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State Board Report

November 2016

While predicting the accounting profession will change more in the next five years than it has in the last 40 years, NASBA President and CEO Ken L. Bishop maintains that in the future there will still be a need for accounting regulation, “But you may not recognize it.” Regulators need to move along at the same pace of change as the profession, but regulators cannot assume the profession will bring them to the table. For example, data analytics is on the radar of many organizations, and NASBA, representing the State Boards of Accountancy, has to be at the table too when standards encompassing data analytics are being developed, he told the Annual Business Meeting.

Software is being developed to give even smaller firms data analytic capability, but is the level of reliance on data analytics appropriate? Do regulators have the technical ability or legal authority to go in and look at the systems being used? President Bishop said he believes the State Boards will be looking to NASBA for help in answering those questions.

NASBA is also concerned with cybersecurity, as cyber-attacks are becoming more prevalent in business. As NASBA Chief Information Security Officer Roy Hall had described for the Annual Meeting the steps NASBA is taking to fend off such attacks, NASBA President Bishop urged the Boards to start thinking about how they would respond to a major case should one of the large accounting firms be hacked. “I think it is all about how we evolve,” Mr. Bishop said. He assured the Boards that NASBA has the resources needed to give them a collective voice.

“If the profession has evolved to introduce management accountants, then we think it has to be done right,” President Bishop advised. “We are asking you to do it right so that we don’t have states doing it in different ways.” NASBA Vice President of State Board Relations Daniel J. Dustin and AICPA Vice President of State Regulation and Legislation Mat Young have worked to draft language to allow for management accountants but in no way put the public in harm’s way. Mr. Bishop asked the Boards to consider this language if their states want to make a change.

He reported to the Boards that the CPEAudit tool, which is very important to NASBA and eagerly anticipated by many State Boards, is now expected to be ready for launch in April 2017. “We would rather launch it a little behind deadline and get it right,” President Bishop said. In December 2017 the new Gateway will be launched. “It is critical that these systems are bullet proof and reliable.”

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