New York (Aug 13, 2002) -- James Castellano, chairman of the American Institute of CPAs, on Monday warned that restrictions on small and midsized CPA firms serving privately-held companies is a possible "cascade" byproduct of the recently-passed Sarbanes-Oxley Act restricting the services firms can provide to public audit clients.
The federal law includes a provision that directs state regulators to independently determine whether to apply similar standards in their jurisdictions. That could affect small and mid-size firms including "firms like mine," Castellano, who is also a partner in Rubin, Brown, Gonstein & Co. of St. Louis, Mo., said in a tele-conference sponsored by the Advisory Board, a group of accounting firm practice management consultants.
Catellano said the AICPA is "working closely" with state CPA societies and the National Association of State Boards of Accountancy to monitor individual states' leanings. The issue is also on the agenda of NASBA's national meeting Oct. 6-9 in New Orleans, he noted.
"I don't see a great appetite in most states to have tag-along legislation, but there will be some interest state by state," Castellano said. Other speakers at the conference included Advisory Board members Allan Koltin, Jay Nisberg, Gary Boomer, Gary Shamis and Troy Waugh.
- John M. Covaleski
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