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Chair's corner.

In my first CPA Letter column back in Nov. 2004, I mentioned how important it is for our professional body, the AICPA, to be in regular contact with the many regulators and quasi-regulators who have an interest in how we carry out our public interest role. In Feb., AICPA President and CEO Barry Melancon, Vice-Chair Leslie Murphy and I spent a full day in Washington, D.C., doing just that.

It is truly a tribute to the stature of our profession and the efforts of our Washington staff, led by Jim O'Malley, Tom Ochsenschlager and Ian MacKay, that we were able to schedule meetings at the Public Company Accounting Oversight Board, the Government Accountability Office, the Internal Revenue Service and the Securities and Exchange Commission on the same day. Not only were we able to meet with key leaders in each case, but they also invited from two to six of their senior staff to participate in the meetings. I'd like to share some general impressions with you.

I was expecting these meetings to be mostly "meet and greets" and that turned out not to be the case at all. PCAOB member Kayla Gillan, IRS Commissioner Mark Everson, GAO Comptroller General David Walker and SEC Chief Accountant Don Nicolaisen and their staffs appeared to view these meetings as serious platforms, during which we could discuss significant issues that impact the profession and our nation's financial systems.

Anyone who reads the financial pages of their major newspapers knows that the PCAOB, GAO, IRS and SEC have at times been critical of our profession or individual CPAs. Each of them at one time or another has singled members of our profession as "part of the problem" they have been addressing in such areas as audit quality, financial reporting and abusive tax shelters.

These regular face-to-face meetings between representatives of our profession and our regulators and, yes, our sometimes critics, allow us to share concerns about the quality of financial services, and at the same time clear up misconceptions about our profession. We have an extraordinary opportunity to remind the regulators that we are an important part of the solutions they are seeking, whether they are the elimination of abusive tax transactions or increased transparency and reliability of financial reporting.

Just as importantly, these meetings help us to better understand the regulator's point of view. As someone who makes a living as a practicing CPA, I want to be sure the people who make the rules hear about the practical and cost-benefit issues associated with implementing their rules. If proposed rules don't make sense or if existing rules are unnecessarily costly or ineffective, I hope the regulators will be willing to make appropriate changes. Our meetings in Washington included some frank dialogue about these kinds of issues, and I believe our message was heard and respected in every case.

When I'm visiting with our members at state CPA society meetings and other functions, I'm frequently confronted by CPAs who are incredulous that a state board of accountancy or some other regulator could have enacted some rule that does not make sense to the CPA. They often ask me how the AICPA or their state societies could have possibly let this happen. They believe in their hearts that if we had just explained the facts to the regulator, the new rule never would have happened. While they are usually too polite to say so, it's clear they think we must be a little inept or asleep at the switch.

We don't often have the chance to tell members, yes, we thought of that, we made those arguments, and we understood the complexities and implications. But still the regulators declined to abandon or modify their proposed rule. As a leader of the AICPA and an active member in my state society, I have seen such scenarios first-hand. When this situation happens, we are reminded that regulators see the world differently from us, and we are not going to win every round. Our goal must always be to persuade where we can and to keep the dialogue open when we are not persuasive, so that if the rule proves to be impractical, we will have the ability to push for appropriate changes later.

In the final analysis, regulators must regulate to protect the public interest and rule-makers will always make rules. We are a highly regulated profession because, in part, of the important role we play in the functioning of our society and economy. In a regulated environment, it is critical that we have access to the regulators and that our legitimate concerns about costs, complexity and public interest benefits are given weight in the rule-making process. Thanks to the constant efforts of the AICPA's Washington office, as well as the supporting work of many volunteers (including the CPAs in the federal Key Person Program who serve as individual contacts for legislators) and your involvement in the political process, I am confident our voice is heard in Washington.
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Author:Bunting, Robert L.
Publication:CPA Letter
Date:Apr 1, 2005
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