CPA Firm Mobility: SAMPLE Talking Points forLobby Visits
· We are here today to ask you to amend our state’s accountancy law to allow CPA firms to operate across state lines without unnecessary paperwork or complicated compliance costs that don’t serve the public interest.
· Approximately, XX years ago, our state passed a law known as “individual CPA mobility.” When you and your colleagues passed that law, it was part of a larger national campaign to allow CPA licenses to operate similarly to a driver’s license. Under the proposal, CPAs would only need one license in one state, but could practice in other states temporarily without having to obtain a license in that other state or pay extra fees. In exchange for this privilege, CPAs would remain subject to both the oversight of their home state board of accountancy as well as the state board of accountancy in any state in which they practice.
· The core tenets of individual CPA mobility have been commonly referred to as “no notice, no fee, no escape.” And, this concept strikes the right balance between allowing CPAs to operate effectively and competitively, while still ensuring they are subject to robust oversight.
· Before individual CPA mobility was the law of the land, state laws were a complicated and inconsistent patchwork of requirements that were a bureaucratic nightmare to comply with. In fact, some CPAs had to maintain up to a half dozen licenses or more, depending on where in the country their clients were located!
· However, now, in less than a decade’s time, 49 states, the District of Columbia, and the U.S. Virgin Islands have passed individual CPA mobility laws and the campaign has been a huge success.
· It is time to move to the next step in ensuring our state has a regulatory regime for the CPA profession for the future.
· We are asking you to pass a CPA firm mobility law that would extend the “no notice, no fee, no escape” concept from individual CPAs to CPA firms as well.
· Right now, out-of-state CPA firms must register and pay extra fees when they come into our state to perform certain services known as attest services. Attest services include: audits, reviews, engagements performed under the Statements on Standards on Attestation Engagements (SSAEs), and Public Company Accounting Oversight Board engagements.
· Out-of-state CPA firms currently do not have to register, however, when performing non-attest services, such as tax advice, financial planning, and consulting services. So, we have partial CPA firm mobility now for certain services. Our proposal would streamline the requirements so attest services have the same requirements as non-attest services.
· Lawmakers, profession leaders, and regulators originally put the attest registration requirements in place, because they wanted to be sure that individual CPA mobility would be a success first. Now that it is has proven to be, it’s time to revisit the promise to look at this issue again.
· Already 14 states – nearly a third of the country – have passed laws to eliminate out-of-state firm registration requirements and associated extra fees.
· The out-of-state registration requirement is of limited value to regulators. Indeed, examinations of potential wrongdoing of CPA firms tend to be complaint-driven. State boards of accountancy initiate investigations into home state or out-of-state firms whenever they receive credible evidence meriting such an investigation, not because they have a registry of all firms.
· However, the varying registration requirements in states across the country impede competition and costs CPA firms hundreds and hundreds of lost hours without serving the public interest.
· While eliminating the registration requirement, the proposal before the legislature has strong public protections in place. Our state board of accountancy retains all of the oversight powers it currently has over out-of-state firms. And, out-of-state firms must meet our peer review and CPA firm ownership requirements to take advantage of the proposed law. These provisions ensure that these firms have the core quality, competence, and regulatory oversight that our home state firms have.
· Our CPA firms are already benefitting from the CPA firm mobility laws in other states. We need to honor the inherent promise made when those states acted by doing the same thing in our state. It is a simple question of fairness and good uniform public policy across the states.
· By passing this law, we can create a strong regulatory regime for the CPA profession in our state while also encouraging competition and reflecting the real way in which CPA firms offer services to their clients.
· Please act quickly to update our accountancy statute law so our state can be a leader on this important CPA profession issue.