Ready for Non-CPA CPA Firms?

What the AICPA and NASBA could learn from other professions.

By Donny C. Shimamoto, CPA.CITP, CGMA

I’ve been watching NASBA and the AICPA communicate the need for a change to the requirements to be CPA. While at a surface level their rationale makes sense, when I think further about the bigger picture of the accounting profession, I’m not sure I agree with their direction. I do however think that the accounting profession needs to be more cohesive and inclusive, and perhaps that is the better solution to pursue, rather enabling more non-accountants to be CPAs.

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One of the major premises of their rationale is that CPA firms are hiring an increasing number of non-accounting graduates so we need to enable more of these people to be CPAs. Well, just because they work at a CPA firm, does someone have to be a CPA? Or just because they help with a tax return audit, or consulting project, do they need to be a CPA?

Take a look at the medical profession. Not everyone that works at a hospital or clinic is a doctor. Yet the technicians, nurses, physician assistants, pharmacists, and many others involved in patient care are considered part of the medical profession. All of these other roles support the work of the doctor and the provision of care to patients, but in the end, it’s the doctor that makes the final diagnoses and writes the prescription for care.

Wouldn’t that be analogous to people from other disciplines being a part of a CPA firm and providing services to the firm’s clients? In the end, though, it’s the CPA who renders the final opinion (audit), finalizes the financial plan (tax), or delivers the recommendation (consulting/advisory). It’s the CPA who synthesizes the insights from the information provided by the other disciplines and works with the client to validate the final outcome or direction.

If we look at other professions like engineering, architecture, education, and law, we see the same parallels. None of these professions are moving to enable those that support the work of the core professional to be able to be licensed as equivalent as the professional themselves. So why would we do that in accounting?

The CPA-Centric Mindset in Public Accounting May the Problem

As I tried to figure out why we would want to enable more non-accountants to be accountants, I realized that this is really only an issue for the public accounting industry (not the accounting profession as a whole). The public accounting industry is the only aspect of our profession whose work and organizational structure is directly impacted by CPA licensure.

So I had to ask myself, what is it about the public accounting industry that would make them want to enable more non-CPAs to be CPAs? The only answer I could come up with is the CPA-centric mindset in public accounting.

I’m going to be a bit heretical and call out the elephant in the room: many CPAs in public accounting look down upon those who are not CPAs. In fact, I might even also be able to say that CPA partners in accounting firms look down on other CPAs who are not partners. Yes, I know this is a broad generalization and it is not true in every firm, but I’ve definitely seen this mentality myself as well as had others who have left public accounting share stories about this superior mentality issue. If this is indeed a core issue, then the fix would be to confront the egos of CPA firm partners.

Instead, all partners and employees of a CPA firm need to be treated with professional respect regardless of whether they aspire to be a partner or whether they decide they would rather be a career senior. This would also solve one of the other issues in public accounting: the up-or-out mentality. (But that’s an entirely different topic for another article.)

Diluting the CPA Could Weaken the Integrity of the CPA Firm

Another potential issue with allowing more non-accountants to be CPAs is that it could result in a weakening of the integrity of the CPA firm itself. As public servants, we must remain vigilant to ensure that our audit options are always independent and that we remain unbiased in the recommendations that we make to our clients. To help ensure that the firm always took this into consideration, the requirement that CPAs have majority control of public accounting firms was written into the Uniform Accountancy Act, which has been generally adopted by all of U.S. states and territories.

If we allow more non-accountants to become CPAs, these non-accountants would be included in the “CPA” count for ownership. The net effect of which would be that a majority of firm owners may not be true CPAs. I’m not saying that these others are necessarily less ethical than CPAs, but will they hold themselves to the same high standards that we do in ensuring the integrity of our profession?

As CPAs we are invested in the accounting profession, the chances of us leaving it are low since it is the core of our skillset. We are less likely to do something that would put our reputation or our firm’s reputation at risk. However, it’s much easier for a professional from another field to simply decide they are going to leave the firm and go back to their field where they won’t be constrained by independence and could take advantage of situations where they could make more money.

Let’s Make Public Accounting More Inclusive

Instead of diluting the CPA, let’s instead work to make public accounting more inclusive. And by inclusive, I’m not referring to gender, sexual orientation, or ethnicity—I’m talking about professional expertise and respect. As CPAs, we need to recognize that our work is moving beyond just finance and that we need to collaborate more with other professionals to deliver the best solutions for our clients, or to render a valid audit opinion.

By recognizing that we need the help of other professionals to best serve our clients, and by treating them as equals that are an integral part of the firm, we can both increase the attractiveness of our firms as a place to work, as well as increase our ability to retain non-CPA professionals in the future. This means that our human resource functions need to learn to create career paths for non-accountants, and that compensation plans need to be revisited to ensure that these professionals have the opportunity to earn as much (if not more) than a partner themselves. This may also mean revisiting traditional hierarchies and authority structures in a firm.

I recognize that this is not an easy change, and there are a lot of barriers to this change in partnership agreements, retirement compensation, and a lot of other traditional firm structures. However, if you’re really looking at the future relevance and sustainability of the firm, you need to figure out how to be more inclusive without diluting the integrity of the CPA itself.


20 Responses to “Ready for Non-CPA CPA Firms?”

  1. Katherine Smith

    Hi Donny,

    I’ve gone through your post and I find it very interesting.

    I agree entirely with the things you have mentioned here and specially with this line if we allow more non-accountants to become CPAs, these non-accountants would be included in the “CPA” count for ownership.

    The net effect of which would be that a majority of firm owners may not be true CPA’s.

  2. M. Frank Eulau, active California Certificate 10344E

    Your article should be read by everyone remotely related to our profession. Or is it really an industry?

    The most prestigious title in the medical field is obviously the MD. Is that a surprise? Let’s use what I know about that, as an example. One of my sons, graduated from a “good” school. His first job was—research in micro-biology. His boss was a CalTech PhD. She suggested he should get the MD because would help establish more credibility for his work. So, upon graduating from med school, he became a licensed MD.
    Did his education stop there?

    He decided he’d do a residency in pathology at UPenn; after a discussion (argument) with a surgeon about the necessity of that particularly surgery. He conferred with his advisor who concurred with him. The advisor suggested he finish that particular year. He did that and was told he was welcome to return.

    He then was accepted at Stanford as a resident in radiation-oncology. While there, he was given awards for the best research for two years in a row. At the time, that was unprecedented.

    After that, he applied for a “real “ job. After accepting a job elsewhere, Stanford offered him a position on the faculty. His ethics caused him to decline.

    Meanwhile, at his new (current) job, he has presented papers at radiation-oncology national convention and has been invited to present again recently.

    BUT, my point is that as an MD he has been able to do a lot. He loves his patients and staff . And, it’s obvious that they love and respect him as an MD and a person.

    Now, that’s the kind of person a CPA can be. Why do I say that? Well, we have two other sons. One is a practicing CPA who is the twin of the MD. The third son is now CFO of a Fortune 500 company.

    I agree with you, the CPA is and should be at the top. Others can, will be and are great at their specialties whether or not they are CPAs. But, it’s hard to believe that we should cheapen our profession!!

    • Donny Shimamoto

      Thanks for the comprehensive reply! I think your story demonstrates my points with the medical profession analogy. The only change I would make to your statement above is to say that the MD and the CPA are “bases” of the professions, not the top. They are starting points from where specialization is then layered upon them. So rather than the current proposal which is to enable specialization from the start, the CPA license requirements should still represent the same base, and the people pursue specialization after that base.

  3. Frank Stitely

    I agree entirely. Not all of the people we work with even want to be CPAs. Within CPA firms, we need a lot of expertise that isn’t necessarily CPA only knowledge. The profession, meaning the AICPA, wants to bring every specialty under their umbrella. Most of the current special designations mean nothing at this point in the market. For instance the BV credential means nothing to the world at large. There are lots of BV credentials that are equally or more desirable than the CPA credentialed one.

    • Donny Shimamoto

      The interesting thing about the AICPA/NASBA proposal is that it implies that more non-CPAs want to be CPAs since they want to expand licensure. My question is then, well why would they want to be CPAs? Why can’t they practice within their own area of expertise and be part of a team with CPAs? Part of what makes us CPAs is having the broad understanding of accounting as a whole (financial accounting, tax, internal controls, etc.) but then also having depth in our particular area(s) of expertise. Which we then demonstrate through getting a credential. And as you’ve indicated above, there are additional non-CPA credentials (including several for BV) which may have additional market relevance and demonstrate this higher level of expertise.

  4. Les Orr

    Donny, Thank you very much for this interesting and thorough posting. I admit to being a bit mystified about who is suggesting that one particular regulated licensed professional designation, CPA, should not have specific underlying requirements while other such designations, like Attorney, Dentist, MD or RN are OK as is. I probably missed something big here. I don’t see how it relates to the ability to prepare a tax return or use QuickBooks. Sorry for my confusion.

    • Donny Shimamoto

      Hi Les, as I understand it, the proposition isn’t to not have underlying requirements, but rather to change it from specific requirements, to more of a “substantial equivalent” requirement. What that would actually mean hasn’t been defined yet, but the principles have been published for comment. More info here:

  5. Joel Schleifer, CPA

    Law firms have paralegals; medical facilities have PA’s, nurse practitioners, registered nurses, pharmacists, lab technicians, etc. Perhaps the accounting profession should look at those business models in order to stay relevant and still be true to our mission

  6. James L Falgout

    I am the only CPA in my firm of 8. We operate on the basis that the chain is only as strong as the weakest link. Everyone on my team is important. We have to have team work to provide the quality of service I want for my clients. I totally agree with your position. Thank you for publishing it.

    • Donny Shimamoto

      You are very welcome James and thank YOU for being a living example of how our profession needs to be more inclusive and respectful of everyone in the profession!

  7. Lisa Gonzalez EA

    I’m an enrolled agent and do a lot of representation work as well as taxes tax planning and bookkeeping. Have a masters in history as well as an m
    MBA…learned my bookkeeping on the job with other businesses but can’t do “accounting” since that’s reserved for CPAs in California. Work with local CPA firms and we even meet together for continuing education. If you can provide the services, you’ll get the business. And I don’t want to do audit work…i love being involved with my clients in a more active way.

    • Ca

      I disagree that “accounting” is left to CPA’s. I have been an accountant for 44 years. I not only prepare taxes, I handle all aspects of bookkeeping, including payroll. I worked extremely hard to learn my trade through community colleges and informative books and have retained most of my clients for the duration of my business. I was a single parent and could not afford college, so had to be “self-taught”. One must focus on the fact that a high number of CPA’s focus on finance and investment. I don’t have enough fingers and toes to count the tax returns I have had to file an amended return for that were originally done by CPA’s. Just because a preparer passes the annual required tests doesn’t mean he/she knows the tax laws. I may not be a CPA, but I am an accountant.

    • Donny Shimamoto

      Thanks Lisa! You’re a great example of how collaboration between different parts of our accounting profession can be accomplished and that there is definitely enough work for all of us. The plentiful mindset is so much more powerful than then scarcity mindset.


    To eliminate completely the “looking down” on non-CPAs, to eliminate the unfounded fear that far better educated, far better trained and much more savvy on things technological non-CPAs may pose to some CPAs, it is imperative that the CPA exam be proscribed, that educational requirements be completely upgraded, expanded and kept up-to-date on an ongoing basis.

    • Donny Shimamoto

      Hi Heinrich, I’ve been debating the CPA Exam changes. I think a lot of people think the exam has to test for EVERYTHING that a CPA does, but in reality I think it needs to assess those things that are core that the public (not necessarily the general public, but the informed public and business decision makers) would expect from a CPA. By that core, I do mean that it should still be focused on the accounting, tax and auditing principles and methodologies. And it does need to include an understanding of information and techniques from other disciplines that may be used to supplement the core accounting areas, but I don’t think we need to know how to actually do everything from the other areas. This becomes even more true if you think of the CPA as a “base” credential with the specialty certifications then representing the more advanced knowledge and cross-discipline expertise. To draw the analogy to the medical profession again, the CPA is the general medical doctor, and then there are specialists with additional schooling and certification.

  9. Mary

    Totally agree. I think that the profession has missed the mark with diluting the cpa licensure. A cpa that completes a minimum of 2 years, although that is no longer the case, in audit alone has a much different skill set than the cpa that earns it through private training. Because of my private, then public training, I am a much better auditor and consultant. However, I stink at taxes and always defer to tax specialists. I think that CPa sometimes fear their competitors. To me, the more the merrier. If you charge a fair fee and do work you are great at, you will keep your clients. To think that one firm of few can have expertise in the broad range of accounting, finance and operations is short sighted and silly.

  10. Lyudmyla

    Non-CPA acting as a CPA is like a non-Surgeon wearing a mask of a Surgeon

  11. Scott

    I agree on inclusiveness and my direction is that the CPA license needs to be more inclusive of educational backgrounds, not just career paths. For example, in the UK, you can be a chartered accountant with a biology degree. I think our profession misses out on very good people just because they don’t fit the square hole we want to everyone through to go into. Our loss but at least they can be EAs in the tax world.

    Change is hard and the old guard has different opinions than me :)

    (30-something tax professional who serves on a state CPA society board)

    • Donny Shimamoto

      Hi Scott, I’m not sure I totally understand the “miss” you describe. People who don’t have a degree in accounting can still become a CPA if they take the additional accounting courses (doesn’t have to be a full degrees). I’m pretty sure we wouldn’t want to have to have someone that didn’t have the foundational accounting education to be able to be a CPA. The EA is much narrower and focused only on tax compliance–effectively return preparation–so a person wouldn’t necessarily need all the accounting background to be an EA. So I don’t think you can compare EA and CPA.