Author: Anonymous
Source: free-articles
FOR IMMEDIATE RELEASE
CONTACT:
Lois Whitehead, Public Relations Manager, 212-719-8402, lwhitehead@nysscpa.org
NEW YORK STATE SOCIETY OF CPAs TESTIFIES TODAY
BEFORE STATE SENATE COMMITTEE
Senator Kenneth P. LaValle Conducts Public Hearings on CPAs in Post-Enron Era
NEW YORK, NY, February 8, 2002 ยกV The New York State, quality control, Society of Certified Public Accountants (NYSSCPA), the oldest and largest state accounting association in the nation, testified last week at hearings conducted, quality control, by Senator P. LaValle, Chair of the New York State Senate Higher Education Committee, quality control, . The testimony will address CPA independence and regulation in light of the recent bankruptcy of the Enron Corporation. Senator LaValle leads the nation in setting up such hearings at the state level to look at the regulation of CPAs.
In its testimony, NYSSCPA will call for ยกยงraising the quality barยกยจ and will make specific recommendations, quality control, for changes in New York State regulation, disciplinary systems, enforcement and peer review. The NYSSCPA also points out the need for a state initiative, quality control, to assist citizens with retirement planning.
In addition, the testimony addresses the interplay between auditing and consulting services, specifically in the non-SEC registrant sector of the economy. The NYSSCPA advises that any consideration to constrain consulting services in the non-SEC sector could have an unintended negative impact on small and medium sized
businesses that rely on CPA firms for, quality control, business advice. Removing such services would disrupt businesses unnecessarily and force them to seek similar services from lesser qualified providers. These businesses tend to not have staff in the areas where expertise is required, and rely more heavily, quality control, on their external auditor for specified consulting services.
Following are the recommendations outlined in the testimony:
โ€žh Reconstitute the, quality control, State Board for Public Accountancy. The New York State Board does not function as an independent regulatory and enforcement, quality control, body, as it does in all other states. Instead,, quality control, it functions in an advisory capacity only to the Board of Regents, which regulates the profession. The NYSSCPA recommends that this Board be reconstituted with more power, independence, stature and resources to protect the public. Consistent with other initiatives at the federal level, the Board should include additional public members with stature and backgrounds that would ensure strong public oversight.
โ€žh Enhance the State Education Departmentยกยฆs capacity and resources. The New York State Education Departmentยกยฆs Office of Professional Discipline (OPD) needs additional qualified staff and resources to be able to investigate and discipline, quality control, effectively. The disciplinary process must reinforce the professionยกยฆs ethics code and New York State laws.
โ€žh Ensure public and private cooperation in disciplinary proceedings. The Society recommends creating an effective, cooperative joint investigation and disciplinary action process between OPD and the NYSSCPA Ethics Committee to enforce, quality control, the code of professional, quality control, ethics and the public accountancy laws and regulations. Currently these two bodies proceed independently. Cooperation will coordinate efforts and expedite timely completion of investigations.
โ€žh Extend and intensify the peer review process. Improve peer view (a process in which one CPA firm analyzes the quality control systems and professional work product of another) of CPAs with certified peer reviewers, quality control, selected with an independent body. Currently firms can select their own reviewers. Make mandatory peer reviews for all registered CPA firms that provide audit and attest services. Currently, only CPA firms who audit SEC registrants are required to be peer reviewed.
โ€žh Register and regulate all CPAs. Currently, New York State does not register or regulate, quality control, CPAs who work as financial statement preparers or internal auditors. Like CPAs in public practice they are a part of the system of checks and balances that provides integrity to financial statements. These CPAs should also be subject to discipline for professional conduct breaches and to continue professional education.
โ€žh Raise the quality bar. The NYSSCPA has developed educational programs and professional, quality control, guidance on quality control processes for CPA firms. It is currently developing more extensive guidance on issues such as the analysis of independence threats and safeguards and document retention and recovery guidelines.
โ€žh Elevate public confidence in financial reporting. Strengthen the current regulatory environment to prohibit unregulated individuals from preparing financial statements.
โ€žh Require ethics education. Integrate business ethics into high school and college curricula to highlight that technical competence is constrained by a demanding code of ethical conduct that stresses independence and protection of the public.
Directing attention to losses experienced by Enron, quality control, employees in their retirement accounts, NYSSCPA called for the support of state initiatives to assist individuals in their retirement investment planning with proper advice about diversification in a retirement investment portfolio made available to all citizens of New York State.
Testifying for the NYSSCPA were three ethics specialists: Marilyn A. Pendergast, CPA of Urbach Kahn & Werlin LLP, former NYSSCPA President and current chair of the Ethics Committee of the International Federation of Accountants; Vincent J. Love, CPA of Kramer & Love, a member of the NYSSCPA Board of Directors and Financial Accounting Standards Committee and Allen L. Fetterman, CPA of Loeb & Troper, Chairman of the NYSSCPA Audit Committee.
ยกยงThe events of the debacle at Enron deeply concern the members of the New York State Society of CPAs,ยกยจ Pendergast said. ยกยงThe CPAยกยฆs primary responsibility is to protect the public. The issues raised by the apparent failure of Enron management and external auditors cause us to want us to find out what was known and done, by whom and when.
We want to know to what extent inadequate accounting and auditing standards played a role in this case, so we can change them. If inadequate standards were not the cause, but lax enforcement was, then we should address their enforcement.ยกยจ
Copies of the NYSSCPA full testimony are available at www.nysscpa.org.
About the NYSSCPA
Representing nearly 30,000 CPAs, the New York State Society of Certified Public Accountants (NYSSCPA) was incorporated in 1897. The Society is a nonprofit organization that seeks to establish and maintain high standards of integrity, honor, and character among certified public, quality control, accountants. Its members are CPAs working in public or private practice in a state that serves as the home of Wall Street and major financial institutions.
The, quality control, New York State Society of CPAs is located at 530 Fifth Avenue, New York, NY 10036. To learn more about the, quality control, Society call 800-633-6320 or visit the Societyยกยฆs website at www.nysscpa.org.
#
#
#
