Takin’ Care of Business

Working together, CPAs can achieve great things.

by Robert Tie

immy Williamson, a senior partner of MDA Professional Group, PC, a 100-member firm in Alabama, was inaugurated as AICPA board chair at the Institute’s fall Council meeting in Las Vegas.

As a long-time AICPA and Alabama Society of CPAs volunteer over a 30-year career with his firm, Williamson believes the profession’s primary purpose is to protect the public interest. “It’s what I call ‘takin’ care of business,’” he said during a recent interview with the JofA. “People depend on us for help that only we CPAs can provide. It’s an awesome responsibility—one that we must focus on now more than ever.”

Why the urgency? Because the profession, with its growing array of successful pro bono and advocacy initiatives—the AICPA 360 Degrees of Financial Literacy campaign is a good example—is optimally equipped to provide the representation, leadership and advice that businesses and individuals need to survive in today’s economy.
“This is a mandate for the profession,” Williamson said, “and we’re going to take the ball and run with it.”

The sports metaphor comes naturally to Williamson, a former football player who attributes many of his professional and personal accomplishments to teamwork. He draws inspiration from the words of Vince Lombardi, winner of five National Football League championships over his 10 years as coach of the Green Bay Packers. Lombardi said it is each individual’s commitment to a group effort that makes teams, companies, societies and civilizations work.

“Add the CPA profession to that list,” Williamson said. He plans to spend his year in office exhorting every member of the AICPA and state societies to work together to make significant improvements in four areas: interstate practice mobility, private company financial reporting, diversity in the profession and Americans’ ability to manage their personal finances.

FREEDOM TO SERVE THE PUBLIC INTEREST
“You can’t meet clients’ needs with one hand tied behind your back,” Williamson said, referring to the complex maze of regulations with which CPAs must cope to serve clients in more than one state.

To illustrate how counterproductive some states’ requirements have become, he cited the case of a CPA who moved from Illinois to Texas. This practitioner wanted to—and was professionally qualified to—establish his own practice. But the state wouldn’t allow it. He had to work in someone else’s firm for a year before he could set up independently.

“That kind of regulation doesn’t protect the public interest,” Williamson said. “Instead it prevents skilled professionals from providing the services businesses and individuals need.”

Because interstate practice mobility is so important to the profession and its constituents, Williamson pledged the Institute will work with the state societies to help every member understand and support more uniform licensure requirements in every state.

A FAIRER APPROACH TO REPORTING
Private companies are another constituency in need of the profession’s advocacy, Williamson said. Recalling the advice of immediate past chair Leslie Murphy, who exhorted firms and employers to make their recruitment and retention policies more responsive to employees’ needs, Williamson said standard setters should do the same for nonissuers and those who do business with them.

“It’s time to develop a set of financial reporting standards for private companies and everyone—investors, lenders and the companies themselves—who struggles with producing and using GAAP statements that don’t quite get the job done and cost more to prepare than they’re worth,” he said.

He cited his own firm’s clients as an example. They own private businesses whose stock isn’t held by outsiders. The banks and lenders these businesses deal with know the owners personally and don’t have information needs as complex as those of financial institutions that deal with public companies.

“Under the current system, nonissuers bear the costs of GAAP compliance, but they don’t get the corresponding informational benefit they need and deserve,” Williamson said. “It’s time for a new, fairer approach.”

When AICPA-led research found that private-company financial reporting constituents want standards that better meet their needs, the Institute and FASB proposed, among other things, that the AICPA would establish and fund a committee to make recommendations to FASB about whether current GAAP should be modified for nonissuers.

“The Institute and FASB have taken the first steps,” Williamson said. “Now it’s up to all members to support the proposal and make continued progress possible.”

A FAIR CHANCE FOR ALL
Another of Williamson’s top priorities is improving the diversity of the CPA profession by offering greater career advancement opportunities to women and members of minority groups. “The face of America has changed, but the face of the profession has not,” he said. “We have to fix that—right now.”

Of course, the AICPA already has made substantial contributions to help achieve that goal. The AICPA Foundation recently doubled its annual financial support for the PhD Project, which is recognized as the most comprehensive and successful initiative to attract people of color to doctoral programs in business. Over the past 30 years, the fellowships it offers have helped dozens of people earn PhDs in accounting. Meanwhile, the AICPA Minority Scholarship Program awarded $423,000 to students at 98 universities in 2006 alone. And it was money well spent: These students’ overall grade point average was nearly a perfect 4.0, and almost 80% of the funds awarded went to seniors or graduate students. In the past 15 years, the Institute awarded more than $8 million to 1,600 students. Williamson wants this important work to continue and expand.

The profession also is making headway in diversifying public practice, Williamson acknowledged, though it isn’t great enough or fast enough. Diversity must increase significantly and quickly, he said.

Each of these achievements is a milestone on the path to a greater and more inclusive profession. But because that goal has not yet been attained, Williamson said, “we must not—and will not—rest until our profession reflects the changing face of America.”

When he was president of the Alabama Society of CPAs, Williamson led efforts to help women rise to leadership positions. The result was a surge in women’s membership in the state society and a corresponding significant improvement in their career prospects. Yet national statistics show that while more than half of accounting graduates and new CPAs are female, only 19% of public accounting partners are women.

At some firms and companies, women are promoted if they diligently work long hours. But the opportunity for promotion is not available to those who need flexible work arrangements, Williamson said. The glass ceiling has been cracked, but not shattered.

He traced this ongoing problem to the fact that some senior leaders still do not understand how to retain and advance women. As competition intensifies, the need for such insight is greater than ever. For example, in today’s business environment, it’s difficult to balance clients’ service expectations with employees’ need for flexible work schedules. But, Williamson said, the profession must pursue solutions to these challenges—including flexible work arrangements, part-time partnership options, paid and unpaid time off and support in caring for employees’ dependents—to make the workplace a better and more productive place in which talented, dedicated people can work effectively.

Williamson also called on firms and employers to improve their recruitment and retention policies. As a positive model of such enlightened thinking, he cited Leslie Murphy’s leadership of the AICPA’s Young CPA Network, which offers resources tailored to this group, including a Web site and a dedicated monthly newsletter. The program ensures young people understand the choices and opportunities awaiting them as they move forward in their careers as CPAs. It is helping develop a new generation of leaders and inspiring the next cadre of students to join the profession and benefit from its many rewards.

CPAS TO THE RESCUE
Perhaps one of the greatest challenges Americans face is managing their increasingly complicated personal finances. And because few people are equal to the task, Williamson believes it’s time for the profession to help out in a big way. “It’s our responsibility to show Americans how to take charge of their financial destiny, fulfill their dreams and secure the bright future their children deserve,” he said.

In his view financial illiteracy threatens the nation’s future and is therefore a problem for all CPAs. “We are the right people—the right profession—to complete this important mission,” he said.

Two million Americans declared personal bankruptcy in 2005 as a result of making poor decisions about their personal finances. Typical Americans spent $1.22 for every dollar they earned, Williamson said, causing savings rates to drop to a level as low as during the Great Depression. That’s a threat to the financial security of all Americans, because such crises weaken the entire economy.

An even more alarming dimension of this problem is that children are being given credit cards in high school—and many of them are declaring bankruptcy just as they enter college. These children and their parents need our advice and guidance, he said, and we’re getting the word out. But it will take more than talk to overcome this challenge.

CPAs are overwhelmingly powerful when they work together through state societies, leveraging the power of volunteerism. “It’s hard to beat a team of 330,000 CPAs working to elevate financial understanding,” Williamson noted. Such unified action is the profession’s greatest strength, enabling CPAs to give their fellow citizens the know-how they need to be financial winners. “When we reach this goal, we will have helped the nation win a great victory over financial ignorance and poverty,” he said.

CPAs have always done such things on a smaller scale, of course. Many are involved in financial education activities in their houses of worship, civic groups and professional organizations. But Williamson urges every CPA across the nation to join the Institute’s and state societies’ team efforts, such as the 360 Degrees of Financial Literacy campaign, a three-year-old nationwide drive to advance Americans’ financial understanding. Virtually every state society is participating, tapping the time and talents of thousands of CPAs. More than 500 million people have had some form of contact with the campaign through the media, outreach programs or the Internet, and the campaign’s Web site (www.360financialliteracy.org) has had more than 15 million hits. Still, Williamson wants to extend the program’s reach even farther.

To that end the AICPA has joined forces with the Ad Council to launch a public service campaign that aims to help young Americans manage their personal finances more effectively (see “Fighting for Financial Literacy”).

WHY WE BECAME CPAS
“The profession’s primary mission is to provide public service, and when we CPAs act in unison, we’re unbeatable,” Williamson said. “We stand at a crossroads today, and the stakes—for CPAs and for America—are enormous. If we don’t act, we’ll regret our indifference to those who depend on us to do the right thing. But I don’t see our profession taking that route. If instead we confidently step forward on the right path, we’ll empower our fellow citizens to chart their own financial destiny and the future will be bright for the next generation of CPAs and for men, women and children in communities all across America.”

For Jimmy Williamson, “America counts on CPAs” is more than a tagline. It’s a passionate belief. And he’s counting on all CPAs to share his passion for making a difference, starting today.

Robert Tie is a senior editor on the JofA. Mr. Tie is an employee of the AICPA and his views, as expressed in this article, do not necessarily reflect the views of the Institute. Official positions are determined through certain specific committee procedures, due process and deliberation.