Regulation of Public Accountancy in New York State
Overview and Recent Initiatives

For more than 100 years, since 1896, the New York State Board of Regents has been responsible for the oversight of public accountancy in the state. Of the 38 professions regulated under Title VIII of education law, only medicine, dentistry, and veterinary medicine have a longer relationship with the Board of Regents. The statutory basis for the licensure of any of the "learned" professions is that the services the professional provides significantly affect the health, safety, or welfare of the public. There is no question that the public accountant, who has such a profound role in the state's economy and the financial well-being of its citizens, fits this description.

New York's system of professional regulation and the CPA profession share core values of independence, integrity, and a commitment to quality education that are intrinsic to the preparation for and continuing competency of the licensed professional.

Deputy Commissioner for the
Professions Johanna Duncan-Poitier

New York's system of lay oversight by the Board of Regents has stood the test of time. This system ensures that the public has access to high quality professional services by promoting both public protection and the integrity of the professions as their practices evolve. The state boards for the professions assist the Board of Regents and the State Education Department with this critical responsibility and contribute extensive, valuable, profession-specific knowledge and perspectives. Each professional board is comprised of licensed professionals and at least one public member.

New York's system of professional regulation by an independent lay board is recognized as a national model. Research has confirmed that lay oversight best protects the public, primarily because that system effectively balances the public interest with promoting good practice by professionals.

Our regulatory structure enables the Regents and the Education Department to respond successfully to today's needs and to anticipate those of tomorrow. This flexibility is critical in a time of exponential change and evolution within the professions. It was a major factor in the department receiving both a 1998 achievement award from the National Council on Licensure
Enforcement and Regulation and one of the six New York State Workforce Champion awards made by Governor Pataki in 1998.

Recent Initiatives

The Board of Regents recently approved a revision of Regents rules that allow CPAs to receive contingency fees for the provision of certain services. For some time, the profession discussed the need for this rule change. The new Regents rule provides practitioners with the needed flexibility to compete fairly in today's marketplace, while preserving their professional integrity. This was achieved by carefully setting out those services that can be independent of compensation other than fees for service.

Another initiative sought by the profession was an increase to 150 credit hours in an educational program for initial licensure. We considered many comments, on both sides of this argument, for this major change in initial credentialing. Ultimately, the Regents determined that the revision was needed to reflect the increasing complexity of this profession and required competencies.

Scope of Practice

One of our initiatives of special interest to CPAs this year is our work to establish in statute a more complete scope of practice for the profession. We are proposing a clarification of the scope of practice of public accountancy that encompasses the many services that CPAs are trained to provide with great efficiency and adherence to accepted standards. This update in the law is necessary because so many years have passed since the profession's scope was last defined by the legislature, while the actual services provided by virtually all CPAs have expanded considerably. We believe these changes are critical for both public protection and the integrity of the profession. We are responding to the evolution of the CPA's practice while remaining true to the core values that distinguish the licensed public accountant from an unlicensed one.

Last July, I wrote to every CPA licensed in New York state, describing the outcome of our review of a proposal by American Express in which it planned to acquire certain nonprofessional assets of a public accounting firm. This proposal raised questions about the practice of the CPA profession by non-licensee business corporations--questions that are not unique to public accountancy. With careful research and consultation with our partners in professional regulation, we developed strict guidelines for the American Express acquisition that ensure compliance with relevant laws and rules, accommodate the evolution of practice forms, and are consistent with our mission to protect the public. That consultation included advice from the State Board for Public Accountancy and input from the NYSSCPA and consumers.

Commitment to the Public

Our commitment to public protection and the integrity of the public accountancy profession is unwavering. You are no stranger to this commitment, as demonstrated by the NYSSCPA's and AICPA's codes of professional conduct which demand an "unswerving commitment to honorable behavior, even at the sacrifice of personal advantage." This is consistent with a profession committed to excellence, serving the public interest, and honoring the public trust.

The NYSSCPA plays an important role by working with the Education Department on the varied issues facing the profession. The Society has been an articulate, reliable advocate for the profession and for the Regents' role in professional regulation. While pursuing the commitment to public protection, the office of the professions also is relentless in its pursuit of improved services for licensed professionals.

We have streamlined professional discipline and handle misconduct cases faster than ever before. We process reregistrations in one day, several licensure applications are now available on our website (www.nysed.gov/prof/profhome.htm), and all will be available online this summer. In the not too distant future, we will use credit card payments and reregistrations via the web. Our website is an example of our commitment to delivering useful, efficient, and effective services to our customers. I encourage you to visit it to learn more about our goals, accomplishments, and services, and we welcome your comments and questions to cpabd@mail.nysed.gov.

New York state is fortunate to have the services of the most talented and trusted CPA professionals in the country. With the support of the members of your profession, the state board and the NYSSCPA, I am committed to ensuring that New York will continue to lead the nation as the financial capital into the 21st century. *

Johanna Duncan-Poitier is the State Education
Department's deputy commissioner for the professions where she leads the office of the professions.