State Closer to Recognizing Foreign Accountants

State Closer to Recognizing Foreign Accountants

Foreign practitioners credentialed in their home countries but working in New York are one step closer to being accorded professional status equivalent to CPA.

The New York State Board for Public Accountancy at its April 20 meeting unanimously endorsed mutual recognition agreements with credentialing agencies from Australia, Ireland and Mexico.

The agreement would allow for the “licensure by regulation” of chartered accountants and other professionals from those countries, according to J. Dwight Hadley, chairman of the board of accountancy. Those members would have to fulfill the same education and experience requirements that apply to CPAs licensed in other U.S. states, Hadley said, but they would also have to have passed the International Qualifying Examination (IQEX).

The board ultimately approved the agreements, which also allows candidates to substitute the IQEX for the uniform CBT exam in the examination requirement.

The National Association of State Boards of Accountancy and the American Institute of CPAs have been recommending that states approve mutual recognition agreements. The board’s action brings New York one step closer to allowing such practitioners to practice as CPAs. The State Education Department and the Board of Regents still have to finalize and approve regulation changes to put the matter into effect.

The state’s action would ultimately cover members in good standing of the associations of the Australian Chartered Accountants, the Australian Certified Practising Accountants, the Ireland Chartered Accountants and the Mexican Contadores Publicos Certificados.

It’s uncertain how many people the agreement would affect if it were to become state regulation. The Association of chartered accountants in the United States (ACAUS) alone has 6,000 chartered accountants, although they are scattered across the U.S. and many are from countries without such mutual recognition agreements. The New York State Society of CPAs, which has worked with ACAUS on reciprocity issues, already has about 65 members who are chartered accountants.

Guy Langford, reciprocity director for ACAUS, said there could be a few hundred chartered accountants in the tri-state area who may be affected by the rule change.

“At the end of the day, quality, integrity and technical proficiency are the key professional elements towards mutual recognition, and hopefully this change is an acknowledgement that those attributes are present in chartered accountants,” Langford said.

Many chartered accountants from Australia and other countries cannot become licensed CPAs in New York under current rules because they don’t meet some aspects of the education requirements, specifically provisions for attaining 30 credits in liberal arts and sciences, Langford said.

“Many who want to apply for licensure are experienced individuals who have ten-plus years in accounting and finance. They meet the examination requirements, and they get a letter saying thanks for the application but, unfortunately, your education is deficient for our purposes,” Langford said.

Some chartered accountants attain licensure in another state that accepts their foreign college credits, then apply for licensure in New York using substantial equivalency provisions. But this can prove too frustrating.

“A lot of people come here and realize that it’s just such a headache, so they get a job outside of the public accountancy profession, where being a licensed CPA is not a requirement. In that instance, you may have lost a person who otherwise would have been a worthy contributor to a resource-constrained profession,” Langford said.

Ross Brown, president of ACAUS, said this was a positive step toward the recognition of chartered accountants. He noted that the quest for mutual recognition has been ongoing at least since the ACAUS was formed in 1980.