State Legislators Weigh in on Emerging Technology Affecting the CPA

July 26, 2018

Arizona State Representative Jeff Weninger speaking
Arizona State Representative Jeff Weninger addresses state CPA societies on blockchain technology regulation.

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 emerging technology issues in laws and regulations. Arizona State Representatives T.J. Shope and Jeff Weninger joined panels at the July 17 forum to discuss how their respective states are approaching legislation related to data breaches 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 Arizona – introduced legislation related to data breaches during the 2018 legislative sessions. Arizona House Bill 2154 - introduced by Representative Shope – requires a person that owns or licenses data to notify the State Attorney General and the individuals affected when a data breach occurs within 45 days. The legislation clarifies what information should be included in the notification and states the Attorney General’s ability to assess civil penalties. Arizona Governor Doug Ducey signed the bill into law in April.

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 released a white paper on blockchain technology’s future implications for the CPA profession.

Representative Weninger introduced House Bill 2603 in the Arizona House of Representatives to authorize “smart contracts” created through blockchain technology in commerce transactions. The bill states that smart contracts cannot be denied legal enforceability solely on the grounds that they are smart contracts. Governor Ducey recently signed the bill into law. For more information on Representative Weninger’s bill, watch his interview with the AICPA.