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Home Accountant News

Why NASBA Can Be a Bully and What CPAs Can Do About It

admin by admin
March 12, 2023
in Accountant News


By Sharon Lassar, PhD, CPA (Florida)
John J. Gilbert Professor and Director of the School of Accountancy, University of Denver

Going Concern previously reported on bits of an interview with Ken Bishop, President and CEO of NASBA, published in Journal of Accountancy. A cut out in the article includes this quote, “Should any state or jurisdiction lower the licensure requirement to 120 hours, their CPAs would no longer be automatically substantially equivalent and would no longer enjoy the mobility and reciprocal practice privileges they currently are afforded.”

A follow up article let us know how the AICPA and NASBA have locked arms to dissuade any further talk by states regarding the 150 hour requirement.

How can NASBA be such a bully? Doesn’t it work for the Boards of Accountancy of the states who pay NASBA membership dues and fees for services? That’s what you might think.

Written into the mobility legislation that NASBA, AICPA, and state societies pushed to enact over about a 20 year period is a substantial equivalency clause. For example, Section 5.2 of the Illinois Public Accountancy Act provides practice privilege to licensed CPAs from states that NASBA has verified “to be in substantial equivalence with the CPA licensure requirements of the Uniform Accountancy Act…” Thus, Illinois, like many states, has given NASBA authority that would otherwise rest with the Board of Examiners.

Changing the Illinois Public Accountancy Act will not be easy. Legislative language needs to be drafted, a member of the state legislature needs to introduce a bill, and the bill will have to pass and be signed by the governor. Changes to bills are often spearheaded by professional associations like state societies, AICPA, or NASBA who employ their lobbyists. I wonder how NASBA as the arbiter of substantial equivalency was written into Illinois statute in the first place.

Other states retain some authority over the determination of substantial equivalency or allow for an easier path to change. For example, Colorado’s Accountants Practice Act provides practice privilege to CPAs licensed in other states according to rules promulgated by the Board of Accountancy. The Board rules then give NASBA the power to determine substantial equivalency. NASBA’s power can be stripped by a change to Board rules; no legislation seems to be necessary.

If you believe that Minnesota’s CPAs should be able to continue to practice in your state should Minnesota enact the alternative pathway to CPA licensure that is under consideration, let your state board members know.

If your state board does not hear from you, the members assume everything is fine. Most state board members serve limited terms and may not realize that a previous board gave power to NASBA that should reside with the board. Write a letter, send it to each board member, and share it with your colleagues.

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