CPA mobility: Mia Takamatsu
Kurt Inouye
Jay Kang
Hyosun Kang

Table of Contents
Introduction.............................................................................................................................. 3
States of the bill....................................................................................................................... 4
Isaac Choy Interview:............................................................................................................... 5
If CPA mobility law passes, how much percentage of your clients do you think you will lose? 5
What makes Hawaii laws that much more stricter or complex compared to the mainland? 5
Do you see the need for CPA mobility, Hawaii’s cpa’s can practice in other states, but when other CPA’s come here they cannot? Reciprocity laws are only in Massachusetts, and Georgia............................................... 5
How long can Hawaii stay out from CPA mobility?............................................................................................ 5
How many more laws do we need to support the CPA mobility bill?................................................. 5
Do you think the quality of Hawaii’s accounting industry will go down or up?................ 5
Who is Jill Tokuda, why would she introduce the bill?............................................................................... 6
Who do you think would be good to contact for issues regarding CPA mobility?............. 6
Wendell Lee Interview:............................................................................................................ 6
Please tell me a little about Accuity? How many employees locally, nationally? How long have you been there? Where you raised here?.................................................................................................................................................................................................................. 6
Each and every state has it’s own unique laws. If CPA mobility passes, how do you ensure there is a quality of work done satisfactory?................................................................................................................................................................................................................................. 6
How do you make sure employees who handle Hawaii clients get the proper training? 6
One of the complaints about was about people not paying the general excise taxes..How do you plan on fixing that problem as a whole?................................................................................................................................................................................................................................. 7
Why do you support CPA mobility?..................................................................................................................................... 7
Is there an in between ground between the CPA mobility?.......................................................................... 8
Conclusion:................................................................................................................................ 11

Introduction When studying CPA mobility, we came with an ‘open mindset’, on how to approach the issue, and whether we supported it or not. The consensus around our auditing class was that people didn’t really know who to talk to. When talking about CPA mobility it seemed as if a whole lot of people weren’t paying to attention to the issue. Hindsight is 20/20, while but when investigating the issue we found the complexity of CPA mobility. Just finding out about people who were familiar with the issue was difficult. Kurt asked Stuart Tanimoto CPA, he said he was so busy he didn’t really follow the issue. Mia talked with her boss, Dave Tamura, and was really busy to follow the issues as well. HPU professor Judy Wong, didn’t really follow the issue either, she had to look up the issue, and do a little more reading. Kurt talked with HPU alum, Edelio Gerola, about the issue, as well, he said he wasn’t really following the issue, because he thinks it’s about the relationships, that clients have with the CPA’s is the reason they are going to choose a local firm. Although the big four accounting firms may be able offer a lower price, they don’t have the relationships.
As a group, we changed our philosophy on who we tried to interview. Instead of interviewing people who weren’t aware, or didn’t think it was relevant to them. Kurt emailed House of Representative Isaac Choy, and surprisingly got an interview. We also got help from professor Judy Wong, on who she thought it would be good to talk to. We got referred to Wendell Lee. When interviewing Isaac Choy, he referred us to Carleton Williams, and Carolyn Niwao, and Kathy Castillo. In audit class, we learned when there is a 100% risk, you shouldn’t take on the audit project. Without the proper ‘internal controls’, it was pointless to audit a company, there were going too many wrongdoings/ errors you couldn’t catch. We wrote this paper (and organized this project) as if we had ‘internal controls’, instead of putting in whole bunch of CPA’s, we wanted to contact people who felt most passionate about the issue, and people who took a strong stance about the issue. We tried to focus, on the quality of the individual who it affected the most, and passion on both sides of the Issue. We tried to include the most relevant people, and tried to include the most relevant information. We viewed it as a 100% risk on our grade, just putting any old information, and people.
Current Status of the bill SB543 was introduced by Senator Jill Tokuda on January 23, 2015. The Senate had two hearings on February 4 and 13th. On march 5, the bill passed the second reading. March 10, the bill passed the third reading, and the case moved to House from Senate. On march 12, the bill passed first reading in the House. It was referred to Economic Development & Business, Consumer Protection & Commerce, and Finance Committee Chair. As of today, the bill has no updates further updates.

Isaac Choy Interview:
If CPA mobility law passes, how much percentage of your clients do you think you will lose?
Not too sure, perhaps 20%
What makes Hawaii laws that much more stricter or complex compared to the mainland?
The point is not that Hawaii’s is complex, each and every state in unique and complex in it’s own ways. It took forever to do a California tax return.
Do you see the need for CPA mobility, Hawaii’s cpa’s can practice in other states, but when other CPA’s come here they cannot? Reciprocity laws are only in Massachusetts, and Georgia.
Most of the state use ‘Quid pro quo’ which the state will not except CPA from Hawaii because hawaii does not have a CPA mobility to let other CPA from other state to come.
How long can Hawaii stay out from CPA mobility?
Forever, local jobs for local folks. States he’s helping local people keep their jobs.
Mentions bank of Hawaii should be done by a local firm. Mentions predecessor in business in Ala Moana “Foli Foli”, a Greek business owner replaced. The problem, the Greek people still ended up choosing his company, although it was the first time his company had produced an international financial statement(IFRS). It was complex, but his company got the job done.
How many more laws do we need to support the CPA mobility bill?

States Bank of Hawaii’s audit was done by a non-local accounting firm. He thinks it helps.
Do you think the quality of Hawaii’s accounting industry will go down or up?
Down, lack of quality for work, because people who don’t know the Hawaii laws will be doing the taxes. What is the benefit for Hawaii resident and Hawaii CPA by being opposed about the CPA mobility?
It lets locals keep their jobs, CPA mobility makes perfect business sense. (Drew a diagram, and showed business model for the mainland companies.)
Who is Jill Tokuda, why would she introduce the bill?
A part of “lobbyist” organization. Tim, Andrew Lions.
Who do you think would be good to contact for issues regarding CPA mobility?
Carolyn Niwao (opposed it), Carleton Williams (supports it)
Our interview with the House of Representative, Isaac Choy (Choy).
Wendell Lee Interview:
Please tell me a little about Accuity? How many employees locally, nationally? How long have you been there? Where you raised here?
From Pearl City, graduated from Kamehameha, and USC graduate. Wendell Lee is a partner at Accuity. Accuity was formerly owned by Price Waterhouse Coopers, then bought out locally. Accuity has 95 people employed. One of the biggest local firms. Accuity has been around since 2006. Member of HSCPA.
Each and every state has it’s own unique laws. If CPA mobility passes, how do you ensure there is a quality of work done satisfactory?
Accounting profession is creating a relationship with clients. Even the CPA mobility pass, clients will have a bound with the current accountant and not move to a different CPA because they offer a cheaper rate.
How do you make sure employees who handle Hawaii clients get the proper training?
Did he answer this question? He stressed on the proper governance, without CPA mobility. We don’t have the proper authority, if mobility passes, there will be more standards. If CPA mobility passes there will consequences for people who don’t follow CPA mobility.
Emphasized CPA mobility is made up from three parts.
1. No notification
2. No escape
3. No fee
If CPA mobility passes, how would much clients do you think your firm would gain? (or lose)
(He didn’t really answer this question)
He doesn’t think he would lose any, he thinks the people of Hawaii are going to stick with someone locally. He seem some th ings online, where some CPA’s where worried that people could get CPA’s from India. Even if they charged half, he choose a CPA from India, too much risks involved when doing the issue.
However in Georgia, and Massachusetts, they “Quid Pro Quo”, meaning, because they can’t do business in our state we can’t do business in their state. Many people from Hawaii are thinking Georgia is too far, and no one would have clients from there, however one of his clients has a business, he has to hire a Georgia based firm, instead of doing work, that his own firm could do.
One of the complaints about was about people not paying the general excise taxes..How do you plan on fixing that problem as a whole?
The problem currently, is we don’t have system in place where we can ‘subpoena’, the people, CPA mobility would allow us the ability to govern our state better.
Why do you support CPA mobility?
CPA mobility helps his firm compete nationally. It’s not good business for someone to wait so long (60 days), we have to wait forever to get a specialist, in here. Without mobility it tremendously hurts his business. Has end clientele firm, in aviation & insurance, if he didn’t have a specialist come in on job, it would tremendously hurt him, and he wouldn’t lost these job. A 60 day notification is way too long, and it’s not good business.
Originally came from big accounting firm, and now is a principal for Accuity. The big mainland firms are dwindling down in size. Allows firms locally to compete nationally. Gave us drawn illustration, and why big accounting firms are dwindling down in size.
Is there an in between ground between the CPA mobility?
We tried…there are 3 components of CPA mobility. We were okay with 2 of 3. But we still couldn’t come with and in between ground.
Our interview with the Founding partner of Accuity LLP, Wendell Lee (Lee, W)

Carleton L. Williams Interview:
Carleton is the founder of CW Associates, CPAs. Last year, CW Associats were nominated as one of the best place to work in Hawaii. Mr. Williams have over 30 years of public accounting experience, including 11 years with Deloitte, providing services to businesses and their owners throughout Hawaii and in the Pacific Islands. He has an MBA in Finance and a BBA in Accounting from the University of Hawaii. He is a past president of HSCPA.
Each and every state has it’s own unique laws. If CPA mobility passes, how do you ensure there is a quality of work done satisfactory?
It will have no impact with quality of work because accountants have a relationship with clients so the clients will not run away to an out of state CPA. The company will benefit by able to hire a specialist as soon as possible with the CPA mobility if this bill passes.
How do you make sure employees who handle Hawaii clients get the proper training?
Every State have special rules, every new hired employee needs to be supervised in order to be a successful worker.
Why do you support CPA mobility?
CPA mobility can benefit a firm by hiring specialist as soon as they need and clients have better choices.
Our interview with the Founder of CW Associate, Carleton L. Williams (Williams, C)

Marilyn Niwao and John Robert Interview: In January of 2010, the Hawaii Association of Public Accountants or HAPA conducted a study on the process to issue a temporary CPA permit for out of state CPA's. They have found that out of state CPA's did not comply with three problems. First is that they did not comply with Hawaii tax laws. About 70% of out of state CPA's or firms did not get a Hawaii general excise tax number. Through this the CPA's did not pay general excise tax in Hawaii and question whether they have at all paid taxes for the income in Hawaii. Secondly the companies from other states did not comply with Hawaii business registration requirements. In the state of Hawaii you are required to register with the Department of Commerce and Consumer Affairs to do business. Of the companies that did not file for GET none have registered with the DCCA. Third thing that the out of state CPA's did not comply with is that they were not eligible for temporary permits under the definition of Incidental Practice in Hawaii administrative rule. Through this study the HAPA has started their own investigation and will further look into the situation. In March of 2015, the Hawaii Association of Public Accountants or HAPA found a number of improvements for out of state temporary permits. They have found that there have been improvements because of three different actions that took place. Hawaii has finally implemented the law requiring all CPA firms practicing in Hawaii to have a firm permit. Secondly a new board of public accountancy required that firms provide Hawaii General Excise Tax License numbers when applying for a firm permit. Third is that they created a new and revised application form for individual temporary permits to practice. They have required on that application form to provide his or her firm's Hawaii CPA firm permit number. As a result of this they have notice a smaller amount of out of state permit applications. This can mean that it is harder for CPA's from out of state to practice or that they have gone underground and are ignoring any such laws of Hawaii. Another change is that although temporary permits have gone down there have been an increase in out of state CPA's obtaining regular CPA licenses in Hawaii. One other influence when it comes to bills and laws being approved is lobbyist that have huge impact in legislation decisions. One example is that the HAPA spent $75,000 for lobbyist per year but do not have the funds to compete with large companies from the mainland to continue and support the lobbyist. It just becomes a matter of large businesses competing with the smaller ones. The main goal here is to provide Hawaii businesses and individuals with access to the best CPA experts. It may be call for us to think not just of controlling the out of state CPA's but to start figuring out a way for us to promote better CPA experts from the current residents in Hawaii.

Analysis:
Bruce Lee’s most famous quote starts famously “Empty your mind, be formless, shapeless like water…” People often forget we hear, see, and read with brain. Our eyes give us the ability to see, our ears gives us the ability to hear, but our brain comprehends why people do things, or say things. The true apparent reason why people support, or oppose things isn’t always apparent. We originally thought the all the local people would be against CPA mobility, and all the big four accounting firms would support Isaac Choy said CPA mobility does make perfect business sense. I thought people the purpose of opposed to CPA mobility was to keep big firms from flying here, taking business and going back to the mainland.
Geographically Hawaii is unlike any place on earth, it’s location makes it more unique than any other place. Mr. Choy’s testimony states “because of we do the Hula”, does that mean other states should adopt the Hula? The key understanding is view point and perspective of who is saying things, and why people are saying things. We thought local people where all going to heavily oppose it. Isaac Choy brought up a very interesting point, accountants are busiest from January- April, and the voting on the bills are from January- May, so the accountants are too busy to give a testimony. In auditing we learned about independence in nature, and independence in appearance. When analyzing his statements given to us, he talks about how he thought Bank of Hawaii should be done locally, and other business’ should be done. Something you may want to consider, he is the principal of Manoa Consulting Group LLC. Some people may consider that a conflict of interest, but Mr. Choy isn’t breaking any rules. Could he being doing this for business purposes? An HSCPA member (whom we prefer not to mention), suggested their could some animosity towards the bigger accounting firms. When college kids go to school, the majority of college accounting majors typically want to go to the bigger firms. Could Isaac want better quality workers, Could this be an issue? Representative Isaac Choy was great individual to talk with, and very nice helpful throughout the process. He let us use name, when referring both sides of the CPA mobility. Isaac Choy genuinely means well, and was a class act. When talking about with Wendell Lee, we got a real different perspective about CPA mobility. From his point of view, CPA mobility was allowing local firms to compete nationally. While from Isaac Choy’s quote "This bill gives the advantage to large international firms to take our jobs, return to the Mainland, sometimes not even paying our taxes. Why would you want to attend our local university to train in accounting if you must move to the mainland because accounting jobs would only be available in large regional firms?" (need citation bizjournal), from his point of view he was helping the local people keep there jobs. But from Wendell’s point of view he feels the lack of CPA mobility was hurting his business. Also 2010-2012 John Radcliff Asssociates donated 3,000.
2012-2014 Contributions

(Campaign spending commission)

Website includes clientele list, KPMG, Deloitte, E& Y. Which all tie into Monsato, ILWU, and UHPA, G.A. Morris (another lobbyist). UHPA 2000,
Total amount donated to Jill Tokuda 44,905.

Need to put picture here: but google is not allowing

http://www.808cch.com/clients.htmlhttp://www.808cch.com/clients.html http://private.uhpa.org/about-uhpa/photos/dsc02038_2.jpg/view Wendell Lee, was referred to us by Kathy Castillo, and he was also a friend of our professor Judy Wong.
Lobbyist reality:
We asked Marilyn Niwao about the lobbyist she said that a lobbyist is paid by his/her employer firm (s) and the lobbyist oftentimes helps a candidate with fundraising by soliciting for additional contributions from his employer or others. That way, the lobbyist gains additional influence over a legislator as the legislator will usually spend the time listening to the lobbyist. The lobbyist tries to educate and persuade the legislator to vote for or against a bill.
Sometimes when a legislator introduces a bill for a lobbyist, he/she may not know the reasons against the bill until hearings are scheduled and the legislators receive testimonies that provide more information about the bill. In the case of Jill Tokuda, I don't think she was told all the reasons why the CPA mobility bill does not make sense in Hawaii.
The Campaign Spending laws are rules to disclose to the public who is contributing to legislators so the public has notice of who is supporting who. Legislators try to become chairs of certain committees because the committees are powerful committees. For example, the finance committees (Senate Ways & Means and House Finance committees) are powerful committees, and more lobbyists would contribute money to those chairs. A top lobbyist is very expensive (HAPA was quoted $75,000 per year for a lobbyist in January, but it is too much for HAPA to afford). The big international CPA firms have lots of money and they can spend big bucks to try to influence legislation that would benefit only the big international CPA firms. So when the big international CPA firms combine forces and work together to promote the same legislation across the nation, the small to mid-sized firms cannot compete. HAPA relies only on volunteers like John and me and other CPA small-firm practitioners. The CPA mobility fight in Hawaii is definitely a Big CPA firm versus Small CPA firm fight for jobs in Hawaii. Many CPAs do not understand the complexity involved in the CPA mobility legislation and just assume that because the big firms want this, it is the right thing to do. So they follow what they are told by the HSCPA and AICPA and support the legislation without understanding the legislation and its impact.

Our interview with the President of Niwao & Roberts CPAs Marilyn Niwao(Niwao, M)
Conclusion:
When we first started the project about CPA mobility we originally thought that the issue of CPA mobility, that people didn’t really care. We thought depending on what your future plans were, and where you came from was going to affect how you felt about CPA mobility.
The consensus among our classmates that CPA’s don’t care, the real issue is people do care. But just finding about the people who do care was the biggest issue. Because of the CPA reciprocity laws, Hawaii CPA’s can do business elsewhere, but people had a problem when coming here. If you were a Hawaii resident or planned on making a living in Hawaii, why change things? CPA mobility is a much greater issue then an accounting, it’s a business and political issue as well. We are not sure if it’s matter of business issues or political issues. As a group we support CPA mobility. It’s simple, the benefit is greater than the cost. In accounting we learn of the cost principle, when benefits exceed cost, we feel we should do it. As of right now, we don’t have the jurisdiction to go after people. With the passing of CPA mobility, we can just let the state board in which they reside in, deal with serving them notice. It would be too expensive to fly on our own and try to catch all the CPA’s who didn’t adhere to the Hawaii laws.
However Isaac Choy is the head of Economic Development committee and Marilyn Niwao is the head of Consumer protection committee so the bill will probably not get approved. We think the bill will not pass until Isaac Choy and Marilyn Niwao retire from being the chair of the committee. This will not happen soon so the bill will not pass soon.

Reference

A Bill For An Act. (n.d.). Retrieved April 18, 2015, from http://www.capitol.hawaii.gov/session2015/Bills/SB543_SD1_.PDF

Choy, I. (2015, February 24). CPA mobility law [Personal interview]

Campaign spending commission. (n.d.). Retrieved April 20, 2015, from https://data.hawaii.gov/apps/campaignspending/rawdata/jexd-xbcg?regNo=CC10282&electionStart=2012-11-07T00:00:00&electionEnd=2014-11-04T00:00:00

Niwao, M. (2015, March 6). The lobbyist [Personal interview].

Lee, W. (2015, March 2). CPA mobility law [Personal interview]

Williams, C. (2015, March 15). CPA mobility law [Personal interview].

Appendix
Who we talked to
Edelio Gerola (Kurt at HSCPA)
HPU alumni
ECA advisors Stuart Tanimoto (Kurt)
Stuart Tanimoto CPA Dave Tamura (Mia)
Tamura & Company CPA Jessica Wong (Mia & Kurt)
Hpu Professor Isaac Choy House Of Representative, CPA (everyone)

Wendell Lee (Mia & Kurt)
Accuity

Carleton L Williams, CPA
CW associates (CPA mobility) People who turned us down:
Kathy Castillo (HSCPA president)
Jill Tokuda ( House of representative)
The person who introduced the bill