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CPAs
Communicate Their Views to Legislators
Breakfast Session Scrutinizes Aspects of Proposed Accounting Reform Laws Given a state accounting statute that has not been updated in more than 50 years and the ongoing investigation into the financial scandals in Long Island’s school systems, it’s important that CPAs contact New York legislators to help make sure they write laws that are good for the public and the profession. On May 20 accounting professionals got this opportunity, as members of the state Society, including past and current officers, met with members and representatives of the state Assembly and one state senator at a joint Nassau Chapter and Suffolk Chapter breakfast. Organized by the Foundation for Accounting Education, the event highlighted a number of accounting-reform and school district accountability bills that have been introduced in the Senate and Assembly and hold the fate of the profession in their pages. “It is important to the success of our efforts in Albany for local CPAs to engage legislators at the grassroots level to acquaint them with issues that concern our profession and ask for their support of legislative solutions we endorse,” former NYSSCPA President Mike Borsuk said. Suffolk Chapter President Ken Cerini added that in the current climate of “enhanced oversight,” state representatives should understand that the accounting profession supports things like mandatory peer review, enhanced education requirements, and a compilations process exclusively performed by CPAs. Bill, A.8358, sponsored by Assemblyman Ron Canestrari (D-Cohoes), would expand the scope of practice, reduce conflicts of interest between auditors and their clients, and implement mandatory peer review. However, it also would allow for non-CPAs to perform compilations, as long as they don’t hold themselves out to be CPAs. The Society has opposed similar provisions in the past. Former NYSSCPA board member and former Nassau Chapter President Andrew Cohen expressed a similar reaction, glad to discuss provisions with the lawmakers. “As chair of the American Institute of CPAs’ Accounting and Review Services Committee (the senior technical committee that sets standards for compilations and reviews), I was pleased that I had the opportunity to express to the Assembly members and their representatives that their bill could potentially harm the public by allowing nonlicensees to perform compilations,” he said. “Nonlicensees do not have to complete a college education, pass the rigorous CPA exam, follow demanding professional standards, or undergo a peer review, and are not subject to CPE (continuing professional education) requirements.” “Given all the recent problems and controversies surrounding many of the people who administer the finances of some of Long Island’s school districts, the suggestion that such people be required to have some minimum level of financial or accounting background is constructive, grounded in common sense and should be adopted,” Nassau Chapter member Lawrence Israeloff added. Referring to proposed school audit legislation, Cerini said that compulsory auditor rotation is not necessarily a solution for assuring continued audit quality and independence. Assembly bill A.6082-A requires mandatory rotation of lead and reviewing partners every five years on school district audits with an additional five years if the district determines a lack of availability of another auditor within a reasonable geographic area—a provision the Society objects to. Senate bill S.5050 does not include mandatory auditor rotation, but requires schools to use a competitive bidding process to select audit firms. Both bills would beef up school district governance and responsibility by requiring financial training for board members and generally requiring boards to become more involved in annual external audits, among other provisions. “Mandatory auditor rotation in the government audit sector is not the answer,” Cerini said. “By strengthening the quality of practicing firms and opening up a competitive bidding process, government audits will be enhanced, more so than through mandatory rotation.” Borsuk added that in some areas of the state it would be cost prohibitive for auditors to rotate every five years. On their part, the legislators said the breakfast discussion helped further acquaint them with the issues facing CPAs and their clients and reinforced the significance of developing effective yet practical legislative solutions that will benefit the public and the profession. Sole practitioner Diana Aliffi is chair of the Suffolk Chapter’s Public Relations Committee. She can be reached at dianaaliffi@optonline.net. |
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