Magazine article The CPA Journal

Championing Dynamic State Regulation: An Interview with David A. Costello

Magazine article The CPA Journal

Championing Dynamic State Regulation: An Interview with David A. Costello

Article excerpt

Invigorating a Proven Systm

David A. Costello is committed to making a century-old state licensing system effectively regulate a changing profession, Forging agreement to change among 54 boards of accountancy is no small task, but Costello, as president and CEO of the National Association of State Boards of Accountancy (NASBA)ItA, has assumed leadership in getting the boards to accept the third edition of the Uniform Accountancy Act (UAA). Striving to keep the system effective despite the challenges of electronic commerce, alternative practice structures, megamergers, and falling geographic constraints, Costello is faced with convincing state board members and legislatures that what is good for the public is also good for the profession.

Whereas critics have said that Costello works too closely with the MCPA, his promotion of substantial equivalency among states has held back the proponents of national licensure, If the current system can offer the ease of mobility licensees clamor for while continuing to protect the public interest, then the necessary alternative has been found.

Six years ago, the NASBA board of directors decided they wanted a CPA to head their organization. David A. Costello began his career in public accounting with Ernst & Ernst (now Ernst & Young) and then moved into industry, working his way through the ranks at Genesco before leaving the corporation as president of one of its subsidiaries. While maintaining a consulting practice, he served less than a year as executive director of the Tennessee State Board of Accountancy before being recruited by NASBA as its president and CEO (much as Barry Melancon, president and CEO of the AICPA, was recruited from the Louisiana Society of CPAs).

Under Costello's leadership, NASBA has initiated new revenue streams that provide additional help to the state boards. He moved the organization's headquarters to cut costs and add space, increased administrative services offered to state boards, and created a for-profit subsidiary to serve the examination administration needs of other professions. Today NASBA holds more conference and committee meetings for state board members and executive directors than ever before and underwrites the costs for many attendees. In the area of technology, it continues to enhance its website (for both public information and the boards' exchange of information) and is developing CredentialNet and other databases to serve the boards' licensees.

As the professional environment changes, however, will the state boards have a meaningful role to play? The CPA Journal asked Costello to describe his vision of professional regulation in the years ahead.


The CPA Journal When the third edition of the Uniform Accountancy Act was issued in February 1998, there was talk that 40 states would be substantially equivalent in two years. What's holding up the process?

David A. Costello: Although our initial prediction now seems overly optimistic, we had good reason to believe the states could accomplish significant adoption quickly. Remember, the third edition of the Uniform Accountancy Act was based on the concepts developed by a joint team of the leadership of NASBA and the AICPA, which then passed their ideas on to the AICPA/NASBA UAA Committee to be written into the UAA. This was then sent as an exposure draft to the state boards of accountancy, state societies, and other interested parties. When the third edition was finally released, we were hopeful that everyone would see how well the sections worked as a whole, allowing for more mobility with enhanced enforcement mechanisms. Unlike previous editions of the UAA, we thought this one was so well integrated that states would opt to adopt it totally.

Maybe we were a bit naive. While many states have adopted significant parts of the UAA-for example, permitting acceptance of commissions, allowing limited nonlicensee ownership, and requiring 150 hours of education-they have been slower to adopt the total concept of substantial equivalency. …

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