Uniform Accounting Act – Definition

Cite this article as:"Uniform Accounting Act – Definition," in The Business Professor, updated May 11, 2019, last accessed October 19, 2020, https://thebusinessprofessor.com/lesson/uniform-accounting-act-definition/.


Uniform Accounting Act (UAA) Definition

Professional accounting is of high esteem in private and public organizations, this is why the government of every state places premium on effective regulation of the accounting industry.

The Uniform Accounting Act is a model licensing law that was created to foster a uniform accounting act. This model law contains regulations that are driven towards achieving professional accounting that would promote public and private interest.

The Uniform Accounting Act contains regulations that respond to the dynamic or evolving nature of accounting practices. The act also addresses CPA firm mobility, this mobility allows CPAs or accounting firms to offer attest services in multiple states without getting multiple state licenses.

A Little More on What is the Uniform Accounting Act

There are many accounting issues that the Uniform Accounting Act addressed. Aside from safeguarding public and private interest, the act also brought changes to the definition of attest. Attest services are offered by certified public accountants, these services cover compilations and reviews of financial statements, audits, and other accounting procedures.

Generally, attest services are performed based on the regulations of PCAOB and other boards. They are also limited to licenses and CPA firms.

A change in AICPA standards cause a change in the definition of attest, although the change was unintended, it has succeeded in achieving a broader definition of attest. The marketplace and needs of clients have been changing overtime and this also caused a change in the definition of attest.

In order to cater for all accounting practices under attest, in July 2013, the American Institute of Certified Public Accountants (AICPA) and National Association of State Boards of Accountancy (NASBA) proposed an amendment to the definition of attest. This stipulated that only CPAs with licenses in the United States can carry out accounting practices in SSAE that were contained in UAA. This gave rise to certain debates which necessitated the joint AICPA/NASBA UAA Committee’s recommendations that the July 2013  proposed amendment should be implemented.

The recommendation resulted in the approval of the purpose changes in UAA by AICPA and NASBA Boards respectively. Approval was given in early 2014 while the changes were released in May 2014.

Change in the definition of attest was not only significant change in UAA, CPA firm mobility was also added. Firm mobility allows CPA firms to provide attest services in many states with having multiple state registration. Although, several states adopted CPA firm mobility, any action to move forward with firm mobility was deferred in some states, especially states without simple majority ownership of CPA firms at that time.

However, since many states have made progress with firm ownership, it is necessary that firm mobility language is added to the UAA. Firm mobility aside a CPA firm to offer services in a state without notifying the State Board of Accountancy or pay a fee. Aside from adding firm mobility, the new language of UAA require that non-CPA owners of CPA firms are trustworthy.

Proposal for the amendment of the UAA language to include firm mobility was released for public comment in October 2013. The requirements contained in the proposed amendment is that CPA firms should be allowed to engage in accounting practices or services in other states without paying a fee or registering with the state. Although, firms are to be exempted from registration requirements, the are still subject to laws and regulations guiding professional accounting. The approval for the addition of firm mobility in the language of UAA came in February 2014.

References for Uniform Accounting Act

Academic Research on Uniform Accounting Act

•    Convergence of audit and credit rating practices: Going concern ratings, Hu, S. (2011). International Journal of Disclosure and Governance, 8(4), 323-338.

•    The pricing and impact of rights issues of equity in Australia, Owen, S., & Suchard, J. A. (2008). Applied Financial Economics, 18(14), 1147-1160.

•    Credit rating agencies: A regulatory challenge for Australia, Bunjevac, T. A. (2009). Melb. UL Rev., 33, 39.

•    Regulatory policy issues in Australia, Thompson, G. (1996). OF THE FINANCIAL SYSTEM, 252.

•    Private and public regulation of the general insurance industry in Australia 1897 to 1992, Benjamin, R. L. (1993). (Doctoral dissertation).

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