NASBA annual meeting focuses on uniformity and liability.

Nathan T. Garret, 1992-93 president of the National Association of State Boards of Accountancy (NASBA), stressed "our future is bright" as he addressed NASBA's 85th annual meeting, held recently in Washington, D.C.

Reciprocity issues

"We have a window of approximately five years to prove we can achieve domestic mobility and address the problems surrounding international reciprocity without federal intervention," Garrett-said.

If all states cannot pass the Uniform Accountancy Act, he urged them at least to adopt a "5/10" rule, which grants a professional a reciprocal license if he or she has been in public practice for 5 of the last 10 years. Garrett also suggested that NASBA consider developing qualifying examinations for international reciprocity.

During a panel session with five of the chief executive officers of the six largest accounting firms, Arthur Andersen & Co. chief executive Lawrence A. Weinbach said that the largest firms collectively transfer an estimated 1,000 professionals between jurisdictions annually. Adoption of the Uniform Accountancy Act is viewed as crucial, he said.

He continued, "We think it's appropriate that the regulatory solution is state licensing and oversight, but we think it is critical to do it through a national set of common standards."

In particular, Weinbach pointed to current differences in the number of accounting hours required to become licensed in various states and differences in continuing professional education calendar-year and course-topic requirements.

The firms' concerns were echoed by 1990-92 NASBA President Jerome P. Solomon when he urged state boards to adopt the Uniform Accountancy Act. Recognizing the act contains compromises reached between NASBA and the American Institute of CPAs, he advised, "As we review the past and speculate on the future, uniformity in regulation of the profession - leading to enhanced mobility of licensees - is our number one concern. We cannot allow our personal biases, parochialism and prejudices to impede our quest for uniformity."

State accountancy boards should enter into an interstate compact similar to that of architects to simplify uniformity, suggested Louis W. Dooner, the 1992 recipient of the William H. Van Rennselaer Public Service Award for his work with NASBA, the Florida state board and the Florida Institute of CPAs. Dooner urged NASBA to issue a national permit to conduct audits for clients engaged in interstate activities, for audits in which government standards apply or for audits regulated by any federal agency.

Liability crisis

In the wake of mounting professional liability problems, Garrett announced the formation of a new NASBA committee that will investigate what the boards should do about the professional liability of their licensees.

Deloitte & Touche CEO J. Michael Cook reported the large firms have studies under way on the viability of different forms of practice, including professional corporations, limited liability partnerships and limited liability corporations.

Cook explained, "The only barrier we have today to obtaining a form of practice that would be more realistic and reasonable is what is not permitted by state laws and regulations."

National regulation

More direct federal regulation of the profession is a likely part of the profession's future, warned Theodore C. Barreaux, counselor to the U. S. comptroller general. "Perceptions of the profession by regulators and Congress are negative - perhaps more negative than most CPAs imagine," he warned. "The wrong solution would be for the profession to continue trying to close the expectation gap by reducing expectations."

To limit liability while preserving its private sector status, the accounting profession will have "to take a proactive role and propose both expanding its services to the public and some form of government regulation," Barreaux advised. He pointed to the Federal Deposit Insurance Act of 1991 (which, among other things, requires accountants to attest to management's assertions on internal controls and compliance with laws and regulations) as a model.

AICPA 1992-93 board chairman Jake Netterville announced the Institute was working to change the perception of the profession and called for grass-roots support through the key person contact program. "The profession does not have a bad image," he argued, "but what we need is full recognition and stature commensurate with our contribution to society."

Netterville called liability reform "the profession's greatest problem," with "no close second," and asked for help "in making our elected officials aware this is not a public accounting problem; this is a business problem and a taxpayer problem."

Louise Dratler Haberman. Ms. Haberman is consulting editor of NASBA'S monthly newsletter, The State Board Report, and executive editor of New Accountant.