December 1999

Bill Addresses Changing Practice Environment, Says AICPA Chair

In his hearing testimony on A. 8600, a bill introduced in the New York State Assembly to reform the accountancy law, AICPA Chair Robert K. Elliott supported the proposed legislation, stressing that it is important to amend the law to better serve the public and the profession in the next century.

Elliott pointed out that the bill incorporates many of the provisions in the Uniform Accountancy Act, which was developed by the AICPA and the National Association of State Boards of Accountancy to reflect changes in the CPA's practice environment. Elliott outlined several factors--globalization, information technology, expansion of CPA services, challenges to the current regulatory system, and demographic shifts--that have impacted the audit function.

He predicted that change will continue to challenge the regulatory system's ability to protect the public. Online financial statements; web assurance; audit technology; and CPA firms' need for more capital to support research and development on new audit paradigms and to attract, train, and retain the talent necessary to perform such engagements were among the reasons Elliott gave to support his view that the profession requires new laws and regulations.

He stated that the public will benefit from "the new paradigm" through more reliable and timely information, improved market liquidity, reduced corruption, and strengthened trust in the financial markets, which will facilitate the democratization of investment.

After setting the stage with his views on the changes and continuing challenges the profession faces, Elliott addressed what he believes are the Assembly bill's benefits to the public and the profession.

Elliott said the passage of A. 8600 will--

* standardize the regulation of CPAs throughout the United States (as all states come into line with the UAA). This will improve quality and reduce consumer confusion;
* permit mobility of CPAs across all states whose accountancy statutes are 'substantially equivalent' (as they will all be when all states come into line with the UAA);
* facilitate international trade in accountancy services, as mandated by the United States' participation in the World Trade Organization under the General Agreement on Trade in Services;
* permit the emergence of new, better capitalized organizational forms, thus permitting the development of new and better services for consumers as well as attracting and retaining the talent necessary to serve their interests; and
* focus regulation on those services involving public reliance on CPAs, better balancing the need for public protection with the benefits of free-market competition in other service areas. *