Letter to the Editor:

In the March 2002 issue of The Trusted Professional, there were two articles on which I would like to comment. I am the immediate past chair of the New York State Board for Public Accountancy, a member of the board of the National Association of State Boards of Accountancy, and a member of the Uniform Accountancy Act (UAA) Committee. I believe that neither article was complete nor accurate to apprise the accounting community of what is happening at the leading edges of the profession.

The first article had the headline “State Board Speaks Out Against SED Proposal to Allow Reviews and Compilations by Non-Licensees.” I believe that the headline missed the most important point of the resolution and the related discussions. As of today, we have a 50-year-old law that allows non-CPAs to prepare audits, reviews and compilations as long so they do not hold themselves out as CPAs. I have personally pointed this out to the leadership of the New York State Society of CPAs (NYSSCPA) on several occasions. I have also sat through several sessions on the UAA Committee that debated what non-licensees can do. The safe-harbor language is a compromise that was reached with non-CPA organizations that include such corporate entities as H&R Block. The political opposition is willing to compromise on the safe-harbor language, but they will fight tooth and nail if they are not allowed to continue to prepare compilations and reviews in the same manner that they have done for the past fifty years.

Contrary to the statement of the reporter, who I do not recall being in attendance at our meeting, I believe the sentiment of the N.Y. State Board vote was to let the NYSSCPA and the representatives of the non-licensees recognize that they have to compromise to get a new bill. As a practicing CPA who has heard all the arguments, I feel we are foolish as a profession to hold up a bill based on wording that appears in an introductory phrase in the proposed bill.

The second article (“State Senate Committee Holds Second Hearing on Post-Enron Auditor Independence”) was the report on the New York State Senate’s Higher Education Committee roundtable. During my term as vice chair and chair of the N.Y. State Board for Public Accountancy, I participated in legislative hearings, including a roundtable with the Senate Higher Education Committee. The problem with this article was not what it reported. The problem is what the article did not report. A key issue that is preventing the current legislation from passing is the definition of “Scope of Practice.” It is my understanding that the NYSSCPA did a 180-degree turn on its position on what should be regulated. In the meetings I attended, NYSSCPA representatives unequivocally stated that they supported a broad definition of the scope of practice. That is, they believed that all professional services provided by a CPA should be covered by regulation. NYSSCPA representatives told me that they objected to the use of a “laundry list” of services, but they did support the general concept. I am told that the NYSSCPA reversed its position at the most recent hearing and took the position that only attest services should be covered by regulation. I believe that this change in direction deserves a full explanation, especially when it is contrary to the UAA position, which the NYSSCPA claims to support.

I am an active practitioner, a member of the NYSSCPA and a member of the N.Y. State Board for Public Accountancy. When I joined the N.Y. State Board after serving on the NYSSCPA board, I felt that our goals of protecting the public interest were similar. After watching some the actions of leaders in our profession recently, I wonder if my perception is wrong or I wonder if we need new leaders.

Very truly yours,
P. Robert Fox, CPA