June 2002

Calling For A Return To Historical Roots

I applaud Lou Grumet’s concise and perceptive column in the April issue, “The Eye of the Storm,” describing the three interconnected issues that bear on the future of CPAs.

In my opinion, the most important issue is professional status, and the key question: Is the AICPA a professional association serving the interests of the investing public, or a trade association dedicated to serving its members’ bottom-line profitability? Answer this question, and the closely related issues of the audit relationship and self-regulation will resolve themselves.

The basic problem with the AICPA today is a muddled mission. The AICPA’s leadership and its president, Barry Melancon, have given primary emphasis to its trade association role and related for-profit functions, including CPA2Biz and its subsidiaries.

The media has questioned the AICPA’s role and related ethical issues, reflecting the public’s current consensus view. A prime example is this excerpt from an April 23 editorial in The Wall Street Journal:

After watching many Andersen partners sabotage Mr. Volcker’s rescue effort, and seeing Andersen’s Big Four competitors circle their wagons to block reform, we wonder if these fellows can be trusted with the grocery money, much less with restoring public confidence in shareholder capitalism…. Their lobby’s chief theorist, Barry Melancon of the [AICPA] … just days after defending auditors who also do consulting for the same corporations … had to acknowledge a conflict of interest of his own because he had profited from the commercial ventures of what was supposed to be his nonprofit institute. It’s as if the boxing reform commission had sent us Don King.

I recommend that the lobbying/trade association/CPA2Biz functions be spun off into a separate organization with its own officers and dues structure while the AICPA returns to its historical roots—serving the public interest and actively upholding its code of ethics.

Visit the new cpajournal.com.