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State Board Report

October 2013

The NASBA Board of Directors and the AICPA Board of Directors have each approved for exposure firm mobility language that would be included in the Uniform Accountancy Act. The vote to expose came on September 25, when the NASBA Board held a special conference call to discuss the proposed language. A few days later the results of the AICPA’s e-mail polling of its Board also resulted in approval to distribute the language for comment. There will be a 90-day comment period ending in January, with the proposed language posted on this website and the AICPA’s website. A state’s enactment of this language would enable firms that are licensed in at least one state and that meet the UAA’s ownership and peer review requirements to temporarily practice across state lines without a permit. Firms with offices in a state would need to be licensed in that state.

NASBA President Ken L. Bishop pointed out that recently there seems to have been some misunderstanding regarding the issue. The concept of firm mobility is not new. It was first proposed in 2006 when mobility was recommended by the UAA Committee and the exposure draft containing both individual and firm mobility was approved by the NASBA and AICPA Boards. However, when the NASBA Mobility Task Force was considering legislative activity, it was determined that the draft did not adequately delineate substantially equivalent firms. NASBA and AICPA leadership then agreed to withdraw firm mobility from the draft at that time, but promised to revisit the provision when the equivalency issues were resolved. The UAA Committee has spent approximately two years developing the firm mobility language.

“Having uniform firm mobility language in the UAA for the states that want to adopt it is critical – but it is not something that we are going to actively campaign for in any state that is not supportive. We realize that each jurisdiction has to consider if and when this would be right for them,” Mr. Bishop said. As there are now 14 states that do not require a visiting CPA firm to obtain a permit even when their staff members are performing attest services, there is ample evidence as to the impact of firm mobility and there does not appear to be any increase in disciplinary problems attributable to this policy, he noted.

UAA Committee Chair Kenneth R. Odom (AL) told the NASBA Board on September 25: “We have two exposure drafts out there for Boards to consider. One on expanding the attest definition and another we are now going to launch on firm mobility. The proposals fit together, but they do not require each other to be effective. We are leaving that for the states to decide.” Mr. Odom will address the NASBA Annual Meeting to report on the comments received. The comment period for the “attest” exposure draft ends on October 17.

NASBA Pacific Regional Director Donald F. Aubrey (WA) told the NASBA Board that states need to know what the impact of firm mobility will be on them before they can endorse the concept. In response, NASBA President Bishop said that the impact is expected to be specific for each state and he offered NASBA’s assistance to any states that ask for help is determining the provision’s meaning to them. He assured the Board of Directors that neither NASBA nor the AICPA would engage in a campaign for all states to begin to adopt firm mobility. If approved for inclusion in the UAA, the language will be there to provide a model for all states to have a consistent approach to such legislation.

NASBA Chair Gaylen R. Hansen (CO) pointed out that the vote of the NASBA Board of Directors was to expose the language for\ comments. It was not a referendum on the concept of firm mobility.

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