Legislative Success

By Michael A. Thompson, CPA

We have had tremendous legislative success this past year in Sacramento with the passing of substantial equivalency and license status disclosure. Mobility legislation is still on the plate, and the California Board of Accountancy now requires peer review. This is quite an accomplishment as we approach CalCPA’s April 30 year-end.

Substantial equivalency: Through the success of a CalCPA grassroots effort, California is now considered a substantially equivalent state under the requirements of the Uniform Accountancy Act. This means that beginning Jan. 1, 2014, CPA candidates must complete 150 hours, including 24 units of accounting and 24 units of business, 10 units of ethics and 20 units that contribute to the competence of a CPA practitioner. Educators and students are already well aware of this 150-hour education requirement.

Mobility: I believe that collectively all states must pass mobility legislation to conform exactly with the UAA. Passing mobility in conformance with a single standard will bring legislation current with the reality of actual practice due to technological advances. Accountability and responsibility is already given through a CPA’s signature on an audit report or a tax return. I hope passing mobility legislation is a smooth and uneventful process because next up is that all CPA jurisdictions are going to have to team up and agree on the much bigger issue of implementing international financial reporting standards.

License status disclosure: California CPAs with an inactive CPA license are now required to disclose their license status whenever they use the CPA designation by placing “inactive” immediately after “CPA,” the title “certified public accountant,” the CPA designation or any other reference that would suggest you are licensed by the CBA, on business cards, stationery, resumes, websites or other business communications. You must obtain 80 hours of CPE before you can make your license active. The CalCPA Education Foundation has a favorably priced program to help you achieve those 80 hours.

Peer Review: The CBA now requires all firms and sole practitioners providing audit, review and compilation services to participate in a peer review program. With just a little bit of legislative effort, the peer review program may provide a path to allow CPAs licensed through general accounting experience and identified as a “G” licensee to perform attest reports.

The peer review program of many other states is already the key element that allows CPAs to perform sign attest report. A beneficial example of implementing such a program is for those who gained audit experience through the GAO or the Inspector General. The two organizations perform internal control audits, a very important attest function. However, they do not perform public accounting financial statement audits.

My sense of urgency on this has to do with qualifying those with significant internal control experience to be able to perform attest functions relating to internal control. These individuals are already well qualified to perform internal control attest audits relating to the vast TARP funding.

CalCPA’s 2010-11 operating year begins May 1, at which time Laura C. Olson will succeed me as chapter president. Laura is an experienced tax manager at Hood & Strong. She is also a graduate of CalCPA’s Leadership Institute. Laura was recognized as such a strong leader that she was invited to address the CalCPA Council and Board on her Leadership Institute experience.

This entry was posted on Friday, January 29th, 2010 at 11:41 am and is filed under President's Message. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.