New York governor signs groundbreaking accountancy legislation
The legislation, A.11696-A, was sponsored by Assemblymember Deborah Glick and Senators Kenneth LaValle, Toby Ann Stavisky, and John DeFrancisco (same as S.7497-B). Legislation to update the state's accounting laws, which have not been substantially changed since 1947, has been considered by the Senate and Assembly for ten years and passage comes at a time when the public needs additional assurances in the value of audit services. The bill also had strong support from Speaker Sheldon Silver and Assemblymember Ron Canastrari.
"I sponsored this measure because I believe it is important that Certified Public Accountants be held professionally responsible for the functions they perform," said Senator LaValle. "The new law will update the existing public accountancy statute to reflect changes in the field, ensure oversight, and enhance public protection."
Assemblymember Glick said that after seeing other bills die after being accepted by both legislative bodies, she made sure to stay on top of the long-awaited accountancy reform legislation. "Now with the hard work behind us, I am elated and relieved," she said.
"We are thrilled that the Governor has signed this legislation to protect the public. The law has not been changed in 60 years and the world we live in has changed dramatically during that time," said Sharon Sabba Fierstein, CPA, NYSSCPA President. "The law will bring CPA practice and protection of the public in step with the reality of today's international oriented and technology-driven world. The governor's signature on this important legislation sets the stage for New York to lead the national reform of our business culture that the nation has been hungrily awaiting."
This groundbreaking legislation will:
- Expand the regulated scope of the practice of the CPA profession to include management advisory, financial advisory, and tax preparation services by CPAs, as well as encompassing practice by CPAs in industry, government, and academia.
- Require all New York state CPA firms that perform attest and/or compilation services to register and those that provide attest services will have to undergo quality review every three years (exempting sole proprietors and firms with two or fewer accounting professionals, except if they perform state or municipal governmental audits. Effective date January 1, 2012).
- Enable out-of-state CPAs to practice attest and compilation services in New York through a temporary practice permit if the CPA's home state has licensure requirements significantly comparable to New York's, and the CPA is in good standing in the state of licensure.
Fierstein cited the importance of the legislation's passage in strengthening the quality of audit services provided by CPA firms. "The serious problems uncovered at publicly traded companies such as Enron and WorldCom, and more recently the financial giants, Bear Stearns and Lehman Brothers, underscore the importance of CPAs' audit services to the investing public. Similarly, the Roslyn School District fraud in 2004, which was in excess of $11 million, is a further example of the importance of high quality governmental audits to protect the interest of New York taxpayers."