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| Public Act 098-0730
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| HB4707 Enrolled | LRB098 17321 ZMM 52417 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Public Accounting Act is amended by |
changing Sections 8.05, 14.2, 14.4, 16, and 17.1 as follows:
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(225 ILCS 450/8.05) |
(Section scheduled to be repealed on January 1, 2024) |
Sec. 8.05. Accountancy activities. |
(a) Accountancy activities are services performed by a CPA, |
including: |
(1) signing, affixing, or associating the names used by |
a person or CPA firm to any report expressing an assurance |
on a financial statement or disclaiming an opinion on a |
financial statement based on an audit or examination of |
that statement or to express assurance on a financial |
statement; |
(2) other attestation engagements not otherwise |
defined in paragraph (1); or |
(3) offering to perform or performing one or more types |
of the following services involving the use of professional |
skills or competencies: accounting, management, financial |
or consulting services, compilations, internal audit, |
preparation of tax returns, furnishing advice on tax |
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matters, bookkeeping, or representations of taxpayers; |
this includes the teaching of any of these areas at the |
college or university level. |
(b) If offering or performing accountancy activities using |
the CPA title set forth in paragraphs (1), (2), and (3) of |
subsection (a) of this Section, then: |
(1) the activities identified in paragraph (1) of |
subsection (a) may only be performed by licensed CPAs; |
(2) the activities identified in paragraph (2) of |
subsection (a) may only be performed by licensed or |
registered CPAs; and |
(3) the activities identified in paragraph (3) of |
subsection (a) are not restricted to licensed or registered |
CPAs, subject to the provisions of Section 9 9.02 of this |
Act.
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(Source: P.A. 98-254, eff. 8-9-13.)
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(225 ILCS 450/14.2)
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(Section scheduled to be repealed on January 1, 2024)
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Sec. 14.2. Licensure by endorsement.
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(a) The Department shall issue a
license as a licensed CPA |
to any applicant
who holds a current, valid, and unrevoked |
license as a certified public accountant issued from another |
state with equivalent educational requirements and examination |
standards, applies to the Department on forms supplied by the |
Department, and pays the required fee,
provided:
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(1) the individual applicant is determined by the |
Department
to possess
qualifications substantially |
equivalent to this State's current
licensing requirements;
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(2) at the time the applicant received his or her |
license, the applicant possessed qualifications
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substantially equivalent to the qualifications for |
licensure then in effect in
this State; or
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(3) the applicant has, after passing the examination |
upon which his or her
license to practice was based, not |
less than 4 years of
experience as outlined in Section 14 |
of this Act within the 10 years immediately
before the |
application.
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(b) In determining the substantial equivalency of any
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state's requirements to Illinois' requirements, the
Department |
may rely on the determinations of the National
Qualification |
Appraisal Service of the National Association
of State Boards |
of Accountancy or such other qualification
appraisal service as |
it deems appropriate.
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(c) Applicants have 3 years from the date of application to |
complete the application process. If the process has not been |
completed in 3 years, the application shall be denied, the fee |
shall be forfeited, and the applicant must reapply and meet the |
requirements in effect at the time of reapplication.
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(d) Any individual who is the holder of a current, valid, |
and not previously disciplined license as a certified public |
accountant of any state and has applied in writing to the |
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Department in form and substance satisfactory to the Department |
for a license as a licensed CPA may perform accountancy |
activities as set forth in Section 8.05 until the earlier of |
the following dates: |
(1) the expiration of 6 months after filing the written |
application; or |
(2) the denial of the application by the Department. |
Any individual performing accountancy activities under |
this subsection (d) shall be subject to discipline in the same |
manner as an individual licensed under this Act. |
(Source: P.A. 98-254, eff. 8-9-13.)
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(225 ILCS 450/14.4) |
(Section scheduled to be repealed on January 1, 2024) |
Sec. 14.4. Qualifications for licensure as a CPA firm. The |
Department may license as licensed CPA firms individuals or |
entities meeting the following requirements: |
(1) A majority of the ownership of the firm, in terms |
of financial interests and voting rights of all partners, |
officers, shareholders, or members, or belongs to persons |
licensed or registered in some state. All partners, |
officers, shareholders, or members, whose principal place |
of business is in this State and who have overall |
responsibility for accountancy activities in this State, |
as defined in paragraph (1) of subsection (a) of Section |
8.05 of this Act, must hold a valid license as a licensed |
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CPA issued by this State. An individual exercising the |
practice privilege afforded under Section 5.2 who performs |
services for which a firm license is required under |
subsection (d) of Section 5.2 shall not be required to |
obtain an individual license under this Act. |
(2) All owners of the CPA firm, whether licensed as a |
licensed CPA or not, shall be active participants in the |
CPA firm or its affiliated entities and shall comply with |
the rules adopted under this Act. |
(3) It shall be lawful for a nonprofit cooperative |
association engaged in rendering an auditing and |
accounting service to its members only to continue to |
render that service provided that the rendering of auditing |
and accounting service by the cooperative association |
shall at all times be under the control and supervision of |
licensed CPAs. |
(4) An individual who supervises services for which a |
license is required under paragraph (1) of subsection (a) |
of Section 8.05 of this Act, who signs or authorizes |
another to sign any report for which a license is required |
under paragraph (1) of subsection (a) of Section 8.05 of |
this Act, or who supervises services for which a CPA firm |
license is required under subsection (d) of Section 5.2 of |
this Act shall hold a valid, active licensed CPA license |
from this State or another state considered to be |
substantially equivalent under paragraph (1) of subsection |
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(a) of Section 5.2. |
(5) The CPA firm shall designate to the Department in |
writing an individual licensed as a licensed CPA under this |
Act or, in the case of a firm that must have a CPA firm |
license pursuant to subsection (b) of Section 13 of this |
Act, a licensee of another state who meets the requirements |
set out in paragraph (1) or (2) of subsection (a) of |
Section 5.2 of this Act, who shall be responsible for the |
proper licensure of the CPA firm.
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(Source: P.A. 98-254, eff. 8-9-13.)
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(225 ILCS 450/16) (from Ch. 111, par. 5517)
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(Section scheduled to be repealed on January 1, 2024)
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Sec. 16. Expiration and renewal of licenses; renewal of |
registration;
continuing education; peer review. |
(a) The expiration date and renewal period for each license |
or registration
issued under this Act shall be set by rule.
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(b) Every holder of a license or registration under this |
Act may renew such license or registration before the |
expiration date upon payment of the required renewal fee as set |
by rule.
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(c) Every application for renewal of a license by a |
licensed CPA who has been licensed under this Act for 3 years |
or more shall be accompanied or supported by any evidence the |
Department shall prescribe, in satisfaction of completing, |
each 3 years, not less than 120 hours of continuing |
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professional education as prescribed by Department rules. Of |
the 120 hours, not less than 4 hours shall be courses covering |
the subject of professional ethics. All continuing education |
sponsors applying to the Department for registration shall be |
required to submit an initial nonrefundable application fee set |
by Department rule. Each registered continuing education |
sponsor shall be required to pay an annual renewal fee set by |
Department rule. Publicly supported colleges, universities, |
and governmental agencies located in Illinois are exempt from |
payment of any fees required for continuing education sponsor |
registration. Failure by a continuing education sponsor to be |
licensed or pay the fees prescribed in this Act, or to comply |
with the rules and regulations established by the Department |
under this Section regarding requirements for continuing |
education courses or sponsors, shall constitute grounds for |
revocation or denial of renewal of the sponsor's registration. |
(d) Licensed CPAs are exempt from the continuing |
professional education requirement for the first renewal |
period following the original issuance of the license. |
Failure by an applicant for renewal of a license as a |
licensed CPA to furnish the evidence shall constitute grounds |
for disciplinary action, unless the Department in its |
discretion shall determine the failure to have been due to |
reasonable cause. The Department, in its discretion, may renew |
a license despite failure to furnish evidence of satisfaction |
of requirements of continuing education upon condition that the |
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applicant follow a particular program or schedule of continuing |
education. In issuing rules and individual orders in respect of |
requirements of continuing education, the Department in its |
discretion may, among other things, use and rely upon |
guidelines and pronouncements of recognized educational and |
professional associations; may prescribe rules for the |
content, duration, and organization of courses; shall take into |
account the accessibility to applicants of such continuing |
education as it may require, and any impediments to interstate |
practice of public accounting that may result from differences |
in requirements in other states; and may provide for relaxation |
or suspension of requirements in regard to applicants who |
certify that they do not intend to engage in the performance of |
accountancy activities, and for instances of individual |
hardship. |
The Department shall establish by rule a means for the |
verification of completion of the continuing education |
required by this Section. This verification may be accomplished |
through audits of records maintained by licensees; by requiring |
the filing of continuing education certificates with the |
Department; or by other means established by the Department. |
The Department may establish, by rule, guidelines for |
acceptance of continuing education on behalf of licensed CPAs |
taking continuing education courses in other jurisdictions.
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(e) For renewals on and after July 1, 2012, as a condition |
for granting a renewal license to CPA firms and sole |
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practitioners who perform accountancy activities outlined in |
paragraph (1) of subsection (a) of Section 8.05 under this Act, |
the Department shall require that the CPA firm or sole |
practitioner satisfactorily complete a peer review during the |
immediately preceding 3-year period, accepted by a Peer Review |
Administrator in accordance with established standards for |
performing and reporting on peer reviews, unless the CPA firm |
or sole practitioner is exempted under the provisions of |
subsection (i) of this Section. A CPA firm or sole practitioner |
shall, at the request of the Department, submit to the |
Department a letter from the Peer Review Administrator stating |
the date on which the peer review was satisfactorily completed. |
A new CPA firm or sole practitioner shall not be required |
to comply with the peer review requirements for the first |
license renewal. A CPA firm or sole practitioner shall undergo |
its first peer review during the first full renewal cycle after |
it is granted its initial license.
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The requirements of this subsection (e) shall not apply to |
any person providing services requiring a license under this |
Act to the extent that such services are provided in the |
capacity of an employee of the Office of the Auditor General or |
to a nonprofit cooperative association engaged in the rendering |
of licensed service to its members only under paragraph (3) of |
Section 14.4 of this Act or any of its employees to the extent |
that such services are provided in the capacity of an employee |
of the association. |
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(f) The Department shall approve only Peer Review |
Administrators that the Department finds comply with |
established standards for performing and reporting on peer |
reviews. The Department may adopt rules establishing |
guidelines for peer reviews, which shall do all of the |
following:
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(1) Require that a peer review be conducted by a |
reviewer that is independent of the CPA firm reviewed and |
approved by the Peer Review Administrator under |
established standards. |
(2) Other than in the peer review process, prohibit the |
use or public disclosure of information obtained by the |
reviewer, the Peer Review Administrator, or the Department |
during or in connection with the peer review process. The |
requirement that information not be publicly disclosed |
shall not apply to a hearing before the Department that the |
CPA firm or sole practitioner requests be public or to the |
information described in paragraph (3) of subsection (i) of |
this Section. |
(g) If a CPA firm or sole practitioner fails to |
satisfactorily complete a peer review as required by subsection |
(e) of this Section or does not comply with any remedial |
actions determined necessary by the Peer Review Administrator, |
the Peer Review Administrator shall notify the Department of |
the failure and shall submit a record with specific references |
to the rule, statutory provision, professional standards, or |
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other applicable authority upon which the Peer Review |
Administrator made its determination and the specific actions |
taken or failed to be taken by the licensee that in the opinion |
of the Peer Review Administrator constitutes a failure to |
comply. The Department may at its discretion or shall upon |
submission of a written application by the CPA firm or sole |
practitioner hold a hearing under Section 20.1 of this Act to |
determine whether the CPA firm or sole practitioner has |
complied with subsection (e) of this Section. The hearing shall |
be confidential and shall not be open to the public unless |
requested by the CPA firm or sole practitioner. |
(h) The CPA firm or sole practitioner reviewed shall pay |
for any peer review performed. The Peer Review Administrator |
may charge a fee to each firm and sole practitioner sufficient |
to cover costs of administering the peer review program. |
(i) A CPA firm or sole practitioner shall not be required |
to comply with the peer review requirements if: |
(1) Within 3 years before the date of application for |
renewal licensure, the sole practitioner or CPA firm has |
undergone a peer review conducted in another state or |
foreign jurisdiction that meets the requirements of |
paragraphs (1) and (2) of subsection (f) of this Section. |
The sole practitioner or CPA firm shall, at the request of |
the Department, submit to the Department a letter from the |
organization administering the most recent peer review |
stating the date on which the peer review was completed; or |
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(2) Within 2 years before the date of application for |
renewal licensure, the sole practitioner or CPA firm |
satisfies all of the following conditions: |
(A) has not accepted or performed any accountancy |
activities outlined in paragraph (1) of subsection (a) |
of Section 8.05 of this Act; and |
(B) the firm or sole practitioner agrees to notify |
the Peer Review Administrator within 30 days of |
accepting an engagement for services requiring a |
license under this Act and to undergo a peer review |
within 18 months after the end of the period covered by |
the engagement; or |
(3) For reasons of personal health, military service, |
or other good cause, the Department determines that the |
sole practitioner or firm is entitled to an exemption, |
which may be granted for a period of time not to exceed 12 |
months. |
(j) If a peer review report indicates that a CPA firm or |
sole practitioner complies with the appropriate professional |
standards and practices set forth in the rules of the |
Department and no further remedial action is required, the Peer |
Review Administrator shall, after issuance of the final letter |
of acceptance, destroy all working papers and documents related |
to the peer review, other than report-related documents and |
documents evidencing completion of remedial actions, if any, in |
accordance with rules established by the Department. |
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(k) (Blank). |
(Source: P.A. 98-254, eff. 8-9-13.)
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(225 ILCS 450/17.1) (from Ch. 111, par. 5518.1)
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(Section scheduled to be repealed on January 1, 2024)
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Sec. 17.1. Restoration. |
(a) Any registered CPA who has permitted his or her |
registration to expire or who has had his or her registration |
on inactive status may have his or her registration restored by |
making application to the Department and filing proof |
acceptable to the Department as defined by rule of his or her |
fitness to have his or her registration restored, which may |
include sworn evidence certifying to active practice in another |
jurisdiction satisfactory to the Department and by paying the |
required restoration fee.
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(b) Any licensed CPA who has permitted
his or her license |
to expire
or who has had his or her license on inactive status |
may have his or her license restored
by (1) making application |
to the Department and filing proof
acceptable to the
Department |
as defined by rule of his or her fitness to have his or her |
license restored, including
sworn
evidence certifying to |
active practice in another jurisdiction satisfactory
to the |
Department, (2) and by paying the required restoration fee, (3)
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and by submitting proof of the
required continuing education |
and (4) in the case of a sole practitioner, satisfactory |
completion of peer review outlined in subsection (e) of Section |
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16, unless exempt from peer review under subsection (i) of |
Section 16. |
(c) Any firm that has permitted its license to expire may |
have its license restored by (1) making application to the |
Department and filing proof acceptable to the Department as |
defined by rule of its fitness to have its license restored, |
including sworn evidence certifying to active practice in |
another jurisdiction satisfactory to the Department, (2) |
paying the required restoration fee, and (3) satisfactory |
completion of peer review outlined in subsection (e) of Section |
16, unless exempt from peer review under subsection (i) of |
Section 16. |
(d) If the licensed CPA or registered CPA has not |
maintained an active
practice in another
jurisdiction |
satisfactory to the Department, the Department shall |
determine,
by an evaluation program established by rule, |
fitness to resume active status
and may require the applicant |
to complete a period of supervised
experience.
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Any licensed CPA or registered CPA whose license or |
registration expired
while he or she was (1) in
Federal Service |
on active duty with the Armed Forces of the United States,
or |
the State Militia called into service or training, or (2) in |
training
or education under the supervision of the United |
States preliminary to
induction
into the military service, may |
have his or her license or registration renewed reinstated or |
restored
without
paying any lapsed renewal and restoration fees |
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if within 2 years after
honorable termination
of such service, |
training or education except under conditions other than
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honorable, he or she furnished
the Department with satisfactory |
evidence to the effect that he or she
has been
so engaged and |
that his or her service, training, or education has been so |
terminated.
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(Source: P.A. 98-254, eff. 8-9-13.)
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