Live Blog #4: Non-CPA Firm Ownership

Submitted by rkoreto on Fri, 02/03/2012 - 10:52

In response to an audience question, Goldfarb said that succession planning was not a good reason for non-CPA ownership, although the audience member noted it might make transitioning easier.

 
An audience member from New Jersey noted that firms were under a department of consumer affairs, so consumers were protected even if firms had non-CPA owners.
 
Goldfarb said he had started with what was then Price Waterhouse. He said PW could bring in specialist non-CPAs when necessary, and that system worked. He reiterated his position that it would be difficult to discipline non-CPA partners under the current system.
 
Alan Weiner, a past NYSSCPA president, wondered if LLP format, available only to professionals, would still apply to non-CPA owned firms.
 
Dick Piluso, current NYSSCPA president, observed that it would be a good idea to get some UAA commentary. He noted the UAA sowed some confusion. How is majority determined? Number of partners or percentage of ownership? He said he didn’t know the answer but would welcome commentary.  What if a very successful non-CPA partner gets too much control, he wondered.
 
And audience member followed up saying it was a problem if a non-CPA partner brings in most of the revenue.
 
Sobel said it was about voting rights. It’s about who has the vote. A non-CPA will not take control. Goldfarb responded by saying some partners have different equity in the firm, but each had the same votes.
 
Weinstein said CPAs must have control no matter how it’s calculated.
 
Also, Piluso continued, what does “Auspices of CPA” really mean regarding the audit function? That the CEO must be a CPA? Or just the relevant audit partner? That bore some consideration, he said.

 

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