Mar 16, 2020

Pa. CPA Law: PICPA Working on Enhancements

By Peter N. Calcara, vice president – government relations

This year’s state budget hearings have concluded in Harrisburg, and as the Pennsylvania General Assembly returns to regular session, the PICPA will be throwing elbows with a lot of other organizations for legislators’ attention. We are busy jockeying to get our legislative priorities a coveted spot on the spring agenda. Between now and June, a narrow window of opportunity opens when lawmakers address other legislation that had been put on hold by all the focus on the budget.

By most accounts, the PICPA already has had a successful first half of the 2019-2020 session. For one, this year’s tax bill (Act 13 of 2019) included a change advocated by the PICPA that allows a fiduciary to make and file a joint tax return for an estate and trust for the taxable years when the trust income is reported as part of the estate income. Also, PICPA championed the passage of a statute of repose on tax collections. Act 90 of 2019 establishes a 10-year time period during which the Department of Revenue must collect any assessed tax. The law includes all taxes administered by the DOR, excluding inheritance taxes.

Rules and regulations stampsSo, what’s next on our agenda?

The biggest with regard to the CPA profession is our seeking amendments to the state CPA Law that will enable Pennsylvania CPAs to better meet the needs of a rapidly evolving industry. House Bill 2288, sponsored by Rep. Mike Peifer (R-Pike), will codify the nationally recognized Code of Professional Conduct standard, expand the scope of education that can be applied toward an accounting degree, and strengthen the peer review requirements of CPA firms.

House Bill 2288 proposes the adoption of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct (code). The code is a set of principles, rules, and interpretations that guides CPAs in the performance of their professional responsibilities. Twenty states and jurisdictions already have adopted the code as a requirement for CPAs to practice in their states. Pennsylvania has adopted portions of the code, but not its entirety. Nationwide adoption would ensure that all CPAs — not just those who are AICPA and PICPA members — adhere uniformly to these robust ethical standards.

House Bill 2288 also proposes important amendments and revisions to the law’s peer review requirements. The legislation will clarify the scope of the requirements to include all attest engagements other than compilations, make conforming changes to comply with current peer review standards, eliminate the exception to the peer review requirements that permit firms with two or fewer licensees to have a five-year peer review cycle rather than a three-year cycle, and modernize and streamline the peer review submission requirements.

The scope of classes students can take toward earning an accounting degree will also expand. For example, House Bill 2288 adds economics to the list of qualified classes. The PICPA will try to amend the bill to include technology topics to this list.

House Bill 2288 is with the state House Finance Committee.

I would like to hear directly from you if you have thoughts or feedback on this legislative proposal. You can contact me at pcalcara@picpa.org.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.