CHAPTER 418
FORMERLY
SENATE SUBSTITUTE NO. 1 FOR
SENATE BILL NO. 131
AS AMENDED BY
SENATE AMENDMENT NOS. 2 & 4
AN ACT TO AMEND TITLE 24 OF THE DELAWARE CODE RELATING TO CERTIFIED PUBLIC ACCOUNTANTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. AMEND §102 of Title 24 of the Delaware Code by re-numbering paragraphs (9) through (13) as (10) through (14) and adding a new paragraph (9) as follows:
“(9) ‘Principal place of business’ means the office location designated by the practice privilege holder for purposes of substantial equivalency and reciprocity.”
Section 2. Amend §103 of Title 24 of the Delaware Code as follows:
(a) “Delete subparagraph b(4) in its entirety and replace it with:
“(4) One public member who is employed full-time in the field of post secondary accounting education, except that this provision shall not become effective until the attorney filling the position as of August 1, 2008, vacates the position or until his or her term ends, whichever first occurs."
(b) In subparagraph (c), delete the words, "the public members, including the attorney," after the word “Board," and before the word "shall" and replace with, "the public members referred to in section 103 (b)(3)".
Section 3. Amend §105(a)(10) of Title 24 of the Delaware Code to insert after the word "profession," and before the words, "to the Division" the following:
"or concerning the unlicensed practice of public accountancy or certified public accountancy,"
Section 4. Amend §107(a) of Title 24 of the Delaware Code by adding the words “, or to qualify for the practice privilege under Section 108 of this title” after the words “maintain a valid certificate and permit to practice certified public accountancy”.
Section 5. Amend § 107(a)(2) of Title 24 of the Delaware Code by deleting it in its entirety and replacing it with the following:
“(2) Has completed at least 150 semester hours of college education including a baccalaureate or higher degree conferred by an accredited college or university acceptable to the Board, the total educational program to include an accounting concentration or equivalent as determined by Board rule to be appropriate.”
Section 6. Amend §107(a)(3) of Title 24 of the Delaware Code by adding the following after the word “certificate”:
“, provided that he or she may not sit for said exams until he or she has successfully completed at least 120 semester hours of college education including a baccalaureate or higher degree conferred by an accredited college or university acceptable to the Board, the total educational program to include an accounting concentration or equivalent as determined by Board rule to be appropriate.”
Section 7. Amend §107(a)(5)a. of Title 24 of the Delaware Code effective August 1, 2008 by deleting the words “either: 1.” and by deleting the words “; or 2. The education requirement described in paragraph (a)(2)b. of this section;”.
Section 8. Amend §107(a)(5) of Title 24 of the Delaware Code effective August 1, 2012 by deleting it in its entirety and replacing it with the following:
“(5) Has had one year of experience. This experience shall include providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills all of which was verified by a certified public accountant, meeting requirements prescribed by the Board by rule. This experience would be acceptable if it was gained through employment in government, industry, academia or public practice.”
Section 9. Amend §107(b) of Title 24 of the Delaware Code by deleting that subsection in its entirety and renumbering current subsections (c) through (j) as subsections (b) through (i).
Section 10. Amend §107(a)(6) of Title 24 of the Delaware Code by deleting the word “(e)” and replacing it with the word “(d)” and by deleting the word “(f)” and replacing it with the word “(e)”.
Section 11. Amend §107(c) of Title 24 of the Delaware Code by deleting the word “(g)” and replacing it with the word “(f)”.
Section 12. Amend § 107(f) by deleting the word “(e)” and replacing it with the word “(d)”.
Section 13. Amend §108 of Title 24 of the Delaware Code by deleting that Section in its entirety and replacing it with the following:
Ҥ 108. Substantial Equivalency.
(a)(1) An individual whose principal place of business is not in this state and who holds a valid license as a Certified Public Accountant from any state which the NASBA National Qualification Appraisal Service has verified to be in substantial equivalence with the CPA licensure requirements of the AICPA/NASBA Uniform Accountancy Act shall be presumed to have qualifications substantially equivalent to this state’s requirements and shall have all the privileges of certificate and permit holders of this state without the need to obtain a certificate or permit under §107 of this title. Notwithstanding any other provision of law, an individual who offers or renders professional services, whether in person, by mail, telephone or electronic means, under this section shall be granted practice privileges in this state and no notice or other submission shall be provided by any such individual. Such an individual shall be subject to the requirements in §108(a)(3).”
(2) An individual whose principal place of business is not in this state and who holds a valid license as a Certified Public Accountant from any state which the NASBA National Qualification Appraisal Service has not verified to be in substantial equivalence with the CPA licensure requirements of the AICPA/NASBA Uniform Accountancy Act shall be presumed to have qualifications substantially equivalent to this state’s requirements and shall have all the privileges of certificate and permit holders of this state without the need to obtain a certificate or permit under §107 of this title if such individual obtains from the NASBA National Qualification Appraisal Service verification that such individual’s CPA qualifications are substantially equivalent to the CPA licensure requirements of the AICPA/NASBA Uniform Accountancy Act. Any individual who passed the Uniform CPA Examination and holds a valid license issued by any other state prior to January 1, 2012 may be exempt from the education requirement in §107(a)(2) for purposes of this §108(a)(2). Notwithstanding any other provision of law, an individual who offers or renders professional services, whether in person, by mail, telephone or electronic means, under this section shall be granted practice privileges in this state and no notice or other submission shall be provided by any such individual. Such an individual shall be subject to the requirements in §108(a)(3).
(3) An individual licensee of another state exercising the privilege afforded under this section and the firm which employs that licensee hereby simultaneously consent, as a condition of the grant of this privilege:
a. to the personal and subject matter jurisdiction and disciplinary authority of the Board;
b. to comply with this Chapter and the Board’s rules;
c. that in the event the license from the state of the individual’s principal place of business is no longer valid, the individual will cease offering or rendering professional services in this state individually and on behalf of a firm; and
d. to the appointment of the State Board which issued their license as their agent upon whom process may be served in any action or proceeding by this Board against the licensee.
(b) A permit holder of this State offering or rendering services or using their CPA title in another state shall be subject to disciplinary action in this State for an act committed in another state for which the permit holder would be subject to discipline for an act committed in the other state. The Board shall be required to investigate any complaint made by the board of accountancy of another state.
(c) Practice within this State by individuals who qualify for the practice privilege under this section shall not obligate a firm that does not maintain an office in this State to obtain a firm permit under §111 of this title.”
Section 14. Amend §109(a)(4) of Title 24 of the Delaware Code by deleting the word “(g)” and replacing with the word “(f)”.
Section 15. Amend §110(c) of Title 24 of the Delaware Code by deleting subsection (2) and replacing with the following:
"(2) Holds, at a minimum, 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;"
Section 16. Amend §111 of Title 24 of the Delaware Code as follows:
In subparagraph (a), add the words “which maintains an office in this State and” after the words “Each firm”.
(a) In subparagraph (c), add the words “or qualifies for the practice privilege under §108 of this title” after the words “issued under §107 of this title”
(b) In subparagraph (e), add the words “public accounting” after the words “the employees of a” and after the words “Every principal of a”
(c) In subparagraph (e), add the words “under §110 of this Title” after the words “individual permit to practice”
(d) In subparagraph (f), add the words “or qualifies for the practice privilege under §108 of this title” after the words “issued under this chapter”
(e) Add the following as a new subparagraph (h):
“(h) A firm that does not maintain an office in this State may engage in the practice of certified public accountancy in this State through an individual practicing pursuant to the practice privilege afforded by §108 of this title without obtaining a permit under this section or otherwise notifying the board.”
Section 17. Amend §116(a) of Title 24 of the Delaware Code by adding the following sentence at the end of §116(a):
“The Division may refer a complaint against an individual practicing under §108 to the state of licensure for handling.”
Section 18. Amend §117(1), Title 24 of the Delaware Code to insert, "or renew" between the words, "to acquire" and "a certificate or permit."
Section 19. Amend §118(a), Title 24 of the Delaware Code by striking §118(a) in its entirety and replacing it as follows:
“(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 1 of the conditions or violations set forth in §117 of this title applies to a certificate or permit holder or to an individual or firm with practice privileges under §108 of this title:
(1) Issue a letter of reprimand;
(2) Censure the certificate or permit holder or individual or firm with practice privileges under section §108;
(3) Suspend the certificate or permit to practice or the practice privilege of the individual or firm;
(4) Place the certificate or permit holder or the practice privilege 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 or practice privilege of an individual or firm;
(6) Impose a fine of up to $5,000 for each offense, at the discretion of the Board; and/or
(7) Require the certificate or permit holder or practice privilege holder or firm to reimburse the Division for the cost of the investigation.”
Section 20. Amend §118(d) of Title 24 of the Delaware Code as follows:
(a) Add the words, “or a practice privilege” after the words, “new certificate or a permit” and before the words “to a person”.
(b) Further amend subsection (d) by adding the words “or practice privilege” after the words “whose certificate or permit” and before the words “has been revoked”.
Section 21. Amend §121 of Title 24 of the Delaware Code by striking §121 in its entirety and replacing it as follows:
Ҥ 121. Violations; penalties.
(a) Where the Board has determined, upon notice and hearing pursuant to Chapter 101 of Title 29, that a person is engaged in the practice of certified public accountancy or public accountancy, or is representing himself or herself to the public as the recipient of a certificate or permit, or is holding himself or herself out as being authorized to practice certified public accountancy or public accountancy, without having lawfully obtained a certificate or permit, or without having a practice privilege under §108 of this title, 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 the revocation or suspension of a practice privilege in this state or after the revocation, suspension or expiration of a certificate or permit from this state or another state, the Board may issue a cease and desist order. In addition to the power to issue a cease and desist order, the Board may seek an injunctive order prohibiting such unlawful practice and/or seek the imposition of other civil penalties defined by this Chapter.
(b) Where the Board has determined, upon notice and hearing pursuant to Chapter 101 of Title 29, that a firm is improperly holding itself out as being authorized to practice certified public accountancy or public accountancy, the Board may issue a cease and desist order. In addition to the power to issue a cease and desist order, the Board may seek an injunctive order prohibiting such unlawful practice and/or seek the imposition of other civil penalties defined by this Chapter.
(c) Upon notice and hearing pursuant to Chapter 101 of Title 29, the Board may fine any person who violates such cease and desist order not less than $500 or more than $1,000, and any firm that violates such cease and desist order not less than $2,000 or more than $5,000. Each day a violation continues may be deemed a separate offense in the Board’s discretion.
(d) Any person or entity who violates any provisions of this Chapter or any rules or regulations promulgated hereunder, shall be liable for a civil penalty as set forth in §118(a)(6). Where a partnership or corporation engages in the practice of certified public accountancy or public accountancy in violation of this chapter, or any rules or regulations promulgated hereunder, every partner of such partnership and every officer, director, shareholder or principal of such corporation, shall be deemed to have committed the violation in question. Nothing in this section shall be construed to prevent prosecution under, or be inconsistent with, Chapter 5 of title 11.”
Section 22. Sections 5, 6, 8, and 15 shall take effect on August 1, 2012. All of the remaining Sections of this Act shall take effect August 1, 2008.
Section 23. Amend Title 24, Chapter 1, by adding a new §127 to read as follows:
Ҥ127. Permitted titles and safe harbor language.
(a) Notwithstanding any provision to the contrary contained herein, an individual who is not a licensee of the Board shall not be prohibited the use of the following titles: the unadorned word Accountant; Enrolled Agent or initials E.A.; Accredited business Advisor or the initials A.B.A.; Accredited Tax Preparer or the initials A.T.P.; Accredited Tax Advisor or the initials A.T.A.
(b) Notwithstanding any provision to the contrary contained herein, an individual who is not a licensee of the Board shall not be prohibited the use of the following language in connection with financial statements:
“I (we) have prepared the accompanying (financial statements) of (name of entity) as of (time period) for the (period) then ended. This presentation is limited to preparing in the form of financial statements information that is the representation of management (owners).
I (we) have not audited or reviewed the accompanying financial statements and accordingly do not express an opinion or any other form of assurance on them.”