Author: David Costello, CPA, NASBA President and CEO
NASBA’s annual East and West regional conferences are tremendous forums for our industry, and the 2011 gatherings were no different.
In addition to sharing best practices among themselves, representatives from NASBA’s 55 state boards and jurisdictions are able to take part in panel and general discussions on emerging and continuing issues facing the profession. This year, those ranged from the debate over private-company standards to dealing with governmental budgetary issues and how those affect the boards’ operating conditions within their states.
Setting the Standards
State boards of accountancy are responsible for all of the accounting standards, both for private and public entities; that is their sovereign right. But traditionally, they have deferred that privilege and duty to others, such as the Financial Accounting Standards Board (FASB) or Governmental Accounting Standards Board (GASB). They sometimes have also deferred to the Public Company Accounting Oversight Board (PCAOB) for auditing standards.
That said, a big issue today is whether or not there should be one set of standards for all companies, public and private. This is a debate that’s been going on for many years, but now the Financial Accounting Foundation (FAF) has received a report of recommendations from its Blue Ribbon Panel which NASBA jointly sponsored with FAF and the AICPA. The issue is still being debated and we’ll continue to be engaged with the FAF as it contemplates next steps including a decision of a separate private standard setting board.
State Budget Grabs Forestalled
Another issue that is much more pragmatic to our boards, and was also the subject of some heated conversations, has to do with state budgets and how they are affecting our regulatory boards.
The boards generate income by charging fees to licensees, both individuals and firms. At times, many boards will have something of a surplus. This money is by law directed to the regulation of the practice of accountancy, but many state governments will sweep those funds into their general funds and leave the board without any money to work with. When these funds are swept into the general fund it in effect results in a tax to CPAs and CPA firms. This year, we also saw some states threaten their boards with consolidation — in a couple of cases, with being done away with altogether.
In either of those situations, the public is left exposed. We talked a good deal about how the state boards can be more independent with respect to their finances and structures, so that they are not threatened, year-after-year, by some enterprising legislation. We want to work to get our boards properly funded, and let them operate without fear of those monies being swept away. The boards are not funded by tax money, so we think it’s grossly unfair and inappropriate for their funding dollars to be taken away as though it were a tax. This is another ongoing problem, and one that we will continue to work on in the coming months.
- MEMBER CENTER