Sunset Review Commission Public Hearing

August 31, 2018 (AUSTIN) - The Sunset Review Commission conducted a public hearing on August 30, where it received a report on the Texas State Board of Public Accountancy (TSBPA) from the Sunset staff and heard from representatives of TSBPA, TXCPA and the public at large. TXCPA representatives attended the hearing to provide testimony and input to the process. TXCPA Chairman Stephen Parker, CPA-Houston, testified, as well as TXCPA Managing Director of Governmental Affairs, John Sharbaugh, CAE.

The report from the sunset staff contained a number of specific recommendations (21 in total). TXCPA responded with a formal comment letter sent to the Commission earlier in the month.

Perhaps the most significant recommendation by the staff was to support the continuation of TSBPA for another 12 years, until the next Sunset Review process. TXCPA was pleased to see this recommendation by the Sunset staff to continue TSBPA.

Another significant recommendation in the report pertained to the composition of the State Board. The Sunset staff recommended that the composition of the 15-member board be changed from 10 CPAs and five public members to seven CPAs and eight public members. This was an issue of major concern to TXCPA, as well as TSBPA, NASBA and AICPA, which all noted that a reduction in the number of CPAs serving on the Board would reduce the number of qualified individuals with the competence and experience to help adjudicate complaints and other matters before the Board. The Sunset Commission decided not to adopt this recommendation at this time. Rather, they are recommending that the Texas Legislature study this issue to determine the best solution for all boards in Texas, rather than handling the issue on a case-by-case basis.

Another recommendation by the Sunset staff was to modify the current mandatory Peer Review program. The staff report recommended that if CPAs only provide compilations or only conduct one peer review a year, then they be reviewed less frequently or not at all. TXCPA argued against this move, as did AICPA, TSBPA and NASBA in their comment letters, noting that the Peer Review program is a national program that is followed by the vast majority of states. Compilation reports are relied on by the public and there is a greater likelihood of substandard work when the service is only performed on an occasional basis. TXCPA Chairman Stephen Parker also discussed this issue in his testimony.

TXCPA encouraged the Commission to include some provisions to bring Texas into alignment with most other states and the Uniform Accountancy Act of AICPA and NASBA with respect to mobility and the ability of CPAs and CPA firms to practice across state lines and manage their firms. TXCPA provided these suggestions to the legislature in its formal comment letter, as well.

The Sunset Commission will take all of the information it received at this hearing and from the public comments and develop a final report and recommendations for submission to the legislature. The final report and proposed legislation will be discussed and voted on at the next Sunset Commission hearing scheduled for November 14-15, 2018. TXCPA will be there to represent your interests.

Read more from John Sharbaugh, CAE, in the Capitol Interest article in your September/October issue of Today’s CPA.