CHAPTER 139
FORMERLY
SENATE BILL NO. 16
AS AMENDED BY SENATE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 24 OF THE DELAWARE CODE RELATING TO THE BOARD OF ACCOUNTANCY.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section I . Amend Chapter 1, Title 24 of the Delaware Code by striking said Chapter in its entirety and substituting in lieu thereof the following:
"Chapter 1. BOARD OF ACCOUNTANCY
§ 101 Objectives and functions.
The primary objective of the Board of Accountancy, to which all other objectives and purposes are secondary, is to protect the general public (specifically those persons who are direct recipients of services regulated by this Chapter) from unsafe practices, including incompetent auditing, accounting, and tax services rendered by certificate and permit holders, and from occupational practices which tend to reduce competition or fix the price of services rendered. Secondary objectives of the Board include maintaining minimum standards of competency in accounting, auditing, and tax services rendered by certificate and permit holders and maintaining minimum standards in the delivery of such services to the public. In meeting its objectives, the Board shall develop standards assuring professional competence, shall monitor complaints brought against practitioners regulated by the Board, adjudicate such complaints at formal hearings, promulgate rules and regulations, and impose sanctions where necessary against practitioners.
§102. Definitions
The following definitions shall apply, unless the definition is inappropriate for the context:
( 1) 'Board' means the Delaware State Board of Accountancy.
(2) 'Certificate' means a certificate of 'certified public accountant' issued by the Board pursuant to this Chapter or the prior law of this State, or a reciprocal certificate of certified public accountant issued by this Board.
(3) 'Certified Public Accountant' means the holder of a certificate.
(4) 'Certified Public Accounting' or 'the Practice of Certified Public Accountancy' means public accounting that is being practiced by a certified public accountant.
(5) 'Division' means the State of Delaware Division of Professional Regulation.
(6) 'Firm' means a sole proprietorship, partnership, corporation or any other entity authorized under Delaware law or a similar statute of another state.
(7) 'Non-public entity' means an entity other than one whose securities trade in a public market either on a stock exchange (domestic or foreign) or in the over-the-counter market, including securities quoted only locally or regionally, or an entity that makes a filing with a regulatory agency in preparation for the sale of any of its securities in a public market.
(8) 'Permit' or 'Permit to Practice' means a permit issued by the Board to practice either public accountancy or certified public accountancy.
(9) 'Public Accountant' means the holder of a permit to practice public accountancy.
(10) 'Public Accounting' or 'Practice of public accountancy' means the performance, or offer to perform, for a client or a potential client, by a person or firm holding itself out to the public as a permit holder, one or more kinds of services involving the use of accounting or auditing skills, including the issuance of reports or financial statements, or of one or more kinds of management advisory, financial advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters.
(11) 'Regulation' means any rule or regulation, duly adopted by the Board.
(12) 'State' means any state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam; except that 'this State' means the State of Delaware.
§ 103. Board of Accountancy: appointments: qualifications: term; vacancies,
(a) There is created a State Board of Accountancy which shall administer and enforce this Chapter.
(b) The Board shall consist of 9 members who are residents of this State and are appointed by the Governor, as follows:
(1) four certified public accountants, three of whom must hold valid permits to practice certified public accountancy;
(2) two public accountants who hold valid permits to practice public accountancy; and
(3) two members from the public at large; and
(4) one practicing attorney, who is neither a certified public accountant nor a public accountant.
(c) To serve on the Board, the public members, including the attorney, shall not be, nor ever have been, a certified public accountant or public accountant, nor a member of the immediate family of a certified public accountant or public accountant; shall not be, nor ever have been, employed by a person or firm which provides certified public accounting or public accounting services; shall not have a material financial interest in the providing of goods and services to any person or firm which provides accounting services; nor have been engaged in an activity directly related to accounting services. The public members shall be accessible to inquiries, comments and suggestions from the general public.
(d) Except as provided in subsection (e) of this section, each member shall serve for a term of 3 years, and may succeed himself or herself for one additional term; provided, however, that where a member was initially appointed to fill a vacancy, such member may succeed himself or herself for only one additional full term. Any person appointed to fill a vacancy on the Board shall hold office for the remainder of the unexpired term of the former member. Each term of office shall expire on the date specified in the appointment; however, the Board member shall remain eligible to participate in Board proceedings unless and until replaced by the Governor.
(e) A person who has never served on the Board may be appointed to the Board for 2 consecutive terms; but no such person shall thereafter be eligible for 2 consecutive appointments. No person, who has been twice appointed to the Board, or who has served on the Board for 6 years within any 9-year period, shall again be appointed to the Board until an interim period of at least 3 years has expired since such person last served.
(f) Any act or vote by a person appointed in violation of this Section shall be invalid. An amendment or revision of this Chapter is not sufficient cause for any appointment or attempted appointment in violation of subsection (c) of this Section, unless such amendment or revision amends this Section to permit such an appointment.
(g) No member of the Board of Accountancy, while serving on the Board, shall be an officer (president, chairperson, president-elect, vice president, secretary or treasurer) of a professional accounting organization, including American Institute of Certified Public Accountants (AICPA), Delaware Society of Certified Public Accountants (DSCPA), National Society of Public Accountants (NSPA), Delaware Association of Public Accountants (DAPA), or any other professional accounting association.
(h) The provisions set forth for 'employees' in Chapter 58, Title 29 of the Delaware Code shall apply to members of the Board, and to all agents appointed or otherwise employed by the Board.
(i) Any member who is absent without adequate reason for 3 consecutive meetings, or fails to attend at least half of all regular business meetings during any calendar year, shall be guilty of neglect of duty.
(j) Each member of the Board shall be reimbursed for all expenses involved in each meeting, including travel; and, in addition, shall receive $50 for each meeting attended, but not more than $500 in any calendar year. After 10 meetings have been attended, the member shall not be compensated for any subsequent meetings attended in that year.
§104. Officers; meetings; conduct of business; quorum; absences.
(a) The Board shall hold a regularly scheduled business meeting at least once in each quarter of a calendar year, and at such other times as the president may deem necessary, or at the request of a majority of Board members.
(b) The Board shall elect annually from its members a president and a secretary. Each officer shall serve for I year, and shall not succeed himself or herself for more than 2 consecutive years.
(c) A majority of members of the Board shall constitute a quorum for the transaction of all business; and no disciplinary action shall be taken without the affirmative vote of at least 5 members.
(e) Minutes of all meetings shall be recorded, and copies shall be maintained by the Division. At any hearing in which evidence is presented, a record from which verbatim transcript can be prepared shall be made. The expense of preparing any transcript shall be incurred by the person requesting it.
§ 105. Powers and duties.
The Board of Accountancy shall have the authority to :
(1) Formulate rules and regulations, with appropriate notice to those affected, where such notice can reasonably be given. Each rule or regulation shall implement or clarify a specific section of this Chapter; all rules and regulations shall be promulgated in accordance with the procedures specified in the Administrative Procedures Act of this State.
(2) Designate the application form to be used by all applicants for certification and permits to practice, and to process all applications;
(3) Designate a written examination to be taken by persons applying for certification or permit, as follows:
(a) The Board shall adopt the Uniform Certified Public Accountant Examination as the national examination to be taken by all applicants for certification as certified public accountants; and use the advisory grading service of the American Institute of Certified Public Accountants (A1CPA), or its successor organization.
(b) The Board shall adopt the examination recognized by the National Society of Public Accountants (NSPA) as the national examination to be taken by applicants for permits as public accountants; and use the advisory grading service of the NSPA.
(c) The Division shall have the power to review, approve and execute all contracts for examination services;
(4) Provide notice and information to applicants regarding their
applications;
(5) Designate the requirements for the issuance of certificates and permits to practice consistent with the provisions of this Chapter;
(6) Issue certificates to all persons who meet the qualifications for certification;
(7) Issue permits to practice to individuals and firms who meet the qualifications of this Chapter;
(8) Require the completion of continuing education requirements for all certificate and permit holders;
(9) Evaluate certified records to determine whether an applicant for a certificate and/or permit to practice, who has been previously licensed, certified, or who has held a certificate and/or permit in another jurisdiction, has engaged in any act or offense that would be grounds for disciplinary action under this Chapter and whether there are disciplinary proceedings or unresolved complaints pending against such applicants for such acts or offenses.
(10) Refer all complaints from licensees and the public concerning accountants and the practice of public accounting or certified public accounting, or concerning practices of the Board or of the profession, to the Division for investigation pursuant to §8810, Chapter 88 of Title 29 of the Delaware Code; and assign a member of the Board to assist the Division in an advisory capacity with the investigation of the technical aspects of the complaint. Such member shall recuse himself or herself from the deliberations on the complaint;
(11) Conduct hearings and issue orders in accordance with procedures established pursuant to this Chapter, the Administrative Procedures Act (Chapter 101, Title 29 of the Delaware Code) and §8810, Chapter 88, Title 29 of the Delaware Code. Where such provisions conflict with the provisions of this Chapter, this Chapter shall govern. TheBoard shall determine whether or not a person or firm shall be subject to a disciplinary hearing, and if so, shall conduct such hearing in accordance with this Chapter, the Administrative Procedures Act (Chapter 101, Title 29 of the Delaware Code) and §8810, Chapter 88, Title 29 of the Delaware Code.
(12) Where it has been determined after a disciplinary hearing, that penalties or sanctions should be imposed, to designate and impose the appropriate sanction or penalty after time for appeal has lapsed;
(13) Bring proceedings in the courts for the enforcement of this Chapter;
(14) To become a member of the National Association of State Boards of Accountancy, or its successor organization, and to pay such dues which that association shall establish; to send delegates to its meetings; and to assist members attending that association's meetings;
(15) To require all applicants for permits to practice to obtain a passing grade on the Code of Ethics examination administered and graded by the American Institute of Certified Public Accountants (AICPA).
§106. Certificate or permit required,
(a) The use of the title or designation 'certified public accountant' or the abbreviation 'CPA' or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that a person is a Certified public accountant, shall be limited to a person who holds a valid certificate issued by the Board pursuant to this Chapter or issued under the laws of another jurisdiction; except that a person who holds a valid certificate, but is not engaged in the practice of certified public accountancy or public accountancy, may use the abbreviation 'CPA' provided it is clearly indicated that such person is not holding himself or herself out as practicing certified public accountancy.
(b) The use of the title or designation 'public accountant' or the abbreviation `PA' or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a public accountant shall be limited to a person who holds a valid permit to practice.
§107. Certificate requirements.
(a) A certificate shall be granted by the Board to any person who meets the following requirements:
(1) Is of good character. Good character for purposes of this Section means that an applicant has not been convicted of a felony of any type, nor been convicted of a misdemeanor involving mishandling or misuse of another's financial, accounting, or tax matters.
(2) Meets one of the following education requirements:
(a) Holds a Master's Degree, conferred by an accredited college or university, with a concentration in accounting, or what the Board determines to be substantially the equivalent of such concentration;
(b) Holds a Baccalaureate Degree, conferred by an accredited college or university, with a concentration in accounting, or what the Board determines to be substantially the equivalent of such concentration;
(c) Holds an Associate Degree, conferred by an accredited college or university, or a degree from an accredited 2-year college with a concentration in accounting, or what the Board determines to be substantially the equivalent of such concentration;
(3) Unless otherwise provided in §I13 of this Chapter, shall have successfully passed the Uniform Certified Public Accountant Examination, and/or such successor examinations as may be required to qualify for a certificate; and
(4) Shall have passed the AICPA self-study course and examination in professional ethics;
(b) A concentration in accounting is considered to be successful completion of 21 semester hours of accounting courses.
(c) A candidate who expects to meet the education requirement within )20 days following the examination shall be eligible to take the examination provided he or she also meets the requirements of paragraph (1) of subsection (a) of this Section. In the case of any candidate admitted to the examination on the expectation that he or she will complete the education requirement within 120 days, no certificate shall be issued, nor shall credit for the examination or any part of it be given, unless such education requirement is, in fact, completed within that time or within such time as the Board in its discretion may determine upon application.
(d) The Board may refuse or reject an applicant for a certificate if, after a hearing, the Board finds that an applicant has misstated or misrepresented a material fact in connection with his or her application; has violated any section of the Code of Professional Conduct for Accountants; or practiced public accountancy or certified public accountancy without being registered in accordance with this Chapter.
(e) In the event that the Board has questions about an applicant's qualifications or application materials, the Board may request an explanation or additional information.
§108. Requirements for permits to practice certified public accountancy.
(a) Each certificate holder, who has met the experience requirements of this Section and who intends to be or is engaged in the practice of certified public accountancy in this State, whether as a principal or employee of a firm, shall be required to obtain and maintain a valid permit to practice certified public accountancy. The Board shall grant or renew permits to persons who make application and demonstrate their qualifications in accordance with this Section. Permits shah be renewed biennially.
(b) The Board shall grant or deny any such application for a permit no later than 120 days after the application is filed in proper form. In any case where the applicant seeks the opportunity to show That issuance or renewal of a permit was mistakenly denied, or where the Board is not able to determine whether it should be granted or denied, the Board may issue to the applicant a provisional permit, which shall expire 90 days after its issuance, or when the Board determines whether or not to issue or renew the permit for which application was made, whichever shall first occur.
(c) An applicant for initial issuance of a permit under this Section shall show:
(1) That the applicant holds a valid certificate;
(2) That the applicant meets one of the following experience requirements:
a. Has at least the equivalent of one year's accounting experience as an employee of a firm engaged in the practice of certified public accountancy; or not less than one year's experience as an accountant in government, commerce, industry or other field of endeavor which, in the opinion of the Board, is substantially equivalent to one year's experience as an employee of a firm engaged in the practice of certified public accountancy; or two years' full-time experience as an owner, principal or employee of a firm engaged in the practice of public accountancy, when such experience has occurred and the individual has obtained the education requirement described in §I07(a)(2)a. of this Chapter; or
b. Has at least the equivalent of two year's accounting experience as an employee of a firm engaged in the practice of certified public accountancy; or not less than two years' experience as an accountant in government, commerce, industry or other field of endeavor, which in the opinion of the Board is substantially equivalent to two years' experience as an employee of a firm engaged in the practice of certified public accountancy; or four years' full-time experience as an owner, principal or employee of a firm engaged in the practice of public accountancy when such experience has occurred and the individual has obtained the education requirement described in §107(a)(2)b. of this Chapter; or
c. Has at least the equivalent of four years' accounting experience as an employee of a firm engaged in the practice of certified public accountancy; or not less than four years' experience as an accountant I II government, commerce, industry or other field of endeavor, which in the opinion of the Board is substantially equivalent to four years' experience as an employee of a firm engaged in the practice of certified public accountancy; or eight years' full-time experience as an owner, principal or employee of a firm engaged in the practice of public accountancy when such experience has occurred and the individual has obtained the education requirement described in §107(a)(2)c. of this Chapter;
d. for purposes of this subsection, experience shall not include experience completed more than ten (W) years prior to the date of an individual's application for a permit.
(3) If the applicant's certificate was issued more than four years prior to his or her application for issuance of an initial permit under this Section, then the applicant, in the two years immediately preceding such application, will have completed no less than the 80 hours of continuing professional education that would have been applicable under subsection (d) of this Section for renewal of such permit.
(d) An applicant for renewal of a permit under this Section shall show that he or she has completed no less than 80 hours of continuing professional education in accordance with the Board guidelines during the two-year renewal period that has elapsed since the last biennial renewal date. If an applicant's initial permit to practice was issued less than two years prior to the renewal date, the applicant must fulfill the following continuing professional education requirements:
(1) No continuing education requirement if initial permit was issued less than one year prior to the renewal date;
(2) A prorated continuing professional education requirement based on SO hours (but no less than 40 hours) if initial permit was issued one year or more, but less than two years, prior to the renewal date.
(e) The Board may also provide by regulation that fulfillment of continuing professional education requirements of other states will be accepted in lieu of the requirements of subsections (c)(3) and (d) of this Section, provided that such other states require at least 80 hours in a two-year period.
(f) Applicants for initial issuance or renewal of permits under this Section shall not have engaged in any of the acts or offenses that would be grounds for disciplinary action under this Chapter; and have no disciplinary proceedings or unresolved complaints pending against him or her in any jurisdiction where the applicant has previously held or currently holds a permit to practice. Each holder of, or applicant for, a permit under this Section shall notify the Board in writing, within 30 days after its occurrence, of any issuance, denial, revocation or suspension of a certificate or permit by another stare.
(g) Where the Board has found to its satisfaction that an application has been intentionally fraudulent, or that false information has been intentionally supplied, it shall report its findings to the Attorney General for further action,
(h) Where the application of a person has been refused or rejected and such applicant feels that the Board has acted without justification; has imposed higher or different standards for the applicant than for other applicants or permit holders; or has in some other manner contributed to or caused the failure of such application, the applicant may appeal to the Superior Court.
§109. Reciprocity.
(a) The Board shall issue a permit to a holder of a certificate or permit issued by another state upon a showing that the applicant:
(1) meets all current requirements in this State for issuance of a certificate or permit at the time the application is made; or
(2) at the time of the issuance of the applicant's certificate or permit in the other state, met all such requirements then applicable in this State; or
(3) has had five years' experience in the practice of certified public accountancy or its equivalent, with such experience having been obtained after passing the examination upon which his or her certificate was based and within the 10 years immediately preceding his or her application; or
(4) meets the requirements of §108(c)(2) of this Chapter, the requirements of §108(c)(3) of this Chapter, if applicable, and the requirements of §108( f) of this Chapter.
(b) The applicant shall contact the licensing authority, or comparable agency, in such other jurisdiction(s) in which the applicant currently or previously has been authorized to practice and shall request that the jurisdiction provide a certified statement as to whether or not there are, or have been, any disciplinary proceedings or unresolved complaints pending against the applicant, or whether the applicant has engaged in any of the acts or offenses that would be grounds for disciplinary action under this chapter. In the event that a disciplinary proceeding or unresolved complaint is pending, the applicant shall not be issued a permit until the proceeding or complaint has been resolved. Applicants for permits to practice in this State shall be deemed to have given consent to the release of such information and to waive all objections to the admissibility of such evidence,
§110. Requirements for permits to practice public accountancy.
(a) Each person, who intends to be or is engaged in the practice of public accountancy in this State, whether as a principal of a firm or an employee of a firm, shall be required to obtain and maintain a valid permit to practice public accountancy. The Board shall grant and/or renew permits to persons who make application and demonstrate their qualifications in accordance with this Section.
(b) Permits shall be issued and renewed for periods of two years. The Board shall grant or deny any application for issuance or renewal of a permit no later than 120 days after the application is filed in proper form. In any case, where the applicant seeks the opportunity to show that issuance or renewal of a permit was mistakenly denied, or where the Board is not able to determine whether a permit should be granted or denied, the Board may issue to the applicant a provisional permit, which shall expire 90 days after its issuance or when the Board determines whether or not to issue or renew the permit for which application was made, whichever shall first occur,
(c) An applicant for initial issuance of a permit under this Section shall show that he or she:
(1) meets the requirements of §107(a)(1) of this Chapter; and
(2) meets, as a minimum, the education requirement of §107(a)(2)c. of this Chapter; and
(3) has passed either all parts of the examination recognized by the National Society of Public Accountants, or both the Accounting and Reporting and Auditing portions of the Uniform Certified Public Accounting Examination; and
(4) has passed the AICPA self-study course and examination in professional ethics and has
(5) not engaged in any acts or offenses that would be grounds for disciplinary action under this Chapter; and, has no disciplinary proceedings or unresolved complaints pending against the applicant in any jurisdiction where the individual has been or currently holds a permit to practice. Each holder of, or applicant for, a permit under this Section shall notify the Board in writing, within 30 days idler its occurrence, of any issuance, denial, revocation or suspension of a permit by another state.
(d) An applicant for renewal of a permit under this Section shall show that he or she has completed no less than 80 hours of continuing professional education in accordance with Board guidelines during the two-year renewal period that has elapsed sincc the last biennial renewal date. Prorated continuing professional education requirements consisting of no less than 40 hours are to be met by an applicant whose initial permit was issued less than two years and at least one year prior to the renewal date. No continuing professional education is required of an applicant whose initial permit was issued less than one year prior to the renewal date. The Board may also provide by regulation that fulfillment of continuing professional education requirements of other states will be accepted in lieu of the foregoing requirements, provided that such other states require at least 80 hours in a two-year period.
§111. Requirements for permits to practice by firms.
(a) Each firm which intends to be or is engaged in the practice of certified public accountancy or the practice of public accountancy in this State shall be required to obtain and maintain a valid permit to practice. The Board shall grant or renew permits to firms that make application and demonstrate heir qualifications in accordance with this Section.
(b) Permits shall be renewed biennially. The Board shall grant or deny any application for issuance or renewal of a permit no later than 120 days after the application is filed in proper form. In any case where the applicant seeks the opportunity to show that issuance or renewal of a permit was mistakenly denied or where the Board is not able to determine whether it should be granted or denied, the Board may issue to the applicant a provisional permit, which shall expire 90 days after its issuance, or when the Board determines whether or not to issue or renew the permit for which the application was made, whichever shall first occur,
(c) An applicant for initial issuance or renewal of a permit to practice certified public accountancy under this Section shall be required to show that each principal, who performs services in this State, or who performs services for a client(s) located in this State, and each employee holding a certificate who performs services in this State, or who performs services for a client(s) located in this State, except for employees who have not as yet accumulated sufficient experience to qualify for a permit under 008 of this Chapter, holds a valid individual permit to practice certified public accountancy issued under §108 of this Chapter.
(d) An applicant for initial issuance or renewal of a permit to practice public accountancy under this Section shall be required to show that each principal, who performs services in this State, or who performs services for a client(s) located in this State, and each employee who performs services in this State, or who performs services for a client(s) located in this State, except for employees who have not as yet met the requirements to qualify for a permit under §110 of this Chapter, holds a valid individual permit to practice.
(e) For purposes of this Section, the employees of a firm with its principal office(s) outside of this State must obtain a permit for those employees who work M excess of 80 hours in this State, or who work for a client(s) located in this State. However, any firm which is engaged to practice certified public accountancy or public accountancy in this State, for even one hour, is required to obtain a permit. Every principal of a firm, who is responsible for the accounting work in this State, shall obtain an individual permit to practice.
(f) An applicant for initial issuance or renewal of a permit to practice under this Section shall be required to register each office of the firm within this State with the Board, and to show that each such office is under the- charge of a person holding a valid permit to practice issued under this Chapter.
(g) Each holder of, or applicant for, a permit under this Section shall notify the Board in writing, within 30 days after ifs occurrence, of any change in the identities of principals who work regularly within this State, of any change in the number or location of offices within this State, of any change in the identity of the persons supervising such offices, and of any issuance, denial, revocation or suspension of a permit, issued by any other State, to the firm or to any principal or employee regulated by this Board.
§112. Professional responsibilities.
While §111(a) of this Chapter requires firms to obtain permits to practice, and §102(6) of this Chapter defines 'firm' to include valid partnerships and corporations, this Chapter shall not he interpreted to alter professional responsibility standards. All firms and accountants practicing in firms shall continue to be bound by professional responsibility standards no less stringent than those stated in §608, Title 8 of the Delaware Code.
§113. Examination.
The Board may, by regulation, prescribe the terms and conditions (hr granting, credit to a candidate for a certificate, or an applicant for a permit to practice public accountancy, based on his or her satisfactory completion of a written examination in any one or more of the subjects of the Uniform Certified Public Accountant Examination, the examination recognized by the National Society of Public Accountants, and tiny written examination in any other subject or subjects given by the Board or by the licensing authority in any other jurisdiction.
§114. Waiver of examination.
(1) The Board may waive the examination of, and issue a certificate
to, any person possessing qualifications equivalent to those set forth in §107(a)(1) and (2) of this Chapter, who, at the time of application for said certificate:
(a) is engaged full-time in the practice of certified public accountancy in this State; and
(b) is the holder of a certificate under the laws of another jurisdiction, provided the requirements for such certificate in the jurisdiction which has granted it to the applicant are, in the opinion of the Board, comparable to those provided in this Chapter; or, is the holder of a currently valid certificate, license or degree of a foreign country constituting a recognized qualification for the practice of public accountancy in such country, which in the opinion of the Board, is comparable to that of a certified public accountant of this State.
§115. Prohibited acts; limitation of services.
(a) No person or firm shall perform compilation, review or audit services as defined by the American Institute of Certified Public Accountants (AICPA) except holders of a valid permit to practice,
(b) Audit services provided by holders of permits to practice public accountancy shall be limited to services for non-public entities.
§116. Complaints.
(a) The Board, or any aggrieved person, may file a complaint against any individual or firm holding a permit to practice or any certificate holder. All complaints shall be received and investigated by the Division in accordance with §8810, Chapter 88, Title 29 of the Delaware Code; and the Division shall be responsible for issuing a final written report at the conclusion of its investigation.
(b) When it is determined that an individual or firm is engaged in the practice of certified public accountancy or public accountancy, without having first obtained the appropriate permit, the Board shall apply to the Office of the Attorney General to issue a cease and desist order after formally warning the individual or firm in accordance with the provisions of this Chapter.
(c) Any complaints involving allegations of unprofessional conduct or incompetence shall be investigated by the Division of Professional Regulation.
§ 117. Grounds for discipline.
(a) An individual holding a certificate, and any individual or firm holding a permit to practice, shall be subject to those disciplinary actions set forth in §I18 of this Chapter, if after a hearing, the Board finds that the individual or firm:
(1) has employed or knowingly cooperated in fraud or material deception in order to acquire a certificate or permit to practice, or be otherwise authorized to practice accountancy; has impersonated another person holding a certificate or permit to practice; or allowed another person to use his or her certificate or permit to practice; or aided or abetted a person not holding a certificate or permit to practice, to represent himself or herself as holding a certificate or permit to practice;
(2) has engaged in an act of fraud or gross negligence in the practice of accounting, or engaged in dishonorable, unethical or unprofessional conduct, intended to or likely to deceive, defraud or harm the public;
(3) has been found guilty of, or has entered a plea of guilty or nolo contendere to, a felony or any crime which includes an element of dishonesty or fraud;
(4) has been subject to disciplinary sanction or censured; or has had his or her certificate or permit to practice revoked or suspended in any other state for any cause other than failure to pay an annual registration fee;
(5) has been subject to disciplinary sanction or censured, or has had his or her right to practice revoked before any state or federal agency;
(6) has violated a lawful provision of this Chapter, or any lawful regulation or rule of professional conduct established thereunder.
§118. Disciplinary sanctions.
(a) The Board may impose any of the following sanctions, or take any of the following actions, singly or in combination, when it finds that one of the conditions or violations set forth in §117 of this Chapter applies to a certificate or permit holder:
(1) issue a letter of reprimand;
(2) censure the practitioner or firm;
(3) suspend the certificate or permit to practice of any certificate or permit holder or firm;
(4) place the certificate or permit holder on probationary status and require him or her to:
a. report regularly to the Board upon the matters which are the basis of the probation;
b. limit all practice and professional activities to those areas prescribed by the Board; and/or
c. continue or renew his or her professional education until the required degree of skill has been attained in the areas which are the basis of the probation.
(5) revoke the certificate or permit to practice of an individual certificate holder or the permit to practice of an individual or firm.
(b) The Board may refuse or reject an applicant for a certificate if, after a hearing, the Board finds that an applicant has misstated or misrepresented a material fact in connection with his or her application; has violated any section of the Code of Professional Conduct for Accountants; or practiced public accountancy or certified public accountancy without being registered in accordance with this Chapter.
(c) The Board may withdraw or reduce conditions of probation when it finds that the deficiencies which required such actions have been remedied.
(d) Upon an application (or petition) in writing, and after notice and a hearing, the Board may issue a new certificate or a permit to a person or firm whose certificate or permit has been revoked or suspended, or modify the terms of any suspension.
§ 119. Board hearings. procedure.
(a) If a complaint is filed with the Board pursuant to §8810, Chapter 88, Title 29 of the Delaware Code, alleging violation of §117 of this Chapter, the Board shall set a time and place to conduct a hearing on the complaint. Notice of the hearing shall be given and the hearing conducted in accordance with this Chapter and §8810, Title 29 of the Delaware Code, and the Administrative Procedures Act, Chapter 101, Title 29 of the Delaware Code.
(b) An hearings shall be informal without use of rules of evidence. If the Board finds, by a majority vote of all members, that the complaint has merit, the Board shall take such action permitted under this Chapter as it deems necessary. The Board's decision shall be in writing and shall include its reason for such decision. A copy of the decision shall be mailed by registered mail immediately to the complainant and to the individual or firm.
(c) Any person or firm affected by any action of the Board may appeal the Board's decision to the Superior Court within 30 days of receipt of the Board's decision or of the postmarked date of the copy of the decision mailed to such person or firm. Upon such appeal, the Court shall hear the evidence on the record. Stays shall be granted in accordance with § I0144, Chapter 101, Title 29 of the Delaware Code.
§ 120. Ownership of working papers
(a) All statements, records, schedules, working papers, and memoranda made by a permit holder or a partner, shareholder, officer, director, or employee of a permit holder, incident to, or in the course of, rendering services to a client, except the reports submitted by the permit holder to the client, and except for records that are part of the client's records, shall be and remain the property of the permit holder in the absence of an express agreement between the permit holder and the client to the contrary. No such statement record, schedule, working paper, or memorandum shall he sold, transferred, or bequeathed, without the consent of the client or the client's personal representative or assignee, to anyone other than one or more surviving partners or stockholders or new partners or stockholders of the permit holder, or any combined or merged firm or successor in interest to the permit holder. Nothing in this Section should be construed as prohibiting any temporary transfer of working papers or other material necessary in the course of carrying out quality reviews.
(b) A permit holder shall furnish to his or her client or former client, upon request and reasonable notice:
(1) a copy of the permit holder's working papers, to the extent that such working papers include records that would ordinarily constitute part of the client's records and are not otherwise available to the client; or
(2) any accounting or other records belonging to, or obtained from or on behalf of, the client that the permit holder removed from the client's premises or received for the client's account; the permit holder may make and retain copies of such documents of the client when they form the basis for work done by the permit holder.
(c) Nothing herein shall require a permit holder to keep any working paper beyond the period prescribed in any other applicable statute.
§ 121. Violations and penalties: jurisdiction.
(a) Any person who represents himself or herself to the public as the recipient of a certificate or permit, or holds himself or herself out as being authorized to practice certified public accountancy or public accountancy, or otherwise wrongfully uses such title or any similar title to practice certified public accountancy or public accountancy, Or continues to practice certified public accountancy or public accountancy after revocation, suspension or expiration of a certificate or permit, or otherwise misleads the public or violates this Chapter or associated regulations, shall be fined not less than $500 nor more than $1,000. Restitution may also be imposed.
(b) The penalties for firms, which improperly hold themselves out as being authorized to practice certified public accountancy or public accountancy, or who otherwise mislead the public, violate this Chapter or associated regulations, shall be fined not less than $2,000 nor more than $5,000. Restitution may be imposed. Where a partnership or corporation engages in the practice of certified public accountancy or public accountancy in this State in violation of this Chapter, every partner of such partnership and every officer, director, shareholder, or principal of such corporation, shall be deemed to be in violation of this Chapter.
(c) The Superior Court of this State shall have exclusive jurisdiction of any violation of this Chapter.
§122. Status of existing certificates preserved.
(a) Any person legally authorized to practice as a certified public accountant in this State as of July 12, 1985, shall thereafter possess the same rights and privileges as persons to whom certificates of certified public accountant shall be issued pursuant to this Chapter; subject, however, to the power of the Board, as provided in this Chapter, to suspend or revoke the certificate of such person, or censure or reprimand such person Ior any of the causes set forth in this Chapter.
(b) Any person, who has successfully passed the Uniform Certified Public Accountant Examination under this Chapter, and regulations of the Board in effect on or before June 30, 1985, who has not been issued a certificate because of not having met the experience requirements of such prior law and regulations, shall be granted such certificate upon submitting an appropriate application to the Board and the Board having approved such application as meeting the applicable requirements.
(c) Any person who holds a valid certificate issued under this Chapter and regulations of the Board in effect on or before June 30, 1985. shall he deemed to have sufficient education and experience to satisfy the experience requirement of §108(c)(2) of this Chapter.
§123. Status of existing, public accountants preserved.
Any person legally authorized to practice as a public accountant in this State as of June 30, 1985, or who had a permit to practice public accountancy on that date, shall thereafter possess the same rights and privileges as persons to whom permits to practice public accountancy shall he issued pursuant to § 110 of this Chapter; subject, however, to the power of the Board, as provided in this Chapter, to suspend or revoke the permit of such person. or censure or reprimand such person for any of the causes set forth in this Chapter."
Section 2. Existing Terms of Office Preserved.
All members of the Board of Accountancy will continue to serve as members until the expiration of their current tents of office.
Section 3. Rules and Regulations.
Rules and Regulations in effect on the date of enactment of this Act shall remain valid to the extent they are not inconsistent with this Act.
Section 4. Severability.
If any provision of this Act or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this Act, which can he given effect without the invalid provisions or applications, and to this end the provisions of this Act are severable.
Approved July 3, 1997