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Is it a good idea to accredit specialists?

The American Institute of CPAs currently offers one accredited specialization, the personal financial specialist, and is developing another for business valuation specialists. The AICPA board has asked its technical committees to take a more active role in recommending new specializations. Is the trend toward accreditation of different areas of expertise good for the profession? Two practitioners offer opposing viewpoints. says James Shambo


says James Shambo

JAMES SHAMBO, CPA, PFS, is managing partner of Sanden, Shambo & Anderson, Colorado Springs, Colorado. The vice-chairman of the American Institute of CPAs personal financial planning executive committee, he was a member of the former accredited personal financial specialist subcommittee.

Accreditation of specialists has been a hotly debated issue among CPAs ever since the AICPA adopted what has become the personal financial specialist (PFS) designation in 1987.

Specialization has been accepted by most as the inevitable progression of today's professionals during their careers. The first accreditation program, introduced by the Colorado Society of CPAs, was intended to address the public's and the profession's concerns prompted by the rapid changes in the capital markets and financial services industry during the inflationary years of the 1970s and early 1980s. The investment and insurance products sold at that time stressed tax avoidance techniques that by their nature required a CPA's expertise and guidance. Unfortunately, all too few CPAs were prepared to properly address our clients' legitimate investment concerns and failed to steer them clear of the most abusive arrangements.

Accreditation was viewed as a means to identify for the public those members who, through increased study and practice, held special knowledge beyond that expected of CPAs in general. The PFS designation was the logical first choice to meet timely needs.


The accreditation process provides the Institute with the ability to address the following issues facing CPAs and resolve them in a way that is beneficial to both the public and the profession:

* Provide public access to independent verification of specialty knowledge. The financial services industry has undergone significant structural changes and the complexity of financial transactions has required most of us to narrow our fields of expertise. General practitioners may no longer offer competent advice in all areas of our increasingly complex financial world.

In some firms, members don't make referrals to other CPAs with specialty knowledge for fear of losing clients. The result has been increased consumer frustration with our profession and a flight to other providers who sell rather than advise. Accreditation can provide the consumer with independent confirmation of education and experience rather than the self-serving claims of the individual or firm.

* Increase CPAs' competency in specialized financial, analytical and consultative skills. Although we generally are held in high regard, the public's confidence in CPAs has been shaken in recent years. Few of us, for example, can explain which insurance products best meet our client's needs. Fewer still educate our clients on historical market forces when asked to assist in their investment decisions. But a viable accreditation program will enable us to refer clients to other professionals within our communities who can help with those kinds of answers.

A 1990 AICPA personal financial planning (PFP) division survey of PFS designees confirms that this accreditation program has addressed the competency issue. As many as 79% of the survey respondents agreed that meeting the PFS accreditation requirements improved their PFP skills and expertise. Only 20% didn't agree that the designation had helped them compete with non-CPAs providing similar services.


* Combat government attempts to regulate areas better served by our own self-regulatory organization. In recent years, Congressmen John Dingell and Rick Boucher have attacked our profession for allegedly failing in our obligation to the public trust. Federal legislation and several state regulatory and legislative efforts have been successfully challenged, however, because of the profession's demonstrated efforts at self-regulation. These efforts are founded on peer review and continuing professional education. The AICPA division for CPA firms is further evidence of our ability to self-regulate. The next step is the accreditation of qualified members of the profession in particular specialty areas.

Since the first specialty was developed, the Institute's PFP division has followed up by developing its proposed statements of responsibilities in personal financial planning practice. If our accredited specialists have meaningful practice guidelines to follow, there will be even less justification for outside regulation.

* Effectively compete with market-driven organizations outside our profession. A colleague of ours argues that CPAs naturally should stand above the crowd of financial services providers because they are uniquely qualified to address any and all of a client's financial needs. The public has challenged this presumption, however, and has sought advice outside the profession. Organizations whose seminars stress how to sell routinely outmarket our profession not because they know more but because they have name identification within their chosen specialties.

The certified financial planner designation is the best example of this challenge in my area of the profession. Designations like the PFS can help small practitioners compete with these other specialists, as well as the large CPA firm presence. My PFS designation has been a contributing factor in several recent new engagements for clients seeking qualified independent advice.

* Portray accounting as a dynamic profession to students. The perception of CPAs as boring number-crunchers did not come about by accident. We have perpetuated the myth by too often relying on number-crunching rather than thoughtful analysis. College students today tend to hold negative views of accounting as a career because they see it as an unglamorous field offering little interaction with other people and few opportunities for creativity.

The specialties identified by the Institute's specialization accreditation board represent dynamic aspects of our practices, from business valuation to computer consulting, from financial forecasting to estate taxation. They should serve to draw more bright young people into the profession.

* Consolidate accreditation efforts in a national organization and provide uniform standards for CPAs in all jurisdictions. Recent efforts by the American Bar Association (ABA) may lead to national standards for attorneys claiming specialty knowledge. The ABA hopes to avoid the proliferation of state specialty programs after the Peel decision in Illinois allowed advertising of specialty designations offered by valid accrediting bodies. The Florida Society of CPAs is pursuing its own accreditation program because it believes the AICPA will not move quickly enough. Our profession cannot afford multiple accreditation programs in various jurisdictions. It is up to the AICPA to put forth viable accreditation programs.


Accreditation will not be without its problems. Questions about adequate testing, sufficient experience or ability to fairly review accredited individuals and practice units will persist. The issues of whether there will be non-CPA designees and whether the Institute will grandfather other organizations' designations have already been debated for five years and can surely be resolved. In addition, many argued that creation of the division for CPA firms would establish a second level of CPAs by accrediting some, but this problem has not materialized.

It is the CPA who has the education, the talent and the integrity to best serve the public in numerous areas of expertise. It's time we make ourselves heard. It's time students admire us and clients hire us with confidence. It's time we recognize our limitations and promote our strengths. It's time for accreditation.


says Sheldon H. Eveloft

SHELDON H. EVELOFF, CPA, is partner in charge of the management consulting services department of Goldenberg/Rosenthal, Jenkintown, Pennsylvania. He is a former member of the American Institute of CPAs MCS executive committee and its MCS practice standards and administration committee.

I believe there is no need to justify adding more designations to those specialties that already exist, particularly when one considers the effect on an area such as my own field--management consulting services.


The practical realities of implementing innumerable new accredited specialties create monumental barriers.

1-2-3-infinity. How many areas of specialization does the profession need? The scope of a CPA's practice usually is very broad, even within specialties such as MCS, encompassing a multitude of discipline-based services, most of which can be deemed a "specialty." To encompass all aspects, an impractical number of specialist designations is required, which would cause mass confusion both inside and outside the profession.

Overlap and redundancy. The focus of designated specialties could be broad or narrow. In MCS, for example, broad designations would include organizational management, information systems and operations, while narrow focuses could be microcomputers, inventory management, cost allocation studies, etc. There are comparable examples in many other service areas.

If the focus is narrow, the number of accredited specialties proliferates uncontrollably, undermining the experienced generalists who are familiar with many specific areas but can't possibly be expected to hold 10 or 15 different accreditations.

If the focus is broad; who can set meaningful requirements for competency in areas as wide as operating management or business data processing? Chances are, when you finish describing all the skills involved, you no longer have a specialty at all; you have an all-around management consultant.

Another drawback is that many specialties would overlap designations already offered by other recognized professional bodies, which have their own criteria and already are held by many CPAs.

Expansion to absurdity. Practitioners with a bundle of related skills would need several allied specialty designations. In my own field, a mergers*and-acquisitions specialist might need separate designations in M&A accounting, cash-flow planning, taxation, appraisals and organizational development. The inventory-management specialist could require a raft of related designations in production, material requirements planning, just-in-time delivery, cost accounting, activity-based costing and so on. The number of possible accredited specializations can proliferate uncontrollably.

If each specialty requires the professional to satisfy a minimum amount of experience time and continuing professional education credits annually to maintain accreditation, CPAs will quickly reach the practical limit on the number of specialist designations they can reasonably hold and still satisfy the other requirements, serve clients and run a practice. The fragmentation tends to weaken the profession and boggle the ultimate consumer.

The profusion of specialization designations would undermine the local CPA firm's generalist and general consultants, who may not want to be pigeonholed and thereby limited in their clients' minds or in their practices. Local firms are not clamoring for specialization, nor are their clients.


Big costs for small firms. While larger firms might support a variety of accredited personnel, smaller firms might expire from the cost burdens associated with preparatory accreditation training and so forth. Many certainly would consider bowing out of highly compartmentalized areas such as specialized MCS.

Typically, smaller firms provide a mix of services--accounting, tax, MCS, etc.--and consequently might not be able to compete effectively with larger firms in obtaining, maintaining and supporting a complete, well-rounded cast of accredited specialists or specialties.

Even if local firms could afford to hire a team of accredited specialists, it's likely that only the largest firms would have the dollars needed to meet the continuing cost of CPE and other accreditation standards year after year. The investment needed to support individuals entitled to the specialist designation would be immense--and probably prohibitive for smaller firms.

The end of worthwhile practice areas. The cost and excessive effort of meeting multiple specialization requirements easily could discourage local accounting firms from even attempting to compete with larger firms in some practice areas. Small business consulting is one field that could suffer as a result, yet small and midsized clients surely need CPAs' expertise as much if not more than do Fortune 500 clients.

The added costs of accreditation would include not only the time and expense to achieve specialization through required courses and examinations but also more of the already expensive CPE requirements set by state licensing boards. This, together with the nonbillable time invested in maintaining accreditation, is an expensive proposition. The final cost presumably also would include administrative and monitoring expenses assumed by the AICPA and paid for indirectly by the full membership.

This circumstance produces three losers: the practitioner, the public (especially smaller clients) and the profession.


Incompetency act. Would qualified professionals who don't hold certain designations be viewed by the public (and other professionals) as less competent than their certified counterparts? Would they be viewed as somehow not meeting the AICPA's standards? Would they, in short, be unfairly branded as inferior?

Certainly, since AICPA accreditation would apply only to CPAs, the many non-CPA professionals who work in CPA firms could not hold these designations, even though they might have equivalent or superior skills. This would almost surely drive the non-CPA practitioner away from CPA firms and, perhaps, turn them into local competitors.

Legal liability nightmare. How would widespread specialization accreditation affect the courts' views of practitioner liability? Courts might set unreasonable standards for those who are accredited or assume that a professional not certified in a narrow area would not perform quality work; it's impossible to say. In addition, how would firms defend in court the work of firm members who aren't accredited in their fields by the AICPA?

Mixed messages. If one purpose of accreditation is to improve practice quality, there's an easier way to do it that is already an accepted part of accountancy: peer review. We don't need an extra layer of accreditation to accomplish what objective peer review can provide.


Any justification for specialty accreditation rests on the benefits it conveys to the public, to professionals and to the profession--all in relation to its cost. As we've seen, the benefits are few and accrue to few, yet everyone would bear the considerable cost.

Too much specialization would unnecessarily and unreasonably restrict the flexibility that firms of all sizes need in providing services that match the wide variety of client needs. It is not in the true interest of either the public or the practitioner, nor would it necessarily encourage the use of additional CPA services. It would simply add to the cost of the services rendered.
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Article Details
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Author:Eveloff, Sheldon H.
Publication:Journal of Accountancy
Date:Apr 1, 1993
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