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Press Release

NYSSCPA Backs Legislation to Exclude CPAs as ESOP Fiduciaries

By:
Robert Busweiler – Communications Associate
Published Date:
Aug 30, 2012

NEW YORK, NY, August 30, 2012 – The New York State Society of Certified Public Accountants (NYSSCPA) is asking Senator Kirsten Gillibrand (D-NY) to support Senate Bill 1232, which would modify the definition of a fiduciary to exclude valuation specialists, including CPAs, that perform appraisals of employee stock ownership plans.

This bill was drafted in response to a Department of Labor (DOL) proposal that seeks to expand the definition of who is considered a fiduciary to include those who perform valuations of employee stock ownership plans (ESOP).

If the DOL’s proposal were to be implemented, CPAs who perform these valuations would be in conflict with the American Institute of Certified Public Accountants’ code of professional conduct, which requires them to “be impartial, intellectually honest, disinterested, and free from conflicts of interest,” when performing valuation services on Employee Stock Ownership Plans (ESOP).
 
Under the DOL proposal, these CPAs would instead be required to determine the value that most favors beneficiaries of the plan.
 
“We believe that beneficiaries and sponsors of ESOPs would be better served if the DOL implemented rules to ensure that only qualified individuals prepare valuations for ESOPs and individuals follow recognized valuation standards,” NYSSCPA President Gail M. Kinsella wrote in a letter to Gillibrand on August 16.
 
The legislation was first introduced in 2011 and has been referred to the Committee on Health, Education, Labor, and Pensions. If passed, the legislation would prevent ESOP valuation specialists from being included in the DOL’s proposed definition change.
 
Proposals from those in the accounting profession have already been communicated to the Department of Labor through comment letters and testimony during review hearings. The NYSSCPA believes these proposals will a far more cost effective approach to protecting ESOP participants and beneficiaries.  
 
About the NYSSCPA
 
Representing more than 28,000 CPAs, the NYSSCPA was the first 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.
 
The New York State Society of CPAs is located at 3 Park Avenue in New York City. To learn more about the Society, call 800-633-6320 or visit the Society’s website at www.nysscpa.org.