Professional licensing has always been what makes a CPA a CPA. Those three simple letters stand for years of dedicated study, rigorous testing, extensive experience, scrupulous oversight, and an avowed commitment to serve the public interest. They signal not just technical expertise, but an ethos of professionalism and objectivity that is the hallmark of the CPA community.
Because of this ethos, CPAs are uniquely licensed to provide attest services integral to public confidence in our capital market system. It is why they are trusted to provide the tax and advisory services that keep businesses strong. It is why they are trusted to guide people through the vast bureaucracy that has formed around our financial system.
These are all vital functions that can carry major implications in our lives. But without certification, how can a taxpayer, a stakeholder, a banker, or anyone differentiate between a qualified professional and someone with lesser qualifications? What would it mean if certification, as we know it, were to vanish?
Unfortunately, this is no idle thought experiment. An antiregulatory movement now sweeping the country is calling into question the very notion of certification across occupations, directly threatening the value of the CPA license. Already, 39 states are considering some form of occupational licensing reform, adding to bills already passed.
Last year, Ohio passed legislation that causes all state licensing boards to expire unless explicitly renewed by law-makers. New Mexico Governor Michelle Lujan Grisham signed an executive order allowing individuals to practice a profession unlicensed, provided their customers acknowledge this absence in writing. In Nebraska, a new statute requires legislative committees to annually review one-fifth of the state’s occupational regulations to identify any rules or laws that should be repealed or modified to be less restrictive.
Those opposing licensure maintain that occupational licensing has created unnecessary barriers to the labor market, which dampens both jobs and competition due to the higher regulatory burden. This is particularly the case where it concerns jobs that they believe should not even be licensed at all.
There are cogent points to be made in this direction; research shows that, from the 1960s to today, the number of jobs requiring a license has exploded from 1 in 20 to 1 in 4. Such rules originally applied only to learned professions such as physicians, attorneys, architects, and, of course, CPAs. (In fact, the first law regulating the accounting profession was introduced right here in New York in 1896.) Today, however, these requirements have come to encompass such diverse jobs as hair braiders, auctioneers, and home entertainment system installers.
It does seem odd that, for example, installing a home entertainment system would require a license. But in this zeal to reduce burdensome regulations, we fear that the necessary ones will be swept up alongside them. The consequences of an incompetent home entertainment installer are far less severe, for both the customer and the public as a whole, than the consequences of an unregulated engineer or CPA.
Yet this distinction is absent from much of the rhetoric behind these measures. This is what must change. If we allow this antiregulatory discourse to continue as it has, we risk an escalating attack on the very basis on which the CPA profession is founded.
The AICPA and NASBA have formed a coalition with other licensed professionals, including engineers and architects, called the Alliance for Responsible Professional Licensing, which aims to educate policy makers and the public on the importance of high standards, rigorous education, and extensive experience within highly complex, technical professions that are relied upon to protect public safety and enhance public trust. This coalition hopes to put the brakes on the unintended consequences this movement could create.
While there are no such measures in Albany so far, as more states embrace the antiregulatory movement, we must anticipate any domino effect. We must protect the CPA license in New York and across the country. We must protect the public we are licensed to serve. The threat is real. Please help by contributing to our PAC now at https://www.nysscpa.org/pacdonate.