December 2000

New Year’s Prediction: 2001 Will Be the Year for the UAA

I’ll go out on a limb and predict that this year will see the passage of the Uniform Accountancy Act (UAA) in New York. Not that this will be easy. First of all, as is always the case with a new Legislature, all prior bills need to be reintroduced. The NYSSCPA will indeed reintroduce the UAA in New York: I expect that we will see effective grassroots activism turn the act into law by the end of the year.

The following is what we need to do to make this happen:

  • Demonstrate to the Senate and Assembly that the legislation underlying the profession—unchanged for five decades—is woefully in need of updating. When the current law was passed, for example, computers were gargantuan devices found only in the armed forces and research laboratories. Today, computers are everywhere, woven into the fabric of daily life. In addition, tax practice has changed and business has gone global, bringing new complexity to accounting and requiring new skill sets and knowledge bases.
  • Show that the UAA will make a positive difference in how accountants serve their clients and the public interest. If the UAA is unable to pass that test it will not become law—nor would it deserve to be. Many opponents of the UAA are against non-CPA ownership of accounting firms. The proposed act allows only minority ownership by nonaccountants, and in those cases only actively participating nonaccounting professionals. These days, most clients need—even expect—the services only multidisciplinary practices (MDP) can provide. They expect sound advice from a team of professionals with a broad base of talent and an understanding of their business. Most clients neither understand nor care about the distinction between partner and principal. They want a well rounded professional services firm with experience that is relevant to their entire business, and not just audit services.

    On the commission issue, audit clients rightly expect the CPA to accept no commissions within the engagement or relationship. But a nonaudit client that asked the CPA for advice on, for instance, insurance planning would probably be surprised to learn that the insurance agent or broker would receive a commission for the CPA’s work. A client that did know would probably be confused about why, and if the reason were explained, the client would probably still be confused, but in a different way—confused about why the accounting profession insists on such a restriction.

  • Show the profession’s openness to public scrutiny and regulation while ensuring that regulations remain focused and relevant. The ultimate goal is to provide solid, objective, honest advice upon which clients can rely.
  • Show that the broad majority of the CPA community cares about the UAA. Historically, the NYSSCPA has relied more on its leadership than its membership. But in the past two years, the Society’s PAC contributions have taken off—from slightly less than $70,000 in FY1999 to more than $100,000 in only the first four months of FY2000, with relatively little fundraising activity—demonstrating, I think, that members want to be involved. They can do that by writing, calling, and visiting their legislators and sharing examples of how the UAA will help them serve their clients better. If you know a member of the New York State Legislature personally and would like to be a member of the NYSSCPA government relations team, please let me know. The legislators need to hear first-hand from people whose businesses and clients the UAA will impact.

    If you have thoughts in support or opposition to the UAA, please let me know. Making a prediction is less chancy when you have confidence in the people who can make it come true, and I have confidence that accountants in New York will soon be celebrating the passage of the UAA.

    Louis Grumet
    Publisher, The CPA Journal
    Executive Director, NYSSCPA

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