As industries go, the accounting industry is fairly well regulated. Employees (especially at larger firms) are expected to have a quality education, go through background checks before being hired, have annual performance reviews, etc. Needless to say big businesses have more to lose by hiring the wrong people than companies without an established reputation.
But, what if your business model is based upon offering as many tax returns as you can take from January 1st to April 15th (when your lease expires), or what if you are just establishing your business and need some extra help on the cheap. Businesses in these circumstances may be more inclined to cut some corners.
PTIN registration is the first step, in telling the IRS who is preparing returns within a firm. It is also very likely the first step in determining whom is at fault for faulty tax positions/ faulty tax preparation. It is also (thus far) the first step to try and make sure that anyone who is making significant tax positions on returns, is also receiving at least a minimal amount of continuing education on a yearly basis. In the near future, those whom are currently required to sign up for a PTIN would also have to pass a proficiency exam of some sort (unless these rules change).
This sounds all well and good, but many in the industry are crying foul. They want to know why individual people within a firm must register, pass an exam, and have continuing education if their work is reviewed by a signing partner, before the return is sent to the client. This is why oversight may change in the near future.
However, I look at it as a good first step. If your boss thinks you are qualified enough to put together substantial portions of a return, then you should be proficient enough to also pass an exam and have some limited amount of continuing education. Or in the more extreme cases, if you want to hang a sign in the window that says you are qualified to prepare tax returns, then you should have to prove that you are qualified before you can accept your first client.
Oh I forgot to mention, that the industry knows there are poor standards out there. That is why when you accept a new client,one of the first things you ask them for is the last three years of income tax returns. You are not only asking to get a intimate knowledge of the client, you also want to see how many mistakes, and what kind of mistakes their previous accountant made so that you might be able to get them a nice little refund as a bonus to signing on with your firm.