Live Blog #5: Non-CPA Firm Ownership

Submitted by rkoreto on Fri, 02/03/2012 - 11:34

A panelist noted that even in New York, non-CPAs can have a certain amount of profit-related bonuses, so it’s really about semantics.

Weinstein, in response to a query, said his firm had a number of non-CPA attorneys at his firm. He stressed they cannot, and do not, practice law at their firms. So this is not an issue.

A CPA from New Jersey clarified that in that state, both voting rights and equity must be a CPA majority.

An audience member said his fear was non-CPAs would pick a CPA as a puppet to run the firm, someone very junior, but another audience member said this was unlikely. Goldfarb said a CPA could resign in protest in such a situation—but why should he be put into that position?

An audience member brought up again issue of disciplining non-CPA owners. Goldfarb reiterated that was a problem. Weinstein said that a non-CPA cannot sign an attest report anyway. That would be a matter of law, he believed.

An audience member commented that many non-CPAs want to be partners and are willing to accept the related obligations.

All non-CPA owners must be actively engaged in running the firm, pointed out Weinstein, according to the UAA, making passive investors an unlikely situation. However, some audience members are worried about large companies buying CPA firms as an investment. Weinstein did say that in the U.K., accounting firms can be publicly owned, although the attest function is separated out. Weinstein said he is not comfortable with that kind of ownership.

A question came about recruiting and retention. Talbert said that his own firm was 100% owned by CPAs, although it doesn’t have to be. Will public be hurt by non-CPA owner provisions? He doesn’t think so. There are safeguards. The reality is there now—just start regulating it.

In conclusion, Goldfarb said that if non-CPA ownership comes to New York it’s at least a supermajority. What happens if the numbers slip so non-CPAs become majority owners?

Sobel said again firms were already there and it was time to step up and change the law.

Talbert said there was no big push to change S.C.'s two-thirds rule at this time. He wishes N.Y. best of luck going forward.

Weinstein says that as the world changes, the basic tenets of being a CPA does not. So whatever the form of ownership, the designation will make CPAs hold to a higher standard anyway.

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