EDU-41-08-00003-P Curricular Content for Registered Programs Leading to Licensure in Public Accountancy and Examination Requirements for Licensure

10/8/08 N.Y. St. Reg. EDU-41-08-00003-P

NEW YORK STATE REGISTER

VOLUME XXX, ISSUE 41

October 08, 2008

RULE MAKING ACTIVITIES

EDUCATION DEPARTMENT

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. EDU-41-08-00003-P

Curricular Content for Registered Programs Leading to Licensure in Public Accountancy and Examination Requirements for Licensure

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of sections 52.13 and 70.3 of Title 8 NYCRR.

Statutory authority:

Education Law, sections 207 (not subdivided), 6501 (not subdivided), 6504 (not subdivided), 6506(1) and (2), 6507(2)(a), (3) and (4)(a), and 7404(1)(2) and (4)

Subject:

Curricular content for registered programs leading to licensure in public accountancy and examination requirements for licensure.

Purpose:

Update an expand curricular content for registered programs and the requirements for admission into the licensing examination.

Text of proposed rule:

1. Paragraph (1) of subdivision (b) of section 52.13 of the Regulations of the Commissioner of Education is amended, effective January 8, 2009, as follows:

(1) Definitions. As used in this subdivision:

(i) Professional accountancy content area shall mean curricular content in professional accountancy that includes but is not limited to each of the [following] subjects identified in clauses (a) through (d) of this subparagraph and may also include but need not be limited to the subjects identified in clauses (e) through (i) of this subparagraph:

(a) financial accounting [theory and principles] and reporting;

(b) cost or managerial accounting;

(c) [tax accounting] taxation; and

(d) auditing and [computer auditing] attestation services[.];

(e) fraud examination;

(f) accounting ethics and professional responsibilities;

(g) accounting research and analysis;

(h) internal controls and risk assessment; and

(i) accounting information systems.

(ii) General business content area shall mean curricular content relating to the development of knowledge in traditional business principles and technical skills. Curricular content in general business [that includes] may include but is not limited to each of the following subjects:

(a) business statistics;

(b) [commercial] business law;

(c) computer science;

(d) economics; [and]

(e) finance[.];

(f) management;

(g) marketing;

(h) operations management;

(i) organizational behavior;

(j) business ethics;

(k) business strategy;

(l) business communications;

(m) quantitative methods; and

(n) information technology and systems.

2. Subdivision (d) of section 70.3 of the Regulations of the Commissioner of Education is amended, effective January 8, 2009, as follows:

70.3 Licensing examinations

(d) The department shall accept passing scores on the uniform certified public accountant examination, or on an examination determined to be comparable in content, as meeting the requirement of the licensing examination, except where the department determines that the administration, scoring, content or other comparable factors concerning such examination have affected the validity and/or integrity of such examination so as to render acceptance of such scores inappropriate. Candidates shall complete [their professional study] a minimum of 120 semester hours of study in a regionally accredited college or university, or its equivalent as determined by the department, [prior] for admission to the licensing examination as a New York candidate.

Text of proposed rule and any required statements and analyses may be obtained from:

Lisa Struffolino, New York State Education Department, 89 Washington Avenue, Room 148, Albany, New York 12234, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Frank Munoz, Office of the Professions, New York State Education Department, 2nd Floor, West Wing, Education Bldg., 89 Washington Avenue, Albany, New York 12234, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. STATUTORY AUTHORITY:

Section 207 of the Education Law grants general rule-making authority to the Board of Regents to carry into effect the laws and policies of the State relating to education.

Section 6501 of the Education Law provides that in order for an applicant to qualify for a professional license, the requirements prescribed in the article for each particular profession must be met.

Section 6504 of the Education Law authorizes the Board of Regents to supervise the admission to and regulation of the practice of the professions.

Subdivision (1) of section 6506 of the Education Law authorizes the Regents to promulgate rules in the supervision of the practice of the professions.

Subdivision (2) of section 6506 of the Education Law authorizes the Regents to promulgate rules relating to preprofessional, professional and other educational qualifications required for licensing in the professions.

Paragraph (a) of subdivision (2) of section 6507 of the Education Law authorizes the Commissioner of Education to promulgate regulations in administering the admission to and practice of the professions.

Subdivision (3) of section 6507 of the Education Law authorizes the State Education Department, assisted by the board for each profession, to establish standards for pre-professional and professional education, experience and licensing examinations as required to implement the article governing each profession, review qualifications in connection with licensing requirements and provide for licensing examinations and re-examinations.

Paragraph (a) of subdivision (4) of section 6507 of the Education Law authorizes the State Education Department to register or approve educational programs designed for the purpose of providing professional preparation which meet standards established by the Department.

Paragraph (2) of subdivision (1) of section 7404 of the Education Law provides that a person shall have received an education, including a bachelor's or higher degree based on a program in accountancy, in accordance with the Commissioner's regulations.

Paragraph (4) of subdivision (1) of section 7404 of the Education Law provides that a person shall pass a written examination satisfactory to the board and in accordance with the Commissioner's regulations and the requirement with respect to such examination may not be waived.

2. LEGISLATIVE OBJECTIVES:

The proposed amendment carries out the intent of the aforementioned statutes by revising the curricula for registered programs leading to licensure as a certified public accountant and amending the standards for admission into the certified public accountant examination.

3. NEEDS AND BENEFITS:

The purpose of the proposed amendment to the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure qualifying registered programs in public accountancy to reflect the current educational model and to allow students to be admitted into the licensing examination after completing 120 semester hours while maintaining the professional study requirements established in 70.1 of the Regulations of the Commissioner of Education for licensure as a certified public accountant.

Currently, section 52.13(b) of the Commissioner's regulations requires New York colleges and universities seeking to register as licensure qualifying programs in public accountancy to include as part of its program 33 semester hours in the professional accountancy content area and a minimum of 36 semester hours in the general business content area. The regulation defines "professional accountancy content area" and "general business content area" to mean curricular content in certain identified subject areas.

The evolution of the practice of public accountancy has resulted in the broadening of the nature and types of course content necessary for students to gain the necessary background to become successful licensed certified public accountants. The proposed amendment is necessary to provide greater flexibility to colleges and universities seeking to adapt their programs to a changing professional practice environment when registering and/or changing licensure qualifying public accountancy programs in New York.

The proposed amendment to section 70.3(d) of the Commissioner's regulations permits a candidate to apply for admission into the uniform certified public accountant examination after completing 120 semester hours of professional study in accountancy. Effective August 1, 2009, the education requirement for licensure as a certified public accountant will increase to 150 semester hours. Forty-six other licensing jurisdictions have transitioned to a 150-hour education requirement. In most cases, these states have sustained a significant decrease in candidates for two or more years following the adoption of the 150-hour education requirement. This model provides a better opportunity for candidates that might otherwise be impeded by time and monetary factors due to the increased education requirement. In reaction to these considerations, approximately 20 states have adopted provisions similar to the proposed amendment to allow candidates to sit for the examination after 120 hours of education.

4. COSTS:

(a) Cost to State government: The regulation will not impose additional costs on the State Education Department or any other State agency.

(b) Cost to local government: There are no additional costs to local government.

(c) Cost to private regulated parties: The proposed amendment will not impose additional costs on any private regulated parties.

(d) Costs to the regulatory agency: As stated above in "Costs to State Government," the proposed amendment will not impose additional costs on the State Education Department.

5. LOCAL GOVERNMENT MANDATES:

The proposed amendment relates to the registration requirements for curricula in public accountancy and to examination requirements applicable to candidates for licensure as a certified public accountant. The amendment does not impose any programs, service, duty, or responsibility upon local governments.

6. PAPERWORK:

The amendment does not establish additional reporting or recordkeeping requirements for applicants for licensure or licensees or public accounting firms.

7. DUPLICATION:

There are no other State or federal requirements on the subject matter of the proposed amendment. Therefore, the proposed amendment does not duplicate other existing State or Federal requirements.

8. ALTERNATIVES:

There are no viable alternatives to the proposed amendment and none were considered.

9. FEDERAL STANDARDS:

There are no Federal standards on the registration requirements for curricula in public accountancy and/or relating to the examination requirements applicable to candidates for licensure as a certified public accountant.

10. COMPLIANCE SCHEDULE:

The proposed amendment must be complied with on its effective date. No additional period of time is necessary to enable regulated parties to comply with the regulation.

Regulatory Flexibility Analysis

The purpose of the proposed amendment to the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure qualifying registered programs in public accountancy to reflect the current educational model and to allow students to be admitted into the licensing examination after completing 120 semester hours while maintaining the professional study requirements established in 70.1 of the Regulations of the Commissioner of Education for licensure as a certified public accountant.

The amendment does not regulate small businesses or local governments. It does not impose any reporting, recordkeeping, or other compliance requirements on small business or local governments, or have any adverse economic effect on them. Because it is evident from the nature of the proposed amendment that it does not affect small businesses or local governments, no affirmative steps were needed to ascertain that fact and none were taken. Accordingly, a regulatory flexibility analysis for small businesses and local governments is not required and one has not been prepared.

Rural Area Flexibility Analysis

1. TYPES AND ESTIMATED NUMBER OF RURAL AREAS:

The proposed amendment will affect individuals who apply for licensure as certified public accountants (CPA), including those that are located in the 44 rural counties with less than 200,000 inhabitants and the 71 towns in urban counties with a population density of 150 per square mile or less. Each year about 1,750 individuals apply for licensure as a certified public accountant. The Department estimates that about eight percent or about 140 come from a rural county of New York State.

2. REPORTING, RECORDKEEPING AND OTHER COMPLIANCE REQUIREMENTS; AND PROFESSIONAL SERVICES:

The purpose of the proposed amendment to the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure qualifying registered programs in public accountancy to reflect the current educational model and to allow students to be admitted into the licensing examination after completing 120 semester hours while maintaining the professional study requirements established in 70.1 of the Regulations of the Commissioner of Education for licensure as a certified public accountant.

The proposed amendment does not impose a need for additional professional services and does not establish additional reporting or recordkeeping requirements on applicants for licensure, including those located in rural areas of New York State.

3. COSTS:

The proposed amendment will not impose any additional cost on applicants for licensure in accountancy, licensees or public accounting firms, including those located in rural areas of New York State.

4. MINIMIZING ADVERSE IMPACT:

The proposed amendment makes no exception for colleges and universities or candidates for licensure that are located in rural areas. The Department has determined that curricula requirements should apply to colleges and universities and candidates for licensure, no matter their geographic location, to ensure a uniform high standard of competency across the State. Because of the nature of the proposed amendment, establishing different standards for colleges and universities and/or candidates for licensure located in rural areas of New York State is inappropriate.

Moreover, the proposed amendment expands the curricular content of registered programs and allows candidates to apply for admission into the licensing examination for certified public accountants earlier. Therefore, it is unnecessary to minimize an adverse impact on colleges and universities or candidates applying for licensure as certified public accountants in rural areas of the State.

5. RURAL AREA PARTICIPATION:

The State Board for Public Accountancy assisted in the development of the proposed amendment and approves the changes. This Board includes members who live and work in rural areas of New York State. In addition, the State Education Department solicited comments on the proposed amendment from the Society of Certified Public Accountants, which includes members located in all areas of New York State, including rural areas of the State.

Job Impact Statement

The purpose of the proposed amendment to the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure qualifying registered programs in public accountancy to reflect the current educational model and to allow students to be admitted into the licensing examination after completing 120 semester hours while maintaining the professional study requirements established in 70.1 of the Regulations of the Commissioner of Education for licensure as a certified public accountant.

The proposed amendment will have no effect on the number of jobs or the number of employment opportunities available in this field. Because it is evident from the nature of the rule that it will have no impact on the number of jobs and number employment opportunities in public accounting or any other field, no affirmative steps were needed to ascertain that fact and none were taken. Accordingly, a job impact statement is not required, and one has not been prepared.