Date: August 11, 2004
To: Mr. Barry Melancon, President and CEO of AICPA
Mr. David Costello, President and CEO of NASBA
From: Randy Howard, Emeritus Professor of Accounting, Montana State University-Billings
CC: Dr. Irvin Gleim, President, Gleim Publications,
Mr. Kotaro Anjo, President, ANJO International
Re: Recent Developments – Need for Administering CPA Examination Outside the U.S.
Attachments: Open Letter dated March 6, 2002
Article in the CPA Journal, Dec. 2001 issue

Dear President Melancon and President Costello,

Recent world events have increased the importance, and potential benefits, of administering the CPA examination in other countries. Thus, I respectfully reiterate my request that NASBA and the AICPA take immediate action to begin administering the U.S. CPA examination outside the U.S. This is an idea whose time has come, which will benefit the U.S. accounting profession, NASBA, the AICPA, American companies doing business overseas, and thousands of international CPA candidates each year. In addition, administering the CPA exam in other countries will aid the efforts of homeland security by the U.S. Immigration Service and the U.S. Customs Office.

It has been a little over two years since my previous letter. In a separate mailing I will forward a copy of my letter dated March 6, 2002 and the related article in the December 2001 CPA Journal so I won’t repeat the reasons for action described in those documents. Shown below are recent developments that further exacerbate the need for action.


Events around the world since March of 2002 call out to NASBA and the AICPA to take action, including:

1. China: China is changing its view on accounting standards. Unfortunately, China is beginning to focus on International Accounting Standards rather than U.S. accounting standards. That has been the risk from the beginning, that while most countries have looked to U.S. accounting as the gold standard, with the consequent taking of the U.S. CPA examination by candidates from around the world, this can change in a heartbeat. International candidates are experiencing greater costs and difficulties to take the U.S. CPA examination. China is particularly important because:
  "" China has 20% of the world’s population.
  "" China is the world’s fastest growing economy.
  "" Chinese visa applicants face an insurmountable hurdle trying to get a visa to the U.S.
2. Homeland Security: Homeland security efforts will benefit from administering the CPA examination to international candidates in other countries, rather than annually having 7,000 – 10,000 people travel to the U.S. to take the CPA examination. Probably none of the people entering the U.S. to take the CPA examination are any type of security threat. However, the man-hours spent handling their visa applications, as well as clearing them through Immigration and Customs upon entering the U.S., could be spent more effectively on pressing matters of national security.
3. Increased Visa Restrictions: Homeland security actions have made it much more difficult, if not impossible, for citizens of many countries around the world to obtain a USA visa. As a result, some candidates, who in the past would have experienced few problems with a visa, now are unable to obtain a visa.
4. Declining Numbers of Candidates: The number of CPA candidates has been declining and has dropped considerably at the onset of computerized testing. Administering the CPA exam in other countries to would dramatically increase the number of international candidates. For example, President Kotaro Anjo of ANJO International in Japan estimates that the number of Japanese candidates would more than double if the CPA exam were administered in Japan.   
5. Cost to Candidates: Declining numbers can only increase the cost-per-candidate to administer the CPA exam. In contrast, administering the CPA exam outside the U.S. will increase the total number of candidates and correspondingly decrease the cost-per-candidate. Monies no longer paid to airlines and hotels will benefit NASBA, the State Boards of Accountancy, and U.S. candidates.

For example, assume that administering the CPA exam outside the U.S. quadruples the number of international candidates to 40,000 individuals and that travel costs average $2,000 per person. Annual travel costs of $80,000,000 (40,000 x $2,000) will be avoided by administering the CPA exam outside the U.S. Paying an additional fee of $1,000 for the right to sit for the CPA exam in one’s own country will still leave an international candidate $1,000 ahead (plus time and money saved by reduced travel time).  International candidates not convinced of the cost-benefit of paying the additional $1,000 administrative fee will be free to travel to the U.S.

NASBA and the State Boards of Accountancy could annually have $40,000,000 of additional fees (40,000 x $1,000) to cover costs for administering the CPA exam outside the U.S., balancing their budgets, and reducing the cost-per-candidate to U.S. candidates.

6. Computer-Based Testing: The successful launching of the computer-based CPA exam in April 2004 has been great for the accounting profession. However, the fact that Prometric has testing centers worldwide calls out for utilizing some of those sites outside the USA to make life easier for international candidates. Imagine the frustration an international candidate feels when passing a Prometric testing center in his hometown on the way to the airport to travel to another country to sit down at a computer at a similar Prometric site in the USA to take the CPA exam.

Also, the change to CBT has created an unintentional bias against international candidates.    The extraordinary cost of traveling to the USA to take the CPA exam makes it much more difficult to sit just for one section of the CPA exam, so international candidates are more pressed to prepare for multiple sections at a time.

Open Letter to the AICPA and NASBA Website 

I have continued receiving messages from interested people and organizations throughout the world, although I have done nothing to encourage people to visit my website and add their names to the “Open Letter to the AICPA and NASBA”. The number of countries has doubled, from 17 to 35, since 2002. Most people have written comments and/or suggestions. You are welcome to review their comments if you wish. Here is a synopsis of the people who have requested that their names be added to the “Open Letter”:
"" 233 individuals and organizations
"" From 35 different countries, including every continent except Antarctica:
South Korea
South Africa
West Indies
Hong Kong
New Zealand
Saudi Arabia
United Arab Emirate
United Kingdom

I respectfully request that you consider the information in this letter, along with your sense of fairness to international candidates, and your concern for the American accounting profession, to take immediate action to begin administering the CPA examination in other countries.


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