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House passes bill to require CPA peer review for certain accounting work
Summary
The Utah House passed House Bill 268 as amended, adding peer‑review and disclosure requirements aimed at raising audit quality for firms serving public companies; the final vote was 43‑3. Supporters said peer review protects investors; critics warned of costs and impact on small practitioners.
Supporters of stricter oversight of accounting practices argued on the House floor that small practitioners who alternate tax work, gift returns and audits may not provide reliable audits for companies seeking to go public. An unidentified speaker told representatives, “We often get accused of being in the fraud capital of The United States... we have a reputation here of having a lot of penny stock operators,” and said that peer review had been “the most healthy thing” his firm experienced.
Representative Harwood and others moved and secured suspension of rules to introduce a short amendment that would require clearer disclosure. The amendment inserted language after the word “chapter” to add, “or unless he clearly indicates on all documents that he is not a certified public accountant,” a change intended to let non‑CPAs disclose their status rather than present themselves as licensed CPAs.
Supporters framed the measure as protecting the public interest by raising the standard for those issuing financial statements. A sponsor said peer review and licensure “will enhance the profession and allow the CPAs in the state of Utah through education requirements and through quality reviews [to] rise to a higher level,” and asked the House for its support.
Opponents raised concerns about cost and barriers for small firms. One member noted peer review costs reported in national press as ranging “anywhere from $1,200 to close to $1,000,000 depending on the size of the firm,” and warned that mandatory reviews could disadvantage small competing firms that charge much lower fees.
The House voted on House Bill 268 as amended. The clerk announced the result: 43 yes, 3 no. The bill passed the House and will be transmitted to the Senate.
