B-148144, SEP 15, 1970
Highlights
THE MAJOR CHANGE FROM OUR PREVIOUSLY ANNOUNCED POSITION WAS THAT AFTER DECEMBER 31. SINCE ANNOUNCING THIS REVISED POSITION WE HAVE RECEIVED INFORMATION AND HAVE HAD CONSULTATIONS WHICH CONVINCED US OF THE DESIRABILITY OF MAKING A FURTHER REVISION IN OUR POSITION. THIS HAS THE EFFECT OF CREATING A TERMINATING CLASS OF PUBLIC ACCOUNTANTS WHO THROUGHOUT THEIR ACTIVE CAREERS WILL CONTINUE TO BE ELIGIBLE FOR SUCH WORK. THE INCLUSION OF THE FOLLOWING LANGUAGE IN A BILL IT IS CONSIDERING. WHO ARE CERTIFIED OR LICENSED BY A REGULATORY AUTHORITY OF A STATE OR OTHER POLITICAL SUBDIVISION OF THE UNITED STATES: EXCEPT THAT INDEPENDENT PUBLIC ACCOUNTANTS LICENSED TO PRACTICE BY SUCH REGULATORY AUTHORITY AFTER DECEMBER 31.
B-148144, SEP 15, 1970
SUBJECT: QUALIFICATIONS OF PUBLIC ACCOUNTANTS MAKING AUDITS OF FEDERALLY CHARTERED, FINANCED, OR REGULATED PRIVATE ORGANIZATIONS
HEADS OF FEDERAL DEPARTMENTS AND AGENCIES:
BY OUR CIRCULAR LETTER OF MAY 12, 1970, (B-148144) WE ADVISED YOU OF A CHANGE IN OUR POSITION REGARDING THE QUALIFICATIONS OF THOSE WHO MAY BE SELECTED TO AUDIT FEDERALLY CHARTERED, FINANCED OR REGULATED PRIVATE ORGANIZATIONS. THE MAJOR CHANGE FROM OUR PREVIOUSLY ANNOUNCED POSITION WAS THAT AFTER DECEMBER 31, 1975, ONLY CERTIFIED PUBLIC ACCOUNTANTS SHOULD BE SELECTED TO MAKE SUCH AUDITS.
SINCE ANNOUNCING THIS REVISED POSITION WE HAVE RECEIVED INFORMATION AND HAVE HAD CONSULTATIONS WHICH CONVINCED US OF THE DESIRABILITY OF MAKING A FURTHER REVISION IN OUR POSITION. INSTEAD OF LIMITING SUCH AUDITS TO ONLY CERTIFIED PUBLIC ACCOUNTANTS AFTER DECEMBER 31, 1975, WE BELIEVE IT EQUITABLE THAT THOSE LICENSED PUBLIC ACCOUNTANTS WHO RECEIVED THEIR LICENSES ON OR BEFORE DECEMBER 31, 1970, ALSO BE PERMITTED TO PERFORM SUCH AUDITS AFTER THE DECEMBER 31, 1975, CUT OFF DATE. THIS HAS THE EFFECT OF CREATING A TERMINATING CLASS OF PUBLIC ACCOUNTANTS WHO THROUGHOUT THEIR ACTIVE CAREERS WILL CONTINUE TO BE ELIGIBLE FOR SUCH WORK.
IN ACCORDANCE WITH THIS REVISED POSITION, WE RECOMMENDED TO THE HOUSE COMMITTEE ON EDUCATION AND LABOR, IN LIEU OF OUR PREVIOUS PROPOSAL, THE INCLUSION OF THE FOLLOWING LANGUAGE IN A BILL IT IS CONSIDERING.
"SUCH AUDITS SHALL BE CONDUCTED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OR BY INDEPENDENT LICENSED PUBLIC ACCOUNTANTS, LICENSED ON OR BEFORE DECEMBER 31, 1970, WHO ARE CERTIFIED OR LICENSED BY A REGULATORY AUTHORITY OF A STATE OR OTHER POLITICAL SUBDIVISION OF THE UNITED STATES: EXCEPT THAT INDEPENDENT PUBLIC ACCOUNTANTS LICENSED TO PRACTICE BY SUCH REGULATORY AUTHORITY AFTER DECEMBER 31, 1970, AND PERSONS WHO, ALTHOUGH NOT SO CERTIFIED OR LICENSED, MEET, IN THE OPINION OF THE SECRETARY, STANDARDS OF EDUCATION AND EXPERIENCE REPRESENTATIVE OF THE HIGHEST PRESCRIBED BY THE LICENSING AUTHORITIES OF THE SEVERAL STATES WHICH PROVIDE FOR THE CONTINUING LICENSING OF PUBLIC ACCOUNTANTS AND WHICH ARE PRESCRIBED BY THE SECRETARY IN APPROPRIATE REGULATIONS MAY PERFORM SUCH AUDITS UNTIL DECEMBER 31, 1975: PROVIDED, THAT IF THE SECRETARY DEEMS IT NECESSARY IN THE PUBLIC INTEREST, HE MAY PRESCRIBE BY REGULATION HIGHER STANDARDS THAN THOSE REQUIRED FOR THE PRACTICE OF PUBLIC ACCOUNTANCY BY THE REGULATORY AUTHORITIES OF THE STATES."
WE RECOMMEND THAT THE POSITION EXPRESSED IN THE ABOVE LANGUAGE, RATHER THAN THAT PROPOSED IN OUR MAY 12, 1970 LETTER, BE INCORPORATED IN REGULATIONS ISSUED BY DEPARTMENTS AND AGENCIES PRESCRIBING THE QUALIFICATIONS OF PUBLIC ACCOUNTANTS SELECTED TO AUDIT PROGRAMS ADMINISTERED BY THE DEPARTMENTS AND AGENCIES.