XYZ.

• Position: Credential for accountants

The Great Debate

CaICPA Members and the AICPA Offer Their Best Shots on the Proposed Global Credential

Reason and passion. The combination can be riveting in any debate. The following point-counterpoint on the global credential includes both of these elements.

A group of CalCPA members: Andrew B. Blackman, CPA/PFS, Shapiro & Lobel LLP, New York, NY; Mitchell Freedman, CPA/PFS, Mitchell Freedman Accountancy Corp., Sherman Oaks; Karen Goodfriend, CPA/PFS, Goldstein-Enright Financial Advisers Inc., Menlo Park; Sheryl Rowling, CPA/PFS, Rowling, Dold & Associates LLP, San Diego; and J. Ben Vernazza, CPA/PFS, Overseas Oversight Group LLC, Aptos, have started the debate by responding to several of the AICPA's talking points, or key statements, on the global credential. These CPA financial planners also are members of the All-Star Financial Group, which discusses and takes positions on matters that affect the CPA profession.

Cynthia S. Lund, AICPA vice president of state society affairs and strategic planning, penned a rebuttal on the AICPA's behalf.

As California CPA went to print, CalCPA's Council and Board of Directors had taken no stance on the proposed global credential other than to provide members with balanced coverage.

For this piece, the two opposing sides were offered equal space and approximately the same length of time to compose their arguments. The views included here are those of the authors only.

We anticipate that considerable news on the global credential will be generated during the next month. CalCPA will keep you informed via updates on CalCPA Online (www.calcpa.org), and in BUZZ, our e-newsletter. If you don't receive BUZZ, please send us your e-mail address at calcpamember@calcpa.org.

AICPA TALKING POINT

XYZ is an additional optional credential for members who want it. Results of the U.S. supply-and-demand research indicates that the combination of CPA and XYZ could hold significant marketplace value.

ALL-STAR FINANCIAL GROUP RESPONSE

"Members," as used here, means AICPA members. However, it turns out, it eventually will mean anyone attaining the XYZ credential including non-CPAs! The fact that the new global credential will be open to anyone who can attain the as-yet-unspecified requirements is probably the single biggest reason many CPAs oppose the concept. Page 20 of the August issue of The Thusted Professional, the monthly newspaper of the New York State Society of CPAs, reported that state societies are finding from their members that "many are adamant that the global credential should only be available to CPAs."

The AICPA is chartered to further accountancy and to benefit certified public accountants, not non-CPAs. The irony of the expensive educational exercise to convince CPAs to support a credential available to non-CPAs is that dues paid by CPAs into an organization that is supposed to have the aforementioned mission are funding it. Opening the door to non-CPAs is a betrayal of the membership by the management and leadership.

The promises that "the AICPA's investment" will be repaid by the Global Institute (to be formed when XYZ passes) are akin to placing the cart before the horse. What if XYZ does not pass? Who will reimburse the AICPA then?

At an August NYSSCPAs chapter forum, John Hunnicutt, AICPA senior vice president of public affairs, said that if XYZ passes, the new credential would be financed by a $70 million infusion from unnamed sources, such as businesses that would provide services to XYZers. Who? He told the chapter, "I can't remember the names off the top of my head." Seems very convenient, but moreover alarming.

Barry Melancon, AICPA president and CEO, has stated that he would "grandfather" in all CPAs who request XYZ when the designation becomes available. There are two problems with this proposal. The first is that all those grandfathered will not necessarily be qualified to be a global expert/generalist, cognitor, international business adviser, or whatever XYZ might be called. It takes years of learning, hands-on experience, and international networking to be globally competent. Having a grandfathered group that presumably will include inexperienced CPA/XYZs (not to mention the newly-conferred XYZs who are not CPAs) holding themselves out as experienced and qualified, will likely make the XYZ designation the laughing stock of the real international professional community, thereby negating any "significant marketplace value."

Competency is one of our important professional ethics. We should not allow that to be given away so carelessly. The second problem is that grandfathering appears to be a pandering for yes votes, lest any CPA feel left at the station when the XYZ train pulls out.

AICPA REBUTTAL

The AICPA appreciates the opportunity to respond to the comments raised by the California CPA/PFS authors. It's important to note that much of the commentary includes editorial comment, rhetorical questions and personal opinion, which is part of the healthy debate of any professional issue, and with which it is best not to tamper.

However, there are several items included in the commentary which are wrong, out of context or at the least, misleading to readers.

The AICPA encourages all members of the California Society and AICPA to exercise the due diligence for which this profession is noted by taking time to become fully informed on the new global business credential proposal. A careful reading of the material available in the September 2001 Journal of Accountancy, the July/August issue of The CPA Letter, the letters to each member from AICPA Chairman Kathy Eddy, and the information on the global credential Web site, www.globalcredential. aicpa.org, is an exercise of that all-important due diligence. These materials also were provided to all state CPA societies.

From the previous commentary: "The fact that the new global credential will be open to anyone who can attain the as-yet-unspecified requirements is probably the single biggest reason many CPAs oppose the concept."

The admission requirements have been specified repeatedly in member information materials. They include:

* A degree from an institution of higher learning;

* A rigorous credential examination;

* Five years of experience (if applicant already holds a recognized professional credential, such as the CPA);

* Eight years of experience, plus attestations by two credential holders (if applicant does not hold a recognized professional credential);

* Commitment to uphold ethical standards, as set forth by a new credential governing body; and

* Commitment to continuous learning, as required by new credential governing bodies.

CPAs who, by December 2005, possess five years of relevant work experience, plus the other qualifiers above, could exercise an "early adopter" opportunity. They would be able, until December 2008, to obtain the credential by completing a rigorous self-assessment, which would be subject to a random audit. Additionally, "early adopters" would need to demonstrate a commitment to uphold the ethical standards and continuous learning required by new credential governing bodies.

In addition, the August 2001 Journal of Accountancy included an eight-page insert devoted entirely to the competency framework developed by the Global Credential Steering Committee. It is posted in its entirety at www.globalcredential. aicpa.org.

To find out how AICPA members feel about the proposed concept, and specifically the inclusion of non-CPAs in the population of eligible credential holders, the AICPA'S governing Council mandated in May that a survey be conducted to gauge those sentiments. The survey s charge is as follows:

1. Determine the sentiment of AICPA members regarding the new credential;

2. Find the leading arguments both in favor and against the new credential; and

3. Understand member reaction regarding non-CPA eligibility for the new credential.

The survey is being conducted using a national random sample of MCPA members and is designed to solicit representative points of view.

The member survey began in early September; results will be available to the MCPA Council before its October meeting.

From the previous commentary: "The AICPA is chartered to further accountancy and to benefit certified public accountants, not non-CPAs."

The AICPA's bylaws state: "The name of this organization shall be the American Institute of Certified Public Accountants. In keeping with the Institute's certificate of incorporation, its objectives shall be to unite certified public accountants in the United States; to promote and maintain high professional standards of practice; to assist in the maintenance of standards for entry to the profession; to promote the interests of CPAs; to develop and improve accounting education; and to encourage cordial relations between CPAs and professional accountants in other countries."

The Institute will continue to look for and develop ideas to promote the interests of CPAs, such as the proposed global business credential. Thus, if the members vote to proceed with the proposed global business credential, they will be amending the bylaws to recognize the AICPA's authority to create a separately funded organization to grant the credential in the U.S. This is the question that will be included in the member ballot later this fall.

From the previous commentary: "The irony of the expensive educational exercise to convince CPAs to support a credential available to non-CPAs is that dues paid by CPAs into an organization that is supposed to have the aforementioned mission are funding it."

The member information and response program was mandated by the AICPA Council at its May meeting, in the resolution introduced by the California Society of CPAs and the Texas Society of CPAs, which stated, in part:

BE IT FURTHER RESOLVED that the Board and management should continue with a program to inform AICPA membership on the potential for a new global credential, how it will benefit CPAs...