MACPA task force's recommendations get high marks

By Bill Sheridan
MACPA Electronic Communications Manager

A "white paper" of recommendations for restoring faith in the CPA profession — the product of a summer's worth of work by a blue-ribbon MACPA task force — received some high-profile consideration in October from a couple of prominent organizations and, more important, the MACPA membership itself.

The document was sent to the National Association of State Boards of Accountancy (NASBA) in time for its annual meeting, held Oct. 6-9 in New Orleans. The NASBA, which serves as a forum for the 54 U.S. boards of accountancy, was expected to use the meeting as a means of offering recommendations to the state boards in light of the Sarbanes-Oxley Act of 2002.

MACPA Executive Director Tom Hood said the message that emerged from the NASBA meeting was consistent with the white paper's theme — and extremely encouraging.

"Incoming (NASBA) Chair Mike Conaway stressed the need for state boards to resist political pressures and maintain uniformity of laws and regulations for CPAs," Hood said. "That's good news."

The possibility that states might use the federal Sarbanes-Oxley Act as a blueprint for local legislation — what Hood calls the "cascade effect" — is one of the reasons why the MACPA's task force developed the white paper. The document's primary purpose is to guide the CPA profession in establishing proactive steps to restore public confidence in the profession and the markets, preserve the vitality of the CPA profession in Maryland, and strengthen the Maryland economy. But it also gives CPAs a position to communicate with state boards of accountancy, legislators and other relevant groups that might try to regulate the profession on a local level.

More than a dozen states are considering legislation that uses Sarbanes-Oxley as a blueprint. The most recent "cascade" came from New York, where state legislators are debating whether federal restrictions on non-audit services for publicly traded companies should be extended to New York businesses of all types and sizes.

NASBA's call for uniformity among state boards of accountancy is a good first step toward lessening the impact of such legislation, Hood said.

'A super effort'

The white paper also was to have been reviewed in October by officials with the American Institute of CPAs. Results of that review were not available at press time, but during a recent visit to Maryland, incoming AICPA Chair Bill Ezzell called the MACPA white paper "a super effort."

"It has the right approach, the right tone," Ezzell said. "It's about doing things right — and about doing the right thing."

In fact, Ezzell said the AICPA would be "paralleling" many of the recommendations outlined in the MACPA's white paper.

"More than anything, we need to get out there and have a dialogue with members," he said. "We need to understand what's important to them and help them understand what we're doing about it. The combination of those things will move us forward in a positive direction."

MACPA members 'a step ahead'

More important, though, are the MACPA's efforts to communicate the task force's recommendations to its membership. The white paper was explained in detail during a webcast and an early draft of the document was made available on the MACPA's Web site.

"We want to mobilize our members to lead the way for the profession," Hood said. "I firmly believe that MACPA members are a step ahead because of the work that has been done (by the task force)."

As it developed its white paper, the task force focused on five principal issues facing the profession:

government regulation and oversight;
public trust and confidence in the integrity of CPAs;
public understanding of the auditor's role;
corporate governance and responsibility;
the importance of ethical behavior and "doing the right thing."

The white paper resulted in dozens of recommendations in these five areas. In the end, though, the task force agreed that all CPAs in every corner of the profession must take a leadership role in their respective organizations and rededicate themselves to the profession's code of professional conduct and protecting the public's interests.

"The current crisis facing the accounting profession points out the need for strong moral leadership," the task force's white paper states. "Sometimes economic pressures can make it difficult to do the right thing. We recommend that companies emphasize the value of reputation of the entity in the long-term in addition to the importance of profit and growth."

Contact this Author: < William Sheridan > bill@macpa.org

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