Academic journal article Journal of Accountancy

NASBA Annual Meeting: Regulators Take Proactive Stand

Academic journal article Journal of Accountancy

NASBA Annual Meeting: Regulators Take Proactive Stand

Article excerpt

"If state boards are to continue to be important in the regulatory fabric, we must seek to intercede at unprecedented new levels in determining entry into the profession and performance of our licensees," said Nathan T. Garrett, outgoing president of the National Association of State Boards of Accountancy (NASBA) at the association's 86th annual meeting in San Diego.

"We must assess the role of the state boards in a regulatory fabric in which are woven the federal government, the American Institute of CPAs, the National Society of Public Accountants (NSPA) and the educators," Garrett said.

At the meeting, NASBA's board of directors endorsed a more active role for the organization in creating regulations enforced by state accountancy boards. Toward this end, Garrett reported he had appointed committees to study topics such as tort reform and non-CPA ownership of CPA firms and to consider accelerating changes in the Uniform CPA Examination and restructuring NASBA's organization.

In the past year, NASBA representatives--while working cooperatively with the AICPA and NSPA--also increased their interaction with federal government agencies that formulate standards of accountants' performance, addressed negotiators for the General Agreement on Tariffs and Trade and met with representatives of the Canadian and Mexican accounting professions.

"We need to embrace change, and the change we embrace is for the benefit of the public and the practice of public accounting," said incoming president Noel P. Kirch, who will appoint additional committees to study the quality of licensees' work as it relates to public expectations and creating within NASBA a mechanism to facilitate multiple-state licensing.

Liability reform: divergences from the AICPA. G. William Tonkin, chairman of NASBA's legal liability task force, explained that recommendations for tort reform in a proposed task force position paper are similar to those suggested by the AICPA, except in two areas: privity of contract and relief from joint and several liability. (See "AICPA Announces Major Initiative to Strengthen Financial Reporting and Further Tort Reform Prospects," JofA, Aug.93, page 15.)

The NASBA task force recommended revising the privity rule to allow creditors or equity holders to sue for restitution in cases of auditor negligence. Moreover, proportionate, rather than joint and several, liability would be limited to those licensees who had established some form of surety. …

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