A recent press release from the American Institute of Certified Public Accountants (AICPA) touted recent research that showed positive perceptions of CPAs. (Their press release is available at http://www.aicpa.org/download/news/2005_0522a.pdf.)
CPAs have traditionally enjoyed solid reputations of trust among the public and in the business community. (I maintain my ACIPA membership to cheer me up when my brothers and sisters in the legal profession let me down.) However, after the Enron and Worldcom debacles, CPAs took a hit along with other professions. Although only a few actors were really responsible, an entire firm with very solid and talented professionals (some of whom I know personally) was professionally ruined. Unfortunately, professions can be tainted by a few bad experiences, and these got a lot of press.
Among those who know the profession best – business decisionmakers and executives – the accounting profession got favorable ratings of 97% and 95% respectively. These numbers are stunningly good. (With numbers that good, one wonders whether they polled only mothers of CPAs!) Investors were slightly lower at 89% -- as some were probably still smarting from losses. But it is remarkable how favorable these views are, given what has happened in recent memory.
One might wonder whether Sarbanes-Oxley has anything to do with an improved professional reputation. Through this legislation, Congress stepped in to fix what the profession’s own standards were apparently unable to accomplish. Interestingly, 80% of business decisionmakers thought that the accounting profession had taken steps to fix problems leading to past accounting scandals, while 70% of executives agreed. I would guess that a good number of these folks are familiar with the legislation, as they are probably impacted by it.
When it comes to investors, however, only 52% felt that the profession had taken steps to fix these problems. However, 71% of those investors admitted not being familiar with Sarbanes-Oxley. Thus, the investing public seems to have some lingering doubt about how much trust they are willing to commit. Some skepticism here is definitely healthy.