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Enforcement Newsletter

January 2017

In 2012, California adopted mobility for CPAs, with the caveat that the California Board of Accountancy (CBA) must undertake an evaluation of the enforcement practices of each jurisdiction to ensure that CPAs entering California through mobility could be appropriately disciplined by their home board, if needed. Although not written into the mobility law of other jurisdictions, the concept of ensuring that CPAs practicing in various jurisdictions through mobility can and will be adequately regulated by their home licensing board is critical to the success of mobility nationwide. Also, in light of the recent emphasis on referrals from federal agencies such as the DOL and PCAOB, it is important to be able to demonstrate the effectiveness of the enforcement practices of boards of accountancy to the public and other regulatory agencies. As such, the California mobility project shared the same concern for enforcement practices as the NASBA Enforcement Resources Committee.

In September 2014, the Enforcement Resources Committee began reaching out to boards to gain a better understanding of the enforcement practices in each jurisdiction, attempting to understand not only what the enforcement process looks like in the laws/rules, but also how the process is actually handled by staff on a daily basis. As a result of these enforcement surveys, the Committee created “Guiding Principles of Enforcement” that provide some basic structure to the foundational areas of an effective enforcement program. In May 2015, the CBA determined that these Guiding Principles of Enforcement met the requirements of California law, and therefore could also be used as the benchmark by which California could fulfill their legislative requirement in BPC 5096.21.


Enforcement practices are uniquely situated to the needs of the particular jurisdiction, and therefore a “check the box” approach would not reveal the true enforcement culture of a board. With NASBA conducting this analysis, the project strives to understand the enforcement practices of each board in the context of their licensee population, complaint/caseloads, staffing resources, umbrella/department restraints, etc. NASBA has also used information obtained during discussion with the boards in order to identify areas in which boards would benefit from more enforcement resources. To that end, NASBA has already provided investigator training quizzes and additional probation tracking tools on the Enforcement Tools web pages in direct response to board requests identified during this process. In early September 2016, NASBA completed its review of the enforcement practices of each board and determined that the practices of all 55 boards are substantially equivalent to the Guiding Principles of Enforcement.


The second prong of the evaluation is whether or not the boards provide disciplinary information on either their own board web pages or through ALD/CPAverify. The discipline must be accessible by searching the licensee’s name. Disciplinary details are not necessary, but there must be some marker or “flag” that puts the potential client on notice that disciplinary action has been taken so that they may contact the appropriate board for further details should they choose to do so. ALD/CPAverify has a field to provide this disciplinary marker to the public users, and currently houses disciplinary markers for 45 jurisdictions. The CBA has the option, by rule, to require CPAs from states which fail to provide publicly available disciplinary data to file a practice privilege form, and pay a fee, before practicing in California (as was the case prior to passage of California’s mobility law). At the time of this article, only nine jurisdictions are lacking publicly available disciplinary data that complies with the California legislation. NASBA continues to work with these boards to include their disciplinary data within ALD/CPAverify.