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    Florida House of Representatives - 1998             CS/HB 4065

        By the Committees on Financial Services, Financial
    Services and Representatives Safley, Lippman, Bainter, Rayson,
    Tamargo, Lawson, Cosgrove, Dennis and Flanagan




  1                      A bill to be entitled

  2         An act relating to public accountancy; amending

  3         s. 473.302, F.S.; providing definitions;

  4         amending s. 473.303, F.S.; revising provisions

  5         relating to membership on probable cause panels

  6         of the Board of Accountancy; amending s.

  7         473.306, F.S.; providing conditions under which

  8         the board may adopt an alternative licensure

  9         examination for persons licensed to practice

10         public accountancy or its equivalent in a

11         foreign country; providing for appointment of

12         an Educational Advisory Committee for purposes

13         of maintaining proper educational

14         qualifications for licensure of certified

15         public accountants; amending s. 473.308, F.S.;

16         revising licensure requirements relating to

17         public accountancy experience outside this

18         state; amending s. 473.309, F.S.; providing

19         additional requirements for a partnership,

20         corporation, or limited liability company to

21         practice public accountancy in this state;

22         amending s. 473.3101, F.S.; providing

23         requirements for the licensure of sole

24         proprietors and other legal entities; amending

25         s. 473.312, F.S.; providing for appointment of

26         a Continuing Professional Education Advisory

27         Committee for purposes of maintaining proper

28         continuing education requirements for renewal

29         of licensure of certified public accountants;

30         amending s. 473.313, F.S.; providing continuing

31         education requirements for the reactivation of

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  1         certain licenses; amending s. 473.315, F.S.;

  2         providing an exemption for attorneys; amending

  3         ss. 473.319, 473.3205, F.S.; revising

  4         provisions relating to contingency fees,

  5         commissions, and referral fees; amending s.

  6         473.322, F.S.; providing certain requirements

  7         for persons offering certain public accounting

  8         services; providing an effective date.

  9

10  Be It Enacted by the Legislature of the State of Florida:

11

12         Section 1.  Section 473.302, Florida Statutes, is

13  amended to read:

14         473.302  Definitions.--As used in this chapter, the

15  term:

16         (1)  "Board" means the Board of Accountancy.

17         (2)  "Department" means the Department of Business and

18  Professional Regulation.

19         (3)  "Division" means the Division of Certified Public

20  Accounting.

21         (4)  "Certified public accountant" means a person who

22  holds a license to practice public accounting in this state

23  under the authority of this chapter.

24         (5)  "Firm" means any entity that is engaged in the

25  practice of public accounting.

26         (6)  "Licensed audit firm" or "public accounting firm"

27  means a firm licensed under s. 473.3101.

28         (7)(5)  "Practice of," "practicing public accountancy,"

29  or "public accounting" means:

30         (a)  Offering to perform or performing for the public

31  one or more types of services involving the expression of an

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  1  opinion on financial statements, the attestation as an expert

  2  in accountancy to the reliability or fairness of presentation

  3  of financial information, the utilization of any form of

  4  opinion or financial statements that provide a level of

  5  assurance, the utilization of any form of disclaimer of

  6  opinion which conveys an assurance of reliability as to

  7  matters not specifically disclaimed, the expression of an

  8  opinion on the reliability of an assertion by one party for

  9  the use by a third party;, or the preparation of financial

10  statements by a certified public accountant, a firm of

11  certified public accountants, or a firm in which a certified

12  public accountant has an ownership interest, including the

13  performance of such services in the employ of another person;

14  or

15         (b)  Offering to perform or performing for the public

16  one or more types of services involving the use of accounting

17  skills, or one or more types of tax, management advisory, or

18  consulting services, by any person who is holding herself or

19  himself or itself out as a certified public accountant who

20  holds an active license or a firm of certified public

21  accountants, including the performance of such services by a

22  certified public accountant in the employ of a person so

23  holding herself or firm; or himself or itself out.

24         (c)  Offering to perform or performing for the public

25  one or more types of service involving the preparation of

26  financial statements not included within s. 473.302(7)(a), by

27  a certified public accountant who holds an active license, a

28  firm of certified public accountants, or a firm in which a

29  certified public accountant has an ownership interest,

30  including the performance of such services in the employ of

31  another person. The board shall adopt rules establishing

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  1  standards of practice for such reports and financial

  2  statements, provided, however, that nothing in this paragraph

  3  shall be construed to permit the board to adopt rules that

  4  have the result of prohibiting licensees employed by

  5  unlicensed firms from preparing financial statements as

  6  authorized by this paragraph.

  7

  8  However, these terms shall not include services provided by

  9  the American Institute of Certified Public Accountants or the

10  Florida Institute of Certified Public Accountants, or any full

11  service association of certified public accounting firms whose

12  plans of administration have been approved by the board, to

13  their members or services performed by these entities in

14  reviewing the services provided to the public by members of

15  these entities.

16         (6)  "Holding out" means advertising, as a part of a

17  licensee's business activities, that the licensee is a

18  certified public accountant when providing, or offering to

19  provide, services or products to the public which involve the

20  use of accounting skills or one or more types of management

21  advisory or consulting services.

22         Section 2.  Subsection (2) of section 473.303, Florida

23  Statutes, is amended to read:

24         473.303  Board of Accountancy.--

25         (2)  Notwithstanding the provisions of s. 455.225(4),

26  The probable cause panel of the board may be composed of at

27  least one board member who shall serve as chair and additional

28  board members or one past members member of the board who are

29  licensees is a licensee in good standing. The past board

30  members member shall be appointed to the panel for a maximum

31

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  1  of 2 years by the chair of the board with the approval of the

  2  secretary of the department.

  3         Section 3.  Subsection (5) of section 473.306, Florida

  4  Statutes, is amended, and subsection (6) is added to that

  5  section, to read:

  6         473.306  Examinations.--

  7         (5)  The board may adopt an alternative licensure

  8  examination for persons who have been licensed to practice

  9  public accountancy or its equivalent in a foreign country so

10  long as the International Qualifications Appraisal Board of

11  the National Association of State Boards of Accountancy has

12  ratified an agreement with that country for reciprocal

13  licensure Canadian chartered accountants who have completed

14  the Canadian chartered accountant licensure examination and

15  hold a chartered accountant license from a Canadian province.

16         (6)  For the purposes of maintaining the proper

17  educational qualifications for licensure under this chapter,

18  the board may appoint an Educational Advisory Committee, which

19  shall be composed of one member of the board, two persons in

20  public practice who are licensed under this chapter, and four

21  academicians on faculties of universities in this state.

22         Section 4.  Paragraph (a) of subsection (3) and

23  subsection (4) of section 473.308, Florida Statutes, are

24  amended to read:

25         473.308  Licensure.--

26         (3)  The board shall certify as qualified for a license

27  by endorsement an applicant who:

28         (a)1.  Is not licensed and has not been licensed in

29  another state or territory and who qualifies to take the

30  examination as set forth in s. 473.306, who has passed a

31  national, regional, state, or territorial licensing

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  1  examination which is substantially equivalent to the

  2  examination required by s. 473.306, and who has satisfied the

  3  experience requirements set forth in s. 473.307; and

  4         2.  Has completed such continuing education courses as

  5  the board deems appropriate, within the limits for each

  6  applicable 2-year period as set forth in s. 473.312, but at

  7  least such courses as are equivalent to the continuing

  8  education requirements for a licensee in this state during the

  9  2 years immediately preceding her or his application for

10  licensure by endorsement; or

11         (4)  If application for licensure is made prior to

12  August 1, 2000, and the applicant has 5 years of experience in

13  the practice of public accountancy, either in the United

14  States or in the practice of public accountancy or its

15  equivalent in a foreign country that the International

16  Qualifications Appraisal Board of the National Association of

17  State Boards of Accountancy has determined has licensure

18  standards that are substantially equivalent to those in the

19  United States as a licensed chartered accountant in Canada,

20  the board shall waive the requirements of s. 473.306(2)(b)2.

21  that are in excess of a baccalaureate degree. All experience

22  that is used as a basis for waiving said requirements of s.

23  473.306(2)(b)2. must be experience outside this state.

24  Furthermore, said experience must be after licensure as a

25  certified public accountant by another state or territory of

26  the United States or after licensure in the practice of public

27  accountancy or its equivalent in a foreign country that the

28  International Qualifications Appraisal Board of the National

29  Association of State Boards of Accountancy has determined has

30  licensure standards that are substantially equivalent to those

31  in the United States. The board shall have the authority to

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  1  establish the standards for experience that meet this

  2  requirement.

  3         Section 5.  Section 473.309, Florida Statutes, is

  4  amended to read:

  5         473.309  Practice requirements for partnerships,

  6  corporations, and limited liability companies; business

  7  entities practicing public accounting.--

  8         (1)  A partnership may not engage in the practice of

  9  public accounting, as defined in s. 473.302(7)(a), in this

10  state unless:

11         (a)  It is a form of partnership recognized by Florida

12  law.

13         (b)  Partners owning at least two-thirds of the

14  financial interest and voting rights of the partnership are

15  certified public accountants in some state. However, each

16  partner who is a certified public accountant in another state

17  and is domiciled in this state must be a certified public

18  accountant of this state and hold an active license.

19         (c)  At least one general partner is a certified public

20  accountant of this state and holds an active license.

21         (d)  All noncertified public accountant partners who

22  are not certified public accountants in any state are engaged

23  in the business of the partnership as their principal

24  occupation.

25         (e)  It is in compliance with rules adopted by the

26  board pertaining to minimum capitalization, letters of credit,

27  and adequate public liability insurance.

28         (f)  It is currently licensed as required by s.

29  473.3101.

30

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  1         (2)  A corporation may not engage in the practice of

  2  public accounting, as defined in s. 473.302(7)(a), in this

  3  state unless:

  4         (a)  It is a corporation duly organized in this or some

  5  other state.

  6         (b)  Shareholders of the corporation owning at least

  7  two-thirds of the financial interest and voting rights of the

  8  corporation are certified public accountants in some state and

  9  are principally engaged in the business of the corporation.

10  However, each shareholder who is a certified public accountant

11  in another state and is domiciled in this state must be a

12  certified public accountant of this state and hold an active

13  license.

14         (c)  The principal officer of the corporation is a

15  certified public accountant in some state.

16         (d)  At least one shareholder of the corporation is a

17  certified public accountant and holds an active license in

18  this state.

19         (e)  All noncertified public accountant shareholders

20  who are not certified public accountants in any state are

21  engaged in the business of the corporation as their principal

22  occupation.

23         (f)  It is in compliance with rules adopted by the

24  board pertaining to minimum capitalization, letters of credit,

25  and adequate public liability insurance.

26         (g)  It is currently licensed as required by s.

27  473.3101.

28         (3)  A limited liability company may not engage in the

29  practice of public accounting, as defined in s. 473.302(7)(a),

30  in this state unless:

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  1         (a)  It is a limited liability company duly organized

  2  in this or some other state.

  3         (b)  Members of the limited liability company owning at

  4  least two-thirds of the financial interest and voting rights

  5  of the company are certified public accountants in some state.

  6  However, each member who is a certified public accountant in

  7  some state and is domiciled in this state must be a certified

  8  public accountant of this state and hold an active license.

  9         (c)  At least one member of the limited liability

10  company is a certified public accountant and holds an active

11  license in this state.

12         (d)  All noncertified public accountant members who are

13  not certified public accountants in any state are engaged in

14  the business of the company as their principal occupation.

15         (e)  It is in compliance with rules adopted by the

16  board pertaining to minimum capitalization, letters of credit,

17  and adequate public liability insurance.

18         (f)  It is currently licensed as required by s.

19  473.3101.

20         (4)  A partnership, corporation, limited liability

21  company, or any other business entity is engaged in the

22  practice of public accounting if its employees are engaged in

23  the practice of public accounting. Notwithstanding any other

24  provision of law, a licensed audit firm may own all or part of

25  another licensed audit firm.

26         Section 6.  Section 473.3101, Florida Statutes, is

27  amended to read:

28         473.3101  Licensure of sole proprietors, partnerships,

29  corporations, and limited liability companies, and other legal

30  entities.--

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  1         (1)  Each sole proprietor, partnership, corporation, or

  2  limited liability company, or any other legal entity seeking

  3  to engage in the practice of public accounting, as defined in

  4  s. 473.302(7)(a), in this state must file an application for

  5  licensure with the department and supply the information the

  6  board requires. An application must be made upon the affidavit

  7  of a sole proprietor, general partner, shareholder, or member

  8  who is a certified public accountant.

  9         (2)  The board shall determine whether the sole

10  proprietor, partnership, corporation, or limited liability

11  company, or any other legal entity meets the requirements for

12  practice and, pending that determination, may certify to the

13  department the partnership, corporation, or limited liability

14  company for provisional licensure.

15         (3)  Each license must be renewed every 2 years.  Each

16  sole proprietor, partnership, corporation, or limited

17  liability company, or any other legal entity licensed under

18  this section must notify the department within 1 month after

19  any change in the information contained in the application on

20  which its license is based.

21         Section 7.  Section 473.312, Florida Statutes, is

22  amended to read:

23         473.312  Continuing education.--

24         (1)(a)  As part of the license renewal procedure, the

25  board shall by rule require licensees to submit proof

26  satisfactory to the board that during the 2 years prior to

27  application for renewal, they have successfully completed not

28  less than 48 or more than 80 classroom hours of continuing

29  professional education programs in public accounting subjects

30  approved by the board. The board may prescribe by rule

31  additional continuing professional education hours, not to

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  1  exceed 25 percent of the total hours required, for failure to

  2  complete the hours required for renewal by the end of the

  3  reestablishment period.

  4         (b)(1)  Not less than 25 percent of the total hours

  5  required by the board shall be in accounting-related and

  6  auditing-related subjects, as distinguished from federal and

  7  local taxation matters and management services.

  8         (2)  Programs of continuing professional education

  9  approved by the board shall be formal programs of learning

10  which contribute directly to the professional competency of an

11  individual following licensure to practice public accounting

12  and may be any of the following:

13         (a)  Professional development programs of the American

14  Institute of Certified Public Accountants, state societies of

15  certified public accountants, or other organizations.

16         (b)  Technical sessions at meetings of the American

17  Institute of Certified Public Accountants, state societies,

18  chapters, or other organizations.

19         (c)  University and college courses.

20         (d)  Formal organized in-firm education programs.

21         (3)  The board shall adopt rules establishing the

22  continuing education requirements for licensees who are

23  engaged in the audit of a governmental entity. The board shall

24  approve subjects directly related to the governmental

25  environment and to governmental auditing for purposes of

26  satisfying the requirement of this subsection.

27         (4)  For the purposes of maintaining proper continuing

28  education requirements for renewal of licensure under this

29  chapter, the board may appoint a Continuing Professional

30  Education Advisory Committee, which shall be composed of one

31  member of the board, one academician on the faculty of a

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  1  university in this state, and six certified public

  2  accountants.

  3         Section 8.  Section 473.313, Florida Statutes, is

  4  amended to read:

  5         473.313  Inactive status.--

  6         (1)  A licensee may request that her or his license be

  7  placed in an inactive status by making application to the

  8  department.  The board may prescribe by rule fees for placing

  9  a license on inactive status, renewal of inactive status, and

10  reactivation of an inactive license.

11         (2)  A license that has become inactive may be

12  reactivated under s. 473.311 upon application to the

13  department. The board may prescribe by rule continuing

14  education requirements as a condition of reactivating a

15  license. The minimum continuing education requirements for

16  reactivating a license shall be those of the most recent

17  biennium plus one-half of the requirements in s. 473.312 for

18  each year or part thereof during which the license was

19  inactive. Notwithstanding any other provision of this section

20  the continuing education requirements are 120 hours, including

21  at least 30 hours in accounting-related and auditing-related

22  subjects and not more than 30 hours in behavioral subjects,

23  for the reactivation of a license that is inactive on June 30,

24  1998, if the licensee notifies the Board of Accountancy by

25  December 31, 1998, of an intention to reactivate such a

26  license and completes such reactivation by June 30, 2000.

27         (3)  Any licensee holding an inactive license may be

28  permitted to reactivate such license in a conditional manner.

29  The conditions of reactivation shall require, in addition to

30  the payment of fees, the passing of the examination approved

31  by the board concerning chapters 455 and 473, and the related

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  1  administrative rules, and the completion of required

  2  continuing education.

  3         Section 9.  Subsection (4) is added to section 473.315,

  4  Florida Statutes, to read:

  5         473.315  Independence, technical standards.--

  6         (4)  Attorneys who are admitted to practice law by the

  7  Supreme Court of Florida are exempt from the standards of

  8  practice of public accounting as defined in s. 473.302(7)(b)

  9  and (c) when such standards conflict with the rules of The

10  Florida Bar or orders of the Florida Supreme Court.

11         Section 10.  Section 473.319, Florida Statutes, is

12  amended to read:

13         473.319  Contingent fees.--Public accounting services

14  as defined in s. 473.302(7)(a) and (c) s. 473.302(5)(a), and

15  those that include tax filings with federal, state, or local

16  government, shall not be offered or rendered for a fee

17  contingent upon the findings or results of such service.  This

18  section does not apply to services involving federal, state,

19  or other taxes in which the findings are those of the tax

20  authorities and not those of the licensee.  Fees to be fixed

21  by courts or other public authorities, which are of an

22  indeterminate amount at the time a public accounting service

23  is undertaken, shall not be regarded as contingent fees for

24  purposes of this section.

25         Section 11.  Section 473.3205, Florida Statutes, is

26  amended to read:

27         473.3205  Commissions or referral fees.--A licensee may

28  not accept or pay a commission or referral fee in connection

29  with the sale or referral of public accounting services as

30  defined in s. 473.302(7)(a) and (c) s. 473.302(5)(a).  Any

31  certified public accountant or business entity that is engaged

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  1  in the practice of public accounting and that accepts a

  2  commission for the sale of a product or service to a client

  3  must disclose that fact to the client in writing in accordance

  4  with rules adopted by the board. However, this section shall

  5  not prohibit:

  6         (1)  Payments for the purchase of an accounting

  7  practice;

  8         (2)  Retirement payments to individuals formerly

  9  engaged in the practice of public accounting or payments to

10  their heirs or estates; or

11         (3)  Payment of fees to a referring licensee for public

12  accounting services to either the successor licensee or the

13  client in connection with an engagement.

14         Section 12.  Section 473.322, Florida Statutes, is

15  amended to read:

16         473.322  Prohibitions; penalties.--

17         (1)  A person may not knowingly:

18         (a)  Practice public accounting unless the person is a

19  certified public accountant or a public accountant;

20         (b)  Assume or use the titles or designations

21  "certified public accountant" or "public accountant" or the

22  abbreviation "C.P.A." or any other title, designation, words,

23  letters, abbreviations, sign, card, or device tending to

24  indicate that the person holds an active license under this

25  chapter, unless the person holds an active license under this

26  chapter;

27         (c)  Perform or offer to perform any services described

28  in s. 473.302(7)(a) Attest as an expert in accountancy to the

29  reliability or fairness of presentation of financial

30  information or utilize any form of disclaimer of opinion that

31  is intended or conventionally understood to convey an

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  1  assurance of reliability as to matters not specifically

  2  disclaimed unless such person holds an active license under

  3  this chapter and is a licensed audit firm or provides such

  4  services through a licensed audit firm. This paragraph does

  5  not prohibit the performance by persons other than certified

  6  public accountants of other services involving the use of

  7  accounting skills, including the preparation of tax returns

  8  and the preparation of financial statements without expression

  9  of opinion thereon;

10         (d)  Present as her or his own the license of another;

11         (e)  Give false or forged evidence to the board or a

12  member thereof;

13         (f)  Use or attempt to use a public accounting license

14  that has been suspended, revoked, or placed on inactive or

15  delinquent status;

16         (g)  Employ unlicensed persons to practice public

17  accounting; or

18         (h)  Conceal information relative to violations of this

19  chapter.

20         (2)  Any person who violates any provision of this

21  section commits a misdemeanor of the first degree, punishable

22  as provided in s. 775.082 or s. 775.083.

23         Section 13.  This act shall take effect October 1 of

24  the year in which enacted.

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