In the wake of the economic crisis in 2008, policymakers and politicians set to work on a far-reaching overhaul of the financial markets and industry regulation. The result two years later is the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act. This far-reaching legislation will have a meaningful impact on CPAs and their clients or employers in many areas. The outcomes may impact future business activities through new regulation, increased cost or changes in borrowing rates or capital requirements.
AICPA Advocacy on Behalf of the Profession
From the beginning of the legislative discussions on Capitol Hill, the AICPA’s Congressional and Political Affairs team has been actively involved, assessing the implications for the profession and the public and speaking out as necessary. Although the AICPA did not take a position on the larger legislation, it did address specific issues affecting the accounting profession. A keystone of its efforts was the successful initiative to ensure that CPAs would not be subject to duplicative regulation under the new Bureau of Consumer Financial Protection. CPAs’ exclusion from oversight by the Bureau was a meaningful recognition of existing comprehensive regulation of the profession. The Institute is also involved in ongoing advocacy against expanded regulation of financial planners. The AICPA also successfully argued against proposed amendments that would have allowed plaintiffs’ attorneys to sue those who may have aided and abetted a securities law violation. In addition, although non-accelerated filers were given permanent exemption from the requirements of Section 404(b) of the Sarbanes-Oxley Act, Institute efforts helped prevent extension of this exemption to larger companies.
Financial Services in the Spotlight
The financial reform legislation--and the hundreds of rulings it is expected to generate—will have a significant effect on the financial services industry, since problems in this sector were at the center of the financial crisis. For CPAs who work in this industry, the new law will make important changes in how their companies or clients do business. In particular, there will be greater emphasis among banking regulators on risk management, especially for depository institutions. Keep in mind, though, that the profession will also be affected because of changes in other areas, as well, including consumer finance, the regulation of financial planners, financial reporting and governance, the financial markets and the securities laws that govern them.
A Critical Role for CPAs
The many complexities and uncertainties of the new legislation create myriad opportunities for CPAs to become indispensible partners in helping clients and employers understand and comply with new regulations. Consumers, for example, may call on CPAs for advice on any new consumer protection initiatives or on new mortgage regulations. Financial services companies and other businesses will benefit from compliance advice from CPAs to ensure they are properly implementing new regulations. In a law this complex, CPAs will find many opportunities to provide valuable services to companies and individuals.
A Comprehensive Resource
The AICPA’s “Dodd-Frank Wall Street Reform and Consumer Protection Act: A Primer for CPAs” white paper provides a comprehensive analysis of the many provisions of critical importance to CPAs. It highlights the key points of the Act and describes what they mean for CPAs and their clients or employers. The AICPA will also continue to provide timely updates on new rulemaking and regulation as it occurs and to speak out on behalf of the profession.