Chair's corner.

• Author: Eddy, Kathy G.
• Position: Uniform Accountancy Act - Brief Article

I am devoting this column to an issue that you will hear me talk about often during my year as chair -- implementation of the core provisions of the Uniform Accountancy Act (UAA), and specifically, the concept of "substantial equivalency." As many of you may know, I have spent the better part of my professional career focusing on regulation of the profession -- as state society president, as a member and chair of the West Virginia Board of Accountancy and as volunteer leader of the AICPA. I believe this issue is a critical link in helping us to achieve the Vision for the profession, as members in all segments would be impacted.

Why it's Important

Substantial equivalency is the "core idea" that will allow CPAs to practice across jurisdictions easily. It is a model legislative provision, and was first introduced into the Uniform Accountancy Act-Third Edition in Jan. 1998. In light of the globalization of business and technology's effect on the ability of CPAs to serve clients regardless of their physical location, the concept of substantial equivalency is a crucial contribution to the profession and the public it serves.

How it Works

Under the concept, if a CPA has a valid license from a state with CPA licensing criteria that are "substantially equivalent" to those outlined in the UAA, then the CPA can cross state lines to practice in another state without obtaining a license in that state. However, the CPA must notify the state board of his/her intent to practice and agree to follow the law and rules in that state.

Individual CPAs who either practice across state lines or who serve clients in other states electronically would not be required to obtain an additional reciprocal or temporary license, if they hold a valid license from another state and if their state is deemed substantially equivalent -- or if they are individually deemed substantially equivalent.

Any CPA who relocates to another state and establishes a "principal place of business" or office in that state would be required to obtain a license in that state. Likewise, if a CPA firm opens an office in a state, the firm must obtain a license in that state.

At the request of the state boards, a National Association of State Boards of Accountancy Qualification Appraisal Service will make determinations of equivalency on a state-by-state basis. Currently, using the NASBA service, nearly 40 states have been determined to meet the criteria for substantial equivalency.

With the...