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chairman's welcome
spotlight on: technical=20
competence
Thomas S. =
Chambers
![3D"Thomas](3D"http://www.dllr.state.md.us/license/news/cpanews/images/Tom_Chambe=) Welcome to the Fall issue of =
The Account=20
Balance! This time, I=E2=80=99ve decided to use my =
column to discuss=20
competence and technical standards (COMAR=20
09.24.01.06 G. (1) through (4).
In essence, this regulation states that a licensee may =
not=20
undertake any engagement for the performance of professional =
services which the licensee cannot reasonably expect to =
complete=20
with due professional competence, including compliance with=20
applicable standards for the specific type of engagement. =
In practice, this regulation means:
- Don=E2=80=99t take on a job that you cannot complete =
on time. This=20
includes taking on more clients than you or your firm can =
handle.=20
Your client needs the product of your services in order to =
meet=20
filing deadlines with government or financial=20
organizations.
- Don=E2=80=99t take on a job that you or the members of =
your firm don=E2=80=99t=20
have the appropriate education or technical expertise to=20
complete.
This regulation requires licensees to comply with =
applicable=20
generally accepted auditing standards and financial =
accounting=20
standards for particular types of engagements as well as =
regular,=20
ordinary engagements. Audit and accounting standards vary =
for=20
pension plans, non-profit organizations, banks, the =
construction=20
industry, community associations, and other industries. The =
American=20
Institute of Certified Public Accountants (AICPA),=20
the Public Company Accountancy Oversight Board (PCAOB),=20
and other government agencies issue, and frequently revise,=20
generally accepted auditing standards.
Licensees should thoroughly familiarize themselves with =
the=20
standards that have been established for the type of =
organization=20
before entering into an engagement. There are many =
resources=20
available to licensees. Most auditing standards can be found =
on the=20
Internet. For example, the =E2=80=9CYellow =
Book=E2=80=9D=20
contains the auditing standards for most nonprofit =
organizations and=20
all government agencies that accept federal money.
As always, thanks for reading, and be sure to let us know =
what=20
you=E2=80=99d like to see in The Account =
Balance!
july-august exam=20
results
Congratulations to all successful 3rd-quarter CPA Exam=20
candidates! A total of 95 candidates passed the exam, =
bringing the=20
current total for 2009 to 268. We=E2=80=99re on track to =
surpass 2008=E2=80=99s=20
numbers, so keep up the good work! =
View=20
the pass list. Maryland candidates sat for 965 =
examination=20
sections in the 3rd quarter. Candidates performed best on =
the Audit=20
and Attestation section of the exam with a 59.4% pass rate. =
Passing=20
rates for the other sections of the exam were Financial =
Accounting=20
and Reporting (55.9%), Regulation (50.4%) and Business =
Environment=20
and Concepts (49.0%).=20
Successful CPA Exam Candidates Since the Launch of=20
Computer-Based Testing
|
2004* |
2005 |
2006 |
2007 |
2008 |
2009** |
|
74 |
166 |
194 |
236 |
291 |
268 |
* Successful candidates from the May 2004 =
launch date=20
to December 2004
** Successful candidates during =
the=20
period January 1, 2009 through September 30, 2009
|
contractor fyi
If you do subcontract work, remember that you=20
must report every firm you have =
contracted=20
with when you benefit from a firm=E2=80=99s peer=20
review.
|
What is NASBA?
The National=20
Association of State Boards of Accountancy (NASBA) works =
to=20
connect the U.S.=E2=80=99 55 boards of public accountancy =
(50 states plus=20
Washington, D.C., Guam, the U.S. Virgin Islands, Puerto =
Rice, and=20
the Commonwealth of the Northern Mariana Islands). =
NASBA=E2=80=99s goals=20
include providing information, programs, and services of =
interest to=20
the CPA community and reporting on major trends and =
developments in=20
the accounting world. NASBA also provides a valuable =
networking=20
environment where members of disparate boards can =
disseminate=20
information. Of course, NASBA also administers the CPA Exam, =
an=20
important contribution indeed, and holds regional and =
national=20
meetings where CPA boards can gather. Additionally, NASBA =
maintains=20
an extensive library of exam publications, white papers, =
board=20
reports, and many other documents. They=E2=80=99re a great =
resource for=20
accounting professionals. |
Wanted: Email Addresses =
Do you have your email address on file with =
the Board?=20
If not, you may be missing valuable information. Exam =
candidates:=20
make sure you include your email address on your =
application, or=20
update it via cpa@dllr.state.md.us. This is=20
especially important as approval notices, including your =
Notice to=20
Schedule, are automatically emailed to you. We have ceased =
sending=20
candidate approval letters through the mail! When you go =
online to=20
schedule your exam, please check that all your information,=20
including your email address, is =
correct.
Licensees: renewal notices are emailed 5 =
days before=20
expiration (notices are also mailed 60 days prior to =
expiration). If=20
you don=E2=80=99t receive either notice because you =
haven=E2=80=99t updated your=20
contact information, you will be assessed a =
non-negotiable late fee. Update=20
your contact information, including your email =
address.
Exam Candidates!
Non-U.S. applicants for the CPA Exam: NACES members are the=20
only acceptable evaluation services for =
foreign=20
transcripts. There are no exceptions=E2=80=94please =
don=E2=80=99t use another=20
service and expect the Board to accept their evaluation of =
your=20
credentials. You must request a course-by-course evaluation=20
for the purpose of taking the Uniform CPA Exam in=20
Maryland. Any other evaluation will be denied.
CPE: Count Your Hours =
Carefully=20
Accuracy and truthfulness in reporting your CPE are of =
the utmost=20
importance. You are certifying, under penalty of perjury, =
that your=20
CPE hours are valid. If you can=E2=80=99t prove it in the =
event that you are=20
audited, don=E2=80=99t claim it. This speaks directly to =
your professional=20
integrity and commitment to uphold the honor of the CPA =
profession.=20
The Board has now decided to seek administrative action =
against and=20
present consent orders to licensees who falsify or =
mis-report their=20
CPE. Not sure if you have enough hours? Get all=20
your CPE questions answered.
SOLE PRACTITIONER VS. FIRM=20
CPAs often call the Board to inquire as to whether they =
need to=20
obtain a firm permit in addition to their individual =
license. Many=20
CPAs work by themselves and have small staffs in their =
practice. In=20
answering this question, it all depends on how a CPA =
practice is=20
organized.
A firm permit is required if the practice is formally =
organized=20
as a corporation or limited liability company. Of course,=20
partnerships and limited liability partnerships are also =
required to=20
have a firm permit.
A firm permit is not required if the practice is composed =
of only=20
one CPA, who owns all the assets of the business.
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|
Educational Requirements: What =
Counts for=20
Ethics?
Raymond C. Speciale, Esq., =
CPA
The Board reviews hundreds of applications =
for the CPA=20
exam every year. Board members carefully examine transcripts =
and=20
course descriptions to determine compliance with current=20
regulations.
Under the current regulations, applicants =
for the CPA=20
exam must provide evidence that they=E2=80=99ve completed an =
ethics course.=20
Specifically, they must complete 3 undergraduate semester =
hours (or=20
4 undergraduate quarter hours) in any one of the following =
four=20
subjects:
- Business ethics;
- Accounting ethics;
- Philosophy of ethics; or
- A course that examines the framework for =
modern=20
ethical decision-making.
When this requirement came into effect in =
December=20
2007, it greatly expanded the types of ethics offerings the =
Board is=20
willing to accept. Prior to December 2007, the Board was =
only=20
willing to accept =E2=80=9Cbusiness ethics=E2=80=9D as =
meeting the ethics=20
requirement for the CPA exam.
The vast majority of applicants submit =
courses that=20
meet the current ethics requirement. However, applications =
continue=20
to be denied for failure to meet the ethics requirement. A =
summary=20
of the most commonly encountered problems is outlined below. =
- =E2=80=9CHybrid=E2=80=9D Courses: Perhaps =
the most common problem=20
encountered is the applicant who attempts to meet the =
ethics=20
requirement through a course that combines ethics with =
another=20
substantive discipline or study. For instance, a 3-credit =
course=20
that focuses on both business law and ethics will not meet =
the=20
board=E2=80=99s ethics requirements. The regulations =
require a 3-credit=20
course devoted to ethics. A course that combines the study =
of=20
business law and ethics is not considered by the =
Board as=20
a full 3-credit ethics course.
- Multiple Courses: From time to time, =
applicants=20
argue that ethics was =E2=80=9Ctaught across the =
curriculum=E2=80=9D and therefore=20
they have met the ethics requirement. Unfortunately, this =
is not=20
acceptable to the Board. Unless each course has a =
published number=20
of credits that are designated as =E2=80=9Cethics=E2=80=9D =
credits, the Board will=20
deny an applicant attempting to meet the ethics =
requirement=20
through multiple courses. While the Board appreciates the =
fact=20
that ethics may have been taught effectively across the=20
curriculum, it has no reasonable way of verifying this =
type of=20
claim.
- Introductory Philosophy or Theology =
Courses:=20
Typically, these courses focus on contemporary responses =
to=20
questions concerning the nature and limits of human =
reality and=20
the relationship of individuals to society. The Board =
can=E2=80=99t accept=20
these courses because they are not substantially devoted =
to the=20
study of ethics. On the other hand, the Board does accept=20
upper-level Moral Theology or Moral Philosophy courses =
where the=20
focus is ethics.
Students and faculty advisors should be mindful of the =
importance=20
of the ethics requirement for any CPA candidate. Information =
on=20
acceptable courses and approved degree programs is available =
on our=20
website. All candidates are urged to refer to the =
Board=E2=80=99s=20
website prior to submitting their application for =
clarification of=20
any questions. |
|
Board =
Members
Thomas S.=20
Chambers, CPA, Chair, Industry Member (Caroline =
County)=20
H. Terry Hancock, CPA, Industry Member=20
(Baltimore County)
Thomas J. =
=E2=80=9CTim=E2=80=9D Murphy, CPA,=20
Industry Member (Prince George=E2=80=99s =
County)
Raymond C.=20
Speciale, Esq., CPA, Education Member (Frederick=20
County)
Marjorie A. Root, Consumer =
Member=20
(Frederick County) |
Ella H. Pierce, Consumer Member =
(Baltimore=20
City)
Muhammed A. Khan, CPA, Industry =
Member=20
(Baltimore County)
Division=20
Personnel
Stanley J. Botts,=20
Commissioner, Occupational & Professional =
Licensing=20
Harry Loleas, Deputy Commissioner, =
Occupational=20
& Professional Licensing |
State Board of=20
Public Accountancy Staff
Dennis L. =
Gring,=20
Executive Director
Matthew A. Lawrence,=20
Board Counsel
Linda L. Rhew,=20
Administrative Officer
Bert Fenwick,=20
CPE Consultant
Barbara Hardy, =
Office=20
Service Clerk
Alicia Coar, Office=20
Secretary
Shannon Davis, Outreach =
Coordinator=20
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