Academic journal article Journal of Accountancy

Accountancy Boards Target Reciprocity at Annual Meeting

Academic journal article Journal of Accountancy

Accountancy Boards Target Reciprocity at Annual Meeting

Article excerpt

Responding to the reciprocity concerns raised by the joint AICPA/NASBA committee on regulatory structure, the National Association of State Boards of Accountancy launched an initiative to help make the CPA license more transportable across state lines. NASBA's leaders urged the more than 250 attendees at the association's 89th annual meeting to look at the credentials of CPAs seeking reciprocal licenses with an eye to substantial equivalence. Even when there may be significant differences between states' requirements, if an individual licensee meets the requirements set out in the Uniform Accountancy Act (UAA), he or she should find it relatively easy to obtain a reciprocal license under a new rule being proposed for adoption by the state boards.

The state boards were asked to adopt the following rule, which had been approved in principle by the NASBA board of directors: "For purposes of reciprocity, an applicant having a valid unrevoked license to practice as a certified public accountant from any jurisdiction and who has obtained from NASBA verification of compliance with the Uniform Accountancy Act's CPA registration requirements shall be presumed to have qualifications substantially equivalent to this state's."

NASBA UAA committee chairman Gerald Burns encouraged meeting attendees to win support for the concept from their state boards, check with their legal counsel to see how it could be implemented and then adopt the rule. Members of his committee will meet with individual state boards to discuss how the rule can be put into practice. Burns explained the idea was to develop a "seamless approach" to reciprocity--to allow the boards to accept credentials from other jurisdictions without extensive checking requiring duplicate detailed applications from licensees.

Though coordinated action was called for, NASBA leaders made it clear that licensing and discipline would remain with the individual state boards. NASBA incoming chairman John M. Greene said, "The state boards own the CPA designation" He disagreed with the idea that some services performed by CPAs should not be regulated by the accountancy boards--"Shouldn't everything a CPA does be regulated at least to the extent of conduct and competency?"--and stressed the need for public confidence in all services rendered by a CPA.

"Most state boards regulate only attest now. However, the concept of 'acts discreditable' to the profession means these boards ultimately regulate all areas of a CPA's practice," Greene said. "This concept changes to fit the circumstances as market forces open new services for CPAs." Greene challenged the need for "creating a level playing field" since CPAs are not being hindered in the marketplace under the current system of accounting regulation.

CPAs must respond to market

"We are entering a decade of enormous and rapid change in accounting and assurance services," Ronnie Rudd, Outgoing NASBA chairman told the state board representatives meeting in San Antonio, Texas. "Unless NASBA and the AICPA respond rapidly, neither organization will be around in 10 to 20 years. That is our challenge."

Budd alluded to the future services identified by the American Institute of CPAs special committee on assurance services, the online electronic hookups that are bringing professionals across state lines and CPAs' use of the Internet for advertising. He underscored the need for the accountancy boards to develop effective strategies for addressing these areas.

Robert Mednick, chairman of the AICPA board of directors, presented some differing views to the regulators, urging them to rethink which areas require regulation and suggesting oversight is required only where the public interest is the greatest. Mednick had outlined his thoughts in "Licensure and Regulation of the Profession: A Time for Change," JofA, Mar.96, page 33.

"We need to find a way to differentiate between the credential and the license" Mednick said. …

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