SPONSOR: |
Sen. Poore & Rep. Brady |
|
|
DELAWARE STATE SENATE 148th GENERAL ASSEMBLY |
SENATE BILL NO. 218 |
AN ACT TO AMEND TITLE 24 OF THE DELAWARE CODE RELATING TO THE BOARD OF ACCOUNTANCY. |
Section 1. Amend Chapter 1, Title 24 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 102. Definitions.
The following definitions shall apply, unless the definition is inappropriate for the context:
“AICPA” means the American
Institute of Certified Public Accountants.
“Attest” means 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 examination of prospective financial information to
be performed in accordance with the Statements on Standards for Attestation
Engagements (SSAE);
d. any engagement to be performed in accordance with
the standards of the PCAOB; and
e. any examination, review, or agreed upon procedures
engagement to be performed in accordance with the SSAE, other than an
examination described in subsection (c).
“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
corresponding certificate of certified public accountancy issued after
examination by this Board under the law of any other state.
“Certified public
accountant” means the holder of a certificate and permit to practice certified
public accountancy.
“Certified public accounting” or “the practice of
certified public accountancy” means public accounting that is being
practiced by a certified public accountant 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 CPA permit holder, of 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.
“Client” means a person or entity that agrees with a
permit holder or permit holder’s employer to receive any professional service.
“Compilation” means providing a service 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.
“Licensee” means an individual or firm licensed under
this title or under corresponding law in another jurisdiction.
“NASBA” means the National Association of State Boards of Accountancy.
“PCAOB” means the Public Company Accounting Oversight
Board.
“Peer Review” means a study, appraisal, or review of
one or more aspects of the professional work of an individual or firm permit
holder that issues attest and/or compilation reports, by a person or persons
who hold Delaware permits or are duly licensed in another jurisdiction and who
are not affiliated with the individual or firm permit holder being reviewed.
“Principal place of business” means the office location
designated by the practice privilege holder for purposes of substantial
equivalency and reciprocity licensee.
“Report” when used with reference to any attest or
compilation service, means 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 financial 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 issuer
of 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. The term
“report” includes any form of language which 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 and/or special competence on the part of the person or
firm issuing such language; and it includes any other form of language that is
conventionally understood to imply such assurance and/or such special knowledge
or competence.
“State” means any state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana Islands, and Guam; except that “this State” means the State of Delaware.
“Substantial Equivalency” is a determination by the
Board of Accountancy or its designee that the education, examination and
experience requirements contained in the statutes and administrative rules of
another jurisdiction are comparable to, or exceed the education, examination
and experience requirements contained in the Uniform Accountancy Act or that an
individual CPA’s education, examination and experience qualifications are
comparable to or exceed the education, examination and experience requirements
contained in the Uniform Accountancy Act. In ascertaining substantial
equivalency as used in this act the Board shall take into account the
qualifications without regard to the sequence in which experience, education or
examination requirements were attained.
§ 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 Five
certified public accountants, 3 all of whom must hold valid
active permits to practice certified
public accountancy;
(2) Two One public
accountants who holds a valid permits to practice public
accountancy;
(3) Two members from the public at large; and
(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 that attorney’s term ends, whichever first occurs.
(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 1 additional term; provided, however,
that where a member was initially appointed to fill a vacancy, such member may
succeed himself or herself for only 1 additional full terms. 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.
(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. compensated
at an appropriate and reasonable level as determined by the Division and may be
reimbursed for meeting-related travel expenses at the State’s approved rate.
§ 105. Powers and duties.
(a) 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 All rules and regulations shall be
promulgated in accordance with the procedures specified in the Administrative
Procedures Act, Chapter 10, Title 29 od the Delaware Code;
(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 an examination to
be taken by persons applying for certification or a 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 licensure as certified public
accountants and use the advisory grading service of the American Institute of
Certified Public Accountants (AICPA), or its successor organization.
(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;
Issue permits to practice to individuals and firms who meet the qualifications of this chapter;
Require the
completion of continuing education requirements for all certificate and
permit holders licensees;
Evaluate
certified records to determine whether an applicant for a certificate and/or
permit to practice, who has been previously licensed or 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;
§ 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 and an active permit to
practice 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, that
it is clearly indicated that such person is not holding himself or herself out
as practicing certified public accountancy. Holders of certificates
only, who have never held a Delaware permit to practice, may not use 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. Up to and
including June 30, 2017, holders of certificates only who have held a Delaware
permit to practice which has since lapsed may use 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; provided that it is
clearly indicated that such person is not holding himself or herself out as a
practicing certified public accountant. Upon proper notification to the Board,
holders of CPA permits to practice who no longer provide any type of service or
advice involving the use of accounting, attest, compilation, management
advisory, financial advisory, tax or consulting skills and who no longer meet
the continuing education requirement under § 108 of this title must place the word “inactive”
adjacent to their CPA title.
(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 public accountancy.
§ 107 Certificate
and permit requirements for certified public accountancy. Requirements
and Qualifications for a Permit to Practice as a Certified Public Accountant
(a)
Each person who intends
to be or is engaged in the practice of certified public accountancy and
whose principal place of business is in this State, whether as a principal
or employee of a firm, shall be required to obtain and maintain a valid certificate
and permit to practice certified public accountancy., or to
qualify for the practice privilege under § 108 of this title. The Board shall
grant or renew permits to persons who make application and demonstrate their
qualifications in accordance with this section. A certificate and permit to
practice certified public accountancy shall be granted by the Board to any
person who meets the following requirements: The permit to practice as a
certified public accountant shall be granted to persons who meet the education,
experience, lack of disqualifying conviction and examination requirements of
the following subsections of this Section and rules adopted thereunder and who
make application therefore pursuant to § 108 of this title.
(1)
(b) Is of good character. For purposes of the section,
"good character" means that anThe applicant has not been convicted of a crime that is
substantially related to the practice of accountancy; however, after a hearing
or review of documentation demonstrating that the applicant meets the specified
criteria for a waiver, the Board, by an affirmative vote of a majority of the
quorum, may waive this paragraph (a)(1) (b) of this section, if
it finds all of the following:
a.(1) For waiver of a felony conviction, more than 5 years have
elapsed since the date of the conviction. At the time of the application the
applicant may not be incarcerated, on work release, on probation, on parole or
serving any part of a suspended sentence and must be in substantial compliance
with all court orders pertaining to fines, restitution and community service.
b. (2) For waiver of a misdemeanor conviction or violation, at
the time of the application the applicant may not be incarcerated, on work
release, on probation, on parole or serving any part of a suspended sentence
and must be in substantial compliance with all court orders pertaining to
fines, restitution and community service.
c. (3) The applicant is capable of practicing accountancy in a
competent and professional manner.
d.(4) The
granting of the waiver will not endanger the public health, safety or welfare;
(2)
(c) Has The applicant 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;
(3)
(d) Unless otherwise provided in § 113 of this title, The applicant has successfully passed
the Uniform Certified Public Accountant Examination and/or such successor
examinations as may be required to qualify for a certificate permit
to practice, provided that the applicant may not sit for said exams until
that applicant 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;
(4) (e) Has
The applicant has successfully passed the AICPA self-study course and
examination in professional ethics; and
(5)(f) Has The applicant has had 1 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
supervised by a United States 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.
(6)
If an
applicant's certificate was issued more than 4 years prior to the application
for issuance of an initial permit under this section, then the applicant, in
the 2 years immediately preceding such application must have completed no less
than 80 hours of continuing professional education that would have been
applicable under subsection (d) or (e) of this section for renewal of such
permit.
(b) The Board shall grant or deny any such application for
a certificate and permit no later than 120 days after the application is filed
in proper form. The Board may refuse or reject an applicant if the Board finds
that the applicant has failed to meet the requirements in subsection (a) of
this section; has misstated or misrepresented a material fact in connection
with the applicant's application; has violated any section of the Code of
Professional Conduct for Accountants; has practiced public accountancy or
certified public accountancy without being registered in accordance with this
chapter; or comes within the provisions of subsection (f) of this section.
(c) 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.
(d)
A certificate
and permit to practice will be issued to applicants who satisfy the
requirements of subsection (a) of this section. Permits shall be renewed
biennially. An applicant for renewal of a permit under this section shall show
that the applicant has completed no less than 80 hours of continuing
professional education in accordance with the Board guidelines during the
2-year renewal period that has elapsed since the last biennial renewal date. If
an applicant's initial permit to practice was issued less than 2 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 1 year prior to the renewal date; or
(2) A prorated continuing professional education
requirement based on 80 hours (but no less than 40 hours) if initial permit was
issued 1 year or more, but less than 2 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 subsection (d) of this section; provided, that such other
states require at least 80 hours in a 2-year period.
(f)
An applicant
for initial issuance of a certificate and permit 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 the applicant in any
jurisdiction where the applicant has previously held or currently holds a
permit to practice. Each holder of or applicant for a certificate and 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 state or jurisdiction.
(g)Where the Board has found to
its satisfaction that an applicant has been intentionally fraudulent or
intentionally supplied false information, 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.
(i)
Persons who
have held valid certificates since June 30, 1985, which were previously issued
under former § 107 of this title, but who have never obtained a permit to
practice certified public accountancy, are deemed to hold valid certificates
and may petition the Board for a permit to practice pursuant to this section.
§ 108.
Issuance and Renewal of CPA Permits to Practice and Maintenance of Competency;
Reciprocity.
(a) The Board shall grant or
renew permits to practice to persons who make application and demonstrate that:
(1)
their qualifications, including where applicable the qualifications prescribed
by § 107, are in accordance with the following subsections of this section, or
(2)
they are eligible under the substantial equivalency standard set out in §
109(a)(2) of this title.
(b)
Permits to practice shall be initially issued, and renewed, for periods of not
more than two years but in any event shall expire on June 30 of the
odd-numbered year following issuance or renewal. Applications for such permits
to practice shall be made in such form, and in the case of applications for
renewal, between such dates, as the Board shall by rule specify, and the Board
shall grant or deny any such application no later than 120 days after the
application is filed in proper form.
(c)(1) Reciprocal
permits to practice shall be issued to applicants who have passed the uniform
CPA examination and hold a valid CPA certificate, license or permit to practice
in a substantially equivalent state or who individually are determined to be
substantially equivalent.
(2)
With regard to applicants that do not qualify for reciprocity under the
substantial equivalency standard set out in § 109 of this title, the Board
shall issue a permit to practice to a holder of a certificate, license or
permit issued by another state upon a showing that:
a.
The applicant passed the uniform CPA examination;
b.
The applicant had four years of experience of the type described in § 107(f) or
meets comparable requirements prescribed by the Board by rule, after passing
the examination upon which the applicant’s certificate was based and within the
ten years immediately preceding the application; and
c.
If the applicant’s certificate, license or permit was issued more than four
years prior to the application for issuance of an initial certificate under
this Section, that the applicant has fulfilled the requirements of continuing
professional education that would have been applicable under subsection (d) of
this Section.
(d) Permits to
practice shall be renewed biennially. An applicant for renewal of a permit
under this Section shall show that the applicant has completed no less than 80
hours of continuing professional education as determined by Board rule 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 educational requirements:
(1)
No continuing education requirement if initial permit was issued less than one
year prior to the renewal date; or
(2)
A prorated continuing professional education requirement as determined by Board
rule if initial permit was issued one year or more, but less than two years,
prior to the renewal date.
(e) For renewal
of a permit to practice under this Section, each licensee shall participate in
a program of learning designed to maintain professional competency. Such
program of learning must comply with Rules adopted by the Board. The Board may
by rule create an exception to this requirement for permit holders who do not
perform or offer to perform one or more kinds of services involving the use of
accounting or auditing skills, including issuance of reports on 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, and who make application for inactive status to the
Board. Licensees granted such an exception by the Board must place the word
“inactive” adjacent to their CPA title on any business card, letterhead or
other document or device with the exception of their CPA permit to practice, on
which their CPA title appears. Holders of an inactive permit to practice certified
public accountancy may apply to have their permit to practice reinstated
pursuant to Board rule.
(f) Applicants
for initial issuance or renewal of permits to practice under this Section shall
in their applications list all states in which they have applied for or hold
certificates, licenses or permits and list any past denial, revocation or
suspension of a certificate, license or permit, and each holder of or applicant
for a permit to practice 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, license or permit by another state.
(g) Holders of
expired permits to practice as of July 1, 2015 may apply to have their permit
to practice reinstated upon a showing that the applicant has completed no less
than 80 hours of continuing professional education as determined by Board rule
during the two-year renewal period ending June 30, 2017. Any holder of an
expired permit to practice who fails to reinstate their permit by June 30, 2017
shall be required to meet all of the requirements for the initial issuance of a
permit to practice pursuant to § 108 herein.
§ 108 109
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 § 107 108 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 paragraph (a)(3) of this section.
(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 § 107 108 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) 107(c) of this title for
purposes of this paragraph (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 paragraph (a)(3) of this section.
§
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;
(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;
(3) Has had 5 years' experience in
the practice of certified public accountancy or its equivalent, with such
experience having been obtained after passing the examination upon which the
applicant's certificate was based and within the 10 years immediately preceding
the applicant's application; or
(4) Meets the requirements of §
107(a)(5) of this title, the requirements of § 107(a)(6) of this title, if
applicable, and, the requirements of § 107(f) of this title.
(b) The applicant shall contact the
licensing authority or comparable agency in such other jurisdiction or
jurisdictions 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.
(b) Permits shall be issued and renewed for
periods of 2 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 the applicant:
(1)
Meets the requirements of § 107(a)(1) of this title; Has not been
convicted of a crime that is substantially related to the practice of
accountancy; however, after a hearing or review of documentation demonstrating
that the applicant meets the specified criteria for a waiver, the Board, by an
affirmative vote of a majority of the quorum, may waive this paragraph (b) of
this Section, if it finds all of the following:
a.
For waiver of a felony conviction, more than 5 years have elapsed since the
date of the conviction. At the time of the application the applicant may not be
incarcerated, on work release, on probation, on parole or serving any part of a
suspended sentence and must be in substantial compliance with all court orders
pertaining to fines, restitution and community service.
b.
For waiver of a misdemeanor conviction or violation, at the time of the
application the applicant may not be incarcerated, on work release, on
probation, on parole or serving any part of a suspended sentence and must be in
substantial compliance with all court orders pertaining to fines, restitution
and community service.
c.
The applicant is capable of practicing accountancy in a competent and
professional manner.
d.
The granting of the waiver will not endanger the public health, safety or
welfare;
(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;
(3) Has passed either all parts of the examination recognized by the National Society of Public Accountants or both the Financial Accounting and Reporting (FAR) and Auditing and Attestation (AUD) portions of the Uniform Certified Public Accounting Examination;
(4)
Has passed the AICPA self-study course and examination in professional
ethics with a score as determined by Board rule to be appropriate. Has
successfully passed the AICPA self-study course and examination in professional
ethics; and
(d) An applicant for renewal of a permit under
this section shall show that the applicant has completed no less than 80 hours
of continuing professional education in accordance with Board guidelines
as determined by Board rule during the 2-year renewal period that has
elapsed since 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 2 years and at
least 1 year prior to the renewal date. No continuing professional education is
required of an applicant whose initial permit was issued less than 1 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 2-year period. 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; or
(2)
A prorated continuing professional education requirement of 40 hours as
determined by Board rule if initial permit was issued one year or more, but
less than two years, prior to the renewal date.
(e) No new permits to practice public accountancy shall be issued after December 31, 2015. Applications for reciprocal public accountant permits to practice will be accepted by public accountants who hold an active public accountant permit in good standing in another jurisdiction and who relocate to Delaware and identify Delaware as their primary residence. The Board may, by rule, require continuing education as a condition to issuance of the reciprocal permit.
§ 111. Requirements for permits to practice by firms.
(a) Each firm which
maintains with an office in this State and 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 their qualifications in accordance with this
section.
(b) A firm that
does not have 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 § 109 of this title without obtaining a
permit under this section or otherwise notifying the Board.
(b) (c)
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) (d) An
applicant for initial issuance or renewal of a CPA firm 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 or clients located in this State,
and each employee holding a certificate who performs services in this State, or
who performs services for a client or clients located in this State, except for
employees who have not as yet accumulated sufficient experience to qualify for
a permit under § 107 of this title, holds a valid individual permit to practice
certified public accountancy issued under § 107 of this title or qualifies for
the practice privilege under § 108 of this title.
(d)(e) An applicant for initial issuance or
renewal of a PA firm 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 or
clients located in this State, and each employee who performs services in this
State, or who performs services for a client or clients located in this State,
except for employees who have not as yet met the requirements to qualify for a
permit under § 110 of this title, holds a valid individual permit to practice.
(1)
Notwithstanding any other provision of law, a simple majority of the ownership
of the firm, in terms of financial interests and voting rights, of all
partners, officers, shareholders, members or managers, belongs to holders of
permits to practice under § 110 of this title. All partners, officers,
shareholders, members or managers, whose principal place of business is in this
State, and who perform public accounting services in this state hold a valid permit
to practice under § 110 of this title. Although firms may include non-licensee
owners, the firm and its ownership must comply with applicable rules
promulgated by the Board.
(2) Any public
accounting firm as defined in this title may include non-licensee owners proved
that
a. The firm
designated a permit holder of this State who is responsible for the proper
registration of the firm and identifies that individual to the Board.
b. All
non-licensee owners are active individual participants in the public accounting
firm or affiliated entities.
c. The firm
complies with such other requirements as the Board may impose by rule.
(e) (f) For
purposes of this section, the employees of a public accounting firm with its
principal office or offices outside of this State must obtain a permit for
those employees who work in excess of 80 hours in this State or who work for a
client or clients located in this State. However, any firm which is engaged to
practice certified public accountancy or public accountancy in this
State, for even 1 hour, is required to obtain a permit. Every principal of a
public accounting firm who is responsible for the accounting work in this State
shall obtain an individual permit to practice under § 110 of this title.
(f) (i) 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 affirm that all attest and compilation services rendered
in this State are that each such office is under the charge of a
person holding a valid an active permit to practice issued under
this chapter or qualifies for the practice privilege under § 108 109 of
this title.
(g) 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 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.
(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.
(j) An applicant
for initial issuance or renewal of permits under this Section shall in their
application list all states in which they have applied for or hold permits as
CPA firms and list any past denial, revocation or suspension of a permit by any
other state, and 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
change in the identities of partners, officers, shareholders, members or
managers whose principal place of business is in this State, any change in the
number or location of offices within this State, any change in the identity of
the persons in charge of such offices, and any issuance, denial, revocation or
suspension of a permit by any other state.
(k) An applicant
for initial issuance or renewal of permits under this Section shall in their
application list all states in which they have applied for or hold permits as
PA firms and list any past denial, revocation or suspension of a permit by any
other state, and 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
change in the identities of partners, officers, shareholders, members or
managers whose principal place of business is in this State, any change in the
number or location of offices within this State, any change in the identity of
the persons in charge of such offices, and any issuance, denial, revocation or
suspension of a permit by any other state.
(l) Firms which
fall out of compliance with the provisions of this section due to changes in
ownership or personnel, after receiving or renewing a permit, shall take
corrective action to bring the firm back into compliance within 60 days.
Failure to bring the firm back into compliance within 60 days will result in
the suspension or revocation of the firm permit.
(m) Effective
July 1, 2017, the Board shall by rule require as a condition to renewal of
permits under this Section, that eligible applicants be enrolled in the AICPA
peer review program and undergo, no more frequently than once every three
years, peer reviews conducted in such manner as the Board shall specify, and
such review shall include a verification that individuals in the firm who are
responsible for supervising attest and compilation services and sign or
authorize someone to sign the accountants’ 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 rule:
(1) shall be
promulgated reasonably in advance of the time when it first becomes effective;
(2) shall
include reasonable provision for compliance by an applicant showing that it
has, within the preceding three years, undergone a peer review that is a
satisfactory equivalent to peer review generally required pursuant to this
subsection (l); and
(3) shall
require, with respect to any organization administering peer review programs
contemplated by paragraph (2), that it be subject to evaluations by the Board
or its designee, to periodically assess the effectiveness of the peer review
program under its charge.
§ 112. Professional responsibilities.
While § 111(a) of this title
requires firms to obtain permits to practice, and § 102(6) 102(10)
of this title defines “firm” to include valid partnerships and corporations,
this chapter shall not be 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 of Title 8.
§113.
Examinations.
The Board may, by regulation, prescribe
the terms and conditions for granting credit to a candidate for a certificate
or an applicant for a permit to practice certified public
accountancy or an applicant for a permit to practice public accountancy based
on the candidate's or applicant's satisfactory completion of a written an
examination in any 1 one or more of the subjects of the Uniform
Certified Public Accountant Examination, the examination recognized by the
National Society of Public Accountants and any 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. [Reserved.]
The Board may
waive the examination of and issue a certificate and permit to practice to any
person possessing qualifications equivalent to those set forth in § 107(a) of
this title who, at the time of application:
(1) Is engaged full-time
in the practice of certified public accountancy in this State; and
(2) Is the
holder of a certificate under the laws of another jurisdiction; provided, that
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.
§ 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 29 Del. C. §
8735 of Title 29, and the Division shall be responsible for issuing a
final written report at the conclusion of its investigation. The Division may
refer a complaint against an individual practicing under § 108 § 109
of this title to the state of licensure for handling.
(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 Division of Professional Regulation 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. Unprofessional Conduct.
§ 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 1 one or more 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 § 109 of this title:
(2) Censure the certificate or permit holder or individual or
firm with practice privileges under section § 108 § 109 of this
title;
(6) Impose a fine of up to $5,000 $10,000
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., including but not
limited to, legal assistance, public hearings, materials, human resources,
contractual assistance and appropriate salary and overtime pay for all state
employees involved notwithstanding merit system laws or regulations to the
contrary.
(b) The Board may
refuse or reject an applicant for a certificate permit to practice if,
after a hearing, the Board finds that an applicant has misstated or
misrepresented a material fact in connection with the applicant's application;
has violated any section of the AICPA Code of Professional Conduct for
Accountants; or practiced public accountancy or certified public
accountancy without being registered in accordance with this chapter.
(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 practice or a practice privilege to a person or firm
whose certificate or permit or practice privilege has been revoked or suspended
or modify the terms of any suspension.
§ 119. Board hearings; procedures.
(a) If a
complaint is filed with the Board pursuant to 29 Del. C. § 8735 of
Title 29, alleging violation of § 117 of this title, 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, 29 Del. C. § 8735 of Title 29 and the Administrative
Procedures Act, 29 Del. C., Chapter 101 of Title 29.
(b) All
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. Upon reaching its
conclusion of law and determining an appropriate sanction, if any, the Board
shall issue a written decision and order in accordance with 29 Del. C. § 10128.
The order must restate the factual findings, but need not summarize the
evidence presented. The decision and order may be issued over the signature of
only the President or other officer of the Board. The decision and order must
be sent by certified mail, return receipt requested, to the subject of the
complaint.
(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 § 10144 of Title 29.
§ 121.
Violations; penalties.
(a) Where the
Board has determined, upon notice and hearing pursuant to 29 Del. C., 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 § 109 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. apply to the Division of Professional
Regulation to issue a cease and desist order.
(b) Where the
Board has determined, upon notice and hearing pursuant to 29 Del. C., 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. apply to the Division of Professional
Regulation to issue a cease and desist order.
(c) Upon notice
and hearing pursuant to Chapter 101 of Title 29, the Board may fine any person
who violates such cease and desistorder 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.
§ 122. Status of existing certificates preserved.
(a) Any person
legally authorized to practice as a certified public accountant in this State
as of July 1, 1985, shall thereafter possess the same rights and privileges as
persons to whom certificates of permits to practice certified
public accountant accountancy 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 and/or permit to practice of
such person or censure or reprimand such person for 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) (b) 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 be deemed to have
sufficient education and experience to satisfy the experience requirement of §
107(a)(5)(c) of this title.
(d) Any person
who has applied to take the Uniform Certified Public Accountant Examination
listing Delaware as the state of application prior to January 1, 2006, shall be
granted a certificate under the prior law and regulations upon submitting an
appropriate application to the Board and the Board having approved such
application as meeting the applicable requirement as of December 31, 2005.
SYNOPSIS
This Act updates the Delaware Code relating to the Board of Accountancy by modernizing the current accountancy licensing standards using the Uniform Accountancy Model Act language as jointly drafted by the National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants as a framework. This Act also makes a greater distinction between a CPA who passed the CPA exam only and a CPA who passed the CPA exam, met the experience requirements, and received a permit to practice. This provides the public with the significant distinction between a CPA who is a certificate holder only, and a CPA who is a permit holder. It also provides for a peer review for those accounting firms that perform attest services as a requirement for permit renewal as a mechanism to ensure practice competency. Author: Senator Poore |
|
|
|
|