While the American Institute of CPAs' recent efforts have focused on strengthening its advocacy and outreach programs, more traditional accounting issues such as peer review, private company GAAP and the ongoing relocation to North Carolina headlined the institute's 2006 Spring meeting of Council."This has been a year of significant transformation," institute president and chief executive officer Barry Melancon told attendees at the three-day confab, held here. "We've wrestled with some difficult and emotional issues."
Topping the AICPA's 2006 to-do list was coordinating the relocation logistics as many of the institute's divisions - including operations, publishing and conferences, among others - prepare to move to Durham, N.C.
Melancon, in his semi-annual report from the president, said that 28 institute people have already relocated to Durham, and that the key components of the move are moving along the projected time frames.
"There's a knowledge transfer [with the move], and the question of how do we build the right culture in Durham?" he said.
Peer review vote
Three months after the institute board approved a motion to restructure the Peer Review committee, Council members voted to allow non-public members to sit on its Peer Review Board.
The approval means that the Peer Review Board joins such AICPA committees as the Auditing Standards Board, the Board of Examiners and the Professional Ethics Executive Committee in including non-institute members. However, under the guidelines, non-institute members may not exceed more than 25 percent of a board's membership.
The institute has also been involved in a transparency initiative, where results of peer review would be shared within states where peer review is a requirement for licensing.
Melancon said that under the current peer review process, there could be significant differences in peer review from state to state.
"This will involve some heavy lifting," he said, adding that the AICPA's Peer Review Board is preparing for a member ballot on the issue - which, from inception to member vote, would take roughly 18 months.
With regard to its push for private company financial reporting, an institute task force has been working on an exposure draft with the Financial Accounting Standards Board on private company GAAP. At press time, the draft was scheduled to come out June 1.
Capitol Hill, and beyond
Attendees also received a legislative update as the 109th session of Congress is slowly drawing to a close until the end-of-the-year recess.
Mark Peterson, AICPA vice president for congressional and political affairs, briefed Council on the pending House and Senate initiatives in which the institute has been actively involved, including supporting H.R. 4006, the Small Business Tax Flexibility Act - which allows small businesses and S corporations to elect taxable years other than a calendar year - as well as S. 1955, the Health Insurance Marketplace Modernization and Affordability Act of 2005 - which would establish small business group health plans sponsored through membership associations.
The institute has also opposed mandatory auditor rotation within the Federal Head Start Program.
Arleen Thomas, senior vice president of member competency and development at the institute, said that 101,000 people sat for the CPA Exam last year, versus 68,000 in the first year that the four-part test became computer-based.
Thomas said that the pass rate for the paper-based exam hovered between 27 percent and 32 percent, while that figure has risen to 40 percent to 45 percent on the computer-based test. Thomas attributed the higher pass rate to the fact that on the paper-based exam, a candidate had to sit for all four parts at one time, while the computer-based test allows a candidate to schedule each section at different times.
Council approved the institute's operating budget for FY 2006-2007. In the budget is a planned $5 to $20 dues increase for many of the AICPA membership categories.
Credentials update
In progress report on whether the AICPA's three specialty credentials were meeting their Council-established break-even marks, Robert Harris, chair of the National Accreditation Committee, reported that the Personal Financial Specialist credential has already met the 3,627 benchmark that was set for October 2006. It is now at 3,649, and he expects the number of credential-holders to grow to at least 3,900 by October 2008. As for the Accredited in Business Valuation designation, the current figure for holders is 1,914. The ABV has a July 2008 target of 2,718.
However, the news was not as encouraging for the 744 holders of the Certified Information Technology Professional credential. The institute has set a July 2008 break-even goal of 1,725 for the CITP, and Harris admitted that, "The CITP is not growing the way we want it to,"
Meanwhile, a motion to extend the AICPA's Honorary Lifetime Membership status from 40 years to 50 years was soundly defeated by members of Council.
AICPA chair Leslie Murphy opened the spring session with a blanket apology from the institute regarding the recent news of a lost hard drive that contained the names, addresses and Social Security numbers of institute members. The hard drive had been sent out for repair in violation of the AICPA's internal controls policy.
"We regret any inconvenience this may have caused, but it appears to be simply a case of a missing package," Murphy explained.
In other news, Karen Pincus, chair of the Accounting Department at the University of Arkansas, was honored with the 2006 Distinguished Achievement in Accounting Education Award. Pincus, currently a member of the institute's Nominations Committee, also served as a past chair of the Pre-Certification Education Executive Committee, and was a member of the Virtual Grassroots Panel and the Accounting Careers Subcommittee.
Meanwhile Ralph Bender, chief financial officer at Manship Media, in Baton Rouge, La., and KraftCPAs LLC, of Nashville, Tenn., received the institute's 2005 Public Service Awards.
Howard Wolosky contributed to this report.
