John J. Kearney, President-Elect

04 – C – 1
Call to Order

04 – C – 2
Minutes

a. Approval of Minutes of January 14, 2004 Meeting

Mr. Hoops asked Executive Committee members if they had any changes to the minutes of the January 14, 2004, meeting. There being none, Mr. Love moved to approve the minutes, and Mr. Bloom seconded the motion. The motion passed unanimously. Ms. Doran and Mr. Nowicki did not participate in the vote.

b. Approval of Minutes of February 4, 2004 Conference Call

Mr. Hoops asked Executive Committee members if they had any changes to the minutes of the February 4, 2004 conference call. There being none, Mr. Bloom moved to approve the minutes, and Ms. Napoleon-Hudson seconded the motion. The motion passed unanimously. Ms. Doran did not participate in the vote.

04 – C – 3
President’s Report

a. Office Relocation

Mr. Hoops asked Messrs. Grumet and Schmelkin to update the committee on the office relocation. Mr. Grumet stated that the lease assignment for the Society’s future offices at 3 Park Avenue had been approved by the building’s owners, and Mr. Schmelkin added that the actual office move was expected to occur in late May. Mr. Grumet asked Executive Committee members if they would be interested in an as-yet-unscheduled walk-thru of the location, and the committee responded favorably.

b. COAP Fundraising Update

Mr. Hoops asked Mr. Pape to provide a COAP Fundraising update. Mr. Pape announced that the recently-formed COAP Fundraising Committee, chaired by Mr. Frank Fusaro, was offering members and their firms the opportunity to purchase ads in the commemorative journal for the 2004 Annual Dinner. Mr. Pape noted that proceeds from the ads would go towards expanding the COAP program. Mr. Hoops stated that he would send an e-mail to the full Board asking members to support the COAP program by purchasing ads.

The committee then discussed a request from the COAP Fundraising Committee to create an award honoring a Society member for his or her outstanding contributions to the Career Opportunities in the Accounting Profession (COAP) program, to be presented live at the 2004 Annual Election and Dinner on May 13. Upon a motion made by Mr. Piluso and seconded by Mr. Love, the committee unanimously agreed to create the award.

A brief discussion ensued with respect to the COAP Program’s tracking of its alumni. Several committee members expressed a desire to hear more about specific COAP alumni success stories. Mr. Pape responded that four COAP alumni would soon be featured in the commemorative journal being distributed at the Annual Dinner, and that the program is continuing its efforts to keep in contact with program alumni.

c. Report on Private Company Audit Standards Task Force

Mr. Hoops asked Mr. Colson to report on the Private Company Audit Standards Task Force. Mr. Colson reported on feedback received by the task force in response to its white paper, which the task force disseminated by e-mail to 25 of the largest public accountancy practice units in New York. Mr. Colson noted that five out of the 25 firms e-mailed written responses to the white paper which indicated a desire to learn more about its recommendations. He stated that all respondents agreed that uniformity in licensing and standards was desirable.

Mr. Colson then noted that representatives from three of the Big Four accounting firms along with BDO Seidman met with Messrs. Grumet and Colson to discuss the concept of an interstate compact. Mr. Colson stated that the three Big Four firm representatives sent a short follow-up letter indicating a current preference to pursue the common goals of licensure uniformity and standards authority through the Uniform Accounting Act (“UAA”) process and AICPA. Mr. Colson added that BDO Seidman representatives verbally expressed a desire to learn more about compacts.

The Executive Committee continued its discussion of an interstate compact as a means to address accounting standards for privately-held companies across state lines, and discussed some of the emerging confusion over the concept. The committee by consensus reaffirmed its position not to formally pursue the idea of an interstate compact at this time but to focus on pending legislation in the New York State Legislature. In addition, the Executive Committee by consensus reaffirmed its direction that staff further study the concept of an interstate compact and that Mr. Grumet keep the issue in the public view in his individual capacity.

d. Annual Dinner Update

Mr. Hoops announced that the 2004 Annual Election and Dinner would be held at the Manhattan Marriott Marquis on May 13, 2004.

Mr. Hoops expressed disappointment that some attendees at previous annual dinners did not pay attention to the awards ceremony portion of the annual dinner. He opined, however, that the awards ceremony may have gone on too long for attendees’ attention span and proposed that award recipients’ statements and bios be limited to the commemorative journal distributed to dinner attendees. He added that the bios and statements should also be published in The Trusted Professional.

Mr. Hoops noted that a separate reception would be held for award recipients before the reception preceding dinner and that the only speeches at the dinner would be his, Mr. Kearney’s and the invited dinner speaker, Harvey Goldschmidt of the Securities and Exchange Commission. He asked for feedback from the committee regarding this plan.

Mr. Pape reiterated a preference by the COAP Fundraising Committee to present the COAP award, approved by the Executive Committee during the dinner and allow the recipient to say a few words to help promote the COAP program and its fundraising objectives. The committee discussed whether an exception to Mr. Hoops’ proposal regarding speeches should be made for the COAP award recipient. After discussion, the committee by consensus agreed that the commemorative journal would be well-received by attendees, and that an exception should not be made for any one award recipient.

A committee member inquired about the progress of a possible Adopt-a-Scholar Program. Mr. Grumet responded that the idea had been temporarily deferred but suggested that it be revisited in the near future.

e. Awards Committee Update

Mr. Hoops announced that the awards committee had chosen to honor two persons for induction into the NYSSCPA Hall of Fame, the late Homer Pace and the late Arthur Carter. In addition, Mr. Hoops noted that the awards committee had recognized Don Kiame with an award for outstanding contributions by a member in industry, and also Board and Executive Committee member Nancy Kirby for her outstanding public service.

The Executive Committee extended its congratulations to all award honorees.

a. President-elects’ Workshop

(See Vice Presidents’ report on Chapters, below.)

b. 2004 Leadership Conference Update

Mr. Schmelkin gave a brief update on the upcoming 2004 Leadership Conference to be held at the Sagamore Resort in Bolton Landing on Lake George, noting that a Board orientation program and a media training session had been added to the schedule of events. He reminded the committee that the 2005 Leadership Conference was also scheduled to be held at the Sagamore Resort.

Mr. Schmelkin then updated the committee regarding contract negotiations with the Gideon Putnam Resort in Saratoga Springs, New York, which was chosen by the Executive Committee as the venue for the 2006 and 2007 conferences. Mr. Schmelkin stated that the parties were incorporating language into the contract to address issues raised by the Executive Committee at its last meeting.

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a. Financial Statements as of December 31, 2003

Mr. Bloom presented the Treasurer’s Report, noting that combined NYSSCPA and FAE income for the period ending December 31, 2003 was $595,247. Net income was ahead of budget by $394,058. Cash and equivalents stood at $3,340,809 as opposed to $2,393,857 in the previous year.

b. Update on Internal Controls Study

The Executive Committee by consensus reaffirmed the scope of the proposed internal controls engagement as a review of the efficiency and adequacy of internal procedures. Mr. Bloom reported that RFPs for the engagement had been sent to a number of firms, and Ms. Chambers noted that one response had been received as of the date of the meeting.

a. Financial Statements as of February 29, 2004

Treasurer Bloom reported on the financial statements as of February 29, 2004, noting that the Society’s and FAE’s cash positions were the strongest they had been in four years. Combined NYSSCPA and FAE income for the period ending February 29, 2004 was $873,000. Net income was ahead of budget by $294,000. Cash and equivalents stood at $1.647 million as opposed to $1.151 million in the previous year.

b. Result of IRS 990 Examination

Treasurer Bloom announced that the IRS had proposed no changes as result of the recent examination of the Society’s form 990 filings, and that the Society would continue to qualify for exemption from federal income tax.

c. Internal Control Review

Mr. Grumet announced that the Society’s and FAE’s internal control review process had been completed. He added that a draft report would be presented to the Finance Committee for their approval, and the draft would then be presented to the Executive Committee.

a. Report on Chapters

Vice Presidents Nowicki and Napoleon-Hudson gave reports on chapters. Ms. Napoleon-Hudson expressed concern that several chapter presidents-elect did not attend the Chapter Presidents-elect workshop held at the Society’s offices on January 26, 2004. She nonetheless reported that the workshop was well-received by attendees.

Mr. Grumet then reminded the Executive Committee that the six most-recently created chapters (Adirondack, Finger Lakes, Manhattan/Bronx, Queens, Rockland and Brooklyn), which were created in 2001 for terms of three years each, were due for a full performance review by the 2004-2005 Board to assess whether the Chapter’s conditional status should be ended.

b. Legislative Update

Vice President Love provided an update on legislation. Mr. Love noted that due to the legislature’s budget priorities, not much progress has been made on the Society’s bill since the last report.

The committee then discussed a recently-passed law that allowed the New York State Education Department (SED) to investigate and issue fines for the unauthorized practice of public accountancy. Mr. Love stated that the SED had issued a request to the state legislature to raise CPA registration fees by $10 to assist it in policing the unauthorized practice of public accountancy under the new law.

Upon a motion by Mr. Love, seconded by Ms. Napoleon-Hudson, the Executive Committee unanimously agreed that the Society should publicly support the SED’s request to raise CPA registration fees to assist it in policing the unauthorized practice of public accountancy.

c. Recent Society Comments

Vice President Rubin noted that the following Society comment had been issued:

• Comments submitted to the Public Company Accounting Oversight Board by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Margaret Wood, regarding Proposed Auditing Standards on Audit Documentation and Proposed Amendment to Interim Auditing Standards; PCAOB Release No. 2003-023, PCAOB Rulemaking Docket Matter No. 012, dated January 20, 2004; Principal Drafters: Margaret A. Wood, Robert Berliner, Fred R. Goldstein, Elliot A. Lesser, Stephan R. Mueller, Bruce H. Nearon, John O’Leary (Financial Accounting Standards Committee), Paul D. Warner and Robert Waxman.

Mr. Rubin commended the drafters and committee for outstanding work.

a. Redesign of Website

Communications Director Joanne Barry gave a brief update on the redesign of the Society’s website, including the area devoted to The CPA Journal. Ms. Barry announced that hits to the Society’s website topped 4 million in February, with over 8,500 unique visitors per day.

b. Staff Training on AM4 System

Mr. Grumet reported on the success of recent staff training sessions on the use of the Society’s membership data system, the AM4.

Mr. Grumet then announced that a new Director of Information Technology had been hired and was expected to commence employment on March 22, 2004.

c. Digitization of Peer Review and Ethics

Mr. Grumet announced that the electronic imaging of the Society’s peer review and ethics files had been completed and efforts were underway to image Society and FAE contracts and Society membership files.

d. CPA Journal Business Advisory Committee Update

The committee by consensus agreed with a staff recommendation to discontinue the CPA Journal Business Activity Committee. President Hoops and several Executive Committee members and staff commended the contributions of CPA Journal Business Committee members over the years. Mr. Hoops stated that he would send a personal letter to CPA Journal Business Committee members thanking them for their service.

Mr. Colson gave a brief update on AICPA communications on peer review, including the discussion of potential public or regulatory access to peer review information. He reminded the committee that because the New York accountancy bill includes a provision for mandatory peer review, public access to such information would have a profound impact on New York CPAs.

The committee then discussed public access to peer review files and failed reviews.

Mr. Markezin, Committee Services Director gave a brief update on revisions to the draft Committee Approval Policy and Procedure for Statewide Committees. The committee reviewed the policy and made several minor editorial changes.

The committee then discussed the extent of the Board’s authority over committee communication with outside organizations and the public. Mr. Woehlke stated that as a legal matter, the Board must have ultimate authority for the organization’s public communications, noting that statewide committees get their authority solely from the Board.

Mr. Riley moved to approve the Committee Approval Policy and Procedure for Statewide Committees, as amended, and Ms. Doran seconded the motion. The motion passed unanimously. Mr. Love did not participate in the vote. The final approved policy is included as Attachment A.

Mr. Pape presented the Membership Report, which included 101 new members (including 74 new associate members), 22 reinstatements, 7 deaths, 4 resignations and 31 terminations. These changes reflected a total membership of 29,928 members as of March 10, 2004, as compared with 29,200 at the same time last year.

Mr. Pape then drew the committee’s attention to a number of associate members who had been terminated for failure to ultimately become a full CPA member. He reminded the committee that associate memberships have a five-year limit. A committee member requested that future membership reports include the number of terminations represented by students, and several committee members agreed that this would be useful. Mr. Pape agreed to include such figures in future reports.

Mr. Piluso moved to accept the membership report and Ms. Doran seconded the motion. The motion passed unanimously.