What's happening
This bill mandates peer review for all CPA firms providing attest services in New York, removing exemptions for small firms.
Why it matters
All CPA firms, regardless of size, must now undergo peer reviews every three years if they provide attest services in New York. Previously, sole proprietorships and very small firms were exempt; this change increases oversight and accountability across the entire profession.
The removal of exemptions for small firms may raise compliance costs and administrative burdens for these businesses. Small firms will need to allocate resources to meet the new peer review requirements, potentially affecting their operations and pricing.
Mandatory peer review aims to enhance the quality and reliability of financial statements and other attest services provided by all CPA firms. This can increase public trust in the profession, ensure greater uniformity in standards, and potentially reduce the risk of errors or misconduct.
Firms performing attest services for government entities must have peer reviews that conform to federal government auditing standards. This ensures that audits and attest services for public sector clients meet rigorous federal requirements, potentially strengthening oversight of public funds.
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Who cares
Sole-proprietor accounting firms and firms with two or fewer accounting professionals
The bill would remove their exemption from mandatory peer review of attest services as a condition of firm registration renewal, unless otherwise exempted by the department.
Accounting firms serving federal governmental entities
The bill would expressly require firms performing attest services for federal entities pursuant to federal law to conform to the U.S. comptroller general’s government auditing standards.
New York State Education Department
The bill would retain its oversight of peer reviews while eliminating the requirement that reviewers come from a department-established roster.
Peer review program administrators
Their programs would cover newly subject small firms, while remaining subject to department evaluations and possible requirements to submit review reports to the State Board for Public Accountancy.
Headline styles
Require CPA Peer Review
Plain English, a few words. Used as the page title.
Sponsors
Assembly Member · Assembly District 127
1 Co-sponsor
History
- Signed chap.364
- Delivered to governor
- Returned to assembly
- Passed senateVote 60–2
- 3rd reading cal.2171
- Substituted for S6026A
- Referred to rules
- Delivered to senate
- Passed assembly
- Ordered to third reading rules cal.176
- Rules report cal.176
- Reported
Show 4 earlier actions
- Reported referred to rules
- Print number 7895a
- Amend (t) and recommit to higher education
- Referred to higher education
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Require CPA Peer Reviews
Senate Floor Calendar · Sponsor Pamela Helming
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7895--A
2017-2018 Regular Sessions
IN ASSEMBLY
May 18, 2017
Introduced by M. of A. STIRPE, BENEDETTO -- read once and referred to the Committee on Higher Education -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the education law, in relation to mandatory peer review of certified public accountants
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph 5 of paragraph c of subdivision 3 of section 7408 of the education law, as amended by chapter 651 of the laws of 2008, is amended to read as follows:
(5) That the firm failed to undergo a [quality] peer review of its attest services pursuant to section seventy-four hundred ten of this article at least once every three years; or
§ 2. Section 7410 of the education law, as added by chapter 651 of the laws of 2008, is amended to read as follows:
§ 7410. Mandatory [quality] peer review. 1. The department shall require as a condition to renewal of registrations under section seventy-four hundred eight of this article, that unless otherwise exempted by the department, applicants for firm registrations, [with the exception of sole proprietorship firms or firms with two or fewer accounting professionals, including certified public accountants or public accountants, or any combination thereof,] undergo, no more frequently than once every three years, except pursuant to a disciplinary action brought under section seventy-four hundred eight of this article, [quality] peer reviews of the firm's attest services conducted in such manner as the commissioner shall specify in regulations, and such review shall include a verification that individuals in the firm who are responsible for supervising attest services sign or authorize someone to sign the accountant's report on the financial statements on behalf of the firm
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11586-04-7
A. 7895--A 2
meet the competency requirements set out in the professional standards for such services, provided that any such regulations:
a. shall include reasonable provisions for compliance by an applicant for firm registration showing that it has, within the preceding three years, undergone a [quality] peer review in this state or a peer review in another state that is a satisfactory equivalent to [quality] peer review required pursuant to this section;
b. shall require, with respect to any organization administering [quality] peer review programs contemplated by paragraph a of this subdivision, that it be subject to evaluations by the department or its designee, to periodically assess the effectiveness of the [quality] peer review program under its charge;
c. shall require the [quality] peer review to be conducted by reviewers acceptable to the department in accordance with the commissioner's regulations[, from a roster of qualified reviewers established by the department]; and
d. may require with respect to [quality] peer reviews contemplated by paragraph a of this subdivision that firms undergoing [quality] peer reviews and organizations administering [quality] peer review programs timely remit such [quality] peer review reports to the state board for public accountancy and such reports shall be maintained by the board in a manner consistent with subdivision [three] two of this section.
2. [Except as provided for in subdivision four of this section, nothing in this section shall be construed to require sole proprietorship firms or firms with two or fewer accounting professionals, including certified public accountants or public accountants, or any combination thereof, to undergo quality review, however, such firms may choose to voluntarily undergo quality review in accordance with this section.
3.] Notwithstanding any provision of law to the contrary, the reports submitted in accordance with subdivision one of this section shall be confidential and shall not constitute a public record and shall not be subject to disclosure under articles six and six-A of the public officers law. However, when any such report is admitted into evidence in a hearing held by the department, it shall then be a public record subject to disclosure under articles six and six-A of the public officers law.
[4.] 3. Notwithstanding any provision of law or regulation to the contrary, a firm that performs attest services for any New York state or municipal department, board, bureau, division, commission, committee, public authority, public corporation, council, office, or other governmental entity performing a governmental or proprietary function for New York state or any one or more municipalities thereof, or performs attest services specifically required to be performed pursuant to New York state law, or performs attest services for any federal governmental entity pursuant to federal law, shall be [required to undergo an external peer review] in conformity with the requirements pursuant to the government auditing standards of the comptroller general of the United States.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.