Board of Public Accountancy

MARYLAND BOARD OF PUBLIC ACCOUNTANCY MINUTES

DATE: September 4, 2007

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

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

OTHERS PRESENT: Dennis L. Gring, Executive Director Linda L. Rhew, Administrative Officer Matthew Lawrence, Counsel Stanley J. Botts, Commissioner Harry Loleas, Deputy Commissioner Norbert Fenwick, CPA Consultant Shirley Buchanan, MSA Sandy Steinwedel, MSA Mary Beth Halpern, MACPA

The September 4, 2007 meeting of the Maryland Board of Public Accountancy was called to order by Arnold Williams, Chairman, at 9:15AM.

Mr. Williams welcomed the Board members to the September business meeting, the first meeting under his chairmanship.

Upon a motion (I) by Mr. Murphy, and seconded by Mr. Chambers, the minutes of the August 7, 2007 meeting were amended and then approved, unanimously.

CHAIRMAN’S REPORT

Mr. Williams deferred his comments to the Board to later in the meeting. . EXECUTIVE DIRECTORS REPORT

Mr. Gring introduced Mr. Stanley J. Botts, who became Commissioner of Occupational and Professional Licensing on July 17. Mr. Botts succeeds Leonard J. Howie as Commissioner. Mr. Howie was appointed Deputy Secretary of the Department on July 4. Mr. Botts said that he was attending the meeting to become acquainted with the issues facing the Board.

Mr. Gring reported that the Board has received 313 scores from examinations conducted from July 1 to August 10. Of the candidates whose scores have been reported, 18 have passed the examination. NASBA advised the Board that due to overwhelming demand examinations for the current window are being scheduled through September 8. Maryland CPA Board Minutes September 4, 2007 Page 2

Mr. Gring advised the Board that two regulations were on the agenda: COMAR 09.24.02.02 & .06 - Code of Professional Conduct/Contingent Fees and COMAR 09.24.02.02 CPE Audit Procedures. The public comment period on these proposed regulations ended on August 24. The Board did not receive any public comments on these regulations.

The Executive Director also advised the Board that proposed regulations that authorize the awarding of CPE for participation on a firm’s peer review team is scheduled to be published in the Maryland Register on September 14. The Board is on schedule to take final action on these regulations at the November 6, 2006 meeting

The proposed regulations that modify the education requirements for qualification to take the Uniform CPA Examination have been forwarded to the AELR Committee. It is expected that these proposed regulations will be published in the October 12, 2007 Maryland Register. If published on that date, the Board can take final action on December 4, 2007, with an effective date of January 1, 2008.

CPA EXAMINATION CANDIDATE APPEALS

The Board heard four in-person appeals and one written appeal from applicants who were denied candidacy for the CPA Examination.

Mr. Victor Arthur appealed the denial for application to take the CPA Exam based upon lacking a 3 credit course in Written Communication. Upon a motion (II) by Mr. Chambers and seconded by Dr. Stewart, the Board denied Mr. Arthur’s appeal, but recommended he reapply in January when he competes his Master’s degree.

Mr. Douglas Adebanjo, who was denied because of a discrepancy in the foreign credential evaluation of his education. Upon a motion (III) by Mr. Chambers and seconded by Mr. Hancock, the Board instructed staff to review Mr. Adebanjo’s application , 4-1 ( Dr. Stewart opposed).

Mr. Alexander Shelton who was denied due to lacking a 3 credit course in oral communication. Upon a motion (IV) by Mr. Chambers and seconded by Mr. Hancock, the Board approved Mr. Shelton’s application, 4-1 (Dr. Stewart opposed).

Ms. Deborah Walsh who was denied due to lacking a 3 credit course in oral communication. Upon a motion (V) by Mr. Chambers and seconded by Mr. Murphy, the Board approved Ms. Walsh’s application, 4-1 (Dr. Stewart opposed).

Ms. Angela Belfiore’s written appeal was considered by the Board. She was denied due to lacking a 3 credit course in written communication. Upon a motion (VI) by Mr. Hancock and seconded by Dr. Stewart, the Board denied Ms. Belfiore’s application.

EDUCATION REPORT (Dr. Stewart)

Reciprocal/Transfer of Grades Applications Dr. Stewart reported that one (1) reciprocal application and three (3) transfer of grades applications were approved. The following applications were denied: Maryland CPA Board Minutes September 4, 2007 Page 3

Sawako Furukawa Reyes (Transfer of Grades) was denied for lacking five semester hours of elective accounting credits and lacking 30 semester hours in business related credits.

Lisa Stover (Regular Reciprocal) was denied for lacking three semester hours in management and three semester hours in business ethics.

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

EXPERIENCE COMMITTEE REPORT

Mr. Chambers presented the Experience Committee Report. Fifteen (15) Maryland applicants were approved. Seventeen (17) reciprocal (4 in10) applicants were approved.

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

PEER REVIEW COMMITTEE

Mr. Chambers reported that the Board’s Compliance Assurance Oversight Committee for Peer Review will meet again on September 11, 2007. He will have a report at the October meeting.

Upon a motion (IX) by Mr. Murphy and seconded by Dr. Stewart, the Peer Review 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.

NEW BUSINESS

The staff sought guidance from the Board concerning the ability and industry standard of operation of an individual licensee serving as the responsible licensee for more than one firm. Mr. Lawrence indicated that there was no legal prohibition to this practice and it was the consensus of the Board that this practice be allowed.

Mr. Gring explained three items of correspondence:

1) A letter from Secretary Perez to the Maryland Association to Delegate Susan W. Krebs who wrote to the Secretary expressing concerns about the requirements and implementation of peer review; 2) Correspondence from Senator Lisa A. Gladden and Delegate Samuel I. Rosenberg, who had written to Mr. Gring concerning the Board’s denial in December 2006 of Maryland CPA Board Minutes September 4, 2007 Page 4

Yeshiva College of the Nation’s Capital request to be an approved education institution for the purpose of qualifying individuals for the Uniform CPA Examination, and Mr. Gring’s response on behalf of the Board to the Senator and Delegate; and

3) AICPA’s response to Kansas letter about examination candidate service.

In a related discussion, Mr. Gring advised the Board that the Educational Testing Service (ETS) would be taking over the management of the operation of all CPA Examination testing services from Prometric.

Mr. Chambers advised the Board that in his conversations with Susan Coffey and Gary Freundlich they are unaware of any application made by the MSA to become an approved peer review program under AICPA.

The Board clarified the policy that all CPE earned would be computed based upon 50 minutes of instruction equaling one hour of instruction as indicated in the continuing education regulations.

Upon a motion (X) by Mr. Chambers and seconded by Mr. Murphy, the Board, unanimously took final action to approve amendments to COMAR 09.24.01.01 & .06 relating to contingency fees under the Code of Professional Conduct.

Upon a motion (XI) by Mr. Chambers and seconded by Mr. Murphy, the Board, unanimously took final action to approve amendments to COMAR 09.24.02.02 Controls and Reporting relating to the conduct of audits on CPE reported by individuals during their first renewal.

Mr. Williams announced the following Committee assignments: Complaints – Mr. Murphy; Education – Dr. Stewart (Chair) and Mr. Hancock; Ethics – Mr. Hancock (Chair) and Leslie Mostow (former Board Chair); Experience – Ms. Pittman (Chair) and Mr. Chambers; Peer Review – Mr. Chambers and Jacob Cohen (former Board Chair).

Mr. Williams also assigned Mr. Hancock to study the Board’s current Continuing Education Regulations.

EXECUTIVE SESSION

It was moved (XII) by Mr. Chambers and seconded by Mr. Murphy and unanimously carried, to go into Executive Session at 10:55 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 12:25 PM.

COMPLAINT COMMITTEE REPORT Mr. Gring reported that board received four complaints. Also, he explained the Complaint Committee process for the benefit of Mr. Murphy.

Maryland CPA Board Minutes September 4, 2007 Page 5

Upon a motion(XII) by Dr. Stewart and seconded by Mr. Murphy, the Complaint Committee report was unanimously approved.

ADJOURNMENT

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

______With corrections

______Without corrections

______Chairman Date