Dear Hon. Bragman and Hon. Sullivan:

My name is Raymond M. Nowicki, and I am the managing partner of Nowicki and Company, LLP, Certified Public Accountants.

I have been in public practice for 24 years, and received my CPA license in 1979. 1 am President of the Buffalo Chapter of the New York State Society of CPA's, which represents approximately 1,400 CPA's in upstate New York. I sit on the Peer Review Committee of the NYSSCPA, and am one of 14 persons charged with the duty of overseeing the quality of the audit and accounting practices in New York State under this important program.

I have attended meetings in Albany, New York City, Buffalo and the NYSSCPA Board of Directors meetings in June 1998 and June 1999, at which this accountancy law was debated. Based on those experiences and the reading of this proposed law, I believe it substantially stands for the goals of Certified Public Accountants, and protects the public trust in New York State, except in one instance.

This bill originally required that a CPA must get at least 2 years of public practice in an accounting firm, or such equivalent experience as the State Education Department deems satisfactory. That was the law of the State for a long time, and is presently how it exists today. This is what we CPA's agreed strongly should be the experience requirement in this proposed law. Our existing president, Alan Weiner, publicly acknowledged support for that position at a meeting in Vermont, and so did leaders of at least 8 of the I I Chapters of our State Society in Albany.

In a private session of the NYSSCPA Board with advice from the AICPA, the Board recalled the proposed law in February, went against the wishes of their members, against the public interests, and redrafted a bill that allows for a CPA license to be granted to anyone who meets certain other minimum requirements ... the exam and the schooling, and works for one year gaining accounting experience anywhere, as long as it is attested to by a CPA. The experienced need not even be under a CPA's observation and control. It merely requires an attestation.

Essentially, the NYSSCPA Board of Directors has discarded a tried and true approach that has produced thousands of qualified practitioners.

Let's talk a little about history. Did you know that CPA's are one of the most trusted professionals, even above lawyers and doctors? We even have a newspaper entitled "The Trusted Professional". Why are CPA's viewed as trusted professionals? It is because all of our professional standards ... accounting, auditing, tax and management advisory - services, require us to embrace and adhere to the ethical standards of INDEPENDENCE, OBJECTIVITY AND INTEGRITY. You don't embrace those standards overnight. It has taken over 100 years to make CPA's understand that they must sometimes forsake a large fee, a prestigious business opportunity, or abandon a longtime client because of a conflict of interest, or if it breaks the standards of independence, objectivity and integrity.

Under this proposed law, we will have two kinds of CPA's: one who receives special permission to do audits, who takes extra training and submits to a peer review ... and one who can do everything else a CPA does ... like taxes and business advice, without any special requirements. It will be extremely confusing for the business owners in New York State to discern between the experienced CPA, and the new hybrid that gets experience counting hamburger inventories at McDonalds.

If the lower experience threshold passes, the hybrids will be considered "trusted professionals" for a short time, until their lack of experience causes damage to the profession's excellent reputation, and to the businesses which they will under-serve. Eventually, the errors will occur. Some of the errors may cause a bank to rely on an incomplete financial statement, or cause a small business to overpay for an inadequate software system because their CPA suggested it ... and we always trust our CPA, until now.

Let me liken the situation to a doctor. How would the public know that a doctor is able to do surgery, if most surgeries were not performed in a hospital where hospital privileges are not granted easily? They wouldn't. So what will the unwitting consumer use to separate the inexperienced practitioner from one who is experienced, and who adheres to standards that I just described.

You will hear from Former NYSSCPA President George Foundotus about how we are enacting a 5-year college requirement to protect the public interest. I have spoken to many distinguished professors, including Professor Robert Colson, Phl), CPA and Professor Ronald Huefher, Phl), CPA. Both of these experts have acknowledged that the schools train students to study and pass exams. This is not comprehensive experience. It is book learning.

Mr. Foundotos will tell you that the CPA exam is difficult. That's true. I know of many people who are born test-takers, but cannot function in the real world.

Then, he will tell you how our magnificent Peer Review Standards will protect the public from unqualified practitioners. It won't. Remember, I'm on the Peer Review Board, and have been on it for 4 years. It is a good process, but there is no way that we peer reviewers will be able to adequately identify and test every practitioner (approximately 34,000 of them) sufficiently to assure that they are only using experienced, knowledgeable practitioners on engagements. That must be done by CPA's who live and value the standards of independence, objectivity and integrity.

That is why the ethics of Independence, Objectivity and Integrity must be drummed into would-be CPA's, by forcing them to go through the narrow door ... the door of a CPA Firm.

In June, 1999, 1 presented the following paper to the Board of Directors of the NYSSCPA, imploring them to recast this aspect of the bill once again. On behalf of eight other Chapters, including Buffalo, we asked for a 2-year minimum experience requirement within a CPA Firm. This document proved to the Board the following facts:

-- Many states have a higher standard than the proposed New York standard;

-- New York could easily maintain a high standard, and still meet the terms of "substantial equivalency", as defined by the NASBA.

-- New York has one of the largest concentrations of CPA's in the United States, which is commensurate with the volume of financial work done in our State;

-- Our membership desires to maintain high standards, for the good of the public, and to protect the profession's good name (see the enclosed endorsements and proposals from Buffalo, Mid-Hudson, Westchester and Utica);

-- Finally, the document cites relevant quotes from the Professional Standards of Accountancy.

In the end, I believe that many members of the Board realized that they had received incomplete information in February 1999, at the hands of the AICPA. However, I also believe that the Board refused to re-amend this paragraph of the bill for fear that the Legislature would look down on the organization's inconsistency in this area.

Please let it be known, the membership of the New York State Society of Certified Public Accountants has never been inconsistent in their feelings about this aspect of the bill. An overwhelming membership percentage would demand the maintenance of a high standard of experience.

It is clear to me that there will be winners and losers as a result of this bill. The winners will be the American Express-type entities, who will use the valuable CPA designation to sell more product.

If the experience requirement is brought down to a low level, as presented in this bill, the losers will be the business owners and taxpayers of New York State.

Please, opt for higher standards. I stand ready at any time to answer any questions that you may have, and I hope the Legislature will see that higher experience and better on-site training within a CPA Firm will produce a better result for the people of New York.

Very truly yours,

Nowicki and Company, LLP
By: Raymond M. Nowicki, CPA