Bill Text: HI SB727 | 2024 | Regular Session | Introduced
Bill Title: Relating To Occupational Licensure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [SB727 Detail]
Download: Hawaii-2024-SB727-Introduced.html
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THE SENATE |
S.B. NO. |
727 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO OCCUPATIONAL LICENSURE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that certain aspects of the occupational licensing requirement for certified public accountants in the State may impact consumers' and businesses' access to high-quality financial services and impede reciprocity for otherwise well-qualified public accountants certified in other states who seek to relocate or work in Hawaii. The legislature recognizes that certified public accountants practice public accountancy across state lines on an increasingly frequent basis. In fact, many factors, including interstate commerce and virtual technologies, lead public accountants to conduct business across state borders every day. The legislature also recognizes that each state, except Hawaii, has enacted a "mobility law", which facilitates the ability of consumers and businesses in one state to obtain services from qualified public accountants certified in other states.
The legislature further finds that the State's existing registration process for out-of-state certified public accountants who wish to serve clients in Hawaii is burdensome, lacks viable enforcement mechanisms, and limits timely access to qualified accountancy services, especially in certain complex industries, including energy, health care, transportation, and technology. Furthermore, existing mobility barriers have the harshest effect on small accountancy firms and sole practitioners. Larger accountancy firms in Hawaii can develop extensive resources and hire many staffers to accommodate the needs of specialized industries. However, smaller accountancy firms and sole practitioners are unable to access a sufficient number of qualified Hawaii-certified public accountants to meet the growing needs of specialized industries, and are thus disproportionately affected by the State's lack of a mobility law. There is a critical need in Hawaii for standards that will authorize certified public accountants who are licensed in other states to provide services in Hawaii, on a limited basis, without the State's existing and unnecessary regulatory burdens.
The legislature finds that without a mobility law, the board of public accountancy has no jurisdiction over certified public accountants licensed by other states. If the State establishes a mobility law, the board of public accountancy will gain automatic jurisdiction over all certified public accountants practicing in Hawaii, which is of critical importance to the enhancement of the board's public protection power. Automatic jurisdiction will enable the board to discipline out-of-state certified public accountants, regardless of whether the accountants are licensed in Hawaii.
The legislature believes that it is necessary to modernize the existing law for certified public accountants to increase employment for the profession, encourage market competition and innovation, and create worker reciprocity. The legislature also believes that it is possible to achieve this modernization without undermining the rigorous standards necessary for licensure.
Accordingly, the purpose of this Act is to:
(1) Improve Hawaii consumers' access to qualified certified public accountants, wherever those certified public accountants may reside; and
(2) Protect Hawaii's consumers by granting the board of public accountancy clear disciplinary power over all certified public accountants conducting business in Hawaii.
SECTION 2. Chapter 466, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:
"§466- Substantial equivalency. (a) An individual whose principal place of business is not in this State and who holds a valid and current license as a certified public accountant from any state that the National Association of State Boards of Accountancy's National Qualification Appraisal Service has verified to be in substantial equivalence with the certified public accountant licensure requirements under the Uniform Accountancy Act shall:
(1) Be presumed to have qualifications that are substantially equivalent to this State's requirements; and
(2) Have a practice privilege in this State, subject to subsections (c) and (d), without the need to obtain a license and permit under sections 466-5 and 466-7.
(b) An individual whose principal place of business is not in this State and who holds a valid and current license as a certified public accountant from any state that the National Association of State Boards of Accountancy's National Qualification Appraisal Service has not verified to be in substantial equivalence with the certified public accountant licensure requirements under the Uniform Accountancy Act shall obtain verification from the National Association of State Boards of Accountancy's National Qualification Appraisal Service that the individual's certified public accountant qualifications are substantially equivalent to the certified public accountant licensure requirements under the Uniform Accountancy Act to:
(1) Be presumed to
have qualifications that are substantially equivalent to this State's
requirements; and
(2) Have a practice privilege in this State, subject to subsections (c) and (d), without the need to obtain a license and permit under sections 466-5 and 466-7.
Any individual who passed the Uniform Certified
Public Accountant Examination and holds a valid license issued by any other
state prior to January 1, 2012, may be exempt from the education requirement
under section 466-5.5 for purposes of this subsection.
(c) An individual who qualifies to have a
practice privilege in this State shall have the practice privilege for no more
than one hundred twenty days per calendar year.
(d) A licensee of another state exercising the
privilege afforded under this section and the accountancy firm that employs
this licensee shall jointly and severally consent, as a condition of the
exercise of this privilege:
(1) To the personal
and subject matter jurisdiction and disciplinary authority of the board;
(2) To comply with
this chapter and the rules adopted by the board;
(3) In the event
the license from the state of the licensee's principal place of business is no
longer valid, as a licensee, to cease to offer or render professional services
in this State as an individual and on behalf of the accountancy firm;
(4) To the
appointment of the state board that issued the license as the licensee's agent
upon whom process may be served in any action or proceeding by the board
against the licensee;
(5) To promptly
notify the board within thirty days if:
(A) Any disciplinary action relating to the individual's license is commenced in any state; or
(B) The individual is convicted of any criminal offense in any state or country;
(6) To notify the regulated industries complaints office to refer reports of any licensee violation of this section to the board for investigation and disciplinary action; and
(7) To provide the department of taxation sufficient information to determine the licensee's tax liabilities in this State, to the extent required by law.
(e) An individual who has been granted practice
privileges under this section may only do so through an accountancy firm that
has obtained a permit issued under section 466-7(d) if the individual, for any
entity with its home office in this State, performs any of the following
services:
(1) Any financial
statement audit or other engagement to be performed in accordance with
statements on auditing standards of the American Institute of Certified Public
Accountants;
(2) Any examination
of prospective financial information to be performed in accordance with
statements on standards for attestation engagements of the American Institute
of Certified Public Accountants; or
(3) Any engagement
to be performed in accordance with the Public Company Accounting Oversight
Board's auditing standards.
(f) A licensee of this State offering or
rendering services or using the licensee's certified public accountant title in
another state shall be subject to disciplinary action in this State for an act
committed in another state for which the licensee would be subject to
discipline for the act committed in the other state. The board shall investigate any written
complaint made by the board of accountancy of another state. The nature and extent of the investigation
shall be determined by the board in the exercise of its discretion.
(g) In ascertaining substantial equivalency, the
board shall consider the qualification without regard to the sequence in which
experience, education, or examination requirements were attained.
(h) The board may impose on an individual having a practice privilege or on a permit holder fees, fines, and costs associated with investigation and enforcement."
SECTION 3. Section 466-3, Hawaii Revised Statutes, is amended as follows:
1. By adding six new definitions to be appropriately inserted and to read:
""Compilation" means providing a service, to be performed in accordance with statements on standards for accounting and review services, that is presenting, in the form of financial statements, information that is the representation of management or owners without undertaking to express any assurance on the statements.
"Home office" means the
location specified by the client as the address to which a service described
under section 466-7(d) is directed.
"Practice privilege"
means the legal right to engage in the practice of public accountancy within this
State pursuant to section 466- .
"Principal place of
business" means the office location designated by a licensee for purposes
of substantial equivalency and reciprocity.
"Substantial
equivalency" means a determination by the board or its designee that:
(1) The education, examination, and experience requirements prescribed by law and rules of another state jurisdiction are comparable to or exceed the education, examination, and experience requirements under the Uniform Accountancy Act; or
(2) An individual's certified public accountant education, examination, and experience qualifications are comparable to or exceed the education, examination, and experience requirements under the Uniform Accountancy Act.
"Uniform Accountancy
Act" means the Uniform Accountancy Act of the American Institute of
Certified Public Accountants and National Association of State Boards of
Accountancy."
2.
By amending the definition of "attest" to read:
""Attest" means
providing the following [financial statement] services:
(1) Any audit or other engagement to be performed in accordance with the statements on auditing standards of the American Institute of Certified Public Accountants;
(2) Any compilation or review of a financial statement to be performed in accordance with the statements on standards for accounting and review services of the American Institute of Certified Public Accountants;
(3) Any examination of prospective financial information to be performed in accordance with the statements on standards for attestation engagements of the American Institute of Certified Public Accountants;
(4) Any engagement to
be performed in accordance with the government auditing standards, also known
as the Yellow Book, issued by the United States Government Accountability
Office; [and]
(5) Any engagement to
be performed in accordance with the standards of the Public Company Accounting
Oversight Board[.]; and
(6) Any examination, review, or agreed-upon procedures engagement to be performed in accordance with the statements on standards for attestation engagements of the American Institute of Certified Public Accountants, except for an examination under paragraph (3)."
3. By amending the definition of
"report" to read:
""Report", when used
with reference to [financial statements,] any attest or compilation
service, means an opinion, report, or other form of language that states or
implies the measure of assurance as to the reliability of [any] the attested information or compiled
financial statements, and that also includes, or is accompanied by, any
statement or implication that the firm issuing it has special knowledge or
competence in accounting or auditing."
SECTION 4. Section 466-7, Hawaii Revised Statutes, is amended to read as follows:
"§466-7 Permits to practice. (a) [A]
Except as provided in section 466- and in subsection (d),
a license and permit are required to actively engage in the practice of
public accountancy. The board may grant
or renew a permit to actively engage in the practice of public accountancy. Permits shall be initially issued and renewed
for periods of two years [but in any event] and shall expire on
December 31 of every odd-numbered year.
The board shall prescribe the methods and requirements for application.
(b) An applicant for the initial issuance or renewal of a permit shall have:
(1) A valid license;
(2) Completed continuing professional education hours, the content of which shall be specified by the board and which may provide for special consideration by the board to applicants for permit renewal when, in the judgment of the board, full compliance with all requirements of continuing education cannot reasonably be met;
(3) Completed an application;
(4) Paid appropriate fees and assessments; and
(5) In the case of a renewal, undergone and provided proof of having undergone the peer review process pursuant to part II.
(c) The board may grant a temporary permit to actively engage in the practice of public accountancy to any person who:
(1) Has attained eighteen years of age;
(2) Possesses a history of competence, trustworthiness, and fair dealing;
(3) Holds [a valid
license of certified public accountant or of public accountant issued under the
laws of another state, or who holds] a valid comparable certificate,
registration, or license or degree from a foreign country determined by the
board to be a recognized qualification for the practice of public accountancy
in [such] the other country;
(4) Incidental to the
person's practice in [such] the other [state or] country,
desires to practice public accountancy in this State on a temporary basis; and
(5) Has completed an application.
[Such] The permit shall be effective
for a period not exceeding three months, and shall specify the nature and
extent of the practice so permitted.
(d)
[All firms shall obtain a permit to practice.] The board [may] shall issue or
renew a permit to actively engage in the practice of public accountancy to any
firm [which] that submits a completed application and
demonstrates qualifications in accordance with this section and as
prescribed by the board. The following
requirements shall apply:
(1) The following
firms shall hold a permit issued under this section:
(A) Any firm having an office in this State performing attest services;
(B) Any firm having an office in this State that uses the title of "certified public accountant" or the abbreviation of "CPA", or "certified public accountant firm" or abbreviation of "CPA firm"; or
(C) Any
firm that does not have an office in this State, but performs for a client
having its home office in this State any audit or other engagements to be
performed in accordance with the statements on auditing standards, any
examination of prospective financial information to be performed in accordance
with the statements on standards for attestation engagements, or any engagement
to be performed in accordance with the auditing standards of the Public Company
Accounting Oversight Board;
(2) A firm that does not have an office in this State may perform for a client having its home office in this State any review of a financial statement to be performed in accordance with the statements on standards for accounting and review services and any compilation, and may use the title "certified public accountant" or the abbreviation of "CPA", or "certified public accountant firm" or the abbreviation of "CPA firm" without a permit issued under this section; provided that:
(A) The firm meets the firm ownership and peer review requirements specified by this chapter and rules adopted by the board; and
(B) The firm performs services through an individual who holds a current permit to practice issued under this chapter or who is granted practice privileges under section 466- ; and
(3) A firm that is
not subject to paragraph (1) or (2) may perform other professional services
while using the title "certified public accountant" or the
abbreviation of "CPA", or "certified public accountant
firm" or the abbreviation of "CPA firm" in this State without a
permit issued under this section; provided that:
(A) The firm performs services through an individual who holds a current permit to practice issued under this chapter or who is granted practice privileges under section 466- ; and
(B) The firm can lawfully perform services in the state where the individual having practice privileges, if applicable, has the individual's principal place of business.
(e) Failure to submit the required fees, continuing education hours, or other requirements for renewal as specified in this section by December 31 of every odd-numbered year, shall constitute forfeiture of the permit. Continued performance in the practice of public accountancy without a permit shall constitute unlicensed activity and the individual or firm shall be subject to sections 466-9, 466-11, 487-13, and 26-9.
(f)
The board may restore forfeited permits to the individual or firm [which]
that satisfies the following:
(1) The requirements
of subsection (a), (b), (c), or (d) [of this section]; and
(2) Payment of required fees.
(g) For the initial issuance or renewal of a firm
permit to practice under this section:
(1) If the firm has an office this State, the firm shall provide evidence that all partners, officers, shareholders, members, or managers residing in this State or whose principal place of business is in this State hold a current permit to practice issued under this chapter; or
(2) If the firm does not have an office in this State, notwithstanding any other law to the contrary, the firm shall provide evidence that a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members, or managers, belongs to holders of a certificate who are licensed in a state, and those partners, officers, shareholders, members, or managers whose principal places of business are in this State and who perform professional services in this State hold a valid permit issued under this chapter or the corresponding prior law, or are public accountants licensed under section 466-6; provided that:
(A) Although a firm may include non-licensed owners, the firm and its ownership shall comply with the rules adopted by the board; and
(B) Any individual who has practice privileges pursuant to section 466- and performs services for which a firm permit is required under section 466-7 shall not be required to obtain a certificate or permit from this State; and
(3) The firm shall provide evidence that any individual licensee or any individual granted practice privileges under this chapter and who is responsible for supervising attest or compilation services and signs or authorizes a person to sign the accountant's report on the financial statements on behalf of the firm shall meet the competency requirements prescribed in the applicable professional standards for these services.
(h) A firm that no longer complies with subsection (g)(2) due to changes in the firm's ownership or personnel after the firm receives or renews a permit shall take corrective action to return the firm to compliance as soon as possible. The board may grant a reasonable period of time for a firm to take corrective action. A firm's failure to return the firm to compliance within a reasonable period, as defined by the board, shall result in the suspension or revocation of the firm permit."
SECTION 5. Section 466-9, Hawaii Revised Statutes, is amended to read as follows:
"§466-9 Disciplinary action. (a) In addition to any other actions or conditions authorized by law, in accordance with chapter 91, the board may take any one or more of the following actions:
(1) Revoke a license or permit[;], or
revoke or limit practice privileges granted pursuant to section
466- ;
(2) Suspend a license [or], permit[;],
or practice privilege;
(3) Refuse to renew a license or permit;
(4) Reprimand, censure, or limit the scope of
practice of any licensee [or], firm[;], or individual
having a practice privilege;
(5) Impose an administrative fine not exceeding $5,000 per violation;
(6) Place a licensee [or], a firm,
or an individual having a practice privilege on probation;
(7) Require a firm to have a peer review conducted in the manner specified by the board; or
(8) Require a licensee or an individual having a practice privilege to attain satisfactory completion of additional continuing professional education hours as specified by the board.
(b) In addition to any other grounds for disciplinary action authorized by law, any one or more of the following shall constitute grounds for disciplinary action:
(1) Fraud or deceit in obtaining a license [or],
permit[;], or practice privilege;
(2) Disciplinary action taken by another state where the license or practice privilege is canceled, revoked, suspended, denied, or refused renewal;
(3) Failure, on the part of a holder of a license
or a permit to maintain compliance with the requirements for issuance of a
license [or a], permit, or practice privilege, or renewal
of a license [or], permit, or practice privilege, or to
report changes to the board;
(4) Revocation or suspension of the right to practice before any state or federal agency;
(5) Dishonesty, deceit, fraud, or gross negligence in the practice of public accountancy as a licensee or individual granted practice privileges, or in the filing or failure to file a licensee's or firm's own income tax returns;
(6) Violation of any provision of this chapter or of any rule adopted by the board;
(7) Violation of any provision of professional conduct established by the board under this chapter;
(8) Conviction of any crime an element of which is dishonesty or fraud, under the laws of the United States, of this State, or of any other state if the act involved would have constituted a crime under the laws of this State;
(9) Performance of any fraudulent act while
holding a license [or], permit, or practice privilege
issued under this chapter; or
(10) Any conduct reflecting adversely upon the
licensee's or permit or privilege holder's fitness to engage in the
practice of public accountancy[.] while a licensee or individual
granted practice privileges under section 466- .
(c) Upon application of any person against whom
disciplinary action has been taken under subsection (a), the board, in
accordance with chapter 91, may reinstate the person's license [or],
permit, or practice privilege to practice which was affected by the
disciplinary action.
(1) The board shall specify the manner in which an application shall be made, the time within which it shall be made, and the circumstances under which the license, permit, or practice privilege may be reinstated; and
(2) Before reinstating, the board may:
(A) Require the applicant to show successful completion of specified continuing professional education; and
(B) Make the reinstatement of a license [or],
permit, or practice privilege conditional and subject to satisfactory
completion of a peer review conducted in a manner as the board may
specify."
SECTION 6. Section 466-10, Hawaii Revised Statutes, is amended to read as follows:
"§466-10 Prohibited acts. (a) Use of title "certified public accountant":
(1) Except as otherwise provided in subsection (d)
[of this section], no person shall assume or use the title or
designation "certified public accountant" or the abbreviation
"CPA" or any other title, designation, words, letters, sign, card, or
device likely to be confused with "certified public accountant" or
"CPA" or tending to indicate that the person is a certified public
accountant, unless the person holds a current license of certified public
accountant issued under this chapter and a current permit to practice issued
under this chapter[;] or has a practice privilege granted pursuant to
section 466- ;
(2) No partnership or corporation shall assume or
use the title or designation "certified public accountant" or the
abbreviation "CPA" or any other title, designation, words, letters,
abbreviation, sign, card, or device likely to be confused with "certified
public accountant" or "CPA" or tending to indicate that such
partnership or corporation is composed of certified public accountants, unless
each of the partners of the partnership who are in the practice of public
accountancy in this State[,] and whose principal place of business is
in this State, or each of the shareholders of the corporation who are in
the practice of public accountancy in this State[,] and whose
principal place of business is in this State, holds a current license of
certified public accountant issued under this chapter and a current permit to
practice issued under this chapter; and
(3) No person shall assume or use the title or
designation "certified public accountant" or the abbreviation
"CPA" or any other title, designation, words, letters, abbreviation,
sign, card, or device likely to be confused with "certified public accountant"
or "CPA", in conjunction with names indicating or implying that there
is a partnership or corporation, or in conjunction with the designation
"and Company" or "and Co." or a similar designation if, in
any case, there is in fact no bona fide partnership or corporation existing under
the laws of this State[.] or registered to do business in this State.
(b) Use of title "public accountant":
(1) Except as otherwise provided in subsection (d)
[of this section], no person shall assume or use the title or
designation "public accountant" or the abbreviation "PA" or
any other title, designation, words, letters, sign, card, or device likely to
be confused with "public accountant" or "PA" or tending to
indicate that the person is a public accountant unless the person holds a current
registration of public accountant issued under this chapter and a current
permit to practice issued under this chapter;
(2) No partnership or corporation shall assume or use the title or designation "public accountant" or the abbreviation "PA" or any other title, designation, words, letters, abbreviation, sign, card, or device likely to be confused with "public accountant" or "PA" or tending to indicate that the partnership or corporation is composed of public accountants, unless each of the partners of the partnership who are in the practice of public accountancy in this State, or each of the shareholders of the corporation who are in the practice of public accountancy in this State, holds a current license of public accountant issued under this chapter and a current permit to practice issued under this chapter; and
(3) No person shall assume or use the title or designation "public accountant" or the abbreviation "PA" or any other title, designation, words, letters, abbreviation, sign, card, or device likely to be confused with "public accountant" or "PA", in conjunction with names indicating or implying that there is a partnership or corporation, or in conjunction with the designation "and Company" or "and Co." or a similar designation if, in any case, there is in fact no bona fide partnership or corporation existing under the laws of this State.
(c) Representation of special knowledge:
(1) [No] Except as otherwise provided in
subsection (d), no person shall sign or affix the person's name or any
trade or assumed name used by the person in the person's profession or business
with any wording indicating, suggesting, or implying that the person is an
accountant or auditor, or with any wording indicating, suggesting, or implying
that the person has special knowledge in accounting or auditing, to any opinion
or certificate attesting in any way to the reliability of any representation or
estimate in regard to any person or organization embracing:
(A) Financial information[,] or attest
service; or
(B) Facts respecting compliance with conditions established by law or contract, including but not limited to statutes, ordinances, regulations, grants, loans, and appropriations,
unless the
person holds a current license and a current permit to practice issued under
this chapter[.]; and
(2) No person shall sign or affix a partnership or corporate name with any wording indicating, suggesting, or implying that it is a partnership or corporation composed of accountants or auditors or persons having special knowledge of accounting or auditing, to any opinion or certificate attesting in any way to the reliability of any representation or estimate in regard to any person or organization embracing:
(A) Financial information[,]; or
(B) Facts respecting compliance with conditions established by law or contract, including but not limited to statutes, ordinances, regulations, grants, loans, and appropriations,
unless each of the partners of the partnership who are in the practice of public accountancy in this State and whose principal place of business is in this State, or each of the shareholders of the corporation who are in the practice of public accountancy in this State and whose principal place of business is in this State, holds a current license of certified public accountant or of public accountant issued under this chapter and a current permit to practice issued under this chapter.
(d) Nothing contained in this chapter shall prohibit any person:
(1) Who holds a current license of certified public accountant issued under this chapter from assuming and using the title and designation "certified public accountant" or "CPA"; provided that if the person does not also hold a current permit to practice issued under this chapter, the person shall clearly indicate in assuming and using said title that the person does not hold the person's self out to be in the practice of public accountancy;
(2) Who holds a current license of public accountant issued under this chapter from assuming and using the title and designation "public accountant" or "PA"; provided that if the person does not also hold a current permit to practice issued under this chapter, the person shall clearly indicate in assuming and using the title that the person does not hold the person's self out to be in the practice of public accountancy;
(3) Who holds a temporary practice permit issued
under this chapter from using the title and designation under which the person
is generally known in the [state or] country from which the person
received a valid comparable certificate, registration, or license for the
practice of public accountancy;
(4) Who qualifies for a practice privilege
granted pursuant to section 466- from using the title and
designation "certified public accountant" or the abbreviation
"CPA" or from providing any service that may be performed by
certified public accountants of this State without having to obtain a
certificate or permit to practice; provided that the conditions prescribed
under section 466- are satisfied;
[(4)] (5)
Who is not a certified public accountant or public accountant from
serving as an employee of, or an assistant to, a certified public accountant or
public accountant; provided that the employee or assistant works under the
control and supervision of a person who holds a current license of certified
public accountant or of public accountant and a current permit to practice
issued under this chapter; and provided further that the employee or assistant
does not issue any statement or report over the person's name except office
reports to the person's employer as are customary, and that the employee or
assistant is not in any manner held out to the public as a certified public
accountant or public accountant;
[(5)] (6)
Who is an officer, employee, partner, or principal of any organization
from signing or affixing the person's name to any statement or report in
reference to the affairs of that organization; provided that in so signing or
affixing the person's name the person shall clearly indicate that the person is
an officer, employee, partner, or principal of the organization, and the
position, title, or office which the person holds therein;
[(6)] (7)
Who is a public official or public employee from the performance of the
person's duties as such; or
[(7)] (8)
Who is an attorney at law from engaging in practice as such.
(e) Notwithstanding any law to the contrary, it is
not a violation of this section for a firm that does not hold a valid permit under
section 466-7 and does not have an office in this State to use the title
"certified public accountant" or the abbreviation "CPA" as
part of the firm's name to provide professional services in this State and its
licensees and individuals to provide services on behalf of the firm; provided
that the firm complies with section 466-7(d)(2) or (3), as applicable. An individual or firm authorized under
section 466- to exercise practice privileges in this State
shall comply with applicable licensee requirements under section 466- .
SECTION 7. Section 466-34, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (b), (c), and (d) to read:
"(b) [All] Except for firms exempt from
the permit requirement pursuant to section 466-7(d)(2) or (3), all firms
subject to this part and performing Hawaii attest work as of December 31, 2014,
shall enroll in the applicable program of an approved sponsoring organization
by December 31, 2015, notify the board of enrollment in that program, and have
a peer review performed by December 31, 2017.
(c)
[Any] Except for firms exempt from the permit requirement
pursuant to section 466-7(d)(2) or (3), any firm that begins performing
Hawaii attest work after December 31, 2014, shall:
(1) Notify the board within thirty days of the beginning of the performance of attest work;
(2) Enroll in the applicable programs of an approved sponsoring organization within one year from its initial licensing date or the performance of Hawaii attest work that requires a peer review;
(3) Provide the board with enrollment information within one year of the date the Hawaii attest work was first performed;
(4) Have a peer review performed within eighteen months of the date the Hawaii attest work was first performed;
(5) Adopt the peer review due date assigned by the sponsoring organization and notify the board of the peer review due date within thirty days of its assignment; and
(6) Schedule and begin an additional review within three years of the previous review's due date, or earlier if required by the sponsoring organization or the board; provided that the firm shall be responsible for anticipating its needs for peer review services in sufficient time to enable the reviewer to complete the review by the assigned review due date.
(d) A firm that does not perform Hawaii attest work or is exempt from the permit requirement pursuant to section 466-7(d)(2) or (3) shall be exempt from the peer review process."
2. By amending subsection (i) to read:
"(i) [An] Except for a firm exempt from
the permit requirement pursuant to section 466-7(d)(2) or (3), an
out-of-state firm performing Hawaii attest work shall comply with this part."
SECTION 8. Section 466-35, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) [A] Except for a firm exempt from
the permit requirement pursuant to section 466-7(d)(2) or (3), a firm shall
include, with the peer review compliance reporting form, the contemporaneous
Hawaii supplement to the peer review report pursuant to section 466-36, if:
(1) A peer review report from an approved sponsoring organization does not include the selection of a Hawaii office or Hawaii attest engagement;
(2) The peer reviewer does not hold permits to practice public accountancy under section 466-7 or is not licensed to practice public accountancy in any other state, except inspectors for the public company accounting oversight board; or
(3) The final report resulting from any inspection by the public company accounting oversight board firm inspection program does not include the firm's Hawaii offices, if any, and Hawaii attest engagements in the scope of the inspection, and the firm is not required to enroll in another peer review program under section 466-34."
SECTION 9. Section 466-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) A firm that is required to undergo a peer review under this chapter and is not exempt from the permit requirement pursuant to section 466-7(d)(2) or (3) shall engage the services of a practitioner or firm holding a permit issued under section 466-7 to perform the following procedures to supplement the peer review report:
(1) Obtain from the reviewed firm a list of Hawaii attest engagements included in the scope of the peer review, in accordance with the American Institute of Certified Public Accountants Standards for Performing and Reporting on Peer Reviews;
(2) Select one or more engagements from the list of engagements obtained from the reviewed firm;
(3) Obtain from the reviewed firm, the reports, financial statements, work papers, and work product resulting from the attest engagements selected;
(4) Read and compare the reports, work papers, and work product to an appropriate disclosure checklist to evaluate the firm's compliance with professional standards; and
(5) Document all instances of noncompliance with professional standards detected while performing the procedures listed in this section."
SECTION 10. Section 466-38, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) [A] Except for a firm exempt from
the permit requirement pursuant to section 466-7(d)(2) or (3), a firm shall
submit to the board:
(1) A copy of the peer review report and the final letter of acceptance from the sponsoring organization, if the report has a rating of "pass";
(2) A copy of the peer review report, the firm's letter of response, the corrective action letter, and the final letter of acceptance if the report has a rating of "pass with deficiency" or "fail"; or
(3) A copy of any report or Part I and any other public portion of the report resulting from any inspection by the public company accounting oversight board firm inspection program together with documentation of any significant deficiencies, findings, and the firm's response."
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take effect on July 1, 2023; provided that this Act shall be repealed on June 30, 2025, and:
(1) The definitions of "attest" and "report" in section 466-3, Hawaii Revised Statutes; and
(2) Sections 466-7, 466-9, 466-10, 466-34(b), (c), (d), and (i), 466-35(b), 466-36(a), and 466-38(a), Hawaii Revised Statutes,
shall be reenacted in the form in which they read on the day before the effective date of this Act.
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INTRODUCED BY: |
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Report Title:
Certified Public Accountants; Board of Public Accountancy
Description:
Establishes procedures and eligibility criteria for a privilege to practice public accountancy in this State for public accountants and certified public accountants licensed in another state with comparable education, examination, and experience requirements. Subjects all holders of a practice privilege to the regulatory and enforcement jurisdiction of the board of public accountancy. Sunsets on 6/30/2025.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
