December 1999

CPAs, Business Leaders, Regulators Testify on Accountancy Reform

State Assembly Hearing Addresses Licensure, Firm Structure, CPA Services

By Danielle D'Angelo

More than 40 individuals testified at the November 16 legislative hearing on accountancy law reform sponsored by State Assembly Majority Leader Michael J. Bragman (Syracuse) and Assembly Standing Committee on Higher Education Chair Edward C. Sullivan (Manhattan). Witnesses included NYSSCPA and AICPA officers; CPAs from industry, academia, and public accounting firms of all sizes; government regulators; and other individuals interested in the future of the profession.

The assemblymen held the hearing in conjunction with their sponsorship of A. 8600. The proposed legislation incorporates many of the provisions of the Uniform Accountancy Act, jointly developed by the AICPA and the National Association of State Boards of Accountancy. Passage of A. 8600 and its Senate companion bill, S. 4402, would mark the first time the legislature has revised the New York accountancy statute in more than 50 years.

"In light of the fact that the statute was first written in 1898, and the current law revised in 1947, we and many others feel that it is time to look at the profession and the current laws to see what improvements need to be made," Bragman said.

The witnesses addressed various issues including experience requirements, commissions, non-CPA ownership, scope of practice, and the 150-hour curriculum. NYSSCPA President Alan E. Weiner, who expressed the Society's support of the legislation, opened with an overview of the CPA profession's evolution since lawmakers last revised the accountancy statute. His testimony highlighted the key provisions of A. 8600 and expressed the Society's views on how the bill better protects the public interest in light of changes in CPA practice.

AICPA Chair Robert K. Elliott also testified in support of A. 8600. He outlined the changing needs of the marketplace and described how the impact from business, economic, and societal forces such as globalization and technology place demands on the profession that the current law does not adequately address.

See the articles on page 1 for more details on Weiner and Elliott's testimony. See the related articles on pages 19­26 for further coverage of the support and opposition for the bill's key issues.

SED and Others Opposed

Among the witnesses who testified in opposition to provisions of A. 8600 was Johanna Duncan-Poitier, State Education Department deputy commissioner for the professions, who expressed the SED's concerns about proposals regarding scope of practice, commissions, non-CPA ownership, and experience requirements.

While the SED and the New York State Board of Regents agree that the current accountancy law needs revision, they have taken a different approach, proposing A. 8789 and S. 4133, legislation that primarily seeks to expand the CPA's scope of practice. In addition to Duncan-Poitier, members of the state board of accountancy focused most of their testimony on the SED and Regents­supported legislation.

Duncan-Poitier commented on the SED's current inability to regulate CPAs outside of the attest function. Prompted by the acquisition of the nonattest assets of New York CPA firm Goldstein Golub Kessler & Co. PC by American Express Tax & Business Services, the SED extensively reviewed the state education law (which governs the accounting profession) and reached the opinion that since the law defines accountancy's scope of practice as attest work, state regulators only have authority over CPAs with respect to attest services. Based on this interpretation of existing law, the SED proposed broadening the scope of practice to include all the services CPAs currently provide to the public.

"We recognize that the CPA title will mean absolute nothing if we can't do anything to protect the public," Duncan-Poitier said.

See "Scope of Practice and the Place of Compilations" on page 20 for background on the SED's proposals. In addition, visit www.nysscpa.org for the complete testimony of Duncan-Poitier and other witnesses who submitted written copies of their statements. *