Read Carolyn's article on Web Trust
By: Carolyn Sechler and Marlene Buffa
Web Trust?? Or Web Dis- Trust or look before you leap or whatever you like...
Let's face it, the way America does business is changing. The way the
world does business is changing. Consequently, our profession must be
in the forefront of this change in order to continue to succeed. We've all seen the "over the counter" software packages for tax returns, the latest databases
and countless other accounting systems available to consumers and
businesses. Where is our opportunity to support the do-it-yourselfer?
The information age lends itself to the hungry minds of our clients, and threatens to displace a CPA or accounting professional's role in the marketplace with easily accessed tools both on the Internet and in software. We need to find a way to keep our expertise just that, expertise. We still need to be the source of information for our clients and we need to become a foundation for total solutions.
Electronic commerce is not new. Companies and individuals that have been conducting business on the Internet for several years continue to be met with mixed feelings about the comfort-level of electronic transactions.
The AICPA has created "CPA Web Trust" to both reassure the consumer and to create another service which a CPA can offer his/her clients. The stripped down description of the process is as follows:
a website using a method of data transmission (credit card, personal information, etc.) is reviewed by a CPA, security and internal controls are reviewed and all is measured against standards spelled out by the AICPA. If the site meets certain criteria for security and credibility, then it is given a Web Trust "seal of approval."
"The CPA WebTrust criteria examines three broad principles:
- Business Practices Disclosures: The web site operator discloses its business practices for electronic commerce transactions and executes transactions in accordance with its disclosed business practices.
- Transaction Integrity: The web site operator maintains effective controls to ensure that customers' orders placed using electronic commerce are completed and billed as agreed.
- Information Protection: The web site operator maintains effective controls to ensure that private customer information is protected from uses not related to its business."
As with all new methods of evaluation, we have to look at the perceived value of the endorsement, the liability involved and the amount of actual business it will generate in the future.
What is the value of the endorsement? According to the AICPA, "the CPA WebTrust assurance service is the latest initiative undertaken by the AICPA and is designed to build consumer trust and confidence in electronic commerce by monitoring and evaluating Web business practices through the hundreds of thousands of AICPA member CPAs and their equivalents around the world."
Their research indicates that having a WebTrust logo on the site (assuming it wasn't copied from an authorized site and simply pasted into an unauthorized site by an unscrupulous site owner) will give the consumer more confidence about purchasing the goods and services on-line, making it more likely that the site will generate income for the owner.
But will it really? As noted above, what about the ability of anyone to "snitch" a graphic from any website and paste it into his own web page? There are limited ways to monitor this (VeriSign "spiders") this. A lofty endorsement can be quickly reduced to a meaningless captured graphic. Unfortunately, this may happen even more frequently as the WebTrust endorsement becomes a coveted business tool.
What is the liability? Given the rigid parameters the WebTrust requires for a true endorsement, the liability should be minimal. Reviewing business practice is normally a matter of judging standards and procedures. The Internet is 'a whole `nother ball game.' How can anyone guarantee that the company represented on-line will fulfill orders on time, not steal credit card numbers, or give away personal information? While it is true that that can be said of any company, but giving one's "WebTrust seal of approval" for the entire world to see, opens up more risk for the CPA.
What if a person "illegally" used the WebTrust logo on his website to lure potential customers, and actually bilked thousands, if not millions of dollars from trusting consumers? The user can claim that he/she only purchased through this website because it displayed the "seal of approval" from a CPA, when in fact, no such endorsement was given. While I am certainly not trained as a lawyer, I wonder, could the CPA or WebTrust itself be sued for damages and loss?
What power does the reviewing body or the CPA have over the actual HTML code of the website? Are you given the login and password to amend the site? Do you really want that power? If you have the login and password, you are now open to more liability - you now have access to the confidential information coming in to the site. Even though you would not use any of this for your advantage, the question of accessibility will always remain.
In interviewing a firm in Pennsylvania, ("Cyberseal") I learned that their choice was to distance themselves from the development of the site and only perform this assurance service. In fact, this is all there practice's entire niche. Joshua Twersky, CPA and president of Cyberseal feels this is an excellent service which will give he and his firm a competitive advantage in the marketplace. In asking what some of the weaknesses might be, besides the graphic pilfering that could occur, he feels it needs to be made clear this is not a 'plug and play' kind of service. The firm that pursues this should have a strong foundation in both technology in general, e-commerce and the Internet in specific.
Let's take a look at the actual business it will generate for your Firm. You now have another service to offer your clients! Great! What do you charge them? Is it a one-time shot, and will he go somewhere else when his quarterly review is due if you "flunked" him
the first time? What are the chances that he makes the changes you recommend you give your seal of approval, and he immediately reverts his site to its original content, knowing he will not be reviewed until 90 days hence? Chances are slim, but still possible that someone could want the endorsement that much - then again, he could just steal the logo and be done with it.
On a more positive note, if one is to proceed and support the development of this service in the belief that there will be added value for the customer, then it is time to jump in and participate in making this product clean, effective and bullet-proof. Training must be more than adequate and on-going. The WebTrust site must serve to create community among the CPA pioneers that have taken this leap. (In trying to contact a number of the CPAs listed on the site I received either no response or an indication that the address was incorrect or no longer valid-- how does this speak of credibility.)
Legitimate companies will appreciate the process and the endorsement. While electronic commerce is not new, is still is not embraced by even a minority of the businesses online. The AICPA hopes that using WebTrust will attract more businesses to doing on-line transactions.
Should your firm offer these services? Consider all the above concerns before deciding to send one of your top-notch techno-CPAs to the training.
Will offering the service bring your firm into the 21st century? Will NOT offering the service hinder the way you do
business? Is the risk really worth it? Perhaps, but only if you understand that like any new service you will have to be a committed contributor to it's ongoing refinement, improvement and promotion to the consumer.
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Last updated November 17, 1998
This information is made available for your non-commercial use. Carolyn
Sechler retains all copyrights to the text, graphics, and animations in these
pages. Feel free to use the material for your personal use. Please make
reference to the origin of any material that you have obtained from this
site. Furthermore, this material is purely INFORMATIONAL, and should
NOT be considered accounting advice or an accounting opinion expressed
by Carolyn Sechler for your specific conditions. Please consult a
professional before making any decisions based on this material.
Last updated November 29, 1998 :
Marlene Schwendler -
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