By George T. Foundotos, CPA

By the time you read this, another tax season will be history and a new mini tax season will have begun (Good old 4868 and 7004 returns). We have an Accountant's Public Responsibility Act in Albany that is slowly working its way through the legislative maze. (Translation: Only after the state budget is approved will this bill move to eventual adoption or defeat.) A proposed reform of our bylaws is out for your consideration. The Society's new administration is taking shape, subject to members' confirmation at the Annual Meeting on May 13.

The other major unresolved issue is the "internal use only" financial statement or financial information. This goes by many names--assembly, managerial purposes, brown paper bag, management use only, management's internal use only, etc. All mean the same thing, namely, financial information portrayed either below or outside the existing compilation standards.

The internal use only issue was on the agenda at the five regional meetings of the AICPA council. It was brought up there because these meetings are closed, as opposed to the regular council meetings, which are open. I made it to the Los Angeles, Orlando, and Dallas meetings, and attended the New York City meeting along with the rest of the New York delegation. I deliberately did not speak at the meetings, so as not to sound like the typical brash know-it-all New Yorker. I did speak with people over coffee and at lunch, explaining our problem and promoting a reopening of this issue by the regular standards setters, using a clean page and an open, unbiased approach.

The AICPA distributed a very fine handout on this issue, a balanced and well done paper. Unfortunately, as of this writing, I cannot share it with you--part of the closed meeting syndrome, which I can understand. It will eventually get out, and rightfully so. The discussion began by explaining the Florida assembly statements in the state's law and our proposed plain paper statements section of our law, mentioned above. Neither Florida nor we were singled out as the bad guys. It was a clear explanation of the existing situation and the listing of several viable alternatives.

By informal straw votes, Los Angeles, Orlando, and New York City favored going forward with a re-examination of the standards with the possibility of changing them, while Dallas and Chicago did not favor reopening the issue. When combined, it seemed the overall vote was about 50/50.

It appears that the AICPA board of directors will ask the Accounting and Review Services Committee to consider addressing internal use only statements. Eventually, this may require a vote of the independent council and potentially a vote by the AICPA membership.

The complete issue is too complicated to lay out here in my next to last message. There will be more substantive discussion and explanation of the protocol. Right now, it seems that I have enough information to conclude that the AICPA and its standards-setting bodies are moving well enough along. This means that I do not have to order the inclusion of a section on plain paper financials in our proposed law. This is in keeping with the Society's board of directors' expressed will at its February meeting.

I will know more by the time the full council meets in Washington, D.C., in early May. After that meeting, the NYSSCPA Executive Committee, the Society's professional staff, and I can make the final decision. We wish to avoid including this in the law. Florida was sort of forced into it. Leaders at the Florida Institute of CPAs agree with us that the better way to promulgate professional standards is through the organized profession and its regular standards-setting mechanisms.

Two other things came up at the regional meetings. One was that I received numerous compliments about our monthly newspaper, The Trusted Professional. Some council members sought me out to pay a compliment. The other matter was that ours is not a regional profession. We are all in the same canoe, despite the dialect of Amariken we speak. Our problems are theirs and theirs are ours. We have solutions and they have solutions. And the best part is that with matters on which we differed with passion, it was always like ladies and gentlemen, like true professionals.