Barry Melancon, president and chief executive of the American Institute of CPAs, welcomed more than 350 AICPA Council members to the nations capital and told the state delegations to get ready to meet with legislators on pressing issues in the profession.
I thank all of you for being here and being willing to subject yourself in some way to this town and this process, Melancon said. Its not the prettiest or may not be the most comfortable, but the effectiveness of our profession is really dependent upon you. We could have an army of people we hire and pay to go up on the Hill, but that visit from the constituents is really the most significant thing that could possibly happen.
Melancon has been coming to Washington to represent the profession for almost 25 years. It is a bizarre time in this city, he acknowledged. We all come to a town like this with our own personal perspectives, our own beliefs, but we have to be mindful that the approach to some of the answers is going to be filtered through a different set of eyes, a different set of approaches, than may have [the case] been two, three or four years ago.
Melancon talked about the state of the profession, addressing regulatory restructuring, one of the institutes primary issues. The organization is recommending that Congress enact a series of measures to promote transparency and strengthen investor protections in the U.S. financial system by requiring tighter audit requirements.
On the subject of fair value accounting, Melancon told the audience that the last 60 days in the nations capital have been incredibly intense.
There were some very contentious hearings with the Financial Accounting Standards Board just a month ago, he said. He noted that the effects of FASBs actions in revamping mark-to-market accounting standards in response to demands from Congress and the financial industry remain to be seen and added that some leaders in the profession believe FASB overreacted to pressure, while others say the board didnt go far enough. The AICPAs position is to strongly support an independent FASB, said Melancon.
Forty-three states are facing budget deficits, according to Melancon, as budget problems continue to dominate state agendas. Mobility, however, remains strong across the country, Melancon said, despite the states challenges.
Melancon talked about the roadmap to International Financial Reporting Standards and stressed the importance of the Securities and Exchange Commission issuing a formal conversion date in order to help implementation to take place.
While the International Accounting Standards Board and FASB are aiming for 2011 for convergence of their standards, outstanding issues still need to be addressed, particularly revenue recognition, financial statement presentation and financial instruments.
Meanwhile, most AICPA members do not believe the benefits of IFRS outweigh the costs. According to a March 2008 IFRS Readiness Survey, AICPA members favored a delay in the currently proposed timeline, except for those members employed by foreign-owned companies. Organizations as a whole, Melancon said, have made little progress in the adoption of IFRS. Nevertheless, the CPA Exam will begin to test for IFRS knowledge in 2012.
The issue of creating an international CPA Exam is moving forward, according to Melancon, with parallel implementation planning and a contract/plan approval targeted for August. The new exam is slated to launch in mid-2010.
According to Melancon, 86,000 CPA candidates registered to take more than 247,000 sections of the domestic CPA Exam in 2008. More than 97 percent of them expressed high levels of satisfaction with the test, which has a 40 percent pass rate. He said there would be no exam fee increases in 2010 and 2011.
Melancon also discussed the institutes efforts to promote financial literacy. April is Financial Literacy Month and April 30 will be Financial Literacy Day on Capitol Hill.
Melancon covered a variety of other topics, including FASB codification, peer review, the work of the Private Companies Practice Section, and various works in progress at the institutes academic arm.
The organizations Web presence will be enhanced in an effort to tap into Web 2.0 capabilities and to reach the younger generation better through social networking tools.
We are in a good position, said Melancon. We are as a country in difficult times, but as a profession, while we have our challenges, they are much different challenges than we faced years before.
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