Call me an eternal optimist, but I subscribe to a theory put forth by Jim Collins, author of the best-selling book Built to Last, which is to celebrate the beauty of "and" thinking and fight the tyranny of "or" thinking.As I read the commentary by my esteemed colleague Lou Grumet ("Interstate commerce versus public protection," Feb. 12-25, 2007, page 6), it occurred to me that the "and" was missing with regard to this mobility issue.
So I would like to propose an alternative: Is it possible to promote interstate commerce and protect the public? Is it possible to respect states' rights to regulate and oversee the CPA profession and for CPAs to be able to easily serve clients regardless of what state they're located in? I suggest that the answer is yes.
In fact, many state CPA societies and boards of accountancy, as well as the American Institute of CPAs, are all working together to find a workable solution. This is unprecedented cooperation and alignment of the regulators and the profession. Shouldn't we all make a bold attempt to make this work for the public, the regulators and the CPA profession?
Consider the recent events that now make a win-win solution possible.
In mid-December, the National Association of State Boards of Accountancy and the AICPA joint committees on the Uniform Accountancy Act released a new exposure draft (www.aicpa.org/download/states/uaa_section_23_exposure_draft_2006.pdf) on UAA Section 23 (the section that relates to these mobility issues). This new edition includes the two important concepts that I believe achieve exactly the type of breakthrough thinking that Jim Collins is referring to when he says "and" versus "or."
This version removes the requirement for notification by licensees that they are entering another state (keep in mind that this is for temporary practice situations, not physically moving into that state), and adds explicit language that gives a state board automatic jurisdiction over a CPA and the firm employing that CPA. That sounds like we actually can have interstate commerce and protect the public, and that we can achieve mobility for CPAs and serve businesses and clients without sacrificing our state regulatory structure or undermining their authority as regulators.
There are several examples of this new model in practice. The new edition of the UAA refers to the fact that several states have already moved successfully to this new concept of mobility without the need for notification and the resulting forms and fees that are imposed on CPAs attempting to serve clients across state borders. Missouri and Wisconsin recently joined Ohio and Virginia, which have had this no-notification concept for more than five years "without any documented lapse in public protection."
Another example of this "and" thinking is the work of the AICPA special committee on mobility, on which I had the privilege to serve. That committee early on established these guiding principles:
* Respect and protect the public interest.
* Ensure uniform practice privileges in all jurisdictions.
* Maintain the credibility and value of the CPA certificate.
* Enable a credible enforcement process.
* Be administratively efficient.
* Provide the ability to be responsive to the changing business environment.
After extensive research, the committee determined that the notification requirement was at the core of these barriers, and did little or nothing to protect the public. Therefore, the committee concluded that eliminating the notification requirement was an important aspect of a uniform mobility system.
The committee concluded that any solution should include these key criteria:
1. No notification.
2. No fees.
3. No extra requirements (e.g.; firm licensure, peer review, CPE, ethics requirements).
4. Licensees submit to the automatic jurisdiction of the state in which they are seeking practice privileges.
The committee's solution was to create a federally mandated national mobility provision that would respect states' regulatory authority and achieve the mobility for CPAs that is needed to serve clients across state lines.
Yet the AICPA board and the committee went a step further: They agreed that they should first invest in current efforts at making uniformity and mobility work within the current state-based system before pursuing their alternative - another brilliant use of "and" thinking. They are going to pursue an effective state-based system and hold another possible solution that respects the states' authority. It only makes sense that we have a fallback position in the event that we simply cannot get every state to realize how important this mobility issue really is.
As a state CPA society executive and a CPA, I have learned to respect and appreciate the collective wisdom of a group of hard-working CPA volunteers focused on solving the issues that challenge our profession. I know that many smart leaders have been working on this at the AICPA, NASBA and state CPA societies for a long time.
As I read the latest exposure draft of the UAA, I get the sense that once again a group of volunteers has put its shoulder to the wheel and figured out a workable solution. The world is truly flat and our Jeffersonian democracy can still function effectively. The latest edition of the UAA and the work of NASBA and the AICPA show us that we can still work together to solve problems that, like our profession, are in the public interest.
I am going to add my shoulder to the volunteers' efforts. Our markets rely on the CPA profession and our regulatory system staying strong, and I think this approach achieves that. I also think that our CPAs deserve our best efforts on their behalf.
Tom Hood is the chief executive and executive director of the Maryland Association of CPAs.
