This letter endorses administering the Uniform U.S.
Certified Public Accounting Examination (CPA exam) in countries outside
the United States (U.S.) commencing in the year 2003 when the CPA exam
is scheduled to be offered in a computerized format.
Reasons For Offering the U.S. CPA Exam
Outside the U.S.
Currently, the CPA exam is administered only in the
U.S. Some of the State
Boards of Accountancy, who administer the exam, discourage international
candidates (non-U.S. residents/citizens) from taking the CPA exam.
However, many professional accountants in other countries wish to
take and pass the CPA exam to prove their knowledge of U.S. accounting
standards in order to enhance their marketability in their own countries.
Indeed, the world market place is currently pushing for the U.S.
CPA to be the globally accepted designation for professional
It is in the national public interest of the U.S.
to encourage professional accountants throughout the world to take and
pass the CPA exam. It will
improve accounting practices, promote U.S. leadership in international
commerce, facilitate international trade and finance, and help
underdeveloped nations to create efficient, market-based economies.
Population growth and technological advances in
transportation and communications have effectively made our world
smaller, and the global economy daily becomes more of a reality. One crucial aspect of globalization is the movement toward
global methods of communication.
What will be the financial language of the global
economy? Accounting has
long been recognized as the language of business, and the world will
need global accounting standards. The
widespread adoption of such standards will, in accordance with
well-established principles of economics, tend to promote more efficient
international operations and therefore freer trade by removing the
barriers created by competing accounting systems.
The role of the U.S. CPA exam in this context is
crucial. By opening the CPA
exam to candidates from abroad, the U.S. accounting profession will be
able to adapt to, guide, and benefit from these trends.
Market forces outside of the U.S. are pushing
strongly to make the U.S. CPA designation the global standard.
One effect of this trend is that, for the past few years, each
May and November CPA exam has attracted thousands of international
candidates. Currently, most
non-U.S. candidates come from countries in Asia (e.g., Japan and Korea)
and the Middle East (e.g., Saudi Arabia and Jordan).
These candidates must travel to one of the 54 U.S. jurisdictions
(50 states, D.C., Puerto Rico, Guam, and the Virgin Islands) to sit for
the U.S. CPA exam.
Having accountants from around the world become
experts in U.S. accounting standards will provide distinct benefits to
the U.S. One such benefit
is that U.S. companies operating in foreign countries, including large
accounting firms, will be able to hire residents who understand U.S.
accounting standards. Still
greater benefits will accrue to U.S. companies operating abroad when
local standards approximate U.S. standards.
Globalizing accounting standards will benefit both U.S. companies
operating in foreign markets as well as foreign companies in the U.S.
The CPA exam will also help determine what
standards become accepted internationally.
As the number of foreign CPAs increases, the likelihood that
international standard-setting bodies will adopt U.S. GAAP as their
reporting standards also increases.
On the other hand, if the CPA exam is not available to
foreign-educated accountants, they will become certified in other
systems of accounting, and the progress toward the adoption of a global
financial language similar to U.S. GAAP may be impeded.
By making the U.S. CPA exam available to candidates
outside the United States, the U.S. accounting profession will be taking
a leadership position in influencing global accounting standards.
Allowing accountants in other countries to take the U.S. CPA exam will
result in accountants throughout the world becoming experts on U.S.
accounting standards. This will increase the likelihood that global
accounting standards will tend to mirror the U.S. standards. As a direct
benefit, U.S. CPAs won't be tasked with learning and adapting to
new and different standards.
For international candidates wishing to take the
U.S. CPA exam, current hardships created by having to travel to the U.S.
to take the exam have significantly restricted the number of
international candidates able to take it. More importantly, the failure
to administer the CPA exam in other countries is generating activities
by other organizations to offer more attractive alternatives to
international candidates than the U.S. CPA exam.
For example, Japan has begun offering the
Bookkeeping and Accounting Test for International Communication (BATIC).
The exam allows candidates to demonstrate their knowledge of U.S.
financial accounting standards. Approximately 1,500 candidates took the
BATIC exam the first time it was offered in June 2001, and the number of
candidates increased to approximately 2,500 for the second offering in
December 2001. The AICPA and NASBA can expect to see this type of
activity expand exponentially, on a global scale, unless actions are
taken to make taking the U.S. CPA exam less onerous for international
Maintaining the status quo is not an option. If actions are not taken
to facilitate international candidates wishing to take the U.S. CPA
exam, the number of international candidates will decline. Such a
decline would only serve to exacerbate the inevitable acceleration of
declining applications to sit for the CPA exam.
Administering the U.S. CPA exam in other countries to international
candidates can serve as a significant revenue stream to both the AICPA
and NASBA. The added revenues can assist both of your organizations in
providing critical services to the accounting profession. In addition, a
reduced number of international candidates would add to the financial
burden for future U.S. candidates since the increased fixed costs of
administering the new computerized exam would have to be absorbed by a
smaller overall number of CPA candidates. In contrast, an increased
number of international candidates could help alleviate the financial
burden to future CPA candidates.
and NASBA have the opportunity to make the U.S. CPA certification the accepted
global designation for accountants world wide.
If the U.S. accounting profession fails to capitalize on the
demand for a globally-recognized accounting certification, others will
seize the opportunity.