State Board Report
The seventh edition of the Uniform Accountancy Act, to be released in May, will contain two major changes from the previous edition: a revised definition of “attest” and provisions for firm mobility. These changes have been approved by both the NASBA and the AICPA Boards of Directors. The revised “attest” definition was approved in January by the NASBA Board and the firm mobility amendments were approved at the NASBA Board’s April 25 meeting. Both changes were approved by the AICPA at the end of March.
NASBA UAA Committee Chair Kenneth R. Odom (AL) explained to the Board: “The UAA Committee has presented this to you as two documents. The document including both the new definition of ‘attest’ and firm mobility will be the one that will be incorporated in the UAA. We wanted a separate ‘attest’ document for those states that only want that part. In Alabama, we already had firm mobility, so we have now moved ahead and adopted the new ‘attest’ definition in our law.”
Mr. Odom reported the language brought to the Board of Directors for their approval was essentially the same as what had been in the exposure draft – with one additional sentence. The NASBA/AICPA UAA Committee had considered all of the comments they received about the new provisions and found that some State Boards were concerned about the peer review requirements that an out-of-state firm would need to meet.
To address that concern, a sentence was added to the commentary that underscores what is required: “Any firm practicing pursuant to this provision must, as required by Section 23(a)(3), comply with the practice privilege state’s statutes and rules such as all those related to peer review, including disclosures, and on all other matters.”
Should a state determine it wants to participate in firm mobility, an out-of-state firm would need to meet the peer review requirement (UAA Section 7(h)) and the ownership requirement (Section 7 ( c)) before offering or rendering any attest service in that state. The UAA ownership requirement has been amended to state in Section 7 (c )(2)(B): “All non-licensee owners are of good moral character and active individual participants in the CPA or PA firm or affiliated entities.”
NASBA President Ken Bishop reminded the Board that neither NASBA nor the AICPA will be pushing for adoption of firm mobility in states that are not ready for it, but will provide legislative support for states that do wish to move forward with firm mobility or the redefinition of “attest.”
- MEMBER CENTER