In testimony presented on February 11, 2002 at the New York State Senate Public Hearing on Independence in the Post-Enron Era, the National Conference of CPA Practitioners (NCCPAP) called upon state legislators to consider special rules for small and regional CPA firms.
NCCPAP Issues Committee Chairman Robert Goldfarb suggested a task force be established to resolve key questions, including: (a) when, or if, a CPA firm performing the attest function for a company should be allowed to perform consulting service, (b) when, or if, a CPA firm should be entitled to receive commissions, and (c) what impact any changes in independence rules might have on smaller CPA firms.
Mr. Goldfarb said NCCPAP is concerned that the New York State Senate's investigation will focus on failures in the auditing procedures of all CPAs, not just the failures in the auditing practices of one firm and its client. He reassured the Senate that smaller CPA firms are fine. "The CPAs in the small and regional firms are on the cutting edge of technological advances in the profession," he said, "and on top of the new accounting pronouncements and auditing standards."
A press release following the hearing said the NCCPAP's testimony reiterated its feeling that:
- The public has not lost confidence in the integrity and professionalism of smaller CPA firms that do not engage in public company audits.
- Accounting firms should continue to be permitted to provide consulting services for privately-held companies, even if they provide attest services.
In the press release, NCCPAP also advocated that tax services should not be defined as consulting services.
Other suggestions made by NCCPAP include mandatory peer reviews for all CPAs performing the attest function for New York companies and changes in school curriculum for business and accounting courses to stress the importance of business ethics, auditing and other attest work. NCCPAP added that, "Courses stressing more auditing techniques and business ethics, including the concept of auditor independence, should be included in even the high school curriculums."