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Get in step with AICPA - or else!

Readers of Accounting Today, the newspaper for the accounting profession, may have suppressed a chuckle or two when they read a full column letter to the editor in the December 4, 1989, issue written by Harry G. Brown, CPA, under the heading "AICPA Hears What it Wants." Mr. Brown, professor of accounting at Canisius College in Buffalo, New York, takes the American Institute of Certified Public Accountants (AICPA) to task because he believes that AICPA is sensitive to outside criticism and does not tolerate any comment contrary to its policies and pronouncements.

We have expressed a similar point of view as recently as the january 1990 Washington Comment, which concerned AICPA and NASBA's Memorandum of Understanding whereby state boards of accountancy with a positive enforcement program under NASBA's guidelines would accept and implement AICPA's quality review program. Licensees and firms that participate in AICPA's quality review program would be exempt from participation in the state board's positive enforcement program.

Exempt by whose say-so? The board's? The legislature's? or AICPA's?

AICPA's precatory language in its Memorandum of Understanding with NASBA that its quality review program may be fully accepted by boards of accountancy which have or may in the future have a positive enforcement program is another plank in AICPA's goal to unify the profession. The last great challenge is the unification of the profession through AICPA. [1] The joint AICPA/NASBA model accountancy bill, the 150 semester hour requirement, the cooperative investigation of complaints against board licensees and the recent agreement on oversight review all lead to one singular conclusion. AICPA's goal is not necessarily to unify but to control the profession.

Twenty-one states have an operational positive enforcement or quality review program. In substantially all of those states, the failure of a licensee to comply with the oversight review program may be cause for the board to decline or defer renewal of a permit to continue in practice. That sanction is powerful medicine and, unless handled in a fair and proper fashion by the board, may very well fall short of the constitutional guarantees regarding the taking of property rights without due process.

Admittedly, most of the states' oversight programs are directed toward remedial action through education and CPE. However, there are bound to be cases where the licensee's conduct is so egregious as to require the board's imposition of a punitive measure. In those cases, will the findings and determinations of a voluntary membership professional organization be sustained as probative evidence in a court of law?2

Of the 21 states with positive enforcement or quality review programs, we are aware of only one that has definitely proposed to adopt the AICPA quality review program. Under its rulemaking powers, the Montana Board of Public Accountants has proposed to amend its profession monitoring rules to provide that the definition of quality review" shall also mean a review under a formal quality review program sponsored by AICPA. The proposed rule would exempt AICPA members who participate in the AICPA program from further participation in the board's current profession monitoring program.

The propriety of a board to exempt a classification of its licensees (i.e., AICPA members) from participation in a program that is mandatory for all other licenses is in itself questionable. We raised that question in the January 1990 Washington Comment regarding the extent to which the rights and privileges of licensees not eligible for the AICPA program (because they are public accountants or CPAs who are not members of AICPA) are affected, particularly where the determination must be made as to who will bear the program operating costs.

The federal Single Audit Act of 1984 (codified in 31 U.S. Code Section 7501 et seq.) provided the impetus to NASBA's model positive enforcement program. [3] NASBA, responding to the complaints of the federal General Accounting Office and the Inspectors General, developed its model positive enforcement program to encourage the adoption of a uniform positive enforcement program by all state boards by providing comprehensive guidelines for implementation. Meanwhile, AICPA's membership voted to require its members to participate in a quality review program as a prerequisite for AICPA membership. Now, two years later, AICPA wants to take over the board's positive enforcement program and relieve the boards of their operational responsibilities.

Some years ago, there was a saying that what's good for General Motors is good for the country. That may or may not be so. We can venture the thought, however, that what's good for AICPA is good for the accounting profession, and, as Professor Brown observed, thou shalt not criticize nor express a contrary view.


[1] See "The Challenges Ahead: Now for the Hard Part," by Charles Kaiser, Jr., Journal of Accountancy, April 1987, especially the final part of Mr. Kaiser's article discussing the need for unity.

[2] Depending on the severity and inaccuracies surfaced by the positive enforcement or quality review program, the board's disciplinary measures may include supervised CPE and training, limitations on scope of practice, preissuance reviews of reports and workpapers, fines, assessment of investigating costs, and suspension or revocation of licenses.

[3] The Single Audit Act of 1984 (31 U.S. Code Section 7501 et seq. ) requires state and local governments that received $100,000 or more per year in federal financial assistance to obtain an independent organization wide audit of their operations, usually on an annual basis.
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Title Annotation:American Institute of Certified Public Accountants
Author:Sager, William H.
Publication:The National Public Accountant
Article Type:column
Date:Feb 1, 1990
Previous Article:Accounting for income taxes.
Next Article:The future of financial planning in the accounting profession.

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