UAA conformity: mobility, 150 hours, peer review and continuing ed.

• Author: Allen, Bruce C.
• Position: Governmentrelations

CalCPA has had a long-standing policy of supporting measures that allow CPAs to represent client interests across state lines. Prior to 2006, out-of-state CPAs were allowed to provide temporary and incidental services to California clients without notifying the California Board of Accountancy or obtaining a license from California.

The CBA had a policy of requiring that CPA firms performing an audit of a California-based company be fully licensed by California, which did require that at least one partner hold a California CPA license, but all other services could be provided under the incidental and temporary exemption.

However, if the CPA had an office in California or spent an inordinate amount of time in this state, it could be argued that the services would not be considered temporary or incidental.

To ease mobility after the passage of Sarbanes Oxley by allowing for expedited entry into the state and to answer the concerns of a Governmental Accountability Office study that pointed out that state licensing laws were impeding the ability of smaller firms to compete with the multinational firms, California enacted a practice privilege provision that became effective in 2006.

California's statute was consistent with provisions of the Uniform Accountancy Act, but it did require that the CPA notify the CBA prior to providing services to California clients, unless the service was tax preparation for an individual or an estate tax return for a former client. All business tax returns, and all other services including consulting and audits, required advance registration.

Rather than provide expedited mobility, California's provision created additional mobility barriers, drove up costs to clients and applied to out-of-state CPAs whose clients had limited contact with California.

CalCPA-sponsored legislation last year would have exempted out-of-state CPAs providing tax services to clients from filing for a practice privilege, but we were forced to accept a compromise bill that allowed for incidental and temporary services and allowed a lower registration fee for CPAs providing non-audit services in California.

The California experience was a wake-up call to the nation that inspired the National Association of State Boards of Accountancy and the AICPA to revise the UAA to specifically allow CPAs to provide services across state lines with no notice, no fee and no escape from discipline.

Like a driver's license, the out-of-state CPA providing the...