NASBA

Accountancy Boards Monitor Enron Proceedings

NASHVILLE, TN -- State boards of accountancy throughout the United States are vigilantly tracking the reports of Enron's financial problems to determine how certified public accountants, their licensees, are involved. Calls for the "reform of the accounting profession" based on the allegations against Enron's auditor, Andersen, LLP, are "consistent with such demands received in the aftermath of the Cendant, Sunbeam and Waste Management debacles," David A. Costello, president of the National Association of State Boards of Accountancy stated. "Boards of accountancy regulate certified public accountants on a daily basis. For each state, they regulate not only CPAs who render services to SEC registrants, but also those who work with the smallest entrepreneur. When major cases break, the boards expect to coordinate their investigations with both the Federal agencies and the self-regulatory organizations to ensure appropriate action is taken. It is only the state boards that have the ability to revoke a license to practice public accounting." Mr. Costello further remarked, "CPAs throughout this land are angry and distressed over the debacle and the CPAs' trusting public is looking to state regulatory boards to conduct a comprehensive investigation and, where appropriate, to terminate audit practice privileges."

Historically, when major problems have been discovered, state boards have acted. For example, Lincoln Savings and Loan, Orange County's bankruptcy and Colonial Realty have all resulted in board action brought against the accountants and firms involved. Upcoming on April 29, the Arizona State Board of Accountancy will begin hearings related to its Baptist Foundation of Arizona investigations.

NASBA Chair Barton W. Baldwin reported he and other NASBA leaders had met with Securities and Exchange Commission Chairman Harvey L. Pitt on December 5, 2001 to discuss the role of the state boards and ways in which the SEC and the boards can facilitate the sharing of information on investigations. Just as the SEC is informing the state boards of the licensees who have committed egregious independence violations uncovered under the Commission's look-back agreement with the large CPA firms, so future information-sharing will help the boards in their enforcement efforts.

"Accounting firms and individuals practice at the pleasure of the states," Chair Baldwin said. "The state boards will continue to conduct comprehensive investigations, uphold due process, and recognize the trust placed in the boards' licensees."

The Web sites of all state boards except Louisiana and Puerto Rico may be accessed through NASBA's Web site, www.nasba.org. Click "NASBA MEMBERS," then "Boards of Accountancy" to view the list of state boards.

The National Association of State Boards of Accountancy is a voluntary organization of the 54 boards of accountancy (all states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands) that regulate the accounting profession in the United States and its territories.

CONTACT: David Costello          1/17/02
(615)880-4201
DCostello@nasba.org
National Association of State Boards of Accountancy
150 Fourth Avenue North, Nashville, TN 37219