Magazine article The CPA Journal

The Profession Debates Non-CPA Ownership and Specialization

Magazine article The CPA Journal

The Profession Debates Non-CPA Ownership and Specialization

Article excerpt

Two issues are heating up and gaining momentum in the profession: non-CPA ownership of CPA firms and specialization. The issues were debated at AICPA regional council meetings earlier this year, and it is expected the debate will continue at the full May Council meeting.

At first look, the sides on both issues seem to form on the basis of firm size--the large firms like non-CPA ownership and specialization; whereas smaller firms would take the opposite stand. But that is not necessarily the case. Representatives from large firms have stated their view that they are content with the use of the principal or similar designation for non-CPAs in important governance positions. Representatives from local firms have demonstrated the benefits to be derived from the use of the CPA Personal Financial Specialist (PFS) designation.


An AICPA task force is proposing that non-CPA ownership be permitted under specific circumstances:

* Non-CPA owner would have to be an active professional participant in the firm;

* The firm and each business unit providing attest services would have to be managed by a CPA;

* Non-CPA owners would have to possess a baccalaureate degree and complete work related CPE requirements;

* Non-CPA owners could not assume responsibility for any attest engagement;

* Non-CPA owners would be permitted to use the title of partner or shareholder but not hold themselves out to be CPAs;

* A majority of the firm's owners in terms of numbers of financial interests and voting rights must be CPAs;

* Non-CPA owners would have to abide by the AICPA Code of conduct; and

* Ownership interests would be surrendered back to the firm if the non-CPA ceased to be an active professional participant in the firm.

FOR NON-CPA OWNERSHIP. The principal argument for non-CPA ownership is based on firms' needs to attract and retain non-CPA professionals who can provide specialized services to clients of CPA firms. Proponents argue these highly motivated professionals strive for the recognition and status that only a form of ownership can bring and CPA owners feel non-CPA professionals can perform most effectively and responsibly when an ownership or equity interest is at stake.

AGAINST NON-CPA OWNERSHIP. Those in opposition argue that competent and talented professionals in other disciplines can be employed and retained by firms without the expectation of ownership. They argue that introducing non-CPA ownership will erode the professionalism and standing of CPA firms in the eyes of the public. Without a compelling need, the risks of damage to the profession, especially with the criticism presently being leveled at it, are just too great. …

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