Minutes of:

New York State Society of Certified Public Accountants Board of Directors Meeting

Date & Time:

Thursday, December 18, 2008, 9:08 a.m. to 2:30 p.m.

Location:

NYSSCPA Offices, 3 Park Avenue, 19th Floor

Presiding Officer:

Sharon Sabba Fierstein, President

Board Members Present:

David J. Moynihan, President-Elect
Joseph M. Falbo, Jr., Vice President
Elliot L. Hendler, Vice President
Margaret A. Wood, Vice President
Richard E. Piluso, Secretary/Treasurer
Scott M. Adair
Edward L. Arcara
John Barone
Susan M. Barossi*
Cynthia D. Barry
S. David Belsky
Anthony Cassella
Robert L. Goecks
David R. Herman
Scott Hotalen
Martha A. Jaeckle
Suzanne M. Jensen
Lauren L. Kincaid

Gail M. Kinsella
Nancy A. Kirby
J. Michael Kirkland
Kevin Leifer
Elliot A. Lesser
David A. Lifson
Anthony J. Maltese
Mark L. Meinberg
Avery E. Neumark
Robert A. Pryba, Jr.
Joel C. Quall
Ita M. Rahilly
Judith I. Seidman
Thomas M. VanHatten
Liren Wei
Charles J. Weintraub
Louis Grumet, Executive Director

Board Member Absent:

Barbara S. Dwyer, Vice President
Warren M. Bergstein

Thomas Boyd
John B. Huttlinger, Jr.

Staff Present:

Suvro C.K. Banerjee
Joanne S. Barry
Alex Charles
Craig Mandelbaum
Ernest J. Markezin

Dennis O’Leary
William J. Pape
Alan Schmelkin
Paul L. Sinegal
James A. Woehlke

B08 – E – 0
Call to Order

President Sharon Sabba Fierstein noted that a quorum was present and called the meeting to order at 9:08 a.m.

B08 – E – 1
Minutes

Approval of Minutes of September 18, 2008 Board Meeting

President Fierstein asked Board members if they had any changes or additions to the minutes of the September 18 Board of Directors’ meeting. Mr. Belsky moved to approve the minutes and Mr. Hendler seconded as written. Several editorial changes were proposed and accepted. The motion to approve the minutes as amended passed unanimously.

a. Chapter Town Hall Meetings

President Fierstein discussed the town hall meetings. She stated that each was well received and unique to each constituency. The last town hall meeting would be scheduled for the Nassau Chapter in January.

b. Response Regarding NYSSCPA Contribution to ADS Program

President Fierstein referred the Board to the agenda attachment detailing the response to the Society’s contribution to the Accounting Doctoral Scholarship Program. The program had been designed to give stipends to qualified CPAs to obtain PhDs in order to increase the number of accounting professors who would be both PhDs and CPAs.

a. Quality Enhancement Policy Committee Update

Mr. Moynihan discussed the committee’s next paper, which was expected to focus on the concept of why quality matters. He stated that quality was the umbrella of all the issues the committee had examined in previous papers, which included peer review, education, and ethics. The next paper would tie these issues together in one document.

b. Presidents-Elect Workshop

Mr. Moynihan reported that the workshop went extremely well and was attended by representatives from 10 chapters. He also stated that he planned to schedule a treasurers’ workshop.

a. Chapters Update

Chapter Vice President Falbo stated that monthly calls to chapters had been ongoing and that the new presidents-elect would be added to the listserve. He planned to have the chapter procedures manual provided to the Board of Directors by the April meeting.

b. Recent Society Comments

Ms. Wood stated that 28 comment letters had been issued this fiscal year to date. Four additional letters were in the pipeline. Three are related to the FASB exposure drafts dealing with earnings per share, going concerns, and subsequent events. A fourth letter, in the early stages, was in response to the SEC’s International Financial Reporting Standards (IFRS) “Roadmap.” The letter regarding the “Roadmap” would be a product of multiple committees who collaborated on this comment letter.

c. Committees Update

Mr. Hendler stated that the committees were at the midpoint of the year. He reported that in January, each committee chair would have received an assessment to fill out for his or her committee. The assessment would request a summary of how the committee functioned, as well as its individual members. Mr. Hendler also reported that more joint meetings had been held. In addition, committee vice chairs had assumed more active roles.

a. Financial Statements for Six Months Ended November 30, 2008

Mr. Banerjee stated that net revenue for the first six months of fiscal year 2009 had been greater than budget by $16,000. Only one strategic goal, “Recognition and Visibility,” lagged in the budget, due to variances in The Trusted Professional and Member Benefits cost centers. Expenses for The Trusted Professional cost center had exceeded budget due to the unanticipated volume of news items reported in the Society’s newspaper.

Member Benefits had fallen short of budget due to a decrease in revenue from the Society’s member affinity program. In addition, Mr. Banerjee stated that cash and cash equivalents were down from the preceding year by 12%, or $580,000. Investments were up $200,000, or 26%, from a year ago.

Mr. Grumet noted that the Society’s accounting and chapters’ staff would be reviewing chapter budgets in greater detail than in previous years so that the Finance Committee would have more in-depth information when evaluating the budgets.

Mr. Banerjee addressed a question raised at the last Board meeting regarding the Society’s bank and credit card charges. Mr. Banerjee noted that his research indicated that the fees charged to the Society were on a par with those charged to other state societies. Mr. Grumet noted that additional research would be done in conjunction with the Society’s bank, Bank of America, to see if the credit card processing fees could be reduced.

b. Nominating Process Report

Mr. Piluso reported that the final meeting of the committee had been scheduled for January 8, 2009, and a teleconference had been held. He also reported that the individuals forwarded for consideration were excellent candidates.

a. Legislative and Regulatory Update

Mr. Grumet stated that the last bill to be passed before the state senate’s holiday break had been the accountancy reform legislation that the Society has been pursuing for 10 years. The new legislation, once signed by the Governor, would include changes to peer review, CPE for CPAs in industry, mobility, scope of practice, and the change of date for the CPE reporting year from August 31 to December 31. Mr. Grumet stated that the Society would develop a communications plan for the members including coverage in The Trusted Professional, a brochure, and chapter meetings. Mr. Grumet said that at the April Board meeting, he might request authority to share the Society’s mailing lists with the state to help disseminate the changes incurred by the bill’s passing. Mr. Grumet stated that the Board should expect an increased budget for approval.

Mr. O’Leary discussed the State Education Department’s proposed regulation change to the CPA exam. The State Education Department has proposed that a student who accumulated 120 hours of credit with no specified curriculum could sit for the CPA exam. The Board agreed that a student with a minimum of 120 hours should meet a minimum threshold of professional accounting courses as a candidate to sit for the CPA exam.

b. Dues Update

Board members were referred to their agenda materials regarding the current year’s collection of dues.

c. Member Benefits

Board members were referred to their agenda materials for a report on the member benefits program.

d. COAP Update

The matter was deferred to a future meeting.

e. Technology Upgrades

Mr. Schmelkin stated the Society selected two software vendors as finalists for the association management system. Demonstrations of the programs had been presented to department heads and staff and illustrated the differences between the two companies. Each system would have seamless integration with the Great Plains accounting software now in place. He reported that each company would now provide additional information and references. It was expected that a proposal for approval would be presented at the April Board meeting.

f. Breakfast Briefings

The matter was deferred to a future meeting.

g. Members in Industry Service Initiative

The matter was deferred to a future meeting.

a. Report from FAE President

Mr. Schmelkin referred the board to the agenda attachment regarding FAE activity. He further stated that since the fall, FAE had been focused on creating the curriculum for next year. FAE staff had been working with the curriculum and oversight committees to develop new courses. Mr. Schmelkin stated that there would be 50 new programs next year. The courses would include more AICPA half-day programs. With the Society-sponsored bill passed in Albany, FAE would examine how the new legislation would affect course offerings for members in industry and how the change in the CPA reporting year would impact course timing.

Mr. Schmelkin stated that attendance at FAE events had gone down by 800 attendees, with 9,000 attendees this year. The early-bird price break for POP sales had been extended. In-firm sales had decreased. Mr. Schmelkin stated that survey results had shown that attendees rated the courses to be of high quality.

b. Proposed Merger with Benevolent Fund

Mr. Woehlke stated that paperwork was sent to the New York State Charities Bureau for its preliminary review in August. In October, he was advised that the documents needed to include a request that the Benevolent Fund’s assets would be permitted to be used for a different purpose than that for which the funds were initially given.

Mr. Berlant reported on activities at the AICPA Council meeting. He stated that the due date of Form 1065 had been changed to September 15, 2009.

The AICPA had undertaken activities in preparation of the adoption of International Financial Reporting Standards (IFRS). The AICPA had conducted surveys of its members that showed the members were increasingly aware of its relevance. Mr. Berlant stated that due to the impending adoption of IFRS, two textbooks with IFRS sections had been scheduled to be released in 2009. He stated that the AICPA had explored the question of why so few accounting PhDs exist. He reported that the AICPA ADS program had 30 PhD candidates in the pipeline.

Mr. Berlant reported that the AICPA Certified in Financial Forensics (CFF) credential had 2,000 applicants since it was launched in September. He further stated that the AICPA had a map of states with mobility activity, which incorrectly showed New York with no mobility activity.

Mr. Berlant reported that the AICPA had proposed the internationalization of the CPA exam. Upon passage of the exam, the AICPA and NASBA would issue and administer a “nonaudit” CPA designation. This initiative had been designed to strengthen the U.S. CPA’s position as a premier global credential. A discussion ensued. The Board raised questions of how this initiative could potentially dilute the CPA designation and how international candidates would be regulated.

Mr. Moynihan stated per NYSSCPA Standing Rule SR-1, President Fierstein appointed a selections subcommittee comprised of Gail Kinsella, Nancy Kirby, Anthony Maltese, and Judith Seidman, chaired by Mr. Moynihan.

Mr. Moynihan explained there were nine “directly elected” AICPA council members from New York, each having three-year terms. Each January, the NYSSCPA submitted recommendations to fill three directly elected Council member vacancies. In addition, there was one “Society Representative” on AICPA Council representing the NYSSCPA, who served a one-year term. He explained further that the Board’s standing rule SR-3, “Recommendation of Individuals to Serve as Elected Members to AICPA Council from New York,” indicated that a position on Council was to be reserved each year for the incoming president elect so that he or she could serve on Council throughout his or her term on the Society’s Board. He noted that Ms. Fierstein was already serving on Council when she was elected to the president-elect’s position, and, therefore, her term on Council would be ending before her term on the Board.

Ms. Kinsella moved to reserve the 2009–2010, one-year Society Representative position for President Fierstein, so that her term on Council would not end before her term on the Society’s Board. Mr. Falbo seconded. The motion passed unanimously.

Mr. Moynihan further explained that the Board needed to identify individuals to fill the three elected Council positions opening up in October 2009. The Board would vote for three individuals, two would be put forward to the AICPA; the third would serve as a first alternate, in the event that the president-elect was already serving on Council or was unable to serve.

In addition, a fourth individual would be identified to serve as a second alternate, in the event one of the other three was ultimately unable to serve.

Mr. Moynihan continued by saying that seven individuals had applied to serve on the AICPA Council, with one later withdrawing from consideration. The six remaining names had been vetted, with one being found to be unqualified at the present time. As a result, on behalf of the Selections Subcommittee, he entered into nomination the five remaining individuals forwarded by the Subcommittee to the Board for its consideration. No additional nominations were made, and the nominations were closed.

President Fierstein appointed Messrs. Maltese and Hotalen to serve as tellers for the election. As a result of the ensuing election, Ms. Fierstein announced that Messrs. Piluso and Berlant would be recommended to the AICPA Nomination Committee. In addition, Mr. Hendler would be the first alternate, in the event the president-elect designate was already serving on Council or unwilling to serve. Finally, Ms. Carol Lapidus was selected as the second alternate.