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
lgrumet@nysscpa.org
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