New Requirements for CPAs Take Effect July 26

New Requirements for CPAs Take Effect July 26

FOR IMMEDIATE RELEASE

Contact:Cara Patterson, Public Relations Associate
212-719-8362
cpatterson@nysscpa.org

NEW YORK, NEW YORK, July 24, 2009 – New York State’s accounting reform law has been updated to reflect the services today’s CPAs provide, and thousands more CPAs will be required to register with the State Education Department (SED) Office of the Professions and take continuing professional education (CPE) when the law takes effect on July 26. These CPAs may be listed currently as “inactive” or not registered because they were not practicing accountancy under an antiquated definition of the law.

“The new law brings regulation of the profession into the 21st century and will help ensure increased public protection,” said David Moynihan, president of the New York State Society of Certified Public Accountants (NYSSCPA). “New York CPAs who fail to comply with the new requirements may be subject to charges of unprofessional conduct and investigation by the SED’s Office of Professional Discipline. The law’s provisions apply to CPAs practicing in New York, including those licensed in other states, where New York is their principal place of business,” Moynihan said.

Many of these CPAs will come under New York state’s regulatory umbrella for the first time because the state has previously defined the practice of public accountancy, in essence, as audit work—performing attest and compilations services, including presenting and certifying financial statements. The new law broadens the definition to include all CPAs who perform accounting, management and financial advisory services, in addition to tax and professional services rendered to one’s employers.

In other words, regardless of a CPA’s employer—whether a company, government, university or nonprofit—they will now be required to register and take CPE if they use any of these skills and competencies and New York is their principal place of business.

The new law also provides a means for CPAs in other states who need to practice attestation services temporarily in New York to apply to the state for a temporary practice permit, valid for 180 days during a 12-month period and renewable up to three times. Temporary permits are valid for no more than four years within a five-year period. Out-of-state CPAs practicing non-attest services in New York state—these include CPAs in industry, tax, government, consulting or education—will be allowed to practice without notifying the state, but will be subject to the disciplinary authority of the state Board of Regents.

In addition to individual CPA registration, all public accounting firms are required to register with the state if the firm performs attest or compilation services. This requirement now applies regardless of the organizational structure of the entity—whether sole proprietorships, partnerships, limited liability partnerships or other organizational structures. Previously, only firms organized as partnerships were required to register.

A provision in the law mandating peer review of the core attest and compilation services of firms with three or more accounting professionals takes effect on Jan. 1, 2012. Peer reviews help ensure that audits meet high standards of quality. New York will be joining 44 other states and jurisdictions in which peer review is mandatory.

CPAs should be aware of the new provisions effective July 26 and should check the NYSSCPA website (www.nysscpa.org/page/reform-law) to learn more.

About the NYSSCPA

Representing 29,000 CPAs, the New York State Society of Certified Public Accountants (NYSSCPA) is the oldest state accounting organization in the nation.

Incorporated in 1897, the Society is a not-for-profit organization that seeks to establish and maintain high standards of integrity, honor, and character among certified public accountants. Its members are CPAs working in public practice, industry, government and education in a state that serves as the home of Wall Street and major financial institutions.

The New York State Society of CPAs is located at 3 Park Avenue, New York, NY 10016. To learn more about the Society call 800-633-6320 or visit the Society’s website at www.nysscpa.org.