A8481
STATE OF NEW YORK
________________________________________________________________________
8481
2003-2004 Regular Sessions
IN ASSEMBLY
May 12, 2003
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Farrell,
Tokasz, Canestrari, DiNapoli, Lafayette, Ortiz) -- read once and
referred to the Committee on Higher Education
AN ACT to amend the education law, in relation to the profession of
public accountancy
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. Subdivision 2 of section 6506 of the education law, as
2 added by chapter 987 of the laws of 1971, is amended to read as follows:
3 (2) Establish by rule, high school, preprofessional, professional and
4 other educational qualifications required for licensing in the
5 professions regulated by this title, including the establishment of
6 rules for the licensing of the profession of public accountancy based
7 upon substantial equivalence pursuant to section seventy-four hundred
8 four of this title;
9 § 2. Section 6509 of the education law is amended by adding a new
10 subdivision 13 to read as follows:
11 (13) In the case of certified public accountants licensed under arti-
12 cle one hundred forty-nine of this title, committing an act in another
13 state for which the licensee would be subject to discipline as a certi-
14 fied public accountant in such other state.
15 § 3. Article 149 of the education law, as added by chapter 987 of the
16 laws of 1971, sections 7401, 7402, the opening paragraph of subdivision
17 1 and subdivision 2 of section 7408 as amended by chapter 994 of the
18 laws of 1971, section 7403 as amended by chapter 245 of the laws of
19 1977, paragraph 4 of subdivision 1 of section 7404 as added by chapter
20 988 of the laws of 1971, paragraph 8 of subdivision 1 of section 7404,
21 subdivision 4 of section 7405, subdivision 2 of section 7406, and para-
22 graph e of subdivision 1 of section 7408 as amended by chapter 62 of the
23 laws of 1989 and section 7409 as added by chapter 805 of the laws of
24 1990, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14499-01-3
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1 ARTICLE 149
2 PUBLIC ACCOUNTANCY
3 Section 7400. Introduction.
4 7401. Definition of practice of public accountancy.
5 7402. Practice of public accountancy and use of title "certified
6 public accountant" [or "public accountant"].
7 7403. State board for public accountancy.
8 7404. Requirements for a license as a certified public account-
9 ant.
10 [7405. Requirements for a license as a public accountant.]
11 7406. Limited permits.
12 7407. Exempt persons.
13 7408. Special provisions.
14 7409. Mandatory continuing education.
15 7410. Mandatory review of certified public accountancy firms.
16 § 7400. Introduction. This article applies to the profession of
17 public accountancy. The general provisions for all professions contained
18 in article one hundred thirty of this title apply to this article,
19 except that insofar as the provisions of this article are inconsistent
20 with the provisions of such article one hundred thirty, the provisions
21 of this article shall be controlling.
22 § 7401. Definition of practice of public accountancy. The practice of
23 the profession of public accountancy is defined as [holding one's self
24 out to the public, in consideration of compensation received or to be
25 received, offering to perform or performing for other persons, services
26 which involve signing, delivering or issuing or causing to be signed,
27 delivered or issued any financial, accounting or related statement or
28 any opinion on, report on, or certificate to such statement if, by
29 reason of the signature, or the stationery or wording employed, or
30 otherwise, it is indicated or implied that the practitioner has acted or
31 is acting, in relation to said financial, accounting or related state-
32 ment, or reporting as an independent accountant or auditor or as an
33 individual having or purporting to have expert knowledge in accounting
34 or auditing.] offering to perform or performing for the public one or
35 more of the following services:
36 1. any audit to be performed in accordance with the generally accepted
37 auditing standards or other similar standards developed by a recognized
38 international or national accountancy organization, approved by the
39 department that establishes auditing standards;
40 2. any review of a financial statement or compilation of a financial
41 statement to be performed in accordance with standards developed by a
42 recognized international or national accountancy organization, approved
43 by the department that establishes such accounting principles; and
44 3. any attestation engagements to be performed in accordance with
45 attestation standards developed by a recognized international or
46 national accountancy organization, approved by the department that
47 establishes such accounting principles.
48 § 7402. Practice of public accountancy and use of title "certified
49 public accountant" [or "public accountant"]. 1. Only a person licensed
50 or otherwise authorized to practice under this article shall [practice
51 public accountancy and] use the title "certified public accountant" or
52 the designation ["C.P.A." or "public accountant"] "CPA" or any other
53 derivative or designation provided in section seventy-four hundred eight
54 of this article.
55 2. Only a certified public accountant or CPA shall engage in the prac-
56 tice of public accountancy, as defined in section seventy-four hundred
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1 one of this article, provided that such person may engage in such prac-
2 tice only in a firm registered pursuant to section seventy-four hundred
3 eight of this article.
4 § 7403. State board for public accountancy. A state board for public
5 accountancy shall be appointed by the board of regents on recommendation
6 of the commissioner for the purpose of assisting the board of regents
7 and the department on matters of professional licensing and professional
8 conduct in accordance with section sixty-five hundred eight of this
9 title. The board shall be composed of not less than twenty [licensed
10 accountants, not less than fifteen of whom shall be licensed as] certi-
11 fied public accountants in this state[, and the board should be kept in
12 such proportion if it is ever increased]. An executive secretary to the
13 board shall be appointed by the board of regents on recommendation of
14 the commissioner and shall be a certified public accountant licensed in
15 this state.
16 § 7404. Requirements for a license as a certified public accountant.
17 1. To qualify for a license as a certified public accountant, an appli-
18 cant shall fulfill the following requirements:
19 a. (1) Application: file an application with the department;
20 (2) Education: have (i) for any applicant who applies for licensure
21 prior to August first, two thousand nine, received an education, includ-
22 ing a bachelor's or higher degree based on a program in accountancy, in
23 accordance with the commissioner's regulations;
24 (ii) for any applicant who applies for licensure on or after August
25 first, two thousand nine, received an education of at least one hundred
26 fifty semester hours of college education including a baccalaureate or
27 higher degree conferred by a college acceptable to the department based
28 on a program that includes an accounting concentration or its equiv-
29 alent, as determined by the department;
30 (3) Experience: have (i) for any applicant who applies for licensure
31 prior to August first, two thousand nine, experience satisfactory to the
32 board and in accordance with the commissioner's regulations providing
33 any type of services or advice using accounting, attest, management
34 advisory, financial advisory, tax or consulting skills. The experience
35 may include employment in private sector, government, academia or public
36 practice and shall be verified by a certified public accountant in good
37 standing licensed in this state;
38 (ii) for any applicant who applies for licensure on or after August
39 first, two thousand eight, one year's experience satisfactory to the
40 board and in accordance with the commissioner's regulations providing
41 any type of services or advice using accounting, attest, management
42 advisory, financial advisory, tax or consulting skills. The experience
43 may include employment in private sector, government, academia or public
44 practice and shall be verified by a certified public accountant in good
45 standing licensed in this state;
46 (4) Examination: pass [a written] an examination satisfactory to the
47 board and in accordance with the commissioner's regulations and the
48 requirement with respect to such examination may not be waived. To the
49 extent possible, the board shall ensure that the examination, the exam-
50 ination process and the passing standard shall be uniform with those of
51 the other states, and may use all or any part of the Uniform Certified
52 Public Accountant Examination and Advisory Grading Service of the Ameri-
53 can Institute of Certified Public Accountants. The department may
54 contract with third parties to administer the examination;
55 (5) Age: be at least twenty-one years of age;
56 (6) Citizenship: meet no requirements as to United States citizenship;
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1 (7) Character: be of good moral character as determined by the depart-
2 ment; and
3 (8) Fees: pay a fee of two hundred twenty dollars to the department
4 for admission to a department conducted examination and for an initial
5 license, a fee of one hundred fifteen dollars for each reexamination, a
6 fee of one hundred thirty-five dollars for an initial license for
7 persons not requiring admission to a department conducted examination,
8 and a fee of two hundred ten dollars for each triennial registration
9 period[.
10 2. In lieu of professional requirements specified in subparagraphs (2)
11 and (3) of subdivision one of this section, fifteen years in the prac-
12 tice of public accountancy satisfactory to the board may be accepted by
13 the department.
14 § 7405. Requirements for a license as a public accountant. To qualify
15 for a license as a public accountant, an applicant shall fulfill the
16 following requirements:
17 (1) Application: file an application with the department;
18 (2) Declaration of intention: a. Have filed a declaration of intention
19 to practice as a public accountant with the department on or before
20 October first, nineteen hundred fifty-nine, on the basis of evidence
21 that the applicant was engaged for a total of six years during the ten
22 years immediately preceding April twenty-third, nineteen hundred fifty-
23 nine, in the practice of public accountancy as an individual practition-
24 er or as a partner of a partnership or as an employee of such an indi-
25 vidual practitioner or partnership engaged in the practice of public
26 accountancy or as an employee of a department, agency or instrumentality
27 of the United States, the state, or a political subdivision of the state
28 in which employment his duties entailed the performance of all or some
29 of the services which would constitute the practice of public accountan-
30 cy, or a combination of the foregoing duties, or in the opinion of the
31 board the equivalent thereof;
32 b. Establish by evidence satisfactory to the board that at the date of
33 the filing of said declaration of intention, the applicant had complied
34 with the conditions established by law on April twenty-third, nineteen
35 hundred fifty-nine, has not violated the provisions relating to practice
36 in public accountancy, and is about to engage in the practice of public
37 accountancy as his principal occupation as an individual practitioner or
38 as a partner of a partnership;
39 (3) Character: be of good moral character as determined by the depart-
40 ment; and
41 (4) Fees: pay a fee to the department for an initial license of two
42 hundred twenty dollars, and a fee of two hundred ten dollars for each
43 triennial registration period.]; or
44 b. (1) Application: file an application with the department;
45 (2) Declaration of intention: (a) Have filed a declaration of inten-
46 tion to practice as a public accountant with the department on or before
47 October first, nineteen hundred fifty-nine, on the basis of evidence
48 that the applicant was engaged for a total of six years during the ten
49 years immediately preceding April twenty-third, nineteen hundred fifty-
50 nine, in the practice of public accountancy as an individual practition-
51 er or as a partner of a partnership or as an employee of such an indi-
52 vidual practitioner or partnership engaged in the practice of public
53 accountancy or as an employee of a department, agency or instrumentality
54 of the United States, the state or a political subdivision of the state
55 in which employment his or her duties entailed the performance of all or
56 some of the services which would constitute the practice of public
A. 8481 5
1 accountancy, or a combination of such duties, or in the opinion of the
2 board the equivalent thereof;
3 (b) Establish by evidence satisfactory to the board that upon the date
4 of the filing of such declaration of intention, the applicant had
5 complied with the conditions established by law on April twenty-third,
6 nineteen hundred fifty-nine, has not violated the provisions relating to
7 practice in public accountancy, and is about to engage in the practice
8 of public accountancy as his or her principal occupation as an individ-
9 ual practitioner or as a partner of a partnership;
10 (3) Character: be of good moral character as determined by the depart-
11 ment; and
12 (4) Fees: pay a fee to the department for an initial license of two
13 hundred twenty dollars, and a fee of two hundred ten dollars for each
14 triennial registration period.
15 2. a. For the purposes of this section, the term "state" shall mean
16 any state of the United States, the District of Columbia, Puerto Rico,
17 the U.S. Virgin Islands and Guam, except that "this state" shall mean
18 the State of New York.
19 b. Notwithstanding the provisions of subdivision one of this section
20 and section sixty-five hundred one of this title, a person not licensed
21 in this state may also qualify to practice public accountancy in this
22 state as a certified public accountant if:
23 (1) the person possesses a valid and current certificate or license as
24 a certified public accountant from such state and is in good standing in
25 such state;
26 (2) the person does not have his or her principal place of business in
27 this state; and
28 (3) the board of regents has determined that (a) the educational,
29 examination and experience requirements of the jurisdiction in which the
30 individual is licensed are substantially equivalent to the uniform
31 certified public accountant licensure requirements established by the
32 American Institute of Certified Public Accountants and the National
33 Association of State Boards of Accountancy; or (b) the person's educa-
34 tion, examination and experience qualifications are comparable or exceed
35 the uniform certified public accountant licensure requirements estab-
36 lished by the American Institute of Certified Public Accountants and the
37 National Association of State Boards of Accountancy.
38 3. A person not licensed in this state whose certificate or license
39 has been determined by the board of regents as substantially equivalent
40 under this section and who intends to practice public accountancy in
41 this state shall notify the department in a manner and in accordance
42 with procedures established by the department. The department may
43 request and review any information which reasonably appears to relate to
44 the individual's professional misconduct in his or her professional
45 practice in this state and in any other jurisdiction.
46 4. A person not licensed in this state whose certificate or license
47 has been determined to be substantially equivalent pursuant to subdivi-
48 sion three of this section and is practicing public accountancy in this
49 state:
50 a. shall have all of the rights and privileges of certified public
51 accountants licensed in this state;
52 b. shall comply with all applicable laws and regulations relating to
53 such profession;
54 c. shall be subject to the jurisdiction of the department in matters
55 relating to the professional misconduct committed in this state; and
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1 d. agrees to the appointment of the secretary of the board as his or
2 her agent upon whom process may be served in any action or proceeding by
3 the board against the person.
4 5. A person who is practicing public accountancy pursuant to subdivi-
5 sion two of this section and who commits professional misconduct in this
6 state shall be subject to the disciplinary proceedings described in
7 section sixty-five hundred ten of this title. In addition, the depart-
8 ment shall immediately notify and refer the matter to the appropriate
9 bodies or officials in the jurisdiction in which the individual is
10 licensed for appropriate disciplinary action.
11 6. Notwithstanding any provision of law to the contrary, no person
12 whose principal place of business is located in this state may engage in
13 the practice of public accountancy in this state without obtaining a
14 license pursuant to subdivision one of this section.
15 7. The department shall establish in regulations the necessary and
16 appropriate procedures to implement the provisions set forth in this
17 section.
18 § 7406. Limited permits. 1. On recommendation of the board, the
19 department may issue a limited permit to an applicant of good moral
20 character who is the holder of a certificate, license or degree in a
21 foreign country constituting a recognized qualification for the perform-
22 ance in such country of the acts set forth in section seventy-four
23 hundred one of this article, provided the applicant has professional
24 qualifications satisfactory to the board, the applicant resides or has a
25 place for the regular transaction of business within the state, and
26 equal recognition is granted by the foreign country concerned to certi-
27 fied public accountants [and public accountants] licensed in this state.
28 Such limited permit shall be valid for a period of two years and may be
29 renewed on recommendation of the board. Such permit shall authorize the
30 applicant to use only the title or designation under which he is gener-
31 ally known in his own country, followed by the name of the country from
32 which he received his certificate, license or degree, notwithstanding
33 the provisions of subdivision [two] four of section seventy-four hundred
34 eight of this article.
35 2. Fees. The fee for each limited permit and each renewal shall be one
36 hundred five dollars.
37 § 7407. Exempt persons. Nothing contained in this article shall be
38 construed to prohibit:
39 [a.] 1. Any person who is an officer of a corporation or partner of a
40 partnership or sole proprietor of a business enterprise or a member of a
41 joint venture or member of a committee appointed by stockholders, credi-
42 tors, courts, trustees, executors or administrators, or an employee of
43 any of the foregoing, in his capacity as such, from signing, delivering,
44 or issuing any financial, accounting or related statement or report
45 thereon, relating to said corporation, partnership, business venture,
46 joint venture, committee, trust or estate[, provided, however, that in
47 so doing such person does not hold himself out to be a certified public
48 accountant or public accountant];
49 [b.] 2. An attorney-at-law or a partnership or limited liability part-
50 nership, limited liability company or professional corporation of attor-
51 neys-at-law from signing a financial, accounting or related statement or
52 report thereon, prepared by [him or them] the attorney, partnership,
53 limited liability partnership, limited liability company or professional
54 corporation as incidental to the practice of law;
55 [c.] 3. Any individual from serving as an employee of a certified
56 public accountant, [public accountant or partnership licensed under this
A. 8481 7
1 article] or any firm as defined in section seventy-four hundred eight of
2 this article;
3 [d.] 4. Any individual, not engaged in practice as a certified public
4 accountant [or public accountant] within the state, from performing
5 services within the state which are incidental to the practice conducted
6 by him outside the state;
7 [e.] 5. Any official or employee of a governmental unit, agency or
8 instrumentality in the performance of his official duties from signing,
9 delivering or issuing any financial, accounting, or related statement or
10 report thereon relating to said unit, agency or instrumentality; or
11 [f.] 6. A corporation chartered in the state of New York to engage in
12 the practice of public accountancy and so engaged as its principal
13 activity on and before the first day of July, nineteen hundred fifty-
14 nine, from continuing in such practice as long as its corporate acts
15 comply with the board of regents rules, provided all employees of such
16 corporation performing any acts constituting the practice of public
17 accountancy as defined herein and who are not certified public account-
18 ants [or public accountants] licensed under this article shall in the
19 performance of such acts be under the supervision of certified public
20 accountants or public accountants licensed in this state.
21 § 7408. Special provisions. 1. [Nothing contained in this article
22 shall be deemed to prohibit two or more certified public accountants or
23 two or more public accountants, or any combination thereof, from forming
24 a partnership; provided, however, that no partnership shall use the
25 words "certified public accountants" or the letters "C.P.A.'s" in
26 connection with its name unless each partner of such partnership, resi-
27 dent or engaged within the United States in practice is in good standing
28 as a certified public accountant of one or more of the states or poli-
29 tical subdivisions of the United States, and each partner thereof resi-
30 dent or engaged in practice within the state is licensed under this
31 article.
32 a. A registration shall be issued to a partnership upon payment of the
33 fee prescribed by the commissioner upon application showing that:
34 (1) At least one partner of such partnership is licensed under this
35 article and his license to practice is not currently suspended, annulled
36 or revoked in any jurisdiction and he is regularly engaged in practice
37 on behalf of the partnership within the state;
38 (2) The partnership consists of at least two present members; and
39 (3) The partnership contains at least as many present partners as the
40 total number of names in the firm name, or, where the word "company" or
41 abbreviation "co." is used, the number of present partners shall be
42 greater than the number of names in the firm name.
43 b. Such registration may be revoked after a hearing conducted in
44 accordance with the provisions of section sixty-five hundred ten of this
45 title upon proof:
46 (1) That the registration was obtained by either misrepresentation or
47 suppression of any material fact;
48 (2) That the license or authorization to practice of any partner is
49 suspended, annulled or revoked in any jurisdiction;
50 (3) That any partner in such a partnership is or has been engaged in
51 the practice of public accountancy in this state who is not licensed in
52 this state; or
53 (4) That the partnership failed to file the written notification
54 required pursuant to paragraph d of this subdivision of this section.
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1 c. Personal service on any general partner of a notice of hearing to
2 revoke a partnership registered hereunder shall be deemed service on the
3 partnership.
4 d. A partnership registered to practice pursuant to this section shall
5 file with the department on or before July first of each year written
6 notification of:
7 (1) Any admission of a partner,
8 (2) Any retirement or death of a partner,
9 (3) Any termination of partnership, or
10 (4) Any occurrence of any event or events which would eliminate as to
11 such partnership conformity with the applicable requirements of this
12 section.
13 e. Partnerships shall register triennially and pay a fee of fifty
14 dollars.] For the purposes of this section, the term "firm" shall mean a
15 partnership, a limited liability partnership, limited liability company,
16 professional corporation or a sole proprietorship.
17 2. a. No firm shall engage in the practice of public accountancy as
18 defined in section seventy-four hundred one of this article in this
19 state or use the title "CPA" or "CPA firm" without a registration from
20 the department. As a condition of registration or its renewal, the firm
21 shall demonstrate that it has complied with the provisions of this arti-
22 cle, any other applicable laws and such other requirements as the
23 department may impose, consistent with this article.
24 b. The commissioner, in consultation with the board, shall establish
25 in regulations a registration process for certified public accountancy
26 firms, including the imposition of application and registration fees and
27 procedures to suspend or revoke a registration for cause.
28 3. Notwithstanding any other provision of law to the contrary, a
29 certified public accountancy firm may include owners who are not
30 licensed or not otherwise authorized to practice under this article,
31 provided that:
32 a. the majority of the ownership of the firm, in terms of equity
33 interest and voting rights of all partners or shareholders, belongs to
34 persons who are licensed or otherwise authorized by law to practice
35 public accountancy;
36 b. those members of the firm whose principal place of business is
37 located within this state and who engage in the practice of public
38 accountancy in this state are licensed to practice pursuant to subdivi-
39 sion one of section seventy-four hundred four of this article;
40 c. all non-licensed owners are actively engaged in the firm or an
41 affiliated entity thereof as his or her principal occupation;
42 d. the firm has designated a partner or an officer who is duly
43 licensed pursuant to this article to be responsible for the registration
44 of the firm;
45 e. any individual certified public accountant who is engaged in or is
46 responsible for supervising the practice or public accountancy for the
47 firm shall meet the experience requirements set forth in the profes-
48 sional standards for such services;
49 f. the firm undergoes a review of its practice of public accountancy
50 pursuant to section seventy-four hundred ten of this article at least
51 once every three years; and
52 g. the firm does not use the words "certified public accountant" or
53 the letters "CPAs" in connection with its name unless each licensed
54 partner or licensed shareholder is in good standing as a certified
55 public accountant in the state or states in which the partner or share-
56 holder is licensed.
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1 4. Any person shall be guilty of a class A misdemeanor who shall use,
2 in connection with the practice of public accountancy, or in any manner
3 tending to imply that he is an independent accountant or auditor, the
4 designations "chartered accountant", "certified accountant", "expert
5 accountant", "certified tax accountant", "tax accountant", "enrolled
6 accountant", "enrolled public accountant", "registered accountant",
7 "licensed accountant", "incorporated accountant", "registered public
8 accountant", "licensed public accountant", or any abbreviation thereof,
9 or the letters "C.A.", "E.A.", "C.T.A.", "T.A.", "E.P.A.", "R.A.",
10 "L.A.", "I.A.", "P.A.", "R.P.A.", or, "L.P.A.", except as provided else-
11 where in this article, or any other designation tending to imply that he
12 has expert knowledge in accounting or auditing.
13 5. Commissions and referral fees. a. Notwithstanding any provisions of
14 law to the contrary, a certified public accountant licensed or otherwise
15 authorized to practice under this article or such certified public
16 accountant's firm may accept or be paid a commission or referral fee
17 from or for any client for whom the certified public accountant or firm
18 is not engaged to perform the practice of public accountancy, as defined
19 in section seventy-four hundred one of this article, except that no
20 commission or fee may be accepted or paid for a compilation of a finan-
21 cial statement in which the compilation report does not disclose a lack
22 of independence.
23 b. Any certified public accountant or firm that is paid or expects to
24 be paid a commission, or accepts a referral fee shall provide written
25 disclosure to the client of such payment or acceptance.
26 6. Contingent fees. A certified public accountant licensed or other-
27 wise authorized to practice pursuant to this article shall not perform
28 for a contingent fee any professional services for, or receive such a
29 fee from, a client for whom the licensee or the licensee's firm engages
30 in the practice of public accountancy or prepare an original or amended
31 tax return or claim a tax refund for a contingent fee for any client,
32 except that no fee shall be deemed to be contingent if fixed by a court
33 or other public authority or, in tax matters, if determined on the basis
34 of the results of judicial proceedings or the findings of a governmental
35 agency.
36 § 7409. Mandatory continuing education. 1. [(a)] a. Each licensed
37 certified public accountant and public accountant required under article
38 one hundred thirty of this chapter to register triennially with the
39 department to practice in the state shall comply with the provisions of
40 the mandatory continuing education requirements except as set forth in
41 [paragraphs (b) and (c)] paragraph b of this subdivision. Certified
42 public accountants [and public accountants] who do not satisfy the
43 mandatory continuing education requirements shall not practice until
44 they have met such requirements, they have paid all applicable fees, and
45 they have been issued a registration or conditional registration certif-
46 icate.
47 [(b)] b. Certified public accountants [and public accountants] shall
48 be exempt from the mandatory continuing education requirement for the
49 triennial registration period during which they are first licensed. In
50 accordance with the intent of this section, adjustments to the mandatory
51 continuing education requirement may be granted by the department for
52 reasons of health certified by a physician, for extended active duty
53 with armed forces of the United States, or for other good cause accept-
54 able to the department which may prevent compliance.
55 [(c) A licensed certified public accountant and a public accountant
56 not engaged in public practice as an individual practitioner, a partner
A. 8481 10
1 of a partnership, a shareholder of a professional service corporation,
2 or an employee of such practice units, shall be exempt from the mandato-
3 ry continuing education requirement and payment of the mandatory contin-
4 uing education fee upon the filing of a statement with the department
5 declaring such status. Any licensee who returns to the public practice
6 of certified public accountancy or public accountancy during the trien-
7 nial registration period shall notify the department prior to reentering
8 the profession and shall pay the current mandatory continuing education
9 fee and shall meet such mandatory continuing education requirements as
10 shall be prescribed by regulations of the commissioner.]
11 2. a. During each year of the triennial registration period beginning
12 September first, nineteen hundred ninety and ending September first,
13 nineteen hundred ninety-three and each registration period thereafter
14 but ending on the period that ends on August thirty-first, two thousand
15 three, an applicant for registration shall have the option of [(a)] (1)
16 completing a minimum of forty contact hours of acceptable formal contin-
17 uing education in recognized areas of study, or [(b)] (2) completing a
18 minimum of twenty-four contact hours of acceptable formal continuing
19 education concentrated in any one of the following three subject areas:
20 auditing, accounting, or taxation.
21 b. During the triennial registration period beginning September first,
22 two thousand three and ending August thirty-first, two thousand six and
23 each registration period thereafter, an applicant for registration shall
24 complete no less than one hundred twenty hours of acceptable formal
25 continuing education in recognized areas of study, with a minimum of
26 twenty hours in each year.
27 c. A licensee who has not satisfied the mandatory continuing education
28 requirements shall not be issued a triennial registration certificate by
29 the department and shall not practice unless and until a conditional
30 registration certificate is issued as provided in subdivision three of
31 this section. No hourly credits may be transferred from one year to a
32 subsequent year. The individual licensee shall determine the selection
33 of courses or programs of study pursuant to subdivision four of this
34 section.
35 3. The department, in its discretion, may issue a conditional regis-
36 tration to a licensee who fails to meet the continuing education
37 requirements established in subdivision two of this section but who
38 agrees to make up any deficiencies and take any additional education
39 which the department may require. The fee for such a conditional regis-
40 tration shall be the same as, and in addition to, the fee for the trien-
41 nial registration. The duration of such conditional registration shall
42 be determined by the department. Any licensee who is notified of the
43 denial of registration for failure to submit evidence, satisfactory to
44 the department, of required continuing education and who practices pub-
45 lic accountancy without such registration, may be subject to discipli-
46 nary proceedings pursuant to section [six thousand five] sixty-five
47 hundred ten of this [chapter] title.
48 4. As used in subdivision two of this section, "acceptable formal
49 continuing education" shall mean formal programs of learning which
50 contribute to [professional practice and which meet the standards
51 prescribed by regulations of the commissioner] the growth in the profes-
52 sional knowledge and professional competence of the licensee. Recog-
53 nized areas of study shall include but not be limited to: accounting,
54 auditing, taxation, advisory services, specialized knowledge and appli-
55 cations related to specialized industries, and such other [technical]
56 areas appropriately related to the practice of accounting as may be
A. 8481 11
1 acceptable to the department. To fulfill the mandatory continuing educa-
2 tion requirement, programs must be taken from sponsors approved by the
3 department, pursuant to the regulations of the commissioner.
4 5. The mandatory continuing education fee shall be determined by the
5 regents, shall be payable on or before the first day of each triennial
6 registration period, and shall be paid in addition to the triennial
7 registration fee required by section [seven thousand four] seventy-four
8 hundred four of this article.
9 § 7410. Mandatory review of certified public accountancy firms. 1.
10 a. As a condition of initial licensure, the department may require a
11 firm to undergo a review of its practice of public accountancy, except
12 that any such firm which within three years immediately preceding the
13 application has received a satisfactory review conducted in accordance
14 with a review program approved by the department, may submit a copy of
15 such review for the purposes of meeting this condition.
16 b. As a condition for renewing the registration of a certified public
17 accountancy firm registered in this state, the department shall require
18 the firm to undergo a review at least once every three years in accord-
19 ance with this section. The review shall be conducted by a reviewer who
20 shall be a certified public accountant in good standing, be independent
21 of the firm reviewed and possess such other qualifications as estab-
22 lished by the department. The department may authorize a third party to
23 administer the review. Failure to participate in the review shall
24 constitute immediate grounds for revocation of the registration of the
25 firm.
26 2. A certified public accountancy firm shall undergo a peer review
27 pursuant to standards and procedures approved by the board to determine,
28 verify and report:
29 a. on the degree of compliance of the firm in its practice of public
30 accountancy with generally accepted accounting principles, generally
31 accepted auditing standards, and other similarly recognized technical
32 standards, and
33 b. on the experience of those licensed individuals in the firm who
34 supervise the practice of public accountancy and sign or authorize any
35 individual in the firm to sign reports of financial statements on behalf
36 of the firm.
37 3. The standards for peer reviews promulgated by the department shall
38 include, at a minimum, procedures for:
39 a. selecting and training, if necessary, qualified reviewers;
40 b. developing criteria for assignment of reviewers to specific
41 reviews;
42 c. ensuring the independence and impartiality of the reviewer;
43 d. evaluating the findings of the reviewer by an oversight committee
44 or board, which may affirm, affirm in part, reverse, reverse in part or
45 remand the findings of the reviewer;
46 e. sanctioning firms or licensed individuals who are not in compliance
47 with applicable professional standards and practice, including referring
48 the matter to the department for appropriate disciplinary action;
49 f. developing grounds for exemption from the requirement to undergo a
50 review; and
51 g. ensuring that all records and files relating to a review are confi-
52 dential.
53 4. Notwithstanding any provision of law to the contrary, the records
54 submitted by a certified public accountancy firm in accordance with this
55 section; the comments of reviewers, the oversight committee or the board
56 on reports submitted by a certified public accountancy firm or working
A. 8481 12
1 papers relating thereto; or the results of the review shall not consti-
2 tute public records and shall not be subject to disclosure under article
3 seven of the public officers law.
4 § 4. Any applicant for a license as a certified public accountant
5 under article 149 of the education law who, as of the effective date of
6 this act, has already fulfilled or completed, or is currently engaged
7 in, the new experience requirements described in subparagraph 3 of para-
8 graph a of subdivision 1 of section 7404, as amended by section three of
9 this act, may submit proof of such experience to the department for the
10 purpose of fulfilling the experience requirement.
11 § 5. Separability clause. In the event that a court of competent
12 jurisdiction shall adjudge any section or sections, provision or
13 provisions of this act to be unconstitutional or void, such determi-
14 nation shall affect only the section or sections, provision or
15 provisions so adjudged to be unconstitutional or void, and shall not
16 affect any other section or provision of this act.
17 § 6. This act shall take effect immediately; provided, however, that
18 paragraph a of subdivision 2 of section 7408 of the education law, as
19 added by section three of this act, shall take effect on January 1,
20 2005; provided further, that any partnership, limited liability partner-
21 ship or professional services corporation engaged in the practice of
22 public accountancy that, on the effective date of this act, possesses a
23 valid registration or certificate issued by a state licensing entity
24 shall be required to be registered by the department under this act by
25 the later of the effective date of such paragraph a or the expiration
26 date of the registration or certificate. Nothing herein shall be
27 construed to prohibit or prevent the applicable state licensing entity
28 from taking disciplinary action against any partnership, limited liabil-
29 ity partnership or professional services corporation that has violated
30 the terms of its registration or certificate.