Nashville, Tenn. (Aug. 27, 2004) -- The National Association of State Boards of Accountancy has proposed a set of rules that would have CPA firms self-report on their internal quality control procedures as well as those of their audit clients.
Unlike traditional quality review programs, the NASBA guidelines would mandate that firms submit to their respective state licensing boards any “adverse” quality control reviews of their operations. They also would have individual CPAs notify the boards of any civil charges brought against them involving fraud, violation of standards of practice or misappropriation of funds.
Currently, North Carolina, Washington and California have implemented self-reporting rules.
“We’re calling on professionals to report on their own problems, whether they be procedural, technical or legal. It is because we believe our states’ licensed accountants will not be ashamed to stand up to scrutiny that we think this system will work,” said NASBA president David Costello.
NASBA’s new proposed procedures, which have been recommended to all state boards, also call for retaining all audit materials for a period of seven years for all client companies -- not just those who are public issuers. NASBA has also proposed that CPAs with four years of public accounting practice within the past 10 years receive a “reciprocity benefit” and be allowed to practice across state lines. The rules can be viewed at www.nasba.org.
-- WebCPA staff
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