The Spirit of Accounting

This column is prompted by the fact that voting is now underway on the American Institute of CPAs’ proposed de facto merger with the Chartered Institute of Management Accountants. Our January column (“Transparency, integrity, prophecy and the AICPA merger,”) accurately predicted that the balloting would occur right after busy season, anticipating that the institute’s elite would expect many members to be too burned out to analyze the issue or vote.

We explain our objections to this proposal (and other AICPA activities) by describing our concept of what an ideal professional association of CPAs should be, do, and not do.

Because the institute has been part of the profession’s fabric for so long, we suspect most members haven’t assessed whether it adequately meets their needs in comparison to all the money they, and their employers, send in every year. We anticipate that this zero-base analysis will be as revealing for our readers as it was for us.

We begin with four premises, and then describe several policies based on them. Throughout, we explain why we believe the AICPA doesn’t measure up.



1. Purpose. The sole purpose for our ideal association would be to help its members benefit society through enhanced professional services to their clients, employers and the public. Affiliation would carry weight because members would be differentiated from nonmembers by their willingness to meet higher professional and ethical standards.
2. CPAs only. To avoid any ambiguity about who it serves, the association’s membership would include only CPAs in good standing.
3. Leadership. The leadership would be humble, honest and trustworthy in every respect. To avoid perpetuating an inbred clique, they would be nominated and elected openly with broad participation, not selected by existing officials. All paid managers would be laser-focused on helping members improve their performance and productivity, not on building a profitable commercial operation. In addition, the staff would be small in number and all salaries would be publicized so members could assess whether they’re appropriate for a nonprofit entity.
4. Attitude. The leaders’ fundamental attitude would be that members must be treated as constituents to be served, not customers to be milked for dues and other revenues. The staff’s daily reality check would be that the association is fortunate to have CPAs as members, not that CPAs are fortunate to belong to the association.



If these premises were to be conscientiously implemented, the association would do many things differently.

No ancillaries. First, the ideal association would not try to generate revenue through ancillary activities that turn constituents into customers. For example, it would not peddle such things as life insurance, credit cards, travel discounts, mortgages and merchandise.

Thus, we think the AICPA shouldn’t try to duplicate what Amazon, Costco, AARP, QuickenLoans and SelectQuote already do so much more effectively.

The CPA Exam. To avoid the conflict of interest inherent in determining who and how many can qualify for membership, our ideal association would neither compile nor administer the Uniform CPA Exam.

Historically, the AICPA took on this task because no other entity was capable. Today, the National Association of State Boards of Accountancy is sufficiently well-established with credible management and governance to fulfill this responsibility.

An additional point for moving the exam to NASBA is our suspicion that the institute’s elite has stealthily used it to pursue political objectives. For example, it tried to advance its agenda by putting IFRS-related questions on the test in order to promote what turned out to be the erroneous impression that those standards’ acceptance was inevitable. We wouldn’t be surprised if the same gambit is used to bolster the controversial Financial Reporting Framework for Small and Medium-Sized Entities that was released after the Financial Accounting Foundation rejected the institute-backed proposal to establish a separate “Small GAAP” standards board.

CPE offerings. Because our ideal association would never treat members as customers, it would not offer any continuing professional education courses except when it could uniquely provide relevant experiences, such as national conferences, that smaller vendors could not. Even then, the co-equal goals would be quality and affordability, with fees that would just cover costs. The association’s only other CPE-related activity would be accrediting suitable vendors.

We note two conflicts of interest related to the AICPA’s CPE business. The first is that it converts members from constituents to customers. Second, it makes the institute unable to independently accredit other CPE providers.

Relations with others. Our ideal association’s leaders would work well with their counterparts at other accounting associations, especially those with overlapping members. Their pattern would be cooperation without competition, and they would certainly make no efforts to acquire another association’s members.

At the heart of this assertion is our recognition that no single organization can credibly serve the diverse needs of all its members, specifically those who want contacts in other networks and opportunities to enhance their expertise beyond the requirements for CPA licensure. In effect, the ideal CPA association can best serve its own members by strengthening other associations, not by consolidating with them.

The proposed AICPA/CIMA merger obviously contradicts this policy because the new entity would be unable to fully serve its diverse subgroups.

This cooperative relationship would also exist with state-level associations. Because we fear the AICPA elite now utterly dominates state societies, we’re neither surprised nor impressed that 51 of them endorsed the proposed merger. What other choice did they have?

In summary, true professionalism requires treating all accountants as colleagues with the utmost cordiality and respect, not with envy and avarice.

No political activism. Our ideal association would be a reliable source of neutral information for regulators and lawmakers. Its members would be honored to provide unbiased testimony, position papers and educational sessions to clarify accounting-related issues and alternative positions. To preserve its independence, it would not have a PAC for making campaign contributions to elected officials.

Jaded AICPA members have told us we’re naive to think legislators will listen without receiving PAC money. Although they may have rationalized this deplorable system, it doesn’t pass our ethical smell test and we think the institute’s participation drags all members into a fetid swamp. We also doubt its effectiveness because other petitioners with contrary goals can always hand over larger checks.

Apart from this ethical taint, the entire membership cannot possibly have a unani­mous view on any political issue. Thus, it’s patently inappropriate to use an association’s prestige, employees and dues to support a position that some members disagree with. Therefore, we’re convinced an ideal CPA association would not do any lobbying that isn’t purely educational.

A notable negative example was the institute elite’s 2013 effort to fiscally induce Congress into squelching the Public Company Accounting Oversight Board consideration of mandatory auditor rotation even though it would have created new opportunities for many members.

No official positions. Similarly, our ideal association would never proclaim an official position on any issue.

To explain with an example, the leadership of the professional society for academic accountants, the American Accounting Association, implemented this policy after the Financial Accounting Standards Board was created in 1973. They wisely determined that no one would be authorized to present an official AAA position in the board’s due process. Instead, ad hoc committees are appointed for specific projects and each must explain that its comment expresses the consensus of only its members, not the entire association.

Because of CPAs’ diverse opinions, no one should ever think that all of us hold the same beliefs. Our ideal association’s leaders would never assert that the association officially believes or endorses a specific political position. The only way they could claim that a majority supported a certain view would be after polling all members to find out what they think.

Unfortunately, we note that the AICPA elite frequently publishes official positions without checking with the rest of us.

No other designations. For three very good reasons, our ideal association would not provide any other certifications or designations to its members.

First, doing so clearly implies that some members are less qualified than others. Second, it would treat members as customers. Third, it would create a temptation to water down the qualifying criteria in order to perpetuate the revenues.

It’s clear to us that the AICPA’s elite feels no compunction against this practice. We believe its most flagrant abuse is the notorious program that conjured thousands of CGMAs into existence without an examination. We note that this questionable credential now extracts millions of dollars in annual fees, mostly from members’ unsuspecting employers.

Instead, our ideal association’s policy would direct members who want additional credentials to get them from other legitimate bodies that can effectively assess the requisite expertise. For example, those who want a financial planning credential should become Certified Financial Planners and those who want to be recognized as management accounting experts should become Certified Management Accountants.



We could say more, but we’ve said enough to explain why we don’t believe the AICPA measures up against our ideal.

Therefore, we think institute members who agree with us should vote against the merger to express disapproval of the elite’s transparent effort to create a larger roster of dues-paying customers.

If this proposal passes, we will encourage members to resign in protest.

Alas, even if the vote goes against the entrenched elite, we’re sure they won’t step down. If they don’t, we’ll then encourage members to send a stronger message by resigning.

Of course, it’s your choice. After all, maybe you like using your AICPA credit card to contribute to the PAC, buy cheaper merchandise and life insurance, book discounted car rentals, and pay your dues as well as your CPE and CGMA fees.

On the other hand, if CPAs want a more ideal association, we’ve just described a useful concept of how it should work.

Paul B. W. Miller is an emeritus professor at the University of Colorado at Colorado Springs and Paul R. Bahnson is a professor at Boise State University. The authors’ views are not necessarily those of their institutions or Accounting Today. Reach them at

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