March 2009
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New Law Addresses Mobility for...
On January 27, 2009, New York Governor David A. Paterson signed accountancy reform legislation that brings regulation of the CPA profession into the 21st century. The new law adds extra levels of protection for the public and raises the bar for the standards of practice for the CPA profession.
The state senate unanimously passed A.11696-A/S.7497-B in December to amend the state's education law. The assembly had unanimously voted for the same bill last summer. It had been 62 years since the law governing CPAs in the state was last updated. The law was originally instituted in 1896, the official birth of public accountancy as a profession in this country, and was last substantially updated in 1947. The new legislation comes as a result of 10 years of effort by the New York State Society, working in conjunction with the State Education Department. It sets strict standards for CPA performance at a time when individuals, businesses, and nonprofit organizations need extra assurance that a CPA's work is of the highest quality.
The highlights include mandatory continuing professional education for all CPAs, an expanded scope of practice that brings management advisory, financial advisory, and tax preparation services under the state's regulatory umbrella, and a peer review requirement for most firms that provide attest services.
The newly signed legislation requires temporary practice permits for attest and compilation services performed by out-of-state CPAs working in New York.
Enhanced Mobility
The newly signed legislation requires temporary practice permits for attest and compilation services performed by out-of-state CPAs working in New York. It also grants unfettered cross-border practice privileges for out-of-state CPAs providing nonattest services. CPAs from other states can offer management advisory, financial advisory, and tax preparation services without giving notice or paying a fee. Therefore, tax practitioners from other states will have the ability to gain practice privileges in New York without obtaining an additional license.
Because CPAs hold the franchise for attest services, and for audit services more specifically, out-of-state CPAs who perform these services will be required to give notice under the new legislation. The public expects CPAs, as licensed professionals, to provide the highest quality auditing services. In our technology-driven, borderless world, business can be conducted across state lines electronically as well as physically, and the legislature is concerned that the public will be left unprotected if no one is watching.
To provide regulated enhanced mobility for attest and compilation services while protecting the public, the new legislation allows out-of-state CPAs in good standing to provide these services through the use of temporary permits to practice. A temporary permit may be used for up to 180 days in a 12-month period from the time it is issued, as long as the licensure qualifications of the other state are deemed significantly comparable to New York's. Out-of-state practitioners using a temporary permit agree to follow the rules of the Board of Regents, as well as the regulations of New York State.
With a stroke of his pen, Governor Paterson has ushered in a brand-new world for CPA mobility in New York. New York shines bright for leading CPAs into the 21st century.
From where I sit, it is as clear as black and white. New York State has substantially achieved mobility.