Virginia Board of Accountancy Proposes New Regulations Governing CPAs; VSCPA Issues Comments
December 28, 2009
On December 23, 2009, the Virginia Board of Accountancy (BOA) submitted revised regulations governing Virginia CPAs into the “fast-track” regulatory process. The regulations were officially posted to the public December 28, 2009. The VSCPA issued official comments to Gov. Tim Kaine on the proposal that same day.
The BOA proposal marks a long process to revise the regulations to conform to Virginia’s accounting statutes, which were passed in the 2007 Virginia General Assembly session and had an effective date of July 1, 2007. Because the regulations and statutes were not in total agreement and caused CPAs some confusion, the BOA decided to make necessary changes.
The BOA decided to submit changes via the fast-track process so that they may be implemented earlier. The fast track is for regulations deemed noncontroversial. Any additional regulatory changes will be submitted by the BOA through the normal and significantly longer regulatory process.
The VSCPA fully supports the BOA proposal, as reflected in its comment letter, and encouraged the governor to approve the changes as soon as possible. The conflicts between the statutes and regulations created “significant confusion for both the public and licensed CPAs about the current rules for the practice of public accounting and created a high risk of non-compliance,” the VSCPA letter stated.
The BOA proposal:
- Removes regulations that are no longer necessary because the requirements in the statute are clear, such as definitions and standards of conduct and practice;
- Removes or updates regulations that are in conflict with the statute, specifically those involving licensing of individuals and firms and peer review requirements;
- Eliminates time-sensitive regulations that are no longer needed, such as those related to administration of the CPA examination and some continuing professional education requirements; and
- Eliminates regulations that simply refer to other regulations.
Other areas covered in the proposed regulation are discussed below.
The proposal clarifies CPE requirements for Virginia CPAs, as well as how to comply with them.
In the current regulations, CPAs not practicing as a CPA and/or not using the CPA title are exempt from CPE requirements. The proposed fast-track regulations revise the requirements so that those CPAs who are active, licensed and listed on the BOA website must fulfill their CPE if they are performing accounting services for the public or to an employer. There is still an exemption for CPAs not performing accounting services for the public or an employer. The proposal also adds a “catch-up” provision for CPAs in this situation who may not have obtained their CPE.
Other CPE-related changes include clarification of how to fulfill CPE requirements.
After a thorough review, the VSCPA concluded that the CPE changes are not substantive in nature, but simply make the requirements more understandable and remove outdated language.
Because fee changes cannot be proposed in fast-track legislation, there are no increases included in the revisions. However, the VSCPA does anticipate significant changes to the BOA’s current fees in a future proposal.
Increases have not yet been finalized, but the BOA has investigated fee changes for more than a year. Licensing fees have not increased since 1991, and several fee decreases were implemented throughout the 1990s. On June 2, 2008, the BOA filed a Notice of Intended Regulatory Action (NOIRA) to show its intent to write regulations increasing fees following a comment period.
CPA Exam requirements
The fast-track package includes emergency regulations passed in May 2009 allowing CPA candidates to sit for the CPA Exam with 120 hours of education (a reduction from the previous 150 hours). However, upon passing the Exam, those candidates must take the extra 30 hours of required education to become a licensed CPA.
The VSCPA emphasizes to all prospective CPAs that the 150-hour requirement for licensure in the state stands, and there is no proposal on the table to reduce that requirement.
A new section in the proposed regulations, called “Information Requested by the Board,” includes details on:
- Supporting documentation for applications for licensure, renewal, reinstatement or lifting of a suspension
- Documentation related to peer review compliance
- Documentation related to investigations
- Requirements that licensees must notify the BOA in writing of any name/address changes
The proposal also specifies that failure to receive license renewal notices does not relieve the licensee of the responsibility to annually renew his or her license.
The proposal also adds interpretations required by the statutes, including how to determine:
- When persons or entities are considered to be located in Virginia
- Whether the principal place of business of a person using the CPA title, or of a firm, is in Virginia
- Whether a college or university is an accredited institution
- When a CPA is providing appropriate supervision of firm personnel
- When a CPA is qualified to release or authorize the release of reports on attest or compilation services
- Requires eight hours of CPE in attest or compilations services for such individual
- Requires firms to establish policies and procedures to ensure appropriate competency levels for such individuals
- When it is appropriate for the BOA to enter into confidential consent agreements
In addition, the proposed regulations give the BOA the authority to waive the peer review requirement or grant an extension of time to comply.
Once the proposed regulations are posted on the Virginia Town Hall website in the fast-track process, they await review from the Office of Attorney General — which has no review deadline. Other areas of the executive branch will then review the package before they hit the governor’s desk. Once approved by the governor and published in the Register, they will be open for a 30-day public comment period.
Have any questions or concerns? We’re here to help. Contact VSCPA Government Affairs Director Emily Walker at firstname.lastname@example.org or (804) 612-9428.