REVISITING THE CPA VISION, LOOKING AT THE PROPOSED GLOBAL CREDENTIAL.

From the profession's grassroots sprouted the CPA Vision a few years back, which explored market forces impacting the profession and defined a set of aspirations to ensure a vigorous future for all CPAs. Members eagerly captured the spirit of the Vision and developed innovative ways to embody it in their work environments. The Vision is, after all, the profession's roadmap to the future.

As the national home for all CPAs, the AICPA continually carves new pathways that will enable members to realize the CPA Vision. These pathways cover a range of activities. From strengthening and extending the profession's bedrock services to upholding the CPA hallmarks of integrity and objectivity to developing new business opportunities, the AICPA strives to maintain the relevancy and vitality of the profession.

Through this special report, members will see how the Institute, working with volunteer member committees and task forces, is meeting its mission of serving members in all segments of the profession and areas of the country. Revisit the CPA Vision and see how the proposed global credential, a market-driven credential signifying a set of competencies -- not a license to deliver particular services, is just one of the many Vision-aligned initiatives fitting in the picture.

All the Things We Do

This past year has been a busy one: strengthening the audit, modernizing independence rules, protecting the public and CPAs in the tax area, showing leadership in technology, and addressing the needs of members in business and industry. Here are some of the highlights spanning the realm of CPA work:

* The AICPA raised serious public policy and self-regulation concerns with a General Accounting Office proposed standard on auditor independence in Government Auditing Standards. The proposal would create yet a third set of independence standards -- the AICPA's and Securities and Exchange Commission's being the others -- and would be especially harmful to smaller entities that rely on the expertise of their usually smaller CPA firms.

* Responding to the AICPA leadership's and members' opposition to its proposed rule on auditor independence, the SEC voted on a negotiated compromise that addressed many of our major professional and public interest concerns. Furthermore, the Institute achieved protection from the rule for smaller firms in the critical service areas of information technology consulting and internal audit outsourcing.

* New initiatives addressed the important issue of quality of earnings, an area of concern for both the profession and the SEC. Through a special one-day conference, a two-day continuing professional education course, a collection of real-life cases with commentary by experts, new AICPA InfoBytes learning modules, and a special report in the July/August CPA Letter, the AICPA promoted high quality in earnings reporting and helped both auditors and financial statement preparers understand their roles in the process. Quality of earnings initiatives will continue next year as well.

* A new charter for the Public Oversight Board approved by the AICPA Board of Directors significantly enhanced the POB's authority to oversee the audits of public companies.

* While an exhaustive study last year by the POB's Panel on Audit Effectiveness concluded audit quality is sound, the Institute committed significant resources -- human and financial -- to address all of the panel's recommendations. Development of new standards and guidance to improve the risk-based audit model including the detection of fraud, and an enhanced peer review program and streamlined disciplinary process for auditors of public companies, are among the efforts of AICPA teams and their respective member committees to implement the many recommendations.

* Members of Council enthusiastically supported a new, five-year $25 million recruitment initiative to help reverse the trend of decreasing student interest in the CPA profession. Expected to launch in late 2001, the direct marketing program will target young people aged 16-22. This campaign is in addition to the Institute's existing student recruitment efforts.

* The Institute further strengthened the profession's image through the sixth year of the national image enhancement campaign, which for the first time had a national network radio strategy. It also included an advertising partnership program with the state CPA societies; more than 30 states joined the effort.

* An international consortium of more than 95 organizations, headed up by the AICPA, developed and launched eXtensible Business Reporting Language (XBRL). XBRL supplies an XML-based framework that is revolutionizing the way businesses create, exchange and analyze financial reporting information. XBRL and the committee's efforts in developing it have generated substantial media coverage.

* CPA2Biz--the profession's own business services provider -- started to roll out its solutions, tools and value-added content to CPAs across the country through its Professional Services Division. The Application Solutions Division that will launch later this year is developing a comprehensive business services hub that offers an integrated suite of best-in-breed business applications. One group of applications is geared toward CPA firm management; the other will address the needs of small- to medium-sized businesses.

* To streamline the development and delivery of valuable new products and services, the AICPA established the Member Innovation Team. The pioneering process and staffing structure creates self-directed groups to work full time on specified projects to achieve the goals and objectives of the volunteer leadership.

* Research on the roles of members in business and industry and in government sheds light on how employers and coworkers view the CPA credential. Insights gleaned from the research will be used to target programs and services for members in industry and in government.

* A number of the AICPA's suggestions for overhauling the estate and gift tax system make their way into the 2001 Economic Growth and Tax Relief Reconciliation Act signed into law in June. Thanks to provisions based on those suggestions, major potential traps for unwary taxpayers or practitioners were eliminated or mitigated. The Institute's suggestions were based on research that included a survey of practitioners.

* The AICPA Board of Examiners and a joint committee with the National Association of State Boards of Accountancy are working together to revise the Uniform CPA Examination and computerize its delivery by Nov. 2003. Among other things, new sections of the exam will test important skills not readily measured in paper-based formats, such as using research tools.

CPA/Global Business Credential

All of the past year's initiatives had one goal in common: to move the profession closer to realizing the aspirations outlined in the CPA Vision, while preserving and extending the critical role CPAs play in society. This is also true of the proposed global business credential.

An important outcome of the CPA Vision was the need expressed by members for expanding the CPA's professional footprint, extending into different services, and achieving global reach. It is with these goals in mind that the AICPA's member-driven Strategic Planning Committee began exploring the concept of a new complementary credential. As they wrestled with tactics for making the Vision a reality, the committee considered a number of important issues. Among those issues was the fact that some CPAs do not want their brand stretched; they want to remain fully and exclusively associated with foundation services. Other factors included the mandates of a stringent regulatory environment, employment practices, difficulty in selectively changing stereotypes, and challenges in modernizing the CPA Exam and accounting education. In this light, the global business credential was conceived.

In the pages that follow, you will learn the thinking behind the proposed credential and where its development and implementation stands today. Then, illustrative scenarios will show you what circumstances may lead a CPA to pursue the credential, should it be approved by the membership this fall.

Background

A new business credential, rooted in a unique set of competencies and market opportunities, may one day be an option for CPAs and other professionals who want to seize new opportunities presented by a knowledge economy without geographic boundaries. An international consortium of professional accounting organizations, including the AICPA, has been studying the development of a global business credential characterized by its breadth of knowledge, strategic focus, future orientation and professional rigor.

Frequently identified by the placeholder name "XYZ," the credential would be administered by a new self-funded international organization, which would establish global standards of ethics and competency, thereby contributing to higher and more consistent quality professional services in the worldwide business marketplace. National Credential Granting Organizations would be created to issue the credential in accordance with the global standards for admission. In the U.S., this would be a new entity operated and managed separately from the AICPA. The AICPA would remain focused on its advocacy for the CPA profession.

In May 2001, the AICPA governing Council passed a resolution presented by delegates of the California and Texas CPA societies to launch a member information and response program on the global business credential. The resolution also authorized a member mail ballot asking for the authority to create a separate self-funded organization that would issue the global business credential in the U.S. The ballot...