President’s Memo: International Impact on NASBA

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Living in an increasingly global economy, the daily world news reports present NASBA and the State Boards with several serious challenges and some promising opportunities:

The coronavirus outbreak that started in the city of Wuhan, China, has now spread around the globe.
After the election of Boris Johnson as Prime Minister and nearly four years of debate since the 2016 European Union Referendum in the United Kingdom, BREXIT has been formally adopted and the implementation of the UK’s departure from the EU begins.
In India, Prime Minister Narendra Modi’s party won a significant majority in the Lok Sabha (the lower house of the Indian parliament), which should increase the opportunity for expansive strategic relationships with the US
The turmoil in the Middle East continues to impact US and global policies and relationships.
Finally, the new trade agreements with China, Canada and Mexico significantly change the economic landscape.

So, how does all this impact NASBA and Boards of Accountancy?

Obviously, the threats resulting from the coronavirus are impacting us all. No matter how many assurances we hear regarding the danger in the US, we all need to remain vigilant. NASBA has staff and volunteers who travel to impacted countries and we have visitors from across the Asian Pacific area including China. The health and safety of our NASBA staff, as well as the many Uniform CPA Examination candidates from throughout the region, are primary concerns as we consider how we respond to the threat. The restrictions on international travel in response to the coronavirus also have an economic and logistical impact, as NASBA and State Boards deal with affected candidates and their requests for flexibility of scheduling and eligibility.

The departure of the UK from the EU provides both challenges and opportunities for NASBA, Boards of Accountancy and the US accounting profession. Just the fact that a final decision has been made provides potential improvement in reciprocal agreements that have been limited in scope and others where we struggled to reach agreements because of onerous and unbalanced requirements in EU rules and policies. We have been in recent discussions with the US Department of Commerce and US Trade Representative offices to coordinate our efforts. We will be closely monitoring the progress of new trade agreement negotiations between the US and the UK for opportunities to advance agreements that have been stalled for decades.

While our direct nexus to India has been somewhat limited, India-based CPA students and professionals have long been a material segment of the CPA candidate pipeline. With the increasing number of US accounting and information technology firms outsourcing work to India, the student population desiring to sit for the Uniform CPA Examination and for ultimate licensure continues to grow. Improved relationships between the US and India, both politically and in business dealings, can only augment our efforts to provide Indian students the opportunity to test and obtain a license. There are valid public protection reasons for ensuring that those individuals providing outsourced services meet the requirements of US accountancy statutes.

Canadians have traditionally been the largest source of international candidates interested in becoming US CPAs. You may not be aware that the fastest increasing source of candidates is from China. While much of the press attention on China deals with the adversarial challenges we face, the expansion of US companies into China continues to grow. From our discussions with the Chinese Financial Ministry, we know that there is a recognition of the value of the US CPA credential, of US GAAP and, with their growing middle class, the importance of reliable financial information. The new trade agreements may ultimately stabilize relations and only increase the need for US accounting and auditing expertise. We need to be prepared for that possibility.

Finally, we have made a significant effort to keep State Boards informed when international standard and policy changes have US implications. An example is the international interest in response to a client’s “non-compliance with laws and regulations” (NOCLAR). As international regulators become educated to the fact that in the US the State Boards of Accountancy are the only entities that issue, restrict or revoke a CPA credential, they are reaching out to NASBA to discuss international efforts at standardization, particularly with topics such as fees, NOCLAR, staff augmentation, etc., where the profession and others may differ on what is needed for public protection and good public policy.

NASBA’s staff and volunteers, particularly through the International Qualifications Appraisal Board, the Ethics Committee and the Regulatory Response Committee, will continue to closely monitor global events that may impact State Boards. In the meantime, when you are watching the evening news, you might want to consider the international impact on NASBA and the State Boards.

Semper ad meliora (Always toward better things).

— Ken L. Bishop
President & CEO