SB 227: "An Act relating to public accounting; and providing for an effective date."
00 SENATE BILL NO. 227 01 "An Act relating to public accounting; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 08.04.020(b) is amended to read: 04 (b) Except for public members, an individual may not be appointed unless the 05 individual holds a current license. Public members may not be employed by a person 06 holding a license, permit, out-of-state exemption, or practice privilege under this 07 chapter. Notwithstanding AS 08.01.025, an accountant who does not hold a license 08 under this chapter and is not engaged in the practice of public accounting in violation 09 of this chapter is eligible for appointment as a public member under this section. 10 * Sec. 2. AS 08.04.075 is amended to read: 11 Sec. 08.04.075. Substantial equivalency. The [UPON REQUEST OF AN 12 APPLICANT FOR A PRACTICE PRIVILEGE UNDER AS 08.04.420(a), OR ON 13 THE BOARD'S OWN MOTION, THE] board shall determine whether the education, 14 examination, and experience qualifications of another state or an individual [THE 15 APPLICANT] are substantially equivalent to the national standard or to another
01 standard established by the board to protect the public interest. The board may adopt 02 by regulation the qualifications established by a nationally recognized professional 03 organization for accountants as the national standard or for another standard 04 established by the board to protect the public interest. The board may accept the 05 determination of a nationally recognized professional organization for accountants or 06 adopt another standard as to [OF] whether the qualifications of the other state or an 07 individual [THE APPLICANT] are substantially equivalent to the national standard. 08 When ascertaining substantial equivalency under this chapter, the order in which 09 education, examination, or experience requirements were attained shall be 10 disregarded [OR TO ANOTHER STANDARD ESTABLISHED BY THE BOARD 11 TO PROTECT THE PUBLIC INTEREST]. 12 * Sec. 3. AS 08.04.100 is amended to read: 13 Sec. 08.04.100. Certificate granted. The certificate of "Certified Public 14 Accountant" shall be granted by the board to any person who meets the requirements 15 of AS 08.04.110 - 08.04.130. The holder of a certificate issued under this section is 16 not authorized to engage in the practice of public accounting in the state unless the 17 holder also has a current license or [,] permit, or an out-of-state exemption or 18 practice privilege [ISSUED UNDER THIS CHAPTER]. 19 * Sec. 4. AS 08.04.200 is amended to read: 20 Sec. 08.04.200. Use of title "certified public accountant" by individual. An 21 individual who has a license from the board as a certified public accountant or holds a 22 practice privilege [OR AN OUT-OF-STATE PERMIT UNDER AS 08.04.420] shall 23 be known as a certified public accountant and may use the abbreviation "CPA." 24 * Sec. 5. AS 08.04.240(a) is repealed and reenacted to read: 25 (a) The board shall grant a permit to engage in the practice of public 26 accounting as a partnership to a partnership that applies to the board as a partnership 27 of certified public accountants if the partnership meets the following requirements: 28 (1) more than one-half of the ownership of the partnership belongs to 29 certified public accountants of this or another state in good standing; 30 (2) an individual who is a certified public accountant or has a practice 31 privilege, who is responsible for supervising attest functions or compilation services in
01 the partnership, and who signs or authorizes another person to sign an accountant's 02 report on financial statements on behalf of the partnership meets the competency 03 requirements established by the board under AS 08.04.423; 04 (3) an individual who signs or authorizes another person to sign an 05 accountant's report on financial statements on behalf of the partnership meets the 06 competency requirements established by the board under AS 08.04.423; and 07 (4) each partner who is personally engaged in this state in the practice 08 of public accounting as a member of that partnership and whose principal place of 09 business is in this state is a certified public accountant of this state in good standing. 10 * Sec. 6. AS 08.04.240(b) is repealed and reenacted to read: 11 (b) The board shall grant a permit to engage in the practice of public 12 accounting as a corporation to a corporation organized for the practice of public 13 accounting that applies to the board as a corporation of certified public accountants if 14 the corporation meets the following requirements: 15 (1) the sole purpose and business of the corporation is to furnish to the 16 public services not inconsistent with this chapter or the regulations adopted under it by 17 the board; however, the corporation may invest its funds in a manner not incompatible 18 with the practice of public accounting; 19 (2) at least a simple majority of the shares of the corporation are 20 owned by certified public accountants of this or another state in good standing and the 21 principal officer of the corporation and any officer having authority over the practice 22 of public accounting by the corporation is a certified public accountant of this or 23 another state in good standing; 24 (3) an individual who is a certified public accountant or has a practice 25 privilege, who is responsible for supervising attest functions or compilation services in 26 the corporation, and who signs or authorizes another person to sign an accountant's 27 report on financial statements on behalf of the corporation meets the competency 28 requirements established by the board under AS 08.04.423; 29 (4) an individual who signs or authorizes another person to sign an 30 accountant's report on financial statements on behalf of the corporation meets the 31 competency requirements established by the board under AS 08.04.423;
01 (5) each shareholder or director personally engaged in this state in the 02 practice of public accounting and whose principal place of business is located in this 03 state is a certified public accountant of this state in good standing; 04 (6) to facilitate compliance with the provisions of this section relating 05 to the ownership of stock, there is a written agreement binding the corporation or the 06 qualified shareholders to purchase shares offered for sale by, or not under the 07 ownership or effective control of, a qualified shareholder and binding a holder not a 08 qualified shareholder to sell these shares to the corporation or the qualified 09 shareholders; the agreement must be noticed on each certificate of corporate stock; the 10 corporation may purchase any amount of its stock for this purpose, notwithstanding 11 any impairment of capital, so long as one share remains outstanding; and 12 (7) the corporation is in compliance with those other regulations 13 pertaining to corporations practicing public accounting in this state that the board may 14 adopt. 15 * Sec. 7. AS 08.04.240(c) is amended to read: 16 (c) Application for a permit under this section shall be made upon the affidavit 17 of a general partner, member, or shareholder who is a certified public accountant of 18 this state in good standing or an individual with a practice privilege. The board 19 shall, in each case, determine whether the applicant is eligible for a permit under this 20 section. A partnership, limited liability company, corporation, or other legal entity that 21 is issued a permit under this section may use the words "certified public accountants" 22 or the abbreviation "CPAs" in connection with the name of the partnership, limited 23 liability company, corporation, or other legal entity. The board shall be notified within 24 one month after the admission or withdrawal of a partner, member, or shareholder 25 from a partnership, limited liability company, corporation, or other legal entity issued 26 a permit under this section. 27 * Sec. 8. AS 08.04.240(d) is repealed and reenacted to read: 28 (d) The board shall grant a permit to engage in the practice of public 29 accounting as a limited liability company to a limited liability company engaged in 30 this state in the practice of public accounting that applies to the board as a limited 31 liability company of certified public accountants if
01 (1) the sole purpose and the sole business of the company are to 02 furnish to the public services that are consistent with this chapter or the regulations 03 adopted under this chapter, except that the company may invest its money in a manner 04 that is compatible with the practice of public accounting; 05 (2) more than one-half of the ownership of the limited liability 06 company belongs to certified public accountants of this or another state in good 07 standing; 08 (3) an individual who is a certified public accountant or has a practice 09 privilege, who is responsible for supervising attest functions or compilation services in 10 the company, and who signs or authorizes another person to sign an accountant's 11 report on financial statements on behalf of the company meets the competency 12 requirements established by the board under AS 08.04.423; 13 (4) an individual who signs or authorizes another person to sign an 14 accountant's report on financial statements on behalf of the company meets the 15 competency requirements established by the board under AS 08.04.423; and 16 (5) each member personally engaged in this state in the practice of 17 public accounting and whose principal place of business is located in this state is a 18 certified public accountant of this state in good standing. 19 * Sec. 9. AS 08.04.240(g) is amended to read: 20 (g) The board shall renew a permit granted under (a), (b), (d), or (e) of this 21 section or a renewal issued under this subsection if 22 (1) the permittee maintains all of the licensee's offices that are located 23 in this state as required by AS 08.04.360 - 08.04.380; 24 (2) each individual who is required by (a), (b), (d), or (e) of this section 25 to be a certified public accountant of this state complies with the continuing education 26 requirements of AS 08.04.425 and the quality review requirements of AS 08.04.426; 27 and 28 (3) the permittee complies with the requirements of this chapter, 29 including the competency requirement of (a)(2) and (3), (b)(3) and (4), and (d)(3) 30 and (4) of this section. 31 * Sec. 10. AS 08.04.240 is amended by adding new subsections to read:
01 (i) For the purposes of issuing a permit under this section, a partnership, 02 limited liability company, corporation, or other legal entity may include owners who 03 are not certified public accountants if 04 (1) the partnership, corporation, limited liability company, or other 05 legal entity designates a certified public accountant or an individual with practice 06 privileges to be responsible for the proper registration of the entity and identifies the 07 certified public accountant or individual to the board; 08 (2) all of the owners of the partnership, corporation, limited liability 09 company, or other legal entity who are not certified public accountants are active 10 individual participants in the partnership, corporation, limited liability company, or 11 other legal entity, or in an entity affiliated with the partnership, corporation, limited 12 liability company, or other legal entity; and 13 (3) the partnership, corporation, limited liability company, or other 14 legal entity complies with the other requirements that the board may adopt by 15 regulation to protect the public interest as described under AS 08.04.005. 16 (j) If the ownership of a partnership, limited liability company, corporation, or 17 other legal entity, after it has received or renewed a permit, does not comply with (i) 18 of this section, the partnership, limited liability company, corporation, or other legal 19 entity shall take corrective action to comply with (i) of this section within a reasonable 20 time after the noncompliance begins. The board shall establish by regulation the 21 criteria to determine what is a reasonable time and may base the regulation on national 22 standards. 23 * Sec. 11. AS 08.04.370 is amended to read: 24 Sec. 08.04.370. Use of title "certified public accountant" by office of legal 25 entity [ORGANIZATION]. The title "certified public accountant" or the 26 abbreviation "CPA" may not be used in connection with an office of a legal entity 27 [AN ORGANIZATION] holding a permit or an out-of-state exemption [UNDER 28 AS 08.04.240 OR 08.04.420(c)] unless the supervision requirement of AS 08.04.360 29 is satisfied. 30 * Sec. 12. AS 08.04.380 is amended to read: 31 Sec. 08.04.380. Waiver of requirements. The board may waive the
01 requirements of AS 08.04.240(a)(4), (b)(5), and (d)(5), [AS 08.04.240(a)(3), (b)(4), 02 AND (d)(4), AND] 08.04.360, and 08.04.370 if 03 (1) the community has a population of 2,000 or less; and 04 (2) the individual, partnership, corporation, limited liability company, 05 or other legal entity that opens or maintains the office maintains another office in the 06 state that meets the requirements outlined in AS 08.04.360 and 08.04.370. 07 * Sec. 13. AS 08.04.420 is repealed and reenacted to read: 08 Sec. 08.04.420. Practice privileges. (a) Except as limited by (b) of this 09 section, an individual who does not have a license in this state, but who is licensed to 10 practice public accounting in another state and whose principal place of business for 11 the practice of public accounting is in the other state may engage in the practice of 12 public accounting in this state under a practice privilege if the state in which the 13 individual is licensed to practice public accounting 14 (1) requires as a condition of licensure that an individual 15 (A) have at least 150 semester hours of college education, 16 including a baccalaureate or higher degree conferred by a college or university; 17 (B) achieve a passing grade on the Uniform Certified Public 18 Accountant Examination; and 19 (C) possess at least one year of experience, which includes 20 providing any type of service or advice involving the use of accounting, attest, 21 compilation, management advisory, financial advisory, tax, or consulting 22 skills; the experience may be obtained through practice with the government, 23 industry, colleges, universities, or the public; or 24 (2) does not require as a condition of licensure that an individual 25 satisfy the requirements of (1) of this subsection but the individual's qualifications are 26 substantially equivalent to the requirements of (1) of this subsection; however, for the 27 purposes of this paragraph, the education of an individual who holds a valid license to 28 practice public accounting that is issued by another state before January 1, 2013, and 29 who passes the Uniform Certified Public Accountant Examination before January 1, 30 2013, is exempt from the education requirement identified in (1)(A) of this subsection. 31 (b) Unless the individual is a sole practitioner, if an individual who engages in
01 the practice of public accounting under a practice privilege under (a) of this section 02 performs designated functions for a client whose home office is in this state, the 03 individual may only provide the designated functions through a legal entity that has a 04 permit. 05 (c) An individual who may engage in the practice of public accounting in this 06 state under (a) or (b) of this section is not required to provide a notice to the board, to 07 pay a fee to the board, or to submit documentation to the board in order to engage in 08 the practice of public accounting in this state. The person may engage in the practice 09 of public accounting by mail, by telephone, by electronic means, or in person. 10 * Sec. 14. AS 08.04 is amended by adding new sections to read: 11 Sec. 08.04.421. Out-of-state permits and exemptions. (a) A legal entity that 12 does not have an office in this state, that is authorized to practice public accounting in 13 another state, and that performs designated functions for a client whose home office is 14 located in this state may not engage in the practice of public accounting in this state 15 unless the legal entity has an out-of-state permit. To obtain an out-of-state permit, the 16 legal entity shall submit to the board 17 (1) a written notice on a form provided by the board; 18 (2) the fee required by the board; 19 (3) verification of the current authorization of the legal entity to 20 practice public accounting in the other state; and 21 (4) verification that the legal entity participates in a quality review 22 program comparable to the program required of entities registered under 23 AS 08.04.426. 24 (b) A legal entity that performs designated services but not designated 25 functions for a client whose home office is located in this state may engage in the 26 practice of public accounting in this state under an out-of-state exemption if the legal 27 entity 28 (1) does not have an office in this state; 29 (2) is authorized to practice public accounting in another state; 30 (3) performs the designated services through an individual with a 31 practice privilege; and
01 (4) participates in a quality review program comparable to the program 02 required under AS 08.04.426. 03 (c) A legal entity that does not have an office in this state, is authorized to 04 practice public accounting in another state, and does not perform designated functions 05 or designated services for a client whose home office is located in this state may 06 engage in the practice of public accounting in this state under an out-of-state 07 exemption if the services that the legal entity performs within the practice of public 08 accounting are performed 09 (1) through an individual who has a practice privilege; and 10 (2) only to the extent that the legal entity can lawfully perform the 11 services in the state where the individual with a practice privilege has the individual's 12 principal place of business. 13 (d) If the board denies an out-of-state permit to a legal entity under (a) of this 14 section, the board shall provide notice of the denial to the legal entity. 15 (e) Notwithstanding AS 08.01.100(b), the board shall establish by regulation 16 the period for which an out-of-state permit authorized by (a) of this section is valid. 17 However, the initial term of an out-of-state permit may not exceed three years. The 18 board may renew an out-of-state permit and shall establish by regulation the terms for 19 and length of a renewal. 20 (f) A legal entity who may engage in the practice of public accounting under 21 an out-of-state exemption is not required to provide a notice to the board, pay a fee to 22 the board, or submit documentation to the board. The person may engage in the 23 practice of public accounting by mail, by telephone, by electronic means, or in person. 24 (g) In this section, "designated service" means 25 (1) a review of a financial statement, if the performance of the review 26 is established by the Statements on Standards for Accounting and Review Services; or 27 (2) a compilation service. 28 Sec. 08.04.422. Conditions of practice privileges, out-of-state permits, and 29 out-of-state exemptions. An individual with a practice privilege who engages in the 30 practice of public accounting in the state under the practice privilege, a legal entity 31 with a permit or exemption under AS 08.04.421 who engages in the practice of public
01 accounting in this state under the permit or exemption, and a legal entity that hires an 02 individual with a practice privilege 03 (1) consent to the personal and subject matter jurisdiction and 04 disciplinary authority of the board; 05 (2) agree to comply with this chapter, including the regulations 06 adopted by the board; 07 (3) agree that the individual or legal entity will stop offering to engage 08 or engaging in the practice of public accounting, whether individually or and on behalf 09 of a legal entity, if the license from the state of the individual's or legal entity's 10 principal place of business becomes invalid; and 11 (4) consent to the appointment of the state board that issued the 12 individual's license as the individual's or legal entity's agent for service of process in a 13 court action or in another proceeding against the individual or legal entity that arises 14 out of a transaction or an operation connected with or incidental to the individual's or 15 legal entity's engagement in the practice of public accounting. 16 * Sec. 15. AS 08.04.440 is amended to read: 17 Sec. 08.04.440. Effect of failure to obtain license or [,] permit [, OR 18 PRACTICE PRIVILEGE]. Failure of an individual, partnership, limited liability 19 company, corporation, or other legal entity to apply for a [THE] required license or [,] 20 permit [, OR PRACTICE PRIVILEGE] or to pay a [THE] required fee within (1) 21 three years from the expiration date of the license or [,] permit [, OR PRACTICE 22 PRIVILEGE] last obtained or renewed, or (2) three years from the date the person was 23 granted a license or permit as a public accountant valid under AS 08.04.661 deprives 24 the individual, partnership, limited liability company, corporation, or other legal entity 25 of the right to a license or [,] permit [, OR PRACTICE PRIVILEGE] or renewal of a 26 license or [,] permit [, OR PRACTICE PRIVILEGE] unless the board determines that 27 the failure is excusable. In case of excusable failure, the fee for a license or [,] permit 28 [, OR PRACTICE PRIVILEGE] or renewal of a license or [,] permit [, OR 29 PRACTICE PRIVILEGE] under this section may not exceed three times one year's 30 portion of the fee that would have otherwise been required for the license, permit, [OR 31 PRACTICE PRIVILEGE,] or renewal.
01 * Sec. 16. AS 08.04.450 is amended to read: 02 Sec. 08.04.450. Revocation or suspension of license, practice privilege, 03 [OR] permit, or out-of-state exemption. In addition to its powers under 04 AS 08.01.075, the board may revoke, suspend, or refuse to renew a license, practice 05 privilege, [OR] permit, or out-of-state exemption, or may censure a holder of a 06 license, practice privilege, [OR] permit, or out-of-state exemption, for 07 (1) fraud or deceit in obtaining a license [, PRACTICE PRIVILEGE,] 08 or permit required by this chapter; 09 (2) dishonesty or gross negligence in the practice of public accounting, 10 or other acts discreditable to the accounting profession; 11 (3) violation of a provision of AS 08.04.500 - 08.04.610 or failure to 12 take corrective action to comply with AS 08.04.240(i) within the time allowed 13 under AS 08.04.240(j); 14 (4) violation of a rule of professional conduct or other regulation 15 adopted by the board; 16 (5) conviction of a felony under the laws of any state or of the United 17 States; 18 (6) conviction of any crime, an essential element of which is 19 dishonesty or fraud, under the laws of any state or of the United States; 20 (7) cancellation, revocation, suspension, or refusal to renew authority 21 to practice as a certified public accountant or public accountant in any other state for 22 any cause other than failure to pay a required fee; 23 (8) suspension or revocation of the right to practice before any state or 24 federal agency; 25 (9) failure to satisfy the continuing education requirements prescribed 26 by the board under AS 08.04.425, except as conditioned, relaxed, or suspended by the 27 board under AS 08.04.425(c) and (d); 28 (10) failure to satisfactorily complete the supervision required by 29 AS 08.04.423 or a quality review requirement under AS 08.04.426; or 30 (11) committing an act in another state for which the holder of the 31 license, practice privilege, [OR] permit, or out-of-state exemption would be subject
01 to discipline in the other [THIS] state. 02 * Sec. 17. AS 08.04.450 is amended by adding a new subsection to read: 03 (b) The board shall investigate a complaint made by the board of accountancy, 04 or other regulatory body for the practice of accounting, of another state. 05 * Sec. 18. AS 08.04.490 is amended to read: 06 Sec. 08.04.490. Reinstatement. Upon application in writing and after a 07 hearing, the board may issue a new license or allow a practice privilege to an 08 individual whose license or practice privilege has been revoked, or may issue a new 09 permit to a person whose permit has been revoked, or may modify the suspension of 10 or may reissue any license, practice privilege, or permit to practice public accounting 11 that has been revoked or suspended. 12 * Sec. 19. AS 08.04.500(b) is amended to read: 13 (b) This section does not prohibit an individual in good standing in any state, 14 including an individual acting as a sole practitioner in the individual's home 15 state, holding a practice privilege under AS 08.04.420 from using the title "certified 16 public accountant [.]" or another title allowed under (a) of this section. 17 * Sec. 20. AS 08.04.505 is amended to read: 18 Sec. 08.04.505. Issuance of reports. Only a person who holds a valid license, 19 practice privilege, [OR] permit, or out-of-state exemption [ISSUED UNDER THIS 20 CHAPTER] may issue a report on financial statements of another person or 21 governmental unit. This restriction does not apply to 22 (1) an officer, partner, member, or employee of a sole proprietorship, 23 partnership, corporation, limited liability company, or other legal entity affixing that 24 person's signature to a statement or report in reference to the financial affairs of the 25 sole proprietorship, partnership, corporation, limited liability company, or other legal 26 entity with wording designating the position, title, or office that the person holds in the 27 sole proprietorship, partnership, corporation, limited liability company, or other legal 28 entity; 29 (2) an act of a public official or employee in the performance of 30 official duties; 31 (3) the performance by persons of other services involving the use of
01 accounting skills, including the preparation of tax returns, management advisory 02 services, and the preparation of financial statements without the issuance of reports on 03 them. 04 * Sec. 21. AS 08.04.510 is amended to read: 05 Sec. 08.04.510. Partnership, limited liability company, corporation, or 06 other legal entity posing as a certified public accountant. (a) A partnership, limited 07 liability company, corporation, or other legal entity may not assume or use the title or 08 designation "certified public accountant" or the abbreviation "CPA" or any other title, 09 designation, word, letter, abbreviation, sign, card, or device tending to indicate that it 10 is composed of certified public accountants, unless the partnership, limited liability 11 company, corporation, or other legal entity holds a permit or an out-of-state 12 exemption and is engaging in the practice of public accounting under the name on its 13 permit, and its offices in this state for the practice of public accounting are maintained 14 as required by AS 08.04.360 - 08.04.380. 15 (b) A partnership, limited liability company, corporation, or other legal entity 16 consisting of certified public accountants in good standing in any state, that does not 17 have a permit as a partnership, limited liability company, corporation, or other legal 18 entity consisting of certified public accountants under AS 08.04.240 but holds a permit 19 under AS 08.04.421 or out-of-state exemption [UNDER AS 08.04.420], may use the 20 title or designation "certified public accountants [.]" or another title permitted under 21 (a) of this section. 22 * Sec. 22. AS 08.04.520 is amended to read: 23 Sec. 08.04.520. Individual posing as public accountant. An individual may 24 not assume or use the title or designation "public accountant" or the abbreviation "PA" 25 or other title, designation, word, letter, abbreviation, sign, card, or device tending to 26 indicate that the individual is a public accountant, unless the individual holds a current 27 license or [,] practice privilege [, OR PERMIT] and the individual's offices in this 28 state for the practice of public accounting are maintained as required by AS 08.04.360 29 - 08.04.380. 30 * Sec. 23. AS 08.04.530 is amended to read: 31 Sec. 08.04.530. Partnership, limited liability company, or corporation
01 posing as public accountant. A partnership, limited liability company, or corporation 02 may not assume or use the designation "public accountant" or the abbreviation "PA" 03 or any other title, designation, word, letter, abbreviation, sign, card, or device tending 04 to indicate that the partnership, limited liability company, or corporation is composed 05 of public accountants, unless the partnership, limited liability company, or corporation 06 holds a current permit or out-of-state exemption, and, if it has a permit, is practicing 07 under the name on its permit, and its office in this state for the practice of public 08 accounting is maintained as required by AS 08.04.360 - 08.04.380. 09 * Sec. 24. AS 08.04.540 is amended to read: 10 Sec. 08.04.540. Use of deceptive title or abbreviation. An individual, 11 partnership, limited liability company, corporation, or other legal entity may not 12 assume or use the title or designation "certified accountant," "chartered accountant," 13 "enrolled accountant," "licensed accountant," "registered accountant," or any other 14 title or designation likely to be confused with "certified public accountant" or "public 15 accountant," or any of the abbreviations "C," "EA," "LA," "RA," or similar 16 abbreviations likely to be confused with "CPA" or "PA" except that "EA" may be used 17 to the extent that it relates to the term "enrolled agent" as defined by the federal 18 Internal Revenue Service; however, an individual, partnership, limited liability 19 company, corporation, or other legal entity holding a current license or permit or an 20 out-of-state exemption [, PERMIT UNDER AS 08.04.240,] or practice privilege, and 21 whose offices in this state for the practice of public accounting, if any, are maintained 22 as required by AS 08.04.360 - 08.04.380 may hold out to the public as an accountant 23 or auditor. 24 * Sec. 25. AS 08.04.560 is amended to read: 25 Sec. 08.04.560. Individual may not assume title. An individual may not sign 26 or affix any name or any trade or assumed name used by that individual to any 27 accounting or financial statement or opinion or report on any accounting or financial 28 statement with any wording indicating that the person is a certified public accountant 29 or public accountant or with any wording indicating that the person has expert 30 knowledge in accounting or auditing, unless the individual holds a current license or 31 practice privilege and the individual's offices in this state, if any, for the practice of
01 public accounting are maintained as required by AS 08.04.360 - 08.04.380. 02 * Sec. 26. AS 08.04.580 is amended to read: 03 Sec. 08.04.580. Partnership posing as accountants or auditors. A person 04 may not sign or affix a partnership name to any accounting or financial statement or 05 opinion or report on any accounting or financial statement with any wording 06 indicating that it is a partnership composed of certified public accountants or public 07 accountants or with any wording indicating that the partnership has expert knowledge 08 in accounting or auditing unless the partnership holds a current permit and is 09 practicing under the name on its permit, and its offices in this state for the practice of 10 public accounting are maintained as required by AS 08.04.360 - 08.04.380, or unless 11 the partnership holds an out-of-state exemption. 12 * Sec. 27. AS 08.04.590 is amended to read: 13 Sec. 08.04.590. Use of title with corporate name. A person may not sign or 14 affix a corporate name to any accounting or financial statement or opinion or report on 15 any accounting or financial statement with any wording indicating that it is a 16 corporation composed of certified public accountants or public accountants or with 17 any wording indicating that the corporation has expert knowledge in accounting or 18 auditing unless the corporation holds a current permit, it is practicing under the name 19 on the permit, and its offices in this state for the practice of public accounting are 20 maintained as required by AS 08.04.360 - 08.04.380, or unless the corporation holds 21 an out-of-state exemption. 22 * Sec. 28. AS 08.04.595 is amended to read: 23 Sec. 08.04.595. Use of title with limited liability company name. A person 24 may not sign or affix a limited liability company name to an accounting or financial 25 statement or opinion or report on an accounting or financial statement with wording 26 indicating that the person is a limited liability company composed of certified public 27 accountants or public accountants or with wording indicating that the company has 28 expert knowledge in accounting or auditing unless the company holds a current 29 permit, it is practicing under the name on the permit, and its offices in this state for the 30 practice of public accounting are maintained as required by AS 08.04.360 - 08.04.380, 31 or unless the limited liability company holds an out-of-state exemption.
01 * Sec. 29. AS 08.04.598 is amended to read: 02 Sec. 08.04.598. Use of title with name of other legal entity. A person may 03 not sign or affix the name of a legal [AN] entity to an accounting or financial 04 statement or opinion or report on an accounting or financial statement with wording 05 indicating that the person is a legal entity composed of certified public accountants or 06 public accountants or with wording indicating that the legal entity has expert 07 knowledge in accounting or auditing unless the legal entity holds a current permit, it is 08 practicing under the name on the permit, and its offices in this state for the practice of 09 public accounting are maintained as required by AS 08.04.360 - 08.04.380, or unless 10 the legal entity holds an out-of-state exemption. 11 * Sec. 30. AS 08.04.600 is amended to read: 12 Sec. 08.04.600. Disclosure of lack of license or permit. An individual, 13 partnership, limited liability company, corporation, or other entity that does not hold a 14 current license, a current practice privilege, [OR] a current permit, or a current out- 15 of-state exemption, may not hold out to the public as a certified public accountant or 16 public accountant by use of such words or abbreviations on any sign, card, letterhead, 17 or in any advertisement or directory, without indicating that the individual, 18 partnership, limited liability company, corporation, or other entity does not hold a 19 current license, a current practice privilege, or a current permit. This section does not 20 prohibit 21 (1) an officer, employee, partner, member, or principal of an 22 organization from self-description through the position, title, or office that the person 23 holds in the organization; 24 (2) an act of a public official or public employee in the performance of 25 that individual's duties; or 26 (3) a person from maintaining a bookkeeping or tax service. 27 * Sec. 31. AS 08.04.610 is amended to read: 28 Sec. 08.04.610. Deceptive use of title or designation by partnership, limited 29 liability company, corporation, or other legal entity. A person may not assume or 30 use the title or designation "certified public accountant" or "public accountant" or an 31 abbreviation of them, in conjunction with a name indicating or implying that there is a
01 partnership, limited liability company, corporation, or other entity, or in conjunction 02 with the designation "and Company," "and Co.," "L.L.C.," "LLC," "Ltd.," or any 03 similar designation unless there is a bona fide partnership, limited liability company, 04 corporation, [OR] other legal entity holding a permit issued under that name, or a 05 current out-of-state exemption. However, a sole proprietor or partnership lawfully 06 using the title or designation "certified public accountant" or "public accountant" or an 07 abbreviation of them in conjunction with such names or designation on April 26, 1960, 08 may continue to do so if the person or partnership otherwise complies with this 09 chapter. 10 * Sec. 32. AS 08.04.620 is amended to read: 11 Sec. 08.04.620. Exceptions. This chapter does not prohibit 12 (1) an individual who does not hold a current license or practice 13 privilege from serving as an employee of or as an assistant to an individual, 14 partnership, limited liability company, corporation, or other legal entity holding a 15 current license, a current practice privilege, [OR] a current permit, or a current out- 16 of-state exemption so long as the employee or assistant does not use the employee's 17 or the assistant's name in connection with an accounting or financial statement; 18 (2) an individual who holds a valid license or equivalent authorization 19 in another state from indicating that the individual is entitled to use the title "certified 20 public accountant," but the individual may not indicate that services are available to 21 the public unless the individual holds a current license or practice privilege issued 22 under this chapter; 23 (3) a holder of a certificate, license, or degree from a foreign country 24 that constitutes a recognized qualification for the practice of public accounting in that 25 country from indicating that the person holds the certificate, license, or degree, but the 26 person may not indicate that the person's services are available to the public unless the 27 person holds a current license, practice privilege, [OR] permit, or out-of-state 28 exemption [ISSUED] under this chapter. 29 * Sec. 33. AS 08.04.662(a) is amended to read: 30 (a) A license holder, a permit holder, a practice privilege holder, an out-of- 31 state exemption holder, or a partner, an officer, a shareholder, a member, or an
01 employee of a license holder, a permit holder, an out-of-state exemption holder, or a 02 practice privilege holder, may not reveal information communicated to the license 03 holder, permit holder, out-of-state exemption holder, or practice privilege holder by 04 a client about a matter concerning which the client has employed the license holder, 05 permit holder, out-of-state exemption holder, or practice privilege holder in a 06 professional capacity. This section does not apply to 07 (1) information required to be disclosed by the standards of the public 08 accounting profession in reporting on the examination of financial statements; 09 (2) the release of information the client has authorized the license 10 holder, permit holder, out-of-state exemption holder, or practice privilege holder to 11 reveal; 12 (3) information revealed as part of the discovery of evidence related to 13 a court or administrative proceeding or introduced in evidence in a court or 14 administrative proceeding; 15 (4) information revealed in ethical investigations conducted by private 16 professional organizations; or 17 (5) information revealed in the course of a quality review under 18 AS 08.04.426. 19 * Sec. 34. AS 08.04.680(1) is repealed and reenacted to read: 20 (1) "attest function" means 21 (A) an audit or other engagement, if the performance of the 22 audit or other engagement is established by the Statements on Auditing 23 Standards; 24 (B) a review of a financial statement, if the performance of the 25 review is established by the Statements on Standards for Accounting and 26 Review Services; 27 (C) an examination of prospective financial information, if the 28 performance of the examination is established by the Statements on Standards 29 for Attestation Engagements; or 30 (D) an engagement, if the performance of the engagement is 31 established by the Auditing Standards of the Public Company Accounting
01 Oversight Board. 02 * Sec. 35. AS 08.04.680(9) is amended to read: 03 (9) "permit" means a permit issued under AS 08.04.240 or 04 08.04.421(a) [AS 08.04.240 OR 08.04.420]; 05 * Sec. 36. AS 08.04.680(12) is repealed and reenacted to read: 06 (12) "principal place of business" means the office location designated 07 by an individual for the purposes of substantial equivalency and reciprocity; 08 * Sec. 37. AS 08.04.680(14) is amended to read: 09 (14) "report," when used with reference to financial statements, means 10 an opinion, report, or other form of language that states or implies assurance as to the 11 reliability of financial statements and that also includes or is accompanied by a 12 statement or implication that the person issuing it has special knowledge or 13 competency in accounting or auditing; a statement or implication of special knowledge 14 or competence may arise from use by the issuer of the report of names or titles 15 indicating that the issuer is a certified public accountant or auditor, or from the 16 language of the report itself; except as provided in this paragraph, "report" includes 17 any form of language that disclaims an opinion when the form of the language is 18 conventionally understood to imply a positive assurance as to the reliability of the 19 financial statements referred to or special competence on the part of the person issuing 20 the language; and "report" includes any other form of language that is conventionally 21 understood to imply such assurance or such special knowledge or competence; 22 "report" does not include 23 (A) a compilation of financial statement language that does not 24 express or imply assurance or special knowledge or competence; or 25 (B) the following disclaimer language when used by a person 26 without a license, a practice privilege, or an out-of-state exemption 27 [NONLICENSEES] in connection with financial statements: 28 (i) "I (we) have prepared the accompanying (financial 29 statements) of (name of entity) as of (time period) for the (period) then 30 ended. This presentation is limited to preparing, in the form of financial 31 statements, information that is the representation of management
01 (owners)."; or 02 (ii) "I (we) have not audited or reviewed the 03 accompanying financial statements and, accordingly, do not express an 04 opinion or any other form of assurance on them."; 05 * Sec. 38. AS 08.04.680 is amended by adding new paragraphs to read: 06 (16) "compilation service" means a service that 07 (A) is performed as established by the Statements on Standards 08 for Accounting and Review Services; and 09 (B) presents, in the form of financial statements, information 10 that is the representation of management, but does not express an assurance on 11 the statements; 12 (17) "designated function" means 13 (A) an audit or other engagement, if the performance of the 14 audit or other engagement is established by the Statements on Auditing 15 Standards; 16 (B) an examination of prospective financial information, if the 17 performance of the examination is established by the Statements on Standards 18 for Attestation Engagements; or 19 (C) an engagement, if the performance of the engagement is 20 established by the Auditing Standards of the Public Company Accounting 21 Oversight Board; 22 (18) "home office" means the location specified by the client as the 23 address to which an attest function service or a compilation service is directed; 24 (19) "out-of-state exemption" means the exemption provided under 25 AS 08.04.421(b) or (c). 26 * Sec. 39. AS 08.04.085 is repealed. 27 * Sec. 40. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 TRANSITIONAL PROVISION: REGULATIONS. The Board of Public Accountancy 30 created under AS 08.04.010 may proceed to adopt regulations necessary to implement this 31 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not
01 before the effective date of secs. 1 - 39 of this Act. 02 * Sec. 41. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 TRANSITIONAL PROVISION: EFFECT ON CURRENT PERMITTEES AND 05 PRACTICE PRIVILEGE HOLDERS. (a) On and after January 1, 2011, a person who holds a 06 permit or practice privilege on January 1, 2011, may continue to engage in the practice of 07 public accounting under the permit or practice privilege until the permit or practice privilege 08 expires normally under AS 08.04, as AS 08.04 existed before January 1, 2011, but shall 09 otherwise comply with AS 08.04, as amended by this Act. 10 (b) In this section, 11 (1) "permit" means a permit issued under AS 08.04.240, as that section existed 12 before January 1, 2011, or AS 08.04.420, as that section existed before January 1, 2011; 13 (2) "practice of public accounting" has the meaning given in AS 08.04.680; 14 (3) "practice privilege" means a practice privilege authorized under 15 AS 08.04.420, as that section existed before January 1, 2011. 16 * Sec. 42. Section 40 of this Act takes effect immediately under AS 01.10.070(c). 17 * Sec. 43. Except as provided in sec. 42 of this Act, this Act takes effect January 1, 2011.