EC07 – B – 0
Call to Order

EC07 – B – 1
Minutes

a. Approval of the Minutes of the February 7, 2007, Executive Committee Meeting

Mr. Riley asked if there were any comments or corrections to the draft minutes of the February 7, 2007, Executive Committee meeting. There being none, Mr. Sohr moved to approve the minutes as written, and Mr. Stubbs seconded the motion. The motion passed unanimously.

b. Minutes of April 5, 2007, Board of Directors Meeting for Information Only

Mr. Riley referred Executive Committee members to the draft minutes of the April 5, 2007, Board of Directors meeting, which were distributed with the agenda for information only.

a. AICPA Update

President Riley noted that the Society’s current relationship with the AICPA was good. He mentioned that the AICPA had issued an exposure draft on reforms to the peer review program to increase transparency. He said the Peer Review Committee, was currently developing comments which would be reviewed by the Quality Enhancement Policy Committee (QEPC) upon completion.

b. FAE Update (including COAP Fundraising Update)

Mr. Riley reported that FAE had had a good year and that it appeared FAE might not need the entire grant budgeted for it by the Society. This would become clear one way or the other after the close of the fiscal year.

Regarding FAE governance, Mr. Woehlke noted that the FAE trustees had initiated a nominating committee process to facilitate the election of their officers. A meeting of the FAE trustees via conference call was planned for early June to elect FAE officers and address some routine matters.

c. Recommendation to Confer with Officers’ Respective Successors

Mr. Riley asked that each of the officers confer with their successors to facilitate transition to the new fiscal year’s leadership.

a. Quality Enhancement Policy Committee

President-elect Lifson reported that the Quality Enhancement Policy Committee (QEPC) had wrapped up its business for the committee year on the previous day. The committee was working on two education thought papers, one on pre-service education and the other on in-service education. The timing for completion of the in-service paper would be dependent on a marketing study that was commissioned by the FAE Trustees. However, the pre-service education thought paper was reported to be proceeding apace. There had been significant input from practitioners and academics on the paper, which was to receive some additional commentary from a task force subcommittee on professors.

Mr. Lifson had established a task force to focus on implementation of the peer review white paper, showing sensitivity to the needs of the membership. The members of the task force were: Robert E. Sohr (chair), Barbara S. Dwyer, Mary A. Kimball, Scott Levy, David J. Moynihan, Thomas E. Riley, and Liren Wei

Mr. Sohr added that the task force would be exploring the practicality of the “pool concept” and how to accomplish greater transparency.

Mr. Lifson suggested that the task force also address how to educate the reviewed firms as to the proper function of the peer reviewer in the process. Mr. Sohr echoed this comment by noting that the peer reviewer should not become a part of the reviewed firm’s quality control system and should not participate in the setting of quality controls. He added that the task force would be exploring the concepts of transparency and progressive discipline and the tension between those concepts on the one hand and maintaining the educational flavor of the program on the other.

b. 2007 Leadership Conference

Mr. Lifson provided an update on the 2007 Leadership Conference scheduled at the Gideon Putnam Resort in Saratoga Springs, New York on July 8 - 10. He announced that the theme of the conference would be “Expectation Gaps” and how to address them. There would be something for everyone in the profession. He and staff had gone to great lengths to make the leadership conference both fun and entertaining.

The dinner this year would be held off-location at the Saratoga National Golf Club. The keynote speaker would be eminent psychiatrist Dr. Kerry Solkowitz. There would be two board orientations this year, one for the new board members and a second for the full board. Mr. Lifson noted that he had requested that the FAE Trustees conduct their meeting open to the membership and they had agreed. He closed by noting that he was soliciting board members to serve as facilitators in the committee and chapter breakout meetings as well as for the expectation gap break-outs.

c. Preview of 2007-2008 Committee Appointments

Mr. Lifson noted that he had obtained agreement from the following individuals to serve as chairs of the operations division committees and task forces noted next to their names:

Michele Levine      Audit Committee
Tom Riley             Legislative Task Force

He noted that the QEPC chair would be announced later and that, per the bylaws, Dick Piluso would be chairing the Finance Committee. Other appointments to the Operations Division committees and task forces would be announced at a future meeting.

Mr. Lifson also noted that he intended to thin out the ranks of the committees somewhat based on committee member attendance, but that if a committee chairperson indicated a nonattending member was otherwise contributing to the committee, for example by participating in conference planning or writing articles for Society publications, Mr. Lifson would nevertheless reappoint the member.

d. 2007-2008 Master List of Meeting Dates

Mr. Lifson distributed the proposed list of meeting dates for the Board and the Executive Committee which would be voted upon by the Board during its June 1 conference call.

a. Report on Chapters

Vice President Fierstein reported that the most recent chapter presidents’ conference call included the chapter presidents-elect and also the Society vice president designees, who Mr. Lifson had indicated would likely be appointed to the chapter vice president roles. Ms. Fierstein noted that these calls were held throughout the year and most of the chapters found them very beneficial venues to share information. Two or three chapters, however, failed to participate on a regular basis. She also noted that one or two chapters appeared to be less active than was optimal. One, for instance, was having great difficulty with succession planning in that they were recycling leadership.

Mr. Riley thanked Ms. Fierstein and Mr. Piluso for their excellent efforts over the year in assisting the chapters to better serve the membership.

b. Recent Society Comments

Vice President Sohr reported that since the April Board meeting the following comments had been submitted:

• 5/16/07 – Comments to the Public Company Accounting Oversight Board on Release No. 2007-002 – a concept release concerning Scope Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles. Prepared by the Auditing Standards and Procedures Committee, Robert Berliner, chair. Principal drafters Robert Berliner and Robert Waxman.
• 5/16/07 – Comments to the Public Company Accounting Oversight Board on Release No. 2007-003 – a Proposed Auditing Standard – Evaluating Consistency of Financial Statements and Proposed Amendments to Interim Auditing Standards. Prepared by the Auditing Standards and Procedures Committee, Robert Berliner, chair. Principal drafter Robert Berliner.
• 5/15/07 – Comments to AICPA and NASBA on proposed revisions to AICPA/NASBA Uniform Accountancy Act Sections 23, 7, and 14. Thomas E. Riley, principal drafter.
• 4/16/07– Comments to FASB in response to their invitation to comment on the need, if any, for valuation guidance in financial reporting, including implementation guidance, specificity of valuation guidance, and whether FASB or another organization should be involved in providing guidance. Prepared by the Financial Accounting Standards Committee, Margaret Wood, chair. Principal drafters Robert Dyson, Roseanne Farley, Sharon Sabba Fierstein, and Margaret Wood.
• 4/6/07 – Comments in response to IRS Notice 2007-21 requesting comment in connection with a study being conducted by Treasury and IRS on the organization and operation of donor advised funds and supporting organizations. Prepared by the Exempt Organizations Committee, Paul Hammerschmidt chair. Principal drafters Martin S. Cantor and Paul Hammerschmidt.

Mr. Sohr noted that two additional comments projects were in the works, which meant that the Society was on schedule to match the previous year for record number of comments submitted

President Riley commended the authors and committees for their work. He added a special commendation to Mr. Sohr for his Herculean efforts as the vice president for professional issues.

Financial Statements for the Ten Months Ending March 31, 2007

In Treasurer Grusd’s absence, Mr. Riley asked Acting Controller Suvro C.K. Banerjee to report on the financial statements for the ten months ending March 31, 2007. Mr. Banerjee noted unrestricted net income of $476,000, which was approximately $85,000 under budget and $146,000 less than reported at the same time last year.

Mr. Banerjee was asked to clarify that the 2006 numbers included a contribution from the Society to FAE of $486,000. He noted that there had not yet been a contribution to FAE in fiscal year ending May 31, 2007; but reminded the Executive Committee that $491,579 had been budgeted as a contribution to FAE for the current fiscal year. Mr. Banerjee then presented what the 2006 numbers would have been had there been no transfer from the Society to FAE at that time to provide a more parallel comparison between the two years. Under this set of circumstances, the Society’s gross profit was under budget by $152,000; and under the fiscal year 2006 amount by $30,000. Under this same scenario, FAE gross profit exceeded budget by $3,000 and exceeded fiscal year 2006 by $275,000.

a. State Board of Public Accountancy

Mr. Grumet briefed the Executive Committee on recent proposed regulatory revisions that would move the experience requirement in New York closer to that in the Uniform Accountancy Act.

b. Legislative Update

Mr. Grumet briefed the Executive Committee on developments regarding proposed legislation in Albany.

c. Member Benefits Update

Mr. Grumet referred the Executive Committee to the materials accompanying their agenda for a member benefits update.

d. Other Matters

Mr. Grumet noted that dues collections were well ahead of the prior year. There was some discussion of the trade show and how attendance numbers were down.  

Mr. Pape presented the Membership Report as of May 17, 2007 which included 200 new members (including 27 CPA candidate and 79 student associate members), 13 reinstatements, 5 resignations and 31 deaths. These changes reflected a total membership of 28,816 as compared with 29,327 at approximately the same time the previous year.

Ms. Fierstein moved to approve the Membership Report, and Mr. Piluso seconded the motion. After discussion, the motion passed unanimously.

RESOLVED, that the Executive Director’s employment contract with the NYSSCPA should be amended to reflect a single, four-year term ending May 31, 2010. RESOLVED, FURTHER, that the president is authorized and directed to sign any documents necessary to carry out the intent of this motion.

President Riley declared the meeting adjourned at 2:15 p.m.