|
|
State
Accounting Reform Legislation Stalls By
Simon Eskow But, the Assembly bill (A11695) failed to garner a vote before the legislature went into recess, despite an 11th hour rush to the Assembly floor. The two bills could not differ from each other more. While S302-D calls for mandatory peer review, universal CPE requirements for CPAs in industry as well as for auditors, and expansion of experience for licensure, A11695 makes no such provisions, imposes stiff penalties for misconduct and allows for non-CPAs to offer compilation services. The sudden appearance of A11695, and its stark contrast to S302-D, took many members of the New York State Society of CPAs by surprise. A large number of Society members urged their representatives in Albany to oppose the Assembly bill in favor of S302-D. The Senate had passed S302-D once before only to see it die in the Assembly in June 2003. Sen. Kenneth LaValle, chairman of the Senate Higher Education Committee and the bill’s sponsor, said that he met with Assembly counterparts—as well as CPAs and other “stakeholders”—in five to ten meetings through the 2003 to 2004 session. He expressed some dismay to learn that the Assembly had introduced a completely different bill. “We have tried all session long to get the Assembly to give us their input on the legislation that passed last year,” LaValle said. “They’ve attended numerous, numerous meetings, and gave us no indication of wanting to make any changes to our bill. Then in, literally, two days before the end of the session, they put in a new bill.” LaValle, and Assemblyman Ron Canestrari, sponsor of A11695, said in separate interviews that they would meet in the coming months to discuss the accounting legislation. “We
are still negotiating and I hope that we will have an agreed upon
bill with the Senate when we do return,” Canestrari said. “We paid attention to (Spitzer’s) thoughts and the bill reflects that,” Canestrari said. “The enforcement mechanism and all those features resulted from discussions with the Attorney General.” Differing Bills Society members have taken issue with several aspects of Canestrari’s bill. Canestrari’s bill defines misconduct in terms similar to those of the Public Company Accounting Oversight Board for auditors of public companies (making the bill, therefore, potentially redundant) and fines violators disproportionately compared with other professions regulated by the state, according to the Society. Fines for a CPA range up to $50,000 for professional misconduct. All other 43 licensed professions, including physicians, nurses and pharmacists, face fines for misconduct that must not exceed $10,000. Additionally, where there is a pattern of misconduct, firms with annual domestic revenue of less than a billion dollars can be fined up to $250,000 and firms with over a billion in annual domestic revenue can be fined up to $750,000 per charge. Members have also objected to the bill’s limited substantial equivalency provision. Under Canestrari’s bill, a CPA can practice in New York under substantial equivalency rules four times up to five years, but it can only be granted to no more than the number of individuals equal to three percent of the partners whose principal business and primary residence is in New York, a problem for firms where many partners work in New York but live in Connecticut or New Jersey. Finally, the Society took issue that the Canestrari bill made no provisions for extending mandatory CPE for CPAs in industry; made no provisions to match experience requirements with an expanded definition of scope of practice; and made no clarification of commission and referral fees for non-attest clients. LaValle’s bill includes provisions for these things. The Canestrari bill remains in the Assembly Rules Committee, and could be reconsidered when legislators return from recess later this summer. To read the full text of A11695, go to http://assembly.state.ny.us/leg/ and type in the bill number. You can also find the text for S302-D there. |
Print