On January 26, 2009, Governor Paterson signed into law, as Chapter 651 of the Laws of 2008, a bill that significantly changes the regulation and practice of the practice of public accountancy in New York.
The new law is effective on July 26, 2009, except for mandatory quality review provision that takes effect on January 1, 2012. The implementing regulations and guidance are still being developed. Questions and answers regarding the new law can be found below.
The new law includes many new or expanded provisions, including:
broadening the definition of the scope of practice of public accountancy to include all professional services performed by a CPA or PA;
providing the Board of Regents with disciplinary authority over CPAs and PAs based on all professional services provided to the public or based on use of his or her professional title;
recognizing foreign equivalent education as a basis of licensure;
modifying the foreign limited permit provision;
providing a temporary practice permit for out-of-state licensed CPAs. 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. Out-of-state CPAs and their firms consent to the disciplinary authority of the Board of Regents as a condition of the exercise of the temporary practice permit.
providing CPAs, licensed and in good standing in another state, may provide accounting, management advisory, financial advisory or tax services in New York without a license or temporary practice permit. These individuals and any firm that employs the CPA consents to the disciplinary authority of the Board of Regents when performing these services in New York;
providing an exemption to non-licensed individuals and business corporations performing accounting, management advisory, financial advisory or tax services. Non-licensed individuals may also issue financial statements using safe harbor reporting language defined in the law;
requiring all firm types (sole proprietorships, partnerships. LLPs, LLCs, and PCs) to maintain a current registration with the Department if the firm performs attest or compilation services or if the firm uses the title “CPA” or “CPA firm” or the title “PA” of “PA firm”;
requiring as a condition of re-registration that firms undergo a peer review of their attest services every three years. Sole proprietorships or firms with two or fewer professionals are exempt from the quality review requirement. Any firm, including sole proprietorships or firms with two or fewer professionals, that performs attest services specifically required under New York State law are required to undergo a peer review in conformity with government auditing standards of the Comptroller General of the United States;
removing the exemption from mandatory continuing education (CPE) for individuals employed in private industry, government and academia;
changing the continuing professional education (CPE) reporting year to a calendar year rather than an artificial September – August reporting year.
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