What Does It Take?

Future of CPA Profession Hangs in the Balance

All CPAs are now required to hold a doctorate in accounting. No grandfathering will be permitted.

Did we get your attention? Did we raise your ire?

The doctorate requirement is a fabrication, but there are several radical changes pending in Sacramento that should peak your interest:

* Abolition of the Uniform CPA Exam;

* Establishment of a specialty certification for auditors;

* Rejection of all elements of the Uniform Accountancy Act;

* Reduction of the current 80 hours of continuing education for license renewal;

* Reconfiguration of the California Board of Accountancy to house a majority of unlicensed members; and

* Overturning the California Supreme Court decision in the Bonnie Moore case concerning advertising by unlicensed bookkeepers.

The Department of Consumer Affairs and the legislative consultant for the Joint Legislative Sunset Review Committee have brought forth these proposals as a part of what we believe is a calculated political attack that jeopardizes the integrity, competence and future of the CPA profession. These proposals could result in the eventual deregulation of the CPA profession and immediately devalue your CPA certificate.

No Specialty Auditing Certificate

This currently vague proposal to create a specialty certificate for auditors could result in a two-tier licensing structure, or require CPAs who perform audits or reviews to complete additional experience requirements and receive some kind of specialty designation.

The proposal is problematic because it puts California out of step with the rest of the nation which is moving toward unifying CPA licensure requirements. Also, a more stringent experience requirement could result in a serious supply issue.

Keep CE Requirement

Currently, California CPAs are required to take 80 hours of continuing education every two years to renew an active license. A CBA study found that the CE requirement enhances consumer protection and is supported by the vast majority of licensees.

Maintain a Licensed Majority

AB 270 would potentially give unlicensed individuals, with their own special agendas, control of the CBA by changing its composition. A cornerstone of the CPA profession is the integrity of its members. The profession's future integrity and independence is in peril if oversight is left to the whim of individuals who have a pecuniary interest in regulating the profession through adoption of California-only practice standards.

Uphold Bonnie Moore

The Bonnie Moore decision, which protects the use of the term "accountant," came after years of legal wrangling and was finalized by the California Supreme Court. It is a basic consumer protection measure that should be preserved. Unlicensed individuals are allowed to refer to themselves as accountants only if they also indicate that they are not licensed by the state.

Save the Uniform CPA Exam

By using the Uniform CPA Exam, California ensures that its CPAs are held to the same rigorous standards as other CPAs nationwide. This is just one of many ways that California protects consumers.

Under UAA, candidates must sit for all parts of the exam and pass a minimum of two sections with a score of 75 or better. They must achieve a score of 50 or better on failed sections to retain credit on the passed sections and must sit for all unpassed sections on subsequent sittings. States that currently follow these rules have shown no decrease in pass rates.

For California to develop its own examination would be cost-prohibitive and the exam would not be recognized by any other jurisdiction. Thus, California CPAs would be denied the benefits of reciprocity and substantial equivalency, and would be unable to serve clients' multi-state needs.

UAA Reflects Real World

To maintain national prominence and continue to serve consumers and businesses' needs, California must adopt the UAA licensing elements or risk other states attempting to eliminate the ability of California's CPAs to represent their clients' interests in those states.

In education, the UAA creates a minimum educational requirement of 150 semester units of college or graduate level coursework and a bachelor's degree, compared to the 120 units currently required. The additional units will give prospective CPAs a broad educational base that will allow them to better serve their clients and further the public trust in accountancy.

The educational requirement is complemented by a change in the experience requirement. UAA demands one year of broad-based experience for initial licensure. This is designed to reflect the current environment for CPA services and is currently required in 45 states.

UAA requires mandatory peer reviews for firms that perform audits or reviews to ensure adequate quality assurance controls. This represents substantial consumer protection as firms must document their ongoing competence. Those firms that perform only compilations would continue to participate in the CBA's Report Quality Monitoring Program.

Take 20 Minutes

Every CPA should be vitally interested in these issues. Every California legislator needs to hear from CPAs. Take 20 minutes to contact your legislators and voice your support of the UAA components and Uniform CPA Exam, as well as your opposition to the radical revisions pending in Sacramento.

For more information, as well as specifics on how to contact your legislators, go to http://calcpa.iris1.com and click on Alerts, or call [phone].

Bruce C. Allen is CalCPA's director of government relations.