December 1999

CPAs Debate Experience Requirements at State Hearing

CPAs from public accounting, industry, and academia testified on the experience licensure requirement at the November 16 hearing sponsored by New York State Assembly Majority Leader Michael J. Bragman (Syracuse) and State Assembly Standing Committee on Higher Education Chair Edward C. Sullivan (Manhattan).

Assembly bill 8600, legislation sponsored by Bragman and Sullivan that seeks to reform New York state's accountancy law, and its Senate companion, S. 4402, would change the CPA experience requirement. The proposal states that CPA candidates must earn 150 semester hours and fulfill a one-year experience requirement in "any type of services or advice using accounting, attest, management advisory, financial advisory, tax, or consulting skills." Current state licensure requirements mandate that a CPA candidate fulfill one or two years of experience (depending on the candidate's education level) performing audits and reviews (i.e., attest functions) in a public accounting firm, under a CPA's direct supervision.

In addition, in June 1998, the New York State Board of Regents approved the 150-hour curriculum as a requirement to sit for the CPA examination after August 2009. Assembly Bill 8600 would move up the Regents regulation's effective date to coincide more closely with the effective date of the proposed legislation. This could, in fact, require compliance with the 150-hour regulation as early as 2005.

Industry CPAs Voice Support

This broadened experience definition would allow a candidate to qualify work in businesses that, under the current regulation, would not fulfill the requirement. CPAs working in industry testified in support of the proposal.

"Allowing this type of work experience to be considered would give the candidates an alternate route and hopefully attract more individuals to the profession," said Thomas Sullivan, of the National Football League.

Others echoed this sentiment and testified how working in industry can help candidates receive quality work experience.

"Private industry can provide very challenging and professionally rewarding experiences," said Michael Hand, of Sotheby's. "Public accounting experience is not the only source of great accounting training."

Proposal Reflects CPA Practice

CPAs in public practice who testified in support of the experience requirement said that allowing more than attest work to qualify for licensure better reflects how CPAs practice today. NYSSCPA President Alan E. Weiner pointed out that A. 8600 "modernizes and contemporizes the entrance requirements" and will help CPA candidates who have experience in other specialties but may not have exposure to attest work.

George Foundotos, the Society's immediate past president, pointed out that, under the current regulation, some CPAs have satisfied the attest experience requirement with work that many professionals may not consider quality experience.

"Put in the requisite time in the requisite area and you were promoted," Foundotos said. "Nowhere was the quality of the experience a major issue. Neither the quality nor the depth or breadth of the experience was a significant consideration."

While many who testified in support of the experience requirement were partners, CFOs, and other senior professionals who satisfied their licensure requirements years ago, the assemblymen also heard from Alan Chu, a young CPA candidate who favors allowing a broader array of experience to qualify for licensure. Chu, who chairs the Society's CPA Candidates Committee, said that A. 8600 would enable young professionals to better discover where they want to go with their careers.

Opposition Questions Public Interest

On the other hand, some individuals testified that A.8600 proposes a lesser requirement that would compromise the quality of the CPA credential and not best protect the public.

"One year is just too short a time to know the demands of the profession and the expectations of the public," said Gary Cassiello, of Judelson, Giordano & Siegel.

Cassiello, who also is president of the NYSSCPA Mid Hudson Chapter, also disagreed with the expanded definition of qualifying experience.

"The new experience requirement will also differentiate between CPAs who can perform attest functions--audits, reviews, compilations of financial statements, and agreed-upon procedures engagements--and those who cannot," Cassiello said.

Herbert Schoenfeld, who represented the National Conference of CPA Practitioners, agreed with Cassiello that A. 8600 would create a dichotomy between attest and nonattest CPAs and confuse the public.

"The public whom we represent will never understand the difference between a practicing CPA who has been schooled, trained, and licensed by the state of New York to perform the attest function and a CPA who has not been schooled, trained, and licensed by the state of New York to perform the attest function." Schoenfeld said. "How are they to know which CPA they are dealing with? Will the CPA wear a sign stating 'I am not qualified'?"

NYSSCPA Buffalo Chapter President Raymond Nowicki also testified against the proposed one-year requirement, questioning the quality of training CPAs would receive if a broader range of services would qualify.

"A new hybrid of CPA will result," Nowicki said. "They will get experience counting hamburger inventories at McDonalds."

Nowicki disagreed with proponents of the experience requirement who say that the increased 150-hour curriculum substitutes for decreased field experience.

"Schools train students to study and pass exams," Nowicki said. "This is not comprehensive experience. It is book learning."

Experience Licensure Requirements

A. 8600 proposes any type of services or advice using accounting, attest, management advisory, financial advisory, tax, or consulting skills as licensure experience. Such experience can be based on employment in industry, government, or academia.