I AM, RUDOLPH L. HERTLEIN, C.P.A., AND I AM A SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT OF VIACOM INC. HEADQUARTERED IN NEW YORK CITY.

VIACOM IS A DIVERSIFIED ENTERTAINMENT COMPANY WHICH OPERATES MTV MUSIC TELEVISION, SHOWTIME, NICKELODEON, VH-1 AND TV LAND. IT ALSO INCLUDES PARAMOUNT PICTURES, PARAMOUNT TELEVISION, PARAMOUNT STATIONS GROUP AND SPELLING ENTERTAINMENT. OPERATIONS IN VIDEO ARE BLOCKBUSTER VIDEO, PARKS INCLUDE FIVE THEME PARKS IN THE U.S. AND CANADA, PUBLISHING OPERATIONS INCLUDE SIMON & SCHUSTER AND VARIOUS OTHER BUSINESSES WITH APPROXIMATELY 50,000 FULL TIME EMPLOYEES WORLDWIDE.

MY RESPONSIBILITIES AND DUTIES INCLUDE THE REVIEW AND ANALYSIS OF POTENTIAL ACQUISITIONS AND DISPOSITIONS INCLUDING DUE DILIGENCE AND BUSINESS REVIEWS. I AM INVOLVED IN PRIOR BUSINESSES THAT WERE SOLD FROM AN ENVIRONMENTAL AND LITIGATION SUPPORT FUNCTION.

I HAVE FIVE DIRECT REPORTS (DEPARTMENT HEADS) WHO ARE IN CHARGE OF WORLDWIDE SATELLITE TECHNOLOGY INCLUDING UPLINK FACILITIES, THE CREATIVE DIRECTOR OF OUR WEB DESIGN FUNCTIONS AND MAINTENANCE AND NEW BUSINESS DEVELOPMENT IN THE ONLINE ENVIRONMENT. IN ADDITION, THERE IS THE PLANNING FUNCTION WHICH IS A SUPPORT FUNCTION TO THE BUDGET AND PLANNING PROCESS AND THE DIRECTOR OF CORPORATE AVIATION. TOTAL EMPLOYEE COMMITMENT TO THESE VARIOUS DEPARTMENTS NUMBERS APPROXIMATELY 200 PEOPLE.

I AM HERE TODAY IN SUPPORT OF ASSEMBLY BILL NUMBER A.8600. PROPOSED AMENDMENTS TO THE STATE ACCOUNTANCY STATUTE - NEW YORK STATE

I AM HERE TODAY TO SPEAK SPECIFICALLY TO THOSE AREAS OF CHANGE THAT AFFECT CPAS WHO, LIKE MYSELF, WORK IN INDUSTRY AND NOT IN THE TRADITIONAL SERVICES PERFORMED BY CPAS

WE IN BUSINESS AND INDUSTRY RELY ON CPA'S TO PERFORM AUDITS, REVIEWS, COMPILATIONS AND ATTEST ENGAGEMENTS FOR VARIOUS REASONS INCLUDING SEC REQURIEMENTS, BANK AND LENDERS DEMANDS AND VARIOUS OTHER EXTERNAL AND INTERNAL REQUIREMENTS.

THE AREAS OF CHANGE I WISH TO ADDRESS ARE AS FOLLOWS:

A) 150 HOURS OF POST-SECONDARY EDUCATION IN ACCOUNTING

B) ONE YEAR'S EXPERIENCE IN GENERAL ACCOUNTING SKILLS VERIFIED BY A LICENSED CPA. EXPERIENCE CAN BE BASED ON EMPLOYMENT IN INDUSTRY, GOVERNMENT OR ACADEMIA.

C) ALLOW CPA'S TO ACCEPT COMMISSIONS OR A REFERRAL FEE FROM NON-ATTEST CLIENTS, PROVIDED THAT SUCH ACCEPTANCE IS DISCLOSED TO THE CLIENT.

D) REPLACING CPE REQUIREMENTS WITH 120 HOURS EVERY THREE YEARS WITH A MAXIMUM OF 20 HOURS EACH YEAR AND REMOVES THE EXEMPTION FROM CPA"S WHO ARE NOT ENGAGED IN PUBLIC PRACTICE.

DETAILS:

A) THE 150 HOURS OF POST-SECONDARY EDUCATION IN ACCOUNTING (UP FROM 120) CAN ONLY BENEFIT THE PROFESSION AS A WHOLE SINCE THOSE COMPLETING THE REQUIREMENT WILL BE BETTER EDUCATED AND WILL BE MORE PREPARED IN AREAS MORE BROADLY REQUIRED BY BUSINESS AND INDUSTRY INCLUDING NON-TRADITIONAL AREAS IN FINANCE, ANALYSIS, BUSINESS VALUATION, ETC.

B) WITH RESPECT TO THE ONE YEAR EXPERIENCE REQUIREMENT, THERE ARE MANY FULLY QUALIFIED INDIVIDUALS IN BUSINESS, INDUSTRY AND EDUCATION WHO WOULD BECOME CPA'S IF THEIR ONE YEAR'S EXPERIENCE UNDER THE DIRECTION OF A CPA NOT IN PUBLIC PRACTICE WERE ALLOWED. THERE ARE A NUMBER OF QUALIFIED PEOPLE IN MY DEPARTMENT WHO COULD POTENTIALLY BENEFIT FROM THIS PROVISION AND WOULD ALLOW OUR EMPLOYEES TO INCREASE THEIR KNOWLEDGE BASE AND STATURE WITHIN THE COMPANY. THIS WOULD ENABLE THOSE NEW INDUSTRY CPA"S TO COME UNDER THE LICENSING PROVISIONS OF THE STATE, REQUIRE CPE AND RAISE THE COMPETENCE LEVEL OF THOSE INDIVIDUALS IN INDUSTRY, GOVERNMENT AND EDUCATION.

C) BY ALLOWING CPA'S TO ACCEPT COMMISSIONS OR A REFERRAL FEE FROM NON-ATTEST CLIENTS THE CPA'S COULD OPERATE ON A MORE EVEN FIELD WITH OTHER ADVISORS AND PROFESSIONALS. BY ALSO ALLOWING CONTINGENT FEES FROM NON-ATTEST CLIENTS, THE PLAYING FIELD WOULD BE MORE EQUAL. WE PRESENTLY DEAL WITH VARIOUS INDIVIDUALS AS CONSULTANTS, INVESTMENT BANKERS, ADVISORS ON A COMMISSION OR CONTIGENT FEE BASIS. HOW MUCH BETTER WOULD IT BE IF THE CPA COULD PERFORM THE SAME SERVICES AND UNDER THE SAME FEE ARRANGEMENTS AND THEREFORE BE A LICENSED PROFESSIONAL WITHIN A LEVEL PLAYING FIELD.

D) THE NEW CPE REQUIREMENTS ARE MORE FLEXIBLE AND ELIMINATE THE EXEMPTION FROM CPE FOR THOSE WHO ARE NOT ENGAGED IN PUBLIC PRACTICE WHICH CREATES A REQUIREMENT FOR CONTINUOUS LEARNING WHICH HAS TO BE BETTER THAN NOTHING. CONTINUOUS LEARNING IS IMPORTANT TO US IN INDUSTRY. WE NEED OUR INDUSTRY PROFESSIONAL TO BE KNOWLEDGABLE AND UP TO DATE ON VARIOUS SUBJECTS. AS AN EXAMPLE WE AT VIACOM HAVE A TAX COMPLAINCE DEPARTMENT WITH OVER 30 PEOPLE TO PREPARE THE FEDERAL AND VARIOUS STATE RETURNS FOR MANY STATES. THEY NEED CONTINUOUS EDUCATION AND THE ADDED BENEFIT OF BEING A C.P.A. FOR MORE OF THESE INDIVIDUALS, WITH LIFE LONG LEARNING, WOULD BE ALL THE MORE BENEFICIAL TO VIACOM AND TO THEMSELVES.

THANK YOU FOR ALLOWING ME TO TESTIFY TODAY. I WILL BE HAPPY TO ANSWER QUESTIONS, IF ANY.