3. What Are the Responsibilities of a Member of a Board of Accountancy? Presented by Laurie Tish and Karen Turner – 2011 Western Ken Odom and Kim Tredinnick – 2011 Eastern
60. NASBA/AICPA Joint Efforts Uniform Accountancy Act International Qualifications Appraisal Board Uniform CPA Examination Standards for CPE Sponsors Coming Soon – International Exam administration
61. AICPA/NASBA UAA Sets substantial equivalency requirements Promotes uniformity Basis for mobility among states Basis for international Mutual Recognition Agreements
62. NASBA/AICPA International Qualifications Appraisal Board Mutual Recognition Agreement partners: Canadian Institute of Chartered Accountants Instituto Mexicano de Contadores Publicos Chartered Accountants of Ireland Institute of Chartered Accountants in Australia New Zealand Institute of Chartered Accountants
63. Uniform CPA Examination 4-part computer-based since 2004 Three partners: AICPA (content and scoring), NASBA (central clearinghouse for information on eligible candidates), Prometric (testing centers) Agreement extended until 2024.
64. Examination Review Board Body which reviews all aspects of the Uniform CPA Examination on behalf of State Boards as a basis for their reliance on the Examination’s results Annual report to Boards presented at Regional Meetings
65. CPE Program Standards Updated this year with input from AICPA. Incorporates material previously only covered in “Frequently Asked Questions.” Recognizes newer CPE formats. Will be appended to UAA.
66. Acronym Quiz Standard setters: PCAOB, IASB, FASB Associations: IMCP, CICA, IFAC Exam-related: FAR, NTS, BEC Designations: CA, CPA, EA (see chart in meeting binder)
70. Who Are the Key Players and Making the Headlines? Ted A. Lodden and Janice Gray 2011 Western Regional Bucky W. Glover and Jeff Chickering 2011 Eastern Regional
71.
72. Speaking for the Public Federal Agencies US Trade Representative HUD SEC Consumer groups Center for Public Interest Law (California) Accountants for the Public Interest Elected officials Governors Legislators Others?
73. Speaking from the Campuses American Accounting Association (AAA) Association of Collegiate Business Schools and Programs (ACSBP) Association to Advance Collegiate Schools of Business (AACSB) Beta Alpha Psi Others?
95. IRS Regulating Tax Preparers IRS Commissioner Shulman announces multi-year effort to provide standards for and oversight of the tax preparation industry. – January 2010 Non-CPA, non-lawyer, non-EA preparers to meet program’s requirements. Databases to be created with new registration numbers. Fall 2011 certain paid preparers will be required to pass new competency test. Expected to start in 2012, certain paid preparers must have 15 hours of continuing education annually. Regular renewals of Preparer Tax Identification Numbers (PTINs).
96. Standards and Fraud Make News Standards Fraud Congressional Hearings IFRS SEC considers IFRS Roadmap – July Panel Adoption by other countries Impact on private company standards Schemes Ponzi schemes across the country Brokerage firms International incidents
97. -- Will Rogers “All I know is what I read in the papers.”
99. HOW WE COMMUNICATE Thomas Kenny - Director, Communications Louise DratlerHaberman - Director, Information & Research
100. WEB SITE www.nasba.org Links to member boards’ sites Newsletter highlights Meeting presentations Committee reports White papers, letters Meeting information Committee membership lists Bylaws, UAA, other NASBA documents Stay tuned for new features
102. PUBLICATIONS State Board Report - Newsletter CPA Candidate Performance on the Uniform CPA Examination Ethics Matters – CPT Newsletter ALD News
103. QUARTERLY MAILING Executive summary and all responses to Regional Directors’ Focus Questions Highlights of Most Recent BOD Meeting Approved Minutes of Previous BOD Meeting New Focus Questions
104. OTHER MEDIA NASBA Twitter News blast Press Releases (PRNewsWire) Quick Polls (for Executive Directors seeking prompt answers to administrative questions from other Executive Directors)
105. E-MAIL To reach any NASBA staff member just send your message to first initial then last name then @nasba.org dcostello@nasba.org kbishop@nasba.org tkenny@nasba.org lhaberman@nasba.org
106. EVERYONE NEEDS E-MAIL E-mail reaches out to quickly distribute information and get current responses. It saves us time and money. Please promptly notify NASBA (aholt@nasba.org) of any e-mail address change.
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
SPEAKER 1 – We welcome you to our orientation this morning and realize that you come with different backgrounds and experience. Some of you have just been appointed to your Board and others have been on the Board for close to a year. Why you decided to volunteer your time and attention to the Board probably varies as well. Looking at our list of reasons for joining the Board, in the current economy, the good coffee and high per diems may have become even less of a reason for signing up. Many states are facing tough times -- and they are merging boards – and even cutting out the coffee. So far Board members have not been asked to pay for reserved seating at their meetings, or been charged for bringing in their briefcases – but that could happen.
SPEAKER 1 – We have listed some additional reasons for joining the Accountancy Board that are a bit more lofty. I think all of us serve because we believe we are contributing to better protection of the public through better government. Would anyone like to add a reason? (WAIT FOR RESPONSE OR CALL ON SOMEONE)
SPEAKER 2 – In December 2010, the Arizona consulting firm of Zwillinger Greek Zwillinger & Knecht was called in to evaluate the performance of the Washington State Board of Accountancy, when consolidation of the Board was under consideration. The Rule shown on the slide was cited in that report. Would you add any others?Given the economic stress many states now face, it is important to underscore why an Accountancy Board is needed and why it should have the resources to do its job efficiently and effectively. This is the focus of NASBA’s State Board Relevance and Effectiveness Committee’s drive for the creation and maintenance of autonomous boards of accountancy, which will be discussed during Friday’s breakout sessions led by the Committee’s Chair, Bucky Glover.
SPEAKER 2 – Are there other groups to be added to this list?When you are selected to serve on a Board of Accountancy, you come with skills, knowledge, experience and capabilities that can be assets to your Board. You come with all those valuable facets, but you leave your advocate’s hat at the door. You are not on the Board to make things harder - or easier - for CPAs. You are there to ensure that CPAs are fairly providing the public with the services they offer -- and that those individuals who qualify to become CPAs are provided a fair way to get that license. Quite simply -- you are protecting the public.
SPEAKER 1 – With 55 Boards of Accountancy across the country and in the territories, there is a broad range among them in the number of licensees they oversee, the size of the Accountancy Board, the number of public members each Board includes and the staff assigned to work for the Boards. In the Regional Meeting binder you will see the “State Board Profile for 2011” which clearly shows the range of sizes.
SPEAKER 1- Much of the work of the Board is accomplished through its committees. Some may be standing committees established in the Board’s rules, while others may be formed to address special issues.Looking at this list, are there any other committees that your Board has which are not included?(WAIT FOR RESPONSE)
SPEAKER 2 – When Accountancy Boards get together, you’ll frequently hear them mention the three Es for licensure – education, examination and experience. You’ll also hear us talk about the “three-legged stool” concept, meaning if any one of these three elements is cut short, the stool will topple. Boards depend on each other to make sure licensees continue to be competent after they are licensed. If a licensee is not performing up to standards there is remediation and perhaps even removal from practice. States depend on each other to make sure their licensees fulfill their peer review and continuing professional education requirements. This has become even more important now that we have mobility.States also depend on each other to follow through on referrals and complaints.
SPEAKER 2 – When there is a financial crisis, the cry often goes out: “Where were the auditors?” That is the expectation gap we talk about – the public expected the auditors had spotted every problem. We heard “Where were the auditors” during the Enron collapse, the Madoff scandals, and even the Lehman Brothers inquiry.By being aware of those who depend upon the Accountancy Boards and working to protect the public and letting them know what our licensees are doing, we help to close that expectation gap. Communication among the Boards, the CPAs and the public is key to keeping State Accountancy Boards relevant.
SPEAKER 1- Be familiar with Board’s org, controls and policies: This is important because as a Board member, you are the face of the Board. If you do not buy into the philosophy used by Board ED and staff (or at least be aware of it) to impose discipline, and to deal with the stakeholders, there is a risk that they may be handling things in a manner that you do not agree with. Learn what the Board’s internal processes are and how claims are dealt with (i.e., Can the ED dispose of a claim without input from a Board member? Once it is deemed to be a case, how much involvement does a consulting Board member have? How transparent are the Board’s policies regarding discipline? Etc.). It is ultimately your responsibility as a Board member to oversee all of the Board’s activities.Ex Parte Communications: Ex Parte Communications are off-the-record communications with one of the parties to a proceeding. For obvious reasons, these can get your Board into trouble as these are legal matters.Direct Inquiries to Board Staff: There is a delicate balance between being helpful to your friend or colleague who approaches you and overstepping your bounds in your role as a Board member – learn to provide helpful tips such as showing them how to navigate the website, Board rules, policies and/or give them the contact info of the correct person who can help them at the Board office. If you, as a Board member, try to give them ‘the answer’, there is a risk that the CPA could think that this is authoritative, and what if your answer is not correct or if they misunderstand you?NASBA exists to increase the effectiveness of State Boards of Accountancy. If your Board needs help, either contact your Regional Director to get information or to the name of the person at NASBA who can be of assistance -- or just call NASBA’s chair.
SPEAKER 2- This slide attempts to clarify some NASBA lingo. NASBA’s “members” are the 55 Boards of Accountancy. The present members of a State Board of Accountancy are the people we call NASBA “delegates” and the former members of State Accountancy Boards we call “associates.” Although NASBA only has 55 members, collectively it is the largest regulatory body of licensed accountants in the world, regulating approximately 650,000 accountants.
SPEAKER 1 – To get legislation passed, it is critical to show regulators that accountancy boards and accountancy societies concur. Legislators do not like to differentiate between squabbling accountants. Now since accountancy Boards put the public’s interest first and the professional societies must be advocates for their members’ interests, coming to mutually agreed upon action is not always easy to achieve. NASBA strives to smooth the negotiation process by working cooperatively with the AICPA on several important projects including: the Uniform Accountancy Act, the International Qualifications Appraisal Board, the Uniform CPA Examination, Standards for CPE Sponsors – and beginning in August of this year the administration of the Uniform CPA Examination abroad.
SPEAKER 1 – The Uniform Accountancy Act is a model act on which states can pattern their laws. While each state may tailor the UAA to match its own existing laws, this gives them a common base. The basic requirements for entering the profession, as set out in the UAA, are the foundation for determining the “substantial equivalency” among the states that enables CPAs to have practice privileges across state lines.
SPEAKER 2 – The Uniform Accountancy Act’s requirements also form the basis for the mutual recognition agreements (MRAs) that the NASBA/AICPA International Qualifications Appraisal Board (or IQAB) develops with foreign professional bodies. As shown, there are now agreements with professional associations in five countries: Australia, Canada, Ireland, Mexico and New Zealand.An agreement with the Hong Kong Institute of CPAs is currently under development and hopefully will be completed soon. After these agreements are signed by the Boards of Directors of the partner organization, NASBA and AICPA, the State Boards are encouraged to adopt them to apply to foreign professionals who seek practice privileges in their borders. Under these agreements, the foreign professionals are allowed to prove their competence to practice by passing the International Qualifications Examination (IQEX), in place of the Uniform CPA Examination. IQEX tests those areas of practice which are peculiar to the US, not all the areas the CPA Examination covers.
SPEAKER 1 – You’ll be hearing about the Uniform CPA Examination on Thursday afternoon. Up until April 2004 this was a high quality professional examination in a paper and pencil format. Then in 2004 it was converted to a computer-based test (as we say the CBT). The American Institute of CPAs prepares and grades the Uniform CPA Exam, Prometric provides the testing sites for the Exam, and NASBA maintains the Gateway system for the candidates’ records. Working to make sure the examination addresses the Boards’ concerns, NASBA has the CPA Examination and Administration Committee which confers with the Board of Examiners.
SPEAKER 2 – Auditing the Uniform CPA Examination on behalf of all the Boards is the Examination Review Board (the ERB). On Thursday ERB Chair Wes Johnson will tell us if, based on the ERB’s work, the State Boards can continue to rely on the Examination’s preparation, delivery and grading. Judging by their written report, it appears we can.
SPEAKER 1 – The revised “Statement on Standards for CPE Programs” were unveiled at NASBA’s CPE Conference in March. Ted Lodden, chair of the CPE Advisory Committee, and NASBA’s Central Regional Director, headed up that effort. The new standards are meant to ensure high quality programs are being offered to the Accountancy Boards’ licensees.
SPEAKER 2 – Please accept our apologies in advance for slipping into acronyms too frequently. But you will see a tab in your meeting binder that will help you decode all the acronyms you hear. Does anyone have an acronym to add to the list in the binder? Please let us know.So welcome to the world of SOX, IFRS and BOE!
SPEAKER 1 – We ask you always to remember that NASBA’S goal is to increase the effectiveness of State Boards of Accountancy.Any questions?(TAKE QUESTIONS)We’ll next explore an “Overview of NASBA” with NASBA President David Costello.
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
Speaker 1 – Lodden - West / Glover – EastSpeaker 2 – Gray - West / Chickering - East
SPEAKER 1 – NASBA was started more than 100 years ago by people like those in this room. They were 17 examiners from ten state boards, at a time when there were only 16 accountancy boards in the country with a total of 55 board members. Their matters of “mutual interest” were very much those of today – the 3 E’s of education, examination and experience. But the concerns of today’s boards go beyond those of the boards a century ago.
SPEAKER 2 – Legislators tend to see all accountants (be they regulators, educators or practicing professionals) as a single group, and consequently working out differences before legislation goes to elected officials is ideal, though not always easy to achieve. Mobility legislation has now passed in 47 States and that was because the societies and boards worked together in those states to overcome concerns and focus on the benefits of “no registration, no fees, no escape,” to enable cross border mobility while at the same time maintaining state board authority. Education legislation has been tricky and continues to be debated, as mentioned earlier. The states can agree on requiring 150 hours of education for licensing, but how many hours must a candidate have before he or she takes the examination? In the Northeast all the states have said candidates only need 120 hours to take the Uniform CPA Examination, but 150 hours to earn their certificate. Then there is the question of what those 150 hours should contain, which has been an ongoing discussion. The California Board has been studying this issue carefully and we expect their conclusions will be out soon.
SPEAKER 2 – Let’s go around the room here and see how much your Board can influence legislation. How may here sit on an Accountancy Board that can hire a lobbyist? (ASK EACH NEW BOARD MEMBER) How many can provide information to legislators? (GO AROUND THE ROOM AGAIN) While the number of Boards that can actually go out and hire a lobbyist is small, the number that can provide information to legislators, generally through their executive director, is large. How about rules: Does your Board need to go to the Legislature to have your rules approved? (GO AROUND THE ROOM AGAIN) When your Board wants to get a message out to the public, what do you do? (ONCE MORE GO AROUND THE ROOM ASKING). NASBA has a Communications Committee, chaired by Jeff Chickering, our Northeast Regional Director, and they are urging every Board to select a Communications Officer who will interact with that Committee and share ideas for effectively reaching the public. See Tom Kenny for details about getting involved in this outreach effort.
SPEAKER 1 – There are many ways in which NASBA helps the voice of the State Boards to be heard by legislators, the public and the profession. When a State Board is threatened with being merged under an umbrella organization, NASBA is ready to send its speakers and provide information to support the Board. Linda Biek, our director of government affairs, who I mentioned before, is the one to contact – or contact one of us, your Regional Directors. We have set up helpful information on the NASBA Web site that covers issues such as public records act requests, establishing a semi-independent Accountancy Board, and testimony on behalf of the Board’s continuing function. Your Board’s Executive Director has access to the site and can share the information with your Board. Exposure drafts from various professional and governmental groups are being released throughout the year. NASBA’s Regulatory Response Committee and Ethics and Strategic Professional Issues Committee are always on the alert for these drafts to see how they might impact accountancy regulation. If there is a regulatory aspect, these committees will respond to make sure the State Boards’ role is not ignored.
SPEAKER 2 – Headlines describing financial crises are where we don’t like to see the State Boards, or their licensees. But it happens -- and Board members should stay aware of what is happening to CPAs in their locale and around the country as well as to the profession throughout the world.
SPEAKER 2 - I don’t know how many of you do the crossword puzzle in the daily newspaper. If you do, you have probably noticed that three-letter answer to the question “Tax expert” is usually “CPA.” The public frequently thinks of tax preparers as CPAs, and the IRS is now in the process of implementing its program in to regulate the unlicensed tax preparers. When this program was announced at the end of 2009, a press release went out from H&R Block praising the new plan and saying their industry needed such oversight. This resulted in the Wall Street Journal commenting that H&R Block favored the plan as a way of getting rid of their competitors. One can only imagine if H&R Block had come out opposed to the plan, the same commentators might well have accused the company of being afraid to be held up to meeting standards. Which illustrates the difficulty of working with the press. You never know how much of what you say will be quoted, or misquoted, and for what purpose.
SPEAKER 1 – International Financial Reporting Standards (or IFRS) are making headlines frequently, with elected officials being quoted as either urging quick adoption of those standards in the U.S., or cautioning against jumping into anything when the US has GAAP well established. Give two different reporters the same speech, and the conclusions they draw from that presentation can be vastly different. With financial problems throughout the world, including in countries that have adopted IFRS, schemes are being spotted. Bernie Madoff managed to make news a couple of years ago and other cases continue to be uncovered throughout the country. Everyone now knows what a “Ponzi scheme” is and several accounting boards are now dealing with CPAs who became involved in such a scheme. When CPAs are involved, the State Boards open investigations that may lead to disciplinary action. What about when scandals occur in foreign markets and international firm names are involved? Those cases are making their way through the courts now too. In April 2011 the SEC sanctioned five India-based affiliates of PWC that formerly served as independent auditors for Satyam Computer Services Limited for repeatedly conducting deficient audits of the company’s financial statements and enabling a massive accounting fraud to go undetected for several years.
SPEAKER 2 – The Accountancy Board needs to recognize the value of transparency, while at the same time respecting confidentiality and due process. Headlines can lead to the opening of investigations – but that is only the beginning of a process of careful consideration. While the public can say, “All I know is what I read in the papers,” it is the Accountancy Board members’ obligation to know more when it comes to our licensees. Now let’s get back to Act II of the “Not Quite Masterpiece Theater.”
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim
WEST: Speaker 1 – Laurie Speaker 2 – Karen EAST: Speaker 1 – Ken Speaker 2 – Kim