BOARD OF PUBLIC ACCOUNTANCY
DATE : July 5, 2001
TIME : 9:00 a.m.
PLACE : 500 N. Calvert Street, 3rd Floor
Conference Room, Baltimore, Maryland 21202
PRESENT : Alicia J. Foster
Leslie A. Mostow
Jacob J. Cohen
D. Sue Singer
Patricia A. Snell
ABSENT : Michele L. Pittman
William D. Smith
PRESENT : Dennis Gring, Executive Director
Daphne Thomas, Administrative Secretary
Matthew Lawrence, Counsel to the Board
Bert Fenwick, Consultant
Carol Kirwan, MACPA
CALL TO ORDER
The meeting was called to order by the Chair at 9:00 a.m.
It was moved (I) by Ms. Snell, seconded by Mr. Mostow and
unanimously carried to approve the minutes of the meeting held
June 1, 2001 with corrections.
REPORT OF THE CHAIR
Ms. Foster summarized the highlights at the June 6-8, 2001
Regional Meeting held in Portland, Maine. She stated that it was
very well attended and the facilities were fairly good. The
AICPA’s Board of Examiners has one (1) position open.
Recommendations from state Boards are being sought for a person
one who supervises new CPAs, and is part of a medium-size CPA
firm, to fill the vacancy. Meetings are conducted June/July and
October/November of each year. The Chair stated that if anyone
is interested, Ms. Arleen Thomas should be contacted.
Chair Foster informed the Board that the Computerization
Implementation Committee (CIC) are panelists representing NASBA’s
July 5, 2001
REPORT OF THE CHAIR CONTINUED
interest i.e. in the security of the exam and the briefing paper.
Some of the topics discussed with the regional counterparts were
non-CPA ownership (big topic and other Boards were interested in
Maryland’s new law effective October 1, 2001) and the newly
revised CPE Standards (with new standards for both the CPA and
sponsors). Having a copy in her possession, Ms. Foster requested
that Mr. Fenwick review the new Standards and report prior to the
next meeting as the deadline for comments is August 1, 2001.
The Chair apprised the Board of a new Exposure Draft from AICPA’s
Ethics Committee for which comments are due by July 16, 2001.
She stated that the draft is on the Internet and asked that
members review and forward any comments.
Ms. Foster stated that she met with Mr. Gring regarding the
Board’s comments on Briefing Paper #2. They were unable to
comment on content and structure specifications without the
Educator Member’s input. Dr. Borra’s input will be given to the
Board at the August 2nd meeting as the Board’s invited guest. The
Board’s response to the Briefing Paper was sent to AICPA on June
Chair Foster advised the Board that NASBA’s Examination Committee
has asked for an advisory vote from Maryland (and twelve (12)
other Boards who have not already agreed) which would give NASBA
the vote to represent Maryland before AICPA’s Board of Examiners.
Additionally, Ms. Foster stated that one of the agenda items is a
submittal from Mr. David Vaudt, NASBA’s Chair of the Examinations
Committee, which evidenced that there is no negative impact to
boards and it would just reflect a unified front. After some
discussion in clarifying areas of the resolution sent by Mr.
Vaudt, it was moved (II) by Mr. Mostow, seconded by Mr. Cohen and
unanimously carried to accept the resolution. Ms. Foster will
sign same and return it as soon as possible.
According to Ms. Foster, NASBA is maintaining a national database
including maintenance of a computer testing center. Ms. Foster
suggested that a committee be implemented to deal with the issues
– cost justification, administrative efforts, content and
conditioning and contractual obligations. Mr. Gring and she will
develop framework for review at the August meeting.
Ms. Foster informed all that the GAO (Government Accounting
Office) has submitted an exposure draft on professional ethics
due for comments at the end of July. She added that it can be
July 5, 2001
REPORT OF THE CHAIR CONTINUED
found on the Internet at – www.gao.gov – and it does conflict
with the AICPA Code of Ethics regarding independence.
EXECUTIVE DIRECTOR’S REPORT
Mr. Gring advised the Board that the Emergency Regulation for the
exam fees was approved by AELR (Administrative, Executive and
Legislative Review Committee) for the fees as discussed: $218 new
applicants; $188 re-examination all parts; and $119 one or two
parts. Mr. Gring added that the office has already started
receiving first-time applications.
Mr. Gring commented that NASBA will shortly provide the grades
from the May, 2001 exam which show both the grades and the
diagnostics and the national release date is July 30th. He added
that with the failing grades, candidates would get a computerized
form so that manual processing of application fees will be
With the new fiscal year, Mr. Gring apprised the Board that there
is a new travel budget of $4000 for which there is the upcoming
NASBA Annual Meeting in October and the Administrator’s
Conference in February. While Ms. Foster commented that if any
Board member is interested in the travel money to contact Mr.
Gring, Ms. Snell stated that she could get funding. Also,
mention was made that the Legal Conference is held concurrent
with the Administrator’s Conference for which Mr. Lawrence may be
Mr. Gring informed the Board that the webpage is being
redesigned. By the end of the year, visitors to the CA Board
website will be able to view new features. Mr. Gring requested
the Board’s input for material for a News/Information section.
While Mr. Mostow suggested using North Carolina’s newsletter as a
pattern, Mr. Gring stated that to do mass mailings would be
expensive. Ms. Foster suggested frequently asked questions and
answers (FAQs) to which Mr. Gring stated that both he and Ms.
Thomas have been working on the formulation of FAQs. Mr. Cohen
added that information should be addressed to applicants, the
profession, and the public.
Mr. Lawrence apprised the Board of his review and drafting of
changes to three (3) of the Board’s applications: (1) reciprocal
application; (2) limited permit; and (3) limited license. Mr.
Lawrence mentioned that it had been some time since these
July 5, 2001
COUNSEL’S REPORT CONTINUED
applications had been revised and that he would e-mail the
revisions to Ms. Thomas for review with Mr. Gring.
Mr. Lawrence informed the Board of his drafting of changes to two
legislative bills for (1) an equivalent exam (Section 2-305D) and
(2) limited permits in line with language for Maryland firms
(Section 2-416). While he did not have written language
available for the Board, he stated that he would e-mail hard
copies to the Board. Copies of both are attached to these
EDUCATION COMMITTEE’S REPORT
Ellie Green - Questioned the acceptability of a
communications course for which Ms. Singer
requested more information. Also, insofar
as the business ethics requirement, she
wished to design her own course after
obtaining an ethics book with which the head
of her accounting department would assist.
Ms. Singer stated that it would be approved
if it is under the direction of the
Department and credit is given on the
official transcript as independent study.
Joseph Gustaff - Approved for reciprocity as he has completed
4 out of 10 years experience.
John Long - Denied reciprocity as he did not meet
Maryland’s educational requirements when he
received his license in another
jurisdiction. Can only reapply under the 4
and 10 rule.
Brenda Mayer - Did not meet Maryland’s conditioning
requirements when she applied for the May,
1995 exam. Can only retake the examination
under Maryland’s requirements or reapply
under the 4 and 10 rule.
It was moved (III) by Mr. Mostow, seconded by Ms. Snell and
unanimously carried to approve the Education Committee’s report.
July 5, 2001
EXPERIENCE COMMITTEE’S REPORT
Mr. Mostow stated that he reviewed a batch of 12 RPE’s, approved
10, denied one for stale dates and one had a missing license
number for the endorser, but could be approved once furnished.
It was moved (IV) by Ms. Snell, seconded by Mr. Cohen and
unanimously carried to approve the Experience Committee’s report.
The Board received submittals from both Ms. Judy Roche and Ms.
Tracey Diss wherein they inquired if the hours for experience
have to billable or could include sick, personal or vacation.
The Board’s response was that the experience must be strictly
hours of experience.
Mr. Cohen outlined the efforts of the new Committee who reviewed
HB86 (Non-CPA Ownership of Firms) for the purpose of implementing
regulations. He had contacted seven (7) CPAs to serve on the
Committee of which three (3) accepted and two (2) attended on
July 2, 2001. Issues were raised by the Committee in the
Simple majority question – no negative finding.
Active participation – can non-CPA be manager or
participant of firm – no negative finding but each
firm must have a CPA responsible for the attest
Registration of CPAs and non-CPA necessary.
Academic qualifications – owner would be responsible and
would have to take CPE in line with peer review. The
Board did not feel that education could be enforced
against a non-member. Mandatory peer review for
licensing may be a consideration.
Responsibility of non-CPA partner – reviews and
compilations can be done by a non-CPA under certain
circumstances in accordance with the Attorney General’s
Violations/interest must revert back to firm.
July 5, 2001
NEW BUSINESS CONTINUED
Two (2) member firms – acceptable as long as the CPA has
over 50% ownership.
Any prohibited services by non-CPA – attest function
The Board concurred with the trickiness of enforcing a statement
in the regulations as to compliance with the standards for
registration. The Board discussed firms names i.e. & Associates
which they concurred must at least be a CPA and a non-CPA who can
be shown as a partner to a CPA firm. Recognizing that the Bill
becomes effective October 1st, the Board needs to have the
regulations in place by that date. Mr. Lawrence will prepare a
draft for the Board’s review and Ms. Foster thanked the Committee
for its efforts.
Ms. Foster informed Mr. Gring that she has not been able to renew
on line to which Ms. Thomas would obtain one from the Licensing
Unit before her departure. Mr. Gring, Occupational and
Professional Licensing’s Internal Technology Manager, explained
that technically speaking, the system that is being dealt with is
antiquated and the problems with the system are now surfacing.
Ms. Foster requested that Ms. Thomas put the matter of a
regulation regarding CPE standards/peer review on the August
It was brought to the Board’s attention that New Jersey Board has
experienced problems with candidates for examination failing to
meet the 150-hour requirement. The Board is now permitting
candidates to sit with 120 semester hours contingent upon gaining
the remaining 30 hours by 2005. American University has
eliminated its undergraduate accounting program and has fired all
its professors. The Board discussed competitive professions
being part of the blame and recognized that major firms are
paying for the fifth year of education.
As the Board’s July, 2002 Board Meeting falls on the 4th, Mr.
Gring suggested that the Board choose another day. All present
concurred with July 11, 2002.
July 5, 2001
It was moved (V) by Mr. Cohen, seconded by Ms. Singer and
unanimously carried to go into Executive Session at 11:40 a.m. in
3rd Floor Conference Room, 500 N. Calvert Street, Baltimore,
Maryland 21202. The purpose of this session was to consult with
counsel. This session was permitted to be closed pursuant to
State Government Title Section 10-508(a)(7). Upon completion of
the session, the Board reconvened their public meeting at 11:45
The Board approved two (2) transfer of grades applicant for
licensure based upon information which was reviewed regarding
their misdemeanor convictions.
It was moved (VI) by Mr. Cohen, seconded by Mr. Mostow and
unanimously carried to take the following action on the
01-PA-28 Closed; not a CPA; no jurisdiction.
01-PA-29 Referred to State’s Attorney’s Office.
01-PA-31 Closed; not a CPA, no jurisdiction.
01-PA-34 Closed; not a CPA; no jurisdiction.
There being no further business, the meeting adjourned at 11:50
____ With corrections
____ Without corrections