Spurred in part by work created by the Sarbanes-Oxley act, regional and even smaller local CPA firms are finding that their commercial clients hold assets or do business in other states, if not other countries.
But becoming newly licensed in one state, even after serving as a trusted CPA in another, can take six months or more.
So the state Board of Accountancy, which regulates the practice in Connecticut, is joining a growing number of its counterparts in considering whether to push for a change allowing CPAs licensed by other jurisdictions under similar guidelines to practice in Connecticut, with as little as a simple notification –- or possibly no heads-up whatsoever.
Frustration
The frustration felt by partners and CPAs at some regional and growing local firms was reared by board member Richard H. Gesseck at the body’s monthly meeting last week. Gesseck, a partner with UHY Advisors in New Haven, serves commercial clients who frequently consider mergers or acquisitions with companies in other states.
Legally, Gesseck or another member of the firm would need to acquire and maintain a license in order to do even a modicum of work in that state as a CPA, or risk a fine by its accountancy board.
But the chance to acquire another company likely can’t wait until the paperwork gets completed. In the meantime, what is Gesseck to tell his client?
“Just wait six months while I go through the licensing process?” he wondered aloud at the meeting. “Ridiculous.”
To speed the process to mobility (or the recognition of licenses in other states), a national group has issued guidelines aimed at helping states create similar-enough rules that re-licensing each others’ CPAs might not be necessary.
The guidelines, formed by the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), are non-binding but are propelling states to agree on the “substantial equivalency” of each others’ procedures.
Four states, led by Ohio, have already begun allowing mobility. Others, including Massachusetts, are currently considering it.
Initial reviews of the idea among Connecticut’s board members, though not put to a vote, were positive, leading to the idea that the group could seek needed legislative changes in the 2008 session.
Mobility will not come to the states easily.
Charged with initiating enforcement actions against those who would illegally serve as CPAs in Connecticut, Rebecca E. Adams, staff attorney for the board, said the number of “marginal players” that dredge multiple states for business and avoid regulators at all cost could rise with increased mobility.
“From the perspective of enforcement, mobility is a nightmare,” she said.n
Adams believes even states that agree to equivalent licensing procedures and mobility will end up engaging in legal wrangling.
