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House Co-Sponsorship Memoranda
House of Representatives
Session of 2021 - 2022
Regular Session
MEMORANDUM
| Posted: | March 12, 2021 10:56 AM |
|---|---|
| From: | Representative Keith J. Greiner |
| To: | All House members |
| Subject: | Updates and Revisions to the Certified Public Accountant (CPA) Law of 1947 |
| In the near future, I plan to introduce legislation that amends the Pennsylvania CPA Law. These amendments are needed to maintain a dynamic and competitive law that reflects the rapidly changing nature of the accounting profession across the country. My proposed legislation has a number of important changes. The legislation proposes adoption of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The Code of Professional Conduct (Code) is a set of principles, rules, and interpretations that guides CPAs in the performance of their professional responsibilities. Mobility provisions in 52 states and jurisdictions now allow CPAs to serve their clients across state lines; but without uniform mandatory ethical standards, CPAs find it hard to navigate inconsistent requirements across multiple states. Variations in ethical standards are confusing and costly to CPAs and firms that practice in multiple states, and these unnecessary costs are ultimately passed on to clients. Moreover, there is a risk to the public when there is an inconsistency or lack of clarity in these rules. Uniform ethical standards make it easier for CPAs to comply with regulations, thereby protecting the public and promoting sound business practices. This legislation will also make much needed changes to the CPA Law’s peer review provision. Section 8.9 of the CPA Law should be modernized. It has not been updated since 1997 and includes outdated references. Revisions to the statute are based on the current Uniform Accountancy Act (the UAA) and UAA Model Rules that provide consistency across all states. Some current statute requirements conflict with AICPA’s Standards for Performing and Reporting on Peer Review (Standards). Of the 53 CPA licensing jurisdictions that require peer review, 52 have a three-year peer review requirement. Over 25,000 firms, including many sole practitioners, are subject to the three-year requirement. To perform auditing or accounting services outside of Pennsylvania, a firm would need to meet the three-year requirement or would not be in compliance with other state board peer review requirements. ANY firm (whether they have AICPA members or not) enrolled in the AICPA Peer Review Program, and therefore subject to the AICPA Standards for Performing and Reporting on Peer Reviews, are required to undergo a peer review every three years (even though Pennsylvania law may only require every five years). A separate program must be maintained for firms undergoing a peer review only once every five years. It is in the public interest that all firms, regardless of firm size, be subject to the same peer review requirements. Lastly, the scope of classes students can take toward earning an accounting degree will also expand under the proposal. For example, economics and technology will be added to the list of qualified classes. I respectfully ask for your consideration to cosponsor this legislation. |
Introduced as HB1328