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AICPA incoming chairman prepares the profession for rapid change.

When Dominic A. Tarantino, the new chairman of the American Institute of CPAs board of directors, was asked in this Journal interview if he expected the accounting profession to change as much in the next five years as it had in the last five, he answered, "I expect it to change even more." He quickly added, "Change, however, is not necessarily bad. Most of the changes in the profession will be influenced by the accountant's and the auditor's expanded role in business, government and the community."

COMMUNICATING A COMMITMENT

In preparing the profession for the changes facing it, Tarantino does not plan to initiate a host of new programs. He said, "The AICPA already has excellent programs. It will be my job to see that Institute members understand them and use them to help solve the problems we face, both for the profession and the public at large."

To accomplish this, Tarantino said, "I think there is a need for the profession and the public to recognize that everything we do should demonstrate uncompromising commitments to performance, principles and people. That will be my primary message during my term in office." He stressed, however, that these commitments should apply to the broader business community as well as the accounting profession. "For example," he said, "when I talk about performance, I don't just mean the performance of the accounting profession, but a commitment to improving the performance of business in general. When I talk of principles, I don't mean just the profession's commitment to the principles of objectivity and independence but also business's commitment to ethical principles from the boardroom to the loading dock. When I talk of people, I don't just mean the accounting profession's commitment to address work force and work place issues, but most businesses' need to take a look at these issues as well."

Tarantino believes the broad commitment to performance, principles and people will help the profession serve its clients and the public better. "For example," he continued, "the AICPA financial reporting initiative has pledged to improve the prevention and detection of fraud. But there are practical limits to what the profession can do directly to redeem this pledge. However, we can join with business to address developments that increase the potential for fraud."

"For instance, the uncertain economic environment has created an unstable ethical environment. Continued restructurings feed fears of unemployment. In such a situation, some workers may be willing to do anything to keep their jobs, including commit fraud. Also, more and more people change jobs frequently in order to advance. Understandably, their commitment is to themselves, not their employers. How can companies foster ethical conduct in such an environment? I think the accounting profession is well qualified to speak out on these issues."

KEEPING THE FINANCIAL REPORTING

REFORM INITIATIVE ROLLING

Tarantino described the ICPA's financial reporting reform initiative (see "Meeting the Financial Reporting Needs of the Future: A Public Commitment from the Public Accounting Profession," JofA, Aug. 93, pages 17-19) as "job 1, the most important thing we have to do." He said, "We may not get it all accomplished in the next year, but we will make a good deal of progress, particularly in the areas the Institute can address. Where we need cooperation, we must turn the light on others, such as Congress and the Securities and Exchange Commission."

Tarantino also noted how the reform initiative dovetailed with the three commitments he intends to highlight during his term in office. "As an example," he said, "our proposal for a more forceful self-disciplinary system certainly falls under our commitment to performance. When we talk about independent audit committees, we demonstrate our commitment to the principle of independence and call for a similar commitment from business."

However, Tarantino finds the closest fit between his three commitments and the liability reform sections of the initiative, which he labeled "a vital part of the reform agenda." He said, "The reforms not only deal with principles of fairness and equity by, for example, ensuring that those who are found to be negligent pay only for the damages they cause, but they also deal with our commitment to people. Resources that now must be devoted to fighting abusive litigation could be redeployed to training and attracting new people to the profession. In a broader sense, it also deals with the investing public. If liability reform is successful, investors who have been truly hurt will stand a better chance of collecting than they do today. As for performance, if we can't attract the best people, we can't provide the best service. That undermines our ability to do our part in safeguarding the integrity of the financial reporting system and helping to ensure the effective and competitive performance of the capital markets."

ATTRACTING THE BEST AND

THE BRIGHTEST

If getting the financial reporting reform initiative under way is job 1, then looking for ways to attract and retain good people to the profession is job 2, according to Tarantino. He said, with absolute conviction, "This is not a numbers business - it's a people business. It's people communicating with other people, people persuading clients to do the right thing, people helping clients to become successful." However, Tarantino observed the liability crisis could damage the profession more than all the monetary awards made to date by discouraging good people from entering the profession. He said, "That's why we must deal with it quickly, so that young people will take advantage of the profession's great opportunities."

FULFILLING A COMMITMENT

TO PEOPLE

Tarantino points to "a whole range of issues" facing the profession in meeting its commitment to people. He said, "Demographics are changing and we must find ways to make the profession attractive to minorities and women. We must find ways to create a family-friendly work place for CPAs. We must convince our members and the public that a CPA can have a successful career and a family life, too." He believes the recently formed AICPA women and a family issues executive committee will play a major role in addressing and speaking out on work place issues as well as the upward mobility of women in the profession. He also believes the AICPA minority scholarship programs (see the sidebar page 100) will encourage more minority students to consider careers in accounting.

Tarantino said, "The AICPA is trying to improve accounting education in a number of ways, including the 150-hour requirement for an accounting degree and the programs to assist CPA educators. But the United States must improve education at all levels today if it is to remain competitive in global markets, and we should be speaking out on this issue as well. CPAs should be known as agents for positive change, not only in their own sphere but also in the community at large."

FROM THE GOLDEN GATE

TO THE BIG APPLE

Tarantino is an avowed city in person. Born, brought up and educated in San Francisco, he joined the audit department of Price Waterhouse & Co. there in 1957 after a two-and-a-half year stint in the U.S. Army. From the audit staff he moved to the tax department, where he became national director of technical tax services after moving to New York in 1975. In 1982, he became vice-chairman of tax services and in 1988 was appointed co-chairman and managing partner. Tarantino first became active in the Institute's tax division in the early 1970s and was elected to the Institute's board of directors in 1989 and vice-chairman in 1992.

AN EXCITING OUTLOOK FOR CPAS

In summing up his upbeat view of the future for the profession, Tarantino said, "The profession is facing some difficult challenges, but I'm confident we can meet them. We have to recognize that, even when we complete job 1, the financial reporting initiative, there will always be more expectations on the part of the public about what we can do, and we have to be creative enough to meet them. Would our profession want it any other way? All in all, I think it's going to be a very exciting time for the profession. I expect my term in office to fly by."
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Title Annotation:Dominic A. Tarantino
Author:Barrett, Gene R.
Publication:Journal of Accountancy
Date:Oct 1, 1993
Words:1356
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