Board of Public Accountancy s2

STATE OF MARYLAND BOARD OF PUBLIC ACCOUNTANCY MINUTES

DATE: July 7, 2009

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

MEMBERS IN ATTENDANCE H. Terry Hancock Thomas Chambers Tim Murphy Ella Pierce Marjorie Root

ABSENT Raymond C. Speciale Muhammad A. Khan

DLLR OFFICIALS/STAFF: Dennis L. Gring, Executive Director Linda L. Rhew, Administrative Officer Matthew Lawrence, Counsel Shannon Davis, Outreach Coordinator Alicia Coar, CPA Office Secretary

OTHERS PRESENT: Skip Falatko, MACPA Sandy Steinwedel, MSA Shirley Buchanan, MSA Bobby Buchanan, MSA Patrick R. Lincoln, MSA

The July 7, 2009 meeting of the Maryland Board of Public Accountancy was called to order by Chairman Thomas Chambers at 9:03 AM.

Upon a motion (I) by Ms. Pierce, and seconded by Ms. Root, the minutes of the June 2, 2009 meeting was approved, without amendments, unanimously.

REPORTS

Chairman’s Report Mr. Chambers reported on the Eastern Regional Conference of the National Association of State Boards of Accountancy (NASBA) which was held in Indianapolis, July 16-19 2009. The major topics of the meeting were summarized by Mr. Chambers as follows:

ASEC Roadmap to Implement IFRS – The biggest issue appears to be a disagreement between “CONVERGENCE” vs “CONVERSION”. NASBA does not oppose International Financial Reporting Standards (IFRS), per se, but it does strongly oppose allowing the Securities and Exchange Commission (SEC) to relinquish its authority over US capital markets to a foreign entity. It was noted that issuers of financial statements under US GAAP are never asked to reissue under IFRS. While over 100 countries have adopted IFRS, many

CPA Board Minutes July 7, 2009 Page 2

of these countries do not have national capital markets and otherwise have a limited regulatory structure. NASBA continues to lobby for representation during the ongoing debate to ensure that the concerns of regulators are adequately addressed.

Mobility – As of the meeting date, 40 states had enacted full mobility provisions, 2 states were quid pro quo, and 4 others states were in the works.

Accountancy Licensing Database (ALD) – Nineteen (19) states are currently participating and 10 more are committed to implementing this important piece of mobility enforcement. A “glitch” has surfaced during implementation because various jurisdictions have different definitions and uses of the term “revoked.” In some cases, “revoked” does not mean that a license has been taken away as a result of a disciplinary action.

Peer Review – Fifteen (15) states have implemented a peer review oversight committee (PROC) and several other states are in the process of doing so. The goal is for the oversight function to be sufficient, independent, transparent, and supportive of regulatory objectives. NASBA was successful in getting the AICPA to allocate 2 seats on the National Peer Review Committee to NASBA representatives.

Model Board Committee – This new NASBA committee has been formed to proactively assist state accountancy boards in becoming independent from state funding. However, due to the financial and administrative “assault” on state boards this year by state legislatures and governors, NASBA has had to “play defense,” writing letters and testifying on behalf of several state boards including Washington, Ohio and Connecticut to deter state officials from raiding funds of these states Boards.

Firm Names – This ongoing project should soon result in the release of a white paper by the AICPA and an exposure draft by PEEC.

International Delivery of the CPA Exam – This project continues to move forward. It has been agreed that licenses will be issued through existing states. International candidates will be asked to sign an agreement under which their exam grades are archived until the applicant fulfills are other licensure requirements. A central database will be developed and maintained to assist with enforcement. The first 2 countries to host the international delivery will likely be Japan and the United Arab Emirates. . Executive Director’s Report

Mr. Gring reported that the Office of the Secretary has approved the 120 semester hour examination requirement/150 semester hour licensing requirement for development as a legislative proposal for 2010. The Secretary’s Office also approved the Board’s in legislative initiative to obtain authority to impose a monetary penalty on CPA firms for statutory/regulatory violations; and adding a sanction by an agency established by state or federal law that involves a licensees/firms fitness to hold a license or a permit. Mr. Gring and Mr. Lawrence will prepare the legislative packets for these initiatives for the Office of the Secretary’s final review and submission to the Governor’s Office.

Mr. Gring also reported that progress continues to be made on two IT projects, the NASBA Accountancy Licensing Database, and the electronic peer review report forms for individual license renewal.

The Executive Director also reported that 86 candidates passed the Uniform CPA examination in the April and May. A total of 187 candidates have passed the examination in 2009. Maryland candidates sat for 770 examination sections. Candidates performed best on

CPA Board Minutes July 7, 2009 Page 3 the Regulation section of the exam with a 56.6% pass rate. Candidate passing rates for the other sections of the exam were Auditing and Attestation (52.3%), Business Environment and Concepts (47.0%), and Financial Accounting and Reporting (44.0%).

Education Report

Mr. Hancock made the Education Report on behalf of Mr. Speciale. He reported one transfer of grades application approval, two regular reciprocal application approvals and one transfer of grades application denial during the period June 2, 2009 through July 7, 2009.

One transfer of grades application was denied because she lacked 10 semester hours of education and three semesters in ethics.

Upon a motion (II) by Ms. Root, and seconded by Mr. Murphy, the Board unanimously approved the Education Report.

Experience Committee Report

Ms. Pierce presented the Experience Committee Report. Thirty-eight (38) Maryland applicants and four reciprocal (4 in 10) applicants were approved during the period June 2, 2009 through July 7, 2009.

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

Communications Committee Report

Ms. Root reported that the e-newsletter, has been electronically distributed and the reviews from licensees and others has been very positive. The next newsletter is scheduled to be published in August. She also reported that Ms. Davis is working on a brochure and the redesign of the Board’s webpage.

Old Business

Final Action on Proposed Regulations Upon a motion (IV) by Ms. Pierce, and seconded by MS. Root, the board unanimously approved final action on proposed regulations to amend COMAR 09.24.01.05 Transfer of Grades to limit the use of this application option to individuals who passed the Uniform CPA Examination as a candidate of another state who have never possessed a license in another state; and to require an individuals who applies under this option four or more years after passing the CPA exam to complete 80 hour of continuing education as an additional requirement.

Project Task List

Mr. Hancock reviewed the Project Task List on Mr. Gring’s behalf. The Board accepted the report

Foreign Credential Evaluation Services

The Board tabled discussion of the certification of acceptable foreign credential evaluation services until Mr. Speciale can address the issue. Mr. Gring will e-mail the results of his survey of state boards of accountancy for the members review prior to the next meeting.

Continuing Professional Education

The Board discussed the documentation that must accompany licensee’s claiming of credit for completing an ethics course. The Board advised staff that the hour equivalent that reflects the percentage of time devoted to regulatory or behavioral ethical subject matter must be documented on the CPE sponsoring organization’s attendance report or certificate of completion. The Board will not recognize ethics CPE hours claimed if supporting documentation is not noted on attendance forms or course completion certificates.

Board Hearing

The Board recessed the meeting at 9:42 AM to conduct a hearing on the appeal of the Board’s license denial of the transfer of grades application of Mr. Andrew Cunningham (CPA LD10-01).

New Business

Discussion of acceptable CPA Firm names was tabled until the next business meeting.

Correspondence

Upon a motion (V) by Mr. Hancock and seconded by Ms. Pierce, the Board unanimously granted a one time exemption from the peer review requirement for Paul Verburg due to the fact that he sold his CPA business.

Upon a motion (VI) by Ms. Root, seconded by Ms. Pierce, the Board unanimously approved a one-time exclusion for peer review for Jan E. Heifner because she had only one client who is no longer a client. Upon a motion (VII) by Mr. Murphy and seconded by Mr. Hancock, the Board unanimously granted a six month extension to complete a peer review to Yurek Cassedy, Inc.

Executive Session

The Board resumed its business meeting and upon a motion (VIII) by Ms. Pierce, and seconded by Ms. Root, approved for the Board to go into Executive Session at 11:050 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 11:45 AM and recessed until 11:55 AM.

Complaint Committee Report

Mr. Murphy reported the Board received 4 complaints during the period June 2 through July 7, 2009. Ten were closed: CPAS 07-0016, CPAS 07-0045, CPAS 09-0039, CPAS 09-0041, CPAS 09-0047, CPAS 09-0048, CPAS 09-0051, CPAS 09-0052, CPAS 09-0053, and CPAS 09-0054.

Upon a motion (IX) by Ms. Root and seconded by Mr. Hancock, the Board unanimously approved the Complaint Committee Report.

Upon a motion (X) by Ms. Root and seconded by Mr. Hancock, the Board unanimously approved the accommodations under the Americans With Disabilities Act for a CPA examination candidate.

Upon a motion (XI) by Mr. Hancock, and seconded by Ms. Pierce, the Board denied the transfer of grades application of a licensee based upon answers to a conduct question on the application.

Upon a motion (XII) by Mr. Hancock, and seconded by Ms. Pierce, the Board adjourned the meeting at 12:08 PM.

NEXT MEETING Tuesday, September 1, 2009, 500 North Calvert Street, Third Floor, 9:00 AM

__ ___ With corrections ______Without corrections

______Chairman Date