Andrew M. Eassa, Vice President
Nancy A. Kirby

05– B – 0
Call to Order

05 – B – 1
Minutes

a. Approval of Minutes of February 10, 2005 Meeting

President Kearney asked Executive Committee members if they had any amendments to the minutes of the February 10, 2005 Executive Committee meeting. There being none, Mr. Piluso moved to approve the minutes as presented and President-elect Langowski seconded the motion. The motion passed unanimously. Messrs. Berlant and Nowicki did not participate in the vote.

b. Minutes of April 21, 2005 Board of Director Meeting for Information Only

President Kearney referred the committee to the draft minutes of the April 21, 2005 Board of Directors meeting for its information.

05 – B – 2
President’s Report

a. AICPA Council Meeting

President Kearney reported on several topics anticipated to be hot issues at the upcoming AICPA Council Meeting in Washington D.C., including peer review, peer review transparency and private company financial statements. He noted that the AICPA was not expected to vote on peer review transparency because many participating members felt the peer review system itself needed to fixed. He added that the AICPA had appointed a task force to look into ways of addressing problems in the peer review system.

b. Annual Dinner Update

Mr. Schmelkin gave an update on the Society’s Annual Dinner at the Marriott Marquis, which was scheduled to draw approximately 200 persons that evening. President Kearney encouraged all Executive Committee members to attend this important event.

c. FAE Update

President Kearney reported that the FAE Trustees elected five new Trustees for the 2005-2006 year from a list of ten nominees recommended by the Society Board. Elected were Arthur Bloom, Elliot L. Hendler and Scott J. Jaffee, who each received three-year terms; Peter K. Maier, who received a two-year term; and D. Edward Martin who received a one-year term. President Kearney noted that FAE’s officers would be elected from amongst the 2005-2006 Trustees at their first meeting in the new year. An orientation for the five newly-elected Trustees would be held the following Tuesday.

President Kearney reported that the FAE Trustees unanimously approved a draft affiliation agreement which contractually outlines the obligations and expectations of FAE’s and NYSSCPA’s relationship on a number of financial, administrative, staffing and other logistical and legal issues. This agreement would be brought to the 2005-2006 NYSSCPA Executive Committee and Board for their review and deliberation. In addition, FAE unanimously approved a revised corporate purpose.

President Kearney reported that the FAE Trustees unanimously approved a contract for audio-visual services under the FAE contract approval policy because the anticipated yearly expenditures under the contract exceeded a $100,000 approval threshold.

President Kearney then called upon Mr. Schmelkin to give an overview of FAE conference highlights. Mr. Schmelkin noted that the month of May had several successes including the Business Valuation Conference, which garnered over 160 attendees, and the Broker Dealer Conference which had 212 registrants. In addition, Mr. Schmelkin noted that the Estate Administration Conference appeared to be on budget and that enrollment in the Entertainment & Sports Conference was strong.

a. Quality Enhancement Policy Committee Update

President-elect Langowski reported that the Quality Enhancement Policy Committee (QEPC) would be assembling a “thought piece” based on its discussions during the year regarding professional quality.

b. COAP Fundraising Update

President-elect Langowski announced that the commemorative journal for the annual Board dinner raised approximately $85,000 in advertising revenue, all going towards funding of the Career Opportunities in the Accounting Profession program.

c. 2005 Annual Leadership Conference

President-elect Langowski reminded Executive Committee members that the 2005 Annual Leadership Conference would be returning to the Sagamore Resort, in Bolton Landing, New York from July 10 to July 12. He announced that the keynote speaker would be New York State Assemblyman Richard Brodsky.

a. Reports on Chapters

Vice President Doran gave a report on the last chapter presidents’ conference call of the 2004-2005 year. She noted that the participating chapter presidents were supportive of the membership dues increase approved by the Board in April.

President Kearney thanked Vice Presidents Doran and Eassa for their service as officers during the 2004-2005 year.

b. Recent Society Comments

Mr. Berlant reported that the Society had issued the following sets of comments as follows:

• Comments submitted to the AICPA by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Mark Mycio, regarding Proposed Statement on Auditing Standards, “Defining Professional Requirements in Statements on Auditing Standards” and Proposed Statement for Attestation Engagements, “Defining Professional Standards for Attestation Engagements”; dated May 11, 2005;
• Comments submitted to the AICPA by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Mark Mycio, regarding Auditing Standards Board Proposed Statement on Auditing Standards: Audit Documentation; dated May 11, 2005; Principal Drafters: Lawrence E. Nalitt, George I. Victor and Robert N. Waxman; and
• Comments submitted to the PCAOB by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Mark Mycio, regarding PCAOB Release No. 2005-002 – Proposed Auditing Standard – Reporting on the Elimination of a Material Weakness; dated March 31, 2005.

Vice President Berlant noted that the Society commented on a broader number of issues during the 2004-2005 year than in previous years, and that the number of committees that issued comments had tripled. He commended the comments’ authors and respective committees for outstanding work.

President Kearney thanked Mr. Berlant for his service as Vice President during the 2004-2005 year.

Financial Statement for Eleven Months Ending April 30, 2005

Treasurer Bloom reported on the financial statement for eleven months ending April 30, 2005, noting that the Society realized an approximately $716,000 increase in net assets and that the statement reflected no major deviations from budget. He anticipated that the Society would finish the fiscal year 2005 better than budget.

Mr. Grumet announced that meetings were scheduled to take place in Washington D.C. with representatives of Forbes and Newsweek magazines regarding the paper developed by the NYSSCPA Committee on Practical Reform for the Tax System, chaired by David A. Lifson. Meetings were also set up with top staff persons working in the offices of U.S. Senator Clinton and Representatives Rangel and Reynolds. The paper had also been submitted to several other government officials.

Mr. Grumet noted that 30 reporters were expected to attend the Society-sponsored course on how to understand financial statements to be held in Washington D.C. He noted that the course would be taught by former Society President Nancy Newman-Limata and incoming Treasurer Neville Grusd.

Mr. Grumet reported that the New York State Senate Committee on Education and the Professions unanimously sent Society-sponsored legislation to the floor for debate, and that the Assembly was expected to introduce its own bill. Mr. Grumet stated that the Assembly bill was not anticipated to include the 120 hours/three years CPE requirement, but would include language on peer review.

Mr. Grumet reported that a handbook on how to perform school district audits had been developed by the State Education Department (SED) in conjunction with the Society’s public schools committee and the New York State Comptroller’s Office. He stated that he had sent a letter to the SED with a copy to the Comptroller’s Office suggesting that the latest update of the handbook not be released until the legislature finished its consideration of school district auditing. Mr. Grumet’s letter further indicated that if SED chose to go forward with the update, the Society did not wish to be listed as a co-sponsor of the handbook.

Mr. Grumet announced that several awards were given to reporters for excellence in financial journalism at a Society luncheon.

Mr. Grumet reported that $500,000 of the Society’s security deposit on its former office location on 5th Avenue had been received from the landlord, and that the remainder of approximately $90,000 plus interest was anticipated shortly.

Mr. Grumet reported that member dues notices had gone out later than usual this year because Board approval was required before the Society could implement a dues increase. He noted that approximately $180,000 in dues revenue had been received to date.

a. Committees Update

Secretary Nowicki reported on Society Committees and plans to develop new committee divisions in the areas of student placement and recruiting, as well as public and government oversight.

b. Report of the Nominating Committee

Secretary Nowicki reminded Executive Committee members that the following individuals were nominated for, and expected to be elected that evening to, the NYSSCPA positions set opposite their names:

President Kearney thanked Secretary Nowicki for his hard work as Secretary during the 2004-2005 year, noting that his term as Secretary was expected to continue through the 2005-2006 fiscal year.

Paul Warner, Accounting and Auditing Division
Maryann Winters, Tax Division
Ed Halas, Industry Division
Marty Leventhal, Consulting Services
Phil Chenok, Future of the Profession Division

The presentations were well-received.

a. A&A Professional Values

A discussion ensued with respect to the Accounting and Auditing Professional Values Committee’s action plan and its potential for overlap with the Quality Enhancement Policy Committee. President-elect Langowski suggested that committee’s name be changed to the Professional Compliance Committee, and the Executive Committee agreed by consensus.

President-elect Langowski then moved to defer approval of the newly-renamed Professional Compliance Committee’s action plan until the potential for overlap between ethics and compliance with the Quality Enhancement Policy Committee can be fleshed out at the leadership conference. Secretary Nowicki seconded the motion. The motion passed unanimously. Messrs. Grusd, Jones and Berlant did not participate in the vote.

b. CPA Exam Task Force

President-elect Langowski noted that he had appointed Robert Kawa of Le Moyne College to chair the CPA Exam Task Force, which was charged with reviewing, commenting and acting as a resource to membership on issues surrounding the Uniform CPA Examination and to liaise with relevant agencies and organizations. After a brief discussion, the CPA Exam Task Force action plan was approved by consensus.

Secretary Nowicki noted that he had spoken with the Public Relations Committee regarding the need for direct Executive Committee control over public relations through the Society’s communications department. A brief discussion ensued.

Secretary Nowicki then moved to discontinue the Public Relations Committee, and Mr. Berlant seconded the motion. The motion passed unanimously. Mr. Piluso did not participate in the vote.

Mr. Pape presented the Membership Report which included 168 new members (including 35 new associate members), 12 reinstatements, 92 deaths, and 3 resignations. These changes reflected a total membership of 30,070 as of May 18, 2005, as compared with 29,544 at approximately the same time the previous year. Secretary Nowicki suggested the stratification of data at certain breakpoints, and staff agreed to implement the suggestion.

Mr. Cohen moved to approve the Membership Report, and President-elect Langowski seconded the motion. The motion passed unanimously Messrs. Grusd, Jones and Berlant did not participate in the vote.

Mr. Sinegal stated that staff had negotiated a three-year renewal contract with Cadmus Specialty Publications for the purposes of printing and distributing The CPA Journal. Although the expiring contract would continue automatically year-to-year, the newly-drafted renewal contract offered discounted publication costs for a more competitive relationship when compared to similar vendors.

It was noted that staff had sought competitive bids from other companies, neither of which resulted in significant savings over what Cadmus was offering under the renewal contract.

Mr. Sinegal noted that Evergreen Printing and Publishing Co., Inc. (“Evergreen”) had been responsible for the printing and distribution of “The Trusted Professional” for a number of years, and staff thought it prudent that a written agreement be agreed upon so that the parties’ respective interests were afforded more protection. The draft contract presented was pending final agreement on wording with Evergreen.

It was noted that staff was limited in its options for competitive quotes due to the relatively small size and distribution of the newspaper and the relative lack of vendor interest. One viable company offered a quote which was substantially more than the Evergreen contract.

President-elect Langowski moved to approve both contracts and Ms. Bailey-Browne seconded the motion. The motion passed unanimously. Messrs. Grusd, Jones and Berlant did not participate in the vote.