A mutual recognition agreement with CPA Australia was approved by the NASBA Board of Directors and the AICPA Board of Directors during the last week in April. The agreement had previously been approved by CPA Australia and will be circulated to the State Boards for their consideration, and hopefully adoption, as soon as all the appropriate signatures are on the document. Sharon A. Jensen (MN), chair of the NASBA/AICPA International Qualifications Appraisal Board (IQAB), presented a detailed summary of the agreement to the NASBA Board of Directors meeting on April 27 in Charleston, SC. Because of the new detailed format of the agreement, this document points out exactly how practitioners are to be recognized in each country and what changes in the terms of the agreement are to be undertaken prior to its renewal in five years’ time.
The agreement allows for the recognition of a qualified US CPA as a member of CPA Australia which then opens the pathway to receiving a public practice certificate and subsequently to qualify to become a registered company auditor with at least 3,000 hours of work experience auditing reporting entities during the five years immediately before the date of their application, of which 12 months must be practical experience obtained in Australia supervised by a registered company auditor. New Zealand will accept U.S. experience without additional experience in New Zealand. Under the terms of the MRA, during the next five years CPA Australia is to seek to persuade the Australian regulatory body to permit that 12- month experience to be obtained in the U.S.
This agreement covers CPA Australia credential holders who are citizens or legal residents in Australia or New Zealand. During the five-year period of the agreement IQAB is to develop alternative requirements that would expand access to other CPA Australia credential holders. IQAB Chair Jensen explained that similar residency provisions are being considered for other agreements currently under review. “IQAB has done its due diligence,” Ms. Jensen stated. “We could assure the State Boards of the qualifications of CPA Australia credential holders in Australia and New Zealand, but not others at this point.
Several professional bodies have offshore membership and IQAB is looking at alternatives to residency that will provide equal assurance.” The issue of offshore credential holders was significant as over 20 percent of CPA Australia’s credential holders are in countries other than Australia or New Zealand.
The renewal of the mutual recognition agreement with Chartered Accountants Australia/New Zealand is currently under development. Ms. Jensen reported to the NASBA Board that it is anticipated that renewal will be completed soon. The more user-friendly format being applied to IQAB’s agreements is providing more detailed information about exactly what is needed to attain audit rights in each partner’s jurisdiction.
Members of the NASBA/AICPA IQAB include: Sharon A. Jensen – chair, Charles Heeter – vice chair, Elizabeth Gordon, Raymond Johnson, Rick Jones, Nancy Juron, Telford Lodden, Joseph Schiavo, Kathleen J. Smith, William Treacy and Jeffrey J. Truitt. The CPA Australia evaluation task force was chaired by Ms. Smith.
NASBA President Ken L. Bishop commented, “This is a changed process from the agreements we developed only a few years ago. In these agreements we have identified the gaps we have to fill, before reaching true mutual recognition, and how to close them up from the U.S. perspective as well as from the partner group’s side.”
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