Fiscal Year 2006–2007 NYSSCPA Annual Report

The NYSSCPA continued to assert itself as a strong leader and voice for the profession in the public arena in its 109th year. During the 2006–07 fiscal year, Society leaders and volunteers worked to implement and meet the five main goals of the Society: Professional Competency, Maintaining the Public Trust, Advocacy, Recognition and Visibility, and Recruiting and Retention, in a number of ways.

Over the past fiscal year, the Society leadership testified before the U.S. House Ways and Means Subcommittee on Select Revenue Measures urging the repeal of the Alternative Minimum Tax (AMT) and met with federal Treasury officials to discuss the NYSSCPA’s Simple Exact Transparent (SET) tax, the Society’s proposed solution to tax complexity. The Society continued to support accountancy reform legislation in New York, including mandatory peer review; recommended improvements for the computer-based CPA exam; and urged New York regulator boards to keep CPA exam costs down.

The Foundation for Accounting Education celebrated its 35th year as an education resource to CPAs, making available over 100,000 hours of continuing professional education at the Park Avenue FAE Conference Center or at firms and businesses through the Society’s In-Firm CPE program.

The Society’s committees remained active during the 2006–07 fiscal year, submitting over 30 public comment letters to state and federal policy makers and regulatory boards.

The Society’s Web site again broke its own record in the number of hits it received this past year, as it launched new programs to increase visibility and member participation. The CPA Journal provided in-depth analysis and technical review in its 77th publication year, and The Trusted Professional continued to provide area CPAs with the news that affects the profession in its twice-monthly publication schedule.

Goal: Professional Competency

The first goal in the Society’s Strategic Plan is professional competency, which aims to give NYSSCPA members access to resources to realize their full potential as competent, educated, ethical and trusted professionals. 

The Foundation for Accounting Education

Between June 2006 and May 2007 FAE sponsored 386 seminars and 44 conferences, attracting more than 14,000 registrants. The net NYSSCPA education expense for the fiscal year was $484,000, or $7,500 less than originally budgeted. In addition, as recommended by the Society’s auditors, NYSSCPA cleared FAE’s negative accumulated fund balance by a transfer contribution of $577,000 to eliminate this carryover from earlier years.

FAE Conferences

FAE conference staff continued to work with committee members to enhance the content quality and timely delivery of committee-sponsored conferences. Close to 5,850 registrants attended during the 2006–07 fiscal year.

The FAE Conference Center, at 3 Park Avenue, in Manhattan, was utilized for 16 conferences during the fiscal year, an action that helped reduce conference overhead costs by eliminating the need for rapidly increasing hotel-meeting-space and related expenses.

Following are some of the conference highlights.

The CFOs/Controllers and Financial Executives Conference educated and shared knowledge with industry-based finance executives on the topics they are confronted with when working in the field. Nearly 100 attendees came to this successful CPE event, which included a networking roundtable discussion where fellow table members discussed the current issues facing their businesses and what they are doing to solve them.

The Health Care Conference covered many topics, including an update on the wording of CPA opinions on Medicaid cost reports for nursing homes and the New York State Department of Health’s final version of the accountant’s certification form for cost report year 2004 filings by nongovernmental certified home health care agencies and long-term home care programs.

The challenges of financial fraud and how to respond to risk-related fraud was part of the June Anti-Fraud Conference. The conference, sponsored by the Litigation Services Committee, was attended by 200 registrants. The day-long event covered forensic accounting, the scope of identity theft, how to explore the utilization of online resources to investigate financial fraud and the importance of data mining.

Over 100 public practitioners and accounting and financial professionals attended the Closely Held and Flow-Through Entities Conference. A wide array of topics were presented, including tax aspects of equity-for-service transactions; bankruptcy issues of closely held entities; mastering Section 1031 like-kind exchanges; an introduction to U.S. international taxation: opportunities and pitfalls; and utilizing synthetic CLATS for strategic wealth transfers.

Over 640 registrants attended the 2006 Investment Partnership Conference. Accountants, lawyers, money mangers, investment advisors, financial principals and financial planners received an update on current legal and industry issues influencing investment partnerships and financial products.

The first Anti–Money Laundering and Counter–Terrorist Financing Conference was held on Dec. 6, 2006, with over 100 registrants in attendance. The participants heard from law enforcement officials from federal and state District Attorney Offices, the U.S. Department of the Treasury and the Internal Revenue Service, and CPAs and attorneys. An overview was provided on the CPA role in money-laundering engagements; assessing AML compliance; the role of the U.S. Department of Justice and the Manhattan District Attorney’s office; criminal prosecutions; penalties; and federal and state anti–money laundering and counter–terrorist financing laws.

The Taxation of Financial Instruments and Transactions Committee sponsored its Taxation of Financial Instruments and Transactions Conference on Jan. 16, 2007. Over 275 registrants, a 51 percent increase over last year’s attendance, were on hand to listen to the Honorable Judge Robert Goelke, of the United States Tax Court. The conference focused on understanding the tax treatment for a wide range of derivative instruments; the impact of the new identified straddle regime; exposure to the newest financial products, including CDOs and CLOs and their related issues; and loan origination.

In May, the Business Valuation Conference was, for the first time, produced as a two-day event, attracting 142 registrants, compared to 118 the year before.

Most May FAE conferences showed an increase in attendance compared to the previous year, with Entertainment and Sports seeing a 27 percent increase; 2007 Employee Benefits, a 20 percent increase; Broker/Dealer, a 10 percent increase; and Business Valuation, a 20 percent increase. Only the Estate Administration Conference showed a small decrease in attendance, 2 percent.

2006 - 2007 FAE Conferences

FAE Seminars

More than 8,160 registrants attended a total of 386 seminars run throughout the state during the year. Ever-popular FAE-originated update programs formed a major part of the offerings. Most members had relatively close access to between 25 and 35 different seminars near their location.

New FAE Seminars 2006-07

FAE Curriculum Development Activities: New CPE Courses

FAE monitors professional pronouncements, regulations, trends, techniques and emerging opportunities to help CPAs maintain and build competencies. See the sidebars titled “2006–07 FAE Conferences” (this page) and “New FAE Seminars 2006–2007” (page 10) for a complete list of conferences and new seminar offerings last year.

FAE In-Firm Continuing Education

FAE offers CPA firms and companies the convenience and economy of private in-house CPE. In 2006–07, 79 in-firm classes were taught to more than 2,955 individuals in 35 firms or businesses. This is a significant increase over the 2005–06 tallies in classes and participants, when 31 in-firm classes were given to 1,115 individuals in 18 organizations.

The FAE Ethics Update was the most popular course, followed by taxation updates. Accounting and auditing updates were also popular.

Technical Hotline

The Society’s member technical hotline exists to assist practitioners with their professional issues and questions. When a member seeks guidance through the technical hotline, the Society selects for response a volunteer with the most relevant professional background from among its technical committee volunteers. Responses neither substitute for the member’s own research and judgment nor constitute an opinion of the Society, the committee, or the volunteer providing the assistance. General guidance frequently is offered by making a referral to an appropriate standards-setting body or to authoritative literature.

The Taxation of Individuals Committee, Closely Held and S Corporations Committee and New York, Multistate and Local Taxation Committee received the highest volume of tax-related calls.

The Financial Accounting Standards and the Auditing Standards and Procedures committees received the largest amount of auditing and accounting calls.

Industry-related queries were most often relayed to members of the Real Estate and the Not-for-Profit Organizations committees.

During the 2006–07 fiscal year, nearly 1,000 calls were handled through the technical hotline. Of these calls:

Approximately 490 were tax related.

Approximately 150 calls were ethics and regulation related.

Approximately 140 calls were accounting and auditing related.

The remaining calls related to consulting, industry-specific, licensing, CPE, and CPA exam issues and other topics.

The CPA Journal

The 2006–07 fiscal year marked the beginning of The CPA Journal’s 77th year of publication. The Journal continued to devote special issues to emerging trends in technology and nonprofit management and governance, and provided in-depth analyses of federal tax policy, fair valuation usage, and financial statement restatements.

Two annual technology issues were published (July 2006 and May 2007) this fiscal year in coordination with the New York CPA Business and Technology Show & Conference, which was moved from July to May in 2007.

The Journal’s Tax Software Survey, in its sixth year, was conducted online for the first time in 2007, with a broader range of responders this fiscal year.

The important but sometimes overlooked nonprofit sector was the featured story in the The CPA Journal’s August 2006 issue. The article examined the CPA’s role in advising on nonprofit organizations’ governance and management.

Association of Certified Fraud Examiners founder and Chairman Joseph T. Wells discussed (September 2006) his organization’s research into the nature of fraud, ways it can be detected and prevented, and the accounting profession’s role in the fight against fraud.

The Oct. 2006 issue featured “The ‘Winners’ and ‘Losers,’” a study and analysis by the NYSSCPA Tax Policy Subcommittee of the President’s Advisory Panel on Federal Tax proposals and how taxpayers in different financial statements would be affected.

Fair valuation was analyzed in the November 2006 story on Enron’s collapse. The story demonstrated how using fair valuation accounting may lead to spectacularly misleading results.

Other key stories included a look behind the trend of financial statement restatements (December 2006) and an analysis of the effect of GASB 43 and 45 accounting rule changes on governmental postemployment benefits (April 2007).

Statistics showed that 53 percent of submissions to the Journal were accepted, 29 percent were rejected, and 18 percent were under revision as of May 31, 2006. Sixty-two percent of the accepted manuscripts were authored by academics; 37.4 percent were written by practitioners.

The CPA Journal’s editorial board met in May 2007. This annual meeting provides an opportunity for an ongoing dialogue between the editors, practitioners and academics about topics of interest to Journal readers. The 2006 Max Block Award winners were announced and awards were distributed at the meeting.

Goal: Maintain the Public Trust

In the wake of corporate collapses and school district scandals, the reputation of CPAs has suffered. It is a major goal of the Society to restore and maintain the public’s trust in our profession.

Peer Review

The NYSSCPA serves as the administering entity for the AICPA Peer Review program for firms that have enrolled in the Institute’s Practice Monitoring Program and whose main offices are in New York state.

In addition, other firms headquartered in New York state may also elect to undergo a peer review that is administered by the NYSSCPA. The Society maintains current information with respect to peer review developments on its Web site at www.nysscpa.org.

Completed reviews are sent to the Society’s Peer Review Group for processing prior to being sent to the NYSSCPA Peer Review Committee for acceptance. The Peer Review Group is led by the Director of Quality Enhancement.

Other staff members include the Quality Assurance Manager–Peer Review, who conducts technical reviews of the peer reviews; the Quality Assurance Administrator, who makes certain that the Society is in compliance with the Institute’s program in all administrative areas; and a Peer Review Administrator.

Although New York state does not mandate peer review, the Society supported legislation that would make peer review in New York state mandatory which was introduced and passed in the Senate in 2007, but died in committee in the Assembly.

For the 12 months ending May 31, 2007, the Society’s Peer Review Group scheduled almost 600 reviews, of which nearly 500 were completed and accepted by the Society’s Peer Review Committee. Of the completed reviews, nearly 300 were system reviews, with the remainder being report and engagement reviews.

In addition, approximately 100 reviews were in some stage of technical review and/or committee review. The program also conducted approximately 10 oversights of peer review team captains during the year.

During the summer and fall of 2006, committee members and staff received intensive training in administrative and technical peer review matters. The training was conducted in two phases, the first by a technical reviewer who covers Tennessee, Kentucky and West Virginia and the second by the Illinois State Society of CPAs’ technical reviewer.

In December 2006, a trial run of a Web-based process for acceptance of peer reviews was completed. The Peer Review staff posts all reviews to the Society Web site’s interface for report acceptance bodies (RAB) deliberation and acceptance.

In January 2007, the Peer Review Committee completed a RAB restructuring that featured fewer RABs with more members, and which separated the RAB function from the administrative and education functions of the Committee. This was done to make the acceptance process timelier and more thorough. Administrative changes included the engagement of a New York contract technical reviewer. Contract reviewers from Connecticut and the New England Peer Review Group have been used in the past, but shifting to a New York contract technical reviewer further ensured that AICPA requirements for timely submission of reviews to the Committee are satisfied.

The Peer Review Committee accepted a request from the AICPA for views on whether the internal audit work for school districts should be included in peer reviews. The Committee deliberated the issue in its February 2007 meeting and determined that the extent of the work, the engagement letter and other factors will determine when such work would be attest work under peer review standards and be reviewable. Chairman Dave Moynihan submitted a memo to the AICPA with the thoughts of the Committee.

The Peer Review Committee met on May 22 and approved a policy that more strictly enforced timeliness policies for submission of peer reviews. The internal oversight of Peer Review program administration was performed May 15 and 16 and a report was provided to the Peer Review Committee on May 22. The report noted that some timeliness issues remained, but improvement had been made in program administration. In May, invoices for firms’ administration fees for fiscal year 2007–08 were mailed along with a memorandum explaining the fee increase and how the fees are used. Collections received through June 25, 2007, totaled approximately $440,000, about 65 percent of the billings.

In June 2007, the Peer Review Committee released a comment letter to the AICPA’s Peer Review Board on their exposure draft of proposed revisions to the standards for performing and reporting on peer reviews, which, in part, are intended to create a single set of program standards.

Ethics

The Society addresses the importance of professional ethics in the accounting profession through its statewide committees and continuing professional education courses.

Although many of the Society’s committees take up the cause of promoting ethics as part of their normal business, the Professional Ethics Committee (PEC) and the Quality Enhancement Policy Committee (QEPC) are charged with the bulk of the Society’s work toward maintaining and improving professional ethics in the profession.

The PEC maintains the Society’s Code of Professional Conduct and also investigates complaints involving the Code of Professional Conduct and NYSSCPA Bylaws. Last year, the PEC opened 39 new complaint cases, investigated and closed 35 cases, and currently has approximately 60 cases under active investigation. The cases included findings where no disciplinary action was taken (no-violation, no-further-action cases). The PEC found violations of the Society’s Code of Professional Conduct, where the sanctions ranged from required CPE, to membership suspension with CPE, to member expulsion.

Additionally, there were approximately 136 open cases involving NYSSCPA members under investigation by the AICPA through the Joint Ethics Enforcement Program.

Last year, the QEPC issued a white paper on ethics in the accounting profession.

The Foundation for Accounting Education presented Society members and other interested parties with CPE courses on ethics last year, including a general ethics update seminar held in seven locations across the state.

Goal: Advocacy

As part of the Strategic Plan, it is a goal of the NYSSCPA to promote the professional interests of our members in the interest of the profession as a whole and the general public.

Government Affairs

Advocacy on behalf of the best interests of the profession in the New York State Legislature, Congress and regulatory agencies is the primary focus of governmental affairs.  This year on March 22, then President-elect David Lifson testified on behalf of the Society before the Subcommittee on Select Revenue Measures of the House Ways and Means Committee in Washington, D.C., on the Alternative Minimum Tax. 

State Legislative Issues

In June 2006, the Society gave strong support to Sen. Kenneth P. LaValle’s (R–Suffolk) accounting reform bill (S.4642-A), which passed the Senate unanimously for the fourth time. The Assembly took no action on S.4642-A, nor on an identical Assembly bill, A.10432 by Assemblyman John W. Levelle (D-Staten Island).  There was no accounting reform legislation passed by the Assembly in 2006, unlike 2005, when it passed A.8358, sponsored by Assemblyman Ron T. Canestrari (D–Albany).

In 2006, the Society continued to raise concerns about provisions in Assemblyman Canestrari’s bill (A.8358), which would apply Sarbanes-Oxley conflict-of-interest restrictions to auditors of publicly traded companies and virtually all governmental entities in New York. The Society urged the Senate and Assembly to resolve differences in their accounting reform bills, including peer review, which was mandatory under the Senate’s proposal but voluntary in the Assembly bill. In June, the Assembly Rules Committee, chaired by Speaker Sheldon Silver, introduced a separate Mandatory Quality Review Bill, A.12027, patterned on the reforms included in the Society’s 2005 Peer Review White Paper, which called for significant enhancements in the current voluntary peer review program. 

The LaValle bill was re-introduced in the 2007 Legislative Session as Senate Bill S.5240. It was again passed unanimously by the Senate on May 30, 2007, with support from the Society, and entailed many reforms, including expansion of the regulated scope of practice; regulation, registration and mandatory continuing professional education for all CPAs, including CPAs in industry; registration of all CPA firms; exclusive rights for CPAs to practice attest service and compilation services; expansion of qualifying experience for licensure; temporary practice permits; substantial equivalency practice privileges; commissions and referral fees; enhanced due process; mandatory peer review; and increased penalties for professional misconduct. The Assembly took no action on any accounting reform legislation.

In an effort to break the legislative stalemate on accounting reform in 2007, the Society worked closely with the State Education Department and the Accountants Coalition to develop a new legislative proposal that would be shared with key staff in the Senate and Assembly. Briefings were held with legislative staff in June, but new accounting reform legislation was not introduced prior the Legislature’s recess. The 2007 proposal was scaled back from prior versions of accounting reform bills in certain respects, but it offered a new approach to practice mobility that raised consumer protection concerns. The 2007 proposal included the following potential amendments for New York’s accountancy statute:

In addition to accountancy reform, the Society recommended amendments to legislation in relation to creating a consumer bill of rights regarding tax preparers, and establishing licensure of tax preparers. Identical legislation was introduced as Senate bill S.2970 by Senator Charles J. Fuschillo Jr. (R-Nassau) and as Assembly bill A.6217 by Assemblywoman Audrey I. Pheffer (D-Queens). While the Society shared the legislators’ concerns with respect to the offering or facilitation of Refund Anticipation Loans (RALs) by tax preparers, it raised concerns about the proposed licensure of tax preparers, which could mislead consumers to incorrectly conclude that licensed tax preparers are deemed qualified by New York state without meeting any minimum standards or qualifications.  The Society recommended that the legislation could accomplish the goals of providing a consumer bill of rights and requiring specific consumer disclosures and registration by tax preparers, including any CPAs who offer RALs, but should not require licensing of tax preparers. Assemblywoman Pheffer amended her bill to conform to the Society’s suggestions, but neither bill was passed by the state Senate or Assembly in 2007.

The Society took no formal position on legislation that would allow up to 24.99 percent of nonlicensee ownership in design professional service corporations. Under current law, professional service corporations in New York restrict ownership to design professionals licensed in engineering, architecture, landscape architecture and land surveying.

Similarly, ownership of professional service corporation to practice public accountancy is restricted to CPAs. The 24.99 percent nonlicensee ownership bill for design professionals was jointly introduced by Assemblyman Canestrari and Senator LaValle, as S.930/A.2060, and would require design professionals to have greater than 75 percent of the voting shares of a “design professional service corporation.” Many states have passed the Uniform Accountancy Act (UAA) model provision that allows up to 49 percent non-CPA ownership of CPA firms. S.930/A.2060 was not passed by either house in 2007.

Regulatory Issues

The Society, upon recommendation of its CPA Exam Task Force, recommended that the State Commissioner of Education should adopt a regulation to convert the score reporting of the computer-based CPA exam sections from pass/fail to numeric scores. The Task Force found that New York was the only state in the nation reporting scores on a pass/fail basis, except for Michigan, which reports only failing grades on a numeric basis. The Task Force’s survey of 617 recent New York exam candidates revealed that 79 percent of the surveyed candidates said that reporting of the grades on a pass/fail basis impeded their ability to evaluate their performance on the exam, and 88 percent said a numerical grade would have helped them decide when to retake a failed section. On Nov. 29, 2006, the State Education Department proposed an amendment to its CPA examination regulations to provide numeric scores. The numeric grade reports, combined with existing diagnostic reports, will better prepare unsuccessful candidates for future examinations. In addition, the regulatory amendment established calculation of the 18-month period for credit for a passed section to be from the end of the three-month examination window in which the passed section was taken. This also requires successful completion of all four sections of the CPA exam within 18 months of the three-month window in which the passed section was taken. The proposed regulation was published on Nov. 20, 2006, and took effect on March 8, 2007.

The Society also called upon the State Education Department, the American Institute of CPAs (AICPA) and Prometric to better monitor the costs of the CPA exam and refrain from increasing them unless absolutely necessary. The cost for the computer-based CPA exam had increased dramatically in New York to over $1,000, including the statutorily required initial license fee for first-time candidates (most other states do not require prepayment of the license fee before admission to the CPA exam). The Task Force’s survey found that exam fees delayed half of the responding candidates either “very much” or “somewhat” in applying for the exam. 

The Society recommended that candidates graduating in May be allowed to begin the application process while still in school because the Task Force found that completion of the application process may delay candidates from first sitting for the exam until the October-November administration, rather than July-August.

Public Comment Letters

During the 2006–07 fiscal year, Society committees submitted 29 comment letters, more than the AICPA or any other state society. Comment letters were submitted to regulatory boards and agencies, including FASB, GASB, PCAOB, GAO, ISACA, the SEC, the IRS, the AICPA, the U.S. Treasury, the House Ways and Means Committee and the New York State Board of Public Accountancy.

Comment letters addressed accounting and auditing standards, the CPA exam, tax legislation, the Sarbanes-Oxley Act, ethics rules and information technology.

The NYSSCPA’s Tax Policy Subcommittee of the Tax Division Oversight Committee published an analysis, “The ‘Winners’ and ‘Losers’: An Analysis of the Bush Tax Advisory Panel’s Proposals,” in the October 2006 CPA Journal that discussed the George W. Bush–appointed President’s Advisory Panel on Federal Tax Reform report, Simple, Fair, and Pro-Growth: Proposals to Fix America’s Tax System. The analysis included comparing the two Panel proposals, the Simplified Income Tax Plan (SITP) and the Growth and Investment Tax Plan (GITP), with the current tax system by determining how taxpayers in different hypothetical financial situations would be affected by each system.

The New York State, Multistate and Local Taxation Committee in November 2006 identified key tax policy issues for Gov. Eliot Spitzer’s transition team to consider and produced a finalized list of foremost tax issues that was included in a letter delivered to Spitzer’s team in December 2006. That same month, committees produced three comment letters, including comments to the House Ways and Means Committee on the Tax Technical Corrections Act of 2006, which contained a provision that would, in effect, repeal the application of the lower 15 percent tax rate on distributions from certain small business exporters.

See below the “2006–07 Comment Letters” for a full list of comment letters issued by statewide committees last year.

2006–07 Comment Letters

Statewide NYSSCPA committees issued nearly 30 comment letters last year, including:

Goal: Recognition and Visibility

It is the goal of the NYSSCPA to make the value and contribution of the CPA profession known to the public at large and universally accepted. The Society pursues this goal through its Public Relations department, media events and press briefings, the NYSSCPA Web site and its newspaper, The Trusted Professional.

Public Relations

Journalists continued to seek out Society members as trusted sources for 385 media interviews during the 2006–07 fiscal year, with additional media interview requests with members’ clients that focused primarily on tax issues.

This fiscal year marks the fifth consecutive year of the Society’s placing CPAs on ABC Eyewitness News’ personal finance series on Saturday mornings.

The Society offered free “Understanding Financial Statements” seminars to area journalists in two locations, New York City and Utica, with 125 and 17 reporters attending, respectively. For over 20 years, the Society has been providing these seminars to New York journalists in order to educate them on accounting principles and how to review basic financial statements. These seminars also provide Society members an opportunity to meet with journalists; these ongoing relationships may, in turn, generate exposure for the Society in regional and national media outlets.

Media training was also provided for members at the Society’s Leadership Conference for representatives of the Board of Directors, committee chairs and chapter presidents.

President David Lifson and Society staff met with reporters at Dow Jones, Time Magazine, BusinessWeek and The New York Times to discuss the Society’s SET Tax proposal.

The Society distributed to reporters President Lifson’s testimony on the AMT before the House Ways and Means Subcommittee on Select Revenue Measures. President Lifson discussed the Society’s opposition to the AMT in interviews with Capital News Source and Accounting Today. The Society also placed members’ clients for interviews with two New York Times reporters about the AMT.

The Society provided presentations on many financial topics. Associated Press journalists learned about forensic accounting and stock options. Press briefings were held with New York City–based media, including Bloomberg News, Dow Jones, Tax Analysts, Reuters, Smart Money, Bureau of National Affairs, Mergermarket, Strategic Finance, Columbia News Service, The Wall Street Journal, Hedgeworld, The New York Sun and The Journal of Accountancy, on taxes, stock options and pensions.

Business reporters regularly attended FAE conferences, and some reporters were featured speakers at FAE conferences. David Cay Johnston, of The New York Times, accepted as luncheon speaker at the Tax Planning for Individuals Conference, and William Carlino, of Accounting Today, was a featured speaker at the SEC/Sarbanes-Oxley Conference.

The Society was very busy during tax season. Society members were featured in weekly Q&A columns in the Daily News, The New York Post and Newsday. Thirty-two Society members sat on tax panels at the Daily News, and 16 members participated in panels at both the Post-Standard and The Journal News. Members also participated in a year-end tax series with WOR Radio.

In April, the Society aired 3,907 tax public service announcements on 28 stations in eight markets around New York state, double the number of airings over last year’s campaign. These airings translated into over 3 million audience impressions and had a media value of over $158,000.

The Society also focused on increasing visibility of all 16 Society chapters. The Society has developed press lists for all chapters and regularly contacts their members for media interviews. A speech and PowerPoint presentation for tax season was prepared with Tax Division Oversight Committee members and distributed to chapters and placed on the Society’s Web site. Money-management personal finance columns are regularly distributed to weekly newspapers in all Society chapter coverage areas.

Ten major reporters attended the Society’s 28th annual New York CPA Business and Technology Show & Conference.

The Society’s respect for quality journalism culminated in its Excellence in Financial Journalism Awards on May 2 at the Yale Club, in which 16 winners were chosen from 38 reporters’ submissions. Winners included journalists from Research, Newsweek, Bloomberg Markets and The Plain Dealer.

During the 2006–07 fiscal year, the Society matched up 85 CPAs with nonprofit boards of directors, which provides more visibility to the profession and gives Society members additional philanthropic opportunities.

NYSSCPA.ORG

The Web site enjoyed another great year, recording excellent numbers for the fiscal year. The site has regularly recorded between 350,000 and 450,000 visitors, and as many as over 1 million views, per month. In addition, the site is still recording between 11 million and 15 million hits each month.

These numbers look even better when compared to other related Web sites. Using a Web site called Alexa, we are able to get an approximate view of how the NYSSCPA.org Web sites compare to some of our competitors and other state CPA societies. Alexa, which is in partnership with Amazon.com, compiles statistics on Web users who voluntarily download a toolbar to their Web browser that tracks their Web surfing habits.

Here are the results for an Alexa search that compiled the three-month average:

The site was the most popular of all 50 state CPA societies by a wide margin, almost a million slots ahead of the second-most popular state society, the Illinois CPA Society.

The site came in as the seventh most popular accounting association site, just behind AccountingWEB.

The site came in as the 18th most popular overall accounting site, right behind the New York State Department of Taxation and Finance.

The Web site also saw a number of new features and upgrades this year, starting with an all new Photo Album archive with pictures from numerous Society events and functions. Also, a banner rotation system was implemented to allow for more ad banners to display on the home page, thereby increasing revenue, and also the ability to promote Society and FAE events, conferences, seminars, etc. Other new features included a page for Upcoming Industry CPE and an Industry E-Zine; and a Trade Show MySpace page to help recruit younger CPAs to the Show.

In addition, the Web site staff revised the way the top Trusted Professional articles jump from the main page. Instead of jumping right into the middle of the story from the main page, they now repeat the first and/or the second paragraph of the story originally featured on the main page as promos, and will anchor link into the part of the story where the main page left off. This is only for the stories that reside on the main page.

Web site staff also revised the Future CPAs architecture, and conducted an online survey of E-zine subscribers to help us improve the newsletter.

The Trusted Professional

The Trusted Professional continued its tradition of reporting accounting news in its second year of a biweekly publishing cycle, maintaining a one issue per month publishing cycle in January and September.

The paper, with an over 35,000 circulation, continued to bring to CPAs local, state, and national news that affects the New York accounting profession.

NYSSCPA President David Lifson’s testimony before the U.S. House Ways and Means Subcommittee on Select Revenue Measures urging a repeal of the AMT was one of The Trusted Professional’s top stories. Society leadership later met with U.S. Treasury Department Assistant Secretary for Tax Policy Eric Solomon and Chief Economist and Director of the Office of Tax Analysis Donald Kiefer to discuss the NYSSCPA Committee on Practical Reform for the Tax System–proposed Simple Exact Transparent (SET) tax, the Society’s proposed solution to the problems associated with the AMT.

Other issues covered in the Society’s newspaper included the Society’s ongoing advocation of accounting reform legislation; continued updates on New York state Office of the State Comptroller’s school audit review; CPA opinion on the Medicaid cost reports for nursing homes; the SEC’s Sarbanes-Oxley Section 404 changes; the scandal surrounding former State Comptroller Alan G. Hevesi; NYSSCPA white papers on higher education reform and recommendations to improve the Society’s ethics process; and regulatory and Code updates published by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, the Government Accounting Standards Board and the IRS, among others.

With consistent coverage of the New York State Board of Public Accountancy, The Trusted Professional reported the Board’s position and votes on a range of issues, including the disagreement with the AICPA’s indemnity proposal, concerns over the CPA exam, and substantial equivalency.

The Chapter Newsletters section continued to provide members with information on meetings, conferences and other events in their home chapters, including profiles and features on individual members throughout the state. All 16 chapters were represented within The Trusted Professional’s pages, providing each chapter’s leadership a conduit to reach their members as well as the Society as a whole.

Members also continued to publish news articles in The Trusted Professional. Some stories featured recent tax court cases; IT solution implementation; committee updates; as well as Media Relations, Risk Management, and tax policy columns.

Goal: Recruiting and Retention

Member Relations

The Society’s total membership as of May 31, 2007, was 28,817, a decline of 509, or roughly 2 percent, in membership when comparing our official roster, as approved by the Board of Directors, on May 31, 2006, and the roster approved on May 31, 2007. The decrease was due primarily to terminations or resignations of CPA members in industry and associate student members.

The Society continues to believe that CPA firms are the best single source of new members, since all professionals employed by CPA firms are eligible for membership.

The Society holds regular meetings with new members at their firms. These informational meetings include presentations about the Society and its programs, and provide a very convenient option for firms looking to enroll their members. Firms the Society has visited include Deloitte & Touche; Ernst & Young; PricewaterhouseCoopers; Grant Thornton, LLP; RSM McGladrey; Marcum & Kliegman, LLP; Frankel, Loughran, Starr & Vallone; Perelson Weiner LLP; Berdon, LLP; and Marks Paneth & Shron, LLP.

Member Benefits

The NYSSCPA has a wide array of member benefits that include a credit card program, insurance programs, CPA review courses, employment services, publication discounts, e-business solutions and much more. 2006–07 was a very active year for member benefits, with a total of six new benefits:

Town Hall Meetings

Each year the State Society president, president-elect and executive director visit all 16 chapters for a Town Hall Meeting with members. The sessions are scheduled with a complimentary two-hour CPE ethics session. The Town Hall Meetings occurred between September 2006 and January 2007 and were attended by about 1,224 persons.

Chapters

The NYSSCPA’s 16 chapters continued to provide members the opportunity to volunteer their time to the Society on a more localized level in the 2006–07 fiscal year. Chapters also provided members unique networking opportunities and enabled members to engage the public with the profession through community-based events. Society chapters continued to offer and sponsor educational conferences and CPE sessions for their members.

The Adirondack Chapter held an Annual Tax Update and presented the Web-cast presentation “How to Keep Out of Trouble and Make Risk Management a Profitable Part of Your Practice.”

The Brooklyn Chapter held three CPE sessions as well as its annual all-day IRS Taxation Conference.

The Buffalo Chapter hosted many events for members during the 2006–07 year. The chapter hosted a summer symposium, the 7th annual Young Professionals Golf Tournament, “Managing Human Resource Issues” and the 53rd annual Tax Institute, to name a few.

The Manhattan/Bronx Chapter held nine CPE sessions and various networking events, including its annual golf classic, Young CPAs museum trip, a billiards tournament, and a wine tasting event. The chapter also hosted two career days for high school seniors to learn about the accounting profession.  

The Mid Hudson Chapter hosted its first Casino Night and CPE sessions that included the all-day Yellow Book update and one on the Section 199 manufacturing deduction.

One of the Society’s oldest and most established chapters, the Nassau Chapter, held 32 CPE events and four conferences. The Nassau Chapter also joint-sponsored a conference with the Suffolk Chapter. Many social and charitable events were held in Nassau, such as the chapter’s annual CPAs 4:(a) Cause 5K Charity Run/Walk, an annual golf outing, a Young CPAs bowling event, several women’s focus group luncheons and its Mentor-a-Student Night.

The Northeast Chapter held the 2006 Capital Region CPA and Banker Dinner, with Kenneth Green, Saratoga Economic Development Corporation president, as the keynote speaker. The chapter also held a student awards dinner.

The Queens Chapter held five CPE sessions, along with a career day at St. John’s University. They also hosted a Young CPAs Committee CPA prep course event.

The Rochester Chapter presented the Rochester Tax Institute and the World of Accounting Day. Rochester’s YCPA Committee hosted its annual Evening Mock Interviews for area college students.

The Society’s Rockland Chapter held 15 CPE events as well as many social events, such as the annual golf outing, a Yankees baseball game outing and a professional networking dinner event.  

The Southern Tier Chapter hosted its Annual Tax Conference and a student awards dinner.

The Staten Island Chapter held seven CPE sessions, hosted a charity Bowl-a-Thon for Batten Disease, offered area students an education night and hosted a professional networking event and cocktail reception with the Staten Island Bar Association and the Bankers Association of Richmond County.

The Suffolk Chapter held eight CPE sessions. Among its social and charitable events were the highly successful U.S. Marine Corp’s Toys for Tots drive, a student night and a Young CPA Committee golf outing. The YCPA Committee also hosted a comedy night. Suffolk held an all-day tax conference as well as the Joint Nassau/Suffolk Accounting and Auditing Conference.

The Syracuse Chapter revived its annual clambake for the 2006–07 fiscal year, and hosted a student awards night. At the request of the Syracuse membership, several small managing partner CPE meetings were held.

The Westchester Chapter held 21 CPE sessions and three conferences. Among its many networking and community-minded events were an annual tax hotline in conjunction with The Journal News, a career opportunity in the accounting profession event held in conjunction with Westchester area universities and colleges, its 5th annual Networking After Hours event, an annual golf outing and a Young CPA wine tasting event.

The Utica Chapter hosted the Nonprofit Organization Executive and Director Financial and Government Seminar. The program was a community outreach event to benefit nonfinancial executives and directors who wish to better understand how to get meaningful and timely information from an accounting staff.

COAP

The Career Opportunities in the Accounting Profession (COAP), a week-long residency for high school minority students to learn more about the accounting profession, saw a record total of 235 students served by 10 programs across the state during the 2006–2007 fiscal year, compared to 213 students last year. A sincere thank-you to everyone for their hard work.

The Society is pleased that St. John’s was the tenth COAP program to be initiated in 2007, thanks to Adrian P. Fitzsimons, president of the Queens Chapter and a professor at St. John’s.

Albany/Siena College: Siena College hosted the 2007 Albany COAP Program from June 25 through June 28. The college provided room and board for 15 students. Activities included an evening picnic and baseball game with the Tri-State Valley Cats, which was a used as an icebreaker for the participating students. Later, students heard college professors and established CPAs give presentations on financial aid, internships, resume writing, financial literacy, forensic accounting and financial technology. The students also enjoyed two offsite presentations, at PricewaterhouseCoopers and the Pepsi bottling plant. 

Buffalo/SUNY Buffalo: The Buffalo COAP program hosted 28 students from 22 different high schools and one participant who is home schooled. In its second year, the program experienced an increased response to recruitment efforts. Forty students applied to the program from area public and private schools and from direct mailings to parents. The four-and-a-half-day-long program included a session for parents on the college application process and financial aid, trips to PricewaterhouseCoopers and to Lumsden and McCormick, and an industry trip to Rich Products. This year’s program, revamped with input from last year’s COAP students, included more group interaction and team-building exercises, a visually enhanced and more challenging jeopardy game and a presentation called “My Life as a High School Senior,” by one of last year’s students. The program was well received, and four students indicated that they were seriously interested in an accounting career.

Long Island/Hofstra: The Hofstra 2007 COAP Program accepted 45 students, with 40 students attending the program. The five-day program included general sessions on college preparation, interviewing and preparation skills, and networking, along with industry-related topics such as ethics and personal behavior, career opportunities in accounting, and business information analysis, taught by established accounting professionals. Highlights of this year’s program included the annual etiquette dinner, a visit to the Belmont Park racetrack and firm trips to Deloitte & Touche, Ernst and Young, Marcum and Kliegman, and Margolin, Weiner & Evens.

Mid Hudson/New Paltz: The Mid Hudson Chapter hosted the 2007 COAP commuter program at Vandenberg Hall on the campus of SUNY New Paltz, from June 25 to June 28. Activities included a field trip to Pepsi Co., Vanacore Accounting Firm, and Health Quest/Vassar Hospital. The students participated in group workshops, including college prep, goal setting, technology in accounting and business, interviewing skills and networking, among others. The program culminated in an awards banquet on June 28 at the Culinary Institute of America in Hyde Park.

New York/Long Island University: Long Island University’s COAP program hosted 16 highly motivated students, who showed great promise for the future. In addition to speakers and workshops, the students visited the offices of PricewaterhouseCoopers and Keyspan.

New York/Pace University: The 2007 Pace University COAP program drew 31 student participants and was held at Pace University’s Pleasantville campus in Westchester County. Throughout the week-long program, the students participated in workshops such as college preparation, accounting overview, financial statement analysis, resume writing, teambuilding, business etiquette and networking. On the last day of the program, an awards banquet ceremony took place at Pace University’s New York City campus.

New York/St. John’s University: June 2006 was the inaugural year for St. John’s COAP program. Not only was the location new, but so were the people involved with the program. Forty-five students applied; the committee accepted 30. Presenters at the firms were enthusiastic and interesting. The New York Times, The New York Mercantile Exchange, Deloitte and Touche, the Federal Reserve Bank, Ernst & Young and NBC Studios all graciously hosted COAP.

Rochester/SUNY Brockport: Twenty-three students participated in the 4th Annual SUNY-Brockport COAP, June 24 to June 28, under new Chair Toni Spina. On Sunday, June 24, many parents and relatives came out for orientation and registration and spent the day attending scheduled workshops. A picnic included three Resident Assistants, who did a great job with the students. The group visited Paychex and was addressed by Melinda Jancik, the business’ vice president and controller, and five other wonderful employees. The students also spent an entire day at Eldredge, Fox & Porretti LLP, where they had the opportunity to personally prepare individual tax returns and watched a forensic accounting presentation by Jim Marasco. The presentations this year were more interactive and student participation was encouraged, which the students appreciated. The program ended on June 28 with a well-attended commencement banquet at Cooper Hall New York Room at the SUNY campus in Brockport. General Motors General Auditor Chester Watson gave an inspiring presentation as the banquet’s guest speaker.

Syracuse/Le Moyne: The Syracuse COAP program is nonresidential, and enrolled 24 students this year. Two field trips were taken, one to Testone, Marshall & Discenza LLP and another to Stickley Furniture. The students walked away with a wealth of information. Students were amazed at the diversity within the profession, and they unanimously agreed that the program was superb. This sentiment was also expressed by the parents during the program’s final evening.

Westchester/Westchester Community College: The Westchester COAP program included 23 Westchester County high school students and was held at Westchester Community College (WCC). 

The program ran from June 25 to June 28 and included breakfast, lunch and dinner. Curriculum consisted of sessions presented by qualified speakers on accounting concepts, college preparation and success, business ethics, résumé writing, networking, interviewing skills, research using business databases, financial statement analysis, forensic accounting and identity theft, case study, public speaking, business communications, goal setting, dressing to achieve, scholarships and internships.

Group field trips included visits to Citrin Cooperman & Co. and Merrill Lynch & Co., both in White Plains. The group participated in Q&A periods on their experience both during and after the firm trips to ensure that the entire group had a complete understanding of what was presented to them.

The four-day program ended with a reception and awards dinner at The Riverview in Hastings-on-Hudson, attended by the students, their parents, the COAP advisory board members, instructors, and special invited guests. Guest speakers included WCC Vice President and Dean of Academic Affairs Dr. Chet Rogolski, WCC Associate Dean of Academic Affairs Jeffrey Conte and keynote speaker Kevin R. Saunders, a 2002 Westchester COAP alumnus. Saunders is currently an accounting major at Pace University with a summer internship at Deloitte & Touche LLP.

All guests also had the opportunity to hear from the students as they each gave a brief presentation on their COAP experience. At the end of the evening, the students received a certificate of completion for participating in the Westchester COAP Program, along with a 2007 class photo.

NYSSCPA Governance

Fiscal Information

The audit for the fiscal year ending May 31, 2007, showed an increase in the net assets of the Society and its consolidated entities of $503,845, compared to the prior year’s increase of $624,353. Included in the consolidated audit are the NYSSCPA, FAE, CPAPAC (a not-for-profit organization, the purpose of which is to provide for the mutual assistance, advancement and recognition of its members and the profession of public accounting by promoting participation in political activities in New York state) and the Benevolent Fund (a not-for-profit organization, the purpose of which is to aid members and their families who are in need of financial assistance and to provide referral services for members suffering from substance-abuse disorders).

At its April 2006 meeting, the Society’s Board of Directors approved the 2006–07 strategic budget, which was presented to the Board by NYSSCPA Treasurer Neville Grusd.

Several revenue streams showed an increase over the 2005–06 fiscal year. Dues revenue increased $117,000; education fees increased $435,000; investment returns increased $268,000; and shows and exhibitions showed a $598,000 increase over the previous year due to two shows occurring in fiscal year 2007, as opposed to one in fiscal year 2005–06.

Producing two trade shows in the same fiscal year also led to increased professional competency expenses; they increased $955,000 over the previous year. Governance and administrative costs rose $546,000 this fiscal year due to additional projects relating to Society governance.

Society Leadership

During the 2006–2007 fiscal year, which ended May 31, 2007, the Board of Directors held four face-to-face meetings as well as one additional meeting via conference call. In addition, the Executive Committee held six face-to-face meetings plus one meeting via conference call. The minutes for these meetings are available on at the Society’s Web site at www.nysscpa.org.

Over the course of the year, the leadership addressed the following governance functions:

The Society held its sixth Annual Leadership Conference at the Gideon Putnam Hotel in Saratoga in July 2006.

The Society’s 110th Annual Election Meeting and Dinner, to elect the 2007–2008 slate of officers and directors, was held May 17, 2006, at the Hilton New York Hotel in New York City and had 187 people in attendance.

Guest speaker Robert H. Herz, Chairman of the Financial Accounting Standards Board, outlined current initiatives of FASB.

Technology Infrastructure Improvements

Several key information-technology infrastructure improvements were made to the Society’s computer network, including: