HB2854 HD1 HSCR441-02

 

STAND. COM. REP. NO.441-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2854

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 2854 entitled:

"A BILL FOR AN ACT RELATING TO ACCOUNTANCY,"

begs leave to report as follows:

The purpose of this bill is to amend the licensure requirements and peer review procedures for certified public accountants (CPAs) to conform to modern developments in the profession.

The Office of Information Practices, Hawaii Association of Public Accountants (HAPA), and Power Ten Capital commented on this measure. The Board of Public Accountancy, Hawaii Society of Certified Public Accountants (HSCPA), and several concerned individuals testified in opposition to the measure and suggested an amendment.

A number of testifiers stated that due to recent developments at the national level, this bill should not move forward in its present form. The recent ENRON Corporation bankruptcy has spurred Congress, the Securities Exchange Commission, and the American Institute of Certified Public Accountants to re-examine professional standards for accountants. Resultant changes in accountancy standards and federal law in areas such as peer review and disclosure requirements will determine what amendments to state law will be necessary.

Your Committee finds that there is consensus among the Board of Public Accountancy, HAPA, HSCPA, Power Ten Capital, and the individuals who testified that the educational requirements for CPA candidates should be amended to reflect changes in the Hawaii marketplace. Specifically, prior to the year 2000, CPA candidates were required to have completed 120 hours of university education (the equivalent of a bachelor's degree) prior to taking the CPA examination. In 2000, the educational requirement was increased to 150 hours. As a result, the number of students entering the profession has decreased. If the number of certified public accountants continues to decrease, the cost of public accounting services will increase at an accelerated rate unless corrective measures are taken immediately.

Therefore, your Committee has amended this measure to remove section 466-5.5, Hawaii Revised Statutes, and references to that section, which contained the 150 semester hour requirement for the CPA examination. As amended, this bill will:

(1) Allow a candidate with a bachelor's degree, which requires approximately 120 hours of education, to sit for the CPA examination; and

(2) Retain the 150-hour education requirement for licensure.

Technical, nonsubstantive amendments were also made for purposes of consistency and style.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2854, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2854, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection and Commerce,

 

		____________________________ KENNETH T. HIRAKI, Chair