VSCPA Reiterates Support for Virginia Board of Accountancy Fast-Track Regulatory Package

August 17, 2010

 

Wade Jewell

Executive Director, Virginia Board of Accountancy

9960 Mayland Drive, Suite 402

Richmond, VA 23233

 

Dear Wade:

 

I am writing on behalf of the 9,000 members of the Virginia Society of Certified Public Accountants (VSCPA) in reference to the Virginia Board of Accountancy’s (VBOA) fast-track regulatory proposal to conform its regulations to the public accountancy statutes as revised in 2007 by repealing Virginia Administrative Code 18 VAC 5-21 and promulgating 18 VAC 5-22.

 

As stated in our January 12, 2010, letter to Gov. McDonnell, the VSCPA has carefully reviewed the proposal and fully supports it as submitted, as well as the notion that fast track is the appropriate channel for these changes. As the result of the comprehensive revisions to Virginia’s accountancy statutes in 2007, there are now multiple instances of conflict between the statutes and the existing regulations. Because it is not common knowledge that in cases of discord statutes supersede regulations, significant confusion exists for both the public and licensed CPAs about the current rules for the practice of public accounting — creating a high risk of non-compliance. Therefore, we reiterate our original position that it is of the utmost importance that the proposed regulations be approved and put into place as soon as possible.

 

One of the key changes in the statutory revisions is the incorporation of universally accepted accounting standards by reference to the bodies charged with promulgating those standards rather than by adding the specific standards themselves or referencing standards set as of a specific date. The statutory reference for this is § 54.1-4413.3, Standards of Conduct and Practice. For example, each time the U.S. Governmental Accounting Standards Board approves new accounting standards for government agencies, those standards are immediately effective for Virginia CPAs. This ensures that Virginia’s accountancy rules remain evergreen and contemporary with the evolving standards of the profession.

 

We believe the following aspects of the proposal are critical to bring Virginia’s accountancy statutes and regulations into alignment and make compliance simpler:

 

  • Removal of regulations that are no longer necessary because the requirements in the statute are clear, such as definitions and standards of conduct and practice
  • Removal or update of regulations that are in conflict with the statute, specifically those involving licensing of individuals and firms and peer review requirements
  • Elimination of time-sensitive regulations that are no longer needed, such as those related to administration of the CPA examination and some continuing professional education (CPE) requirements
  • Elimination of regulations that simply refer to other regulations
  • Clarification of CPE requirements and how to comply with them
  • Several additions of  interpretations required by the statutes

 

In our review of the proposal, the VSCPA paid particular attention to section 18 VAC 5-22-90 dealing with CPE requirements. We concluded that the changes are not substantive in nature, but simply make the requirements more understandable and remove outdated language related to a transition period that has already passed.

 

  • CPAs performing services for the public are still required to obtain 120 hours of education over a three-year reporting period.
  • The gradual phase-up to 120 hours of education over a three-year reporting period for CPAs performing services for an employer is still intact.
  • CPAs not providing services to either the public or an employer are still exempt from CPE.
  • CPAs are still permitted to take whatever CPE they deem appropriate for the manner in which they are practicing.

 

A question has been raised pertaining to the fact that the proposed regulations do not define one hour of CPE as 50 minutes of instruction. We agree with the VBOA’s conclusion that this definition is not necessary. Standard No. 12 of the American Institute of CPAs and National Association of State Boards of Accountancy Statement on Standards for Continuing Professional Education (CPE) Programs states that 50 minutes of instruction constitutes one hour of CPE credit. All substantially equivalent accountancy jurisdictions comply with the 50-minute credit hour.

 

A crucial reason to conform the regulations to professional standards and not define a CPE credit hour in the regulations is to ensure continued and future compliance with substantial equivalency between the Commonwealth and other jurisdictions. 

 

The VSCPA sincerely appreciates the opportunity to comment on this important matter. If we can be of any service to you during this process, please don’t hesitate to contact VSCPA Government Affairs Director Emily Walker at (804) 612-9428 or ewalker@vscpa.com.

 

Thank you for your time and consideration.

 

Sincerely,

 

Bradford R. Jones, CPA

Chair, Virginia Society of CPAs

 

Cc:       Governor Bob McDonnell

            Jim Cheng, Secretary of Commerce and Trade

            Senator Walter Stosch

            Bill Axselle, Williams Mullen

            Travis Hill, Williams Mullen

LAST UPDATED 8/17/2010

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