Battle of the Bookkeepers
Who knew legislation to regulate accountants could be so hotly contested?
| In the wake of Enron, a battle is brewing between the big and little number
crunchers - a.k.a. public accountants. Over the past several years, there
has been a push by the big accounting firms to adopt something called the
Uniform Accountancy Act (UAA), model legislation, which is designed to regulate
professional accountants across the nation. The smaller firms don't like
it, saying it would lower Hawaii's high accountancy standards, especially
in the area of required education.
The UAA is certainly a hot button for Robert Fukuhara Jr., a certified public accountant and president of Fujieki, Fukuhara & Co. CPA Inc. In August, Fukuhara was elected second vice president of the National Society of Accountants, which should lead to his becoming the organization's president in 2006. Fukuhara says, "The UAA was designed to get the borders down, so that any accountant can come in, do work and leave. My association is totally against it in light of Enron."
Q: There were big scandals with large accounting firms a couple of years ago. How has that affected the Hawaii market, besides having the Anderson partners leave to form their own firm? Well, basically it affects the national firms, because they're basically all getting zinged. Every single one of the national firms has one bad area where they got points knocked off. The local firms, we don't deal with these big national companies, so we really didn't get affected. Q: Does the UAA have any relationship to the Sarbanes-Oxley Act? The UAA was around before the Sarbanes-Oxley Act. We're going through the third draft revised. The majority of the states, including New York and California, are not on board with the UAA. They don't like it. But the national firms keep on pushing, saying it's going to be good for everybody. Yeah, it's going to be good for them, it's not going to be good for the average local practitioner. If we have to jump through the hurdles, we'll jump through the hurdles. But we don't want to lower our standards, because who is going to get hurt? The general public. Q: Would the UAA lower standards, in your opinion? Definitely. No matter what people tell you, there is no one state that is 100 percent in back of the UAA. A lot of states are for portions of the UAA and, granted there are a lot of good portions of the UAA, but with all that volume - it's about two inches thick - they can stick in things in there that can really create a problem. Q: Does Hawaii have more rigorous accountancy requirements than most of the nation? Hawaii is one of the top two or three as far as standards for CPAs. They can't come into our state and practice, but we can move to their state, because we are overqualified in a lot of the other states. Q: I understand that one of the differences in standards is that, in order to be qualified in Hawaii, you have almost the equivalent of a master's degree in business administration … Right, a lot of the other states don't have that. You can come in with basically a bachelor's degree and, in some states, they're not even licensed, so you can graduate from a two-year college and hang your shingles up to do accounting and tax work. That's why [accountants from] Hawaii can go into anywhere else, because we have the higher standards. New York is the only other one and possibly California-[we] are the three top states. Q: How did CPAs in Hawaii become so highly qualified? I think it's basically the foresight of the previous generation. They saw that if they needed to make Hawaii one of the top financial areas, they were going to need qualified people doing work, etc., so they put in these standards way back in the '70s and '80s. Now national firms want to lower the standards. Why? The only thing we can come up with is money. They want to make more money. Q: What do you think is important for the business community to know about Hawaii's accountants? Local practitioners, who handle medium to small firms, in general, are very conscientious, very cautious and thorough in what they do. So I don't anticipate any problems from our local people and the quality of work that they do. … CPAs worry about their profession. They worry about their credibility. Without their credibility, they won't have any more clients. Remember now, the bulk of us work word of mouth, only through referrals. We don't advertise. Q: What's the bread and butter of local accountants with smaller firms? I would say, write-up work, financial presentations and income tax returns. Income tax returns are basically for corporations, partnerships, individuals, and they have [different] fiscal years all through the year, so accountants are constantly busy. We also have what we call management services, where we do efficiency reports. We also are sort of financial planners also for our clients, so that generates revenue for us where we help the clients diversify their portfolios, etc. That's where the bulk of local practitioners make their money. Q: Has it been an ongoing battle at the Legislature? The national firms have the money. The local firms only have grass roots. Money speaks, naturally. Their lobbyist has spent tremendous amounts of money whereas we do not have a lobbyist. If we do, it's a pro bono kind of lobbyist. We just appeal to the common sense of our Legislature not to pass anything that will hurt the general public. They get real upset when we tell them we want a roll call of who is against us. We're willing to put our reputations on the line. If the Legislature wants to go against us, stand up and be counted, because when everything hits the fan, we want to know who to blame. Q: What do you expect to happen at the Legislature next year, regarding the UAA? I don't think those guys are going to pass this thing, not if they are in their right mind. |
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