Letters to Accounting Today

Why is it necessary to become a CPA?

The CPA may still be a profession serving the public interest, but it is rapidly deteriorating into an industry.

Over the past 30 years, self-inflicted missteps lost our control as standard-setters and self-regulators to Public Company Accounting Oversight Board lawyers and the Securities and Exchange Commission, which formerly deferred to the American Institute of CPAs for promulgating accounting rules. “Non-GAAP” financials further dilute our relevance.

1998 started a precipitous decline with the AICPA’s “The Vision,” that consultants might not have to learn auditing to become CPAs. You can become a CGMA and join the AICPA without becoming a CPA. (What’s a CGMA?) Those initials were added to PFS/PFP, CITP/IT, ABV, CFF, and FVS, among others. While these dilute the prestige of the CPA — some were once ethically proscribed as “incompatible occupations” — you can keep those extra initials only while continuing to pay AICPA credential dues. For tax accreditation, become an Enrolled Agent, or a Certified Fraud Examiner for fraud.

Audits are now loss leaders used as “feeders” for consulting engagements. Consulting revenues dwarf audit revenues. What was once considered status to call a firm “Certified Public Accountants” has been dropped by most firms in favor of showcasing a multidisciplinary professional service organization. The top partner is now called CEO, highlighting the business rather than professional aspect of the firm.

The profession has rendered itself leaderless because no one credible voice can speak responsibly for the divergent interests of consultant, product salesman, and professional CPA — roles that carry conflicting obligations to clients, the bottom line and the public.

The profession’s decline resulted from the seductive profits of providing consulting services to audit clients. As trusted professionals, CPAs already had their foot in the clients’ doors. It was access they were trusted not to abuse. Ultimately, CPA firms decided to undertake consulting services, staffed entirely by non-CPAs and serving no public interest, as a “business” while simultaneously carrying on an accounting practice as a “profession.”

Jay Starkman, CPA

A version of this article was originally published in Accounting Today, September 22, 2021.