New York Accountancy Reform and You

Accountancy reform has officially come to New York state.

The new law, signed by Gov. David A. Paterson on Jan. 27, makes sweeping changes to the state's regulations for the accounting profession, including bringing a larger number of CPAs under the state's regulatory structure and requiring CPAs working in industry to complete continuing professional education courses.

The bill also authorizes CPAs from states with similar licensure requirements to New York to provide attest and compilation services in New York through a temporary practice permit, allowing for cross-border practice. Finally, the bill requires that all CPA firms register with the State Education Department.

A special issue of The Trusted Professional includes details on what CPAs can expect from the long-awaited legislation.

The scope of the profession will now include management advisory, financial advisory and tax preparation services, bringing all New York state CPAs under state regulatory oversight, including CPAs in industry, government and academia.

NYSSCPA President Sharon Sabba Fierstein cited in a Society press release the importance of the legislation’s passage in strengthening the quality of audit services provided by CPA firms.

“The serious problems uncovered at publicly traded companies such as Enron and Worldcom, and more recently the financial giants, Bear Stearns and Lehman Brothers, underscore the importance of CPAs’ audit services to the investing public," Fierstein said. "Similarly, the Roslyn School District fraud in 2004, which was in excess of $11 million, is a further example of the importance of high quality governmental audits to protect the interest of New York taxpayers.”

This groundbreaking legislation will also:

* Mandate that all CPAs, including those who are not in public practice, complete continuing professional education (an exemption statement may be filed with the SED by CPAs who do not engage in any services within the expanded scope of practice);
* Require all New York state CPA firms to register and those that provide attest services will have to undergo peer review every three years (exempting sole proprietors and firms with two or fewer accounting professionals, except if they perform state or municipal governmental audits); and
* Enable out-of-state CPAs to practice attest and compilation services in New York through temporary practice permits for attest and compilation services and may be issued to out-of-state CPAs for up to 180 days in a 12-month period from the date the permit is issued, as long as the CPA’s home state has licensure requirements significantly comparable to New York’s. For non-attest services, no permit will be required for an out-of-state CPA in good standing in his or her state of licensure

The bill was cosponsored in the Senate by Sen. Kenneth P. LaValle (R-Suffolk) and Toby Ann Stavisky (D-Queens); and in the Assembly by Assemblymember Deborah J. Glick (D-Manhattan).

Wondering what the Accountancy Reform Bill has in store for you? Don't worry: some answers have arrived. More will come with time.

The NYSSPCA hosted a presentation to explain the impacts of the reform law. You can view the webcast below. 

Webcast on the Accountancy Reform Law

In addition, the Office of the Professions at the New York State Education Department also has now posted information and a Q&A on its Web site.

Here's a snapshot of some of the most frequently asked questions (and answers):

• When does the new law take effect? On July 26, 2009. However, changes in CPE requirements took effect Jan. 1. Mandatory quality review provisions kick in Jan. 1, 2012. 
• Who has to register under the new requirements? As of the July date, all licensed CPAs and public accountants will need to register with the SED unless they file a request for inactive status certifying that the individual is not practicing public accountancy or using the title.
• But what if I'm officially retired and prepare a few tax returns for family members? If you sign the return as preparer, you must register.
• What exactly are the CPE requirements? A registered CPA or public accountant must complete with 40 hours of general studies or 24 hours of concentrated study in one recognized area of study during each calendar reporting year. Four hours of professional ethics CPE must be completed during the triennial registration period. In some cases, those four hours are applicable to the 24 or 40 hour requirement.

You can read the complete question and answer document here.

Questions about the new law may be e-mailed to the NYSSCPA at newlaw@nysscpa.org.