PRIOR PRINTER'S NO. 3197 PRINTER'S NO. 3485
No. 2381 Session of 1976
INTRODUCED BY MESSRS. BENNETT, PRENDERGAST, SHELTON, RIEGER,
BUTERA, MRS. CRAWFORD AND MR. HEPFORD, MAY 12, 1976
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 14, 1976
AN ACT
1 Reenacting and amending the act of May 26, 1947 (P.L.318,
2 No.140), entitled "An act relating to the public practice of
3 certified public accountants; providing for the certification
4 of persons desiring to practice and the listing of persons
5 engaged in practicing as certified public accountants, and
6 for the suspension and revocation of such certificates,
7 subject to appeal and for their reinstatement; prescribing
8 the powers and duties of the State Board of Examiners of
9 Public Accountants and the Department of Public Instruction;
10 providing for ownership of working papers; defining unlawful
11 acts and acts not unlawful; providing penalties, and
12 repealing existing laws,"
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. The title and section 1, act of May 26, 1947
16 (P.L.318, No.140), known as "The C. P. A. Law," are reenacted
17 and amended to read:
18 AN ACT
19 Relating to the public practice of certified public accountants;
20 providing for the certification of persons desiring to
21 practice, the registrations of public accountants, requiring
22 continuing education for registrants, and the listing of
1 persons engaged in practicing as certified public accountants
2 and public accountants, and for the suspension and revocation
3 of such certificates, subject to appeal and for their
4 reinstatement; prescribing the powers and duties of the State
5 Board of Examiners of Public Accountants and the [Department
6 of Public Instruction] Department of State; providing for
7 ownership of working papers; defining unlawful acts and acts
8 not unlawful; providing penalties, and repealing existing
9 laws.
10 Section 1. Short Title.--This act shall be known and may be
11 cited as "The C. P. A. Law."
12 Section 2. Sections 2, 3, 3.1, 4, 5 and 6 of the act,
13 amended December 30, 1974 (P.L.1122, No.362), are reenacted and
14 amended to read:
15 Section 2. Definitions.--The following words and phrases
16 when used in this act shall have the meanings ascribed to them
17 in this section:
18 [(1)] "Board" The State Board of Examiners of Public
19 Accountants as constituted by The Administrative Code of 1929
20 and its amendments.
21 "Certified public accountant" Persons to whom a certificate
22 of certified public accountant has been issued under "The C. P.
23 A. Law" and partnerships, professional corporations or
24 professional associations, composed of certified public
25 accountants, which if engaged in the practice of public
26 accounting, are registered and are holders of live permits as
27 herein provided.
28 "Corporations" Professional corporations and professional
29 associations as defined by the act of July 9, 1970 (P.L.461,
30 No.160), known as the "Professional Corporation Law," and the
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1 act of August 7, 1961 (P.L.941, No.416), known as the
2 "Professional Association Act," and any amendments thereof.
3 [(2)] "Department" The Commissioner of Professional and
4 Occupational Affairs in the Department of State of this
5 Commonwealth as constituted by The Administrative Code of 1929
6 and its amendments.
7 "In good standing" The holder of a certificate of certified
8 public accountant, registration or permit which is not revoked
9 or suspended or the holder of a registration or permit issued to
10 a public accountant registered under this act which is not
11 revoked or suspended.
12 "Masculine terms" shall also include the feminine.
13 "Public accountant" Persons who are qualified and accepted
14 for registration in accordance with this act and partnerships,
15 professional corporations or professional associations engaged
16 in practice as public accountants which are registered and are
17 holders of live permits as herein provided.
18 Section 3. General Powers of the Board.--The Board shall
19 have the power:
20 (1) To provide for and to regulate the issuance of
21 certificates and issue a certificate of certified public
22 accountant to any person (a) who meets the general
23 qualifications and education and experience requirements
24 provided herein and who passes the examination required by the
25 board, or (b) who meets the requirements for the issuance of a
26 certificate by reciprocity.
27 (2) To provide for and to regulate registration and permits
28 to practice as provided herein.
29 (3) To prescribe the subject, manner, time and place of
30 examination for the certificate of certified public accountant:
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1 Provided, That an examination shall be held at least twice in
2 each calendar year, and simultaneously in at least two counties
3 of the Commonwealth, and shall be a written examination in
4 general accounting, theory of accounts, accounting practice,
5 auditing and such other subjects as the board shall determine to
6 be appropriate. The board may make such use of all or any part
7 of the Uniform Certified Public Accountants' examination and/or
8 Advisory Grading service of the American Institute of Certified
9 Public Accountants as it deems appropriate to assist in
10 performing its duties hereunder.
11 (4) To keep a roster showing the names and the places of
12 business of persons to whom the certificate of certified public
13 accountant has been issued under this act and under prior laws
14 and [of persons, professional corporations or professional
15 associations] all others registered [under this act and of all
16 persons, professional corporations or professional associations]
17 or holding permits under this act. The department shall publish
18 such roster biennially in booklet form and shall mail copies
19 thereof to all permit holders listed and shall furnish the same
20 to others upon request.
21 (5) To suspend for a fixed term or revoke the certificate
22 and permit of any certified public accountant or the
23 registration and permit of [a person or professional corporation
24 or professional association] all others registered under this
25 act or to censure the holder of such certificate, registration
26 or permit as provided for in this act.
27 (6) To collect fees as provided for in this act and to
28 submit annually, to the department an estimate of the financial
29 requirements of the board for its administrative, investigative,
30 legal and miscellaneous expenses.
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1 (7) To arrange for assistance in the performance of its
2 duties, and to administer and enforce the laws of the
3 Commonwealth relating to registration of and practice by
4 certified public accountants, and all others registered or
5 holding permits under this act and to instruct and require its
6 agents to seek an injunction, or bring a prosecution for a
7 violation of this act.
8 (8) To keep minutes and records of all its transactions and
9 proceedings. Copies thereof duly certified by the Secretary of
10 the board shall be received as evidence in all courts and
11 elsewhere.
12 (9) To become a member of the National Association of State
13 Boards of Accountancy, or a similar organization, and pay such
14 dues as said association shall establish and send delegates to
15 the meetings of the association and defray their expenses.
16 (10) [To adopt, promulgate and enforce such administrative
17 rules and regulations not inconsistent with this act, or other
18 acts, as are necessary and proper to carry into effect the
19 provisions of this act.] To adopt, promulgate and enforce such
20 rules and regulations consistent with the provisions of this act
21 establishing requirements of continuing education to be met by
22 certified public accountants, public accountants and foreign
23 accountants registered under this act as a condition for renewal
24 of biennial permits to engage in the practice of public
25 accounting in this Commonwealth.
26 (11) To promulgate and amend rules of professional conduct,
27 uniformly applicable to certified public accountants, foreign
28 accountants and public accountants registered under this act,
29 appropriate to establish and maintain a high standard of
30 integrity and dignity in the profession of public [accountancy]
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1 accounting. The board may, in its discretion, adopt as its rules
2 of professional conduct the Code of Professional Ethics of the
3 Pennsylvania Institute of Certified Public Accountants or any
4 part thereof.
5 (12) To adopt, promulgate and enforce such administrative
6 rules and regulations not inconsistent with this act, or other
7 acts, as are necessary and proper to carry into effect the
8 provisions of this act.
9 Section 3.1. General Qualifications.--A person shall be
10 permitted to take the examination for the certificate of
11 certified public accountant and the certificate of certified
12 public accountant shall be granted by the board to any person
13 (a) who is a resident of this Commonwealth, is enrolled in a
14 college or university in this Commonwealth, or is engaged in
15 public accounting therein at the time he first sits for the
16 examination, and (b) who has attained the age of eighteen years
17 and (c) who is of good moral character, and (d) who meets the
18 requirements of education and experience as hereinafter provided
19 and (e) who, with respect to granting a certificate shall have
20 passed a written examination in general accounting, theory of
21 accounts, accounting practice, auditing and such other subjects
22 as the board shall determine to be appropriate.
23 Section 4. Education and Experience Requirements.--(a)
24 Before any person is permitted to take the examination or is
25 issued a certificate of certified public accountant, the board
26 shall be satisfied that he has complied with the following
27 requirements:
28 (1) Graduation with a baccalaureate degree from a college or
29 university approved at the time of graduation by Department of
30 Education, pursuant to policies and standards promulgated by the
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1 State Board of Education, or an education which is the
2 equivalent thereof, and completion of at least twelve semester
3 credits in accounting subjects of a content satisfactory to the
4 board, not necessarily as part of his undergraduate work, and at
5 least two years of public accounting experience of a caliber
6 satisfactory to the board, or
7 (2) Graduation with a Master's Degree in Accounting or
8 Business Administration or an equivalent Master's Degree from a
9 college or university approved at the time of graduation by
10 Department of Education, pursuant to policies and standards
11 promulgated by the State Board of Education, and completion of
12 at least twelve semester credits in accounting subjects of a
13 content satisfactory to the board, not necessarily as part of
14 his undergraduate or graduate work, and at least one year of
15 public accounting experience of a caliber satisfactory to the
16 board.
17 (3) Subject to the general qualifications of section 3.1,
18 the board may issue a certificate of certified public accountant
19 to a person who has qualified for permission to take the
20 examination under section 4(a)(1) or (2) provided he has passed
21 the written examination of the board in general accounting,
22 theory of accounts, accounting practice, auditing and such other
23 subjects as the board shall determine to be appropriate.
24 (b) As an alternative to sections 4(a)(1) and (2), a person
25 may be permitted to take the examination without meeting the
26 experience requirements as provided in sections 4(b)(3) and (4)
27 hereof, if the board shall be satisfied that he has complied
28 with one of the following requirements:
29 (1) Graduation with a baccalaureate degree from a college or
30 university approved at the time of graduation by the Department
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1 of Education, or an education which is the equivalent thereof,
2 and completion of at least twenty-four semester credits in
3 accounting subjects of a content satisfactory to the board, not
4 necessarily as a part of his undergraduate work, or
5 (2) Graduation with a Master's Degree or a Doctor's Degree
6 from a college or university approved at the time of graduation
7 by the Department of Education and completion of at least
8 twenty-four semester credits in accounting subjects of a content
9 satisfactory to the board, not necessarily as part of his
10 undergraduate or graduate work.
11 (3) Subject to the general qualifications of section 3.1,
12 the board may issue a certificate of certified public accountant
13 to a person who has qualified for permission to take the
14 examination under section 4(b)(1) provided he has passed the
15 written examination of the board in general accounting, theory
16 of accounts, accounting practice, auditing and such other
17 subjects as the board shall determine to be appropriate and,
18 further provided he has at least two years of public accounting
19 experience of a caliber satisfactory to the board.
20 (4) Subject to the general qualifications of section 3.1,
21 the board may issue a certificate of certified public accountant
22 to a person who has qualified for permission to take the
23 examination under section 4(b)(2) provided he has passed the
24 written examination of the board in general accounting, theory
25 of accounts, accounting practice, auditing and such other
26 subjects as the board shall determine to be appropriate, further
27 provided he has at least one year of public accounting
28 experience of a caliber satisfactory to the board.
29 (c) Notwithstanding the provisions of section 4[(a) and] (b)
30 above, the board may, in its discretion, permit an applicant to
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1 take the examination during the final term, semester or quarter
2 of the school year in which he will graduate, if it is
3 reasonably expected that he will fulfill the educational
4 requirements of section 4(b) and receive the required degree:
5 Provided, however, That he must receive the required degree
6 within ninety days after the date of the examination in order to
7 fulfill the educational requirements set forth in [sections 4(a)
8 and (b)] section 4(b).
9 (d) Subject to such regulations as the board may adopt
10 governing reexaminations, a candidate shall be entitled to
11 retake the examination referred to in sections 4(a)(3), 4(b)(3)
12 and (4).
13 (e) Service in the Armed Forces of the United States
14 subsequent to July 1, 1940, shall be substituted for the
15 experience requirements in sections 4(a)(1) and 4(b)(3) above,
16 on the basis of one month's experience credit for each six
17 months' service: Provided, That the maximum credit for such
18 service shall be six months.
19 (f) A person who has previously taken the examination under
20 the provisions of a prior CPA Law of this Commonwealth shall
21 continue to be permitted to take the examination and receive a
22 certificate subject to such prior provisions.
23 Section 5. Certificates Issued by Reciprocity.--Without
24 requiring a written examination the board may, in its
25 discretion, issue a certificate of certified public accountant
26 to a holder of a certificate of certified public accountant then
27 in full force and effect issued as the result of a written
28 examination by any other state or political subdivision of the
29 United States: Provided, That the applicant shall submit
30 evidence satisfactory to the board that he possesses the general
19760H2381B3485 - 9 -
1 qualifications specified in this act; [and] that he possesses
2 the equivalent of the education and experience requirements for
3 issuance of a certificate of certified public accountant in this
4 Commonwealth in effect at the time he received his original
5 certificate under the laws of such other state or political
6 subdivision of the United States or the education and experience
7 requirements in effect in this Commonwealth at the time of
8 filing his application for a reciprocal certificate; and that he
9 meets the continuing education requirements specified in section
10 8.2(b) of this act.
11 Section 6. Fees.--All fees required under the provisions of
12 this act shall be fixed by the department in accordance with
13 existing law. All fees collected under the provisions of this
14 act shall be received by the department and shall be paid into
15 the State Treasury through the Department of Revenue for the use
16 of the General Fund of the Commonwealth.
17 Section 3. Section 7 of the act, amended September 2, 1961
18 (P.L.1165, No.524), is reenacted to read:
19 Section 7. Status of Existing Certificates Preserved.--Any
20 person legally authorized to practice as a certified public
21 accountant in this Commonwealth at the time this act takes
22 effect shall thereafter possess the same rights and privileges
23 as persons to whom certificates of certified public accountant
24 shall be issued pursuant to this act, subject, however, to the
25 power of the board, as provided in this act, to suspend or
26 revoke the certificate of any such person or censure any such
27 person for any of the causes set forth in this act and subject
28 to the power of the board to provide for and to require permits
29 to practice.
30 Section 4. Sections 8.1 and 8.2 of the act, amended December
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1 30, 1974 (P.L.1122, No.362), are amended to read:
2 Section 8.1. Registration of Foreign Accountants,
3 Partnerships, Professional Corporations, or Professional
4 Associations.--[(a)] The board may, in its discretion, permit
5 the registration of any person of good moral character, who is
6 the holder of a certificate, license or degree in a foreign
7 country, constituting a recognized qualification for the
8 practice of public accounting in such country, provided (i) such
9 country grants a similar right to practice to certified public
10 accountants of this Commonwealth, and (ii) the board determines
11 that the standards under which the applicant received such
12 certificate, license or degree are equivalent to the standards
13 of this act for the issuance of a certificate as a certified
14 public accountant in this Commonwealth. A person so registered
15 shall use only the title under which he is permitted to practice
16 in his own country, followed by the name of the country from
17 which he received his certificate, license or degree.
18 [(b) A professional corporation or a professional
19 association organized in this Commonwealth or any other state or
20 territory of the United States or District of Columbia, and
21 engaged in the practice of public accounting in this
22 Commonwealth as certified public accountants, shall register
23 with the board and file with the board a copy of its Articles of
24 Incorporation, or Articles of Association, and a copy of its
25 bylaws, and such professional corporation, or professional
26 association shall at all times have the following
27 characteristics:
28 (1) Name. The name under which the professional corporation
29 or professional association renders professional services shall
30 contain only the name of the certified public accountant in the
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1 case of a sole practitioner, the names of one or more of the
2 present or former associates or shareholders or of partners who
3 were associated with a predecessor accounting firm. No name of a
4 professional corporation, or professional association shall
5 include the words certified public accountant, public
6 accountant, or any abbreviations thereof. Impersonal or
7 fictitious names, as well as names which indicate a specialty,
8 are prohibited.
9 (2) Purpose. The professional corporation, or professional
10 association shall not provide services that are incompatible
11 with the practice of public accounting.
12 (3) Ownership. All shareholders of the professional
13 corporation or associates of the professional association shall
14 be persons duly qualified to practice as certified public
15 accountants in a state or territory of the United States or the
16 District of Columbia, and engaged in the practice of public
17 accounting. At least one shareholder of a professional
18 corporation must be a certified public accountant of this
19 Commonwealth, and each shareholder thereof personally engaged
20 within this Commonwealth in the practice of public accounting as
21 a shareholder thereof, must be a certified public accountant of
22 this Commonwealth. Each manager in charge of an office of a
23 professional corporation in this Commonwealth must be a
24 certified public accountant of this Commonwealth in good
25 standing and the holder of a live permit issued under section
26 8.2 of this act. At least one associate of a professional
27 association must be a certified public accountant of this
28 Commonwealth and each associate thereof personally engaged
29 within this Commonwealth in the practice of public accounting as
30 an associate thereof, must be a certified public accountant of
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1 this Commonwealth. Each manager in charge of an office of a
2 professional association in this Commonwealth must be a
3 certified public accountant of this Commonwealth in good
4 standing and the holder of a live permit issued under section
5 section 8.2 of this act. Shareholders or associates shall at all
6 times own their shares or interest in their own right and shall
7 be the real and beneficial owners of such equity capital or
8 interest ascribed to them.
9 (4) Retention and Transfer of Shares. In the case of
10 professional corporations, transfer of shares shall be in
11 accordance with the provisions of the act of July 9, 1970
12 (P.L.461, No.160), known as the "Professional Corporation Law."
13 In the case of professional associations, provisions shall be
14 made requiring any associate who ceases to be eligible to be an
15 associate to dispose of all of his interest within a reasonable
16 period to a person qualified to be an associate or to the
17 association. If mutual agreement cannot be reached, and if the
18 method of determining the sale price of the interest of an
19 associate is not expressed in the articles of association, the
20 fair value of such interest shall be determined by the American
21 Arbitration Association.
22 (5) Directors and Officers. The principal executive officer
23 of a professional corporation shall be a shareholder and a
24 director, and to the extent possible, all other directors and
25 officers shall be certified public accountants. The principal
26 executive officer of a professional association shall be an
27 associate and a governor and, to the extent possible, all other
28 governors and officers shall be certified public accountants.
29 Lay directors, governors, and officers shall not exercise any
30 authority whatsoever over professional matters.
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1 (6) Conduct. The right to practice as a professional
2 corporation or professional association shall not change the
3 obligation of its shareholders, directors, officers, associates,
4 or board of governors and other employes to comply with the
5 rules of professional conduct promulgated by the board.
6 (7) Liability. In addition to the liability provisions of
7 the "Professional Corporation Law," the professional corporation
8 shall carry professional liability insurance or maintain
9 unimpaired capital in accordance with regulations promulgated by
10 the board. In addition to the liability provisions of the act of
11 August 7, 1961 (P.L.941, No.416), known as the "Professional
12 Association Act," the professional association shall carry
13 professional liability insurance or maintain unimpaired capital
14 in accordance with regulations promulgated by the board.
15 Liability shall not be limited by the formation of subsidiary or
16 affiliated corporations or associations each with its own
17 limited and unrelated liability.]
18 Section 8.2. Permits to Practice.--(a) Biennial permits to
19 engage in practice in this Commonwealth [as certified public
20 accountants, or to practice as designated in section 8.1 of this
21 act,] shall be issued by the department to (i) holders of the
22 certificate of certified public accountant issued by this
23 Commonwealth, foreign accountants and public accountants
24 registered under sections 8.1 and 8.7 respectively of this act
25 who shall have furnished evidence satisfactory to the board of
26 compliance with the requirements of subsection (b) of this
27 section and (ii) [to persons, professional corporations or
28 professional associations] partnerships and corporations
29 registered under [section 8.1] sections 8.3 to 8.6 of this act.
30 There shall be a biennial permit fee in an amount to be
19760H2381B3485 - 14 -
1 determined, from time to time, by the department not to exceed
2 [ten dollars ($10)] twenty-five dollars ($25). THIRTY DOLLARS <--
3 ($30). Permits to practice shall expire on the last day of
4 August of [1974] 1976 and on the last day of August of alternate
5 years thereafter, or on such other biennial expiration dates as
6 the department may fix. Permits may be renewed, biennially, for
7 a period of two years by such certificate holders and
8 registrants in good standing upon payment of the biennial fee.
9 Failure of a certificate holder or registrant to apply for such
10 permit to practice within (a) three years from the expiration
11 date of the permit to practice last obtained or renewed, or (b)
12 three years from the date upon which the certificate holder or
13 registrant was granted his certificate or registration, if no
14 permit was ever issued, shall deprive the certificate holder or
15 registrant of the right to such permit: Provided, That a
16 certified public accountant or a public accountant registered
17 under this act who is not engaged in the practice of public
18 accounting may request the board, in writing, to place his name
19 on the inactive roll and thus protect his right to obtain a
20 permit at such time as he may become engaged in the practice of
21 public accounting. The board, in its discretion, may also review
22 each case of failure to apply for such biennial permit and
23 determine whether such failure was due to excusable neglect. In
24 such case the renewal fee or the fee for the issuance of the
25 original permit, as the case may be, shall be such amount as the
26 department shall, from time to time, determine.
27 (b) Effective with respect to biennial permits to be issued
28 for the two-year period beginning September 1, 1980 and for each
29 subsequent period, each certified public accountant, public
30 accountant and foreign accountant filing an application for a
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1 permit or a renewal thereof to engage in the practice of public
2 accounting in this Commonwealth must, during the two-year period
3 immediately preceding a biennial date, complete eighty credit
4 hours of continuing education, as defined by and acceptable to
5 the board, which shall include a specified number of hours
6 dealing with accounting, auditing and tax subjects. No carry-
7 over of credits shall be permitted from one biennial permit
8 period to another.
9 (c) Failure by an applicant for renewal of his biennial
10 permit to furnish evidence of completion of eighty credit hours
11 of acceptable continuing education shall constitute grounds for
12 denial or refusal to renew such permit, unless the board, in its
13 discretion, shall determine such failure to have been due to
14 reasonable cause.
15 (d) In issuing rules, regulations and individual orders in
16 respect of requirements of continuing education, the board, in
17 its discretion, may among other things, use and rely upon
18 guidelines and pronouncements of recognized educational and
19 professional organizations; may prescribe for content, duration
20 and organization of courses; shall take into account the
21 accessibility of such continuing education as it may require,
22 and any impediments to interstate practice of public accounting
23 which may result from differences in such requirements in other
24 states; and may provide for relaxation or suspension of such
25 requirements in instances of individual hardship such as for
26 reasons of health, military service or other good cause.
27 Section 5. The act is amended by adding sections to read:
28 Section 8.3. Partnerships Composed Solely of Certified
29 Public Accountants.--A partnership composed solely of certified
30 public accountants engaged in this Commonwealth in the practice
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1 of public accounting shall, within six (6) months after the
2 enactment of this act, register with the board as a partnership
3 of certified public accountants, provided it meets the following
4 requirements:
5 (1) At least one partner thereof must be a certified public
6 accountant of this Commonwealth in good standing and the holder
7 of a live permit issued under section 8.2 of this act, and
8 (2) Each partner thereof personally engaged within this
9 Commonwealth in the practice of public accounting as a member
10 thereof (i) must be a certified public accountant of this
11 Commonwealth in good standing and the holder of a live permit
12 issued under section 8.2 of this act, or (ii) must be a
13 certified public accountant of some state or political
14 subdivision of the United States in good standing and must have
15 filed with the board, but not have been refused by the board, an
16 application for a certificate of certified public accountant of
17 this Commonwealth by reciprocity and after having received such
18 certificate must have filed for, but not been refused, a permit
19 under section 8.2 of this act, and
20 (3) Each partner thereof engaged in the practice of public
21 accounting in the United States must be a certified public
22 accountant of some state or political subdivision of the United
23 States in good standing, and
24 (4) Each manager in charge of an office of a partnership in
25 this Commonwealth must be a certified public accountant of this
26 Commonwealth in good standing and the holder of a live permit
27 issued under section 8.2 of this act.
28 Section 8.4. Corporations Composed Solely of Certified
29 Public Accountants.--A professional corporation or a
30 professional association composed solely of certified public
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1 accountants organized in this Commonwealth or any other state or
2 territory of the United States or District of Columbia, and
3 engaged in the practice of public accounting in this
4 Commonwealth as certified public accountants, shall register
5 with the board and file with the board a copy of its Articles of
6 Incorporation, or Articles of Association, and a copy of its
7 bylaws, and such professional corporation, or professional
8 association shall at all times have the following
9 characteristics:
10 (1) The name under which the professional corporation or
11 professional association renders professional services shall
12 contain only the name of the certified public accountant in the
13 case of a sole practitioner, the names of one or more of the
14 present or former associates or shareholders or of partners who
15 were associated with a predecessor accounting firm. No name of a
16 professional corporation, or professional association shall
17 include the words certified public accountant, public
18 accountant, or any abbreviations thereof. Impersonal or
19 fictitious names, as well as names which indicate a specialty,
20 are prohibited.
21 (2) The professional corporation, or professional
22 association shall not provide services that are incompatible
23 with the practice of public accounting.
24 (3) All shareholders of the professional corporation or
25 associates of the professional association shall be persons duly
26 qualified to practice as certified public accountants in a state
27 or territory of the United States or the District of Columbia,
28 and engaged in the practice of public accounting. At least one
29 shareholder of a professional corporation must be a certified
30 public accountant of this Commonwealth, and each shareholder
19760H2381B3485 - 18 -
1 thereof personally engaged within this Commonwealth in the
2 practice of public accounting as a shareholder thereof, must be
3 a certified public accountant of this Commonwealth. Each manager
4 in charge of an office of a professional corporation in this
5 Commonwealth must be a certified public accountant of this
6 Commonwealth in good standing and the holder of a live permit
7 issued under section 8.2 of this act. At least one associate of
8 a professional association must be a certified public accountant
9 of this Commonwealth and each associate thereof personally
10 engaged within this Commonwealth in the practice of public
11 accounting as an associate thereof, must be a certified public
12 accountant of this Commonwealth. Each manager in charge of an
13 office of a professional association in this Commonwealth must
14 be a certified public accountant of this Commonwealth in good
15 standing and the holder of a live permit issued under section
16 8.2 of this act. Shareholders or associates shall at all times
17 own their shares or interest in their own right and shall be the
18 real and beneficial owners of such equity capital or interest
19 ascribed to them.
20 (4) In the case of professional corporations, transfer of
21 shares shall be in accordance with the provisions of the act of
22 July 9, 1970 (P.L.461, No.160), known as the "Professional
23 Corporation Law." In the case of professional associations,
24 provisions shall be made requiring any associate who ceases to
25 be eligible to be an associate to dispose of all of his interest
26 within a reasonable period to a person qualified to be an
27 associate or to the association. If mutual agreement cannot be
28 reached, and if the method of determining the sale price of the
29 interest of an associate is not expressed in the Articles of
30 Association, the fair value of such interest shall be determined
19760H2381B3485 - 19 -
1 by the American Arbitration Association.
2 (5) The principal executive officer of a professional
3 corporation shall be a shareholder and a director, and to the
4 extent possible, all other directors and officers shall be
5 certified public accountants. The principal executive officer of
6 a professional association shall be an associate and a governor
7 and, to the extent possible, all other governors and officers
8 shall be certified public accountants. Lay directors, governors,
9 and officers shall not exercise any authority whatsoever over
10 professional matters.
11 (6) The right to practice as a professional corporation or
12 professional association shall not change the obligation of its
13 shareholders, directors, officers, associates, or board of
14 governors and other employes to comply with the rules of
15 professional conduct promulgated by the board.
16 (7) In addition to the liability provisions of the
17 "Professional Corporation Law," the professional corporation
18 shall carry professional liability insurance or maintain
19 unimpaired capital in accordance with regulations promulgated by
20 the board. In addition to the liability provisions of the act of
21 August 7, 1961 (P.L.941, No.416), known as the "Professional
22 Association Act," the professional association shall carry
23 professional liability insurance or maintain unimpaired capital
24 in accordance with regulations promulgated by the board.
25 Liability shall not be limited by the formation of subsidiary or
26 affiliated corporations or associations each with its own
27 limited and unrelated liability.
28 Section 8.5. Partnerships, Composed of Certified Public
29 Accountants and Public Accountants or Solely of Public
30 Accountants.--A partnership, composed of certified public
19760H2381B3485 - 20 -
1 accountants and public accountants or solely of public
2 accountants, engaged in this Commonwealth in the practice of
3 public accounting shall, within six (6) months after the
4 enactment of this act, register with the board as a partnership
5 of public accountants provided it meets the following
6 requirements:
7 (1) At least one partner thereof must be a certified public
8 accountant or a public accountant registered under this act, in
9 good standing and the holder of a live permit issued under
10 section 8.2 of this act, and
11 (2) Each partner thereof personally engaged within this
12 Commonwealth in the practice of public accounting as a member
13 thereof (i) must be a certified public accountant or a public
14 accountant registered under this act, in good standing and the
15 holder of a live permit issued under section 8.2 of this act, or
16 (ii) must be a certified public accountant of some state or
17 political subdivision of the United States in good standing and
18 must have filed with the board, but not have been refused by the
19 board, an application for certificate of certified public
20 accountant of this Commonwealth by reciprocity and after having
21 received such certificate, must have filed for, but not have
22 been refused, a permit under section 8.2 of this act, and
23 (3) Each manager in charge of an office of a partnership in
24 this Commonwealth must be a certified public accountant or a
25 public accountant of this Commonwealth in good standing and the
26 holder of a live permit issued under section 8.2 of this act.
27 Section 8.6. Corporations, Composed of Certified Public
28 Accountants and Public Accountants or Solely of Public
29 Accountants.--A professional corporation or a professional
30 association, composed of certified public accountants and public
19760H2381B3485 - 21 -
1 accountants or solely of public accountants, organized under the
2 laws of this Commonwealth and engaged in the practice of public
3 accounting in this Commonwealth as public accountants, shall,
4 within twelve (12) months after the enactment of this act,
5 register with the board and file with the board a copy of its
6 Articles of Incorporation, or Articles of Association, and a
7 copy of its bylaws, and such professional corporation, or
8 professional association shall at all times have the following
9 characteristics:
10 (1) The name under which the professional corporation or
11 professional association render professional services shall
12 contain only the name of the public accountant in the case of a
13 sole practitioner, the names of one or more of the present or
14 former associates or shareholders or of partners who were
15 associated with a predecessor accounting firm. No name of a
16 professional corporation, or professional association shall
17 include the words certified public accountant, public
18 accountant, or any abbreviations thereof. Impersonal or
19 fictitious names, as well as names which indicate a specialty,
20 are prohibited.
21 (2) The professional corporation or professional association
22 shall not provide services that are incompatible with the
23 practice of public accounting.
24 (3) All shareholders of the professional corporation or
25 associates of the professional association shall be persons duly
26 qualified to practice as certified public accountants in a state
27 or territory of the United States or the District of Columbia,
28 or as public accountants registered under this act, and engaged
29 in the practice of public accounting. At least one shareholder
30 of a professional corporation must be a certified public
19760H2381B3485 - 22 -
1 accountant, or a public accountant registered under this act and
2 each shareholder thereof personally engaged within this
3 Commonwealth in the practice of public accounting as a
4 shareholder thereof, must be a certified public accountant, or a
5 public accountant registered under this act. Each manager in
6 charge of an office of a professional corporation in this
7 Commonwealth must be a certified public accountant, or a public
8 accountant registered under this act, in good standing and the
9 holder of a live permit issued under section 8.2 of this act. At
10 least one associate of a professional association must be a
11 certified public accountant, or a public accountant registered
12 under this act and each associate thereof personally engaged
13 within this Commonwealth in the practice of public accounting as
14 an associate thereof, must be a certified public accountant, or
15 a public accountant registered under this act. Each manager in
16 charge of an office of a professional association in this
17 Commonwealth must be a certified public accountant, or a public
18 accountant registered under this act, in good standing and the
19 holder of a live permit issued under section 8.2 of this act.
20 Shareholders or associates shall at all times own their shares
21 of interest in their own right and shall be the real and
22 beneficial owners of such equity capital or interest ascribed to
23 them.
24 (4) In the case of professional corporations, transfer of
25 shares shall be in accordance with the provisions of the act of
26 July 9, 1970 (P.L.461, No.160), known as the "Professional
27 Corporation Law." In the case of professional associations,
28 provisions shall be made requiring any associate who ceases to
29 be eligible to be an associate to dispose of all of his interest
30 within a reasonable period to a person qualified to be an
19760H2381B3485 - 23 -
1 associate or to the association. If mutual agreement cannot be
2 reached, and if the method of determining the sale price of the
3 interest of an associate is not expressed in the Articles of
4 Association, the fair value of such interest shall be determined
5 by the American Arbitration Association.
6 (5) The principal executive officer of a professional
7 corporation shall be a shareholder and a director, and to the
8 extent possible, all other directors and officers shall be
9 certified public accountants, or public accountants registered
10 under this act. The principal executive officer of a
11 professional association shall be an associate and a governor
12 and, to the extent possible, all other governors and officers
13 shall be certified public accountants, or public accountants
14 registered under this act. Lay directors, governors, and
15 officers shall not exercise any authority whatsoever over
16 professional matters.
17 (6) The right to practice as a professional corporation or
18 professional association shall not change the obligation of its
19 shareholders, directors, officers, associates, or board of
20 governors and other employes to comply with the rules of
21 professional conduct promulgated by the board.
22 (7) In addition to the liability provisions of the
23 "Professional Corporation Law," the professional corporation
24 shall carry professional liability insurance or maintain
25 unimpaired capital in accordance with regulations promulgated by
26 the board. In addition to the liability provisions of the act of
27 August 7, 1961 (P.L.941, No.416), known as the "Professional
28 Association Act," the professional association shall carry
29 professional liability insurance or maintain unimpaired capital
30 in accordance with regulations promulgated by the board.
19760H2381B3485 - 24 -
1 Liability shall not be limited by the formation of subsidiary or
2 affiliated corporations or associations each with its own
3 limited and unrelated liability.
4 Section 8.7. Registration of Public Accountants.--Any person
5 (i) who is a resident of this Commonwealth or has a place of
6 business therein, and (ii) who has attained the age of eighteen
7 years, and (iii) who is of good moral character, and (iv) meets
8 the requirements of clause (1) or (2) to the satisfaction of the
9 board as set forth in clause (3) may register with the board as
10 a public accountant within six (6) months of the effective date
11 of this act and not thereafter:
12 (1) Persons who held themselves out to the public as public
13 accountants and who were engaged as principals (as distinguished
14 from employes) within this Commonwealth at the effective date of
15 this act in the practice of public accounting as their principal
16 occupation.
17 (2) Persons serving in the armed forces of the United States
18 of America at the effective date of this act who immediately
19 prior to entering such service held themselves out to the public
20 as public accountants and were engaged as principals (as
21 distinguished from employes) within this Commonwealth in the
22 practice of public accounting as their principal occupation. In
23 the case of any such person, the time for registration shall be
24 extended for a period of six (6) months from the time such
25 person is separated from active duty with such service.
26 (3) In order to meet the requirements of clauses (1) and
27 (2), the applicant must furnish the board with evidence that he,
28 as a principal (as distinguished from an employe), has held
29 himself out to the public as being engaged in the practice of
30 public accounting as his principal occupation and he did perform
19760H2381B3485 - 25 -
1 for others, in consideration of compensation, services which
2 involved the signing or affixing of his name, or any trade or
3 assumed name used by him in his profession, to any opinion or
4 certificate attesting in any way to the reliability of any
5 representation in regard to financial statements or other
6 financial data upon which the public relies together with any
7 wording accompanying such opinion or certificate which indicates
8 that he is an accountant or auditor or that he has expert
9 knowledge in accounting or auditing.
10 (4) The board shall in each case determine whether the
11 applicant qualified for registration. Any individual who is so
12 registered and who holds a permit issued under section 8.2 of
13 this act shall be styled and known as a "public accountant."
14 (5) The department shall charge a fee for registration
15 hereunder.
16 (6) Persons who have registered as provided in this section
17 and whose qualifications as set forth in their registration
18 applications are in compliance with this section may continue to
19 hold themselves out to the public as public accountants and
20 engage as principals in the practice of public accounting within
21 this Commonwealth and shall not be subject to sections 12, 14,
22 15, 16 and 16.2 for a period of one (1) year from the enactment
23 hereof but thereafter shall be subject to the provisions of
24 sections 12, 14, 15, 16 and 16.2.
25 Section 6. Section 9 of the act is reenacted and amended to
26 read:
27 Section 9. Procedure for the Suspension and Revocation of
28 Certificates; Appeals.--The procedure to be followed in the
29 suspension and revocation of certificates, registrations or
30 permits to practice under this act, censure of certificate
19760H2381B3485 - 26 -
1 holders or registrants, and in appeals taken from actions of the
2 board shall be that prescribed by the act, approved the fourth
3 day of June, one thousand nine hundred forty-five (Pamphlet Laws
4 1388), known as the Administrative Agency Law, and its
5 amendments, and any General Rules of Administrative Practice and
6 Procedure promulgated by the board pursuant to said act.
7 Section 7. Sections 9.1 and 9.2 of the act, amended December
8 30, 1974 (P.L.1122, No.362), are reenacted and amended to read:
9 Section 9.1. Revocation or Suspension of Certificate
10 Registration or Permit.--In accordance with the procedure
11 referred to in section 9 of this act, the board, [by unanimous
12 vote] by a two-third's vote of its maximum authorized membership
13 as provided by law, or by a minimum of five affirmative votes,
14 if the membership of the board is less than its authorized
15 membership as provided by law, may revoke or suspend any
16 certificate of certified public accountant or the registration
17 of those registered under [section 8.1] sections 8.1 and 8.7 of
18 this act, or may revoke, suspend or refuse to renew any permit
19 issued under section 8.2(a)(i) of this act, or may censure the
20 holder of any such certificate, registration or permit, for any
21 one or any combination of the following causes:
22 (1) Fraud or deceit in obtaining a certificate as certified
23 public accountant or in obtaining registration under this act or
24 in obtaining a permit to practice under this act.
25 (2) Dishonesty, fraud or gross negligence in the practice of
26 public accounting.
27 (3) Violation of any of the provisions of section 12 of this
28 act.
29 (4) Violation of a rule of professional conduct promulgated
30 by the board under the authority granted by this act.
19760H2381B3485 - 27 -
1 (5) Pleading guilty, entering a plea of nolo contendere, or
2 being found guilty of a felony under the laws of any state or
3 political subdivision of the United States or of the United
4 States.
5 (6) Pleading guilty, entering a plea of nolo contendere, or
6 being found guilty of any crime, an element of which is
7 dishonesty or fraud under the laws of any state or political
8 subdivision of the United States or of the United States.
9 (7) Cancellation, revocation, suspension or refusal to renew
10 authority to practice as a certified public accountant,
11 [professional corporation or professional association] public
12 accountant or foreign accountant by any other state or political
13 subdivision of the United States for any cause other than
14 failure to pay a registration or other fee in such other state
15 or political subdivision.
16 (8) Suspension or revocation of the right to practice before
17 any state or Federal agency.
18 (10) Failure (1) of a certificate holder or registrant to
19 obtain a biennial permit under section 8.2 within either (a)
20 three years from the expiration date of the permit to practice
21 last obtained or renewed by said certificate holder or
22 registrant, or (b) three years from the date upon which the
23 certificate holder or registrant was granted a certificate or
24 registration if no permit was ever issued, unless under section
25 8.2, such failure shall have been excused by the board; or (2)
26 of a certificate holder or registrant to furnish evidence of
27 satisfaction of requirements of continuing education as required
28 by the board under and pursuant to section 8.2 or to meet any
29 conditions in respect of continuing education which the board
30 may have ordered in respect of such certificate holder or
19760H2381B3485 - 28 -
1 registrant under that section.
2 (11) Conduct discreditable to the public accounting
3 profession.
4 Section 9.2. Reinstatement.--Upon application in writing and
5 after hearing pursuant to notice, the board may issue a new
6 certificate to a certified public accountant whose certificate
7 has been revoked, or may permit the re-registration of any
8 person, [professional corporation, or professional association]
9 partnership or corporation whose registration has been revoked,
10 or may reissue or modify the suspension of any permit to
11 practice which has been revoked or suspended.
12 Section 8. The act is amended by adding a section to read:
13 Section 9.3. Revocation or Suspension of Partnership or
14 Corporation Registration or Permit.--In accordance with the
15 procedure referred to in section 9 of this act, the board shall
16 revoke the registration and permit to practice of a partnership
17 or corporation if at any time it does not have all the
18 qualifications prescribed by the section of this act under which
19 it qualified for registration.
20 Section 9. Section 10 of the act is reenacted to read:
21 Section 10. Employes and Assistants.--The department shall
22 assign to the board such agents, clerks, stenographers,
23 assistants and investigators as may be deemed necessary to carry
24 out and enforce the provisions of this act.
25 Section 10. Sections 11, 11.1, 12, 13, 14, 15 and 16 of the
26 act, amended December 30, 1974 (P.L.1122, No.362), are reenacted
27 and amended to read:
28 Section 11. Ownership of Working Papers.--All statements,
29 records, schedules, working papers and memoranda prepared by or
30 for a certified public accountant, [professional corporation, or
19760H2381B3485 - 29 -
1 professional association] public accountant, partnership or
2 corporation incident to or in the course of professional service
3 to clients by such certified public accountant, [professional
4 corporation, or professional association] public accountant,
5 partnership or corporation, except reports submitted to a
6 client, shall be and remain the property of such certified
7 public accountant, [professional corporation, or professional
8 association] public accountant, partnership or corporation in
9 the absence of an express agreement between the parties to the
10 contrary. No such statement, record, schedule, working paper or
11 memorandum shall be sold, [or] transferred, or bequeathed,
12 without the consent of the client or his personal
13 representative, successor or assignee, to anyone other than one
14 or more surviving partners, shareholders or associates of such
15 certified public accountant or such public accountant.
16 Section 11.1. Privileged Communication.--Except by
17 permission of the client or person or [firm or corporation]
18 entity engaging him or the heirs, successors or personal
19 representatives of such client or person or [firm or
20 corporation] entity, a certified public accountant,
21 [professional corporation, or professional association] public
22 accountant, partnership or corporation, holding a permit to
23 practice under this act, or a person employed by a certified
24 public accountant, public accountant, partnership, or a director
25 of or a person employed by a professional corporation holding a
26 permit to practice under this act, or an associate of or a
27 person employed by a professional association holding a permit
28 to practice under this act shall not be required to, and shall
29 not voluntarily, disclose or divulge information of which he may
30 have become possessed relative to and in connection with any
19760H2381B3485 - 30 -
1 professional services as a certified public accountant,
2 [professional corporation, or professional association] public
3 accountant, partnership or corporation. The information derived
4 from or as the result of such professional services shall be
5 deemed confidential and privileged: Provided, however, That
6 nothing herein shall be taken or construed as prohibiting the
7 disclosure of information required to be disclosed by the
8 standards of the profession in reporting on the examination of
9 financial statements, or in making disclosures in a court of law
10 or in disciplinary investigations or proceedings when the
11 professional services of the certified public accountant,
12 [professional corporation, or professional association] public
13 accountant, partnership or corporation are at issue in an
14 action, investigation or proceeding in which the certified
15 public accountant, [professional corporation or professional
16 association] public accountant, partnership or corporation are
17 parties.
18 Section 12. Unlawful Acts.--(a) It is unlawful for any
19 person (1) to assume or use the title or designation "certified
20 public accountant," or the abbreviation "CPA," or any other
21 title, designation, words, letters, abbreviation, sign, card or
22 device, tending to indicate that such person is a certified
23 public accountant unless such person has received, or has been
24 notified in writing by the board that he has qualified to
25 receive a certificate of certified public accountant issued by
26 this Commonwealth, which is not revoked or suspended, or (2) to
27 assume or use such title, designation or abbreviation in the
28 practice of public accounting unless he has received or has been
29 notified in writing that he has qualified to receive a
30 certificate of certified public accountant by this Commonwealth
19760H2381B3485 - 31 -
1 and unless he also holds a permit issued under section 8.2 of
2 this act, which is not revoked or suspended, hereinafter
3 referred to as a "live permit": Provided, That a foreign
4 accountant who has registered under the provisions of section
5 8.1 of this act, and who holds a live permit issued under
6 section 8.2 of this act, may use the title under which he is
7 permitted to practice in his country, followed by the name of
8 the country from which he received his certificate, license or
9 degree.
10 (b) It is unlawful for any person to use the title
11 "certified public accountant," public accountant" or any
12 abbreviation thereof, or the letters "CPA" or "PA" by virtue of
13 any certificate, registration or permit illegally or
14 fraudulently obtained by such person, or issued unlawfully or
15 through any fraudulent representation or deceit, or misstatement
16 of material fact or fraudulent concealment of a material fact
17 made or induced or aided or abetted by such person.
18 (c) It is unlawful for any partnership or corporation to
19 assume or use the title or designation "certified public
20 accountant," or the abbreviation "CPA," or any other title,
21 designation, words, letters, abbreviation, sign, card or device,
22 tending to indicate that such partnership or corporation is
23 composed of certified public accountants, unless such
24 partnership [meets all of the following requirements:
25 (1) At least one partner thereof must be a certified public
26 accountant of this Commonwealth in good standing and the holder
27 of a live permit issued under section 8.2 of this act, and
28 (2) Each partner thereof personally engaged within this
29 Commonwealth in the practice of public accounting as a member
30 thereof (i) must be a certified public accountant of this
19760H2381B3485 - 32 -
1 Commonwealth in good standing and the holder of a live permit
2 issued under section 8.2 of this act, or (ii) must be a
3 certified public accountant of some state or political
4 subdivision of the United States in good standing and must have
5 filed with the board, but not have been refused by the board,
6 application for a certificate of certified public accountant of
7 this Commonwealth by reciprocity, and after having received such
8 certificate, must have filed but not have been refused a permit
9 under section 8.2 of this act;
10 (3) Each partner thereof must be a certified public
11 accountant of some state or political subdivision of the United
12 States in good standing, and
13 (4) Each manager in charge of an office of the firm in this
14 Commonwealth must be a certified public accountant of this
15 Commonwealth in good standing and the holder of a live permit
16 issued under section 8.2 of this act.] or corporation is
17 registered as a partnership or corporation of certified public
18 accountants under sections 8.3 and 8.4 of this act and holds a
19 live permit issued under section 8.2 of this act.
20 (d) It is unlawful for any person, [professional
21 corporation, or professional association] partnership or
22 corporation to sell or offer to sell or fraudulently obtain,
23 furnish or procure any certificate, registration or permit under
24 the provisions of this act or cause or aid or abet another
25 person so to do.
26 (e) It is unlawful for any person or persons to engage in
27 the practice of public accounting in this Commonwealth as a
28 limited partnership providing for limited liability of the
29 members or partners.
30 (f) Except as prescribed in subsections (a) and (c), [and
19760H2381B3485 - 33 -
1 (h),] in respect of certified public accountants, it is unlawful
2 for any person, partnership, [professional corporation, or
3 professional association] or corporation to use a title,
4 including the word "certified" as a part thereof, or any other
5 title or designation likely to be confused with "certified
6 public accountant," or any title or designation implying or
7 connoting accreditation by a state or political subdivision of
8 the United States, for the practice of any type of bookkeeping,
9 accounting, auditing, tax or other professional practice related
10 thereto, or to use any abbreviation of such title or
11 designation.
12 (g) It is unlawful for any person to assume or use the title
13 or designation "certified public accountant" or public
14 accountant" in conjunction with names indicating or implying
15 that there is a partnership or corporation, or in conjunction
16 with the designation "and Company" or "and Co" or a similar
17 designation, if there is, in fact, no bona fide partnership or
18 corporation registered under sections 8.3 through 8.6: Provided,
19 That a sole proprietor or partnership lawfully using such title
20 or designation in conjunction with such names or designation
21 prior to November 1, 1961 may continue to do so if he, or it,
22 otherwise complies with the provisions of this act: And further
23 provided, That any public accountant registered under this act
24 using the title or designation public accountant or the
25 abbreviation "PA" in conjunction with such names or designation
26 prior to the effective date of this act may continue to do so if
27 he otherwise complies with the provisions of this act.
28 (h) [It is unlawful for any professional corporation or
29 professional association to use the title or designation
30 "certified public accountant" or the abbreviation "CPA" or any
19760H2381B3485 - 34 -
1 other title, designation, words, letters, abbreviation, sign,
2 card, or device, tending to indicate that such professional
3 corporation or professional association is composed of certified
4 public accountants, unless such professional corporation or
5 professional association is registered under section 8.1 of this
6 act and holds a live permit issued under section 8.2 of this
7 act; and, each manager in charge of an office of the firm in
8 this Commonwealth is a certified public accountant of this
9 Commonwealth in good standing and the holder of a live permit
10 issued under section 8.2 of this act.] No person shall sign or
11 affix a partnership or corporate name to any opinion or
12 certificate attesting in any way to the reliability of any
13 representation or estimate in regard to any person or
14 organization embracing (1) financial information or (2) facts
15 respecting compliance with conditions established by law or
16 contract, including but not limited to, statutes, ordinances,
17 regulations, grants, loans, and appropriations, together with
18 any wording, accompanying or contained in such opinion or
19 certificate, which indicates that such partnership or
20 corporation is composed of or employs (i) accountants or
21 auditors or (ii) persons having expert knowledge in accounting
22 or auditing, unless the partnership or corporation holds a live
23 permit issued under section 8.2 of this act.
24 (i) It is unlawful for a certified public accountant,
25 [professional corporation, or professional association] public
26 accountant, partnership or corporation, engaged in the practice
27 of public accounting, to use an impersonal fictitious name or a
28 name which indicates a specialty. Firm names may contain the
29 names of one or more of the present or former associates or
30 shareholders or of partners who were associated with a
19760H2381B3485 - 35 -
1 predecessor accounting firm.
2 (j) It is unlawful for any person to assume or use the title
3 or designation "public accountant" or the abbreviation "PA" or
4 any other title, designation, words, letters, abbreviation,
5 sign, card or device, tending to indicate that such person is a
6 public accountant, unless such person is registered as a public
7 accountant under section 8.7 of this act and holds a live permit
8 issued under section 8.2 of this act, or unless such person has
9 received, or has been notified in writing by the board that he
10 has qualified to receive a certificate as certified public
11 accountant issued by this Commonwealth and holds a live permit
12 issued under section 8.2 of this act.
13 (k) It is unlawful for any partnership or corporation to
14 assume or use the title or designation "public accountant" or
15 the abbreviation "PA" or any other title, designation, words,
16 letters, abbreviation, sign, card or device, tending to indicate
17 that such partnership or corporation is composed of public
18 accountants, unless such partnership or corporation is
19 registered as a partnership or corporation of public accountants
20 under section 8.5 or 8.6 of this act, or as a partnership or
21 corporation of certified public accountants under section 8.3 or
22 8.4 of this act and holds a live permit issued under section 8.2
23 of this act; and each manager in charge of an office of the firm
24 in this Commonwealth is a certified public accountant or a
25 public accountant registered under this act, in good standing
26 and the holder of a live permit issued under section 8.2 of this
27 act.
28 (l) It is unlawful for any person, partnership or
29 corporation to assume or use the title or designation "certified
30 accountant," "chartered accountant," "enrolled accountant,"
19760H2381B3485 - 36 -
1 "licensed accountant," "registered accountant," "licensed public
2 accountant," "registered public accountant," or "accredited
3 accountant," or any other title or designation likely to be
4 confused with "certified public accountant" or "public
5 accountant," or any of the abbreviations "CA," "EA," "RA," "LA,"
6 "RPA," "LPA," or "AA," or similar abbreviations likely to be
7 confused with "CPA": Provided, however, That anyone who holds a
8 live permit issued under section 8.2 of this act may hold
9 himself out to the public as an "accountant," "auditor" or
10 "accountant and auditor": Provided, however, That a foreign
11 accountant registered under section 8.1 of this act and who
12 holds a live permit issued under section 8.2 of this act may use
13 the title under which he is permitted to practice in his own
14 country, followed by the name of the country from which he
15 received his certificate, license or degree.
16 (m) It is unlawful for any person to sign or affix his name
17 or any trade or assumed name used by him in his profession or
18 business to any opinion or certificate attesting in any way to
19 the reliability of any representation or estimate in regard to
20 any person or organization embracing (1) financial information
21 or (2) facts respecting compliance with conditions established
22 by law or contract, including, but not limited to statutes,
23 ordinances, regulations, grants, loans, and appropriations,
24 together with any wording accompanying or contained in such
25 opinion or certificate, which indicates (i) that he is an
26 accountant or auditor, or (ii) that he has expert knowledge in
27 accounting or auditing, unless he holds a live permit issued
28 under section 8.2 of this act: Provided, however, That the
29 provisions of this subsection shall not prohibit any officer,
30 employe, partner, or principal of any organization from affixing
19760H2381B3485 - 37 -
1 his signature to any statement or report in reference to the
2 affairs of said organization with any wording designating the
3 position, title, or office which he holds in said organization,
4 nor shall the provisions of this subsection prohibit any act of
5 a public official or public employe in the performance of his
6 duties as such.
7 (n) It is unlawful for any partnership or corporation not
8 holding a live permit under section 8.2 of this act to hold
9 itself out to the public as an "account" or "auditor" by use of
10 either or both of such words or any sign, card, letterhead, or
11 in any advertisement or directory without indicating thereon or
12 therein that such partnership or corporation does not hold such
13 a permit: Provided, however, That this subsection shall not
14 prohibit any officer, employe, partner, or principal of any
15 organization from describing himself by the position, title or
16 office he holds in such organization, nor shall this subsection
17 prohibit any action of a public official or public employe in
18 the performance of his duties as such.
19 (o) It is unlawful for any person, partnership or
20 corporation to indicate by printed or written statement, sign,
21 card or other device that such person, foreign accountant,
22 partnership or corporation holds membership in any society,
23 association or organization of certified public accountants or
24 public accountants, unless such person holds a valid certificate
25 of certified public accountant issued by this Commonwealth or by
26 some state or political subdivision of the United States, is
27 registered as a foreign accountant under section 8.1 or as a
28 public accountant under section 8.7, and in the case of a
29 partnership or corporation, they are registered under sections
30 8.3 through 8.6 of this act.
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1 (p) The provisions of sections 12, 14, 15, 16 and 16.2 as
2 they relate to public accountants permitted to register under
3 section 8.7 and as to partnerships permitted to register under
4 sections 8.3 and 8.5 and as to corporations permitted to
5 register under section 8.4 and 8.6, the said sections shall
6 become effective one (1) year from the enactment hereof.
7 Section 13. Acts Not Unlawful.--(a) Nothing contained in
8 this act shall prohibit any person not a certified public
9 accountant or a public accountant registered under this act from
10 serving as an employe of or an assistant to a certified public
11 accountant, [a professional corporation, or a professional
12 association] a public accountant, a partnership of certified
13 public accountants or public accountants or a corporation,
14 holding a permit to practice issued under section 8.2 of this
15 act, [a partnership of certified public accountants,] or a
16 foreign accountant registered under section 8.1 of this act:
17 Provided, That such employe or assistant shall not issue any
18 accounting or financial statement over his name.
19 (b) Nothing contained in this act shall prohibit a certified
20 public accountant, [professional corporation, or professional
21 association,] or partnership or corporation composed of
22 certified public accountants of another state or political
23 subdivision of the United States, or any accountant who holds a
24 certificate, degree or license in a foreign country constituting
25 a recognized qualification for the practice of public accounting
26 in such country, and who is concurrently engaged in public
27 practice in such state, political subdivision or country from
28 temporarily practicing in this Commonwealth on professional
29 business incident to their regular practice outside this
30 Commonwealth: Provided, That such temporary practice is
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1 conducted in conformity with the regulations and rules of
2 professional conduct promulgated by the board.
3 (c) Persons, partnerships or corporations other than as
4 defined in this act offering and rendering only record keeping
5 services or engaged in the preparation of tax returns are not
6 required to register under this act and may continue to perform
7 such services.
8 Section 14. Injunction Against Unlawful Act.--Whenever [in
9 the unanimous judgment of all the members of the board] in the
10 judgment of two-third's of the maximum authorized membership of
11 the board as provided by law, or in the judgment of a minimum of
12 five members, if the membership of the board is less than its
13 authorized membership as provided by law, any person,
14 [professional corporation, or professional association]
15 partnership or corporation, has engaged or is about to engage in
16 any acts or practices which constitute or will constitute a
17 violation of this act the board or its agents may make
18 application to the appropriate court for an order enjoining such
19 acts or practices and, upon a showing by the board that such
20 person, [professional corporation, or professional association]
21 partnership or corporation has engaged or is about to engage in
22 any such acts or practices, an injunction, restraining order or
23 such other order as may be appropriate shall be granted by such
24 court without bond.
25 Section 15. Single Act Evidence of Practice.--The [wilful]
26 willful or knowing display or uttering by a person,
27 [professional corporation, or professional association]
28 partnership or corporation of a card, sign, advertisement or
29 other printed, engraved or written instrument or device bearing
30 a person's name, or the name of a [professional corporation or
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1 professional association] partnership or corporation in
2 conjunction with the words "certified public accountant" or
3 "public accountant" or any abbreviation thereof or any
4 designation prohibited by this act, shall be prima facie
5 evidence in any prosecution, proceeding or hearing that the
6 person, [professional corporation, or professional association,]
7 partnership or corporation whose name is so displayed, caused or
8 procured the display or uttering of such card, sign,
9 advertisement or other printed, engraved, or written instrument
10 or device and that such person, [professional corporation, or
11 professional association] partnership or corporation is holding
12 himself or itself out to be a certified public accountant or a
13 public accountant. In any prosecution or proceeding under this
14 act, evidence of the commission of a single act prohibited by
15 this act, shall be sufficient to justify an injunction or a
16 conviction without evidence of a general course of conduct.
17 Section 16. Penalties.--(a) Any person, [professional
18 corporation, or professional association] partnership or
19 corporation violating any of the provisions of this act shall be
20 guilty of a misdemeanor and upon conviction thereof shall be
21 sentenced to pay a fine not exceeding [five hundred dollars
22 ($500)] one thousand dollars ($1,000) or suffer imprisonment not
23 exceeding one (1) year, or both.
24 (b) The right of the board to suspend and revoke
25 certificates and permits issued under this act and the right to
26 censure certificate holders or registrants shall be in addition
27 to the penalties set forth in this section.
28 Section 11. Section 16.1 of the act, added September 2, 1961
29 (P.L.1165, No.524), is reenacted to read:
30 Section 16.1. Construction.--If any provision of this act or
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1 the application thereof to anyone or to any circumstances is
2 held invalid, the remainder of the act and the application of
3 such provision to others or other circumstances shall not be
4 affected thereby.
5 Section 12. The act is amended by adding a section to read:
6 Section 16.2. Audits Limited to Certified Public Accountants
7 and Public Accountants Registered Under This Act.--Whenever any
8 statute heretofore or hereafter enacted requires the audit or
9 examination of finances, accounts, financial statements, books
10 and records or reports of (1) any department, division, board,
11 bureau, office, commission or agency of this Commonwealth or (2)
12 of any municipal authority or other authority or political
13 subdivision within this Commonwealth, or (3) of any corporation,
14 joint stock company, nonprofit corporation, association,
15 cooperative or joint stock association or any other business or
16 professional entity or (4) of any eleemosynary institution by a
17 certified public accountant, public accountant, independent
18 accountant or auditor, competent public accountant or other
19 person purporting to have expert knowledge of accounting and
20 auditing, such requirement shall be construed to mean certified
21 public accountant or public accountant registered under this
22 act.
23 Section 13. Section 17 of the act is reenacted to read:
24 Section 17. Repeals.--The act, approved the twenty-ninth day
25 of March, one thousand eight hundred ninety-nine (Pamphlet Laws
26 21), entitled "An act to establish a board for the examination
27 of accountants, to provide for the granting of certificates to
28 accountants, and to provide a punishment for the violation of
29 this act," and its amendments are hereby repealed.
30 All other acts or parts of acts inconsistent herewith are
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1 hereby repealed.
2 Section 14. Except as heretofore provided, this act shall
3 take effect immediately.
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