State Board Report

July 2008

NASBA’s 2008 Eastern Regional Meeting, June 11-13 in Asheville, NC, drew representatives from 34 jurisdictions and a total attendance of 213, only to be followed a week later, June 18-20, by NASBA’s 2008 Western Regional in Newport Beach, CA, which had representatives from 31 jurisdictions and a total attendance of 257. Arthut M. Winstead, Jr., president of the North Carolina State Board of CPA Examiners welcomed the Eastern’s participants and Donald A. Driftmier, president of the California Board of Accountancy welcomed the Western’s participants. Mr. Driftmier focused his remarks on the impact of International Financial Reporting Standards (IFRS) on the many small businesses that drive the U.S. economy and that serve as the client base of the majority of his state’s CPAs.

“We have to convince our clients that their financial statements are not going to make it in a global market, “ Mr. Driftmier mused. “We’ll tell them you have to have IFRS – and we are going to charge you a gazillion dollars to change and we will come out and audit it — after we figure it out.”

The inevitability of greater international involvement for the state boards was referenced in different ways by many speakers, for example: Chair Samuel Cotterell talked about a statebased regime to administer the Uniform CPA Examination internationally; President Costello spoke of acquiring a seat for NASBA among the international standard setters and of the International Regulators Conference scheduled for October; Board of Examiners Chair Colleen Conrad reported the AICPA is putting together groups to write questions on IFRS for the Uniform CPA Examination; and NASBA Past Chair Michael Weatherwax told the boards that they may have already indirectly acknowledged the International Accounting Standards Board (IASB): “The AICPA has now revised its Code of Professional Conduct to include the IASB as a designated standard setting body for purposes of establishing international accounting and reporting principles. The AICPA Code of Professional Conduct has been adopted in whole or in part in the rules of a significant number of boards of accountancy. Thus, IASB as a standard setter may have found its way into a number of states’ rules without NASBA and the boards of accountancy independently performing an assessment of the IASB as a standard setter.”

Mr. Weatherwax maintained that the state boards should have a significant say in the adoption of IFRS particularly for non-public companies. “Neither FASB nor the AICPA should be allowed to make such a fundamental decision without guidance and input from NASBA and the boards of accountancy.” He also pointed out that boards need to be involved in reconciling ethics standards being promulgated by various bodies.

Gaylen Hansen, chair of the NASBA Strategic Initiatives Committee, summarized for the Regional Meetings the preliminary recommendations being made by the US Treasury Department’s Advisory Committee on the Auditing Profession (ACAP). Although ACAP is focused on dealing with the audits of public companies, Mr. Hansen stated, “We all know there will be a trickle down effect” to other companies. He reported that thanks to President David Costello’s testimony to the Committee, which underscored to the Uniform Accountancy Act’s Section 23 mobility provisions that are being adopted by the states, the discussion of a national license was taken off the table. The ACAP’s preliminary recommendations also call for state boards to become operationally and financially independent. Mr. Hansen said incoming NASBA Chair Thomas Sadler will form a committee to assist the boards in reaching that goal. ACAP’s final report is expected to be released about September 26, Mr. Hansen stated.

Related News

Full Issue