2007 Board Meetings and Agendas
Minutes of a Meeting of the Board
Time and Place of Meeting:
Friday, July 27, 2007 - 9:05 a.m. - 2:25 p.m.
Red Lion Hotel - Pasco, Sage Room
2525 N 20th Avenue
Sharron J. O'Donnell, CPA Chair
Laurie J. Tish, CPA, Secretary
James W. Caley, CPA, Board Member
Robin Clark, CPA, Board Member
Gerald F. Ryles, Public Board Member
Mary M. Tennyson, Senior Assistant Attorney General
Richard C. Sweeney, CPA, Executive Director
Cheryl Sexton, Executive Assistant
Call to Order
Sharron J. O'Donnell, Chair, called the Board meeting to order at 9:05 a.m.
The Board approved the Consent Agenda as presented:
- Minutes of the April 27, 2007 regular Board meeting
- Minutes of the June 15, 2007 special Board meeting
- Request Review Committee Report (PDF 21kb)
2000-3 Quality Assurance Review Program
The Board adopted revisions to the Board's Policy 2000-3 Quality Assurance Review Program with correction of a typographical error on page 5, section VIII.C. The revisions implement the rule change effective July 27, 2007.
2006-1 Directions to Staff
The Executive Director, Richard C. Sweeney, presented a proposed revision to the Board's Policy 2006-1 Directions to Staff seeking clarification of the term "natural person" for purposes of CPA firm licensing. The Board adopted the revised policy with three changes:
- Change two references in the policy to the definition of "natural person" from Board rule (WAC 4-25-410) to the definition in statute (RCW 18.04.025)
- Add "(non CPA firms)" to clarify commercial enterprise
Board members noted Board rule WAC 4-25-750(3)(a) regarding ownership requirements needs to be amended. The Board directed staff to begin the rule-making process.
Delegation of Authority - Quality Assurance Review (QAR) Program Remedial Actions
The Board adopted the delegation of authority as presented and approved by legal counsel. The revised delegation provides the Executive Director, with concurrence of the Board member who is co-chair of the Quality Assurance Review Committee, the authority to take appropriate remedial actions using Respondent Contracts for any CPA firm receiving an "unacceptable" grade for the first time.
The Executive Director requested permission from the governor's office for all Board Members to attend the NASBA Annual meeting in Maui October 28-31, 2007. Board Members will notify staff if they plan to attend.
AICPA - Exposure Draft - Interpretation 102-7 (PDF 110kb)
The Board has no comments to provide to the AICPA's Professional Ethics Executive Committee.
Board Member Appointments
The Executive Director reported recruitment for Board members is active, applications are in to the governor's office; but, the recruitment secretary is not responsive. The Board Chair will write a letter to the governor on behalf of the Board expressing concern that without appointments to the Board the Board is operating at less than capacity. This is affecting the Board's ability to function efficiently. If appointments are not made, the full Board will enter a statement of concern with Governor Gregoire.
NASBA Western/Eastern Regional Meetings
Laurie Tish attended NASBA's Eastern Regional meeting June 6-8, 2007 in Williamsburg, Virginia and gave a brief report.
Richard Sweeney attended NASBA's Western Regional meeting June 20 23, 2007 in Colorado Springs, Colorado and gave a brief report.
CPA Exam Liaison
Robin Clark reported that the cut-and-paste issue continues to be a problem with Prometric's administration of the CPA exam. The AICPA has rescored exams and changed grades due to this problem. The Executive Director volunteered to draft a strong letter to NASBA for Sharron O'Donnell and Robin Clark's signatures expressing the Board's concerns regarding the integrity of the exam including costs and the lack of full communication. The Executive Director will also touch base with other state boards.
CASTLE Worldwide Request for Equitable Adjustment Payment
Robin Clark presented CASTLE Worldwide's request for an equitable adjustment payment for work outside the scope of the contract. The Board directed the agency to pay an equitable adjustment to CASTLE in the amount of $38,000. Robin Clark and Laurie Tish will prepare a document outlining the reasons for the payment.
CPA Mobility Readiness
Laurie Tish, Committee Chair, reported on the status of pending legislation, by state.
Proposed Revisions to Washington Statute
Laurie Tish presented draft amendments to chapter 18.04 RCW. The Board reviewed the draft and continues to support movement towards legislation to change RCW 18.04 to implement mobility. The Executive Director will prepare examples of mobility scenarios for the Board. The Executive Director and one or more Board members will meet with professional associations and large stakeholders, such as public companies, labor, and educators, to gather input on mobility. The Executive Director will document these meetings.
Laurie Tish reported the Washington Society of CPAs (WSCPA) will spearhead the legislation before the 2008 legislature. The Board requested legal advice as soon as possible regarding protocols the Board must follow when legislation changing the Public Accountancy Act is before the legislature is not agency sponsored. The WSCPA plans to hold stakeholder meetings throughout the state. Laurie will solicit Board member volunteers to attend these stakeholder meetings to obtain an understanding of stakeholder issues concerning mobility.
Practice Review Committee
Compliance Assurance Oversight Committee
The Board tabled consideration of this item until Thomas Sadler can fully advise the Board at a future Board meeting.
The WSCPA expressed a desire to be included in future review of this subject.
Quality Assurance Review (QAR) Committee
2007 Desk Review Results - Preliminary Reports
Sharron O'Donnell, committee co-chair, presented a report on the current status of the 2007 QAR desk review session held on June 14th and June 15th at the Central Washington University (CWU) - Des Moines campus. The Board noted results have not changed over the years and asked for a report of how many of the reports graded "unacceptable" during 2007 are repeat.
Sharron reported Board staff would soon be sending a letter out to stakeholders soliciting volunteers for committee members and reviewers. The Board directed staff to provide each Board member with a copy of the letter for distribution to their professional circles.
Increased Oversight of Firms Providing Audits
The Board agreed that the QAR committee should look into requesting additional information from firms submitting audit reports for QAR. Board members suggested the QAR Committee ask for the type of information that would be found in a Concurring Partner's Engagement Review Summary.
Executive Director's Report
The Executive Director reported on the following agency activities:
- Meeting with Board Officers
- Personnel changes - On June 16, 2007 Diane Bren joined Board staff.
As of July 19, 2007, 1,171 individuals have subscribed.
Investigation Management Report
The Executive Director reviewed the following reports with the Board:
- Case Status Report
- Activity Analysis of Administrative Violations
Lapsed Licensees/Certificateholders - Notification
The Board directed staff to reduce the number of reminder notices and to find alternative ways to notify licensees/certificateholders of the lapse of their license/certificate looking for efficiency and cost benefits.
Mobility Meeting with Members of Other State Boards
The Executive Director will arrange a meeting with neighboring state board members to discuss mobility.
Possible Agency Request Legislation
With the 2008 mobility legislation, the Board will not seek to submit agency request legislation regarding agency custody of client records or civil penalty authority for the Executive Director.
The Board directed staff to arrange a reception with stakeholders for the evening preceding the next Board meeting.
During the meeting the Board heard comments from Rich Jones and Tony Laliberte representing the Washington Society of CPAs (WSCPA) and Jerry Miller representing the Washington Association of Accountants (WAA).
Recognition for Service
The Board presented a plaque to James Caley recognizing and thanking Jim for his nine years of service as a member of the Board.
The regular Board meeting was adjourned at 2:25 p.m.
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