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Profile of the 21st century NSPA member.

In less than eight years we will arrive at the year 2000 - the 21st Century. What will the National Society member look like at the closing years of this decade and at the opening of the new century? Can we construct a composite profile of the NSPA member of that time? Further, what is the basis on which we can formulate our conclusions.

I think the 21st Century NSPA member can be described in three words: Young, Educated and Professional.


While the 1991 NSPA Needs Assessment Survey would indicate an aging NSPA membership, there is reason to believe that the aging trend is subject to reversal. One reason for older members is that they are on their "second career" in the public practice of accountancy after having retired from a primary career as an accountant in the private sector in government. Thus the "second career" member naturally "skews" the line when the age factor is considered.

Despite surveys showing that college students prefer five other professions (medicine, teaching, engineering, law and financial planning) over accounting, young people (high school graduates and students in their first and second years at the college level) do find the prospect of accountancy as a profession to be interesting and challenging. The number of college graduates majoring in accounting counting has not materially decreased in recent years. The negative factor to that observation is the effect of the 150 semester hour requirement to take the CPA examination. The 150 semester hour requirement is a definite barrier to entry to the profession, particularly in the case of the low income or minority student who has to struggle financially to pay for four years of college education, much less five. Many students will decline the study of accountancy requiring five years of college and opt instead to enter professions such as pharmacy, engineering, teaching, architecture and others in which the four-years college stint is the norm.

I believe we can safely conclude that the closing years of this decade will see a lower average age in NSPA membership. Student interest in the National Society has not lagged in recent years. While student membership in the Society could be increased substantially, the main point is that student interest in the Society indicates active membership in due time.


The NSPA member of the 21st Century will be better educated. Aside from the 150 semester hour requirement previously referred to, high school students in increasing numbers are attending four year colleges or two year junior colleges. The NSPA 1991 Income and Fees Survey of Accountants in Public Practice showed that 55% of NSPA's members had a baccalaureate degree or equivalent and an additional 21% have done postgraduate work. We can expect those percentages to increase as we approach the 21st Century. Additionally, high schools and colleges are preparing their students to cope with the technological advancements in the profession. A student's education is incomplete unless trained to be "computer-wise." Thus the student of the 21st Century will not only be better prepared "bookwise" but also better prepared to meet technological changes.

Moreover, not all students who meet the 150 semester hour requirement and pass the CPA examination will find employment with a CPA firm. In an average year, CPA firms hire approximately one-third of the college graduates in accountancy.

Some of the states that adopted the 150 semester hour requirement effective at a future date in this decade have eliminated the practical experience requirement. Other states have declined to substitute education for experience. In those states, the aspiring CPA must seek employment with a CPA firm to satisfy the experience requirement before he or she receives a permit to practice as a CPA. Since CPA firms employ only about one-third of the college graduates, those individuals who pass the CPA examination but lack the qualifying experience will still not receive the required permit to practice. Accordingly, we can look for better educated non-certified accountants to enter the public practice of accountancy.

However, the individual joining the National Society in the closing years of this century will more than likely be a certified public accountant. The 1991 NSPA Needs Assessment Survey showed that CPAs comprised 24% of the Society's membership. There is reason to believe that young CPAs, in public practice as sole proprietors or an small size partnerships and having as their clientele small business entities that do not require audits, will find membership in the National Society more attractive than membership in a professional society that caters to large size national and regional firms. There are simply no grounds of commonality between the sole proprietor CPA and the large size regional CPA partnerships. The sole proprietor CPA's scope of practice is similar to that of the currently licensed public accountant.


The NSPA member of the 21st Century will likely be more professional in demeanor and conduct of practice. The Code of Ethics and Rules of Professional Conduct are badges that distinguish the true professional from the tradesman in the market place. Professionalism in practice runs not only to the members' clients but also to the members' colleagues and to government officials with whom the members come into contact on behalf of clients. Adherence to the highest standard of ethics and professional conduct will be the accepted norm.

What else can be expected of the 21st Century NSPA member other than youth, education and professionalism? For one thing, we can expect the trend of more women in the accounting profession to continue. By the year 2000, we can safely predict that women will constitute one-half of all the professional accountants in public practice, although at this point in time a large percentage of the women in accounting are employed in the private sector.

We can expect the declining trend in the audit scope of practice to continue. The small business clientele of NSPA members have no need for an audited financial statement. For small business entities, the audited financial statement is overkill and a needless expense. A review statement in practically all cases will satisfy the small business clients' bankers and creditors.

We can also expect the 21st Century accountant to be more politically attuned. For example, in the November 1991 elections for the Virginia General Assembly, five CPAs were candidates for office. Without question, professionals (other than lawyers who traditionally have had a "lock-hold" on the state legislature) are becoming more aware of actions and reactions of their state legislatures. Professional associations, particularly state societies, are placing politics high on their agendas.

We have predicted that the majority of NSPA's members will be young CPAs operating as sole proprietors or in very small size partnerships. Members who are not CPAs (and they are likely in the minority) will be as highly credentialed as CPAs. The political pressure of NSPA's affiliated state organizations on the state legislatures to pass NSPA's Model Accountancy Law will result in an additional class of licensee - the registered accountant - who will possess a scope of practice identical to that of CPAs expect for the certified audit.

Thus, in many jurisdictions, the registered accountant will replace the dying class licensed (or registered) public accountant whose numbers are diminishing rapidly. In the state of New York (which enacted its dying class law in 1959), there are less than 800 public accountants remaining in active practice by renewing their PA permits, and that number is diminished annually by retirement and death.

AICPA's legislative policy that there should be only one class of accounting licensee, namely, the CPA, is bound to fail in the early years of the 21st Century as restrictions on entry into the profession, especially the 150 semester hour requirement, go into effect. A dual classification of accounting licensee (CPA and RA) is necessary if the 18 million small business entities in the U.S. are to receive the accounting, tax and management advisory service that they require at an affordable cost.

Additionally, there are credentials that may be described as "CPA equivalency." The status of enrolled agent is one. There is no difference between the CPA and the EA insofar as their duties and responsibilities to represent their clients before the IRS are concerned. The only difference between the CPA and the EA is that the CPA is automatically admitted to practice before the IRS by virtue of a 1965 Congressional act, whereas the enrolled agent must pass a difficult two day examination in taxation and then is subjected to a rigorous character investigation by the IRS to determine fitness to practice and represent clients before the IRS.

Credentials may also be achieved through the Accreditation Council in Accountancy and Taxation (ACAT). ACAT offers qualifying examinations in both accountancy and taxation and the requirement of CPE to maintain the qualification. The achievement of ACAT's accreditation status is a credential that establishes competency through preparation and examination at an academic level recognized at colleges and universities. The individual who achieves ACAT's credentials possesses a high degree of credibility and visibility within the accounting profession.

The "any person" qualification to enter the accounting profession is rapidly fading. By the end of this century it will have been eliminated. The individual who wishes to enter the profession must possess a definite and tangible credential - license status by the state, enrolled agent status, ACAT recognition and possession of an academic degree (or equivalent) at least to the baccalaureate level.

Thus, the profile of the future NSPA member in the coming new century may be summarized in the three words: Young. Educated and Professional.
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Title Annotation:Washington Comment; National Society of Public Accountants
Author:Sager, William H.
Publication:The National Public Accountant
Article Type:Column
Date:Apr 1, 1992
Previous Article:Stemmy receives NSPA Golden Quill Award.
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