AICPA Open Discussion on the Proposed Global Business Credential: Should CPAs Lead the Way?
Presented by Kathy G. Eddy, CPA, Chairman of the AICPA
Wednesday, August 22, 2001 11:00 a.m. EDT
Visit the AccountingWEB Workshop Calendar for upcoming sessions.
You can read the complete transcript of this event.
During this workshop, the following items were discussed:
- What market forces are driving this proposal?
- What is the proposed global business credential?
- How will the global business credential be positioned?
- Will the market accept a global business credential?
- What impact would a global business credential have on students?
- Why should CPAs take the lead?
Gail Perry - Session Moderator: We would like to welcome everyone today for this special AICPA Proposed Global Business Credential Session. AccountingWEB would like to thank Kathy Eddy, Chairman of the Board of Directors of the American Institute of Certified Public Accountants (AICPA) for presenting this informative session.
Today's session will begin shortly and will cover the following topics:
- What market forces are driving this proposal?
- What is the proposed global business credential?
- How will the global business credential be positioned?
- Will the market accept a global business credential?
- What impact would a global business credential have on students?
- Why should CPAs take the lead?
After the initial session, which should last approximately 25-35 minutes, AccountingWEB members' questions will be submitted directly to Ms. Eddy in an open question and answer forum. You should feel free to submit questions throughout the presentation - these questions will be compiled by AccountingWEB and posted at the end of the presentation. The goal today is to enlighten the membership on the stand the AICPA is taking with the global business credential. We encourage our members to participate with an open mind, and to ask questions of Ms. Eddy.
Member questions will be answered as time allows. As many questions as possible will be addressed.
Welcome, Ms. Eddy - and thank you so much for joining us today!
Kathy Eddy: Thank you Gail. Welcome, it is a pleasure being with you all today on AccountingWEB to discuss this important initiative that will potentially affect the future of our profession.
Welcome, it is a pleasure being with you all today on AccountingWEB to discuss this important initiative that will potentially affect the future of our profession.
First, I want to share with you my perspective. I am a CPA, a credential of which I am incredibly proud. My firm, McDonough, Eddy, Parsons and Baylous, is located in Parkersburg, West Virginia. I have built a successful career with a profession that stands for integrity, independence and value in the business world. These are essential characteristics of the CPA, and no one, especially not the AICPA, is proposing that the bedrock of the profession be altered.
As a member of the volunteer leadership of the AICPA, I am deeply aware of my responsibility– not only for today’s CPAs but also for those yet to come. I assume responsibility for helping to retain the unique value CPAs offer the business community and financial markets. And I assume responsibility for strengthening the profession’s future. That is what we are talking about today.
There is growing evidence that demand is increasing for experienced strategists who draw upon a wide array of competencies to provide solutions that create wealth and a competitive edge for businesses.
Responding to this need, the American Institute of CPAs and an international consortium of professional accounting organizations have proposed a global business credential that would be available for highly qualified professionals, such as CPAs and business lawyers, who submit to a rigorous admissions process.
Honoring the CPA profession’s 100-year tradition of quality and integrity, this visionary new badge of excellence would complement current professional credentials and validate the holder’s breadth of strategic business ability, experience and commitment to ethics, professional standards and continuous learning across disciplines.
In essence, the proposed global business credential would stand for broad-based knowledge, much like an MBA does today, and add in the professional rigor associated with the CPA (code of ethics, defined competency set, relevant work experience, continuous learning and re-assessment, rigorous examination).
Its requirements are clearly rooted in the values and traditions of the CPA profession. Moreover, these requirements would be consistent from country to country.
As a result, the global business credential would signify the same professional quality and level of expertise wherever and whenever it is used, and would not be dependent on the reputation of any particular academic program. Anyone wishing to obtain the credential would have to earn his or her way through a system as rigorous as the one associated with the CPA profession. In addition, credential holders would be members of a global organization dedicated to ensuring that its members are aware of emerging practices necessary for success in a rapidly changing world. They would have access to an online worldwide resource, as well as a unique network of elite professionals across the globe.
CPAs who are likely to benefit most are those already operating beyond foundational services such as audits, taxes and financial planning, areas in which CPAs will remain singularly positioned as premier experts.
Yet market data suggest that the CPA profession is likely to enjoy added value from its early association with and leading role in the credential’s development.
The proposed global business credential is a long-term strategy, one whose ultimate impact is likely not to be fully realized until the next generation enters the work market. But it is our belief that in order to secure this opportunity, the CPA profession must stake its claim now.
I want to thank AccountingWEB for giving all of us the opportunity to come together as a nationwide community to have this discussion. Regardless of what happens with the global business credential, I am excited to see CPAs engaged passionately in a grassroots dialogue about our profession and its future.
This dialogue is, in my eyes, a sign of our collective pride and commitment to providing the highest value to the business community. We may, as intelligent individuals, disagree on which paths are the most advantageous for the profession to follow, but our goal is one and the same: The health and vitality of the CPA profession and the value we offer society in our roles as professional service providers.
Should you want more information after our discussion today, I encourage all of you to visit the Global Credential Member Information Center Web site at http://www.globalcredential.aicpa.org.
The site contains lots of important information—the business overview, competency framework, articles, a detailed list of questions and answers, the pro-con debate from the spring 2001 Council, among others. There’s also a place for you to share your comments.
Introduction: Where are we now?
Today’s session is part of the Member Information and Response Program that was authorized by Council in May 2001. The goal of this program is to provide resources and stimulate dialogue about the proposed global business credential so members are better prepared to make an informed decision when the membership referendum is sent out this fall.
Pending final Council review in October, a ballot will be mailed to members asking for authority to create a separate self-funded organization that would issue the global business credential in the United States. This organization will not be the AICPA, and membership in this new organization would be optional. The AICPA will not have ongoing financial obligations for the new entity.
Let me take a moment here to point out that this new organization can only be created if two-thirds of the voting membership votes yes. If two-thirds of those voting do not signal their approval, the credential will not go forward. This decision is in the membership’s hands.
While the AICPA Board of Directors has voted unanimously to support the issuance of the credential through a separately self-funded organization, the initiative itself is contingent upon member approval. Regardless of the outcome of the ballot, you can rest assured that the AICPA will remain focused on its continued advocacy for the CPA profession. That has been and will continue to be our primary mission.
Having been engaged in discussions with members over the last few months, I recognize that the global business credential is not without controversy. We know that some members have concerns about the credential and its potential impact upon our profession.
Some believe that the credential may be needed in the future, but argue that we shouldn’t pursue it now. Some worry about diminishing the CPA brand and others worry about the credential heightening non-CPA competition. These are important issues, and we must give them appropriate consideration. I urge all members to take the time to consider what the credential means for them today, for the profession as a whole, and for those who are yet to come.
Before we move on to discuss the credential in full, I want to touch upon one more issue: Naming. The name “Cognitor” was officially dropped many months ago. Currently, a new name is being developed that will be descriptive in nature, something like “Strategic Business Advisor.”
What is the proposed global business credential?
The AICPA and a group of international professional organizations have been studying the development of a global business credential characterized by its breadth of knowledge, future orientation, strategic focus, and professional rigor.
The credential would represent the diverse competencies that add value to clients and employers amid the ever-changing demands of our knowledge economy. The credential has the following characteristics:
Portable: recognized in all participating countries
Cross Disciplinary: ability to integrate and apply knowledge from multiple disciplines
Ethics Criteria: governed by a consistent international code
Experience and Competency-based: requires knowledge obtained through work experience as well as continuous learning
Linked to Global Knowledge Resource: provides access to worldwide knowledge resource and network of elite professionals and
Complements Existing Credentials: stands for strategic advisors who can offer breadth of generalist with depth of specialist.
Again, a new self-funded global institute would administer the credential. One of the biggest misconceptions we’ve had with the new credential is that the AICPA would administer it, thereby diverting attention and resources from its obligations to CPAs. Nothing could be further from the truth. The AICPA and state CPA societies will continue to focus on advocacy for the CPA profession.
The research initiative that created the Competency Framework for the global business credential identified three distinct types of competencies that credential holders will be required to demonstrate. These are explained in full detail in the Global Business Credential Introductory and Competency Framework, which you can find on the global credential Web site I mentioned earlier. Briefly, the three areas of competency are:
Cross-Disciplinary Knowledge- encompasses the broad and interdisciplinary portfolio of business knowledge and functional expertise that credential holders are expected to understand. Such areas of knowledge may include accountancy, business law, corporate finance, human resources, information technology and operations.
Professional Competencies- include a suite of skills, capabilities and attributes, such as entrepreneurial orientation, analytical prowess and networking and resourcing, that allow the global business credential holder to be effective and productive.
Integrative Competencies- are the hallmark of the global business credential holder representing his/her capacity to envision, strategize, conceptualize and innovate. They signify the credential holder’s ability to combine knowledge from many sources, often in novel ways to create economic value. These highlight such areas as strategic thinking, innovation, conceptual skills, and global perspective.
Credential holders are not expected to be experts in all competencies, but rather have an awareness of many different business disciplines so that they can leverage that knowledge to create economic value for employers, clients and organizations.
How will the global business credential be positioned?
You may be asking, “What is the difference between the CPA and the global business credential?” You also may be wondering how the credential differs from the MBA. There are definite and important distinctions that I want to talk about here. These distinctions go to the very heart of how the global business credential will be positioned.
The CPA has unparalleled depth of knowledge in finance and business. This expertise, coupled with a reputation for trust, is what distinguishes the CPA. I recently heard someone say, “Everything financial should go through the CPA.” I agree. That statement is not in conflict with the proposed global business credential.
Global credential holders would be defined as professionals who help people or organizations achieve their objectives through an unmatched breadth of knowledge in strategically critical and diverse disciplines.
Holders would be characterized as facilitators of organizational change, entrepreneurial in nature, globally aware, combining depth (specialty knowledge) with breadth (generalist knowledge across disciplines). They would also bring a future orientation, and focus on strategy that drives an entire organization toward its stated goals.
By the way, let me add here, that I am well aware many CPAs fit that description. In my travels across the country this year, I have met and had interesting discussions with CPAs who share all of these characteristics.
And this is one of the reasons I believe so strongly that our profession has the right to stake the claim and establish the game rules to the strategic knowledge and advisory service playing field. The proposed global business credential is not a license to deliver a specific set of services, but rather a measure of the credential holder’s knowledge and skills. Unlike the state-licensed CPA designation, the global business credential will be market-driven and privately owned, not based on a government-granted license.
The proposed global credential stands for a breadth of high-quality knowledge and skill, comparable to those often associated with the MBA. But it would go further than that degree by adding international consistency and recognition, adherence to ethics, continuous learning, a worldwide professional association and access to an exclusive learning platform. As you may have noticed, the proposed credential builds on the CPAs traditions and values.
The proposed credential requires that applicants have several years of relevant work experience, demonstrating an ability to apply knowledge to provide strategic business insight. While some MBA programs have semesters in which real-life work experience is offered, MBA programs do not generally mandate a specific work experience hurdle.
Currently, the quality of an MBA is dictated largely by the quality of the institution at which it was earned. There are no continuing learning requirements, so an MBA from ten years ago may not hold the same meaning in today’s market. Plus, MBAs are not subject to the professional rigor that is associated with the CPA and would be associated with the global business credential.
The following outline shows the distinctions between the CPA, MBA and the global business credential (GBC):
Cross Disciplinary: CPA - No; MBA - Yes; GBC - Yes
CPE Required: CPA - Yes; MBA - No; GBC -Yes
Code of Ethics: CPA - Yes; MBA - No; GBC - Yes
Work Experience Required: CPA - Yes; MBA - No; GBC -Yes
Internationally Consistent Competency Standard: CPA - No; MBA - No; GBC - Yes
Admission Examination: CPA - Yes; MBA - No; GBC - Yes
Regulatory-Based: CPA - Yes; MBA - No; GBC - No
Based on a License to Perform a Set of Services: CPA - Yes; MBA - No; GBC - No
These distinctions are important. For CPAs who choose to add the global business credential, the intent is to support them as they position themselves in the marketplace as individuals who combine the depth of financial understanding signaled by the CPA with the breadth of interdisciplinary knowledge and networking signaled by the global business credential.
We already know that approximately one-third of CPAs have chosen to obtain the MBA. The creation of the proposed global credential would offer them and, more importantly, future generations of CPAs another way to complement their CPA license, one we believe complements and reinforces the CPA’s values and traditions.
What market forces are driving this proposal?
Let’s talk a moment about how the credential concept originated. A few years ago, Jeannie Patton, the CEO of the Utah Association, headed up a grassroots effort to explore the future pathways for the CPA profession.
This was an unprecedented process, both in terms of scope and reach. And it was enormously successful. CPAs around the country came together to wrestle with current political, economic, social, technological and regulatory trends, and their potential impact on the markets in which we all work. They forged something called the CPA Vision. This grassroots effort created a blueprint for the profession.
In light of this enormous effort, the members of the AICPA’s Strategic Planning Committee analyzed possible initiatives to help make this CPA Vision a reality. They also took a long, hard look at hiring trends and client/employer needs. It was this thoughtful deliberation among CPAs that led to the concept of the global business credential. What drove the Committee to this concept? The world in which CPAs work has changed tremendously in recent years. Business is becoming more complex and nonlinear. Boundaries between industries have blurred, and the speed of innovation has accelerated beyond anyone’s expectations.
Customers are driving the market more powerfully and more directly. They want instantaneous and in-depth information. Service and product decisions are increasingly based on perceived current value and not on loyalty. Globalization, deregulation and technology have created competition from every direction and that has meant that the value of knowledge has soared.
These powerful market forces have created a new economy. Thirty or forty years ago, we worked pretty much in a manufacturing economy. Today, more than 70% of companies in the United States are in the service business. Entirely new industries have emerged. And thousands of businesses have soared and crashed in what seems like nanoseconds.
Fortunately, CPAs have adapted to this market, vastly diversifying our skills far beyond the activities our license allows us to practice. But let’s remember we have done this as individuals or as individual firms. The CPA license definition has not changed. Let me be clear here: the CPA’s bedrock services are extremely important. They are key to who we are and to the values and reputation for which we are known and respected.
What we are saying is that in addition to these core services, our profession has expanded into much broader business roles and sets of competencies. We, as individuals, have been given permission to go way beyond our core services.
I will use myself as an example. My clients know I practice in the space I’m talking about—they see me as a strategic advisor who can draw upon a wide range of business disciplines and competencies to solve problems and create value for themselves or their companies. But when I go out into the world with that client, they nevertheless introduce me as, “this is the person who does my taxes.”
There is definitely an area where perception of what I do is bound up in an expectation of the kind of work CPAs are known and licensed to perform. So many CPAs tell me similar stories. Their clients and employers may accept that they, as individual CPAs, are broader than the image commonly held of CPAs as a profession, yet the perception persists. And here’s the double-edged sword: a lot of that perception, that stereotype, is extremely positive. We are trusted advisors. We are seen as professional, offering independence and integrity. How then does the CPA profession preserve these positive stereotypical attributes, while ridding itself of negative attributes?
The only area of service that remains exclusively in the CPA domain is attest—even as we have expanded our services from traditional accounting into virtually every aspect of business, including marketing, strategic planning and personnel. Roughly 85% of our profession does something other than the franchise service of auditing. This is a crucial statistic.
What’s happened is that CPAs stretch into other areas only after they pass the CPA exam, which doesn’t test most of the areas in which CPAs end up working. There is an enormous disconnect between what the CPA exam tests and signifies and what CPAs are actually doing in their day-to-day jobs. This incongruity creates the “eye of the needle” problem because more and more students are going directly into the broader professional service market, bypassing the CPA exam. The number one problem among many public firms is their inability to find and retain qualified young people. There are not enough graduates to fill the jobs.
And there’s this: today’s businesses have a real need for people who can help bring together a number of different specialties. A study conducted by an international leader in market research shows that 76% of small, medium and large U.S. companies that employ professional services firms are devoting more resources to strategic planning compared to five years ago.
More than half of these companies and professional services firms are finding it difficult to identify people with suitable strategic skills. The CPA profession finds itself at a crossroads. We created the Vision Project responding to the knowledge that the profession has reached a critical juncture.
But to realize this Vision, we have several challenges:
Market image - selectively change stereotypes
Regulation reform - implement UAA
Modernize accounting curriculum
Modernize the CPA exam
Alter employment practices and improve work-life appeal in firms
Meanwhile, convince 340,000 CPAs and thousands of CPA firms to identify themselves as CPAs and actively promote the CPA brand
Address the needs of CPAs who do not want to extend beyond foundation services (assurance and tax).
What else is needed to realize the Vision? The Strategic Planning Committee of the AICPA, again a member-driven body, believed that a new global business credential, open to CPAs and other top-caliber professionals, would be one innovative way to extend and underscore Vision-aligned CPA attributes.
Will the market accept a global business credential?
Independent research conducted by the Interpublic Group of Companies (IPG) to gauge the interest in the credential among clients, employers and credential holders has shown significant demand for the global business credential. The research shows that 83% of employers and 75% of clients would be more likely to hire someone holding a global credential for a senior strategic business planning position or engage a professional services firm that employs credential holders.
Fifty-six percent of senior executives expressed a willingness to pay a premium (on average 14% for an employee and 11% for a professional services firm) to holders of the credential. Moreover, this research suggests that the global credential could have a positive impact on the CPA profession. When asked whether their rating of the CPA would increase, decrease or stay the same if a CPA also had the new credential signifying a broader professional footprint, three out of five senior executives (61%) said it would increase. Virtually no one (1%) said it would decrease.
In other words, the credential could result in a greater percentage of business leaders attributing strategic advisory abilities to CPAs.
What impact would a global business credential have on students?
The student research was conducted by the Taylor Research & Consulting Group and it asked three important questions concerning the impact of the credential on student interest:
How interested are college students in the CPA credential if the CPA profession was to live up to the Vision CPA?
How interested are college students in the global business credential?
To the extent that college students are interested in the global business credential, how likely is it to replace interest in the CPA, be independent of interest in the CPA, or complement interest in the CPA?
The research shows significant and positive results to all three of these questions. When asked how many students would pursue the CPA profession if it were to do nothing (not move towards the Vision or develop the credential), 2.4% or 157,000 students in real numbers would be interested in obtaining a CPA certificate. If the profession does not establish a global business credential, but pursues the Vision, the number increases to 5.3% of the student population, 345,000 students.
On the other hand, if the profession does not pursue the Vision but does establish the global credential, that number increases again—9.9% or 645,000 students would be interested in a CPA license.
Finally, if our profession both establishes the global business credential and pursues the Vision, the number of students interested in the CPA jumps to 11.8% or 768,000 students. That is an astonishing increase. Moreover, the study shows that 83% of all college students see the credential as a complement to, not a substitute for, the CPA. Even more important, very few accounting students said they would choose to obtain the new credential alone.
That was a concern for us, but the results are interesting. Among those accounting majors planning to pursue a CPA, only 1% would be interested in pursuing only the global business credential, while 25% would be interested in pursuing both the credential and the CPA.
Why should CPAs take the lead?
Ultimately, this is a decision that each CPA must make for him or herself. It is a decision that each CPA must make upon considering both sides of the global business credential issue, separating fact from fiction. One hundred years ago, a group of people decided to make the CPA a credential when it didn’t then exist. Someone took a visionary lead. Our role right now is to assume that same visionary mantle. Is there risk?
Yes. But I think that this combination of objectives and strategy provides the lowest risk with the highest possible return. I do not believe that the proposed credential will harm the CPA. If I did, I could not support the initiative. I fully believe that CPAs will retain their unique value, and in fact remain the standout professional.
The truth is that creating the global business credential will not affect many of us participating in this workshop today. Our daily lives and jobs will not change. The credential is designed to be a long-term strategy, addressing the future of our profession. The decision is not only a decision for us today, but also a decision for future generations who will be struggling with many of the pressures we spoke about earlier.
Finally, we will not go forward with this credential unless the membership decides we should. As you prepare for the membership referendum in the fall, you will have more to consider than whether the credential is right for you. You’ll also need to consider if the credential is right for the profession as a whole. Whether or not we choose to obtain the credential ourselves, should we allow others who do want to occupy this strategic space the opportunity to pursue the global business credential? I believe we should.
Once again, thank you to everyone for participating in this session today.
QUESTION AND ANSWER FORUM
I will now address questions regarding the proposed credential. Thank you!
Gail Perry - Session Moderator Thank you so much, Ms. Eddy. We will now open the discussion to questions submitted by the participants. We will address as many questions as time allows.
Melody Thornton: Have you considered expanding CPA requirements for new entrants to meet the additional challenges and retain CPA instead of making a new credential?
Kathy Eddy: That's an important question, Melody. It is important to remember that the CPA credential is defined by U.S. regulation as a license to perform certain business functions. It is not owned by CPAs or CPA associations, but by the 54 governmental jurisdictions. The profession, therefore, cannot change most of its rules and regulations arbitrarily. Attempts, for example, to broaden the CPA exam and modernize accounting education are difficult battles in which the AICPA and state societies have long been engaged.
Mark Glochowsky: Since one of the major differences between the global credential and an MBA is the code of ethics, wouldn't it make more sense to create a sort of 'MBA Society' that has a code, rather than create a whole new credential?
Kathy Eddy: Thanks, Mark, for your question What you're suggesting would relinquish any opportunities for CPAs to gain an early adopter advantage and to seize the opportunity. And, there are more distinctions between the global business credential and MBAs than just a code of ethics for example, continuous lifelong learning, continuing competency assessments, a rigorous exam, international consistency, etc.
Andrew Blackman: Is there a legal opinion grounded in the organizational documents (charter, by-laws, etc.) to support the AICPA's venture to develop a cross-disciplinary designation?
Kathy Eddy: Andy, you've asked a good question. The AICPA has a responsibility to be in the strategic planning area, and that's what this development has been to date. The membership ballot will be asking members for approval for a bylaws change to establish a separate entity to grant this credential.
Sarah Werley: So what will students study for...a CPA or an "XYZ"? Won't we lose young professionals to a new credential (much like the MBA)?
Kathy Eddy: Hello, Sarah. The data suggest that the existence of global business credential would actually have a positive effect on the number of students interested in pursuing the CPA:
- 83% of all college students view the XYZ as a complement to the CPA
- 8% view it as a substitute for the CPA
- 3% would be interested in pursuing only the XYZ
- 27% would be interested in pursuing both the XYZ and the CPA.
Among those accounting majors definitely planning to pursue a CPA, the results were even more striking. While 72% said they were likely to pursue a CPA only, 25% would likely pursue both, and an insignificant 1% would choose only the new credential. I think kids will study to be CPAs. With the required experience, and ongoing learning, they'll be able to earn the global business credential
Richard Stinson: How many (and which) countries have signed on to the GBC?
Judy Trepeck: Thank you, Richard for that question. At the present time, we have five countries on the Steering Committee...US, Canada, Australia, New Zealand and both accounting Institutes in Italy. We are talking with the French and hope to announce their official entrance next month. We have also met with the Institute in Mexico and anticipate that South Africa will officially join next year.
Jay Dismukes: Can you explain in greater detail why it is necessary that other professions be permitted to obtain the credential?
Kathy Eddy: Jay, thanks for joining the call today. Allowing other high-level professionals to sit for the global credential examination brings added value to credential holders. They will become members of an exclusive international network of elite professionals, and contribute to an unprecedented worldwide resource bank. Bringing in non-CPA professionals and holding them to the same high standards as CPAs is consistent with CPA profession's other efforts with non-CPA professionals. Specialists from other disciplines are often employed to enhance the value of services delivered by CPAs to clients
CPA financial executives frequently collaborate and coordinate the work of other professionals, holding them to the same high standards of performance. Some state CPA societies and Beta Alpha Psi, the national accounting fraternity, have recognized the value of non-CPA involvement in the profession by creating new membership categories.
Acknowledging the active presence of other professionals in the strategy space adds credibility to the credential in the eyes of the marketplace. The global business credential can't be characterized as an attempt to re-brand the CPA.
Mark Glochowsky: When will we get a final decision on a name for the credential?
Kathy Eddy: Hello, Mark. We expect a proposed name to be presented mid-September.
David Storhaug: What justification is there for using AICPA resources (money and otherwise) to help start a new profession? If XYZ is such a great concept, it should be able to start it separately without any involvement by the AICPA, since there are many other legitimate visions of the future other than the XYZ vision.
Kathy Eddy: David, you ask a good question. The proposed global business credential isn't a new profession, it's a new credential. The AICPA is permitted to develop, through its strategic planning process, new ideas and opportunities for its members. This proposal will require approval by members to amend the bylaws to grant the AICPA the authority to create a separate organization.
Kendall Wheeler: I have heard that the some of the profits from CPA2BIZ will be used to promote the new credential. Is this true? If so, what if the portal fails?
Kathy Eddy: No resources from CPA2Biz will be involved in the development of the new global credential.
Mark Glochowsky: Do you think that the initial self-assessment for admission will be rigorous enough to guarantee the quality of the first credential holders? After all, just because I am a CPA doesn't mean I have the other requisite skills ...
Kathy Eddy: Mark, I think the initial self-assessment will be quite rigorous. The international consortium is committed to making the first assessment appropriately tough.
Gail Perry - Session Moderator: Can you elaborate on these initial requirements?
Kathy Eddy: It's a work in progress, and it will be based on the competency framework, which you can take a look at on the website or the Aug issue of the Journal of Accountancy.
Marianne Brams: If no portal resources will be used to develop the new credential, where will the millions required come from?
Judy Trepeck: The money will come from experienced providers of face-to-face and on-line education.
Charles: Doesn't this just impose USGaap or IAS on others?
Kathy Eddy: Because it's not an accounting designation, it has no connection to GAAP, GAAS, or IAS.
Gail A. Perry Session Moderator: How long will you continue to support this credential if it doesn't seem to take hold in the marketplace and among business professionals?
Kathy Eddy: The AICPA won't support this after the member vote, because the global institute will take over. However, ultimately, the marketplace will decide the value of the credential and its success
Sonya Graywolf: You say that the initial requirements are a work in progress. How can we vote on supporting the credential unless we know those facts?
Kathy Eddy: I'm glad you logged on today, Sonya. Without the authority from the members, we can't go forward. The initial requirements have been laid out: experience, competency, lifelong learning, code of conduct, rigorous self-assessment subject to audit, etc. What is still in process is the psychometric design of the self-assessment.
Gail Perry - Session Moderator: We'll be wrapping this session up in about 10 minutes. Any questions that have not been answered in today's workshop will be forwarded to the AICPA. Answers will be posted later on AccountingWEB.
Stanley Henslee: How many AICPA staff will leave the AICPA and go to the "global institute" if the vote passes?
Kathy Eddy: Stanley, the answer is none.
Mark Glochowsky: Are you confident that enough of the member base will have a sufficient understanding of the credential and its ancillaries to make a proper decision? I wonder how many of the self selected group here today have bothered to read the white paper or visit the global credential web site.
Kathy Eddy: We're doing all we can do to inform our members. We hope members will take time to learn about the credential through the CPA Letter, Journal of Accountancy, state societies, the website, etc. I also hope members will take time to read my letters that I've sent to our membership to outline the issue
Richard Ferrone: Is there more detailed information available on the Interpublic Group of Companies market survey report?
Kathy Eddy: Richard, please go to www.globalcredential.aicpa.org. We've posted the details of the research there, and it's interesting reading.
Kendall Wheeler: Will the Global Institute reimburse the AICPA for all monies spent to investigate and produce the new credential?
Judy Trepeck: At the present time, the Global Institute plans on reimbursing the members of the Steering Committee for their contributions toward expenses of development.
Gail Perry - Session Moderator: We want to take a moment to thank everyone for your participation today - Kathy Eddy, members of the AICPA Global Credential committee, and all of you AccountingWEB members.
Kathy Eddy: Thank you everyone for joining us today. I hope everyone will take time to study the issue to be able to make an informed decision on the ballot this fall. Many thanks to Accounting Web for hosting this opportunity today, and to everyone out there who participated!
Kendall Wheeler: Thanks to AccountingWEB for the open forum for members!
Gail Perry - Session Moderator: You are very welcome! It was our pleasure to host this event!
Editor's note: Due to time contraints of the session many questions that were posted during the forum were not able to be addressed. The remaining questions have been forwarded to the global credential committee at the AICPA and answers are forthcoming.
Following AICPA Chairman Kathy Eddy's presentation and Q&A session regarding the proposed global business credential, AccountingWEB members gathered in the AccountingWEB chat room where they conducted an informal analysis of the presentation. You can read the transcript of that session. Questions posed during this session will be forwarded to the AICPA's global credential committee for response.
Kathy G. Eddy is Chairman of the Board of Directors of the American Institute of Certified Public Accountants (AICPA) for the year 2000-2001. She is a shareholder in the accounting corporation of McDonough, Eddy, Parsons and Baylous, A.C., in Parkersburg, West Virginia.
Ms. Eddy previously co-chaired the AICPA National Steering Committee for the Regulation of the Profession, and served on the AICPA Political Leadership Committee. She also was a member of the AICPA Special Committee on Regulation and Structure of the Profession (The Mingle Committee), the Joint AICPA/NASBA Committee on Regulation of the Profession, and completed a three year term on the AICPA Board of Directors in 1997. In addition, she has served the West Virginia Society of CPAs and the West Virginia Board of Accountancy by holding all offices, including President of both organiza-tions.
Ms. Eddy has received several awards including the West Virginia Society of CPAs’ Public Services Award in 1990 and again in 1994 and their Distinguished Service Award in 1993. In addition, she serves as a volunteer on several community boards including Chairman of Camden Clark Memorial Hospital Corporation Board of Directors, Past Chairman of the Chamber of Commerce of the Mid-Ohio Valley and Treasurer of the Education & Business Foundation of Wood County, Inc.
Ms. Eddy has a BBA in accounting from Marshall University in Huntington, WV, and became a Certified Public Accountant in 1978. She resides in Parkersburg WV with her husband Edward McDonough, also a CPA and managing partner of McDonough, Eddy, Parsons and Baylous, A.C.