Board of Accountancy

The West Virginia Board
of Accountancy is Needed
to Protect Public Interests

The Board of Accountancy
Complies with the General
Provisions of Chapter 30

The West Virginia Board of Accountancy was created by the Legislature in 1959 in order to regulate the practice of accounting and to provide for the certification and registration of persons engaged in accounting. The Board is composed of five members appointed by the Governor with the advice and consent of the Senate. Members serve three-year terms (or until their successors are named) and may only serve two terms consecutively. The Board has three staff members, an Executive Director, a CPA Exam Coordinator and a CPE Coordinator.

One of the principle duties of Board members is conducting the examination of candidates seeking to obtain certification as a Public Accountant. The American Institute of Certified Public Accountants (AICPA) develops, prepares and grades the exam. It is offered twice a year, in May and in November, for applicants meeting the necessary qualifications. The examination is a uniform written examination given in all jurisdictions of the United States on the same date. The examination is graded by professional graders who do not know the identity of the candidates. Grading costs are paid from fees collected by the Board from the applicants. The Board of Accountancy contracts with the American Institute of Certified Public Accountants (AICPA) as a sole source provider for CPA exam services.

Issue Area 1: The West Virginia Board of Accountancy is needed to protect public interests.

Chapter 4, Article 10, Section 2 of the Code finds, "...that agencies and programs have been created without demonstrable evidence that their benefits to the public clearly justify their creation." It is the primary finding of this regulatory review that the West Virginia Board of Accountancy provides demonstrable benefit to the citizens of West Virginia. In §30-1A-1:

The Legislature finds that regulation should be imposed on an occupation or profession only when necessary for the protection of public health and safety. [Emphasis Added]

A major consideration of the Legislative Auditor in this review was the following question posed in §4-10-11(4):

The extent to which there would be significant and discernable adverse effects on the public health, safety or welfare if the agency were abolished.

Discontinuing the regulation of accountants would have an unfavorable effect on the citizens of West Virginia. The Board of Accountancy licenses 2,332 individuals. This includes: 1757 resident Certified Public Accountants; 299 non-resident Certified Public Accountants; 52 resident Public Accountants; 6 non-resident Public Accountants; and 218 active Certificate Holders.

An accountant audits, inspects and maintains the financial records of individuals or business concerns and prepares financial and tax reports. An unethical, incompetent or unscrupulous accountant could cause individuals and businesses to incur financial losses. The certification provided by the Board of Accountancy assures the public that the accountant is competent to practice the profession and receives continuing education each year.

The Board of Accountancy operates solely on the fees paid by licensees and candidates for licensure. There is no cost to the public, or state general revenue fund, for regulating this profession.

Recommendation 1:
The Legislature should consider continuing the Board of Accountancy.

Issue Area 2: The Board of Accountancy Complies with the General Provisions of Chapter 30.

The Legislative Auditor finds that the Board of Accountancy complies with the General Provisions of Chapter 30, which are essential for the effective operation of a licensing board. The Board of Accountancy has complied with all of the following requirements:

The Board of Accountancy began requiring continuing education in 1990. West Virginia Code §30-9-5 allows the Board to establish rules for continuing education and Code of State Rules §1-1-7 requires certificate holders applying for license renewal to complete 120 hours of continuing education within the three preceding calendar years. Individuals are required to provide annual continuing education report forms. This form is available in Appendix A. The Board's CPE Coordinator randomly selects a percentage of these for auditing to verify continuing education.

The passage of House Bill 4062 during the 2000 Regular Legislative Session required licensure boards to promulgate legislative rules detailing procedures for the investigation and resolution of all complaints against licensees. The Board of Accountancy complied with this requirement on June 28, 2000. Until then, the Board had no codified procedure to handle complaints, although it did have a "traditional procedure" which was provided to the Legislative Auditor.

Receipts collected from licensees to practice and from examination fees are deposited in a Special Revenue Fund, and the expenses of the Board are disbursed from and charged to this fund, as required by §30-1-10. Table 1 shows that the Board is self-sufficient and is able to carry out its licensing responsibilities as required by law [§30-1-6(c).]

Table 1

Board Revenues, Expenditures and Cash Balances

FY 1996
FY 1997 FY 1998 FY 1999
Revenue 255,452.00 284,830.00 301,990.04 308,102.02
Expenditures 264,235.34 288,212.81 294,817.62 306,665.89
End of Year Cash Balance 281,651.95 278,269.14 285.441.56 286,877.69
Source: 2000 PERD Analysis of FIMS Documents.

Chapter 30 requires "When the special fund of any board accumulates to an amount which exceeds twice the annual budget of the board or ten thousand dollars, whichever is greater, the excess amount shall be transferred by the state treasurer to the state general revenue fund." The Board of Accountancy, due to its expenditures, is not required to deposit excess funds into the state general revenue fund. The Board does have adequate funding, is self-sufficient and provides necessary protection to the public in an efficient manner.

The Legislative Auditor finds that the Board is satisfactorily complying with applicable laws and rules in providing for public access. In 1998, the Legislature addressed the accessibility of state licensure boards by amending §30-1-12 of the state Code. The amendment added subsection (c) which states:

To promote public access, the secretary of every board shall ensure that the address and telephone number of the board are included every year in the state government listings of the Charleston area telephone directory. Every board shall regularly evaluate the feasibility of adopting additional methods of providing public access, including, but not limited to, listings in additional telephone directories, toll-free telephone numbers, fascimile and computer-based communications.

The Board of Accountancy developed a web site ( that is user-friendly. Upon entering the site, the user is presented with the Board's address, telephone and fax number. The page also lists Board members and staff. A large button prompts the user to send e-mail to the Board. The site allows the user to link to:

The site allows the user to access a license verification database. The user may search for a CPA by last name, city or zip code. It allows the consumer to verify if an individual is indeed a currently licensed certified public accountant in the state of West Virginia. Other easily accessible areas of the site are: The Related Links section of the Board of Accountancy's web site offers immediate access to: Although the Board has clearly sought to make maximum use of the Internet to provide information to its licensees as well as to the public, it does not provide a complaint form which the public may download. Other state Boards and Commissions do use this technology in order to provide the public with a plethora of forms. It is the opinion of the Legislative Auditor that by providing a complaint form on its web-site, the Board will improve its efforts in public access and protection.

Although the Board is in compliance with public access requirements in the state Code, it does not receive a comparable percentage of complaints when compared to other states. In order to fulfill its duty of public protection, the Board should provide a complaint form on its web-site which the public may download. It is the opinion of the Legislative Auditor that by providing a complaint form on its web-site, the Board will improve its efforts in public access and protection. Table 2 shows the number and percentage of complaints for West Virginia and surrounding states.

Table 2
Comparison of Complaints

# Licensees #Complaints #Actions Percentage Online Form
Ohio 30,000 400 300 1.3% yes
Kentucky 6,600 139 42 2.1% no
Virginia 7,117 28 40 .39% yes
Maryland 13,834 47 8 .33% yes
Pennsylvania 20,000 160 240 .8% yes
West Virginia 2,332 2 9 .08% no

Recommendation 2:
The Board of Accountancy should provide a complaint form on its web-site.