How do you define mobility for CPAs? The accounting and auditing standards that an Iowa CPA follows are the same ones a Florida CPA follows. Add the Internet-driven, practically borderless nature of commerce today and it would seem reasonable that these two CPAs should be able to provide their services in each other's states without impediment. Right?More often than not, unfortunately, the answer is "wrong." Most states now impose differing and sometimes onerous notification and fee demands on CPAs who want to do business in their jurisdictions, even if a CPA has no intention of establishing an office there - or even being physically present. Moreover, each state has its individual rules, regulations and requirements for allowing CPAs from the outside to practice within its boundaries. It's virtually impossible for any CPA to comply with so many variations.
The American Institute of CPAs and the National Association of State Boards of Accountancy for years have been concerned about difficult-to-enforce and even unreasonable rules and restrictions placed on CPAs, which serve neither the public interest nor the profession.
The organizations' joint Uniform Accountancy Act Committee ultimately determined that the guiding principle for any mobility system should both eliminate the barriers to interstate practice and retain the basic tenets of the state-based regulatory system, which for many years has ensured appropriate protection of the public.
The committee and the leadership of the two organizations concluded that uniform adoption of the "substantial equivalency" provision of the UAA was the most viable means of achieving the desired result. Substantial equivalency allows any CPA with a valid state license to secure practice privileges in another substantial-equivalency state - without notification, arguably the highest hurdle for mobility. At the same time, and most important, it gives state boards of accountancy automatic jurisdiction over CPAs and CPA firms that provide services in their state. This new provision is paramount to protecting the public.
Some have challenged this concept, asking: How would a state be able to protect its citizens from unscrupulous business practices by a practitioner from the outside without notification - or knowing who was actually practicing in the state?
The elimination of the notification requirement would not give CPAs any type of immunity when they provide services in a state in which they are not licensed. They still would be automatically bound by the laws of that state and subject to the regulation of the state board of accountancy, just as citizens of one state are bound by local laws when they visit another.
The UAA is explicit about this. Further, NASBA's Accountancy Licensee Database is a superb regulatory tool for states that adopt the UAA's mobility provisions, helping their boards of accountancy track CPAs who do not adhere to the rules.
Fortunately, the states are quickly coming to appreciate that restrictions on CPA mobility are in nobody's best interests, particularly the public's. Prior to this year, only four states - Missouri, Ohio, Wisconsin and Virginia - had "no-notification" mobility laws on their books that allowed CPAs from other substantial-equivalency states to practice in their states without providing notification.
In 2007, six enacted this type of mobility legislation - Illinois, Indiana, Maine, Rhode Island, Tennessee and Texas. Louisiana also has enacted legislation giving the board legislative authority to promulgate mobility by rule. In addition, legislation was also introduced in Delaware, Hawaii, Massachusetts and Oklahoma. That's not all. There is early mobility activity in three more states, and we anticipate that a majority of states will take legislative or regulatory action in 2008.
It's significant that the six states that adopted legislation this year relied on the AICPA/NASBA model. It is also significant that this legislation was fully embraced by the legislatures in these states, passing with little to no opposition. Not only do they understand the importance of unrestricted access, they also recognize that notification is a needless, time-consuming exercise, one that does not further the public interest. As one regulator recently stated, state boards of accountancy are vested with protecting the public interest, and in this instance, that also includes giving consumers of CPA services access to the most qualified professionals - regardless of where they are located.
We're optimistic that the balance of the states eventually will permit all CPAs to practice within their jurisdictions without having to negotiate a labyrinth of requirements. It may well be inevitable in a world where business spans not only states, but also continents. Keep in mind that another word for "mobility" is "movement" - and one synonym for "movement" is "progress."
Ken L. Bishop is chairman of the NASBA Mobility Task Force, and Susan S. Coffey, CPA, is senior vice president of member quality and state regulation at the AICPA.
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