Bill Text: PA HB2354 | 2011-2012 | Regular Session | Amended

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Bill Title: Further providing for certificate requirements, for equivalency practice for individuals and for equivalency practice for firms and entities.

Spectrum: Moderate Partisan Bill (Republican 23-4)

Status: (Engrossed - Dead) 2012-06-30 - Referred to CONSUMER PROTECTION AND PROFESSIONAL LICENSURE [HB2354 Detail]

Download: Pennsylvania-2011-HB2354-Amended.html

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PRIOR PRINTER'S NO. 3490 PRINTER'S NO. 3831
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2354 Session of2012
INTRODUCED BY DENLINGER, ADOLPH, MAHER, PEIFER, DUNBAR, BOYD, CALTAGIRONE, CLYMER, CUTLER, DALEY, FARRY, FLECK, GINGRICH, GRELL, GROVE, HARRIS, HICKERNELL, M. K. KELLER, KILLION, MILLARD, MILLER, MURT, PETRARCA, RAPP, WATSON AND BEAR, MAY 8, 2012
AS REPORTED FROM COMMITTEE ON PROFESSIONAL LICENSURE, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 26, 2012
AN ACT
Amending the act of May 26, 1947 (P.L.318, No.140), entitled, as
amended, "An act relating to the practice of public
accounting; providing for the examination, education and
experience requirements for certification of certified public
accountants and for the licensing of certified public
accountants, public accountants and firms; requiring
continuing education and peer review; providing for the
organization and ownership of firms and for the procedures
and grounds for discipline and reinstatement of licensees;
prescribing the powers and duties of the State Board of
Accountancy and the Department of State; providing for
ownership of working papers and confidentiality; regulating
the professional responsibility of licensees; defining
unlawful acts and acts not unlawful; providing penalties; and
repealing existing laws," further providing for definitions, <--
for certificate requirements, for equivalency practice for
individuals and for equivalency practice for firms and
entities.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definition of "attest activity" in section 2 <--
of the act of May 26, 1947 (P.L.318, No.140), known as the CPA
Law, reenacted and amended December 8, 1976 (P.L.1280, No.286)
and amended July 9, 2008 (P.L.954, No.73), is amended and the
section is amended by adding definitions to read:
Section 2. Definitions.--The following words and phrases
when used in this act shall have the meanings ascribed to them
in this section unless the context clearly indicates otherwise:
* * *
"Attest activity." The provision of any of the following
financial statement services together with the issuance of a
report expressing or disclaiming an opinion or other assurance
on the information:
(1) an audit or other engagement performed in accordance
with Statements on Auditing Standards (SAS);
(2) a review or compilation of a financial statement
performed in accordance with Statements on Standards for
Accounting and Review Services (SSARS);
(3) an engagement performed in accordance with Statements on
Standards for Attestation Engagements (SSAE); or
[(4) an audit or other engagement performed in accordance
with government auditing standards issued by the Comptroller
General of the United States; or]
(5) any other engagement performed in accordance with
attestation standards established by an organization granted
authority by statute or regulation to establish attestation
standards, such as the American Institute of Certified Public
Accountants (AICPA) [or], the Public Company Accounting
Oversight Board (PCAOB), the Financial Accounting Standards
Board (FASB) or the International Accounting Standards Board
(IASB).
* * *
"FASB." The Financial Accounting Standards Board.
* * *
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"IASB." The International Accounting Standards Board.
* * *
Section 2. Sections 4.2, 5.2 and 5.4 of the act, amended or
added July 9, 2008 (P.L.954, No.73), are amended to read:
Section 1. Sections 4.2, 5.2 and 5.4 of the act of May 26, <--
1947 (P.L.318, No.140), known as the CPA Law, reenacted and
amended December 8, 1976 (P.L.1280, No.286) and added July 9,
2008 (P.L.954, No.73), are amended to read:
Section 4.2. Requirements for Issuance of Certificate.--(a)
The board shall issue a certificate upon application by an
individual who has passed the examination and meets the
education and experience requirements in this section.
(b) Before an individual may take the examination, the board
shall be satisfied that the individual:
(1) has attained eighteen years of age;
(2) is of good moral character; and
(3) has graduated with:
(i) a baccalaureate or higher degree from a college or
university accredited by a nationally recognized accrediting
agency recognized by the United States Department of Education,
or a college or university approved by the board, and completed
a total of one hundred fifty semester credits of post-secondary
education, including at least a total of twenty-four semester
credits of accounting and auditing, business law, finance or tax
subjects of a content satisfactory to the board and an
additional twelve semester credits in accounting, auditing and
tax subjects of a content satisfactory to the board, not
necessarily as part of the individual's undergraduate or
graduate work;
(ii) a baccalaureate degree from a college or university
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accredited by a nationally recognized accrediting agency
recognized by the United States Department of Education, or a
college or university approved by the board, and completed at
least a total of twenty-four semester credits, which credits
shall be in accounting and auditing, business law, finance or
tax subjects of a content satisfactory to the board, not
necessarily as a part of his undergraduate work; or
(iii) a Master's Degree or other post-graduate degree from a
college or university accredited by a nationally recognized
accrediting agency recognized by the United States Department of
Education, or a college or university approved by the board, and
completed at least a total of twenty-four semester credits,
which credits shall be in accounting and auditing, business law,
finance or tax subjects of a content satisfactory to the board,
not necessarily as part of his undergraduate or graduate work.
(c) Before an individual who takes the examination under
subsection (b)(3)(ii) or (iii) may be issued a certificate, the
individual must also satisfy the education requirement in
subsection (b)(3)(i).
(d) Before an individual may be issued a certificate, the
board shall be satisfied that the individual has completed at
least one year of experience that:
(1) was completed within sixty months preceding the date of
application for a certificate;
(2) included [not less than four hundred hours of attest
activity in any of the following:
(i) public accounting;
(ii) as an internal auditor, if the internal audit function
reports to an independent board or similar body responsible for
oversight of the financial reporting process; or
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(iii) as an auditor with a unit of Federal, State or local
government] providing any type of service or advice involving
the use of accounting, attest, compilation, management advisory,
financial advisory, tax or consulting skills, which were gained
through employment in government, industry, academia or public
practice;
(3) was of a caliber satisfactory to the board; and
(4) was [supervised] verified by an individual with a
current license to practice public accounting as a certified
public accountant or public accountant in this Commonwealth or
another state.
(e) The following requirements may be complied with instead
of the otherwise applicable provisions of subsections (b), (c)
and (d):
(1) An individual who [takes] took the examination before
December 31, 2011, but [does] did not pass at least one part
taken before that date, may not be issued a certificate until
the individual:
(i) has satisfied the education requirement in subsection
(c), if applicable; and
(ii) has completed at least one year of experience described
in subsection (d)(2), (3) and (4) within one hundred twenty
months preceding the date of application for a certificate.
(2) An individual who [passes] passed at least one part of
the examination taken before December 31, 2011, pursuant to
subsection (b)(3)(ii), may be issued a certificate before or
after December 31, 2011, without satisfying the education
requirement in subsection (c), but not until the individual has
completed at least two years of experience that satisfies the
requirements in subsection [(d)(3)] (d)(2), (3) and (4)[, except
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that the experience must include at least eight hundred hours of
attest activity]. The experience may be completed within one
hundred-twenty months preceding the date of application for a
certificate.
(3) An individual who [passes] passed at least one part of
the examination taken before December 31, 2011, pursuant to
subsection (b)(3)(iii), may be issued a certificate before or
after December 31, 2011, without satisfying the education
requirement in subsection (c) and may complete the one year of
experience required by subsection (d) within one hundred twenty
months preceding the date of application for a certificate.
Section 5.2. Practice in this Commonwealth by Individuals
under Substantial Equivalency.--(a) A person may practice
public accounting in this Commonwealth under substantial
equivalency as provided in this section and section 5.4 [if the
state the person is licensed in has also adopted into law a
provision allowing for practice under substantial equivalency
that includes no notice and no fee as provided for in subsection
(b)(9)]. Any determination as to whether substantial equivalency
exists with respect to a state or individual for purposes of
this act shall be consistent with any determination as to
substantial equivalency with respect to that state or individual
made by the National Association of State Boards of Accountancy
National Qualification Appraisal Service.
(b) The following apply to practice in this Commonwealth
under substantial equivalency:
(1) Notwithstanding any other provision of this act, an
individual whose principal place of business is not in this
Commonwealth and who has a valid certificate or right to
practice public accounting from a state that is substantially
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equivalent shall be presumed to have qualifications
substantially equivalent to the Commonwealth's requirements and
shall have all the privileges and obligations of a licensee of
the Commonwealth without the need to obtain a certificate or
license under this act.
(2) Notwithstanding any other provision of this act, an
individual whose principal place of business is not in this
Commonwealth and who has a valid certificate or right to
practice public accounting from a state that is not
substantially equivalent shall be presumed to have
qualifications substantially equivalent to the Commonwealth's
requirements and shall have all the privileges and obligations
of a licensee of the Commonwealth without the need to obtain a
certificate or license if there is substantial equivalency as to
the individual. In determining whether substantial equivalency
exists as to an individual, the order in which the individual
satisfied the experience, education and examination requirements
shall be disregarded.
(3) The exercise by an individual of the right to practice
in this Commonwealth under this section constitutes:
(i) sufficient contact with this Commonwealth for the
exercise of personal jurisdiction by the board and the courts of
this Commonwealth over the individual in any action or
proceeding arising out of acts or omissions by the individual;
(ii) consent by the individual to the personal and subject
matter jurisdiction and disciplinary authority of the board;
(iii) an agreement by the individual to comply with the
provisions of this act and regulations promulgated by the board;
and
(iv) consent by the individual to the appointment of the
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board of accountancy or other regulatory authority of the state
in which the principal place of business of the individual is
located as the agent upon which process may be served in any
action or proceeding by the board against the individual.
(4) An individual who exercises the right to practice under
this section shall be subject to disciplinary action in this
Commonwealth for any act or omission that would subject the
holder of a Pennsylvania certificate or license to disciplinary
action.
(5) An individual who passed the Uniform CPA Examination and
holds a valid license to practice public accounting issued by
any other state on or before December 31, 2011, may be exempt
from the education requirements in section 4.2(b)(3)(i) and (c)
of this act for purposes of this section.
(6) If the board imposes discipline on an individual
exercising the right to practice under this section, the board
shall, as soon as practicable, notify the board of accountancy
or other regulatory authority in each state where the board has
learned during the disciplinary process that the individual has
been granted a certificate or license to practice public
accounting of the imposition of the discipline. If the order
imposing discipline is appealed or stayed, the board shall send
a subsequent notice to each regulatory authority advising of the
filing of the appeal or entry of the stay. As an alternative to
sending the notices to each regulatory authority, the board may
send the notices instead to a multistate enforcement information
network maintained at the time by AICPA or NASBA. The board may
furnish investigative information and the hearing record
relating to the disciplinary proceeding to such other regulatory
authorities upon request.
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(7) An individual exercising the right to practice under
this section may identify the fact that the individual practices
with a partnership, corporation or other association and may use
its name even if the partnership, corporation or other
association is not a licensee.
(8) An individual practicing under this section or a firm or
qualified unlicensed entity practicing under section 5.4 may
provide professional services in this Commonwealth in the same
manner as a licensee, including without limitation, in person or
by mail, telephone or electronic means.
(9) The board shall not require a filing or payment of a fee
by an individual, firm or qualified unlicensed entity in
connection with practicing under this section or section 5.4.
Section 5.4. Practice by Firms and Unlicensed Entities under
Substantial Equivalency.--(a) A firm may practice public
accounting in this Commonwealth through an individual who is not
a licensee if the individual has the right to practice in this
Commonwealth under section 5.2 of this act [and if the state the
firm is licensed in has also adopted into law a provision
allowing for practice under substantial equivalency that
includes no notice and no fee as provided for in section 5.2(b)
(9) of this act]. The exercise by a firm of the right to
practice through such individuals under this subsection
constitutes an agreement by the firm:
(1) to be subject to the jurisdiction and disciplinary
authority of the board with respect to acts or omissions of the
individuals through whom it practices under this subsection;
(2) to accept service of process from the board on behalf of
the individuals through whom it practices under this subsection;
and
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(3) to cooperate in any investigation by the board involving
an individual through which the firm has practiced under this
subsection even if the individual is no longer an owner of or
employed by the firm.
(b) A qualified unlicensed entity may practice public
accounting in this Commonwealth through an individual who:
(1) has the right to practice in this Commonwealth under
section 5.2 of this act; or
(2) is a licensee.
(c) The exercise by a qualified unlicensed entity of the
right to practice in this Commonwealth under subsection (b)
constitutes:
(1) sufficient contact with this Commonwealth for the
exercise of personal jurisdiction by the board and the courts of
this Commonwealth over the qualified unlicensed entity in any
action or proceeding arising out of acts or omissions by an
individual associated with the qualified unlicensed entity in
any capacity;
(2) consent by the qualified unlicensed entity to the
personal and subject matter jurisdiction and disciplinary
authority of the board;
(3) an agreement by the qualified unlicensed entity to
comply with the provisions of this act and regulations
promulgated by the board; and
(4) consent by the qualified unlicensed entity to the
appointment of the board of accountancy or other regulatory
authority of the state in which the principal place of business
of the qualified unlicensed entity is located as the agent upon
which process may be served in any action or proceeding by the
board against the qualified unlicensed entity.
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(d) As used in this section "qualified unlicensed entity"
means a partnership, corporation or other association that:
(1) is not a licensee;
(2) does not have an office in this Commonwealth; and
(3) may lawfully practice public accounting in another
state.
Section 3 2. This act shall take effect in 60 days. <--
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