Changes proposed this month to the Uniform Accountancy Act (UAA) and the Uniform CPA Examination Model Rules in the US are designed to help holders of qualified foreign designations apply for state licensure as a CPA and support the updated Uniform CPA Examination.
The American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) published an exposure draft containing the proposal and seek comments by Sept. 1.
Under the proposal, a unilateral pathway to CPA licensure would be provided for holders of qualified foreign designations. The NASBA/AICPA International Qualifications Appraisal Board would conduct an evaluation to verify that the foreign designation has licensing requirements that are substantially equivalent or higher compared with those in the UAA.
If the licensing requirements for the foreign designation are found to be adequate, the board would recommend that applicants holding that foreign credential be eligible to apply to a state for a US CPA licence. Applicants with approved designations would still be required to pass the International Qualification Examination.
The current UAA requirement that the foreign body have reciprocal recognition of US CPAs would be eliminated. Currently, the AICPA and NASBA have mutual recognition agreements (MRAs) with six foreign accountancy bodies. Under these MRAs, holders of specific foreign designations may apply for state licensure as a CPA in a state that recognises the MRA as long as the foreign authority that granted the designation allows a licensed US CPA to obtain the foreign authority’s comparable designation to practise.
The exposure draft states that bringing these foreign professionals working in the US under the jurisdiction of state boards would strengthen public protection. In addition, the exposure draft states that other countries will want to similarly move to recognition of qualified US CPAs.
The exposure draft also proposes updates to the Model Rules to accommodate the move to the next CPA exam, which will be launched in April.
Proposed updates to the Model Rules would:
- Identify the Uniform CPA Examination as the examination required for licensure.
- Eliminate the definition of the two-month testing window and replace it with a new definition of the testing window equal to a calendar quarter with a minimum of two months of testing.
- Highlight that examination content tests the knowledge and skill of a newly licensed CPA and that passing all sections of the examination is only one component of qualifying for a licence.
The UAA and Uniform CPA Examination Model Rules are model documents, so the proposed updates would not take effect in any jurisdiction until legislatures in those jurisdictions change their requirements and rules.
—Ken Tysiac (email@example.com) is a CGMA Magazine editorial director.