BY AMY HIGGINS
The Cincinnati Enquirer
Some have compared the Internet to the Wild West: loosely organized, with few laws and fewer lawmen. And as with any new frontier, the Internet is having a gold rush, one where more money is at stake than all the gold in them thar hills.
This year $22 billion worth of goods and services will be sold over the Internet, double the amount of 1997, according to Forrester Research Inc. in Boston. By 2002, that number is expected to reach $349 billion. About the only thing holding it back is lack of trust. Enter the American Institute of Certified Public Accountants, often thought of as among the most trustworthy professionals in America. Consider them the new sheriffs in town: The CPAs hope to tame the cyberspace frontier by offering to Web businesses a certification called CPA WebTrust.
"What we're trying to do with CPA WebTrust is raise the bar, so to speak, to make companies adhere to upfront, legitimate business practices," said Bob Findley, CPA with Fleming, Brockschmidt & Durkin PLL in Cincinnati.
The CPAs, however, are putting themselves into a corral with plenty of competition. Already there are at least nine programs certifying and verifying the legitimacy of Web businesses. They range from the little-known -- Web Assurance Bureau and Multicheck -- to the well-known Better Business Bureau.
The WebTrust and its counterparts are usually nothing more than a graphic (protected from copying and unauthorized use) placed on a Web site. Their presence is supposed to mean that the verifying organization has checked out the site and is meant to calm customers and ease their fears about buying goods and services online.
That just might work -- and it could be more efficient than anything the government could do, said Mozelle Thompson, commissioner of the Federal Trade Commission. Mr. Thompson has testified before Congress about Internet fraud and the need for some kind of online safeguards.
"This is an important time for electronic commerce," Mr. Thompson said. "Study after study has shown this: People who don't use it, their primary reason is concern about their privacy." The AICPA and its Canadian counterpart, the Canadian Institute of Chartered Accountants, worked together to form the WebTrust's criteria. A WebTrust seal on a site means:
The company has fully disclosed all of its business practices on the site.
The accountant has verified the credibility of the company and its transactions.
The company promises to ask customers' permission before disclosing any private information, such as address or phone number.
But if an accredited Web company violates these policies, the only remedy the AICPA guarantees is pulling its certification. In order for the seals to gain real pull, more business need to be covered and a stronger enforcement policy must be tested, the FTC's Mr. Thompson said.
"Then, we think customers will feel comfortable," he said. Steve Salter, BBB Online project director, said about 1,500 Internet-based companies are certified through the Better Business Bureau. He said his program is cheaper, but doesn't yet include the privacy safeguards of the CPA WebTrust.
Mr. Findley is one of the few accountants in the Tristate licensed by AICPA to offer the CPA WebTrust service. He gave the first-ever CPA WebTrust certification to Resource Marketing Inc., a Fort Thomas-based Internet advertising and service provider.
Resource Marketing president Christopher Swainhart said Findley started auditing his Web site at the end of 1997. The process takes about three months and costs about $5,000. Four updates a year will annually cost about $2,500. But it's well worth it, Mr. Swainhart said.
"It wasn't until we put up the WebTrust and the improvements the WebTrust program suggested ... that we saw a 20 percent increase in transactions over the Internet," Mr. Swainhart said.
Mr. Swainhart, whose company offers Internet service, Web hosting and advertising banner placement, said the biggest change since he started the program is the decrease in phone calls asking mundane questions.
"I used to get all kinds of e-mail or calls, a lot of them just looking for reassurance," he said. "Since I put up the WebTrust program, I've gotten no e-mail like that. All of the questions were answered in the (disclosure of) business practices.
"Now they don't ask questions, they just purchase."
