CPAs largely exempt from Consumer Financial Protection Agency legislation

In sweeping financial regulatory reform legislation passed in the U.S. House last Friday, CPA services remain largely exempt from oversight by the proposed new Consumer Financial Protection Agency.

Under a provision the AICPA and OSCPA lobbied heavily for, CPAs who provide financial planning, tax planning and tax return preparation, as well as financial literacy education to consumers, will not be subject to new and duplicative regulation from the new consumer protection agency under the legislation as approved by the House.

The bill, H.R. 4173, The Wall Street Reform and Consumer Protection Act of 2009, passed in a 223 to 202 vote, essentially following party lines. The bill now moves to the Senate, where Senate Banking Committee Chairman Christopher Dodd, D-Conn., is working on his own financial regulatory reform legislation. The Senate isn’t expected to vote on regulatory reform until at least early next year.

Another major provision in the bill exempts non-accelerated filers with market values below $75 million from Sarbanes-Oxley Section 404(b) internal control requirements. Without the exemption, the non-accelerated filers would have been required to comply with Section 404(b) on or after June 15, 2010.

A Senate amendment to eliminate the proposed Section 404(b) exemption was not approved despite efforts by the AICPA’s Center for Audit Quality to have all public companies, small and large, comply with SOX Section 404(b).

Aiding and abetting provision excluded

The aiding and abetting provision that was contemplated in November wasn’t included in the final House bill. OSCPA met with Sen. Sherrod Brown, D-Ohio, a member of the Senate Banking Committee,  to express serious concerns about the possible provision that would give plaintiffs' lawyers an expanded ability to sue third parties on claims of securities fraud. Brown agreed that the proposed change would result in significant problems and supported OSCPA’s position.

FASB maintains independence

Strong lobbying by the AICPA and the Center for Audit Quality (CAQ), supported by OSCPA, succeeded in ultimately blocking language in an amendment that would remove the SEC’s oversight of FASB and instead assign the role to a Federal Accounting Oversight Board. 

Broker-dealer inspections

The bill gives the PCAOB authority to inspect and regulate audits of all broker-dealers. It gives the PCAOB authority to exempt auditors of introducing broker-dealers from the registration and inspection requirements. 

Related news

• H.R. 4173, The Wall Street Reform and Consumer Protection Act of 2009
• Not losing is new winning as bankers dilute overhaul
• U.S. Chamber calls on Senate to fix financial regulatory reform bill
• House passes financial regulatory reform bill
• House passes rules for Wall Street over opposition

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