July 2003

KEEPING CPAs IN INDUSTRY CURRENT

In light of the Sarbanes-Oxley Act and other consequences of the recent accounting scandals, should CPAs that work in public companies be required to keep their CPA licenses current?

This question is the subject of many discussions and frustrations of colleagues of mine who work for companies with SEC-reporting requirements. Controllers, CFOs and vice-presidents of finance of several Fortune 500 companies that are signing representation letters have chosen not to stay current, and their choice trickles down to accounting managers and other members of their staffs, some of whom are in-turn asked to sign various representations as well.

Nor do these companies budget to keep their accountants educated about standards, regulations, and laws. I have struggled with every Fortune 100 SEC employer of mine to try to obtain approval for AICPA and NYSSCPA membership dues and state licensure fees, as well as reimbursement for attending seminars to maintain my own minimum requirements. Some companies pay their accountants’ AICPA and state CPA society membership dues, but my impression from anecdotal information is that increasingly they do this only partially.

This isn’t a minor point. When public companies don’t pay educational and professional expenses to keep their CPAs current, they increase their risk of accounting and disclosure issues.

This is important for another reason. When a company has CPA candidates on its staff who need sign-off by an active CPA to obtain their licenses, if their managers aren’t current then they are precluded from becoming licensed CPAs.

I think it would be worthwhile for the NYSSCPA—possibly in cooperation with the AICPA—to survey CPAs in industry—especially those who are not active—about these issues.

Name withheld on request

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