American Institute of CPAs®

CPA Firm Mobility Common Concerns During the Comment Period

Debbie LambertUniform Accountancy Act Committee

September 9, 2014

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Overview

Approximately 3 dozen comment letters received

• State Boards

• State CPA Societies

• CPA Firms

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Broad range of somewhat complex issues

Letter from UAA Co-chairs dated May 20, 2014 summarized issues and how the UAA Committee addressed them

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5 Common Themes

1. Potential insufficient information without registration/notification

2. Questions about enforcement

3. Inconsistency between states (e.g. compilations)

4. Concerns about insufficient information or study of the issue

5. Understanding the peer review protections

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Potential insufficient information without registration/notification

Concern of some State Boards

“Would they have sufficient information to regulate out-of-state firms if there is no registration/notification requirement?”

• No knowledge until a complaint is logged- Consistent with individual CPA mobility- Even with firm registration, complaints drive investigations of

potential wrongdoing

• Similar concerns when individual mobility was introduced- Subsequently issues have not emerged

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Potential insufficient information without registration/notification

NASBA’s Accountancy Licensee Database (ALD)

• Alerts Boards to the disciplinary history of CPAs

• This database could potentially be expanded to include information regarding firm discipline

No state that has firm mobility commented that they had insufficient info to fulfill their responsibilities and several wrote in support of the change to the UAA

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Questions about enforcement

Two pronged concern:

• Question of enforcement powers over an out-of-state firm that comes into jurisdiction

• What if the out-of-state firm’s home Board of Accountancy might not have the same support and oversight capacity

Currently in place: UAA Section 23(a)(3):  A Board can take any action against an out-of-state firm that it can take against its own licensees, short of revoking the out-of-state firm’s license

• A Board can bar a firm from practicing within their jurisdiction with or without CPA firm mobility

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Questions about enforcement

Enforcement powers will not be harmed by passage of CPA firm mobility

NASBA has offered to assist Boards with resources when constraints impact their ability to enforce mobility laws and regulations

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Inconsistency between states

Issue raised by Texas Board and Texas Society:  Under Texas definition of attest compilations must be performed by a CPA firm

• Compilations fall under the definition of attest in other states as well – but not under the UAA

UAA Sections 7(a)(2) and Section

23(a)(3) address the issue sufficiently• A mobility jurisdiction is able to enforce its

definition of “attest” requirements for out-of-state firms just as it would for in-state firms

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Inconsistency between states

Will require unique tailoring of the UAA language to conform to the specific statutes in certain jurisdictions

Potential expansion of CPAmobility.org

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Concerns about insufficient information or study of the issue

Some commenters – insufficient information/study on the issue of firm mobility

However:

• Several states have had firm mobility in place well over a decade and have not found barriers to regulating and protection the public

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Understanding the Peer Review Protections

(Covered in a separate presentation by AICPA Vice President, Jim Brackens)

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CPA Mobility and Board Revenue Streams

(To be covered in a separate presentation by AICPA Senior Manager, Suzanne Jolicoeur)

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Questions?