HB 44: "An Act relating to the practice of accounting."
00 HOUSE BILL NO. 44 01 "An Act relating to the practice of accounting." 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 07 under this chapter. Notwithstanding AS 08.01.025, an accountant who does not hold a 08 license under this chapter and is not engaged in the practice of public accounting in 09 violation of this chapter is eligible for appointment as a public member under this 10 section. 11 * Sec. 2. AS 08.04.100 is amended to read: 12 Sec. 08.04.100. Certificate granted. The certificate of "Certified Public 13 Accountant" shall be granted by the board to any person who meets the requirements 14 of AS 08.04.110 - 08.04.130. The holder of a certificate issued under this section is 15 not authorized to engage in the practice of public accounting in the state unless the
01 holder also has a current license or permit [, OR AN OUT-OF-STATE EXEMPTION 02 OR PRACTICE PRIVILEGE]. 03 * Sec. 3. AS 08.04.105(b) is amended to read: 04 (b) The board may renew a license granted under this section if the licensee 05 (1) maintains all of the licensee's offices as required by AS 08.04.360 06 and 08.04.370 [AS 08.04.360 - 08.04.380]; 07 (2) complies with the continuing education requirements of 08 AS 08.04.425 and the peer [QUALITY] review requirements of AS 08.04.426; and 09 (3) complies with the requirements of this chapter. 10 * Sec. 4. AS 08.04.195(d) is amended to read: 11 (d) The board may renew a license issued under this section if the licensee 12 (1) maintains all of the licensee's offices as required by AS 08.04.360 13 and 08.04.370 [AS 08.04.360 - 08.04.380]; 14 (2) complies with the continuing education requirements established 15 under (c) of this section; and 16 (3) complies with the requirements of this chapter. 17 * Sec. 5. AS 08.04.240(a) is amended to read: 18 (a) The board shall grant a permit to engage in the practice of public 19 accounting to a firm with an office in the state [AS A PARTNERSHIP TO A 20 PARTNERSHIP] that applies to the board as a firm [PARTNERSHIP] of certified 21 public accountants if the firm [PARTNERSHIP] meets the following requirements: 22 (1) more than one-half of the ownership of the firm [PARTNERSHIP] 23 belongs to certified public accountants of this or another state in good standing; 24 (2) 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 firm [PARTNERSHIP], and who signs or authorizes another person to sign an 27 accountant's report on financial statements on behalf of the firm [PARTNERSHIP] 28 meets the competency requirements established by the board under AS 08.04.423; 29 (3) an individual who signs or authorizes another person to sign an 30 accountant's report on financial statements on behalf of the firm [PARTNERSHIP] 31 meets the competency requirements established by the board under AS 08.04.423; and
01 (4) each owner [PARTNER] who is personally engaged in this state in 02 the practice of public accounting as a member of the firm [THAT PARTNERSHIP] 03 and whose principal place of business is in this state is a certified public accountant of 04 this state in good standing. 05 * Sec. 6. AS 08.04.240(f) is amended to read: 06 (f) An initial permit issued under (a) or (k) [, (b), (d), OR (e)] of this section 07 lasts for the remainder of the biennial licensing period during which the initial permit 08 was granted. 09 * Sec. 7. AS 08.04.240(g) is amended to read: 10 (g) The board shall renew a permit granted under (a) or (k) [, (b), (d), OR (e)] 11 of this section or a renewal issued under this subsection if 12 (1) the permittee maintains all of the licensee's offices that are located 13 in this state as required by AS 08.04.360 and 08.04.370 [AS 08.04.360 - 08.04.380]; 14 (2) each individual who is required by (a) or (k) [, (b), (d), OR (e)] of 15 this section to be a certified public accountant of this state complies with the 16 continuing education requirements of AS 08.04.425 and the peer [QUALITY] review 17 requirements of AS 08.04.426; and 18 (3) the permittee complies with the requirements of this chapter [, 19 INCLUDING THE COMPETENCY REQUIREMENT OF (a)(2) AND (3), (b)(3) 20 AND (4), AND (d)(3) AND (4) OF THIS SECTION]. 21 * Sec. 8. AS 08.04.240(i) is amended to read: 22 (i) For the purposes of issuing a permit under this section, a firm 23 [PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION, OR 24 OTHER LEGAL ENTITY] may include owners who are not certified public 25 accountants if 26 (1) the firm [PARTNERSHIP, CORPORATION, LIMITED 27 LIABILITY COMPANY, OR OTHER LEGAL ENTITY] designates a certified 28 public accountant or an individual with practice privileges to be responsible for the 29 proper registration of the entity and identifies the certified public accountant or 30 individual to the board; 31 (2) all of the owners of the firm [PARTNERSHIP, CORPORATION,
01 LIMITED LIABILITY COMPANY, OR OTHER LEGAL ENTITY] who are not 02 certified public accountants are active individual participants in the firm 03 [PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, OR 04 OTHER LEGAL ENTITY,] or in an entity affiliated with the firm [PARTNERSHIP, 05 CORPORATION, LIMITED LIABILITY COMPANY, OR OTHER LEGAL 06 ENTITY]; and 07 (3) the firm [PARTNERSHIP, CORPORATION, LIMITED 08 LIABILITY COMPANY, OR OTHER LEGAL ENTITY] complies with the other 09 requirements that the board may adopt by regulation to protect the public interest as 10 described under AS 08.04.005. 11 * Sec. 9. AS 08.04.240(j) is amended to read: 12 (j) If the ownership of a firm [PARTNERSHIP, LIMITED LIABILITY 13 COMPANY, CORPORATION, OR OTHER LEGAL ENTITY], after the firm [IT] 14 has received or renewed a permit, does not comply with (i) of this section, the firm 15 [PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION, OR 16 OTHER LEGAL ENTITY] shall take corrective action to comply with (i) of this 17 section within a reasonable time after the noncompliance begins. The board shall 18 establish by regulation the criteria to determine what is a reasonable time and may 19 base the regulation on national standards. 20 * Sec. 10. AS 08.04.240 is amended by adding a new subsection to read: 21 (k) The board shall grant a permit to engage in the practice of public 22 accounting to a firm that does not have an office in the state but provides, or offers to 23 provide, attest functions in the state, if the firm applies to the board as a firm of 24 certified public accountants and meets the following requirements: 25 (1) the firm meets the requirements of (a)(1) of this section; 26 (2) the firm complies with the requirements in AS 08.04.426; 27 (3) the attest functions performed by the firm in the state are performed 28 by an individual who is a certified public accountant of this state in good standing or 29 who has a practice privilege; and 30 (4) the firm holds a permit to engage in the practice of public 31 accounting in good standing in the jurisdiction in which the principal office of the firm
01 is maintained. 02 * Sec. 11. AS 08.04.360 is amended to read: 03 Sec. 08.04.360. Supervision required. Each office established or maintained 04 in this state for the practice of public accounting shall be under the direct supervision 05 of an individual [IN RESIDENCE] who holds a license issued under this chapter 06 [OR A PRACTICE PRIVILEGE]. The supervisor may be a sole proprietor, partner, 07 principal, member, or staff employee. A supervisor may serve in this capacity for 08 each [AT ONE] office in the state that is maintained by a firm [ONLY]. 09 * Sec. 12. AS 08.04.370 is amended to read: 10 Sec. 08.04.370. Use of title "certified public accountant" by office of firm 11 [LEGAL ENTITY]. The title "certified public accountant" or the abbreviation "CPA" 12 may not be used in connection with an office of a firm [LEGAL ENTITY] holding a 13 permit [OR AN OUT-OF-STATE EXEMPTION] unless the supervision requirement 14 of AS 08.04.360 is satisfied. 15 * Sec. 13. AS 08.04.420(a) is amended to read: 16 (a) An [EXCEPT AS LIMITED BY (b) OF THIS SECTION, AN] individual 17 who does not have a license in this state, but who is licensed to practice public 18 accounting in another state and whose principal place of business for the practice of 19 public accounting is in the other state may engage in the practice of public accounting 20 in this state under a practice privilege if the state in which the individual is licensed to 21 practice public accounting 22 (1) requires as a condition of licensure that an individual 23 (A) have at least 150 semester hours of college education, 24 including a baccalaureate or higher degree conferred by a college or university; 25 (B) achieve a passing grade on the Uniform Certified Public 26 Accountant Examination; and 27 (C) possess at least one year of experience, which includes 28 providing any type of service or advice involving the use of accounting, attest, 29 compilation, management advisory, financial advisory, tax, or consulting 30 skills; the experience may be obtained through practice with the government, 31 industry, colleges, universities, or the public; or
01 (2) does not require as a condition of licensure that an individual 02 satisfy the requirements of (1) of this subsection, but the individual's qualifications are 03 substantially equivalent to the requirements of (1) of this subsection; however, for the 04 purposes of this paragraph, the education of an individual who holds a valid license to 05 practice public accounting that is issued by another state before January 1, 2013, and 06 who passes the Uniform Certified Public Accountant Examination before January 1, 07 2013, is exempt from the education requirement identified in (1)(A) of this subsection. 08 * Sec. 14. AS 08.04.420(c) is amended to read: 09 (c) An individual who may engage in the practice of public accounting in this 10 state under (a) [OR (b)] of this section is not required to provide a notice to the board, 11 to pay a fee to the board, or to submit documentation to the board in order to engage in 12 the practice of public accounting in this state. The person may engage in the practice 13 of public accounting by mail, by telephone, by electronic means, or in person. 14 * Sec. 15. AS 08.04.422 is amended to read: 15 Sec. 08.04.422. Conditions of practice privileges [, OUT-OF-STATE 16 PERMITS, AND OUT-OF-STATE EXEMPTIONS]. An individual with a practice 17 privilege who engages in the practice of public accounting in the state under the 18 practice privilege, a firm [LEGAL ENTITY] with a permit that [OR EXEMPTION 19 UNDER AS 08.04.421 WHO] engages in the practice of public accounting in this 20 state [UNDER THE PERMIT OR EXEMPTION], and a firm [LEGAL ENTITY] that 21 hires an individual with a practice privilege shall 22 (1) consent to the personal and subject matter jurisdiction and 23 disciplinary authority of the board; 24 (2) agree to comply with this chapter, including the regulations 25 adopted by the board; 26 (3) agree that the individual or firm [LEGAL ENTITY] will stop 27 offering to engage or engaging in the practice of public accounting, whether 28 individually or on behalf of a firm [LEGAL ENTITY], if the license from the state of 29 the individual's or firm's [LEGAL ENTITY'S] principal place of business becomes 30 invalid; and 31 (4) consent to the appointment of the state board that issued the
01 individual's license as the individual's or firm's [LEGAL ENTITY'S] agent for service 02 of process in a court action or in another proceeding against the individual or firm 03 [LEGAL ENTITY] that arises out of a transaction or an operation connected with or 04 incidental to the individual's or firm's [LEGAL ENTITY'S] engagement in the 05 practice of public accounting. 06 * Sec. 16. AS 08.04.426(a) is amended to read: 07 (a) The board may require as a condition for renewal of a license or a permit 08 that the applicant for the renewal provide evidence of enrollment in [UNDERGO] a 09 peer [QUALITY] review program approved [CONDUCTED AS REQUIRED] by 10 the board by regulation. 11 * Sec. 17. AS 08.04.426(c) is amended to read: 12 (c) The board shall adopt the regulations under (a) and (f) of this section in a 13 reasonable time before the regulations are scheduled to become effective. 14 * Sec. 18. AS 08.04.426(d) is amended to read: 15 (d) The regulations adopted under (a) or (f) of this section may require that 16 (1) an applicant demonstrate that the applicant has undergone a peer 17 [QUALITY] review that is a satisfactory equivalent to the peer [QUALITY] review 18 under (a) of this section; 19 (2) the administration of a peer review [QUALITY REVIEWS] be 20 subject to oversight [SUPERVISION] by an oversight body established or approved 21 by the board; 22 (3) a peer review [THE QUALITY REVIEWS] be performed 23 [OPERATED] and the documents be maintained in a manner that is designed to 24 preserve confidentiality; and 25 (4) organizations administering peer review programs provide 26 information requested by the board [THE BOARD OR ANOTHER PERSON, 27 EXCEPT FOR THE OVERSIGHT BODY AUTHORIZED BY (2) OF THIS 28 SUBSECTION, MAY NOT ACCESS THE DOCUMENTS FURNISHED OR 29 GENERATED IN THE COURSE OF THE QUALITY REVIEW]. 30 * Sec. 19. AS 08.04.426 is amended by adding a new subsection to read: 31 (f) The board shall, not more frequently than once every three years, require as
01 a condition for renewal of a permit of a firm that the applicant firm undergo a peer 02 review conducted as required by the board by regulation. The peer review must 03 include verification that an individual who practices at the firm, including an 04 individual who is responsible for supervising attest functions or compilation services 05 in the firm, and who signs or authorizes another person to sign the accountant's report 06 on a financial statement on behalf of the firm, meets competency requirements 07 established by the board. The regulations must 08 (1) include reasonable provision for compliance by a firm showing that 09 it has, within the preceding three years, undergone a peer review acceptable to the 10 board that is substantially equivalent to the peer review required in (d) of this section; 11 (2) require, for an organization administering peer review programs 12 under (1) of this subsection, to be subject to periodic evaluation by the board to assess 13 the effectiveness of the peer review program; 14 (3) require, for peer reviews under (1) of this subsection, timely 15 submittal of peer review documents on board request; and 16 (4) maintain documents collected by the board under this subsection in 17 a manner that is designed to preserve confidentiality. 18 * Sec. 20. AS 08.04.440 is amended to read: 19 Sec. 08.04.440. Effect of failure to obtain license or permit. Failure of an 20 individual or a firm [, PARTNERSHIP, LIMITED LIABILITY COMPANY, 21 CORPORATION, OR OTHER LEGAL ENTITY] to apply for a required license or 22 permit or to pay a required fee within (1) three years from the expiration date of the 23 license or permit last obtained or renewed, or (2) three years from the date the person 24 was granted a license or permit as a public accountant valid under AS 08.04.661 25 deprives the individual or firm [, PARTNERSHIP, LIMITED LIABILITY 26 COMPANY, CORPORATION, OR OTHER LEGAL ENTITY] of the right to a 27 license or permit or renewal of a license or permit unless the board determines that the 28 failure is excusable. In case of excusable failure, the board shall determine the fee 29 for a license or permit or renewal of a license or permit under this section [MAY NOT 30 EXCEED THREE TIMES ONE YEAR'S PORTION OF THE FEE THAT WOULD 31 HAVE OTHERWISE BEEN REQUIRED FOR THE LICENSE, PERMIT, OR
01 RENEWAL]. 02 * Sec. 21. AS 08.04.450(a) is amended to read: 03 (a) In addition to its powers under AS 08.01.075, the board may revoke, 04 suspend, or refuse to renew a license, practice privilege, or permit, [OR OUT-OF- 05 STATE EXEMPTION, OR] may censure a holder of a license, practice privilege, or 06 permit, or may require a holder of a license, practice privilege, or permit to 07 undergo a peer review under terms required by the board or satisfactorily 08 complete continuing education, if the board finds [OR OUT-OF-STATE 09 EXEMPTION, FOR] 10 (1) fraud or deceit in obtaining a license or permit required by this 11 chapter; 12 (2) dishonesty or gross negligence in the practice of public accounting, 13 or other acts discreditable to the accounting profession; 14 (3) violation of a provision of AS 08.04.500 - 08.04.610 or failure to 15 take corrective action to comply with AS 08.04.240(i) within the time allowed under 16 AS 08.04.240(j); 17 (4) violation of a rule of professional conduct or other regulation 18 adopted by the board; 19 (5) conviction of a felony under the laws of any state or of the United 20 States; 21 (6) conviction of any crime, an essential element of which is 22 dishonesty or fraud, under the laws of any state or of the United States; 23 (7) cancellation, revocation, suspension, or refusal to renew authority 24 to practice as a certified public accountant or public accountant in any other state for 25 any cause other than failure to pay a required fee; 26 (8) suspension or revocation of the right to practice before any state or 27 federal agency; 28 (9) failure to satisfy the continuing education requirements prescribed 29 by the board under AS 08.04.425, except as conditioned, relaxed, or suspended by the 30 board under AS 08.04.425(c) and (d); 31 (10) failure to comply with the peer [SATISFACTORILY
01 COMPLETE A QUALITY] review requirement under AS 08.04.426; [OR] 02 (11) commission of [COMMITTING] an act in another state for which 03 the holder of the license, practice privilege, or permit [, OR OUT-OF-STATE 04 EXEMPTION] would be subject to discipline in this or the other state; 05 (12) dishonesty, fraud, deceit, or gross negligence by the holder of 06 a license, practice privilege, or permit in the filing or failure to file the income tax 07 returns of the holder of the license, practice privilege, or permit; 08 (13) violation of professional standards; 09 (14) performance of any fraudulent act while holding a license, 10 practice privilege, or permit under this chapter; or 11 (15) a false or misleading statement or verification provided in 12 support of the application of another person for a license or permit under this 13 chapter. 14 * Sec. 22. AS 08.04.450 is amended by adding a new subsection to read: 15 (c) The board may require the holder of a license, practice privilege, or permit 16 who is disciplined under (a) of this section to bear the costs of the disciplinary 17 proceedings. 18 * Sec. 23. AS 08.04.470 is amended to read: 19 Sec. 08.04.470. Revocation of a firm permit [OF PARTNERSHIP, 20 LIMITED LIABILITY COMPANY, CORPORATION, OR OTHER LEGAL 21 ENTITY]. The board shall revoke the permit of a firm [PARTNERSHIP, LIMITED 22 LIABILITY COMPANY, CORPORATION, OR OTHER LEGAL ENTITY] if at any 23 time the firm [IT] does not meet the qualifications prescribed by the sections of this 24 chapter under which the firm [IT] qualified for the permit. 25 * Sec. 24. AS 08.04.480 is amended to read: 26 Sec. 08.04.480. Grounds for censure of, or the revocation, suspension, or 27 refusal to renew a permit for, a firm [PARTNERSHIP, LIMITED LIABILITY 28 COMPANY, CORPORATION, OR OTHER LEGAL ENTITY]. The board may 29 revoke or suspend the permit of a firm [PARTNERSHIP, LIMITED LIABILITY 30 COMPANY, CORPORATION, OR OTHER LEGAL ENTITY], may revoke, 31 suspend, or refuse to renew its permit, or may censure the firm [PARTNERSHIP,
01 LIMITED LIABILITY COMPANY, CORPORATION, OR OTHER LEGAL 02 ENTITY] for any of the causes enumerated in AS 08.04.450 or for any of the 03 following additional causes: 04 (1) the revocation, [OR] suspension, or refusal to renew [OF] the 05 license or practice privilege of an owner of a firm in this state or in another state 06 [A PARTNER, A MEMBER, A SHAREHOLDER, OR, IF THE PERMITTEE IS A 07 LEGAL ENTITY OTHER THAN A PARTNERSHIP, CORPORATION, OR 08 LIMITED LIABILITY COMPANY, AN OWNER OF THE PERMITTEE]; 09 (2) [THE REVOCATION, SUSPENSION, OR REFUSAL TO 10 RENEW THE PERMIT OF A PARTNER, A MEMBER, OR A SHAREHOLDER, 11 OR, IF THE PERMITTEE IS A LEGAL ENTITY OTHER THAN A 12 PARTNERSHIP, CORPORATION, OR LIMITED LIABILITY COMPANY, AN 13 OWNER OF THE PERMITTEE; 14 (3)] the cancellation, revocation, suspension, or refusal to renew the 15 permit or authority of the firm [PARTNERSHIP OR ANY PARTNER, THE 16 LIMITED LIABILITY COMPANY OR A MEMBER, THE CORPORATION OR A 17 SHAREHOLDER, OR THE OTHER LEGAL ENTITY] to practice public accounting 18 in another state for any cause other than failure to pay a required fee in that state. 19 * Sec. 25. AS 08.04.500(a) is amended to read: 20 (a) An individual may not assume or use the title or designation "certified 21 public accountant" or the abbreviation "CPA" or any other title, designation, word, 22 letter, abbreviation, sign, card, or device tending to indicate that the individual is a 23 certified public accountant, unless the individual has received a license and all of the 24 individual's offices in this state for the practice of public accounting are maintained as 25 required by AS 08.04.360 and 08.04.370 [AS 08.04.360 - 08.04.380]. 26 * Sec. 26. AS 08.04.505 is amended to read: 27 Sec. 08.04.505. Issuance of reports. Only a person who holds a valid license, 28 practice privilege, or permit [, OR OUT-OF-STATE EXEMPTION] may issue a 29 report on behalf [FINANCIAL STATEMENTS] of another person or governmental 30 unit. This restriction does not apply to 31 (1) an officer, partner, member, or employee of a firm [SOLE
01 PROPRIETORSHIP, PARTNERSHIP, CORPORATION, LIMITED LIABILITY 02 COMPANY, OR OTHER LEGAL ENTITY] affixing that person's signature to a 03 statement or report in reference to the financial affairs of the firm [SOLE 04 PROPRIETORSHIP, PARTNERSHIP, CORPORATION, LIMITED LIABILITY 05 COMPANY, OR OTHER LEGAL ENTITY] with wording designating the position, 06 title, or office that the person holds in the firm [SOLE PROPRIETORSHIP, 07 PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, OR 08 OTHER LEGAL ENTITY]; 09 (2) an act of a public official or employee in the performance of 10 official duties; 11 (3) the performance by persons of other services involving the use of 12 accounting skills, including the preparation of tax returns, management advisory 13 services, and the preparation of financial statements without the issuance of reports on 14 them. 15 * Sec. 27. AS 08.04.510(a) is amended to read: 16 (a) A firm [PARTNERSHIP, LIMITED LIABILITY COMPANY, 17 CORPORATION, OR OTHER LEGAL ENTITY] may not assume or use the title or 18 designation "certified public accountant" or the abbreviation "CPA" or any other title, 19 designation, word, letter, abbreviation, sign, card, or device tending to indicate that it 20 is composed of certified public accountants, unless the firm [PARTNERSHIP, 21 LIMITED LIABILITY COMPANY, CORPORATION, OR OTHER LEGAL 22 ENTITY] holds a permit [OR AN OUT-OF-STATE EXEMPTION] and is engaging 23 in the practice of public accounting under the name on its permit [, AND ITS 24 OFFICES IN THIS STATE FOR THE PRACTICE OF PUBLIC ACCOUNTING 25 ARE MAINTAINED AS REQUIRED BY AS 08.04.360 - 08.04.380]. 26 * Sec. 28. AS 08.04.520 is amended to read: 27 Sec. 08.04.520. Individual posing as public accountant. An individual may 28 not assume or use the title or designation "public accountant" or the abbreviation "PA" 29 or other title, designation, word, letter, abbreviation, sign, card, or device tending to 30 indicate that the individual is a public accountant, unless the individual holds a current 31 license or practice privilege and the individual's offices in this state for the practice of
01 public accounting are maintained as required by AS 08.04.360 and 08.04.370 02 [AS 08.04.360 - 08.04.380]. 03 * Sec. 29. AS 08.04.530 is amended to read: 04 Sec. 08.04.530. Firm [PARTNERSHIP, LIMITED LIABILITY 05 COMPANY, OR CORPORATION] posing as public accountant. A firm 06 [PARTNERSHIP, LIMITED LIABILITY COMPANY, OR CORPORATION] may 07 not assume or use the designation "public accountant" or the abbreviation "PA" or any 08 other title, designation, word, letter, abbreviation, sign, card, or device tending to 09 indicate that the firm [PARTNERSHIP, LIMITED LIABILITY COMPANY, OR 10 CORPORATION] is composed of public accountants, unless the firm 11 [PARTNERSHIP, LIMITED LIABILITY COMPANY, OR CORPORATION] holds 12 a current permit [OR OUT-OF-STATE EXEMPTION, AND, IF IT HAS A PERMIT], 13 is practicing under the name on its permit, and its office in this state for the practice of 14 public accounting is maintained as required by AS 08.04.360 and 08.04.370 15 [AS 08.04.360 - 08.04.380]. 16 * Sec. 30. AS 08.04.540 is amended to read: 17 Sec. 08.04.540. Use of deceptive title or abbreviation. An individual or firm 18 [, PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION, OR 19 OTHER LEGAL ENTITY] may not assume or use the title or designation "certified 20 accountant," "chartered accountant," "enrolled accountant," "licensed accountant," 21 "registered accountant," or any other title or designation likely to be confused with 22 "certified public accountant" or "public accountant," or any of the abbreviations "C," 23 "EA," "LA," "RA," or similar abbreviations likely to be confused with "CPA" or "PA" 24 except that "EA" may be used to the extent that it relates to the term "enrolled agent" 25 as defined by the federal Internal Revenue Service. However [; HOWEVER], an 26 individual [, PARTNERSHIP, LIMITED LIABILITY COMPANY, 27 CORPORATION,] or firm [OTHER LEGAL ENTITY] holding a current license, 28 [OR] permit, [OR AN OUT-OF-STATE EXEMPTION] or practice privilege [,] and 29 whose offices in this state for the practice of public accounting, if any, are maintained 30 as required by AS 08.04.360 and 08.04.370 [AS 08.04.360 - 08.04.380] may hold out 31 to the public as an accountant or auditor.
01 * Sec. 31. AS 08.04.560 is amended to read: 02 Sec. 08.04.560. Individual may not assume title. An individual may not sign 03 or affix any name or any trade or assumed name used by that individual to any 04 accounting or financial statement or opinion or report [ON ANY ACCOUNTING OR 05 FINANCIAL STATEMENT] with any wording indicating that the person is a certified 06 public accountant or public accountant or with any wording indicating that the person 07 has expert knowledge in accounting or auditing, unless the individual holds a current 08 license or practice privilege [AND THE INDIVIDUAL'S OFFICES IN THIS STATE, 09 IF ANY, FOR THE PRACTICE OF PUBLIC ACCOUNTING ARE MAINTAINED 10 AS REQUIRED BY AS 08.04.360 - 08.04.380]. 11 * Sec. 32. AS 08.04.565 is amended to read: 12 Sec. 08.04.565. Prohibited acts. An individual licensed under AS 08.04.105 13 may not perform attest functions through a firm [PARTNERSHIP, LIMITED 14 LIABILITY COMPANY, CORPORATION, OR OTHER BUSINESS ENTITY] 15 unless the firm [PARTNERSHIP, LIMITED LIABILITY COMPANY, 16 CORPORATION, OR OTHER BUSINESS ENTITY] holds a valid permit issued 17 under AS 08.04.240. 18 * Sec. 33. AS 08.04.600 is amended to read: 19 Sec. 08.04.600. Disclosure of lack of license or permit. An individual [, 20 PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION,] or firm 21 [OTHER ENTITY] that does not hold a current license, a current practice privilege, or 22 a current permit [, OR A CURRENT OUT-OF-STATE EXEMPTION,] may not hold 23 out to the public as a certified public accountant or public accountant by use of those 24 [SUCH] words or abbreviations on any sign, card, or letterhead, or in any 25 advertisement or directory, without indicating that the individual [, PARTNERSHIP, 26 LIMITED LIABILITY COMPANY, CORPORATION,] or firm [OTHER ENTITY] 27 does not hold a current license, a current practice privilege, or a current permit. This 28 section does not prohibit 29 (1) an officer, employee, partner, member, or principal of an 30 organization from self-description through the position, title, or office that the person 31 holds in the organization;
01 (2) an act of a public official or public employee in the performance of 02 that individual's duties; or 03 (3) a person from maintaining a bookkeeping or tax service. 04 * Sec. 34. AS 08.04.610 is amended to read: 05 Sec. 08.04.610. Deceptive use of title or designation by firm 06 [PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION, OR 07 OTHER LEGAL ENTITY]. A person may not assume or use the title or designation 08 "certified public accountant" or "public accountant" or an abbreviation of them [,] in 09 conjunction with a name indicating or implying that there is a firm [PARTNERSHIP, 10 LIMITED LIABILITY COMPANY, CORPORATION, OR OTHER ENTITY], or in 11 conjunction with the designation "and Company," "and Co.," "L.L.C.," "LLC," "Ltd.," 12 or any similar designation, unless there is a bona fide firm [PARTNERSHIP, 13 LIMITED LIABILITY COMPANY, CORPORATION, OTHER LEGAL ENTITY] 14 holding a permit issued under that name [, OR A CURRENT OUT-OF-STATE 15 EXEMPTION]. However, a sole proprietor or partnership lawfully using the title or 16 designation "certified public accountant" or "public accountant" or an abbreviation of 17 them in conjunction with those [SUCH] names or designation on April 26, 1960, may 18 continue to do so if the person or partnership otherwise complies with this chapter. 19 * Sec. 35. AS 08.04.620 is amended to read: 20 Sec. 08.04.620. Exceptions. This chapter does not prohibit 21 (1) an individual who does not hold a current license or practice 22 privilege from serving as an employee of or as an assistant to an individual [, 23 PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION,] or firm 24 [OTHER LEGAL ENTITY] holding a current license, a current practice privilege, or 25 a current permit if [, OR A CURRENT OUT-OF-STATE EXEMPTION SO LONG 26 AS] the employee or assistant does not use the employee's or [THE] assistant's name 27 in connection with an accounting or financial statement; 28 (2) an individual who holds a valid license or equivalent authorization 29 in another state from indicating that the individual is entitled to use the title "certified 30 public accountant," but the individual may not indicate that services are available to 31 the public unless the individual holds a current license or practice privilege issued
01 under this chapter; 02 (3) a holder of a certificate, license, or degree from a foreign country 03 that entitles the holder to practice public accounting or the equivalent in the 04 foreign country from providing professional services to the government of the 05 country issuing the license, a business whose principal office is located in the 06 foreign country, or a person who is a resident of the foreign country, if the holder 07 of the certificate, license, or degree issued by the foreign country does not 08 perform attest functions, or issue a report regarding an individual firm, or 09 government of the state, and uses only the title or designation permitted under 10 the certificate, license, or degree issued by the foreign country followed by an 11 English translation [CONSTITUTES A RECOGNIZED QUALIFICATION FOR 12 THE PRACTICE OF PUBLIC ACCOUNTING IN THAT COUNTRY FROM 13 INDICATING THAT THE PERSON HOLDS THE CERTIFICATE, LICENSE, OR 14 DEGREE, BUT THE PERSON MAY NOT INDICATE THAT THE PERSON'S 15 SERVICES ARE AVAILABLE TO THE PUBLIC UNLESS THE PERSON HOLDS 16 A CURRENT LICENSE, PRACTICE PRIVILEGE, PERMIT, OR OUT-OF-STATE 17 EXEMPTION UNDER THIS CHAPTER]. 18 * Sec. 36. AS 08.04.662(a) is amended to read: 19 (a) A license holder, a permit holder, or a practice privilege holder [, AN 20 OUT-OF-STATE EXEMPTION HOLDER,] or a partner, an officer, a shareholder, a 21 member, or an employee of a license holder, a permit holder, [AN OUT-OF-STATE 22 EXEMPTION HOLDER,] or a practice privilege holder may not reveal information 23 communicated to the license holder, permit holder [, OUT-OF-STATE EXEMPTION 24 HOLDER,] or practice privilege holder by a client about a matter concerning which 25 the client has employed the license holder, permit holder, [OUT-OF-STATE 26 EXEMPTION HOLDER,] or practice privilege holder in a professional capacity. This 27 section does not apply to 28 (1) information required to be disclosed by the standards of the public 29 accounting profession in reporting on the examination of financial statements; 30 (2) the release of information the client has authorized the license 31 holder, permit holder, [OUT-OF-STATE EXEMPTION HOLDER,] or practice
01 privilege holder to reveal; 02 (3) information revealed as part of the discovery of evidence related to 03 a court or administrative proceeding or introduced in evidence in a court or 04 administrative proceeding; 05 (4) information revealed in ethical investigations conducted by private 06 professional organizations; 07 (5) information revealed in the course of a peer [QUALITY] review 08 under AS 08.04.426; or 09 (6) information disclosed 10 (A) under applicable state or federal laws or regulations; or 11 (B) as required by the Public Company Accounting Oversight 12 Board. 13 * Sec. 37. AS 08.04.680(1) is amended to read: 14 (1) "attest function" means 15 (A) an audit or other engagement, if the performance of the 16 audit or other engagement is established by the Statements on Auditing 17 Standards; 18 (B) a review of a financial statement, if the performance of the 19 review is established by the Statements on Standards for Accounting and 20 Review Services; 21 (C) an examination of prospective financial information, if the 22 performance of the examination is established by the Statements on Standards 23 for Attestation Engagements; 24 (D) an engagement, if the performance of the engagement is 25 established by the Auditing Standards of the Public Company Accounting 26 Oversight Board; or 27 (E) any examination, other than an examination described in 28 (C) of this paragraph, review, or agreed upon procedure [TO BE] performed 29 in accordance with the standards on attestation engagements as 30 (i) developed by national accountancy organizations, 31 including the American Institute of Certified Public Accountants and
01 the Public Company Accounting Oversight Board; and 02 (ii) adopted by the board in regulation; 03 * Sec. 38. AS 08.04.680(4) is amended to read: 04 (4) "compilation service" means a service of any compilation 05 engagement performed in accordance with [THAT 06 (A) IS PERFORMED AS ESTABLISHED BY] the Statements 07 on Standards for Accounting and Review Services; [AND 08 (B) PRESENTS, IN THE FORM OF FINANCIAL 09 STATEMENTS, INFORMATION THAT IS THE REPRESENTATION OF 10 MANAGEMENT, BUT DOES NOT EXPRESS AN ASSURANCE ON THE 11 STATEMENTS;] 12 * Sec. 39. AS 08.04.680(14) is amended to read: 13 (14) "permit" means a permit issued under AS 08.04.240 [OR 14 08.04.421(a)]; 15 * Sec. 40. AS 08.04.680(15) is amended to read: 16 (15) "practice of public accounting" means the offering to perform or 17 the performance as a person holding a license, practice privilege, or permit under this 18 chapter of a service involving the use of accounting or auditing skills; in this 19 paragraph, "accounting or auditing skills" includes preparing financial statements, 20 issuing reports [ON FINANCIAL STATEMENTS], furnishing management services, 21 furnishing financial advisory services, providing consulting services, preparing tax 22 returns, advising on tax matters, or consulting on tax matters; 23 * Sec. 41. AS 08.04.680(19) is amended to read: 24 (19) "report," when used with reference to an attest function or 25 compilation service, 26 (A) means 27 (i) an opinion, report, or other form of language that 28 states or implies assurance as to the reliability of the attested 29 information or compiled financial statements and that also contains or 30 is accompanied by a statement or implication that the person issuing it 31 has special knowledge or competency in accounting or auditing, which
01 may arise from use by the issuer of the report of names or titles 02 indicating that the issuer is a certified public accountant or auditor, or 03 from the language of the report itself; 04 (ii) any form of language that disclaims an opinion 05 when the form of the language is conventionally understood to imply a 06 positive assurance as to the reliability of the attested information or 07 compiled financial statements referred to or special competence on the 08 part of the person issuing the language; 09 (iii) any other form of language that is conventionally 10 understood to imply that assurance or special knowledge or 11 competence; 12 (B) does not include 13 (i) a compilation of financial statement language that 14 does not express or imply assurance or special knowledge or 15 competence; or 16 (ii) the following disclaimer language when used by a 17 person without a license or [, A] practice privilege [, OR AN OUT-OF- 18 STATE EXEMPTION] in connection with financial statements: 19 "I (we) have prepared the accompanying (financial 20 statements) of (name of entity) as of (time period) for the (period) then 21 ended. This presentation is limited to preparing, in the form of financial 22 statements, information that is the representation of management 23 (owners)."; or 24 "I (we) have not audited or reviewed the accompanying 25 financial statements and, accordingly, do not express an opinion or any 26 other form of assurance on them."; 27 * Sec. 42. AS 08.04.680(20) is amended to read: 28 (20) "state" means a state of the United States, the District of 29 Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern 30 Mariana Islands, Guam, the United States Virgin Islands, and American Samoa. 31 * Sec. 43. AS 08.04.680 is amended by adding new paragraphs to read:
01 (21) "firm" means a sole proprietorship, partnership, limited liability 02 company, corporation, or other legal entity; 03 (22) "peer review" means a study, appraisal, or review of one or more 04 aspects of the professional work of a person in the practice of public accounting who 05 issues attest or compilation reports conducted as prescribed under AS 08.04.426 by a 06 person who holds a certificate and who is not affiliated with the person being 07 reviewed; 08 (23) "preparation of financial statements" means providing a service of 09 any preparation of financial statements engagement to be performed in accordance 10 with the Statements on Standards for Accounting and Review Services. 11 * Sec. 44. AS 08.04.240(b), 08.04.240(c), 08.04.240(d), 08.04.240(e), 08.04.380, 12 08.04.420(b), 08.04.421, 08.04.426(b), 08.04.426(e), 08.04.510(b), 08.04.680(6), 13 08.04.680(7), 08.04.680(12), and 08.04.680(18) are repealed.