Society Embraces Reputation as Reformer

Waves of change rocked CPAs again last year as the aftermath of corporate failures forced regulators to take a hard look at the profession. Your Society’s voice continued to be heard in legislative, regulatory and media circles as we spoke out for meaningful and effective reform.

Some have labeled us a reform Society, stepping up to the plate in understanding that stronger regulation could reinforce the profession’s role as protector of the public interest. In this context, our challenge was to communicate the law of unintended consequences to those who were seeking hasty solutions to complex issues. We attempted to steer legislative and regulatory proposals so that the public interest could be served, without compromising the tenets of the profession.

Under the spirited leadership of President Jo Ann Golden, a tireless advocate for a better CPA profession and society, we looked inward as well. Initiating meaningful action will hopefully show that we walk our talk in the areas that are within our control as a professional association.

We were fueled by the strong membership support we still hear about when we took unwavering positions against the XYZ global credential and participation in the AICPA portal, standing in the minority as almost all other state societies voted to support those initiatives.

Since passage of the Sarbanes-Oxley legislation last summer, we have made important inroads with the new players in the profession, including the chair of the Securities and Exchange Commission, William H. Donaldson, and his staff and with both the acting and current chairs of the Public Company Accounting Oversight Board. Each of the latter two individuals chose to use NYSSCPA forums for their first public addresses.

Our proclivity to stand out from the crowd has not gone unnoticed. At our SEC Conference in September, William J. McDonough, chair of the PCAOB, made the following remarks in his speech to a packed room of members and press:

“With New York being the first state to enact laws applicable to CPAs, it is only appropriate that the New York State Society of CPAs would be a leader of the accounting profession. Through years of dedicated service to the improvement of the profession, the New York State Society has stepped up to the plate, proving time and again that it is not afraid to take positions contrary to the norm. In fact, the New York State Society was reform-minded before it was popular to be so.”

We are proud of this reputation.

On the state level, knowing that reform was needed, our position was to encourage the profession to work with our legislators and regulators to enact reasonable legislation, not a knee- jerk reaction to a crisis. In the end, the New York State Senate passed reform legislation that provides the public with more protection yet remains sensible for the CPA profession. This year we hope the legislation will pass in the state Assembly as well.

We had similar dialogues with the state attorney general’s office regarding Eliot Spitzer’s proposals for accountancy reform. The Society opposed the attorney general’s original proposal, including the extension of Sarbanes-Oxley restrictions to the vast majority of privately held companies and not-for-profit organizations. We maintained that the legislation would have an adverse economic impact on small businesses throughout New York State by limiting services to be provided by their CPAs. The attorney general’s bill was amended to apply Sarbanes-Oxley restrictions to only publicly traded corporations.

Extensive discussions occurred between the Society and the attorney general’s office on his separate proposal for greater accountability by officers and boards of directors of not-for-profit corporations. In particular, the Society found the low revenue threshold for the application of this legislation would be harmful to the viability of many small not-for-profits. The threshold was raised in the attorney general’s amended bill.

Although the Society continues to have opposition to provisions in each of these bills, we are encouraged by the dialogue we have had with this important office.

Last year also found us tying together these legislative issues with the strategic plan developed by leadership groups and finalized by the board of directors in 2002. One objective of this plan is to strengthen the reputation of CPAs as trusted professionals and promote the value of CPAs and what they do to improve the quality of audits.

We kept this in mind as we looked inward. President Golden appointed the Ethics and Peer Review Task Force, headed by past President Brian Caswell, focusing on ethics and peer review requirements for our membership. We revamped the staff to provide extra resources to this important area.

Our Bylaws Revision Task Force addressed internal governance issues and, among many other substantive changes, included a requirement that ethics cases that come before the Society’s Professional Ethics Committee could be referred to state and federal regulators as well. This process will provide extra bite to any necessary disciplinary actions. The membership subsequently approved this change.

Although these issues consumed your Society last year, good things were happening behind the scenes with ongoing activities. For the first time, we developed a Society budget that followed the strategic plan. Your membership dues are now spent in accordance with predefined objectives that the Society’s leadership has approved.

Society finances were healthy, which put us in a strong position to continue to develop member services to meet the needs of an ever-changing profession. And as we look to the future, a task force of CPA experts worked hard this past year to find new real estate for us for a planned move in 2004.

The Foundation for Accounting Education achieved one of its best years ever and met its budget goals. More participants, better evaluations, and more targeted marketing ensured continued programming to meet member needs.

Our press activities have put us on the map in New York state and beyond. We have a reputation for providing objective feedback for reporters looking for education and sources on particular issues. Our Trusted Professional has become the newspaper of record for our membership. We have more readers, more contributors and more letters to the editor agreeing or disagreeing with what we have said. Our website tops more than 3 million hits a month, and has a following outside of our own membership.

Committees saw an increase in participation. We issued a record number, 23, of comment letters last year, which encouraged more members to join committees, which in turn enables us to step up our responses to exposure drafts and tax proposals.

Our new chapters are growing and the more established ones are boasting increased activities, including student and member recruitment, more professional programming, outreach to industry members and networking events. During the officers visitations last year, attendance increased from an historic 500 to close to 3,000, indicating that our members feel that the Society is clearly the place to be.

And membership itself is up, especially with younger CPAs. We continued our recruitment programs, and launched an advertising program with college newspapers to attract more students to the profession. Career Opportunities in the Accounting Profession expanded in 2002 with brand-new programs at Long Island University and Westchester Community College, which join Hofstra and Pace universities, all of which will focus on exposing minority groups to opportunities in the profession. Still another COAP program was started at Le Moyne College in Syracuse in 2003.

We take all of these trends and statistics as a vital sign of a vibrant Society. Our members view the Society as their professional home, their voice, as a place for them to gather. And that’s just fine with us.

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Editor’s Note: The following article was written with respect to the 2002–2003 NYSSCPA Annual Report that is featured on pages 12–18 of this issue. The President’s Commentary that usually occupies this page will resume in the December issue.