New York's new accountancy reform law, which goes into effect July 26, broadens the definition of the scope of practice of public accountancy to include all professional services provided by a CPA.
"Any CPAs who use the letters 'CPA' after their name will now be required to register," said David Moynihan, president of the New York State Society of CPAs. "Even if someone is retired and serves on a board on a voluntary basis, he or she will be required to be registered with the state. The most sweeping changes will be for those in industry or government. They used to be able to declare their status inactive, because registration only applied to CPAs performing the attest function. And all of them are now subject to the continuing professional education requirement."
The other significant change that impacts the profession will be the change in the peer review law, according to Moynihan.
"This doesn't go into effect until 2012, but it's a sweeping change," he explained. "In the past, being in a peer review program was voluntary in New York State. If you were a member of the American Institute of CPAs or the NYSSCPA, then that was a requirement of your membership, but you weren't required to be in either organization. If you chose not to be a member, then you didn't have to participate in a peer review program."
Peer reviews are conducted every three years. The AICPA contracts with the NYSSCPA to conduct peer reviews of member firms.
"Up until this change, we did about 600 peer reviews a year," said Moynihan. "Under the new law, we'll pick up 400 more firms that haven't volunteered in the past. There's an exception for firms with two or fewer professionals."
The new law does not ease the requirements for out-of-state CPAs looking to practice in New York with a license from another state, he noted. Out-of-state CPAs still have to obtain a temporary practice permit.
"The legislature's opinion seems to be that this is a consumer-protection issue," said Moynihan. "They want to know who's doing an audit in the state. We are the exception here, as 41 states have full mobility. The state society hasn't taken any position on the mobility issue, but we might over the next year."
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