State Board Report
Although we are in the midst of the NASBA Regional Meetings, I decided I needed to rewrite June’s President’s Memo in response to a recently published item about the CGMA. Because of the confusion that article may have caused, I felt it important to attempt to clarify a few issues.
As we have been discussing for some time, NASBA has been communicating with the AICPA about their decision to allow non-CPAs to assume and use the CGMA designation, and the Institute’s desire to allow those non-CPAs to work in CPA firms. NASBA has raised three primary concerns: First, the public confusion/protection issue; second, the concern about the CGMA’s impact on the CPA candidate pipeline; and, third and potentially the most complicated issue, the interpretation of the Uniform Accountancy Act that prohibits non-CPAs from assuming or using confusing or misleading credentials or titles. In our discussions with the AICPA we have been open to looking for ways to resolve these issues.
There has been significant progress. First, the AICPA agreed to apply conditions to the non CPA CGMAs that essentially prohibit them from practicing public accounting and to enforce that prohibition. Second, the AICPA and NASBA are working together to develop effective strategies to attract candidates to the CPA pipeline. The third and remaining issue, the statutory prohibition, has been the toughest issue to address. The current UAA, and most states, have language that restricts titles for non-CPAs.
The UAA Section 14(g) states: No person or firm not holding a valid certificate, permit or registration issued under Sections 6, 7, or 8 of this Act shall assume or use the title "certified accountant," "chartered accountant," "enrolled accountant," "licensed accountant," "registered accountant," "accredited accountant," or any other title or designation likely to be confused with the titles "certified public accountant" or "public accountant," or use any of the abbreviations "CA," "LA," "RA," "AA," or similar abbreviation likely to be confused with the abbreviations "CPA" or "PA." The title "Enrolled Agent" or "EA" may only be used by individuals so designated by the Internal Revenue Service.
Other related UAA sections have been developed for decades to be consistent with 14(g), and have protected consumers from being misled by non-regulated and misleading titles.
In the article I mentioned earlier, there is a statement that, "Some states have asked if the prohibition on certain titles prevents non-CPAs from using any professional designation that includes the word ‘accountant’." As the organization that State Boards would typically go to with such a question, NASBA has never been asked that question. However, in the purity of the UAA, which NASBA and AICPA volunteers coauthored, the answer is clearly: "No." I have to qualify my response with reference to "purity of the UAA" because a few states do specifically prohibit the use of "accountant" by non-CPAs.
The question which NASBA has been asked is: "Is there a prohibition that prevents non-CPAs from assuming or using any designation that includes ‘accountant’ in conjunction with other words such as ‘certified’, ‘chartered’ or the like that might be confusing to the public?" The NASBA answer to that question is clearly: "Yes." That is our dilemma.
So, how do we resolve this dilemma? While it is not the easiest path, the surest and safest way is through legislative action. We have been advised that a few states have an interest in allowing "management accountants" to use titles such as CGMA. If that is the case, we believe it is important that the proposed statute language is tightly written, continues to protect the public, and is enforceable. In the spirit of the UAA, the language should also be consistent with the rest of the model legislation to allow for uniform adoption by any state choosing to do so.
Without agreeing to the value, the public policy arguments or anticipated legislative success, NASBA staff is working with our counterparts at the AICPA to explore language that would allow the use of certain management accountant titles, so long as the language provides for the safeguards, prohibitions and protections that are critical to public protection.
It is important for State Boards to know that NASBA has not yet reached any agreement with AICPA on the CGMA issue. However, that does not preclude us from communicating and working towards resolutions in a respectful way. It will ultimately be up to the states to determine how this story ends!
Semper ad meliora. (Always toward better things.)
— Ken L. Bishop
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