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If you haven't learned how to identify customers' information needs, you're not ready to provide new assurance services. Why? Because those assurance services that meet customers' needs will sell; those that do not will fail. Traditional audit services cannot be expected to expand your practice; they are no longer growth areas. Therefore, the profession has no alternative but to fashion new services that bridge customers' needs and CPA's competencies. However, no bridging can take place without understanding customers' needs. WHO ARE THE CUSTOMERS? The potential customers are people who use information to make decisions. They could be senior managers or other employees, members of corporate or not-for-profit boards, institutional investors, financial analysts, individuals investors, creditors, charitable donors and individuals who make decisions about matters such as selecting personal medical care or arranging care for elderly family members. Assurance services are defined as independent professional services that improve the quality of information, or its context, for decision makers. If the assurer does not improve the decision-making information, the service does not qualify as an assurance engagement. So the key criterion identifying the customer for an assurance services is that he or she is the party who can benefit from improved decision-making information. However, the customer is not necessarily the party who pays for the assurance service. For example, in a financial statement audit, the decision maker is the investor or creditor who uses the financial statements or, in the case of not-for-profits or governmental units, the decision maker is the donor or taxpayer. But it is the client who prepares the financial statements, deals with the auditor and pays the fee. Focusing on the customer is a fundamental business concern. The decision-making users of information create demand for assurance services; their needs dictate engagement possibilities. HOW TO IDENTIFY CUSTOMERS' ASSURANCE NEEDS The first requisite for CPAs is a customer-focused mindset. This includes not only understanding who the customer is but also making a commitment to learn the customer's information needs, being alert to all kinds of information that could illuminate those needs and constantly striving to learn more about them. Existing clients -- because of the established service relationship -- offer the best opportunity to learn more about their information needs in order to create a new service. In addition, because clients trust them, CPAs have a marketing advantage with their clients. CPAs can use three basis techniques to identify clients' information needs. They can ask them individually, take surveys and hold discussion groups. 1. Asking clients what they need can be a regular procedure. Good communications are always a plus, and clients appreciate learning how their accounting firms can help them. 2. A questionnaire delivered to a sample of clients with the objective of learning about them provides data helpful in making decisions about potential services. 3. A formal focus group, with a two-way mirror, a facilitator and videotapes, can be costly, but gathering some clients together to discuss service needs allows interaction and delivers more information than can be gained from a questionnaire. It also creates goodwill. The American Institute of CPAs special committee on assurance services created a questionnaire to learn clients' information needs, which was published in the July 1996 Journal of Accountancy (page 10) and is available at www.aicpa.org/assurance/scas/comstud/icn/index.htm. The special committee also interviewed a spectrum of decision makers to learn their needs for decision-making information. The interviews included members of corporate boards, investors, creditors, managers, regulators, members of government and university administrators. …
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