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State Board Report

December 2012

The participant evaluations from NASBA’s 105th Annual Meeting (held October 29-31 in Orlando) have been tabulated and one of the sessions that received particularly high marks was the State Accountancy Board Chairs’ and Presidents’ Breakfast Meeting. This interactive, informal meeting, was moderated by 2012-13 Chair Gaylen Hansen and covered topics raised by the Board Chairs and Presidents. These included:

How do Boards locate licensees who are doing substandard work? Besides referrals from other governmental agencies and complaints received, some cases come from reviewing the phone directory and locating people who are offering CPA services although they are not CPAs. One state receives audit reports from all state government agencies and the Board discovers problems within them. The State Auditor’s office regularly reports problems to the Accountancy Board in one state, and in another the state’s insurance commissioner has been reporting problems. On the federal level, complaints from HUD and the Department of Education have been received.

Another issue raised at the breakfast meeting was what role the community colleges are playing in the preparation of CPA candidates. In one state, the two-year colleges are seen as providing the link to the profession for those who have non-accounting undergraduate degrees and decide they want to change careers. How the community colleges are accredited was questioned. Karen Turner, chair of NASBA’s Education Committee and Mountain Regional Director, announced that a research project is now in progress that is focused on accreditation agencies. She anticipates this will be ready for discussion at the June 2013 NASBA Regional Meetings. The sensitivity of this issue was noted by Chair Hansen, who pointed out community colleges are supported by the states and have traditionally been a source of education for minority groups.

A few states still restrict the number of continuing professional education courses that can be taken on line to fulfill the CPErequirement. One state is looking at the revised CPE Standards and changing its regulations to differentiate between live interactive courses and traditional self study courses. Other State Board chairs reported they too are revisiting their CPE requirements. One participant noted that his Board gives its Board members CPE credit for attending the NASBA Annual Meeting.

The AICPA’s new Financial Reporting Framework for Small and Medium-Sized Entities, which was about to be released as an exposure draft, raised questions. Some Chairs wondered how the new framework relates to Other Comprehensive Basis of Accounting (OCBOA). Ken Odom, NASBA Director-at-Large who had served on the AICPA task force that developed the new Framework, said that the Framework is OCBOA. He noted that this is easier for the practitioner to use than GAAP, but he cautioned that the unintended consequences of the framework still need to be considered. AICPA is accepting comments on the exposure draft, which was released on November 1, until January 13, 2013.

How states will evaluate experience earned during military service in fulfillment of the CPA experience requirement was discussed. NASBA Executive Vice President Colleen Conrad told the Board Chairs that new legislation in this area is being monitored. The language originally proposed under the “Strengthening Our Military Families” initiative was not a problem, but in some cases it morphed into bad law, Mr. Odom observed.

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