This issue of The CPA Journal comes at a time of significant regulatory and advocacy activity.
(Yes, I realize that CPAs face a seemingly never-ending pace of activity. But it certainly seems like that activity has increased lately, nonetheless.)
This year, after a push that has gone on for more than a decade, the New York State Legislature has overwhelmingly approved a bill that would permit non-CPA ownership of CPA firms (A.4189/S.2473A). The bill passed unanimously in the Assembly (Y: 144/N: 0) and overwhelmingly in the Senate (Y: 59/N: 2). I am quite proud to have overseen the final movement on this bill, especially during just my first year as Chief Executive Officer.
Why do I consider this legislation such a positive development for CPAs? Because it provides options that currently do not exist.
To reflect, “non-CPA ownership” allows non-CPAs to have an ownership interest in a CPA firm. Under the bill as passed by the legislature, a CPA firm would only need to have a “simple majority” of its owners to be licensed CPAs. Currently, in New York State, all of the owners of CPA firm must be CPAs. But with other states offering a simple majority option, New York State has been at a disadvantage.
From our smallest CPA firm to the largest multinational firm, non-CPA ownership provides various benefits that would not be possible under the existing regulatory regime. The bill would allow other professionals, such as engineers or economists, to have an ownership stake in a CPA firm of any size—so long as this simple majority of owners are CPAs. This provides new opportunities for CPA firms to attract investment through ownership interest as well as for long-term succession planning.
It is also worth noting that non-CPA ownership is not required in any way. If you are a CPA firm owner and are happy with your mix of partners, nothing has to change.
Although the bill does still require Governor Hochul’s signature to become law, we are hopeful that this will occur later in the year. By providing this non-CPA ownership option to firms, I believe our profession will retain its relevancy in today’s environment.
Relevancy and Advocacy
Speaking of relevancy, this issue also highlights the Baruch Financial Reporting Conference. Now in its 21st year, this event included leading speakers from the SEC, PCAOB, and FASB, among others.
Last but not least, you will find articles focusing on taxation. On the federal side, we review new rules and case law, such as the new proposed deductions that would impact the standard deduction. For state taxation, we highlight various new rules for consideration.
I consider advocacy the biggest member benefit that no one talks about. Whether it’s playing a key role in moving forward bills like the non-CPA ownership initiative, providing comment letters to regulators and standards setters, or ensuring that we provide exposure as well as training (via our Foundation for Accounting Education) on new taxation rules, your Society is committed to service.