by MELISSA McGINLEY
A joint report issued by AICPA and NASBA in July outlines a new regulatory framework for the future of accounting. The report recommends substantial equivalency, licensure for all CPAs and adoption of the Uniform Accountancy Act in each state.
The changes are aimed at increasing CPAs' professional mobility and the portability of the CPA designation. Globalization, telepractice, expanding scopes of practice and demographic shifts in the workforce were cited as the major factors forcing change.
The report explains, "With a shift to global capital markets, efforts are...underway to harmonize accounting and auditing standards of the various developed countries...Businesses are adapting to these changes, and the accounting profession and state boards must also respond to meet the future needs of clients, employers and the public.
The report, written by the AICPA/NASBA Joint Committee on Regulation of the Profession, proposes a number of changes to the Uniform Accountancy Act, which apply mainly to CPAs performing attest services. Among the most significant changes:
Critics of the report feel the changes will further disadvantage small and mid-sized accounting firms. They argue the expanded definition of "attest services" encompasses almost every service by which unlicensed practitioners currently earn a living. Eliminating commissions for these services, they warn, may drive competitors out of business.
Leslie S. Shapiro, writing for National Public Accountant, targets the proposed "safe harbor" language as particularly unfair. "Such language," she states, "suggests the hopelessness of the plight of [unlicensed] accountants... Not only is the language misleading and demeaning, but reports issued with the safe harbor language probably would not be accepted by many third parties, such as banking institutions."
The professional associations counter, "If [we] do not take the initiative on this front, others will surely step into the void and attempt to create a future, and a system of regulation, with which our organizations may not agree and which may not be best for the public we serve."
An exposure draft of the report is available on AICPA's web site: www.aicpa.org A final report is expected this fall.
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