Board of Public Accountancy s3

MARYLAND BOARD OF PUBLIC ACCOUNTANCY MINUTES

DATE: October 2, 2007

LOCATION: 500 North Calvert Street Baltimore, Maryland 21202 Third Floor Conference Room

MEMBERS IN ATTENDANCE Arnold Williams Barbara Stewart, Ph.D. H. Terry Hancock Thomas J. “Tim” Murphy

OTHERS PRESENT: Dennis L. Gring, Executive Director Linda L. Rhew, Administrative Officer Matthew Lawrence, Counsel Norbert Fenwick, CPA Consultant Thomas Hood, MACPA Shirley Buchanan, MSA Bobby Buchanan, MSA Leslie Mostow Raymond C. Speciale

The October 2, 2007 meeting of the Maryland Board of Public Accountancy was called to order by Arnold Williams, Chairman, at 9:15 AM.

Mr. Williams introduced Mr. Raymond C. Speciale, who was in the audience. Mr. Speciale has been appointed to the Board by Governor O’Malley as the education member of the Board. Mr. Speciale is a member of the accounting faculty at Mt. St. Mary’s College in Emittsburg, Maryland. He will be officially sworn in after this Board meeting and will attend his first meeting as a Board member on November 6, 2007. He will succeed Dr. Barbara Stewart, who is attending her final meeting as a Board Member.

Dr. Stewart expressed her appreciation for the opportunity to serve on the Board. Mr. Williams and the other members of the Board individually thanked Dr. Stewart for her tireless efforts on behalf of the Board for the past six years.

Upon a motion (I) by Mr. Murphy, and seconded by Dr. Stewart, the minutes of the September 4, 2007 meeting were amended and then approved, unanimously.

CHAIRMAN’S REPORT

Mr. Williams noted the participation of Secretary Thomas Perez, Deputy Secretary Leonard Howie, Commissioner Stanley J. Botts, Deputy Commissioner Harry Loleas, himself and the members and staff of this Board at the Maryland Association of Certified Public Accountant’s “swearing-in ceremonies” of new CPA’s on September 24, 2007. NASBA requested each Board designate a communications officer to be a point of contact. Mr. Williams suggested that when a new consumer member is appointed, this responsibility be assigned to that individual. Maryland CPA Board Minutes October 2, 2007 Page 2

Upon a motion (II) by Mr. Williams and seconded by Mr. Murphy, the Board approved appointing the next consumer member to be communication officer with NASBA.

Mr. Williams suggested that following the final appointment of a consumer member that the Board invite Dr. Stewart and former chair Leslie Mostow, to a meeting in the near future to formally thank them for their service to the Board and the citizens of Maryland.

EXECUTIVE DIRECTORS REPORT

Mr. Gring provided the following update on pending regulations:

 Regulations governing the earning of up to 16 hours of continuing education credit hours for participation on a firm’s peer review team was published in the September 14, 2007 Maryland Register. The Board is accepting public comment through October 15, 2007. The Board can take final action on these regulations at the November 6, 2007 meeting.

 The regulations modifying the educational requirements for qualifying for the Uniform CPA examination will be published in the October 12, 2007 Maryland Register. The public may comment on these regulations until November 12, 2007. The Board can take final action on these regulations at the December 4, 2007 meeting.

Mr. Gring also reported that through October 1, 2007, the Board has received the scores for 568 of the 696 examination section administered during the July/August Examination window. Thirty-seven candidates have passed the examination in this window. There are 127 Audit and Attestation section scores yet to be reported. The final number of passing candidates could be higher. To date, 145 Maryland candidates have passed the CPA Exam. in 2007. Mr. Williams inquired as to the apparent drop in the passing rates in 2007, from 2006. Mr. Gring indicated that it was too early to tell and suggested that a more complete analysis and conclusions be made after the final grades are received from the October- November administration of the examination.

CPA EXAMINATION CANDIDATE APPEALS

The Board reviewed one written appeal of the Board’s denial of candidacy for the CPA Examination.

Demetri Protos was denied for lacking 1.5 semester hours in oral communication. The basis of Mr. Protos’ appeal was that public speaking was required throughout his curriculum and should be credits toward meeting the oral communication requirement.

EDUCATION REPORT (Dr. Stewart)

Reciprocal/Transfer of Grades Applications Dr. Stewart reported that two regular reciprocal and one transfer of grades applications were approved.

Maryland CPA Board Minutes October 2, 2007 Page 3

Two regular reciprocal applications were denied:

Collins Headley was denied for lacking courses in written communication and business ethics.

Xiaozhuo Wang was denied for lacking courses in written communication and business ethics.

The following transfer of grades application was denied:

Rekha Chatterjee was denied due to not filing a complete application.

Dr. Stewart reminded the Board that the proposed changes in the education regulations will not apply to reciprocal applicants. According to §203-08 b(4) of the Business Regulation Article, an applicant must provide evidence that at the time the individual was licensed in another state, the applicant met the educational, examination , and experience requirements that were substantially equivalent to those then required by the law of Maryland. She suggested that the law be modified to accommodate reciprocal applicants filing after the effective date of the new educational requirement. The Board took Dr. Stewart’s recommendation under advisement but indicated its belief that the law should be modified to be flexible for future reciprocal applications.

Upon a motion (III) by Mr. Murphy and seconded by Mr. Hancock, the Education Report was unanimously approved.

EXPERIENCE COMMITTEE REPORT

Mr. Williams presented the Experience Committee Report. Thirteen (13) Maryland applicants were approved. Seventeen (17) reciprocal (4 in10) applicants were approved.

Upon a motion (IV) by Mr. Hancock and seconded by Dr. Stewart, the Experience Report was unanimously approved.

PEER REVIEW COMMITTEE

Mr. Gring presented the Peer Review Report for Mr. Chambers. He reported that the Peer Review Quality Assurance Committee met on September 11, 2007. The Committee chaired by Former Board Chair Jacob is in the process of defining its mission. It will meet again in November.

The Board also discussed a letter received from Delegate Susan Krebs expressing concern over Maryland Society of Accountants’ account of experiencing difficulty in getting approval from the AICPA to be approved as a peer review program. The Board reiterated its willingness to assist MSA in developing a peer review program which meet the standards for conducting peer reviews established by law. Upon a motion (V) by Mr. Hancock and seconded by Mr. Murphy, the Peer Review Committee Report was unanimously approved.

CONTINUING EDUCATION COMMITTEE

Mr. Hancock distributed a summary. In the summary, he cataloged the laws, regulations and Board policies governing continuing educations. Additionally he indicated that the task force will prepare a detailed analysis of CPE rules and regulations, survey the CPE regulations in surrounding states, survey changes and initiative currently be considered by NASBA, AICPA and other surrounding states, and prepare recommendations and alternatives to be considered by the Board.

Mr. Hancock will provide status reports at each Board meeting.

Upon a motion (VI) by Mr. Murphy and seconded by Dr. Stewart, the CPE Task Force Report was unanimously approved.

OLD BUSINESS

The Board reviewed and discussed the current regulations requiring licensees to obtain 4 hours of continuing professional education in professional ethics each license period to qualify for renewal (COMAR09.24.02.02 B). It was determined that the regulation does not prohibit a licensee from carrying forward into the next license period excess CPE ethics that is earned. The Board would have to amend its regulations to require a licensee to obtain 4 hours of CPE in each license period and expressly prohibit carrying forward excess hours.

LICENSE DENIAL APPEAL HEARING – PHILLIP EDWARD CPAS-LD-01

The Board adjourned its business meeting to conduct a hearing in the above captioned matter at 10:20 AM

EXECUTIVE SESSION

It was moved (VII) by Mr. Murphy and seconded by Mr. Hancock and unanimously carried, to go into Executive Session at 11:25 AM. in the 3rd Floor Conference Room, 500 N. Calvert Street, Baltimore, Maryland 21202. The purpose of this session was to consult with counsel. This session is permitted to be closed pursuant to State Government Title Section 10-508(a), (7). Upon completion of the session, the Board resumed its public meeting at 11:57 AM.

COMPLAINT COMMITTEE REPORT

Mr. Murphy presented the Complaint Committee report, for the period, September 4 through October 2, 2007, 5 complaints were received, 3 were closed, and 2 complaints were referred to pre-charge review.

Upon a motion (VIII) by Dr. Stewart, and seconded by Mr. Hancock, the Board unanimously approved the Complaint Committee Report Upon a motion (IX) by Mr. Murphy, and seconded by Mr. Hancock, the Board approved Mr. Edward’s license application, 3-1

Upon a motion (X) by Mr. Hancock, and seconded by Mr. Murphy, the Board approved the extension of James Patrick Gallagher’s conditional credit for the Audit section of the CPA Examination until March 31, 2008. The motion was passed 3-1, Dr. Stewart was opposed.

Upon a motion (XI) by Mr. Murphy, and seconded by Mr. Hancock, the Board approved the extension of Kimberly Carlson’s conditional credit for the Regulation section of the CPA Examination until March 31, 2008. The motion passed, 2-1, (Mr. Williams abstained, Dr. Stewart opposed.)

ADJOURNMENT

There being no further business, the meeting adjourned at 12:31 PM.

______With corrections

______Without corrections

______Chairman Date