N.Y. Comp. Codes R. & Regs. tit. 8 § 70.1

Current through Register Vol. 46, No. 45, November 2, 2024

Section 70.1 - Definition of practice of public accountancy

Pursuant to Education Law section 7401, the practice of public accountancy is defined as:

(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; or

(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 (a) and (b) of this section, which involve use of the professional skills or competencies described in paragraph (1) of this subdivision of the licensed accountant, including professional services rendered to one's employer not required to register under Education Law section 7408, in any and all matters related to accounting concepts and to the recording of financial data or the preparation or presentation of financial statements.

(1) 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.

(ii) application of transaction processing cycles and the control environment, which shall include:

(a) development of a flow chart to explain operational processes;

(b) identification of potential weaknesses in a company's internal control structure, including computer information systems controls; and

(c) evaluation of corporate governance and structure;

(iii) identification of potential violations of ethical behavior;

(iv) fraud detection and deterrence;

(v) application of business law and laws related to fraud, including:

(a) 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;

(b) recognition of the advantages and disadvantages of the different forms of business organization;

(c) recognition of the ethical duties and legal responsibilities associated with confidentiality; and

(d) familiarization with legal restrictions, privacy laws, and rights of individuals in gathering evidence of embezzlement, money laundering, and other issues related to fraud;

(vi) application of tax law:

(a) application of current Federal income tax laws for individuals and businesses;

(b) application of current State and local income tax laws for individuals and businesses;

(c) application of financial planning concepts to current gift and estate tax laws;

(d) calculation of payroll taxes; and

(e) calculation of sales and use taxes.

(vii) application of government and not-for-profit accounting principles, including:

(a) analysis of the differences between financial reporting for a business enterprise and a government or not-for-profit entity; and

(b) 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:

(a) evaluation of data to support decision-making; and

(b) analysis of expenses to reduce a company's costs and improve profitability.

(ix) application of finance concepts, including:

(a) calculation of the time value of money;

(b) analysis of debt versus equity in business financing decisions; and

(c) evaluation of investment opportunities using discounted cash flow, net present value, and risk analysis.

N.Y. Comp. Codes R. & Regs. Tit. 8 § 70.1