Getting
into Position
Accounting
and Auditing Division Goes to Bat on Practice Issues
By Paul
Warner
The
New York State Society of CPAs’ Accounting and Auditing
Division has entered an era of increased participation in the
formation of public policy recommendations since the Sarbanes-Oxley
Act passed in 2002.
Prior to
that sweeping reform legislation, the division—which includes
the Accounting and Review Services Committee, the Auditing Standards
and Procedures Committee and the Financial Accounting Standards
Committee, among others—primarily commented on Financial
Accounting Standards Board proposals, while coordinating annual
conferences.
But in the
last three years the Society has placed an increasing importance
on the committees’ work, resulting in a plethora of comment
letters on emerging regulations, and a number of proposals for
new regulations. These committees have become among the most important
technical committees in the Society, as such activity impacts
every aspect of accounting and auditing issues.
The division’s
oversight committee reviews and synchronizes the policy recommendations
of the division’s seven committees with the policies of
the Society. The chairs of the division—which also includes
the Government Accounting and Auditing Committee, the International
Accounting and Auditing Committee, the SEC Practice Committee
and the Technology Assurance Committee—sit on the oversight
committee to help ensure consistency in the positions the Society
takes on important issues.
Such efforts
are ongoing. In February 2005, the Society released comments,
originating in the Auditing Standards and Procedures Committee,
on the Public Company Accounting Oversight Board’s proposed
rules concerning independence, tax services and contingent fees.
It has commented on FASB Staff Position FIN 46(R)-b on implicit
variable interests resulting from related party interests under
FASB Interpretation No. 46. It has taken a position on the International
Federation of Accountants (IFAC) Exposure Draft ISA 230 (Revised),
on audit documentation; the PCAOB’s Staff Questions and
Answers on the Audits of Financial Statements of Non-issuers performed
pursuant to PCAOB standards; and it has commented on the negative
effects of SEC’s SFAS 150 on business succession plans of
broker-dealers.
The division
has had an influence. Last June, the Society submitted comment
letters that helped bolster the Financial Accounting Standards
Board’s efforts to require reporting of share-based compensation
at a time when some parts of the public and certain members of
Congress resisted the idea. Statement No. 123 passed late in 2004,
and will go into effect this June.
A Society
letter submitted to FASB regarding its fair value measurement
proposal also contributed to the board’s consideration of
relevance and reliability requirements.
Many of these
issues are ongoing, but a glance at the work that the committees
of the division have done even over the last 12 months shows that
we are raising our voices and being heard.
The division
is a tight-knit group, with the oversight committee providing
assistance on the direction the committees are taking, coordinating
their activities and assisting them in developing committee action
plans.
The committee
also assists the NYSSCPA’s Board of Directors and Executive
Committee on accounting and auditing technical matters. For example,
it liaises between a commenting committee and the Executive Committee
and the Society President who gives his or her final approval
to comment letters.
Paul
Warner is the chair of the NYSSCPA’s Accounting
and Auditing Oversight Committee and chairperson and professor
of the Department of Accounting, Taxation, and Legal Studies in
Business at Hofstra University.
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