Lodden and Bishop Meet with FRC

State Board Report

January 2017

The United Kingdom’s anticipated exit from the European Union (Brexit) has made negotiations for US/UK recognition of professionals more complex, but representatives of NASBA and the United Kingdom’s Financial Reporting Council (FRC) continue to discuss how this will be achieved in the future. Meeting in New York City on December 14, FRC CEO Stephen Haddrill observed that Brexit will create opportunities and uncertainties, as the Prime Minister will formally request an exit from the EU in March 2017 and then it will take two years before the exit is completed.

NASBA Chair Telford Lodden told the FRC delegation that the goal is to have a “common sense pathway” that would allow experienced auditors in the US and the UK to have a functioning mutual recognition agreement in the two countries. Mr. Lodden (IA) is the former chair of the NASBA/AICPA International Qualifications Appraisal Board. “NASBA and AICPA have been trying to forge these agreements with foreign professional bodies for over 20 years and the time has come to get more of them completed,” he said. While both the NASBA and AICPA Boards of Directors in 2016 approved modifying Uniform Accountancy Act Section 6(g) to allow for unilateral recognition of professionals, IQAB continues to work towards reaching mutual recognition as the ultimate goal of such agreements.

FRC Chairman Sir Winfried Bischoff was also at the meeting with Chair Lodden, President Bishop, current IQAB Chair Sharon Jensen (MN) and others. Sir Bischoff encouraged work on agreements including a date certain by which time if the terms for complete recognition were not met, the agreements would fall away.

NASBA President Bishop suggested that agreements be intuitive. He asked that the parties look at the overall goal, ascertain what obstacles are in the way of achieving it, and then develop a pathway.