ADVOCACY
Comments and recommendations galore VSCPA volunteers have been hard at work this year, providing a flurry of comment and position letters to state and national stakeholders since July. The VSCPA is lucky to be able to call on its wealth of knowledgeable volunteer experts to help staff and leaders craft position letters on a variety of topics. The Accounting & Auditing Advisory Committee and Tax Advisory Committees have tackled several issues. Below are the positions we have taken in the latter half of 2021. Want more info? Read our full positions any time at vscpa.com/positions.
AICPA AUDITING STANDARDS BOARD: QUALITY MANAGEMENT FOR ENGAGEMENTS EXPOSURE DRAFT The A&A Committee reviewed the Proposed Statement on Auditing Standards — Quality Management for an Engagement issued by the Auditing Standards Board and gave feedback on a wide variety of areas. This far-reaching exposure draft will have serious implications for engagements. A sample of the VSCPA’s feedback is below. • The Committee’s main concern with implementing these new standards is related to over- or under-designing the
framework of the quality management system. Without proper guidance, many firms will try to think of every possibility without determining the quality of the risk, so the iterative risk assessment process should emphasize that updating the firm’s quality management system should not be overly burdensome while always being aware of new risks or changes to quality risk. Peer reviewer training will be crucial. • While there should be increased emphasis on governance and leadership in the proposed quality management system, small firms with limited staff and high costs could have trouble meeting the standard. • Small firms will incur the most significant hit to their bottom lines — both monetary and human. Smaller firms need help to ensure they do not include non-relevant areas and exclude relevant ones incorrectly.
GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB): EXPOSURE DRAFT ON ACCOUNTING CHANGES AND ERROR CORRECTIONS The VSCPA responded to GASB’s exposure draft, Accounting Changes and Error Corrections, by generally supporting the Board’s decision to clarify guidance to address diversity in practice.
TOP LEGISLATIVE ISSUES AROUND THE NATION The mid-year legislative session summary from the American Institute of CPAs (AICPA) summarizes the top issues facing state legislatures, from occupational licensing to taxes on services and threats to CPA independence. Here are state trends: Occupational licensure: “The CPA profession, as with all professions, must defend the legitimacy and efficacy of state licensure against threats to reduce or eliminate occupational licensure,” the AICPA report states. Nationwide, 200 bills were introduced in 46 jurisdictions that threatened licensure, but only 46 were enacted. In Virginia, we lobbied against a bill that would have given the governor power over regulatory licensing decisions; that legislation died in Committee. Taxes on professional services: CPAs fought legislation to tax professional services in Louisiana, Nebraska, Oregon, West Virginia and Wyoming, with the West Virginia Society of CPAs putting up a significant fight. All proposals died. Contract monitoring: Legislation was introduced in several states that contract with certain service providers to monitor keystrokes, mouse clicks, and take screenshots to collect data on contractors’ use of time on key projects. The Virginia Department of Human Resource issued what the AICPA calls a “scathing report” striking down the need for such services. Noncompete agreements: The AICPA is always watching non-competes, which “chip away at independence rules for CPAs.” Non-compete legislation can cause unintended consequences for CPAs and their firms.
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DISCLOSURES
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FALL 2021
