Newspaper article THE JOURNAL RECORD

Accountants Split on Creating New Credentials

Newspaper article THE JOURNAL RECORD

Accountants Split on Creating New Credentials

Article excerpt

Would an accountant, by any other name, sound sweeter?

The question has been raised by the American Institute of Certified Public Accountants, which has floated a proposal to create an internationally accepted credential certifying a certain level of finance expertise. The aim is to complement the existing accounting certification, and to attract more students and practicing professionals.

But the proposal has run into trouble, not least because the name first proposed for the credential was the reptilian-sounding Cognitor. Many accountants also resent the implication that they need an additional title and hate the idea of increased competition from lawyers, consultants and other professionals, who would be eligible to take the test for the credential.

"This has just been a disaster from the beginning," said Arthur W. Bowman, editor of Bowman's Accounting Report in Atlanta. The accounting institute's leadership "started pontificating on the profession and saying, `This is what we need and this is why we need it,' rather than people out there in the real world" making suggestions, he said. "There's a real communication gap."

The institute is trying to address two problems: Fewer college students are interested in accounting, and more certified accountants -- more than 90 percent of the institute's members, in fact -- are engaged in consulting, financial advising or something other than traditional audit and tax work.

The new credential, for now designated XYZ, is to solve these problems because it will presumably attract accountants and nonaccounting professionals alike, as well as college students who would otherwise seek neither an XYZ nor a CPA, according to the institute. Part of the attraction is that the proposed credential does not require knowledge of all the complex accounting principles the CPA exam requires. Indeed, those holding the new credential would not be permitted to conduct audits of companies unless they were already CPAs.

The initiative to create the new credential comes at a time of increasing corporate pressure on regulators to agree on and adopt international accounting standards to simplify bookkeeping. The credential would be available in various countries, offering uniform standards of ethics across national borders.

"The market data is such that this is inevitable," said John Hunnicutt, the accounting institute's senior vice president for public affairs, said at a news conference presenting the credential proposal. Accountants' clients, he said, would be willing to pay a premium to hire advisers with the new credential, according to surveys the group conducted.

But it is unclear whether the new credential would allow professionals to do anything more than what they are already doing. Its definition is extremely broad and the topics that would be on a test for certification run the gamut from law to -- you guessed it - - accounting. …

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