State Board Eases Licensure Experience for Out-of-State CPAs

By Dennis O’Leary, Legislative Counsel

NEW YORK—By a vote of 8 to 4, the New York State Board for Public Accountancy on Jan. 28 liberalized its long-standing experience policy for out-of-state CPAs to qualify for licensure in New York state.

The New York State Society of CPAs considers this action by the board as a significant step in the right direction, and hopes it will be persuasive to legislators to expand professional experience for all candidates for initial licensure. State Senate bill S302-D by Sen. Kenneth LaValle and the identical Assembly bill A8555-A by Assemblyman Ron Canestrari would expand experience to include attest, auditing, tax preparation, tax advisory services, or any combination thereof.

Under the current licensure by endorsement rule, paragraph (b) of the State Education Commissioner’s Regulation 70.4, CPAs licensed in other states where licensing standards are not equivalent to New York’s standards, who apply for licensure by endorsement in New York, must demonstrate “…evidence satisfactory to the state board of at least five years of professional experience in the practice of public accountancy following initial licensure and within the 10 years immediately preceding application for licensure by endorsement.” This is generally referred to as the “Five-in-Ten” rule.

In the past, the board held that professional experience in the practice of public accountancy under the Five-in-Ten rule required at least 18 months of diversified experience involving the application of generally accepted accounting principles (GAAP) and the application of generally accepted auditing standards (GAAS) in the practice of public accountancy. This experience is generally known as “audit” experience.

The prior policy led to circumstances where, for example, a CPA licensed in another jurisdiction, who was a tax partner in a CPA firm for the last 20 years, was ineligible for licensure by endorsement in New York because he or she did not have at least 18 months of audit experience under the Five-in-Ten Rule.

Now, the board will be satisfied with any professional experience in the practice of public accountancy, with proper verification by a supervising CPA. This would open the opportunity for licensees in other states who specialize in, among other areas, tax preparation, tax advisory services, personal financial planning and management advisory services in a practice of public accountancy to qualify for licensure in New York. 

“Since most states have adopted the expanded scope of practice for public accountancy and allow a broad range of professional experience for licensure, it is reasonable for New York to expand the experience qualification for licensure by endorsement,” NYSSCPA Vice President Vincent J. Love said. “I applaud the state board for taking this action and look forward to working with them to expand the qualifying experience for all applicants for the CPA license in New York.”