The Uniform Accountancy Act (UAA) sets the foundation for CPA licensure requirements across the United States. These uniform standards provide consistency while allowing CPAs to practice in any state with just one state license.
Recently, the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) released a proposed update to the UAA, introducing changes to modernize pathways to licensure, such as a competency-based experience option.
Read on to learn about the proposed changes to the Uniform Accountancy Act, how they may impact future CPAs, and what the profession can expect if these revisions are implemented.
What is the Uniform Accountancy Act?
The Uniform Accountancy Act is a model law that standardizes accounting regulations across states.
Created by AICPA and NASBA, the UAA is adopted (with some variations) by most states to guide CPA licensure and protect the public. By establishing consistent guidelines, the UAA decides interstate practice and enhances the quality of CPAs nationwide.
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What are the proposed changes to the Uniform Accountancy Act?
The AICPA and NASBA’s proposed changes to the UAA provide more flexibility for CPAs to gain their license. The updates offer new ways to fulfill licensure requirements, including modernized licensure options and a competency-based experience pathway.
Traditionally, CPA candidates must complete a specific number of work hours under supervision to qualify for licensure. The new pathway allows candidates to demonstrate competency through real-world experience and skills assessments, potentially accelerating their path to becoming a licensed CPA.
These revisions come at a time when the profession faces a shortage of CPAs, particularly among new graduates. The AICPA and NASBA can attract new, qualified candidates by offering more flexible pathways.
What is the benefit of the Competency-Based Experience Pathway?
CPAs must complete a 150-credit-hours model through a Bachelor’s degree with a Master’s degree and one year of experience. The Master’s degree could also be swapped for an additional 30 credits.
With the UAA, CPAs can acquire those additional 30 credits through the Competency-Based Experience Pathway, which includes professional and technical competencies such as communication, ethical behavior, audit and assurance, and more.
The pathway is currently open for comment, but if approved, it would provide:
- Flexibility: Candidates could tailor their experience to their career focus to improve engagement and retention within the profession.
- Recognition of specialized skills: Candidates could highlight competencies like technology, regulatory knowledge, and analytical skills.
- Increased accessibility: The pathway would make CPA licensure more attainable for those who might not have access to traditional CPA experience opportunities.
What do these proposed changes mean for current and future CPAs?
For current CPAs, the Uniform Accountancy Act highlights the industry’s growing emphasis on data-driven insights and technical knowledge, encouraging them to enhance their skills in these areas. The act would give future CPAs an alternative route to licensure while demonstrating the need for CPAs to be skilled in more than just traditional accounting. CPAs can show expertise in data analytics, cyber security, compliance, and more.
The AICPA and NASBA are actively seeking feedback on the proposed changes to the Uniform Accountancy Act. Public feedback is due by December 30, 2024, with both organizations encouraging accounting professionals, educators, and stakeholders to share their perspectives. This feedback will be used to shape the final licensure model.
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Preparing for the future with the Uniform Accountancy Act
For accounting professionals and firms, understanding the impact of the Uniform Accountancy Act revisions is critical to future planning. By staying informed about these changes, CPAs can proactively prepare for shifts in licensure and professional requirements. Firms can also consider:
- Assessing staff training programs: With the Competency-Based Pathway’s focus on skills, organizations may need to develop more targeted professional development programs.
- Investing in technology and tools: Modernized licensure requirements mean greater emphasis on technical proficiency. Firms may need to incorporate data analytics and regulatory technology into their practices.
- Engaging with professional organizations: Staying connected with groups like the AICPA or NASBA will help firms stay updated on regulatory changes.
Professional Liability / Errors & Omissions Insurance
CPAs face new uncertainties in their jobs every year, and the UAA will be no different. One way to provide peace of mind is to rely on McGowanPRO for insurance coverage. Firms gain access to an expert team that understands the challenges CPAs face, helping them to address new challenges with customizable Professional Liability / Errors & Omissions Insurance that meet every firm’s unique needs and operations.
Contact a McGowanPRO expert today and learn how the right insurance policy helps protect firms from new developments such as the UAA.