May 2001

By P. Gerard Sokolski

It’s hard to believe, but this is my last President’s Commentary. The past 12 months have flown by. I have really enjoyed the opportunity to serve as your president this past year, and I hope that I have served you well.

Reflecting on my term, my presidency began quietly. I wondered what issues would arise and have to be addressed in the coming year. Well, it did not take very long for things to heat up. In rapid succession there were testimony before the Public Oversight Board and the Securities and Exchange Commission on the issue of auditor independence, discussions over a global credential referred to at times as “Cognitor” or “XYZ,” a web portal for accountants called CPA2Biz, six new chapters within the New York State Society of CPAs, and so on.

As I leave my presidency, the American Institute of CPAs has approved the portal, although it has not yet been launched, and the Institute continues to develop the global credential.

The latest actions on the global credential took place at the spring AICPA Council meeting in Washington, D.C., during the first week of May. Discussion of the credential consumed a lot of our meeting time.

The New York delegation proposed a resolution to cease any further action on the XYZ. The NYSSCPA’s board of directors approved this resolution at its March 28 meeting, because the vast majority of our members oppose the credential. Following New York’s lead, several states — including Illinois, New Jersey, and Tennessee — also passed resolutions opposing the credential concept. In fact, representatives from the CPA societies of New York, including myself and Nancy Newman-Limata, Illinois, California and Texas met with AICPA Vice President John Hunnicutt on April 20 in New York City to discuss the AICPA’s position on the global credential.

At AICPA Council on May 1, I participated in a debate with five other council members, three in favor of the credential and three opposed to it. When Council met on May 2, New York submitted a resolution that was defeated by a vote of 152 to 41. Then, a compromise resolution from California and Texas was introduced on the floor and passed by an overwhelming majority.

This resolution authorized the AICPA to send out a ballot to the full AICPA membership on the XYZ concept, but not until after the October AICPA Council meeting. Before the ballot is sent, Council has the authority to rescind its decision at that meeting. The resolution directed the AICPA to immediately institute a grass roots educational campaign to educate CPA society members throughout the country on the global credential project. This educational process is intended to be a non-biased effort. The New York State Society’s leadership will be working with the AICPA staff to formulate a process that will present a nonbiased, complete picture of the credential, including the pros and cons.

The rest of the Council meeting, outside of the time devoted to the global credential, focused on other AICPA projects. We were briefed on issues to mention to our elected representatives during our Capitol Hill visits. They include a fiscal year for pass-through entities (workload compressions), estate and generation skipping tax (GST) reform, repeal of the marriage penalty, work-based retirement planning, and privacy and e-commerce. Additionally, we discussed an AICPA program that will be geared toward informing high school juniors and seniors and college freshman and sophomores about the accounting profession in an attempt to attract more students to the profession.

Turning to New York State Society issues, I am pleased to report that the new chapters are progressing well and representatives from those chapters will be present at the Annual Leadership Conference in Hershey, Pa., in June.

I would like to take this opportunity to congratulate Nancy Newman-Limata and the incoming officers and directors, who were officially elected at the annual election meeting and dinner at the Roosevelt Hotel on May 8. For more information on the election results, visit www.nysscpa.org.

Issues that are ongoing as my presidency comes to an end include a drive to enact the Uniform Accountancy Act in New York state and the extension of the State Societies Network Inc. (SSNI) Phase I agreement. SSNI is the consortium of state societies that joined together to share common expenses associated with the CPA2Biz portal.