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Chair's corner.

As I travel around the country, I am encouraged by the renewed commitment states are making to tackle a critical problem facing CPAs. It's a problem affecting CPAs of all sized firms, from sole practitioners to the Big 4. I am speaking of mobility--or the ability of a licensee to get a practice privilege in a jurisdiction outside of their home state--without the need to obtain another license.

As geographic boundaries become increasingly irrelevant to business operations, clients are in desperate need of CPAs who can conduct business across state lines, unfettered by counterproductive regulations that do not serve the public interest.

For nearly 10 years, the AICPA has worked with the National Association of State Boards of Accountancy to develop and implement a uniform approach to cross-boarder mobility through a provision in the AICPA/NASBA Uniform Accountancy Act (UAA) called substantial equivalency. Efforts to date have resulted in a disjointed and non-uniform approach to mobility because states have not implemented substantial equivalency as it was intended.

The pure concept of substantial equivalency is simple and similar to a driver's license: A CPA must have a license from a state that has licensing criteria equivalent to the provisions in the UAA, and when that occurs, the CPA can practice in other substantial equivalent states without the need to obtain a license in that state.

As I talk to CPAs across the country and hear the needs of the clients they serve, it becomes strikingly apparent that a uniform approach to facilitate mobility, while preserving the rights of the state boards of accountancy to discipline those who practice in their state, has reached a critical juncture.

Solving this crisis will take a collaborative effort. Importantly, on board with the AICPA are NASBA, state CPA societies and state boards of accountancy across the country.

Within the AICPA, the Special Committee on Mobility was charged at its inception in Apr. 2006 to develop recommendations for achieving a uniform mobility system across the nation for CPAs and firms.

The special committee was additionally tasked with providing significant resources to the states that seek to enact and/or revise mobility provisions (substantial equivalency) within their state laws or regulations.

After conducting comprehensive research and heating the perspectives from other stakeholders, the committee agreed that any model mobility system would have to:

* 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.

Ultimately, the committee brought its recommendations to the AICPA Board of Directors (The CPA Letter, Mar.). At the same time, our board took serious notice of the agreement between the AICPA and NASBA to remove the notification requirement from Section 23 (substantial equivalency) of the UAA. The notification requirement has been found to be one of the most significant obstacles to achieving a uniform mobility system.

I view this as a monumental step towards achieving uniformity and the new provision is being exposed for public comment through May 15 ( UAA_Section_23_Exposure_Draft_2006.pdf).

Because of the strong desire to find an immediate and permanent solution to our current mobility system, many states are moving ahead to amend or provide for substantial equivalency in their states. Four states (Ohio, Missouri, Virginia and Wisconsin) have already moved to this approach and it has been quite effective for CPAs practicing in those states.

I would like to compliment these early adopters, as well as those states that have introduced or will be introducing proposals this year, and encourage other states to follow the trend to move to a system that will allow CPAs to serve their clients across boarders, while at the same time preserving the state boards of accountancy's ability to protect the public. In the end, it will be up to each state to enact this provision to provide for a national uniform mobility system. For more details on this critically important issue, see this month's Journal of Accountancy article, "Barriers to Mobility: A Crisis for CPAs."

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Author:Williamson, Jimmy L.
Publication:CPA Letter
Date:Apr 1, 2007
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