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State Board Report

May 2015

Talks with leaders of the Department of Labor and NASBA Executive Vice President Colleen K. Conrad and NASBA Chief Legal Officer Maria-Lisa Caldwell have been moving forward to have the DOL provide referrals of inadequate employee benefits plan audits performed by CPAs sent to the State Boards of Accountancy at the same time they are released to the AICPA. Ms. Conrad told the April Board of Directors meeting that over the past 10 years there have been 80 such referrals. "The State Boards have been cut out of the loop," Ms. Conrad observed. "We need to be part of the solution." NASBA and the DOL are also exploring the opportunity for the DOL to share its investigative files with the Boards by obtaining consents for the auditors during the benefit plan review process. This type of collaboration and information sharing is expected to benefit all parties involved in these complaints and significantly streamline the disciplinary process.

Another collaborative effort is underway to enable the AICPA and the State Boards to coordinate their investigations of referrals from the DOL and other government agencies. Under consideration is a program that would allow the AICPA to share its investigative files and conclusions with the Board. The Accountancy Board would commence its own investigation of the matter at the completion of the AICPA’s investigation, and could take into consideration the findings and conclusions reached by the AICPA. However, the Board would reach its own findings/conclusions and could request that the licensee provide additional information and/or respond to additional interrogatories. This approach would be available to Boards of Accountancy at their discretion and would relate to only DOL and governmental audit cases, which is expected to lead to more timely resolutions of the cases. Details of this program will be discussed at the NASBA June Regional Meetings.

President Ken L. Bishop informed the Board of Directors that the California Board of Accountancy is currently engaged in a study of the enforcement practices of other jurisdictions to support the Board’s decision to adopt individual mobility. NASBA has offered to help in California’s overall evaluation of the states’ disciplinary processes.

NASBA’s Enforcement Resources Committee released this year "Guiding Principles of Enforcement". The purpose of these Principles is to benefit consumer protection by promoting uniformly effective Board enforcement and disclosure policies and practices.

Ms. Caldwell explained: "While of course not binding on Boards, these Guiding Principles are based on exhaustive, multi-year research into the enforcement and disclosure practices and policies of the Boards of the 55 jurisdictions, and represent common practices for Boards to consider and, potentially, against which to measure themselves."

President Bishop told the Board of Directors that NASBA stands ready to provide resources to help states strengthen their enforcement efforts.

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