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Most midsized manufacturers ignoring new quality standards.

CPAs with clients or companies interested in overseas markets, particularly the European Community, should advise them to become familiar with ISO 9000 quality standards. ISO 9000 is a series of technical standards that were developed by the International Organization for Standardization (ISO) in 1987. The standards confirm whether a company implements sound quality procedures through a review process covering how the company designs, produces, installs, inspects, packages and markets its product.

ISO 9000 is accepted and will eventually be required in more than 50 countries, including the United States. All EC members will be legally bound to conform to ISO standards after December 31, 1992. At that time, ISO 9000 certification will become mandatory for companies that either manufacture or export products to the EC. CPAs should recognize that as ISO 9000 certification becomes mandatory for EC manufacturers and exporters, most companies will require their suppliers to either comply with the standards or become certified under them.

However, a survey of 254 midsized American manufacturers, with annual sales of $10 million to $500 million, found that 49% had never even heard of ISO 9000. Of those polled, 13% did not believe ISO 9000 would have any impact on their operations, and only 11% believed the new guidelines would affect them "a great deal." Another 25% of the respondents thought ISO 9000 would affect them to some degree. Thus, there appears to be a growing need for CPAs to educate midsized companies or clients in the growing relevance of ISO 9000 standards on a company's competitive position.
COPYRIGHT 1992 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Dec 1, 1992
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