State Board Report

August 2011

The NASBA/AICPA Uniform Accountancy Act Committee and the NASBA/ AICPA International Qualifications Appraisal Board both saw their recommendations approved as submitted at the July 29 meeting of the NASBA Board of Directors, held in Coeur d’Alene, ID. The American Institute of CPAs’ Board of Directors similarly approved the documents at their meeting on August 5. The UAA and Model Rule changes will shortly be sent to the State Boards with NASBA’s recommendation for their adoption. Following the formal signing, the mutual recognition agreement with the Hong Kong Institute of CPAs (HKICPA) will also be sent to the Boards with NASBA’s recommendation for its adoption and implementation.

NASBA UAA Committee Chair Carlos Johnson presented the revisions, related to CPA firm names, in the UAA and the Model Rules. A sentence has been added to UAA section 14(i) along with commentary, and Model Rule 14-1 has been completely revised beginning with the statement: “A CPA Firm name may not be used unless such name has been registered with and approved by the Board.”

Added to UAA Section 14(i) is the directive: “A common brand name, including common initials, used by a CPA Firm in its name, is not misleading if said firm is a Network Firm as defi ned in the AICPA Code of Professional Conduct (‘Code’) in effect July 1, 2011 and when offering or rendering services that require independence under AICPA standards, said fi rms must comply with the Code’s applicable standards on independence.” New Model Rule 14-1 contains guidance on what is and what is not a misleading fi rm name and how a network fi rm may use the network’s name.

The mutual recognition agreement with HKICPA was developed over a number of years with the assistance of many IQAB members. They found it challenging to evaluate education, examination and experience for substantial equivalence between the Hong Kong and U.S. credentials. The Hong Kong qualifi cations are based on courses and examinations offered through their institute, compared to the state-set requirements in the U.S. system. Constructing an agreement that ensures candidates meet the rigorous standards of both credentials and that facilitates public practice took patient negotiations, IQAB Chair William Treacy (TX) explained. A formal signing of the agreement will take place at NASBA’s Annual Meeting in Nashville, with representatives of the HKICPA, AICPA and NASBA in attendance. This is the first agreement IQAB  has negotiated with a professional body in Asia. Mr. Treacy commented, “This will be a step in the right direction in bringing East to West and West to East.”

Serving with Chair Johnson, NASBA’s UAA Committee members include: Donald A. Driftmier (CA), Andrew L. DuBoff  (NJ), J. Dwight Hadley (NY), Robert J. Hyde (MN), Thomas J. Mulligan (OH), Ronald E. Nielsen (IA), Robert A. Pearson (MO), Eric Robinson (FL), James F. Thielen (FL), Michael D. Weatherwax (CO). Serving with Chair Treacy, NASBA’s IQAB members include: Charles H. Calhoun (FL), Ruben A. Davila (CA), Jeffrey A. Leiserowitz (KS), Antonia Browning Smiley (DC) and Kathleen J. Smith (NB).

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