EC07 – E – 0
Call to Order

EC07 – E – 1
Minutes

a. Approval of Minutes of August 20, 2007, Executive Committee Meeting

Mr. Lifson asked if there were any comments or corrections to the draft minutes of the August 20, 2007, Executive Committee meeting. Ms. Jensen provided several edits. Mr. Piluso moved to approve the minutes as edited by Ms. Jensen, and Ms. Fierstein seconded the motion. The motion passed unanimously. Ms. Seidman abstained.

b. Approval of Minutes of August 28, 2007, Executive Committee Conference Call

Mr. Lifson asked if there were any comments or corrections to the draft minutes of the August 28, 2007, Executive Committee conference call, which had been e-mailed separately for approval. There being none, Mr. Piluso moved to approve the minutes as presented, and Ms. Fierstein seconded the motion. The motion passed unanimously. Mss. Barnickel and Jensen abstained.

a. AICPA Update

No report was given.

b. Set Tax Update

President Lifson distributed an informational brochure regarding the Society’s SET Tax proposal. He also distributed copies of a speech he presented at the Tax Plenary Conference. Ms. Barry added that columns currently were being developed for three publications interested in the SET Tax.

c. Town Hall Meeting Schedule

President Lifson referred members to the schedule of remaining Chapter “Town Hall” meetings, which was included in the agenda materials.

d. Bylaws Update

Mr. Lifson noted that on October 5, a special meeting of the members occurred to conduct an election regarding the bylaw proposals. All proposed bylaws were approved by at least 89% of the members voting, which greatly exceeded the two-thirds necessary for passage.

e. FAE Update

Mr. Lifson asked Mr. Schmelkin to provde an update on FAE. Mr. Schmelkin reported that FAE was doing well.

f. PAC Update

Mr. Grumet noted that the Political Action Committee’s audit had historically been conducted by a different auditor separately from the Society’s audit. He suggested that the PAC audit be consolidated with the Society’s and FAE’s, and asked if there were any objection. There being none, he noted that the PAC board needed to vote on its proposed inclusion in the Society-FAE. He said that he would report on the result of the PAC vote at a later time.

g. Update on Auditor RFP Process

Mr. Markezin gave a brief update on the auditor RFP process, noting that four firms had submitted bids.

f. Other matters

Mr. Lifson distributed a draft article he had been working on concerning independence in compilations and issues concerning work product. A discussion ensued.

a. Quality Enhancement Policy Committee

President-elect Fierstein reported that in addition to its work in the ethics area, the Quality Enhancement Policy Committee was concentrating on finalizing its white paper on pre-service education.

a. Chapters Update

Vice Presidents Barnickel and Lauchert reported on the most recent conference call of chapter presidents.

b. Recent Society Comments

Because of Vice President Torres’s loss of voice, Mr. Lifson provided a brief summary of a written report submitted by Mr. Torres regarding recent Society comments. A list of comments follows:

• 11/12/07 – Comments to the Securities and Exchange Commission on a concept release to obtain information about the public’s interest in allowing U.S. issuers to prepare financial statements in accordance with International Financial Reporting Standards for purposes of complying with the rules and regulations of the Commission; Principal Drafters from the Financial Accounting Standards Committee: Fred R. Goldstein, Edward P. Ichart, John J. McEnerney; From the International Accounting and Auditing Committee: William M. Stocker III; From the SEC Practice Committee: Mitchell J. Mertz.
• 11/1/07 – A comment paper sent to IRS offering a recommendation to improve tax reporting related to Forms 1040 filed on extension and Schedules K-1 from Partnership Returns on extension to the same due date; NYSSCPA Taxation of Individuals Committee, William H. Jones, Chair; Principal Drafter: William H. Jones.
• 10/31/07 – Comments to the The Committee of Sponsoring Organizations of the Treadway Commission on their September 2007 discussion document on guidance on monitoring internal control systems; SEC Practice Committee, Rita M. Piazza, Chair; Principal Drafter: Anthony S. Chan.
• 10/25/07 – Statement of the NYSSCPA Submitted for the Record of October 25, 2007 Hearing Entitled “Single Audits: Are They Helping to Safeguard Federal Funds”, By the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security of the United States Senate Committee on Homeland Security and Governmental Operations.
• 9/28/07 – Comments to the International Accounting Standards Board on their exposure draft of an international financial reporting standard (IFRS) for small and medium-sized entities; International Accounting and Auditing Committee, William M. Stocker III, Chair; Principal Drafter: William M. Stocker III
• 9/28/07 – Comments to the Securities and Exchange Commission on a discussion paper for consideration by the SEC Advisory Committee on improvements to financial reporting. The discussion paper is to provide a discussion of issues, views and potential consideration points that the Committee may evaluate; Financial Accounting Standards Committee, Edward P. Ichart, Chair; Principal Drafters: Robert A. Dyson, Edward P. Ichart, John J. McEnerney.
• 9/21/07 – Comments to the Securities and Exchange Commission on Release No. 33-8818 – Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with International Financial Reporting Standards without Reconciliation to U.S. GAAP; Principal Drafters: From the Financial Accounting Standards Committee: Fred R. Goldstein, Edward P. Ichart, John J. McEnerney; From the SEC Practice Committee: Mitchell J. Mertz, Robert E. Sohr, Joseph Troche.
• 9/17/07 – Comments to the Securities and Exchange Commission on Release Nos. 33-8819; 34-56013; 39-2447; File No. S7-15-07 on proposed rule amendments relating to disclosure and reporting requirements for smaller companies under the Securities Act of 1933 and the Securities and Exchange Act of 1934; SEC Practice Committee, Rita M. Piazza, Chair; Principal Drafters: Mitchell J. Mertz, Rita M. Piazza, Robert E. Sohr, Joseph Troche.
• 9/14/07 – Comments to the IRS on their discussion draft of a redesigned Form 990, Return of Organization Exempt from Income Tax, filed by many public charities and other exempt organizations; NYSSCPA Exempt Organizations Committee, Paul E. Hammerschmidt, Chair; Principal Drafters: Martin S. Cantor, Sonja Lepkowski, Paul E. Hammerschmidt.
• 9/7/07 – Comments to the Public Company Accounting Oversight Board on Release No. 2007-008 – Proposed ethics and independence rule, Rule 3526, Communication with Audit Committees Concerning Independence, that would supersede the Board's interim independence requirement; Auditing Standards and Procedures Committee, Robert W. Berliner, Chair; Principal Drafters: Robert W. Berliner, Anna Zubets.
• 9/4/07 – Comments to the Securities and Exchange Commission on Release No.34-56010 concurring with proposal to provide two exemptions from the registration requirements of the Securities Exchange Act of 1934 for compensatory employee stock options; SEC Practice Committee, Rita M. Piazza, Chair; Principal Drafter: Robert E. Sohr.

President Lifson commended the comment authors and their respective committees for outstanding work.

• Net Revenue was over budget by $546,000, and ahead of August 2007 by $389,000.
• Each strategic goal was ahead of budget, with Advocacy as the driving force with an excess over budget of $361,000, followed by Professional Competency with an excess of $68,000.
• No contribution to the Foundation for Accounting Education had been made during the first three months of fiscal year 2008, in keeping with budget.
• Cash and Cash Equivalents reflected an increase of $735,000 from the prior year.
• Investments reflected an increase of $224,000 over fiscal year ’07.

a. Committees Update

Secretary Ellis presented an update which included a report on oversight committees, linking FAE and committees for morning and evening technical sessions, committee “open houses” scheduled for January 2008 and a follow up regarding 2008 Leadership Conference participation by committee chairs.

b. Nominating Process Update

Secretary Ellis reported that the 2007-2008 Nominating Committee was comprised of the following individuals:

• John J. Kearney, Chair
• Stewart Berger
• Robert Fagliarone
• Allen L. Fetterman
• Scott J. Jaffee
• Lauren L. Kincaid
• Stephen F. Langowski
• Robert A. Pryba, Jr.
• M. Jacob Renick
• David Rubenstein
• P. Gerard Sokolski

The positions to be filled by the Nominating Committee were President-elect, Vice President (four positions), Secretary/Treasurer and five at-large Directors. In addition, six chapter representative Board positions would be filled by the Nominating Committee from the Adirondack, Brooklyn, Nassau, Rochester, Staten Island and Suffolk chapters.

a. Legislative and Regulatory Update

Mr. Grumet briefed the Executive Committee on developments regarding accountancy legislation and regulation of the CPA profession. The Executive Committee approved a lobbying contract with the law firm Hodgson Russ under item EC-G-15.

b. Member Benefits Program Update

Executive Committee members were referred to the agenda materials for a written report on member benefits programs.

c. Accountants Club Update

Mr. Grumet provided background regarding the Accountants Club’s relationship with the NYSSCPA. He said that although the NYSSCPA had previously provided some administrative assistance to the organization, the Accountants Club was a separate organization with its own funds and activities. He said that going forward, the Accountants Club would continue to operate independently of the NYSSCPA and noted that it recently hired an employee to assist in the administration of its activities.

d. Expected Timing for 2008 Employee Benefits Program Approvals

Mr. Woehlke gave an update on the timing for the 2008 employee benefits program renewals. He said that a special Executive Committee meeting would be required in mid December to consider the renewals.

Thomas Irvin, Chair of the Industry Oversight Committee, gave a report regarding the Industry division. He noted a number of areas of concern in his area including meeting attendance and future growth, but commended Industry Division conferences which enjoyed a 20% increase in attendance. During the ensuing discussion, it was suggested that the NYSSCPA utilize additional technology to enhance committee meetings and increase attendance. It was noted that “Microsoft Live Meeting” software was currently being used by committees to enhance phone participation during Microsoft Powerpoint presentations. Mr. Grumet agreed to look at additional technology options and develop a proposal during the budget process.

Mr. Lifson distributed a redlined version of the Finance Committee CAP (committee action plan) reflecting changes which he said were needed before a final draft could be voted on by the Executive Committee. He also noted that the Investment Committee was a subcommittee of the Finance Committee. Mr. Lifson said that the revised CAP would be presented to the Finance Committee for its blessing before Executive Committee action at a later meeting.

Mr. Falbo, Chair of the Governance Subcommittee, presented the Governance Subcommittee’s report on proposed leadership policies (LP) relating to:

• LP-1 Code of Conduct for Board members;
• LP-2 Resolving NYSSCPA Policy Disputes; and
• LP-3 Acknowledgment of Board Member Responsibilities.

After review and discussion of LP-1, Mr. Ellis moved to recommend Board approval of LP-1 at its December meeting. Mr. Piluso seconded the motion. The motion passed unanimously. Ms. Kinsella and Mr. Torres were not present for the vote.

After review and discussion of LP-2, Mr. Piluso moved to recommend Board approval of LP-2 at its December meeting. Mr. Wei seconded the motion. By consensus, the Executive Committee approved a clarification to the draft and also changed a reference to “legal representation” to “representation by a third party” The motion to approve the revised draft passed unanimously. Ms. Kinsella and Mr. Torres were not present for the vote.

After review and discussion of LP-3, Mr. Piluso moved to recommend Board approval of LP-3 at its December meeting. Mr. Ellis seconded the motion. The motion passed unanimously. Ms. Kinsella and Mr. Torres were not present for the vote.

• Terminations will remain on the website for a maximum of 7 years. If the member has his/her membership reinstated, their article will remain for a minimum of 5 years or the date of reinstatement, whichever is longer.
• Suspension will be removed from the website 1 year after the member’s suspension period has ended.
• Admonishments will be removed from the website 1 year after the effective date of the admonishment.

Ms. Fierstein moved to approve the proposed timelines, and Mr. Piluso seconded the motion. During the ensuing discussion, it was noted that implementation of the timelines would be coordinated by staff. The motion passed unanimously.

Mr. Grumet referred Executive Committee members to the proposed engagement letter with lobbyist Hodgson Russ, LLP (Fred Jacobs, Partner). He then presented a summary of the Society’s relationship with the firm, noting that Hodgson Russ had represented the Society in connection with accountancy legislation and other matters before the New York State Legislature for several years.

Mr. Falbo moved to approve the continued engagement of Hodgson Russ. Mr. Ellis seconded the motion. The motion passed unanimously.

Mr. Sinegal presented an overview of a proposed contract between the NYSSCPA and Sheridan Printing Company Inc. (“Sheridan”). He said that expenditures under the proposed contract were anticipated to exceed $100,000 over the initial contract term, thus requiring Executive Committee review and approval under the Society's contract approval policy. He also noted that the contract locked in pricing for the three-year contract term; however, the agreement was not exclusive. The NYSSCPA could therefore engage alternative printers should the pricing become less favorable in the marketplace during the contract term.

Ms. Barry noted that Sheridan had been printing and distributing NYSSCPA and FAE brochures and other print materials for a number of years. She said that bids from the Wall Street Group Inc., Tanaseyert, and Marlborough Press were solicited for this service; however, Sheridan’s competitive pricing, exceptional service and longstanding history with the NYSSCPA made them the more attractive company.

Ms. Seidman moved to approve the contract and Ms. Jensen seconded the motion. The motion passed unanimously. Mr. Lauchert and Ms. Barnickel were not present for the vote.

Mr. Pape presented the Membership Report as of November 14, 2007, which included 339 new members (including 50 CPA candidate and 122 student associate members), 5 reinstatements, 54 resignations and 20 deaths. These changes reflected a total membership of 29,461 as compared with 29,813 at approximately the same time the previous year.

Mr. Piluso moved to approve the Membership Report, and Ms. Barnickel seconded the motion. The motion passed unanimously.