Doing Business Away from Home: Expediting Reciprocity

Last week, National Association of State Boards of Accountancy (NASBA) President David Costello and American Institute of Certified Public Accountants (AICPA) President and CEO Barry Melancon, sent a letter to the State Boards of Accountancy requesting assistance in speeding and easing the process by which displaced accounting professionals can begin practicing in other states.


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According to the letter, the accounting statutes governing firms from Alabama, Louisiana and Mississippi are “substantially equivalent to the Uniform Accountancy Act.” It should be noted that the Uniform Accountancy Act (UAA), which was designed to provide a uniform approach to regulating the accounting profession across the nation when it was first approved in 1997, has been undergoing a revision process since October 2004. Comments on the revised exposure draft must be submitted by October 3, 2005. Changes to the way CPA firms are regulated included in the exposure draft have not yet been approved and do not apply.

Texas, Tennessee, Maryland and Oklahoma are among the states named in the letter having plans or processes for responding to reciprocity requests that Board’s of Accountancy in other states may wish to use as examples. According to the Houston Chronicle efforts like those being undertaken by the AICPA, NASBA and other professional organizations are why displaced professionals, such as accountants, will have an easier time finding employment in new locations than their low- or un-skilled counterparts.

“The professional, the high-skilled person is going to find it easiest to be able to find work in Houston,” Barton Smith, director of the Institute for Regional Forecasting at the University of Houston told the Houston Chronicle.

To facilitate reciprocity, the letter states that NASBA’s Accountancy License Database, including all Louisiana’s licensees, has been made available to every state board. The AICPA has also posted a digest of reciprocity and temporary practice rules.

CPAs and accounting firm owners or partners are also encouraged to investigate local and municipal rules governing business licenses and operating a business even on a temporary basis in a location other than where the firm is normally headquartered or maintains offices.
“If a CPA has an office in San Ramon [California] and send stuff to a client here [Alameda, California] he is not conducting business [in Alameda],” Julie-Ann Boyer, chief financial officer for Alameda told the San Francisco Chronicle. “But if he comes to Alameda and sits down with a client, that is the conduct of business and he needs a license.”

According to the San Francisco Chronicle most California cites require local companies to have a local business license. Many also require out-of-town businesses transacting or soliciting business within the city to obtain a license, the Chronicle reports. It is unclear if this problem is unique to California or occurs in other places throughout the country.

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