On behalf of the nearly 12,000 members of the Virginia Society of CPAs (VSCPA), the VSCPA Executive Committee appreciates the opportunity to comment on the Board’s proposed regulatory changes related to firm requirements and principal place of business (PPB). We support the Board’s commitment to protecting the public and maintaining an effective regulatory framework for the accounting profession.

Based on our review, the Committee has identified several concerns with the draft. While the proposal seeks to address legitimate policy concerns, several proposed changes could have unintended consequences for individual CPAs and CPA firms operating across multiple states. For the reasons outlined below, we encourage the Board to reconsider provisions related to firm licensure triggers and PPB for firms, changes affecting the determination of PPB for individual licensees, and the proposed authority to require firms to enroll in specific practice-monitoring programs. We believe the Board can achieve its objectives while maintaining consistency with national standards and avoiding unnecessary regulatory complexity.

Firm Licensure and Principal Place of Business

The proposal includes changes to redefine how PPB is determined for CPA firms. We are concerned that redefining PPB in this context could create unintended consequences for firms operating in multiple states, particularly larger or regional firms whose organizational structures do not align with a single geographic headquarters. We believe the intent of these changes is to use a physical presence test to determine if a firm is required to have a Virginia CPA firm license.

From a regulatory standpoint, physical presence in Virginia is a clear and appropriate trigger for firm licensure. However, attempting to address this through a revised PPB framework may introduce confusion and inconsistent application across jurisdictions. Because § 54.1-4412.1.B. requires firm licensure when a firm’s principal place of business is Virginia — not based on physical presence alone — any effort to tie licensure to a physical presence test would likely require a statutory change. The Uniform Accountancy Act (UAA) similarly relies on a physical location test rather than a PPB determination when requiring firm licensure.

More fundamentally, PPB is not a concept unique to accountancy, but one that is used across multiple legal and regulatory frameworks to identify a firm’s primary jurisdiction. Adopting a definition of PPB for Virginia CPA firm licensure that diverges from these broader, established uses risks creating unnecessary inconsistency and confusion for firms operating across jurisdictions, without a corresponding improvement in regulatory effectiveness.

Principal Place of Business and Individual Mobility

The proposal modifies the framework used to determine an individual licensee’s PPB by allowing the Board to make this determination rather than permitting individuals to determine their own PPB, as is currently the case. The national model reflected in the UAA allows individual licensees to determine their own PPB. This approach has been widely adopted across most accounting jurisdictions and is a key driver of CPA license mobility. Departing from this established framework would represent a significant policy shift and could create uncertainty and compliance challenges for CPAs practicing across state lines — potentially undermining the effectiveness of mobility.

We understand the Board is concerned about transparency when enforcement actions involve out-of-state licensees practicing in Virginia under mobility. While we appreciate the importance of ensuring effective enforcement oversight, removing the individual licensee’s ability to determine their PPB is not the best solution to that concern.

It is our understanding the UAA Committee will soon discuss PPB as part of a broader national conversation about further modernizing CPA mobility and the use of the CPA title. Given the importance of maintaining national alignment, we recommend Virginia defer changes to the PPB framework until that work is complete.

In the interim, the Board may wish to focus on approaches that enhance transparency and coordination of enforcement actions across jurisdictions, including continued collaboration with NASBA and the use of tools already available, such as the Accounting Licensing Database (ALD) to improve visibility into disciplinary actions involving CPAs practicing under mobility.

Practice-Monitoring Program Requirements

The proposal includes a provision that would allow the Board to require firms to enroll in a specific practice-monitoring program. We understand this proposal is intended to address language in the AICPA Peer Review Program Standards requiring “the board” to perform a risk assessment based on the firm’s practice structure. In the Standards, “the board” refers to the AICPA Peer Review Board — not a state board of accountancy. Allowing the VBOA to compel firms to enroll in a specific practice-monitoring program would conflict with the Standards. Therefore, we recommend the Board not adopt the proposed change.

Firm Notification Requirements

The proposed requirement that firms notify the Board of “any change that affects the ownership, operating status, or structure of a Virginia CPA firm” is overly broad. As written, the provision could be interpreted to include a wide range of routine operational or administrative changes that do not materially affect a firm’s operations or governance. Such a broad reporting requirement will create unnecessary administrative burden for both firms and Board staff without providing meaningful regulatory benefit.

We recommend the Board narrow this requirement to apply to material events like mergers, acquisitions, outside investment, dissolutions or other significant structural changes. The Board should also consider publishing guidance or illustrative examples to promote consistent interpretation and compliance.

Maintaining Alignment with National Frameworks

Virginia has long benefited from maintaining alignment with nationally recognized frameworks and standards, including the UAA and the AICPA Peer Review Standards. These frameworks promote consistency across jurisdictions and allow CPAs and firms to operate effectively in an increasingly interstate and global marketplace.

We encourage the Board to carefully consider whether aspects of the proposal could inadvertently position Virginia as an outlier relative to national standards. In the current environment, where professional regulation is receiving increased scrutiny in many states, it is particularly important that regulatory changes be clearly justified and narrowly tailored to achieve their intended objectives.

Conclusion

The VSCPA and its members remain committed to working collaboratively with the Board to ensure Virginia’s statutory and regulatory framework protects the public while supporting a strong and vibrant accounting profession. We appreciate the Board’s willingness to engage with stakeholders as it evaluates these proposed changes.

We welcome the opportunity to continue discussing the issues outlined above and to help identify solutions that address the Board’s policy objectives while maintaining alignment with national standards and minimizing unintended consequences for Virginia CPAs and firms.

Please feel free to contact me or VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at (804) 612-9428 or ewalker@vscpa.com if we can be of assistance.

Sincerely,

Stephanie R. Peters, CAE

President & CEO

Virginia Society of CPAs