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What is the purpose of the one-year requirement? Will this lower standards for the profession? The one-year experience requirement is not new. Current State Education Department regulations allow any applicant who has received an education consisting of 150 semester hours in an approved program in accountancy to have one year's experience to be eligible for licensure. (The alternative is 120 semester hours and two years' experience.) The proposed legislation will now replace the two tracks with one track--150 semester hours and one year's experience. It is important to note that SED has promulgated in its regulations the elimination (as of August 1, 2004) of the 120 hours/two-year track. What is new, under the proposed legislation, is allowing nonattest engagements to qualify as experience. Under current SED regulations, the applicant must demonstrate "diversified experience involving the application of generally accepted accounting principles and the application of generally accepted auditing principles in the practice of public accountancy." The experience can be obtained in private or governmental accounting or auditing work, and must demonstrate that the applicant is able to conduct an independent audit of a small but complex entity. The current requirements have become a major barrier for young accountants seeking certification. They were written at a time when audit and other assurance services constituted a majority of the billings of a CPA or CPA firm. Such services now constitute a smaller part of the practice of many mid-size and smaller CPA firms. Many small firms or sole practitioners today do not even engage in audit or review services. Potential candidates are finding it more and more difficult to obtain the one or two years' experience in generally accepted accounting principles and generally accepted auditing standards. Maintaining the current requirements will adversely affect the practices of the small firms and sole practitioners. The profession is already facing a hiring crisis. Under the proposed legislation, an applicant would be able to fulfill the experience component by working in CPA firms that do not engage in attest services. Moreover, the proposed legislation, consistent with the UAA, changes the focus with respect to assurance services from the individual to the CPA firm, based on the conclusion that it is the firm, and not the individual, that issues reports. Accordingly, the proposed legislation tightens and strengthens the oversight of attest services by requiring all firms that engage in attest services to be registered by the department and to have their attest practice, including the qualifications of those in the firm who perform or supervise performance of the firm's attest engagements, reviewed once every three years. The proposed legislation also will require any CPA who performs or supervises attest engagements to meet the experience requirements set forth in the professional standards for such services. Finally, it is instructive to compare the legislation's one-year experience requirement with the experience requirements of other professions: Attorneys - none Architects - eight
years of combined education and Engineers - up to four years, depending upon amount of education Physicians - one year of post-graduate hospital training
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