Society Board Votes on Uniform Accountancy Act

Parameters for Draft Legislation Defined

By Joanne S. Barry

The NYSSCPA board of directors voted at its October 6th meeting to accept certain accounting reforms contained in the Uniform Accountancy Act, and authorized the necessary legislative actions to incorporate these reforms into the current law.

NYSSCPA board members Lou Grassi (left) and David A. Lifson

The board supported the UAA's core changes (summarized in the September issue of The Trusted Professional), but also voted for a more specific definition of attest and to maintain the current New York state requirement on experience.

After much discussion, the board voted to define scope of practice (the attest function) to include SAARS compilations in addition to audits and reviews. This broadened definition has
implications for several provisions of the UAA.

"It would be foolish for us to give up SAARS compilations as part of our franchise," board member Nancy Newman-Limata said.

Board member David A. Lifson emphasized that there must be an unregulated format for communicating financial information to a client that is not intended for third parties. The board endorsed this suggestion.

The board also voted to reject the UAA's extensive broadening of what experience qualifies for licensure. The rejected provision would have created two tiers of CPAs: attest CPAs and all others. The board decided that the licensure experience should require attest experience.

On the other provisions, the board voted to accept substantial equivalency that would facilitate CPA practice across state lines.

It accepted the CPE provision that requires all CPAs, regardless of specialty or employment, to take 120 hours of CPE over a three-year period, with no less than 20 hours in a single year. If passed as part of the legislation, this would eliminate the 24-credit track now available in New York state.

The board also passed the provision requiring a simple majority of CPAs to own public accounting firms which, for example, would allow non-CPAs to own 49 percent. President George T. Foundotos (Suffolk) stated that this issue generated a great deal of discussion around the state with no regional differences.

"This is a reality of life," board member Lou Grassi (Nassau) said. "We need to stay competitive. We should not be swimming against the tide."

The board agreed to the acceptance of commissions from nonattest clients. The State Education Department restrictions on commissions from nonattest clients are no longer enforceable. (See the October issue of The Trusted Professional for details.)

According to Foundotos, the issue of CPAs working in non-CPA firms, although approved by the board, has already been decided by the courts. The acquisition of CPA firms by corporations such as American Express and Century Business Services are examples of this. CPAs in these companies, however, are not permitted to offer attest services.

The board approved the provision requiring peer review for CPA firms that provide attest services and the CPA=CPA provision, which requires that all individuals wishing to publicize their CPA credential be subject to the same licensing requirements, including the CPE requirement.

At the meeting, which had the UAA as its only discussion item, the board heard how the membership itself voted on the UAA through surveys, meetings, e-mail, and personal contact with the leadership. President Foundotos, Executive Director Louis Grumet, and other Society leaders traveled throughout the state to solicit feedback on the act to be used as the basis for board discussion. The board discussion and vote reflected sentiment across the state.

Guests at the board meeting included AICPA Senior Vice President John Hunnicutt, who clarified various discussion points and stressed the need for consensus within the profession; several chapter presidents and presidents-elect; members of the State Board for Public Accountancy; and Joe Renda, representing the Empire State Association of Public Accountants.