State Legislature Passes Bill, Supported by the Society, Mandating Peer Review for All Firms

By:
Ruth Singleton
Published Date:
Jun 22, 2017


iStock-532047444 New York State Capitol Albany
A bill (S6026A) that would require mandatory peer review for all CPA firms in New York state that do attest work, an item on the NYSSCPA’s legislative agenda since December, passed the Senate on June 21, 60-2, requiring only Gov. Cuomo’s signature to become law.

The NYSSCPA advocated for passage of the act, which eliminates an exemption from mandatory peer review for firms with two or fewer CPAs, in order to protect the public interest by ensuring best practices among all CPA firms that perform audits.

The legislation also streamlines the language used to describe the review process, using the term “peer review” throughout rather than “mandatory quality review.” This change was made because the process is known as peer review throughout the country among the public accountancy profession.

Under the current version of the law, which took effect in 2012, there was an exception to the exception: Firms with two or fewer CPAs were subject to peer review in conformity with governmental auditing standards of the U.S. comptroller general (yellow book) if they provided attest work for any governmental agency.

With the passage of this legislation, New York joins every other state in the country in requiring mandatory peer review—periodic, third-party evaluation of a CPA firm’s accounting and auditing practices—for all firms that do attest work, with no exceptions.

The Senate bill was sponsored by Republican Sen. Pamela Helming. A week earlier, on June 14, the Assembly passed the legislation (A7895A) sponsored by Democrat Assemblyman Al Stirpe, by a vote of 108-0.

The bill now heads to the governor’s desk for signature. If Gov. Cuomo signs the bill, sole proprietors and firms with two or fewer CPAs will be required to undergo a peer review of their attest services before they re-register with New York State. All CPA firms that perform attest or compilation services, including sole proprietorships, have been required to register with the New York State Education Department since 2009. 

rsingleton@nysscpa.org

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