December 1998 Issue



By William C. Barrett, III

Something almost miraculous happened to CPAs as a result of the traumatic displacement of the tax and compliance services that CPA firms have traditionally offered: the change from green-eyeshade auditor to trusted and sought-after counselor. This change required the application of existing skills from our once stodgy profession.

Rise of the CPA Mediator

CPAs are instilled with and governed by their Professional Code of Conduct, which is quite unique among professional codes. It charges the CPA with maintaining independence, objectivity, and integrity above the CPA's self-interests. These attributes, along with highly developed communication and analytical skills, make CPAs naturals as process neutrals in ADR proceedings, especially as mediators, where subjectivity can subtly influence the outcome.

A mediator is a trained, impartial third party with no vested interest or decision-making authority in the outcome of a dispute. The mediator assists the disputing parties in exploring voluntary settlement options through an agreement that defines their future corporate or individual conduct.

Most commercial disputes are not really legal disputes. They don't necessarily turn on points of law, they turn on points of commerce. And most can be resolved within the business community using sound business judgment. Many disagreements result from improper or ill-defined terms in contracts, warranties, and industry-specific procedures. The CPA's understanding of business at the operational level can objectively assist the parties in a quicker and less expensive resolution of disputes over transactions gone awry.

Businesses look for creative solutions that add value, rather than adjudicated solutions. The CPA's nonjudicial credentials permit the disputants to maintain more control over their outcomes, focusing on resolution rather than compromise over legal rights and wrongs. A CPA who understands the operational, risk, and economic issues for both sides may facilitate crafting long-lasting solutions.

In individual disputes, the CPA helps divorcing parties understand after tax cash flows, budgets, and better ways to divide property. In estate, trust, and personal financial planning, the CPA facilitator can reduce the probability of family litigation. Also, in mediating will and trust contests, the CPA can assist the disputants in resolving issues of administration, as well as in finding agreeable solutions to incomplete or erroneous documents.

Comparison of Skill Sets

The CPA has already mastered many of the abilities needed to become a good mediator. These skill sets come right out of the CPA's professional training and experience. The CPA mediator is able to demonstrate to the parties, through words and behavior, that he or she is--

* an expert listener

* able to speak in clear, neutral

* able to diffuse hostility

* able to control prejudice and bias

* respectful toward the parties and sensitive to their strongly felt values and any gender, ethnic, or cultural differences

* able to see issues on multiple levels

* able to analyze complex factual materials and problems

* able to think on his or her feet

* able to direct the dynamic flow of the process

* trustworthy and able to keep


Listening is a fundamental skill for both mediators and CPAs. CPAs have developed good listening skills in daily consultation and problem solving.

The CPA can be an effective mediator because he or she is a highly skilled listener, with the ability to concentrate totally, read between the lines, and listen with his or her eyes. Listening involves being sensitive to the nonverbal behavior of the parties, not just understanding their words.

Mediators are usually selected for their industry-specific knowledge and subject matter expertise. CPAs have long served as expert witnesses and industry arbitrators, for example, in the insurance and construction industries. Judges, who are not always knowledgeable of financial and technical matters, are increasingly referring disputes to knowledgeable CPAs, who act as neutral evaluators, special masters, and mediators.

Problem Solving

CPAs help industry and individuals solve problems on a daily basis. They have learned to assist their clients in assessing and prioritizing possible solutions to a problem. Their approach is similar to the six-step model that mediators use to help parties resolve their disputes:

1. Identify and define the problem.

2. Generate alternative solutions.

3. Evaluate the alternative solutions.

4. Make a decision.

5. Implement the decision.

6. Follow up when necessary.


The CPA uses motivation to encourage top performance, cooperation, initiative, and teamwork. Likewise, the mediator views motivation as the ability to inspire disputants to meet their personal and organizational goals by helping to direct their efforts toward obtaining the objectives they defined at the onset of the mediation process.

Often parties lose motivation because they do not have access to or the ability to analyze information. The CPA mediator has a high understanding of such information and can explain it to the parties in a usable form.


Negotiating is defined as a process for reaching agreement among individuals or groups, acting either for themselves or as representatives of organizations that have conflicting interests. Basically, negotiation involves reaching an agreement to change a relationship from adversarial to collaborative. This is done through trust.

CPAs have earned the general public's highest tribute--their trust. In a 1997 Hart Research opinion poll, the general public gave CPAs a six percent unfavorable rating (in contrast, lawyers had a 34% unfavorable score). This rating was one of the lowest negative scores given to any profession tested by the survey. In positive ratings, CPAs ranked a third in overall respect behind teachers and doctors.

The new CPA makes an excellent mediator for businesses and individuals locked in dispute. He or she possesses the professional ethics and facilitation skills required to help parties towards outcomes that will enhance their lives and promote better, more profitable business dealings. Other key advantages of the CPA mediator are operational subject matter knowledge, cost-effectiveness, and non-advocacy mediation skills independent of but complimentary to legal dispute resolution. *

William C. Barrett, III, CPA, is a certified neutral for the New York and Virginia Supreme Courts and currently chairs the AICPA Alternative Dispute Resolution Task Force.


By Philip Zimmerman, CPA

Here's a sampling of the most frequently asked questions about getting started as a mediator:

Q. How can I obtain training to become a mediator?

A. Various organizations offer courses on becoming a mediator. First consult your state society's committee on arbitration and mediation or its educational arm. In New York, call (212) 719-8300, or e-mail Another source is Teachers College at Columbia University, (212) 678-3000.

Q. How do I gain experience in mediation?

A. 1. Join your state society's arbitration media committee and actively participate.

2. Locate a local community dispute resolution agency and volunteer.

3. Let clients know you are available and prepared to mediate a dispute.

4. Inform the National Association of Securities Dealers (NASD) (212) 858-4400 that you have the training and experience to serve as a mediator in securities disputes.

Q. How much can I charge for my services as a mediator?

A. 1. For your state society committee--pro bono.

2. For community dispute resolution agencies--pro bono.

3. For clients, parties in dispute, or the NASD--your customary billing rate.

Q. If it is so difficult to obtain training and/or employment as a mediator, why should I bother reading about it?

A. 1. CPAs make excellent mediators because they possess the necessary skills, training, and experience.

2. Progress is steadily being made to broaden the opportunities for CPAs to serve as mediators by such groups as the New York State Society of CPAs and NASD.

3. Knowledge of mediation is extremely useful to a CPA trying to amicably resolve disputes when confronted with them in business or personal life. *

Philip Zimmerman, CPA
Mediator and Arbitrator

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