Legislature(2005 - 2006)SENATE FINANCE 532
03/23/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB 206 | |
| SB222 | |
| SB284 | |
| HB274 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 222 | TELECONFERENCED | |
| + | SB 284 | TELECONFERENCED | |
| + | HB 274 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 206 | ||
10:16:05 AM CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 274(FIN) "An Act relating to the practice of accounting; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. 10:16:13 AM REPRESENTATIVE MIKE HAWKER, sponsor of the bill, testified that Alaska's accounting statues were written in 1960 through 1962. Many accounting practices have changed since that time. Efforts are underway nationally to standardize accounting practices including education and licensing requirements. The Alaska Board of Public Accountants has been collaborating with the American Institute of Certified Public Accountants to implement changes to comply with the Uniform Accountancy Act, written by the Institute. This bill represents the first portion of those efforts. Representative Hawker stated that most of the language in this lengthy legislation is technical, conforming to current standards. Representative Hawker informed of the shortage of qualified Certified Public Accountants (CPA) in Alaska. This bill would grant practice privileges to out of state accountants under the Standard of Substantial Equivalency. The reciprocity requirements are designed to encourage accountants to work in Alaska by not requiring them to redo any professional credentials. Representative Hawker told of the current requirement that all communications to the accounting community must be conducted through certified mail. At the request of the Board of Accountancy this provision would be repealed and would reduce operating costs of the Board by $6,000 to $8,000 a year. Representative Hawker emphasized the public reliance on audits attesting to the correctness of financial statements. The national trend has been to increase regulation and management of CPAs performing attest functions. This bill would mandate that professional accountants undergo peer reviews, a practice currently in regulation. However, regulations do not include a definition of attesting, nor do they provide for a process of writing regulations to address attesting. This bill would require the Board of Accountancy to develop regulations defining attest functions and providing special oversight of accountants who perform those functions. 10:21:40 AM Representative Hawker relayed attempts within the accounting community in Alaska to change practices to conform to the national Uniform Accountancy Act. Some have been eager to fully conform, while others were reluctant to make changes. The Board held internal and public hearings on the issue and this legislation represents compromises made to the various concerns. Those accountants who had opposed making any changes were satisfied with the proposal and expressed willingness to see the results. Representative Hawker explained that the delayed effective date of the statutory changes is January 1, 2008. Regulations could be written in the meantime and, if deemed necessary, statutory changes could be offered in the next legislative session. Representative Hawker described the support for this bill from different factions of industry. 10:23:59 AM Senator Olson remarked that businesses are dependant on accountants. He asked if any negative criticism to this bill has been voiced from business representatives. 10:24:19 AM Representative Hawker had heard of no negative comments with the exception of comments raised by independent accountants, those who are not certified. Those concerns have been addressed. 10:24:34 AM Senator Olson asked if his accountant would therefore support this legislation. 10:24:41 AM Representative Hawker responded this would depend on who his accountant is. Those who have been actively involved in the process have reached agreement on the provisions in the bill. 10:25:12 AM Representative Hawker noted that the oldest member of the association supports this bill. This person represented the anchor of the "old school" approach. Through the process, he became supportive of allowing regulations to be adopted, and if those regulations proved effective, he would support their being codified. Representative Hawker predicted this bill would likely not be the last legislation addressing changes to the accounting statutes. 10:26:18 AM Co-Chair Green recalled the dissent when these changes were originally proposed. 10:26:26 AM DAN KENNEDY, Certified Public Accountant, testified via teleconference from Mat-Su, acknowledging that this issue is relatively insignificant in comparison to other issues before the legislature. He supported this bill, a modernization of Alaska's accounting procedures that would align with 40 other states. This legislation represents a compromise within the accounting profession. He had advocated for more aggressive changes, including a reduction of the activity requirements for becoming a CPA. Currently an accountant must work under the supervision of a CPA for two years. Alaska is the only state with this requirement. He had recommended one year of supervised practice. Mr. Kennedy defined the peer review process as an audit of the auditors, which would strengthen the profession. Therefore, only one year of supervised practice is necessary. However, he was willing to compromise on this item in the interest of passage of this legislation. 10:30:18 AM Senator Bunde offered a motion to report the bill from Committee with individual recommendations and accompanying fiscal note. Without objection HB 274 was MOVED from Committee with zero fiscal note #1 from the Department of Commerce, Community and Economic Development.
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