Something Is Wrong
Accounting Reform Bill Falls Short in a ‘Dysfunctional’ Legislature

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AUGUST 2008 - Much-needed accounting reform died in the New York State Senate on June 23. Although the assembly unanimously passed the legislation, the senate did not vote on the bill. What makes this more disappointing is that the senate had brought an identical bill with identical language on its floor.

For almost 10 years, the NYSSCPA has pushed for necessary accounting reform in New York. The law that governs New York State CPAs today was instituted in 1897, the official birth of the public accountancy profession in the United States. The last time the law was substantially revised was 1947.

In each of the last five legislative sessions, the New York State Senate passed accounting reform legislation with unanimous support from both parties—accounting legislation that was primarily crafted by the Society’s board of directors.

This year, under the leadership of the State Education Department (SED), interested parties from throughout the state got together and narrowed their differences. With the most important components of our original proposal still intact, the NYSSCPA board of directors fully supported the SED proposal and requested that Society members contact their legislators to support the bill. A solution was finally in place that would have—

  • provided enhanced mobility by establishing a temporary practice permit for attest and compilation services by out-of-state CPAs;
  • established cross-border practice privileges in New York for nonattest services provided by out-of-state CPAs;
  • made quality review mandatory for attest services by all CPA firms (except for sole proprietors and firms with two or fewer accounting professionals);
  • expanded the regulated scope of practice to reflect the many services performed by CPAs;
  • regulated all CPAs, including those in industry;
  • required any CPA firm that performs attest services for a New York State governmental entity or that performs attest services specifically required pursuant to New York State law to undergo an external peer review in conformity with the government auditing standards of the comptroller general of the United States;
  • extended continuing professional education (CPE) requirements to all CPAs, including those in industry, government, and academia;
  • granted CPAs exclusive license to perform attest and compilation services; and
  • required triennial registration of all CPA firms, regardless of their legal form of organization.

A ‘Dysfunctional’ Process

In 2004, the Brennan Center for Justice at the New York University School of Law released a report that described the New York State legislative process as the most dysfunctional in the United States. In the four years since the publication of that report, not enough has changed. Considering that there was an identical bill in each house that would have brought accountancy reform to New York State, and that the assembly passed one of the bills before recess, the senate’s failure to pass its bill is alarming.

In an environment that emphasizes protecting the public, the time is long overdue for meaningful accountancy reform in New York State.

All NYSSCPA members should contact their state legislators and remind them of our common purpose, the importance of accounting reform. A listing of senate and assembly legislators can be found online at www.nysscpa.org/legislative/representatives.htm. The Society will continue its efforts on behalf of all of its members to achieve passage of accounting reforms to finally modernize New York’s accountancy statute. We need your help to make it happen.

Louis Grumet
Publisher,
The CPA Journal
Executive Director, NYSSCPA
lgrumet@nysscpa.org


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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