Section 7410. Mandatory quality review

1. The department shall require as a
  condition to renewal of registrations under section seventy-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
  accountants, 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  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
  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  review  in this state or a peer review in
  another state that  is  a  satisfactory  equivalent  to  quality  review
  required pursuant to this section;
    b.  shall  require,  with  respect  to  any organization administering
  quality 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 review program
  under its charge;
    c. shall require the quality  review  to  be  conducted  by  reviewers
  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  reviews  contemplated by
  paragraph a of this subdivision that firms  undergoing  quality  reviews
  and  organizations  administering  quality  review programs timely remit
  such quality 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 of this section.
    2. Except as provided for in subdivision four of this section, nothing
  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
  officers 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. 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  governmental
  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, 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.
    * NB Effective January 1, 2012