GOVERNMENT AFFAIRS

Society Works for UAA Reform at the State House

Legislation introduced in both chambers of the General Assembly this year would align Rhode Island’s accountancy statute with the national Uniform Accountancy Act (UAA). The reform measure would require that CPAs own a simple majority of the equity in a CPA firm, making Rhode Island law similar to that in 43 other states.

“Current state law makes Rhode Island an outlier when it comes to non-CPA ownership,” said Ernie Almonte, the state’s former Auditor General, currently a partner at DiSanto Priest & Co. “This bill would change that to a simple majority, in line with the national UAA and the overwhelming majority of states.”

In the House of Representatives the legislation (2011 H-5576) was introduced by Rep. Robert Flaherty (D-Warwick). The Senate version (2011 S-716) was introduced by Sen. Lou DiPalma (D-Little Compton, Tiverton, Middletown and Newport). Almonte testified in favor of the legislation at the House Corporations Committee hearing on April 5. The Senate bill had a hearing before the Senate Corporation Committee on March 31.

The State Board of Accountancy, the governing body for CPAs in R.I., has signed off unanimously on the change.

In his testimony before the House committee, Almonte explained that the legislation would be a boon to smaller firms who often can’t afford the expense that the big national firms can for non-CPA expertise. This would allow the smaller firms to offer non-CPA employees equity ownership – or stock – in the firm instead.

“CPAs, however, would retain control of the firm – as it should be,” Almonte told the committee.

Sen. DiPalma, a Brown University graduate who works as a Technical Director at Raytheon, has a long record of support for business-oriented legislation. He told his Senate colleagues that he viewed the bill as a valuable recruitment tool for CPA firms in the state.

“As CPA firms more and more become business advisors and service providers, this type of forward-looking legislation allows them to compete for talent in diverse areas,” he explained. “It’s 2011. We can’t allow Rhode Island CPAs to operate at a disadvantage.”

Rep. Flaherty, a well-known attorney based in Warwick, also cited the need for Rhode Island to compete as his primary motivation for sponsoring the bill.

“The need for skills in addition to those of a CPA has been recognized by the major professional organization of CPAs, the AICPA, and the organization of state accountancy regulatory bodies, NASBA,” Rep. Flaherty said to his fellow House members.

The Society’s Government Relations team will continue to advocate for the legislation and monitor its progress through the legislature.

Ernie Almonte	Rep. Robert Flaherty	Sen. Lou DiPalma