Seven states have passed legislation so far this year aligning their statutes with the Uniform Accounting Act (UAA). Six states adopted the comprehensive definition of attest, one of which also adopted firm mobility, and another state adopted key provisions related to peer review and firm ownership.
Kansas, Michigan, Mississippi, Nebraska, Washington, and West Virginia joined the list of states that have closed a loophole in their definition of attest that allowed non-CPAs to perform certain attest engagements and issue reports on those engagements using profession standards. Thirty-seven (37) states nationwide now have the comprehensive definition in their law.
In 2015, eight states – Connecticut, Kentucky, Maine, Maryland, Minnesota, Oklahoma, Oregon, and South Carolina – adopted the definition, and another half dozen will look at adopting it in 2017.
Washington’s legislation also included language adopting firm mobility for attest services, which allows CPA firms to perform attest services in states in which they do not have a physical presence without first having to register the firm or pay fees. In order to have this practice privilege, the firm must meet the peer review and non-CPA ownership requirements of the state in which they wish to offer services. Firm mobility follows the same “no notice, no fee, no escape” model that currently allows CPAs to offer non-attest services across state lines.
Washington was the first state to adopt firm mobility in 2016, and the fifteenth state overall. Illinois and Louisiana are also considering firm mobility legislation this year, with bills in both states having passed through the first house of their respective legislatures.
Finally, Delaware approved a measure that requires all firms licensed in the state to undergo a peer review and that moves the state to a simple majority ownership structure for CPA firms. With the passage of Delaware’s legislation, 53 jurisdictions nationwide now require firms to participate in peer review, while 52 jurisdictions allow for simply majority ownership for CPA firms.
For more information on these and other policy trends, visit the AICPA State Board Resources website and follow the team on Twitter @AICPAState.