros and cons dealing with this situation, will allow an intelligent vote on this critical matter. While we, and the National Conference of CPA Practitioners (NCCPAP), will continue working toward defeating XYZ, we want to continue the dialogue so that, as we said previously, the voting membership will have a clear understanding of both points of view. We are looking at the “majority” of the membership of the AICPA who really do not understand the effect the global credential will have on their profession. This is where we hope both sides will come together and concentrate on a true understanding so that the voting will be based on knowledge instead of ignorance.

We believe that if anyone should be a global credential holder only, CPAs should be the designee. CPAs have passed rigorous exams and have the highest education and experience in financial matters. We are qualified to be global credential holders if you truly read the definition of a designee. We deal with every conceivable financial situation on a daily basis. In local firms, we are the right arm of small business entrepreneurs. In larger firms, we are the consultants for major national and international industries. There is absolutely no reason why everything financial that must be done for a client should not go through a CPA firm.

THE CPA DESIGNATION HAS SOLID CREDIBILITY

The CPA designation has already been set, it is 100 years old and has the utmost respect behind it. It should be used and not discarded. After we become CPAs, our education requirement continues. We are constantly reading material on the current position of the profession and the world economy as well as on what is considered to be the future innovation and thinking for this world economy. We are considered experts by our clients, bankers and other third parties. We have multidisciplinary services already included in our firms, even though we do not consider them separate services or call them by their true name. If at any time situations arise in which we need help, we outsource to qualified nonCPA or CPA firms who are experts in that particular area.

Finally, if the 150-hour rule for education is applied properly and accounting education changes to teach different disciplines, college students now and in the future will learn exactly what the global credential is trying to create—the true knowledge expert who is well organized and able to get things done properly. This individual is currently known as a CPA.

STATE vs. GLOBAL ADMINISTRATION

The new global credential will not be a state license and, therefore, will not be subject to a state licensing disciplinary committee. We are worried that the AICPA will be the only reprimanding agency in the United States for this new designation and it remains to be seen how the disciplinary actions will be handled around the world. We cannot agree now on worldwide politics. Why would this coalition agree on disciplinary and reprimanding action? It puts unequal burdens on CPAs who already have many layers of discipline through their state licensing agency, state societies, AICPA, other government agencies, etc. Why have another organization that has the authority to discipline but not the right to revoke the CPA license?

Currently, each state is having problems passing different aspects of the Uniform Accountancy Act. The AICPA says this is because it is very difficult to change 54 different jurisdictions. Yet, it is still better to allow states to administer the discipline than a global organization which has no idea how to practice in this country. We should be working with NASBA to effect changes in the CPA profession so that the state license has a different scope and encompasses all that the global designation would. Every global credential holder, as does every CPA, should have an accounting background and live up to the AICPA standards, but states should have the right to discipline CPAs.

Another designation will confuse the public about what a CPA is and who is more qualified to do a particular assignment—a CPA or a global credential holder. There would be a duplication of work in the field, elevating our unlicensed competitors to the same level as CPAs. Is another level of competition necessary or unnecessary? We cannot have the global credential equal to a CPA, and the AICPA or its affiliate cannot be the master of both. It is definitely a conflict of interest.

The global designation also will hinder the small firms’ ability to grow. If the CPA firm itself cannot expand its services because the XYZ is being promoted heavily, local and regional firms will wither and die. Also, why would the larger CPA firms or consulting firms (or whatever they are called today) that are already global in nature want this designation? It is possible that in 20 years or less, it will be time to form a global designation and we understand the argument that if we do not start now, we will fall short and not control the marketplace when the proper time comes. The designation will definitely confuse the public and we are not ready to replace the CPA profession.

The next question concerns what constitutes qualified education and experience to become a global credential holder. Can anyone be as talented as to live up to the necessary qualifications which will be needed to become an XYZ? If the ultimate goal is to have 700,000 possibly qualified XYZs become designees—after reading what a global credential holder is to accomplish we cannot believe there are that many geniuses around the world. No one can fill the bill in the definition.

‘A CPA is already more than 50% there and perhaps just needs a little more training and experience to become that person. If CPAs are automatically given the designation by evaluating themselves for qualification for the next five years, why will these CPAs be any smarter than they were yesterday? Do they automatically become more intelligent, knowledgeable and experienced? This defeats the purpose of the XYZ and this is why we believe the new designation is not necessary. Most of the designees will be CPAs or chartered accountants from different parts of the world. Why don’t we just form a global accountants organization before allowing nonCPA competition to invade our territory?

THE UNANSWERED QUESTION

Finally, there is the question about the actual reason for creating the global credential beyond what we have read. Is the AICPA worried that not enough students are graduating who want to become accountants and therefore the profession will not have enough CPAs to join the AICPA and state societies? Is the AICPA afraid of losing its base and is this one of the reasons why it is going forward with the XYZ? They have to face this question in reality. What is the real intention? What proof other than all the surveys and percentages we have seen is there to have the XYZ other than that presented by the AICPA? As we have stated before, larger firms already have a global connection. Small and regional firms have no need for this. Educators who are CPAs, government employees who are CPAs, retired CPAs and CPAs in industry really have no need for this. CPAs in industry also are using whomever they need to survive in their global marketplace; they are not going to find anybody smarter tomorrow than they already have today. We should be pursuing the fact that CPAs should be doing all financial work, working with CPAs in industry and not have new designations.

Students also may not become CPAs if this credential is passed, because the easier road is to have one designation rather than two and if there is more money and it is easier to attain, then an XYZ will be more palatable than a CPA. We are creating our own death. Local firms will be leaving the AICPA and the state society in droves because these organizations will no longer be 100% in serving the CPA community.

HERBERT SCHOENFELD, CPA, can be reached at hschoenfeld@smgcpas.com . ROBERT GOLDFARB, CPA, can be reached at rgoldfarb@smgcpas.com . They are partners at Schoenfeld, Mendelsohn, Goldfarb LLP, Woodbury, New York.