The American Institute of CPAs seems to have forgotten an old money expression, Gresham's Law:  "Why pay dear when you can pay cheap?"

 

The bimetallic standard offered the debtors something nice: they could repay their debts in the cheapest metal. The market value of the metal that coins (dollars if you want) were minted from changed every day, but the value of the coins when used to repay debts or to buy something was constant. A dollar is a dollar, be it gold or silver. So nobody would pay with a coin whose metal content was worth more than its legal-tender value, and those undervalued coins were either melted or hoarded. Conversely, overvalued coins, that is coins whose value as a legal tender was greater than the value of their metal content if melted, were the only to circulate. Bad money drives out good money, as Thomas Gresham, a scottish banker, first said it.

 

Specialization is good, initials like MBA, MSF, et al. are interesting. But nowhere does specialization replace good judgment and earned reputation.

 

The good term CPA, seems about to be driven out by the AICPA into a maelstrom of new, still undefined designations. Who are we kidding?

 

At the same time we are making it more difficult to qualify as a CPA by increasing the accounting major requirements to 150 hours, the dynamic response of students, who might have become accounting majors, is to vote with their feet and head in other directions! 

 

Are we saying that only multiplied initialed specialists are capable of offering the basic services that businesses and individuals have traditionally expected from CPAs? 

 

Let's discuss some CPA postulates: 

So an essential part of any CPA's competence is a knowledge of the arena where the transaction is taking place. This is essential literacy.  If we need to change the requirement for the CPA designation to include "money domain" literacy, then let's do it in the basic CPA requirements, not add another description or designation that casts doubt on the existing reputation of the term CPA. 

 

Finally, another Swiftian suggestion: Should we ask management to include in the notes to the financial statements a risk assessment on the independence of the accounting firm who presents the report on the financial statements?