Public Accountancy

Implementing Chapter 651, Laws of 2008

Summary of Implementing Regulations for the New Public Accountancy Law

Experience for licensure.

The proposed amendment broadens acceptable experience for licensure to include providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills under the direct supervision of a certified public accountant licensed in the United States or a public accountant licensed in New York. Further, experience may be gained through employment in public practice, government, industry or educational institutions. See Commissioner’s regulation section 70.3.

Competency requirement.

The proposed regulations define as unprofessional conduct the supervision of attest or compilation services or signing or authorizing someone to sign the accountant’s report on financial statements unless the individual met a minimum set of competencies. See Rules of the Board of Regents section 29.10(a)(13).

Education for Licensure.

The purpose of the proposed amendment to section 52.13(b)(1) of the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure-qualifying registered programs in public accountancy to reflect the current educational model. The proposed amendment is necessary to provide greater flexibility to colleges and universities seeking to adapt their programs to a changing professional practice environment when registering and/or changing licensure-qualifying public accountancy programs in New York. See Commissioner’s regulation sections 52.13 and 70.2.

Examination for Licensure.

The proposed amendment to section 70.3 of the Commissioner’s regulations will provide students with the opportunity to apply for admission to the Uniform CPA Examination after completing 120 semester hours of professional study, including at least one course in each of the mandatory professional accountancy content areas: financial accounting, managerial or cost accounting, taxation, and auditing and attestation services. The proposed amendment provides a better opportunity for candidates who might otherwise be impeded by time and monetary factors due to the increased education requirement. See Commissioner’s regulation section 70.4.

Foreign Limited Permits.

The new law authorizes a foreign candidate to obtain a limited permit if the foreign country that issued the candidate a license or its foreign equivalent, recognizes certified public accountants licensed in the United States. The regulation also establishes a fee of $100 for issuance of the limited permit. See Commissioner’s regulation section 70.6.

Temporary Practice Permits.

The temporary practice permit would be valid for up to 180 days during a twelve-month period and would be renewable no more than three times. The proposed regulations also require the submission of application materials and the payment of a $50 application fee and renewal fee. See Commissioner’s regulation section 70.7.

Endorsement of Out-of-State CPA License.

The proposed regulation provides that an applicant licensed by a state with significantly comparable licensure requirements, meaning those states recognized by the Department to have significantly comparable requirements, would be eligible for a license through endorsement. If the applicant was licensed in a state that did not have significantly comparable licensing requirements, the individual’s credentials would be evaluated to determine if his or her credentials are significantly comparable to New York’s requirements. See Commissioner’s regulation section 70.5.

Endorsement of a Foreign License, Certificate or Degree.

Provides for licensure by endorsement of a foreign applicant with an acceptable license, certificate or degree from a foreign country with significantly comparable licensure requirements, meaning those foreign licenses, certificates or degrees recognized by the Department to have significantly comparable requirements. See Commissioner’s regulation section 70.5.

Commission and Referral Fees.

The purpose of the rule is to retain the independent judgment of the CPA or PA. The proposed rule also defines as unprofessional conduct the failure of a CPA or PA to provide specific written disclosure to a client when the licensee performs professional services, other than certain attest or compilation services, for which a licensee may receive a commission, and the licensee receives a commission or referral fee for recommending the products or services of a third party to that client. See Rules of the Board of Regents section 29.10(i).

Firm Registration.

The proposed amendment requires all firms (including sole proprietorships, partnerships, LLPs, LLCs, and PCs) to maintain a registration with the Department if the firm is performing attest or compilation services or using the title “CPA” or “CPA firm” or the title “PA” or “PA firm”. It requires firms applying for registration with the Department to provide a list of all offices within this state and a list of all states or jurisdictions in which the firm maintains offices. It also requires firms to list any past denial, revocation or suspension of a registration or permit by any other state or jurisdiction within the past three years. See Commissioner’s regulation section 70.8.

Continuing Professional Education (“CPE”).

The proposed amendment implements the statutory changes, deletes prior exemptions from mandatory CPE for individuals who work in private industry or government and specifies that all registered CPAs and Pas are required to pay a CPE fee of $50. Any licensee who does not engage in public practice as defined in §7401 may file a written request for an exemption from CPE. See Commissioner’s regulation section 70.9.

Registration and Use of Professional Title.

The proposed rule requires CPAs and PAs to maintain an active registration with the Department if the licensee is practicing public accountancy or using the title “certified public accountant” or “public accountant” or the designation “CPA” or “PA.” Licensees not practicing public accountancy and not using the title may request inactive status from the Department by filing a form to be approved by the Department requesting such status. See Rules of the Board of Regents section 29.10(a)(14).

Non-attest Services Performed by Out-of-State Licensed CPAs.

The proposed rule amends the Rules of the Board of Regents by defining as unprofessional conduct the willful or grossly negligent failure of an out-of-state CPA practicing non-attest services pursuant to Education Law §7406-a to comply with substantial provisions of Federal, State or local laws, rules or regulations. See Rules of the Board of Regents section 29.10(h).

Professional Skills & Competencies.

The proposed regulation defines the professional skills and competencies used by a licensee when performing accounting, management advisory, financial advisory, tax and other non-attest services pursuant to Education Law section 7401(3). See Commissioner’s regulation section 70.1.

Quality Review.

The proposed regulations would establish a peer review program in New York, including standards for peer reviews; enrollment and participation; address substandard reviews; reporting requirements; establish a Quality Peer Review Oversight Committee; define record retention; identify procedures for sponsoring organizations; and identify and define the responsibilities of the peer review report committee. (To be discussed at September 2009 Regents Meeting)