New threats to CPA licensing posed in 2020 legislative year

By Ken Tysiac

The beginning of the 2020 legislative year for state lawmakers across the country comes with new threats to the future of CPA licensure.

Legislative challenges to professional licensing standards remain a threat to CPAs and other professionals as groups such as the American Legislative Exchange Council and Americans for Prosperity advocate for anti-licensing legislation in individual states.

Legislation that would weaken state professional licensing requirements was introduced in the West Virginia Legislature earlier this month, and similar legislation is expected to be introduced in other states. Groups advocating against licensing have developed model legislative proposals that call for professional and occupational licensing to be eliminated.

The AICPA is monitoring all the state legislatures that are in session with the intention of responding to any bills that might endanger important licensing regulations that protect the public.

“It’s important for us to stay vigilant,” Skip Braziel, vice president–State Regulatory & Legislative Affairs at the AICPA, said in a telephone interview Wednesday.

Survey shows support for licensing

In response to these challenges, the AICPA and representatives of other professions have formed the Alliance for Responsible Professional Licensing to educate lawmakers and the public on how licensing rules protect the public.

The alliance on Wednesday released the results of a survey of 952 likely voters indicating that:

  • Three-fourths of voters believe it is important to ensure qualifications for professionals in certain industries. A majority of voters said current professional licensing requirements protect the public and should not be reformed.
  • More than 70% of voters say regulating professionals is important in accounting, engineering, architecture, landscape architecture, and related fields with a high impact on public safety and welfare.
  • Seventy-one percent of voters believe professional licensing should be required unless it can be proved that eliminating licensing will not have a negative impact on public health and safety.
  • About two-thirds (67%) of voters believe that consumers are best protected by a system that regulates education, examination, and experience standards. All these standards are overseen by professional licensing boards.

“When people start to really think about the consequences of some of these proposals, there would not be a lot of support for potentially de-licensing CPAs or architects or engineers or landscape architects or surveyors,” Braziel said. “And what we see in this survey is that bearing itself out.”

Consumer choice? Or consumer beware?

Advocates for professional licensing are concerned about anti-licensing proposals that would allow any unlicensed person to perform any service that typically has required a license, as long as a consumer gives consent to the service.

These are being promoted as “consumer choice” proposals. Braziel calls them “consumer beware” proposals.

As an example of what could occur under such a proposal, Braziel provided the hypothetical of a county official who is looking to replace an old bridge in their area. Under “consumer choice,” he said, the county official may be able to contract with anybody to build that bridge, as long as the county official signs an agreement that says they know the builder is not a licensed engineer.

Braziel would argue that the consumer is not just the county official who purchases the services, but everybody in the public who drives across that bridge. The same would hold true in an audit of a company; the consumers include investors, lenders, and other users of the financial statement — not just the company that is being audited.

“There are more [consumers] involved in this than just the two parties that the legislation highlights,” Braziel said.

CPAs have a role to play in defending professional licensing against pressure from anti-licensing advocates, Braziel said. He said a long history of work in the public interest has given the accounting profession a good reputation with policymakers.

Braziel said it’s time for CPAs to remind their local politicians of the profession’s contributions to the community, regardless of whether anti-licensing legislation has been introduced in their state.

“It’s never too early to begin talking about why our profession is so important,” he said. “Talk about the services we provide. Talk about the impact we have on our communities. One of the things I’ve learned over the last couple of years working on this issue is that we don’t tell our story enough.”

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.

RESOURCES

Keeping you informed and prepared amid the coronavirus crisis

We’re gathering the latest news stories along with relevant columns, tips, podcasts, and videos on this page, along with curated items from our archives to help with uncertainty and disruption.

SPONSORED REPORT

Getting leases in line

ASC Topic 842 is a relatively simple standard that can mean profound changes for organizations with leases. This report examines what makes this standard challenging and describes new ways for CPAs to add value.