STAND. COM. REP. NO.755

Honolulu, Hawaii

, 2003

RE: S.B. No. 1549

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1549 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC ACCOUNTANCY,"

begs leave to report as follows:

The purpose of this measure is to disallow the substitution of private industry or government accounting experience for public accounting experience for certified public accountant license applicants.

Testimony in support of this measure was submitted by the Hawaii Association of Public Accountants, Hawaii Society of Certified Public Accountants, and numerous members of the public accountancy profession. The Board of Public Accountancy (Board), Internal Revenue Service, and a certified public accountant opposed the measure. The Department of Taxation commented on the measure.

A person wishing to practice public accountancy in this State is required to obtain both a certified public accountant (CPA) license and a permit to practice. The license requirements establish minimum educational, experiential, and competency standards. In order to obtain a permit to practice, a person must have a valid license and additionally, comply with continuing education requirements, among other requirements.

One of the requirements for obtaining a license is the completion of two years of professional experience in public accountancy practice. Experience in private or government accounting or auditing work may be substituted for all or part of this requirement if deemed equivalent to professional experience in public accounting by the Board. This measure proposes to disallow the experience equivalency on the basis that experience in private industry or government accounting is not equivalent to public accounting experience.

Your Committee acknowledges the concerns of the proponents of this measure that the current licensing structure allows persons without public accounting experience to engage in public accountancy since the standard for obtaining a permit to practice does not distinguish between licensees with public accounting experience and those qualified for a license on the basis of a public accounting equivalency.

However, your Committee also recognizes the concerns raised by the opponents of this measure that the elimination of the experience equivalency will adversely affect the ability of private industry and government to employ or retain staff to perform accounting and auditing work, since that experience will not be able to be applied to qualify for a license. The Department of Taxation testified that this measure would affect its ability to recruit new college graduates for employment.

In order to balance these competing interests, your Committee has amended this measure to retain the experience equivalency for the purpose of qualifying for a license, but to disallow consideration of the equivalency for the purpose of qualifying for a permit to practice. By making this amendment, it is your Committee's intent to authorize only persons with the requisite public accounting experience to actively engage in public accounting practice, but to allow persons with other accounting or auditing experience to qualify for a CPA license.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1549, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1549, S.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair