Members of the editorial staff of Practical Accountant have been attending AICPA Fall and Spring Council meetings for as long as I can remember. At first, the meetings were rather predictable, as the agenda was usually set well in advance, and any real discussions occurred at the regional meetings--that preceded the full Council meetings.
Things began to change for those who remember when the push for a new designation, Cognitor, failed . It has also been evident over the last couple of years, as representatives from state societies like New York have been vocal at some of these meetings. Then there was the Council of spirited debate over funding of financial planning, valuation, and technology certifications by the AICPA. What was most interesting was that a number of former AICPA chairs spoke on the subject from the floor.
As this column appears, I am attending the Fall Council Meeting in Racho Mirage, outside Palm Springs. I like the Fall Council better than the Spring, because the AICPA discloses, in conjunction with their annual report, its financials and the first thing that I have been going to as of late is the numbers on CPA2Biz.
This year's Council should be particularly interesting because of two important issues on the agenda. The first is a proposal to replace and restructure the Center for Public Company Audit Firms with the Public Company Auditor's Forum. If approved, the Center would have a very short life, as it was established in January 1, 2004. In this proposal, I see an analogy to the software applications that we see. Why not just call it Center for Public Company Audit Firms, Version 2? As with software that looks to establish a position in the marketplace as soon as possible, I got the distinct impression the Center was unveiled in a quick reaction to changes by Sarbanes-Oxley. After only a while, there is a desire for some dramatic adjustments. These version 1s are more and more looking like beta versions.
The second critical issue being discussed was just publicly disclosed, so there were no discussions on it at the regional meetings. On October 18th, the members of Council were told they would be asked to approve a move of AICPA's Jersey City, N.J., operations and a portion of its New York City operations to an undisclosed location in the Southern Atlantic region.
If approved, it is anticipated there would be a first-year loss of about $49 million, but the AICPA would supposedly benefit with a net present-value savings of approximately $100 million over the next 15 years. The AICPA Board secured a loan commitment to cover costs. The loan is expected to be paid back within five years. The AICPA would attempt to sublet the remaining seven years on its N.J. lease.
In addition to real estate savings, there is anticipated "ability to achieve approximately 25 percent labor savings." In the memo from Barry Melancon, AICPA president and CEO, Council members are assured that during the move, the AICPA will "commit to a set period of parallel operations for impacted functions." The memo also indicates that the AICPA will "place a moratorium on new initiatives that are not critical to the welfare and interests of the profession."
I am eager to see the AICPA Council members' discussion of these two issues, especially the proposed move. It seems to be on a very fast track, and the Council members, though supplied with some underlying support documentation, have had little time to really analyze the significance of this proposed move. I wonder if this proposed move should give rise to a parallel discussion as to how the AICPA will operate in the future, including exactly how a move would impact AICPA operations, finances, and the services that it delivers.
There seems here to be a rush to make a decision, and I am hopeful that Council will fully discuss this matter in the three hours allotted to this issue, and focus on the fact that a "yes" vote on this move shouldn't even be considered until all relevant issues, including the future strategic direction of AICPA, are vetted.
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