Locally

The last couple months have been busy at the state level and nationally. In the last issue of the Washington CPA magazine I talked about two bills that the WSCPA proposed. I have great news: both bills passed!

CPAs in Washington now have an exemption in the Private Investigator’s statute. The language of the Private Investigator’s statute, as it stood previously, contained a possibility that certain kinds of investigative work that fall under a CPA’s purview, such as fraud investigation, could require a private investigator’s license. The cost of obtaining a license for the individual and the firm would have been expensive and would mean that CPAs reported to two licensing bodies. Failure to obtain the license could have led to legal issues for individual CPAs or for those testifying in court. Although this fear had not yet been borne out on the national level, we wanted to be proactive and head off any issues with Bill #1263, which provides an exemption for CPAs. The bill was signed by the Governor on April 24^th and effectively became law on July 24, 2015.

The actual language of the bill as to whom is exempted from the statute is: (12) A certified public accountant regulated under chapter 18.04 20 RCW or the employee of a certified public accountant performing duties within the scope of public accountancy. You can find more information about the statute under RCW 18.165.020 in Washington.

The second bill, #5534, was a bit more challenging. The bill creates a scholarship program with what some considered a surplus of funds at the Washington State Board of Accountancy (WBOA). The WBOA is funded solely from CPA and firm licensing fees, and according to the statute, the money is only allowed to be used for the regulation of CPAs. While trying to work out some of the state’s budget issues, legislators proposed sweeping the fund balance from the WBOA into the state’s general fund. This was first proposed a couple of years ago, and many WSCPA members stepped up to the plate by writing or calling their legislators, and were able to prevent that from happening. Once again though, the fund balance was a target, and we knew that a long-term solution had to be reached. The bill proposed a scholarship program that would utilize the funds to help future CPAs, thus keeping the funds working for the profession.

Bill #5534 was signed by Governor Inslee on May 8, 2015 and became effective immediately. The new state budget that was signed on June 30^th moves $3.3 million from the WBOA into the account bill #5534 created over the biennium. The Washington CPA Foundation, the WBOA and the WSCPA will be working on contracts to create the new scholarship program.

Although there is a lot of work to be done, there is a lot of excitement around providing substantive scholarships for a greater pool of talented students in Washington. If you have or know of a college student studying accounting in Washington State, make certain they apply. Learn more about the scholarship applications here.

Nationally

In mid-May, key WSCPA leaders attended the AICPA council meeting in Washington, D.C. The meeting was extremely informative as to what is happening at a national level that may affect the profession. WSCPA leaders met with Washington State Congressmen and women as well as our Senators or their key staff.

The topics that were discussed included: the cash basis method of accounting, creating a structured response for tax relief for natural disaster victims, mobile workforce legislation (allowing a minimum of days worked in a state before you need to pay income tax), and the level of service and other issues at the IRS. Our state has some great representatives who are willing to listen to our issues, ask questions and respond to our requests. They are always happy to hear from constituents. If you ever go to Washington D.C., try to stop in and visit your congressman or woman.

Another emerging issue is the recent Department of Licensing (DOL) report, released on May 28, 2015, regarding audits of employee benefit programs.

The report was not favorable. If you are interested in reading the report, it is located here: http://www.dol.gov/ebsa/pdf/2014AuditReport.pdf. Here is a quote from the DOL’s press release regarding the report.

“The existing patchwork of regulations and rules needs to be overhauled and a meaningful enforcement mechanism needs to be created,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “The department is proposing, among other measures, legislation that will fix these problems.”

More than 7,300 licensed CPAs nationwide audit more than 81,000 employee benefit plans. EBSA’s review found that 61 percent of audits fully complied with professional auditing standards or had only minor deficiencies under professional standards. The remaining 39 percent of the audits contained major deficiencies, however, which put $653 billion and 22.5 million plan participants and beneficiaries at risk. These figures reflect increases in the amount of plan assets and number of plan participants at risk compared with prior EBSA studies.”

The AICPA and NASBA have been working with the DOL to learn more about the issues and how to create better training, support and reviews. If your firm audits employee benefit plans, this will definitely be of interest to you.

There is definitely a lot going on that touches the accounting profession. You can expect to see changes in the not too distant future around continuing education, peer review, global standards and more. Change can be overwhelming, but it also means there is a need for CPAs and that need is growing!

Kimberly Scott, CAE, is WSCPA Vice President of Government and Member Relations. You can contact her at kscott@wscpa.org.