MINUTES
BOARD OF PUBLIC ACCOUNTANCY
DATE : October 2, 2003
TIME : 9:10 a.m.
PLACE : 500 N. Calvert Street, 3rd Floor Conference Room, Baltimore,
Maryland 21202
PRESENT : Jacob J. Cohen
Barbara R. Stewart
Patricia A. Snell
Arnold Williams
Leslie A. Mostow
ABSENT : Michele L. Pittman
OTHERS
PRESENT : Gregory Safko, Commissioner
Dennis L. Gring, Executive Director
Daphne Thomas, Management Associate
Matthew Lawrence, Counsel to the Board
Bert Fenwick, Consultant
Ron Grafman, MSA
Carol Kirwan, MACPA
CALL TO ORDER
The meeting was called to order by the Chair at 9:10 a.m.
MINUTES
It was moved (I) by Dr. Stewart, seconded by Mr. Williams and unanimously carried to approve the minutes of the meeting held September 4, 2003 as written.
REPORT OF THE CHAIR
The following is the remarks of Jacob J. Cohen, Chairman of the Board of Public Accountancy:
“Good Morning – I hope you all received today’s Agenda. We are looking at an unusually long meeting because of two scheduled hearings and a large number of correspondence and petitions. I will, therefore, restrict my comments in the interest of time.
I received from NASBA the specs for the CBT Gateway System National Candidate Database and required files. The two booklets ware available if you need to see them or you need a copy let me know or ask Mr. Gring for a copy.
I also received and e-mailed to you, NASBA’s Regional Director’s Focus Questions. Please give your input to Mr. Gring or me.
The International Federation of Accountants which is the association of all the AICPAs of the world issued an exposure draft of a new Code of Ethics worldwide for comments by November 30, 2003. If you are interested in a copy, please let me know. My review of the exposure draft revealed one big area that is completely different from what we are working on in the U. S. The structure of the Code is in 3 parts:
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REPORT OF THE CHAIR CONTINUED
(1) Part A applies to all professional accountants
(2) Part B applies to professional accountants in public service
(3) Part C addresses in more detail than we have in our current exposure draft – its application to professional accountants in business.
This is something we have to monitor here in Maryland, especially in light of the report issued by MACPA last year recommending to our Board a similar approach in Maryland.
Finally, I cannot end my remarks without mentioning that this may be Patti Snell’s last Board Meeting. Her term in office has expired. We would like to thank Patti for her time and efforts contributed on behalf of the citizens of Maryland. She attended all Board Meetings, traveled to NASBA’s conferences and regional meetings at her own expense, chaired the Complaint Committee during the past year or 18 months and certainly participated actively in all Board decisions.
On behalf of the Board and the citizens of Maryland, we would like to thank you for your efforts and wish you the best in your future endeavors.”
EXECUTIVE DIRECTOR’S REPORT
Mr. Gring reported that Board Counsel Matthew Lawrence continues work with NASBA to bring the negotiations with NASBA for the computer-based administration of the CPA Examination to its completion. The Board is awaiting NASBA’s response to Mr. Lawrence’s revisions to the first draft that was prepared by NASBA. Mr. Gring, however, expressed concern that time was running out to get the contract approved in time to begin computer-based testing by April 5, 2004. As soon as the contract is completed, it must be submitted to the Board of Public Works for approval. Mr. Mostow stated that if Mr. Lawrence does not have a response by the Annual NASBA Meeting on October 24-26, 2003. Mr. Lawrence should provide details to both he and Mr. Cohen. Mr. Cohen said that, if necessary, he would meet with NASBA officials in an attempt to expedite the process.
Mr. Gring reported that the regulations governing the computer-based administration of the CPA Examination is expected to be submitted to the Administrative Executive and Legislative Review Committee (AELR) for approval later this month. He expected the regulations to establish the fee structure under computer-based administration to be ready for the Board’s approval by the December 4, 2003 meeting. Mr. Gring noted that the Board’s authority to establish fees is limited to examination fees under Title 2-307, Business Occupations and Professions Article.
The final paper and pencil examination will be administered to 1,264 candidates on November 5 & 6, 2003. There are two explanations for the increase in candidates from more recent examinations: (1) the regulation establishing the November, 2003 Examination as the deadline for candidates approved for the examination prior to July, 1999; and (2) persons who may be apprehensive about take the examination in the computer-based format. Mr. Gring added that the examination will be administered in the Exhibition Hall and the 4-H Building at the Timonium Fairgrounds.
Mr. Gring advised that the current licensing records show 18, 888 CPAs and firms currently hold licenses or permits.
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EXECUTIVE DIRECTOR’S REPORT CONTINUED
Mr. Gring announced that the new Commissioner, Mr. Gregory Safko, would be visiting today’s meeting. Mr. Gring said that he found the Commissioner to be enthusiastic and sincerely interested in the success of the Division of Occupational and Professional Licensing.
INFORMAL MEETINGS
The Board heard appeals from the following applicants who had been denied for the November, 2003 Examination:
Michael Schwartz - Denied for official transcript being received past the due date,
August 8th. Based upon an e-mail from Ms. Thomas (in which she
later acknowledged showing the due date for the transcript as
August 28th inadvertently), Mr. Schwartz requested that his
transcript be accepted. Having presented with additional
information from the school, the Board advised him that he would
be advised of their decision by Ms. Thomas later in the day.
Patrick Rossello - Denied for the lack of an acceptable business ethics course. Mr.
Rossello provided the Board with information from his institution,
University of Baltimore, regarding his 1978 “Environment of
Business Enterprise” as being a business ethics course, but he
explained that the actual syllabus was not available. He also
presented the table of contents to the Board, stating that the book
focused on ethics. He was advised that he too would be
contacted by Ms. Thomas with their decision.
Maryam Ghaemi - Denied for the lack of a business ethics course. After review of the
information provided by Ms. Ghaemi, the two courses that she
proposed were business ethics (Business Policy and Administrative
Strategy) were found unacceptable as neither course catalog
description contained business ethics. As she indicated that she
had an acceptable course for which she was expecting official
verification from the institution, the Board advised her what would
be needed for their review at the next meeting. Also, if such was not
the case, the Board told her that she would have to take an
acceptable course and reapply for a future examination.
Jay Jethwa - Denied for the lack of a business ethics course and Jr. Core, from
the University of Denver, was not received showing the breakdown
of accounting courses. Mr. Jethwa provided the Board with
information from the University of Denver. Recognizing that this was a case of integrated courses, the Board advised Mr. Jethwa that he too would be advised by day’s end of their decision by Ms. Thomas.
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COMMISSIONER SAFKO’S COMMENTS
Commissioner Safko stated that today is Day No. 7 for him. He has found the Division very diverse with twenty-two boards and commissions. He further added that he looks forward to working with the Board.
DENIED EXAMINATION APPLICATIONS
The following applicants appealed their denials for the November, 2003 exam as follows:
Tzvi Friedman - Denied for non-receipt of his official transcript by the deadline
(August 8th). The Board noted that three transcripts from Ner Israel,
CCB, and Bergen College were received late on August 19th, August
11th, and August 26th, respectively. The fourth transcript from UMUC
had not been received. Dr. Stewart reviewed the transcripts to
determine a timeline to consider whether or not the transcripts were
received untimely.
Ella Bowden - Denied for non-receipt of her official transcript for which the Board
recognized that she furnished the school with the incorrect address of
the Board. As the transcript was provided by this meeting, Dr.
Stewart reluctantly reviewed same as she felt that was the function of
the Contractor and the responsibility of the applicant to properly
complete the Checklist Form. She did not find an oral
communications course, noting that Ms. Bowden indicated
organizational management as oral communications (which of course,
was not acceptable). While Mr. Lawrence felt that her accidentally
using the wrong address was understandable, and even if the Board
considers the transcript timely, one should be careful in sending or
having items sent to the Board insofar as the address. The Board
was ultimately of the opinion that while they will accept the transcript,
Ms. Port should perform her usual evaluation. This action was
moved (III) by Mr. Williams, seconded by Ms. Snell and unanimously
carried.
Hotan Phamdo - Denied for non-receipt of his transcripts. As they had not been
received by this meeting, the Board had no alternative but to deny his
request for consideration.
Kevin Leroux - Denied for the lack of an acceptable business ethics course. After
review of the course description, that Mr. Leroux claimed was
business ethics (PHL 212 Ethics), the perspective of the Members
varied with some opinionating that the Board has the discretion to
accept this course. Mr. Lawrence, however, advised against the
Board’s accepting a course based on the definition. He further
advised that the Board should consider changing its regulations. It
was moved (IV) by Ms. Snell, seconded by Mr. Williams and carried 5
to 1 to accept this course as meeting the business ethics requirement.
Honesto Ramirez - Denied for non-receipt of an official transcript. As he furnished the
official transcript and substantiation from his school that an official
one was sent prior to the deadline, after some discussion, the Board
accepted the late transcript for review.
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CORRESPONDENCE
Ms. Rebecca Amos petitioned the Board for either a waiver or extension to gain the statutory CPE based on medical circumstances. Noting that her current license expires in two years, the Board requested that Ms. Thomas advise her to petition at that time, providing medical substantiation.
HEARINGS
Chairman Cohen advised that the Board that the hearings scheduled for today have been postponed. The first hearing has been postponed and rescheduled for December 4, 2003. The second hearing is being postponed for the purpose of reaching a consent agreement.
EDUCATION COMMITTEE REPORT
Dr. Stewart reported that there were twenty-four (24) applications administratively approved (19 reciprocal) for which 23 were Internet transactions.
Joshua Forgione - Did not meet Maryland’s educational requirements when he
obtained his initial license in the other jurisdiction.
Can only take the required courses, obtain an original license in
another jurisdiction, then reapply to Maryland for reciprocity or reapply
under the 4 and 10 rule.
Fonda Giacola - Did not meet Maryland’s educational requirements when she
obtained her initial license in the other jurisdiction.
Can only take the required courses, obtain an original license in
another jurisdiction, then reapply to Maryland for reciprocity or reapply
under the 4 and 10 rule.
Rebecca Mattoni - Did not meet Maryland’s educational requirements when she
obtained her initial license in the other jurisdiction.
Can only take the required courses, obtain an original license in
another jurisdiction, then reapply to Maryland for reciprocity or reapply
under the 4 and 10 rule.
It was moved (II) by Ms. Snell, seconded by Mr. Mostow and unanimously carried to approve the Education Committee’s report.
EXPERIENCE COMMITTEE’S REPORT
On Ms. Pittman’s behalf, Ms. Thomas reported that thirty-five RPE’s had been reviewed since the last meeting. It was moved by Dr. Stewart, seconded by Mr. Mostow and unanimously carried to approve the Experience Committee’s Report.
OTHER BUSINESS
Mr. Mostow, being a member of NASBA’s Litigation and Support Committee, which is dealing with the Sarbanes-Oxley Act, stated that the Committee submitted a resolution (which he read to the Board) that has been accepted and will be reviewed at the October Board of Directors meeting. He further stated that some national cases continue for years, and if boards were aware earlier, they could have taken action. NASBA came to the conclusion that state societies
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OTHER BUSINESS CONTINUED
have legal obligations to inform the Board or be subject to civil liabilities as there should be total transparency between state societies, NASBA and state boards. Noel Allen, Legal Counsel to NASBA, advised that fifteen (15) states are starting this approach for better communications. Mr. Mostow added that when NASBA advertises the resolution, the Board should review same as to endorsement and if possible, include in Maryland regulations. He concluded that he would monitor this matter and also, as Mr. Cohen is a part of the Ethic Committee, information would be filtered through both.
EXECUTIVE SESSION
It was moved (VI) by Ms. Snell, seconded by Mr. Williams and unanimously carried to go into Executive Session at 11:45 a.m. in the 3rd Floor Conference Room, 500 N. Calvert Street, Baltimore, Maryland 21202. The purpose of this session was to consult with counsel. This session was permitted to be closed pursuant to State Government Title Section 10-508(a)(7). Upon completion of the session, the Board resumed their public meeting at 12:53 p.m.
COMPLAINTS
Ms. Snell, with today being her last meeting, provided the following report on complaints from July 1. 2002 to date:
6 - Complaint of records being held hostage
9 - Code of Ethics or technical competence issues, such as independence or poor
workmanship
11 - Had to do with tax preparation
3 - Were complaints of possible holding out as a CPA