Subcommittee OKs withdrawal of new CPA regulation language; board to study alternative practice structures

The subcommittee approved a request from the accountancy board to withdraw and resubmit newly added language in Section 105e of proposed CPA regulations, a change the board said followed concerns raised by the state association and was intended to better align rules with the updated Accountancy Practice Act.

The action was presented by a department representative who said the changes largely conform to a bill that passed in 2025. Susanna Sharp was identified by the department as the board executive and a CPA; the department speaker said, "I brought the brains with me today. Susanna Sharp is our board executive, and she's also a CPA." Ken Whitener, introduced himself as the accountancy board chair and said the board "has voted to approve and submit those regulations" while agreeing to request removal of Section 105e and appointing a subcommittee to study the issue further.

The board and department described the disputed language as connected to "alternative practice structures," meaning different ownership models in which private equity or other outside investors could take stakes in accounting firms. Ken Whitener said the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) have exposure drafts on the topic and the board wants to consider their input before moving forward. The chair of the subcommittee observed privately that "Everybody's worried about AI taking over the world. I think PE, private equity, is gonna take over the world first."

Committee members asked whether the regulation changes affected reciprocity or the requirements to obtain licensure; department representatives responded that reciprocity is set in statute and that the regulatory edits do not change licensure requirements. A motion to withdraw and rescind Section 105e was made and seconded and the chair called for a roll call to confirm the request; the committee approved the withdrawal and resubmission request.

The board will meet next Friday to begin the study of alternative practice structures; the subcommittee action was procedural and did not itself adopt permanent regulatory language.