Officials Reject Widened Experience Requirement
Accountancy Board Narrowly Defeats Resolution

By Simon Eskow

New York — The New York State Board of Accountancy narrowly rejected a motion to recommend expansion of the experience requirement for becoming a CPA to include nonattest services.

The board at its Nov. 10 meeting defeated by an 11-to-9 vote the measure introduced by the Board’s Examination/Licensure Subcommittee, chaired by Board Member P. Robert Fox.

The motion would have recommended altering state regulations to allow two years of work in accounting, consulting, taxation or attestation to count toward a candidate’s experience requirement when applying for licensure. All work would be supervised by a CPA, who would have to sign an affidavit in support of the candidate’s competency in these areas.

Candidates now must dedicate at least 75 percent of their two years of work time exclusively to audit work, and 25 percent to other services. (Candidates currently can reduce that two-year requirement to one year if they’ve completed a 150-hour college accounting program.)

Opponents of the motion argued that allowing nonattest services to count toward CPA experience strayed too far from the CPA scope of practice and gave the public a false impression of a CPA’s capabilities. Supporters, however, pointed out that the motion would better reflect the reality of what CPAs typically do.

“We’re missing the global issue,” said Board Member Marc Zand. “Thirty-two years ago people would describe CPAs primarily as auditors. Today it’s different. Granted, legislation hasn’t expanded the scope of practice, but that doesn’t mean we should wait for them to act.”

Current regulation states that candidates must show “diversified experience involving the application of generally accepted accounting principles and the application of generally accepted auditing standards in the practice of public accountancy, or the satisfactory equivalent thereof as determined by the State Board.”

Documentation must demonstrate “diversified experience that would enable the applicant, once licensed, to conduct and report on an independent audit of a small but complex entity with a minimum of supervision.”

By August 2009, all candidates will have to have fulfilled a 150-hour education requirement, effectively reducing the two-year experience requirement to one year for all students.

To some Board members, this change seemed to dilute the meaning of the experience requirement. These opponents said that allowing other services to count toward a CPA license watered down the experience further.

But others pointed out that the existing attest experience requirement itself did not guarantee competency in attestation, suggesting that the state could find ways to ensure competency on a continual basis, perhaps in conjunction with mandatory peer review.

“If you don’t maintain the experience, it doesn’t assure long-term competency,” said Board Member Robert L. Gray. He added that the experience requirement was meant to expose a candidate to a professional environment, not specific skills.

Opponents of the measure went on to say that the education and exam aspects of licensure were the true guarantors of a candidate’s competency. To them, the reduction of the experience requirement from three years to one year already seemed a dilution, and to add nonattest services would be to weaken the requirement’s representation that a candidate could conduct an attestation with little supervision.

“My inkling would be to eliminate this requirement,” said Board Member Harvey Moskowitz. “I don’t see the need for it if we’re going to weaken it further.”

Supporters of the motion said it was consistent with what CPAs do in the real world and what the Board has done in the recent past, specifically allowing nonattest services to count toward “licensure by endorsement” of out-of-state CPAs to practice in New York.

The debate over the motion seemed as much about expanding scope of practice as it was about experience. While only a change to law can alter the scope of practice, which hasn’t changed in more than 50 years, some Board members saw the experience requirement as a small step toward making scope match the real world.

“The public knows the CPA does more than audit,” Board Member Jeff Hoops said. “I don’t see how we can want to regulate CPAs in various functions, yet say that experience in those functions does not count….We should want CPAs at the forefront of providing those services, yet we are saying that if you do that it doesn’t count as experience.”

While other members pointed out that many other states allow for nonattest services to count toward experience, opponents defeated the motion.