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Fiscal year 2003–2004
NYSSCPA Annual Report

Welcome to the New York State Society of CPAs’ Annual Report for fiscal year 2003–2004.

The Society made great strides in its 106th year to bolster service to its membership, while asserting itself as a strong leader and voice for the profession in the public arena.

You will read about the Society’s first bylaw changes since 1999, changes that have helped to create a more open and democratic form of governance.

You will read how the Society took the lead in reforming accountancy law in New York state. Not only did the NYSSCPA support the first major changes to New York’s accountancy law in more than 50 years, it also led a successful grassroots efforts to stymie an alternative bill in the state Assembly.

You will read how Society recruitment efforts in firms and on college campuses led to an increase of more than 1,300 new members. And the members, through their chapters, are staying very busy, supporting charities, networking and serving as a vital resource for their communities. This included educating journalists on complex tax and accounting issues and participating in hundreds of media interviews on financial matters of real significance to the average consumer.

You will read how the Foundation for Accounting Education is bringing education services to your firm through in-house CPE sessions, and answering the needs of the membership with quality conferences and more than 15 new timely and innovative programs. FAE also bolstered its industry CPE, scheduling 52 new seminar offerings for members in that arena.

For the second year in a row, the Society showed strong financial solvency, and is looking ahead with its budget goals. You will read how the NYSSCPA plans to support even greater expansion of its hugely successful Career Opportunities in the Accounting Profession programs, how it supported establishment of five new committees, and how it’s building up its peer review program.

You will see how the Society asserted its influence through its highly active committees, which authored 26 comment letters on everything from tax forms to tax reform.

You will read how the Society’s website saw a record number of hits (exceeding 5 million per month), with inviting new sections for members in industry and redesigned pages for The Trusted Professional and The CPA Journal, which in January debuted a complete redesign of the magazine.

Finally, you will get to know more about the Society’s new home, which will be located at 3 Park Ave. and will offer first-rate accommodations for the membership to conduct meetings and hold conferences.

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Good Governance

A new set of bylaws set the tone of governance for the 2003–2004 year, which saw a series of changes to how the NYSSCPA is governed.

Society members overwhelmingly approved by ballot vote in July 2003 the first changes to the NYSSCPA bylaws since 1999.
The new bylaws reduced the number of vice presidents and redefined their responsibilities, enlarged the Nominating Committee and empowered the board of directors to establish and publish standing rules from year to year, among other changes.

Many of the changes have already gone into effect and have informed other decisions intended to simplify governance. For example, under the new bylaws, the Nominating Committee now consists of nine Society members nominated by petition and two directors who are designated to serve by the board. In the past, board designees had been selected by the president and approved by the board, but immediate past President Jeff Hoops—following a recommendation by the same task force whose work led to the new bylaws—called for the board to elect those designees during its November 2003 meeting. It was the first time the board elected Nominating Committee designees. The board also used elections for the first time to fill two other vacancies on the Nominating Committee.

The board expanded on this idea by using formal election procedures to determine whom to recommend to the American Institute of CPAs (AICPA) to serve on the AICPA’s Council from New York. As with the Nominating Committee designees, these were traditionally presidential appointments. But the board in November elected Peter Berlant, Vincent Love and Thomas Riley for consideration by the AICPA Nominating Committee as directly elected Council members from New York. Frank Aquilino was also chosen in that election to serve in the position of Society representative to Council for 2004–2005. Election of members to these bodies—the Nominating Committee and the AICPA Council—was part of a shift to more open and democratic governance.

The new bylaws approved in 2003 empower the board to establish and publish standing rules for itself and protocols for the Nominating Committee from year to year. While bylaws had permitted the board to establish standing rules in the past, the new bylaws added the requirement that any standing rules be published to the membership before becoming effective. In April of this year, the board included protocols for the Nominating Committee and the establishment of a selection subcommittee for generating candidates to the AICPA Council and the Nominating Committee as part of its standing rules. This was the first time ever the board established standing rules for itself and protocols for the Nominating Committee.

The board last year also set about a policy-making agenda for its members and employees.

In October, the board unanimously approved a policy requiring its volunteer leadership (i.e., Society board members, committee chairs, etc.) and employees to report any actual and potential conflicts of interest pertaining to that person’s Society-related activities. The policy requires leadership and employees to make such disclosures from year to year. Violation of the policy would result in an employee’s termination or a member’s dismissal from his or her leadership position.

The board at the same meeting approved a uniform reimbursement policy for committees and the board. The policy sets the ground rules for reimbursement of members’ travel, lodging and meal expenses.

The board also passed a policy requiring the executive director to establish a business continuity plan to be reviewed on a quarterly basis. The plan arose from a recommendation by the Society’s auditing firm in its 2002–2003 audit that the NYSSCPA adopt a disaster recovery plan. The board authorized the executive director to implement a business continuity plan and required that the plan be reviewed on a quarterly basis.

While the board made improvements to Society governance, it also steered the NYSSCPA toward its new headquarters at 3 Park Ave. in New York City. The new space is spread over two floors, with enough space to accommodate conferences with up to 150 attendees.

Earlier this year, the Society engaged the firm Loeb & Troper to review the NYSSCPA’s internal controls. The study covered internal controls over payroll, investments, membership dues, education fees, publications, chapter activities, allocation of expenses and computer access, among other items. The Executive Committee, which met 12 times in the 2003–2004 year, accepted the firm’s report at its March 29 meeting. The report concluded that the internal controls worked as they were intended, and included some recommendations for improvement.

The Society’s Executive Committee and board of directors in the spring also approved what was described by Treasurer Arthur Bloom as a break-even budget for 2004–2005. The budget expects a $3.8 million expense allocation to the Foundation for Accounting Education, Inc., in line with grants made to the Foundation in recent years, and representing 29 percent of the Society’s $13 million total budget expense.

The budget, as drafted by the Finance Committee, originally proposed new initiatives, including four new staff positions and an increase in the publication schedule of The Trusted Professional, following a successful test run in the last quarter of the fiscal year. This expansion, however, was put on hold pending a financial review at the end of the FAE year.

Government Affairs

One of the primary accomplishments for the profession in the legislative arena was the unanimous passage by the state Senate of a bill patterned on the Society’s reform proposals.

The bill, S302-D, sponsored by Senator Kenneth LaValle, was the first substantial revision of the state’s accountancy law to pass in the Senate in more than 50 years. It represented a reasoned state-level response to restore public confidence in the post-Enron environment.

S302-D recognized that the state controls the licensing of CPAs, but that existing law was inadequate to meet the current challenges to the profession and to protect the public interest.

The LaValle bill called for mandatory peer review of a firm’s attest and compilation services every three years; registration of all CPA firms; regulation of all services within the CPA’s scope of practice, including CPAs in private industry; expansion of qualifying experience for licensure; temporary practice permits; expansion of mandatory continuing professional education to cover all registered CPAs; enhanced due process in disciplinary proceedings; clarification of commissions and referral fees from nonattest clients; and increased penalties for professional misconduct. The Society’s network of Key Contact Persons communicated directly with state legislators to show the profession’s support for S302-D.

Assemblyman Ron Canestrari introduced a bill identical to S302-D late in the session. The Assembly, however, took no action on the bill, A8555-A.

The Society’s Legislative Task Force was actively involved in developing strategies to build support for S302-D and A8555-A. In the 2004 legislative session, the goal was to support passage of the legislation in both houses. Because S302-D was not passed by the Assembly during the 2003 session, it was returned to the Senate and would need to be re-passed. Task Force Chair Kevin McCoy and then Society President Jeff Hoops met twice with the representatives of the State Education Department to discuss legislative reforms.

McCoy also participated in a roundtable discussion of all interested parties that was convened by LaValle’s office in January 2004. In May, Hoops, McCoy and NYSSCPA Executive Director Lou Grumet met with staff of the Assembly Speaker’s office on accountancy reform. While the Society continued to strongly support S302-D and A8555-A, it advocated for the addition of substantial equivalency provisions to the legislation.

Later in the 2004 legislative session, the Senate again unanimously passed S302-D, but the Assembly took no action on its counterpart, A8555-A. Instead, the Assembly introduced a separate reform bill, A11695, sponsored by Canestrari, which the Society deemed unacceptable. Consequently, the Society’s Key Contact Persons launched a major effort to persuade Assembly members that A11695 would not be good for the profession.

That bill included Sarbanes-Oxley–type conflict-of-interest provisions for New York firms that audit publicly traded companies; a very limited version of substantial equivalency; exorbitant level of fines up to $250,000 per charge based upon a pattern of misconduct for firms with less than a billion dollars in annual domestic gross revenue and up to $750,000 per charge for firms with over a billion in annual domestic gross revenue; and authorization for nonlicensees to perform compilations.

The fact that the Assembly’s bill had no provisions for mandatory peer review was equally objectionable, as was the absence of provisions for continuing professional education for all registered CPAs, of expansion of qualifying experience for licensure, and of clarification of commission and referral fees from nonattest clients.

The Society’s Legislative Task Force, Key Contact Persons and leadership contacted legislators and voiced strong opposition to the Assembly bill, A11695, which died in the Assembly Rules Committee after being reported from the Higher Education and Codes committees. This effort demonstrated the importance of grassroots lobbying to bring the Society’s position to the attention of legislators.

On another legislative matter in 2003, the Society supported the passage and enactment into law of LaValle’s bill S4960-A to grant civil enforcement powers to the State Education Department to prevent unlawful practice of professions. Hoops wrote a letter to Gov. George Pataki urging that the bill be signed into law to protect CPAs from the unlawful practice of the profession, but also recommended that sufficient resources be made available to the department to implement this new responsibility. The governor approved this new unlawful-practive law on October 1, 2003, and it took effect immediately.

Member Relations: 30,300 Served and Counting

The single greatest responsibility, and honor, of the NYSSCPA is to serve the 30,280 (as of May 2004) people across the state who choose to be members of the organization. For more than 100 years, members, each one a volunteer, have built viable leadership structures at the state and chapter level, establishing the secret to the Society’s success. This past fiscal year was no exception.

Meeting immediate and long-term goals, the Society continued to offer its members increased networking opportunities, informative CPE and assurance that Society members are positive role models in the business world and in their local communities.

Having recruited 1,321 new members, the Society ended 2003–2004 with an encouraging increase in membership and ambitious goals for the future. Although the Society recruited more people in almost all of its membership categories, the largest growth was in the associate student group (870 new student members signed on in FY 2003–2004). This reflects an increased effort to work with college accounting departments throughout the state to invigorate our membership with active CPA candidates and young CPAs.

This year, the Society launched an initiative to host open houses at CPA firms, promoting NYSSCPA membership. Eleven CPA firms opened their doors to the Society over eight months, securing at least 79 new members. An additional 16 visits were planned for the first quarter of the 2004–2005 year.

Chapters

To ensure all these new members have a place to call home, this year the Society approved its six newest chapters as “permanent” fixtures, thus cementing its 17-chapter organizational structure.

As in all successful nonprofits, active volunteers with a grassroots attitude do much of the Society’s most influential work. Whether it’s supporting a local charity, attending a CPE session featuring a well-known CPA from the area, or visiting a high school classroom, chapter initiatives leave a lasting impression on New York’s communities and on the profession at large. Here are some highlights from last year.

For the six newest chapters just hitting their stride and the veterans alike, 2003–2004 was a year of many firsts. Syracuse organized its inaugural Career Opportunities in the Accounting Profession (COAP) summer program at Le Moyne College, while the Northeast and Rochester chapters finalized plans to host their first COAP sessions in fiscal year 2004–2005 (read more in the COAP section following). Rochester also formed a High School Relations Task Force, and the Nassau Chapter, similarly focused on student recruitment, launched a new mentoring program enlisting members to advise local accounting students.

The Manhattan/Bronx Chapter had its first conference as a new chapter, featuring speakers from the AICPA, the NASBA, the NYSSCPA and the New York State Board for Public Accountancy, as well as managing partners of three New York firms. And the Adirondack Chapter, also one of the new six, hosted its first E-Submissions Seminar, with the NYSSCPA Tax Committee, the IRS and the New York State Taxation Department.

Adding to its busy CPE schedule, the Buffalo Chapter re-introduced a significant two-day CPE offering by resurrecting its annual Summer Symposium, which had been off the schedule for a few years. The Rockland Chapter’s participation in the Rockland County Small Business Resource Fair was also a new endeavor, bringing together many local businesses whose services are integral to building a sound financial base in the community. And Suffolk Chapter young CPAs had their hands full hosting for the first time the annual Young CPA Forum, which moves to a new chapter each year, while the Mid-Hudson young CPAs hosted their first Hudson Valley Renegades baseball outing.

One of the primary goals of having chapters cover the state geographically is to be sure members in the farthest corners of New York are informed of the issues and developments surrounding their profession and their region. To do so, the Queens Chapter held a technical session to help its members understand the challenges that face them in the current regulatory climate resulting from corporate scandals. The Staten Island and Southern Tier chapters offered tax conferences. Utica Chapter members participated in a series of Estate and Charitable Giving Strategies sessions, in addition to several chapter CPE sessions. The Northeast Chapter invited its members to tour SUNY Albany’s Nanotechnology Center. 

In addition to developing new programs individually, several chapters combined forces this year to cosponsor CPE or social events. The Manhattan/Bronx, Nassau and Suffolk chapters set sail together on the Hudson River for a young CPA networking cruise. Also combining work and play, the Brooklyn and Mid-Hudson chapters joined to offer their members 25 CPE credits at a week-long summer retreat in the Catskills.

Running four conferences and the third annual joint Nassau/Suffolk Accounting and Auditing All-Day Conference, as well as over 40 chapter CPE programs, the Nassau Chapter has once again distinguished itself in meeting the CPE needs of its members. The Suffolk Chapter also hosted its Annual Tax Conference and its fifth annual Half-Day Estate Planning Conference. The Mid-Hudson and Syracuse chapters both brought professionals together with banker/attorney programs. And the Queens Chapter ran a joint program with St. John’s University Law School and the Queens County Bar Association on the practical application of retirement distribution rules.

In addition to the chapters’ outreach to local high school and college students, many chapters established community service as a top priority this year. In cooperation with the Journal News, the Westchester Chapter participated in an annual community service tax hotline to help Westchester residents with tax questions. The chapter also worked with the Westchester County Association, Inc., to host Profiles in Success, an award program honoring the best of Westchester small businesses. While celebrating the chapter’s 50th anniversary, Rochester members participated in the March of Dimes Blue Jeans for Babies fundraiser. And Utica Chapter members held a canned foods drive in the fall.

The Manhattan/Bronx Chapter helped the New York Cares organization set up a winter coat drive and refurbish the grounds of a Brooklyn high school, while the Mid-Hudson and Utica chapters collected toys for Toys-for-Tots. The Staten Island Chapter held its annual fundraiser and bowl-a-thon to raise money for the neurological disorder Batten’s Disease. And the Nassau Chapter once again gave back with a blood drive and its annual CPAs for a Cause 5K Run/Walk, raising more than $13,000 for local charities.

Each chapter also hosted an annual NYSSCPA Officers Visitation and Ethics CPE event. Then President Jeff Hoops, then President-Elect John Kearney and Executive Director Lou Grumet made the rounds to all 17 chapters. In addition to a legislative update, their visits in the 2003–2004 fiscal year focused on advocacy and the importance of being active at the state and local level. The Society offered attendees a free two-hour ethics CPE session, helping members fulfill half of their ethics requirements.

Finally, all chapters that work hard must also play hard. Golf outings, ballgames, hockey games, clambakes, barbeques, horse races, museum visits, poetry readings, dinner theater, holiday parties and happy hours filled the already jam-packed schedules of CPAs across the state.

Members in Industry

Industry members represent the Society’s second-largest membership category, comprising about 25 percent of membership. Last year the Society increased incentive for industry members to be active in statewide committees and on the chapter level by adding educational events, networking opportunities and committees.

To address the educational needs of industry members, the Foundation for Accounting Education launched a multiyear educational campaign specifically for financial professionals operating in industry. The first set of courses was offered during the summer across the state.

The new educational program follows the AICPA’s competency model, covering four basic areas: personal attributes, leadership qualities, broad business perspective and functional specialty.

Several industry committees on the state and chapter level also offered educational programs at committee meetings and at evening networking events. The statewide CFO Committee hosted evening technical sessions on topics ranging from human resources to corporate insurance. One highly successful session on the ethical responsibilities of the industry CPA outlined ethics enforcement in the profession and how it specifically applies to members in industry.

The Society created two new statewide industry committees during the year to address the demands of the industry member operating in these arenas: the Risk Management and Business Insurance Committee and the Investment Management Committee.

Committee involvement is a great way for these members to stay abreast of news within their respective industries, while providing networking opportunities. This year the Society had 18 active statewide industry committees and seven chapter industry committees.

COAP

An intensive college campus–based program that introduces minority high school students to the accounting profession, Career Opportunities in the Accounting Profession, offered five programs in 2003. One hundred and fourteen high school students from New York attended the programs last summer to learn principles of accounting and polish their networking and communication skills.

For nine years, COAP operated out of just one location at Pace University in Pleasantville until it secured Hofstra University in Hempstead in 1996. The program expanded in 2002 to include Long Island University’s Brooklyn Campus and Westchester Community College, and then again by adding Le Moyne College in Syracuse in 2003. In summer 2004, the Society ran programs at SUNY Brockport in Rochester and the College of St. Rose in Albany, offering New York state high school students seven locations.

To support program expansion, the Society developed a significant new source of funding. More than $90,000 was raised by selling advertisements in an annual dinner journal. A committee chaired by Frank Fusaro oversaw the solicitation of CPA and private companies across the state. The Society expects to continue this ad drive in 2004–2005.

The following are highlights from the 2003–2004 COAP programs:

Hofstra University: Thirty students attended this residential program featuring full-day curriculum and field trips to KPMG, Margolin Winer and Evens LLP, Ernst & Young, Computer Associates and the Museum of American Financial History. The program concluded with an awards dinner and a speech from Ulric Haynes, executive dean of Hofstra University International Relations, who was once the ambassador to Algeria.      

Le Moyne College: Twelve students gathered for this program in Syracuse, which was supported by the Syracuse Chapter’s young CPAs. Students studied public speaking and the art of networking and visited Green and Seifter, Cardaret and Grant, and PricewaterhouseCoopers.

Long Island University, Brooklyn Campus: Seventeen students learned not only business ethics from Professor Phil Wolitzer at this COAP program, but also the basics of writing college essays, networking and the importance of reading newspapers daily. They also visited Roberts and Holland, Ernst & Young and Keyspan. 

Pace University: Thirty-two students attended the program, which offered workshops in college preparation, career opportunities, resume writing, teambuilding and networking. Students visited PricewaterhouseCoopers, KPMG and MasterCard. On the last day of the program an award banquet ceremony featured Rosemary Rodriquez, national president of the Association of Latin Professionals in Finance and Accounting.

Westchester Community College: Seventeen students attended and visited MasterCard Inc., Pepsi Bottling Group and BDO Seidman, where they were given presentations on accounting and business concepts and the opportunities available with an accounting degree. The curriculum consisted of financial statement analysis, college preparation, resume writing, case studies, scholarships, goal setting, business ethics and other related accounting and business topics. 

All COAP participants received COAP certificates of completion and were invited to reunite as COAP alumni with their peers, counselors and COAP volunteers at a holiday party at PricewaterhouseCoopers on Dec. 12, 2003.

Member Benefits

The Society entered the fifth year of its exclusive endorsement of Camico Mutual Insurance Company as the provider of professional liability insurance to NYSSCPA members. During that time, Camico experienced tremendous growth in New York. The number of firms covered by Camico grew by 97, reaching a total of 386 firms as of the fiscal year ended May 31, 2004. The number of CPAs covered grew by 342, reaching a total of 1,282 CPAs as of the same time period.

Several other member benefits are particularly popular with members who want to take advantage of NYSSCPA group membership discounts. Among these programs is the insurance portfolio, offered by the Marsh Affinity Group Service, Geico Auto Insurance and our MBNA affinity credit card.

 The Society is able to offer a term life plan, hospital indemnity, disability, catastrophe, major medical and accidental death and dismemberment through Marsh Affinity Group Service. The most popular program is the accidental death and dismemberment plan, followed by life insurance and then disability. A total of 4,645 members use one or more of our insurance plans. This figure is current as of June 30, 2004.

Geico, the low-cost auto insurance company, provides auto insurance for 6,053 members. In August 2004, the company announced that it was going to enter the New Jersey auto insurance market, making the group discount program available to our New Jersey-based members for the first time.

MBNA offers NYSSCPA members many different affinity credit cards with very competitive interest rates, depending on credit worthiness. A total of 2,981 members have opened accounts. This figure is current as of April 30, 2004.

More information about these programs and other benefits offered to Society members can be found on the NYSSCPA webpage under “Member Benefits.” Or call the Member Services phone number, 800-633-6310.

Peer Review

he NYSSCPA administers the AICPA Peer Review program for CPA firms whose main offices are in New York state and that have enrolled in the AICPA Practice Monitoring Program. The Society also administers a parallel program for firms headquartered in New York state that are not members of the AICPA Practice Monitoring Program but choose to have a quality review. The Society maintains current information with respect to peer review developments. This can be found at the NYSSCPA website, www.nysscpa.org.

The program’s technical reviewer periodically distributes updates to all peer reviewers on matters of administrative importance, such as changes to administrative procedures, forms, frequently encountered problem areas, peer reviewer training programs, and other current matters of an administrative nature.

For the 12 months ended May 31, 2004, the peer review program processed approximately 650 closed (completed) reviews and, on average, administers another 650 reviews in various stages of scheduling, fieldwork, and administrative or technical review before submission to the peer review committee for acceptance. The program also conducts between 15 and 20 oversights of peer review team captains during the year. This number has doubled in the past two years.

Foundation for Accounting Education

FAE Course Development Activities: New CPE Courses

FAE monitors professional pronouncements, regulations, trends, techniques and emerging opportunities to help CPAs maintain and build competencies. The following new programs were developed by FAE or on its behalf in 2003–2004:

FAE In-Firm Continuing Education

FAE offers CPA firms and companies the convenience and economy of private, in-house CPE. In 2003–2004, 29 organizations held or scheduled 50 classes with a total of 1,389 participants. The classes were four or eight hours in duration. FAE’s Ethics Update was the most selected program. Courses in accounting, auditing, compilation and review, and tax, including fraud/SAS 99 and not-for-profit, were also selected.

FAE Conferences

FAE conference staff continued to work proactively with committee members to improve content quality and timely delivery of committee-sponsored conferences. There has been significant improvement in technical content and speakers. As a response to members attending conferences with significantly high attendance, the FAE new facilities, such as the Crowne Plaza Times Square and the New York Marriott Marquis hotels, were researched for cost-effectiveness and the quality of the learning environment. These facilities were utilized for major conference programming.

More than 100 young and upcoming CPAs from across the state, who networked and attended a series of workshops, attended the third annual Young CPA Conference, sponsored by the Suffolk Chapter’s Young CPA Committee. As a response to post–Sarbanes-Oxley implementation concerns, a new conference on Section 404 took place in April 2004. The event was a great success, with an attendance of 190 individuals.

In recognition of the outstanding contribution of Society committees that sponsor FAE conferences, for the first time FAE held a special recognition reception in April 2004 to highlight the participation and efforts of FAE speakers and committee and conference chairs.

NYSSCPA Annual Leadership Conference

The Society’s third Annual Leadership Conference took place at the historic Gideon Putnam Hotel in Saratoga Springs in July 2003. Representatives from every leadership level of the Society, including the board of directors, officers, statewide committee chairs, chapter officers, the FAE Board of Trustees, members of the NYSSCPA CPAPAC and others, attended. During the conference, political consultant Michael Dunn and former SEC Chief Accountant Lynn Turner led a workshop in which the leadership addressed the issues of establishing effective grassroots relationships with lawmakers throughout the state, and ways for the Society to help rebuild the public’s image of the CPA professional. Conference attendance totaled 144 members plus 69 spouses and children.

107th Annual Election Meeting and Dinner

The Society held its 107th Annual Election Meeting and Dinner at the New York Marriott Marquis Hotel in New York City with an attendance of 200 people. Guest speaker SEC Commissioner Harvey J. Goldschmid delivered a speech on the continued efforts of the SEC to improve the quality of audits and enforcement. For the first time, the Society adopted a new format by conducting the awards ceremony earlier in the evening, followed by the usual reception and dinner.

NYSSCPA Office Relocation Project

During the meeting of the Society’s board of directors, held at the Annual Leadership Conference in Saratoga Springs, the board approved moving forward with negotiations to occupy office and classroom space at 3 Park Ave. and 34th Street in New York City. The transaction began as a sublease with the American Institute of Chemical Engineers (AIChE), who were tenants in the space, from the landlord.

Subsequent negotiations resulted in modifications to the transaction, placing the Society as the sublandlord and the AIChE as the subtenant, until August 2013. The board approved this arrangement in September 2003. Staff worked with outside legal counsel in finalizing all leasing documents between the landlord, the AIChE and the Society. All architectural drawings were finalized, and a general contractor was selected. The NYSSCPA’s Executive Committee, the board of directors and the FAE Board of Trustees received monthly reports on the status of the project.

The build-out, expected to be finished by May 2004, met a number of delays, requiring the modification of a move-in date from May 2004 to later in the year. The renovations will be completed before the Society must vacate current office space, at 530 Fifth Ave., before Oct. 31, 2004.

Fiscal Information

Society Treasurer and Finance Chair Arthur Bloom presented the 2004–2005 combined NYSSCPA and FAE strategic goals budget, which the board of directors approved in April 2004. It is a break-even budget. Highlights include:

The audit for the fiscal year ending May 31, 2004, shows an increase in the Society’s net assets of $803,000, compared to last year’s increase of $1,235,000. Included in the consolidated audit are the Society, FAE, CPA PAC and the Benevolent Fund.

Committees Still Committed

An upward trend in comment letters continued strongly in the 2003–2004 committee year, making the Society’s 67 committees a thoughtful voice for the NYSSCPA membership.

Comment letters increased from 23 to 26 beyond the 2002–2003 committee year, with committees submitting letters to local, state and federal government and regulating bodies. The final count more than triples such activity over the 2001–2002 year, greatly contributing to the Society’s leadership role in the profession.

The letters added luster to an already impressive year for committees. Committee attendance increased, conferences featured interesting speakers who drew ample audiences, and committee expenses fell for the third consecutive year. Demand among members in industry created two new committees: the Investment Management Committee and the Risk Management and Business Insurance Committee.

The Investment Management Committee is focusing its attention on the accounting and operational implications for originators, intermediaries and end users of new and existing financial products, developments in the areas of short selling, credit analysis and valuation, and proposals of the SEC’s Investment Management Division, the Commodity Futures Trading Division and other regulatory bodies. The Risk Management and Business Insurance Committee not only fills a need for a Society committee to address the traditional role of a risk and insurance manager, but also responds to the nonconventional areas of risk management that CPAs increasingly find themselves responsible for. The addition of these two committees resulted in the first net increase in the total number of committees in 11 years.

But the comment letters also have led to direct participation in developing policy.

The Exempt Organizations Committee, for example, submitted a comment letter to the Treasury Department in July 2003 with recommendations on how to help stop the unintentional funding of terrorist organizations. The Treasury Department, as a result, invited the Society to send a member to join discussion on the matter at its Initial Outreach event last April. Committee Member Paul Hammerschmidt attended the meeting in Washington, D.C., reporting that Treasury Secretary John Snow looked forward to working with an expanded group of Society members to help create guidelines for spotting potential terrorist financing through charitable organizations.

Other comment activity included:

Another highlight of the committee year was a number of well-attended and well-received conferences. The SEC Practice Committee’s SEC Practice Under the Sarbanes-Oxley Act Conference featured former SEC Chief Accountant Walter Schuetze. The accounting reformer declared that many noncash assets included in financial statements are unauditable and give a subjective impression of a corporation’s well-being. Keynote speaker William J. McDonough used the conference to make his public debut as chair of Public Company Accounting Oversight Board.

“The board and our inspectors want to know if the message of doing the right thing is reaching the rank and file at your firm,” McDonough told the 250 CPAs and members of the press attending the conference. “We will look at how often and how well that message is delivered.”

The Annual Business Valuation Conference, sponsored by the Business Valuation Committee, featured keynote speaker the Honorable Judge David Laro of the U.S. Tax Court. This conference was geared toward business valuation professionals and focused on cutting-edge business valuation topics such as “Assessing Risk in a Business Valuation” and “How to Make an Expert Witness Sweat,” among other respective topics. Close to 180 people attended the conference.

Former U.S. Attorney Mary Jo White spoke before the Society’s Litigation Services Committee’s Fraud Conference. The conference covered the latest tools and information CPAs need to prevent and deter fraud. More than 100 people attended the conference.

And Andrew Alper, president of the New York City Economic Development Corporation, spoke about the city’s economic future at the Real Estate Committee’s Real Estate Conference.

Other notables, such as New York City Comptroller William Thompson and New York State Department of Taxation and Finance Commissioner Andrew Eristoff, spoke at Society conferences.

Committees undertook other activities. For instance, the Tax Division Oversight Committee’s E-Filing Task Force offered an educational program on e-filing to all chapters. Members earned three CPE credits in three hour-long presentations that featured a representative from the New York State Department of Taxation and Society members, all of whom discussed the filing services available. The program included a discussion led by John Raspante, of Camico Insurance, on the liability aspect of electronic filing.

The annual chair orientation session, held in May, was well attended by new committee leaders; 90 percent of the participants were new committee chairs. The successful session covered all topics and issues related to committees, and featured a panel of seasoned chairs, who shared their experiences and answered questions.

NYSSCPA.org

The Society website, www.nysscpa.org, had another record-breaking year in FY 2003–2004. From June 2003 through May 2004, the website not only exceeded 4 million hits for the first time ever, but in April and May 2004, the site surpassed 5 million hits. The site also has regularly approached or exceeded 200,000 visits in the past fiscal year, and also has regularly eclipsed 700,000 page views.

The two biggest website improvements were The CPA Journal and The Trusted Professional site redesigns.

The new CPA Journal site, located at www.cpajournal.com/, replaced the old template with a more professional look that incorporates elements of high-profile magazine websites.

As part of the new design, the user can navigate The CPA Journal either through the current issue’s Table of Contents or by topics, such as “Accounting & Auditing.” From the new launch forward, this topic drill-down lets users find all past and present stories related to a topic. In addition, users can still find stories using the search engine.

The site is also more graphic-based than previous NYSSCPA.org locations, with large color images, a professional-looking navigation rail, a custom-designed Media Kit page and an attractive blue-field containing the magazine’s logo at the top of each page.

The new Trusted Professional site, located at www.nysscpa.org/trustedprof/main.htm, replaced the old template, and its straight listing of stories, with a more classic design that mirrors the look and feel of the publication’s print version. The site is even accented with whatever color the paper used for that month’s issue.

As part of the new design, the main story of the current month’s issue is now prominently displayed on the homepage, with a photo, and, just like in the print version, continues on another page. Three to four other stories are also displayed on the home page, along with the stories’ first paragraph. Links to all remaining stories from the month are located on the left side under “What’s Inside.” All stories also feature links to e-mail the author, to print the article or to send the article to a friend.

In addition, the “Chapter Newsletters” section is now located in the bottom right of the main page. This section includes news and notes from the Society’s 17 chapters, as well as messages from chapter presidents.

Other upgrades include:

One additional feature is the new monthly Web Notes column appearing in The Trusted Professional. It includes tips, new features and advice to help the members navigate the Society sites. The column also features the monthly website numbers.

Public Relations: Enhanced Education and Exposure

he Society members continued to serve as a highly valued source for local, state and national media in 2003–2004. Members participated in 387 interviews that spanned topics as far-ranging as the AMT, the New York state sales and use tax, the outsourcing of tax services, credit card debt and the effects of Sarbanes-Oxley. Good Day New York, ABC Eyewitness News, Newsday, The Wall Street Journal, Accounting Today and The New York Times were just some of the media outlets that the Society worked with on these issues.

The passage of a New York State Senate bill to update accountancy laws, much of which incorporated the views of NYSSCPA members, and the findings of our annual Economic Report also put several Society members in contact with the media. Nearly 500 CPAs participated in the economic poll, which received coverage in Crain’s New York Business, CBS Marketwatch, The Times Herald, The Troy Daily Record and Fox News, to name a few. The Society also made the op-ed pages of the state’s local newspapers. NYSSCPA-authored letters on New York state accounting reform legislation, of which the Society has been a leading advocate, appeared in the Albany Times Union, as did ones on 529 plans in The Buffalo News.

Over the last year, the Society has increased its efforts to become a leading resource on personal finance matters, offering straightforward, practical advice and information to the average consumer. To that end, CPA members helped out with a unique six-part series called “Love and Money.” Featured on ABC Eyewitness News, the series included discussions on taxes, retirement, financial planning and credit card debt. As it has in the past, the NYSSCPA Public Relations Committee again conducted its credit card debt seminars for professionals, consumers and journalists. This year, the committee also presented the seminar to students at Long Island University.

In its campaign to help out the consumer, the Society also took to the airwaves, distributing public service announcements to all New York state radio stations with reminders for taxpayers to check their mailing address before submitting forms and the need for year-round tax planning, as well as information on capital gains rates. Of course, the Society also continued with its hugely popular year-end tax panels. This year, Society members again staffed tax hotlines at the New York Daily News, and contributed their expertise to a weekly tax column that ran in the newspaper. The NYSSCPA’s Westchester and Syracuse chapters were part of tax hotlines with The Journal News and The Post-Standard, respectively.

The FAE conferences further served as excellent story opportunities for the media. In particular, the April 26, 2004, Section 404 Conference, the Jan. 29, 2004, Nonprofit Conference and the Sept. 9, 2003, SEC Practice Under the Sarbanes-Oxley Act Conference drew special interest from reporters.

However, the Society and its public relations programs do a great deal more for the media than granting them interviews and giving them story ideas. Just as it does with the general public, the NYSSCPA helps educate journalists on tax and accounting issues. For more than 20 years, the Society has hosted free seminars, most recently led by board member Philip Wolitzer, for New York City–based reporters which are designed to help them understand financial statements. In addition to holding the seminars at the Society’s headquarters throughout the year, special sessions also took place at the offices of Baseline Magazine and of the Associated Press.

The Society even took the show on the road. Members of the Rochester Chapter held sessions for reporters from the Rochester Democrat and Chronicle as well as other Gannett newspapers, while other members from the same chapter helped journalists from the Rochester Business Journal. Buffalo chapter members did the same for their local paper, The Buffalo News.

Working so closely with the media, the Society has developed a great deal of admiration for those journalists who are responsible for important, often complex, editorial contributions. As in years past, the Society recognized their hard work through its Excellence in Financial Journalism Awards, which are judged by members of the NYSSCPA Public Relations Committee and the New York Financial Writers Association. This year, the Society organized a special luncheon at the Yale Club to honor those reporters whose entries were chosen, including the producer of the “Love and Money” series previously referred to.

Because NYSSCPA members are increasingly asked to provide comments and insight to the media, the Society developed special public relations programs for the 17 chapters. Chapter presidents were contacted to discuss the program, designed to draw more media attention to the chapter and facilitate strong working relationships with their communities’ local press.

Chapter and committee chairs also participated in special media training sessions at this year’s annual leadership conference. These sessions have proven instrumental in enhancing communication skills and building confidence. And, as has been the case for the last two years, the NYSSCPA’s Public Relations Department continued publishing its Media Relations column in The Trusted Professional that regularly offers CPAs media tips and techniques.

Finally, and in keeping with the constant quest to bring more exposure to the CPA profession, the Society also ran recruitment advertisements in 12 college newspapers throughout the state during those schools’ spring and fall semesters. The NYSSCPA also placed a special recruitment ad in the journal for the New York State Assembly/Senate Puerto Rican Hispanic Task Force.

The CPA Journal

Over the last year, The CPA Journal continued to play an active part in the public dialogue about accounting and tax reform and regulation, publishing more articles of analysis and opinion and providing a voice to the readership. The Journal published exclusive interviews with PCAOB Chief Auditor Douglas R. Carmichael (September 2003), SEC Chief Accountant Donald Nicolaisen (April 2004), U.S. Tax Court Judge Juan F. Vasquez (January 2004) and SEC Commissioner Harvey Goldschmid (October 2003).

The January 2004 issue marked the debut of a complete redesign of the magazine, the most significant change to its structure and appearance since 1972. The technical content has been reorganized into six “Essential” sections, each focusing on a specific core knowledge area of the profession. The new “In Focus” section contains interviews with influential leaders and professionals, as well as thought-provoking articles of broad interest. The “News & Views” section has been retitled “Perspectives,” and a monthly “Economic & Market Data” page was added to give our readers a concise, current snapshot of the economy.

January also witnessed the first meeting of the entire Editorial Board, leaders in the profession who act as “ambassadors” between the Journal and its readers and contributors. A few months later the Journal website, www.cpajournal.com, was completely redesigned as well, both to reflect the redesign of the print journal and to make the site more functional and useful to our diverse audience.

July 2003’s annual Technology issue expanded by eight additional pages to accommodate extra editorial content and advertising. This was the first issue in more than four years to be expanded from the usual 80-page format. As the number of submissions and ads continues to grow, the editors and publisher hope to be able to publish more expanded issues, or additional special issues on subjects of high interest. The editorial and productions groups also have worked hard over the past two years to deliver the Journal in the last week of the month preceding the issue date.

In 2005 The CPA Journal will turn 75 years old, and during that year the editors plan to share perspectives from the Journal’s past that illuminate the present state of the profession.

The Trusted Professional

Increased in-depth coverage of committee-sponsored FAE conferences defined The Trusted Professional in its sixth year of publication. Discussion about the efficacy of SAS 99 (July 2003 Fraud Conference); management’s assessment of internal controls (April 2004 Section 404 Conference); the typical “firm of the future” (November 2003 Annual Tax/Plenary Conference); and anticipated growth for New York City’s real estate market (January 2004 Real Estate Conference) made for just a few of the conferences’ many unique editorial opportunities that offered comprehensive insight into different facets of the broader CPA profession. The Trusted Professional also took advantage of the chance to hear from prominent individuals who influence the business world, including Taxpayer Advocate Nina Olson, who spoke about the significance of a revamped IRS; Public Company Accounting Oversight Board Chair William J. McDonough, who gave his views on the oversight board and his expectations for CPA firms; and New York City Comptroller William Thompson, who detailed his office’s efforts to ensure that the nonprofit sector continues to retain a vital role in the city’s economy.

While capitalizing on the conferences’ news angles, the newspaper for the first time produced twice-monthly issues of The Trusted Professional. From February to April, The Trusted Professional went to press twice a month, offering its readership more news content on a more timely basis.

In fiscal year 2003–2004, the newspaper continued to fulfill one of its chief priorities: reporting on regulatory and legislative developments that affect the profession. Chief among those events was the unanimous passage in the state Senate of a profound accountancy reform bill, which incorporates many of the NYSSCPA’s views and recommendations. Other major stories that received extensive coverage included the PCAOB’s development and approval of Auditing Standard No. 2, regarding internal controls; legislative efforts to reform the AMT and simplify the tax code; FASB’s proposal to require companies to expense their stock options; and notable actions by the state board of accountancy, including a vote to ease licensure experience for out-of-state CPAs. While summarizing these hard news events, The Trusted Professional also tried to bring more meaningful context to its reporting through comprehensive features on everything from Sarbanes-Oxley’s clear influence on State Comptroller Alan Hevesi’s proposed public authority reform initiative to the need for strengthening governance oversight in the nonprofit sector to CPAs’ views on the economic consequences of the 2003 tax act.

Of course, The Trusted Professional also served as the voice for the Society. Through the newspaper, the NYSSCPA was able to publicize the important work that it carries out on behalf of its members and the profession in general. Just some of these activities and the related coverage included the development and approval of important new bylaw amendments; a stronger NYSSCPA ethics process; a task force to weigh the advantages and disadvantages of outsourcing tax services; and assistance to the state tax department on line 56, the complicated reporting requirement on New York’s sales and use tax form.

This work, from CPE sessions to community volunteerism, clearly extended to the chapters as well, as was perhaps most evident in the increased content of Chapter Newsletters. In its second year of production, Chapter Newsletters solidified its value to the Society’s 17 chapters, which recognized the section’s ability to easily communicate a wide variety of news items and events pertinent to their individual members. The Trusted Professional again peppered its pages with a number of reoccurring columns, including “Media Relations,” which helps CPAs develop important relationships with the media; “Committee Close-Up,” which tracks the efforts of the Society’s committees; and “Risk Management,” a feature written by experts from Camico, the Society-endorsed professional liability insurance carrier. Two new columns joined those features: “School Profiles,” which details New York state college and university accounting programs, and a human resources column that has practical applications to CPA firms.

Finally, The Trusted Professional was proud to receive a large number of outside editorial contributions from Society members and business experts. These writings—from former Society President Alan E. Weiner’s article on significant changes to New York state’s LLC/LLP annual fee requirements to Poughkeepsie CPA Eugene H. Fleishman’s piece on reporting problems associated with 2003 dividends—gave the newspaper added authority and professional competency.

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