Editor’s Response

Mr. Fox has questioned the completeness and accuracy of two articles in the March 2002 issue of The Trusted Professional: “State Board Speaks Out Against SED Proposal to Allow Reviews and Compilations by Non-Licensees” and “State Senate Committee Holds Second Hearing on Post-Enron Auditor Independence”; both ran on page one of the issue.

With respect to the article on the Feb. 18, 2002, meeting of the New York State Board for Public Accountancy (“State Board Speaks Out Against SED Proposal to Allow Reviews and Compilations by Non-Licensees”), the reporting is supported by an excerpt from the official minutes approved by the state board. For purposes of reading the excerpt, the following names and respective positions have been defined accordingly:

• P. Robert Fox: member of the New York State Board for Public Accountancy
  
• Kevin J. McCoy: vice president of the New York State Society of CPAs
  
• Charles J. Schoff: chairman of the New York State Board for Public Accountancy
  
• Daniel J. Dustin: executive secretary of the New York State Board for Public Accountancy
  
• Dennis O’Leary: director of governmental affairs for the New York State Society of CPAs
  
• John P. Laschenski: member of the New York State Board for Public Accountancy
  
• Dena G. Williams: member of the New York State Board for Public Accountancy

Excerpt

Mr. Fox asked Mr. McCoy what he perceived as the major obstacles in the state Society supporting the (New York) State Education Department bill. Mr. McCoy suggested that the state Society did not support the “safe harbor” language contained in the bill for use by non-licensed accountants or the broad definition of scope of practice that contained a “laundry list” of professional services. He suggested that the bill did not reflect discussions held between representatives of the state Society, the board and the department in recent months. Mr. McCoy noted that the state Society had shared revised “safe harbor” language at the previous meetings…

…He (Chairman Schoff) noted that the safe harbor language was critical even though it was included as part of the Uniform Accountancy Act. Mr. Dustin explained to the board that the safe harbor language was included as part of the bill because legislative staff indicated that some provision for safe harbor language would be necessary. Mr. Dustin noted that the department does not regulate non-licensed practice of the professions, that oversight is maintained by the NYS (New York State) Office of the Attorney General. He noted that he had encouraged the state Society and representatives of the non-licensed accountants to negotiate mutually acceptable wording.

Mr. O’Leary…suggested that the bill as written places the state Society at odds with the department because the department’s bill contains a safe harbor provision. He suggested that the department consider taking the language out of the bill. Mr. Laschenski suggested that the board advise the department that section 7408(a)(4), containing the safe harbor language provision, be removed from the department’s bill due to the department’s neutrality on the issue. Ms. Williams seconded the motion. After further board discussion, the motion passed unanimously.

Taking A Position

The second article that Mr. Fox refers to in his letter, “State Senate Committee Holds Second Hearing on Post-Enron Auditor Independence,” reflects the events as well as the views expressed by three Society members who testified in their individual capacities and not as representatives of the NYSSCPA at the Feb. 26, 2002, hearing.

The Society’s position on regulation of the profession in the post-Enron era can be found on the NYSSCPA website at www.NYSSCPA.org, which includes the full testimony that the Society presented at the Feb. 6, 2002, New York State Senate Higher Education Committee hearing on public accounting.

The Trusted Professional stands by its articles as reported.