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September 27, 2023

#TBT: The XYZ Credential Was the CGMA of Its Day

I don't know about you but back in 2001, the last thing I cared about was the AICPA as I was too busy trying to squeeze the last bit of free-flowing money out of the spectacularly collapsed dot com bubble in San Francisco at the time. A large majority of you weren't paying attention to the accounting industry back then either, but the old timers here will be happy to chime in on this one I'm sure. Besides, you don't have to be a longtimer to remember this:

Under the AICPA plan, professionals who possess the XYZ credential will have specific integrative competencies, professional competencies, and cross-disciplinary knowledge. Integrative competencies represent the true differentiators of the XYZ professional and demonstrate the capacity to envision, strategize, conceptualize, and innovate. These competencies include creating and leveraging knowledge, systemic thinking, future focus, strategic thinking, innovation, conceptual skills, and a global perspective. Professional competencies are the enablers that allow the XYZ professional to be effective. These competencies include an entrepreneurial orientation, stakeholder focus, external focus, analytical prowess, organizational insight, networking and resourcing, recognized expertise, impactful communication, compelling influence, dedication to excellence, and lifelong learning. The XYZ professional must also have a solid knowledge base. This knowledge differs from knowledge required for other credentials in that it covers a much broader range of functional expertise. This cross-disciplinary knowledge covers accountancy, business law, corporate finance, human resources, information technology, marketing/sales, and operations. The knowledge required in each of these areas is not at the depth of a professional who works exclusively in the area; however, the XYZ must have a big picture understanding of specifically how a competency brings value in a business sense.

That's Jim Emerson of The Emerson Company in an editorial published in the Journal of Accountancy October 2001.

The XYZ credential is something of an urban legend; something so ridiculously comical it's hard to believe it actually happened. Well, almost happened.

Let's recall that there was a time current AICPA President and CEO Barry Melancon was "a fresh face" who could bring new direction to a "rudderless" AICPA:

Back in 1995 — back when Barry Melancon took over as the president and CEO of the American Institute of Certified Public Accountants — even current critics had kind words for the chief defender of the audit industry. Mitchell Freedman, one of the 22 founders of a new group called CPAs Reforming Our Profession, recalls being "avidly in support" of the rookie AICPA chief. "He was a fresh face with new ideas," Freedman remembers.

Melancon got off to a promising start. In the early days of his tenure at the 116-year old institute, the AICPA head eagerly pushed members to expand their professional horizons beyond mere auditing and tax consulting. As Allan Koltin, president of Practice Development Institute, recounts: "He advanced concepts with accountants about being more than bean counters."

It seemed like a smart move. At the time, auditing was fast becoming a loss leader for many accounting firms, and the computer had turned tax advice into a commodity business. Melancon, say industry-watchers, wanted bookkeepers to provide a much broader array of services. The goal? To turn accountants into strategic business advisers, some say.

Under Melancon's aegis, AICPA leaders pushed for a new, unregulated "XYZ" credential offered globally and focused on strategic issues. Along with such ambitions came an expanded notion of what the institute, which boasts 333,000 members, should actually be. "Until [Melancon] came to the AICPA they were a rudderless ship, with no vision, no direction," remembers Koltin. "Members viewed [the AICPA] as a way to get continuing education credit and life insurance."

Holy shit, Barry has been steering this ship for almost 20 years? Time to stage a coup and get a truly fresh face in there, guys, I have some serious doubts Barry's face was fresh even back in 1995.

"There is compelling data that suggests that there is a substantial population that is attracted to the idea [of XYZ] and find it appealing," said John Hunnicutt, AICPA senior vice president of public affairs in April of 2001.

When it was brought to vote, 62.7% of voting AICPA members shot it down. A 2/3rds majority was required. So yeah, there's your compelling data, folks.

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