EC10 - B - 0
Call to Order

EC10 - B - 1
Minutes

a–c. Approval of Minutes of November 17, 2009, Executive Committee Meeting; December 3, 2009, Executive Committee Meeting; and January 25, 2010, Executive Committee Conference Call

Mr. Moynihan asked if members had any changes or comments to the minutes of the November 17, 2009, and December 3, 2009, executive committee meetings and the January 25, 2010, executive committee conference call. Mr. Herman moved to approve the minutes of the November 17, 2009, and December 3, 2009, executive committee meetings and the January 25, 2010, executive committee conference call, and Mr. Stubbs seconded the motion. After discussion, the motion passed. Mr. Wei abstained from voting to approve the minutes of the December 3, 2009, executive committee meeting and the minutes of the January 25, 2010, executive committee conference call. Mr. Adair abstained from voting to approve the minutes of the December 3, 2009, executive committee meeting minutes. There was no objection to the motion.

d-e. Draft Minutes of December 3, 2009, and January 25, 2010 Board of Directors’ Meetings (for information only)

Mr. Moynihan noted that the draft December 3, 2009, and January 25, 2010, Board of Directors’ meeting minutes were provided for the Executive Committee’s information.

Mr. Moynihan began the president's report by commending Ms. Barry on the excellent job she had been doing during Mr. Grumet's leave of absence.

a. AICPA Update

Ms. Barry noted that the AICPA would be holding Council meetings in March and May 2010 and that, as a result of the Board’s mobility resolution, the AICPA had reissued the CPA Mobility Legislative Activity map, indicating the change in New York’s status. She mentioned that the U.S. Senate Banking Committee had planned on examining financial re-regulations, and that New York Senator Charles Schumer was on the committee. The AICPA would be looking for state societies to contact their legislators with regard to the aforementioned issue as early as March 2010.

Mr. Moynihan noted that the AICPA was pleased that the Society’s Board of Directors had recently approved a draft resolution on the issue of mobility as defined by Section 23 of the Uniform Accountancy Act. He also added that Ms. Carol L. Lapidus would be serving on Council, should the membership confirm the recent nomination of Richard E. Piluso as the Society’s President-elect during the upcoming election. Mr. Piluso was in the first year of his current 3-year term as an elected AICPA Council member ending in 2012. As a result, Ms. Lapidus, the alternate selected in December 2009 by the Society’s Board, would be submitted as the Society’s recommendation for the 3-year term on AICPA Council reserved each year for the President-elect, and Mr. Piluso would complete his current term.

b. Chapter Town Hall Meetings Update

Mr. Moynihan announced that the FY2009/2010 chapter town hall meetings had been completed as of February 7, 2010.

c. FAE Update

Ms. Barry referred members to the FAE Report in the agenda packet previously provided. She noted that FAE’s year-to-date results had been running according to budget, in terms of financial and registration results.

d. “Quality Matters” Speaking Engagements

Mr. Moynihan mentioned that he would be speaking on February 16, 2010, at the Bank of America Tower in Manhattan, organized by the Manhattan/Bronx Chapter. He would also be speaking in front of the Association of Towns of the State of New York earlier the same day. He had also spoken to the United Way in January 2010 in Buffalo. He noted that he would be speaking at the Financial Management Institute in May 2010.

a. Quality Enhancement Policy Committee

Ms. Wood noted that the QEPC would be meeting during the week of February 15, 2010, and would continue to discuss the issues related to the white paper. She noted that there would be a scheduling conflict with the committee’s March meeting date, due to the AICPA Council meeting.

b. 2010 Leadership Conference

Ms. Wood stated that the 2010 Leadership Conference to be held at Turning Stone Resort and Casino would not feature a guest speaker. Instead, she had planned to have a panel of speakers, which would include certain Society officers. The theme of the discussion would center on the idea of the chapters and committees working together.

She noted that the Board of Directors’ meeting would be held between 8:00 a.m. and 2:00 p.m. The open session would be between 9:00 a.m. and 12:00 noon, and an executive session would be included.

Ms. Wood added that there would be an Executive Committee meeting on Sunday, July 11, 2010.

a. Chapters

Mr. Meinberg noted that a presidents’ call had taken place recently and it was productive. Mr. Jay H. Goldberg, Chair of the Accounting & Review Services Committee, had made a presentation during the call. Mr. Meinberg mentioned that the chapter presidents were becoming more aware that information and resources were available to them and would be relaying this knowledge back to their respective chapters. He noted that he and Mr. Wei would be preparing a summary of “lessons learned” and “good to know” comments from their experience at the presidents’ calls prior to the 2010 Annual Leadership Conference.

Mr. Wei added that he had suggested that the chapter vice presidents receive the minutes of the chapter leadership meetings. He also requested an improvement of the budget process related to the chapters.

b. Recent Society Comments

Vice President C. Daniel Stubbs, Jr., noted that 10 more comment letters had been issued since the December 3, 2009, Board of Directors’ meeting, bringing the total number of letters released in the fiscal year to 25. Since the November 17, 2009, Executive Committee meeting, the following 10 comment letters had been submitted:

• 2/8/10 - Comments to the FASB on a Proposed Accounting Standards Update: Receivables (Topic 310) – Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset. Prepared by the Financial Accounting Standards Committee, chaired by Mr. Mark Mycio. Principal drafter was Mr. John McEnerney.
• 2/8/10 - Comments to the IRS on proposed regulations relating to reporting sales of securities by brokers and determining the basis of securities. The regulations would require brokers, when reporting securities sales to the IRS, to include the customer’s adjusted basis and to classify any gain or loss as long-term or short-term. Prepared by the Taxation of Individuals Committee, chaired by Ms. Amy M. Vega. Principal drafters were Messrs. Scott M. Cheslowitz and Jonathan M. Horn, and Ms. Amy M. Vega.
• 1/13/10 - Comments on an exposure draft of proposed statements on auditing standards. The proposed SASs represent the redrafting of SAS No. 85 and paragraphs .03–.10 of SAS No. 84 to apply the Auditing Standards Board’s clarity drafting conventions and to converge with International Standards on Auditing (ISA). Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafter included Mr. John F. Georger, Jr.
• 1/13/10 - Comments on an exposure draft of proposed statements on auditing standards that would supersede SAS No. 58, No. 87, No. 1 section 410, and No. 32. The proposed SASs represent the redrafting of the preceding SAS numbers to apply the Auditing Standards Board’s clarity drafting conventions and to converge with International Standards on Auditing. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafter included Mr. Fred R. Goldstein.
• 12/29/09 - Comments on an exposure draft of two proposed statements on auditing standards, Special Considerations – Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks, and Special Considerations – Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement. These proposed SASs would supersede SAS No. 1 and SAS No. 62, and represent a redrafting to apply ASB’s clarity drafting conventions and converge with International Standards on Auditing. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafter included Mr. Stephen P. Tuffy.
• 12/29/09 - Comments on an exposure draft of a proposed statement on auditing standards that would supersede paragraphs 19–21 of SAS No. 62, Special Reports, and represents the redrafting of certain paragraphs of SAS No. 62 to apply the Auditing Standards Board’s clarity drafting conventions. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafters included Messrs. Robert W. Berliner and Robert N. Waxman.
• 12/16/09 - Comments to the Financial Crimes Enforcement Network agency (FinCEN) of the Treasury Department on FinCEN’s proposed rulemaking to amend the relevant Bank Secrecy Act information sharing rules to allow certain foreign law enforcement agencies—and state and local law enforcement agencies—to submit requests for information to financial institutions. Prepared by the Anti Money Laundering and Counter Terrorist Financing Committee, chair by Mr. Robert Goecks. Principal drafters included Messrs. Stephen K. Doka, Alan W. Greenfield, Tom Levanti (Advisor), and Richard M. Morris (Advisor), and Ms. Linda Silvestri.
• 12/15/09 - Comments on an exposure draft of a proposed statement on auditing standards. This proposed SAS would supersede the “Related Parties” section of SAS No. 45, Omnibus Statement on Auditing Standards, and represents a redrafting to apply the Auditing Standards Board’s clarity drafting conventions and to converge with International Standards on Auditing. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafter included Mr. Mark Mycio.
• 12/15/09 - Comments on an exposure draft of a proposed statement on auditing standards on audits of group financial statements. This proposed SAS would supersede SAS No. 1, section 543, “Part of Audit Performed by Other Independent Auditors,” and was drafted to apply the Auditing Standards Board’s clarity conventions to SAS No. 1 and converge with ISA 600. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafters included Messrs. Kamel W. Abouchacra and Lawrence E. Nalitt.
• 12/3/09 - Comments on an exposure draft of a proposed statement on auditing standards that would supersede SAS No. 57, Auditing Accounting Estimates, and SAS No. 101, Auditing Fair Value Measurements and Disclosures, and represents a redrafting to apply the Auditing Standards Board’s clarity drafting conventions and to converge with International Standards on Auditing. Prepared by the Auditing Standards Committee, chaired by Mr. Robert N. Waxman. Principal drafters included members of the Auditing Standards Committee.

c. Committees

Mr. Lesser mentioned that the Society had been updating the committee operations manual and preparing for the new committee chair orientation, which would take place during early May. Mr. Lesser noted that the Society had been working on posting videos on the website that would market committee activities. He added that, since January 1, 2010, 25 Society members had become new committee members, compared to 21 during the same time one year ago. The newly created Family Office Committee had experienced a good start, although the other newly created committee, the Internal Audit Committee, had not progressed as well.

Ms. Wood noted that the vice chair for a tax committee would not be able to serve as chair during the next fiscal year, and a replacement would be needed. She also added that she had planned to add two additional members to the oversight committee of each division: one liaison for chapters and one liaison for the committee. She would prefer the liaison to be someone other than the current chair of a committee in order to avoid any perceived conflict.

a. Nominating Committee Report

Mr. Falbo noted that the Nominating Committee had met on January 14, 2010, and the slate of the nominated officers and board members for FY2010/2011 was formed. The Society leadership was subsequently informed of the results.

b. Financial Statements for Six Months Ended November 30, 2009

Mr. Payano provided a presentation on the unaudited financial statements of the Society for the 6 months ended November 30, 2009. The Society had experienced a consolidated decrease in net assets of approximately $6,628 during the 6 months ended November 30, 2009.

c. Update on 990s

Mr. Falbo stated that the 990s for the Society and its affiliated entities were sent to the IRS on January 15, 2010. All members of the Board of Directors had previously received the 990s prior to their filing and no comments were received.

d. Status of Agreed-Upon Procedures Engagement

Mr. Payano stated that Loeb & Troper LLP had provided an updated report to the Society. Staff would be reviewing the report and drafting the management response, which would be provided to the Executive Committee, Board of Directors, and Loeb & Troper LLP.

e. Software Financing

Mr. Payano noted that the outstanding balance for the acquisition of Aptify was approximately $200,000. He had held discussions with various banks on a bank loan for this obligation and he would expect further developments over the coming weeks. Mr. Moynihan asked Messrs. Meinberg and Kirkland to work with Messrs. Falbo and Payano to draft a proposal on the Society’s long-term asset financing.

f. Status of Line of Credit

Mr. Payano informed members that Bank of America had approved a $500,000 line of credit for the Society and it would be available for use immediately.

a. Legislative and Regulatory Update

Ms. Barry provided an update on the recent State Board for Public Accountancy meeting at the end of January 2010. The State Board had introduced its new members, including Ms. Priscilla (Penny) Z. Wightman and Milton L. Lawney, a public member who had been the former executive secretary of the NY State Board of Dentistry. Mr. Dan Dustin had provided statistics at the meeting on the huge increase in inquires in relation to the new law. E-mails had increased from approximately 4,400 in 2007 to 10,500 in 2009. Calls had increased from 14,200 to 31,000 during the same period. It was noted that applications for approximately 100 temporary practice permits and 1,350 firm registrations had been received by the Office of the Professions since the effective date of the 2009 New York State Accountancy Reform Law.

Ms. Barry noted that the regulations for quality review were being proposed, and the Office of the Professions would expect the regulations to be finalized and approved by January 2011. Mr. Moynihan added that he would expect the issue of quality review be an agenda item for the 2010 chapter town hall meetings.

Ms. Barry also mentioned that the State Board for Public Accountancy would be discussing the master’s degree legislation at its April 2010 meeting. The State Board for Public Accountancy had also formed an ad hoc committee on professional conduct due to the 2009 New York State Accountancy Reform Law, but there had been no updates yet.

Ms. Barry informed members that Mr. Dennis O’Leary had been analyzing Assemblywoman Deborah J. Glick’s bill on mobility, and an update for the leadership would be forthcoming. Mr. O’Leary had recently spoken to Senator Toby Ann Stavisky’s staff regarding the Society’s position on mobility. Mr. Moynihan added that Assemblyman Sheldon Silver’s current position on mobility was unclear.

b. Member Benefits Program Update

Mr. Pape referred executive committee members to the member benefits program update in the agenda packet previously provided. Mr. Lesser moved to accept the new member benefits enhancements, and Mr. Kirkland seconded the motion. After discussion, the motion passed unanimously with no abstention.

Ms. Wood requested that Mr. Pape report at a future meeting whether the new U.S. healthcare reform law would affect the Society’s healthcare-related affinity programs.

c. Association Management System ? Aptify Update

Mr. Schmelkin noted that staff testing had begun during the week of February 8, 2010, and that three days of intensive training sessions to “train the trainer” had already taken place during the week of February 1, 2010. He expected the “go-live” date for Aptify to be after mid-March, though it was originally planned for the second week of March. Mr. Schmelkin would expect to have further updates on the schedule in the coming week.

During the ensuing discussion with members, Mr. Schmelkin noted that the $43K budgeted for training in the General & Administrative section of the Labor Costs & Overheads of the FY2010/2011 budget would not be necessary and that he would not expect there to be any further capitalization of Aptify-related costs after May 31, 2010.

d. Dues Update

Mr. Pape noted that the Society’s dues collection rate had been at approximately 93% of total billed in April 2009, which was consistent with the same time in 2009.

e. Update on AICPA Doctoral Scholars Program

Ms. Barry referred members to the AICPA Doctoral Scholars Program update in the agenda packet previously provided. It was disclosed to members as part of the requirement for the IRS Form 990.

Mr. Cheslowitz informed members that Mr. Alan D. Kahn, Chair of the Tax Division Oversight Committee, had sent his apologies for not being able to participate. Mr. Cheslowitz provided members with an overview of the activities of the Tax Division Oversight Committee and its tax committees, which included the annual tax conference held at the New York Marriott Marquis at Times Square, and key technical sessions on topics like the Madoff Ponzi scheme, government relief programs, and estate tax planning. The tax division committees had also been active in committee letters and were always looking to expand committee memberships.

Ms. Wood noted that she thought the preelection breakfast session was exemplary and that similar efforts should be encouraged for other committees. She added that the committees within the Tax Division should work more closely with Albany and various advocacy committees.

Mr. Markezin informed members that the Peer Review Committee would like to allow more than one member from the same firm to be members of the committee. The Society had previously restricted the Peer Review Committee and the Professional Ethics Committee from having more than one member from the same firm on the committee. Mr. Markezin indicated that the Peer Review Committee had believed such a request was necessary due to the increasing demand on the workload of the committee and its Review Acceptance Bodies, and also the potential impact of the new law on the new quality review program.

Members deliberated on the various issues pertaining to the request. It was noted that the committee had experienced an increase in workload due to expanding peer review requirements in the areas of the Yellow Book, the Employee Retirement Income Security Act of 1974 (ERISA), stock brokerage businesses, and investment companies. It was mentioned that a second member from the same firm should be limited to firms above a certain size. It was noted in response that the sitting Society president would have the final authority in approving members of the committee and that option was dismissed. Mr. Markezin suggested that a limit of no more than two members from the same firm be considered as an alternative if there was concern of a concentration of members from the same firm.

Mr. Lesser moved to allow more than one, but no more than two, member from the same firm to serve on the Peer Review Committee simultaneously, and Mr. Huttlinger seconded the motion. After discussion, the motion passed by a vote of 11 yeas, one nay, and one abstention.

A discussion of the FY2010/2011 NYSSCPA budget was held. Early in the discussion, Ms. Jensen moved to enter into an executive session on the budget, and Mr. Kirkland seconded the motion. There being no objection, an executive session on the budget was held between 2:25 p.m. and 3:40 p.m. Ms. Barry and Messrs. Schmelkin, Payano, and Yung were invited to attend. At the conclusion of the executive session on the budget, Ms. Wood moved to adjourn the executive session on the budget, and Mr. Stubbs seconded the motion. There being no objection, the executive session on the budget was adjourned.

Mr. Moynihan asked Society staff to prepare a list of additional cuts pertaining to the FY2010/2011 budget, along with descriptions on the potential impact on member services due to each proposed cut. Mr. Moynihan would like to reconvene the Executive Committee for a meeting prior to the March 25, 2010, Board of Directors’ meeting to further discuss the FY2010/2011 budget. Mr. Moynihan thanked the members of the Finance Committee for their work. He added that there would be no need for the Finance Committee to meet further to discuss the FY2010/2011 budget, though the committee should be updated as required.

Mr. Pape presented the membership report, noting that, upon approval, there would be 27,278 members, compared to 27,972 at approximately the same time in the previous year. The new membership approved would include: 252 total applicants, 438 reinstatements and readmissions, 14 deaths, and 26 resignations.

Mr. Pape noted that the Society had recruited approximately twice the number of CPAs in industry at this point in the fiscal year (280) as compared to the same time during the last fiscal year (2009/2010) at 117. He also pointed out that these new CPA members had tended to be licensed longer, and were therefore coming in at a higher dues rate than the typical new member from a public CPA firm.

Mr. Meinberg moved to accept the membership report, and Mr. Lesser seconded the motion. Mr. Pape noted that a recent survey of individuals who had terminated their membership from the Society indicated that they had decided to end their membership mostly due to high membership dues and leaving New York State. After discussion, the motion was approved. Ms. Jensen abstained from the vote.

Mr. Moynihan requested that a report be given at the March 25, 2010, Board of Directors’ meeting regarding the NYSSCPA membership recruitment plans for the upcoming fiscal year.

Messrs. Sacks and Pryba addressed members with the request for approval of two sections of the Professional Ethics Committee Manual.
The background of Section XIV dealing with conflicts of interest was provided. Messrs. Sacks and Pryba indicated that this section was completely rewritten and updated. Mr. Adair moved to approve Section XIV, “Conflicts of Interest,” and Mr. Herman seconded the motion. After discussion, the motion passed unanimously with no abstention.

The background of Section VII dealing with complaints was provided. Messrs. Sacks and Pryba noted that this section had no substantive changes except for the new addition in section B.1.c. Members inquired how the committee would handle the situation when a complaint had been dismissed. Messrs. Sacks and Pryba responded that, in this situation, the complaint would be discussed at the meeting, details would be noted in the executive session—which would not be available for public viewing and no names would be mentioned—and the complainant would receive in writing the decision of the committee. Mr. Wei moved to approve Section VII, “Complaints,” and Mr. Kirkland seconded the motion. After discussion, the motion passed unanimously with no abstention.

Mr. Moynihan noted that the Executive Committee appreciated the work and commitment of Mr. Sacks to the Professional Ethics Committee and the Society due to the importance of the matter for the integrity of the profession.