2003 Legislation
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HOUSE BILL NO. 31 – Accountant, license, qualifications

HOUSE BILL NO. 31

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H0031...........................................................by MR. SPEAKER
                      Requested by: Board of Accountancy
ACCOUNTANTS - Amends existing law relating to the Idaho Accountancy Act to
revise a definition; to revise qualifications for licensure and reciprocity;
to revise renewal and reinstatement provisions; to revise grounds for action
upon licenses; and to revise substantial equivalency provisions.
                                                                        
01/06    House intro - 1st rdg - to printing
    Rpt prt - to Bus
01/22    Rpt out - rec d/p - to 2nd rdg
01/23    2nd rdg - to 3rd rdg
01/27    3rd rdg - PASSED - 70-0-0
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
      Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
      Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
      Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
      McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Nacarrato, Nielsen,
      Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali,
      Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24),
      Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Deal
    Title apvd - to Senate
01/28    Senate intro - 1st rdg - to Com/HuRes
01/31    Rpt out - rec d/p - to 2nd rdg
02/03    2nd rdg - to 3rd rdg
02/05    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Calabretta, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill,
      Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie,
      McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Stegner,
      Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Cameron, Sorensen
    Floor Sponsor - Andreason
    Title apvd - to House
02/06    To enrol
02/07    Rpt enrol - Sp signed
02/10    Pres signed
02/11    To Governor
02/12    Governor signed
         Session Law Chapter 14
         Effective: 07/01/03

Bill Text


                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 31
                                                                        
                                       BY MR. SPEAKER
                             Requested by: Board of Accountancy
                                                                        
  1                                        AN ACT
  2    RELATING TO THE IDAHO ACCOUNTANCY ACT; AMENDING SECTION 54-206, IDAHO CODE, TO
  3        REVISE A DEFINITION; AMENDING SECTION 54-210, IDAHO CODE, TO REVISE PROVI-
  4        SIONS RELATING TO  QUALIFICATIONS  FOR  RECIPROCITY,  TO  REQUIRE  CERTAIN
  5        APPLICANTS FOR CERTIFICATE AND LICENSE TO COMPLETE A BOARD APPROVED ETHICS
  6        EXAMINATION AND TO REQUIRE HOLDERS OF DESIGNATIONS ISSUED BY FOREIGN COUN-
  7        TRIES  TO BE OF GOOD MORAL CHARACTER; AMENDING SECTION 54-211, IDAHO CODE,
  8        TO PROVIDE DESCRIPTIVE LANGUAGE, TO PROVIDE CORRECT TERMINOLOGY,  TO  PRO-
  9        VIDE  REFERENCE  TO  COMPILATION  REPORTS,  TO  PROVIDE  FOR NONRENEWAL OF
 10        LICENSES, TO REVISE PROVISIONS RELATING TO REINSTATEMENT OF  LICENSES,  TO
 11        PROVIDE FOR REENTRY INTO ACTIVE STATUS AND TO REQUIRE DISCLOSURE BY APPLI-
 12        CANTS  AND  LICENSEES OF DISCIPLINARY ACTIONS AND CONVICTIONS OF OR GUILTY
 13        PLEAS TO A FELONY; AMENDING SECTION 54-214, IDAHO CODE, TO PROVIDE  REFER-
 14        ENCE  TO  COMPILATION  REPORTS, TO MAKE A GRAMMATICAL CHANGE AND TO REVISE
 15        REQUIREMENTS RELATING TO FIRM PEER REVIEWS; AMENDING SECTION 54-219, IDAHO
 16        CODE, TO REVISE GROUNDS FOR WHICH THE  BOARD  MAY  ACT  UPON  LICENSES  TO
 17        INCLUDE  CONVICTIONS  UNDER THE LAWS OF ANY STATE OR COUNTRY AND TO REMOVE
 18        LANGUAGE RELATING TO NONPAYMENT OF ANNUAL LICENSE FEES;  AMENDING  SECTION
 19        54-220,  IDAHO CODE, TO PROVIDE REFERENCE TO COMPILATION REPORTS; AMENDING
 20        SECTION 54-226, IDAHO CODE, TO MAKE A TECHNICAL CORRECTION;  AND  AMENDING
 21        SECTION  54-227,  IDAHO CODE, TO REVISE PROVISIONS RELATING TO SUBSTANTIAL
 22        EQUIVALENCY.
                                                                        
 23    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 24        SECTION 1.  That Section 54-206, Idaho Code, be, and the  same  is  hereby
 25    amended to read as follows:
                                                                        
 26        54-206.  DEFINITIONS. As used in this section:
 27        (1)  "AICPA" means the American institute of certified public accountants.
 28        (2)  "Applicant"  means any person having the requisite qualifications who
 29    makes application to the board for examination, or  for  initial  issuance  or
 30    renewal or reinstatement of a license under the provisions of this chapter.
 31        (3)  "Attest" means providing the following financial statement services:
 32        (a)  Any  audit or other engagement to be performed in accordance with the
 33        statements on auditing standards;
 34        (b)  Any review of a financial statement to  be  performed  in  accordance
 35        with the statements on standards for accounting and review services; and
 36        (c)  Any  examination of prospective financial information to be performed
 37        in accordance with the statements on  standards  for  attestation  engage-
 38        ments.
 39        (4)  "Board" means the Idaho state board of accountancy.
 40        (5)  "Certificate"  means  that document issued by the board upon original
 41    approval of licensure. The original certificate does not constitute  licensure
 42    and  a  person cannot represent himself or herself as a licensee unless a cur-
 43    rent and valid annual license has been issued by the board.
                                                                        
                                           2
                                                                        
  1        (6)  "Certified public accountant" means any person  who  holds  a  valid,
  2    unrevoked and unsuspended license under the provisions of chapter 2, title 54,
  3    Idaho  Code, or an equivalent provision of the laws of another state designat-
  4    ing said person as a certified public accountant.
  5        (7)  "Client" means the person or entity that agrees with  a  licensee  or
  6    licensee's  employer to receive any professional services with or without com-
  7    pensation  and shall include all affiliates and related entities in the finan-
  8    cial statements of an attest or compilation engagement.
  9        (8)  "Compilation" means a service performed in accordance with statements
 10    on standards for accounting and review services which presents, in the form of
 11    historical or prospective financial statements, information that is the repre-
 12    sentation of management or owners without undertaking to express any assurance
 13    on the statements. The term "compilation" does not  include  financial  state-
 14    ments  accompanied by the language set forth in section 54-226(3), Idaho Code,
 15    (whether used by a licensee or by a person not licensed under this chapter) so
 16    long as the financial statements are not accompanied by any other language  of
 17    assurance or disclaimer.
 18        (9)  "Financial statements" means a presentation of historical or prospec-
 19    tive  financial data, which may include accompanying notes, intended to commu-
 20    nicate an entity's economic resources or obligations at a point  in  time,  or
 21    the  changes  therein for a period of time, in accordance with a comprehensive
 22    basis of accounting.
 23        (10) "Firm" means a proprietorship, partnership, professional corporation,
 24    professional limited liability company, or  any  other  form  of  professional
 25    organization permitted by Idaho law, registered under the requirements of sec-
 26    tion 54-214, Idaho Code.
 27        (11) "Good  moral character" means lack of a history of dishonest dealings
 28    or a felonious act.
 29        (12) "License" means that authorization issued by the board upon  original
 30    approval and on an annual basis permitting a qualified person to practice as a
 31    certified  public  accountant  or  licensed  public accountant in the state of
 32    Idaho.
 33        (13) "Licensed public accountant" or "LPA" means any person  who  holds  a
 34    valid,  unrevoked  and  unsuspended license under the provisions of chapter 2,
 35    title 54, Idaho Code, designating said person as a licensed public accountant.
 36        (14) "Licensee" means the holder of a current valid license.
 37        (15) "Member" means a person who has been admitted to membership in a firm
 38    which is organized as a limited liability company.
 39        (16) "Peer review" means a board approved study, appraisal  or  review  of
 40    one  (1)  or  more aspects of the professional work of a licensee or firm that
 41    performs attest or compilation services or issues compilation  reports,  by  a
 42    person  or persons licensed under this chapter or by another state and who are
 43    independent of the licensee or firm being reviewed.
 44        (17) "Permit" means a permit to practice as a  firm  issued  under  corre-
 45    sponding provisions of the laws of other states.
 46        (18) "Person" means any natural living person.
 47        (19) "Professional  services"  means services arising out of or related to
 48    the specialized knowledge or skills associated with certified  public  accoun-
 49    tants or licensed public accountants.
 50        (20) "Report,"  when used with reference to financial statements, means an
 51    opinion or other form of language that states or implies assurance as  to  the
 52    reliability  of any financial statements and that also includes or is accompa-
 53    nied by any statement or implication that the person or firm  issuing  it  has
 54    special knowledge or competence in accounting or auditing. Such a statement or
 55    implication  of  special  knowledge  or  competence  may arise from use by the
                                                                        
                                           3
                                                                        
  1    issuer of the report of names or titles indicating that the person or firm  is
  2    an  accountant or auditor, or from the language of the report itself. The term
  3    "report" includes any form of language which disclaims an  opinion  when  such
  4    form  of language is conventionally understood to imply any positive assurance
  5    as to the reliability of the financial statements referred  to or special com-
  6    petence on the part of the person  or  firm  issuing  such  language;  and  it
  7    includes any other form of language that is conventionally understood to imply
  8    such assurance or special knowledge or competence.
  9        (21) "State"  means any state of the United States, the District of Colum-
 10    bia, Puerto Rico, the U.S. Virgin Islands and Guam; except that  "this  state"
 11    means the state of Idaho.
 12        (22) "Substantial  equivalency"  or  "substantially  equivalent"  means  a
 13    determination  by  the  board  that  the education, examination and experience
 14    requirements contained in the statutes and  administrative  rules  of  another
 15    jurisdiction  are comparable to or exceed the education, examination and expe-
 16    rience requirements for CPAs contained in this chapter or that  an  individual
 17    licensee's education, examination and experience qualifications are comparable
 18    to  or  exceed the education, examination and experience requirements for CPAs
 19    contained in this chapter.
                                                                        
 20        SECTION 2.  That Section 54-210, Idaho Code, be, and the  same  is  hereby
 21    amended to read as follows:
                                                                        
 22        54-210.  RECIPROCITY  --  TRANSFER  OF EXAMINATION GRADES -- FOREIGN RECI-
 23    PROCITY -- QUALIFICATIONS. (1) A person whose  certificate  and  license  have
 24    been granted by another state, whose principal place of business is located in
 25    this  state,  shall obtain a license by reciprocity from the board before pro-
 26    viding professional services in this state.
 27        (2)  (a) An applicant for certificate and license by reciprocity to  prac-
 28        tice as a certified public accountant in Idaho must:
 29             (ai)   Be eighteen (18) years of age or older;
 30             (bii)  Be of good moral character;
 31             (ciii) Have  obtained the education and passed the uniform CPA exami-
 32             nation with standards no less  than  those  required  in  Idaho.  The
 33             requirements of education and the Idaho standards relating to passage
 34             of  the  uniform CPA examination shall be waived if the applicant has
 35             no less than four (4) years' experience as determined by  the  board,
 36             provided  that  the  experience  or its equivalent was obtained after
 37             original licensure as a certified public accountant  and  within  the
 38             ten (10) years immediately preceding the reciprocity application; and
 39             (div)  Have  completed  the  necessary experience, continuing profes-
 40             sional education, and board approved ethics examination required  for
 41             issuance  of  a  license  in Idaho and hold a current license in good
 42             standing in another licensing jurisdiction.
 43        (b)  The requirements of subsection (2)(a) of  this  section  relating  to
 44        education, Idaho standards relating to passage of the uniform CPA examina-
 45        tion, experience, continuing professional education and ethics examination
 46        shall  be waived if the applicant has no less than four (4) years' experi-
 47        ence as determined by the board,  provided  that  the  experience  or  its
 48        equivalent  was  obtained  after  original licensure as a certified public
 49        accountant and within the ten (10) years immediately preceding  the  reci-
 50        procity application.
 51        (3)  (a) A  person  holding an inactive or retired certificate and license
 52        granted by another state, whose principal place of business is located  in
 53        this  state,  may  apply for an equivalent license by reciprocity from the
                                                                        
                                           4
                                                                        
  1        board, provided the applicant must:
  2             (i)   Meet the requirements for an inactive license as set  forth  in
  3             section  54-211(1)(c),  Idaho Code, or the requirements for a retired
  4             license as set forth in section 54-211(1)(d), Idaho Code;
  5             (ii)  Be of good moral character;
  6             (iii) Have obtained the education and passed the uniform CPA examina-
  7             tion with standards no less than those required in Idaho; and
  8             (iv)  Have completed the necessary experience and board approved eth-
  9             ics examination required for issuance of a license in Idaho.
 10        (b)  The requirements of subsection (3)(a) of  this  section  relating  to
 11        education, Idaho standards relating to passage of the uniform CPA examina-
 12        tion,  experience  and ethics examination shall be waived if the applicant
 13        has no less than four (4) years' experience as determined  by  the  board,
 14        provided that the experience or its equivalent was obtained after original
 15        licensure  as  a certified public accountant and within the ten (10) years
 16        immediately preceding the reciprocity application.
 17        (4)  An applicant for certificate and license to practice as  a  certified
 18    public  accountant  in  Idaho  by  transfer of examination grades from another
 19    licensing jurisdiction must:
 20        (a)  Be eighteen (18) years of age or older;
 21        (b)  Be of good moral character;
 22        (c)  Have obtained the necessary education and have passed the uniform CPA
 23        examination with standards no less than those prescribed  by  the  board's
 24        rules for examination candidates in Idaho; and
 25        (d)  Possess  experience  qualifications as required under section 54-209,
 26        Idaho Code, and complete a board approved ethics examination required  for
 27        issuance of a license in Idaho.
 28        (45)  The  board  shall  issue  a certificate and license to a holder of a
 29    substantially equivalent designation issued by  a  foreign  country,  provided
 30    that:
 31        (a)  The  foreign  authority  which  granted the designation makes similar
 32        provision to allow a person who holds  a  valid  certificate  and  license
 33        issued  by this state to obtain such foreign authority's comparable desig-
 34        nation; and
 35        (b)  The designation:
 36             (i)   Was duly issued by an authority of a foreign country which reg-
 37             ulates the practice of public accountancy and has not expired or been
 38             revoked or suspended;
 39             (ii)  Entitles the holder to issue reports upon financial statements;
 40             and
 41             (iii) Was issued upon the basis of  substantially  equivalent  educa-
 42             tional,  examination  and  experience requirements established by the
 43             foreign authority or by law; and
 44        (c)  The applicant:
 45             (i)   Received the designation, based on educational and  examination
 46             standards  substantially equivalent to those in effect in this state,
 47             at the time the foreign designation was granted;
 48             (ii)  Completed an experience requirement,  substantially  equivalent
 49             to  the  requirements  set  out  in this chapter, in the jurisdiction
 50             which granted the foreign designation or has completed four (4) years
 51             of  professional  experience  in  this  state;  or  meets  equivalent
 52             requirements prescribed by the board by rule,  within  the  ten  (10)
 53             years immediately preceding the application; and
 54             (iii) Passed  a  uniform qualifying examination in national standards
 55             acceptable to the board; and
                                                                        
                                           5
                                                                        
  1             (iv)  Is of good moral character.
                                                                        
  2        SECTION 3.  That Section 54-211, Idaho Code, be, and the  same  is  hereby
  3    amended to read as follows:
                                                                        
  4        54-211.  LICENSES  --  LICENSING  PERIOD -- NONRENEWAL -- REINSTATEMENT --
  5    INACTIVE LICENSES -- RETIREMENT -- FEES. (1) The board  shall  issue  original
  6    initial  certificates  and licenses, and renewal and reinstatement licenses to
  7    practice as a certified  public  accountant,  and  renewal  and  reinstatement
  8    licenses to practice as a licensed public accountant to persons who have qual-
  9    ified therefor in accordance with the provisions of this chapter and the rules
 10    of the board. A certificate and license, once issued, shall continue in effect
 11    so long as the holder thereof complies with the provisions of this chapter and
 12    the rules and orders of the board.
 13        (a)  Original Initial. The board shall collect an original initial license
 14        fee  upon  board  approval of an original initial license to practice as a
 15        certified public accountant in the state of Idaho as set forth in  section
 16        54-212,  Idaho  Code,  and  as prescribed by the rules of the board. Those
 17        individuals meeting the requirements for  original  initial  licensure  in
 18        Idaho,  pursuant  to  the  provisions of this chapter and the rules of the
 19        board, shall be issued a license effective for no more  than  twelve  (12)
 20        months. The license shall then be subject to annual renewal.
 21        (b)  Renewal.  The  board  shall  collect  an  annual license fee from all
 22        licensees each year as set forth in section 54-212,  Idaho  Code,  and  as
 23        prescribed  by  the rules of the board. Those persons meeting the require-
 24        ments of this subsection for license renewal shall  be  issued  a  license
 25        effective  for  a  period of one (1) year after its issuance. Requirements
 26        include:
 27             (i)   Good moral character;
 28             (ii)  Completion of continuing professional education as specified by
 29             the board's rules;
 30             (iii) Identification, in the renewal application, of  the  firm  with
 31             which the licensee is affiliated; and
 32             (iv)  Where  applicable, verification of satisfactory completion of a
 33             peer review program by the firm with which the  licensee  is  affili-
 34             ated,  pursuant  to  section  54-214,  Idaho Code, and the rules pre-
 35             scribed by the board. Any licensee who  performs  issues  compilation
 36             services  reports  for  the  public  other  than  through a firm must
 37             undergo no more frequently than once every three (3)  years,  a  peer
 38             review  conducted  in  accordance with rules prescribed by the board,
 39             and such review shall include verification that such licensee has met
 40             the competency requirements set out  in  professional  standards  for
 41             such service.
 42        (c)  Inactive  status.  Any licensee in current compliance with the provi-
 43        sions of this chapter who chooses not to perform or offer to  perform  for
 44        the  public  one  (1)  or more kinds of attest or compilation services may
 45        apply to place his or her license in inactive status. The  annual  renewal
 46        fee  for  inactive  status  shall be as set forth in section 54-212, Idaho
 47        Code, and as prescribed by the rules of the board. Licensees with inactive
 48        status must place the word "inactive" adjacent to their CPA or  LPA  title
 49        on  any  business  card,  letterhead  or any other document or device when
 50        using the title, with the exception of their certificate  on  which  their
 51        title appears.
 52        (d)  Retired.  After  a  person reaches the age of sixty (60) years, or in
 53        the event of a disability preventing continued practice,  the  certificate
                                                                        
                                           6
                                                                        
  1        of  a  certified  public  accountant  or  licensed public accountant, upon
  2        application to the board by the holder, may be  placed  by  the  board  in
  3        retired  status.  Retired status shall allow the holder to retain the wall
  4        certificate and remain on the board's mailing list. The annual renewal fee
  5        for retired status shall be as set forth in section  54-212,  Idaho  Code,
  6        and as prescribed by the rules of the board. Licensees with retired status
  7        must  place  the  word "retired" adjacent to their CPA or LPA title on any
  8        business card, letterhead or any other document or device when  using  the
  9        title,  with  the  exception  of  their  certificate  on which their title
 10        appears. An individual who performs or offers to perform  for  the  public
 11        attest or compilation services shall not qualify for retired status.
 12        (e)  Nonrenewal.  A  licensee  may place the license into lapsed status as
 13        prescribed by the rules of the board rather than renew  the  license.  Any
 14        license  not  renewed or placed into lapsed status within thirty (30) days
 15        after the expiration of the previous license shall be automatically placed
 16        into lapsed status.
 17        (f)  Reinstatement. Any certificate and license suspended  for  nonpayment
 18        of  the annual renewal fee, or a certificate in retired or inactive placed
 19        in lapsed status, may be reinstated upon completion of an application sup-
 20        plied by the board along with payment of a reinstatement fee as set  forth
 21        in  section  54-212,  Idaho  Code,  and  as prescribed by the rules of the
 22        board. In addition, the board shall require  the  applicant  to  meet  the
 23        qualifications  of subsection (b) of this section. Reinstatement following
 24        involuntary suspension shall be governed by the terms of the board's order
 25        of involuntary suspension.
 26        (g)  Reentry. A license in inactive or retired status may  reenter  active
 27        status  upon completion of an application supplied by the board along with
 28        payment of a reentry fee as prescribed by the rules of the board. In addi-
 29        tion, the board shall require the applicant to meet the qualifications set
 30        forth in subsection (1)(b) of this section.
 31        (2)  Applicants for initial issuance or reinstatement  of  licenses  under
 32    this  section  shall  in  their application list all states in which they have
 33    applied for or hold a license and list any past disciplinary action against or
 34    denial, revocation or suspension of a certificate, license or permit.
 35        (3)  Applicants and licensees shall notify the board  in  writing,  within
 36    thirty (30) days after its occurrence of:
 37        (a)  Any  felony  charges or convictions of, or guilty pleas to, a felony;
 38        or
 39        (b)  The issuance, Any disciplinary action against or the denial, restric-
 40        tion, revocation or suspension of a  certificate,  license  or  permit  by
 41        another state or by any federal agency.
                                                                        
 42        SECTION  4.  That  Section  54-214, Idaho Code, be, and the same is hereby
 43    amended to read as follows:
                                                                        
 44        54-214.  FIRM REGISTRATION -- PEER REVIEW. (1) The  board  shall  register
 45    firms  that  make application and demonstrate their qualifications therefor in
 46    accordance with the following subsections of this section or to  firms  origi-
 47    nally licensed in another state that establish an office in this state. A firm
 48    must  be  registered  with the board in order to provide attest or compilation
 49    services or compilation reports or in order to use  the  titles  "CPAs,"  "CPA
 50    firm," "LPAs" or "LPA firm." Firms must register with the board annually in on
 51    such  form  and between such dates as the board may specify by rule. The board
 52    may charge a fee for each registration for initial issuance or  renewal  of  a
 53    registration  under  this  section as set forth in section 54-212, Idaho Code,
                                                                        
                                           7
                                                                        
  1    and as prescribed by the rules of the board.
  2        (2)  An applicant for initial registration or renewal of a registration to
  3    practice under this section shall demonstrate that:
  4        (a)  Notwithstanding any other provision of law, a simple majority of the
  5        beneficial ownership of the firm belongs to holders of a  certificate  who
  6        are  licensed  in  some  state, and such partners, officers, shareholders,
  7        members or managers, whose principal place of business is in  this  state,
  8        and who perform professional services in this state, hold a valid certifi-
  9        cate  and  license  issued  by  this  state.  Although  a firm may include
 10        nonlicensee owners the firm and its ownership must comply with rules  pro-
 11        mulgated by the board.
 12        (b)  Any firm may include nonlicensee owners provided that:
 13             (i)   The  firm designates a licensee of this state, who is responsi-
 14             ble for the proper registration of the firm and identifies that indi-
 15             vidual to the board.
 16             (ii)  All nonlicensees are active individual participants in the firm
 17             or affiliated entities.
 18             (iii) The firm complies with such other requirements as the board may
 19             impose by rule.
 20        (c)  Any licensee who is responsible for supervising attest or compilation
 21        services or compilation reports or who signs or authorizes someone to sign
 22        a report on financial statements on behalf of the  firm,  shall  meet  the
 23        competency requirements of the professional standards for such services.
 24        (3)  Firms  registered to practice under this section shall be required to
 25    register each office of the firm within this state with the board and to  show
 26    that  all  attest  and compilation services reports rendered in this state are
 27    under the charge of a person holding a valid certificate and license issued by
 28    this state or some other state.
 29        (4)  A firm registering under this section shall list all states in  which
 30    it  has applied for or holds permits as a firm and list any past denial, revo-
 31    cation or suspension of a permit by any  other  state.  Each  firm  registered
 32    under  this section shall notify the board in writing, within thirty (30) days
 33    following any change in the identities of partners, officers, shareholders  or
 34    members  whose principal place of business is in this state, any change in the
 35    number or location of offices within this state, any change in the identity of
 36    the persons in charge of such offices, and any issuance, denial, revocation or
 37    suspension of a permit by any other state.
 38        (5)  Firms which fall out of compliance with the provisions of  this  sec-
 39    tion  due to changes in firm ownership or personnel, after registration, shall
 40    take corrective action to bring the firm back into compliance  as  quickly  as
 41    possible.  The  board may grant a reasonable period of time for a firm to take
 42    such corrective action. Failure to bring the firm back into compliance  within
 43    a  reasonable  period  as defined by the board may result in penalties as pre-
 44    scribed by board rule.
 45        (6)  As a condition of registration renewal under this section, the board,
 46    by rule, shall require firms to undergo, no more frequently  than  once  every
 47    three  (3)  years, peer reviews conducted comply with peer review requirements
 48    as specified by rule. Such review shall include a verification that  individu-
 49    als  in  the  firm  who are responsible for supervising attest and compilation
 50    services reports and who sign or authorize someone to sign a report on  finan-
 51    cial statements on the behalf of the firm meet the competency requirements set
 52    out in the professional standards for such services. The rules concerning peer
 53    review shall require:
 54        (a)  Peer  reviews  to be subject to oversight by an oversight body estab-
 55        lished by board rule which will periodically report to the  board  on  the
                                                                        
                                           8
                                                                        
  1        effectiveness  of  the review program under its charge, and provide to the
  2        board a listing of firms that have participated in a peer  review  program
  3        that is satisfactory to the board; and
  4        (b)  The  peer review processes to be operated and documents maintained in
  5        a manner designed to preserve confidentiality, and that neither the  board
  6        nor  any  third party, other than the oversight body, shall have access to
  7        documents furnished or generated in the course of the review.
  8        (7)  Information discovered solely as a result of  a  firm's  peer  review
  9    shall not be grounds for suspension or revocation of a license.
                                                                        
 10        SECTION  5.  That  Section  54-219, Idaho Code, be, and the same is hereby
 11    amended to read as follows:
                                                                        
 12        54-219.  LICENSE --  RESTRICTION,  REVOCATION,  SUSPENSION  OR  DENIAL  --
 13    CAUSES  --  COST  RECOVERY  --  ADMINISTRATIVE PENALTIES. (1) After notice and
 14    opportunity for hearing in accordance with the provisions of chapter 52, title
 15    67, Idaho Code, for cause shown, the board  may  revoke,  suspend,  refuse  to
 16    renew,  administratively  penalize,  reprimand, restrict or place on probation
 17    the holder of a certificate or license, or refuse to issue any certificate  or
 18    any license to an applicant, for any one (1) of the following causes:
 19        (a)  Any  false  statement with the intent to mislead or deceive the board
 20        or its members in connection with any application;  or,  cheating  or  any
 21        attempt to cheat in an examination.
 22        (b)  Fraud  or deceit in obtaining or renewing a certificate or license to
 23        practice as a certified public accountant or  licensed  public  accountant
 24        under the provisions of this chapter.
 25        (c)  Dishonesty,  fraud  or gross negligence in the performance of profes-
 26        sional services as a licensee or individual granted privileges under  sec-
 27        tion  54-227,  Idaho  Code,  or  in  the filing or failure to file his own
 28        income tax returns.
 29        (d)  Violation of any provision of this chapter, or any  rule  adopted  by
 30        the  board  under  authority  granted  by this chapter, or an order of the
 31        board directed specifically to the licensee.
 32        (e)  Conviction of or a guilty plea to a felony  under  the  laws  of  any
 33        state or of the United States country.
 34        (f)  Conviction  of  or  a guilty plea to any crime involving moral turpi-
 35        tude, an element of which is dishonesty or fraud, under the  laws  of  any
 36        state or of the United States country.
 37        (g)  Representing  oneself  as  a  certified public accountant or licensed
 38        public accountant during any period in which the license of the person  so
 39        practicing has been suspended or revoked by the board.
 40        (h)  Cancellation,  revocation,  suspension or refusal to renew or grant a
 41        license or privileges under section 54-227, Idaho Code,  for  disciplinary
 42        reasons by any other state for any cause.
 43        (i)  Practicing  as  a  certified  public  accountant  or  licensed public
 44        accountant under a false or assumed name; provided, however, this  subsec-
 45        tion shall have no application to practicing as a certified public accoun-
 46        tant  or  licensed  public  accountant under the name of a firm, when such
 47        style or name is in conformity with a type or form approved by  the  rules
 48        of the board.
 49        (j)  Habitual  use  of  drugs or intoxicants to such a degree as to render
 50        the licensee unreliable and  unfit  to  practice  as  a  certified  public
 51        accountant or licensed public accountant.
 52        (k)  Suspension  or  revocation of the right to practice before any agency
 53        of the United States government or of the state of Idaho,  for  any  cause
                                                                        
                                           9
                                                                        
  1        other than failure to pay a registration or similar fee.
  2        (l)  Having  been  declared  mentally  incompetent by a court of competent
  3        jurisdiction; provided, however, that when a person's license  shall  have
  4        been revoked or suspended for this cause, such license shall be reinstated
  5        by the board when said disability is judicially removed.
  6        (m)  Nonpayment  of  the annual license fee required by this chapter, said
  7        nonpayment having continued for a period of thirty  (30)  days  after  the
  8        expiration of the previous license.
  9        (n)  Representing oneself as qualified or authorized to practice as a cer-
 10        tified public accountant or licensed public accountant in this state with-
 11        out  holding  a  current, valid, unrevoked and unsuspended certificate and
 12        license or privileges under section 54-227, Idaho Code.
 13        (on)  Performance of any  fraudulent  act  while  holding  a  certificate,
 14        license, permit or privileges under this chapter.
 15        (po)  Any conduct reflecting adversely upon the licensee's fitness to per-
 16        form  services  while  a  licensee, or individual granted privileges under
 17        section 54-227, Idaho Code.
 18        (2)  The expenses, including attorney's fees, incurred by  the  board  for
 19    any  or all proceedings initiated against a person for violation of any of the
 20    provisions of this chapter may be charged against such person  by  the  board,
 21    upon  the  finding of a violation of this chapter, in addition to any adminis-
 22    trative penalties which may be levied by the board against such person. Admin-
 23    istrative penalties levied by the board shall not  exceed  two  thousand  five
 24    hundred dollars ($2,500) per violation.
 25        (3)  In  lieu  of  or in addition to any remedy specifically provided, the
 26    board may require of a licensee or a firm:
 27        (a)  A peer review conducted in such fashion as the board may specify;
 28        (b)  Preissuance review;
 29        (c)  Satisfactory completion of  such  continuing  professional  education
 30        programs or examinations as the board may specify; and
 31        (d)  Other similar remedies.
 32        (4)  In  any action brought under the provisions of this chapter, evidence
 33    of the commission of a single act prohibited in this chapter shall  be  suffi-
 34    cient  to  justify  a  suspension,  revocation,  fine, administrative penalty,
 35    restriction, reprimand, injunction, restraining order, conviction or any other
 36    remedy authorized in this chapter. Evidence of a  general  course  of  conduct
 37    shall not be required.
                                                                        
 38        SECTION  6.  That  Section  54-220, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
 40        54-220.  USE OF TITLE -- VALID LICENSE TO PRACTICE. (1)  No  person  shall
 41    assume  or  use  the  title  or  designation  "certified public accountant" or
 42    "licensed public accountant" or any other title, designation, words,  letters,
 43    abbreviations,  sign, card or device tending to indicate that such person is a
 44    certified public accountant or licensed public accountant unless  such  person
 45    holds  a  license or is granted privileges as a certified public accountant or
 46    licensed public accountant pursuant to chapter 2, title 54, Idaho Code.
 47        (2)  No person or firm not licensed, granted privileges or registered pur-
 48    suant to this chapter shall assume or use the title or designation  "certified
 49    accountant,"  "chartered  accountant,"  "public accountant," "enrolled accoun-
 50    tant," "licensed accountant," "registered   accountant,"  "accredited  accoun-
 51    tant,"  or  other  titles or designation likely to be confused with the titles
 52    "certified public accountant" or "licensed public accountant" or  use  any  of
 53    the  abbreviations  "CA," "LA," "LPA," "CPA," "RA," "AA," or similar abbrevia-
                                                                        
                                           10
                                                                        
  1    tion likely to be confused with the abbreviations "CPA" or  "LPA."  The  title
  2    "enrolled  agent" or "EA" may only be used by individuals so designated by the
  3    internal revenue service. Notwithstanding the provisions of this section,  the
  4    board  may adopt rules authorizing and limiting the use of specific titles and
  5    designations granted by recognized professional societies or associations.
  6        (3)  No person, proprietorship, partnership or corporation not licensed or
  7    registered pursuant to this chapter shall assume or use any title or  designa-
  8    tion  that  includes the words "accountant," "auditor" or "accounting" in con-
  9    nection with any other language, including the  language  of  a  report,  that
 10    implies  that  such  person,  proprietorship, partnership or corporation is so
 11    licensed or registered or has special competence as an accountant or  auditor;
 12    provided however, that this subsection does not prohibit any officer, partner,
 13    member  or  employee  of  any  organization from affixing his signature to any
 14    statement in reference to the financial affairs of such organization with  any
 15    wording  designating  the  position, title or office that he holds therein nor
 16    prohibit any act of a public official or employee in the  performance  of  his
 17    duties as such.
 18        (4)  No  business  entity  shall provide attest or compilation services or
 19    compilation reports or assume or use the title "certified public  accountants"
 20    or  "licensed  public  accountants"  or the abbreviation "CPAs," "LPAs" or any
 21    other title, designation, words, letters, abbreviations, sign, card or  device
 22    tending  to indicate that such business entity is a firm unless: (a) the busi-
 23    ness entity is a firm registered pursuant to this chapter, and  (b)  ownership
 24    of the firm is in accord with this chapter and rules promulgated by the board.
                                                                        
 25        SECTION  7.  That  Section  54-226, Idaho Code, be, and the same is hereby
 26    amended to read as follows:
                                                                        
 27        54-226.  INAPPLICABILITY OF CHAPTER. (1) This chapter shall  not  be  con-
 28    strued  to prevent any person from rendering tax services, management advisory
 29    or consulting services, or from preparing  financial  statements  without  the
 30    expression of an opinion or an assurance.
 31        (2)  This  chapter shall not be construed to prevent any person from stat-
 32    ing that he has prepared, assembled or drafted a financial statement, provided
 33    he does not use any additional language which comprises an assurance.
 34        (3)  The prohibitions of section 54-221, Idaho Code, and the other  provi-
 35    sions  of  this chapter shall not be construed to preclude the use of the fol-
 36    lowing language  by  any  person:  "I  (We)  have  prepared  the  accompanying
 37    (financial  statements)  of  (name  of  entity)  as  of  (time period) for the
 38    (period) then ended. This presentation is limited to preparing in the form  of
 39    financial  statements  information  that  is  the representation of management
 40    (owners). I (We) have not  audited  or  reviewed  the  accompanying  financial
 41    statements  and,  accordingly,  do not express an opinion or any other form of
 42    assurance on them."
                                                                        
 43        SECTION 8.  That Section 54-227, Idaho Code, be, and the  same  is  hereby
 44    amended to read as follows:
                                                                        
 45        54-227.  SUBSTANTIAL  EQUIVALENCY.  (1)  A person whose principal place of
 46    business is not in this state and who has  an  valid  active  certificate  and
 47    license  as  a  certified public accountant from any state which the board has
 48    determined to be substantially equivalent to this chapter shall be presumed to
 49    have qualifications substantially equivalent to this state's requirements  and
 50    shall  have  all the privileges of licensees of this state without the need to
 51    obtain a license. However, such persons shall notify the board of their intent
                                                                        
                                           11
                                                                        
  1    to enter the state under this provision. The board may charge a fee  for  such
  2    notification  as set forth in section 54-212, Idaho Code, and as prescribed by
  3    rules of the board.
  4        (2)  A person whose principal place of business is not in this  state  and
  5    who  has an valid active certificate and license as a certified public accoun-
  6    tant from any state which the board has not  determined  to  be  substantially
  7    equivalent  to  this chapter shall be presumed to have qualifications substan-
  8    tially equivalent to this state's requirements and shall have all  the  privi-
  9    leges  of licensees of this state without the need to obtain a license only if
 10    such person demonstrates that his  or  her  qualifications  are  substantially
 11    equivalent  to  the licensure requirements of this chapter. The requirement to
 12    demonstrate substantially equivalent qualifications shall  be  waived  if  the
 13    applicant  has  no  less  than four (4) years' experience as determined by the
 14    board, provided that the experience or its equivalent was obtained after orig-
 15    inal licensure as a certified public accountant and within the ten (10)  years
 16    immediately  preceding  the practice privilege application. Such persons shall
 17    notify the board of their intent to enter the state under  this  provision  in
 18    the manner provided by rules of the board. The board may charge a fee for such
 19    notification  as set forth in section 54-212, Idaho Code, and as prescribed by
 20    rules of the board.
 21        (3)  Licensees of other states exercising  the  privilege  afforded  under
 22    this section hereby consent, as a condition of the grant of this privilege:
 23        (a)  To  the  personal  and  subject  matter jurisdiction and disciplinary
 24        authority of the board;
 25        (b)  To comply with this chapter and the board's rules; and
 26        (c)  To the appointment of the state boards which issued their licenses as
 27        their agents upon whom process may be served in any action  or  proceeding
 28        by this state's board against such licensees.
 29        (4)  A  licensee of this state offering or rendering services or using the
 30    CPA title in another state shall be subject to  disciplinary  action  in  this
 31    state  for  an  act committed in another state for which the licensee would be
 32    subject to discipline for an act committed in another  state.  Notwithstanding
 33    the  board's  enforcement  authority  granted by this chapter, the board shall
 34    investigate any complaint made by the board of accountancy of another state.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE

                             RS 12408

In the 2002 Legislative Session, the Idaho Society of CPAs
introduced HB 485 which moderized the way in which CPAs are
licensed and regulated in the state of Idaho.  The bill reflected
changes that are being adopted nationwide.  The Idaho State Board
of Accountancy supported HB 485.  As with any major change to Idaho
Code, we have found corrections that need to be made.  This
legislative proposal clarifies intent, corrects inconsistent
references between the law and the rules, adopts recommendations
from Legislative Services, and allows non-renewed licenses to go
into lapsed status.




                         FISCAL IMPACT

There is no fiscal impact to the General Fund or the Board's
dedicated fund. 

CONTACT
Name:        Barbara R.Porter
Agency:      Accountancy, Board of
Phone:       208-334-2490

Name:        Melissa Nelson
Agency:      Idaho Society of CPAs
Phone:       208-344-6261

Statement of Purpose/Fiscal Impact                                                  H 3