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THE ACCOUNTING INDUSTRY:
MOVING TOWARD HIGH PERFORMANCE

The Increasingly Complex Role of the Professional Accountant

For nearly 100 years accountants, educators, and government regulators have deliberated on the exact nature of the activities and responsibilities of accountants. Are accountants bookkeepers or consultants? Are their skills technical or judgmental? Are they engineers or artists? What is the extent of their liability in collecting and reporting financial information? Understanding the jobs of accountants is further complicated both by wildly differing public perceptions of their roles and by changing technologies and service markets that have had profound effects on what accountants are able to do and what is expected of them.

Role ambiguity is particularly true for auditors who perform the "best known function of the accountant"--the audit or the attest function (Porter & Burton, 1971, p. 4). Although auditors are contractually obligated to represent their "clients," they are legally obligated to objectively and independently apply a set of technical criteria and produce a report that reflects accurately the client's financial situation, even if that situation reflects poorly on them. Relying almost completely on the information provided by their clients, the auditor is not only responsible to the client for the document that they produce but to the public at large who uses the information presented in their documentation for a variety of investment decisions. Auditors must, therefore, be cognizant of the private, corporate interests of their clients while protecting the public's interests.

Given a "plethora of civil liability and criminal lawsuits against CPA firms" that emerged as a result of accountants' often conflicting roles, the accounting community has been quick to realize that their duties entail more than technical financial reporting (Olson, 1982, p. 15). [5] The public, often vacillating between over- and underestimating the depth and breadth of a profession whose services only begin with financial reporting, created a dubious role for the auditor. [6] The auditor is expected to report objectively what is often either subjective or incomplete data--"reading between the lines" to discover the entire story behind a client's disclosure of the facts. As a spokesman for Arthur Young stated in the early 1900s, "What you (the client) have asked us for is not an accountant's report, but our business judgment on the entire business situation" (Edwards, 1960, p. 96). Often the public has insisted that the profession entail no more than bookkeeping (Belkaoui, 1985; Edwards, 1960). While in other instances, observers claim that "an accountant is paid for his judgment, not for his technical abilities" (Zug, 1951, p. 177). Indeed, the accountant's job contains both science and art; it includes not only reporting but synthesizing and offering unbiased judgments and opinions on financial information (Belkaoui, 1985).

At many points in accounting's history, standards and standards-setting bodies have been used to define the ambiguous role of the accountant. Realizing that the judgment required in accounting work can often obstruct objectivity and independence, aspects that are vital in accounting activities, standards-setters have sought to develop a solid industry-driven infrastructure that would place boundaries upon public expectations and guide professional behavior. Indeed, over 100 years ago, the British auditors [7] who recruited and trained the first U.S. bookkeepers and accountants encouraged the establishment of the first professional association in the United States, the American Association of Public Accountants (AAPA), to create a professional identity and to guide professional development. Displeased with U.S. accountants that they found to be "competent `keepers of accounts' . . . (with) . . . diffuse practices (and) . . . little experience in giving opinions on financial data" (Chenok, 1988, p. 9), their British counterparts encouraged U.S. accountants to create a CPA title. The title was officially created in New York in 1887 as a way to differentiate the profession from the more technical "non-profession" of bookkeeping. The AAPA was given the responsibility to promote accountants as professionals who not only report factual information but also provide judgments based upon their technical reporting duties.

Clarification of roles and responsibilities has been the impetus for the skill standards developed in many of the industries involved in the current skill standards movement, especially in service-oriented professions or occupations. For example, the automotive industry developed an extensive set of standards in the 1980s for their technicians. These standards, developed under the auspices of the National Automotive Technicians Education Foundation (NATEF), were initially established to assure quality or Automotive Service Excellence (ASE) so consumers would feel confident and could expect comparable service throughout the country and across dealerships. Automotive standards have been further refined in one of the 22 pilot projects funded by the U.S. Departments of Labor and Education to highlight the range and depth of worker skills required in the industry (NATEF, 1995). [8] One of the three items [9] developed by the National Council of Teachers of Mathematics (NCTM) (1991) offers professional standards or guidelines for teachers to use as they implement the new mathematical standards in their classroom. These standards describe the changes that must take place in the classroom if teachers are to effectively teach mathematics in an applied fashion that focuses more on investigation and problem solving and less on abstract concepts and rote memorization. They require teachers to share the burden of learning with their students. The standards developed by NATEF and NCTM are often used as exemplars in the standards movement. They make the point that standards can in some way codify work roles and establish a range of acceptable outcomes of performance that will increase consumer understanding and, therefore, confidence.

Judgment is perhaps one of the most difficult and important job functions to capture in standards--a difficulty that has emerged in accounting and will most likely emerge for standards-setters in all occupations and industries as organizations require more non-routine activities from their employees. Brown, Collins, and Thornton (1993) attempt to clarify the role of accountants by focusing on the types of judgment they are required to exercise rather than on the technical skills they must acquire. He classified an accountant's judgment as the following:

These types of judgments have become increasingly important for accountants over the past decade as technological advancements and complex business markets have further expanded their roles and responsibilities. Software programs available to most business organizations can now perform data collection and certain routine aspects of financial analysis--activities once performed only by accountants. Technology has forced accountants to broaden their scope of services and advise and direct client activities using data that the client can now collect and report. This broadening of accounting services moves in tandem with the need for more and better financial reporting mechanisms that have resulted from increasingly complex business environments. Before the growth, and ultimate collapse, of the stock market in the 1920s and early 1930s, audits and the pursuant financial reports were mainly a formality used most frequently by those inside organizations. [10] As corporations merged and grew, financial data became more difficult to decipher and the public became more reliant upon the outcomes of the auditor's labors to make their investment decisions.

Thus, historical and contemporary conditions have solidly grounded the auditor in an advisory role. Advising or consulting requires accountants to have a firm command of technical skills as well as the ability to apply traditional academic knowledge and utilize generic, employability skills [11] such as problem solving and teamwork to unique and often complicated situations. This is the common conception of professional responsibility, a conception that the accounting community has sought to institutionalize for the past century by mirroring the professional models found in medicine and law and establishing similar standards and education and examination processes. As the accounting industry has become less technical and more advisory, accounting standards-setters have grown more committed to increasing the use of educational credentials and national examination as prerequisites for professional practice.

Similarly, more advisory-type, "professional" activities and training are now being demanded of many nonprofessionals in high-performance work organizations (see Bailey & Merritt, 1995, for a detailed discussion of changing workplace and skill demands). Current and future workers must meet increasing skill and education requirements, work in more demanding and autonomous roles, and continue to update their skills as technology increases and the work organization changes. Actions taken by the NSSB support the idea of broadening and legitimizing the role of workers to allow them to function more effectively in high-performance workplaces. Instead of the traditional, narrowly defined industries and occupations of the Dictionary of Occupational Titles (DOT) and the Standard Industry Classification (SIC), the NSSB has established 16 broad economic sectors or clusters to guide standards development. [12] In addition, the NSSB has proposed a standards framework that stresses broader occupational classifications. As opposed to the traditional model that merely lists workers' immediate skills and duties, the NSSB recommends that future standards include the functions that workers provide in the organization, the roles workers assume as decisionmakers, and workers' contributions as team players. They also place more importance on broad-based, service-oriented duties to customers and to the organization. Developing skill standards in this manner sends a clear message that workers can and should become more self-directed professionals and not rely completely on management for direction and guidance, as the traditional assembly line model suggests. Accounting provides excellent examples of these trends as the industry has grown to embrace a more holistic function for accountants.

Efforts to obtain a broader role for accountants have forced the profession to re-examine the relationship between the types of skills that accountants use and need. The profession has attempted to establish, in school curricula and through examination questions and formats, a more realistic representation of the technical, academic, and real-world skills that the profession requires. Technical and broad-based ethical standards have been established by myriad bodies inside and outside of the profession to guide professional activities, better define accounting duties for the general public, shield professionals from excessive liability, and avoid excessive government regulation. Generally Accepted Accounting Principles (GAAP), Accounting Series Releases (ASR), and various other public documents guide accountants' decisions and duties. Academic standards or core bodies of knowledge for accountants have been developed as a vehicle to structure the college curricula and justify increasing educational requirements. Academic standards, in many cases, include traditional academic and accounting subjects as well as business, humanities, and social science subjects to allow the accountant to become more of a generalist and serve the client in a more expanded capacity than strict technical skills would permit.

Investigating the triumphs and pitfalls that the accounting community has experienced in establishing this broad base of standards has a considerable relevance for those working to establish standards in other industries and occupations. Such a discussion will focus on the issues of incorporating technical, academic, and real-world skill standards and how those standards, once developed, can keep pace with an increasingly complex and changing workplace. The NSSB, in its attempt to create a standards framework, has emphasized these three types of skills as necessary for successful workforce development. Thus far, the proposed framework "requires that the skill standards the Board endorses consist of statements of the occupational, academic, and work-related skills required to competently perform the work specified at the core, concentration, and specialist levels . . ." (NSSB statement released 4/16/97, p. 5). Even though all of the pilot projects sponsored by the U.S. Departments of Education and Labor in the early 1990s included these three types of standards, none have established a certification exam such as the CPA exam that tests an employee's ability to use his or her skills. Furthermore, the NSSB has yet to exert its role in the standards-setting process, concentrating at this point on fostering the development of voluntary partnerships in the economic sectors or clusters they have established. These partnerships or coalitions comprised of employers, labor, educators, and community-based organizations will constitute a management structure that will guide the development of standards.

In the next section, the report will provide more background into the accounting profession by discussing the specialization that has occurred in the industry as a result of the demand for more diverse services. This section will be followed by a discussion of the mechanisms and processes that the accounting industry has used to establish and maintain the technical, academic, and real-world skill standards of accounting professionals.

The Evolving Content of Accounting:
Specialization, Standards, Education, and Certification

For the past century, the audit has been the mainstay of the accounting profession. Times have changed, however, and accountants have begun to capitalize on the fact that their intimate knowledge of a client's finances gives them a natural advantage in helping clients figure out how to improve their financial condition. The industry has looked for other ways to market accounting skills and services as well. [13] As AICPA Chair, Ronald Cohen, points out, the accounting community has been forced to "think beyond putting the rubber stamp of approval on stale information" and supply forward-looking information (Von Brachel, 1995, p. 65). The goal is to ensure that CPAs continue to be necessary to their client's business, establish new services for clients and management such as business consulting and specialization, offer long-range research and analysis, take on more responsibilities, seek out opportunities to serve clients, and speak out on public issues. As a result, specialized accounting services and consulting have grown.

Efforts to develop management consulting services in accounting are not new. They have been underway since 1957 when the American Institute of Accounting (AIA) began focusing on the potential for accountants to perform additional services for their corporate clients. Even earlier, in 1942, Arthur Andersen, one of the country's largest accounting firms, formed its first management information consulting division called administrative accounting. In the fall of 1994, the AICPA appointed a Special Committee on Assurance Services (SCAS) to "reinvigorate the audit function and stake out new economic territory for the CPA profession" by transforming the audit into a "value-added service worth a premium price" (Pallais, 1995, p. 14). The Committee will emphasize auditor competencies such as independence and objectivity that the marketplace appears to value. A 1995 survey of managing partners and partners at CPA firms indicate that 88% of accountants feel that their firm's future requires either an industry or functional specialization ("Specialization Is Key to CPA Firms' Success," 1995).

Those that support specialization and the expansion auditor services point out that these services are a natural extension of the audit and can pay real dividends for clients. Indeed, the methods used by accountants are now being used in a wide variety of fields to service a wide range of clients. Examples offered by Berton (1996) include the following:

A new auditing service offered by KPMG Peat Marwick--the "business measurement process" (BMP)--provides another example of new accounting activities. The process, performed in conjuncture with regular audits, examines a company's annual financial results, including inventories and costs and revenue sources, to see if they meet generally accepted auditing standards and checks internal control systems to see if they control fraud and waste. In addition, the process allows auditors to tell clients how they rate their industries--for example, which are their best suppliers and which distribution channels are the quickest. The process includes interviews and fieldwork (Berton, 1996).

Responding to these changes, accountants are now developing new and unique areas of specialization, which in turn require new forms of education and certification. Areas such as environmental and forensic accounting [14] allow accountants to become full service providers to their clients thus creating a new "consultant track" (AICPA, 1997). In order to stay active with future directions for accounting, AICPA Chair Cohen recognizes that "now more than ever, [the AICPA] must take on the responsibility to raise the level of CPAs skills, both in public and in industry, to create a value-added profession" (Von Brachel, 1995, p. 64). The AICPA has developed certifications for Personal Financial Specialist (PFS) and Chartered Financial Analyst (ChFA) to deal with increasing demands in the user community for consulting and segmented and comprehensive planning (Chesser, Moore, & Ghee, 1995). These certifications, controlled and promoted by the AICPA, enforce "the idea of a natural relationship between CPAs and financial planning" (p. 100). Likewise, the AICPA is attempting to compete with certifications such as Certified Financial Planner (CFP) and Chartered Financial Consultant (ChFC) offered in the financial community. The six-hour PFS exam, one of six requirements for certification, [15] is given in 250 U.S. sites and was held by over 1,200 CPAs as of May 1995 ("PFS Test Scheduled for September," 1995).

The proliferation of consulting services has made it clear to the standards-setting community that it is impossible to establish standards for every situation that may present itself to an auditor in a complex business environment. The complexity of the accounting environment has led some to conclude that accounting actually does allow for standards but that they are more like conventions that serve as guidelines for practice (Beresford, 1995). Conventions either become widely accepted and, therefore, used or get replaced. Thus, the term Generally Accepted Accounting Principles (GAAP) is applied aptly to the body of rules and procedures formulated on the basis of experience, reason, custom, usage, and practical necessity that define good accounting practice (Belkaoui, 1982).

Various industries in the current skill standards movement seem to appreciate the need to develop conventions rather than standards for their workers and are opting for a system that stresses good practice over an isolated list of skills and knowledge. Industries such as biotechnology, hospitality and tourism, and electronics have developed standards that describe the work in its workplace context rather than produce an abstract list of required skills. In their most recent attempts, these industries framed their standards around employee roles and responsibilities. The biotechnology standards developed 32 scenarios that include a routine situation and a pursuant problem. The employee is asked to demonstrate his competence and the accompanying knowledge and skills by handling the situation that is presented in the scenario (Education Development Center, 1995). Hospitality standards use snapshots of a worker's duties to illustrate required skills and the workplace dynamic in which the skills will be used (Council on Hotel, Restaurant, and Institutional Education, 1995). The electronic standards developed by the American Electronics Association (AEA) (1994) are structured around key purposes and critical functions of occupational areas or clusters of related jobs. A key purpose resembles a corporate mission statement that summarizes the bottom-line goal of an occupational area; critical functions indicate what must be done to achieve the key purpose. All of these standards are requiring workers to combine a variety of skills and handle the whole of an activity, not simply the individual parts as a list of "standards" would imply. The NSSB has directed the voluntary partnerships to describe work and develop standards for basic certificates in terms of critical work functions. Critical functions, as originally developed by the AEA, are "major chunks of work that must be performed and which, taken together, constitute the critical or principal responsibilities of the individuals involved . . . (not) a list of all the tasks required to perform the critical function" (NSSB, 1996).

Describing work and the skills that work requires in terms of critical functions and scenarios represents a drastic break from previous views of work and potential problems for those that are developing standards for the new workforce. This is especially true for the work performed by nonprofessional workers that was previously defined as a series of tasks directed by a supervisor or manager. Although accountants have always been given a certain amount of autonomy that was not offered to nonprofessional workers, the broadening and diversification of accounting services has created difficulties for accounting organizations that are similar to those that promise to arise for today's trade associations. The increase in specialized accounting services created a precarious role for organizations such as the Financial Accounting Standards Board (FASB) and the AICPA. These organizations were established under the premise that there was some body of activity called "accounting" that could be governed and controlled in a centralized fashion. Indeed, the "profession's long-standing view was that a certified public accountant is competent to engage in all aspects of public accounting practice and that formal categories of specialization, therefore, are unnecessary" (Olson, 1982, pp. 191-192). Members of the AICPA fought to maintain a narrow view of accounting that they felt would preserve the pure nature of accounting services. In turn, the industry's professional associations hampered the development of specialized fields that threatened to bring more outsiders into the accounting environment and broaden the responsibilities of accountants (see Olson, 1982 for a detailed discussion of the AICPA's fight to exclude consultants from their membership and certification processes).

The new, complicated environment of proliferated services and skills has confused a firmly established standards-setting process. Indeed, the current head of the FASB, accounting's official standards-setting body, cites the constant "balancing act" that his organization must perform. The FASB must ensure that they are working on the right issues, weigh input from an ever-increasing number of constituency groups, and endeavor to reach answers that are as relevant and practical as possible (Beresford, 1993, pp. 70-72).

At the same time that FASB is confronted with increasing practical concerns that require timely answers, they are being criticized for their delay in producing a conceptual framework that will broadly govern accounting. A responsibility of the FASB for over twenty years, the accounting community and government regulators believe that such a conceptual framework will be more applicable to an increasingly changing and specialized accounting environment than a static set of technical standards or principles. In producing such a conceptual framework for standards for entry-level workers, the NSSB has also been criticized for taking too long to demonstrate tangible results.

The FASB and the NSSB have both proved that developing a conceptual framework is a slow and arduous process. They have also experienced similar difficulties in working toward an all-inclusive, exhaustive analysis to use as the basis for their framework (Delaney, Adler, Epstein, & Foran, 1996). Given a public policy community that is anxious for results, the NSSB has worked hard to allocate the necessary time to produce such a framework. In its attempt to get a thorough picture of the process, product, and potential outcomes, the NSSB commissioned papers, held public forums, and brought in experts to analyze standards, work, work roles, assessments, and certifications. Beresford (1993) points out that the lag time between the need for standards and the time it takes to develop them is something that people do not realize or appreciate. When people fail to get immediate direction, they move on to the next dilemma, and, therefore, a conceptual framework fails to be produced. He also states that ". . . agenda setting is the single most important decision that we make at the FASB. Yet, for all the care that goes into this process, it may be one of our least understood and least appreciated activities"
(p. 70). Clearly, the issues faced in the accounting standards-setting community for nearly 100 years are of extreme importance to the NSSB as it enters a time when educators, employers, and policymakers are clamoring for evidence of the NSSB's work. Although the FASB has failed to do so, it is imperative for the NSSB to prove to its many constituency groups that intangible research efforts as well as work in developing partnerships and coalitions is necessary for the future development and success of standards.

Given the proper foundation that comes from coalition building, research, and communication, a conceptual framework will allow an industry to look broadly at the activities it pursues and help it position itself for future changes. A conceptual framework in the accounting profession is intended to place boundaries around accounting activities, to determine whether the specific financial reporting decisions made by accountants yield benefits that are sufficient to compensate for their costs. Unfortunately, as Beresford (1993) states, the benefits and costs of decisions do not affect each constituent in the same proportions, and it is difficult to obtain objective and reliable information on which to base an analysis. The NSSB will, undoubtedly, face similar difficulties as it creates a framework or guide for industries to produce occupational standards. Is it possible to produce a conceptual framework that the NSSB can endorse that will meet the needs of all industries? Clearly, the FASB has tried for twenty years, without success, to produce such a framework for only one industry.

In addition to complicating the standards-setting process, the proliferation of specialties raised concerns in the accounting community about the credibility of an accountant's professional credentials. Accountants worried that the more business-like (as opposed to technical) accounting activities of management consulting and the like were perceived the more the public's faith in the independence and objectivity of accountants would be threatened. In the beginning, accounting's professional associations avoided this problem. Professional organizations and societies not associated with accounting were given complete latitude to develop the formal professional designations, examinations, and education/experience requirements for the new specialty areas. Groups such as the Association of Government Accountants (AGA), the Financial Executives Institute (FEI), the Tax Executives Institute (TEI), and the Institute of Internal Auditors (IIA) had a strong presence in consulting and specialty services.

The level of outside involvement in accounting-related services, however, led to a series of educational dilemmas for the accounting community. The Commission on Standards of Education and Experience (CSEE) (AICPA, 1956) [16] was forced to grapple with the timing of specialized education and determine whether young CPAs should begin training in the highly developed specialties or in general practice activities that will provide the background to absorb the further specialized experience and training. In 1977, the AICPA's Board on Standards for Schools of Professional Accountancy felt it necessary to deal with the question of accounting education--that is, whether the education should differ for different career paths. As recalled by McGee (1987), the Standards Board "answered the question (of specialty education) safely, by stating that a single set of standards was equally relevant for all accounting career paths" (p. 37). Specialization, it was determined, would be developed after the common body of knowledge had been acquired. The outside organizations that had been created to handle specialty areas would not be threatened.

As the accounting community hesitated to confront and control specialization of accounting and accounting-related services, one issue became particularly troublesome. How can the accounting establishment limit and control organizations, inside and outside the accounting community, that establish their own training and certification for consultants? Arthur Andersen (1997), for example, has been privately training its staff to perform consulting services for at least twenty years. The corporation trains its staff in accounting procedures as well as in the client's businesses. Their training "focuses on the client's competition, products, services, key management and business issues, government regulations, systems, success factors, technology trends and more" so they can anticipate change, prepare for it, and help their clients manage it. As will be discussed in the section on academic standards, it is not surprising that private companies felt the need for additional training given the fact that the formal education community has been slow in embracing many of the new trends in accounting. Most college and university accounting programs focus on traditional, narrowly defined accounting tasks, rules, and methods. The academic disconnection from the corporate environment has forced many private companies to act on their own as training providers for their employees. One reason for this disconnection may be the fact that the accounting standards-setting community has failed to create a strong set of guidelines for training and performance in these new roles.

Clearly, the accounting industry has failed to create the sort of seamless system of workforce preparation that the NSSB and others involved in current skill standards initiatives hope to establish. Employers feel that college graduates in accounting arrive in the job market without the proper skills to function in the high-performance workplace--skills that the school-to-work initiative and applied academic reforms are promoting. Instead, many students have a strong technical background with little experience connecting broader business issues to the technical aspects of accounting services. The NSSB (1996) has attempted to eliminate this problem by proposing that basic certificates function to certify the core knowledge and skills of workers as well as their concentration knowledge and skills. [17] Specialty skills and knowledge follow the achievement of these basic skills and form the most detailed components that target particular jobs and needs of specialized firms. But how will the NSSB respond when they are faced with organizations such as Arthur Andersen who will most likely fight any changes to their firmly established systems of training? Unlike the accounting community that has the AICPA as an organization that can develop certification mechanisms to compete with those of the non-industry sanctioned organizations, the NSSB is reliant on these organizations for their success. Not only will the NSSB have to attain consensus on and support for their framework for training and certification, they will have to propose an educational infrastructure that can accommodate the skills requirements they are promoting--an infrastructure that might be different from what is now established by industry. The following sections will focus on accounting standards and the issues that have arisen in the development of technical, academic, and real-world skill standards.

[5] See Chapter 2 of Olson (1982) for a brief synopsis of the litigation against auditors in the 1960s and 1970s and its impact on professional standards and the profession's ability to be self-regulating.

[6] In his presentation of accountants as business advisors, Grollman (1986) points out the array of business functions that accountants "have always served" (p. 3). Such activities include accounting systems, inventory control systems, electronic data processing, tax and estate planning, budgeting, and financial control and reporting systems.

[7] British auditors came to the United States after realizing professional status as chartered accountants in their homeland. See Edwards (1960) for a description of the professional legacy that was handed to U.S. accountants from their British counterparts.

[8] See Bailey and Merritt (1995) for an extensive analysis of the 22 industry-based skill standards projects.

[9] The three-part set of mathematics standards developed by the National Council of Teachers of Mathematics is comprised of Curriculum and Evaluation Standards for School Mathematics (March 1989); Professional Standards for Teaching Mathematics (March 1991); and Assessment Standards for School Mathematics (May 1995).

[10] This was one of the most important events in the establishment of management accounting as an accounting specialization requiring public accountants and auditors to assume more holistic responsibilities to their corporate clients.

[11] Generic, employability, or SCANS (named for the Secretary's Commission on Necessary Skills in the Workforce) skills will be discussed in more detail later in this report.

[12] The 16 economic sectors that the NSSB has developed are agricultural production and natural resource management; mining and extraction operations; construction operations; manufacturing, installation, and repair; energy and utilities operations; transportation operations; communications; wholesale/retail sales; hospitality and tourism services; financial services; health and social services; education and training services; public administration, legal and protective services; business and administrative services; property management and building maintenance services; and research, development, and technical services.

[13] The industry's interest in new service areas is, perhaps, predicated on occupational data that shows no growth in auditing. Nevertheless, in 1994, the U.S. Department of Labor's Bureau of Labor Statistics predicted that accounting would be one of the ten fastest growing industries during the next ten years. This growth can most likely be explained by auditing's close connection with consulting and specialty services that have recently experienced exponential growth as accounting services have expanded to cater to a more complex and demanding business community. For example, 25% of total combined revenues from Coopers and Lybrand LLP and Price Waterhouse (now merging) in fiscal year 1996 came from consulting (Burton, 1997). Arthur Andersen has created a two business unit infrastructure for its worldwide operations consisting of Andersen Consulting and Arthur Andersen. In 1996, $4.7 billion of Andersen Worldwide's $9.5 billion in revenues came from consulting (Arthur Andersen on the internet, 1997).

[14] Forensic accounting, investigative accounting, or fraud auditing is one of the hot growth areas for CPAs in public accounting. The area involves anything from setting up preventative systems to ensure compliance and avoid future claims and disputes, to handling the claims and disputes once they are made. It also allows accountants to look beyond the face value of accounting records and search for evidence of criminal conduct or the determination or rebuttal of claimed damages. Investigative accountants are also being used as consultants to advise companies on actions to take to remain solvent or declare bankruptcy.

[15] Requirements for the PFS certificate include a valid CPA certificate, good standing as a AICPA member, at least 250 hours per year of PFS practice experience for each of three years prior to the exam, statement of intent to comply with re-accreditation requirements (72 hours of CPA in financial planning every three years and completion of internal review questionnaire), and six references to substantiate PFS work experience ("PFS Test Scheduled for September," 1995)

[16] The American Institute of Accountants (AIA) first established the CSEE in the early 1950s. It was comprised of practitioners and members of the AIA, members of the various state accountancy boards and state boards of examiners, accounting teachers, and educational administrators.

[17] Core skills and knowledge, as stated by the NSSB, are those common to and essential for an entire, broad-based economic sector. Concentration knowledge and skills cover a broad area within each economic sector to be more targeted than the core level but less specific than the specialty level (NSSB, 1996).

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