State Board Report
Some of you may have flinched a bit when you read the title of this month’s President’s Memo. For many of us who have been associated with the regulation of the accounting profession for years, any promotion of the profession was considered conflicting — and for a few it bordered on heresy or hubris. Some might question why, at a time when there is public scrutiny of the profession with concerns being raised about audit quality and investor confidence, would the President of NASBA make such a declaration. As a high profile friend in the U.S. accounting profession recently commented to me, "The quality of audits performed by U.S. CPA firms is still the highest in the world." In fact he is correct. The benchmark of audit quality, whether admitted to or not by the rest of the planet, is auditing performed by U.S. CPA firms.
I am not too far out on a limb here. I recently returned from meetings with Japanese and Chinese educators and regulators. The constant and recurring theme of those meetings was the recognition of the premier status of the U.S. CPA, even compared to their native credentials. Students and practitioners in both countries testify to the importance of acquiring a U.S. CPA license. Interestingly, the message from Asia echoed what I have heard from the United Kingdom, that our failure to promote and protect the U.S. CPA credential, and our willingness to allow the use of credentials that are confusingly close to the regulated credential, could ultimately damage credibility and harm the public.
As I reported at the June Regional Meetings, the volunteer members of the NASBA Strategic Planning Task Force for the first time included the importance of maintaining the CPA candidate pipeline as one of our priorities. Recognizing and articulating that most of the work performed by U.S. CPA firms is the best in the world can go a long way toward continuing to attract the best and brightest to the profession.
I should be clear that my assertions are in no way acceptance of insufficient and/or bad work. In fact, in the U.S. regulatory structure, mediocre and technically deficient work is not accepted. The State Board regulatory system is formidable. The U.S. CPA credential has grown to its dominant global role under that regime, while much of the rest of the world has seen inferior credentials gain practice privileges, including attest and audits, which has resulted in loss of consumer confidence and reliance.
For decades, Boards of Accountancy have successfully worked to protect the public from individuals or firms that have attempted to use any credential, title or designation that was likely to have been confused with "Certified Public Accountant" or "CPA." We should anticipate and be prepared for attempts to weaken both our resolve and ability to maintain that protection. This morning, I looked through some websites hawking accounting credentials and they all contained a common message: They use words like "inevitable change," "specialization" and "ethics" to justify, promote and sell their credential.
I am reminded of an event I attended a while back where an "accountant" handed his business card to another attendee. The card contained a string of credentials, abbreviations and letters. After a bit, the confused recipient of the card asked, "So are you a CPA?" A moment passed before the accountant responded, "No. I could never pass that @#%^ test!"
Supplementary credentials may be desirable and useful for designating specializations, but without being linked to the bedrock core of a "CPA" and the integrity of being part of a robust, disciplined and regulated profession, they are just letters on a card. That is unless these credentials are given a toe-hold in the U.S. and lead to the chipping away of the value and relevance of "CPA." It has happened elsewhere. It remains an important part of the role of the State Boards of Accountancy to protect the U.S. CPA credential, the world’s premier accounting credential. That’s not to promote the profession — but to protect the public.
Semper ad meliora. (Always toward better things.)
— Ken L. Bishop
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