California Board of Accountancy Contemplates National Association of State Boards of Accountancy’s Amendments to the Uniform Accountancy Act Model Rules


By Connor Greth

At its July 23, 2020 meeting, [Agenda Item I.I], the California Board of Accountancy (CBA) considered the National Association of State Boards of Accountancy’s (NASBA) “exposure draft” of proposed amendments to the Uniform Accountancy Act (UAA) Model Rules. According to the CPA Evolution Initiative–—a joint venture of NASBA and the American Institute of Certified Public Accountants (AICPA)—these amendments propose new education requirements for initial licensure of Certified Public Accountants (CPAs) “to incorporate additional subjects and skills reflective of the evolving profession, and create more consistency reflect changes in the accounting industry.” Citing the automation, outsourced labor, and the fact that paraprofessionals are now performing work traditionally done by CPAs, the CPA Evolution Initiative’s website asserts that the market for certified public accountants demands more education and specialization, and states that its goal is to launch a new uniform licensing exam in January 2024 that reflects the evolution of the CPA profession.

According to CBA’s staff memo [Item I.I], NASBA developed the UAA Model Rules in 2004 to promote uniformity in the regulation of the accounting profession across various licensing jurisdictions. California uses the model rules for guidance but maintains its own regulatory framework for licensing CPAs in this state. The staff memo sets forth a detailed analysis of the proposed education requirement revisions, and compares them with CBA’s existing statutes and regulations.  For example, NASBA’s proposal would amend Model Rule 5-2(c) to require state boards to review applicant academic transcripts from all colleges and universities, regardless of their level of accreditation, as opposed requiring only minimal review for transcripts from Level 1 accredited colleges or universities. But, as staff points out, CPA’s Licensing Division already reviews each applicant’s transcript.

NASBA’s additional proposed amendments include requiring specific coursework to develop “critical thinking” and “professional skepticism and judgment” skills; increasing minimum required accounting-related units from 24 to 27 or 30, with specific subject matter requirements including financial accounting and reporting for business organizations, financial statement auditing, taxation, and accounting information systems, among others.

After the detailed analysis, staff concluded that none of the proposed amendments were significantly different than CBA’s existing statutes or regulations such that the Board should consider seeking amendments at this time.  Ultimately, the Board voted to adopt a neutral position on the proposed amendments and submitted a letter [Agenda Item I.I; Attachment 4] to NASBA advising it of the Board’s neutrality, expressing support for NASBA’s efforts to revise the Model Rules to encourage uniformity among education requirements for CPA licensure, and stating that NASBA’s interest in the uniform regulation of CPAs aligns with CBA’s mission to protect consumers because CBA regulations include a practice privilege which allows CPAs licensed in other states to practice accountancy in California, subject to qualifications.

According to a NASBA press release, the NASBA Board of Directors voted to approve the proposed amendments to the model rules at its October 13, 2020 meeting. At this writing CBA has not undertaken any rulemaking or pursued any statutory changes as a result of the new rules.


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