Surpassing their basic financial, accounting and tax capabilities, CPAs have a major, reserved role – they are the critical cog in the wheel of financial regulation. CPAs take an oath to protect the public – which is the reason for their license and the reason that no one but CPAs can attest to the validity of financial statements.
It’s a two part responsibility:
- CPAs need to be held accountable for that role.
- States need to assure that the fees paid by CPAs, paid into state board coffers, are used first and foremost to assure that CPA licensees focus on that responsibility as they provide their services, particularly in financial attest areas.
That was the core of my Acceptance/Motivational Speech for the Van Rensselaer Public Service Award I recently received from the National Association of State Boards of Accountancy (NASBA). I challenged CPAs, legislators and the general public to assure that CPAs have the power and the will to actively fulfill their role of protecting the public’s interest in financial areas. Here are excerpts from my message:
“This is a time for looking back at progress over the last 20 years. Even more important, I am aware that State Boards and the profession are at a cross-road.
Although I no longer do audits, I have used my auditing and accounting skills on every management consulting project in the last 20 years. I use those auditing skills – including systems thinking, organization assessment, diagnostic interviewing and process planning – on diverse growth and change projects. I appreciated my audit background on every project.
CPA’s do have core skills that can help all organizations in many different ways. But, aside from these basic capabilities, CPAs have a major, reserved role – they are the critical cog in the wheel of financial regulation. They take an oath to protect the public – which is the reason for the CPA license.
Currently, because of the recession, state agencies are looking for new sources of funds, including reduction of all budgets (without regard to source of funds) and going after the reserves of licensing boards. Many boards, especially Boards of Accountancy, generate surpluses from the licensing fees which are intended for use in assuring the quality of the services provided by CPAs, particularly in the financial attest function.
Taking reserve funds and minimizing the Accountancy Board budget (which does not come from taxpayer funds) works against the public interest:
- If legislators knew and understood that public protection role, they would not treat Accountancy Boards as just another administrative Board.
- If all CPAs truly accepted and affirmed that important role, they would vehemently protest to their legislator friends who ask them about the merits of Sunset and Umbrella Agency legislation which restricts the effectiveness of the Accountancy Boards.
- If the public knew about the critical State Board of Accountancy role, they would be horrified to hear about proposed legislation that reduces the effectiveness of Accountancy Boards.
- And, if Accountancy Board members truly accepted this role and responsibility they would focus more attention on how to better protect the public and less on “nit-picky” offenses that rile and antagonize their CPA “customers”.
Board administrative functions are important, but they can be done more effectively and with a different attitude – an attitude of helping CPAs and potential CPAs to understand the importance of their public service role better rather than the ‘gotcha’ attitude that most CPAs perceive in state boards. And, perception is everything.
In the public’s best interest, the public needs to be aware of CPAs’ important role to help them. State Boards need NASBA’s central leadership role and resources to help them do their job of protecting the public through promoting transparency and accountability in financial reporting.”