State Senate Holds Second Round of Hearings on Enron

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State Senate Holds Second Round of Hearings on Enron

ALBANY, N.Y. -- A second round of state senate hearings on the independence of CPAs in the post-Enron era were held on Tuesday in Albany, N.Y.

State Sen. Kenneth P. LaValle called the hearings, which focused on reviewing legislation that had been introduced in Albany in response to Enron, particularly LaValle's bill S.6269. A first round of hearings took place on Feb. 6 in New York City, and Sen. LaValle has announced plans to hold a third hearing.

Two members of the New York State Society of Certified Public Accountant (NYSSCPA)'s board of directors, Kevin McCoy and Katharine Doran, and former NYSSCPA President, Marilyn Pendergast testified. All three opposed LaValle's proposed restrictions on auditors of any state/local retirement system or state agency, department, bureau, authority or instrumentality from:

Prohibiting non-audit services to audited entity,
Mandatory auditor rotation after 7 years,
Prohibiting employment of the auditor with the auditing entity for 2 years after the most recent audit.

They each described adverse impacts of these prohibitions on small and medium-sized practitioners, as well as the increased costs to clients who rely on CPAs for an array of taxation and consulting services.

For more on the New York State Senate Hearings and to read complete testimonies, visit the Briefing Book on Enron.

Testimonies

-- NYSSCPA.org News Staff