AmEx wins

Florida First Amendment Case Settles Little

On the surface, its a simple court decision: The 11th Circuit Court of Appeals ruled that CPAs, even when working for an unlicensed entity, may advertise their designation. American Express and one of its CPA employees, Stephen M. Miller, had sued the Florida Board of Accountancy for the right of Amex CPAs to "hold out" as CPAs. "We can now advertise that we do employ CPAs," said Sarah McKenzie, Amex vice-president—government relations.

Amex appears to have received support from the American Institute of CPAs and the National Association of State Boards of Accountancy: Language added to the latest version of the Uniform Accountancy Act says, "CPAs may offer nonattest services through any type of entity they choose and there are no requirements in terms of a certain percentage of CPA ownership for these types of entities as long as they do not call themselves a CPA firm or use the term CPA in association with the entitys name."

AICPA General Counsel Richard Miller said the court decision "certainly appears to substantiate the action by the AICPA council at its last meeting regarding the direction regulation should take in the profession. To that extent, we have no problem with the ruling."

Not an end; only a beginning

However, despite the recent court decision, confusion and conflict remain. "I dont want to say NASBA supports Amexs position," NASBA President David Costello told the Journal . "We coauthored a position with the AICPA in the Final Report From the AICPA/NASBA Joint Committee on Regulation of the Profession that shows we have a similar stand, but it is not the Amex position. First and foremost, we support the right of the Florida board to enact and interpret the laws it has." Although Costello said he supported the right of CPAs to call themselves CPAs wherever they worked, he emphasized that they all needed to be under the authority of state boards. "I think Amex wants to say, NASBA supports us, but we dont. We support our state boards."

To compile or not to compile

In Florida, a non-CPA, or a CPA working at Amex but not holding out as a CPA, can issue a financial statement but cannot claim compliance with the AICPA statements on standards for accounting and review services (SSARS). But can a CPA now holding himself or herself out as a CPA, and working for Amex, do so and claim compliance with SSARS? The state board referred the Journal to John Rimes, an assistant attorney general in Florida. "That is a murky issue," he said. "Because the CPA doesnt work in a CPA firm while holding out as a CPA, he or she may not be able to be in compliance with SSARS. But as a CPA, he or she is required to. It could be a Catch 22 and no one really knows the answer right now." Meanwhile, Rimes said the state board was appealing Miller to the U.S. Supreme Court. If the Court refuses to hear the case, Miller will stand; if it does agree to hear the case, it will go a final, lengthy round. As for now, when Dave Fountain, spokesman for the Florida department of business and professional regulation, was asked if "confused" best described the situation, he said, "That would be accurate. It also would be an understatement."

At-Large Trustee Heads FAF

Manuel H. Johnson has been elected chairman of the board of trustees and president of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board and the Governmental Accounting Standards Board. A relative newcomer to the FAF, Johnson joined it in 1996 as one of the at-large, or public, members following negotiations on the boards composition between the FAF and the Securities and Exchange Commission. Johnsons immediate predecessor, J. Michael Cook, chairman and chief executive officer of Deloitte & Touche, remains on the board. "Cook will be a tough act to follow," said Johnson in a public statement, "He was an outstanding leader of the FAF." Cook also praised his successor: "Johnson is a great choice to lead the FAF."

Johnson, who has a PhD in economics, is cochairman of Johnson Smick International, a Washington, D.C., consulting firm that provides policy and economic analysis to U.S. and foreign financial institutions. He was assistant secretary of the treasury from 1982 to 1986 and vice-chairman of the Board of Governors of the Federal Reserve System from 1986 to 1990.

Standard setting—independent and fair

"Standard setting belongs in an independent private organization," Johnson told the Journal . "To that end, I see part of the FAFs role is making sure the process is perceived as fair." The problem—as exemplified by the furor over the proposed derivatives standard despite extensive exposure—may be one of public relations: "The FASB has been unfairly attacked. Its not as if the derivatives project was a big surprise to anyone; its been debated and discussed for a long time. We need to help financial statement preparers and users understand and support the process—a lot of them simply may not have been paying attention."

Another issue with its share of controversies is international accounting, which Johnson said would be a key concern for the FAF over the next few years. "The world is changing quickly—the standard-setting process is speeding up, and that makes some people uncomfortable." He said the FAF could help the FASB, SEC and other groups coordinate their efforts in addressing international GAAP.

Year 2000 Issue Information Online

The American Institute of CPAs Year 2000 task force has posted a document on AICPA Online addressing many of the problems connected with what is commonly known as the Year 2000 issue. The document explores questions in accounting and financial reporting, auditing and working with clients. It even includes a sample managements discussion and analysis section specifically referring to the Year 2000 issue. This information, which is similar to that found in an AICPA audit risk alert, will be continually updated and augmented.

At Journal press time, the document was expected to be available on November 1. Link directly from the AICPA home page,

Where to find January’s flipbook issue

Starting this month, all Association magazines — the Journal of Accountancy, The Tax Adviser, and FM magazine (coming in February) — are completely digital. Read more about the change and get tips on how to access the new flipbook digital issues.


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Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.