CPA Perspectives on ISO 9000: The Pros and Cons of Offering This Service

By Miller, Jeffrey R.; Miller, Lori C. et al. | The CPA Journal, January 1998 | Go to article overview

CPA Perspectives on ISO 9000: The Pros and Cons of Offering This Service


Miller, Jeffrey R., Miller, Lori C., Smith, L. Murphy, The CPA Journal


The ISO 9000 series is having a dramatic impact on quality assurance practices around the world. What do CPAs think about the ISO 9000 quality assurance program?

Once considered a marketing ploy, ISO 9000 has become a practical necessity for many businesses. Some businesses are demanding their suppliers become ISO 9000 certified. General Electric, for exam ple, requires 340 vendors to meet ISO 9000 standards if they want to continue to do business with GE. In the United Kingdom, more than 20,000 companies have registered to ISO 9000. Manufacturers, brokerage firms, lawyers, doctors, and even a barbershop have obtained certification. In the United States, companies initially were slow in adopting ISO 9000 standards, but the number of ISO 9000 certifications is rapidly gaining

IN BRIEF

Should We or Shouldn't We?

Accountants in public accounting and industry need to stay informed about ISO 9000 quality standards. ISO 9000 is a good business practice, and accountants may benefit from learning more about the standards and the registration process. Accountants in public practice will likely see many of their clients affected by ISO 9000; accountants can assist their industry clients in the registration process, if and when the decision to participate in ISO 9000 is made. Accountants can be particularly helpful in preparing for the ISO 9000 audit by seeing that a company's procedures are in place before the actual audit.

The survey of CPA firms indicates that, at this time, smaller firms tend not to get involved with ISO 9000 services because most of their clients are not seeking registration to ISO 9000. However, the survey showed that most large CPA firms have some involvement with ISO 9000 services, such as helping the client prepare for the registration audit and recommending consultants and registrars. Few firms, however, have actually become a registrar due to the significant time and resource commitment necessary to attain and maintain a high quality practice. momentum. United States' ISO 9000 registrations have been doubling every nine to 12 months.

What Is ISO 9000?

Many believe that ISO, pronounced "ice-oh," is an acronym. It is not. ISO comes from the Greek word isos, which means equal, as in an isosceles triangle or isometrics. The International Organization for Standardization, located in Geneva, Switzerland, is the agency responsible for ISO 9000 standards. This not-for-profit organization's membership consists of national standards bodies from over 90 countries. Representing the United States is the American National Standards Institute (ANSI). The first ISO 9000 standards were issued in 1987. The goal of the Inter national Organization for Standardization is to foster the creation and voluntary adoption of worldwide industrial and manufacturing standards.

One of the driving forces behind the creation of ISO 9000 was that many companies were facing multiple second party audits. That is, a supplier may encounter audits from customers to see if their products are meeting certain quality standards. Some suppliers may face 30 to 40 quality audits in one year. To help reduce the number of audits, it was felt a third-party auditor could be employed to attest to the quality of the products. This certification would then be accepted by customers, and reduce the need for second party audits of suppliers. ISO 9000 is regarded as a quality standard because it requires management to document and support its quality management system.

The Registration Process

Different Standards. Plant sites, not companies as a whole, are registered to ISO 9000. The ISO 9000 series must be reviewed to determine what standard would be the most appropriate for a particular plant site. One plant may be registered to one standard, while another site may be registered to a different standard. The plant sites' processes are the most dominant factor in determining the proper standard. …

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