AICPA President Barry Melancon on The CPA Vision Project’s Impact on Auditing
By Gary P. Braun

Attendees at the AAA Annual Meeting had three separate opportunities to hear AICPA President Barry Melancon speak about the AICPA Vision Project. One of these occasions was the Auditing Section Luncheon. During that presentation, he spoke specifically of the impact of this project on the future of auditing. He characterized the project as a “grass roots” look at the future of the profession. As part of the project, three thousand members from both small and big firms were asked, “Where are we going?” An example of an audit-related question is “What will an audit look like in 2020?” While admitting the danger in making long-range predictions, he decided to proceed. The likelihood, he said, is that we will see instantaneous assurance on information that can be accessed in the format desired by the user. To further illustrate, he related a prediction in the tax area. In five to seven years, how will people file tax returns? He envisioned the taxpayer talking to a TV screen as part of an interactive process. To dispel potential skepticism within the audience, he assured us that although today’s clients may not be comfortable with this, their children certainly will be!

Another aspect of his presentation involved the need to move the profession up the “Value-Chain.” In this context, he mentioned that the Auditing Standards Board Horizons Task Force had preceded the CPA Vision Project. Important issues identified by the task force include: improvement of core service, broadening the utility of the attest standards to accommodate the market, strengthening the AICPA’s role in the area of international standards, and implementing a process of improvement. In the area of audit reengineering, the AICPA is working with the SEC Practice Section (SECPS) looking at firms’ changes in audit process. The AICPA is also working with a task force in Canada regarding continuous assurance and electronic dissemination issues. In the assurance services area, another task force is working on the next set of assurance services.

Specifically addressing changes in the profession, he mentioned impacts in various areas. For example, he mentioned the so-called “American Express” phenomenon which represents a potential threat to CPAs historic monopoly in the audit area and its potential impact in the area of ethics.

Mr. Melancon finished his speech with a series of messages that pertained specifically to educators. First, it is our responsibility to inform our students and our colleagues about these issues. Second, necessary competencies are changing and, as a result, so should the CPA exam. In particular, he mentioned that, in the future, we are likely to see technology-based delivery consisting of a series of “testlets” which would enable the candidate to demonstrate skills and thus move quickly through the exam. In terms of competencies, he mentioned both the necessity of testing a broader skill-set and that the exam will increase the emphasis on integration of skills and knowledge. In summary, he made it clear that changes are coming and that these changes will continue to occur at an increasing rate. Given these changes, the next century will bring with it tremendous challenges and opportunities for the auditing profession and auditing educators.

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