Hon. Majority Leader Michael J. Bragman Hon. Chairman Edward C. Sullivan and other Hon. Members of the Assembly

My name is George T. Foundotos, CPA and I am testifying in support of your bill A-8600, which amends the State Accountancy Statutes. I have spent 37 years in public practice at the local firm and small town level. My firm consists of 5 partners, 25 professional staff, and 5 administrative staff. My firm is somewhat unusual for a local firm, in that 1/3 of our practice is in the attest area, overwhelmingly for local governments and not-for-profit clientele. We are very active in the New York State Society of CPA's (NYSSCPA). My one partner and I are both past presidents of the Suffolk Chapter of the Society and I am the immediate Past President of the State Society. In addition, I am a member of the governing Council of the national society; the American Institute of CPA's (AICPA).

In the late sixties, when I became certified, the experience requirement included three years of public accounting experience, under the supervision of a CPA, performing audit and or near audit work. Years later, this was amended, which changed the requirement to two years of experience and even this could be reduced to one year, if the individual had an acceptable academic Masters degree. The rule of thumb was and still is, that if your experience amounted to a minimum of 60 -65%, audit and audit related work, you would qualify. This is what is called attest work

You could spend the better part of your time on one facet of an audit e.g.: cash, accounts receivable or inventory and you would still qualify. You could conceivably never or hardly ever see any other aspects of an audit, whether it was the actual financial statements themselves, the note disclosures, client conferences or any one of host of a audit related activities.

This was reality and would hold true, whether you worked for an international firm performing SEC audits for a Fortune 100 company or for a local practitioner in an unincorporated hamlet in eastern Long Island. It is essentially the army system of time in grade. Put in the requisite time in the requisite area and you were promoted. 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.

Once licensed, you were free to practice accounting in public, private, government or academia and never have to concern yourself with audit issues, developments or advancements. And most CPA's fall into this category. The overwhelming majority of CPA's do not perform attest work. Even those in local public practice shy away from this type of work. Amazingly, there are even those who refuse to perform any attest work.

So why should we impose this level of experience on those who will not continue to use it? And why should we continue this system of time in grade, without considering the quality of the experience? I believe we should not and that is why I am supporting the proposed experience issue.

The proposed amendment would require one year of relevant accounting and business experience, to which a CPA would attest to its acceptability. The one-year experience requirement will come into being with the effective date of the 150 academic credit requirement. So that is not really new. A CPA attesting to the experience is not new; we are doing that now. All that is new is that the experience can be much broader that the narrow field of attest work. Everything else is unchanged e.g.: the educational requirement, the examination requirement, and ethics standards all remain the same.

For the CPA to perform attest work however, there is a major change. Currently under development by the standard setters (AICPA and NASBA) is a new set of attest experience standards that are qualitative in orientation, rather than time oriented. The quality of the experience is what counts, not the time in grade concept currently used. No doubt that there will be a time element - six months, a year, two years or whatever. But the main thing is that the direction will be in the overall quality of the work experience.

This is a fundamental factor and is the most important factor, which will protect the public interest in licensing these people to perform attest work.

This will also improve enforcement. Currently, firms are not regulated; firms are not licensed, are not tested nor do firms need CPE. Individuals do. Under the new provisions, the firm would be regulated for the kind of work it can offer. Only those firms, which have CPA's qualified to perform attest work can perform attest work. Therefore, not only will the individual CPA be held accountable, but also so will the firm. This way the public is better protected and served.

In closing, when I was licensed, I can now question if my experience would pass muster, in the attest environment My experience in a sole proprietorship in eastern Long Island was not very heavy in attest work, but I did see the entire audit process from start to finish. I did get involved in tax work, bookkeeping work, estate planning work, succession planning, the purchase and sale of a business and a host of other wonderful and useful business and human experiences. This I firmly believe has made me a better CPA and more mindful of my public responsibility.

I urge you to accept this experience change. It is the final E of the triple E's needed for substantial equivalency amongst the states; namely education, examination and experience. We have the first two and we need the last. The public will be better served, because this will result in a better-trained CPA for the actual work that is to be performed, rather than the work that is in our fantasies from days of yore.