AICPA CEO Mark Koziel warns of threats to CPA profession

AICPA president and CEO Mark Koziel told a group of accountants about challenges to the CPA credential by the federal government, states, companies and even accounting firms.

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During a speech Wednesday in New York at a meeting of the Accountants Club of America, Koziel spoke about a proposal last year from the U.S. Department of Education to exclude accounting from the definition of “professional degree” programs, potentially reducing the amount of student loan aid available to graduate students. The AICPA, the National Association of State Boards of Accountancy, state CPA societies, the American Accounting Association and other accounting organizations are banding together to protest the move. Koziel said the proposal is expected to be formalized soon in the Federal Register, and the AICPA is poised to mount a campaign to get the wording changed.

“We’re going to ring the bell and get as many of our members commenting on that as possible,” said Koziel. “We’ll help with support on that. We have everybody ready to go to pull the trigger on that to make sure we comment. We are working with both the White House and the Department of Education to have a discussion around that.”

A negotiating committee convened by the Department of Education has proposed a definition that designates medicine, dentistry, law and several other high-cost programs as eligible for a $200,000 borrowing limit, but students who pursue a degree in other types of graduate or doctoral programs would be capped at $100,000 in federal loans.

Koziel noted that the nursing, engineering, architecture and other professions are facing similar threats under the proposal. He believes the dollar sizes aren’t so much a problem as the definition of a professional degree.

“If you can’t get a master’s degree in accounting for under $100,000, you’re probably doing it wrong,” said Koziel. “But that said, we are still a profession.”

Florida threat

The AICPA is also concerned about legislation introduced last month in Florida that would eliminate the Florida Board of Accountancy and other licensing boards, as well as other licensing requirements. The proposal has caught the attention of the Florida Institute of CPAs, which is opposed to the proposal, even as it works to change the CPA licensing requirements.

“That would eliminate the license completely in Florida the way they have it written, and then you have the moving back to 120 hours,” said Koziel. “Some are trying to say that we’re reducing requirements. It’s an equivalency because you have an additional year of experience by bringing the education down a little bit. People are saying you’re making it easier to enter all of these things. and we were waiting for it. We were waiting for somebody to connect the dots and say: ‘Is accounting really a profession?’ All these things come at us.”

He has also seen some states and firms challenging the ability to claim to be a CPA. 

“The use of CPA in a number of states, their regulations said that you could only say you were a CPA if you were in public practice and registered with the state,” said Koziel. “If you were a CFO working for a company in that state, you could not say that you were a CPA. When I started here, some of the commentary was around private equity firms telling their people not to put CPA on your business card. Well, the Big Four have told their people not to put CPA on your business card for 20-plus years, and the fact that you don’t put it on your business card doesn’t prevent you from not following the rules. If you’re still a registered CPA, whether you put it on your card or not, you are still holding out as a CPA in their mind, no matter what it is that you do.”

Koziel said he would continue to call himself a CPA, no matter what, referring to a speech he gave last year at a conference. “There is absolutely one thing I can guarantee,” he said. “I can absolutely guarantee I will never pass that exam again so you can take those three letters out of my cold, dead hands. I think it’s a shame that many of our young professionals work hard, they pass, and now all of a sudden they can’t put the CPA in their business card or LinkedIn. We tell them work hard in your own time, go out and study, pass the exam, because you’re going to need that to move forward. And then they come back to the office after they pass the exam and are excited to tell everybody. And the firm says, ‘Well, don’t tell anybody, You can tell your mother, but don’t tell anybody else.’ When you think about that, what are we doing when we talk about the CPA brand and the pride that’s in it and should be in it? We kind of take away from ourselves with some of the rules. We are working with some of these states. We want to make it absolutely clear that everyone should be able to say that they’re a CPA when they’re a CPA, as long as you follow the rules and everything else. It’s a challenge, but all of those factors came together all at once.”

SEC and PCAOB

During the wide-ranging speech, Koziel also talked about the changes at the Securities and Exchange Commission and the Public Company Accounting Oversight Board, and his conversations with SEC chair Paul Atkins and chief accountant Kurt Hohl during an AICPA conference in December.

“They have high interest in us having more firms in the public company audit space. There’s been a number of companies that have gotten out of doing public company audits, primarily because of the overreach of the PCAOB in their minds that they felt like it wasn’t worth keeping in the game,” said Koziel. “There have been a number of firms, if they didn’t get out completely, they were managing the number of issuers that they were auditing, because once you hit 100 issuers, then you had to have an annual inspection, versus every three years, and so a lot of firms just manage to do that.”

Atkins said at the conference he wants to “make IPOs great again” and see more listed entities. There are about 3,800 listed companies now in the U.S., with many of them being foreign issuers, but the figure used to be closer to 8,000, Koziel noted. Atkins and Hohl both want to reduce the requirements for ESG and sustainability, and Atkins asked Koziel how the accounting “profession could let sustainability get as out of control as it is today.” 

“I said, look, it’s not been driven by the profession,” Koziel said he responded. “The profession has supported it as companies have needed it, but it’s the investor community that has actually been asking for it.”

Atkins contended that only institutional investors have been asking for sustainability information, but not the average American investor.

They talked about the impact of globalization, and how it makes it easier for U.S.-based companies that have to follow rules in other countries to be able to do it consistently everywhere. 

Koziel doesn’t expect the SEC to revive its climate disclosure rule in the current administration, and noted that some of the accounting firms that had large ESG practices are starting to shift some of their ESG experts into working on advisory services related to AI responsibility inside organizations. He believes that trend is going to continue. 

He noted that the SEC is still planning to replace the members of the PCAOB. “They opened up applications for five seats on the PCAOB before there were five seats available, which was a clear indicator for those who were still on the PCAOB board that they probably wouldn’t still be there when this was all over,” said Koziel. 

Last year’s 43-day government shutdown delayed the process of finding new candidates for the board members, but he predicted the SEC may announce the new board members in February. He noted that Atkins wants to revamp the inspection process for auditing firms by focusing more on quality management. The PCAOB had finalized the QC 1000 quality control standard, but delayed the effective date of it last year. He pointed out that QC 1000 was overwhelmingly opposed by the profession, but the AICPA’s Auditing Standards Board is more supportive of the International Auditing and Assurance Standards Board’s International Standards of Auditing for quality management systems.

“International standards have been out for five-plus years, and ours are very consistent, if not almost identical, to the international standards, so you have consistency there,” said Koziel. “QC 1000 took it way beyond where we were on just those two standards, so there was a lot of pushback. It’s a big expense for firms to have even adopted it. That has now been paused. It hasn’t been eliminated, but it’s been paused. It takes a new PCAOB board to eliminate it. If I were to bet on it, I would think that at some point QC 1000 may eventually just go away.”

During last summer’s deliberations over the One BIg Beautiful Bill Act, Congress came close to eliminating the PCAOB by shifting its responsibilities to the SEC, but the Senate parliamentarian struck out that provision from the Senate version of the bill. However, there had been speculation earlier in the year that the PCAOB might be eliminated and Koziel had discussed that possibility a year ago, during his previous speech to the Accountants Club of America. Accounting Today reported at the time that the AICPA was preparing for the possibility of the end of the PCAOB. Koziel said the AICPA’s representatives in Washington, D.C., heard questions about that speech soon after the story was posted. Accounting Today asked on Wednesday about Atkins and Hohl’s desire to leverage international auditing and accounting standards. 

“The thought is to use the international standards as a base, and then you have base plus,” said Koziel. “It’s pretty similar to how we do it at the Auditing Standards Board. We take the ISAs from the IAASB, and we look at those and say, ‘Does it need tweaking inside of the U.S.’ No matter what, we need something for private companies that we’re going to do, so it’s always this international base, plus whatever additional that you would need, whether it’s the SEC or whether it’s the ASB, that are setting those for public and private companies. It’s something that we see as being better for the firms, because there’s greater consistency.”