AICPA Members Defeat Global Credential Initiative

NEW YORK—Members of the American Institute of CPAs soundly defeated a proposition to establish a new global business credential that many accountants criticized as detrimental to the profession.

Members rejected the credential in a referendum vote by almost two to one, with 63 percent opposed and 37 percent in favor. The AICPA needed a two-thirds majority to form the separate and independent International Institute of Strategic Business Professionals.

“We believe we took the right course by putting this proposal in the hands of the members,” said Barry Melancon, president and CEO of the AICPA, during a teleconference announcing the vote tally on Jan. 3. “Although many CPAs didn’t see this credential as the solution to the issues they are facing, numerous members and state societies were actively involved in the debate; we learned a great deal from this dialogue and we’ll use this knowledge to find new solutions.”

Debate intensified in the months leading up to the ballot vote that put an end to the AICPA’s three-year, $5 million gambit to establish a new credential, alternately known as Cognitor, XYZ and, ultimately, the Strategic Business Professional. Opponents from 12 state societies and two accounting firms had raised myriad concerns, including that the credential would open the profession to unnecessary competition and that, as an attempt to add luster to the CPA image, the concept was misguided. Meanwhile, six state societies endorsed the credential. The debate drew better-than-average participation in the vote, with 134,000 accountants—or 41 percent of the AICPA’s 330,000-strong membership—casting ballots.

Interest in the issue and the results of the vote were reassuring to CPAs on both sides of the debate.

“The debate that went on was a good thing,” said AICPA Chairman Jim Castellano. “It showed that our members really cared about the profession and that reasonable people can differ.”

“It was a sign that CPAs are getting more involved in their profession,” said Nancy Newman-Limata, president of the New York State Society of CPAs, which took a leading role in opposition to the credential.

“I’m surprised at how strongly it was defeated,” she said. “It was reassuring that New York’s CPAs don’t see things that radically different from others...It showed the value of keeping in touch with the members.”

NYSSCPA leadership questioned the AICPA’s proposal as early as May 2000, when the Society’s Executive Committee decided not to act on an early proposal because the AICPA had left some details open to question. The AICPA had already formed a task force with accounting societies from other countries to study a globally recognized designation, but the Society questioned the move to allow non-CPAs to join. The Society also, early on, questioned the AICPA’s commitment to the CPA Vision statement developed in 1997 as a blueprint for strengthening the profession.

By late 2000, the AICPA had revamped the global credential it had been developing over the previous year, partly because CPAs derided the designation’s name, Cognitor. The AICPA changed the name to “XYZ” as a placeholder for a future designation while it attempted to pull together support among state societies and accounting boards in a number of nations, some of whom retracted support for an international credential later in the year. But questions remained.

The NYSSCPA continued to take a vocal stance against the credential for much the same reason: that non-CPAs would be able to obtain the designation. In May 2001, the NYSSCPA proposed that the AICPA Council vote to discontinue further development of the credential. That motion was defeated in favor of a plan that would allow the AICPA to spend $1.9 million to educate and receive feedback on the credential, in preparation for a possible vote later in the year.

By the autumn of 2001, state societies and individual members increasingly called for CPAs to vote against the proposal. Some criticized the AICPA for not representing the interests of its membership, though AICPA officials insisted that market research and a globalized economy justified the credential and that it was in keeping with the CPA Vision statement.

“The AICPA was given a strong message about how its membership feels,” Newman-Limata said. “This is a strong message that the AICPA should push forward with the Vision as it was initially viewed: putting the members’ money toward improving our profession.”

Officials with the AICPA said during the teleconference that though they didn’t see eye-to-eye with the state societies on this particular issue, there were “literally hundreds” of other initiatives in which the AICPA and state societies are cooperating. They also said the AICPA would use information garnered from its XYZ research to take on other initiatives, such as a $25 million student recruitment initiative.

“Our research had ancillary benefits,” Melancon said. “A fair amount was done at the student level…and that research was used to move in that direction.”

Melancon and Castellano said they were also surprised by the defeat, saying early research showed the credential had wider support, but they wouldn’t speculate on what might have changed the minds of CPAs, except attributing any change of heart to the debate process.