By Jo Ann Golden

This has been a year of challenge for all of us as CPAs—a challenge to make the profession more responsive to the needs of those whom we serve and to regain the respect of the general public.

The events of the past 12 months have caused us to question and reflect upon whether we as CPAs can re-instill the confidence the public has always had in our profession by simply continuing to practice the way we do, finding comfort in the fact that there are but a handful of CPAs responsible for the “bad press” our profession continues to endure. Indeed, most of us strive to perform the essential service that we provide with the highest levels of competence—competence grounded in a strong basic understanding of the principles of accounting, bolstered by continuing professional education (CPE) that keeps us up to date in a financial world that has become increasingly complex and by a code of professional conduct that upholds the public interest.

Few other professions endure changes in the “rules of the game” greater than those in accounting. These changes and the increasing complexity of financial events and dealings more than justify the extraordinarily high annual CPE requirements we, as accountants, face in New York state. Compare, for example, the 24 to 40 hours of CPE per year that those of us practicing public accountancy are required to take to the 12 hours per year1 that our colleagues in the legal profession are mandated to take.

Currently, the New York State Board of Regents requires that all licensed CPAs who are registered to practice in the state must participate in continuing professional education. A licensed CPA must register in order to hold out as a Certified Public Accountant and practice public accountancy within New York state. The education requirement is not mandated, however, if you are not registered in New York state. 2

But CPE alone does not ensure competency. Although each of us would like to believe that we are practicing competently, none of us is immune to the “trap” of honestly believing that the way we did it last year is the way it should be done now. This false comfort—or perhaps misconception—exemplifies one weakness in the self-examination approach.

In view of this, most of us have found comfort in a system that enables us to discover our own shortcomings and/or accounting misconceptions through a process more objective than self-examination, the process of peer review. Peer review is one of the mechanisms by which we ensure that we and the members of our profession become and remain current and competent.

Those of us who are members of the American Institute of CPAs, as well as non-AICPA members who perform certain types of audits (e.g., GAO and SEC audits), are subject to mandatory peer review. Interestingly, hundreds of CPAs not mandated to have peer review undergo it voluntarily. The state of New York, however, does not currently mandate peer review as a prerequisite to registering to practice.

It is important to note that the New York State Society of CPAs does not require its members to participate in peer review or CPE as a condition of membership. NYSSCPA does administer peer review in New York as a service to and under contract with the AICPA. The AICPA’s requirement for peer review of a firm encompasses a review of the firm’s compliance with CPE requirements of its specific areas of practice, such as governmental audits under “Yellow Book” standards. There has been significant debate recently as to whether the NYSSCPA should mandate both peer review and CPE as a prerequisite to membership. Such debate has also raised questions about the scope and effectiveness of our ethics enforcement program.

At the November New York State Society of CPAs Board of Directors meeting, the agenda included a full morning’s discussion of these timely issues, with relevant committee chairpersons in both peer review and ethics participating with the board. These participants included David Pitcher, chair of the NYSSCPA Peer Review Committee, Rona Cherno, chair of the NYSSCPA Professional Ethics Committee, and Henry Krostich, former chair of the Society’s Peer Review Committee and a long-standing member of the AICPA’s Peer Review Committee. The discussion focused on what measures the NYSSCPA should take to strengthen its peer review and ethics programs. As might be expected, many questions were raised at the meeting, including:

• Should New York state require peer review as a condition of registration?
• Should peer review be mandatory for NYSSCPA membership if a member provides audit, review or compilation services?
• Should the results of peer review be posted on a public website?
• Should there be a link between peer review and discipline within the Society?
• Should continuing professional education be mandatory for NYSSCPA membership?

These issues are complex and obviously need further discussion, as the outcomes may well have far-reaching consequences. The NYSS-CPA board has directed that a task force, to be chaired by Brian A. Caswell, be formed to further explore these issues and make recommendations, with the possibility of proposing bylaw changes to our membership. Indeed, if excellence in our profession is what we strive for, that may be part of the answer.

The NYSSCPA prides itself on being an organization that strives to represent the needs and views of its membership. It has accomplished this goal by actively communicating with its members through chapter visitations, a broad and diverse committee structure, and a board, officers and staff that are constantly in touch with the membership and seeking input.

In order for the board-directed task force to effectively reflect the desires of the NYSSCPA membership, we will need your input. All too often, policy change is followed by criticism which, had it been received in time, might have either averted the need for change or favorably modified the change that took place.

Be a part of the process. Contact Mr. Caswell at brian@caswellaccountants.com. Or, e-mail me at president@nysscpa.org and your comments will be passed on to him.

The success of the Society and our profession depends upon it.

president@nysscpa.org