A Big Step Forward

By Jeffrey R. Hoops

At the end of June, the New York State Senate unanimously passed accounting reform legislation. An identical (“as is”) bill was introduced in the Assembly, but the Assembly took no action on this bill before it adjourned. This is the first time that either house of the legislature has acted on accounting reform since 1947. A copy of the bill is on the Society’s website at www.nysscpa.org.

The key provisions of the Senate bill are summarized in an article in this issue of The Trusted Professional. (See “State Senate Passes Accounting Legislation” on page 1.) However, what’s not in the bill is just as important. There are no provisions that modify the Sarbanes-Oxley Act of 2002 as it applies to publicly traded companies, or that would make the act applicable to privately held companies. The Society submitted a letter in support of the bill as the full Senate debated it.

The Senate bill, if it becomes law, will have an impact on every CPA in New York state. CPAs in private industry would be required to register with the state and complete continuing professional education. All CPA firms that perform audits and reviews will be subject to peer review. Rules on accepting commissions and referral fees from nonattest clients are clarified, and a procedure for obtaining temporary practice permits is established. I urge all of you to become familiar with its provisions and let us know your views as the bill continues down the legislative path in the Assembly during the next 12 months.

One of the important three- to five-year goals in our strategic plan is advocacy: “The professional interests of our members will be promoted by the NYSSCPA in pursuit of the interests of the profession and the public.” I’m pleased to report that the Society was an active participant in the efforts that produced the Senate bill. An important part of the foundation for the Senate bill was the Society’s proposed legislative package that was approved by the board of directors early in the year.

During the course of the year the Society (along with other member groups) met with legislators and their staff members, representatives from the State Education Department and other important participants in the legislative process. In particular, we stressed the fundamental differences in the needs of the users of financial statements of public companies compared to private companies. We also stressed that the role of the board of directors and the audit committee is different for public and private companies. Our meetings served to enhance everyone’s mutual understanding of the issues and legislative objectives. When it came time to draft the final bill, we were active participants in the process.

Much of the “heavy lifting” was done by our Legislative Task Force, which includes Jo Ann Golden, Vincent Love, Stephen Langowski and, more recently, John Kearney and Tom Emmerling. Special thanks go to our Legislative Task Force chair, Kevin McCoy, our Legislative Counsel, Dennis O’Leary, and to Lou Grumet for their incredible efforts at the end of the legislative session.

In another advocacy initiative, we submitted extensive comments to the State Education Department on the proposed amendments to the state’s regulations relating to unprofessional practice. The proposed amendments and our comment letter are on the Society’s website. We recently met with Robert Bennett, chancellor of the Board of Regents, and Regent Arnold Gardner to discuss our concerns with the proposed amendments. Many of you directly contacted Board of Regents members to express your views. The education department and the Board of Regents are reviewing the comments made by us and others, and have deferred formal discussion of the proposals until the fall.

I hope you are pleased with our advocacy efforts and that we are effectively representing your views. I think the next 12 months will be a critical and important time for legislative and regulatory reform in New York state. Much has been accomplished, but much more needs to be finished. We are committed to being a positive voice for meaningful and effective changes which will benefit both our profession and the public.

Please let us know what you think.

president@nysscpa.org