Many accountants think CPA regulation is a four-letter word. More laws to navigate means more staff time to interpret accounting practices, accounting standards and income tax laws. However, regulating the CPA profession may be beneficial in the 21st century as accountants attempt to remain viable in an increasingly technological environment.
Gary Bollinger, president and CEO of the Indiana CPA Society, notes a nationwide license should not be required of all accounts. The industry must, instead, transform itself at the most fundamental levels. CPA regulation should foster growth from the bottom up instead of waiting for Congress or state lawmakers to act.
One way to standardize accountants and achieve better CPA regulation starts with the education students receive. Some states require 150 hours of schooling before taking the exam. Other states require just 120 hours, especially after computerized exams became standard in 2003. Keeping educational requirements the same makes sense in terms of a university's overall investment. Why would an aspiring accountant go to school for 150 hours when he or she can get the same basic education one state away for one less year of school?
An accounting degree is not cheap. Because accountants can be held legally liable for their clients' taxes and audits, CPA regulation can be held to a higher standard. Accountants must earn a college degree, shadow a certified accountant for at least a year and then continue the education at periodic intervals. Lower-cost programs that deliver the same quality education benefit aspiring accountants worried about student debt, future mortgage payments and starting salaries.
When everyone has the same educational requirements and accountant standards, many students may stay in-state rather than jump to the competition. This type of CPA regulation does not have to occur in Washington and can instead be done by the accounting profession. The Uniform CPA Examination, AICPA and NASBA can change their regulations at any time without federal approval. With gridlock in Congress, Bollinger believes the industry should change itself simply to remain relevant to clients.
Accounting jobs are not going away any time soon. As the industry changes, so must the people employed as CPAs. Cloud computing, mobile apps, artificially intelligent software and automatic client updates are all part of a fast-paced accounting industry that demands exceptional scrutiny, precision and attention to detail. When more accountants receive better, more standardized educations, higher-quality results follow. Great change is never easy nor fast, but gradual changes should be implemented soon before more accountants get left behind.
Self-regulation, market-based regulation or even deregulation serves as a better model than both state and federal initiatives for CPA regulation. One way to achieve such standards is through industry-wide changes at all levels. The sooner these transformations happen, the better for CPAs.
Photo courtesy of phaseinphoto at FreeDigitalPhotos.net
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