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The quintessential professional

The New CPA:

An interview with


By James L. Craig, Jr.

In Brief

The CPA Journal recently spoke with Stuart Kessler to see how he was doing in his year as chair of the AICPA. In his acceptance speech, he spelled out his program for the year--completing the vision project, continuing the image enhancement program, moving the new assurance services along, and more. High on his list toward enhancing the image of the CPA is a network television program featuring CPAs.

Kessler also proposed changing the words behind the CPA designation to Certified Professional Adviser. The CPA Journal asks him about the reaction to the proposal.

Kessler also comments on some of the professional issues facing CPAs, including the new Uniform Accountancy Act from the AICPA and NASBA and the prospects for enactment by the various licensing jurisdictions.

Stuart Kessler is the chair of the AICPA, the second New Yorker to hold that position in the last four years. He is the quintessential supporter of the profession and for what it stands. The CPA pin is always on his jacket lapel, he remains active in his state CPA society, and he makes time for all his duties as the number one CPA in the nation. During his 40 years as a CPA, he has chaired committees, served on boards and councils, written articles, attended annual conferences, and, most notably, moved the practice of personal financial planning to a position of prominence. He was one of the first CPAs to obtain a PFS designation, something he achieved while serving on the AICPA's Personal Financial Planning Executive Committee, which he later chaired.

Managing Editor James L. Craig, Jr., met with Kessler to learn how his year was proceeding and the progress toward achieving his goals for the year.

The CPA Journal: What's it like to be chair of the largest professional accounting association in the world?

Stuart Kessler: It has truly been a wonderful time for me. I have been warmly greeted and uplifted by so many of the colleagues that I have come to know over my years of active participation in the profession. And I have visited CPAs and CPA societies in many states and had the opportunity to meet many other outstanding professionals. It has been a great year.

CPAJ: The most visible project coming from the AICPA during your year of service has been the profession's vision project. How is that proceeding?

Kessler: We have had more than 180 Future Forums where CPAs met in small groups to talk about where the profession will be in 10 to 15 years. And early in 1998, we had the national gathering of representatives from all the states that developed their top-five lists of issues, values, services, and competencies that will make up the world of the CPA in the 21st century. That group, working without any input from AICPA leadership--we did not want any undue influence--developed a draft core purpose and draft mission statement which were presented to council in May. I wanted to get the vision from the perspective of what I call the "worm roots" (closer to the members than even grass roots). In the process, we have tried to reach out at the most fundamental levels to find out how CPAs think and what's important to them. I think about just under 4,000 members participated.

The key will be the buy-in from the rest of the membership. Will the core purpose and mission statement that come out of the process serve to motivate, excite, change, and inspire the profession to move to greater heights to achieve our full potential? At the May council meeting we began to deal with implementation issues, such as to whom should the conclusions be communicated, how will priorities change, and is there a need for structural realignment at the AICPA?

CPAJ: Any surprises in what has come out of the visioning?

Kessler: Not really. A disappointment has been the lack of response by the many who have not joined in the Future Forums nor become a part of the program. I wanted everybody involved.
Those that participated came away with a rah-rah feeling.

CPAJ: Last October, when you assumed the chair position, you listed a number of things you wanted to accomplish. One of those was the continuation of the image enhancement program.

Kessler: The program is continuing under the able leadership of the AICPA staff. My impression is that members are pleased with what has been accomplished. My contribution, which could be a break-through event, is the idea of a network television program featuring the work of CPAs. Some have found this idea amusing, but for me it's no laughing matter. There is a place out there for a show, not a comedy, but more in the mold of the popular medical shows. It would be situational, with the CPA firm or team called upon to deal with issues--perhaps a financial fraud--but also featuring many personal situations: love, intrigue, conflict--all the emotions as they occur in the lives of CPAs.

CPAJ: Is it likely to happen?

Kessler: I'd say the odds are less than 50/50. There is an audience out there to watch it; there are sponsors looking for good shows. It's just waiting to happen. We have to put together a pilot and get a network interested. If we are successful, you will see an unheard of spike upward in the recognition and respect for the profession.

CPAJ: Will it happen this year?

Kessler: Probably not. But the important thing is that it happens.

CPAJ: How is the institute doing in the implementation of the first six new assurance services? We see and hear lots about WebTrust, but we haven't seen much about the other services.

Kessler: WebTrust is moving nicely. The AICPA's own Web site displays the seal, and a road show has been going around the country explaining the benefits of offering this service. AICPA president Barry Melancon received a recent voice mail message in which a local practitioner spoke of obtaining a $40,000 WebTrust engagement. There are more than 70 small and medium-sized firms that have qualified to provide the WebTrust seal. So it's not just a Big Six service; it has potential for firms of all sizes. At the May council meeting, we heard from a WebTrust customer who told us that his volume had increased 50% after he had acquired the WebTrust seal.

Eldercare is supposed to be rolled out in late summer, and three others next year.

CPAJ: Other new initiatives, this time more for CPAs in business and industry, are the "new finance" and the Center for Excellence in Financial Management. Where is the center located?

Kessler: CPAs in business and industry comprise 43% of the AICPA's membership, the single largest group. Under the leadership of AICPA Director John Morrow, the AICPA is bringing all the things it does for that group into one place on the institute's Web site, the Center for Excellence in Financial Management. The result is an impressive offering. So the center has no physical presence. It's in cyberspace. I encourage all CPAs in business and industry to visit the Web site and take a look.

The "new finance" refers to the skills and competencies needed by today's CPA in business and industry to fully participate as a complete player on the business team. The AICPA has developed a document that defines the new finance and the competencies required to meet the definition. It's a significant step in giving CPAs the tools to perform at very high levels in the business community.

As another outreach program, the AICPA has sponsored a series of roundtables for members in industry. I was pleased to speak to, and listen to, members at these sessions. The CPA designation means a great deal to industry members; otherwise they wouldn't belong. But we must bring more value to their membership. How can they better themselves and the companies for whom they work? That's the question we're trying to assist them with.

CPAJ: At the Spring Council meeting, the Special Committee on Accreditation of Specialization presented a report proposing an expansion of CPA subsets such as the one you have in personal financial planning. What are the needs here?

Kessler: The report of the special committee, under the able chairmanship of Bob Israeloff, was enthusiastically accepted at the May meeting. It provides a framework to move ahead where we think we can use a designation to obtain market acceptance and permission to serve in a specialized area. With the first two accreditations--financial planning and business valuations--we were late to the market. Under the new framework, we seek to identify a market opportunity and move quickly to be the first with the specialty credential. There is no plan to add a credential where the CPA already has market acceptance such as auditing or tax preparation. We expect to move in a proactive fashion, bringing more value to the CPA imprimatur.

CPAJ: Your agenda called for improvements in continuing professional education. What can we expect?

Kessler: Right now, sitting in a classroom for 50 minutes doesn't seem to be the best way. CPAs and firms feel that there must be better ways to keep the profession well informed so as to protect the public interest. One thought is to give some weight to on-the-job training. Another is to measure and evaluate skills and competencies, perhaps through computer testing and other interactive means.

By the way, by the year 2001, the CPA qualifying exam will probably be computerized, with the availability for candidates to take the exam on demand. The psychometricians say this can be done, and with more reliable results in admitting qualified individuals into the profession.

CPAJ: One of your goals was to let members in local CPA firms know how important they are.

Kessler: As part of this, I am visiting as many state society gatherings as I can. I expect to visit a total of about 15 this year. Unfortunately, many of the societies have their annual conferences at about the same time. In fact, four conflict with the New York State meeting--and I would not think of missing my home state meeting. The vast majority of CPAs at these conferences are from local firms. Let's face it, they are the heart and soul of the state societies. I try to encourage them and tell them how important they are. I was one of them.

One of the most inspiring society meetings I attended was in South Carolina. It was a black tie affair, with about 400 in attendance. Special honor was given to all CPAs whose certificate numbers were 500 or less. And there were other special awards and just a general warm feeling about being a CPA.

CPAJ: And yet, many CPAs from small firms think the AICPA is dominated by the Big-Six firms.

Kessler: I've heard that. But if you look at the board of directors, only 3 of 23 members are from the Big Six. Seven are from small firms, five are from industry, and three are public members. By the way, six are women. The vast majority of committees where standard setting is not involved--AcSEC and the ASB--are comprised of CPAs from local and regional firms.

CPAJ: You introduced in your goals for the year the idea that CPAs should broaden their image to the public by perhaps changing the meaning of CPA to "Certified Professional Adviser." What's wrong with "public" or "accountant"?

Kessler: I don't want to change the initials. In many cases, consumers and the public don't even know what the initials stand for. When they are told that the "P" stands for public, they don't get it. Is it like the term "public defender" or "public library"? And the word "accountant" has very narrow connotations in the minds of many and does not represent all that CPAs do. The CPA label has almost a definition and a distinction that goes beyond the words it represents. It's CPA that matters.

CPAJ: But the professional adviser words are so general and could relate to any field--law, medicine, social behavior. And public does mean something. It means the CPA is concerned about more than just his or her own interests. The vision process has shown that the core values of independence, objectivity, competence, and integrity are paramount to being a CPA in the minds of CPAs. And these all suggest the public interest idea.

Kessler: Yes, these values are what CPAs are all about. But what about the more than half of AICPA members that are not in public practice? We have CPAs in business and industry who are saying it's about time we dropped "public." By the way, my e-mail is running five to one in favor of my suggestion. I also find that the older generations are most opposed to it. What is important is to emphasize that "CPA" has special meaning--that it does represent the core values you mentioned--and for those who possess the credential to display it proudly and conspicuously. I do not want to change the initials, and I do not want to change the commitment to the core values. Perhaps some of your readers can come up with something better that tells the story and is inclusive of all AICPA members.

CPAJ: You also want to improve the outreach to minorities. Do you have specific plans?

Kessler: I have been meeting with members of the AICPA's minority issues committee to develop ways to broaden our appeal. The profession needs greater participation. We have done very well in encouraging greater involvement by women. My successor is a woman, presently working in industry. This will be a first in both categories; it reflects a changing landscape. But we are failing when it comes to African-Americans and Hispanics. I heard the story from a member of the minority issues committee about an African-American CPA from a small rural town talking about role models--there was an African-American minister, an African-American doctor, an African-American lawyer, but no African-American CPA. My Chair's Corner column in the May CPA Letter deals with the issue of diversity in the profession. The AICPA board recently issued a diversity commitment statement. The New Jersey Society followed suit; hopefully, all the state societies will do the same.

CPAJ: We have a new Uniform Accountancy Act coming out of the joint agreement with the AICPA and NASBA for restructuring the profession. Barry Melancon would like to see 40 jurisdictions adopt the act in the next year. How are members reacting?

Kessler: Most like the mobility provisions embodied in the substantial equivalence aspects of the UAA, with the freedom for CPAs to practice in other states. The simple majority requirement for CPA owners to be able to be called a CPA firm is sticking in the craw of some.

CPAJ: The UAA's relaxed one-year experience requirement is troublesome to a number of CPAs. The new act says the experience for those who do not perform attest service does not have to be with a CPA firm or for that matter even under the supervision of a CPA. All that is required is that a CPA certify that the experience meets the act's requirements.

Kessler: Don't forget, that some states don't have any experience requirement at the present time. And I would say that less than half of CPAs in public practice actually perform any attest services. So the new experience requirement is an attempt to look at the reality of what CPAs are actually doing and to get a buy-in from a large number of jurisdictions. The ownership issue is the most difficult one for most.

CPAJ: Others are troubled that CPAs working for firms such as American Express Tax and Business Services can hold out as CPAs, doing things that CPAs do, as long as they do not perform attest services.

Kessler: The court cases in Florida are saying the right to hold out as a CPA, as long as attest services are not involved, is undeniable under freedom of speech doctrine. It makes no sense to have a UAA that runs counter to that. Other parts of the UAA will see that the CPAs that do this are subject to licensing and discipline for misconduct. Also there is a proposed amendment to the AICPA code of conduct being exposed for public comment that will permit CPAs to operate within alternative forms of practice.

CPAJ: Is the AICPA maintaining the proper balance between trade association and professional organization? Some observers feel it has not.

Kessler: In my mind, the AICPA is only one thing--a professional organization. I push very strongly for this. There are, of course, benefits of being a member--low-cost life insurance and various affinity programs. The trade association label has negative connotations, and I don't see any of those at the moment. The staff leadership under Barry Melancon is extremely professional, with professional issues and concerns at the very forefront of all that they do.

CPAJ: Attracting membership is probably job number one for membership organizations like the AICPA and the state CPA societies. What are the challenges facing these organizations?

Kessler: The AICPA and state societies need to do a better job of bringing new members in and holding on to them after they leave public accounting. How do we do it? First, we need to convince firms and, for that matter, employers of CPAs in business and industry of the benefits of paying the dues of their employees to belong to both organizations. Second, we must expand our outreach programs telling young people of the benefits of being a CPA and belonging to professional organizations. We need to reach out to those in the profession who are not involved and promote the benefits of membership. My TV program would do wonders here.

CPAJ: This past busy season seems to demonstrate that there are not enough people in the profession. Headhunters had a field day luring young professionals from one firm to another. The underhiring into the profession a number of years ago has come back to haunt us. The increase in demand should have a two-pronged effect--demonstrating increased opportunity to students and driving up salaries, which have not been keeping up with other career fields.

Kessler: We have to make the profession more attractive by promoting the exciting kinds of work that CPAs do and offering competitive salary levels. The more important aspects are job and quality of life issues, which unfortunately we have not always projected in a way that attracts the new generation. I wish I could take on the quality of life/work issue alone. Today, the work is challenging, the camaraderie is exhilarating, and the personal growth opportunities outstanding. It is an exciting time. We have to destroy the "my CPA is different" syndrome. By this I mean the popular viewpoint that CPAs are narrow in perspective, introverted, not very exciting--"except for my CPA, she's vivacious, intelligent, up-to-date, and well versed in technology. She reads the latest best-sellers, gardens, cooks, and runs every morning; but she's not your typical CPA. Most CPAs are not like that." We need the world to know that most CPAs are just like "my CPA."

CPAJ: Does the staff of the AICPA set your agenda for you? Do you follow their script, so to speak?

Kessler: There have been many requests for me to visit state societies and other accounting organizations. These are made directly to me. I wish I could be in more than one place at a time. This past week, because of scheduling difficulties, I turned down three speaking engagements--one was to visit a college campus, one was a visit to the emirate of Dubai, all expenses paid, and the third was a visit to Australia in October.

What is fixed are the six board meetings; the dates were set last year. The meetings extend over three days--Wednesday for committee meetings, and Thursday and Friday for the board meeting. We have Thursday night dinner meetings, with perhaps a guest speaker. In July, that dinner meeting will be at my home; I hope to give the board members a sense that New York is more than Midtown Manhattan.

CPAJ: Is the agenda for the meetings set by the AICPA staff?

Kessler: The past chair, the chair, and the vice-chair do the planning of the board meetings for the upcoming year, and the staff contribute a good deal of input. Obviously if there are major initiatives under way they will be on the agenda--the visioning process for example.

CPAJ: Does the staff try to influence you in anyway?

Kessler: Not at all. For example, generally my columns for the CPA Letter are my own ideas. I write the first draft, my wife edits the copy, I rewrite, my wife re-edits, and then I send it off to the AICPA. Ellen Goldstein, editor of the Letter, looks it over and makes suggestions, not grammatical, my wife has seen to that, and then it gets published.

CPAJ: Is there more that the AICPA and state societies can be doing by way of collaboration to move the best interests of the profession and our mutual members forward?

Kessler: Right now, the AICPA and state societies seem to be working beautifully together. It hasn't always been that way. When I was president in New York, there were conflicts over CPE, commissions, and contingent fees. I hear very good things from the executive directors regarding what the AICPA is doing relative to their interests. We have a state society executive director as a guest at every AICPA board meeting.

CPAJ: A lot of CPAs seem to want to earn money by means other than providing professional services. By that I mean they seem very interested in earning commissions from sales of products. How do commissions fit into the profession from your perspective, as a financial planning enthusiast?

Kessler: I'm from the old school; no commissions. But, the FTC said we must permit that as an option--for nonattest clients. I'm not sure I like it. Here in New York, we are presently not allowed to take commissions. But the number of CPAs who are registered investment advisors is growing. I've heard from those doing it that their clients are very satisfied. We have been in an up market for six years or so and everybody is doing well. What will happen when the bottom falls out, I don't know.

CPAJ: Do you have some final thoughts for our readers?

Kessler: The word for today is change. The successful professional--at whatever stage of his or her career--must be receptive and adaptable to new ways and new ideas. Technology is a major factor. But that's just a part of it. Our members and our leaders must open their minds to the profession's full potential. Set the sights on what can be, with our core values at the center. The key question is, does the modern world need a professional whose very being is based upon independence, objectivity, and integrity? I think it does.

CPAJ: Stu, thank you for talking with us. You are having a rich and satisfying year. Our best for the remainder of your term and the years ahead.*

Stuart Kessler, CPA/PFS, is a partner of Goldstein Golub Kessler & Company, PC. He is a past president of the New York State Society of CPAs and past chair of the AICPA Personal Financial Planning Executive Committee.

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