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Reinventing the CPA.

Robert Mednick, the new chairman of the American Institute of CPAs board of directors, is out to change the way the CPA does business in the 21st century. To Mednick, change is synonymous with success, and he believes the profession must reengineer itself to respond to the needs of a new global marketplace and to better serve the public interest. His plans for change coincide with the rapid growth in technology that has made businesses more efficient and the profession more competitive. The future will put a premium on professionals who can guide managers and others through the vast array of available information to find what they need. Mednick believes the accounting profession is best suited for this challenge, and he is determined to devote his time as chairman to projects that will transform the CPA of today into the premier information professional of tomorrow.

Mednick is the managing partner for professional and regulatory matters at Andersen Worldwide and chairman of its worldwide committee on professional standards. He has long considered himself a "big-picture" person--there are few accounting, reporting and regulatory matters over the past two decades in which Mednick has not been a player. He also has published a considerable number of articles and is often called to speak on the future of the profession. Mednick plans to use this experience to encourage CPAs to become as proactively involved in the process of change as he is.

LEADING WITH A VISION

Mednick acknowledges that the profession has been expanding its services for some time and that the mold of the traditional CPA has been broken and recast several times over. Nevertheless, concerned that the profession has evolved too slowly in the past, he is determined to support CPAs in capturing a whole new market for their core competencies and skills in today's information age.

In an interview with the Journal, Mednick attributed the success of his firm to the fact that it has continuously reinvented itself over time to bring value to clients and the public. "I plan to devote my energy to projects that will help the profession similarly transform itself and broaden the scope of its services," said Mednick.

He said many of the initiatives necessary to accomplish this transformation have already been set in motion by his predecessors, who established the committees that will help the CPA become a premier information professional, such as the special committee on financial reporting, the special committee on assurance services and the special committee on regulation and structure of the profession. He said there are clear signs the profession is already changing, albeit slowly, and that some CPAs already have creatively expanded their services to clients, employers and the public.

CREATING THE RIGHT CONDITIONS FOR CHANGE

Tort reform. Mednick believes the passage of the Private Securities Litigation Reform Act of 1995 was a tremendous victory for the profession but that much remains to be done at the state level to further eliminate abusive legislation that can have a serious impact on the profession's willingness and ability to offer new and expanded services to its clients. As a former chairman of the AICPA accountants legal liability committee, Mednick plans to reinvigorate state tort reform efforts during the coming year. "Ninety percent of the lawsuits and two-thirds of the dollar claims against the larger firms are filed in state courts," said Mednick, "and the situation for smaller firms is even worse. It is very difficult to be innovative if you are always concerned that every new service you offer could be subject to significant liability." As a result, Mednick plans to encourage an even closer working relationship between the state steering committees of the larger firms and the state CPA societies to both achieve further liability reform and fight efforts in states aimed at negating the reforms won in Congress last year.

Regulation and structure. Mednick believes it is critical that the profession seek to reform its current regulatory structure. In "Licensure and Regulation of the Profession: A Time for Change" (JofA, Mar. 96, page 33), he recommended a national certification process that would permit all individuals who earned a national CPA certificate--whether in public practice, industry, education or government--to call themselves CPAs in any jurisdiction and that would leave to the states the licensing of practice entities that perform traditional third-party attest services with their related public responsibilities. "Such an approach would create immediate uniformity in the certification process and erase the reciprocity problems faced by an increasing number of CPAs who regularly practice across state borders, either physically or electronically" said Mednick.

Since then, Mednick and the special committee on regulation and structure have been working with the National Association of State Boards of Accountancy (NASBA) on a new state-based regulatory model that would similarly grant individuals who are certified in states that meet preestablished standards the automatic right to practice in all other such states in much the same way a state-issued driver's license can be used throughout the country. Most important to Mednick, however, the proposed approach would "redefine regulated services, focusing future regulation on those services in which the public interest is greatest, such as the traditional attest services. This would deregulate other services, such as systems design and management consulting, where CPAs currently compete against other, nonregulated professionals."

He said he is committed to continuing to work with NASBA and the state CPA societies to accomplish uniformity,, CPA mobility and more focused regulation. "Until we deregulate nonattest services we are not allowing CPAs to operate most effectively in an increasingly competitive environment"

MORE SERVICES FOR MEMBERS

The Center for Excellence. In September, the AICPA board of directors approved the creation of a center for excellence in financial management for members in industry. Mednick said the center would provide management accountants with information on best practices, salary surveys, career guidelines, industry benchmarks and trends. "The center also will provide them with other important tools and resources, available on the AICPA Web page, such as documented case studies of new financial management techniques." He believes this initiative is fully consistent with other programs to make the CPA tomorrow's premier information professional. "Members in industry already have to be broader strategic and information specialists who can provide management with much more than historical financial statements," he said. To get the center off to a running start and to get feedback on its operation, Mednick and AICPA President Barry Melancon will meet with key members in industry across the country.

Assurance services. The special committee on assurance services, chaired by Robert K. Elliott, issued its final report at the AICPA fall council and annual members meeting. Among other things, the committee recommended ways to expand the attest function and make attest services more relevant. It also provided examples of three new assurance services and three extensions of existing service lines. Mednick strongly supports the committee's work and recommendations and hopes to see them implemented during his chairmanship.

"The committee's recommendations are crucial to the CPA's development as a premier information professional and to the future vitality of the U.S. profession," said Mednick. As a result, he has appointed a permanent, ongoing committee to fuel a continuing effort at developing new assurance services and guidance for those services. Ronald S. Cohen, the immediate past chairman of the board, chairs the new group. "New assurance services will help CPAs begin to focus more on marketplace needs and provide the public with value-added professional services" Mednick said.

PUBLIC RESPONSIBILITY

Mednick believes the profession needs to become more active in Washington on public policy issues, particularly where CPAs' analytical skills can play a useful role, to fully serve the public interest and improve the CPA image among key leaders, as the AICPA recently did in the debate over flat and consumption taxes. "My goal is for the Institute to secure a position as a leading public policy resource by bringing to policymakers proven best practices in areas such as financial analysis, budgeting and cost controls," said Mednick. For this reason, he has arranged for the 1997 spring council meeting to take place jointly with the annual key persons conference in Washington, D.C.

He also plans to try to educate public policymakers and regulators on the benefits of multidisciplinary professional services firms, the logical outcome of transforming the profession into premier information professionals. "We need not apologize for offering one-stop shopping in an increasingly complex and fast-changing business environment where companies need to look to outside consultants for support," said Mednick. Most important, Mednick believes the quality of audits goes up, not suffers, when a firm has a broad base of skills in house and an expanded knowledge of its clients' businesses and operations.

Mednick also plans to support the work of the International Organization of Securities Commissions (IOSCO) and the International Accounting Standards Committee (IASC) in their efforts to develop and reach agreement on international accounting standards that will be accepted as a common language for financial reporting by multinational companies throughout the world. "Cross-border investments can be measured in trillions of dollars; we can't allow the profession to be cut out of the action."

EDUCATING INFORMATION PROFESSIONALS

Mednick also supports the continuing implementation of the recommendations of the Accounting Education Change Commission to redesign the curricula at the university level to "develop well-rounded and creative individuals to maintain high-quality service and client satisfaction in today's world of electronic commerce and virtual global trade" As the AICPA council concluded several years ago, said Mednick, "this will require the adoption of the 150-hour education requirement to sit for the Uniform CPA Examination beginning in the year 2000. "In support of the education requirement, he has set a goal of getting legislation passed in the remaining states that have yet to pass the longer education requirement. Mednick also is committed to rewriting the CPA exam to better test the skills and knowledge that will be required from premier information professionals in the future. "We need to expand CPAs' general knowledge of business, international finance, the global capital markets and information technology and to hone their critical thinking and communications skills" said Mednick.

A LEADER ON ALL FRONTS

Mednick said he was pleased with the AICPA's new structure and organization and fully supports Barry Melancon's focus on membership needs and internal operations. Mednick plans to focus his attention on major initiatives and the profession's strategic plan. In fact, Mednick intends to request that the new board of directors at its first meeting in December authorize a new strategic initiative to develop a comprehensive picture of the CPA of tomorrow. "We need to develop a shared vision of the future to serve as a platform upon which the AICPA leadership can confidently and aggressively implement the programs needed to overcome the barriers and take advantage of market opportunities to assure our members remain a vital part of the U.S. economy and society into the 21st century."

Mednick loves to travel and speak out for the profession. He has spent decades doing just that for Arthur Andersen and is poised to continue his crusade as AICPA chairman. It is not surprising, then, that he has applied the same energy and enthusiasm to contributions to society and human rights initiatives. Mednick is most proud of the time he and his wife spent during the 1980s helping Jewish families in the former Soviet Union obtain exit visas. "We engaged prime ministers and presidents throughout the world to get the Soviet Union to open its gates," said Mednick. Together, they were instrumental in getting 25 families, whom they had met in Moscow, St. Petersburg, Riga and Minsk in 1982, out of the Soviet Union. "It is the most inspiring thing I have done in my life," said Mednick.

Mednick was born in Chicago and has never left. He received a bachelor's degree in accounting from Roosevelt University in 1962 and immediately joined Arthur Andersen, where he became a manager in 1966 and a partner in 1971. He and his wife have three children--two sons and a daughter.

Mednick, who considers himself in the information and knowledge business, plans to help CPAs be tomorrow's premier information professionals. Admitting it will take much longer than 12 months to transform the profession, he is quick to point out that the 100-year old profession was built one year at a time. His goal as chairman is clear: to steer the profession on a course that will lead to new, enhanced client services and a renewed commitment to the public interest.

JOHN VON BRACHEL is a Journal news editor. Mr. von Brachel is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.
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Title Annotation:new AICPA chairman Robert Mednick's advice for certified public accountants
Author:Von Brachel, John
Publication:Journal of Accountancy
Date:Nov 1, 1996
Words:2137
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