Print Friendly HOUSE BILL NO. 485 – Accountants, licensure requirements
HOUSE BILL NO. 485
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ACCOUNTANTS - LICENSURE - Amends, repeals and adds to existing law to
modify requirements for licensure under the Idaho Accountancy Act; to
revise provisions relating to the acceptance by licensees of commissions
and contingent fees and the use of certain titles or abbreviations; and to
provide for substantial equivalency.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Bus
02/06 Rpt out - rec d/p - to 2nd rdg
02/07 2nd rdg - to 3rd rdg
02/11 3rd rdg - PASSED - 53-15-2
AYES -- Aikele, Barraclough, Bedke, Bell, Black, Block, Bolz,
Bradford, Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy,
Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
Gagner, Gould, Hadley, Hammond, Harwood, Jones, Kellogg, Kunz, Lake,
Langford, Mader, Meyer, Montgomery, Mortensen, Pischner, Pomeroy,
Raybould, Robison, Sali, Schaefer, Sellman, Shepherd, Smith(33),
Smith(23), Smylie, Stevenson, Stone, Tilman, Trail, Young, Mr.
NAYS -- Barrett, Bieter, Boe, Henbest, Higgins, Hornbeck, Jaquet,
Kendell, Loertscher, Martinez, McKague, Pearce, Roberts, Wheeler,
Absent and excused -- Moyle, Ridinger
Floor Sponsor - Deal
Title apvd - to Senate
02/12 Senate intro - 1st rdg - to Com/HuRes
03/06 Rpt out - rec d/p - to 2nd rdg
03/07 2nd rdg - to 3rd rdg
03/13 3rd rdg - PASSED - 30-2-3
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Burtenshaw,
Darrington, Davis, Deide, Dunklin, Frasure, Geddes, Goedde, Hawkins,
Hill, Ingram, Ipsen, Keough, King-Barrutia, Little, Lodge, Marley,
Richardson, Risch, Sandy, Schroeder, Sims, Sorensen, Stegner, Thorne,
NAYS -- Noh, Wheeler
Absent and excused -- Bunderson, Cameron, Stennett
Floor Sponsor - Stegner
Title apvd - to House
03/14 To enrol
03/15 Rpt enrol - Sp signed
03/15 To Governor
03/19 Governor signed
Session Law Chapter 92
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 485
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO ACCOUNTANCY ACT; AMENDING SECTION 54-201, IDAHO CODE, TO
3 PROVIDE CORRECT TERMINOLOGY; AMENDING SECTION 54-202, IDAHO CODE, TO
4 REVISE LEGISLATIVE INTENT; AMENDING SECTION 54-203, IDAHO CODE, TO REVISE
5 THE MEMBERSHIP OF THE BOARD OF ACCOUNTANCY; AMENDING SECTION 54-204, IDAHO
6 CODE, TO REVISE THE RULEMAKING AUTHORITY AND OTHER POWERS AND DUTIES OF
7 THE BOARD OF ACCOUNTANCY; AMENDING SECTION 54-206, IDAHO CODE, TO REVISE
8 DEFINITIONS AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 54-207,
9 IDAHO CODE, TO PROVIDE FOR ADDITIONAL EDUCATIONAL REQUIREMENTS FOR LICEN-
10 SURE AND TO PROVIDE THAT THE BOARD OF ACCOUNTANCY MAY ADOPT RULES RELATING
11 TO EDUCATIONAL REQUIREMENTS; AMENDING SECTION 54-208, IDAHO CODE, TO
12 REVISE THE REQUIREMENTS FOR ADMISSION TO EXAMINATION, TO PROVIDE FOR THE
13 CONDUCT OF EXAMINATIONS AND TO PROVIDE THAT A FEE MAY BE CHARGED FOR EXAM-
14 INATIONS; AMENDING SECTION 54-209, IDAHO CODE, TO REVISE THE EXPERIENCE
15 REQUIRED OF APPLICANTS FOR LICENSURE; AMENDING SECTION 54-210, IDAHO
16 CODE, TO REVISE CERTAIN REQUIREMENTS FOR LICENSURE BY RECIPROCITY AND TO
17 PROVIDE FOR FOREIGN RECIPROCITY; AMENDING SECTION 54-211, IDAHO CODE, TO
18 REVISE LICENSING FEES AND LICENSING PERIODS FOR ORIGINAL LICENSES AND THE
19 RENEWAL OF LICENSES, TO REVISE REQUIREMENTS FOR THE RENEWAL OF LICENSES,
20 TO PROVIDE FOR REQUIREMENTS FOR INACTIVE AND RETIRED STATUS, TO REVISE
21 FEES FOR REINSTATEMENT OF LICENSES, TO PROVIDE THAT APPLICANTS FOR INITIAL
22 ISSUANCE OR REINSTATEMENT OF LICENSES SHALL FILE AN APPLICATION LISTING
23 ANY PAST DENIALS, REVOCATIONS OR SUSPENSIONS OF A CERTIFICATE, LICENSE OR
24 PERMIT AND TO PROVIDE A REFERENCE TO LICENSEES; AMENDING SECTION 54-212,
25 IDAHO CODE, TO REVISE GENERAL FEES; AMENDING SECTION 54-213, IDAHO CODE,
26 TO PROVIDE THAT CERTAIN INDIVIDUALS LICENSED AS OF JULY 1, 2002, SHALL BE
27 CONSIDERED LICENSEES; AMENDING SECTION 54-214, IDAHO CODE, TO REMOVE
28 REQUIREMENTS OF PRACTICE UNIT REGISTRATION AND QUALITY REVIEWS AND TO PRO-
29 VIDE FOR FIRM REGISTRATION AND PEER REVIEWS; REPEALING SECTIONS 54-215 AND
30 54-216, IDAHO CODE; AMENDING SECTION 54-218, IDAHO CODE, TO PROVIDE FOR
31 THE ACCEPTANCE OF COMMISSIONS AND CONTINGENT FEES UNDER CERTAIN CONDI-
32 TIONS; AMENDING SECTION 54-219, IDAHO CODE, TO REVISE THE GROUNDS ON WHICH
33 THE BOARD MAY PENALIZE LICENSEES AND HOLDERS OF CERTIFICATES AND TO MAKE A
34 TECHNICAL CORRECTION; AMENDING SECTION 54-220, IDAHO CODE, TO REVISE
35 RESTRICTIONS ON THE USE OF CERTAIN TITLES, DESIGNATIONS OR ABBREVIATIONS
36 RELATED TO ACCOUNTANCY; AMENDING SECTION 54-221, IDAHO CODE, TO PROVIDE
37 THAT ONLY LICENSEES SHALL ISSUE REPORTS ON FINANCIAL STATEMENTS OR OFFER
38 TO RENDER OR RENDER ATTEST OR COMPILATION SERVICES, TO PROVIDE THAT LICEN-
39 SEES AND INDIVIDUALS GRANTED PRIVILEGES SHALL PERFORM ATTEST SERVICES ONLY
40 THROUGH CERTAIN BUSINESSES, TO PROVIDE THAT LICENSEES SHALL ISSUE COMPILA-
41 TION REPORTS ONLY THROUGH CERTAIN BUSINESSES UNLESS SPECIFIED CONDITIONS
42 ARE MET AND TO PROVIDE THAT LICENSEES AND FIRMS WHICH DO NOT ISSUE REPORTS
43 MAY ISSUE FINANCIAL STATEMENTS ONLY IF SUCH STATEMENTS INCLUDE SPECIFIED
44 DISCLAIMER LANGUAGE; AMENDING CHAPTER 2, TITLE 54, IDAHO CODE, BY THE
45 ADDITION OF A NEW SECTION 54-227, IDAHO CODE, TO PROVIDE FOR SUBSTANTIAL
46 EQUIVALENCY, TO PROVIDE CONDITIONS FOR THE EXERCISE OF CERTAIN PRIVILEGES
1 BY LICENSEES OF OTHER STATES, TO PROVIDE THAT LICENSEES OF IDAHO WHO OFFER
2 OR RENDER SERVICES OR USE THE CPA TITLE IN OTHER STATES SHALL BE SUBJECT
3 TO DISCIPLINARY ACTION IN IDAHO AND TO PROVIDE THAT THE BOARD SHALL INVES-
4 TIGATE COMPLAINTS MADE BY ACCOUNTANCY BOARDS OF OTHER STATES; AND AMENDING
5 CHAPTER 2, TITLE 54, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 54-228,
6 IDAHO CODE, TO PROVIDE FOR SEVERABILITY.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 54-201, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 54-201. SHORT TITLE. This act chapter shall be known and may be cited as
11 "The Idaho Accountancy Act."
12 SECTION 2. That Section 54-202, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 54-202. LEGISLATIVE INTENT. It is the policy of this state, and the pur-
15 pose of this chapter, to promote the reliability of information that is used
16 for guidance in financial transactions or for accounting for or assessing the
17 financial status or performance of commercial, noncommercial and governmental
18 enterprises. The public interest requires that persons professing special com-
19 petence in accountancy or offering assurance as to the reliability or fairness
20 of presentation of such information shall have demonstrated their qualifica-
21 tions to do so, and that persons who have not demonstrated and maintained such
22 qualifications shall not be permitted to hold themselves out as having special
23 competence or to offer such assurance; that the professional conduct of per-
24 sons licensed as having special competence in accountancy be regulated in all
25 aspects of the practice of public accountancy their professional work; that a
26 public authority competent to prescribe and assess the qualifications and to
27 regulate the professional conduct of practitioners of public accountancy
28 licensees be established; and that the use of titles relating to the practice
29 of public accountancy that are likely to mislead that have a capacity or ten-
30 dency to deceive the public as to the status or competence of the persons
31 using such titles be prohibited.
32 SECTION 3. That Section 54-203, Idaho Code, be, and the same is hereby
33 amended to read as follows:
34 54-203. BOARD CREATED -- MEMBERSHIP -- APPOINTMENT -- VACANCIES. There is
35 hereby created in the department of self-governing agencies a board of accoun-
36 tancy in and for the state of Idaho, to be known as the Idaho state board of
37 accountancy. The board shall consist of seven (7) members, all of whom shall
38 be residents of this state, appointed by the governor, five (5) of whom shall
39 hold current certified public accountant licenses issued under the laws of
40 this state, one (1) who shall be either a licensed public accountant or certi-
41 fied public accountant and one (1) who shall be a public member not engaged in
42 the practice of public accounting licensed under this chapter, who has profes-
43 sional or practical experience in the use of accounting services and financial
44 statements. Board members shall be appointed for terms of five (5) years to
45 commence on the first day of September. The existing members of the Idaho
46 state board of accountancy as previously appointed, shall continue in office
47 with their terms expiring on August 31 of each member's final year. A person
48 who is either a licensed public accountant or certified public accountant
1 shall fill a sixth position on the board whose first term shall be for four
2 (4) years beginning September 1, 1993. One (1) public member from the business
3 community shall serve as the seventh member of the board whose first term
4 shall be for four (4) years beginning September 1, 1993. Whenever the term for
5 a member of the board holding one (1) of the original five (5) seats on the
6 board originally appointed from nominations of the Idaho society of certified
7 public accountants expires or the position is becomes vacant for any cause,
8 the Idaho society of certified public accountants shall nominate two (2) per-
9 sons with qualifications to become a member of the board as herein specified,
10 for each such vacancy. Whenever the term for a member holding the sixth posi-
11 tion on the board shall expire originally appointed from nominations of the
12 Idaho association of public accountants expires or becomes vacant for any
13 cause, the Idaho association of public accountants shall nominate two (2) per-
14 sons with qualifications to become a member of the board as herein specified,
15 for each such vacancy. Nominations shall be forwarded to the governor who
16 shall appoint from such nominees the requisite number of persons to be members
17 of the board to fill such vacancy or vacancies. Whenever the term for a the
18 public member holding the seventh position on the board shall expires or
19 becomes vacant for any cause, the governor shall appoint a nonlicensed person
20 to become a member of the board without receiving official nominees from any
21 source. Vacancies occurring during the term shall be filled by appointment by
22 the governor for the unexpired term. Upon expiration of the term of office, a
23 member shall continue to serve until a successor shall have been appointed and
24 shall have qualified.
25 SECTION 4. That Section 54-204, Idaho Code, be, and the same is hereby
26 amended to read as follows:
27 54-204. POWERS AND DUTIES. The Idaho state board of accountancy, in addi-
28 tion to the other powers and duties set forth in this chapter, shall have the
29 following powers and duties:
30 (1) To adopt and amend rules in accordance with the provisions of the
31 administrative procedure act, chapter 52, title 67, Idaho Code, governing its
32 administration and the enforcement of this chapter and the conduct of licen-
33 sees including, but not limited to:
34 (a) Rules governing the board's meetings and the conduct of its business;
35 (b) Rules of procedure governing the conduct of investigations and hear-
36 ings by the board;
37 (c) Rules specifying the education, examination and experience qualifica-
38 tions required for the issuance of certificates, the experience required
39 for initial issuance of certificates and the continuing professional edu-
40 cation required for renewal of licenses;
41 (d) Rules of professional conduct directed to controlling the quality and
42 probity of the practice of public accountancy professional services by
43 licensees, and dealing among other things with independence, integrity and
44 objectivity; competence and technical standards; responsibilities to the
45 public; and responsibilities to clients;
46 (e) Rules specifying actions and circumstances that shall be deemed to
47 constitute holding oneself out as a licensee in connection with the prac-
48 tice of public accountancy governing the professional standards applicable
49 to licensees;
50 (f) Rules governing the manner and circumstances of use of the titles
51 "certified public accountant" and "licensed public accountant";
52 (g) Rules regarding quality peer reviews that may be required to be per-
53 formed under the provisions of this chapter;
1 (g) Rules for the method and substance of examination for licenses to
2 practice as certified public accountants. The board shall provide for
3 examination of applicants, at least annually, at such times and places as
4 circumstances and applications may warrant. The board shall use all or
5 part of the uniform CPA examination, and may use any related service
6 available from the American institute of certified public accountants
7 (AICPA) and the national association of state boards of accountancy
8 (NASBA), or an examination and services consistent with standards of the
9 AICPA examination. The board may contract with third parties to perform
10 such administrative services with respect to the examination as it deems
11 appropriate to assist it in performing its duties hereunder. The board
12 shall adopt a system to maintain the security and integrity of the exami-
13 nation process; and
14 (h) Rules on substantial equivalency to implement section 54-227, Idaho
16 (i) Rules adopting statements on standards as specified in section
17 54-206(3), Idaho Code, which, if the board may deem appropriate, shall be
18 those standards developed for general application by recognized accoun-
19 tancy organizations such as the AICPA, as such statements are established
20 from time to time; and
21 (j) Such other rules as the board may deem necessary or appropriate to
22 implement or administer the provisions and purposes of this chapter.
23 (2) To issue original certificates of qualification and licenses to prac-
24 tice as certified public accountants to such applicants as may be qualified by
25 reciprocity, transfer of examination grades or by examination.
26 (3) To charge and collect from all applicants, certificate holders, and
27 licensees such fees as are provided by this chapter and prescribed by rules of
28 the board.
29 (4) To initiate or receive complaints, cause the same to be investigated,
30 initiate proceedings, and conduct hearings or proceedings pursuant to chapter
31 2, title 54, Idaho Code. The board may designate a member, or any other person
32 of appropriate competence, to serve as investigating officer to conduct an
33 investigation. Upon completion of an investigation, the investigating officer
34 shall file a report with the board. Unless dismissed by the board as unfounded
35 or trivial, the board may proceed with disciplinary proceedings or may return
36 the report to the investigating officer for further investigation.
37 (a) In order to protect the interests of a complainant, witness, third
38 party or defendant, the board may upon application and for good cause
39 shown, issue a protective order, consistent with chapter 3, title 9, Idaho
40 Code, prohibiting the disclosure of specific information otherwise not
41 privileged and confidential and direct that the proceedings be conducted
42 so as to implement the order.
43 (b) In carrying into effect the provisions of this chapter, the board may
44 subpoena witnesses and compel their attendance, and also may require the
45 submission of books, papers, documents or other pertinent data; may admin-
46 ister oaths; may take testimony; may cooperate with the appropriate
47 authorities in other states in investigation and enforcement concerning
48 violations of this chapter and comparable acts of other states; and may
49 receive evidence in any disciplinary matters or in any case wherever a
50 violation of the provisions of this chapter is alleged. Upon failure or
51 refusal to comply with any such order of the board, or upon failure to
52 honor its subpoena, the board may apply to the court in the district where
53 the witness resides to enforce compliance.
54 (5) To authorize by written agreement the bureau of occupational licenses
55 as agent to act in its interest.
1 (6) Any action, claim or demand to recover money damages from the board
2 or its employees which any person is legally entitled to recover as compensa-
3 tion for the negligent or otherwise wrongful act or omission of the board or
4 its employees, when acting within the course and scope of their employment,
5 shall be governed by the Idaho tort claims act, chapter 9, title 6, Idaho
6 Code. For purposes of this subsection, the term "employees" shall include spe-
7 cial assignment members of the board and other independent contractors while
8 acting within the course and scope of their board related work.
9 (7) All hearings, investigations or proceedings conducted by the board
10 shall be conducted in conformity with chapter 52, title 67, Idaho Code, and
11 rules of the board adopted pursuant thereto, and, unless otherwise requested
12 by the concerned party, be subject to disclosure according to chapter 3, title
13 9, Idaho Code.
14 SECTION 5. That Section 54-206, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 54-206. DEFINITIONS. As used in this section:
17 (1) "Academic year" means that period of study, at a college or univer-
18 sity, approved by the board, necessary to accumulate the equivalent of thirty
19 (30) semester credit hours.
20 (2) "AICPA" means the American institute of certified public accountants.
21 ( 32) "Applicant" means any person having the requisite qualifications who
22 makes application to the board for examination, or for initial issuance or
23 renewal or reinstatement of a certificate and license under the provisions of
24 this chapter.
25 (3) "Attest" means providing the following financial statement services:
26 (a) Any audit or other engagement to be performed in accordance with the
27 statements on auditing standards;
28 (b) Any review of a financial statement to be performed in accordance
29 with the statements on standards for accounting and review services; and
30 (c) Any examination of prospective financial information to be performed
31 in accordance with the statements on standards for attestation engage-
33 (4) "Audit" means an examination of financial statements conducted in
34 accordance with generally accepted auditing standards, to determine whether,
35 in the auditor's opinion, the statements are fairly presented and conform with
36 generally accepted accounting principles, or if applicable, with another com-
37 prehensive basis of accounting.
38 (5) "Board" means the Idaho state board of accountancy.
39 ( 65) "Certificate" means that document issued by the board upon original
40 approval of a license licensure. The original certificate does not constitute
41 licensure and a person cannot hold represent himself or herself out to the
42 public as a licensee unless a current and valid annual license has been issued
43 by the board.
44 ( 76) "Certified public accountant" means any person who holds a valid,
45 unrevoked and unsuspended license under the provisions of chapter 2, title 54,
46 Idaho Code, or an equivalent provision of the laws of another state designat-
47 ing said person as a certified public accountant.
48 ( 87) "Client" means the person or entity which retains a practice unit
49 engaged in the practice of public accounting for the performance of that
50 agrees with a licensee or licensee's employer to receive any professional ser-
51 vices with or without compensation and shall include all affiliates and
52 related entities in the financial statements of an attest or compilation
1 ( 98) "Compilation" means presenting a service performed in accordance
2 with statements on standards for accounting and review services which pres-
3 ents, in the form of historical or prospective financial statements, in accor-
4 dance with standards adopted by the AICPA, information that is the representa-
5 tion of management or owners without undertaking to express any assurance on
6 the statements. The term "compilation" does not include financial statements
7 accompanied by the language set forth in section 54-226(3), Idaho Code,
8 (whether used by a licensee or by a person not licensed under this chapter) so
9 long as the financial statements are not accompanied by any other language of
10 assurance or disclaimer.
11 ( 109) "Financial statements" means a presentation of historical or pro-
12 spective financial data, which may include accompanying notes, intended to
13 communicate an entity's economic resources or obligations at a point in time,
14 or the changes therein for a period of time, in accordance with a comprehen-
15 sive basis of accounting.
16 (1 10) "Firm" means a proprietorship, partnership, professional corpora-
17 tion, professional limited liability company, or any other form of profes-
18 sional organization permitted by Idaho law, engaged in the practice of public
19 accounting of which all proprietors, partners, officers, shareholders or mem-
20 bers are licensed under the provisions of this chapter registered under the
21 requirements of section 54-214, Idaho Code.
22 (1 21) "Good moral character" means lack of a history of dishonest dealings
23 or a felonious act.
24 (13) "Hold out" or "holding out" means providing or offering to provide
25 work or services as a certified public accountant or licensed public accoun-
26 tant. Holding out includes, but is not limited to, display of a license, or
27 oral or written representation that the person holds a current and valid
28 license or is authorized to practice public accounting. Written representation
29 can include the certified public accountant, licensed public accountant, or
30 any other designation cited in section 54-220, Idaho Code, which may appear on
31 a letterhead, business card, office sign or advertisement.
32 (1 42) "License" means that permit authorization issued by the board upon
33 original approval and on an annual basis permitting a qualified person to
34 practice as a certified public accountant or licensed public accountant in the
35 state of Idaho.
36 (1 53) "Licensed public accountant" or "LPA" means any person who holds a
37 valid, unrevoked and unsuspended license under the provisions of chapter 2,
38 title 54, Idaho Code, designating said person as a licensed public accountant.
39 (1 64) "Licensee" means the holder of a current valid license. issued by
40 this state authorizing that person to practice public accountancy.
41 (1 75) "Member" means a licensed person who has been admitted to membership
42 in a firm which is organized as a limited liability company.
43 (18) "Partnership" means an association of two (2) or more licensees to
44 carry on as co-owners a business for profit for the practice of public accoun-
46 (16) "Peer review" means a board approved study, appraisal or review of
47 one (1) or more aspects of the professional work of a licensee or firm that
48 performs attest or compilation services, by a person or persons licensed under
49 this chapter or by another state and who are independent of the licensee or
50 firm being reviewed.
51 (17) "Permit" means a permit to practice as a firm issued under corre-
52 sponding provisions of the laws of other states.
53 (1 98) "Person" means any natural living person.
54 (20) "Practice of public accounting" means offering to perform or perform-
55 ing, for a client or potential client, one (1) or more types of services
1 involving the use of accounting or auditing skills, or one (1) or more types
2 of management, financial advisory or consulting services, or the preparation
3 of tax returns, or the furnishing of advice on tax matters, while holding
4 oneself out in such manner as to state or imply that one is a licensee.
5 (21) "Practice unit" means a firm with which a licensee engaged in the
6 practice of public accounting is affiliated, including a proprietorship, part-
7 nership, professional corporation or any other form of organization permitted
8 by Idaho law.
9 (22) "Professional corporation" means either:
10 (a) A professional public accounting corporation organized pursuant to
11 chapter 13, title 30, Idaho Code, or any other form of organization per-
12 mitted by Idaho law, the shareholders of which are all persons licensed as
13 certified public accountants or licensed public accountants; or
14 (b) A foreign corporation certified by the secretary of state to do busi-
15 ness in public accountancy in Idaho, provided that any officer, share-
16 holder, agent or employee of the corporation remains personally and fully
17 liable and accountable for any negligent or wrongful act or misconduct
18 committed by him, or by any person under his direct supervision and con-
19 trol, while rendering professional accounting services on behalf of the
20 corporation in the state of Idaho.
21 ( 2319) "Professional services" means any services performed or offered to
22 be performed by a licensee for a client in the course of the practice of pub-
23 lic accountancy arising out of or related to the specialized knowledge or
24 skills associated with certified public accountants or licensed public accoun-
26 (24) "Proprietorship" means a business for the practice of public accoun-
27 tancy which is owned by a licensee.
28 (25) "Quality review" means a board approved study, appraisal or review of
29 one (1) or more aspects of the professional work of a practice unit by a per-
30 son or persons who are licensed under this chapter or by another state and who
31 are independent of the practice unit being reviewed.
32 (2 60) "Report," when used with reference to financial statements, means an
33 opinion or other form of language that states or implies assurance as to the
34 reliability of any financial statements and that also includes or is accompa-
35 nied by any statement or implication that the person or firm issuing it has
36 special knowledge or competence in accounting or auditing. Such a statement or
37 implication of special knowledge or competence may arise from use by the
38 issuer of the report of names or titles indicating that he or she the person
39 or firm is an accountant or auditor, or from the language of the report
40 itself. The term "report" includes any form of language which disclaims an
41 opinion when such form of language is conventionally understood to imply any
42 positive assurance as to the reliability of the financial statements referred
43 to or special competence on the part of the person or firm issuing such lan-
44 guage; and it includes any other form of language that is conventionally
45 understood to imply such assurance or special knowledge or competence.
46 (27) "Review" means performing inquiry and analytical procedures in accor-
47 dance with standards adopted by the AICPA that provide a reasonable basis for
48 expressing limited assurance that there are no material modifications that
49 should be made to financial statements in order for them to be in conformity
50 with generally accepted accounting principles or, if applicable, with another
51 comprehensive basis of accounting.
52 (2 81) "State" means any state , territory or insular possession of the
53 United States, or the District of Columbia, Puerto Rico, the U.S. Virgin
54 Islands and Guam; except that "this state" means the state of Idaho.
55 (22) "Substantial equivalency" or "substantially equivalent" means a
1 determination by the board that the education, examination and experience
2 requirements contained in the statutes and administrative rules of another
3 jurisdiction are comparable to or exceed the education, examination and expe-
4 rience requirements for CPAs contained in this chapter or that an individual
5 licensee's education, examination and experience qualifications are comparable
6 to or exceed the education, examination and experience requirements for CPAs
7 contained in this chapter.
8 SECTION 6. That Section 54-207, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 54-207. LICENSE -- APPLICATION. (1) Any person meeting the qualifications
11 as hereinafter provided, and desiring a certificate and license (where appli-
12 cable), shall make a written application for such certificate and license to
13 the board, upon forms to be prescribed and furnished by the board. Such appli-
14 cation shall be filed and shall be accompanied by such fee as may be required
15 by rules of the board.
16 (2) In addition to meeting the qualifications provided elsewhere in this
17 chapter, before a certificate and license may be issued, a person desiring to
18 receive a certificate and license shall have satisfactorily completed a mini-
19 mum of one hundred fifty (150) semester hours, or two hundred twenty-five
20 (225) quarter hours, of college education, with a concentration in accounting,
21 auditing and business, including a baccalaureate or higher degree at a college
22 or university acceptable to the board, as established by rule. Satisfactory
23 evidence in the form of an official transcript received directly from the
24 school registrar indicating the credits and degree received shall be presented
25 to the board to demonstrate successful completion of these education require-
27 (3) The board may adopt rules allowing persons who met the education
28 requirements of section 54-208, Idaho Code, when they first sat for the exami-
29 nation to become licensed even though they do not meet the education require-
30 ments of this section.
31 SECTION 7. That Section 54-208, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 54-208. EXAMINATION -- EDUCATION -- QUALIFICATIONS. (1) An applicant for
34 admission to examination as a certified public accountant shall:
35 (a) Be eighteen (18) years of age or older,
36 (b) Be of good moral character,
37 (c) Be a resident, have been a resident, or intend to immediately become
38 a resident of the state of Idaho,
39 (d) Be approved by the board for admission to the examination, and
40 (e) Comply with subparagraph (i) or (iii) hereof; provided, however, that
41 subparagraphs (i) and (iii) hereof shall not apply to any applicant who
42 has qualified under prior existing law and has made written application to
43 the board and such application is on file with the board prior to the
44 effective date of this chapter.
45 (i) Provide s Satisfactory evidence in the form of an official tran-
46 script received directly from the school registrar indicating the
47 credits and degree received shall be presented to the board to demon-
48 strate successful completion of the education requirements as estab-
49 lished in subparagraph (ii) hereof a baccalaureate degree or its
50 equivalent, the required credits and courses to be prescribed by the
51 rules of the board. Applicants who will complete the educational
1 requirements within ninety (90) days of the examination shall may be
2 allowed to sit for the examination provided that prior to the release
3 of examination grades satisfactory evidence is submitted verifying
4 that the required education was completed within ninety (90) days of
5 the examination.
6 (ii) Education requirements. Until June 30, 2000, the board shall
7 require four (4) academic years of study for a baccalaureate degree
8 or its equivalent, the required credits and courses to be prescribed
9 by the rules of the board. After July 1, 2000, the board shall
10 require a minimum of one hundred fifty (150) collegiate level semes-
11 ter hours, or two hundred twenty-five (225) quarter hours, of educa-
12 tion, with a concentration in accounting, auditing and business,
13 including a baccalaureate degree or its equivalent at a college or
14 university acceptable to the board. The total educational program
15 shall include subjects and hours approved by the board, as estab-
16 lished by rule.
17 (iii) An applicant who is unable to meet the education requirements
18 specified in subparagraph (ii) hereof shall show, to the satisfaction
19 of the board, achievement of equivalency to the education require-
20 ments before and after July 1, 2000, as specified in subparagraph
21 (ii) hereof. Equivalency standards shall be established by board
23 (2) The examination required to be passed as a condition to granting a
24 certificate shall be held at least twice each year, and shall test the
25 applicant's knowledge of the subjects of accounting and auditing, and such
26 other related subjects as the board may specify by rule, including, but not
27 limited to, business law and taxation. The time for holding such examination
28 shall be determined by the board and may be changed from time to time. The
29 board shall prescribe by rule the methods of applying for and conducting the
30 examination, including methods for grading and determining a passing grade
31 required of an applicant for a certificate; provided however, that the board
32 shall endeavor to assure that the examination itself, grading of the examina-
33 tion, and the passing grades, are uniform with those of other states. The
34 board may make use of all or any part of the uniform certified public accoun-
35 tant examination and advisory grading service of the AICPA and may contract
36 with third parties to perform such administrative services with respect to the
37 examination as it deems appropriate to assist it in performing its duties
39 (3) The board may charge, or provide for a third party administering the
40 examination to charge, each applicant a fee, in an amount prescribed by the
41 board by rule.
42 (4) None of the education requirements specified in subparagraph (i),
43 (ii) or (iii) hereof this section shall apply to an applicant who is a
44 licensed public accountant pursuant to this chapter.
45 SECTION 8. That Section 54-209, Idaho Code, be, and the same is hereby
46 amended to read as follows:
47 54-209. EXPERIENCE. An applicant of good moral character who successfully
48 passes the examination, with standards no less than those prescribed by the
49 board's rules for examination of candidates in Idaho, and who fulfills the
50 requirements of section 54-207, Idaho Code, shall receive a license as a cer-
51 tified public accountant if the applicant has completed , or upon completion of
52 the following:
53 (1) The applicant, in obtaining experience, must be supervised by a cer-
1 tified public accountant who holds a current valid license in any state or by
2 a licensed public accountant who shall certify that experience obtained under
3 either subsection (a) or (b) of this section consists of one (1) or more types
4 of services involving the use of accounting or auditing skills, or one (1) or
5 more types of management or financial advisory or consulting skills, or the
6 preparation of tax returns or the furnishing of advice on tax matters.
7 (a) Two (2) years of full-time public accounting employment, or one thou-
8 sand nine hundred fifty-six (1,956) minimum hours per year; or
9 (b) Experience of a character and for a length of time which is, in the
10 opinion of the board, substantially equivalent to the requirements of sub-
11 section (a) of this section. Rules shall be adopted by the board estab-
12 lishing such experience levels.
13 (2) The board by order shall also have authority to approve programs with
14 private industry, nonprofit and governmental entities to establish acceptable
15 experience substantially equivalent to subsection (1)(a) of this section one
16 (1) year of experience. This experience shall include providing any type of
17 service or advice involving the use of accounting, attest, compilation, man-
18 agement advisory, financial advisory, tax or consulting skills -- all of which
19 have been verified by a licensee, meeting requirements prescribed by the board
20 by rule. This experience may be gained through employment in government,
21 industry, academia or public practice.
22 SECTION 9. That Section 54-210, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 54-210. RECIPROCITY -- TRANSFER OF EXAMINATION GRADES -- FOREIGN RECI-
25 PROCITY -- QUALIFICATIONS. (1) A person whose certificate and license have
26 been granted by another state, whose principal place of business is located in
27 this state, shall obtain a license by reciprocity from the board before pro-
28 viding professional services in this state.
29 (2) An applicant for certificate and license by reciprocity to practice
30 as a certified public accountant in Idaho must:
31 (a) Be eighteen (18) years of age or older;
32 (b) Be of good moral character;
33 (c) Have obtained the education and passed the uniform CPA examination
34 with standards no less than those required in Idaho. The requirements of
35 education and the Idaho standards relating to passage of the uniform CPA
36 examination shall be waived if the applicant has no less than five four
37 ( 54) years' experience as determined by the board, provided that the expe-
38 rience or its equivalent was obtained after original licensure as a certi-
39 fied public accountant and within the ten (10) years immediately preceding
40 the reciprocity application; and
41 (d) Have completed the necessary experience, continuing professional edu-
42 cation, and board approved ethics examination required for issuance of a
43 license to practice public accounting in Idaho and hold a current license
44 in good standing in another licensing jurisdiction.
45 ( 23) An applicant for certificate and license to practice as a certified
46 public accountant in Idaho by transfer of examination grades from another
47 licensing jurisdiction must:
48 (a) Be eighteen (18) years of age or older;
49 (b) Be of good moral character;
50 (c) Have obtained the necessary education and have passed the uniform CPA
51 examination with standards no less than those prescribed by the board's
52 rules for examination candidates in Idaho; and
53 (d) Possess experience qualifications as required under section 54-209,
1 Idaho Code.
2 (4) The board shall issue a certificate and license to a holder of a sub-
3 stantially equivalent designation issued by a foreign country, provided that:
4 (a) The foreign authority which granted the designation makes similar
5 provision to allow a person who holds a valid certificate and license
6 issued by this state to obtain such foreign authority's comparable desig-
7 nation; and
8 (b) The designation:
9 (i) Was duly issued by an authority of a foreign country which reg-
10 ulates the practice of public accountancy and has not expired or been
11 revoked or suspended;
12 (ii) Entitles the holder to issue reports upon financial statements;
14 (iii) Was issued upon the basis of substantially equivalent educa-
15 tional, examination and experience requirements established by the
16 foreign authority or by law; and
17 (c) The applicant:
18 (i) Received the designation, based on educational and examination
19 standards substantially equivalent to those in effect in this state,
20 at the time the foreign designation was granted;
21 (ii) Completed an experience requirement, substantially equivalent
22 to the requirements set out in this chapter, in the jurisdiction
23 which granted the foreign designation or has completed four (4) years
24 of professional experience in this state; or meets equivalent
25 requirements prescribed by the board by rule, within the ten (10)
26 years immediately preceding the application; and
27 (iii) Passed a uniform qualifying examination in national standards
28 acceptable to the board.
29 SECTION 10. That Section 54-211, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 54-211. LICENSES -- LICENSING PERIOD -- REINSTATEMENT -- VOLUNTARY SUS-
32 PENSION INACTIVE LICENSES -- RETIREMENT -- FEES. (1) The board shall issue
33 original certificates and licenses, and renewal and reinstatement licenses to
34 practice as a certified public accountant, and renewal and reinstatement
35 licenses to practice as a licensed public accountant to persons who have
36 qualified therefor in accordance with the provisions of this chapter and the
37 rules of the board. A certificate and license, once issued, shall continue in
38 effect so long as the holder thereof complies with the provisions of this
39 chapter and the rules and orders of the board.
40 (a) Original. The board shall collect an original license fee upon board
41 approval of an original license to practice as a certified public accoun-
42 tant in the state of Idaho in an amount not to exceed two hundred dollars
43 ($200) as set forth in section 54-212, Idaho Code, and as prescribed by
44 the rules of the board. Those individuals meeting the requirements for
45 original licensure in Idaho, pursuant to the provisions of this chapter
46 and the rules of the board, shall be issued a license effective until the
47 end of the fiscal year, which shall extend from July 1 through June 30, in
48 which the original license was granted for no more than twelve (12)
49 months. The license shall then be subject to annual renewal.
50 (b) Renewal. The board shall collect an annual license fee from all
51 licensees by July 1 of each year in an amount not to exceed two hundred
52 dollars ($200) as set forth in section 54-212, Idaho Code, and as pre-
53 scribed by the rules of the board. Those persons meeting the requirements
1 of subparagraphs (i), (ii), (iii) and (iv) of this subsection for license
2 renewal shall be issued a license effective for a period of one (1) year
3 through the last day of June after its issuance. Requirements include:
4 (i) Good moral character;
5 (ii) Completion of continuing professional education as specified by
6 the board's rules;
7 (iii) Identification, in the renewal application, of the practice
8 unit firm with which the licensee is affiliated; and
9 (iv) Where applicable, verification of satisfactory completion of a
10 quality peer review program by the practice unit firm with which the
11 licensee is affiliated, pursuant to section 54-214, Idaho Code, and
12 the rules prescribed by the board. Any licensee who performs compila-
13 tion services for the public other than through a firm must undergo
14 no more frequently than once every three (3) years, a peer review
15 conducted in accordance with rules prescribed by the board, and such
16 review shall include verification that such licensee has met the com-
17 petency requirements set out in professional standards for such ser-
19 (c) Inactive status. Any licensee in current compliance with the provi-
20 sions of this chapter who chooses not to practice or hold himself or her-
21 self out to provide work or services as a certified public accountant or
22 licensed public accountant perform or offer to perform for the public one
23 (1) or more kinds of attest or compilation services may apply to suspend
24 place his or her license in inactive status. An individual who holds out
25 or practices public accounting, as defined in section 54-206, Idaho Code,
26 shall not qualify for inactive status The annual renewal fee for inactive
27 status shall be as set forth in section 54-212, Idaho Code, and as pre-
28 scribed by the rules of the board. Licensees with inactive status must
29 place the word "inactive" adjacent to their CPA or LPA title on any busi-
30 ness card, letterhead or any other document or device when using the
31 title, with the exception of their certificate on which their title
33 (d) Retired. After a person reaches the age of sixty (60) years, or in
34 the event of a disability preventing continued practice, the certificate
35 of a certified public accountant or licensed public accountant, may, upon
36 application to the board by the holder, may be placed by the board in
37 retired status. Retired status shall allow the holder to retain the wall
38 certificate and remain on the board's mailing list. The annual renewal fee
39 for retired status shall not exceed fifty dollars ($50.00) be as set forth
40 in section 54-212, Idaho Code, and as prescribed by the rules of the
41 board. Licensees with retired status must place the word "retired" adja-
42 cent to their CPA or LPA title on any business card, letterhead or any
43 other document or device when using the title, with the exception of their
44 certificate on which their title appears. An individual who holds out or
45 practices public accounting, as defined in section 54-206, Idaho Code,
46 performs or offers to perform for the public attest or compilation ser-
47 vices shall not qualify for retired status.
48 (e) Reinstatement. Any certificate and license suspended for nonpayment
49 of the annual renewal fee, or a certificate in retired or inactive status,
50 may be reinstated upon completion of an application supplied by the board
51 along with payment of a reinstatement fee in an amount not to exceed five
52 hundred dollars ($500), as set forth in section 54-212, Idaho Code, and as
53 prescribed by the rules of the board. In addition, the board shall require
54 the applicant to meet the qualifications of subparagraphs (i), (ii), (iii)
55 and (iv) of subsection (b) of this section. Reinstatement following invol-
1 untary suspension shall be governed by the terms of the board's order of
2 involuntary suspension.
3 (2) Applicants for initial issuance or renewal reinstatement of licenses
4 under this section shall in their application list all states in which they
5 have applied for or hold a license to practice public accountancy and list any
6 past denial, revocation or suspension of a certificate, license or permit.
7 (3) Applicants and licensees shall notify the board in writing, within
8 thirty (30) days after its occurrence of:
9 (a) Any felony charges; or
10 (b) The issuance, denial, restriction, revocation or suspension of a cer-
11 tificate, license or permit by another state or by any federal agency.
12 SECTION 11. That Section 54-212, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 54-212. GENERAL FEES. The board, as prescribed by its rules, may charge
15 an amount not to exceed:
16 (1) Three hundred dollars ($300) One thousand dollars ($1,000) for exami-
17 nation. or application for licensure.
18 (2) Three hundred dollars ($300) for licensure application or license
20 (3) Twenty-five dollars ($25.00) for any certificate, original or
21 replacement, to be issued as herein provided.
22 ( 34) Fifty dollars ($50.00) for administrative services, including, but
23 not limited to, review of examination papers mailing lists and release of
24 information to other boards for purposes of licensure.
25 (5) One hundred dollars ($100) for retired or inactive status licenses.
26 (6) Five hundred dollars ($500) for license reinstatement.
27 ( 47) Three hundred dollars ($300) for late fees, including late filing of
28 the annual license renewal.
29 ( 58) Three hundred dollars ($300) for late fees, including late filing of
30 the continuing professional education report.
31 (6) Two hundred dollars ($200) for temporary practice registration.
32 ( 79) Two hundred dollars ($200) for practice unit firm registration.
33 (10) Fifty dollars ($50.00) for notification of intent to enter the state
34 pursuant to section 54-227, Idaho Code.
35 SECTION 12. That Section 54-213, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 54-213. GRANDFATHER CLAUSE. Individuals who, on July 1, 19932002, hold
38 certified public accountant and licensed public accountant licenses heretofore
39 issued under the laws of this state, shall, for all purposes, be considered
40 licensees under this chapter and subject to the provisions thereof.
41 SECTION 13. That Section 54-214, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 54-214. QUALITY REVIEW -- PRACTICE UNIT FIRM REGISTRATION -- PEER
44 REVIEW. (1) All individuals engaged in the practice of public accounting shall
45 be affiliated with a practice unit. All practice units engaged in practice in
46 this state shall be required to register with the board on an annual basis.
47 When registering annually, each practice unit shall indicate if it issues
48 reports on financial statements.
49 The board may require by rule that all practice units issuing reports
1 undergo quality reviews, on either a uniform or random basis, conducted no
2 more frequently than once every three (3) years in such manner and producing
3 such satisfactory results as the board may specify; provided however, that any
4 rule imposing such requirement shall be adopted reasonably in advance of the
5 time when compliance is required and shall include reasonable provision for
6 compliance by a practice unit if it shows that it has undergone a satisfactory
7 quality review performed for other purposes which was substantially equivalent
8 to quality reviews generally required pursuant to this subsection and comple-
9 tion of such review was within the three (3) years immediately preceding the
10 registration period The board shall register firms that make application and
11 demonstrate their qualifications therefor in accordance with the following
12 subsections of this section or to firms originally licensed in another state
13 that establish an office in this state. A firm must be registered with the
14 board in order to provide attest or compilation services or in order to use
15 the titles "CPAs," "CPA firm," "LPAs" or "LPA firm." Firms must register with
16 the board annually in such form and between such dates as the board may spec-
17 ify by rule. The board may charge a fee for each registration for initial
18 issuance or renewal of a registration under this section as set forth in sec-
19 tion 54-212, Idaho Code, and as prescribed by the rules of the board.
20 (2) Information discovered solely as a result of a practice unit's qual-
21 ity review shall not be grounds for suspension or revocation of a license An
22 applicant for initial registration or renewal of a registration to practice
23 under this section shall demonstrate that:
24 (a) Notwithstanding any other provision of law, a simple majority of the
25 beneficial ownership of the firm belongs to holders of a certificate who
26 are licensed in some state, and such partners, officers, shareholders,
27 members or managers, whose principal place of business is in this state,
28 and who perform professional services in this state, hold a valid certifi-
29 cate and license issued by this state. Although a firm may include
30 nonlicensee owners the firm and its ownership must comply with rules pro-
31 mulgated by the board.
32 (b) Any firm may include nonlicensee owners provided that:
33 (i) The firm designates a licensee of this state, who is responsi-
34 ble for the proper registration of the firm and identifies that indi-
35 vidual to the board.
36 (ii) All nonlicensees are active individual participants in the firm
37 or affiliated entities.
38 (iii) The firm complies with such other requirements as the board may
39 impose by rule.
40 (c) Any licensee who is responsible for supervising attest or compilation
41 services or who signs or authorizes someone to sign a report on financial
42 statements on behalf of the firm, shall meet the competency requirements
43 of the professional standards for such services.
44 (3) Each practice unit shall be required to show that each owner, part-
45 ner, officer, member or shareholder who regularly works in this state, and
46 each employee holding a certificate who regularly works in this state holds a
47 valid individual license to practice issued under the provisions of this chap-
48 ter and that each nonresident partner, officer, member or shareholder holds a
49 certificate and is licensed to practice public accountancy in some other state
50 Firms registered to practice under this section shall be required to register
51 each office of the firm within this state with the board and to show that all
52 attest and compilation services rendered in this state are under the charge of
53 a person holding a valid certificate and license issued by this state or some
54 other state.
55 (4) Each practice unit shall be required to register each office of the
1 firm within this state with the board and to show that each such office is
2 under the charge of a person holding a valid license to practice issued under
3 the provisions of this chapter or the corresponding provision of prior law A
4 firm registering under this section shall list all states in which it has
5 applied for or holds permits as a firm and list any past denial, revocation or
6 suspension of a permit by any other state. Each firm registered under this
7 section shall notify the board in writing, within thirty (30) days following
8 any change in the identities of partners, officers, shareholders or members
9 whose principal place of business is in this state, any change in the number
10 or location of offices within this state, any change in the identity of the
11 persons in charge of such offices, and any issuance, denial, revocation or
12 suspension of a permit by any other state.
13 (5) Firms which fall out of compliance with the provisions of this sec-
14 tion due to changes in firm ownership or personnel, after registration, shall
15 take corrective action to bring the firm back into compliance as quickly as
16 possible. The board may grant a reasonable period of time for a firm to take
17 such corrective action. Failure to bring the firm back into compliance within
18 a reasonable period as defined by the board may result in penalties as pre-
19 scribed by board rule.
20 (6) As a condition of registration renewal under this section, the board,
21 by rule, shall require firms to undergo, no more frequently than once every
22 three (3) years, peer reviews conducted as specified by rule. Such review
23 shall include a verification that individuals in the firm who are responsible
24 for supervising attest and compilation services and who sign or authorize
25 someone to sign a report on financial statements on the behalf of the firm
26 meet the competency requirements set out in the professional standards for
27 such services. The rules concerning peer review shall require:
28 (a) Peer reviews to be subject to oversight by an oversight body estab-
29 lished by board rule which will periodically report to the board on the
30 effectiveness of the review program under its charge, and provide to the
31 board a listing of firms that have participated in a peer review program
32 that is satisfactory to the board; and
33 (b) The peer review processes to be operated and documents maintained in
34 a manner designed to preserve confidentiality, and that neither the board
35 nor any third party, other than the oversight body, shall have access to
36 documents furnished or generated in the course of the review.
37 (7) Information discovered solely as a result of a firm's peer review
38 shall not be grounds for suspension or revocation of a license.
39 SECTION 14. That Sections 54-215 and 54-216, Idaho Code, be, and the same
40 are hereby repealed.
41 SECTION 15. That Section 54-218, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 54-218. PROHIBITION -- ACCEPTANCE OF COMMISSIONS AND CONTINGENT FEES. (1)
44 A licensee engaged in the practice of public accounting or who holds out as a
45 certified public accountant or as a licensed public accountant shall not pay a
46 commission to obtain a client, nor accept a commission for a referral to a
47 client of products or services of others. This does not prohibit payments for
48 the purchase of all, or a material part, of an accounting practice, or retire-
49 ment payments to persons formerly engaged in the practice of public accoun-
50 tancy, or payments to the heirs or estates of such persons may accept a com-
51 mission or referral fee unless prohibited by this section.
52 (a) A licensee shall not for a commission recommend or refer to a client
1 any product or service, or for a commission recommend or refer any product
2 or service to be supplied by a client, or receive a commission, when the
3 licensee or the licensee's firm also performs for that client:
4 (i) An attest service; or
5 (ii) A compilation when the licensee expects, or reasonably might
6 expect, that a third party will use the compilation and the compila-
7 tion report does not disclose a lack of independence.
8 (b) A licensee who is not prohibited by this section from performing ser-
9 vices for or receiving a commission and who is paid or expects to be paid
10 a commission shall disclose in writing that fact to any person or entity
11 to whom the licensee recommends or refers a product or service to which
12 the commission relates.
13 (c) Any licensee who accepts a referral fee for recommending or referring
14 any service of a licensee to any person or entity or who pays a referral
15 fee to obtain a client shall disclose such acceptance or payment to the
16 client in writing.
17 (2) A licensee engaged in the practice of public accounting or who holds
18 out as a certified public accountant or as a licensed public accountant shall
19 not offer or perform professional services for a fee which is contingent upon
20 the findings or results of such services; provided however, that this does not
21 apply to professional services involving federal, state or other taxes in
22 which the findings are those of the tax authorities and not those of the
23 licensee, nor does it apply to professional services for which the fees are
24 fixed by courts or other public authorities, and which are indeterminate in
25 amount at the time the professional services are undertaken may accept a con-
26 tingent fee which is disclosed to the client in writing unless prohibited by
27 this section.
28 (a) A licensee shall not perform for a contingent fee any professional
29 service for, or receive such a fee from, a client for whom the licensee or
30 the licensee's firm performs:
31 (i) An attest service; or
32 (ii) A compilation, when the licensee expects, or reasonably might
33 expect, that a third party will use the compilation and the compila-
34 tion report does not disclose a lack of independence.
35 (b) A licensee shall not prepare an original or amended tax return or
36 claim for a tax refund for a contingent fee for any client.
37 (c) Except as stated in the next sentence, a contingent fee is a fee
38 established for the performance of any service pursuant to an arrangement
39 in which no fee will be charged unless a specified finding or result is
40 attained, or in which the amount of the fee is otherwise dependent upon
41 the finding or result of such service. Solely for purposes of this sec-
42 tion, fees shall not be regarded as contingent if fixed by courts or other
43 public authorities or, in tax matters, if determined based on the results
44 of judicial proceedings or the findings of governmental agencies. A
45 licensee's fees may vary depending, for example, on the complexity of ser-
46 vices rendered.
47 (3) The prohibitions contained in this section shall apply during the
48 period in which the licensee is engaged to perform any of the services listed
49 herein and the period covered by any historical financial statements involved
50 in any such listed services.
51 SECTION 16. That Section 54-219, Idaho Code, be, and the same is hereby
52 amended to read as follows:
53 54-219. LICENSE -- RESTRICTION, REVOCATION, SUSPENSION OR DENIAL --
1 CAUSES -- COST RECOVERY -- ADMINISTRATIVE PENALTIES. (1) After notice and
2 opportunity for hearing in accordance with the provisions of chapter 52, title
3 67, Idaho Code, for cause shown, the board may revoke, suspend, refuse to
4 renew, administratively penalize, reprimand, restrict or place on probation
5 the holder of a certificate or license, or refuse to issue any certificate or
6 any license to an applicant, for any one (1) of the following causes:
7 (a) Any false statement with the intent to mislead or deceive the board
8 or its members in or in connection with any application; or, cheating or
9 any attempt to cheat in an examination.
10 (b) Fraud or deceit in obtaining or renewing a certificate and or license
11 to practice as a certified public accountant or licensed public accountant
12 under the provisions of this chapter.
13 (c) Dishonesty, fraud or gross negligence in the practice of public
14 accounting performance of professional services as a licensee or individ-
15 ual granted privileges under section 54-227, Idaho Code, or in the filing
16 or failure to file his own income tax returns.
17 (d) Violation of any provision of this chapter, or any rule adopted by
18 the board under authority granted by this chapter, or an order of the
19 board directed specifically to the licensee.
20 (e) Conviction of or a guilty plea to a felony under the laws of any
21 state or of the United States.
22 (f) Conviction of or a guilty plea to any crime involving moral turpi-
23 tude, an element of which is dishonesty or fraud, under the laws of any
24 state or of the United States.
25 (g) Practicing Representing oneself as a certified public accountant or
26 licensed public accountant during any period in which the license of the
27 person so practicing has been suspended or revoked by the board.
28 (h) Cancellation, revocation, suspension or refusal to renew or grant a
29 certificate or authority to practice as a certified public accountant or
30 licensed public accountant license or privileges under section 54-227,
31 Idaho Code, for disciplinary reasons by any other state , for any cause.
32 other than failure to pay an annual registration or license fee in such
33 other state.
34 (i) Practicing as a certified public accountant or licensed public
35 accountant under a false or assumed name; provided, however, this subsec-
36 tion shall have no application to practicing as a certified public accoun-
37 tant or licensed public accountant under the name of a practice unit firm,
38 when such style or name is in conformity with a type or form approved by
39 the rules of the board.
40 (j) Habitual use of drugs or intoxicants to such a degree as to render
41 the licensee unreliable and unfit to practice as a certified public
42 accountant or licensed public accountant.
43 (k) Suspension or revocation of the right to practice before any agency
44 of the United States government or of the state of Idaho, for any cause
45 other than failure to pay a registration or similar fee.
46 (l) Having been declared mentally incompetent by a court of competent
47 jurisdiction; provided, however, that when a person's license shall have
48 been revoked or suspended for this cause, such license shall be reinstated
49 by the board when said disability is judicially removed.
50 (m) Nonpayment of the annual license fee required by this chapter, said
51 nonpayment having continued for a period of thirty (30) days after the
52 expiration of the previous license.
53 (n) Holding out Representing oneself as qualified or authorized to prac-
54 tice as a certified public accountant or licensed public accountant in
55 this state , or practicing public accountancy without holding a current,
1 valid, unrevoked and unsuspended certificate and license issued by the
2 board or privileges under section 54-227, Idaho Code.
3 (o) Performance of any fraudulent act while holding a certificate,
4 license, permit or privileges under this chapter.
5 (p) Any conduct reflecting adversely upon the licensee's fitness to per-
6 form services while a licensee, or individual granted privileges under
7 section 54-227, Idaho Code.
8 (2) The expenses, including attorney's fees, incurred by the board for
9 any or all proceedings initiated against a person for violation of any of the
10 provisions of this chapter may be charged against such person by the board,
11 upon the finding of a violation of this chapter, in addition to any adminis-
12 trative penalties which may be levied by the board against such person. Admin-
13 istrative penalties levied by the board shall not exceed one two thousand five
14 hundred dollars ($ 1,02,500) per violation.
15 (3) In lieu of or in addition to any remedy specifically provided, the
16 board may require of a licensee or a practice unit firm:
17 (a) A quality peer review conducted in such fashion as the board may
19 (b) Preissuance review;
20 (c) Satisfactory completion of such continuing professional education
21 programs or examinations as the board may specify; and
22 (d) Other similar remedies.
23 (4) In any action brought under the provisions of this chapter, evidence
24 of the commission of a single act prohibited in this chapter shall be suffi-
25 cient to justify a suspension, revocation, fine, administrative penalty,
26 restriction, reprimand, injunction, restraining order, conviction or any other
27 remedy authorized in this chapter. Evidence of a general course of conduct
28 shall not be required.
29 SECTION 17. That Section 54-220, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 54-220. USE OF TITLE -- VALID LICENSE TO PRACTICE. (1) No person shall
32 assume or use the title or designation "certified public accountant" or
33 "licensed public accountant" or any other title, designation, words, letters,
34 abbreviations, sign, card or device tending to indicate that such person is a
35 certified public accountant or licensed public accountant unless such person
36 holds a license or is granted privileges as a certified public accountant or
37 licensed public accountant pursuant to chapter 2, title 54, Idaho Code.
38 (2) No person , proprietorship, partnership or corporation or firm not
39 licensed, granted privileges or registered pursuant to this chapter shall
40 assume or use the title or designation "certified accountant," "chartered
41 accountant," "public accountant," "enrolled accountant," "licensed accoun-
42 tant," "registered accountant," "accredited accountant," "accountant,"
43 "auditor" or other titles , or designation or abbreviation likely to be con-
44 fused with the titles "certified public accountant" or "licensed public
45 accountant ." or use any of the abbreviations "CA," "LA," "LPA," "CPA," "RA,"
46 "AA," or similar abbreviation likely to be confused with the abbreviations
47 "CPA" or "LPA." The title "enrolled agent" or "EA" may only be used by indi-
48 viduals so designated by the internal revenue service. Notwithstanding the
49 provisions of this section, the board may adopt rules authorizing and limiting
50 the use of specific titles and designations granted by recognized professional
51 societies or associations.
52 (3) No person, proprietorship, partnership or corporation not licensed or
53 registered pursuant to this chapter shall assume or use any title or designa-
1 tion that includes the words "accountant," "auditor" or "accounting" in con-
2 nection with any other language, including the language of a report, that
3 implies that such person, proprietorship, partnership or corporation is so
4 licensed or registered or has special competence as an accountant or auditor;
5 provided however, that this subsection does not prohibit any officer, partner,
6 member or employee of any organization from affixing his signature to any
7 statement in reference to the financial affairs of such organization with any
8 wording designating the position, title or office that he holds therein nor
9 prohibit any act of a public official or employee in the performance of his
10 duties as such.
11 (4) No business entity shall provide attest or compilation services or
12 assume or use the title "certified public accountants" or "licensed public
13 accountants" or the abbreviation "CPAs," "LPAs" or any other title, designa-
14 tion, words, letters, abbreviations, sign, card or device tending to indicate
15 that such business entity is a firm unless: (a) the business entity is a firm
16 registered pursuant to this chapter, and (b) ownership of the firm is in
17 accord with this chapter and rules promulgated by the board.
18 SECTION 18. That Section 54-221, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 54-221. ISSUANCE OF A REPORT. (1) Only those practice units registered
21 pursuant to this chapter licensees shall issue a report on the financial
22 statements of any other person, firm, organization or governmental unit or
23 offer to render or render any attest or compilation service, as defined
24 herein. This prohibition does not apply to any officer, partner, employee or
25 member of any organization affixing their signature to any statement or report
26 in reference to the financial affairs of such firm or organization with any
27 wording designating the position, title or office that they hold therein; nor
28 prohibit any act of a public official or employee in the performance of their
29 duties as such; nor prohibit the performance by any person of other services
30 involving the use of accounting skills, including the preparation of tax
31 returns, management, financial advisory or consulting services, and the prepa-
32 ration of financial statements without the issuance of reports, as defined in
33 section 54-206, Idaho Code.
34 (2) The prohibition contained in subsection (1) of this section is appli-
35 cable to issuance, by a person or firm not holding a valid license, of a
36 report using any form of language conventionally used by licensees respecting
37 a review of financial statements or respecting a compilation of financial
39 (3) No corporation shall affix its name to a report on the financial
40 statements of any other person, firm, organization or governmental unit unless
41 it is a professional public accounting corporation, as defined in section
42 54-206, Idaho Code No licensee or individual granted privileges under section
43 54-227, Idaho Code, shall perform attest services through any form of business
44 that is not registered under the provisions of section 54-214, Idaho Code, or
45 an equivalent provision of the laws of another state.
46 (4) No firm of any kind or nature shall affix its name to a report on the
47 financial statements of any other person, firm, organization or governmental
48 unit unless all of its owners, partners, officers, shareholders or members who
49 regularly work in the state of Idaho are themselves persons licensed as certi-
50 fied public accountants or licensed public accountants pursuant to this chap-
51 ter, and all other partners, officers, shareholders or members are persons
52 licensed as certified public accountants or licensed public accountants in
53 some other state No licensee shall issue a compilation report through any form
1 of business that is not registered under the provisions of section 54-214,
2 Idaho Code, unless the report discloses the name of the business through which
3 the individual is issuing the report, and the individual:
4 (a) Signs the compilation report identifying the individual as a CPA or
6 (b) Meets the competency requirements provided in this chapter and by
7 board rule; and
8 (c) Undergoes no less frequently than once every three (3) years, a peer
9 review conducted in such manner as the board shall by rule specify, and
10 such review shall include verification that such individual has met the
11 competency requirements set out in professional standards for such ser-
13 (5) A licensee or firm that does not issue reports may issue financial
14 statements without reports only if the financial statements include the dis-
15 claimer language of section 54-226(3), Idaho Code.
16 SECTION 19. That Chapter 2, Title 54, Idaho Code, be, and the same is
17 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
18 ignated as Section 54-227, Idaho Code, and to read as follows:
19 54-227. SUBSTANTIAL EQUIVALENCY. (1) A person whose principal place of
20 business is not in this state and who has a valid certificate and license as a
21 certified public accountant from any state which the board has determined to
22 be substantially equivalent to this chapter shall be presumed to have qualifi-
23 cations substantially equivalent to this state's requirements and shall have
24 all the privileges of licensees of this state without the need to obtain a
25 license. However, such persons shall notify the board of their intent to enter
26 the state under this provision.
27 (2) A person whose principal place of business is not in this state and
28 who has a valid certificate and license as a certified public accountant from
29 any state which the board has not determined to be substantially equivalent to
30 this chapter shall be presumed to have qualifications substantially equivalent
31 to this state's requirements and shall have all the privileges of licensees of
32 this state without the need to obtain a license only if such person demon-
33 strates that his or her qualifications are substantially equivalent to the
34 licensure requirements of this chapter. Such persons shall notify the board of
35 their intent to enter the state under this provision in the manner provided by
36 rules of the board. The board may charge a fee for such notification as set
37 forth in section 54-212, Idaho Code, and as prescribed by rules of the board.
38 (3) Licensees of other states exercising the privilege afforded under
39 this section hereby consent, as a condition of the grant of this privilege:
40 (a) To the personal and subject matter jurisdiction and disciplinary
41 authority of the board;
42 (b) To comply with this chapter and the board's rules; and
43 (c) To the appointment of the state boards which issued their licenses as
44 their agents upon whom process may be served in any action or proceeding
45 by this state's board against such licensees.
46 (4) A licensee of this state offering or rendering services or using the
47 CPA title in another state shall be subject to disciplinary action in this
48 state for an act committed in another state for which the licensee would be
49 subject to discipline for an act committed in another state. Notwithstanding
50 the board's enforcement authority granted by this chapter, the board shall
51 investigate any complaint made by the board of accountancy of another state.
52 SECTION 20. That Chapter 2, Title 54, Idaho Code, be, and the same is
1 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
2 ignated as Section 54-228, Idaho Code, and to read as follows:
3 54-228. CONSTRUCTION -- SEVERABILITY. The provisions of this chapter are
4 hereby declared to be severable and if any provision of this chapter or the
5 application of such provision to any person or circumstance is declared
6 invalid for any reason, such declaration shall not affect the validity of the
7 remaining portions of this act.
STATEMENT OF PURPOSE
This legislation would modernize the regulation of the practice of
accounting in Idaho. Based on the Uniform Accountancy Act which was
developed by the American Institute of CPAs and the National
Association of State Boards of Accountancy, this legislation moves
toward a regulatory framework which is more consistent with other
states. It would remove existing barriers accountants face in
practicing in Idaho and, by allowing reciprocal practice rights
to people who are licensed in states with substantially equivalent
requirements, would facilitate the interstate practice of accounting
for accountants licensed in Idaho and elsewhere, recognizing that
many clients who need accounting services operate in more than one
state. It would also afford the State Board of Accountancy the
ability to protect the public interest by monitoring and regulating
the practice of accounting in Idaho by accountants whose businesses
are not located in this state.
This bill will have no impact on the General Fund.
Name: Ken McClure, Givens Pursley LLP
Melissa Nelson, Idaho Society of CPAs, 344 6261
Barbara Porter, State Board of Accountancy, 334 2490
STATEMENT OF PURPOSE/FISCAL NOTE H 485