The National Society of Accountants (“NSA”) is pleased to submit comments on the Exposure Draft of Proposed Section 14(q) of the Uniform Accountancy Act, or UAA. As you may know, NSA is a voluntary association of Certified Public Accountants, Enrolled Agents, licensed public accountants, and other financial professionals. A significant percentage of NSA members are subject to regulation by a state Board of Accountancy.
NSA has long disagreed with the premise of Section 14(g), which is that the public is incapable of distinguishing between a certified public accountant and an accountant that is “enrolled,” “licensed,” “registered,” or “accredited.” Consequently, we are predisposed to support Section 14(q) and its recognition that the use of the word “accountant” coupled with the descriptive word “management” is not inherently misleading. Frankly, it should not have taken the financial interest of the AICPA in offering the Chartered Global Management Accountant credential for it to come to that realization.
We encourage NASBA and the AICPA to revisit Section 14(g) and revise the restrictions on other credentials and titles earned by non-licensees, none of whom seek to provide audit and attest services. We also encourage the parties to review the language of Section 14(h)(2), which seemingly precludes a non-licensed individual who has earned a Masters in Accounting degree from identifying herself as such because it may “imply…. special competence as an accountant.”
We note initially that Section 14(g) is similar to Proposed Section 14(q) in that it seeks to prohibit non-licensees and others from using titles that may be misleadingly similar to the titles specifically reserved to licensees. In order to make the intent of the prohibition as clear as possible, the Section lists with specificity those titles it considers misleading, including, ““certified accountant,” “chartered accountant,” “enrolled accountant,” “licensed accountant,” “registered accountant,” “accredited accountant,” or any other title or designation likely to be confused with the titles “certified public accountant” or “public accountant.”” All of the titles are presumably examples of “accounting designations” the UAA finds objectionable for purposes of Section 14(g).
In contrast, proposed Section 14(q) states that an individual may use an “accounting designation” but provides no examples of titles that would be acceptable under Section14(q) other than that they include the word “management” and are conferred by a nationally recognized accounting organization.
There is simply too much that is unclear in the proposed Section 14(q) to warrant support for the language presented even though we support the concept. Consider the following:
- The term “accounting designation” in Section 14(q)(1). Using this term without definition would allow any state adopting the proposed Section 14(q) to supply its own definition. NSA is aware of a number of titles that include the word “management” and may – or may not – currently be considered an accounting designation. Among such titles are:
- “Business Management.” This title is used by individuals who provide bookkeeping & tax services.
- “Tax Compliance Management.” This title is used by individuals who provide tax consulting services.
- “Medical Practice Management.” This title is used by individuals who provide medical coding & accounts receivable services to physicians.
Absent a definition, NSA can envision a situation where a State Board of Accountancy may decide that, even though the services provided may only be tangentially related to accounting, one of the titles identified above is sufficiently related to accounting to be considered an “accounting designation.”
- The term “nationally recognized accounting organization” in Section 14(q)(1). The breadth of this term is unclear inasmuch as many entities the public would consider an accounting organization also enjoy national recognition. Such entities could include State Boards of Accountancy, state CPA societies and NASBA. Is it the intent of Section 14(q) to encompass future “management” accounting designations that may be conferred by state CPA societies or by NASBA? We think not.
The combination of items 1 and 2 above suggest the possibility that the two organizations seeking comment on the proposed Section 14(q) may reap financial benefits from having current job titles containing the word “management” suddenly become “accounting designations” that may only be used by CPAs or individuals working for CPAs and would thus be subject to regulation by state Boards of Accountancy that are NASBA members.
- Proposed Section 14(q)(2)(B), which relates to offering or rendering tax services. The thrust of the proposal, when read in combination with items 1 and 2 above, could result in non-licensed individuals using long-acceptable titles suddenly finding that such titles have become “accounting designations that include the word ‘management’” and will therefore be unacceptable in the future unless the individuals become CPAs or work within a CPA firm. We do not believe this is or should be the purpose of Section 14(q).
Accordingly, we propose that Section 14(q) be amended to:
- provide examples of accounting designations that are intended to be included within the scope of the Section, similar to the approach in Section 14(g);
- define “nationally recognized accounting organization” to specifically include only national organizations, and to exclude NASBA, any State Board and any state CPA society.
NSA appreciates this opportunity to submit our comments on NASBA's Exposure Draft of Proposed Section 14(q) of the UAA and looks forward to further dialogue on this important subject. The Exposure Draft on Proposed Section 14(q) of the UAA is available here to read.