NYSSCPA Responds to Spitzer’s Accounting Reform Proposals

NEW YORK -- The New York State Society of Certified Public Accountant’s (NYSSCPA) Executive Committee on Tuesday sent a letter to New York State Attorney General Eliot Spitzer that provided him with specific comments on his proposed legislation to better regulate CPAs in New York State, and ultimately stated that the Society could not support the legislation in its current form.

Click here to read the full NYSSCPA response to Spitzer’s proposed legislation. Click here to read the attorney general’s proposed legislation (Adobe Acrobat required).

The letter by NYSSCPA President Jo Ann Golden informs the attorney general that although his proposed legislation is helpful in broadening the discussion about accounting reform, it does contain provisions that would have large, negative economic impacts.

“The proposed legislation you have circulated is helpful in broadening the discussion, but many of its provisions would have large, negative economic impacts, particularly on private business, non-profits, local governments, and government agencies, leading to significant loss of jobs for these entities and their CPA firms,” the letter said.

The letter stated that the NYSSCPA cannot support the proposed legislation at this time because it “either does not adequately deal with existing problems in some cases or completely misses the mark in others.”

The letter specifically mentions that the attorney general’s proposed legislation does not appropriately deal with the following:

• The proposed legislation incorporates the Sarbanes-Oxley Act of 2002 in a way that treats private businesses, non-profits, government agencies, and their CPAs as if they have the same problems as SEC registrants.
• Most of the instances of professional misconduct in the proposed legislation are already covered in the general law of the professions.
• The proposed legislation inappropriately allows a regulatory body to discipline CPAs without conviction of a crime, thereby singling out CPAs for a denial of due process accorded to the 38 other professions regulated by the State Education Law.
• Many of the reportable events in the proposed legislation are either inappropriate or thwart public policy, as they tie up the court system with cases that could otherwise be settled..
• The proposed legislation fails to provide an adequate mechanism for enforcement, nor does it provide enough of a public voice.

The letter also pointed out how New York state’s accounting laws are “antiquated,” and details how the proposed legislation does not address “substantial updates” as comprehensively as the Society’s proposal. Here are several examples:

• The Society’s proposal calls for more public members on the state board for public accountancy.
• The Society’s approach to defining the practice of public accountancy extends to more CPAs and provides essential regulatory provisions, such as mandatory continuing professional education for all CPAs.
• The Society’s proposal dedicates resources to the state board for public accountancy to regulate CPAs for their exclusive services and to discipline them for breaching ethical guidelines in services they share on a non-exclusive basis with other professions and businesses.
• The Society’s proposal completely updates disciplinary due process.
• The Society’s proposal recognizes that clients’ changing business practices have made necessary temporary practice permits for CPAs similar to those already given architects and engineers.
• The Society’s proposal includes an expanded definition of the scope of professional accountancy practice and, as a necessary corollary, a commensurate expansion of the educational and experience requirements for licensure.

-- NYSSCPA.org News Staff

Posted on 03/14/03