Nov. 11, 2024
AICPA/NASBA Joint UAA Committee
AICPA Leadership and Board of Directors
NASBA Leadership and Board of Directors
RE: Exposure Draft to the Uniform Accountancy Act, Eighth Edition - January 2018
The Virginia Society of CPAs (VSCPA) has reviewed and appreciates the opportunity to respond to the Exposure Draft (ED) — Exposure Draft to the Uniform Accountancy Act, Eighth Edition - January 2018 — issued by the AICPA and NASBA on Sept. 20, 2024. The VSCPA is the leading professional association in Virginia dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of nearly 12,000 individual members who actively work in public accounting, private industry, government, and education.
The Uniform Accountancy Act (UAA) serves an important role as model legislation to help promote consistency among all U.S. accounting jurisdictions. Still, its effectiveness relies on adoption by each jurisdiction and the need for it to reflect a consensus within the profession. The development process for this language must prioritize transparency and inclusivity, especially in a political climate that is increasingly anti-regulatory. Changes to the UAA should reflect a commitment to understanding the current landscape while ensuring robust public protection.
As the regulatory landscape has evolved over the past two decades, especially with the advent of interstate compacts and trust systems, it is vital to re-evaluate our approach to mobility. By aligning with modern standards and addressing these concerns, we can ensure the UAA remains relevant and effective for the future of the profession.
After careful review, we have significant concerns about this exposure draft and offer the following comments for your consideration:
Section 5 — Qualifications for a Certificate as a Certified Public Accountant
The proposed language adopts the CPA competency-based experience pathway outlined in the exposure draft issued on Sept. 12, 2024. Please see Attachment A for our specific comments on the pathway itself. In order to be more evergreen, we believe the UAA language should not reference a competency-based experience pathway and should instead prescribe two years of experience as determined by board rule. States already have varying degrees of prescribed experience through rule, and that is the more appropriate place for guidance related to experience requirements.
Section 23 — Substantial Equivalency
This UAA exposure draft presents a crucial opportunity to address the challenges of mobility and substantial equivalency in the CPA profession. However, deferring any authority on substantial equivalency to the National Qualification Appraisal Service (NQAS) is problematic, contradicting NASBA's own arguments against automatic mobility. NASBA is not a regulator, nor is NQAS. Giving NQAS authority to determine whether licensing jurisdictions or individual CPAs qualify for substantial equivalency dilutes state authority and undermines effective public protection.
The proposed language adds unnecessary complexity by requiring verification of substantial equivalency for individuals from non-compliant states, creating potential tiers of licensure — an outcome explicitly avoided in CPA Evolution. While the substantial equivalency test may still be relevant for evaluating candidates for reciprocal licenses, it should not complicate the mobility process for all CPAs.
Additionally, the draft preserves mobility for CPAs licensed under the 150-hour requirement or prior to its adoption but fails to extend similar protections to newer entrants unless they are from a substantially equivalent state or undergo evaluation to prove they individually meet substantial equivalency requirements. This approach does not facilitate seamless interstate practice and instead adds complexity and expense for both licensees and state boards. Many states are considering the adoption of a pathway that would permit licensure for candidates with a baccalaureate degree, an accounting concentration, two years of experience, and passage of the CPA Exam. Under the proposed language, this pathway would not be considered substantially equivalent even though many current licensees who obtained their CPA license before the adoption of the 150-hour requirement used a similar pathway. This inconsistency raises equity concerns that must be addressed.
Automatic mobility for any CPA with a license in good standing should be the standard, allowing state boards to maintain authority over all CPAs practicing in their states. Relying on substantial equivalency limits this authority in the event another jurisdiction introduces a licensure pathway not considered to be substantially equivalent. This could limit a state board’s authority in an enforcement situation to pursuing CPAs not considered substantially equivalent for unlicensed practice rather than addressing the actual infraction, creating a risk to public protection.
Conclusion
Due to the concerns we have expressed, we believe both of these issues should be sent back to the Joint UAA Committee for additional consideration. We firmly believe collaborative efforts within the CPA profession are essential to address the talent shortages in the CPA pipeline effectively. The adoption of widely accepted alternative pathways to licensure and an easy-to-administer, evergreen approach to practice mobility will significantly benefit the profession as a whole. Therefore, it is imperative that the process for reviewing the comments be transparent and the final changes to the UAA be reflective of stakeholder input.
We appreciate the opportunity to comment and remain committed to working alongside AICPA, NASBA and other stakeholders in shaping the future of CPA licensure. Please feel free to contact me or VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at (804) 612-9428 or [email protected] if we can be of further assistance.
Sincerely,
Stephanie R. Peters, CAE
President & CEO
Virginia Society of CPAs
Attachment — VSCPA letter on the CPA competency-based experience pathway