The American Institute of CPAs’ (AICPA) State Regulation and Legislation Team hosted a public policy forum this month for state CPA society staff and other stakeholders to discuss how CPAs are affected by the impact of emerging technology issues on laws and regulations. Illinois State Representative Michael Zalewski and Massachusetts State Representative Angelo Puppolo, Jr. joined panels at the forum to discuss how their respective states are approaching legislation related to cybersecurity and blockchain and how state CPA societies can engage on these issues.
The AICPA, along with state CPA societies, tracks state-level policy related to these topics to determine their impact on CPAs and CPA firms.
Several states – including Illinois – have introduced legislation related to blockchain during the 2017 legislative sessions. The Illinois House of Representatives passed House Joint Resolution 25, introduced by Rep. Zalewski, which creates the Illinois Legislative Blockchain and Distributed Ledger Task Force. The task force studies if and how state, county and municipal governments can benefit from a transition to a blockchain-based system for recordkeeping and service delivery.
Blockchain is a decentralized, transparent public ledger where individuals can share information without having to trust a third party to verify the information. Multiple people can access copies of the ledger simultaneously, allowing transactions such as contracts to be recorded and verified without a principal authority. This could be revolutionary for the CPA profession, because the blockchain can record all parts of a transaction in real time from multiple sources, helping reduce errors. Once records are submitted on the blockchain, they cannot be altered, even by the records’ owner, providing transactions a high level of security. The AICPA plans to release a white paper discussing the impact later this year.
Cybersecurity is another issue affecting CPA firm operations, as cybercrime has emerged as a leading financial and operational risk for organizations of all sizes in all sectors. Because CPA firms collect and maintain financial and personal client information, they are often targeted by cybercriminals. State legislatures are focusing their attention on how the data are stored, used, disposed of and protected. Massachusetts is one state that has taken steps to combat cybercrime through legislation, regulation, and public and private sector cooperation, teaming up with the U.S. Coast Guard and National Guard to create cyber bureaus and protect Boston Harbor.
Rep. Puppolo cosigned House Bill 2814, which would increase penalties against cybercriminals. Additionally, the Massachusetts Legislature is considering ways to promote an office of consumer regulations, which would help to protect privacy through smart devices (TVs, phones, cars, etc.) by establishing regulations and up to date protocol. The state is also working to promote the importance of cybersecurity at the state government level, increasing staff training and elevating a secretary-level cyber office, ensuring government preparedness and compliance, and helping cut down on cybercrime.
For questions about how these issues will impact the states, please contact the State Regulation and Legislation team at email@example.com