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FAE's Ethics Update 2024 Members in Business PDF Free Download

FAE's Ethics Update 2024 Members in Business PDF free Download. Think more deeply and widely.

FAE’s Ethics Update 2024

Members in Business

Presented by:

Debbie A. Cutler, CPA/CFF, CFE, CCEP

Email:

dac@cutlerforensics.com

Phone:

516

336

6594

Date:

August 20, 2024

Time: 1:30 AM to 5:00 PM

Disclaimers

The material in this presentation and presented during this update is

designed for, and intended to serve as an aid to, continuing

professional education of CPAs. Due to the certainty of continuous

current developments in the profession affecting CPAs, these

materials are not appropriate to serve as the sole authority for any

opinion or position relating to the subject matter. They must be

supplemented with the authoritative source. Before making any

decision or taking any action you should consult the underlying

authoritative guidance and if necessary, a qualified professional

advisor. The author/instructor, and FAE shall not be held responsible

for any loss sustained by any person who relies solely on this

material or the presentation made by the instructor.

Course Outline

I. Introduction

II. NYS Education Department

•Regulatory structure

•Legislative update

•Laws, Rules & Regulations

III. Professional Ethics Updates

•NYSSCPA/PEC

•Tax Standards & Circular 230

•IESBA/AICPA-PEEC

IV. Enforcement/disciplinary matters

•NYS OPD

•AICPA

•SEC

•PCAOB

V. Ethical theories

VI. Resources

• AICPA & NYSED

VII. Supplemental Materials

I. Introduction

“In an integrity-first organization,

management speaks frequently about

the importance of integrity, and puts

policies and programs in place to back

their words up with actions”

The EY Global Integrity Report 2024

Based on a survey of 5,464 board members, senior managers,

managers and employees in a sample of large organizations and

public bodies in 53 countries and territories across the Americas,

Asia Pacific and Europe, the Middle East, India and Africa.

Interviews were conducted by the global research agency, Ipsos,

through online panels between October 2023 and January 2024.

EY Global

Integrity

Report 2024

Reveals some good news:

Almost half (49%) of global

respondents think compliance

with their organization’s

standards of integrity has

improved in the last two years.

This marks an increase of 7%

points from our EY Global

Integrity Report 2022 findings.

However, headwinds continue:

•Nearly four out of 10 (38%) global respondents admit they’d be prepared to

behave unethically in one or more ways to improve their own career progression

—more than one and a half times higher than the findings in the last report.

•Employee misconduct is directly influenced by the behaviors they observe from

leaders —where 25% of workers say they’d behave unethically for their own

benefit, the percentage rises to 67% among board members and 51% among

senior management.

•Leaders face pressure to look the other way on misconduct. Nearly two-thirds

(65%) of board members and 57% of senior management feel under pressure not

to report misconduct.

•A lack of training and awareness, and insufficient resources, open the door to

misconduct. More than half (54%) of global respondents say that employees not

understanding policies or requirements, combined with a lack of internal

resources to manage compliance activities, creates opportunities for employees to

violate integrity standards.

The EY Global Integrity Report 2024

“Trust and

integrity are

the heart of

the accounting

profession”

Empowering Ethical Leadership |

Resources | AICPA (aicpa-cima.com)

How Leaders Can Champion An Ethical Workplace

By: Susan Coffey, CEO of Public Accounting Association of International Certified Professional Accountants

Date: July 7, 2023

“In my career as a certified public accountant, and now as an executive at a

global association representing the accounting profession, ethics have always

been at the forefront of my work.

In my profession, we are required to abide by strict codes of conduct, and we

have robust self-regulatory mechanisms in place. However, pressure to act

unethically can happen in any profession, even those with rigorous

frameworks. Guardrails can help prevent accidents, misunderstandings or

blurring of lines that lead to unethical behavior, but they can’t completely

eliminate them.”

https://www.forbes.com/sites/forbesfinancecouncil/2023/07/07/how-leaders-can-champion-an-ethical-workplace/?sh=30f176147028

How You Can Model Ethical Behavior in Your

Organization

•Immediately taking responsibility for unethical actions that occur in

the workplace

•Modeling ethical leadership every day

•Normalizing discussions about your company’s code of conduct

https://www.forbes.com/sites/forbesfinancecouncil/2023/07/07/how-leaders-can-champion-an-ethical-workplace/?sh=30f176147028

What drives ethical behavior

•Individual values

•Organization culture

•Laws and regulations

•Code of Professional Conduct

•Public trust

Public’s Expectation of CPAs in Business

1. Act honorably

2. Act with integrity and objectivity

3. Comply with professional and regulatory standards and various State Board of

Accountancy requirements for CPAs

4. Keep employers or organizations information confidential

5. Protect employers or organization’s data from data breaches

6. Do not subordinate your judgment to another

7. Exercise due professional care and diligence when performing professional

services

8. Only accept work that you are competent to perform

II. NYS Education Department

Regulatory Structure

Legislative Update

Laws Rules & Regulations

http://www.nysed.gov/

common/nysed/files/n

ysed-org-chart.jpg

The Professions:

State Board of Public

Accountancy &

Peer Review Oversight

Committee (“PROC”)

Jennifer Winters, CPA

Executive Secretary

Board of Regents

•17 members

•Elected by the State Legislature for 5 year term and re-election for 5

year concurrent term is permissible

•1 member from each of the State's 13 judicial districts and 4 members

who serve at large

•Meetings every month for two days except for the month of August

•Regents are unsalaried and are reimbursed only for travel and related

expenses in connection with their official duties

https://www.regents.nysed.gov/members

Office of the Professions

•Establishes the requirements for licensure

•Approves the content of accounting programs at educational institutions

•Approves and administers licensing examinations

•Processes licensing applications and issues credentials

•Registers professional corporations and partnerships and CPE providers

•Provides information and advice to state legislature concerning the

professions

•Creates regulations concerning the professions and submits them to the

Board of Regents for approval

NYSED Logo

New

Access to NYS

Board for Public

Accountancy &

Peer Review

Oversight

Committee

Meeting Agendas

•Meeting Minutes

•Public Packet

Board for Public Accountancy Meetings Dates

2024 2025

•Jan 24 Jan 29

•Apr 25* Apr 30*

•July 24 July 30

•Oct 23 Oct 22

*In Person, otherwise Video

https://www.op.nysed.gov/professions/certified-public-accountants/board-committee-

meetings/state-board-meetings-pa

NYSED Logo

December 5, 2022

The Office of the Professions’

has a newly redesigned

website.

https://www.op.nysed.gov/

https://www.op.nysed.gov/certified-public-accountants

NYSED Logo

NY State Board for Public Accountancy

Members & Expiration of term

NYSED Logo

1. Charles Abraham NYC

03/31/27

12. Brian Krist, Esq.

Public Member NYC

06/30/29

2. Carney AuYeung NYC

08/31/24

13. John Lauchert Utica

09/30/27

3. Anthony Basile NYC

06/30/28

14. Danilsa Lopez NYC

03/31/29

4. Anthony M. Bracco NYC

01/31/25

15. Joseph Maffia NYC

03/31/26

5. Alexander Buchholz NYC

10/31/24

16. Maria Moran

(Vice Chair) Albany

04/30/29

6. Elizabeth Bush Syracuse

07/31/26

17. Charles Pezzino Buffalo

12/31/27

7. Ann Burstein Cohen (Chair) Buffalo

04/30/28

18. Kevin S. Richards NYC

04/30/25

8. Crisy Geerholt,

Public Member Albany

06/30/29

19. James Schnell Rochester

09/30/26

9. Gretchen Guenther Collins Albany

03/31/29

20. Thomas Sciametta NYC

01/31/25

10. Timothy Hammond Syracuse

7/31/29

21. Shelly Taleporos Albany

05/31/29

11. Rose Hu Buffalo

12/31/27

https://www.op.nysed.gov/boards/statutory-composition-current-membership

National

Association of

State Board of

Accountancy

“NASBA”

•Created in 1908, NASBA has

served as a forum for the

nation’s 55 State Boards of

Accountancy

•administers the Uniform

CPA Examination,

•licensed more than 650,000

CPA, and

•regulates the practice of

public accountancy in the

United States 21

NASBA Legislative & Regulatory Support

Provide a comprehensive monitoring and response network to Boards of Accountancy on

regulatory and legislative issues that affect the Boards, the public and the profession by:

•Monitoring State and Federal legislation and notifying Boards of pending legislation affecting

their jurisdictions

•Monitoring changes to Board rules and regulations

•Maintaining an extensive legislative affairs network and leveraging those contacts to benefit

the Boards

•Supporting Boards facing political threats to their mission to protect the public

•Assisting Boards with resources needed to address legislative and regulatory issues

•Working to promote uniform statutes and rules across the Boards of Accountancy

Uniform Accountancy Act (“UAA”)

Standards for Regulations

•Latter half of the 19th century Great Britain created the public accounting profession

•1896 NYS recognized the designation “certified public accountant” and formally incorporated

on January 28, 1897

•1984 AICPA and NASBA created the first joint model bill, later renamed the UAA

•The UAA is an "evergreen" model licensing law endorsed by the AICPA and NASBA that provides

a uniform approach to regulation of the accounting profession

•The UAA provides a comprehensive system for enhancing public protection, facilitating

consumer choice, and supporting the efficient operation of the capital markets

•8th Edition, January 2018

UAA Model Rules

January 2024

The Model Rules promote uniformity in the regulatory schemes governing the practice of

accountancy in the various jurisdictions.

ARTICLE 3 – DEFINITIONS

ARTICLE 4 – STATE BOARD OF ACCOUNTANCY

ARTICLE 5 – CERTIFIED PUBLIC ACCOUNTANTS

ARTICLE 6 – ISSUANCE OF CERTIFICATES AND

RENEWAL OF CERTIFICATES AND

REGISTRATIONS, CONTINUING PROFESSIONAL

EDUCATION AND RECIPROCITY

ARTICLE 7 - PERMITS TO PRACTICE – FIRMS

ARTICLE 10 - ENFORCEMENT ACTIONS

AGAINST LICENSEES

ARTICLE 11 - ENFORCEMENT PROCEDURES –

INVESTIGATIONS

ARTICLE 13 – REINSTATEMENT

ARTICLE 14 - UNLAWFUL ACTS

ARTICLE 23 - SUBSTANTIAL EQUIVALENCY

https://nasba.org/wp-content/uploads/2024/01/January-2024-Model-Rules-1.22.2024-dd.jj-edit-FINAL-CLEAN-VERSION.pdf

NYSSCPA

Advocacy

Legislative

Update

Monthly Email

A monthly email designed to provide members with insight into how

the NYSSCPA is advocating on their behalf is sent to all members on

the last Thursday of the month.

Have a legislative issue?

The NYSSCPA Government Relations Team wants to help you to be

heard in the halls of power. If you have a suggestion for our

Legislative Agenda, if you are having trouble getting through red tape,

or if you would like assistance in reaching your local or state officials,

please email Media & Government Relations Manager, Jovan C.

Richards, at jrichards@nysscpa.org.

May 14, 2024 NYS Lobby Day

Support to Co sponsor financial literacy in high schools and

the power of attorney expansion for e-signature bills and the

team also addressed other issues that the NYSSCPA is paying

close attention to, such as the PTET; BOI; ESG; and taxes on

cannabis

NYS Legislative Update

I. Non-CPA Ownership

II. Ethics CPE Revision

III. Modification to Regulations for new CPA exam structure

IV. Recoupling with the IRS

2024 NYSSCPA Legislative Agenda

https://www.nysscpa.org/advocacy/2024-legislative-agenda#sthash.tOQIXo7c.JXXovn3g.dpbs

I. Non-CPA

Ownership

Chapter 701 of

Laws of 2023

Pertaining to Non-

CPA Ownership

“allows for non-licensees to be minority owners

of CPA firms, was signed by the Governor on

December 8, 2023. There was a chapter

amendment to the legislation that includes an

effective date of June 8, 2024.

Please visit our answers to frequently asked

questions, and new forms that were developed

and posted to the Registration of Public

Accounting Firms web-page. Please email the

Professional Corporations Unit with any specific

questions at OPCORP@nysed.gov”

https://www.op.nysed.gov/chapter-701-laws-2023-pertaining-ownership-cpa-firms

Governor Hochul signing memorandum states….

This bill would allow public accounting firms with minority ownership by

individuals who are not certified public accountants to incorporate in New

York State. Similar laws already exist in forty-eight other states.

I proposed substantially similar legislation in my last two Executive Budget

proposals, and I support the goals of this legislation. By allowing

professionals who are not certified public accountants to become

minority owners of accounting firms, this bill will modernize New York's

incorporation laws, allow New York accounting firms to remain

competitive, and increase the availability of advancement options to a

diverse group of employees. However, certain administrative changes to

the effective date were necessary to allow the State Education Department

sufficient time to make the changes necessary for full implementation.

I have reached an agreement with the Legislature to enact these changes.

On the basis of this agreement, I am pleased to sign this bill.

https://www.nysscpa.org/news/publications/the-trusted-professional/article/gov.-hochul-signs-

non-cpa-ownership-bill-into-law-121123

“Any firm established for the business purpose of incorporating

as a professional service corporation formed to lawfully engage

in the practice of public accountancy, as such practice is

defined under Article 149 of the Education Law shall be

required to show (1) that a simple majority of the ownership

of the firm, in terms of financial interests and voting rights held

by the firm's owners, belongs to individuals licensed to practice

public accountancy in some state. ...” [Emphasis added]

Current requirement

70.9(b)(5)

Four (4) contact hours of

acceptable professional ethics

must be completed every

three calendar years.

These 4 credits of ethics may

be counted toward your 24 or

40 CPE credits in the calendar

year that you actually

complete the ethics course.

https://www.op.nysed.gov/professions/certifi

ed-public-accountants/mce-questions-answers

Proposal by State Board of Accountancy dated

10-24-18

70.9(b)(3)

“For each registration ending on or after

January 2, 2020 [TBD], a registered licensee

who is subject to the continuing

professional education requirement shall be

required to complete at least two credits in

ethics every calendar year period;

including, at a minimum, a two-credit NYS

approved ethics course must be completed

every three calendar years.

The two credits of ethics may be counted

toward the annual requirement in the

calendar year that they are taken.”

https://www.nysscpa.org/news/publications/the-trusted-

professional/article/ethics-cpe-regulatory-changes-set-to-take-

effect-in-2020

II. Ethics CPE Revision

Ethics CPE Disclosure on AICPA website

IMPORTANT NOTICE ABOUT YOUR CPE CREDIT:

Many states do not accept the AICPA course to meet the

ethics requirement for earning or maintaining a CPA

license. Please contact your state board to determine

which ethics course is required to earn your license

Ethics

requirement for

CPA licensed in

multiple

jurisdictions

An individual who is licensed in multiple

jurisdictions is required to meet the ethic’s

requirement as mandated by the State in which

their principal place of business is located.

A licensee who is licensed in multiple jurisdictions

and whose principal place of business is New York

must take a NYS specific ethics course.

"Principal place of business" means the office

location designated by the licensee from which the

person directs, controls, and coordinates his or her

professional services. §7401-a. Definitions.

https://www.op.nysed.gov/professions/certified-public-

accountants/mce-questions-answers #10

Requirement for approved ethics courses for dually

licensed CPA who’s principal place of business is

outside NYS

1. NY State-registered CPE sponsor that is approved to

provide ethics courses

2. NASBA-approved CPE sponsor

3. Sponsor that is approved by the licensing authority of

the state which is your principal place of business

Ethics and/or Regulations Exam Licensure Requirement for CPAs

Exam Required No Exam State Specific Exam

48%

24 States

32%

16 States

Incl. NY

20%

10 States

As of 6-14-24

Source: NASBA

NASBA State and Territories Ethics Exam Requirements for CPA

Licensure (as of 6-14-24)

I. Ethics Exam Required in

24 States

Alabama, Alaska, Arizona,

Connecticut, Delaware, Idaho, Illinois, Iowa, Kansas, Maryland,

Minnesota, Missouri, Montana, Nevada,

New Mexico,

North Dakota, Oklahoma, Oregon, Rhode

Island,

South Carolina,, Tennessee, Vermont, Virginia, Wyoming

II. State Requires a state specific ethics exam and/or regulations exam

in 10 states

California

, Colorado, Nebraska, North Carolina, Ohio, South Dakota, Texas, Utah, Washington,

Wisconsin

III. No ethics exam required in

16 states, District of Columbia and 5 territories

, Arkansas

, Florida, Georgia, Hawaii, Indiana, Kentucky, Louisiana, Maine, Massachusetts,

Michigan, Mississippi,

New Hampshire, New Jersey, New York, Pennsylvania, West Virginia

CN Mariana

s Islands, District of Columbia, Guam, Puerto Rico, US Virgin Island

III. Modifications

to Regulations

for new CPA

Exam structure

On Sept 28, 2022 the NYS Board of Regents approved

amendment of sections § 52.13, §70.2, §70.3 and §70.4

of the Regulations of the Commissioner of Education

relating to education, examinations, and experience

requirements for licensure in the profession of public

accountancy.

New CPA Evolution CPA Exam-January 2024

Core = Three sections

Financial Accounting and Reporting

Audit

Taxation

Disciplines (chose one)

Business Analysis and Reporting (BAR)

Information Systems and Controls (ISC)

Tax Compliance and Planning (TCP)

CPA Exam Testing Window

On April 21, 2023 the NASBA Board of Directors approved changes to the UAA Model Rule 5-7 for the granting of credit

requirement for sections passed on the Uniform CPA Examination

The revised Rule increases the number of months of conditional credit provided to a candidate from 18-months to 24-

months and provides greater clarity as to a Board’s authority to allowing additional time to candidates

On April 24, 2023 NASBA changed the conditional credit to 30 month period with an effective date of 1-1-24

Advisory Notice – CPA Examination Condition Period | Office of the Professions (nysed.gov)

The New York State Board of Regents, at its November 2023 meeting, approved an amendment to the Commissioner’s

Regulations Section 70.4.c. that extends the credit retention period for the Certified Public Accountant examination

from 18 to 30 months. These regulatory amendments move New York State into alignment with the national standards

for the credit retention requirements.

The regulatory amendment was approved by emergency action and is effective January 1, 2024.

For a detailed view of the regulatory amendments, see the Regent’s website at:

https://www.regents.nysed.gov/sites/regents/files/1123ppca1.pdf.

IV. Recoupling

with the IRS

A.9461 & S.8398

Governor Hochul signed the bill into law

July 21, 2022.

SUMMARY: Coordinates extensions of time to

file state taxes to any extensions of time to

file federal taxes beyond ninety days.

PURPOSE: To allow New York State to enact a

corresponding tax deadline beyond ninety

days, consistent with any deadline extension

by the IRS.

Laws, Rules & Regulations

Education Law

Title VIII links to all Articles

Article 149 Public Accountancy

Commissioner's Regulations

Part 52-13 Registration of Curricula, Accountancy

Part 70 Public Accountancy

Rules of the Board of Regents

Part 29 Unprofessional Conduct

29.1 General Provisions

29.10 Special Provisions for the profession of public accountancy

NYS Public Accountancy - Laws, Rules & Regulations (nysed.gov)

NYSED Logo

Education Law & Regulations

NYS Education Law (Article 12)

§ 7401 Definition of practice of public accountancy

§ 7401-a Definitions (7)

§ 7402 Practice of public accountancy and use of title “certified

public accountant” or “public accountant”

§ 7403 State board of accountancy

§ 7404 Requirements for a license as a certified public accountant

§ 7405 Requirements for a license as a public accountant

§ 7406 Limited permits and practice privilege

§ 7407 Exempt provisions

§ 7408 Special provisions

§ 7409 Mandatory continuing education

§ 7410 Mandatory peer review program

https://www.op.nysed.gov/professions/certified-public-

accountants/laws-rules-regulations/article-149

Regulations of the Commissioner (Part 70)

§ 70.1 Definition of practice of public accountancy

§ 70.2 Professional study of public accountancy

§ 70.3 Experience requirements

§ 70.4 Licensing examinations

§ 70.5 Licensure by endorsement

§ 70.6 Limited permits

§ 70.7 Practice by certain out-of-state individuals and firms

§ 70.08 Registration of a firm

§ 70.09 Continuing Education

§ 70.10 Mandatory peer review program

https://www.op.nysed.gov/professions/certified-public-

accountants/laws-rules-regulations/part-70

NYSED Logo

AICPA issues guidance on

potential mobility changes

By Mari Sagedal

December 14, 2023

If your State CPA Licensure

Requirements Change,

Make Sure You Understand

the Compliance

Implications

AICPA & CIMA

Overview:

CPAs currently benefit from a nationwide licensing system

that allows almost complete freedom to practice virtually or

in-person across states without having to obtain additional

licenses. This is known as practice mobility.

Types of Mobility

1. Automatic Mobility

Alabama, Nebraska, Nevada and North Carolina

2. Mobility Based on Substantial Equivalents

Interstate Practice Compliance Checklist for CPAs from States

With Changing Licensure Requirements

https://www.journalofaccountancy.com/news/2023/dec/aicpa-issues-guidance-on-potential-mobility-changes0.html

https://www.nescpa.org/storage/files/70b9311b478d9fcb9ef4081310826809.pdf

§ 7401 Definition of practice

of public accountancy

a. offering to perform or performing attest and/or compilation services,

as defined in Education Law section 7401-a of this Article;

b. incident to the services described in subdivision (a) of this section,

offering to perform or performing professional services for clients, in

any or all matters relating to accounting concepts and to the recording,

presentation, or certification of financial information or data;

§ 7401 Definition of practice of public accountancy

c. offering to perform or performing, for other persons one or more types of the

following services including but not limited to accounting, management advisory,

financial advisory, and tax exclusive of services within subdivisions one and two of

this section, involving the use of professional skills or competencies of the

licensed accountant as described in the rules of the board of regents, including

professional services rendered to one's employer not required to register under

section seventy-four hundred eight of this article, in any and all matters related to

accounting concepts and to the recording of financial data or information or the

preparation or presentation of financial statements. [emphasis added]

§ 70.1(c) Definition of

practice of public

accountancy

Professional skills and

competencies

The practice of public accountancy shall include

accounting, management advisory, financial

advisory, and tax exclusive of services within

subdivisions (a) and (b) of this section, which

involve, but shall not be limited to, use of the

following professional skills or competencies:

Application of:

i. accounting skills

ii. transaction processing cycles and the control

environment

iii. business law and laws related to fraud

iv. tax law

v. government and not-for-profit accounting

vi. management accounting concepts

vii. finance concept

viii. Identification of potential violations of ethical

behavior

ix. Fraud detection and deterrence

Supplemental Material has slides with details of each application

NYS CPA License

•You remain a CPA in NYS for a lifetime except for the rare

exception of a license suspension, revocation or annulment

•There is a difference, between being licensed as a CPA and

being registered to practice public accountancy in NY under

the state’s definitive scope of practice laws and regulations

CPA License Classifications

1. REGISTERED = the licensee is "active" and allowed to work within the scope

of practice

2. INACTIVE = Licensee is not allowed to work within the scope of practice.

NOT practicing and your status is changed as of the start of the next

registration period.

3. NOT REGISTERED= registration has lapsed without explanation. Licensee is

not allowed to work within the scope of practice.

4. SUSPENDED, REVOKED, or SURRENDERED = pursuant to a disciplinary action

5. RESCINDED= due to an error in issuing the license

6. DECEASED= Department has received reliable notice

NYSED Logo

Online License Verification

https://www.op.nysed.gov/verification-search

Name:

Address:

Profession: CERTIFIED PUBLIC ACCOUNTANCY

License No:

Date of Licensure:

Additional Qualification: Not applicable in this profession

Status: REGISTERED

Registered through last day of:

NYSED Logo

4747

•Online central repository of information about licensed CPAs and public

accounting firms maintained by the NASBA

•Provides a single-search resource covering participating 54 jurisdictions

(except Hawaii) where a person or firm has been licensed. Some states

provide information about registered firms in addition to individuals.

•Multiple state licenses should all appear.

https://www.cpaverify.org/

CPA Verify

Scope of

Practice:

Representation

as a NYS CPA

Even if a CPA is not actively

providing any of the types of

services described in the

above-referenced scope of

practice provisions for public

accountancy, you are not

permitted to represent

yourself as a CPA unless you

have an active registration to

practice.

https://www.op.nysed.gov/professions/certified-public-accountants/professional-practice

What is a representation?

Rule 29.10 (a) (14) (iii)(c)

“A representation shall include, but not be limited to, any oral, electronic, or

written communication within the control of the licensee, indicating that the

person holds a license, including without limitation the use of titles or

designations on letterheads, reports, business cards, brochures, resumes,

office signs, telephone directories, websites, the Internet, or any other

advertisement, news article, publication, listing, tax return signature, signature

on experience certifications for licensure applicants, the display of licenses as

a certified public accountant or public accountant from this or any other

jurisdiction, or the display of certificates or licenses from other organizations

which have the designation “CPA” or “PA” or use of the title “certified public

accountant” or “public accountant” with the licensee’s name. ”

Using CPA Title or Designation

Use of the title "certified public accountant" or "public accountant" or

designation "CPA" or "PA" shall mean any representation that a person holds a

license as a certified public accountant or public accountant, provided that

representation is

1. made by the licensee,

2. or by someone associated with the licensee who the licensee has knowingly

allowed to make such representation,

3. or by someone serving as the licensee's agent who the licensee has

knowingly allowed to make such representation.

Rule 29.10 (a) (14) (iii)(b) 51

Scope of Practice:

Determining

When An Active

or Inactive

Registration

Statue is

Appropriate

A New York CPA may decide to leave the

"practice of public accountancy," as defined in

section 7401 of the Education Law and section

70.1 of the Regulations of the Commissioner

of Education (Commissioner's Regulations),

and request to have his or her registration

moved to an inactive status.

However, only a person with an active

registration may use the title "certified

public accountant" or the designation CPA or

may perform any of the services described in

section 70.1 of the Commissioner’s

Regulations, which are listed below.“

Scope of Practice:

Serving on a

Board of

Directors or

Board of Trustees

“A CPA, with an inactive registration, may in some circumstances

be permitted to serve on governing boards of commercial and not-

for-profit entities, or on committees of such governing boards,

without being considered as providing services within the scope of

practice of public accountancy.

Accordingly, a CPA would not be subject to the CPE requirement, as

long as he or she does not provide attest or compilation services,

serve as an employee of the organization, or otherwise provide

services specifically described as being within the scope of practice

of public accountancy.

However, if the CPA serves on a publicly held company’s governing

board or committee and becomes the designated financial expert,

as defined by the Sarbanes Oxley Act of 2002, he or she must

maintain an active registration and be in compliance with the CPE

requirements.”

https://www.op.nysed.gov/professions/certified-public-

accountants/professional-practice

Scope of Practice:

Teaching a college

course, CPA review

course, or CPE

course

Added June 2021

A CPA who teaches a college level

accounting course; a CPA review

course for the CPA examination; or a

formal CPE course offered by an

approved CPE provider must be in

compliance with the CPE

requirements and maintain an

active registration.

https://www.op.nysed.gov/professions/certified-public-

accountants/professional-practice

Scope of Practice:

Preparing Tax

Returns for

Family Members

“A CPA with an inactive registration may be

permitted to prepare income tax returns, and

other tax returns, for himself or herself and family

members, without being considered as providing

services within the scope of practice of public

accountancy, as long as

•he or she does not perform these services for a

fee,

•is not on the Internal Revenue Service’s Tax

Preparer Identification Number (PTIN) registry,

•and does not sign the tax returns as a paid

preparer.

Otherwise, the CPA must be in compliance with the

CPE requirements and maintain an active

registration.”

https://www.op.nysed.gov/professions/certified-public-

accountants/professional-practice

Scope of Practice:

Serving as a Trustee,

Executor or Executrix

for Family Members

Added: 4-26-23

“A CPA with an inactive registration may be permitted

to serve a family member as a trustee of a trust or as

the designated executor or executrix for a family

member’s estate, without being considered as

providing services within the scope of practice of

public accountancy, provided that the licensee does

not perform these services for a fee or commissions.

Notwithstanding this requirement, a trustee of a trust

or executor or executrix of an estate may receive

reimbursement for reasonable and necessary out of

pocket expenses. Otherwise, the CPA must maintain

an active registration and must be in compliance with

the CPE requirements.”

https://www.op.nysed.gov/professions/certified-public-

accountants/professional-practice

Out-of-State

Licensed

CPAs

Practicing in

NYS

•An individual who is licensed as a CPA in

another jurisdiction, practicing in the scope

of practice noted above, (employed by a

public accounting firm or in private industry,

government or academia) and has a

principal place of business in NYS, must

file an application to become licensed

in NYS.

•Initial licensing requirements can be

found here. Licensure by endorsement can

be found here. Questions not found on the

licensing pages may be sent

to CPABD@nysed.gov.

Rules of the Board of Regents:

Unprofessional Conduct

General provisions §29.1 (b)

14 Provisions however

4 have been replaced by

§ 29.10

Special provisions for the

profession of public

accountancy §29.10

Sections (a) to (j) with

several sections having

subsections

AICPA Code incorporates many of the same topics as the NYS Rules of the Board of Regents.

https://www.op.nysed.gov/title8/rules-board-regents/part-29

Rules of the Board

of Regents

Part 29

Unprofessional

Conduct

§ 29.1(a) General provisions.

Unprofessional conduct shall be the

conduct prohibited by this section. The

provisions of these rules applicable to a

particular profession may define

additional acts or omissions as

unprofessional conduct and may

establish exceptions to these general

prohibitions.

General Provisions

of Board of

Regents

Unprofessional

Conduct §29.1(b)

1. Willful or grossly negligent failure to

comply with substantial provisions of

Federal, State or local laws, rules or

regulations governing the practice of

the profession;

2. Exercise undue influence on a client,

including the promotion of the sale of

services;

5. Conduct evidencing moral unfitness to

practice the profession;

General Provisions

of Board of

Regents

Unprofessional

Conduct §29.1(b)

6. Willfully making or filing a false report, or

failing to file a report required by law or by

the Education Department, or willfully

impeding or obstructing such filing, or

inducing another person to do so;

9. Practicing or offering to practice beyond the

permitted law, or accepting and performing

professional responsibilities the licensee

knows or has reason to know licensee is not

competent to perform;

General Provisions

of Board of

Regents

Unprofessional

Conduct §29.1(b)

10. Delegating professional

responsibilities to a person

licensee knows or has reason to

know such person is not qualified

by training, experience or

licensure to perform them;

11. Performing professional services

which have not been duly

authorized by client or client’s

legal representative;

12. Advertising or soliciting not in the

public interest;*

*See 29.10 (a)(10) for specific interpretation

General Provisions

of Board of

Regents

Unprofessional

Conduct §29.1(b)

13.Failing to respond within 30

days to written communication

from the Education Department

and to make available any

relevant records with respect to

an inquiry or complaint about

unprofessional conduct;

14.Violating any term of probation

or condition or limitation

imposed by the Board of

Regents pursuant to Education

Law, Section 6511

General Provisions

of Board of

Regents

Unprofessional

Conduct §29.1(b)

Additional references:

(3),(4),(7) and (8) have been

replaced by §29.10 Special

Provisions for Public

Accountancy

Public Accountancy Rules of the Board of Regents

In Lieu of General Provisions

Description

§29.1 (b)

General

Provisions

§29.10

Public

Accountancy

1. Commissions & Referral Fees

(3) (i) (8)

2. Sharing of income

(4) (b)

3. Client

request for copies of documents (7) (a) (8) (vi)

4. Client Confidential Information

(8) (c) *

* Exception included in Public Accountancy Rule

Reform of Board

of Regents

Rules § 29.10

Unprofessional

Conduct

2013 Project Commenced

2016 NYS Board for Public Accountancy proposed and

submitted changes to the Rules to NYS Counsel of

Legal Affairs

2024 Still pending NYS Counsel review

Code of Professional Conduct Adoption

AICPA by Reference

AICPA by Ref w

Exceptions

State CoPC w Ref to AICPA

State CoPC

MT ND

ID NY

SD WI

AK NJ

UT IL

CA WV

CO VA

KS MO KY

AZ AR SC

9States that have adopted the AICPA Code of Professional Conduct by Reference

States that have adopted the AICPA Code of Professional Conduct with Exceptions

8State Code of Professional Conduct with Reference to AICPA

10 State Code of Professional Conduct

CNMI

OK TN

Grand Total 55

CT RI

CoPC Adoption Status Total

As of June 30, 2022

NASBA AICPA Code of Professional Conduct

Adoption- States only (as of 6-30-22)

States Adopted Code with Exceptions

State Only not adopted Code

State Code with Reference to Code

State Adopted Code by Reference

18%

9 states

10%

5 states

16%

8 states

56%

28 states

50 US States

Excluded 5 territories

NASBA Code of Professional Conduct Adoption

As of 6-30-22

II. Adopted AICPA Code with Exceptions

- 28 States

Colorado, Idaho,

Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi,

Missouri, Montana, Nevada,

New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Ohio, Oregon,

South Carolina, South Dakota,

Tennessee, Utah, Washington, Wisconsin, Wyoming

I. States Adopted AICPA Code by Reference

- 5 States and 4 Territories

Alaska, Arizona,

Delaware, Rhode Island, Virginia

CN Mariana

s Islands, Guam, Puerto Rico, U.S. Virgin Islands

IV. State Code of Professional Conduct

(Not Adopted) 9 States and District of Columbia

Alabama, Arkansas,

California, Georgia, Hawaii, Maryland, Nebraska, New York, West Virginia

District of Columbia

III. State Code of Professional Conduct with Reference to AICPA Code

- 8 states

Connecticut,

Florida, Kentucky, Maine, North Carolina, Pennsylvania, Texas, Vermont

Proposed index to

the Reform of

Board of Regents

Rules §29.10

As of 10-26-16

a. Definitions (new)

b. General and Technical Standards (Acct Principles)

c. Confidential Information

d. Applicability of Rules

e. Reportable Events

f. Acts Discreditable

g. Competency Requirements

h. Registration Requirements

i. Fee Arrangements

j. Independence

k. Licensee’s Working Papers and Client Records

l. Advertising & Solicitations

m. Mandatory Peer Review

AICPA Code of

Professional Conduct

Acts Discreditable

2.400

. 010 Discrimination and Harassment in Employment Practices

.020 Solicitation or Disclosure of CPA Examination Questions

& Answers

.030 Failure to File Tax Return or Pay Tax Liability

.040 Negligence in the Preparation of Financial Statements or

Records

.050 Governmental Bodies, Commissions, or Other Regulatory

Agencies

.060 Indemnification and Limitation of Liability Provisions

.070 Confidential Information Obtained from Employment or

Volunteer Activities

.090 False, Misleading, or Deceptive Acts in Promoting or

Marketing Professional Services

.100 Use of the CPA Credential

Proposed

§29.10

Definitions

As of 10-26-16

i. Client

ii. Client-prepared records

iii. Commission

iv. Confidential information

v. Contingent fee

vi. Continuing Professional Education

vii. Firm

viii. GAAP Standards

ix. Inactive Status

x. Licensee

Proposed

§29.10

Definitions

As of 10-26-16

xi. Licensee-prepared records

xii. Licensee’s work products

xiii. Licensee’s working papers

xiv. Professional Services

xv. Referral fee

xvi. Regulatory Body

xvii. Representation

xviii. Substantive alterations

xix. Use of title “certified public

accountant” or “public accountant”

or designation “CPA” or “PA”

Current

§ 29.10

Unprofessional

Conduct

Special provisions

for the profession

of public

accountancy

a. Includes all conduct prohibited

by Section 29.1, except as

provided in this section, and

shall also include the following:

14 provisions

b-j ………………………..

§ 29.10

Unprofessional

Conduct

Special provisions for the

profession of public

accountancy

(a) provisions include:*

(1) Accountant's opinions in financial statements

(4) Forecasts

(5) Independence

(6) Contingency fee arrangements

(7) Independence

(8) Refusing to furnish to a client upon request…..

(10) Soliciting or advertising for clients

(11) Retention and maintenance of workpapers

(12) Determining incompetence or negligence

(13) Competency requirements for attest &

compilation services

(14) Registration with Department of Education

* Provisions (2), (3), and (9) fall into the categories of

acts discreditable, general and technical standards in

the proposed revised Rules

§ 29.10 (a)(11)

Workpapers

Effective since

1-3-2003

i. Applicability of the requirement

ii. Definition

iii. Documentation in work papers

iv. Retention of work papers

v. Availability of work papers to the

department

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

ii. Definition. As used in this paragraph

a. Work papers means the licensee's records of the

procedures applied, the tests performed, the information

supporting, and the material conclusions reached for a work

product produced in the practice of public accountancy as

defined in section 7401 of the Education Law, including but

not limited to an audit, review, compilation, forecast or

projection.

Work papers may include, but are not limited to,

programs used to perform professional services, analyses,

memoranda, letters of confirmation and representations,

copies or abstracts of company documents and schedules or

commentaries prepared or obtained by the licensee.

Work papers may be in handwritten, typewritten, printed,

photocopied, photographed, or electronic form, or in any

other form of letters, words, pictures, sounds, or symbols.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

ii. Definition

b. Substantive alterations to work papers

means changes to work papers that

alter the nature, timing, extent, and

results of the procedures performed for

the work product; alter the information

obtained and the conclusions reached

for the work product; and alter the

identity of the persons who performed

and reviewed the work for the work

product.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

III. Documentation in work papers

a. Work papers shall contain sufficient

documentation to enable a reviewer with

relevant knowledge and experience, but

having no previous connection with the

specific work product, to understand the

nature, timing, extent, and results of the

procedures performed for the work

product, information obtained and

conclusions reached for the work product,

and the identity of the persons who

performed and reviewed the work for the

work product.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

III. Documentation in work papers

b. Within 45 days of the issuance of the

work product, a complete set of work

papers shall be retained. Any

substantive alteration made

subsequent to the issuance of the work

product shall be clearly documented by

indicating the subject of the alteration,

the date of the alteration, and the

reason for the alteration.

c. Substantive alterations to work papers

resulting from post-issuance review

procedures shall be identified in an

addendum to the work papers.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

IV. Retention of work papers

a. Licensees shall ensure that a formal

written policy is established for the

retention of work papers that is in

accordance with the requirements of this

subparagraph. Licensees employed by an

employer authorized to practice public

accountancy shall have met this

requirement for a formal written policy,

for work papers produced under such

employment, if their employer has

established a formal written policy for the

retention of work papers that is in

accordance with the requirements of this

subparagraph. Such written policy shall

identify the process and authorization

requirements for the destruction of work

papers after the expiration of the

retention period.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

IV. Retention of work papers

b. For a minimum of 7 years after the date of

issuance of the work product, unless there

is a requirement by law to retain for a

longer period. Work papers may be

retained permanently.

c. Licensees shall ensure that work papers

are retained during the term of a New York

State Education Department investigation

or disciplinary proceeding by the New York

State Education Department that is

reasonably related to such work papers.

Licensees shall not dispose of such work

papers until notified in writing by the New

York State Education Department of the

closure of the investigation or until final

disposition of the disciplinary proceeding.

§ 29.10 (a)(11)

Workpapers

Effective since 1-3-2003

IV. Retention of work papers

d. If work papers are retained in an

electronic form, the licensee shall ensure

that such work papers are capable of

being accessed, for read-only purposes,

throughout the required retention period

established for the work papers and are

safeguarded through sound computer

security procedures to prevent the

unauthorized modification of the work

papers.

e. Work papers shall not be destroyed or

otherwise disposed of at a time or in a

manner that is inconsistent with

applicable requirements of the law.

§ 29.10

Unprofessional

Conduct

Special provisions for the

profession of public

accountancy

b) Allocation of firm profits and compensation to

employees

c) Client Confidentiality

d) Public Accountancy Firms

e) Reportable Events

f) Unprofessional conduct in the practice of public

accounting shall include

(1) Having admitted guilt or having been found

guilty of improper professional practice or

professional misconduct in a SEC, PCAOB

disciplinary proceeding …….

(2) Having voluntarily consented to a revocation or

temporary or permanent suspension of the

authority to appear to practice as an

accountant before the SEC, PCAOB…………

§ 29.10

Unprofessional

Conduct

Special provisions for the

profession of public

accountancy

g) As such practice relates to an audit in

the practice of public accountancy of

an issuer of publicly traded securities

that is subject to the Federal Sarbanes-

Oxley Act of 200 shall include…

h) Practice privilege

i) Definitions (commission and referral

fees including mandatory disclosure)

j) Mandatory Peer Review (new)

What is required

under the Attest and

Compilation

Competency Rules?

How many CPE

hours are required?

§ 29.10 (a) (13)

Any licensee who supervises attest services or signs or

authorizes someone to sign an accountant's report on

the financial statements of a client for attest services

must be in compliance with A, B, and C, and for

compilation services be in compliance with B and C:

a.1. have at least 1,000 hours of experience within

the previous five years in providing attest

services or reporting on financial statements

gained through employment in government,

private industry, public practice or an educational

institution satisfactory to the State Board for

Public Accountancy; or

2. be employed by a firm registered with the

Department pursuant to section 70.8 of the

Regulations of the Commissioner of Education

that has undergone a peer review satisfactory to

the Department which indicates that the firm has

received a rating of pass or pass with

deficiencies; and

https://www.op.nysed.gov/professions/certified-

public-accountants/mce-questions-answers #5

What is required

under the Attest and

Compilation

Competency Rules?

How many CPE

hours are required?

§ 29.10 (a) (13)

For attest and compilation services:

b. completed at least 40 hours of

CPE in the area of accounting,

auditing or attest during the

prior 3 calendar years or in the

calendar year in which the

service is performed; and

c. maintained the level of

education, experience and

professional conduct required

by generally accepted

professional standards, relating

to the attest and/or

compilations services

performed.

https://www.op.nysed.gov/professions/certified-public-

accountants/mce-questions-answers #5

What is required

under the Attest and

Compilation

Competency Rules?

How many CPE

hours are required?

§ 29.10 (a) (13)

The audit partner is ultimately responsible

for all the work on the audit, including the

tax provision and is required to meet the

competency requirements under this rule.

The tax partner, or any other partner

brought in to assist the audit, is functioning

as a consultant to the audit partner and

would not be subject to the requirement to

obtain 40 hours of CPE in accounting,

auditing or attest.

https://www.op.nysed.gov/professions/certified-public-accountants/mce-questions-

answers #5

29.10 (a) (14)

Registration

failing to maintain an active registration

with the Department in accordance with

the requirements of this paragraph when

a licensee engages in the practice of

public accountancy pursuant to

Education Law section 7401 …………

Inactive status- you must request in

writing or online during registration

process, and receive NYSED approval.

Start Online Renewal

NYSED Logo

NYS CPA Online

Registration

Renewal

E Licensing

How to

Request

Inactive Status

Online

“If you are not practicing your profession or using your title

in New York, you may place your registration in inactive

status free of charge.

To do so, you must advise us of your decision to register

inactive.

You can do this online following the steps below or by

answering "no" to question 1 on your paper renewal

registration form, signing and returning the form with no

fee.

If you do not inform us of such a decision, you are subject

to the customary registration fee for your profession.

In the event that you decide to resume practice after an

inactive period, you must reregister your license and meet

any post-licensure requirements imposed on your

profession.”

NYSED Logo

Information available at

https://www.op.nysed.gov/registration-

renewal/online-registration-renewal

REGISTRATION RENEWAL ADDENDUM

Public Accountancy

Public Accountancy - CE Reg Renewal Addendum, Page 1 of 2, Rev. 9/23

Continuing Education: Beginning January 1, 2009 each certified public accountant or public accountant

registered to practice in New York State must complete either: 1) a minimum of 24 contact hours in a

concentrated area of study in continuing education for each calendar year period; or 2) a minimum of 40

contact hours of continuing education in any combination of approved subject areas. A minimum of 4

hours of professional ethics must be completed every 3 calendar years. A continuing education fee of $50

per triennium is added to the registration fee. Each licensee must maintain continuing education

certificates for a period of five (5) years and be subject to audit by the New York State Education

Department. With the exception of Item 4, do not send any continuing education documents with this

application.

Individuals who have NOT met the continuing education requirement MUST choose Item 1, 2 or 3.

Individuals who were previously granted an exemption or adjustment to the continuing education

requirement and now want to practice MUST choose Item 4.

Your signature indicates agreement with the terms of the option you have selected

1. I do not intend to practice in New York State and am requesting that my registration be placed in an

INACTIVE STATUS. I have reviewed the scope of practice document under the practice guidelines at

https://www.op.nysed.gov/professions/certified-public-accountants/professional-practice.

As long as your registration remains inactive, you are not responsible for the registration fee or the continuing

education requirement. If you intend to resume practicing in New York State, you must meet certain continuing

education requirements prior to reactivating your registration. You may not practice public accountancy in New

York State if you are not registered.

Name (please print) __________________________________ License number ________________________

Signature ___________________________________________________ Date _______ / _______ / _______

Home telephone number ________________ Work telephone number _________________________________

E-mail address _______________________________________________________________________________

Employer name and address ____________________________________________________________________

Job Title ____________________________________________________________________________________

Job description _______________________________________________________________________________

____________________________________________________________________________________________

Principal place of business ______________________________________________________________________

Public Accountancy - CE Reg Renewal Addendum, Page 1 of 2, Rev. 9/23

NYS Board of Public

Accountancy

Scope of Practice

Review 10-19-22

Request for Inactive Status:

Licensee requested an Inactive Status of their

registration.

The licensee was found to be working in the

scope of practice.

• Held a position as Director of Operations for a

not-for-profit organization. Providing

financial assistance to constituents.

Fundraising – coordinate for a yearly ask-a-

thon fundraiser event; seek high donors

• Licensee notified of the determination and re-

registered with a regular online registration

renewal.

Source: NYS Board of Public Accountancy Minutes

NYS Board of Public

Accountancy

Scope of Practice

Sub-committee Review

5-28-24

Request for Inactive Status:

Licensee requested an Inactive Status of their

registration.

• Held a position as Senior Account Director at

Cartra Inc in NYC (Equities Management

Firm)

•Licensee managed client relationships and

does do not any accounting or tax work

Decision: The committee concluded that the

licensee was not providing services which meet

the definition of “scope of Practice

Source: NYS Board of Public Accountancy Board Packet 7-24-24 pg 48-49

How does a firm

apply for a

registration with

the Board?

Summary of Registration Process :

•PCs and LLCs must apply to the Professional Corporations Unit

for a Certificate of Authority (PLS-709). Once granted, the firm

files the PLS-709 and other required documents with the NYS

Department of State to form the corporation. The firm then

returns to the Professional Corporations Unit to register the

firm.

•LLPs apply directly to the NYS Department of State to form

their corporation. After forming, the firm applies to the

Professional Corporations Unit for a registration.

•Sole Proprietorship and Partnership formations are dictated

by the county where the firm plans to practice. Most counties

require Partnerships to file a DBA certificate. Not all counties

require or allow a Sole Proprietorship to file a DBA certificate.

Firm owners are required to know the laws that apply in their

respective counties. After filing the firm's DBA certificate in

their local county (where required), the firm applies to the

Professional Corporations Unit for a registration.

Firms are urged to contact the Professional Corporations Unit

at opcorp@nysed.gov for a more detailed registration guide or

call 518-474-3817 ext. 400

https://www.op.nysed.gov/professions/certified-public-accountants/registration-public-

accounting-firms See#5

Who is required to

complete

continuing

education?

“Licensed CPAs and PAs, performing

any accounting, tax, financial or

management advisory work in NYS,

including work performed in

private industry, government

agencies, public accounting firms,

not-for-profits, or an academia

employer, are required to meet the

continuing professional education

requirements.”

Mandatory

Annual CPE

Requirements

https://www.op.nysed.gov/professions/certified-public-

accountants/mce-questions-answers #14 98

Q. If I complete more hours of continuing education than are

required in one year, can I use them toward the hours

required in a subsequent year?

A. No

Section 7409 of the State Education Law clearly states that the

CPE requirement is to be met on an annual basis and that no

credits may be transferred from one year to a subsequent

year.

CPE tracking and reporting runs on a standard January 1 -

December 31 year.

NYSED Random

CPE Audit

“Monthly, the State Board for

Public Accountancy office

conducts random audits of

licensee CPE records. Failure to

produce comprehensive records

in a timely manner is grounds for

disciplinary action including

suspension or revocation of a

license and/or fines.”

https://www.op.nysed.gov/professions/certified-public-

accountants/mce-questions-answers #6

NYS CPA Online

Registration

Renewal

Question #7 CPE

Since your last registration application

Have you completed the continuing education

required for your profession? Yes or No

Continuing Professional Education (CPE): Effective

January 1, 2009, licensees must meet the annual

CPE requirement each calendar year between

January 1 and December 31.

The question below refers to each full calendar

year during the registration period that is currently

ending.

2024 renewals certifying CPE for years 2021-2023

100

NYS CPA Online

Registration

Renewal

Question #7 CPE

Licensees who, under public accountancy legislation

effective July 26, 2009, are practicing under the scope

of regulated practice are required to register with the

Department to practice and shall complete either:

1) a minimum of 24 contact hours of acceptable

formal continuing education concentrated in ONE

of the following recognized subject areas:

auditing, accounting, taxation, advisory services,

attest, or specialized knowledge and applications;

2) a minimum of 40 contact hours of acceptable

formal continuing education in a combination of

any of the subject areas listed in 1) above.

Additionally, all licensees who are subject to CPE must

complete at least 4 CPE credits of professional ethics

course work every 3 calendar years. These 4 credits

can be combined with 1) or 2) above, in the calendar

year that they are taken.

101

NYS CPA Online

Registration

Renewal

Question #7 CPE

A licensee who fails to meet the CPE

requirements shall not be issued a

registration certificate and shall not

practice unless and until he or she

completes the required CPE.

Each licensee shall maintain a record of

continuing education completed for not

less than five years and shall make such

records available to the Department upon

request.

102

Five years=2019-2023

NYS CPA Online

Registration

Renewal

Question #7 CPE

All registrants are assumed to be in practice and

completing CPE.

Adjustments to the requirement may be granted

upon meeting special circumstances. Eligible

adjustments include licensees who are not in

practice due to: personal illness, active military

service or extreme hardship. If you claim an

adjustment, you must provide the State Board for

Public Accountancy with documentation from your

physician, military orders or other documentation

substantiating your claim. CONTACT INFORMATION:

CPABD@nysed.gov, State Board for Public

Accountancy, 89 Washington Avenue, Albany, NY

12234-1000, 518-474-3817 extension 160.

If you answer no to this question you must complete

a Registration Renewal Addendum to request a

Conditional Registration, an Inactive status, or an

Adjustment to the CPE requirements.

103

NYS Online

Registration

Renewal

Affidavit

I hereby certify that all the statements, attestations,

information, and data contained in this application are true,

complete and accurate. I understand that any

misrepresentation or any false or misleading information made

in connection with my application may result in criminal

prosecution and may be cause for disciplinary action, including

the loss of my license; and that the willful failure to register

while continuing to practice my profession constitutes

professional misconduct.

I also understand that the authorized electronic signature

(profession, license number and PIN) used to submit this

application has the same legal validity and enforceability as a

written signature.

Signed under penalty of perjury.

2. I request a CONDITIONAL REGISTRATION.

Conditional registrations are not automatic and may be issued at the Department's discretion. A conditional registration, if

granted, is valid for one year and cannot be renewed or extended. You may request a conditional registration for a one-

year period if you agree to the following four items:

1. pay the full registration fee for the one-year conditional registration;

2. complete, by the conclusion of the one-year conditional registration period, the continuing education hours you

are lacking from your previous registration period;

3. complete, as directed by the State Board for Public Accountancy, the regular continuing education requirement during

the one-year conditional registration period; and

4. pay, by the conclusion of the one-year conditional registration period, the full triennial registration fee for the

remaining 2 years of the registration period

Prior to the end of the one-year conditional registration period, you will be sent a Registration Renewal Application to

renew your registration for the remaining two years of the registration period. You must pay the full triennial registration

fee and submit copies of CPE certificates before you will receive a registration for the remaining two years. Failure to

meet the requirements of the conditional registration may subject you to prosecution for professional misconduct.

Name (please print) _____________________________ License number __________________________

Signature ________________________________________________ Date _______ / _______ / _______

Home telephone number _________________ Work telephone number __________________________

E-mail address _________________________________________________________________________

Public Accountancy - CE Reg Renewal Addendum, Page 1 of 2, Rev. 9/23

How to obtain

NYSSCPA CPE

records?

Log into your account

•Change Password

•Check FAE VP Balance

•CPE Transcript

•Download Course Materials

•Dues Reduction Application

•Get CPE Certificates

•Order History

•View Webcasts

106

My Membership

How to obtain

AICPA CPE records?

1. Log into your account

2. Scroll to purchases

3. Scroll down to “Your learning

dashboard” and “Access your

transcripts, certificates,

Learning Tracker, and learning

history” and click “My

Learning”

4. Export Transcript

107

What are the approved NYS continuing education subject areas?

Effective January 1, 2024

1. Accounting

1. Fraud

2. Auditing

1. Fraud

2. Internal Controls

3. Risk Assessment

4. Service Organization Controls (SOC) Reporting

3. Attestation

4. Taxation

https://www.op.nysed.gov/professions/certified-public-accountants/mce-questions-answers #16 108

What are the approved NYS continuing education subject areas?

Effective January 1, 2024

5. Advisory Services

1. Behavioral Ethics

2. Business Law

3. Business Management & Organization

4. Communications and Marketing - Note:

Marketing is reviewed on a case-by-case

basis. Promotional marketing or sales are

not accepted.

5. Computer Software & Applications

6. Economics

7. Finance

8. Information Technology

9. Management Services

10.Personal Development

11.Personnel/Human Resources

12.Production

13.Statistics

109

6. Specialized Knowledge and Applications

Related to Specialized Industries

7. Professional Ethics

1. Regulatory Ethics

2. Ethics and Professional Conduct

3. State specific ethics

https://www.op.nysed.gov/professions/certified-public-accountants/mce-questions-answers #16

What are the approved NYS continuing education subject areas?

Effective January 1, 2024

Note: The subject areas Environmental, Social, and Governance (ESG) and

Data Analytics will be classified depending on the main subject area of the

course.

In order to be eligible for CPE credit, regardless of the subject area, a

course must contribute to the development or maintenance of

professional knowledge. Credit will not be given for courses that focus on

the marketing of professional services or improving the profitability of

an accounting firm or practice.

Click here for a Detailed Description of CPE Subject Areas. Click here for

the NASBA fields of study.

110

https://www.op.nysed.gov/professions/certified-public-accountants/mce-questions-answers #16

CPE

Requirements

for AICPA

Members

From January 1, 2001, forward, and for each three-year

reporting period thereafter, all AICPA members shall

complete 120 hours or its equivalent of continuing

professional education.

Members shall report compliance with such requirement to

the AICPA each year by paying membership dues and shall

keep appropriate records and submit copies of such on

request of the Institute.

Members who are retired, unemployed or who have

temporarily left the workforce are exempt from the

AICPA's CPE requirement.

Members who place their license/certificate on inactive

status with their state board of accountancy AND do not

hold themselves out as CPAs are exempt from the AICPA's

CPE requirement as long as their state board does not

require CPE while on inactive status.

CPE requirements vary from state to state. Contact your

state board for information concerning your state's specific

requirements.

111

AICPA Online annual membership renewal

aicpa.org/credrecert

IMPORTANT: In making my payment, I

affirm that my information is correct

as shown or amended, that I have

complied with the AICPA Code of

Conduct and with CPE Requirements

for the year ending Dec. 31, 2023. I

have seen and agree with the AICPA

IMPORTANT: In making my

credential/designation payment, I

affirm that I meet all of the

requirements to hold my

qualification(s) as outlined at

aicpa.org/credrecert. I note that

certifications/designations are subject

to audit.

§ 29.10 (e)

Reportable

Events

Submit a written report within 45 days

if you meet criteria even though all

available appeals have not yet been

exhausted, unless exempted from

disclosure pursuant to paragraph (5)

or excused for good cause as

determined by the department, such

as a circumstance beyond the

licensee's … that prevented timely

compliance:

113

§ 29.10 (e) (2) (i)

Reportable Events

conviction

of ….a crime that constitutes a

felony or misdemeanor

(yourself, a registered partnership

or public accountancy firm).

conviction

shall include:

•a plea of guilty or no contest,

•or a verdict or finding of guilt that

has been accepted and entered by a

court of competent jurisdiction;

114

§ 29.10 (e) (2) (ii)

Reportable Events

Court decision awarding a monetary judgment

>$25,000

in a civil action or an arbitration award

proceeding in which the CPA, the registered

partnership, or public accountancy firm is found to be

liable for:

a) negligence, gross negligence, recklessness, or

intentional wrongdoing relating to the practice of

public accountancy in NYS;

b) fraud or misappropriation of funds relating to the

practice of public accountancy in NYS;

c) breach of fiduciary responsibility relating to the

practice of public accountancy in NYS; or

d) preparation, publication, and/or dissemination of

false, fraudulent, and/or materially incomplete or

misleading financial statements, reports, or

information relating to the practice of public

accountancy in NYS 115

§ 29.10 (e) (2) (iii)

Reportable Events

receipt of written notice of imposition of a disciplinary

penalty upon, …. including but not limited to, censure,

reprimand, sanction, probation, monetary penalty,

suspension, revocation, or other limitation on practice,

relating to the practice of public accountancy, issued by:

•SEC or the PCAOB;

•another agency of the U.S. government that

regulates the practice of public accountancy;

•an agency of the government of another state or

territory of the U.S. that regulates the practice of

public accountancy; or

•an agency of the government of another country

that regulates the practice of public accountancy;

Additional rules under sections 3 to 7 ………

116

Commission

and Referral

Fee

•Are CPAs permitted to accept

commissions and referral fees?

•Are there differences between the

AICPA and Board of Regents

Rules?

117

§ 29.10 (i)

Definition

Commission and

Referral Fee

In Lieu of 29.1

Any compensation,

including a referral fee, paid

by a third party to the CPA

and the public accounting

firm that employs CPA, for

recommending or referring

any product or service to be

supplied by another person.

118

§ 29.10 (i)

Commission

and Referral

Fee

to directly or indirectly, offer, give, solicit, or receive or

agree to receive, a commission for the referral of any

product or service to a client if performing any of the

following services:

a)audit or review of a financial statement;

b)compilation of a financial statement ……

c)an examination of prospective financial

information;

d)and/or any other attest service (not in AICPA Code)

If commissions and or referral fees are permitted a

written disclosure to the client to notify the client of the

receipt of a commission or referral fee is required

119

§ 29.10 (i)

Commission and

Referral Fee

5. .………………….a written disclosure

statement in

12 point type or larger

containing the following information:

(Next slide)

Currently, the proposed revision to

this Rule eliminates font size which

would is not in the AICPA Code.

120

§ 29.10 (i) 5

Commission

and Referral

Fee

Disclosure includes

i. a description of the product(s) or services(s) which the

licensee is recommending to the client, the identity of

the third party that is expected to provide the product

or service, the business relationship between the

licensee and the third party, a description of any

commission which may be received by the licensee

and/or the licensee's firm. Where the product(s) or

service(s) cannot be specifically identified at the time of

the initial disclosure, this information shall be included

in a supplemental disclosure which the licensee must

provide to the client within 30 days of receipt of the

commission; and

ii. the dollar amount or value of the commission or the

basis on which such commission shall be computed.

121

III. Professional Ethics Update

NYSSCPA/PEC

Circular 230 &Tax Standards &

IESBA/AICPA-PEEC

Society’s Ethics

Resource Center

Link to Ethics can be found from

homepage under the heading

“Resources for CPAs”

http://www.nysscpa.org/

Home Page: Resources for CPAS

123

Internal

Revenue Code

Provisions

Examples of standards & ethics rules include (but are not

limited to):

•Preparer penalty rules - IRC §6694 - Understatement of

taxpayer’s liability by tax return preparer

•Confidentiality criminal penalty - IRC §7216 - Disclosure

or use of information by preparers of returns

•Confidentiality civil penalty - IRC §6713 - Disclosure or

use of information by preparers of returns

•Privilege rules - IRC §7525 - Confidentiality privileges

relating to taxpayer communications

•Tax shelter rules - IRC §6111 - Disclosure of reportable

transactions and IRC §6112 - Material advisors of

reportable transactions must keep lists of advisees, etc.

124

Tax

Professional

Standards

•Circular 230-Regulations

Governing Practice Before the

Internal Revenue Service

•Statement on Standards for Tax

Services “SSTS”

125

Circular 230

Last updated

in 2014

The Loving and Ridgely tax cases held that Treasury exceeded

its authority in applying Circular 230 to return preparation. In

2020 AICPA recommended that Circular 230 should be

revised in addition to other proposed revisions.

In March of 2021, AICPA wrote a letter to Sharon Fisk,

Director of Office of Professional Responsibility “OPR”

detailing proposed revisions.

In September 2022 Tim McCormally was appointed Interim

Director of OPR previously he was special counsel. Tom

Curtain replaced Tim McCormally as Interim Director of OPR.

Proposed revisions to Circular 230 were expected sometime

in 2023. The AICPA’s Tax Practice Responsibilities Committee

meets annually with the Director of the IRS Office of

Professional Responsibility in November and next expected

update is in November 2024.

126

Revision to the AICPA

Statements on

Standards for Tax

Services (“SSTS”)

Project began in Fall 2018

•SSTS Revision Task Force, Tax Practice

Responsibilities Committee (“TPRC”), Tax

Executive Committee (“TEC”)

•PEEC also involved

August 26, 2022

Exposure Draft for Revisions to SSTS (Part 1) and

Invitation to Comment (“ITC”) (Part 2) with comments

due December 31, 2022

ITC addresses: potential approaches to effectively

introduce quality management in tax

May 18, 2023

TEC approved revisions effective January 1, 2024

127

SSTS #

Revised Effective 1

-1-2024

Tax Return Positions

General tax guidance (includes new standards

on data protection and reliance on tools)

Answers to Questions on Tax Returns

Tax return preparation guidance

Certain Procedural Aspects of Preparing

Returns

Advisory Services

Use of Estimates

Representation Services (new standard)

Departure from a Position Previously

Concluded in an Administrative

Proceeding or Court Decision

Knowledge of Error: Return Preparation

and Administrative Proceedings

Form and Content of Advice to Taxpayers

Statement on Standards for Tax Services No. 1-4

Effective 1-1-24

1. Link to the Revised SSTS and Mapping Document

https://www.aicpa-cima.com/resources/toolkit/statements-on-standards-for-

tax-services

2. Interpretation 1-1 and 1-2 of SSTS No. 1 and No. 2

https://www.aicpa-cima.com/resources/download/interpretations-for-ssts-1-

1-2024

3. Frequently Asked Questions (FAQ) for SSTSs

https://www.aicpa-cima.com/resources/download/frequently-asked-

questions-for-ssts-1-1-2024

4. The Tax Advisor-AICPA finalizes new standards on tax positions By: David

J. Holets, CPA August 1, 2023

https://www.thetaxadviser.com/issues/2023/aug/aicpa-finalizes-new-standards-on-tax-

positions.html?utm_source=mnl:cpal&utm_medium=email&utm_campaign=24Oct2023

129

agenda

The SSTS Revision Task Force is being

reformed to review the existing

guidance on the SSTSs and determine

what revisions, if any, need to be

made to the existing guidance and

propose new guidance to support the

new standards.

Estimated completion for this project

is sometime in 2025.

130

IRS: Identity

Theft Information

for Tax

Professionals

Resources

•Publication 4557, Safeguarding Taxpayer Data (PDF)

Revised 6/24

•Publication 5293, Data Security Resource Guide (PDF)

•Publication 5199, Tax Preparer Guide to Identity Theft

(PDF)

•NIST’s Small Business Information Security – The

Fundamentals (PDF)

https://www.irs.gov/identity-theft-fraud-scams/identity-

theft-information-for-tax-professionals

131

IRS: Identity Theft

Information for Tax

Professionals

Report Suspected Identity Theft or Data Loss

You or Your Firm

If you or your firm are the victim of data theft, immediately:

•Report it to your local stakeholder liaison

Liaisons will notify IRS Criminal Investigation and others

within the agency on your behalf. Speed is critical. If

reported quickly, the IRS can take steps to block fraudulent

returns in your clients’ names and will assist you through

the process.

•Email the Federation of Tax Administrators

at StateAlert@taxadmin.org

Get information on how to report victim information to the

states. Most states require that the state attorney general

be notified of data breaches. This notification process may

involve multiple offices.

Find more information at Data Theft Information for Tax

Professionals.

132

https://www.irs.gov/identity-theft-fraud-scams/identity-theft-information-for-tax-

professionals

IRS: Identity

Theft Information

for Tax

Professionals

Protect Your Clients and Prevent Data Loss

Know your responsibilities

Federal law requires you to create, implement

and maintain an information security plan to

protect client data, no matter the size of your

firm.

Implement a Data Security Plan

Know the Signs of Data Theft

Identify Suspicious Activity

Identify Spear Phishing Scams

https://www.irs.gov/identity-theft-fraud-scams/identity-theft-

information-for-tax-professionals 133

Beneficial Ownership information

(“BOI”)

“Starting Jan. 1, 2024, most companies created in or registered to do

business in the U.S. will need to report information on their beneficial owners

to the Financial Crimes Enforcement Network (FinCEN) under the Corporate

Transparency Act (CTA).”

https://www.aicpa-cima.com/resources/landing/beneficial-ownership-information-boi-reporting

Access resources to learn about the beneficial ownership information

reporting requirement under FinCEN’s Corporate Transparency Act (CTA).

134

Risk of BOI non-compliance

Penalties for willfully not complying with the

BOI reporting requirement can result in

criminal and civil penalties of $500 per day and

up to $10,000 with up to two years of jail time

135

International

Ethics Standards

Board for

Professional

•AICPA is a member body of International

Federation of Accountants (“IFAC”)

•IFAC requires its member bodies to adopt

standards at least as stringent as IESBA

•PEEC considers convergence of revisions to

International Code with limited exceptions (e.g.

federal or state laws that would

prohibit implementing)

•18 Member Board

Laurie Endsley- Vice Chair PwC 2020

Richard Huesken Retired EY 2020

Andrew Mintzer* Hemming Morse 2019

* AICPA representative

136

AICPA

Professional

Ethics

Committee

“PEEC”

2024 Quarterly Meetings:

•February 20-21, 2024

•May 9-10, 2024

•August 13-14, 2024

•November 12-13, 2024

Note: NYS CPE credit is available but

does not count towards NYS 4 hour

Regulatory Ethics requirement.

https://www.aicpa.org/interestareas/professionalethics.html

137

AICPA PEEC Committee 2024-2025

1. Catherine Allen

2. Claire Blanton

3. Brian Bluhm

4. Jack Bonner

5. Thomas Campbell *

6. Robert E. Denham *

7. Anna Dourdourekas, Chair

8. Michael Dunn

9. Brendan Fitzgerald

10. Anika Heard

11. Jennifer Kary

*Public Member

138

12. Clare Levinson

13. Randy Milligan

14. Karen Moncrieff

15. Donald Murphy

16. Kenneth Omoruyi

17. Brian Powers

18. Nicolas Preusch

19. Katherine Savage

20. Lisa Snyder

21. Kenya Watts

22. Jimmy Williams

PEEC

Ethically speaking podcasts

* Starting in May 2024, podcasts have been replaced by posting

the recording of PEEC’s open quarterly meetings, similar to what

the ASB does. You will be able to see a time stamp of the

discussion noted on the meeting agenda.

33 Podcasts

2024 1* (Quarterly Meeting) Last Podcast

2023 4 (Quarterly Meetings)

2022 28 (Quarterly Meetings & Other)

https://www.aicpa-cima.com/resources/article/peec-meeting-

information

Goal is to keep members informed on ethical matters

•Standard setting

•Member enrichment

•Enforcement

https://ethicallyspeaking.libsyn.com/

Digital Dose of

Ethics (“DDE”)

Emails

•Send an email to

peeccoordinator@aicpa.org with the

subject line “I’d like to receive Digital

Dose of Ethics.”

•In the body of the email, indicate if you

want (i) all communication from the

ethics division* or (ii) only DDE.

*All communication meaning, PEEC

meeting agendas and other occasional

emails from the division.

140

2023& 2024 Ethically Speaking Episodes

Episode #

Date Description

Minutes

Feb 23,

2024

PEEC’s 1Q 2023 Meeting: Proposed updates to the

Code of Professional Conduct

May 11

PEEC’s 2Q Meeting: Digital assets, public interest

entities, and more

Aug 10

PEEC's 3Q meeting: AI, sustainability, changes to

the code and more

Nov 15

PEEC’s 4Q meeting: Update on national and

international ethics projects

Feb 23

PEEC’s 1Q 2024 Meeting: AI, private equity and

2022 Ethically Speaking Episodes

Episode #

Date Description

Minutes

37 Feb 18 PEEC 1 Qtr. 2022 Meeting 20

38 Feb 25

B2B*

Part 1

You are the standard we need 19

39 Mar 4

B2B*

Part 2

Complying with standards 17

Mar 11

B2B*

Part 4

Safeguarding your integrity and objectivity 17

Mar 11

B2B*

Part 5

Integrity, objectivity, and the Conceptual Framework 21

48 Apr 33

B2B*

Part 11

Acting with honor

* B2B= Back to Basics- 13 episodes

2022 Ethically Speaking Episodes

Episode # Date Description Minutes

May 19

PEEC 2 Qtr. 2022 Meeting

June 17

Timely advice for avoiding pitfalls of Soc 2 ® reporting

July 01

Call the ethics hotline… We’re here for it!

Aug 05

Highlights from PEEC’s 3 Qtr. 2022 Meeting

Sept 22

Are you violating the ethics code without even realizing it?

Oct 20

Mind over bright lines

-Tools for thinking outside the box 17

Nov 14

PEEC’s 4Q meeting debrief NOCLAR, private equity in firms,

compliance audits and more

Overview

•Principles

•Framework for fulfilling ethical

responsibilities

•Rules

•Govern the performance of

professional services

•Interpretations

•Authoritative guidance of the

rules

Conceptual Frameworks

144

AICPA Online Ethics Library

https://pub.aicpa.org/codeofconduct/Ethics.aspx

What’s New in the Online Ethics Library

145

Online Ethics

Library

Q&A

Introduction

The answers to these questions and answers (Q&As) are

based on guidance the AICPA Professional Ethics Division

staff provided in response to members’ inquiries. The Q&As

are not rules, regulations, or statements of the Professional

Ethics Executive Committee and, therefore, are not

authoritative guidance. The “Conceptual Framework for

Members in Public Practice” (ET sec. 1.000.010), the

“Conceptual Framework for Independence” (ET sec.

1.210.010), and the “Conceptual Framework for Members in

Business” (ET sec. 2.000.010) should be used in conjunction

with these Q&As. Further, the answers do not address the

requirements of other regulatory bodies, such as the state

boards of accountancy, the Securities and Exchange

Commission (SEC), and the U.S. Government Accountability

Office whose positions may differ from those of the AICPA.

Terms that are defined in the AICPA Code of Professional

Conduct (AICPA code) appear in italics. The first time a

defined term appears in a Q&A, it will be linked. References

to the AICPA code will be cited the first time they appear in a

Q&A section.

The date the Q&A was added or revised appears in brackets

at the end of the answer. Dates are not given for purely

editorial revisions (for example, revised citations for the

AICPA code).

146

Examples of a Compliance Audit

Objectivity

Conflict of Interest

Gifts & Entertainment

Responding to Noncompliance with Laws and Regulations

100

Independence

105

Network and Network Firms

110

Accounting Firms

120

Affiliates

125

Fees

130

Trust and Estates

140

Loans, Leases, and Guarantees

150

Current Employment or Association with an Attest Client

180

Gifts & Entertainment

200

*Nonattest Services

205

*Management Responsibilities

210

*General Requirements

215

*Documentation Requirements for Performing Nonattest Services

217

*Advisory Services

220

*Appraisal, Valuation, and Actuarial Services

222

*Assisting Attest Clients With Implementing Accounting Standards

230

*Bookkeeping, Payroll, and Other Disbursements

240

*Hosting Services

250

*Information Systems Services

280

*Tax Services

400

General Standards

450

Compliance with Standards

500

Accounting Principles

600

Acts Discreditable

650

Records Requests

670

Transfer of Files and Return of Client Records in Sale, Transfer,

Discontinuance or Acquisition of a Practice

710

Contingent Fees

730

Commission and Referral Fees

800

Advertising and Other Forms of Solicitation

825

Disclosing Client Information in Connection With a Review or Acquisition of

the Member's Practice

850

Confidential Information

Table of Contents – Ethics Q&A

* 200 Section is for Nonattest Services

148

Official Releases through December 2023

Preface: Applicable to All Members

pages 1

0.100 Overview……………………………………………………………………………………………..

0.200 Structure and Application of the AICPA Code………………………………………

0.300 Principles of Professional Conduct…………………………………………………...

0.400 Definitions…………………………………………………………………………………………..

0.500 Nonauthorative Guidance…………………………………………………………………..

0.600 New, Revised, and Pending Interpretations and Other Guidance…………

0.700 Deleted interpretations and Other Guidance……………………………………

Part 1: Members in Public Practice (Rules, Interpretations, and Conceptual Framework)

228

Part 2: Members in Business (Rules, Interpretations, and Conceptual Framework)

229

272

Part 3: Other

273

278

Appendix A Council Resolution Designating Bodies to Promulgate Technical Standards

279

284

Appendix B Council Resolution Concerning the Form of Organization and Name Rule

285

288

Appendix C Revision History Table

289

300

Appendix D Mapping Document

301

322

Principles and

Rules of the Code

§0.100.010

Framework for

fulfilling ethical

responsibilities

“The AICPA bylaws require that members

adhere to the rules of the code.

Compliance with the rules depends

primarily on members’ understanding and

voluntary actions; secondarily on

reinforcement by peers and public opinion;

and ultimately on disciplinary proceedings,

when necessary, against members who fail

to comply with the rules. Members must be

prepared to justify departures from these

rules.

149

Six Principles

1. Responsibilities (.020)

2. The Public Interest (.030)

3. Integrity (.040)

4. Objectivity and Independence (.050)

5. Due Care (.060)

6. Scope and Nature of Services (.070)

150

Integrity § 0.300.040.03

requires a member to be, among other things, honest

and candid within the constraints of client

confidentiality. Service and the public trust should not

be subordinated to personal gain and advantage.

Integrity can accommodate the inadvertent error and

the honest difference of opinion; it cannot

accommodate deceit or subordination of principle.”

(emphasis added)

151

Five Rules

•2.100.001 Integrity & Objectivity

•2.300.001 General Standards

•2.310.001 Compliance with Standards

•2.320.001 Accounting Principles

•2.400.001 Acts Discreditable

152

Twenty-Three

Interpretations

•2.100.001 Integrity & Objectivity 8

•2.300.001 General Standards 2

•2.310.001 Compliance with Standards 4

•2.400.001 Acts Discreditable 9

153

154

AICPA Code of Professional Conduct Part 2 Members in Business

2.000 Introduction

2.000.010 Conceptual Framework for Members in Business

2.000.020 Ethical Conflicts

2.100 Integrity and Objectivity

2.100.001 Integrity and Objectivity Rule

Interpretations Under the Integrity and Objectivity Rule

2.100.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts

2.110 Conflicts of Interest

12.110.010 Conflicts of Interest for Members in Business

2.120 Gifts and Entertainment

22.120.010 Offering or Accepting Gifts or Entertainment

2.130 Preparing and Reporting Information

32.130.010 Knowing Misrepresentations in the Preparation and Presentation of Information

42.130.020 Subordination of Judgment

52.130.030 Obligation of a Member to His or Her Employer's External Accountant

2.160 Educational Services

62.160.010 Educational Services

2.170 Pressure to Breach the Rules

72.170.010 Pressure to Breach the Rules

2.180 Responding to Noncompliance with Laws and Regulations (NEW)

82.180.010 Responding to Noncompliance with Laws and Regulations (NEW)

155

2.300 General Standards

2.300.001 General Standards Rule

Interpretations Under the General Standards Rule

2.300.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts

2.300.010 Competence

2.300.030 Submission of Financial Statements

2.310 Compliance with Standards

2.310.001 Compliance with Standards Rule

Interpretations Under the Compliance with Standards Rule

2.310.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts

2.320 Accounting Principles

2.32

0.001 Accounting Principles Rule

Interpretations Under the Principles Rule

2.320.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts

2.320.010 Responsibility for Affirming That Financial Statements Are In Conformity With the Applicable Financial

Reporting Framework

2.320.020 Status of FASB, GASB, Federal Accounting Standards Advisory Board, and IASB

2.320.030 Departures From Generally Accepted Accounting Principles

2.320.040 Financial Statements Prepared Pursuant to Financial Reporting Frameworks Other than GAAP

156

2.400 Acts Discreditable

2.400.001 Acts Discreditable Rule

Interpretations Under the Compliance with Standards Rule

2.400.005 Application of the Conceptual Framework for Members in Business and Ethical Conflicts

2.400.010 Discrimination and Harassment in Employment Practices

2.400.020 Professional Qualifications or Competencies (revised, new title)

2.400.030 Failure to File a Tax Return or Pay a Tax Liability

2.400.040 Negligence in the Preparation of Financial Statements

2.400.050 Governmental Bodies, Commissions, or Other Regulatory Agencies

2.400.060 Indemnification and Limitation of Liability Provisions

2.400.070 Confidential Information Obtained From Employment or Volunteer Activities

2.400.090 False, Misleading, or Deceptive Acts in Promoting or Marketing Professional Services

2.400.100 Use of the CPA Credential

When does

the

Conceptual

Framework

Apply?

The framework incorporates a

“threats and safeguard” approach,

which is designed to assist in

analyzing relationships and

circumstances that the AICPA code

does not specifically address and in

determining whether such

relationships or circumstances may

result in the violation of any of the

rules in the Code.

157

Conceptual Framework Approach

•Identify threats

Threat=relationships or circumstances that could compromise compliance

with the rules

i. Adverse interest, ii. Advocacy, iii. Familiarity, iv. Self interest, v. Self review,

vi. Undue influence

•Evaluate the significance of the threats

Acceptable level- a reasonable and informed third party who is aware of the

relevant information would be expected to conclude that compliance with

the rules is not compromised

•Identify and apply safeguards

Safeguards- Actions or other measures that may eliminate a threat or reduce

a threat to an acceptable level.

158

Additional information-Slides 252-260

Practice Aid

Conceptual framework toolkit

for Members in Business

Practice

Updated June 2022

https://us.aicpa.org/content/dam/aicpa

/interestareas/professionalethics/resour

ces/downloadabledocuments/toolkitsan

daids/conceptual-framework-toolkit-for-

members-in-business-final.pdf

159

Updated to converge

with IESBA Role and

Mindset Code

revisions

Added:

Professional judgment section and examples of

biases that can affect you when identifying,

evaluating, and addressing threats

Toolkit assists in the

implementation of the

Conceptual Framework. It

includes among other

things, a flowchart (see

slide 261) and a worksheet

to aid with applying the

steps of the conceptual

framework that could be

used to document your

assessment.

Professional

Judgement

“is the application of your training, skill, and experience to the

facts and circumstances.

Consider whether your professional training, skill, and

experience are sufficient to reach an appropriate conclusion or

if consultation is necessary.

It’s important to evaluate threats and safeguards with an

inquiring mind. This means considering the source, relevance,

and adequacy of the information being used along with the

nature, scope, and results of the professional service you are

providing.

Examples include the emergence of new information,

inconsistencies in the information you have obtained, a new

client subsidiary, or a new user of the financial statements.”

160

“Be open to a need for further investigation or action and to be aware of the effects of conscious or unconscious

bias that could affect your professional judgment.

Here are some examples of bias that can affect you when identifying, evaluating, and addressing threats:

1. Anchoring bias – Using an initial piece of information as an anchor against which subsequent information is

inadequately assessed

2. Automation bias – Favoring output generated from automated systems, even when human reasoning or

contradictory information raises questions about whether such output is reliable or fit for purpose

3. Availability bias – Placing more weight on events or experiences that immediately come to mind or are

readily available than on those that are not

4. Confirmation bias – Placing more weight on information that corroborates an existing belief than on

information that contradicts or casts doubt on that belief

5. Groupthink – The tendency for a group of people to discourage individual creativity and responsibility and as

a result reach a decision without critical reasoning or consideration of alternatives

6. Overconfidence bias – The tendency to overestimate one's ability to make accurate assessments of risk or

other judgments or decisions

7. Representation bias – The tendency to base an understanding on a pattern of experiences, events, or beliefs

that are assumed to be representative

8. Selective perception – The tendency for a person's expectations to influence how the person views a

particular matter or person”

Appendix C

Revision History Table- Member in Business

Description

(Not in Appendix C)

Citation

Action

Effective Date

Official Release

1. Professional Qualifications

or Competencies

Formerly called "Solicitation or

Disclosure of CPA Examination

Questions and Answers”

2. NOCLAR

Ethical Conflicts

2.400.020

2.180.010

1.000.020

Added Sept 2023

Added May 2022

Revised

-15-2023

-30-2023

-15-2014

https://us.aicpa.org/content/dam/

aicpa/interestareas/professionalet

hics/community/exposuredrafts/d

ownloadabledocuments/2023/202

-professional-qualifications-

official

-release.pdf

https://us.aicpa.org/content/dam/

aicpa/interestareas/professionalet

hics/community/exposuredrafts/d

ownloadabledocuments/2021/561

75896

-2022finalnoclar.pdf

Appendix C

Revision History Table- Public Practice

Description

(Not in Appendix C)

Citation

Action

Effective Date

Official Release

1. Publicly traded entity

Public interest entity

0.400.45

0.400.43

Added Dec 2023

Revised Dec 2023

Effective 12

-15-23

Effective for periods

beginning on or after

December 15, 2024, with

early implementation

allowed. For an entity

that, under the revised

definition, is no longer

considered a public

interest entity, the revised

definition is effective

December 15, 2023.

https://us.aicpa.org/cont

ent/dam/aicpa/interestar

eas/professionalethics/c

ommunity/exposuredraft

s/downloadabledocumen

ts/2023/2023

-public-

interest

-entity-official-

release.pdf

Appendix C

Revision History Table- Public Practice

Description

(Not in Appendix C)

Citation

Action

Effective

Date

Official Release

2. Determining Fees for an Attest

Engagement

Fee dependency

Conceptual Framework for

Independence

Client Affiliates

1.230.030

1.230.040

1.210.010

1.224.010

1.400.020

Added Sept 2023

Revised Sept 2023

-1-2025

https://us.aicpa.org/content/dam/

aicpa/interestareas/professionalet

hics/community/exposuredrafts/d

ownloadabledocuments/2023/202

-fees-official-release.pdf

Appendix C

Revision History Table- Public Practice

Description

(Not in Appendix C)

Citation

Action

Effective Date

Official Release

3. Compliance audit

Compliance audit client

Financial statement attest client

4. Section 529 Plans

5. Assisting Attest Clients with

Implementing Accounting

Standards

6. Unpaid fees

.0400.09

.0400.10

.0400.18

1.240.070

1.295.113

1.230.010

Added Jan 2023

Revised Jan 2023

Revised Sept 2022

Added May 2022

Revised

For compliance

audits

commencing after

-15-2023

-15-2014

-31-2022

https://us.aicpa.org/content/dam/a

icpa/interestareas/professionalethic

s/community/exposuredrafts/down

loadabledocuments/2022/2022com

pliance

-audits-final.pdf

https://us.aicpa.org/content/dam/a

icpa/interestareas/professionalethic

s/community/exposuredrafts/down

loadabledocuments/2022/section5

29technicalcorrection.pdf

https://us.aicpa.org/content/dam/a

icpa/interestareas/professionalethic

s/community/exposuredrafts/down

loadabledocuments/2021/2021

September

-accounting-standards-

implementation.pdf

https://us.aicpa.org/content/dam/a

icpa/interestareas/professionalethic

s/community/exposuredrafts/down

loadabledocuments/2021/5617589

-2022finalunpaidfees.pdf

Appendix C

Revision History Table- Public Practice

Description

(Not in Appendix C)

Citation

Action

Effective Date

Official Release

7A.

Beneficially owned, beneficial ownership interest

Conceptual Framework for Independence

Client Affiliates

Loans

Loans & Leases with Financial Institutions

Immediate Family Members

7B. Officers, directors, and beneficial owners

0.040.06

1.210.010

1.224.010

1.260.010

1.260.020

1.270.010

1.000.010

1.120.010

1.285.010

Revised

August 2022

-31-2022

https://us.aicpa.org/co

ntent/

dam/aicpa/interestare

as/

professionalethics/com

munity/

exposuredrafts/downlo

adabledocuments/

2021/56175896

2022finalloans.pdf

https://us.aicpa.org/co

ntent/dam/aicpa/inter

estareas/professionale

thics/community/expo

suredrafts/downloada

bledocuments/2022/of

ficers

-directors-

beneficial

-owners-

final.pdf

PEEC releases exposure drafts on recruiting and tax services

Date: June 10, 2024

By: Kelly D. Mullins

Harmonization with international standards

“One of PEEC's strategic objectives is promoting consistency in global ethics and independence

standards. To accomplish this, PEEC employs a rigorous process of considering the International

Ethics Standards Board for Accountants' projects to evaluate whether related changes will

enhance the AICPA Code of Professional Conduct (the AICPA Code) and better protect the public

interest.

The proposed changes to the "Executive or Employee Recruiting" interpretation (ET

§1.295.135) and the "Tax Services" interpretation (ET §1.295.160) were identified through this

process. PEEC believes these changes will keep the AICPA Code fit for purpose in a rapidly

changing, global environment and serve to protect the public interest by helping members

maintain independence.”

https://www.journalofaccountancy.com/news/2024/jun/peec-releases-exposure-drafts-on-recruiting-and-tax-services.html?utm_source=mnl:cpal&utm_medium=email&utm_campaign=10Jun2024

167

Exposure Draft

Revised interpretation

Recruiting Executives

or Employees

1.295.135

Issued: 6-10-24

Comment Period Ending: 9-10-24

“PEEC welcomes all feedback on the proposal and has these specific

questions for AICPA members and other interested parties:

1. Do you agree with the addition of the familiarity and undue

influence threats when evaluating recruiting services for

independence?

2. Do you agree with the proposal to prohibit some services for key

positions but allow them for non-key positions?

3. Do you agree with the addition of examples of services that may

be provided by members without impairing independence?

4. Do you think there are any positions at an attest client for which

the member should not advise on candidate competence?

5. Do you agree with the proposal to prohibit members from

negotiating on behalf of an attest client for all positions?

6. Do you agree that the recommended effective date of January 1,

2026, provides adequate time to implement the proposals?

168

https://www.aicpa-cima.com/resources/download/ethics-exposure-draft-proposed-revised-

interpretation-executive-or-employee/

Exposure Draft

Revised interpretation

Tax Services

1.295.160

Issued: 6-10-24

Comment Period Ending: 9-10-24

“

“ PEEC welcomes all feedback on the proposal and has these specific

questions for AICPA members and other interested parties:

1. What are your thoughts on providing attest clients tax advisory or

tax planning services and, specifically, on those services that may

involve a higher level of uncertainty (as opposed to general tax

advisory or tax planning services)?

2. Do you agree with the proposal to revise the existing “Tax

Services” interpretation to include tax advisory and tax planning

services rather than to create a new interpretation?

3. Do you agree with the addition of the advocacy threat when

evaluating tax services for independence?

4. Do you agree with the proposal to use the more-likely-than-not

threshold for independence?

5. Do you agree that the effective date provides adequate time to

implement the proposals? [Proposed one year after published in

JOA, with early implementation allowed]

169

https://www.aicpa-cima.com/resources/download/ethics-exposure-draft-proposed-revised-

interpretation-tax-services/

Private Equity Deals with CPA firms

1. March 2024 Grant Thorton LLP and New Mountain Capital LLC

2. February 2024 Baker Tilly US LLP and Hellman & Friedman and Valeas Capital Partners

3. June 2022 Cherry Bekaert LLP and Parthenon Capital

4. April 2022 Citrin Cooperman and New Mountain Capital

5. August 2021 EisnerAmper LLP and TowerBrook Capital Partners

170

Allan Koltin, CPA, CGMA, head of the Koltin Consulting Group in Chicago,

told the JofA last year that more than half of the top 20 accounting firms

were in "some type of transformative discussion.

In that JofA article, Barry Melancon, CPA, CGMA, the CEO of AICPA & CIMA,

said in a written statement:

"The fact that private equity is interested in the profession is a statement

about the importance of the profession. That's a good third-party

validation. We are seeing lots of private-equity activity but also

tremendous numbers of traditional merger deals among firms. This

demonstrates choice and different approaches for firms, which is always

good as long as the focus on quality remains paramount.“

Source: March 2024 https://www.journalofaccountancy.com/news/2024/mar/grant-thornton-deal-continues-the-private-equity-investment-trend.html

171

CPA Journal March/April 2024 News & Views-Editorial Page 12

Private Equity and the Ethics of the Profession

By: Richard H. Kravitz, MBA, CPA

The Climate Today

In the spirit of constructive self-reflection, might CPAs take a step back and ask

whether the explosive interest from private equity firms, which have invested

millions of dollars in CPA firms, today might lead to unintended consequences that

might conflict with the profession’s historic obligations to serve the public?

Might investors like these from outside interests take over the management focus of

the CPA firm and negatively impact their decision making, bending in towards

greater profits?

Will a non-CPA majority investment in CPA firms impair objectivity and

independence?

Will legislators and the public ask why CPA firms should be granted a monopoly to

audit public companies if they appear to have forsaken their historical obligation to

serve the public?

172

SEC Press Release

2022-114 June 28, 2022

Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics

Exams and Misleading Investigation

Largest Penalty Ever Imposed by SEC Against an Audit Firm

“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted

to audit many of our Nation’s public companies. It’s simply outrageous that the very

professionals responsible for catching cheating by clients cheated on ethics exams of all

things,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division.

“And it’s equally shocking that Ernst & Young hindered our investigation of this

misconduct.

This action should serve as a clear message that the SEC will not tolerate integrity

failures by independent auditors who choose the easier wrong over the harder right.”

https://www.sec.gov/news/press-release/2022-114 173

Texas Hits EY with $3 million penalty

Accounting Today, November 10, 2023, By: Daniel Hood

“In an agreed consent order, the Texas State Board of

Accountancy has reprimanded Ernst & Young and levied a

$3 million administrative penalty against the Big Four firm.

The penalty — the largest the board has ever assessed

against a CPA firm — stems from a scandal that surfaced in

mid-2022 when the Securities and Exchange Commission

revealed that almost 50 EY audit employees had improperly

shared answer keys to the ethics portion of the CPA exam

between 2017 and 2021, and that hundreds more cheated

on continuing professional education course.” 174

NYS Regents

Action on

Professional

Misconduct

& Discipline

6-11-24

Ernst & Young LLP NY, NY

Penalty agreed upon: Censure and

Reprimand, $10,000 fine.

Summary:

Registrant did not contest the charge of

during the approximate period of 2017 to

2021, professional employees of registrant

had cheated by sharing answer keys to

ethics exams and/or continuing professional

education assessments, and registrant, on

more than one occasion, failed to

implement adequate controls to detect its

employees cheating.

175

SEC Press Release: 2022-114

The Order finds that EY violated:

•a PCAOB rule requiring the firm to maintain integrity in the

performance of a professional service

•committed acts discreditable to the accounting profession

•failed to maintain an appropriate system of quality control

EY has admitted the facts underlying these findings and acknowledged

that its conduct violated the integrity standard and provides a basis for

the SEC to impose remedies against the firm pursuant to Sections

4C(a)(2) and (a)(3) of the Exchange Act and Rules 102(e)(1)(ii) and (iii) of

the Commission’s Rules of Practice.

https://www.sec.gov/news/press-release/2022-114

176

SEC Press Release: 2022-114

“Over multiple years, a significant number of EY audit professionals cheated

on these exams by using answer keys and sharing them with their

colleagues.

From 2017 to 2021, 49 EY audit professionals sent and/or received answer

keys to CPA ethics exams.

In addition, hundreds of other audit professionals cheated on CPE courses,

including those addressing CPAs’ ethical obligations.

And a significant number of EY professionals who did not cheat themselves,

but knew their colleagues were cheating and facilitating cheating, violated

the firm’s Code of Conduct by failing to report this misconduct”.

https://www.sec.gov/news/press-release/2022-114

177

SEC Press Release

2019-95 July 17, 2019

KPMG Paying $50 Million Penalty for Illicit Use of PCAOB Data and

Cheating on Training Exams

The SEC’s order also finds that numerous KPMG audit professionals

cheated on internal training exams by improperly sharing answers and

manipulating test results.

KPMG agreed to settle the charges by paying a $50 million penalty and

complying with a detailed set of undertakings, including retaining an

independent consultant to review and assess the firm’s ethics and

integrity controls and its compliance with various undertakings.

178

SEC Press Release

2019-95 July 17, 2019

•The SEC’s order also finds that KPMG audit professionals who had passed

training exams sent their answers to colleagues to help them also attain

passing scores. The exams related to continuing professional education

and training mandated by a prior SEC order finding audit failures. They

sent images of their answers by email or printed answers and gave them

to colleagues. This included lead audit engagement partners who not

only sent exam answers to other partners, but also solicited answers from

and sent answers to their subordinates.

•Furthermore, the SEC’s order finds that certain KPMG audit professionals

manipulated an internal server hosting training exams to lower the score

required for passing. By changing a number embedded in a hyperlink,

they manually selected the minimum passing scores required for

exams. At times, audit professionals achieved passing scores while

answering less than 25 percent of the questions correctly.

179

Law 360

2nd Circ. Drops Fraud Charges Against Ex-KPMG Exec

By Khadrice Rollins Date: December 6, 2023

A Second Circuit panel Tuesday approved federal prosecutors' request to remand the appeals of a

former executive at the accounting firm KPMG and an inspector leader with the PCAOB……

New Definition of ‘Fraud’ Wipes Out High-

Profile Prosecutions

Scandals in auditing, college admissions and a hedge

fund are all hit by Supreme Court ruling

By: David Michaels Date: August 3, 2023

A Rare Justice Department Mea Culpa

Prosecutors admit they were wrong to prosecute a

KPMG fraud case. Apparently miracles happen.

By: WSJ The Editorial Board Date: August 4, 2023

August 2023 Update on Federal Criminal Wire Fraud 2020 Conviction against

KPMG Partner (David Middendorf) and PCAOB Employee (Jeffrey Wada)

PEEC Exposure Draft-

Uniform CPA

Examination and

Continuing

Professional

Education

Issued: March 15, 2023

Comments Due: May 15, 2023

Background

Several public accounting firms have been sanctioned by the SEC for

employees sharing answer keys to various continuing professional

education (CPE) examinations; consequently, several state boards of

accountancy have taken action against individuals identified in these

instances.

The current Code states that soliciting or disclosing Uniform CPA

Examination content without proper authorization is an act discreditable

to the profession in violation of the “Acts Discreditable Rule” (ET sec.

1.400.001, 2.400.001, or 3.400.001).

PEEC is proposing to expand the interpretation to include question and

answer sharing on examinations taken in connection with CPE courses

unless collaboration is expected and permitted.

As many CPE offerings are based on attendance only, PEEC also included

language to clarify that falsifying attendance checks in any way is also

considered an act discreditable to the profession, in violation of the

“Acts Discreditable Rule” (ET sec. 1.400.001, 2.400.001, or 3.400.001).

181

§2.400.020

Professional Qualifications

or Competencies

Solicitation or

Disclosure of CPA

Examination Questions

and Answers

Added

.02 A member shall be considered in violation of the “Acts

Discreditable Rule” [2.400.001] if a member engages

in false, misleading, or deceptive acts related to

professional qualifications or competencies. Examples

of such false, misleading, or deceptive acts include:

a. soliciting or knowingly disclosing questions or

answers of any professional education course

examination unless collaboration is expressly

permitted.

b. falsifying or misrepresenting attendance at a

professional education course.

c. tampering with the administration of or

examination grading for any professional

education course or credential.

Effective date: September 15, 2023

182

The promise and

peril of ChatGPT

JOA May 2023

By: Andrew Kenney

Early adopters are finding uses for ChatGPT in

accounting, but the chatbot raises concerns

about security and accuracy.

“ChatGPT can also pose security risks. Per the

terms of its user agreement, OpenAI is allowed

to use data that users input to the free version

of ChatGPT in order to improve its products.

OpenAI states that it removes personal

identification from such data. Nevertheless,

there is a risk that if users input sensitive data, it

could become part of the database ChatGPT is

trained on — and potentially appear in other

users’ chats.”

183

ChatGPT for

Legal and Tax

Professionals

‘World-Altering

Power’ Requires

Kid Gloves

CPA Journal July/August 2023

By: Garrett L. Brodeur, Grace Hall, and Ella Tynch

The American Bar Association’s Model Rules of

Professional Conduct (MRPC) “and Circular 230

both require professional ethical judgement, but

Circular 230 appears to prohibit the use of

ChatGPT when tax advisors are providing

“written advice,” creating difficulties for tax

accounting firms and professionals seeking to

streamline costs or provide quicker services.

Given this obstacle, and numerous others, tax

professionals should tread cautiously and treat

ChatGPT as a small piece of the puzzle rather

than a cure-all.”

184

Responding to

Noncompliance

with Laws &

Regulations

“NOCLAR”

2.180.010

Effective: June 30, 2023

This interpretation sets out your

responsibilities when you encounter

a NOCLAR while considering your

obligations of confidentiality under

the Code 2.400.070

185

Responding to

Noncompliance

with Laws &

Regulations

“NOCLAR”

2.180.010.02

Effective June 30, 2023 and

may be implemented early

comprises acts of omission or

commission, intentional or

unintentional, that are contrary to the

prevailing laws and regulations and are

committed by the member’s employing

organization or by those charged with

governance, by management, or by

other individuals working for or under

the direction of the employing

organization.

186

NOCLAR

“When an AICPA member

encounters a known or

suspected NOCLAR, he or she

should alert the appropriate

parties to enable a employing

organization's management and

those charged with governance

to rectify, mitigate the effects of,

or deter the commission of the

NOCLAR.

187

NOCLAR

Summary of

Sections

•Introduction

•Applicability

•Scope

•Responsibilities of the Employing

Organization’s Management and Those

Charged with Governance

•Responsibilities of Members in Business

•Responsibilities of Members Who Are

Senior Professional Accountants in Business

•Responsibilities of Members Other Than

Those Who Are Senior Professional

Accountants in Business

188

NOCLAR

Applicability

Exempt situations

and services

a) Personal misconduct unrelated to the business

activities of the employing organization

b) Noncompliance by parties other than

i. the employing organization, ii. those charged with

governance, iii. management, or iv. other individuals

working for under the direction of the employing

organization

c) A member in business involved with

i. A litigation or investigation engagement as

defined in AICPA’s Statement on Standards for

Forensic Services No. 1

ii.A matter where the purpose is to identify, reach

a conclusion regarding, or otherwise respond to

a known or potential NOCLAR

iii. A matter pursuant to which the protections

set forth in IRC Sec. 7525 or any comparable

state and local statues may apply

iv. A matter where the compliance with this

interpretation would cause a violation of law

or regulation

189

NOCLAR

Scope

This interpretation sets out the approach to be

taken by a member who encounters or is made

aware of noncompliance or suspected

noncompliance with the following:

a. Laws and regulations generally recognized

to have a direct effect on the determination

of material amounts and disclosures in the

employing organization’s financial statements

b. Other laws and regulations that do not

have a direct effect on the determination of

the amounts and disclosures in the

employing organization’s financial

statements, but compliance with which may

be fundamental to the operating aspects of

the client’s business, to its ability to continue

its business, or to avoid material penalties

190

NOCLAR

Examples of Laws & Regulations May Include:

191

Fraud, corruption and bribery

Money laundering

Securities markets and trading

Banking and other financial products and services

Data protection

Tax and pension liabilities and payments

Environmental protection

Public Health and Safety

Responsibilities

of Members

Who Are Senior

Professional

Accountants in

Business

.14 Members who are senior professional

accountants in business are directors,

officers, or senior employees able to

exert significant influence over, and

make decisions regarding, the

acquisition, deployment, and control of

the employing organization's human,

financial, technological, physical, and

intangible resources"

192

NOCLAR

Responsibilities of

Members who are

Senior Professional

Accountants in

Business

2.180.010.20

.20 Are required to disclose a

NOCLAR to external auditors if the

member in business determines

that disclosure is necessary to

provide information that’s needed

for performance of an audit.

193

Ethics Library

Q&A section 90,

Responding to

Noncompliance

with Laws and

Regulations

Twenty-seven non

authoritative Q&A’s were

added in December 2022

194

https://pub.aicpa.org/codeofconduct/Ethics.aspx

Journal of Accountancy

NOCLAR: What CPAs in

business should know

By Elizabeth Pittelkow

Kittner, CPA/CITP,

CGMA, CPA

November 1, 2022

“The Code defines senior professional

accountants in business as "directors, officers,

or senior employees able to exert significant

influence over, and make decisions regarding,

the acquisition, deployment, and control of the

employing organization's human, financial,

technological, physical, and intangible

resources" (see paragraph .14 of ET

§2.180.010).”

Case study

https://www.journalofaccountancy.com/news/202

2/nov/noclar-what-cpa-business-should-know.html

195

Decision Tree

Animation-

What should I do

when I

encounter

noncompliance

with laws and

regulations?

http://view.ceros.com/aicpa/pros-noclar-decision-tree-new-dt-round-1-9-12-22-1/p/1

Have fun learning how to implement the new

"Noncompliance with Laws and Regulations"

(NOCLAR) interpretations in the Code of

Professional Conduct.

This is an interactive story that you help write, whether

you are a member in business or a member in public

practice. Respond to questions about the services you

provide in your practice or about your role within your

business entity and discover your responsibilities as

outlined by the new interpretations.

http://view.ceros.com/aicpa/pros-noclar-decision-tree-

new-dt-round-1-9-12-22-1/p/1

Inquiries of the Predecessor

Auditor Regarding Fraud and

Noncompliance With Laws and

Regulations,

Amendment to SAS No. 122,

Statements on Auditing Standards:

Clarification and Recodification, as

Amended, section 210, Terms of

Engagement (AICPA, Professional

Standards, AU-C sec. 210)

Effective for audits of financial

statements for periods beginning on

or after June 30, 2023

“requires an auditor, once

management authorizes the

predecessor auditor to respond,

to inquire of the predecessor

auditor regarding identified or

suspected fraud or NOCLAR”.

197

The Controversial

NOCLAR Proposal

Are Stakeholders in

Favor of Changes

CPA Journal

March/April 2024

By: Yigal M. Rechtman, CPA,

CFE, CITP, CISM and Susanne

O’Callaghan, CPA

On June 6, 2023, the PCAOB (“Board”) issued for public comment a

proposal to replace AS 2405, Illegal Acts by Clients, in its entirety

with AS 2405, A Company’s Noncompliance with Laws and

Regulations, together with conforming amendments to PCAOB

auditing standards with comment period ending August 7, 2023.

The PCAOB received 140 comment letters.

On March 6, 2024 due to significant public interest in the proposal,

including requests from commenters for the Board to engage in

additional public outreach, the staff of the Office of the Chief

Auditor and the Office of Economic and Risk Analysis hosted a

roundtable to discuss certain aspects of the proposal and related

comments received.

In addition, the Board reopened the comment period for an

additional 21 days from February 26, 2024 to March 18, 2024.

198

https://pcaobus.org/about/rules-rulemaking/rulemaking-dockets/docket-051

Revised Ethical Conflicts 2.000.020

01 An ethical conflict arises when a member encounters one or both of the

following:

a. Obstacles to following an appropriate course of action due to internal or

external pressures

b. Conflicts in applying relevant professional standards or legal standards

For example, a member suspects a fraud may have occurred, but reporting the

suspected fraud would violate the member’s responsibility to maintain client

confidentiality.

199

07 Effective December 15, 2014. Refer to the “Responding to Noncompliance With Laws and

Regulations” interpretation [2.180.010] of the “Integrity and Objectivity Rule” [2.100.001] for

additional guidance.

New interpretation

Assisting Attest Clients

with Implementing

Accounting Standards

1.295.113

Effective 12-31-2022

Early implementation

permitted

Provides guidance on how independence could be

affected when a member assists an attest client with

implementing new or existing accounting standards.

The self-review or management participation threats to

compliance with the Independence Rule may exist.

The interpretation provides examples for how to avoid

performing management responsibilities in the delivery

of such services

Nonauthoritative questions and answers regarding

suitable skill, knowledge, and experience are available.

See Ethics Questions & Answers (Q&A) sections 210.02–

.10 of Q&A section 210, Nonattest Services — General

Requirements.

200

Revised Interpretation

Unpaid Fees

1.230.010

Effective 12-31-22

Early implementation

permitted

•Revised interpretation helps converge Code more closely with SEC and

IESBA

•Provides a principle based approach for whether unpaid fees impairs

independence

•Provides four examples of actions or safeguards that might help

eliminate threats to independence or reduce threats to an acceptable

level. If safeguards can not be applied to reduce threats to an

acceptable level, you are required to discontinue engagement until

the threat can be reduced to an acceptable level.

a. Have an appropriate reviewer who has not provided attest or

nonattest services to the attest client review the attest work

performed before the current-year attest report is issued.

b. Obtain partial payment of the unpaid fees balance before the

current-year attest report is issued such that the remaining

unpaid balance is insignificant to the covered member.

c. Obtain an agreement from the attest client to a payment

schedule before the current-year attest report is issued.

d. Suspend further work on current attest engagements and not

accept new engagements with this attest client.

201

JOA: DOL report of audits of 2020 filing year of Form 5500 points out deficiencies in employee benefit plan audits

Date: 12-15-23

Findings

In the DOL study, deficiencies were more likely among firms that performed smaller numbers of

EBP audits. Deficiencies were found in 70% of plan audits performed by firms that audit just one

or two plans annually.

As a result of the study, DOL has referred seven deficient engagements to the AICPA

Professional Ethics Division for review and possible disciplinary action. Sue Coffey, CPA,

CGMA, the AICPA's CEO—Public Accounting, said the AICPA Professional Ethics Division and

Peer Review Program are investigating, on an expedited basis, all audits from the study that

were referred to the AICPA, and any disciplinary action by the AICPA will be shared promptly

with the appropriate state boards of accountancy, which could have an impact on licensure.

The report concluded that, overall, firms that "perform more benefit plan audits tend to perform

higher quality work." Also, the leading areas of audit deficiencies, the report said, were areas

unique to EBP auditing, such as participant data, contributions received and receivable, and

benefit payments.

In the study, the EBSA made recommendations in the areas of enforcement, regulations, and

outreach. Among the recommendations were that the EBSA should "work with state licensing

boards to enhance the investigation and sanctioning process for CPAs who perform significantly

deficient audit work" and "encourage state boards of accountancy to accept the results of

investigations performed by the AICPA's Professional Ethics Division.

https://www.journalofaccountancy.com/news/2023/dec/dol-report-points-out-deficiencies-in-employee-benefit-plan-

audits.html?utm_source=mnl:cpal&utm_medium=email&utm_campaign=18Dec2023 202

IV. Enforcement/disciplinary matters

NYS OPD

AICPA

SEC

PCAOB

How many active

licensed CPAs are

there in 53

Jurisdictions?

As of September 1, 2023 *

(a) 665,612

(b) 672,587

(d) 710,286

*Does not include data from Hawaii

or Vermont

204

https://www.nasba.org/blog/2016/05/24/nasba-releases-official-cpa-population-statistic/

https://www.nasba.org/licensure/howmanycpas/

Profession Facts & Data

Organization

Established

Membership Other info

AICPA 1887 421,000

375,659 (2015 Voting Members)

47% Public Accounting

34% Management Accounting

14% Retired & Miscellaneous

3% Government

2% Education

131 countries

NYSSCPA 1897 23,000 NYS-1st state to

license CPA in 1896

CPAs are Registered in NYS

As of July 1, 2024

License Statistics for Certified Public Accountants | Office of the Professions (nysed.gov)

CPA Geographic Distribution

NYS* 44,101 65.8%

Other US 22,007 32.9%

Non US 894 1.3%

Total 67,002 100%

8 Counties

with greater

than 1,000

licensed CPAs

In New York State Based on mailing addresses

County CPA # %

Nassau

8,824

20.01%

6,198

14.05%

Suffolk

4,782

10.84%

Queens

4,669

10.59%

Westchester

3,614

8.19%

Kings

3,843

8.71%

Erie

2,097

4.75%

Monroe

1,584

3.59%

Subtotal

35,611

80.75%

Other (54)

8,490 19.25

Total in NYS*

44,101

100.00%

Regents Actions on Professional Misconduct & Discipline by Category

Jan 2004-July 2024 (20 years and 7 months)

202420232022202120202019201820172016201520142013201220112010200920082007200620052004

Total # 503 of cases

NYS Professional Misconduct Enforcement - Complaint Form (nysed.gov)

Regents Actions on Professional Misconduct & Discipline by Category

January 2004-July 2024 (20 years and 7 months)

283,56%

157, 31%

23, 5%

24, 5%

14, 3%

2, 0%

503 Cases Suspensions (Full, Partial, Stayed)

Surrender

Revocation

Censure/Reprimand (Firm)

Censure/Reprimand (Ind)

Reconsideration

Surrender

Suspensions

Regents Enforcement Matters

Examples of License Surrender

1. Audits

2. CPA Exam

3. CPE & Register

4. Fraud

5. Gambling

6. Grand Larceny

7. Money Laundering

8. Reportable events

9. Petit Larceny

10. Registration

11. SEC

12. Tax returns

150 Cases for the period January 2004 to May 2024

Regents

Enforcement

Matters

2022-July 2024

Surrender of

License for CPE

27 cases

Licensee Admitted or did not contest to the charge of:

(1) willful failure to comply with mandatory cpe requirements

Month # of cases

April June July Sept 2022 5

Jan Feb July Sept Oct 2023 5

Jan June 2024 5

(2) failing to comply or timely complete with mandatory cpe requirements

Month # of cases

July 2022 1

Jan Feb Oct 2023 5

Jan June July 2024 4

(3) grossly negligent failure to comply with mandatory cpe requirements

Month # of cases

Sept 2022 1

(4) failing to timely pay a $500.00 fine, failing to complete continuing education

consisting of coursework in ethics, and failing to answer and submit quarterly

questionnaires as requested by the Department, as required by the terms of

probation imposed by the Board of Regents in Order No. 32592 (Slide 232)

Month # of cases

Feb 2024 1

Regents Enforcement

Matters

Examples of Seven

Surrender License for CPE

Nov 2015-December

2020

7 cases

Admitted to the charge of:

1. failing to complete required cpe

9/20 (2 cases), 1/19, 2/19, 11/15

2. failing to comply with mandatory cpe

6/16

3. failing to complete the required cpe credits for

the registration periods April 1990 to present

3/16

211

Regents Enforcement

Matters

Examples of Surrender

License

Registration

Admitted to the charge of:

willfully failing to register

7/24, 7/16 and 3/16

212

Regents Enforcement

Matters

Examples of

Surrender License-

Other

213

Admitted to charges of:

1. Having been convicted of Driving While Intoxicated, a Class E

felony, and of violating a term of probation imposed by the

Board of Regents. (1/08 and 2/01)

2. Having been convicted of promoting Gambling in the 1st

Degree, a class E felony. (2/16)

3. could not successfully defend against the charge of having

failed to timely submit a written report to the State Education

Department of receipt of written notice of a disciplinary

penalty upon him relating to the practice of public

accountancy issued by the SEC. (10/13) (Rule 29.10 (e))

4. Signing a Certification of Employer in support of an

individual's application for licensure as a NY CPA without

examining said certification for accuracy. (9/04)

Regents Enforcement Matters

CPE Suspensions

11-2023

Summary: Licensee did not

contest the charge of failing

to timely complete

mandatory continuing

education credits for the

calendar years of 2017, 2018,

2019, 2020, and 2021.

Action: Application for

consent order granted;

Penalty agreed upon: 2 years

stayed suspension, 2 years

probation, $2,000 fine.

4-15-24

Summary: Licensee did not

contest the charge of failing

to comply with the

mandatory continuing

education requirements to

be registered to practice as a

Certified Public Accountant.

Action: Application for

consent order granted;

Penalty agreed upon: 2 years

stayed suspension, 2 years

probation, $2,500 fine.

3-12-24

Summary: Licensee did not

contest the charge of failing

to comply with the

mandatory continuing

education requirements to

be registered to practice as a

Certified Public Accountant.

Action: Application for

consent order granted;

Penalty agreed upon: 2 years

stayed suspension, 2 years

probation, $2,500 fine.

Regents

Enforcement

Matters

CPE Suspension

Related: 2-13-24 Surrender

10-19-21

Summary: Licensee admitted to the charge of failing

to timely pay a $500 fine, failing to complete

continuing education coursework in ethics, and failing

to submit quarterly update reports to the

Department, as was required.

Action: Application for consent order granted; Penalty

agreed upon: 1 month actual suspension, 23 months

stayed suspension, 2 years probation, $500 fine.

7-15-19

Summary: Licensee did not contest the charge of

refusing to return client records upon request.

2019 Action: Application for consent order granted;

Penalty agreed upon: 2 years stayed suspension, 2

years probation, $500 fine. 215

Regents Enforcement Matters

CPE Suspensions

7-16-18

Summary: Licensee admitted to the

charge of willfully failing to complete

mandatory continuing education

requirements.

Action: Application for consent order

granted; Penalty agreed upon: 2 years

suspension with leave to apply for a

stay of execution of any unserved

portion thereof upon satisfactory

successful completion of certain

continuing education requirement,

upon service of or earlier termination

of suspension, 2 years probation,

$2,500 fine

11-6-18

Summary: Licensee admitted

to the charge of failure to

timely complete required

continuing education.

Action: Application for

consent order granted;

Penalty agreed upon: 1 year

stayed suspension, 1 year

probation, $1,000 fine.

6-7-21

Summary: Licensee was found

guilty of professional

misconduct for failing to

comply with the mandatory

continuing education

requirements to be registered

to practice certified public

accounting in NYS.

Action: Application for

consent order granted;

Penalty agreed upon: 1 year

stayed suspension, 1 year

probation, $500 fine.

AICPA Annual Disciplinary Report

2019-2023 (5 years)

http://www.aicpa.org/InterestAreas/ProfessionalEthics/Resources/EthicsEnforcement/Pages/default.aspx

Year Opening

New

Closed Ending

Litigation

Deferrals

2023

539 471

(444)

566 66

2022

629 431

(521)

539 77

2021

722 389

(482)

629 81

2020

777 359

(414)

722 78

2019

967 260

(450)

777 116

Total

1,910

(2,311)

Summary of Disposition of Completed Cases

Disciplinary Report 2019-2023 (5 years)

51.20%

48.80%

# of cases 1,968

Code Violation or Failure to Cooperate No Violation or No Further Action

Code Violation or Failure to

Cooperate

1. Expelled or Suspended* 22.1 %

2. Required Corrective Action 18.0 %

3. Admonished* 11.1 %

1. No Further Action 34.0 %

2. No Violation 14.8 %

In cases involving suspension of

membership or where corrective action

is required, respondents are directed to

attend specified CPE courses or perform

other remedial directives.

# of cases being monitored for CPE

completion and follow-up review.

219

Year #

2023 150

2022 150

2021 236

2020 346

2019 450

SEC Charges International Accounting Firm Prager Metis with Hundreds of Auditor

Independence Violations

FOR IMMEDIATE RELEASE 9-29-23

2023-214

“According to the SEC’s complaint, between approximately December 2017 and October 2020,

Prager improperly included indemnification provisions in engagement letters for more than

200 audits, reviews, and exams. As a result, the complaint alleges, Prager was not

independent from its clients for those engagements, as required under the federal securities

laws. The SEC alleges that Prager continued to sign engagement letters containing

indemnification provisions and also issued “accountant’s reports” in which it purported to be

independent in connection with its audits and exams, even after Prager’s senior partners

repeatedly were notified that inclusion of indemnification provisions in engagement letters

rendered Prager not independent. Many of Prager’s clients included those “accountant’s

reports” in their filings with the SEC. Prager allegedly also failed to advise its clients of its

violations, even after the Public Company Accounting Oversight Board informed Prager that

the indemnification provisions violated the independence requirements of the federal

securities laws.”

https://www.sec.gov/news/press-release/2023-214 220

Marcum LLP

Enforcement Actions

PCAOB Release No. 105-2023-005

June 21, 2023

•Imposing $3 Million Fine and

Requiring First-Ever Changes to

Supervisory Structure, PCAOB

Sanctions Marcum LLP for Significant

Quality Control Violations

•The $3 million fine is the largest

penalty imposed on a non-affiliate

firm (an audit firm that is not a

member of a global network)

SECURITIES EXCHANGE ACT OF 1934

Release No. 97773 / June 21, 2023

•The SEC imposed a $10 Million civil

monetary penalty concerning related

conduct. The PCAOB’s penalty is the

largest it has imposed on a “non-affiliate

firm,” meaning an audit firm that is not a

member of a global network.

SEC Charges Audit Firm Marcum LLP for Widespread Quality Control Deficiencies

Press Release 2023-114 June 21, 2023

“According to the SEC’s order, over a three-year period, Marcum more than

tripled its number of public company clients, the majority of which were SPACs,

including auditing more than 400 SPAC initial public offerings in 2020 and 2021.

The strain of this growth, however, exposed substantial, widespread, and pre-

existing deficiencies in the firm’s underlying quality control policies, procedures,

and monitoring. These deficiencies permeated nearly all stages of the audit

process and were exacerbated as Marcum took on more SPAC clients.

Moreover, in hundreds of SPAC audits, Marcum failed to comply with audit

standards related to audit documentation, engagement quality reviews, risk

assessments, audit committee communications, engagement partner

supervision and review, and due professional care. Depending on the audit

standard at issue, violations were found in 25-50 percent of audits reviewed,

with even more frequent, nearly wholesale violations found as to certain audit

standards across Marcum’s SPAC practice.”222

PCAOB Release No. 105-2022-025

October 18, 2022

“PCAOB imposed the largest civil money penalty against an individual in PCAOB history. The Board

imposed separate civil money penalties of $150,000 on audit partner Jonathan B. Taylor, CPA, and

the New York-based firm where he is a partner, Spielman Koenigsberg & Parker LLP (“SKP”), after

Taylor misled PCAOB inspectors and investigators during two PCAOB inspections and a subsequent

PCAOB investigation.”

Summary:

“In anticipation of a PCAOB inspection in 2021 (“2021 Inspection”), Taylor coordinated a months-long

effort involving other SKP professionals to alter and backdate audit work papers, and then made

those work papers available to the inspectors. Taylor made false statements to the inspectors about

whether those work papers had been improperly altered, even after they pointed out modification

dates appearing in the firm’s audit software that suggested the contrary. Following commencement

of a PCAOB investigation regarding this conduct, Taylor provided false and misleading information to

PCAOB investigators. Taylor misled investigators regarding whether engagement quality reviews

(“EQRs”) were performed, when and what kinds of alterations were made to work papers, and

whether SKP had certain documents in its possession. Taylor also represented that his productions on

SKP’s behalf in response to document demands from the investigators were complete—while

withholding thousands of responsive documents, including documents that evidenced Taylor’s

misconduct.”

ht tps :// pcaob-ass ets.az ureed ge.net/pcaob-dev/docs /de fault-source/enfo rcement/d ec ision s/ docum ents/1 05-2022-025-taylo r.pdf ?sfvr sn= eb74 a0a2_ 2 223

PCAOB Release No. 105-2021-005

June 21, 2023

PCAOB Sanctions Audit Firm and Partner for Independence, Professional Skepticism Failures and

Improper Alteration of Documents

PCAOB imposes $150,000 in total fines, revokes firm’s registration, and permanently bars auditor

from association with any registered public accounting firm

In the Matter of AJ Robbins CPA, LLC and Allan Jeffrie Robbins, CPA,

Specifically, the PCAOB found the following:

•The Firm issued multiple audit reports and interim review engagements between 2016 and 2018

without first obtaining concurring approval for issuance from an engagement quality reviewer.

•The Firm failed to conduct two issuer audits with due professional care and professional skepticism

during 2018.

•The Firm and Robbins failed to cooperate with a PCAOB inspection during 2018 by improperly

altering audit documentation and making misrepresentations to the PCAOB’s inspections staff.

•The Firm failed to maintain its independence from an issuer client in violation of SEC and PCAOB

rules due to a business relationship with an officer and director of that issuer client.

•Robbins directly and substantially contributed to the Firm’s violations. 224

V. Ethical Theories

Philosophical Moral Theories

1. Consequentialism-Utilitarianism

•Greatest good for the greatest #

•Focus on the results/consequences of an action

2. Deontological-Immanual Kant (1724-1804)

•Focuses on obligations or duties motivating a decision or action, what would

be good for all people.

•Golden Rule

3. Virtue Ethics-Aristotle (384-322 BC)

•How does one achieve the good life?

Immanuel Kant

Virtue and the Role of Rules of Ethics

Virtues help us make sense of and provide a rational for the rules and

provide an intellectual and emotional basis for following the rules

Fairness  Courage  Temperance

Honesty  Charity  Obedience

Respect  Modesty  Patience

227

VI. Resources

NYSED & AICPA

NYSED Contact

information

Practice Issues and Continuing Education

For answers to questions contact:

NY State Education Department

Office of the Professions

State Board for Public Accountancy

89 Washington Avenue

Albany, New York 12234-1000

Phone: 518-474-3817, press 1, then, ext. 160

Fax: 518-474-6375

E-mail: cpabd@mail.nysed.gov

AICPA Ethics Hotline

“Some ethics matters are black-and-

white. But for all the gray areas, there's

the Ethics Hotline.

If you're an AICPA member with

questions on the Code of Professional

Conduct, you may reach the hotline

either by calling 888-777-7077 Option #2

then Option #3 or emailing

ethics@aicpa.org.”

230

Takeaways

1. File and monitor BOI legislation

2. Check your online license status on CPAverify and NYSED

3. Tax preparers- review revised SSTS effective January 1, 2024, monitor revisions

to Circular 230 and implement a data security plan if you don’t have one

3. Monitor PEEC exposure drafts and ongoing projects

4. Consider sending email to sign up for Digital Dose of Ethics

5. Consider reviewing NOCLAR decision tree animation exercise (Slide 196)

6. Monitor proposed changes to: NYS Rules 29.10 and NYS ethics CPE

7. 8. If applicable, complete NYSED change of name or address form (Slides 234-238)

9. Reach out when in doubt

He who exercises power by means of his

virtue may be compared to the north star,

which keeps its place while all the other

stars revolve around it.

– Confucius

232

VI. Supplemental Materials

Information about NYS Address Changes

11. Can I change my address using OP Online Registration Renewal?

Yes. You can change your main address using the Online Registration Renewal.

12. Will I get a new registration certificate for my current registration period when I change my address?

Yes. Your address will be updated in two (2) business days. At that time a new registration certificate for the

current period will be sent to the new address and all future correspondence from this office will be directed to

the new address.

13. Can I change my address and then send in the registration application and fee in the regular mail?

Yes. This is possible; however, please consider completing your registration renewal online at the same time.

https://www.op.nysed.gov/registration-renewal/online-registration-renewal

NYSED

How do I

change my

address?

Information copied from NYS OP link below

Please submit an Address Change Form. You can also Chat, weekdays, 8:30am -

4:30pm EST, to change an address. Just follow the prompts in the link to connect

with an agent.

Your address appears on your Registration Certificate and must be current.

If your address changes, you are required by Education Law to inform the Office of

the Professions within 30 days and to request a new Registration Certificate be

printed and sent to you.

To change your address and have a new Registration Certificate sent to you,

please click on the "Address Change Form" link below and fill in all required fields.

The "Submit" button will send your address change information to the Office of

the Professions.

235

https://op-support.nysed.gov/hc/en-us/articles/360061782033-How-do-I-change-my-

address-

NYSED

How do I

change my

address?

Please Note

•For applicants who are not yet licensed, to

avoid licensure delays notify the Department

of any change in your mailing address as soon

as possible.

•For licensees, failure to notify the Department

of any change in your mailing address within

30 days of the change may be considered

professional misconduct. It may also delay

renewal and result in late fees to renew the

registration of a professional license.

https://op-support.nysed.gov/hc/en-us/articles/360061782033-

How-do-I-change-my-address-

236

NYSED

Name changes

Cannot be submitted online.

You must provide written

notification of any name change.

You may complete a Name Change

Form for this purpose and mail it,

along with the supporting

documentation, to the address at

the end of the form, or fax it to

518-474-1449.

237

§ 70.1(c) Definition

of practice of public

accountancy

Professional skills and

competencies

The practice of public accountancy shall include accounting,

management advisory, financial advisory, and tax exclusive of

services within subdivisions (a) and (b) of this section, which

involve, but shall not be limited to, use of the following

professional skills or competencies:

I. Application of accounting skills, which shall include:

a. preparation of financial statements and note

disclosures;

b. analysis of the effects of transactions on account

balances;

c. analysis of account balances;

d. calculation of key financial ratios and interpretation

of the results of such calculations; and

e. application of appropriate generally accepted

accounting principles in practice.

238

§ 70.1(c)

Definition of

practice of public

accountancy

Professional skills and

competencies

II. Application of transaction processing cycles and the

control environment, which shall include:

•development of a flow chart to explain operational

processes;

•identification of potential weaknesses in a

company's internal control structure, including

computer information systems controls; and

•evaluation of corporate governance and structure.

III. Identification of potential violations of ethical

behavior;

IV. Fraud detection and deterrence;

239

§ 70.1(c)

Definition of

practice of public

accountancy

Professional skills and

competencies

V. Application of business law and laws related to

fraud, including:

•cognizance of the fundamental legal principles

associated with contracts, civil and criminal

matters, social goals associated with the legal

system and the role of the justice system;

•recognition of the advantages and disadvantages

of the different forms of business organization;

•recognition of the ethical duties and legal

responsibilities associated with confidentiality;

and

•familiarization with legal restrictions, privacy

laws, and rights of individuals in gathering

evidence of embezzlement, money laundering,

and other issues related to fraud.

240

§ 70.1(c)

Definition of

practice of public

accountancy

Professional skills and

competencies

VI. Application of tax law:

•application of current federal income

tax laws for individuals and businesses;

•application of current state and local

income tax laws for individuals and

businesses;

•application of financial planning

concepts to current gift and estate tax

laws;

•calculation of payroll taxes; and

•calculation of sales and use taxes;

241

§ 70.1(c)

Definition of

practice of public

accountancy

Professional skills and

competencies

VII. Application of government and not-for-profit

accounting principles, including:

•analysis of the differences between financial

reporting for a business enterprise and a

government or not-for-profit entity; and

•preparation of financial statements for a

governmental and a not-for-profit organization

by applying appropriate accounting concepts.

VIII. Application of management accounting concepts,

including:

•evaluation of data to support decision-making;

and

•analysis of expenses to reduce a company's costs

and improve profitability.

242

§ 70.1(c)

Definition of

practice of public

accountancy

Professional skills and

competencies

IX. Application of finance concepts,

including:

•calculation of the time value of

money;

•analysis of debt versus equity in

business financing decisions; and

•evaluation of investment

opportunities using discounted

cash flow, net present value, and

risk analysis.

243

Who is required to report under the Corporate

Transparency Act’s BOI reporting requirement?

“All domestic and foreign entities that have filed information or registration documents with a

U.S. state (or Indian tribe), unless they meet one of 23 enumerated exemptions (see question

No. C.2 of FAQs https://www.fincen.gov/boi-faqs for a full list of exemptions) including:

•EXEMPT: Large operating entities that meet all of the following criteria:

oEmploy more than 20 people in the U.S.

oHad gross revenue (or sales) over $ 5 million on the prior year’s tax return

oHas a physical office in the U.S.

•Exempt: Publicly traded companies that have registered under Section 102 of SOX”

Source: https://www.aicpa-cima.com/resources/download/beneficial-ownership-information-

boi-faq-for-clients

244

Securities reporting issuer

Governmental authority

Bank

Credit union

Depository institution holding company

Money services business

Broker or dealer in securities

Securities exchange or clearing agency

Other Exchange Act registered entity

Investment company or investment adviser

Venture capital fund adviser

Insurance company

State

-licensed insurance producer

Commodity Exchange Act registered entity

Accounting firm

Public utility

Financial market utility

Pooled investment vehicle

Tax

-exempt entity

Entity assisting a tax

-exempt entity

Large operating company

Subsidiary of certain exempt entities

Inactive entity

The following

table summarizes

the 23

exemptions:

These entities include publicly traded

companies meeting specified

requirements, many nonprofits, and

certain large operating companies.

Source: https://www.fincen.gov/boi-

faqs C.2 of FAQs

When must companies comply?

1. New entities (created/registered after December 31, 2023)

Must file within 90 days

from the date of receiving actual or public notice of their creation

or registration becoming effective to file their initial reports

2. Existing entities (created/registered before January 1, 2024)

Must file by January 1, 2025

Reporting companies that have changes to previously filed

information or discover inaccuracies in previously filed must report

within 30 days.

Source: https://www.aicpa-cima.com/resources/download/beneficial-ownership-information-boi-

faq-for-clients 246

FinCEN

Small Entity Compliance Guide (50 pages)

December 2023

Reporting Requirements

https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf

“FinCEN estimates that about 6.6 million BOI update reports will be filed in 2024, and about 14.5 million

such reports will be filed annually for 2025 and beyond. The total five-year average of expected BOI

update reports is almost 12.9 million.”

https://www.journalofaccountancy.com/news/2023/sep/fincen-proposes-boi-reports-deadline-

extension-for-certain-companies.html?utm_

247

Small Entity Compliance Guide

December 2023

If your company is a reporting company, your next step is to identify its beneficial owners.

Who is a beneficial owner of my firm?

A beneficial owner is any individual who, directly or indirectly:

• Exercises substantial control over a reporting company;

• OR

• Owns or controls at least 25 percent of the ownership interests of a reporting company.

Bold italics are defined in CTA 248

Conceptual Framework Definitions

Threat(s)

Relationships or

circumstances that

could compromise

compliance with the

rules.

Safeguards

Actions or other

measures that may

eliminate a threat or

reduce a threat to an

acceptable level.

Acceptable level a reasonable and

informed third party who is aware of

the relevant information would be

expected to conclude that compliance

with the rules is not compromised.

Six Categories

of Threats

2.000.010.09-14

1. Adverse interest

2. Advocacy

3. Familiarity

4. Self-interest

5. Self-review

6. Undue influence

Evaluate the

significance of a

threat (Continued)

Consider both qualitative and quantitative factors

when evaluating the significance of a threat,

including the extent to which existing safeguards

already reduce the threat to an acceptable level.

If conclude that a reasonable and informed third

party who is aware of the relevant information

would be expected to conclude that the threat does

not compromise compliance with the rules, the

threat is at an acceptable level and no requirement

to evaluate the threat any further.

Two Categories of

Safeguards

•Created by the profession,

legislation, or regulation

•Implemented by the employing

organization

Factors affecting

the effectiveness

of safeguards

a. The facts and circumstances specific to a particular

situation

b. The proper identification of threats

c. Whether the safeguard is suitably designed to meet

its objectives

d. The party(ies) who will be subject to the safeguard

e. How the safeguard is applied

f. The consistency with which the safeguard is applied

g. Who applies the safeguard

h. How the safeguard interacts with a safeguard from

another category

i. Whether the employing organization is a public

interest entity

Safeguards-

profession,

legislation, or

regulation

a. Education & training requirements on ethics and professional

responsibilities

b. Continuing education requirements on ethics

c. Professional standards and the threat of discipline

d. Legislation establishing prohibitions and requirements for entities

and employees

e. Competency and experience requirements for professional licensure

f. Professional resources, such as hotlines, for consultation on ethical

issues

Safeguards-

employing

organization

a. A tone at the top emphasizing a commitment to fair financial

reporting and compliance with applicable laws, rules,

regulations, and corporate governance policies

b. Policies and procedures addressing ethical conduct and

compliance with laws, rules, and regulations

c. Audit committee charter, including independent audit

committee members

d. Internal policies and procedures requiring disclosure of

identified interests or relationships among the employing

organization, its directors or officers, and vendors, suppliers,

or customers

e. Internal policies and procedures related to purchasing controls

f. Internal policies and procedures related to customer

acceptance or credit limits

Safeguards-

employing

organization

g. Dissemination of corporate ethical compliance policies and

procedures, including whistle-blower hotlines, the reporting

structure, dispute resolution, or other similar policies, to

promote compliance with laws, rules, regulations, and other

professional requirements

h. Human resource policies and procedures safeguarding against

discrimination or harassment, such as those concerning a

worker’s religion, sexual orientation, gender, or disability

i. Human resource policies and procedures stressing the hiring

and retention of technically competent employees

j. Policies and procedures for implementing and monitoring

ethical policies

k. Assigning sufficient staff with the necessary competencies to

projects and other tasks

l. Policies segregating personal assets from company assets

Safeguards-

employing

organization

m. Staff training on applicable laws, rules, and

regulations

n. Regular monitoring of internal policies and

procedures

o. A reporting structure whereby the internal auditor

does not report to the financial reporting group

p. Policies and procedures that do not allow an internal

auditor to monitor areas where the internal auditor

has operational or functional responsibilities

q. Policies for promotion, rewards, and enforcement of

a culture of high ethics and integrity

r. Use of third-party resources for consultation as

needed on significant matters of professional

judgment

Conceptual Framework Flowchart-

The following flowchart illustrates the steps of the Conceptual Framework:

Source: AICPA Conceptual Framework Toolkit

Recommended

SEC Enforcement Action Coding Results, 2016-2020

Year Total Related Principle

Cases

3. Integrity*

4. Objectivity &

Independence

5. Due Care*

6. Scope & Nature

of Services

2016

2017

2018

2019

2020

Total

191

134

131

Source: CPA Journal March/April 2022 SEC Enforcement Actions Supporting Critical Skills-based Ethics Training By: Roxane DeLaurell, Roger B. Daniels, and Josette Pelzer

Actions linked in these two category demonstrated the member had:

(3) Integrity- Been dishonest with either their client, the public or both

(5) Due Care- Either offered services without possessing the required knowledge to do so, or provided services in a manner that was careless and

disregarded relevant standards.

ABOUT THE

AUTHOR

Debbie A. Cutler, CPA/CFF CFE, CCEP, is shareholder in the firm of Debra A.

Cutler, CPA, P.C. with more than 35 years of experience in providing dispute

resolution and litigation services including fraud investigations, forensic

accounting and representing CPAs in accounting malpractice and disciplinary

matters.

Ms. Cutler previously spent 10 years providing attest and tax services to

public and private corporations and partnerships. She was a partner with the

firm Kramer Love & Cutler, LLP and was also with the NYC Office of a Big Four

Accounting Firm.

Ms. Cutler is a member of the AICPA and NYSSCPA and past member and

Chair of the AICPA Joint Trial Board. She is currently a member of NYSSCPA

Legislative Task Force and has served on the NYSSCPA Board of Directors and

past member of its Executive Committee and Governance Subcommittee and

many other committees throughout her career. She also has served as a

Council Member of the AICPA and Chair of the NYSSCPA Professional Ethics

Committee and a committee member for 10 years. Ms. Cutler is also a

presenter of Ethics Courses for FAE and has taught Rutgers Business School

MAACY Ethics online course for the past ten years.

261

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