August 1999

CPA: WHAT SHOULD IT STAND FOR?

By Mark T. Ross and
Janet L. Colbert

In recent years, CPAs have increasingly augmented their traditional audit and tax work with other services such as consulting, attesting, assuring, and financial planning. As these nontraditional services become more significant to CPAs, it is fitting to examine whether the credential "certified public accountant" still fits today's trusted professional.

Stuart Kessler, in his October 1997 speech at his installation as chair of the AICPA, suggested a substitution for the words standing behind the "CPA" acronym.

The understandable confusion over what CPA means centers around the latter two initials standing for "public" and "accountant." Updating these two terms would allow for a broader image of the profession.

A New "CPA"

One way to address the concern over the brand loyalty to CPA is to maintain the letters C, P, and A. While the familiar moniker would remain the same, the words represented by the letters could be changed to better reflect the functions being performed.

Certified Professional Advisor. A popular suggestion that keeps CPA but alters the words behind the acronym is "certified professional advisor." This was the term used by Kessler in his October 1997 speech. This title more accurately describes the work performed by a CPA in public practice, industry, government, nonprofits, and academia. By replacing public with professional, possible confusion over the former is eliminated. Professional connotes arduous academic preparation, specialized knowledge, and proficiency; these attributes certainly fit the CPA. Accountant could be amended to advisor. The latter term embraces the providing of information, developing of recommendations, and offering of consultation that more appropriately encompass the broad range of services performed by CPAs.

Certified Professional Assurer. Another option is to again change "public" to "professional" and alter "accountant" to become "assurer." Assurer is an improvement over accountant for several reasons. The AICPA Special Committee on Assurance Services defined assurance services in the following manner:

Assurance services are independent professional services that improve the quality of information, or its context, for decision makers.

Such a definition focuses on the information users consider when making decisions. The assurer performs services that provide an overall improvement in the information; better information allows users to make better decisions.

The assurer works with both financial and nonfinancial information. In addition, the information may be discrete or may focus on systems or processes (such as the system of internal control or the purchase order process.) Furthermore, the information may be direct (data regarding international sales) or indirect (data developed by market analysts regarding international market share). The assurer must be capable of performing a wide array of tasks in a number of different settings. The work of an accountant, which is perceived as dealing primarily with financial information, seems narrow and limited compared to that of an assurer.

The use of assurer rather than accountant would help CPAs better compete with non-CPAs and nonaccountants in the marketplace. Many of the services offered by CPAs are not primarily accounting-based. The continued use of accountant may impede opportunities for further growth in the profession, as clients may not realize that CPAs can perform the service. Thus, a change from accountant to assurer should allow for the increase in the amount of nontraditional services being provided.

Of course, there also remains the possibility that the definition and perception of assurance services may change, perhaps as a result of a change in the CPA's scope of practice. The above definition of assurance services should remain intentionally broad, allowing room for the development of future service opportunities under the name.

A Delicate Balance

As CPAs continue to broaden the scope of services being offered, the moniker certified public accountant becomes increasingly outdated. The preceding suggestions are meant to more accurately reflect the services CPAs provide today while allowing for continued expansion. However, extreme care must be taken to ensure that the benefits of changing the meaning of CPA do not dilute or confuse recognition as the trusted professional in the marketplace. *

Mark T. Ross, PhD, CPA, is an assistant professor of accounting, and Janet L. Colbert, PhD, CIA, CPA, the Meany-Holland Professor of Accounting, both at the Gordon Ford College of Business, Western Kentucky University, Bowling Green.

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.