March 2002

State Board Calls for NASBA to Issue RFP on Computerized CPA Exam

ALBANY—The long-simmering dispute between the New York State Board for Public Accountancy and the National Association of State Boards of Accountancy (NASBA) regarding NASBA’s contracting with the American Institute of CPAs (AICPA) and Prometric for a computerized-based CPA exam erupted again during a special state board meeting on Feb. 18.

State board members expressed dismay after learning that NASBA had failed to sign a contract that had been approved by its board of directors in early January. It was apparent from the Feb. 18 meeting that some state board members believe the delay is due to the AICPA’s supposed unwillingness to disclose any agreements that could potentially be a conflict of interest. Though The Trusted Professional does not have access to the proposed three-party contract, members attending the state board meeting noted that the contract calls on the three parties to disclose potential conflicts of interest to one another.

As of March 8, NASBA had not signed the contract with the AICPA, according to NASBA President David A. Costello.

“We have not signed the agreement yet. We are hoping in good faith to try to get it done. There are still some issues that we’re still working (out). It had to do with the section on full-disclosure, what’s been disclosed and how they (the AICPA) handle some of those issues. So that’s primarily what that is,” Costello said. “It is workable…I’m absolutely shocked that things haven’t been finalized at this time. Our board said go for it on Jan. 9. The Institute hasn’t been able to get to the point of clearing these things up yet.”

“It’s all about integrity,” said Charles (Chuck) Schoff, chairman of the state board, at the Feb. 18 meeting. During the meeting, the state board passed a motion that NASBA prepare a “Request for Proposal” for a new contract in light of the fact that the contract for the computer-based test had not been signed on a timely basis.

For months, the state board has consistently raised concerns over possible conflict-of-interest issues stemming from the AICPA’s relationship with its CPA2Biz venture partner, Thomson Corporation, parent to Prometric. On Jan. 9, during a nonbinding advisory vote, the state board joined six other NASBA delegates in voting against the proposed contract for the computer-based exam. Despite their opposition, 43 other delegates voted in favor, giving NASBA the green light to enter into the contract with the AICPA and Prometric. Delegates from four states abstained from voting.

At its previous meeting on Jan. 26, the state board established a task force to look into the computer-based CPA exam. Comprised of Schoff, Nicholas J. Mastracchio Jr., Mark Zand and Henry E. Senefelder (public member), the task force plans to develop recommendations for an alternative course of action in New York state regarding the computerized CPA exam. The task force will make its recommendations to the state board, which, if the recommendations are approved, will convey the task force’s findings to the New York State Education Department.