“After finding out how small firm members define success, I want to learn how the AICPA can help them achieve it,” James C. Metzler, CPA, said in August 2003 when he became the AICPA’s first vice president of small firm interests.

In the months since, Metzler’s “listening tour” has taken him to 18 states where he continues to ask small firm practitioners “What keeps you up at night?”

During his keynote address at the MACPA Small Practitioners Conference in August 2004, Metzler shared how responses to that question are helping him develop and implement new ways of meeting constituency needs, as well as address initiatives that are already in the works. Michigan Board of Accountancy Chair Ed Kisscorni, who also presented at the Conference, addressed legislative and regulatory initiatives at the state level.

Practitioners: We have concerns for the appropriateness, relevance and applicability of rules and regulations that come from the AICPA and other sources, i.e. regulatory bodies.

Metzler: In addition to the prevalent issues undergoing close scrutiny, like Sarbanes Oxley and its cascade effect at the state level, proposals for increased transparency in peer review processes and the analysis of Independence Interpretation 101-3, which addresses management decisions that impair independence, we are identifying opportunities that these complex rules and regulations are creating for the practitioner. For example, Sarbanes Oxley independence rules have made CPA services a “multi-vendor” world. A wealth of opportunities have emerged for a well-positioned smaller firm. Even the smallest of firms are finding opportunities in public companies for services they have been performing for years as a result of this legislation. The work of AICPA initiative on Private Companies Financial Reporting is a big step in this area. Members are weighing in on whether there should be a separate set of GAAP for private companies that may be more appropriate.

Practitioners: We are seeking hard-hitting practical guidance, implementation tools and resources that we can utilize immediately.

Metzler: Because of the smaller size of firms and the demands on the practitioner’s time, small firms are very vulnerable when they lose clients. At the same time, as clients’ businesses grow and become more sophisticated, their CPA firms have to keep pace, which adds challenges. Losing clients can devastate small firms. So I want to find ways to help them prevent that and deal with it if it happens. When firms don’t have all the resources they need to serve a growing client, one good solution is to team up with another practice that offers different skills and expertise. As a result, two or more small firms can offer one client the full-service options normally available only from a large firm. Clients like it because they can retain the longtime trusted adviser who helped them through their early years.

We are investigating communications options to ensure members are aware of other Institute resources already available to them, such as Partnering for CPA Practice Success (PCPS) – the AICPA Alliance for CPA Firms. PCPS is a membership section exclusively for CPA firms of the AICPA. PCPS’s mission is to provide advocacy and research that lead to permanent solutions for problems facing firms; present an organized viewpoint to the AICPA and its technical committees consistent with the needs of local and regional CPA firms; provide member firms advice on increasing and improving service offerings; act as the AICPA alliance for CPA firms; and practice management tools, resources and representation for small firms. PCPS is the AICPA community of CPA firms committed to making practicing CPAs and their firms successful.

CPA2biz, the AICPA’s marketing arm, features an online firm practice management resource center available to members, including articles, publications and tools addressing Expanding and Planning a Practice, Getting and Keeping Staff, Marketing a Practice, Owner Issues and Running a Practice. Several other materials are available in the practice management resource center.

Several AICPA publications, including the CPA Letter, the Practicing CPA and the Journal of Accountancy, address practice issues for firms of all sizes.

Practitioners: We are concerned the profession [AICPA] does not go deep enough into understanding our size practices, our clients and our business environment.

Metzler: In addition to the many PCPS initiatives underway, such as firm succession and transition, staff recruiting and retention, work load compression, fee pressure, sales and marketing, best practices and new practice opportunities, we have developed Quality Centers that represent early steps to better address member needs. Our Employee Benefit Plan Audit Quality Center has really caught on. We will continue to investigate and launch new Centers that address small firm needs. In fact, the Government Audit Quality center will be launched any day. Our team (Firm Practice Management) works cross-functionally throughout the Institute to provide input into the issues and concerns of small firms and their small business clients.

Practitioners: We want the profession to uphold the core values and high esteem of the CPA and more aggressively punish the bad guys.

Metzler: In October 2003, AICPA members voted overwhelmingly to strengthen the Institute’s ethics enforcement process to ensure that the AICPA has greater flexibility to act in the public interest in the event that a member violates the profession’s code of ethics. The vote involved two proposed changes to the bylaws, including permitting AICPA to sanction members in a timelier manner without investigation if the member has been sanctioned by an approved organization such as the SEC, IRS, or PCAOB. In certain cases, this revision avoids the need for a full investigation which lasts, on average, 18 months and frequently eliminates the need for repeat investigations by multiple bodies on the same matter while preserving a member’s current right to appeal. The second bylaw change gave the AICPA the flexibility to disclose more information about disciplinary matters and allows the Institute to disclose the results of all cases to an individual or body filing a formal complaint with the Institute. This ensures that complainants are informed as to when and how an investigation was concluded. Prior to these changes, the Institute could not disclose to a complainant private remedial actions taken against members or actions concluded with no finding or no violation.

We continue to work diligently with our dedicated volunteers and members to continually strengthen our Code of Ethics.

Kisscorni: In Michigan, the civil fine for a violation of prohibited conduct currently does not exceed $10,000. Along with several other recommendations reported in the July/August issue of Leaders’ Edge, the Michigan Board has drafted language that would allow for an increase in civil fines up to $25,000 per violation. In addition, a “copycat CPA” provision has been proposed with a recommendation to amend the violation from a misdemeanor, punishable by a fine of not more than $5,000, or imprisonment for not more than one year, or both, to a felony punishable by a fine of not more than $25,000, or imprisonment for not more than five years, or both.

Practitioners: We want to be better heard and feel better respected at the AICPA.

Metzler: We have vowed that small firms will have a front row seat at every table in the AICPA. I assure you that having completed my first year as an ambassador for small firms that this has overwhelmingly been the case. The majority of AICPA committees and volunteer groups are chaired by small firm CPAs.

An article published in the March 2004 issue of Journal of Accountancy featured Metzler and expands upon his efforts.

Feedback
Metzler urges members to send him their questions and concerns. He can be contacted by phone at 212.596.6039 or via e-mail. Members can write him at the AICPA, Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881.

Small Firm Background
Metzler got his start at Gaines, Metzler, Kriner and Co. in Buffalo, New York, where he worked with closely held family businesses on tax, accounting and financing issues. There were five people in the firm when Metzler started there in 1970, and 45 when he left the firm two years ago, along with another 25 in its technology subsidiary. At the age of 28, Metzler became a partner in the CPA firm and throughout his career there he took on many leadership roles in areas such as marketing, information technology and community involvement. After 32 years with the firm, he co-founded ConvergenceCoaching LLC—a CPA firm coaching practice in which he worked until joining the Institute. Metzler has served on many AICPA committees is a past president of the Buffalo chapter of the New York State Society and has spoken in public forums on technology and practice management issues. Metzler has authored the book How to Build a Million Dollar Technology Consulting Practice, participated in AICPA video courses and is often quoted in professional publications.

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