Governor Rell Signs Public Act 08-52; CPA “Practice Mobility” Now Law in Connecticut
Please note: this language has been modified since its initial posting on May 13, 2008.
On May 12, 2008, Governor M. Jodi Rell signed “An Act Concerning the Practice and Privileges of Certified Public Accountants” into law as Public Act 08-52. The new law, effective immediately, establishes “Practice Mobility” for Certified Public Accountants in Connecticut.
The CSCPA extends its sincere appreciation to Governor Rell and to the 2008 Connecticut General Assembly for their leadership in recognizing the importance of CPA practice mobility.
Specifically, Public Act 08-52 permits out-of-state CPAs to practice in Connecticut under what is termed “No Notice, No Fee, No Escape.” That means a CPA can now enter Connecticut without having to notify our State Board of Accountancy, and without paying a fee. If that CPA were accused of violating local accounting statutes, the Connecticut State Board of Accountancy would report the alleged violation to the visiting CPA’s home state regulators – hence the term “no escape.”
An out-of-state CPA firm that provides certain attest services to a client with its home office in Connecticut must still obtain a Connecticut firm permit. Those services are: any financial statement audit or other engagement performed in accordance with the Statements on Auditing Standards, any examination of prospective financial information to be performed in accordance with Statements on Standards for Attestation Engagements, and any engagement performed in accordance with PCAOB Auditing Standards.
This is a “driver’s license” approach to regulation. Just as a Connecticut driver’s license allows a resident of our state to drive in any other state, mobility enables the CPA to practice in any state with reciprocal law. Earlier this year, the Connecticut State Board of Accountancy voted unanimously in favor of practice mobility, so the profession and its regulators are in harmony on this issue.
The key to practice mobility is for all states to adopt it. That is happening - quickly. In 2005, only three states had practice mobility. Today 20 states have mobility, and another three states have legislation awaiting gubernatorial approval. Eleven additional states have legislation pending.
There are safeguards. Practice mobility would only extend to states deemed “substantially equivalent” – states with the same high accountancy standards as Connecticut.
Why is practice mobility is important? Many clients have operations in other states. The Internet makes practicing across state lines commonplace. Because CPAs are regulated state-by-state, the profession needs a system that will facilitate serving clients around the country while upholding the rules by which CPAs must practice. Practice mobility accomplishes both goals.
Frequently when a CPA attempts to practice across state lines, he or she must register, pay a fee, and endure indeterminate delays of paperwork processing. Opportunities are missed, client needs go wanting, and the public is not served. CPA practice mobility is a business-friendly, 21st century regulatory model.
Senate Bill No. 684 passed 148-0 on April 29, 2008 in the state House of Representatives after passing unanimously in the state Senate on April 24.
Coincidentally, the signing occurred the same day as the Centennial Annual Meeting of the Connecticut Society of Certified Public Accountants.
CPA mobility is a national trend! Here's where the country stands today.
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