Legislative threat to CPA licensure stalls in West Virginia

By Anita Dennis

When a bill that would have weakened the requirements for occupational licensing failed to become law recently in West Virginia, the accounting profession achieved a significant victory in its efforts to protect the rigor and standards associated with CPA licensure.

House Bill 2007 in West Virginia would have diminished occupational licensing requirements as they apply to individual reciprocity, including those that apply to CPAs.

A coalition of professional and regulatory associations led by the AICPA, the National Association of State Boards of Accountancy (NASBA), the state board of accountancy, and the state CPA society worked to defeat the bill, but the battle to maintain appropriate licensing standards is not over.

A growing trend

The proposed legislation in West Virginia is part of a rising trend seen across the country to minimize occupational licensing rules. The reasons given for the bipartisan effort include desires to reduce regulation and to find the “silver bullet” for reciprocity, according to Marta Zaniewski, AICPA vice president–State Regulatory & Legislative Affairs. Supporters of these efforts have also cited concerns about unemployment and economic disruptions during the COVID-19 pandemic. In 2020, the AICPA was tracking about 60 such efforts, while today it is monitoring around 179.

The proposals seen across the country typically mix in a variety of occupations. Although vocational occupations don’t have the same robust education, examination, experience, and continuing education requirements as CPAs and other learned professions, “these bills would lump us together,” said Judy Proctor, CPA, CGMA, the CEO of the West Virginia Society of CPAs.

In some cases, “legislators don’t take into account the prestige and respect for the CPA license and don’t understand the consequences that this kind of legislation will have,” said Megan Kueck, lead manager–State Regulation & Legislation at the AICPA.

The public clearly supports responsible licensing. In a survey commissioned by the Alliance for Responsible Professional Licensing (ARPL), 67% of voters said consumers are best protected by a system that regulates education, examination, and experience standards — all of which are overseen by a professional licensing board.

Potential consequences

If these proposals are enacted, the impact could be considerable. Weak regulations could endanger the public health, safety, and welfare by allowing, for example, inaccurate financial reporting or audits or, in the case of engineers or architects, poorly constructed infrastructure or buildings. In the absence of strong licensing, consumers would be left to determine a professional’s competency.

CPAs’ ability to practice across state lines would also be at stake. “Over time, the profession risks not only eroding the trust between the profession and the public but also eating away at three decades of promoting and increasing uniformity across all 55 U.S. accountancy jurisdictions,” said Kristi Justice, executive director, West Virginia Board of Accountancy. “My fear is that this would most likely destroy the major strides made to eliminate barriers to interstate mobility and revert the profession back to the days of having to obtain a license to practice in another jurisdiction.”

Building a coalition

To counteract this trend, in 2019, the AICPA and NASBA helped found the ARPL, which advocates for rigorous licensing standards in learned and technical professions and which led the effort in West Virginia.

“We wanted to join forces to ensure the CPA license is protected,” Zaniewski said.

The ARPL also seeks to educate policymakers on the unintended consequences of cookie-cutter legislation. Other ARPL members include professional associations or boards related to engineers, surveyors, architects, and landscape architects.

One of the key reasons the effort worked was because the effort was personal for volunteers in the state. West Virginia members of the various ARPL member groups worked together as a team on behalf of their professions. “That’s why we got the attention of our legislators,” Proctor said. Various partners had close relationships with state policymakers, while ARPL staff at the national level oversaw letter-writing campaigns and the development of talking points and testimonials.

“I believe we were able to clearly articulate the difference in regulating highly complex professions,” Justice said.

The victory in West Virginia was particularly important because there have been regular efforts in the state in recent years to pass troubling occupational licensing legislation, according to Zaniewski. This was the first year that ARPL worked together on a state level as a coalition.

“At the end of the day, logic and reason prevailed,” she said. She also believes the achievement was a lesson learned for the future. “The success in West Virginia is a model that others can follow.”

How to get involved

Attempts to roll back licensing standards are expected to continue, but CPAs can help make a difference. The first step is to get informed by watching for updates from your state CPA society and following up to learn more, Kueck said. If a bill is being considered, in cooperation with their state societies CPAs might also contact their own state legislators or ones with whom they have a connection or a business relationship.

“Sometimes you do have to make some noise,” Proctor concluded.

Anita Dennis is a freelance writer based in New Jersey. To comment on this article or to suggest an idea for another article, contact Chris Baysden, the JofA’s associate director–Content Development, at Chris.Baysden@aicpa-cima.com.

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