State Senators Introduce Bill to Update Accountancy Law

By Fong Chan

New York state Senators Kenneth P. LaValle (Suffolk) and Nicholas A. Spano (Westchester) introduced a bill on April 5 to amend the current laws that establish and regulate the public accountancy profession in the state. Other Senate sponsors include Dale M. Volker (Erie), John A. DeFrancisco (Syracuse), Nancy Larraine Hoffman (Syracuse), John J. Marchi (Staten Island), and Caesar Trunzo (Suffolk).

If enacted, the bill (S. 4402) will represent the first comprehensive change to the accountancy law since 1947. The legislation reflects the reforms discussed by the NYSSCPA board of directors as it deliberated the merits of the Uniform Accountancy Act, the model bill and set of regulations proposed by the AICPA and the National Association of State Boards of Accountancy. The bill seeks to:

* redefine scope of practice to include only assurance services, such as audits, reviews, compilations, and other attest engagements;

* amend the current licensure requirements to require 150 hours of education and one year of experience in general accounting skills verified by a CPA;

* allow for interstate practice of public accountancy through substantial equivalency;

* require CPA firms that provide attest services to be registered by the State Education Department;

* allow for 49 percent ownership of CPA firms by non-CPAs;

* authorize CPAs to accept commissions and referral fees from nonattest clients; and

* establish in state law a peer review process for CPA firms that engage in attest services.

"This legislation reflects many of the realities of today's marketplace," said NYSSCPA President George T. Foundotos (Suffolk). "It is an important step to bring the accounting profession into the
twenty-first century."

The Senate Higher Education Committee will now place the bill on its agenda. This committee, chaired by LaValle, has primary jurisdiction on legislation concerning the professions. Once reported out of committee, the bill will go to the full Senate for consideration unless the bill is forwarded to other committees for further action.

The next important step is to seek introduction of a similar bill in the state Assembly. At press time, the chair of the Assembly Higher Education Committee, Edward C. Sullivan (Manhattan), and Assembly leaders and their staff are reviewing the NYSSCPA proposal. The Society anticipates the Assembly will introduce a bill by the end of April.