By Michael D. Colgan, CAE, executive director and CEO
PICPA’s proposed changes to the Pennsylvania CPA Statute – SB 1018, sponsored by Sen. Pat Browne, CPA – cleared its final hurdle last week by being unanimously approved by the state House.
The primary objective of the legislation is to adopt a new comprehensive definition of attest services, which are restricted to current licensees. This change was needed because certain unregulated non-CPAs were performing some types of attest services using the accounting profession’s standards. The new definition includes all examinations, reviews, and agreed-upon procedures completed in accordance with the AICPA Statement on Standards for Attestation Engagements. This updated definition addresses the fact that CPAs are now being asked to perform attest services on nonfinancial information, such as XBRL, sustainability reports, greenhouse gas emissions, and service organization control reports.
In addition, the new law removes a requirement that an inactive CPA from another state, upon applying for domestic reciprocity in Pennsylvania, must have completed a year of experience within the previous 60 months. This restriction created an unnecessary burden for an individual who may have left the profession for a period of time to raise a family and is now reentering the workforce. The revised statute now aligns with language in the profession’s model Uniform Accountancy Act (UAA).
The amendments also include an exemption from the Private Detective Act of 1953, which states that individuals providing expert testimony in a legal proceeding should have a private investigator license. New language ensures that the CPA Statute is the sole law governing CPAs and their services, which would include providing forensic accounting services. We would not want to see a member in court questioned by opposing counsel on whether or not they had a private investigator license under a 1953 law!
The concept of non-CPA ownership of CPA firms is already law in Pennsylvania and most other states. The CPA Law permits up to 49 percent of firm owners to be non-CPAs, which recognizes a reality in a CPA firm today as the diversity of services provided may require other professionals. Our amendments include a provision to allow the office managing partner to be a nonlicensee owner, but still requires that the partner in charge of the attest function in a CPA firm be a current licensee. This provision promotes a realistic standard for today’s practice environment and keeps Pennsylvania’s law consistent with the UAA and other states.
I would like to thank Sen. Browne for his sponsorship of this bill, and the support from our other CPA legislators in the House: John Maher, George Dunbar, Keith Greiner, and Mike Peifer. If you have any questions regarding these changes, please feel free to contact me.