SB 29

Sponsor
Session
Regular Session 2018
Title
Public Accountancy Board, board composition and powers altered, Secs. 34-1-2, 34-1-3, 34-1-11, 34-1-12 am'd.
Description

Under existing law, certified public accountants and public accountants are licensed and regulated by the Alabama State Board of Public Accountancy

This bill would alter the composition of the board

This bill would further define terms

This bill would authorize the board to classify a certified public accountant or public accountant as retired

This bill would also shorten the grace period after a license has lapsed after which time the board may take disciplinary action against a licensee for failure to apply for a permit or be placed on inactive status

Relating to public accountants; to amend Sections 34-1-2, 34-1-3, 34-1-11, and 34-1-12, Code of Alabama 1975; to alter the composition of the Alabama State Board of Public Accountancy; to further define terms; to authorize the board to classify a licensed certified public accountant or public accountant as retired; and to shorten the grace period after a license has lapsed after which time the board may take disciplinary action against a licensee for failure to apply for a permit or be placed on inactive status.

Subjects
Public Accountancy, State Board of
View Original PDF: SB 29 - Introduced - PDF

Under existing law, certified public accountants and public accountants are licensed and regulated by the Alabama State Board of Public Accountancy

This bill would alter the composition of the board

This bill would further define terms

This bill would authorize the board to classify a certified public accountant or public accountant as retired

This bill would also shorten the grace period after a license has lapsed after which time the board may take disciplinary action against a licensee for failure to apply for a permit or be placed on inactive status

Relating to public accountants; to amend Sections 34-1-2, 34-1-3, 34-1-11, and 34-1-12, Code of Alabama 1975; to alter the composition of the Alabama State Board of Public Accountancy; to further define terms; to authorize the board to classify a licensed certified public accountant or public accountant as retired; and to shorten the grace period after a license has lapsed after which time the board may take disciplinary action against a licensee for failure to apply for a permit or be placed on inactive status.

Section 1

Sections 34-1-2, 34-1-3, 34-1-11, and 34-1-12, Code of Alabama 1975, are amended to read as follows:

§34-1-2.

For purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed in this section:

(1) AICPA. The American Institute of Certified Public Accountants.

(2) ATTEST. Providing the following services:

a. Any audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS).

b. Any review of a financial statement to be performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS).

c. Any engagement to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE).

d. Any engagement to be performed in accordance with the auditing standards of the Public Company Accounting Oversight Board (PCAOB).

e. The statements on standards specified in this definition shall be adopted by reference by the board pursuant to rule making and shall be those developed for general application by recognized national accountancy organizations such as the AICPA and PCAOB.

(3) BOARD. The Alabama State Board of Public Accountancy created by Section 34-1-3, except the special meaning applicable only to Section 34-1-4.

(4) COMPILATION. Providing a service of any compilation engagement to be performed in accordance with Statements on Standards for Accounting and Review Services (SSARS). that is presenting in the form of financial statements, information that is the representation of management (owners) without undertaking to express any assurance on the statements.

(5) FIRM. A sole proprietorship, partnership, professional corporation, professional association, limited liability company, limited liability partnership, or any other form of business entity now or hereafter recognized by Alabama law.

(6) LICENSE. A certificate issued pursuant to Section 34-1-4, a permit issued pursuant to Section 34-1-11, registration pursuant to Section 34-1-8; or, in each case, a certificate or permit issued pursuant to corresponding provisions of prior law, or the practice privilege provided pursuant to Section 34-1-7.

(7) LICENSEE. The holder of a license.

(8) OWNER. Any person who holds an ownership interest in a firm.

(9) PEER REVIEW. The study, appraisal, or review of one or more aspects of the professional work of a licensee or firm that performs attest or compilation services, by a person or persons who hold licenses and who are not affiliated with the licensee or firm being reviewed.

(10) PREPARATION OF FINANCIAL STATEMENT. Providing a service of any preparation of financial statements engagement to be performed in accordance with Statements on Standards for Accounting and Review Services (SSARS).

(11)a. REPORT. When used in reference to any attest or compilation service, an opinion, report, or other form of language that states or implies assurance as to the reliability of the attested information or compiled financial statements and that also includes or is accompanied by any statement or implication that the person or firm issuing it has special knowledge or competence in accounting or auditing. Such a statement or implication of special knowledge or competence may arise from use by the insurer or the report of names or titles indicating that the person or firm is an accountant or auditor or from the language of the report itself.

b. The term report includes any form of language that disclaims an opinion when such form of language is conventionally understood to imply any positive assurance as to the reliability of the attested information or compiled financial statements referred to or special competence on the part of the person or firm issuing such language. The term report includes any other form of language that is conventionally understood to imply such assurance or such special knowledge or competence.

(11) (12) STATE. Any state, territory, or insular possession of the United States or the District of Columbia.

§34-1-3.

(a) There is created a board of public accountancy in and for the State of Alabama, to be known as the Alabama State Board of Public Accountancy. The board shall consist of seven members appointed by the Governor and, effective October 1, 1988, confirmed by the Senate. Members of the board shall be citizens of the United States and residents of the state. The membership of the board shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state. Five Commencing October 1, 2019, six members of the Alabama State Board of Public Accountancy shall be certified public accountants in good standing with the board and shall be appointed by the Governor to the board. The Governor shall, in addition, appoint two other members to the board one being a public accountant who holds an active license to practice public accountancy issued under the laws of this state and who is in active practice as a public accountant and a seventh and one member of the board who shall be a public member who is not under the jurisdiction of the board, but shall at the time of his or her appointment be an active and reputable member of the Alabama business community who possesses a knowledge and understanding of financial transactions and financial statements. The persons and their successors shall constitute the Board of Public Accountancy and shall have and exercise all the powers and authority vested by law in the board.

(b) All appointments shall be effective on October or four-year terms, unless an appointment is made for an unexpired term.

(c) The Alabama Society of Certified Public Accountants shall, at least 30 days prior to the beginning of any term or within 30 days after any position on the board becomes vacant, submit to the Governor the names of five persons qualified for membership on the board for the certified public accountant position and public member position to be filled, and the Governor shall appoint one of the five nominees. Upon the failure of the Alabama Society of Certified Public Accountants to submit timely nominations for a position on the Board of Public Accountancy, the Board of Public Accountancy may submit nominations for the position to the Governor, who shall appoint one of the five nominees.

(d) The Alabama Association of Accountants shall, at least 30 days prior to the beginning of any term or within 30 days after any position on the board becomes vacant, submit the names of five persons qualified for membership on the board for the public accountant position to be filled, and the Governor shall appoint one of the five nominees. Upon the failure of the Alabama Association of Accountants to submit timely nominations for a position on the Board of Public Accountancy, the Board of Public Accountancy may submit nominations for the position to the Governor, who shall appoint one of the five nominees.

(e) (d) No person who has served two successive complete terms on the board shall be eligible for reappointment until after the lapse of one year. An appointment to fill an unexpired term shall not be considered a complete term. Vacancies occurring during a term shall be filled by appointment for the unexpired term. Upon the expiration of his or her term of office, a member shall continue to serve until his or her successor is appointed and confirmed by the Senate. Within 15 days after their confirmation by the Senate, the members of the board shall take an oath before any person lawfully authorized to administer oaths in this state to faithfully and impartially perform their duties as members of the board, and the same shall be filed with the Secretary of State. The Governor shall remove from the board any accountant-member whose permit to practice has become void, has been revoked, or suspended, or may, after a hearing, remove any member of the board for neglect of duty or just cause.

(f) (e) The board shall elect annually a chair, a vice-chair, and a secretary from its members.

(g) (f) The board may adopt and amend rules and regulations pursuant to the Administrative Procedure Act for the orderly conduct of its affairs and for the administration of this chapter.

(h) (g) A majority of the board shall constitute a quorum for the transaction of business.

(i) (h) The board shall have a seal which shall be judicially noticed.

(j) (i) The board shall keep records of its proceedings and of any proceeding in court, civil or criminal, arising out of or founded upon this chapter. Copies of the records certified as correct under the seal of the board shall be admissible in evidence to prove the content of the records.

(k) (j) The board shall maintain an annual register which shall contain the names, arranged alphabetically by classification, of all licensees under this chapter; the names of the members of the board; and all other information deemed proper by the board. The board may charge a fee in an amount set by it for furnishing the annual register to persons who request it.

(l) (k) The board shall employ an executive director who is a certified public accountant in good standing with the board and such other personnel as may be needed, including, but not limited to, certified public accountants in good standing with the board, and shall arrange for such assistance, services, supplies, and equipment as it requires for the performance of its duties. The number of employees, their compensation, and all other expenses of the board shall be paid at such rates and in such amounts as the board shall approve. The executive director and other employees of the board shall not be subject to or governed by the provisions of the state Merit System law but shall be entitled to all benefits accruing to Merit System employees including, but not limited to, the right to accumulate leave, participate in the Employees' Retirement System, and participate in the State Employees' Health Insurance Plan.

(m) (l) The board may promulgate and amend rules of professional conduct appropriate to establish and maintain a high standard of integrity in the profession of public accountancy. At least 60 days prior to the promulgation of any rule or amendment, the board shall mail copies of the proposed rule or amendment to each holder of a permit issued under Section 34-1-11, with a notice advising him or her of the proposed effective date of the rule or amendment and requesting that he or she submit comments thereon at least 15 days prior to the effective date; the comments shall be advisory only. Failure to receive by mail the rule, amendment, or notice by all permit holders shall not affect the validity of any rule or amendment.

(n) (m) Each member of the board shall be paid the same per diem and travel allowance paid to state employees for each day the member is actively engaged in the official business of the board out of the funds of the board.

(o) (n) Any records, information, or writings obtained or kept by the Board of Public Accountancy in connection with a peer review program which the board is authorized to establish by rules and regulations, or obtained or kept by the board in connection with a disciplinary investigation shall be held in confidence. If, pursuant to a disciplinary investigation, probable cause for a hearing is found by the board, records, information, or writings upon which the finding is based shall be available to the licensee under investigation. Records, information, and writings held in confidence shall not be disclosed to any person except to the extent necessary to carry out the purposes of the peer review program, the investigation, or the provisions of this chapter; pursuant to a court order for the production of evidence or the discovery thereof; or pursuant to litigation involving the Board of Public Accountancy wherein the records, information, or writings are relevant to the issue in litigation. Notwithstanding the foregoing, with respect to peer review programs deemed acceptable to the board which are performed by other organizations, the board shall require that the peer review processes be operated and documents maintained in a manner designed to preserve confidentiality, and that neither the board nor any third party, other than an oversight body, shall have access to documents furnished or generated in the course of the review.

§34-1-11.

(a)(1) Permits to engage in the practice of public accounting in this state shall be issued by the board to a holder of a certificate of certified public accountant issued under Section 34-1-4 and to a person registered under Section 34-1-8 who furnishes evidence satisfactory to the board of compliance with the requirements of subsection (c) and who: (1) is a citizen of the United States or, if not a citizen of the United States, a person who is legally present in the United States with appropriate documentation from the federal government, or has declared his or her intent to become a citizen; and (2) has attained the age of 19 years; and (3) is of good moral character; and (4) meets the experience requirements set forth in subsection (e). Permits to engage in the practice of public accounting in this state also shall be issued by the board to persons or firms under Sections 34-1-5, 34-1-6, and 34-1-9, if all offices of those certificate holders or registrants are maintained and registered as required under Section 34-1-10. There shall be an annual permit fee for each certificate holder under Section 34-1-4, each registrant under Section 34-1-8, and each firm in an amount to be determined by the board. All permits shall expire on September 30 of each year and may be renewed annually for a period of one year. The application for renewal and annual renewal fee shall be filed with this board no later than December 31 following the expiration date. The board may also charge a late renewal penalty on or after January 1 following the expiration date in an amount set by the board which is graduated depending on the length of time the renewal is delinquent.

(2) The board shall by rule require as a condition for renewal of a permit under this section, by any permit holder who performs compilation services for the public other than through a CPA or PA firm, that such individual undergo, no more frequently than once every three years, a peer review conducted in such manner as the board shall by rule specify.

(b)(1) Notwithstanding subsection (a), a certified public accountant or public accountant registered under this chapter who is not engaged in the practice of public accounting may request the board, in writing, to place his or her name on the board's inactive roll or retired roll, thereby granting him or her inactive status or retired status, and protecting his or her right to obtain a permit to practice pursuant to subsection (a) at a later time as he or she wishes to become actively engaged in the practice of public accounting.

(2) If, upon receipt of the notification, the board determines that the certified public accountant or public accountant is not engaged in public accounting, the certified public accountant or public accountant shall be permitted to retain his or her initial registration or certificate by paying an annual registration fee in an amount as the board shall, from time to time, determine. Effective October 1, 2007, certified Certified public accountants or public accountants granted inactive status or retired status by the board shall place the word "inactive" or "retired," respectively, adjacent to their CPA title or PA title on any business card, letterhead, or any other document or device, with the exception of their CPA certificate or PA registration, on which their CPA or PA title appears. If a certified public accountant or public accountant who has elected inactive status or retired status wishes to reenter the active practice of public accountancy, he or she shall make application to the board for an annual permit to practice. The board, in its rules and regulations, shall specify the number of hours of continuing education the applicant shall obtain before he or she regains active status to ensure his or her competency to practice public accounting.

(c) Every application for renewal of an annual permit to practice by any person who holds a certificate as a certified public accountant or who is a registrant under Section 34-1-8 shall be accompanied or supported by any evidence the board prescribes of satisfaction of its continuing education requirements during the preceding year. Failure by an applicant for renewal of an annual permit to furnish the evidence shall constitute grounds for revocation, suspension, or refusal to renew the permit in a proceeding under Section 34-1-12, unless the board determines the failure to have been due to reasonable cause. The board may renew an annual permit to practice despite failure to furnish evidence of satisfaction of requirements of continuing education upon the condition that the applicant follows a particular program or schedule of continuing education. In issuing rules, regulations, and individual orders in respect of requirements of continuing education, the board may, among other things, use and rely upon guidelines and pronouncements of recognized educational and professional associations; may prescribe for content, duration, and organization of courses; shall take into account the accessibility by applicants to the continuing education required and any impediments to interstate practice of public accountancy which result from the difference in the requirements in other states; and may provide for relaxation or suspension of those requirements in regard to applicants who certify that they do not intend to engage in the practice of public accountancy, and for instances of individual hardships.

(d) In the event a certified public accountant or public accountant fails to apply for an annual permit to practice or to be placed on the board's inactive roll within: (1) One year Six months from the expiration date of the permit to practice last obtained or renewed pursuant to subsection (a); (2) one year six months from the expiration date of the last annual renewal of his or her certificate pursuant to subsection (b); or (3) one year six months from the date upon which the certificate holder or registrant was granted his or her certificate or registration, if no permit was ever issued to him or her under subsection (a) or his or her name was never placed on the board's inactive roll under subsection (b), it shall deprive him or her of the right to apply for a permit or inactive status, and shall constitute grounds for revocation or suspension of the holder's certificate, unless the board determines the failure to have been due to reasonable cause. In that case, the board may impose a reinstatement fee not to exceed one hundred dollars ($100), plus the total annual registration fees and late renewal penalties which the certified public accountant or public accountant would have paid under this chapter during the period when neither a permit nor inactive status was maintained. The board may also charge an inactive status penalty in an amount set by the board which is graduated for the time of the inactivity.

(e) The experience requirement shall be one year of experience in the practice of public accounting as defined by the board's rules and regulations.

§34-1-12.

(a) After notice and hearing as provided in Section 34-1-14, the board may suspend for a period not to exceed three years or revoke any certificate issued under Section 34-1-4, or any registration granted under Section 34-1-5 or 34-1-8, or any practice privilege granted pursuant to Section 34-1-7; may revoke, suspend, or refuse to renew any permit issued under Section 34-1-11; or may censure the holder of any permit or any practice privilege for any one or any combination of the following causes:

(1) Fraud or deceit in obtaining a certificate as a certified public accountant or in obtaining registration under this chapter or in obtaining a permit to practice public accounting under this chapter.

(2) Dishonesty, fraud, or gross negligence in the practice of public accounting.

(3) Any violation of Section 34-1-16.

(4) Any violation of a rule of professional conduct promulgated by the board under the authority granted by this chapter.

(5) Conviction of any crime, an element of which is dishonesty or fraud, under the laws of any state or of the United States.

(6) Conviction of a felony under the laws of any state or of the United States.

(7) Cancellation, revocation, suspension, or refusal to renew authority to practice as a certified public accountant or a public accountant by any other state for any cause other than failure to pay an annual registration fee in the other state.

(8) Suspension or revocation of the right to practice before any state or federal agency.

(9) Failure to be legally present in this state, or to become a citizen of the United States within six years by any person not a citizen of the United States when he or she received a certificate as a certified public accountant or was registered as a public accountant under this chapter.

(10) Failure to apply for an annual permit to practice or to be placed on the board's inactive roll within any of the following time periods:

a. One year Six months from the expiration date of the permit to practice last obtained or renewed pursuant to Section 34-1-11(a).

b. One year Six months from the expiration date of the last annual renewal of his or her certificate pursuant to Section 34-1-11(b).

c. One year Six months from the date upon which the certificate holder or registrant was granted his or her certificate or registration, if no permit was ever issued under Section 34-1-11(a) or his or her name was never placed on the board's inactive roll under Section 34-1-11(b), unless the failure is excused by the board pursuant to Section 34-1-11.

(11) Conduct discreditable to the public accounting profession.

(12) Failure of a certificate holder or registrant to furnish evidence of satisfaction of requirements of continuing education as required by the board pursuant to Section 34-1-11 or to meet any conditions in respect of continuing education which the board may have ordered with respect to the certificate holder under that section.

(13) Failure to comply with the provisions and requirements of the board's peer review program.

(14) Failure to comply with this chapter or rules promulgated by the board under this chapter or failure to comply with professional standards.

(15) Making any false or misleading statement or verification in support of an application for a certificate, registration, or permit filed by another.

(b) In addition to the disciplinary powers granted pursuant to subsection (a), the board may singly, or in combination with any other disciplinary action, levy and collect administrative fines for violations of this chapter or the rules and regulations of the board of not more than five thousand dollars ($5,000) for each violation."

Section 2

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

No articles found.
Action Date Chamber Action
February 8, 2018SAssigned Act No. 2018-106.
February 8, 2018SPassed Second House
February 8, 2018HMotion to Read a Third Time and Pass adopted Roll Call 266
February 13, 2018HSignature Requested
February 8, 2018HThird Reading Passed
February 13, 2018SEnrolled
February 1, 2018HRead for the second time and placed on the calendar
January 23, 2018HRead for the first time and referred to the House of Representatives committee on Boards, Agencies and Commissions
January 23, 2018SMotion to Read a Third Time and Pass adopted Roll Call 57
January 23, 2018SThird Reading Passed
January 16, 2018SRead for the second time and placed on the calendar
January 9, 2018SRead for the first time and referred to the Senate committee on Governmental Affairs
2018-02-08
Chamber: House
Result: Passed
2018-01-23
Chamber: Senate
Result: Passed