S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6026--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 10, 2017
                                ___________
 
 Introduced  by  Sen. HELMING -- read twice and ordered printed, and when
   printed to be committed  to  the  Committee  on  Higher  Education  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the education law, in relation to mandatory peer  review
   of certified public accountants

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph 5 of paragraph c of subdivision 3  of  section
 7408  of  the  education  law,  as amended by chapter 651 of the laws of
 2008, is amended to read as follows:
   (5) That the firm failed to undergo a [quality]  PEER  review  of  its
 attest  services  pursuant  to  section seventy-four hundred ten of this
 article at least once every three years; or
   § 2. Section 7410 of the education law, as added by chapter 651 of the
 laws of 2008, is amended to read as follows:
   § 7410. Mandatory [quality]  PEER  review.  1.  The  department  shall
 require  as a condition to renewal of registrations under section seven-
 ty-four hundred eight of this article, that unless otherwise exempted by
 the department, applicants for firm registrations, [with  the  exception
 of  sole  proprietorship  firms  or  firms  with two or fewer accounting
 professionals, including certified public accountants or public account-
 ants, or any combination thereof,] undergo, no more frequently than once
 every three years, except pursuant  to  a  disciplinary  action  brought
 under section seventy-four hundred eight of this article, [quality] PEER
 reviews  of  the  firm's attest services conducted in such manner as the
 commissioner shall specify in regulations, and such review shall include
 a verification that individuals in the  firm  who  are  responsible  for
 supervising  attest  services  sign  or  authorize  someone  to sign the
 accountant's report on the financial statements on behalf  of  the  firm
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11586-05-7
              

 S. 6026--A                          2
 
 meet  the  competency requirements set out in the professional standards
 for such services, provided that any such regulations:
   a.  shall include reasonable provisions for compliance by an applicant
 for firm registration showing that it has, within  the  preceding  three
 years,  undergone a [quality] PEER review in this state or a peer review
 in another state that is a satisfactory  equivalent  to  [quality]  PEER
 review required pursuant to this section;
   b.  shall  require,  with  respect  to  any organization administering
 [quality] PEER review programs  contemplated  by  paragraph  a  of  this
 subdivision,  that it be subject to evaluations by the department or its
 designee, to periodically assess the effectiveness of the [quality] PEER
 review program under its charge;
   c. shall require the [quality] PEER review to be conducted by  review-
 ers  acceptable  to the department in accordance with the commissioner's
 regulations[, from a roster of qualified reviewers  established  by  the
 department]; and
   d.  may require with respect to [quality] PEER reviews contemplated by
 paragraph a of this subdivision that  firms  undergoing  [quality]  PEER
 reviews  and  organizations administering [quality] PEER review programs
 timely remit such [quality] PEER review reports to the state  board  for
 public  accountancy and such reports shall be maintained by the board in
 a manner consistent with subdivision [three] TWO of this section.
   2. [Except as provided for in subdivision four of this section,  noth-
 ing  in  this  section shall be construed to require sole proprietorship
 firms or firms with two or  fewer  accounting  professionals,  including
 certified  public  accountants or public accountants, or any combination
 thereof, to undergo quality review, however, such firms  may  choose  to
 voluntarily undergo quality review in accordance with this section.
   3.]  Notwithstanding any provision of law to the contrary, the reports
 submitted in accordance with subdivision one of this  section  shall  be
 confidential  and  shall not constitute a public record and shall not be
 subject to disclosure under articles six and six-A of the  public  offi-
 cers  law.  However, when any such report is admitted into evidence in a
 hearing held by the department, it shall then be a public record subject
 to disclosure under articles six and six-A of the public officers law.
   [4.] 3. Notwithstanding any provision of  law  or  regulation  to  the
 contrary, a firm that performs attest services for any New York state or
 municipal  department,  board,  bureau, division, commission, committee,
 public authority, public corporation, council, office, or other  govern-
 mental  entity performing a governmental or proprietary function for New
 York state or any one or more municipalities thereof, or performs attest
 services specifically required to be  performed  pursuant  to  New  York
 state  law,  OR  PERFORMS  ATTEST  SERVICES FOR ANY FEDERAL GOVERNMENTAL
 ENTITY PURSUANT TO  FEDERAL  LAW,  shall  be  [required  to  undergo  an
 external  peer  review]  in conformity with the requirements pursuant to
 the government auditing standards of  the  comptroller  general  of  the
 United States.
   § 3. This act shall take effect immediately.