ISO 9000 is a series of quality management and quality assurance standards adopted by some 91 countries worldwide - the acceptance of which is growing exponentially in the NAFTA countries of the U.S., Canada, and Mexico. ISO 9000 (American National Standards Institute/American Society for Quality Control/Q9000 in the U.S.) deals with the business system (process) of an organization, whether a manufacturer or service-provider, and how consistently that system is applied at strategic, tactical, and operational levels. It is a natural entry point for the CPA; who better understands a company's system?

Many companies consult their CPA firm for advice first; this can be both a danger and an opportunity to the CPA firm. The danger to the smaller firm, which may have neither the knowledge nor the resources, is that one of the larger firms, with the knowledge and resources, will gain a foothold into their client base. A similar danger is that the client will turn to a boutique consulting organization, where they may talk a good game but, in reality, have just read "the book"! There are other more positive reasons why a CPA firm should consider gaining expertise in this area and offer ISO 9000 service.

Customer Pressure on Clients. Sooner or later, many client companies, however small, are going to be pressured by customers to gain ISO 9000 registration as a condition of doing business. Help will be sought and obtained from somewhere.

Diversity. There is a limit to fees from audit and tax work, and only so much of that to go around. ISO 9000 is a natural extension to a CPA's skill set because it requires the examination, documentation, and implementation of procedures and work instructions to ensure that a consistent system is being operated.

Building Upon Existing Knowledge. The CPA firm may have designed some of the client company's business systems - implementing and maintaining ISO 9000 is enhancing work which has been done before or with which the CPA firm is very familiar.

ISO 9000 Is Nonseasonal. The annual life cycle for work in a CPA firm is a series of peaks (work compression) and valleys. Most firms must staff to meet the peaks. What do firms do with people during the valleys? How can they afford to keep and pay good people? Personnel turnover is expensive; a conservative estimate is that it costs three times an annual salary to replace someone. Staggering the financial workload helps but there are limits. Bringing in more work (ISO 9000) for the valleys is certainly a better idea. Fully utilizing staff allows firms to spread their cost over 12 months rather than six or eight. The cost of a firm's traditional business would thus decrease providing a real cost edge in a cost-sensitive business!

ISO 9000 Is Manageable. An ISO 9000 engagement is not a whale omelet that has to be eaten all at once. It lends itself to at least seven distinct smaller engagements which then fit together into the whole implementation.

ISO 9000 Is Predictable. ISO 9000 is a process that is time-independent. Firms that gain the expertise to carry out ISO 9000 work can level their capacity with the ease of a manufacturer to stock.

ISO 9000 Fee Structure Is Fluid. ISO 9000 is not a commodity. There can be real competition, and the suitably prepared smaller CPA firm can compete on equal terms with all the king's horses and king's men of the larger firms.

ISO 9000 Is Growing. ISO 9000 deals with processes; therefore, it is universally applicable. It does not matter whether the company makes nuclear missiles or cleans hotel rooms - ISO 9000 is applicable. This alone suggests a huge potential market; but in fact, ISO 9000 is evolving further and developing into new areas. An example of this is the "Vision 2000" rewrite of the standards, which will be more oriented toward total quality management. Examples of areas of development are the imminent ISO 14000 Standards, which will cover environmental management systems, and a move to create an international health and safety standard based upon ISO 9000.

ISO 9000 Is a Door-Opener. The potential that ISO 9000 offers for follow-on work is enormous. A few examples are as follows:

* Internal Quality Audit of the ISO System. This standard requires that an internal audit process exist in the client company and there is no problem with that company outsourcing regular internal quality audit work. This is a natural opportunity for CPA firms.

* Business Process Analysis and/or Reengineering Work. To document a process and operate it under controlled conditions requires profound knowledge of the process. Many business processes are probably inefficient without being at a breaking point. ISO 9000 implementation offers an opportunity to analyze the processes and streamline them.

* Continuous Process Improvement/Total Quality Management. TQM does work, though few companies have been able to get it to do so. Many companies lack focus in their TQM efforts; ISO 9000 provides that focus and allows an easy controlled entry into a TQM process.

* Materials Resource Planning (MRPII) Implementation. Very few MRPII implementations have delivered their full potential because of lack of profound knowledge of the actual business system. ISO 9000 formalizes the system and encourages the elimination of wasteful practices.

* Cost of Quality and Strategic Measurements. The standard requires that managements review their operation using objective data. Who better than their CPA firms to provide consistent measurements of such vital business indicators as cost of quality? This could be a regular exercise timed halfway between the financial audits.

ISO 9000 offers CPA firms an opportunity to retain client loyalty and increase value-added services. It also allows the CPA firm to utilize staff that would be otherwise redundant in the slow periods of the year.

ISO 9000 deals with systems. The CPA who ignores the standard is disregarding a profitable opportunity to enhance client service, capitalize upon existing knowledge and relationships, and help client companies prepare themselves for the global competition of the 21st century.

Thomas H. Landelles-Gordon is a partner in the Ironbridge Group in Overland Park, Kansas, which provides training material for ISO implementation and education. The toll-free number for this organization is (800) ISO-9001.