STAND. COM. REP. NO. 1537
Honolulu, Hawaii
, 2005
RE: S.B. No. 120
S.D. 1
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Third State Legislature
Regular Session of 2005
State of Hawaii
Sir:
Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 120, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO PUBLIC ACCOUNTANCY,"
begs leave to report as follows:
The purpose of this bill is to change the requirements for obtaining a certified public accountant (CPA) license and permit to practice. Specifically, this bill:
(1) Changes licensing requirements by:
(A) Narrowing down the range of private or governmental accounting or auditing work that may be substituted for the public accountancy experience needed for licensure, to experience deemed equivalent to public accountancy "attestation, tax preparation, or tax consulting work";
(B) Defining "attestation" and requiring the Board of Accountancy to incorporate by rule, the statements on standards referenced in the definition; and
(C) Extending to all licensed CPAs, the continuing professional education (CPE) requirement currently applicable to CPAs who hold a permit, by requiring licensees to complete four hours of ethics CPE;
and
(2) Changes permit requirements by requiring two years of public accountancy experience for a permit to practice as a CPA, and exempting persons holding licenses prior to December 31, 2005.
The Hawaii Association of Public Accountants, and many concerned citizens submitted testimony in support of this bill. The Board of Public Accountancy, Department of Taxation, Hawaii Society of Certified Public Accountants, and several concerned citizens submitted testimony in opposition to this bill. The State Auditor voiced concerns.
Your Committee heard concerns that government accounting experience is vastly different from and cannot substitute for public accounting experience, and that requiring public accounting experience for CPA licenses and permits is necessary if the public is to be protected.
However, your Committee also heard testimony that the overwhelming majority of United States jurisdictions recognize private and government accounting experience for licensure, and that there is no indication that CPAs without public accounting experience are incompetent so that the law must be amended. There were concerns that the change in licensing and permitting requirements would deny accountants exposure to a larger range of work, and adversely affect government recruiting of accounting graduates.
After further consideration, and in recognition of the continuing debate on these issues, your Committee has amended this measure by changing the effective date to July 1, 2099.
Technical, nonsubstantive amendments have also been made for clarity and style.
As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 120, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 120, S.D. 1, H.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,
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____________________________ KENNETH HIRAKI, Chair |
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