SAMPLE TESTIMONY ON PROPOSED LEGISLATION TO AMEND THE STATE ACCOUNTANCY STATUTE’S
MOBILITY PROVISIONS
By NAME, ORGANIZATIONAL TITLE
Mr./Madam Chairman, Ranking Member [name], thank you for the opportunity to testify before you
today. On behalf of the [X,XXX] members of the [STATE CPA SOCIETY], I am here to ask you to pass
Senate Bill/House Bill XX, which would modernize our state’s accountancy statute and create a
modernized regulatory regime known as CPA firm mobility.
I am also pleased to be joined by other strong proponents of the bill such as the [STATE BOARD OF
ACCOUNTANCY (if supporting), other accounting organizations, specific accounting firms, and/or other
groups, etc. As you can see, both the Certified Public Accountants’ or CPA profession in [STATE] and our
state regulators (if supporting) are unified in calling for this legislation to pass.
I would also like to let you know that both the American Institute of CPAs (AICPA) and the National
Association of State Boards of Accountancy (NASBA) have jointly developed model legislative language
on this concept, as provided in the newest edition of the state model act they co-write, the Uniform
Accountancy Act.
The CPA profession, as you are aware, is principally regulated at the state level. State boards, both here
in [STATE] and in 54 other U.S. states and jurisdictions both protect the public interest and ensure that
CPAs are appropriately regulated through powers granted to them by their legislatures in their state or
jurisdictional accountancy statutes. Here in [STATE], our state board oversees both the licensing of
Certified Public Accountants and CPA firms, as well as any enforcement against those individuals and
firms. This is a very successful model that has served our state and the profession well for many
decades.
In [INSERT YEAR THAT INDIVIDUAL MOBILITY PASSSED THE STATE], our state took an enormous step
forward in determining a model for how the CPA profession should be regulated in the 21st century.
That was the year that the legislature passed a bill to create what is commonly referred to as individual
CPA mobility.
Individual CPA mobility is a simple idea. It is the idea that your professional CPA license should operate
like a driver’s license across the country. You obtain a driver’s license in your home state, but you don’t
have to get a new driver’s license in another state every time you cross a state line. And so, our
lawmakers, working with the profession and our regulators, set up a similar system for CPA licenses.
Even more impressive, they did so in concert with state lawmakers and the CPA profession all over the
country.
Such a model follows three basic concepts, commonly referred to as “no notice, no fee, no escape.”
That is to say: you do not have to give another state notice when you come into that state to practice
accounting, just like you do not have to give notice when you are driving into a state that isn’t your
home state. You do not have to pay any special fees or tolls to have the right to drive in another state,
and now you do not have to do so to practice accounting. But, in return for these privileges, there is no
escape from regulatory oversight for drivers or for CPAs. Or in other words, you are subject to the
oversight of the board of accountancy both in your home state as well as any state in which you provide
services - just like motorists are subject to the laws of their home state and any state in which they may
drive. This model works well for motorists and it has worked extremely well for CPAs.
Indeed, it is the envy of many other professions who would like to have enhanced interstate mobility.
Thanks in part to your great leadership, our state joins 49 other states, the District of Columbia, and the
U.S. Virgin Islands in having an individual CPA mobility law. CPAs can move freely across state lines to
provide services, but the public is always protected by strong enforcement powers both in the home
state and in any other state in which the CPA is practicing.
I’m happy to report that such oversight has also been enhanced by other measures, such as the National
Association of State Boards of Accountancy or NASBA’s website, CPAVerify.org. This website is a tool
to look up CPAs across the country and it is populated by official state regulatory data sent from state
boards to a central database. It is also free and open to the public. The website allows both boards of
accountancy and the public to see if individuals have a license in good standing, how long the individual
has had that license, and in some cases, if disciplinary action is pending against a license holder.
Now that our state has had such success with individual CPA mobility, we are returning to a promise
made by profession leaders to eventually examine the concept of mobility for CPA firms. Right now,
out-of-state firms coming into our state to provide attest services must register with our state board of
accountancy.
Meanwhile, nearly a third of the states around the country have already implemented a successful CPA
firm mobility law allowing our state’s CPA firms to come into their states with no notice. However,
when our CPA firms do come into those states, they are subject to the oversight of the state board of
accountancy in that state as well as the on-going oversight of our home state board of accountancy. It is
a robust system of regulatory oversight, but without unnecessary paperwork. It also is working very well
in those states that have implemented such a law.
Today, I am calling on our legislature to act to pass our own CPA firm mobility law. By passing CPA firm
mobility in our state, we will be creating a fair playing field for all, cutting out red tape, and ensuring
strong public protections – just like we did when we passed individual CPA mobility.
Already, our neighboring states of [INSERT STATES HERE] have adopted this model and they look to us to
join them as leaders on this issue.
In addition to promoting fairness with our neighbors, passing a CPA firm mobility is also an important
acknowledgement of the way in which the profession currently operates across stateliness. Many CPA
firms have business opportunities all around the country. This includes not just the largest firms, but
also regional and small firms. By passing CPA firm mobility, we are promoting a competitive and vibrant
profession nationwide.
As you consider this legislation, one question that may come up is: how will our board of accountancy be
able to provide oversight without registration? The truth is they already do this quite well in terms of
individual licensees. The treatment of CPA firms would be no different. And, the reality of public
protection is that enforcement actions are complaint driven. When the state board begins an
investigation, it is because a concerned party has brought potential wrongdoing to their attention. It is
not because they have a static database of out-of-state firms saved to a computer somewhere. Enacting
CPA firm mobility will not harm a single enforcement power available to our state board of accountancy.
Furthermore, this legislation contains important public protection provisions requiring out-of-state CPA
firms to meet our state’s peer review and CPA firm ownership requirements before they can take
advantage of our proposed mobility law. These requirements ensure that these out-of-state firms have
similar protections in place to those we require for our home state CPA firms. Such common sense
provisions ensure a level playing field for everyone.
I encourage you to move on this legislation quickly. It is the right thing to do. It protects the public. It
promotes competition. It modernizes the oversight of the CPA profession in our state. And, it fulfills a
promise the profession and its regulators made to review this issue upon successful enactment of our
individual CPA mobility campaign.
Furthermore, I am concerned that if we do not act, there could eventually be negative consequences.
Namely, that states with CPA firm mobility laws may consider undoing their laws or add “quid pro quo”
provisions that would place our state’s CPA firms at a competitive disadvantage. We have a chance to
be leaders and move the profession forward but it requires all states to have fair provisions in their
accountancy statutes.
Mr./Madam Chairman, Ranking Member [name], I want to thank you for your time today. And, I want
to thank you for your leadership on accounting issues. Our profession is united in our commitment to
protecting the public and to ensuring that we have a regulatory system in place that reflects the needs
of the public and the realities of today’s CPA firms. Please know that the [STATE CPA SOCIETY] is ready
to assist you however we can in fixing this problem.
Thank you.