CPA Firm Mobility Common Concerns During the Comment Period

1. CPA Firm Mobility Common Concerns During the Comment Period Debbie Lambert Uniform Accountancy Act Committee September 9, 2014

2. Overview Approximately 3 dozen comment letters received • State Boards • State CPA Societies • CPA Firms

3. Broad range of somewhat complex issues Letter from UAA Co-chairs dated May 20, 2014 summarized issues and how the UAA Committee addressed them

4. 5 Common Themes • Potential insufficient information without registration/notification • Questions about enforcement • Inconsistency between states (e.g. compilations) • Concerns about insufficient information or study of the issue • Understanding the peer review protections

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. Understanding the Peer Review Protections (Covered in a separate presentation by AICPA Vice President, Jim Brackens)

13. CPA Mobility and Board Revenue Streams (To be covered in a separate presentation by AICPA Senior Manager, Suzanne Jolicoeur)

14. Questions?