00                    SENATE CS FOR HOUSE BILL NO. 315(FIN)                                                                
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 is amended by adding a new section to read:                                                     
11            Sec. 08.04.055. Executive secretary of board. (a) The department, in                                       
12       consultation with the board, shall employ a certified public accountant or person who                             
13       has other accounting experience satisfactory to the board and who is not a member of                              
14       the board to serve as executive secretary of the board.                                                           
15            (b)  The executive secretary shall perform duties as prescribed by the board.                                
01    * Sec. 3. AS 08.04.070 is amended by adding a new subsection to read:                                              
02            (h)  The board shall define by regulation the qualifications and duties of the                               
03       executive secretary and delegate authority to the executive secretary as necessary to                             
04       conduct board business.                                                                                           
05    * Sec. 4. AS 08.04.075 is amended to read:                                                                         
06            Sec. 08.04.075. Substantial equivalency. The [UPON REQUEST OF AN                                         
07       APPLICANT FOR A PRACTICE PRIVILEGE UNDER AS 08.04.420(a), OR ON                                                   
08       THE BOARD'S OWN MOTION, THE] board shall determine whether the education,                                     
09       examination, and experience qualifications of another state or an individual [THE                         
10       APPLICANT] are substantially equivalent to the national standard or to another                                    
11       standard established by the board to protect the public interest. The board may adopt                             
12       by regulation the qualifications established by a nationally recognized professional                              
13       organization for accountants as the national standard or for another standard                                     
14       established by the board to protect the public interest. The board may accept the                                 
15       determination of a nationally recognized professional organization for accountants or                         
16       adopt another standard as to [OF] whether the qualifications of the other state or an                     
17       individual [THE APPLICANT] are substantially equivalent to the national standard.                         
18       When ascertaining substantial equivalency under this chapter, the order in which                              
19       education, examination, or experience requirements were attained shall be                                     
20       disregarded [OR TO ANOTHER STANDARD ESTABLISHED BY THE BOARD                                                  
21       TO PROTECT THE PUBLIC INTEREST].                                                                                  
22    * Sec. 5. AS 08.04.100 is amended to read:                                                                         
23            Sec. 08.04.100. Certificate granted. The certificate of "Certified Public                                  
24       Accountant" shall be granted by the board to any person who meets the requirements                                
25       of AS 08.04.110 - 08.04.130. The holder of a certificate issued under this section is                             
26       not authorized to engage in the practice of public accounting in the state unless the                             
27       holder also has a current license or [,] permit, or an out-of-state exemption or                          
28       practice privilege [ISSUED UNDER THIS CHAPTER].                                                                   
29    * Sec. 6. AS 08.04.200 is amended to read:                                                                         
30            Sec. 08.04.200. Use of title "certified public accountant" by individual. An                               
31       individual who has a license from the board as a certified public accountant or holds a                           
01       practice privilege [OR AN OUT-OF-STATE PERMIT UNDER AS 08.04.420] shall                                           
02       be known as a certified public accountant and may use the abbreviation "CPA."                                     
03    * Sec. 7. AS 08.04.240(a) is repealed and reenacted to read:                                                       
04            (a)  The board shall grant a permit to engage in the practice of public                                      
05       accounting as a partnership to a partnership that applies to the board as a partnership                           
06       of certified public accountants if the partnership meets the following requirements:                              
07                 (1)  more than one-half of the ownership of the partnership belongs to                                  
08       certified public accountants of this or another state in good standing;                                           
09                 (2)  an individual who is a certified public accountant or has a practice                               
10       privilege, who is responsible for supervising attest functions or compilation services in                         
11       the partnership, and who signs or authorizes another person to sign an accountant's                               
12       report on financial statements on behalf of the partnership meets the competency                                  
13       requirements established by the board under AS 08.04.423;                                                         
14                 (3)  an individual who signs or authorizes another person to sign an                                    
15       accountant's report on financial statements on behalf of the partnership meets the                                
16       competency requirements established by the board under AS 08.04.423; and                                          
17                 (4)  each partner who is personally engaged in this state in the practice                               
18       of public accounting as a member of that partnership and whose principal place of                                 
19       business is in this state is a certified public accountant of this state in good standing.                        
20    * Sec. 8. AS 08.04.240(b) is repealed and reenacted to read:                                                       
21            (b)  The board shall grant a permit to engage in the practice of public                                      
22       accounting as a corporation to a corporation organized for the practice of public                                 
23       accounting that applies to the board as a corporation of certified public accountants if                          
24       the corporation meets the following requirements:                                                                 
25                 (1)  the sole purpose and business of the corporation is to furnish to the                              
26       public services not inconsistent with this chapter or the regulations adopted under it by                         
27       the board; however, the corporation may invest its funds in a manner not incompatible                             
28       with the practice of public accounting;                                                                           
29                 (2)  at least a simple majority of the shares of the corporation are                                    
30       owned by certified public accountants of this or another state in good standing and the                           
31       principal officer of the corporation and any officer having authority over the practice                           
01       of public accounting by the corporation is a certified public accountant of this or                               
02       another state in good standing;                                                                                   
03                 (3)  an individual who is a certified public accountant or has a practice                               
04       privilege, who is responsible for supervising attest functions or compilation services in                         
05       the corporation, and who signs or authorizes another person to sign an accountant's                               
06       report on financial statements on behalf of the corporation meets the competency                                  
07       requirements established by the board under AS 08.04.423;                                                         
08                 (4)  an individual who signs or authorizes another person to sign an                                    
09       accountant's report on financial statements on behalf of the corporation meets the                                
10       competency requirements established by the board under AS 08.04.423;                                              
11                 (5)  each shareholder or director personally engaged in this state in the                               
12       practice of public accounting and whose principal place of business is located in this                            
13       state is a certified public accountant of this state in good standing;                                            
14                 (6)  to facilitate compliance with the provisions of this section relating                              
15       to the ownership of stock, there is a written agreement binding the corporation or the                            
16       qualified shareholders to purchase shares offered for sale by, or not under the                                   
17       ownership or effective control of, a qualified shareholder and binding a holder not a                             
18       qualified shareholder to sell these shares to the corporation or the qualified                                    
19       shareholders; the agreement must be noticed on each certificate of corporate stock; the                           
20       corporation may purchase any amount of its stock for this purpose, notwithstanding                                
21       any impairment of capital, so long as one share remains outstanding; and                                          
22                 (7)  the corporation is in compliance with those other regulations                                      
23       pertaining to corporations practicing public accounting in this state that the board may                          
24       adopt.                                                                                                            
25    * Sec. 9. AS 08.04.240(c) is amended to read:                                                                      
26            (c)  Application for a permit under this section shall be made upon the affidavit                            
27       of a general partner, member, or shareholder who is a certified public accountant of                              
28       this state in good standing or an individual with a practice privilege. The board                             
29       shall, in each case, determine whether the applicant is eligible for a permit under this                          
30       section. A partnership, limited liability company, corporation, or other legal entity that                        
31       is issued a permit under this section may use the words "certified public accountants"                            
01       or the abbreviation "CPAs" in connection with the name of the partnership, limited                                
02       liability company, corporation, or other legal entity. The board shall be notified within                         
03       one month after the admission or withdrawal of a partner, member, or shareholder                                  
04       from a partnership, limited liability company, corporation, or other legal entity issued                          
05       a permit under this section.                                                                                      
06    * Sec. 10. AS 08.04.240(d) is repealed and reenacted to read:                                                      
07            (d)  The board shall grant a permit to engage in the practice of public                                      
08       accounting as a limited liability company to a limited liability company engaged in                               
09       this state in the practice of public accounting that applies to the board as a limited                            
10       liability company of certified public accountants if                                                              
11                 (1)  the sole purpose and the sole business of the company are to                                       
12       furnish to the public services that are consistent with this chapter or the regulations                           
13       adopted under this chapter, except that the company may invest its money in a manner                              
14       that is compatible with the practice of public accounting;                                                        
15                 (2)  more than one-half of the ownership of the limited liability                                       
16       company belongs to certified public accountants of this or another state in good                                  
17       standing;                                                                                                         
18                 (3)  an individual who is a certified public accountant or has a practice                               
19       privilege, who is responsible for supervising attest functions or compilation services in                         
20       the company, and who signs or authorizes another person to sign an accountant's                                   
21       report on financial statements on behalf of the company meets the competency                                      
22       requirements established by the board under AS 08.04.423;                                                         
23                 (4)  an individual who signs or authorizes another person to sign an                                    
24       accountant's report on financial statements on behalf of the company meets the                                    
25       competency requirements established by the board under AS 08.04.423; and                                          
26                 (5)  each member personally engaged in this state in the practice of                                    
27       public accounting and whose principal place of business is located in this state is a                             
28       certified public accountant of this state in good standing.                                                       
29    * Sec. 11. AS 08.04.240(g) is amended to read:                                                                     
30            (g)  The board shall renew a permit granted under (a), (b), (d), or (e) of this                              
31       section or a renewal issued under this subsection if                                                              
01                 (1)  the permittee maintains all of the licensee's offices that are located                         
02       in this state as required by AS 08.04.360 - 08.04.380;                                                        
03                 (2)  each individual who is required by (a), (b), (d), or (e) of this section                           
04       to be a certified public accountant of this state complies with the continuing education                      
05       requirements of AS 08.04.425 and the quality review requirements of AS 08.04.426;                                 
06       and                                                                                                               
07                 (3)  the permittee complies with the requirements of this chapter,                                  
08       including the competency requirement of (a)(2) and (3), (b)(3) and (4), and (d)(3)                            
09       and (4) of this section.                                                                                    
10    * Sec. 12. AS 08.04.240 is amended by adding  new subsections to read:                                             
11            (i)  For the purposes of issuing a permit under this section, a partnership,                                 
12       limited liability company, corporation, or other legal entity may include owners who                              
13       are not certified public accountants if                                                                           
14                 (1)  the partnership, corporation, limited liability company, or other                                  
15       legal entity designates a certified public accountant or an individual with practice                              
16       privileges to be responsible for the proper registration of the entity and identifies the                         
17       certified public accountant or individual to the board;                                                           
18                 (2)  all of the owners of the partnership, corporation, limited liability                               
19       company, or other legal entity who are not certified public accountants are active                                
20       individual participants in the partnership, corporation, limited liability company, or                            
21       other legal entity, or in an entity affiliated with the partnership, corporation, limited                         
22       liability company, or other legal entity; and                                                                     
23                 (3)  the partnership, corporation, limited liability company, or other                                  
24       legal entity complies with the other requirements that the board may adopt by                                     
25       regulation to protect the public interest as described under AS 08.04.005.                                        
26            (j)  If the ownership of a partnership, limited liability company, corporation, or                           
27       other legal entity, after it has received or renewed a permit, does not comply with (i)                           
28       of this section, the partnership, limited liability company, corporation, or other legal                          
29       entity shall take corrective action to comply with (i) of this section within a reasonable                        
30       time after the noncompliance begins. The board shall establish by regulation the                                  
31       criteria to determine what is a reasonable time and may base the regulation on national                           
01       standards.                                                                                                        
02    * Sec. 13. AS 08.04.370 is amended to read:                                                                        
03            Sec. 08.04.370. Use of title "certified public accountant" by office of legal                            
04       entity [ORGANIZATION]. The title "certified public accountant" or the                                         
05       abbreviation "CPA" may not be used in connection with an office of a legal entity                             
06       [AN ORGANIZATION] holding a permit or an out-of-state exemption [UNDER                                        
07       AS 08.04.240 OR 08.04.420(c)] unless the supervision requirement of AS 08.04.360                                  
08       is satisfied.                                                                                                     
09    * Sec. 14. AS 08.04.380 is amended to read:                                                                        
10            Sec. 08.04.380. Waiver of requirements. The board may waive the                                            
11       requirements of AS 08.04.240(a)(4), (b)(5), and (d)(5), [AS 08.04.240(a)(3), (b)(4),                          
12       AND (d)(4), AND] 08.04.360, and 08.04.370 if                                                                  
13                 (1)  the community has a population of 2,000 or less; and                                               
14                 (2)  the individual, partnership, corporation, limited liability company,                               
15       or other legal entity that opens or maintains the office maintains another office in the                          
16       state that meets the requirements outlined in AS 08.04.360 and 08.04.370.                                         
17    * Sec. 15. AS 08.04.420 is repealed and reenacted to read:                                                         
18            Sec. 08.04.420. Practice privileges. (a) Except as limited by (b) of this                                  
19       section, an individual who does not have a license in this state, but who is licensed to                          
20       practice public accounting in another state and whose principal place of business for                             
21       the practice of public accounting is in the other state may engage in the practice of                             
22       public accounting in this state under a practice privilege if the state in which the                              
23       individual is licensed to practice public accounting                                                              
24                 (1)  requires as a condition of licensure that an individual                                            
25                      (A)  have at least 150 semester hours of college education,                                        
26            including a baccalaureate or higher degree conferred by a college or university;                             
27                      (B)  achieve a passing grade on the Uniform Certified Public                                       
28            Accountant Examination; and                                                                                  
29                      (C)  possess at least one year of experience, which includes                                       
30            providing any type of service or advice involving the use of accounting, attest,                             
31            compilation, management advisory, financial advisory, tax, or consulting                                     
01            skills; the experience may be obtained through practice with the government,                                 
02            industry, colleges, universities, or the public; or                                                          
03                 (2)  does not require as a condition of licensure that an individual                                    
04       satisfy the requirements of (1) of this subsection but the individual's qualifications are                        
05       substantially equivalent to the requirements of (1) of this subsection; however, for the                          
06       purposes of this paragraph, the education of an individual who holds a valid license to                           
07       practice public accounting that is issued by another state before January 1, 2013, and                            
08       who passes the Uniform Certified Public Accountant Examination before January 1,                                  
09       2013, is exempt from the education requirement identified in (1)(A) of this subsection.                           
10            (b)  Unless the individual is a sole practitioner, if an individual who engages in                           
11       the practice of public accounting under a practice privilege under (a) of this section                            
12       performs designated functions for a client whose home office is in this state, the                                
13       individual may only provide the designated functions through a legal entity that has a                            
14       permit.                                                                                                           
15            (c)  An individual who may engage in the practice of public accounting in this                               
16       state under (a) or (b) of this section is not required to provide a notice to the board, to                       
17       pay a fee to the board, or to submit documentation to the board in order to engage in                             
18       the practice of public accounting in this state. The person may engage in the practice                            
19       of public accounting by mail, by telephone, by electronic means, or in person.                                    
20    * Sec. 16. AS 08.04 is amended by adding new sections to read:                                                     
21            Sec. 08.04.421. Out-of-state permits and exemptions. (a) A legal entity that                               
22       does not have an office in this state, that is authorized to practice public accounting in                        
23       another state, and that performs designated functions for a client whose home office is                           
24       located in this state may not engage in the practice of public accounting in this state                           
25       unless the legal entity has an out-of-state permit. To obtain an out-of-state permit, the                         
26       legal entity shall submit to the board                                                                            
27                 (1)  a written notice on a form provided by the board;                                                  
28                 (2)  the fee required by the board;                                                                     
29                 (3)  verification of the current authorization of the legal entity to                                   
30       practice public accounting in the other state; and                                                                
31                 (4)  verification that the legal entity participates in a quality review                                
01       program comparable to the program required of entities registered under                                           
02       AS 08.04.426.                                                                                                     
03            (b)  A legal entity that performs designated services but not designated                                     
04       functions for a client whose home office is located in this state may engage in the                               
05       practice of public accounting in this state under an out-of-state exemption if the legal                          
06       entity                                                                                                            
07                 (1)  does not have an office in this state;                                                             
08                 (2)  is authorized to practice public accounting in another state;                                      
09                 (3)  performs the designated services through an individual with a                                      
10       practice privilege; and                                                                                           
11                 (4)  participates in a quality review program comparable to the program                                 
12       required under AS 08.04.426.                                                                                      
13            (c)  A legal entity that does not have an office in this state, is authorized to                             
14       practice public accounting in another state, and does not perform designated functions                            
15       or designated services for a client whose home office is located in this state may                                
16       engage in the practice of public accounting in this state under an out-of-state                                   
17       exemption if the services that the legal entity performs within the practice of public                            
18       accounting are performed                                                                                          
19                 (1)  through an individual who has a practice privilege; and                                            
20                 (2)  only to the extent that the legal entity can lawfully perform the                                  
21       services in the state where the individual with a practice privilege has the individual's                         
22       principal place of business.                                                                                      
23            (d)  If the board denies an out-of-state permit to a legal entity under (a) of this                          
24       section, the board shall provide notice of the denial to the legal entity.                                        
25            (e)  Notwithstanding AS 08.01.100(b), the board shall establish by regulation                                
26       the period for which an out-of-state permit authorized by (a) of this section is valid.                           
27       However, the initial term of an out-of-state permit may not exceed three years. The                               
28       board may renew an out-of-state permit and shall establish by regulation the terms for                            
29       and length of a renewal, except that the length of a renewal for an out-of-state permit                           
30       may not exceed four years.                                                                                        
31            (f)  A legal entity who may engage in the practice of public accounting under                                
01       an out-of-state exemption is not required to provide a notice to the board, pay a fee to                          
02       the board, or submit documentation to the board. The person may engage in the                                     
03       practice of public accounting by mail, by telephone, by electronic means, or in person.                           
04            (g)  In this section, "designated service" means                                                             
05                 (1)  a review of a financial statement, if the performance of the review                                
06       is established by the Statements on Standards for Accounting and Review Services; or                              
07                 (2)  a compilation service.                                                                             
08            Sec. 08.04.422. Conditions of practice privileges, out-of-state permits, and                               
09       out-of-state exemptions. An individual with a practice privilege who engages in the                             
10       practice of public accounting in the state under the practice privilege, a legal entity                           
11       with a permit or exemption under AS 08.04.421 who engages in the practice of public                               
12       accounting in this state under the permit or exemption, and a legal entity that hires an                          
13       individual with a practice privilege shall                                                                        
14                 (1)  consent to the personal and subject matter jurisdiction and                                        
15       disciplinary authority of the board;                                                                              
16                 (2)  agree to comply with this chapter, including the regulations                                       
17       adopted by the board;                                                                                             
18                 (3)  agree that the individual or legal entity will stop offering to engage                             
19       or engaging in the practice of public accounting, whether individually or and on behalf                           
20       of a legal entity, if the license from the state of the individual's or legal entity's                            
21       principal place of business becomes invalid; and                                                                  
22                 (4)  consent to the appointment of the state board that issued the                                      
23       individual's license as the individual's or legal entity's agent for service of process in a                      
24       court action or in another proceeding against the individual or legal entity that arises                          
25       out of a transaction or an operation connected with or incidental to the individual's or                          
26       legal entity's engagement in the practice of public accounting.                                                   
27    * Sec. 17. AS 08.04.440 is amended to read:                                                                        
28            Sec. 08.04.440. Effect of failure to obtain license or [,] permit [, OR                                  
29       PRACTICE PRIVILEGE]. Failure of an individual, partnership, limited liability                                   
30       company, corporation, or other legal entity to apply for a [THE] required license or [,]                  
31       permit [, OR PRACTICE PRIVILEGE] or to pay a [THE] required fee within (1)                                    
01       three years from the expiration date of the license or [,] permit [, OR PRACTICE                              
02       PRIVILEGE] last obtained or renewed, or (2) three years from the date the person was                              
03       granted a license or permit as a public accountant valid under AS 08.04.661 deprives                              
04       the individual, partnership, limited liability company, corporation, or other legal entity                        
05       of the right to a license or [,] permit [, OR PRACTICE PRIVILEGE] or renewal of a                             
06       license or [,] permit [, OR PRACTICE PRIVILEGE] unless the board determines that                              
07       the failure is excusable. In case of excusable failure, the fee for a license or [,] permit                   
08       [, OR PRACTICE PRIVILEGE] or renewal of a license or [,] permit [, OR                                         
09       PRACTICE PRIVILEGE] under this section may not exceed three times one year's                                      
10       portion of the fee that would have otherwise been required for the license, permit, [OR                           
11       PRACTICE PRIVILEGE,] or renewal.                                                                                  
12    * Sec. 18. AS 08.04.450 is amended to read:                                                                        
13            Sec. 08.04.450. Revocation or suspension of license, practice privilege,                                   
14       [OR] permit, or out-of-state exemption. In addition to its powers under                                       
15       AS 08.01.075, the board may revoke, suspend, or refuse to renew a license, practice                               
16       privilege, [OR] permit, or out-of-state exemption, or may censure a holder of a                               
17       license, practice privilege, [OR] permit, or out-of-state exemption, for                                      
18                 (1)  fraud or deceit in obtaining a license [, PRACTICE PRIVILEGE,]                                     
19       or permit required by this chapter;                                                                               
20                 (2)  dishonesty or gross negligence in the practice of public accounting,                               
21       or other acts discreditable to the accounting profession;                                                         
22                 (3)  violation of a provision of AS 08.04.500 - 08.04.610 or failure to                             
23       take corrective action to comply with AS 08.04.240(i) within the time allowed                                 
24       under AS 08.04.240(j);                                                                                        
25                 (4)  violation of a rule of professional conduct or other regulation                                    
26       adopted by the board;                                                                                             
27                 (5)  conviction of a felony under the laws of any state or of the United                                
28       States;                                                                                                           
29                 (6)  conviction of any crime, an essential element of which is                                          
30       dishonesty or fraud, under the laws of any state or of the United States;                                         
31                 (7)  cancellation, revocation, suspension, or refusal to renew authority                                
01       to practice as a certified public accountant or public accountant in any other state for                          
02       any cause other than failure to pay a required fee;                                                               
03                 (8)  suspension or revocation of the right to practice before any state or                              
04       federal agency;                                                                                                   
05                 (9)  failure to satisfy the continuing education requirements prescribed                                
06       by the board under AS 08.04.425, except as conditioned, relaxed, or suspended by the                              
07       board under AS 08.04.425(c) and (d);                                                                              
08                 (10)  failure to satisfactorily complete the supervision required by                                    
09       AS 08.04.423 or a quality review requirement under AS 08.04.426; or                                               
10                 (11)  committing an act in another state for which the holder of the                                    
11       license, practice privilege, [OR] permit, or out-of-state exemption would be subject                          
12       to discipline in this or the other state.                                                                     
13    * Sec. 19. AS 08.04.450 is amended by adding a new subsection to read:                                             
14            (b)  The board shall investigate a complaint made by the board of accountancy,                               
15       or other regulatory body for the practice of accounting, of another state.                                        
16    * Sec. 20. AS 08.04.490 is amended to read:                                                                        
17            Sec. 08.04.490. Reinstatement. Upon application in writing and after a                                     
18       hearing, the board may issue a new license or allow a practice privilege to an                                
19       individual whose license or practice privilege has been revoked, or may issue a new                               
20       permit to a person whose permit has been revoked, or may modify the suspension of                                 
21       or may reissue any license, practice privilege, or permit to practice public accounting                           
22       that has been revoked or suspended.                                                                               
23    * Sec. 21. AS 08.04.495 is amended to read:                                                                        
24            Sec. 08.04.495. Fees. The department [DEPARTMENT OF COMMERCE,                                          
25       COMMUNITY, AND ECONOMIC DEVELOPMENT] shall set fees under                                                         
26       AS 08.01.065 for examinations, reexaminations, permits, licenses, and practice                                    
27       privileges.                                                                                                       
28    * Sec. 22. AS 08.04.500(b) is amended to read:                                                                     
29            (b)  This section does not prohibit an individual in good standing in any state,                         
30       including an individual acting as a sole practitioner in the individual's home                                
31       state, holding a practice privilege under AS 08.04.420 from using the title "certified                        
01       public accountant [.]" or another title allowed under (a) of this section.                                    
02    * Sec. 23. AS 08.04.505 is amended to read:                                                                        
03            Sec. 08.04.505. Issuance of reports. Only a person who holds a valid license,                              
04       practice privilege, [OR] permit, or out-of-state exemption [ISSUED UNDER THIS                                 
05       CHAPTER] may issue a report on financial statements of another person or                                          
06       governmental unit. This restriction does not apply to                                                             
07                 (1)  an officer, partner, member, or employee of a sole proprietorship,                                 
08       partnership, corporation, limited liability company, or other legal entity affixing that                          
09       person's signature to a statement or report in reference to the financial affairs of the                          
10       sole proprietorship, partnership, corporation, limited liability company, or other legal                          
11       entity with wording designating the position, title, or office that the person holds in the                       
12       sole proprietorship, partnership, corporation, limited liability company, or other legal                          
13       entity;                                                                                                           
14                 (2)  an act of a public official or employee in the performance of                                      
15       official duties;                                                                                                  
16                 (3)  the performance by persons of other services involving the use of                                  
17       accounting skills, including the preparation of tax returns, management advisory                                  
18       services, and the preparation of financial statements without the issuance of reports on                          
19       them.                                                                                                             
20    * Sec. 24. AS 08.04.510 is amended to read:                                                                        
21            Sec. 08.04.510. Partnership, limited liability company, corporation, or                                    
22       other legal entity posing as a certified public accountant. (a) A partnership, limited                        
23       liability company, corporation, or other legal entity may not assume or use the title or                      
24       designation "certified public accountant" or the abbreviation "CPA" or any other title,                           
25       designation, word, letter, abbreviation, sign, card, or device tending to indicate that it                        
26       is composed of certified public accountants, unless the partnership, limited liability                            
27       company, corporation, or other legal entity holds a permit or an out-of-state                             
28       exemption and is engaging in the practice of public accounting under the name on its                          
29       permit, and its offices in this state for the practice of public accounting are maintained                        
30       as required by AS 08.04.360 - 08.04.380.                                                                          
31            (b)  A partnership, limited liability company, corporation, or other legal entity                        
01       consisting of certified public accountants in good standing in any state, that does not                           
02       have a permit as a partnership, limited liability company, corporation, or other legal                            
03       entity consisting of certified public accountants under AS 08.04.240 but holds a permit                           
04       under AS 08.04.421 or out-of-state exemption [UNDER AS 08.04.420], may use the                                
05       title or designation "certified public accountants [.]" or another title permitted under                      
06       (a) of this section.                                                                                          
07    * Sec. 25. AS 08.04.520 is amended to read:                                                                        
08            Sec. 08.04.520. Individual posing as public accountant. An individual may                                  
09       not assume or use the title or designation "public accountant" or the abbreviation "PA"                           
10       or other title, designation, word, letter, abbreviation, sign, card, or device tending to                         
11       indicate that the individual is a public accountant, unless the individual holds a current                        
12       license or [,] practice privilege [, OR PERMIT] and the individual's offices in this                          
13       state for the practice of public accounting are maintained as required by AS 08.04.360                            
14       - 08.04.380.                                                                                                      
15    * Sec. 26. AS 08.04.530 is amended to read:                                                                        
16            Sec. 08.04.530. Partnership, limited liability company, or corporation                                     
17       posing as public accountant. A partnership, limited liability company, or corporation                           
18       may not assume or use the designation "public accountant" or the abbreviation "PA"                                
19       or any other title, designation, word, letter, abbreviation, sign, card, or device tending                        
20       to indicate that the partnership, limited liability company, or corporation is composed                           
21       of public accountants, unless the partnership, limited liability company, or corporation                          
22       holds a current permit or out-of-state exemption, and, if it has a permit, is practicing                  
23       under the name on its permit, and its office in this state for the practice of public                             
24       accounting is maintained as required by AS 08.04.360 - 08.04.380.                                                 
25    * Sec. 27. AS 08.04.540 is amended to read:                                                                        
26            Sec. 08.04.540. Use of deceptive title or abbreviation. An individual,                                     
27       partnership, limited liability company, corporation, or other legal entity may not                            
28       assume or use the title or designation "certified accountant," "chartered accountant,"                            
29       "enrolled accountant," "licensed accountant," "registered accountant," or any other                               
30       title or designation likely to be confused with "certified public accountant" or "public                          
31       accountant," or any of the abbreviations "C," "EA," "LA," "RA," or similar                                        
01       abbreviations likely to be confused with "CPA" or "PA" except that "EA" may be used                               
02       to the extent that it relates to the term "enrolled agent" as defined by the federal                              
03       Internal Revenue Service; however, an individual, partnership, limited liability                                  
04       company, corporation, or other legal entity holding a current license or permit or an                         
05       out-of-state exemption [, PERMIT UNDER AS 08.04.240,] or practice privilege, and                          
06       whose offices in this state for the practice of public accounting, if any, are maintained                     
07       as required by AS 08.04.360 - 08.04.380 may hold out to the public as an accountant                               
08       or auditor.                                                                                                       
09    * Sec. 28. AS 08.04.560 is amended to read:                                                                        
10            Sec. 08.04.560. Individual may not assume title. An individual may not sign                                
11       or affix any name or any trade or assumed name used by that individual to any                                     
12       accounting or financial statement or opinion or report on any accounting or financial                             
13       statement with any wording indicating that the person is a certified public accountant                            
14       or public accountant or with any wording indicating that the person has expert                                    
15       knowledge in accounting or auditing, unless the individual holds a current license or                             
16       practice privilege and the individual's offices in this state, if any, for the practice of                    
17       public accounting are maintained as required by AS 08.04.360 - 08.04.380.                                         
18    * Sec. 29. AS 08.04.580 is amended to read:                                                                        
19            Sec. 08.04.580. Partnership posing as accountants or auditors. A person                                    
20       may not sign or affix a partnership name to any accounting or financial statement or                              
21       opinion or report on any accounting or financial statement with any wording                                       
22       indicating that it is a partnership composed of certified public accountants or public                            
23       accountants or with any wording indicating that the partnership has expert knowledge                              
24       in accounting or auditing unless the partnership holds a current permit and is                                    
25       practicing under the name on its permit, and its offices in this state for the practice of                        
26       public accounting are maintained as required by AS 08.04.360 - 08.04.380, or unless                           
27       the partnership holds an out-of-state exemption.                                                              
28    * Sec. 30. AS 08.04.590 is amended to read:                                                                        
29            Sec. 08.04.590. Use of title with corporate name. A person may not sign or                                 
30       affix a corporate name to any accounting or financial statement or opinion or report on                           
31       any accounting or financial statement with any wording indicating that it is a                                    
01       corporation composed of certified public accountants or public accountants or with                                
02       any wording indicating that the corporation has expert knowledge in accounting or                                 
03       auditing unless the corporation holds a current permit, it is practicing under the name                           
04       on the permit, and its offices in this state for the practice of public accounting are                            
05       maintained as required by AS 08.04.360 - 08.04.380, or unless the corporation holds                           
06       an out-of-state exemption.                                                                                    
07    * Sec. 31. AS 08.04.595 is amended to read:                                                                        
08            Sec. 08.04.595. Use of title with limited liability company name. A person                                 
09       may not sign or affix a limited liability company name to an accounting or financial                              
10       statement or opinion or report on an accounting or financial statement with wording                               
11       indicating that the person is a limited liability company composed of certified public                            
12       accountants or public accountants or with wording indicating that the company has                                 
13       expert knowledge in accounting or auditing unless the company holds a current                                     
14       permit, it is practicing under the name on the permit, and its offices in this state for the                      
15       practice of public accounting are maintained as required by AS 08.04.360 - 08.04.380,                         
16       or unless the limited liability company holds an out-of-state exemption.                                      
17    * Sec. 32. AS 08.04.598 is amended to read:                                                                        
18            Sec. 08.04.598. Use of title with name of other legal entity. A person may                               
19       not sign or affix the name of a legal [AN] entity to an accounting or financial                               
20       statement or opinion or report on an accounting or financial statement with wording                               
21       indicating that the person is a legal entity composed of certified public accountants or                          
22       public accountants or with wording indicating that the legal entity has expert                                
23       knowledge in accounting or auditing unless the legal entity holds a current permit, it is                     
24       practicing under the name on the permit, and its offices in this state for the practice of                        
25       public accounting are maintained as required by AS 08.04.360 - 08.04.380, or unless                           
26       the legal entity holds an out-of-state exemption.                                                             
27    * Sec. 33. AS 08.04.600 is amended to read:                                                                        
28            Sec. 08.04.600. Disclosure of lack of license or permit. An individual,                                    
29       partnership, limited liability company, corporation, or other entity that does not hold a                         
30       current license, a current practice privilege, [OR] a current permit, or a current out-                       
31       of-state exemption, may not hold out to the public as a certified public accountant or                        
01       public accountant by use of such words or abbreviations on any sign, card, letterhead,                            
02       or in any advertisement or directory, without indicating that the individual,                                     
03       partnership, limited liability company, corporation, or other entity does not hold a                              
04       current license, a current practice privilege, or a current permit. This section does not                         
05       prohibit                                                                                                          
06                 (1)  an officer, employee, partner, member, or principal of an                                          
07       organization from self-description through the position, title, or office that the person                         
08       holds in the organization;                                                                                        
09                 (2)  an act of a public official or public employee in the performance of                               
10       that individual's duties; or                                                                                      
11                 (3)  a person from maintaining a bookkeeping or tax service.                                            
12    * Sec. 34. AS 08.04.610 is amended to read:                                                                        
13            Sec. 08.04.610. Deceptive use of title or designation by partnership, limited                              
14       liability company, corporation, or other legal entity. A person may not assume or                             
15       use the title or designation "certified public accountant" or "public accountant" or an                           
16       abbreviation of them, in conjunction with a name indicating or implying that there is a                           
17       partnership, limited liability company, corporation, or other entity, or in conjunction                           
18       with the designation "and Company," "and Co.," "L.L.C.," "LLC," "Ltd.," or any                                    
19       similar designation unless there is a bona fide partnership, limited liability company,                           
20       corporation, [OR] other legal entity holding a permit issued under that name, or a                            
21       current out-of-state exemption. However, a sole proprietor or partnership lawfully                            
22       using the title or designation "certified public accountant" or "public accountant" or an                         
23       abbreviation of them in conjunction with such names or designation on April 26, 1960,                             
24       may continue to do so if the person or partnership otherwise complies with this                                   
25       chapter.                                                                                                          
26    * Sec. 35. AS 08.04.620 is amended to read:                                                                        
27            Sec. 08.04.620. Exceptions. This chapter does not prohibit                                                 
28                 (1)  an individual who does not hold a current license or practice                                      
29       privilege from serving as an employee of or as an assistant to an individual,                                     
30       partnership, limited liability company, corporation, or other legal entity holding a                              
31       current license, a current practice privilege, [OR] a current permit, or a current out-                       
01       of-state exemption so long as the employee or assistant does not use the employee's                           
02       or the assistant's name in connection with an accounting or financial statement;                                  
03                 (2)  an individual who holds a valid license or equivalent authorization                                
04       in another state from indicating that the individual is entitled to use the title "certified                      
05       public accountant," but the individual may not indicate that services are available to                            
06       the public unless the individual holds a current license or practice privilege issued                             
07       under this chapter;                                                                                               
08                 (3)  a holder of a certificate, license, or degree from a foreign country                               
09       that constitutes a recognized qualification for the practice of public accounting in that                         
10       country from indicating that the person holds the certificate, license, or degree, but the                        
11       person may not indicate that the person's services are available to the public unless the                         
12       person holds a current license, practice privilege, [OR] permit, or out-of-state                              
13       exemption [ISSUED] under this chapter.                                                                        
14    * Sec. 36. AS 08.04.662(a) is amended to read:                                                                     
15            (a)  A license holder, a permit holder, a practice privilege holder, an out-of-                          
16       state exemption holder, or a partner, an officer, a shareholder, a member, or an                              
17       employee of a license holder, a permit holder, an out-of-state exemption holder, or a                         
18       practice privilege holder, may not reveal information communicated to the license                                 
19       holder, permit holder, out-of-state exemption holder, or practice privilege holder by                         
20       a client about a matter concerning which the client has employed the license holder,                              
21       permit holder, out-of-state exemption holder, or practice privilege holder in a                               
22       professional capacity. This section does not apply to                                                             
23                 (1)  information required to be disclosed by the standards of the public                                
24       accounting profession in reporting on the examination of financial statements;                                    
25                 (2)  the release of information the client has authorized the license                                   
26       holder, permit holder, out-of-state exemption holder, or practice privilege holder to                         
27       reveal;                                                                                                           
28                 (3)  information revealed as part of the discovery of evidence related to                               
29       a court or administrative proceeding or introduced in evidence in a court or                                      
30       administrative proceeding;                                                                                        
31                 (4)  information revealed in ethical investigations conducted by private                                
01       professional organizations; or                                                                                    
02                 (5)  information revealed in the course of a quality review under                                       
03       AS 08.04.426.                                                                                                     
04    * Sec. 37. AS 08.04.680(1) is repealed and reenacted to read:                                                      
05                 (1)  "attest function" means                                                                            
06                      (A)  an audit or other engagement, if the performance of the                                       
07            audit or other engagement is established by the Statements on Auditing                                       
08            Standards;                                                                                                   
09                      (B)  a review of a financial statement, if the performance of the                                  
10            review is established by the Statements on Standards for Accounting and                                      
11            Review Services;                                                                                             
12                      (C)  an examination of prospective financial information, if the                                   
13            performance of the examination is established by the Statements on Standards                                 
14            for Attestation Engagements; or                                                                              
15                      (D)  an engagement, if the performance of the engagement is                                        
16            established by the Auditing Standards of the Public Company Accounting                                       
17            Oversight Board;                                                                                             
18    * Sec. 38. AS 08.04.680(9) is amended to read:                                                                     
19                 (9)  "permit" means a permit issued under AS 08.04.240 or                                           
20       08.04.421(a) [AS 08.04.240 OR 08.04.420];                                                                     
21    * Sec. 39. AS 08.04.680(12) is repealed and reenacted to read:                                                     
22                 (12)  "principal place of business" means the office location designated                                
23       by an individual for the purposes of substantial equivalency and reciprocity;                                     
24    * Sec. 40. AS 08.04.680(14) is amended to read:                                                                    
25                 (14)  "report," when used with reference to financial statements, means                                 
26       an opinion, report, or other form of language that states or implies assurance as to the                          
27       reliability of financial statements and that also includes or is accompanied by a                                 
28       statement or implication that the person issuing it has special knowledge or                                      
29       competency in accounting or auditing; a statement or implication of special knowledge                             
30       or competence may arise from use by the issuer of the report of names or titles                                   
31       indicating that the issuer is a certified public accountant or auditor, or from the                               
01       language of the report itself; except as provided in this paragraph, "report" includes                            
02       any form of language that disclaims an opinion when the form of the language is                                   
03       conventionally understood to imply a positive assurance as to the reliability of the                              
04       financial statements referred to or special competence on the part of the person issuing                          
05       the language; and "report" includes any other form of language that is conventionally                             
06       understood to imply such assurance or such special knowledge or competence;                                       
07       "report" does not include                                                                                         
08                      (A)  a compilation of financial statement language that does not                                   
09            express or imply assurance or special knowledge or competence; or                                            
10                      (B)  the following disclaimer language when used by a person                                   
11            without a license, a practice privilege, or an out-of-state exemption                                    
12            [NONLICENSEES] in connection with financial statements:                                                      
13                           (i)  "I (we) have prepared the accompanying (financial                                        
14                 statements) of (name of entity) as of (time period) for the (period) then                               
15                 ended. This presentation is limited to preparing, in the form of financial                              
16                 statements, information that is the representation of management                                        
17                 (owners)."; or                                                                                          
18                           (ii)  "I (we) have not audited or reviewed the                                                
19                 accompanying financial statements and, accordingly, do not express an                                   
20                 opinion or any other form of assurance on them.";                                                       
21    * Sec. 41. AS 08.04.680 is amended by adding new paragraphs to read:                                               
22                 (16)  "compilation service" means a service that                                                        
23                      (A)  is performed as established by the Statements on Standards                                    
24            for Accounting and Review Services; and                                                                      
25                      (B)  presents, in the form of financial statements, information                                    
26            that is the representation of management, but does not express an assurance on                               
27            the statements;                                                                                              
28                 (17)  "department" means the Department of Commerce, Community,                                         
29       and Economic Development;                                                                                         
30                 (18)  "designated function" means                                                                       
31                      (A)  an audit or other engagement, if the performance of the                                       
01            audit or other engagement is established by the Statements on Auditing                                       
02            Standards;                                                                                                   
03                      (B)  an examination of prospective financial information, if the                                   
04            performance of the examination is established by the Statements on Standards                                 
05            for Attestation Engagements; or                                                                              
06                      (C)  an engagement, if the performance of the engagement is                                        
07            established by the Auditing Standards of the Public Company Accounting                                       
08            Oversight Board;                                                                                             
09                 (19)  "home office" means the location specified by the client as the                                   
10       address to which an attest function service or a compilation service is directed;                                 
11                 (20)  "out-of-state exemption" means the exemption provided under                                       
12       AS 08.04.421(b) or (c).                                                                                           
13    * Sec. 42. AS 08.04.085 is repealed.                                                                               
14    * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to                         
15 read:                                                                                                                   
16       TRANSITIONAL PROVISION: REGULATIONS. The Board of Public Accountancy                                              
17 created under AS 08.04.010 may proceed to adopt regulations necessary to implement this                                 
18 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                 
19 before the effective date of secs. 1 - 42 of this Act.                                                                  
20    * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to                         
21 read:                                                                                                                   
22       TRANSITIONAL PROVISION: EFFECT ON CURRENT PERMITTEES AND                                                          
23 PRACTICE PRIVILEGE HOLDERS. (a) On and after January 1, 2011, a person who holds a                                      
24 permit or practice privilege on January 1, 2011, may continue to engage in the practice of                              
25 public accounting under the permit or practice privilege until the permit or practice privilege                         
26 expires normally under AS 08.04, as AS 08.04 existed before January 1, 2011, but shall                                  
27 otherwise comply with AS 08.04, as amended by this Act.                                                                 
28       (b)  In this section,                                                                                             
29            (1)  "permit" means a permit issued under AS 08.04.240, as that section existed                              
30 before January 1, 2011, or AS 08.04.420, as that section existed before January 1, 2011;                                
31            (2)  "practice of public accounting" has the meaning given in AS 08.04.680;                                  
01            (3)  "practice privilege" means a practice privilege authorized under                                        
02 AS 08.04.420, as that section existed before January 1, 2011.                                                           
03    * Sec. 45. Section 43 of this Act takes effect immediately under AS 01.10.070(c).                                  
04    * Sec. 46. Except as provided in sec. 45 of this Act, this Act takes effect January 1, 2011.