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We soon will be celebrating the 100th anniversary of the nation's first CPA licensing act. In 1896, New York State enacted the lay.: creating the CPA designation. As we come closer to the new century and reflect on our history, we can see how the profession has grown and developed. From its relatively straightforward beginnings, it has evolved into a complicated field faced with many problems, among them competition, proliferation of regulations and tax laws, globalization and the need for specialized knowledge.

Looking ahead, there is more concern than ever about the survival of individual practitioners and small, general practice firms made up of fewer than 10 professionals. Many believe CPAs in such firms can't continue to be successful unless they specialize in some way. I believe small, general practices will he able to withstand the challenges thrust on them; they will prosper and continue to serve their clients' general interest.

THE COURT OF FIRST RESORT

The trend toward practicing in specialties is not new and has been evident in other professions for a long time. My vision of the future for the smaller practice units is similar to the situation of the current family practitioner in medicine. In this sense, the accounting general practitioner serves as a court of first resort for clients seeking help with complex problems.

Small firms will handle the same basic accounting, financial, tax work and consultations that they do now. They will continue to be handholders--the people who know their clients' ups and downs and their day-to-day business dealings in a way no specialist can. At the same time, I believe that when a client has special needs, ethical CPAs won't overreach or perform services for which they are not qualified but will refer their clients to specialized firms or individuals.

Here are some real examples from our own practice in which we were able to shepherd clients through complex situations. In each case, the clients enjoyed the benefits of a long-standing relationship with their CPA firm along with the expertise of specialists when it was needed. I believe small business clients always will need both kinds of practitioners to solve their business problems.

* A client couple decided to obtain a divorce and selected their attorneys. They came to us to help them frame a method of allocating their assets, which included real property, a business and personal property. We provided them with a plan prepared in conjunction with their attorneys. Since we couldn't properly value their business, we suggested a specialist, who prepared an evaluation that was built into the distribution plan and implemented under our auspices. All this was done without the usual dramatics of an unpleasant divorce action. This is probably because of the long-term relationship we have enjoyed with the clients and their trust in our ability to act in their individual interests.

* A corporate client decided to sell stock to the public. We met with the client and discussed the practical ramifications. As we don't perform any Securities and Exchange change Commission engagements, we advised the client that another CPA firm would have to attest to the financial statements. We helped the client to select and work with the auditor to put together the required-information and perform other necessary tasks. Although our firm is not a specialist in public companies, we believe we were able to serve the client's interest by contributing to the engagement our knowledge of the company's affairs.

* A business client had unexpected problems with its computer software system. We performed a preliminary study based on our understanding of the business and our general knowledge of computer systems. Our conclusion was that the client should hire a specialist to upgrade the system. By overseeing the specialist's work, we were able to help the client make the needed improvements in a quick conversion process.

* A client wanted to upgrade its computer billing system and asked us for recommendations. We researched available off-the-shelf systems only to determine that the client-needed a customized product. We laid out a simple sample of the company's ideal and worked with the client to hire the right specialist to write and install the program.

* A client won a substantial chunk of a lottery. Because of the many unusual considerations, including estate handling and other issues, we consulted an experienced estate specialist. At a time of great transition in the client's life, we provided continuity and reliable advice.

* A client had a severe sales tax problem involving a dispute with the state tax commission based on differing interpretations of tax law. The state's suggested audit adjustment would have had a major financial impact on the business. We sought a specialist to help make the client's case and work with this person during many reviews, appeals, negotiations, etc. The client ultimately was deemed correct in his interpretation and the problem was resolved in his favor.

AN IMPORTANT ROLE

These are but a few of the circumstances that bear out our belief that a general practitioner need not be a specialist but, rather, should know when to seek one out. General practitioners serve several important purposes for their clients. Without them, small businesses would need a panel of accounting specialists to handle their full range of business needs.

Small business is a burgeoning sector and has been among the best creators of new jobs in our economy. The people who run these businesses need the expertise of general practice CPAs. The small, general practitioner has always had a good, practical grasp of business because he or she spends so much time in the trenches with clients. These practitioners' efforts as close advisers over the years have given them good insights into basic business principles--insights that are valuable to their clients.

General practitioners can help small clients evaluate and select needed experts in fields that are completely outside the clients' areas of expertise. And, working as advisers, they can lay the groundwork during engagements with these experts, making the engagements cheaper and more efficient because of the generalist's intimate knowledge of the workings of clients' businesses. The assistance they offer to small businesses should not be underestimated.

THE PROFESSIONAL

The concept of the CPA's ideal role has been argued almost from the beginning of the profession in the United States. It probably was not until the passing of the licensing laws that the CPA was recognized as a professional distinguishable from others offering their services to the public. It followed naturally that users of accounting services would select these recognized professionals--the CPAs--to perform all kinds of services, including bookkeeping and other internal functions. This was especially true with small, new and emerging companies and closely held or family owned businesses. Once the tax laws were passed, small general practitioners found themselves doing more work and becoming major elements in the operations of such businesses. These firms have always served clients' interests well, and there is no reason they should not be able to continue to do so despite changing conditions in the profession.

It seems to me that one of the problems with today's practice environment is that there is too much emphasis on the CPA firm's bottom line rather than on the client's interests. If CPAs can be successful only by specializing--which means the small, general practice firm would perish--what will happen to the idea of "service in the public interest"?

While the risk reward ratio for general practitioners admittedly can be frustrating at times, working with the start-ups and the established small businesses may be the most satisfying thing we do in our practices. Who will be there to help if we are not?

STANLEY PERSON, CPA, is managing partner of Person & Company, CPAs, a 10-person firm in New York City. He serves as an editorial adviser to the Journal and is a former editor of the Journal's Practitioners Forum department. He is the former chairman of the American Institute of CPAs continuing professional education executive committee and of the AICPA CPE standards subcommittee.