SB 305: "An Act relating to the regulation of accountants; and amending the effective date for sec. 6, ch. 62, SLA 1991."
00SENATE BILL NO. 305 01 "An Act relating to the regulation of accountants; and amending the effective date 02 for sec. 6, ch. 62, SLA 1991." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 08.04 is amended by adding a new section to read: 05 Sec. 08.04.195. RECIPROCITY WITH OTHER JURISDICTIONS. (a) 06 Notwithstanding AS 08.04.100 - 08.04.130, the board may issue a certificate to an 07 applicant who holds a certificate, or its equivalent, issued by another jurisdiction if 08 the applicant 09 (1) passes a public accounting examination given by the other 10 jurisdiction in order to receive the applicant's initial certificate from the jurisdiction; 11 (2) has five years of experience outside the state in the practice of 12 public accounting or meets equivalent requirements established by the board by 13 regulation; the five years must occur after the applicant passes the examination 14 required in (1) of this subsection and within the 10 years immediately preceding the
01 applicant's application under this chapter; 02 (3) is not the subject of review procedures, disciplinary proceedings, 03 or unresolved complaints related to the applicant's certificate from another jurisdiction; 04 and 05 (4) is of good moral character. 06 (b) An applicant for the initial issuance of a certificate under this section shall 07 list in the application all states where the applicant has applied for or holds a 08 certificate, or its equivalent, and shall notify the board in writing within 30 days after 09 a denial, revocation, or suspension of a certificate, or its equivalent, by another 10 jurisdiction. 11 (c) The board may by regulation establish the education and continuing 12 education requirements for the issuance of a certificate under this section. 13 * Sec. 2. AS 08.04.240(c) is amended to read: 14 (c) Application for registration shall be made upon the affidavit of a general 15 partner, member, or shareholder who is a certified public accountant of this state in 16 good standing. The board shall in each case determine whether the applicant is 17 eligible for registration. A partnership, limited liability company, or corporation that 18 is so registered and that holds a permit issued under AS 08.04.400 may use the words 19 "certified public accountants" or the abbreviation "CPAs" in connection with its 20 partnership, limited liability company, or corporate name. Notification shall be given 21 the board within one month after the admission or withdrawal of a partner, member, 22 or shareholder from a partnership, limited liability company, or corporation registered 23 under this section. 24 * Sec. 3. AS 08.04.240 is amended by adding a new subsection to read: 25 (d) A limited liability company engaged in this state in the practice of public 26 accounting may register with the board as a limited liability company of certified 27 public accountants if 28 (1) the sole purpose and the sole business of the company are to furnish 29 to the public services that are consistent with this chapter or the regulations adopted 30 under this chapter, except that the company may invest its money in a manner that is 31 compatible with the practice of public accounting;
01 (2) at least one member is a certified public accountant of this state in 02 good standing; 03 (3) each member of the company is a certified public accountant in 04 good standing of this or another state of the United States; and 05 (4) except as otherwise provided in this chapter, each resident manager 06 in charge of an office of the company in this state and each member personally 07 engaged in this state in the practice of public accounting are certified public 08 accountants of this state in good standing. 09 * Sec. 4. AS 08.04.360 is amended to read: 10 Sec. 08.04.360. SUPERVISION REQUIRED. Each office established or 11 maintained in this state for the practice of public accounting shall be under the direct 12 supervision of a person in residence who holds a permit under AS 08.04.390 - 13 08.04.440. The supervisor may be either a sole proprietor, partner, principal, member, 14 or staff employee. A supervisor may serve in this capacity at one office only. 15 * Sec. 5. AS 08.04.380 is amended to read: 16 Sec. 08.04.380. WAIVER OF REQUIREMENTS. The board may waive the 17 requirements of AS 08.04.240(a)(3), [AND] (b)(4), and (d)(4), and 08.04.360 and 18 08.04.370 if 19 (1) the community has a population of 2,000 or less; and 20 (2) the firm opening or maintaining the office maintains another office 21 in the state that meets the requirements outlined in AS 08.04.360 and 08.04.370. 22 * Sec. 6. AS 08.04.400 is amended to read: 23 Sec. 08.04.400. PERMIT FOR PARTNERSHIP, LIMITED LIABILITY 24 COMPANY, OR CORPORATE PRACTICE AS A PUBLIC ACCOUNTANT. The 25 board shall issue a permit to engage in the practice of public accounting as a 26 partnership, limited liability company, or [AS A] corporation to a partnership, limited 27 liability company, or corporation registered under AS 08.04.240. The permit is valid 28 for two years. A permit is valid only for practice under the registered name of the 29 partnership, limited liability company, or corporation. A partnership registered under 30 former AS 08.04.330 - 08.04.340 on June 29, 1980, qualifies for a permit under this 31 section as long as each partner personally engaged in the practice of public accounting
01 in this state holds a license or permit under AS 08.04.661. 02 * Sec. 7. AS 08.04.420 is amended to read: 03 Sec. 08.04.420. PERMIT FOR GENERAL PRACTICE AS A CERTIFIED 04 PUBLIC ACCOUNTANT. A certified public accountant, or a partnership, limited 05 liability company, or corporation of certified public accountants in good standing in 06 a state, not holding a permit under AS 08.04.390 or 08.04.400 or [NOR] maintaining 07 an office in this state but engaging in the practice of public accounting in this state, 08 shall apply to the board for a permit to practice. The board shall determine whether 09 the applicant is eligible for the permit. 10 * Sec. 8. AS 08.04.440 is amended to read: 11 Sec. 08.04.440. EFFECT OF FAILURE TO OBTAIN PERMIT. Failure of an 12 individual [A PERSON], partnership, limited liability company, or corporation to 13 apply for the annual permit to practice or to pay the annual fee within (1) three years 14 from the expiration date of the permit to practice or annual registration last obtained 15 or renewed, or (2) three years from the date upon which the certificate holder or 16 licensee was granted a certificate as a certified public accountant or license as a public 17 accountant valid under AS 08.04.661 deprives the individual [PERSON], partnership, 18 limited liability company, or corporation of the right to a permit or annual registration 19 or renewal of a permit, unless the board determines that the failure is excusable. In 20 case of excusable failure, the fee may not exceed three times the annual fee. 21 * Sec. 9. AS 08.04.470 is amended to read: 22 Sec. 08.04.470. REVOCATION OR SUSPENSION OF PARTNERSHIP, 23 LIMITED LIABILITY COMPANY, OR CORPORATE REGISTRATION OR 24 PERMIT. The board shall revoke the registration and permit to practice of a 25 partnership, limited liability company, or corporation if at any time it does not meet 26 the qualifications prescribed by the sections of this chapter under which it qualified for 27 registration. 28 * Sec. 10. AS 08.04.480 is amended to read: 29 Sec. 08.04.480. GROUNDS FOR REVOCATION OR SUSPENSION OF 30 PARTNERSHIP, LIMITED LIABILITY COMPANY, OR CORPORATE PERMIT. 31 The board may revoke or suspend the registration and permit to practice of a
01 partnership, limited liability company, or corporation, may revoke, suspend, or refuse 02 to renew its permit to practice or may censure the partnership, limited liability 03 company, or corporation for any of the causes enumerated in AS 08.04.450 and 04 08.04.460, or for any of the following additional causes: 05 (1) the revocation or suspension of the certificate, license, or 06 registration of any partner, member, or shareholder; 07 (2) the revocation, suspension, or refusal to renew the permit to practice 08 of any partner, member, or shareholder; 09 (3) the cancellation, revocation, suspension, or refusal to renew the 10 authority of the partnership or any partner, the limited liability company or a 11 member, or the corporation or a shareholder to practice public accounting in any other 12 state for any cause other than failure to pay an annual registration fee in that state. 13 * Sec. 11. AS 08.04.505 is amended to read: 14 Sec. 08.04.505. ISSUANCE OF REPORTS. Only a person or firm that holds 15 a valid permit issued under this chapter may issue a report on financial statements of 16 another person, firm, organization, or governmental unit. This restriction does not 17 apply to 18 (1) an officer, partner, member, or employee of a firm or organization 19 affixing that person's signature to a statement or report in reference to the financial 20 affairs of the firm or organization with wording designating the position, title, or office 21 that the person holds in the firm or organization; 22 (2) an act of a public official or employee in the performance of 23 official duties; 24 (3) the performance by persons of other services involving the use of 25 accounting skills, including the preparation of tax returns, management advisory 26 services, and the preparation of financial statements without the issuance of reports on 27 them. 28 * Sec. 12. AS 08.04.510 is amended to read: 29 Sec. 08.04.510. PARTNERSHIP, LIMITED LIABILITY COMPANY, OR 30 CORPORATION POSING AS A CERTIFIED PUBLIC ACCOUNTANT. (a) A 31 partnership, limited liability company, or corporation may not assume or use the title
01 or designation "certified public accountant" or the abbreviation "CPA" or any other 02 title, designation, word, letter, abbreviation, sign, card, or device tending to indicate 03 that it is composed of certified public accountants, unless the partnership, limited 04 liability company, or corporation is registered and holds a live permit, is practicing 05 under its registered name, and its offices in this state for the practice of public 06 accounting are maintained as required by AS 08.04.360 - 08.04.380. 07 (b) A partnership, limited liability company, or corporation of certified public 08 accountants in good standing in any state, not registered as a partnership, limited 09 liability company, or corporation of certified public accountants under AS 08.04.240 10 but holding a permit under AS 08.04.420, may use the title or designation "certified 11 public accountants." 12 * Sec. 13. AS 08.04.530 is amended to read: 13 Sec. 08.04.530. PARTNERSHIP, LIMITED LIABILITY COMPANY, OR 14 CORPORATION POSING AS PUBLIC ACCOUNTANT. A partnership, limited 15 liability company, or corporation may not assume or use the designation "public 16 accountant" or the abbreviation "PA" or any other title, designation, word, letter, 17 abbreviation, sign, card, or device tending to indicate that the partnership, limited 18 liability company, or corporation is composed of public accountants, unless the 19 partnership, limited liability company, or corporation holds a live permit, is practicing 20 under its registered name, and its office in this state for the practice of public 21 accounting is maintained as required by AS 08.04.360 - 08.04.380. 22 * Sec. 14. AS 08.04.540 is amended to read: 23 Sec. 08.04.540. USE OF DECEPTIVE TITLE OR ABBREVIATION. An 24 individual [A PERSON], partnership, limited liability company, or corporation may 25 not assume or use the title or designation "certified accountant", "chartered 26 accountant", "enrolled accountant", "licensed accountant", "registered accountant", or 27 any other title or designation likely to be confused with "certified public accountant" 28 or "public accountant", or any of the abbreviations "CA", "EA", "LA", "RA", or 29 similar abbreviations likely to be confused with "CPA" or "PA"; however, an 30 individual [A PERSON], partnership, limited liability company, or corporation 31 holding a live permit and whose offices in this state for the practice of public
01 accounting are maintained as required by AS 08.04.360 - 08.04.380 may hold out to 02 the public as an accountant or auditor. 03 * Sec. 15. AS 08.04.570 is amended to read: 04 Sec. 08.04.570. ACTS NOT PROHIBITED. AS 08.04.560 does not prohibit 05 (1) an officer, employee, partner, member, or principal of any 06 organization from affixing that person's signature to any statement or report in 07 reference to the financial affairs of the organization together with any wording 08 designating the position, title, or office which that person holds; 09 (2) an act of a public official or public employee in the performance 10 of that person's duties; 11 (3) a person maintaining a bookkeeping or tax service from affixing 12 that person's signature to any record, statement, or report maintained or prepared by 13 the person. 14 * Sec. 16. AS 08.04 is amended by adding a new section to read: 15 Sec. 08.04.595. USE OF TITLE WITH LIMITED LIABILITY COMPANY 16 NAME. A person may not sign or affix a limited liability company name to an 17 accounting or financial statement, or opinion or report on an accounting or financial 18 statement, with wording indicating that the person is a limited liability company 19 composed of certified public accountants or public accountants or with wording 20 indicating that the company has expert knowledge in accounting or auditing unless the 21 company holds a live permit, is practicing under its registered name, and its offices in 22 this state for the practice of public accounting are maintained as required by 23 AS 08.04.360 - 08.04.380. 24 * Sec. 17. AS 08.04.600 is amended to read: 25 Sec. 08.04.600. DISCLOSURE OF LACK OF PERMIT. An individual [A 26 PERSON], partnership, limited liability company, or corporation that does not hold 27 a live permit may not hold out to the public as a certified public accountant or public 28 accountant by use of such words or abbreviations on any sign, card, letterhead, or in 29 any advertisement or directory, without indicating that the individual [PERSON], 30 partnership, limited liability company, or corporation does not hold a permit. This 31 section does not prohibit
01 (1) an officer, employee, partner, member, or principal of an 02 organization from self-description through the position, title, or office that the person 03 holds in the organization; [,] 04 (2) an act of a public official or public employee in the performance 05 of that individual's [PERSON'S] duties; [,] or 06 (3) a person from maintaining a bookkeeping or tax service. 07 * Sec. 18. AS 08.04.610 is amended to read: 08 Sec. 08.04.610. DECEPTIVE USE OF PARTNERSHIP, LIMITED 09 LIABILITY COMPANY, OR CORPORATION TITLE. A person may not assume 10 or use the title or designation "certified public accountant" or "public accountant" or 11 an abbreviation of them, in conjunction with a name indicating or implying that there 12 is a partnership, limited liability company, or corporation, or in conjunction with the 13 designation "and Company," [OR] "and Co.," "L.L.C.," "LLC," "Ltd.," or any 14 similar designation unless there is a bona fide partnership, limited liability company, 15 or corporation registered under that name. However, a sole proprietor or partnership 16 lawfully using the title or designation "certified public accountant" or "public 17 accountant" or an abbreviation of them in conjunction with such names or designation 18 on April 26, 1960, may continue to do so if the person or partnership otherwise 19 complies with this chapter. 20 * Sec. 19. AS 08.04.620 is amended to read: 21 Sec. 08.04.620. EXCEPTIONS. This chapter does not prohibit 22 (1) a person not a certified public accountant or public accountant from 23 serving as an employee of or as an assistant to an individual [A PERSON], 24 partnership, limited liability company, or corporation holding a live permit so long 25 as the employee or assistant does not use the employee's or the assistant's name in 26 connection with an accounting or financial statement; 27 (2) a certified public accountant or public accountant from indicating 28 that the certified public accountant or public accountant holds a certificate or license 29 entitling the certified public accountant or public accountant to that designation if the 30 certified public accountant or public accountant holds a valid certificate or license in 31 any state, but the person may not indicate that services are available to the public
01 unless the certified public accountant or public accountant holds a live permit issued 02 under this chapter; 03 (3) a holder of a certificate, license, or degree from a foreign country 04 which constitutes a recognized qualification for the practice of public accounting in 05 that country from indicating that the person holds the certificate, license, or degree, but 06 the person may not indicate that the person's services are available to the public unless 07 the person holds a live permit issued under this chapter. 08 * Sec. 20. AS 08.04.662(a) is amended to read: 09 (a) A licensee, or a partner, officer, shareholder, member, or employee of a 10 licensee, may not reveal information communicated to the licensee by a client about 11 a matter concerning which the client has employed the licensee in a professional 12 capacity. This section does not apply to 13 (1) information required to be disclosed by the standards of the public 14 accountancy profession in reporting on the examination of financial statements; 15 (2) the release of information the client has authorized the licensee to 16 reveal; 17 (3) information revealed as part of the discovery of evidence related to 18 a court or administrative proceeding or introduced in evidence in a court or 19 administrative proceeding; 20 (4) information revealed in ethical investigations conducted by private 21 professional organizations; or 22 (5) information revealed in the course of a quality review under 23 AS 08.04.426. 24 * Sec. 21. AS 08.04.680 is amended by adding new paragraphs to read: 25 (7) "limited liability company" means an organization organized under 26 AS 10.50 or a foreign limited liability company; in this paragraph, "foreign limited 27 liability company" has the meaning given in AS 10.50.990; 28 (8) "member" means a person who has been admitted to membership 29 in a limited liability company. 30 * Sec. 22. Section 6, ch. 62, SLA 1991, is repealed and reenacted to read: 31 Sec. 6. AS 08.04.120 is repealed and reenacted to read:
01 Sec. 08.04.120. EDUCATIONAL AND EXPERIENCE REQUIREMENTS. 02 (a) The education and experience requirements for an applicant are as follows: 03 (1) a baccalaureate degree or its equivalent conferred by a college or 04 university acceptable to the board and additional semester hours or post-baccalaureate 05 study so that the total educational program includes at least 150 hours, with an 06 accounting concentration or equivalent as determined by the board by regulation to be 07 appropriate, and two years of accounting experience satisfactory to the board; or 08 (2) a baccalaureate degree or its equivalent conferred by a college or 09 university acceptable to the board and additional semester hours or post-baccalaureate 10 study so that the total educational program includes at least 150 hours, and three years 11 of accounting experience satisfactory to the board. 12 (b) Notwithstanding (a) of this section, the board may grant a certificate to an 13 applicant who has not completed the 150-hour educational program required by (a) of 14 this section if the applicant has received a baccalaureate degree, or its equivalent, in 15 public accounting before January 1, 2001, from a college or university acceptable to 16 the board, and if the applicant satisfies the other criteria established by the board by 17 regulation for receiving the certificate. 18 * Sec. 23. Section, 21, ch. 62, SLA 1991, is amended to read: 19 Sec. 21. Section 6 of this Act takes effect January 1, 2001 [SEPTEMBER 1, 20 1997].