We’re writing about the April-June balloting on the American Institute of CPAs’ merger with the Chartered Institute of Management Accountants. This column addresses:
- The biased election;
- The losers; and,
- Future events.
THE BIASED ELECTION
Two points about the election show it was biased by design.
The first evidence is the AICPA’s willingness to misrepresent the results while claiming victory. Four official announcements touted that 86.5 percent voted “Yes” and 13.5 percent voted “No.” Deplorably, none noted that the turnout was “just under 15 percent,” as we learned from a totally reliable source.
Assuming the turnout was 14.9 percent, only 12.9 percent (48,945) voted “Yes,” 2.0 percent (7,615) voted “No,” and 85.1 percent (322,940) didn’t vote.
Besides revealing the elite’s willingness to mislead by omission, we question why the turnout was so low. We’re convinced it was no accident. Even for us, that’s a bold claim, and we wish it weren’t so. We invite anyone who has evidence to share it. If we’re wrong, we’ll say so.
Our rationale has four parts.
First, the elite chose electronic ballots, which tend to escape recipients’ attention.
Second, the ballot arrived on April 20 when virtually every member in public practice was comatose, hung over, starting the vacation they fantasized about for three months, or otherwise unlikely to be checking e-mail for awhile.
Third, the ballot’s understated format didn’t identify the AICPA as its sender, increasing the likelihood that it would be ignored or blocked. Further, the tabulator delivered a strong “Yes” recommendation that negates its claim of independence.
Fourth, the most insidious factor was a differential follow-up communication strategy that targeted those most susceptible to one-sided pleas to vote “Yes” and ignored the rest. Thus, we speculate that every CGMA was vigorously lobbied. If it worked, that group alone would explain about 40,000 of the 49,000 “Yes” votes! In addition, we know a member who received four e-mails from the AICPA on April 24, 25, 26 and 29. Significantly, one noted that the member in question is young, another that she is female, and two that she’s not in public practice. (She still voted “No”!) In contrast, the one of us who’s a member heard nothing further, despite waiting several weeks to see whether a reminder would come. Jay Starkman, whose resignation letter appears in this issue, reports he didn’t even get the ballot. It seems older members didn’t merit any attention.
Alas, the facts indicate that the elite conspired to thwart this election’s fairness.
WHO ARE THE LOSERS?
We have identified six groups who are worse off.
- The first consists of every member who failed to vote, a group comprised of two sub-populations. One consists of those who were victimized by the elite’s schemes, while the others didn’t think the issue was controversial, mainly because the elite never explained the negative position. Thus, 85.1 percent of the membership had their institute stolen out from under them.
- The second group of losers are those among the 12.9 percent who voted “Yes” without fully understanding what they were endorsing. They were misled into believing it was a good idea to convert a longstanding respectable association consisting of licensed and empowered professionals into an international hodgepodge of dues-paying accountants of all ilks with differing backgrounds and credentials. Their unfortunate swallowing of the prejudiced publicity has diminished the institute’s integrity, and their own.
- The third losing group is all the CGMAs the elite created out of thin air without testing or legitimate verification of experience or expertise. One might think they’ve been vindicated. To the contrary, this outcome condemns them to continue living under the delusions that they are somehow more qualified than other CPAs, and more qualified than they really are.
- The fourth category includes the state societies of CPAs that so willingly and literally attached themselves to the AICPA’s fortunes by signing up for “revenue-sharing” arrangements like the CGMA. But what will they do now? Those who can’t pull back from the trough will become societies of what kind of accountants? Do they just open their rosters up to anyone who has any accounting-sounding initials after their name? If so, they will lose their identity and mission of supporting CPAs in their states. In turn, their existing CPA membership will dwindle if they don’t offer unique representation.
- The fifth collection are the members of CIMA. This group has been the target of a complete takeover for more than four years. (See our March 2012 column, “CGMA ploy brings Cognitors back as CoGMAtors; Is AICPA 2.0 next?”) If this merger happens, this smaller organization will become irrelevant, like a sardine sucked into a whale’s gaping maw, and its members will never, ever have another ounce of influence.
- Finally, the sixth group of losers are the most visible, specifically the AICPA elite. “What?” one might ask, “Aren’t they the winners?” They might think so, but the truth is just the opposite. Sure, they’re probably toasting their success in garnering a majority of a tiny minority of the whole membership. Our analysis of their situation is straightforward: According to our values and opinions, we suggest they traded their integrity and trustworthiness for personal ambition. They surely believe otherwise, but in our ethical framework, when given a choice between glory and unquestioned character, only losers choose glory.
WHAT DOES THE FUTURE HOLD?
We see five things unfolding in the future. We’ll let you decide whether they’re good or bad.
First, we predict that the AICPA will lose its relevance. Contrary to the elite’s hopes, growing bigger by sweeping in more diverse kinds of members won’t make the institute more influential. Instead, the greatest political clout is wielded by entities that represent a clearly homogeneous group. The institute’s power will actually diminish because it will no longer represent only licensed and otherwise trusted CPAs. In addition, the elite’s declining reputations will make them less impactful.
Second, we anticipate a change in the composition of the AICPA’s membership. For one thing, we expect many older members to resign if they haven’t done so already. (If you’d care to send your resignation letter to us, we’d like to see it.) For another, we doubt that many new younger members will join. It used to be that achieving AICPA membership was the hallmark of a professional public accountant who had arrived. Because that distinctive quality will no longer exist, we anticipate that fewer employers will reimburse members’ dues. After all, they don’t reimburse fees for Costco, so why would they subsidize their employees’ access to the institute’s credit cards, personal computers, home mortgages, etc.?
Third, a significant legal battle could stop the seemingly unstoppable drift toward a merger. Over here in the U.S., we aren’t sure who will choose to fight. However, on the other side of the Atlantic, wily international business veteran Clifford Moggs has been crusading against CIMA’s diminution by pounding on many different authorities’ doors with two arguments. The first asserts that CIMA cannot legally endorse CGMAs without a valid examination and the second posits that the empowering Privy Council never granted CIMA’s board the authority to merge with any other body. The fact that these issues weren’t explored and resolved ahead of time testifies to the two elites’ headlong rush to merge at any cost.
Fourth, we encourage the National Association of State Boards of Accountancy to take over responsibility for developing and administering the CPA Examination. As long as the AICPA consisted only of CPAs, and as long as state boards weren’t working in concert, it was expedient to have the institute perform these tasks. However, the exam should move to NASBA from the AICPA as soon as possible because the former has become a strong voice for the CPA profession while the latter is welcoming non-CPA members from around the world.
Finally, we’re idealists, but we think this power grab orchestrated by the elite will be their downfall. Although some will disagree, we believe that many others outside the inner circle will not overlook this scheme and its underhanded execution, including their virtually complete co-opting of the AICPA Council and board of directors. We don’t expect them to resign but anticipate they could be pushed out when the members finally grasp the full scope and nature of this stage-managed outcome.
OUR CLOSING THOUGHTS
Our criticism should be expected. We have written about the AICPA’s flaws on numerous occasions since 2002, and spoke about it in a national forum several years ago. From the beginning, we have watched the appallingly atrocious maneuvering behind the CGMA gambit and knew it would bring nothing good to anyone, even those who designed and implemented it.
Although we sounded a call to vote “No,” our voices were drowned out by the AICPA’s messages conceived and delivered through its expensive but less than fully truthful PR campaigns. On that note, we challenge the CEO to reveal how many tens of millions of dollars were spent over the last four years to achieve this deplorable outcome.
The irony is that everyone loses despite all that time, effort and money.
Well, maybe not everyone. We think those who resign from the AICPA will be winners because they will have escaped with their integrity intact.
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 firstname.lastname@example.org.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access