Peeling away the layers of CPA2Biz

By the time you read this, CPA2Biz.com, the long-awaited web portal operated by an AICPA for-profit subsidiary, will have launched. Many of us have been waiting for this moment—the NYSSCPA has asked more than its share of questions in deciding whether to support the venture—and will be following the CPA2Biz launch closely. Now is a good time to peel away the layers of issues surrounding CPA2Biz in order to examine the concept closely.

First, a definition: A “portal” is, in a nutshell, a one-stop-shopping website for news, research, e-commerce, networking, you name it. A portal puts the entire World Wide Web at your fingertips, but gives it focus, structure, and selectivity. (Although the AICPA announced plans for both CPA2Biz and the much-discussed global credential proposal at around the same time last year, the two projects are, in fact, unrelated.)

One of my concerns is that the critical mass needed to sustain a for-profit portal for CPAs may not yet exist. One of the models that the AICPA used for CPA2Biz was the much-hyped but now struggling WebMD (www.webmd.com), whose stock price was already dropping before the market began its downturn last year. Moreover, Pro2Net, one of the first accounting portals, went under earlier this year in the first wave of the dot-com bloodbath. By all accounts, Pro2Net had strong funding and leadership, a sound business plan, and excellent content and design. In contrast, CPA2Biz has not had the level of pre-launch promotion commensurate with such a huge enterprise. It’s the proverbial well-kept secret, and if you haven’t heard much about it you’re not alone.

I’m also concerned that in the past year, CPA2Biz has signed up only three (in addition to the state societies) strategic partners, albeit major ones: Thomson Corporation and Microsoft promised to put up $25 million in cash or other valuable consideration, and insurance industry giant Aon Corporation recently invested $7 million.

Thomson’s role is controversial because it is a major commercial provider of products and services for the accounting profession. Some have raised conflict-of-interest questions about Thomson’s role as a vendor to the AICPA in developing the computerized version of the CPA exam (see “CPA Exam, or Turf Battle?,” May 2001). In addition, the AICPA shifted $60 million worth of educational products and publications into CPA2Biz.

The AICPA has asked the state societies through their collective bargaining mechanism—a shared-services company called SSNI—to extend by six months the preliminary license to CPA2Biz of their membership databases (the so-called Phase 1 of the CPA2Biz endeavor) because negotiations between the AICPA, CPA2Biz, and SSNI have not gone as quickly—or smoothly—as the AICPA expected. The good news is that these investors and funds have allowed CPA2Biz to create a full, approximately 125-person staff, including new hires from Pro2Net and an undisclosed number of reassigned AICPA staff. The bad news is that a well-staffed dot-com can burn through $57 million very quickly.

At the spring 2000 AICPA Council meeting, the NYSSCPA delegation expressed its reservations as persuasively as it could, and the NYSSCPA was alone in taking that stand. Last year, the NYSSCPA Board of Directors decided to enter into Phase 1 of the project because it felt obligated to do so in the spirit of solidarity among the state societies. But at its June 10, 2001, meeting, the Board voted not to sign the six-month extension.

Now it is time to discuss CPA2Biz with our entire membership. My first question is: Should a nonprofit organization run a service whose purpose extends well beyond the nonprofit’s mission, such as this portal, even through a for-profit subsidiary? Will this refocus the organization to favor earning profits over fulfilling a mission?

Second: Should nonprofit staff benefit directly through stock ownership in a portal, such as in CPA2Biz? Many would say that this arrangement—officers of a tax-exempt organization owning stock in a for-profit subsidiary—raises conflict-of-interest issues of the first order, and is totally contrary to the mission of any nonprofit organization.

Third: The public’s perception of the CPA profession—as cited in the CPA2Biz business plan—is one of independence, objectivity, and integrity. Is this perception jeopardized by selling or endorsing other products or services?

Fourth: Will the portal compete with CPAs’ clients? For instance, the portal will inevitably sell commodities, such as stationery, and CPAs whose clients make, sell, or distribute similar commodities may not want to use an e-commerce network that is a potential competitor.

I’m also concerned about the impact on the state societies. Each state society is unique and we provide affinity programs tailored to our memberships. The portal would nationalize affinity programs and possibly require that states cut programs that compete with CPA2Biz. Members may find that CPA2Biz provides them with fewer or less attractive options than they can find on their own.

One final question, the one closest to home: Assuming all the other questions are adequately answered and the portal project proceeds with the support of all of the other state societies, is the NYSSCPA correct in standing on principle and declining to participate, or should it act in solidarity with the other state CPA societies and join up?

In the final analysis, membership organizations such as the NYSSCPA and the AICPA qualify for nonprofit status because they serve the public by developing their members’ professions rather than by enlarging their own or their officers’ coffers. An organization that would pursue the latter goal will eventually look very different from an organization dedicated to the former.

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