State Board Report

January 2010

NASBA Chair Billy Atkinson and President David Costello told the AICPA’s SEC Conference in December that “the 55 State Boards of Accountancy are working with NASBA to strengthen the accounting profession.” They reminded attendees that Boards of Accountancy comprise the largest accountancy regulatory body in the world, regulating over 650,000 CPAs and over 47,000 accounting firms. The Washington, DC, conference included presentations from many SEC officials and was telecast to several locations throughout the nation.

To acquaint the audience with the work of the State Boards, NASBA Chair Atkinson told the meeting that the Texas State Board of Public Accountancy receives over 3,500 complaints per year, which are initiated by the State Board as well as the general public, Federal/State agencies and other CPAs. “On average, 250 will be dismissed, 2,500 will achieve voluntary compliance, over 600 will result in revocation or suspensions of license, and another 150 will be disposed with practice restrictions, assignment of pre?issuance reviewer, reprimands or other sanctions. Those with sanctions amount to less than 1 percent of the Texas’ 70,000 licensees.“

Chair Atkinson told the CPAs: “State Boards don’t have quotas. If you get a letter from your State Board, respond timely, provide complete information, show up for informal conferences and, above all – if you have violated a Board rule – acknowledge your responsibility, make restitution (if applicable) and take steps to avoid reoccurrence…State Boards strongly favor remediation actions.” He counseled them, “Take your personal CPA license seriously in all that you do, both professionally and privately.”

Several of the conference’s speakers mentioned International Financial Reporting Standards and Chair Atkinson said: “Our views are clear – The IFRS accounting standards setter should be independent (in a manner similar to the US’s FAF) in order to retain the public’s confidence. The US Legal system is another key consideration as is our concern that a FASB type entity to properly vet proposed standards must continue in the US. Failure to retain such public protection deductively risks governmental or Congressional interference. These and other issues contained in NASBA’s response letter to the SEC’s proposed roadmap led us to suggest ‘convergence as the more likely path toward IFRS adoption. Indeed, the ball is in the SEC’s court and we, as state regulators, have confidence that the SEC is studying its decision very diligently. As you well know, the full weight of public confidence in financial reporting and, indeed main street accounting, lies in the balance with this decision.”

SEC Chief Accountant James Kroeker addressed the same conference and was expected to make some statements about the roadmap for IFRS adoption. He told the gathering, “You can expect to hear more from us in the short term.”

Elisse B. Walter, SEC Commissioner, reported over 200 comments on the proposed roadmap were received by the Commission and are being carefully considered. “At this stage in our review process, I expect we will likely consider further action sometime in early 2010,” she told the conference. One of the significant issues raised in the letters was the continuing role of the FASB. Ms. Walter said, “FASB has been instrumental in helping to make the vision of global accounting standards start to become a reality…I am eager to explore the continuing role of FASB in the event global standards are adopted.”

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