STATE OF NEW YORK
________________________________________________________________________
6026--A
2017-2018 Regular Sessions
IN SENATE
May 10, 2017
___________
Introduced by Sen. HELMING -- read twice and ordered printed, and when
printed to be committed 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 Assem-bly, do enact as follows:
1 Section 1. Subparagraph 5 of paragraph c of subdivision 3 of section
2 7408 of the education law, as amended by chapter 651 of the laws of
3 2008, is amended to read as follows:
4 (5) That the firm failed to undergo a [quality] peer review of its
5 attest services pursuant to section seventy-four hundred ten of this
6 article at least once every three years; or
7 § 2. Section 7410 of the education law, as added by chapter 651 of the
8 laws of 2008, is amended to read as follows:
9 § 7410. Mandatory [quality] peer review. 1. The department shall
10 require as a condition to renewal of registrations under section seven-
11 ty-four hundred eight of this article, that unless otherwise exempted by
12 the department, applicants for firm registrations, [with the exception
13 of sole proprietorship firms or firms with two or fewer accounting
14 professionals, including certified public accountants or public account-
15 ants, or any combination thereof,] undergo, no more frequently than once
16 every three years, except pursuant to a disciplinary action brought
17 under section seventy-four hundred eight of this article, [quality] peer
18 reviews of the firm's attest services conducted in such manner as the
19 commissioner shall specify in regulations, and such review shall include
20 a verification that individuals in the firm who are responsible for
21 supervising attest services sign or authorize someone to sign the
22 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.
LBD11586-05-7
S. 6026--A 2
1 meet the competency requirements set out in the professional standards
2 for such services, provided that any such regulations:
3 a. shall include reasonable provisions for compliance by an applicant
4 for firm registration showing that it has, within the preceding three
5 years, undergone a [quality] peer review in this state or a peer review
6 in another state that is a satisfactory equivalent to [quality] peer
7 review required pursuant to this section;
8 b. shall require, with respect to any organization administering
9 [quality] peer review programs contemplated by paragraph a of this
10 subdivision, that it be subject to evaluations by the department or its
11 designee, to periodically assess the effectiveness of the [quality] peer
12 review program under its charge;
13 c. shall require the [quality] peer review to be conducted by review-
14 ers acceptable to the department in accordance with the commissioner's
15 regulations[, from a roster of qualified reviewers established by the
16 department]; and
17 d. may require with respect to [quality] peer reviews contemplated by
18 paragraph a of this subdivision that firms undergoing [quality] peer
19 reviews and organizations administering [quality] peer review programs
20 timely remit such [quality] peer review reports to the state board for
21 public accountancy and such reports shall be maintained by the board in
22 a manner consistent with subdivision [three] two of this section.
23 2. [Except as provided for in subdivision four of this section, noth-
24 ing in this section shall be construed to require sole proprietorship
25 firms or firms with two or fewer accounting professionals, including
26 certified public accountants or public accountants, or any combination
27 thereof, to undergo quality review, however, such firms may choose to
28 voluntarily undergo quality review in accordance with this section.
29 3.] Notwithstanding any provision of law to the contrary, the reports
30 submitted in accordance with subdivision one of this section shall be
31 confidential and shall not constitute a public record and shall not be
32 subject to disclosure under articles six and six-A of the public offi-
33 cers law. However, when any such report is admitted into evidence in a
34 hearing held by the department, it shall then be a public record subject
35 to disclosure under articles six and six-A of the public officers law.
36 [4.] 3. Notwithstanding any provision of law or regulation to the
37 contrary, a firm that performs attest services for any New York state or
38 municipal department, board, bureau, division, commission, committee,
39 public authority, public corporation, council, office, or other govern-
40 mental entity performing a governmental or proprietary function for New
41 York state or any one or more municipalities thereof, or performs attest
42 services specifically required to be performed pursuant to New York
43 state law, or performs attest services for any federal governmental
44 entity pursuant to federal law, shall be [required to undergo an
45 external peer review] in conformity with the requirements pursuant to
46 the government auditing standards of the comptroller general of the
47 United States.
48 § 3. This act shall take effect immediately.
