a.
Master List of Meeting Dates
Ms. Golden
commended the master list of meeting dates contained in the
agenda materials to the Board. She noted that Mr. Barry Melancon
had agreed to attend the September 24 Board dinner.
b.
Bylaws Task Force
Ms. Golden
noted that Ms. Fierstein is heading a task force to revise
the bylaws.
c.
Report on AICPA Council Meeting
CPA2Biz.
Ms. Golden provided a background for the May 7 letter from
Ms. Newman-Limata to Ms. Kathy Eddy, immediate past chair
of the AICPA and one of the CPA2Biz directors, who had done
presentations on the status of CPA2Biz at the Spring regional
meetings of AICPA Council, with questions to the AICPA regarding
CPA2Biz. She noted that NYSSCPA staff had prepared a side-by-side
comparison of the May 7 letter with the response presented
by Mr. Michael Mountjoy, chair of the AICPA Finance Committee
and another of the CPA2Biz directors, at the full Council
meeting on May 21, which was included with the Board’s
agenda. Mr. Hoops noted that the side-by-side comparison showed
that a number of Ms. Newman-Limata’s questions had gone
unanswered.
Computerization
of Uniform CPA Examination. This matter was included in the
report on the State Board for Public Accountancy.
Recruitment
Initiative. Ms. Golden noted the AICPA’s recruitment
initiative, which included Internet web sites designed to
attract student interest in the CPA profession. Ms. Golden
asked Ms. Barry to report on the Society’s efforts to
place ads in New York college newspapers. She said advertisements
had been placed in twelve college newspapers throughout the
state.
Massachusetts
Society Call for AICPA Governance Review. Ms. Golden noted
that the Massachusetts Society, prior to the May AICPA Council
meeting, sent a letter to AICPA leadership asking Council
to formally look into its role as governing body of the Institute
and how the AICPA can capture timely and accurate feedback
from the rank-and-file membership. AICPA chair Castellano
announced at the beginning of the May Council meeting that
the issues raised by the Massachusetts Society would be explored
in breakout sessions at the Council meeting to be held in
Hawaii in October 2002.
d.
Chapters Update
Ms. Golden
recognized Mr. Keiser, vice-president for chapters, who presented
a status report on the chapters.
e.
Relations with State Board for Public Accountancy
Ms. Golden
recognized Mr. McCoy, chair of the Legislative Task Force,
who reviewed recent activities of the State Board for Public
Accountancy. He noted that the State Education Department
is poised to promulgate a number of regulations in the absence
of state legislation. These include: work paper documentation
and retention, regulations addressing rotation of auditors,
and restrictions on CPAs accepting employment with audit clients.
Ms. Golden
then recognized Mr. Seidel, a past Society president and member
of the State Board for Public Accountancy, who gave an update
on the computerized examination. He reported that contracts
had reportedly been signed regarding the administration of
a computerized CPA exam beginning Spring 2004 by Prometric,
Inc. a subsidiary of Thomson Publishing, in cooperation with
the AICPA and National Association of State Boards of Accountancy
(NASBA). He noted that New York had not signed on to the arrangement
because of apparent conflicts of interest resulting from loans
Prometric had agreed to make to the AICPA ($10 million) and
NASBA ($3 million) and due to the fact that Thomson publishing
both owned Prometric, Inc. and was a co-venturer in CPA2Biz.
At its last meeting, the State Board for Public Accountancy
recommended that the State Education Department issue a request
for proposal for development of a CPA examination independent
of the Uniform CPA Examination. He did not indicate whether
the Department had taken the state board’s advice. Seven
states’ public accountancy boards, though no large states
other than New York, had chosen not to sign on with the AICPA/NASBA
computerized examination.
f.
Legislative Update
Ms. Golden
noted her telephone discussion with Mr. Melancon, president
and CEO of the AICPA, the preceding evening. She noted that
the U.S. Senate the preceding night had unanimously passed
a major accounting reform bill sponsored by Senator Sarbanes.
Mr. Borsuk,
a past president of the Society, was recognized by Ms. Golden
and urged that the Society have a campaign to explain what
audits are. Messrs. Hoops and Kessler, another former President
of the Society and former chair of the AICPA, responded that
now was not the time to conduct such a campaign. A director
stated that if the Society were to carry out such a campaign
at the present time, it would be seen as defending those responsible
for recent audit failures.
Mr. Hoops
outlined the legislative developments in the Oxley bill, passed
by the House of Representatives in the Spring, the Sarbanes
bill, and efforts in the New York legislature. He emphasized
the devastating impact of the WorldCom audit failure on the
legislative environment. He reminded the Board that the strength
of the Society is in its 30,000 dedicated members who are
serving clients well on a daily basis.
Ms. Golden
recognized Mr. McCoy, chair of the Legislative Task Force,
who presented a report on the Society’s legislative
efforts in Albany. He listed a number of Society-sponsored
initiatives, including restructuring the State Board for Public
Accountancy; registration of all CPA firms; requiring all
CPAs, including those in industry, to be registered and meet
CPE requirements; phase-out of the 24-hour CPE rule; permission
for CPAs to accept commissions; mandatory peer review; clarification
of the scope-of-practice provision; a temporary permit system
for CPAs who practice temporarily in the state; and a dedicated
state fund to support the operations of the State Board for
Public Accountancy.
He reported
that the Society had not taken a position on state legislation
to criminalize willful misrepresentations made to auditors.
Mr. McCoy
also noted that the Society opposed a number of state legislative
proposals, including mandatory rotation of audit firms every
seven years, prohibiting auditors from providing non-audit
services to their audit clients, a two-year restriction on
an auditor’s acceptance of employment with an audit
client.
Mr. McCoy
outlined the Society’s efforts to assist the New York
Senate in shaping a bill that does not contain the more egregious
measures that have been floated in the legislature and does
contain a number of the measures that the Society supports.
Ms. Golden
recognized Mr. Krostich, former chair of the Peer Review Committee,
who asked how the Society could support a legislative proposal
that creates a higher requirement on licensees than it requires
of its own members. Ms. Golden indicated that the Bylaws Task
Force was expected to explore additional requirements for
membership. One director asked why the Society had not taken
a position on the criminalization of misstatements in financial
statements. Mr. McCoy responded that it was out of deference
to federal legislative efforts, some of which included these
penalties. Another Board member asked if the Board should
direct the Bylaws Task Force to conform membership requirements
to New York. An informal poll was taken, the results of which
supported inclusion of a peer review requirement for members
in public practice.
Mr. Federmann
then moved, and Ms. Kirby seconded, a motion to direct the
Bylaws Task Force that it should include peer review as a
membership requirement for members in public practice. The
motion was unanimously approved.
g.
FAE Update
Ms. Golden
recognized Ms. Newman-Limata, president of FAE, who outlined
FAE’s current initiatives.
h.
Miscellaneous
Ms. Golden
recognized Mr. Kessler who made an appeal to reinstate the
annual conference format for the summer conference. The Board
took no action on the suggestion, though Mr. Hoops offered
to reopen consideration of the format of the conference for
the following year. Mr. Fagliarone, a former president of
the Society, was recognized. He suggested that the firms’
leaders should be included in the future leadership conferences.
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