Roundtable discussion: Ohio's leaders share their views on the future of the CPA profession.

What are the greatest challenges currently facing the profession? What do you see as future obstacles? Are there new opportunities on the horizon? What do you see as the future of the audit? These are questions asked around the profession every day. In this first of a continuing series of roundtable discussions, we ask these questions and more to both state and national leaders of the profession.

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Roundtable participants included:

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** William H. Carter, CPA

Executive Vice President and Chief Financial Officer, Borden Chemical, Inc.

** Janice L. Culver, CPA

Senior Vice President, Key Bank

2004-2005 Chair-Elect, The Ohio Society of CPAs

** Michael R. Dickson, CPA, CITP

President, Business Technology Group LLC

2003-2004 Chair of the Board, The Ohio Society of CPAs

** Jerry L. Esselstein, CPA

Consultant, Jerry L. Esselstein Company, LLC

** Julie T. Kunkel, CPA

Managing Partner, Ernst & Young LLP, Columbus

** Charles E. Landes, CPA

Director--Audit and Attest Standards, American Institute of CPAs

** Mary J. Reimer, CPA

Managing Member, GBR Group LLC

Member, Accountancy Board of Ohio*

** Gary S. Shamis, CPA

Managing Director, SS & G Financial Services

Also participating in the call were Ohio Society CEO J. Clarke Price, CAE, and Chief Operating Officer Laura A. Hay, CPA, who served as moderator. The following excerpts are from a dialogue that took place in March of this year.

HAY: Over the past few years, the CPA profession has seen tremendous change and significantly greater attention than at any other time in its history, from image and auditing standards, to scope of services and everything in between. With so many changes, which one do you think ultimately has had the greatest impact on the profession?

REIMER: I think without a doubt it's Sarbanes-Oxley. It has far reaching implications for all of us whether we're in industry or public practice.

CARTER: I think the word image is an important one because I certainly find that the first question now asked by the public, in the form of individual investors, rating agencies or others, is whether the company is aggressive in their accounting. And the whole questioning of what kind of books and records do you keep. Certainly the image out there is that a lot of companies are playing with their numbers and they believe, to a degree, that the CPA profession allows too much leeway as to what different companies have done.

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CULVER: I'll answer from the industry perspective too. I have seen tremendous change in the way the external auditors and internal auditors are holding management accountable here at Key Bank and I'm sure other companies are experiencing the same changes. We are actually signing off on Sarbanes-Oxley management reports every quarter verifying that certain standards met with our accounting and other risk management activities.

KUNKEL: I think it's changed the audit from being viewed as a commodity to being something that can add value. Although that raised the bar for auditors, it's been good for our profession.

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SHAMIS: I want to put a little different spin on it. Maybe not equal to Sarbanes-Oxley but pretty close to it, at least from the public practice side, is the demise of Andersen. In a lot of ways that's had an even more significant impact on CPAs in public practice than Sarbanes-Oxley because a lot of firms, certainly the smaller practices, don't feel Sarbanes-Oxley as much as the larger ones. But with Andersen out of the fold, it's created stratification in the industry. It existed before, but it's much more evident right now.

DICKSON: I think it's interesting to point out the impact corporate fraud has had on the profession. As a result of a few widely publicized frauds, not only has confidence in the investor markets decreased, but also confidence in the integrity of corporate officers in the board room. It's ironic that this is largely due to something that auditors had been openly discussing for years--the expectation gap and the difference between what the public, or even the client, expects out of an audit and what the auditor intended to give.

ESSELSTEIN: Image. The public's lower confidence in CPAs is real. This lower confidence only adds to the existing cynical view of business and executive compensation. The question is: Who is now looking out for the public interest? Expectations of a "watchdog" by the government MUST be replaced by a restored confidence in the private sector.

Long term--the profession must heal internally. The cohesive elements holding us together have been strained. Our integrity and objectivity were the common ground in a profession of many and varied specialties. We all, each differing specialty, must recommit to these core values.

HAY: Student interest in the accounting profession has definitely increased recently and accounting enrollments at both the undergraduate and graduate levels are up. Some believe this increase is a direct result of the heightened visibility and under-standing of the CPA profession created by the high profile business failures and scandals like Enron and Global Crossing. Is this just a temporary upward blip on the screen? Is it changing how employers approach recruiting and staff composition? Is there a greater demand for CPAs in the corporate industry sectors because of the Sarbanes-Oxley Act?

CARTER: As we talk about demands in the corporate sector I know we have certainly invested in more finance resources both from an internal audit and corporate accounting perspective. I think there also is greater focus on the CPA credential; we're seeing a greater demand. In terms of how we recruit, we are trying to take a much more structured approach from the standpoint of ensuring that the finance candidate has a clear understanding of GAAP, preferably with some public accounting in their background. Previously, there was a much greater emphasis on recruiting for industry experience.

LANDES: From everything I hear, with all the work that is available because of Sarbanes-Oxley, there is a tremendous demand right now for students; both in industry as well as in public practice. I think the big question of whether it will continue is going to depend on a number of key factors, including whether our entry-level salaries improve--especially vis a vis the additional hour requirement. I think it will also be dependent upon whether we're able to convince students coming into the profession that the fifth year is actually worthwhile and that they do see benefits from a compensation point of view. Thirdly, we still have a job to do in restructuring the audit--or at least the perception of the audit--to continue to make it a worthwhile profession. A young student coming into the profession needs to be able to see the real value in what the audit brings and not believe that they are simply coming into a profession of number crunchers and checklist preparers.

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SHAMIS: In terms of raising salaries, I couldn't agree with you more. But the flip side of that is generating...