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PA Bulletin, Doc. No. 11-1842



Notice of Comments Issued

[41 Pa.B. 5844]
[Saturday, October 29, 2011]

 Section 5(g) of the Regulatory Review Act (71 P. S. § 745.5(g)) provides that the Independent Regulatory Review Commission (Commission) may issue comments within 30 days of the close of the public comment period. The Commission comments are based upon the criteria contained in section 5.2 of the Regulatory Review Act (71 P. S. § 745.5b).

 The Commission has issued comments on the following proposed regulations. The agencies must consider these comments in preparing the final-form regulation. The final-form regulation must be submitted within 2 years of the close of the public comment period or it will be deemed withdrawn.

Close of the Public Comments
Reg. No. Agency/Title Comment Period Issued
16A-5511 State Board of Accountancy 9/19/11 10/19/11
Continuing Professional Education
41 Pa.B. 4541 (August 20, 2011)
16A-48 Bureau of Professional and Occupational 9/19/11 10/19/11
Schedule of Civil Penalties—Accountants
41 Pa.B. 4535 (August 20, 2011)

State Board of Accountancy
Regulation #16A-5511 (IRRC #2902)

Continuing Professional Education

October 19, 2011

 We submit for your consideration the following comments on the proposed rulemaking published in the August 20, 2011 Pennsylvania Bulletin. Our comments are based on criteria in Section 5.2 of the Regulatory Review Act (71 P. S. § 745.5b). Section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)) directs the State Board of Accountancy (Board) to respond to all comments received from us or any other source.

1. Section 11.1. Definitions—Consistency with statute.

 The Board included several new definitions from Act 73 of 2008 (Act 73), but did not amend all of the definitions affected by this act. The House Professional Licensure Committee (HPLC) comments recommend that the regulation be amended to clarify the usage of the Act 73 definition of ''attest activity.'' The Pennsylvania Institute of Certified Public Accountants (PICPA) commented with the example that in Paragraph 11.63(a)(1) the word ''attest'' is used, but the definition of ''attest activity'' is not revised by this regulation. We recommend that the Board include in the final-form regulation revisions to definitions to reflect Act 73. In addition, we suggest that, if the Board does not adopt the statutory definitions by reference, the Board should provide the regulated community the opportunity to review a draft of the amended the definitions prior to submittal of the final-form regulation.

2. Section 11.62. CPE requirement for issuance of license; waiver or extension.—Consistency with statute; Need; Reasonableness; Clarity.

Minimum of 20 CPE hours each year

 In Subsection (b), the Board requires an applicant to complete ''a minimum of 20 CPE hours during each year of the 2-year period.'' Under 63 P. S. § 9.8b(b), a licensee is required to complete 80 hours of continuing education, but this provision of the statute does not include a minimum number of hours for each year. If a licensee completed 80 hours in the first year of the 2-year period, the licensee would meet the requirement of 63 P. S. § 9.8b(b). Why does the regulation impose a requirement to take another 20 hours in the second year to meet the regulation? This requirement would also foreclose the opportunity for a licensee to qualify for renewal if the licensee did not take any continuing education during the first year, but under the statute the licensee would still have a year to take the 80 hours during the second year. The Board should either delete this requirement or explain the need for and reasonableness of this requirement.


 In Subsection (c), the HPLC commented requesting a change for clarity to the phrase ''that still has a current expiration date.'' We agree.

3. Section 11.63. CPE subject areas; relevance to professional competence.—Reasonableness; Need.

 Paragraph (a)(5) states ''the Board will accept CPE hours in specialized knowledge and applications until January 1, 2012.'' The Board explains in the Preamble that specialized knowledge does not relate to the actual practice of public accounting and it believes the proper focus of CPE should be on fostering competency in the practice of public accounting. The HPLC commented on the need for flexibility in obtaining CPE hours for individuals practicing in various areas of the accounting field. PICPA commented that 40% of licensed Certified Public Accountants are no longer solely in public accounting. Both advocate removing the January 1, 2012 phase out of the specialized knowledge provision. The Board should further explain the reasonableness of and need to phase out CPE credit for specialized knowledge and applications.

4. Section 11.64. Sources of CPE hours.—Reasonableness; Need; Clarity.

Entry-level courses

 The HPLC commented requesting an explanation of the Preamble which states that entry-level courses are specifically excluded when such language is not included in this section, as amended. We agree that existing Subparagraph (7)(iv) specifically excludes entry-level accounting courses, but we did not find this language in Section 11.64, as amended. The Board should explain why it did not include this exclusion in the amended Section 11.64.

2 hours of preparation time

 The HPLC recommends that Paragraph (3)(i) be rewritten to improve clarity. We agree with the HPLC's suggested language.

Authorship of articles, books and other publications

 Under Subparagraph (4)(iii), CPE hours for authorship will not be awarded for publications that occur on or after January 1, 2012. The HPLC and PICPA commented in opposition to phasing out this provision. The Board should further explain why it is phasing out this provision.

5. Section 11.69a. Approval of CPE program sponsor.—Clarity.

 The HPLC commented that Paragraph (b)(1) should use the word ''or'' in place of ''and'' to be consistent with Paragraph (2). We agree.

 PICPA commented on this section questioning whether the regulation would recognize CPE affiliates of accredited colleges and universities. PICPA also asked that national and state recognized accounting organizations be exempt from the approval process. The Board should clarify the status of these CPE program sponsors.

6. Implementation procedure.

 The HPLC commented on the effective date of this regulation and its effect on CPE hours completed by licensees. We ask the Board to explain how it will implement the regulation.

 In addition, some of the dates in the regulation may expire before the final-form regulation becomes effective. Provisions that have dates in them include Sections 11.63(a)(5), 11.63(a)(7) and 11.64(4). The Board should review the dates used in the final-form regulation and explain how the implementation of these requirements is reasonable.

Bureau of Professional and Occupational Affairs
Regulation #16A-48 (IRRC #2904)

Schedule of Civil Penalties—Accountants

October 19, 2011

 We submit for your consideration the following comments on the proposed rulemaking published in the August 20, 2011 Pennsylvania Bulletin. Our comments are based on criteria in Section 5.2 of the Regulatory Review Act (71 P. S. § 745.5b). Section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)) directs the Bureau of Professional and Occupational Affairs (Bureau) to respond to all comments received from us or any other source.

Section 43b.10a. Schedule of civil penalties-accountants.—Reasonableness; Need; Implementation procedures.

 This regulation amends the schedule of civil penalties for accountants for failure to complete continuing education requirements for license renewal, as well as for various circumstances that would constitute unlawful representation of accounting credentials or membership in professional accounting organizations. The schedule details the fines that coincide with statutory violations. We raise three issues.

 First, both the House Professional Licensure Committee (HPLC) and the Pennsylvania Institute of Certified Public Accountants (PICPA) recommend that the regulation more clearly distinguish between practicing on a lapsed license versus practicing without a license. PICPA recommends that Certified Public Accountant (CPA) licensees who inadvertently practice with a lapsed license be treated no more harshly than non-credentialed first-time offenders. Additionally, the HPLC recommends more severe penalties for parties who have never been licensed.

 Under the existing regulation, it would be unlawful for individuals and firms to use certain credentials if they are ''not currently licensed.'' Under these circumstances, the regulation provides for Act 48 civil penalties to be imposed for these violations before formal action is taken. However, these provisions have been amended in the proposed regulation to apply only to individuals and entities that have never been credentialed by the State Board of Accountancy (Board) as CPAs, public accountants or public accounting firms. The Bureau explains in the Preamble that:

the Board prefers that certified public accountants, accountants and public accounting firms that use professional designations after their licenses have lapsed be charged with the unlicensed practice of public accounting under section 12(q) of the act, which the Board has always enforced through formal action, fashioning each disciplinary sanction on a case-by-case basis by taking into account the length of time that a license has lapsed and the type of accounting activities performed.

 In light of the circumstances raised by the HPLC and PICPA, we request that the Bureau explain why formal action is necessary in every instance related to a lapsed license.

 Second, both PICPA and the HPLC recommend that various violations in the schedule require more stringent monetary penalties as well as fewer offenses before formal action, including violations of §§ 9.12(a), (c), and (j), and for the violations listed in the regulation under 49 Pa. Code Chapter 11. PICPA also suggests that licensees who violate § 9.8b(b) should not be afforded a second offense. How did the Bureau determine the penalty amounts and the number of offenses prior to formal action for the violations contained in this rulemaking?

 Finally, the existing regulation states that a violation of Section 9.12(a) occurs when a person never licensed or not currently licensed unlawfully uses the titles ''certified public accountant'' or ''CPA.'' The proposed regulation amends this subsection to provide that unlawful use occurs when these credentials are used by a person ''not possessing a CPA certificate in good standing.'' We request that the Bureau clarify the difference between a CPA license and a CPA certificate.


[Pa.B. Doc. No. 11-1842. Filed for public inspection October 28, 2011, 9:00 a.m.]

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