Value Proposition: While CPAs May Cost a Little More, They Bring Critical Skills to a Company's Finance Team
EXECUTIVE SUMMARY * The CPA is the gold standard in financial credentials, but CPAs are increasingly in short supply. The result is that it is more difficult and more expensive for companies to find qualified CPAs. * CPAs can benefit companies in a number of ways that they may not anticipate. Unlike MBA programs that can vary greatly from school to school, the CPA is consistent nationwide, demonstrates a broad proficiency in finance that is otherwise difficult to determine, requires technical compliance knowledge of both GAAP and other regulations, provides a fuller understanding of the implications of management decisions on the finances of a company, and establishes an ethical requirement outside of your company that is enforced by a state licensing body and by the AICPA. * The Walt Disney Co. has made the CPA an informal requirement for certain finance and accounting positions. The company believes this investment is worthwhile to its business. ********** It's no secret that CPAs are in short supply. Accounting firms--long known as the incubator for highly skilled CPAs--cited staffing as their No. 1 concern in 2006. That means CPAs will command higher salaries and be harder to find than other finance professionals. But what is less known is the tremendous value CPAs bring to a company that extends well beyond their unparalleled knowledge of GAAP. As an executive in industry, you know all too well the dual responsibility of maintaining your company's high standard for financial integrity while also controlling costs. The same analysts who criticize companies ,for corporate governance and accounting problems are even quicker to criticize a company that has "excessive" overheads, especially those in back office tasks like finance and accounting. This article explains the benefits of hiring CPAs and offers points you can use in explaining to your CEO and others, including analysts, why you should require CPAs to fill more of your key finance positions. BENEFITS The following characteristics help distinguish CPAs from other professionals. Consistency. Consistency is a key asset CPAs bring to the job. "CPAs have a fixed set of credentials that are reliable across all state lines," says K. Michael Conaway, CPA, a Republican member of Congress from the 11th District of Texas. Conaway, who has also served on the Texas State Board of Accountancy, notes that "CPAs have all passed the same exam and met experience and education requirements. That sets them apart from a general consultant or someone else with no specific credentials." By contrast, MBAs, for example, may have concentrated in disciplines outside of accounting or finance. Finance Proficiency. Colleges teach and test one topic at a time, and often employees are not exposed to certain financial concepts until they are promoted or move into a new department. By the time you find out that an employee is in over his head, it might be too late. "I feel that the CPA is more valuable than my J.D. degree," says Scott N. Flanders, CPA, president and chief executive officer of Freedom Communications Inc., a privately owned media company in Irvine, Calif. "A lawyer may not have knowledge of business, but the CPA credential connotes more financial savvy than a degree from the best schools." Finally, given their training and the range of experience they typically gain early in their careers, "in a few years an effective CPA experiences more issues than a general manager might experience in 10," says Dick Norwalk, CPA, chief operating officer of G. L. Homes, a Florida homebuilder that has a number of CPAs on its senior management team. Technical Skill. A prospective employee's understanding of GAAP cannot be accepted based merely on a resume showing an "appropriate" combination of education and experience. When it comes to knowledge of and training in GAAP, the CPA is the gold standard. …