As I have said several times over the past year, time flies when you are having fun. It seems just like yesterday when I was standing in NASBA’s studio in Nashville at our LAST annual virtual meeting and laying out my goals to you. Now, it is time for me to hand over the reins of this great organization to Rick Reisig as he starts his term as chair.
Our theme for this year’s conference was REBOUND. A common definition of rebound is “the bouncing back from a hard surface or place.” NASBA showed its ability to bounce back despite continued obstacles and challenges that we faced-thru this endemic. Regardless of a variety of uncertainties, we were able to move forward and had a very successful year, adding $1.2 million to net assets despite a downturn in the financial markets. With strong leadership from Ken Bishop and his team, we were able to continue being nimble and efficient, yet serving state boards effectively throughout the year.
This past year, we have had in-person board meetings, regional conferences and joint NASBA/AICPA summit meetings. I am referring to myself as the “clean-up hitter,” as we have now worked through all our pre-COVID contracts for meeting locations. This has allowed Rick to be the first chair in over two years, to work with Tom Kenny and his team to be able to choose locations where he would like meetings to be held. Although our regional meeting attendance was a bit lower than pre-COVID times, they were extremely successful. I hope you will agree with me that it is much better to communicate in-person than on Zoom through a computer screen.
The family culture we have created at NASBA is very, very unique. We all share common interests and can leverage from our experiences to help others who may be dealing with a similar situation in their jurisdiction. I encourage you to take advantage of future meetings and conferences to reach out and meet new people or renew relationships with people you have not seen in a couple of years.
My major goals this past year were to make sure that CPA Evolution continued on its path for a January 2024 implementation date, take new steps forward in increasing the CPA pipeline, enhancing our efforts in diversity, equity and inclusion and to explore ways to further improve quality of services performed by CPAs.
Major steps have been taken in moving toward the January 2024 implementation date. I want to applaud the staff of NASBA for their massive efforts thus far. We have collaborated to work with educators on how curriculum may be modified to prepare candidates for the 2024 CPA Exam.
As you know, the Examination blueprint was exposed for comment this summer and final changes will be made for the 2024 CPA Exam. We are deep into a two-and-a-half-year project of revamping our Candidate Gateway and CPAES systems, projecting to spend more than $10 million dollars.
Improvements are also being made using mobile technology to allow candidates to interact with NASBA in the application process. Additionally, changes are being made in systems to allow us to glean information about candidates that may help with pipeline initiatives.
This past August, Carlos Barrera, Kent Absec, Colleen Conrad and Dan Dustin (remotely) met with members of the AICPA, and other stakeholders in New York, to discuss how all of us can work together to build interest in the profession and to increase the number of licensed CPAs. I believe there are areas where we can mutually work together. By developing “swim lanes,” each organization can properly allocate the right amount of energy and resources to meet our goals. For example, I believe that firms, the AICPA and state societies are in the best position to work with high schools and higher education to make the profession more attractive to students and to educators.
At NASBA, we continue to explore opportunities to streamline the candidate experience during the application process. To keep the Exam as a top priority for candidates, we are reaching out directly to remind them of any approaching deadlines to their Notices to Schedule or any upcoming credit expirations for passed Exam sections. Each of these communications contains positive messaging to keep candidates focused on passing the Exam and reaching the ultimate goal of becoming a CPA.
From prior experience, we know that there will be a delay in the release of Exam scores while the new test is being validated and new cut scores are established. In June, the CBT Administration and Executive Directors Committee asked state boards to take action to allow candidates with CPA Examination sections passed as of January 1, 2024, to have those credits not expire prior to June 30, 2025. At a special October board meeting, we discussed proposed changes to the UAA Model Rules regarding the 18-month rolling period a candidate has to pass all four sections. Some jurisdictions currently start the clock on the date the candidate takes the Exam as opposed to when they receive their passing score.
The proposed changes are out for exposure through mid-December. After adoption into the UAA, it is our goal to work with all 55 state boards to achieve uniformity. After the CPA Evolution launch, AICPA and NASBA leadership have agreed to jointly review and reconsider the number of months that candidate scores remain valid.
Also related to the pipeline, we are jointly exploring potential solutions to help students achieve the 150 credit hours for licensure. A joint task force has been established to work on a plan that is cost effective, allows up to 30 academically rigorous hours and is scalable by firm size. Let me be clear, NASBA is not looking to change the number of core hours within the 120 hours required by most states prior to sitting for the CPA Exam, nor the current requirement for licensure. We are also not downplaying the quality of MAcc programs that many students will continue to pursue. However, we are aware of large and small firms working with colleges and universities in creative ways to provide lower cost options for meeting the requirements for licensure, which may reduce the barrier of entry for some candidates. Active discussions are occurring to potentially allow more hours for internships and work experience. The task force is also looking at other ways to achieve this goal. Stay tuned as to what alternatives this task force may propose.
It is my personal belief that the more hands-on experience a candidate can obtain prior to licensure the stronger they will be as a professional.
We have also continued to improve upon on our goals of implementing additional diversity, equity and inclusion initiatives. This past year, Alison Andrew and Alfonzo Alexander worked with the Diversity Committee to analyze the makeup of each state board and identify the top five and bottom five state boards that may not be reflective of the licensees they regulate. Information was gathered in order to better understand what factors made state boards more successful and what barriers may exist for those state boards to improve. We also looked at ways that could attract new state board members and ramp up their involvement in NASBA committees, and potentially serve in future leadership positions. Our “call to leadership” events at our regional conferences as well as outreach to new state board members have resulted in a record number of state board members expressing interest in serving on committees for the upcoming year.
Likewise, we saw an increased number of state board members expressing interest in serving on our board, which provided our Nominating Committee the ability to again recommend a very diverse board for election.
We also continue to be a relevant voice with domestic and international regulators and standard setters. Our Regulatory Response Committee, in conjunction with other committees, reviews change to standards and provides comments to various exposure drafts on accounting, auditing and ethics. This past year, the PCAOB re-implemented its advisory groups. As a result of one of our comment letters to an exposure draft, they agreed to have us participate as an observer on its Standards and Emerging Issues Setting Advisory Group. Colleen Conrad serves as our observer. Additionally, Diane Rubin, a former NASBA chair, was selected to serve on this group. In May, the AICPA and NASBA met with CPA Ireland to sign a mutual recognition agreement. In October, the International Ethics Board for Accountants (IESBA) held their fall meeting in our Nashville offices. NASBA Past Chair Gaylen Hansen serves as the CAG chair for IESBA. Our incoming chair, Rick Reisig, is a current FAF board member. These are just a few examples of how NASBA is maintaining relevance in the profession.
In 2022, John Johnson continued to be very busy. A total of 33 jurisdictions had some form of deregulation bill filed in 2022, with a number of jurisdictions already pre-filing bills for 2023. We continue to work with the Alliance for Responsible Professional Licensing (ARPL) to ensure that states have the tools to inform state lawmakers that the CPA profession must and should be viewed and treated differently because it is NOT an occupation that would warrant wholesale deregulation. IT is a technical, licensed and learned profession. We are also extremely hopeful and confident that, by working together, we can continue to successfully defeat any harmful effect that wholesale deregulation may have on the CPA profession and the public we serve.
As my 9-year tenure on the NASBA board comes to a close, Phyllis and I reflect back on how we have been so blessed to create close relationships with our NASBA family. We have celebrated promotions, retirements, weddings and grandchildren. But we have also prayed for healing from illness and mourned the deaths of family members.
To the leadership and staff of NASBA, my heartfelt thanks go to you for everything you do, and for helping me fulfill my role as chair. It truly has been the pinnacle of my career. I also want to give my sincere thanks and appreciation to those of you who unselfishly gave of your time to serve on a NASBA committee or were our representative on a joint committee with the AICPA. Without your insight and work, we would not be able to continue to move the profession and regulation of our profession forward.
It is because of you that NASBA remains “Mission Driven- Member Focused.”
W. Michael Fritz, CPA
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