PRIOR PRINTER'S NO. 2207 PRINTER'S NO. 3538
No. 1782 Session of 1995
INTRODUCED BY FARGO, FAJT, BROWNE, LESCOVITZ, RAYMOND, ITKIN,
WAUGH, BOYES, COY, PITTS, EVANS, GANNON, HERSHEY, SHEEHAN,
BAKER, JADLOWIEC, WILLIAMS, D. W. SNYDER, SEMMEL, PISTELLA,
WALKO, MERRY, NYCE, DEMPSEY, E. Z. TAYLOR, STEIL, PETTIT,
WOGAN, HERMAN, FAIRCHILD, LYNCH, SATHER, HABAY, BELARDI,
TRELLO, S. H. SMITH, MELIO, TIGUE, DeLUCA, MIHALICH, LEH,
GODSHALL, SCHULER, ALLEN, GORDNER, MUNDY, SCRIMENTI, STETLER,
KAISER, BOSCOLA, READSHAW, ROONEY, KING, STERN, NAILOR,
VAN HORNE, BARD, CONTI, HASAY, KENNEY, STISH, BUNT, STEELMAN,
PHILLIPS, COLAFELLA, OLASZ, TULLI, DRUCE, RICHARDSON,
O'BRIEN, MARKOSEK, WOZNIAK, YEWCIC, SURRA, HORSEY, TRAVAGLIO,
BROWN, MARSICO, TRICH, GLADECK, D. R. WRIGHT, HUTCHINSON,
PRESTON AND ROBERTS, JUNE 19, 1995
AS REPORTED FROM COMMITTEE ON PROFESSIONAL LICENSURE, HOUSE OF
REPRESENTATIVES, AS AMENDED, MAY 13, 1996
AN ACT
1 Relating to the practice of public accounting; providing for the <--
2 examination, education and experience requirements for
3 certification of certified public accountants and for the
4 licensing of certified public accountants, public accountants
5 and firms; requiring continuing education and peer review;
6 providing for the organization and ownership of firms;
7 providing the procedures and grounds for discipline and
8 reinstatement of licensees; prescribing the powers and duties
9 of the State Board of Accountancy; providing for ownership of
10 working papers and confidentiality; regulating the
11 professional responsibility of licensees; defining unlawful
12 acts and the penalties therefor; and making a repeal.
13 TABLE OF CONTENTS
14 Section 1. Short title.
15 Section 2. Definitions.
16 Section 3. State Board of Accountancy.
17 Section 4. General powers of board.
1 Section 5. Examination and issuance of certificate.
2 Section 6. Education requirements.
3 Section 7. Experience requirements.
4 Section 8. Certificates issued by domestic reciprocity.
5 Section 9. Certificates issued by foreign reciprocity.
6 Section 10. Fees.
7 Section 11. Status of existing rights preserved.
8 Section 12. Licenses to practice.
9 Section 13. Peer review.
10 Section 14. Licensing of firms.
11 Section 15. Disciplinary procedures; appeals.
12 Section 16. Grounds for discipline.
13 Section 17. Reinstatement.
14 Section 18. Ownership of working papers.
15 Section 19. Privileged communications.
16 Section 20. Unlawful acts.
17 Section 21. Acts not unlawful.
18 Section 22. Injunction against unlawful act.
19 Section 23. Single act evidence of practice.
20 Section 24. Penalties.
21 Section 25. Audits limited to certified public accountants
22 and public accountants.
23 Section 26. Transitional provisions.
24 Section 27. Repeal.
25 Section 28. Effective date.
26 AMENDING THE ACT OF MAY 26, 1947 (P.L.318, NO.140), ENTITLED, AS <--
27 AMENDED, "AN ACT RELATING TO THE PUBLIC PRACTICE OF CERTIFIED
28 PUBLIC ACCOUNTANTS; PROVIDING FOR THE CERTIFICATION OF
29 PERSONS DESIRING TO PRACTICE, THE REGISTRATIONS OF PUBLIC
30 ACCOUNTANTS, REQUIRING CONTINUING EDUCATION FOR REGISTRANTS,
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1 AND FOR THE SUSPENSION AND REVOCATION OF SUCH CERTIFICATES,
2 SUBJECT TO APPEAL AND FOR THEIR REINSTATEMENT; PRESCRIBING
3 THE POWERS AND DUTIES OF THE STATE BOARD OF ACCOUNTANCY AND
4 THE DEPARTMENT OF STATE; PROVIDING FOR OWNERSHIP OF WORKING
5 PAPERS; DEFINING UNLAWFUL ACTS AND ACTS NOT UNLAWFUL;
6 PROVIDING PENALTIES, AND REPEALING EXISTING LAWS," AMENDING
7 THE TITLE; FURTHER PROVIDING FOR THE SHORT TITLE, FOR
8 DEFINITIONS, FOR THE PUBLIC ACCOUNTANTS' ADVISORY COMMITTEE,
9 FOR THE STATE BOARD OF ACCOUNTANCY AND ITS GENERAL POWERS,
10 FOR GENERAL QUALIFICATIONS, FOR EDUCATION AND EXPERIENCE AND
11 FOR RECIPROCITY; PROVIDING FOR FOREIGN RECIPROCITY; FURTHER
12 PROVIDING FOR LICENSURE, FOR PARTNERSHIP AND CORPORATE
13 LICENSURE AND FOR REGISTRATION OF PUBLIC ACCOUNTANTS;
14 PROVIDING FOR LICENSURE OF FIRMS AND FOR PEER REVIEW; FURTHER
15 PROVIDING FOR DISCIPLINE, FOR REINSTATEMENT, FOR REVOCATION
16 AND SUSPENSION, FOR AGENCY, FOR WORK PRODUCT, FOR PRIVILEGE,
17 FOR PENALTIES AND REMEDIES, FOR CONSTRUCTION AND FOR AUDITS;
18 REGULATING THE PROFESSIONAL RESPONSIBILITY OF LICENSEES; AND
19 REENACTING CERTAIN PROVISIONS.
20 The General Assembly of the Commonwealth of Pennsylvania
21 hereby enacts as follows:
22 Section 1. Short title. <--
23 This act shall be known and may be cited as the CPA Law of
24 (in preparing this act for printing in the Laws of Pennsylvania,
25 the Legislative Reference Bureau shall insert here, in lieu of
26 this statement, the calendar year of enactment of this act).
27 Section 2. Definitions.
28 The following words and phrases when used in this act shall
29 have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
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1 "AICPA." The American Institute of Certified Public
2 Accountants.
3 "Attest activity." Any of the activities described in
4 paragraph (1) of the definition of "public accounting."
5 "Board." The State Board of Accountancy.
6 "Business unit." A functional group of individuals in a firm
7 or a sole practitioner performing an attest activity.
8 "Certified public accountant." An individual to whom a
9 certificate of certified public accountant has been issued under
10 this act or prior law.
11 "Commission." Compensation, except a referral fee, for
12 recommending or referring any product or service to be supplied
13 by another person.
14 "Department." The Department of State acting through the
15 Commissioner of Professional and Occupational Affairs.
16 "Equity interest." Any type of ownership interest in a firm,
17 including, without limitation, the right to vote with respect to
18 any issue, whether or not the right to vote is coupled with an
19 interest in the profits or assets of the firm.
20 "Examination." The examination for the certificate of
21 certified public accountant provided for in section 5(b).
22 "Firm." A qualified association that is a licensee.
23 "Holding out" or "hold out." Any representation of the fact
24 that a person, or an individual associated in any way with a
25 person, holds a certificate of certified public accountant, a
26 registration as a public accountant or a license, made in
27 connection with the performance of, or an offer to perform,
28 services for the public. A representation shall be deemed to
29 include any oral or written communication conveying the fact
30 that the person or individual holds a certificate, registration
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1 or license, including, without limitation, the use of titles or
2 legends on letterheads, business cards, office doors,
3 advertisements and listings or the displaying of a certificate,
4 registration or license.
5 "Internal auditor." An individual within a governmental or
6 private entity who performs an audit function that requires the
7 individual to be independent of the activities he audits. The
8 independence required of an internal auditor does not need to
9 meet the standard of independence required of a certified public
10 accountant or public accountant.
11 "Licensee." An individual certified by or registered with
12 the State Board of Accountancy and holding a current license to
13 practice under section 12 or a qualified association holding a
14 current license to practice under section 14. A person on
15 inactive status under section 12(c) or otherwise not holding a
16 current license is not a licensee.
17 "Nonqualified individual." An individual who is not and has
18 never been a certified public accountant or a public accountant.
19 "Peer review." A study, appraisal or review of one or more
20 aspects of the professional work of an individual or firm in the
21 practice of public accounting to determine the degree of
22 compliance by the individual or firm with generally accepted
23 accounting principles and auditing standards and other generally
24 accepted technical standards by persons who hold current
25 licenses to practice public accounting under the laws of this
26 Commonwealth or another jurisdiction and who are not affiliated
27 with the individual or firm being reviewed.
28 "Public accountant." An individual who was qualified and
29 accepted for registration in accordance with section 8.7 of the
30 act of May 26, 1947 (P.L.318, No.140), known as The C.P.A. Law.
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1 "Public accounting." Offering to perform or performing for a
2 client or potential client:
3 (1) An examination, audit, review, compilation or other
4 agreed-upon procedure with respect to financial information
5 together with the issuance of a report expressing or
6 disclaiming an opinion or other assurance on such
7 information, which opinion or assurance, when issued, is
8 based on the performance of services in accordance with
9 generally accepted auditing standards, standards for
10 accounting and review services, standards for prospective
11 financial information, standards for attestation engagements,
12 governmental auditing standards or any other similar
13 standards.
14 (2) Other professional services, including, but not
15 limited to, the use of accounting skills, management advisory
16 or consulting services, business valuations, financial
17 planning, preparation of tax returns or furnishing of advice
18 on tax matters while:
19 (i) holding oneself out as a certified public
20 accountant, public accountant or firm; or
21 (ii) using a firm name that is the same as the name
22 that the firm uses when performing an attest activity.
23 "Qualified association." An association as defined in 15
24 Pa.C.S. § 102 (relating to definitions) that is incorporated or
25 organized under the laws of this Commonwealth or any other
26 jurisdiction if the organic law under which the association is
27 incorporated or organized does not afford the shareholders,
28 partners, members or other owners of equity interests in the
29 association or the officers, employees or agents of the
30 association with greater immunity than is available to the
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1 shareholders, officers, employees or agents of a professional
2 corporation under 15 Pa.C.S. § 2925 (relating to professional
3 relationship retained).
4 "Referral fee." Compensation paid to a licensee for
5 recommending another licensee to, or referring to another
6 licensee, any person for the performance by the other licensee
7 of any service within the definition of public accounting.
8 "Report." An opinion, statement or other form of written
9 communication that states or implies assurance as to the
10 reliability of any financial information or assessments of the
11 status or performance of any person and that also implies or is
12 accompanied by any statement or implication that the person
13 issuing it has special knowledge or competence in accounting or
14 auditing. Such a statement or implication of special knowledge
15 or competence may arise from use by the issuer of the
16 communication of names or titles indicating that the issuer or
17 any individual employed by or affiliated with it is an
18 accountant or auditor or from the language of the communication
19 itself. The term "report" includes any form of language which
20 disclaims an opinion when such form of language is
21 conventionally understood to imply any positive assurance as to
22 the reliability of the financial information referred to and/or
23 special competence on the part of the person issuing such
24 language, and it includes any other form of language that is
25 conventionally understood to imply such assurance and/or such
26 special knowledge or competence.
27 "Unprofessional conduct." For the purposes of the
28 application of section 16 only, "unprofessional conduct" means
29 failure to:
30 (1) undertake only those professional services that a
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1 licensee can reasonably expect to be completed with
2 professional competence;
3 (2) exercise due professional care in the performance of
4 professional services;
5 (3) adequately plan and supervise the performance of
6 professional services; or
7 (4) obtain sufficient data to afford a reasonable basis
8 for conclusions or recommendations in relation to any
9 professional services performed.
10 Section 3. State Board of Accountancy.
11 (a) Membership.--The State Board of Accountancy shall
12 consist of 18 members, one of whom shall be the Commissioner of
13 Professional and Occupational Affairs in the Department of State
14 or his designee, one of whom shall be the Director of the Bureau
15 of Consumer Protection in the office of the Attorney General or
16 his designee, and the remaining 16 of whom shall be appointed by
17 the Governor subject to the consent of the Senate as follows:
18 (1) Eleven members shall be certified public
19 accountants, all of whom are licensees and at least six of
20 whom are actively engaged in the practice of public
21 accounting as their principal occupation at the time of their
22 appointment. Two members shall be appointed from the eastern
23 part of the Commonwealth, two from the western part, two from
24 the central part and five from any part of the Commonwealth.
25 (2) Three members shall be persons who are not
26 affiliated in any manner with the profession, who shall
27 represent the public at large.
28 (3) Two members shall be registered public accountants
29 who are licensees engaged in the practice of public
30 accounting as their principal occupation at the time of their
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1 appointment. The number of public accountant members shall be
2 reduced by one and the number of certified public accountant
3 members increased by one when the number of public
4 accountants who are licensees falls below 500 for the first
5 time by elimination of the public accountant member whose
6 term expires closest to that time. The remaining public
7 accountant member shall be eliminated and the number of
8 certified public accountant members increased by one when the
9 number of public accountants who are licensees falls below
10 100 for the first time.
11 (b) Terms of members.--The terms of the members of the board
12 shall be four years from the respective dates of their
13 appointment, except that a member may continue to serve for a
14 period not to exceed six months beyond the expiration of his
15 term, if a successor has yet to be duly appointed and qualified
16 according to law. A board member shall not serve more than two
17 consecutive full four-year terms and shall not be eligible for
18 reappointment until after four years have elapsed.
19 (c) Organization; action by board.--Ten members of the board
20 shall constitute a quorum. The board shall select from among its
21 number a chairman, vice chairman, secretary and under secretary.
22 The board may act by a majority of the members present and
23 voting at a meeting at which a quorum is present, except that
24 action by the board under section 15(a), 22 or 24(c) may only be
25 taken by:
26 (1) a majority vote of the maximum authorized membership
27 of the board; or
28 (2) if the current membership of the board is less than
29 its full authorized membership, the greater of:
30 (i) a majority vote of the duly qualified and
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1 confirmed membership of the board; or
2 (ii) a minimum number of nine affirmative votes.
3 (d) Compensation.--Each member of the board shall be paid
4 reasonable traveling and other expenses and per diem
5 compensation at the rate of $100 for each day of actual service
6 while on board business.
7 (e) Forfeiture of membership.--A member who fails to attend
8 three consecutive meetings shall forfeit his seat unless the
9 Commissioner of Professional and Occupational Affairs upon
10 written request from the member finds that the member should be
11 excused from a meeting because of illness or the death of an
12 immediate family member.
13 (f) Successor members.--In the event that a member of the
14 board shall die, resign or be removed during his term of office,
15 his successor shall be appointed in the same way and with the
16 same qualifications as set forth in this section and shall hold
17 office for a full four-year term.
18 (g) Restrictions on other activities.--
19 (1) A certified public accountant, representative of the
20 public or a public accountant appointed to the board pursuant
21 to subsection (a)(1), (2) or (3) shall not hold any other
22 public office, compensated or uncompensated, during the term
23 of his membership on the board.
24 (2) No member of the board shall be a teacher or
25 instructor in any coaching school which has as its primary
26 purpose preparation for the examination or a person who has a
27 financial interest in such a coaching school.
28 (h) Support staff.--The department shall assign to the board
29 such agents, clerks, stenographers, assistants and investigators
30 as may be deemed necessary to carry out and enforce the
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1 provisions of this act.
2 Section 4. General powers of board.
3 (a) Authority.--The board shall have the power:
4 (1) To provide for, regulate and approve the issuance of
5 a certificate of certified public accountant to any person:
6 (i) who meets the requirements for the issuance of a
7 certificate in section 5(e); or
8 (ii) who meets the requirements for the issuance of
9 a certificate by reciprocity in section 8 or 9.
10 (2) To contract with a professional testing organization
11 for the preparation and administration of the examination in
12 accordance with section 812.1(a) of the act of April 9, 1929
13 (P.L.177, No.175), known as The Administrative Code of 1929,
14 and to establish prior to the administration of each
15 examination an appropriate minimum passing score in keeping
16 with the purposes of this act.
17 (3) To keep a record showing the names and the places of
18 business of persons to whom a certificate of certified public
19 accountant has been issued under this act or prior laws and
20 of all other persons registered or holding licenses under
21 this act or prior laws. The department shall furnish copies
22 of such record to the public upon request and may establish a
23 reasonable fee for such copies which shall not exceed the
24 cost of reproduction.
25 (4) To revoke, suspend, limit or otherwise restrict the
26 certificate or license of any certified public accountant or
27 the registration or license of any public accountant or the
28 license of any firm under this act, to censure or reprimand
29 the holder of any certificate, registration or license, to
30 require completion of general or a specific number of
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1 continuing professional education courses, to require more
2 frequent peer review or other remedial action, and to impose
3 civil penalties for violation of this act.
4 (5) To collect fees as provided for in this act and to
5 submit annually to the department an estimate of the
6 financial requirements of the board for its administrative,
7 investigative, legal and miscellaneous expenses.
8 (6) To arrange for assistance in the performance of its
9 duties, to administer and enforce the laws of this
10 Commonwealth relating to certification, registration,
11 licensing and practice by certified public accountants,
12 public accountants and firms and to instruct and require its
13 agents to seek an injunction or bring a prosecution for a
14 violation of this act.
15 (7) To keep minutes and records of all of its
16 transactions and proceedings. Copies thereof duly certified
17 by the secretary of the board shall be received as evidence
18 in all courts and elsewhere. The department shall furnish
19 copies of such minutes and records to the public upon request
20 and may establish a reasonable fee for such copies which
21 shall not exceed the cost of reproduction.
22 (8) To become a member of the National Association of
23 State Boards of Accountancy or a similar organization, to pay
24 such dues as that association shall establish and to send
25 members of the board and staff as delegates to the meetings
26 of that association and defray their expenses.
27 (9) To adopt, promulgate and enforce rules and
28 regulations consistent with the provisions of this act
29 establishing requirements of continuing education and peer
30 review to be met by certified public accountants, public
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1 accountants and firms as a condition for renewal of biennial
2 licenses to engage in the practice of public accounting in
3 this Commonwealth. Such rules and regulations shall include,
4 but not be limited to, analysis of continuing education
5 records by a consultant whose analysis shall cover licensee
6 forms and records of continuing education sponsors. The
7 analysis shall be designed to determine compliance with all
8 continuing education regulations of the board, including
9 attendance of licensees, qualifications of sponsors and
10 qualifications of courses for credit and shall have a
11 statistical validity of 95%, plus or minus 3%.
12 (10) To promulgate and amend rules of professional
13 conduct, uniformly applicable to certified public accountants
14 and public accountants, appropriate to establish and maintain
15 a high standard of integrity, objectivity and dignity by
16 certified public accountants, public accountants and firms.
17 (11) To adopt, promulgate and enforce such
18 administrative rules and regulations not inconsistent with
19 this act or other acts as are necessary and proper to carry
20 into effect the provisions of this act.
21 (12) To submit annually to the Consumer Protection and
22 Professional Licensure Committee of the Senate and the
23 Professional Licensure Committee of the House of
24 Representatives a description of the types of complaints
25 received, status of the cases, board action that has been
26 taken and length of time from the initial complaint to final
27 board resolution.
28 (13) To submit annually to the Appropriations Committee
29 of the Senate and the Appropriations Committee of the House
30 of Representatives not later than 15 days after the Governor
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1 has submitted his budget to the General Assembly a copy of
2 the budget request for the upcoming year that the board
3 previously submitted to the department.
4 (14) To engage consultants as may be deemed necessary to
5 carry out and enforce the provisions of this act.
6 (b) Limitations.--The board shall not have the power to:
7 (1) Require a photograph as part of an application for a
8 certificate of certified public accountant.
9 (2) Adopt regulations requiring licensees to maintain a
10 minimum amount of insurance, unimpaired capital or net worth.
11 Section 5. Examination and issuance of certificate.
12 (a) Qualifications.--An individual shall be permitted to
13 take the examination for the certificate of certified public
14 accountant if the individual:
15 (1) Is a resident of this Commonwealth, is enrolled in a
16 college or university in this Commonwealth or is employed in
17 this Commonwealth under the supervision of a licensee at the
18 time the individual first sits for the examination.
19 (2) Has attained the age of 18 years.
20 (3) Is of good moral character.
21 (4) Meets the education requirements provided for in
22 section 6.
23 (b) Conduct and contents of examination.--The examination
24 shall be held at least twice in each calendar year and
25 simultaneously in at least two counties of the Commonwealth and
26 shall be a written examination in business law and professional
27 responsibilities, auditing, accounting and reporting, and
28 financial accounting and reporting. The board shall use all
29 parts of the Uniform Certified Public Accountants' examination
30 and Advisory Grading service of the AICPA to assist in
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1 performing its duties hereunder.
2 (c) Retaking examination.--Subject to such regulations as
3 the board may adopt governing reexaminations, a candidate shall
4 be entitled to retake the examination.
5 (d) Examination under prior law.--An individual who has
6 previously taken an examination for a certificate of certified
7 public accountant under the provisions of a prior law of this
8 Commonwealth shall continue to be permitted to take the
9 examination and receive a certificate subject to such prior
10 provisions.
11 (e) Issuance of certificate.--A certificate of certified
12 public accountant shall be issued by the board upon application
13 by an individual who:
14 (1) has passed the examination;
15 (2) meets the experience requirements provided for in
16 section 7; and
17 (3) has successfully completed an examination or self-
18 study program on professional conduct satisfactory to the
19 board, in the case of an individual applying for the
20 certificate of certified public accountant on or after (in
21 preparing this act for printing in the Laws of Pennsylvania,
22 the Legislative Reference Bureau shall insert here, in lieu
23 of this statement, the date that is one year after the
24 effective date of this act).
25 Section 6. Education requirements.
26 (a) General rule.--Before an individual is permitted to take
27 the examination, the board shall be satisfied that he has
28 complied with the following requirements:
29 (1) Except as provided in subsection (b), an individual
30 not subject to paragraph (2) shall have:
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1 (i) graduated with a baccalaureate degree from a
2 college or university approved at the time of graduation
3 by the Department of Education, or completed an education
4 that is the equivalent thereof and also completed at
5 least 24 semester credits in accounting, auditing,
6 business law, finance and tax subjects of a content
7 satisfactory to the board, not necessarily as a part of
8 his undergraduate work; or
9 (ii) graduated with a master's degree or a doctoral
10 degree from a college or university approved at the time
11 of graduation by the Department of Education and
12 completed at least 24 semester credits in accounting,
13 auditing, business law, finance and tax subjects of a
14 content satisfactory to the board, not necessarily as
15 part of his undergraduate or graduate work.
16 (2) On and after January 1, 2005, an individual applying
17 to sit for the examination for the first time shall be
18 required to have graduated with a baccalaureate degree from a
19 college or university approved at the time of graduation by
20 the Department of Education or have completed an education
21 that is the equivalent thereof. Prior to being granted the
22 certificate of certified public accountant, the individual
23 must also demonstrate that he has completed a total of 150
24 semester credits, including at least 24 semester credits of
25 accounting, auditing, business law, finance and tax subjects
26 of a content satisfactory to the board, and an additional 12
27 semester credits in accounting, auditing and tax subjects of
28 a content satisfactory to the board, not necessarily as part
29 of his undergraduate or graduate work.
30 (b) Transitional provision.--The board shall permit an
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1 applicant taking the examination for the first time before (in
2 preparing this act for printing in the Laws of Pennsylvania, the
3 Legislative Reference Bureau shall insert here, in lieu of this
4 statement, the date that is one year after the effective date of
5 this act), to take the examination during the final term,
6 semester or quarter of the school year in which he will
7 graduate, if it is reasonably expected that he will fulfill the
8 educational requirements of subsection (a)(1) and receive the
9 required degree within 90 days after the date of the
10 examination.
11 Section 7. Experience requirements.
12 (a) General rule.--An individual shall be issued the
13 certificate of certified public accountant under section 5(e)
14 after the individual has complied with the following experience
15 requirements:
16 (1) An individual taking the examination on the basis of
17 having satisfied the education requirements in section
18 6(1)(i) shall have completed at least two years of experience
19 in public accounting or as an internal auditor or as an
20 auditor with a unit of Federal, State or local government.
21 (2) An individual taking the examination on the basis of
22 having satisfied the education required in section 6(1)(ii)
23 or (2) shall be subject to the same experience requirements
24 as in paragraph (1), except that the individual shall need
25 only one year of qualifying experience.
26 (b) Nature of experience.--The experience required under
27 subsection (a)(1) or (2) must:
28 (1) Be of a caliber satisfactory to the board.
29 (2) Have required the use of auditing skills.
30 (3) Have been supervised by a licensee.
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1 (c) Completion of experience.--Individuals taking the
2 examination for the first time after January 1, 1997, must
3 complete the experience required by this section within 120
4 months preceding the date of application for a certificate of
5 certified public accountant under section 5(e). Individuals
6 taking the examination before January 1, 1997, need not attain
7 the experience required by this section within any particular
8 period of time.
9 (d) Minimum audit experience.--The experience required under
10 subsection (a)(1) must include not less than 800 hours of
11 auditing, and the experience required under subsection (a)(2)
12 must include not less than 400 hours of auditing.
13 Section 8. Certificates issued by domestic reciprocity.
14 (a) General rule.--Without requiring the examinations
15 otherwise required under section 5(e), the board may in its
16 discretion issue a certificate of certified public accountant to
17 a holder of a certificate of certified public accountant then in
18 full force and effect issued by another state following passage
19 of a written examination if the applicant shall submit evidence
20 satisfactory to the board that he:
21 (1) possesses the qualifications specified in section
22 5(a), has passed the written examination required to practice
23 as a certified public accountant under the laws of the other
24 state, meets the continuing education requirements specified
25 in section 12 and has the experience required under section 7
26 to receive the certificate in this Commonwealth; or
27 (2) has held a certificate and license to practice
28 public accounting for the immediately preceding five years in
29 another state.
30 (b) Contents of application.--An applicant for a certificate
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1 under this section shall list in the application all states and
2 foreign jurisdictions in which the applicant has applied for or
3 holds a designation or certificate to practice public
4 accounting.
5 (c) Notice of actions in other jurisdictions.--Each holder
6 of a certificate issued under this section shall notify the
7 board in writing within 30 days after its occurrence of any
8 issuance, denial, revocation or suspension of his designation,
9 certificate or license to practice public accounting or the
10 commencement of a disciplinary or enforcement action against him
11 or his firm by any state or foreign jurisdiction.
12 Section 9. Certificates issued by foreign reciprocity.
13 (a) General rule.--Without requiring the examinations
14 otherwise required under section 5(e), the board may in its
15 discretion issue a certificate of certified public accountant to
16 a holder of a foreign designation, granted and then in full
17 force in a foreign country or other jurisdiction that is not a
18 state, entitling the holder thereof to engage in the practice of
19 public accounting if all of the following conditions are
20 satisfied:
21 (1) Pursuant to a duly enacted free trade agreement, the
22 foreign jurisdiction that granted the designation makes
23 similar provision to allow an individual who holds a valid
24 certificate issued by this Commonwealth to obtain such
25 foreign jurisdiction's comparable designation.
26 (2) The foreign designation:
27 (i) Was duly issued by a duly constituted authority
28 within the foreign jurisdiction that regulates the
29 practice of public accounting and the foreign designation
30 has not expired or been revoked or suspended.
19950H1782B3538 - 19 -
1 (ii) Entitles the holder to issue reports.
2 (iii) Was issued upon the basis of educational,
3 examination and experience requirements established by
4 the foreign authority or by law.
5 (3) The applicant:
6 (i) Received the designation based on educational
7 and examination standards substantially equivalent to
8 those in effect in this Commonwealth at the time the
9 foreign designation was granted.
10 (ii) Completed an experience requirement
11 substantially equivalent to the requirements set forth in
12 section 7 in the jurisdiction that granted the foreign
13 designation or has completed five years of experience in
14 the practice of public accounting in this Commonwealth or
15 meets such other requirements as may be prescribed by the
16 board by rule within the ten years immediately preceding
17 the application.
18 (iii) Passed a uniform qualifying examination in
19 national standards and has successfully completed an
20 examination or self-study program on professional conduct
21 acceptable to the board.
22 (b) Contents of application.--An applicant for a certificate
23 under this section shall list in the application all states and
24 foreign jurisdictions in which the applicant has applied for or
25 holds a designation or certificate to practice public
26 accounting.
27 (c) Notice of actions in other jurisdictions.--Each holder
28 of a certificate issued under this section shall notify the
29 board in writing within 30 days after its occurrence of any
30 issuance, denial, revocation or suspension of his designation,
19950H1782B3538 - 20 -
1 certificate or license to practice public accounting or the
2 commencement of a disciplinary or enforcement action against him
3 or his firm by any state or foreign jurisdiction.
4 Section 10. Fees.
5 (a) General rule.--All fees required under the provisions of
6 this act shall be fixed by the board by regulation and shall be
7 subject to review in accordance with the act of June 25, 1982
8 (P.L.633, No.181), known as the Regulatory Review Act. If the
9 revenues generated by fees, fines and civil penalties imposed in
10 accordance with the provisions of this act are not sufficient to
11 match the expenditures of the board over a two-year period, the
12 board shall increase those fees by regulation, subject to review
13 in accordance with the Regulatory Review Act, such that the
14 projected revenues will meet or exceed projected expenditures.
15 (b) Increase.--If the Bureau of Professional and
16 Occupational Affairs determines that the fees established by the
17 board are inadequate to meet the minimum enforcement efforts
18 required, then the bureau after consultation with the board
19 shall increase the fees by regulation, subject to review in
20 accordance with the Regulatory Review Act, such that adequate
21 revenues are raised to meet the required enforcement effort.
22 (c) Exclusive use.--All fees, fines, civil penalties and
23 reimbursements of costs imposed in accordance with this act
24 shall be for the exclusive use of the board in carrying out the
25 provisions of this act and shall be annually appropriated for
26 that purpose.
27 Section 11. Status of existing rights preserved.
28 Any person legally authorized to practice public accounting
29 in this Commonwealth at the time this act takes effect shall
30 thereafter possess the same rights and privileges as persons to
19950H1782B3538 - 21 -
1 whom certificates of certified public accountant shall be issued
2 under this act, subject, however, to the power of the board, as
3 provided in this act, to suspend or revoke the certificate,
4 registration or license of any such person or censure any such
5 person for any of the causes set forth in this act and subject
6 to the power of the board to provide for and to require licenses
7 to practice.
8 Section 12. Licenses to practice.
9 (a) General rule.--Biennial licenses to engage in the
10 practice of public accounting in this Commonwealth shall be
11 issued by the Department of State to:
12 (1) Holders of the certificate of certified public
13 accountant issued by this Commonwealth and public accountants
14 registered in this Commonwealth who shall have furnished
15 evidence satisfactory to the board of compliance with the
16 requirements of subsection (c).
17 (2) Qualified associations licensed under section 14.
18 (b) Expiration of licenses.--Licenses to practice shall
19 expire on April 30 of even-numbered years or on such other
20 biennial expiration dates as the department may fix.
21 (c) Renewal; inactive status.--Licenses may be renewed for a
22 period of two years upon payment of the biennial licensing fee
23 and, in the case of certified public accountants and public
24 accountants, upon completion of the continuing education
25 requirement specified in subsection (d). A certified public
26 accountant or public accountant who is not engaged in the
27 practice of public accounting may request the board, in writing,
28 to place his name on the inactive roll and thus protect his
29 right to obtain a license at such time as he may become engaged
30 in the practice of public accounting. As to reinstatement from
19950H1782B3538 - 22 -
1 inactive status, see section 17(d).
2 (d) Continuing education required.--Each certified public
3 accountant or public accountant filing an application for a
4 license or a renewal thereof to engage in the practice of public
5 accounting in this Commonwealth must, during the reporting
6 period immediately preceding the current biennial period,
7 complete 80 hours of continuing education in programs approved
8 by the board. The reporting period for licensees shall be
9 January 1 of even-numbered years to December 31 of odd-numbered
10 years. No carryover of credits shall be permitted from one
11 biennial license period to another. The continuing education
12 requirement shall not apply to firms but shall apply to all
13 natural persons who apply for a license or a renewal thereof
14 under this section.
15 (e) Failure to complete continuing education.--Failure by a
16 licensed certified public accountant or public accountant
17 applying for renewal of his biennial license to furnish evidence
18 of completion of the required number of hours of acceptable
19 continuing education shall constitute grounds for denial or
20 refusal to renew his license, unless the board in its discretion
21 shall determine such failure to have been due to reasonable
22 cause, in which case the board shall grant an extension.
23 (f) Continuing education regulations.--In issuing rules,
24 regulations and individual orders with respect to requirements
25 of continuing education, the board:
26 (1) may rely upon guidelines and pronouncements of
27 recognized educational and professional organizations;
28 (2) may prescribe the content, duration and organization
29 of courses;
30 (3) shall take into account the accessibility of such
19950H1782B3538 - 23 -
1 continuing education as it may require and any impediments to
2 interstate practice of public accounting that may result from
3 differences in such requirements in other states; and
4 (4) may provide for relaxation or suspension of such
5 requirements in instances of individual hardship such as for
6 reasons of health, military service or other good cause.
7 (g) Reporting of multiple certifications.--A certified
8 public accountant or public accountant who is also certified,
9 registered or licensed to practice public accounting in any
10 other state or foreign jurisdiction shall report this
11 information to the board on the biennial renewal application.
12 Any disciplinary action taken in any other state or foreign
13 jurisdiction shall be reported to the board on the biennial
14 renewal application or within 90 days of disposition, whichever
15 is sooner. Multiple certification, registration or licensure
16 shall be noted by the board on the record of the certified
17 public accountant or public accountant, and the state or foreign
18 jurisdiction shall be notified by the board of any disciplinary
19 action taken against the certified public accountant or public
20 accountant in this Commonwealth.
21 (h) Peer review of sole practitioners.--An initial or
22 renewal license shall not be issued on or after May 1, 1998, to
23 a certified public accountant or public accountant practicing as
24 a sole practitioner unless he complies with the requirements of
25 section 13.
26 Section 13. Peer review.
27 (a) General rule.--As a condition for granting a firm an
28 initial or renewal license on or after May 1, 1998, the board
29 shall require that the firm have undergone a peer review in
30 accordance with this section unless the firm meets one of the
19950H1782B3538 - 24 -
1 exemptions in subsection (f). A firm shall not be required to
2 undergo a peer review more frequently than once every three
3 years, except that the board may order a firm that has been
4 disciplined under section 16 or that has been ordered to take
5 remedial action under subsection (d) to undergo a peer review
6 more frequently. If a firm has undergone a peer review within
7 three years before the date of application for an initial or
8 renewal license, the firm shall submit to the board a copy of
9 the peer review letter of acceptance from that peer review. The
10 board shall not require submittal of the peer review report,
11 letter of comment, letter of response or working papers related
12 to the peer review process. As used in this section, the term
13 "firm" includes, but is not limited to, a sole practitioner.
14 (b) Regulations.--The board shall adopt regulations
15 establishing guidelines for peer reviews which shall:
16 (1) Establish a Peer Review Oversight Committee to serve
17 as consultants to the board and to insure that the board's
18 guidelines are followed. The membership of the Peer Review
19 Oversight Committee shall consist of:
20 (i) Two certified public accountants who are board
21 members and current licensees with extensive current
22 experience in accounting and auditing.
23 (ii) One nonlicensee who shall have significant
24 experience in the preparation or use of financial
25 statements but who need not be a member of the board.
26 (2) Require that the peer review program be administered
27 by an organization approved by the AICPA and that the
28 standards and procedures applied by the reviewer be in
29 accordance with the Standards for Performing and Reporting on
30 Peer Reviews established by the AICPA, but no licensee shall
19950H1782B3538 - 25 -
1 be required to become a member of the AICPA or of any
2 administering organization.
3 (3) Require that a peer review be conducted by a
4 reviewer that is both independent of the firm reviewed and
5 qualified pursuant to board rules. The administering
6 organization shall approve reviewers for those reviews not
7 administered by the AICPA. A peer reviewer for a review not
8 administered by the AICPA must provide evidence of one of the
9 two following minimum qualifications to the administering
10 organization:
11 (i) acceptance as a peer reviewer by the AICPA; or
12 (ii) compliance with the qualifications required by
13 the AICPA to qualify as a peer reviewer.
14 (4) Other than in the peer review process, prohibit the
15 use or public disclosure of information obtained by the
16 reviewer, the administering organization, the board or
17 members of the Peer Review Oversight Committee during or in
18 connection with the peer review process. The requirement that
19 information not be publicly disclosed shall not apply to a
20 hearing before the board that the firm requests be public
21 under subsection (d) or to the information described in
22 subsection (g)(3).
23 (c) Nature of peer review required.--
24 (1) The peer review of a firm that performs one or more
25 audits of historical financial statements or examinations of
26 prospective financial information shall include an onsite
27 study and evaluation of a representative selection of audit,
28 examination, review and compilation reports, the financial
29 information upon which those reports were based and the
30 associated working papers. The onsite review shall include
19950H1782B3538 - 26 -
1 additional procedures relating to the firm's system of
2 quality control sufficient to provide the reviewer with a
3 reasonable basis upon which to issue a peer review report.
4 (2) The peer review of a firm that performs no audit or
5 examination engagements but does perform one or more review
6 engagements or one or more compilation engagements may be
7 limited by regulation to an offsite study and evaluation of
8 review and compilation reports and the financial information
9 upon which those reports were based. The offsite review need
10 not include a study of the associated working papers but
11 shall include procedures and inquiries sufficient to provide
12 the reviewer with a reasonable basis upon which to issue a
13 peer review report.
14 (d) Remedial action.--If a firm does not comply with any
15 remedial actions determined appropriate by the administering
16 organization, the administering organization shall refer the
17 matter to the Peer Review Oversight Committee to determine if
18 further action under this subsection is warranted. If the Peer
19 Review Oversight Committee notifies the board that a firm has
20 not complied with any remedial actions, the board may at its
21 discretion or shall upon submission of a written application by
22 the firm hold a hearing to determine whether the firm complies
23 with the appropriate professional standards and practices. The
24 hearing shall be confidential and shall not be open to the
25 public unless requested by the firm. If the board after
26 conducting a hearing determines that the firm complies with the
27 appropriate professional standards and practices, it shall issue
28 an order requiring the reviewer, the administering organization
29 and the Peer Review Oversight Committee to take any necessary
30 action to record and implement the board's determination and to
19950H1782B3538 - 27 -
1 restore the status of compliance of the firm. However, if the
2 board after conducting the hearing determines that the firm does
3 not comply with the appropriate professional standards and
4 practices, it may issue an order that requires both of the
5 following:
6 (1) Remedial action, which may include any or all of the
7 following:
8 (i) Requiring employees of the firm to complete
9 general or specific continuing professional education
10 courses.
11 (ii) Requiring the firm to undergo a peer review
12 more frequently than every three years.
13 (iii) Any other remedial action specified by the
14 board.
15 (2) An affidavit from the firm submitted within the time
16 specified by the board indicating completion of the required
17 remedial actions.
18 (e) Payment of costs.--The firm reviewed shall pay for any
19 peer review performed, including without limitation any
20 administrative costs of the administering organization.
21 (f) Exemptions.--The board may exempt a firm from the
22 requirement to undergo a peer review if the firm submits to the
23 board a written and notarized statement that the firm meets at
24 least one of the following grounds for exemption identified in
25 the statement:
26 (1) Within three years before the date of application
27 for initial or renewal licensure, the firm has undergone a
28 peer review conducted in another state or foreign country
29 which meets the requirements of subsection (b)(2) and (3).
30 The firm shall submit to the board a copy of the peer review
19950H1782B3538 - 28 -
1 letter of acceptance.
2 (2) The firm satisfies all of the following conditions:
3 (i) The firm does not engage in any attest activity.
4 (ii) Within the next two years, the firm does not
5 intend to engage in any attest activity.
6 (iii) The firm agrees to notify the board within 90
7 days of engaging in any attest activity and will undergo
8 a peer review within 18 months of commencing such
9 activities.
10 (3) Subject to the board's approval, for reasons of
11 personal health, military service or other good cause, the
12 firm is entitled to an exemption for a period of time not to
13 exceed 12 months.
14 (g) Privileged information.--In any civil action,
15 arbitration or administrative proceeding involving a licensee or
16 to which a licensee is reasonably anticipated to be made a
17 party, all of the following shall apply:
18 (1) The proceedings, records and working papers of any
19 reviewer, administering organization, board member or Peer
20 Review Oversight Committee member involved in the peer review
21 process are privileged and not subject to discovery, subpoena
22 or other means of legal process and may not be introduced
23 into evidence.
24 (2) No reviewer, administering organization, board
25 member or Peer Review Oversight Committee member shall be
26 permitted or required to testify as to any matters produced,
27 presented, disclosed or discussed during or in connection
28 with the peer review process or be required to testify to any
29 finding, recommendation, evaluation, opinion or other actions
30 of any person in connection with the peer review process.
19950H1782B3538 - 29 -
1 (3) No privilege exists under this section for either of
2 the following:
3 (i) Information presented or considered in the peer
4 review process that was otherwise available to the
5 public.
6 (ii) Materials not prepared in connection with a
7 peer review merely because they subsequently are
8 presented or considered as part of the peer review
9 process.
10 (h) Handling of workpapers.--If a peer review report
11 indicates that a firm complies with the appropriate professional
12 standards and practices set forth in the regulations of the
13 board, the administering organization shall destroy all working
14 papers and documents, other than report-related documents,
15 related to the peer review within 90 days after issuance to the
16 firm of the letter of acceptance by the administering
17 organization. If a peer review letter of acceptance indicates
18 that corrective action by a firm is required, the administering
19 organization may retain documents and reports related to the
20 peer review until completion of the next peer review or other
21 agreed-to corrective actions.
22 (i) Peer review year of successor practices.--In the event
23 the practices of two or more firms are merged or otherwise
24 combined, the surviving firm shall retain the peer review year
25 of the largest firm, as determined by the number of accounting
26 and auditing hours of each of the practices. In the event that
27 the practice of a firm is divided or a portion of its practice
28 is sold or otherwise transferred, any firm acquiring some or all
29 of the practice that does not already have its own review year
30 shall retain the review year of the former firm. In the event
19950H1782B3538 - 30 -
1 that the first peer review year of a firm otherwise established
2 by this subsection would be less than 12 months, a review year
3 shall be assigned by the administering organization so that the
4 review occurs after 12 months of operation, but not later than
5 18 months.
6 (j) Immunity.--
7 (1) None of the following persons shall be held to have
8 violated any criminal law or to be civilly liable by reason
9 of the performance by him or it of any duty, function or
10 activity under this section so long as the person has not
11 engaged in recklessness or willful misconduct:
12 (i) reviewers;
13 (ii) the administering organization or any of its
14 members, employees or agents or any person furnishing
15 professional counsel or services to the administering
16 organization;
17 (iii) board members; or
18 (iv) members of the Peer Review Oversight Committee.
19 (2) Subsection (g) shall not apply to the defense of a
20 claim alleging conduct not protected under paragraph (1).
21 Section 14. Licensing of firms.
22 (a) General rule.--An association shall not practice public
23 accounting in this Commonwealth unless it is a qualified
24 association, has been granted a license to practice and
25 satisfies the requirements of this section at all times while it
26 is a licensee. A new firm shall apply for its initial license
27 within 90 days after its formation; thereafter, the firm's
28 license shall be subject to renewal in accordance with section
29 12(c).
30 (b) Applications.--The initial and all renewal license
19950H1782B3538 - 31 -
1 applications by a firm shall:
2 (1) List the name, home address and license number of
3 each certified public accountant or public accountant who
4 owns an equity interest directly or indirectly in the firm
5 and who is a licensee.
6 (2) List the name and home address of each nonqualified
7 individual who owns an equity interest in the firm.
8 (3) Include a statement that the firm is in compliance
9 with subsections (d) and (e).
10 (c) Peer review.--An initial or renewal license shall not be
11 issued to a firm on or after May 1, 1998, unless the firm
12 complies with the requirements of section 13.
13 (d) Organizational requirements.--A firm shall satisfy all
14 of the following requirements:
15 (1) At least one general partner if the firm is a
16 partnership, one record and beneficial owner of common shares
17 if the firm is a corporation, or one owner of a similar
18 equity interest if the firm is any other form of qualified
19 association, shall be a certified public accountant or public
20 accountant who is a licensee.
21 (2) Except as provided in subsections (e) and (f), each
22 shareholder, partner, member or other owner of an equity
23 interest in the firm must be the holder of a current license
24 to practice public accounting as a certified public
25 accountant or public accountant under the laws of this
26 Commonwealth or another jurisdiction. This paragraph shall
27 not:
28 (i) apply in the case of a person who withdraws from
29 a firm for such period as may be reasonable under the
30 circumstances to permit the firm to comply with this
19950H1782B3538 - 32 -
1 requirement; or
2 (ii) prohibit payments by a firm to a former equity
3 owner or his estate in connection with his withdrawal
4 from the firm.
5 (3) Each individual in charge of an office that performs
6 any attest activity or business unit of the firm in this
7 Commonwealth shall be a certified public accountant or public
8 accountant who is a licensee.
9 (4) The principal executive officer of the firm shall be
10 a certified public accountant or public accountant who holds
11 a current license to practice public accounting in this
12 Commonwealth or another state.
13 (5) An individual who does not hold a current license to
14 practice public accounting as a certified public accountant
15 or public accountant in this Commonwealth or another
16 jurisdiction shall not assume ultimate responsibility for any
17 attest activity.
18 (e) Nonqualified owners.--Notwithstanding any other
19 provision of law, a nonqualified individual may own an equity
20 interest in a firm if all of the following conditions are met:
21 (1) All of the nonqualified individuals owning equity
22 interests in the firm shall not:
23 (i) own in the aggregate equity interests in the
24 firm entitling them to cast more than one-third of the
25 votes on any issue or to receive more than one-third of
26 any dividend or other distribution of profits or assets
27 of the firm; or
28 (ii) constitute more than one-third in number of the
29 owners of equity interests in the firm.
30 (2) The nonqualified individual shall not hold himself
19950H1782B3538 - 33 -
1 out as a certified public accountant or public accountant.
2 (3) The nonqualified individual shall be permitted to
3 designate or refer to himself as a principal, owner, officer,
4 member or shareholder of the firm. The nonqualified
5 individual may also use such other titles as may be
6 authorized by the regulations of the board.
7 (4) The nonqualified individual shall not:
8 (i) have pleaded guilty, entered a plea of nolo
9 contendere or been found guilty or been convicted of a
10 felony under the laws of this Commonwealth or any other
11 jurisdiction; or
12 (ii) be in violation of any regulation of the board
13 regarding the character or conduct of a nonqualified
14 individual who is the owner of an equity interest in a
15 firm.
16 (5) The participation of the nonqualified individual in
17 the business of the firm must be the principal occupation of
18 the individual and shall be in the nature of providing
19 services to clients of the firm and not solely as an investor
20 or in another commercial or passive capacity.
21 (6) On and after January 1, 2005, the nonqualified
22 individual shall satisfy the educational requirements for
23 eligibility to take the examination set forth in section
24 6(2), except that the nonqualified individual shall not be
25 required to have taken courses in the subjects specified in
26 section 6.
27 (7) The nonqualified individual shall comply with all
28 applicable provisions of this act and the regulations of the
29 board.
30 (f) Indirect ownership.--An equity interest in a firm may be
19950H1782B3538 - 34 -
1 owned indirectly but only if all of the ultimate, indirect
2 beneficial owners of the equity interest are licensees.
3 (g) Effect of noncompliance.--In accordance with the
4 procedure referred to in section 16, the board shall revoke the
5 license to practice of a firm if at any time it is in violation
6 of any of the provisions of this section.
7 Section 15. Disciplinary procedures; appeals.
8 (a) General rule.--Except as provided in section 3(c), the
9 procedure to be followed in the imposition of discipline under
10 section 16 and in appeals taken from disciplinary actions of the
11 board shall be that prescribed by 2 Pa.C.S. (relating to
12 administrative law and procedure) and any applicable rules of
13 the board.
14 (b) Payment of costs.--A person who is disciplined by the
15 board under section 16 shall reimburse the board for the actual
16 costs incurred by the board in the proceeding resulting in the
17 imposition of the discipline.
18 (c) Surrender of suspended or revoked certificate.--The
19 board shall require an individual whose certification has been
20 suspended or revoked to return his certificate or to certify in
21 such manner as the board directs that it was lost, stolen or
22 destroyed. Failure to comply with the board's directions shall
23 be a misdemeanor of the third degree.
24 Section 16. Grounds for discipline.
25 (a) General rule.--In accordance with the procedure provided
26 in section 15, the board may revoke, suspend, limit or otherwise
27 restrict the certificate of a certified public accountant or the
28 registration of a public accountant, may revoke, suspend, limit
29 or otherwise restrict any license issued under this act, may
30 censure or reprimand the holder of any certificate, registration
19950H1782B3538 - 35 -
1 or license, may require completion of general or a specific
2 number of continuing professional education courses or may
3 require more frequent peer review or other remedial action for
4 any one or any combination of the following causes:
5 (1) Fraud or deceit in obtaining a certificate of
6 certified public accountant or in obtaining registration
7 under this act or in obtaining a license to practice under
8 this act.
9 (2) Dishonesty, fraud or gross negligence in the
10 practice of public accounting.
11 (3) Violation of any of the provisions of section 20.
12 (4) Violation of a rule of professional conduct
13 promulgated by the board under the authority granted by this
14 act.
15 (5) Pleading guilty to, entering a plea of nolo
16 contendere to or being found guilty of a felony under any
17 Federal or State law.
18 (6) Pleading guilty to, entering a plea of nolo
19 contendere to or being found guilty of any crime, an element
20 of which is dishonesty or fraud under any Federal or State
21 law.
22 (7) Pleading guilty to, entering a plea of nolo
23 contendere to or being found guilty of violating any Federal
24 or State revenue law.
25 (8) Cancellation, revocation, suspension or refusal to
26 renew his authority to practice as a certified public
27 accountant or public accountant by any other state or other
28 jurisdiction for any cause other than failure to pay a
29 registration or other fee in such other state or
30 jurisdiction.
19950H1782B3538 - 36 -
1 (9) Suspension or revocation of the right to practice
2 before any Federal or State governmental agency.
3 (10) Failure of a certified public accountant or public
4 accountant to furnish evidence of completion of the
5 requirements for continuing education under section 12 or to
6 meet any conditions with respect to continuing education that
7 the board may have ordered in respect to such certified
8 public accountant or public accountant under that section.
9 (11) Failure of a firm or sole proprietorship to satisfy
10 the peer review requirements in section 13.
11 (12) Failure of a firm to satisfy any of the
12 organizational requirements in section 14(d).
13 (13) Conduct that brings the profession of public
14 accounting into disrepute or that lowers public esteem for
15 the profession.
16 (14) Violation of an order of the board.
17 (15) Engaging in a pattern of unprofessional conduct.
18 Discipline may be imposed under this paragraph whether or not
19 actual injury or loss to a client is established.
20 (b) Inactive persons.--The fact that a certified public
21 accountant or public accountant is on inactive status under
22 section 12(c) or that a person does not hold a current license
23 for any reason shall not limit or otherwise affect the power of
24 the board to discipline him or it as provided in subsection (a).
25 Section 17. Reinstatement.
26 (a) Reinstatement following suspension for five years or
27 less.--Except as provided in subsection (b), upon application in
28 writing and after hearing pursuant to notice, the board may
29 reinstate or modify the suspension of any license to practice
30 that has been suspended. Reinstatement shall not be granted
19950H1782B3538 - 37 -
1 under this subsection:
2 (1) To an individual unless he demonstrates that he has
3 completed the biennial continuing education requirements that
4 he would have been required to complete during the
5 immediately preceding two full biennial periods if his
6 license had not been suspended.
7 (2) Unless the person seeking reinstatement pays the
8 current biennial licensing fee plus a reinstatement fee not
9 in excess of $100 fixed by the board.
10 (b) Reinstatement following suspension for more than five
11 years.--An individual whose license has been suspended for more
12 than five years shall not be eligible to apply for reinstatement
13 of the license, but instead must take the examination and apply
14 for a certificate of certified public accountant in accordance
15 with section 5.
16 (c) Reinstatement following revocation prohibited.--Unless
17 ordered to do so by a court, the board shall not reinstate the
18 certificate of a person to practice as a certified public
19 accountant or the registration of a person to practice as a
20 public accountant that has been revoked. A person whose
21 certification or registration has been revoked may take the
22 examination and apply for a certificate of certified public
23 accountant in accordance with section 5 not less than five years
24 after his certificate or registration was revoked if he desires
25 to resume the practice of public accounting.
26 (d) Reinstatement following lapse.--A person whose license
27 to practice has expired for failure to make biennial
28 registration or who has been on the inactive roll under section
29 12(c) may have the license reinstated upon compliance with the
30 following:
19950H1782B3538 - 38 -
1 (1) In the case of an individual, presentation to the
2 board of satisfactory evidence of having completed the
3 biennial educational requirements that he would have been
4 required to complete during the immediately preceding two
5 full biennial periods if the license had not expired.
6 (2) Payment of the current biennial licensing fee plus a
7 reinstatement fee not in excess of $100 fixed by the board.
8 (e) Reimbursement of costs.--A person whose certificate,
9 registration or license has been suspended or revoked shall not
10 be entitled to reinstatement of the certificate, registration or
11 license or to apply for a certificate under section 5 until the
12 person has reimbursed the board for any costs of prosecution
13 under section 15(b).
14 Section 18. Ownership of working papers.
15 (a) General rule.--All statements, records, schedules,
16 working papers and memoranda prepared by a licensee or a
17 partner, shareholder, member or other owner of an equity
18 interest in a firm, or an officer, director, employee or agent
19 of a licensee incident to or in the course of rendering services
20 to a client pursuant to the practice of public accounting,
21 except reports submitted to a client and statements, records,
22 schedules, working papers and memoranda provided by a client to
23 a licensee or a partner, shareholder, member or other owner of
24 an equity interest in a firm, or an officer, director, employee
25 or agent of a licensee shall be and remain the property of the
26 licensee in the absence of an express agreement between the
27 licensee and the client to the contrary. No such statement,
28 record, schedule, working paper or memorandum shall be sold,
29 transferred or bequeathed without the consent of the client or
30 his personal representative, successor or assignee to anyone
19950H1782B3538 - 39 -
1 other than one or more surviving or new partners, members,
2 shareholders or other owners of an equity interest of the
3 licensee or any combined or merged firm or successor in interest
4 to the licensee. Nothing in this section shall be construed as
5 prohibiting any temporary transfer of working papers or other
6 material in the course of complying with the peer review
7 provisions of this act or as otherwise interfering with the
8 disclosure of information pursuant to section 13.
9 (b) Right of client to certain documents.--In addition to
10 any statements, records, schedules, working papers, memoranda or
11 reports required to be furnished or returned to the client in
12 accordance with subsection (a), a licensee shall furnish to his
13 or its client or former client upon request made within a
14 reasonable time after original issuance of the document in
15 question:
16 (1) A copy of a tax return of the client.
17 (2) A copy of any report or other document issued by the
18 licensee to or for such client and not formally withdrawn or
19 disavowed by the licensee prior to the request.
20 (3) A copy of the licensee's working papers to the
21 extent that such working papers include records that would
22 ordinarily constitute part of the client's records and are
23 not otherwise available to the client. However, a licensee
24 may require that fees due the licensee with respect to
25 completed engagements be paid before such information is
26 provided.
27 (4) Any accounting or other records belonging to or
28 obtained from or on behalf of the client that the licensee
29 removed from the client's premises or received for the
30 client's account. The licensee may make and retain copies of
19950H1782B3538 - 40 -
1 such documents of the client whenever those documents form
2 the basis for work done by him.
3 (5) If a licensee can document compliance with the
4 foregoing requirements, he need not comply with subsequent
5 requests to again provide such information.
6 Section 19. Privileged communications.
7 (a) General rule.--Except by permission of the client
8 engaging him or the heirs, successors or personal
9 representatives of a client, a licensee or a person employed by
10 a licensee shall not be required to and shall not voluntarily
11 disclose or divulge information of which he may have become
12 possessed unless the sharing of confidential information is
13 within the peer review process. This provision on
14 confidentiality shall prevent the board from receiving reports
15 relative to and in connection with any professional services as
16 a certified public accountant, public accountant or firm. The
17 information derived from or as the result of such professional
18 services shall be deemed confidential and privileged. Nothing in
19 this section shall be taken or construed as prohibiting the
20 disclosure of information required to be disclosed by the
21 standards of the profession in reporting on the examination of
22 financial statements or in making disclosures in a court of law
23 or in disciplinary investigations or proceedings when the
24 professional services of the certified public accountant, public
25 accountant or firm are at issue in an action, investigation or
26 proceeding in which the certified public accountant, public
27 accountant or firm is a party.
28 (b) Cross reference.--See section 13(g).
29 Section 20. Unlawful acts.
30 (a) Use of titles.--It is unlawful for any person:
19950H1782B3538 - 41 -
1 (1) To hold himself out as or otherwise use the title or
2 designation "certified public accountant" or the abbreviation
3 "CPA" or any other title, designation, words, letters or
4 abbreviation tending to indicate that the person is a
5 certified public accountant or engaged in the practice of
6 public accounting unless the person has received or has been
7 notified in writing by the board that he has qualified to
8 receive a certificate of certified public accountant issued
9 by this Commonwealth, which is not revoked or suspended.
10 (2) To hold himself out as or otherwise use the title
11 "certified public accountant," "public accountant" or any
12 abbreviation thereof or the letters "CPA" or "PA" by virtue
13 of any certificate, registration or license illegally or
14 fraudulently obtained by the person or issued unlawfully or
15 through any fraudulent representation or deceit or
16 misstatement of material fact or fraudulent concealment of a
17 material fact made or induced or aided or abetted by the
18 person.
19 (3) If organized in the form of a partnership,
20 corporation or other association, to hold itself out as or
21 otherwise use the title or designation "certified public
22 accountant" or "public accountant" or the abbreviation "CPA"
23 or "PA" or any other title, designation, words, letters or
24 abbreviation tending to indicate that the corporation,
25 partnership or other association is composed of or includes
26 certified public accountants or public accountants unless the
27 partnership, corporation or other association holds a current
28 license under section 14.
29 (4) Except as prescribed in paragraphs (1) and (3), to
30 use a title, including the word "certified" as a part
19950H1782B3538 - 42 -
1 thereof, or any other title or designation likely to be
2 confused with "certified public accountant" or any title or
3 designation implying or connoting accreditation by any
4 jurisdiction for the practice of any type of bookkeeping,
5 accounting, auditing, tax or other professional practice
6 related thereto or to use any abbreviations of such title or
7 designation.
8 (5) To hold himself out as or otherwise use the title or
9 designation "public accountant" or the abbreviation "PA" or
10 any other title, designation, words, letters or abbreviation
11 tending to indicate that the person is a public accountant
12 unless the person is registered as a public accountant and is
13 a current licensee or unless the person has received or has
14 been notified in writing by the board that he has qualified
15 to receive a certificate as certified public accountant
16 issued by the Commonwealth.
17 (6) To hold himself out as or otherwise use the title or
18 designation "certified accountant," "chartered accountant,"
19 "enrolled accountant," "licensed accountant," "registered
20 accountant," "licensed public accountant," "registered public
21 accountant" or "accredited accountant" or any other title or
22 designation likely to be confused with "certified public
23 accountant" or "public accountant" or any of the
24 abbreviations "CA," "EA," "RA," "LA," "LPA" or "AA" or
25 similar abbreviations likely to be confused with "CPA,"
26 except that a person who is a licensee may hold himself out
27 to the public as an "accountant," "auditor" or "accountant
28 and auditor." "Enrolled agent" or "EA" may only be used by
29 individuals so designated by the Internal Revenue Service.
30 (b) Certificate, registration or license.--It is unlawful
19950H1782B3538 - 43 -
1 for any person to sell or offer to sell or fraudulently obtain,
2 furnish or procure any certificate, registration or license
3 under the provisions of this act or cause or aid or abet another
4 person to do so.
5 (c) Reports issued by firms.--It is unlawful for any person
6 that is not a licensee to sign, affix a firm name to or
7 otherwise issue any:
8 (1) report; or
9 (2) opinion, certificate or other communication
10 respecting compliance with conditions established by law or
11 contract, including, but not limited to, statutes,
12 ordinances, regulations, grants, loans and appropriations,
13 together with any wording, accompanying or contained in such
14 opinion or certificate, that indicates that the person is
15 composed of or employs:
16 (i) accountants or auditors; or
17 (ii) persons having expert knowledge in accounting
18 or auditing.
19 (d) Firm names.--It is unlawful for a licensee to use a
20 professional or firm name that the licensee is prohibited from
21 using by other applicable provision of law, or that is
22 misleading as to the persons who are partners, officers,
23 members, directors, employees or shareholders of the firm or as
24 to any other matter, except that the names of one or more former
25 partners, shareholders or members may be included in the name of
26 a firm or its successor.
27 (e) Reports issued by individuals.--It is unlawful for any
28 individual who is not a licensee to sign or affix his name or
29 any trade or assumed name used by him in his profession or
30 business to or otherwise issue any:
19950H1782B3538 - 44 -
1 (1) report; or
2 (2) opinion, certificate or other communication
3 respecting compliance with conditions established by law or
4 contract, including, but not limited to, statutes,
5 ordinances, regulations, grants, loans and appropriations,
6 together with any wording accompanying or contained in such
7 report or other communication, that indicates that:
8 (i) he is an accountant or auditor; or
9 (ii) he has expert knowledge in accounting or
10 auditing.
11 The provisions of this subsection shall not prohibit any
12 officer, employee, partner or principal of any organization from
13 affixing his signature to any report or other communication in
14 reference to the affairs of that organization with any wording
15 designating the position, title or office that he holds in the
16 organization, nor shall the provisions of this subsection
17 prohibit any act of a public official or public employee in the
18 performance of his duties as such.
19 (f) Professional memberships.--It is unlawful for any person
20 to hold himself or itself out as a member in any society,
21 association or organization of certified public accountants or
22 public accountants unless the person holds a valid certificate
23 of certified public accountant issued by this Commonwealth or by
24 another state or is registered as a public accountant in this
25 Commonwealth, or in the case of a firm, is licensed under
26 section 14.
27 (g) Holding out as auditor.--It is unlawful for any person
28 not a licensee to hold himself or itself out as an "auditor" or
29 as an "accountant and auditor." This subsection shall not
30 prohibit any officer, employee, partner or principal of any
19950H1782B3538 - 45 -
1 organization from describing himself by the position, title or
2 office he holds in the organization, nor shall this subsection
3 prohibit any action of a public official or public employee in
4 the performance of his duties as such.
5 (h) Commissions.--It is unlawful for a licensee to pay a
6 commission to obtain a client or to accept a commission for
7 referring products or services of others to a client of his
8 accounting practice. This subsection does not prohibit:
9 (1) Payments for the purchase of all or part of an
10 accounting practice.
11 (2) Retirement or similar payments to persons formerly
12 engaged in the practice of public accounting.
13 (3) Payments to the heirs or estates of persons formerly
14 engaged in the practice of public accounting.
15 (4) Referral fees as defined in section 2.
16 (i) Practice of public accounting.--It is unlawful for any
17 person not a licensee to engage in the practice of public
18 accounting in this Commonwealth.
19 Section 21. Acts not unlawful.
20 (a) Staff.--Nothing contained in this act shall prohibit any
21 person not a certified public accountant or a public accountant
22 from serving as an employee of or an assistant to a certified
23 public accountant, a public accountant or firm, but an employee
24 or assistant shall not issue any report or accounting or
25 financial statement over his name.
26 (b) Temporary practice.--Nothing contained in this act shall
27 prohibit a certified public accountant, or association composed
28 of certified public accountants, of another state concurrently
29 engaged in public practice in such state from temporarily
30 practicing in this Commonwealth on professional business, if
19950H1782B3538 - 46 -
1 such practice is conducted in conformity with the regulations
2 and rules governing temporary practice promulgated by the board.
3 (c) Actions while not holding out.--Nothing contained in
4 this act shall prohibit a person while not holding himself out
5 as a certified public accountant, public accountant or licensee
6 from offering and rendering bookkeeping and similar technical
7 services or other services involving the use of accounting
8 skills, including the preparation of tax returns and the
9 preparation of financial information without issuing a report or
10 other communication that expresses an opinion or assurance on
11 the statements. Such a person may use the title or designation
12 "accountant" or "accountants."
13 Section 22. Injunction against unlawful act.
14 Whenever in the judgment of the board any person has engaged
15 in or is about to engage in any acts or practices that
16 constitute or will constitute a violation of this act, the board
17 or its agents may make application to the appropriate court for
18 an order enjoining such acts or practices, and, upon a showing
19 by the board that the person has engaged or is about to engage
20 in any such acts or practices, an injunction, restraining order
21 or such other order as may be appropriate shall be granted by
22 such court without bond. See section 3(c).
23 Section 23. Single act evidence of practice.
24 The willful or knowing display or uttering by a person of a
25 card, sign, advertisement or other printed, engraved or written
26 instrument or device bearing a person's name in conjunction with
27 the words "certified public accountant" or "public accountant,"
28 or any abbreviation thereof or any designation prohibited by
29 this act, shall be prima facie evidence in any prosecution,
30 proceeding or hearing that the person whose name is so
19950H1782B3538 - 47 -
1 displayed, caused or procured the display or uttering of such
2 card, sign, advertisement or other printed, engraved or written
3 instrument or device and that the person is holding himself or
4 itself out to be a certified public accountant or a public
5 accountant. In any prosecution or proceeding under this act,
6 evidence of the commission of a single act prohibited by this
7 act shall be sufficient to justify an injunction or a conviction
8 without evidence of a general course of conduct.
9 Section 24. Penalties.
10 (a) Misdemeanor.--A person who violates any of the
11 provisions of section 20 commits a misdemeanor of the third
12 degree and shall, upon conviction, be sentenced to pay a fine of
13 not more than $2,500 or to imprisonment for not more than one
14 year, or both. See also section 15(c).
15 (b) Discipline in addition to penalties.--The disciplinary
16 powers of the board under sections 15 and 16 shall be in
17 addition to the penalties set forth in this section.
18 (c) Civil penalties.--In addition to any other civil remedy,
19 criminal penalty or discipline provided for in this act, the
20 board may levy a civil penalty of up to $1,000 on any person who
21 violates any provision of this act or on any person who
22 practices public accounting without being properly licensed to
23 do so under this act. The board shall levy this penalty only
24 after affording the accused party the opportunity for a hearing,
25 as provided in 2 Pa.C.S. (relating to administrative law and
26 procedure). Each day's continuance in the violation of any
27 provision of this act or in the practice of public accounting
28 without being properly licensed to do so under this act shall be
29 a separate and distinct offense, subject to a civil penalty of
30 not more than $1,000 for each violation for each day that the
19950H1782B3538 - 48 -
1 violation persists, except that the maximum civil penalty shall
2 not be more than $200,000 for any related series of violations.
3 See section 3(c).
4 Section 25. Audits limited to certified public accountants and
5 public accountants.
6 Whenever any statute or any rule, regulation or order of a
7 department, board, agency or commission heretofore or hereafter
8 enacted or adopted requires the audit or examination of
9 finances, accounts, financial statements, books and records or
10 reports of any:
11 (1) department, division, board, bureau, office,
12 commission or agency of this Commonwealth;
13 (2) municipal authority or other authority or political
14 subdivision within this Commonwealth;
15 (3) corporation, joint-stock company, nonprofit
16 corporation, association, cooperative or joint-stock
17 association or any other business or professional entity; or
18 (4) eleemosynary institution;
19 by a certified public accountant, public accountant, independent
20 accountant or auditor, competent public accountant or other
21 person purporting to have expert knowledge of accounting and
22 auditing, that requirement shall be construed to mean a
23 licensee. Nothing in this section shall be construed to affect
24 the eligibility of any person to serve as an elected auditor in
25 a political subdivision.
26 Section 26. Transitional provisions.
27 (a) Prior board.--Any reference in any statute of this
28 Commonwealth containing the words "State Board of Examiners of
29 Public Accountants" shall instead refer to the State Board of
30 Accountancy as provided in this act.
19950H1782B3538 - 49 -
1 (b) Prior rules and regulations.--Unless inconsistent with
2 this act, all rules and regulations promulgated by the State
3 Board of Accountancy prior to the effective date of this act
4 shall remain in full force and effect until amended or repealed
5 by the State Board of Accountancy.
6 Section 27. Repeal.
7 The act of May 26, 1947 (P.L.318, No.140), known as The
8 C.P.A. Law, is repealed.
9 Section 28. Effective date.
10 This act shall take effect in 60 days.
19950H1782B3538 - 50 -
1 SOURCE NOTES
2 Section 1: Derived from act of May 26, 1947 (P.L.318,
3 No.140) § 1 (63 P.S. § 9.1).
4 Section 2: Derived from act of May 26, 1947 (P.L.318,
5 No.140) § 2 (63 P.S. § 9.2). The definition of "business unit"
6 is patterned after a resolution of the Council of the AICPA
7 adopted May 1994 interpreting Rule 505 of the AICPA Code of
8 Professional Conduct. The definition of "holding out" (or "hold
9 out") is patterned after Rule 3-5 of the Uniform Accountancy Act
10 Rules (2d Ed., Rev). The definition of "internal auditor" is
11 patterned after the Standards for the Professional Practice of
12 Internal Auditing of the Institute of Internal Auditors. The
13 definition of "licensee" has been substituted for the definition
14 in the prior law of "current licensee" with no change in
15 substance. The definition of "peer review" is patterned after
16 Uniform Accountancy Act (2d Ed., Rev.) § 3(j) and Ohio Revised
17 Code § 4701.04(C). The definition of "peer review" is intended
18 to be applied broadly and is not limited to peer reviews
19 performed only under the requirements of this act; thus, a peer
20 review administered pursuant to the requirements of the AICPA,
21 whether before or after the effective date of this act, as well
22 as one performed pursuant to the law of another state will be
23 subject to the provisions of section 13(g) of this act regarding
24 privileged information. The definition of "person" in the prior
25 law has been omitted as supplied by 1 Pa.C.S. § 1991. The
26 definition of "report" is patterned after Uniform Accountancy
27 Act (2d Ed., Rev.) § 3(k). The definition of "unprofessional
28 conduct" is patterned after Rule 201 of the AICPA Code of
29 Professional Conduct and has been introduced for purposes of
30 defining the types of conduct for which the board may discipline
31 a licensee, but is not intended to affect other issues such as
32 when a licensee may be held liable to clients or other persons.
33 Section 3: Derived from act of March 7, 1984 (P.L.106,
34 No.23) § 3 (63 P.S. § 9.2c).
35 Section 4: Derived from act of May 26, 1947 (P.L.318,
36 No.140) § 3 (63 P.S. § 9.3). Subsection (b)(1) is limited to an
37 application for a certificate of certified public accountant to
38 make clear that the board may require photographs for other
39 purposes, e.g., to enforce security in the administration of the
40 examination. Subsection (b)(2) abrogates 49 Pa. Code § 11.41.
41 Section 5: Subsections (a) and (e) are derived from act of
42 May 26, 1947 (P.L.318, No.140) § 3.1 (63 P.S. § 9.3a).
43 Subsection (b) is derived from act of May 26, 1947 (P.L.318,
44 No.140) § 3(3) (63 P.S. § 9.3(3)). Subsections (c) and (d) are
45 derived from act of May 26, 1947 (P.L.318, No.140) § 4(d) and
46 (f) (63 P.S. § 9.4(d) and (f)).
47 Section 6: Subsection (a) derived from act of May 26, 1947
48 (P.L.318, No.140) § 4(b)(1) and (2) (63 P.S. § 9.4(b)(1) and
49 (2). Subsection (b) derived from act of May 26, 1947 (P.L. 318,
50 No.140) § 4(c) (63 P.S. § 9.4(c)).
51 Section 7: Subsections (a), (b) and (c) are derived from act
52 of May 26, 1947 (P.L.318, No.140) § 4(b)(3) and (4) and (e) (63
53 P.S. § 9.4(b)(3) and (4) and (e)). The last sentence of
54 subsection (d) abrogates 49 Pa. Code § 11.54. The provision of
55 section 4(b)(3) of the prior law that employment with the
56 Department of Auditor General satisfies the experience
57 requirement of this section has been omitted as redundant, with
58 no change in substance. Subsection (e) abrogates 49 Pa. Code §
59 11.55.
19950H1782B3538 - 51 -
1 Section 8: Subsection (a) is derived from act of May 26,
2 1947 (P.L.318, No.140) § 5 (63 P.S. § 9.5). Subsections (b) and
3 (c) are patterned after Uniform Accountancy Act (2d Ed., Rev.) §
4 6(h). The term "state" is defined in 1 Pa.C.S. § 1991 to include
5 "the District of Columbia and the several territories of the
6 United States." The term "foreign jurisdiction" in not defined
7 in the act, but is intended to be applied broadly to include any
8 jurisdiction other than a state and thus includes, for example,
9 a foreign county or a province of a foreign country.
10 Section 9: Subsection (a) is patterned after Uniform
11 Accountancy Act (2d Ed., Rev.) § 6(g). See also act of May 26,
12 1947 (P.L.318, No.140) § 8.1 added by act of September 2, 1961
13 (P.L.1155, No.518) § 6 (former 63 P.S. § 9.8a) repealed by act
14 of March 7, 1984 (P.L.106, No.23) § 9. With regard to the use of
15 the term "foreign jurisdiction" in this section, see Source Note
16 to Section 8. Subsections (b) and (c) are patterned after
17 Uniform Accountancy Act (2d Ed., Rev.) § 6(h).
18 Section 10: Subsections (a) and (b) are derived from act of
19 May 26, 1947 (P.L.318, No.140) § 6 (63 P.S. § 9.6). Subsection
20 (c) is patterned after act of December 20, 1985 (P.L.457,
21 No.112) § 6(c) (63 P.S. § 422.6(c)).
22 Section 11: Derived from act of May 26, 1947 (P.L.318,
23 No.140) § 7 (63 P.S. § 9.7).
24 Section 12: Derived from act of May 26, 1947 (P.L.318,
25 No.140) § 8.2 (63 P.S. § 9.8b).
26 Section 13: Subsections (a) through (h) are patterned after
27 Ohio Revised Code § 4701.04(C)-(I). Subsection (i) is patterned
28 after act of July 20, 1974 (P.L.564, No.193) § 3(b)(63 P.S. §
29 425.3(b)), known as the Peer Review Protection Act.
30 Section 14: Subsections (a)-(d) and (g) are a generalization
31 of act of May 26, 1947 (P.L.318, No.140) §§ 8.3, 8.4, 8.5 and
32 8.6 (63 P.S. §§ 9.8c, 9.8d, 9.8e and 9.8f). Subsection (e) is
33 patterned after a resolution of the Council of the AICPA adopted
34 May 1994 interpreting Rule 505 of the AICPA Code of Professional
35 Conduct.
36 Section 15: Subsection (a) is derived from act of May 26,
37 1947 (P.L.318, No.140) § 9 (63 P.S. § 9.9). Subsection (b) is
38 patterned in general after Rule 208(g) of the Pennsylvania Rules
39 of Disciplinary Enforcement. Subsection (c) is patterned after
40 act of December 20, 1985 (P.L.457, No.112) § 44 (63 P.S. §
41 422.44), known as the Medical Practice Act of 1985.
42 Section 16: Derived from act of May 26, 1947 (P.L.318,
43 No.140) § 9.1 (63 P.S. § 9.9a).
44 Section 17: Subsections (a) and (c) are derived from act of
45 May 26, 1947 (P.L.318, No.140) § 9.2 (63 P.S. § 9.9b).
46 Section 18: Derived from act of May 26, 1947 (P.L.318,
47 No.140) § 11 (63 P.S. § 9.11). The term "client" is not defined
48 in the act, but is intended to have the same meaning as under
49 applicable professional standards; the last sentence of
50 subsection (b)(3) is patterned after Interpretation 501-1 of
51 Rule 501 of the AICPA Rules of Professional Conduct.
52 Section 19: Derived from act of May 26, 1947 (P.L.318,
53 No.140) § 11.1 (63 P.S. § 9.11a).
54 Section 20: Derived from act of May 26, 1947 (P.L.318,
55 No.140) § 12 (63 P.S. § 9.12). The effect of the first clause of
56 subsection (d) is to make a violation of a provision of law such
57 as 15 Pa.C.S. §§ 1303, 8505 or 8905 or 54 Pa.C.S. § 311 by a
58 licensee also a violation of this act.
59 Section 21: Derived from act of May 26, 1947 (P.L.318,
19950H1782B3538 - 52 -
1 No.140) § 13 (63 P.S. § 9.13).
2 Section 22: Derived from act of May 26, 1947 (P.L.318,
3 No.140) § 14 (63 P.S. § 9.14).
4 Section 23: Derived from act of May 26, 1947 (P.L.318,
5 No.140) § 15 (63 P.S. § 9.15).
6 Section 24: Derived from act of May 26, 1947 (P.L.318,
7 No.140) § 16(a)-(c) (63 P.S. § 9.16(a)-(c)).
8 Section 25: Derived from act of May 26, 1947 (P.L.318,
9 No.140) § 16.2 (63 P.S. § 9.16b).
10 Section 26: Derived from act of March 7, 1984 (P.L.106,
11 No.23) §§ 16 and 18 (63 P.S. § 9.2c note and § 9.3 note).
12 Section 27: New.
13 Section 28: New.
14 SECTION 1. THE TITLE OF THE ACT OF MAY 26, 1947 (P.L.318, <--
15 NO.140), KNOWN AS THE C.P.A. LAW, REENACTED AND AMENDED DECEMBER
16 8, 1976 (P.L.1280, NO.286) AND AMENDED MARCH 7, 1984 (P.L.106,
17 NO.23), IS AMENDED TO READ:
18 AN ACT
19 RELATING TO THE [PUBLIC] PRACTICE OF [CERTIFIED PUBLIC
20 ACCOUNTANTS] PUBLIC ACCOUNTING; PROVIDING FOR THE
21 [CERTIFICATION OF PERSONS DESIRING TO PRACTICE, THE
22 REGISTRATIONS OF PUBLIC ACCOUNTANTS, REQUIRING CONTINUING
23 EDUCATION FOR REGISTRANTS, AND FOR THE SUSPENSION AND
24 REVOCATION OF SUCH CERTIFICATES, SUBJECT TO APPEAL AND FOR
25 THEIR REINSTATEMENT;] EXAMINATION, EDUCATION AND EXPERIENCE
26 REQUIREMENTS FOR CERTIFICATION OF CERTIFIED PUBLIC
27 ACCOUNTANTS AND FOR THE LICENSING OF CERTIFIED PUBLIC
28 ACCOUNTANTS, PUBLIC ACCOUNTANTS AND FIRMS; REQUIRING
29 CONTINUING EDUCATION AND PEER REVIEW; PROVIDING FOR THE
30 ORGANIZATION AND OWNERSHIP OF FIRMS AND FOR THE PROCEDURES
31 AND GROUNDS FOR DISCIPLINE AND REINSTATEMENT OF LICENSEES;
32 PRESCRIBING THE POWERS AND DUTIES OF THE STATE BOARD OF
33 ACCOUNTANCY AND THE DEPARTMENT OF STATE; PROVIDING FOR
34 OWNERSHIP OF WORKING PAPERS AND CONFIDENTIALITY; REGULATING
35 THE PROFESSIONAL RESPONSIBILITY OF LICENSEES; DEFINING
36 UNLAWFUL ACTS AND ACTS NOT UNLAWFUL; PROVIDING PENALTIES[,];
19950H1782B3538 - 53 -
1 AND REPEALING EXISTING LAWS.
2 SECTION 2. SECTION 1 OF THE ACT IS AMENDED TO READ:
3 SECTION 1. SHORT TITLE.--THIS ACT SHALL BE KNOWN AND MAY BE
4 CITED AS ["THE C.P.A. LAW."] THE "CPA LAW."
5 SECTION 3. SECTIONS 2, 2.2, 2.3, 3, 3.1 AND 4 OF THE ACT,
6 AMENDED OR ADDED MARCH 7, 1984 (P.L.106, NO.23), ARE AMENDED TO
7 READ:
8 SECTION 2. DEFINITIONS.--THE FOLLOWING WORDS AND PHRASES
9 WHEN USED IN THIS ACT SHALL HAVE THE MEANINGS ASCRIBED TO THEM
10 IN THIS SECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
11 ["BIENNIAL PERIOD" THE TWO-YEAR PERIOD BEGINNING MAY 1, 1986
12 AND ENDING APRIL 30, 1988 AND EACH SUBSEQUENT TWO-YEAR PERIOD.]
13 "ATTEST ACTIVITY." AN EXAMINATION, AUDIT, REVIEW,
14 COMPILATION OR OTHER AGREED-UPON PROCEDURE WITH RESPECT TO
15 FINANCIAL INFORMATION, TOGETHER WITH THE ISSUANCE OF A REPORT
16 EXPRESSING OR DISCLAIMING AN OPINION OR OTHER ASSURANCE ON THE
17 INFORMATION.
18 "BOARD." THE STATE BOARD OF ACCOUNTANCY.
19 "BUSINESS UNIT." A FUNCTIONAL GROUP OF INDIVIDUALS IN A FIRM
20 OR A SOLE PRACTITIONER PERFORMING ATTEST ACTIVITY.
21 "CERTIFIED PUBLIC ACCOUNTANT." [PERSONS] AN INDIVIDUAL TO
22 WHOM A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT HAS BEEN
23 ISSUED UNDER ["THE C.P.A. LAW" AND PARTNERSHIPS, PROFESSIONAL
24 CORPORATIONS OR PROFESSIONAL ASSOCIATIONS, COMPOSED OF CERTIFIED
25 PUBLIC ACCOUNTANTS, WHICH IF ENGAGED IN THE PRACTICE OF PUBLIC
26 ACCOUNTING, ARE REGISTERED AND ARE CURRENT LICENSEES AS HEREIN
27 PROVIDED.] THE LAWS OF THIS COMMONWEALTH OR ANOTHER STATE.
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
19950H1782B3538 - 54 -
1 ACT OF AUGUST 7, 1961 (P.L.941, NO.416), KNOWN AS THE
2 "PROFESSIONAL ASSOCIATION ACT," AND ANY AMENDMENTS THEREOF.
3 "CURRENT LICENSEE" THE HOLDER OF A CERTIFICATE TO PRACTICE
4 AS A CERTIFIED PUBLIC ACCOUNTANT UNDER THIS ACT OR A
5 REGISTRATION TO PRACTICE AS A PUBLIC ACCOUNTANT UNDER THIS ACT,
6 WHICH CERTIFICATE OR REGISTRATION HAS NOT BEEN SUSPENDED OR
7 REVOKED AND HAS NOT EXPIRED, AND A CURRENT LICENSE ISSUED UNDER
8 SECTION 8.2, 8.3, 8.4, 8.5 OR 8.6.]
9 "COMMISSION." COMPENSATION FOR RECOMMENDING OR REFERRING A
10 PRODUCT OR SERVICE TO BE SUPPLIED BY ANOTHER PERSON. THE TERM
11 DOES NOT INCLUDE A REFERRAL FEE.
12 "DEPARTMENT." THE DEPARTMENT OF STATE ACTING THROUGH THE
13 COMMISSIONER OF PROFESSIONAL AND OCCUPATIONAL AFFAIRS.
14 ["OPINIONS ON FINANCIAL STATEMENTS" ANY REPORT, OPINION OR
15 ASSURANCE BASED UPON EXAMINATIONS IN ACCORDANCE WITH GENERALLY
16 ACCEPTED AUDITING STANDARDS OR STANDARDS FOR ACCOUNTING AND
17 REVIEW SERVICES AS TO WHETHER THE PRESENTATION OF INFORMATION
18 USED FOR GUIDANCE IN FINANCIAL TRANSACTIONS OR FOR ACCOUNTING
19 FOR OR ASSESSING THE STATUS OR PERFORMANCE OF COMMERCIAL AND
20 NONCOMMERCIAL ENTERPRISES, WHETHER PUBLIC, PRIVATE OR
21 GOVERNMENTAL, IS IN CONFORMITY WITH GENERALLY ACCEPTED
22 ACCOUNTING PRINCIPLES OR OTHER COMPREHENSIVE BASIS OF
23 ACCOUNTING.
24 "PERSON" INCLUDES A CORPORATION, PARTNERSHIP AND
25 ASSOCIATION, AS WELL AS A NATURAL PERSON.]
26 "EQUITY INTEREST." ANY TYPE OF OWNERSHIP INTEREST IN A FIRM.
27 THE TERM INCLUDES THE RIGHT TO VOTE WITH RESPECT TO ANY ISSUE,
28 WHETHER OR NOT THE RIGHT TO VOTE IS COUPLED WITH AN INTEREST IN
29 THE PROFITS OR ASSETS OF THE FIRM.
30 "EXAMINATION." THE EXAMINATION FOR THE CERTIFICATE OF
19950H1782B3538 - 55 -
1 CERTIFIED PUBLIC ACCOUNTANT PROVIDED FOR IN SECTION 3.1(B) OF
2 THIS ACT.
3 "FIRM." A QUALIFIED ASSOCIATION THAT IS A LICENSEE.
4 "HOLDING OUT" OR "HOLD OUT." ANY REPRESENTATION OF THE FACT
5 THAT A PERSON, OR AN INDIVIDUAL ASSOCIATED IN ANY WAY WITH A
6 PERSON, HOLDS A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT, A
7 REGISTRATION AS A PUBLIC ACCOUNTANT OR A LICENSE, MADE IN
8 CONNECTION WITH THE PERFORMANCE OF, OR AN OFFER TO PERFORM,
9 SERVICES FOR THE PUBLIC. A REPRESENTATION SHALL BE DEEMED TO
10 INCLUDE ANY ORAL OR WRITTEN COMMUNICATION CONVEYING THE FACT
11 THAT THE PERSON OR INDIVIDUAL HOLDS A CERTIFICATE, REGISTRATION
12 OR LICENSE, INCLUDING, WITHOUT LIMITATION, THE USE OF TITLES OR
13 LEGENDS ON LETTERHEADS, BUSINESS CARDS, OFFICE DOORS,
14 ADVERTISEMENTS AND LISTINGS OR THE DISPLAYING OF A CERTIFICATE,
15 REGISTRATION OR LICENSE.
16 "INTERNAL AUDITOR." AN INDIVIDUAL WITHIN A GOVERNMENTAL OR
17 PRIVATE ENTITY WHO PERFORMS AN AUDIT FUNCTION THAT REQUIRES THE
18 INDIVIDUAL TO BE INDEPENDENT OF THE ACTIVITIES BEING AUDITED.
19 THE INDEPENDENCE REQUIRED OF AN INTERNAL AUDITOR DOES NOT NEED
20 TO MEET THE STANDARD OF INDEPENDENCE REQUIRED OF A CERTIFIED
21 PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT.
22 "LICENSEE." AN INDIVIDUAL CERTIFIED BY OR REGISTERED WITH
23 THE BOARD AND HOLDING A CURRENT LICENSE TO PRACTICE UNDER
24 SECTION 8.2 OF THIS ACT OR A QUALIFIED ASSOCIATION HOLDING A
25 CURRENT LICENSE TO PRACTICE UNDER SECTION 8.8 OF THIS ACT. THE
26 TERM DOES NOT INCLUDE A PERSON ON INACTIVE STATUS UNDER SECTION
27 8.2(A.1) OF THIS ACT OR OTHERWISE NOT HOLDING A CURRENT LICENSE.
28 "PEER REVIEW." A STUDY, APPRAISAL OR REVIEW OF ONE OR MORE
29 ASPECTS OF THE PROFESSIONAL WORK OF AN INDIVIDUAL OR FIRM IN THE
30 PRACTICE OF PUBLIC ACCOUNTING TO DETERMINE THE DEGREE OF
19950H1782B3538 - 56 -
1 COMPLIANCE BY THE INDIVIDUAL OR FIRM WITH GENERALLY ACCEPTED
2 ACCOUNTING PRINCIPLES AND AUDITING STANDARDS AND OTHER GENERALLY
3 ACCEPTED TECHNICAL STANDARDS, CONDUCTED BY PERSONS WHO HOLD
4 CURRENT LICENSES TO PRACTICE PUBLIC ACCOUNTING UNDER THE LAWS OF
5 THIS COMMONWEALTH OR ANOTHER STATE AND WHO ARE NOT AFFILIATED
6 WITH THE INDIVIDUAL OR FIRM BEING REVIEWED.
7 "PUBLIC ACCOUNTANT." [PERSONS WHO ARE] AN INDIVIDUAL WHO WAS
8 QUALIFIED AND ACCEPTED FOR REGISTRATION IN ACCORDANCE WITH
9 FORMER SECTION 8.7 OF THIS ACT [AND PARTNERSHIPS, PROFESSIONAL
10 CORPORATIONS OR PROFESSIONAL ASSOCIATIONS ENGAGED IN PRACTICE AS
11 PUBLIC ACCOUNTANTS WHICH ARE REGISTERED AND ARE CURRENT
12 LICENSEES AS HEREIN PROVIDED].
13 "PUBLIC ACCOUNTING." [THE PRACTICE OF EXAMINING FINANCIAL
14 STATEMENTS OF COMMERCIAL OR NONCOMMERCIAL ENTERPRISES AND
15 ISSUING A REPORT EXPRESSING OR DISCLAIMING AN OPINION ON SUCH
16 STATEMENTS OR EXPRESSING ASSURANCE ON SUCH STATEMENTS, WHICH
17 OPINION OR ASSURANCE, WHEN ISSUED, IS BASED ON EXAMINATIONS IN
18 ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS OR
19 STANDARDS FOR ACCOUNTING AND REVIEW SERVICES AS TO WHETHER THE
20 PRESENTATION OF INFORMATION IS IN CONFORMITY WITH GENERALLY
21 ACCEPTED ACCOUNTING PRINCIPLES OR OTHER COMPREHENSIVE BASIS OF
22 ACCOUNTING, AND WHICH OPINION OR ASSURANCE MAY ASSIST IN THE
23 MAKING OF JUDGMENTS BY OTHERS. THE TERM ALSO INCLUDES THE
24 PERFORMANCE OF OTHER] OFFERING TO PERFORM OR PERFORMING FOR A
25 CLIENT OR POTENTIAL CLIENT:
26 (1) ATTEST ACTIVITY.
27 (2) OTHER PROFESSIONAL SERVICES [IN ANY OR ALL MATTERS
28 RELATING TO ACCOUNTING PROCEDURE AND TO THE RECORDING,
29 PRESENTATION OR CERTIFICATION OF FINANCIAL INFORMATION OR DATA.]
30 INVOLVING THE USE OF ACCOUNTING SKILLS, INCLUDING, BUT NOT
19950H1782B3538 - 57 -
1 LIMITED TO, MANAGEMENT ADVISORY OR CONSULTING SERVICES, BUSINESS
2 VALUATIONS, FINANCIAL PLANNING, PREPARATION OF TAX RETURNS OR
3 FURNISHING OF ADVICE ON TAX MATTERS BY A PERSON HOLDING OUT AS A
4 CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT OR FIRM.
5 ["REPORTING PERIOD" THE TWO-YEAR PERIOD BEGINNING JANUARY 1,
6 1986 AND ENDING DECEMBER 31, 1987 AND EACH SUBSEQUENT TWO-YEAR
7 PERIOD.]
8 "QUALIFIED ASSOCIATION." AN ASSOCIATION AS DEFINED IN 15
9 PA.C.S. § 102 (RELATING TO DEFINITIONS) THAT IS INCORPORATED OR
10 ORGANIZED UNDER THE LAWS OF THIS COMMONWEALTH OR ANY OTHER STATE
11 OR FOREIGN JURISDICTION IF THE ORGANIC LAW UNDER WHICH THE
12 ASSOCIATION IS INCORPORATED OR ORGANIZED DOES NOT AFFORD THE
13 SHAREHOLDERS, PARTNERS, MEMBERS OR OTHER OWNERS OF EQUITY
14 INTERESTS IN THE ASSOCIATION OR THE OFFICERS, EMPLOYES OR AGENTS
15 OF THE ASSOCIATION GREATER IMMUNITY THAN IS AVAILABLE TO THE
16 SHAREHOLDERS, OFFICERS, EMPLOYES OR AGENTS OF A PROFESSIONAL
17 CORPORATION UNDER 15 PA.C.S. § 2925 (RELATING TO PROFESSIONAL
18 RELATIONSHIP RETAINED).
19 "QUALIFIED NONLICENSEE." AN INDIVIDUAL WHO DOES NOT HOLD A
20 CURRENT LICENSE OR PERMIT TO PRACTICE PUBLIC ACCOUNTING IN THIS
21 COMMONWEALTH OR ANY OTHER STATE OR FOREIGN JURISDICTION.
22 "REFERRAL FEE." COMPENSATION PAID TO A LICENSEE FOR
23 RECOMMENDING ANOTHER LICENSEE TO, OR REFERRING TO ANOTHER
24 LICENSEE, ANY PERSON FOR THE PERFORMANCE BY THE OTHER LICENSEE
25 OF PUBLIC ACCOUNTING.
26 "REPORT." ANY OPINION, STATEMENT OR OTHER FORM OF WRITTEN
27 COMMUNICATION THAT STATES OR IMPLIES ASSURANCE AS TO THE
28 RELIABILITY OF ANY FINANCIAL INFORMATION OR ASSESSMENTS OF THE
29 STATUS OR PERFORMANCE OF ANY PERSON AND THAT ALSO IMPLIES OR IS
30 ACCOMPANIED BY ANY STATEMENT OR IMPLICATION THAT THE PERSON
19950H1782B3538 - 58 -
1 ISSUING IT HAS SPECIAL KNOWLEDGE OR COMPETENCE IN ACCOUNTING OR
2 AUDITING. SUCH A STATEMENT OR IMPLICATION OF SPECIAL KNOWLEDGE
3 OR COMPETENCE MAY ARISE FROM USE BY THE ISSUER OF THE
4 COMMUNICATION OF NAMES OR TITLES INDICATING THAT THE ISSUER OR
5 ANY INDIVIDUAL EMPLOYED BY OR AFFILIATED WITH IT IS AN
6 ACCOUNTANT OR AUDITOR OR MAY ARISE FROM THE LANGUAGE OF THE
7 COMMUNICATION ITSELF. THE TERM INCLUDES ANY FORM OF LANGUAGE
8 WHICH DISCLAIMS AN OPINION WHEN THE FORM OF LANGUAGE IS
9 CONVENTIONALLY UNDERSTOOD TO IMPLY ANY POSITIVE ASSURANCE AS TO
10 THE RELIABILITY OF THE FINANCIAL INFORMATION REFERRED TO OR
11 SPECIAL COMPETENCE ON THE PART OF THE PERSON ISSUING THE
12 LANGUAGE. THE TERM ALSO INCLUDES ANY OTHER FORM OF LANGUAGE THAT
13 IS CONVENTIONALLY UNDERSTOOD TO IMPLY ASSURANCE OR SPECIAL
14 KNOWLEDGE OR COMPETENCE.
15 [SECTION 2.2. PUBLIC ACCOUNTANTS' ADVISORY COMMITTEE.--(A)
16 THERE IS HEREBY CREATED A PUBLIC ACCOUNTANTS' ADVISORY COMMITTEE
17 TO CONSIST OF FIVE MEMBERS TO BE APPOINTED BY THE GOVERNOR.
18 MEMBERS SHALL BE APPOINTED FOR STAGGERED TERMS OF THREE YEARS.
19 UPON EXPIRATION OF A TERM OF OFFICE, A MEMBER SHALL CONTINUE TO
20 SERVE FOR A PERIOD NOT TO EXCEED SIX MONTHS, IF A SUCCESSOR HAS
21 YET TO BE DULY APPOINTED AND QUALIFIED ACCORDING TO LAW. MEMBERS
22 SHALL NOT SERVE FOR MORE THAN TWO CONSECUTIVE FULL THREE YEAR
23 TERMS AND SHALL NOT BE ELIGIBLE FOR REAPPOINTMENT UNTIL AFTER
24 THREE YEARS HAVE ELAPSED.
25 (B) MEMBERS OF THE ADVISORY COMMITTEE SHALL BE REGISTERED
26 PURSUANT TO THIS ACT AS PUBLIC ACCOUNTANTS AND SHALL BE CURRENT
27 LICENSEES.
28 (C) THREE MEMBERS OF THE COMMITTEE SHALL CONSTITUTE A
29 QUORUM. THE COMMITTEE SHALL SELECT, FROM AMONG THEIR NUMBER, A
30 CHAIRMAN WHO SHALL CONDUCT MEETINGS OF THE COMMITTEE.
19950H1782B3538 - 59 -
1 (D) THE COMMITTEE SHALL ADVISE AND AID THE BOARD IN MATTERS
2 WHICH WOULD AFFECT PUBLIC ACCOUNTANTS. THE COMMITTEE SHALL
3 RECOMMEND TO THE BOARD COURSES, MEETINGS, OR CONFERENCES TO
4 FULFILL THE REQUIREMENTS OF CONTINUING EDUCATION FOR PUBLIC
5 ACCOUNTANTS.]
6 SECTION 2.3. STATE BOARD OF ACCOUNTANCY.--(A) THE STATE
7 BOARD OF ACCOUNTANCY SHALL CONSIST OF FIFTEEN MEMBERS, ONE OF
8 WHOM SHALL BE THE COMMISSIONER OF PROFESSIONAL AND OCCUPATIONAL
9 AFFAIRS IN THE DEPARTMENT OF STATE OR A DESIGNEE, ONE OF WHOM
10 SHALL BE THE DIRECTOR OF THE BUREAU OF CONSUMER PROTECTION IN
11 THE OFFICE OF ATTORNEY GENERAL OR HIS DESIGNEE, AND THE
12 REMAINING THIRTEEN OF WHOM SHALL BE APPOINTED BY THE GOVERNOR,
13 SUBJECT TO THE CONSENT OF THE SENATE, AS FOLLOWS:
14 (1) EIGHT MEMBERS SHALL BE CERTIFIED PUBLIC ACCOUNTANTS [WHO
15 HAVE HELD CERTIFICATES OF CERTIFIED PUBLIC ACCOUNTANT ISSUED BY
16 THIS COMMONWEALTH], ALL OF WHOM ARE [CURRENT] LICENSEES [AS
17 REQUIRED BY THIS ACT] AND [FOUR] AT LEAST SIX OF WHOM [HAVE
18 BEEN] ARE ACTIVELY ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING
19 AS THEIR PRINCIPAL OCCUPATION AT THE TIME OF THEIR APPOINTMENT.
20 TWO OF THE MEMBERS WHO ARE CERTIFIED PUBLIC ACCOUNTANTS SHALL BE
21 APPOINTED FROM THE EASTERN PART OF THE STATE, TWO FROM THE
22 WESTERN PART, TWO FROM THE CENTRAL PART, AND TWO FROM ANY PART
23 OF THE STATE. [NO MEMBER OF THE BOARD SHALL BE A TEACHER OR
24 INSTRUCTOR IN ANY COACHING SCHOOL WHICH HAS AS ITS PRIMARY
25 PURPOSE PREPARATION FOR THE EXAMINATION UNDER THIS ACT OR ANY
26 PERSON WHO HAS A FINANCIAL INTEREST IN SUCH COACHING SCHOOL.] AT
27 LEAST TWO OF THE MEMBERS WHO ARE CERTIFIED PUBLIC ACCOUNTANTS
28 SHALL BE ACTIVELY ENGAGED AT THE TIME OF THEIR APPOINTMENT IN
29 THE PRACTICE OF PUBLIC ACCOUNTING WITH FIRMS THAT HAVE FIVE OR
30 FEWER LICENSEES PARTICIPATING IN THE FIRM'S PRACTICE.
19950H1782B3538 - 60 -
1 (2) THREE MEMBERS SHALL BE PERSONS [REPRESENTING] WHO ARE
2 NOT AFFILIATED IN ANY MANNER WITH THE PROFESSION, WHO SHALL
3 REPRESENT THE PUBLIC AT LARGE. [SUCH PUBLIC MEMBERS SHALL NOT BE
4 AFFILIATED IN ANY MANNER WITH THE PROFESSION AND SHALL NOT HOLD
5 PUBLIC OFFICE DURING THE TERM OF MEMBERSHIP ON THE BOARD.]
6 (3) TWO MEMBERS SHALL BE PUBLIC ACCOUNTANTS [REGISTERED
7 UNDER THIS ACT AND SHALL BE CURRENT LICENSEES.] WHO ARE
8 LICENSEES ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING AS THEIR
9 PRINCIPAL OCCUPATION AT THE TIME OF THEIR APPOINTMENT. THE
10 NUMBER OF PUBLIC ACCOUNTANT MEMBERS SHALL BE REDUCED BY ONE AND
11 THE NUMBER OF CERTIFIED PUBLIC ACCOUNTANT MEMBERS INCREASED BY
12 ONE WHEN THE NUMBER OF PUBLIC ACCOUNTANTS WHO ARE LICENSEES
13 FALLS BELOW FIVE HUNDRED FOR THE FIRST TIME. THE REMAINING
14 PUBLIC ACCOUNTANT MEMBER SHALL BE ELIMINATED AND THE NUMBER OF
15 CERTIFIED PUBLIC ACCOUNTANT MEMBERS INCREASED BY ONE WHEN THE
16 NUMBER OF PUBLIC ACCOUNTANTS WHO ARE LICENSEES FALLS BELOW FIFTY
17 FOR THE FIRST TIME. A DECREASE IN THE NUMBER OF MEMBERS OF THE
18 BOARD WHO ARE REQUIRED TO BE PUBLIC ACCOUNTANTS AS PROVIDED IN
19 THIS CLAUSE SHALL NOT HAVE THE EFFECT OF SHORTENING THE TERM OF
20 AN INCUMBENT MEMBER OF THE BOARD.
21 (B) [THE TERMS OF THE MEMBERS] A FULL TERM OF A MEMBER OF
22 THE BOARD SHALL BE FOUR YEARS FROM THE [RESPECTIVE DATES OF
23 THEIR] DATE OF APPOINTMENT, [PROVIDED] EXCEPT THAT A MEMBER MAY
24 CONTINUE TO SERVE FOR A PERIOD NOT TO EXCEED SIX MONTHS BEYOND
25 THE EXPIRATION OF HIS TERM, IF A SUCCESSOR HAS YET TO BE DULY
26 APPOINTED AND QUALIFIED ACCORDING TO LAW. A BOARD MEMBER SHALL
27 NOT SERVE MORE THAN TWO CONSECUTIVE FOUR-YEAR TERMS AND SHALL
28 NOT BE ELIGIBLE FOR REAPPOINTMENT UNTIL AFTER FOUR YEARS HAVE
29 ELAPSED.
30 (C) [EIGHT] A MAJORITY OF THE DULY APPOINTED AND QUALIFIED
19950H1782B3538 - 61 -
1 MEMBERS OF THE BOARD SHALL CONSTITUTE A QUORUM. [THE BOARD SHALL
2 SELECT, FROM AMONG THEIR NUMBER, A CHAIRMAN AND A SECRETARY.]
3 THE BOARD MAY ACT BY A MAJORITY OF THE MEMBERS PRESENT AND
4 VOTING AT A MEETING AT WHICH A QUORUM IS PRESENT, EXCEPT THAT
5 ACTION BY THE BOARD UNDER SECTION 9, 14 OR 16(C) OF THIS ACT MAY
6 ONLY BE TAKEN BY:
7 (1) A MINIMUM NUMBER OF EIGHT AFFIRMATIVE VOTES IF THERE ARE
8 NO VACANCIES ON THE BOARD AT THE TIME; OR
9 (2) A MINIMUM NUMBER OF SEVEN AFFIRMATIVE VOTES IF THE
10 CURRENT MEMBERSHIP OF THE BOARD IS LESS THAN ITS FULL AUTHORIZED
11 MEMBERSHIP.
12 (D) EACH MEMBER OF THE [STATE BOARD OF ACCOUNTANCY] BOARD
13 SHALL BE PAID REASONABLE TRAVELING AND OTHER EXPENSES AND PER
14 DIEM COMPENSATION AT THE RATE OF SIXTY DOLLARS ($60) FOR EACH
15 DAY OF ACTUAL SERVICE WHILE ON BOARD BUSINESS.
16 (E) A MEMBER WHO FAILS TO ATTEND THREE CONSECUTIVE MEETINGS
17 SHALL FORFEIT HIS SEAT UNLESS THE COMMISSIONER OF PROFESSIONAL
18 AND OCCUPATIONAL AFFAIRS, UPON WRITTEN REQUEST FROM THE MEMBER,
19 FINDS THAT THE MEMBER SHOULD BE EXCUSED FROM A MEETING BECAUSE
20 OF ILLNESS OR THE DEATH OF AN IMMEDIATE FAMILY MEMBER.
21 (F) IN THE EVENT THAT ANY OF THE SAID MEMBERS OF THE BOARD
22 SHALL DIE [OR], RESIGN OR BE REMOVED DURING HIS TERM OF OFFICE,
23 HIS SUCCESSOR SHALL BE APPOINTED IN THE SAME WAY AND WITH THE
24 SAME QUALIFICATIONS AS [ABOVE] SET FORTH IN THIS SECTION AND
25 SHALL HOLD OFFICE FOR THE UNEXPIRED TERM.
26 (G) A MEMBER OF THE BOARD SHALL NOT:
27 (1) SERVE AS A PEER REVIEWER IN A PEER REVIEW OF A LICENSEE;
28 OR
29 (2) BE A TEACHER OR INSTRUCTOR IN A COACHING SCHOOL THAT HAS
30 AS ITS PRIMARY PURPOSE PREPARATION FOR THE EXAMINATION, OR HAVE
19950H1782B3538 - 62 -
1 A FINANCIAL INTEREST IN SUCH A COACHING SCHOOL.
2 (H) THE BOARD SHALL SELECT FROM AMONG ITS NUMBER A CHAIRMAN,
3 VICE CHAIRMAN AND SECRETARY.
4 (I) THE DEPARTMENT SHALL ASSIGN TO THE BOARD SUCH AGENTS,
5 CLERKS, STENOGRAPHERS, ASSISTANTS AND INVESTIGATORS AS MAY BE
6 NECESSARY TO ADMINISTER THIS ACT.
7 SECTION 3. GENERAL POWERS OF THE BOARD.--(A) THE BOARD
8 SHALL HAVE THE POWER:
9 (1) TO PROVIDE FOR, REGULATE AND APPROVE THE ISSUANCE OF A
10 CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT TO ANY PERSON (A) WHO
11 MEETS THE [GENERAL QUALIFICATIONS AND EDUCATION AND EXPERIENCE
12 REQUIREMENTS PROVIDED HEREIN AND WHO PASSES THE EXAMINATION
13 REQUIRED BY THE BOARD,] REQUIREMENTS FOR THE ISSUANCE OF A
14 CERTIFICATE IN SECTION 3.1(E) OF THIS ACT; OR (B) WHO MEETS THE
15 REQUIREMENTS FOR THE ISSUANCE OF A CERTIFICATE BY RECIPROCITY IN
16 SECTION 5 OR 5.1 OF THIS ACT.
17 [(2) TO PROVIDE FOR AND TO REGULATE REGISTRATION AND
18 LICENSES TO PRACTICE AS PROVIDED HEREIN BUT THE BOARD SHALL NOT
19 HAVE THE POWER TO REQUIRE A PHOTOGRAPH AS PART OF AN APPLICATION
20 FOR A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT.]
21 (3) TO CONTRACT WITH A PROFESSIONAL TESTING ORGANIZATION FOR
22 THE PREPARATION AND ADMINISTRATION OF THE EXAMINATION, IN
23 ACCORDANCE WITH SECTION 812.1(A) OF THE ACT OF APRIL 9, 1929
24 (P.L.177, NO.175), KNOWN AS "THE ADMINISTRATIVE CODE OF 1929,"
25 AND TO ESTABLISH PRIOR TO THE ADMINISTRATION OF EACH EXAMINATION
26 AN APPROPRIATE MINIMUM PASSING SCORE, IN KEEPING WITH THE
27 PURPOSES OF THIS ACT. [THE EXAMINATION SHALL BE HELD AT LEAST
28 TWICE IN EACH CALENDAR YEAR, AND SIMULTANEOUSLY IN AT LEAST TWO
29 COUNTIES OF THE COMMONWEALTH, AND SHALL BE A WRITTEN EXAMINATION
30 IN GENERAL ACCOUNTING, THEORY OF ACCOUNTS, ACCOUNTING PRACTICE,
19950H1782B3538 - 63 -
1 AUDITING AND RELATED SUBJECTS. THE BOARD MAY MAKE SUCH USE OF
2 ALL OR ANY PART OF THE UNIFORM CERTIFIED PUBLIC ACCOUNTANTS'
3 EXAMINATION AND/OR ADVISORY GRADING SERVICE OF THE AMERICAN
4 INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AS IT DEEMS
5 APPROPRIATE TO ASSIST IN PERFORMING ITS DUTIES HEREUNDER.]
6 (4) TO KEEP A RECORD SHOWING THE NAMES AND THE PLACES OF
7 BUSINESS OF PERSONS TO WHOM [THE] A CERTIFICATE OF CERTIFIED
8 PUBLIC ACCOUNTANT HAS BEEN ISSUED UNDER THIS ACT [AND UNDER] OR
9 PRIOR LAWS AND ALL [OTHERS] OTHER PERSONS REGISTERED OR HOLDING
10 LICENSES UNDER THIS ACT OR PRIOR LAWS. THE DEPARTMENT SHALL
11 FURNISH COPIES OF SUCH RECORD TO THE PUBLIC UPON REQUEST AND MAY
12 ESTABLISH A REASONABLE FEE FOR SUCH COPIES WHICH SHALL NOT
13 EXCEED THE COST OF REPRODUCTION.
14 (5) TO REVOKE, SUSPEND [FOR A FIXED TERM OR REVOKE], LIMIT
15 OR OTHERWISE RESTRICT THE CERTIFICATE [AND] OR LICENSE OF ANY
16 CERTIFIED PUBLIC ACCOUNTANT OR THE REGISTRATION [AND] OR LICENSE
17 OF [ALL OTHERS REGISTERED] ANY PUBLIC ACCOUNTANT OR THE LICENSE
18 OF ANY FIRM UNDER THIS ACT [OR], TO CENSURE OR PUBLICLY
19 REPRIMAND THE HOLDER OF [SUCH] ANY CERTIFICATE, REGISTRATION OR
20 LICENSE [AS PROVIDED FOR], TO REQUIRE COMPLETION OF GENERAL OR A
21 SPECIFIC NUMBER OF CONTINUING PROFESSIONAL EDUCATION COURSES, TO
22 REQUIRE MORE FREQUENT PEER REVIEW OR OTHER REMEDIAL ACTION AND
23 TO IMPOSE CIVIL PENALTIES AS PROVIDED IN SECTION 16 FOR
24 VIOLATION OF THIS ACT.
25 (6) TO COLLECT FEES AS PROVIDED FOR IN THIS ACT AND TO
26 SUBMIT ANNUALLY[,] TO THE DEPARTMENT AN ESTIMATE OF THE
27 FINANCIAL REQUIREMENTS OF THE BOARD FOR ITS ADMINISTRATIVE,
28 INVESTIGATIVE, LEGAL AND MISCELLANEOUS EXPENSES.
29 (7) TO ARRANGE FOR ASSISTANCE IN THE PERFORMANCE OF ITS
30 DUTIES, [AND] TO ADMINISTER AND ENFORCE THE LAWS OF [THE] THIS
19950H1782B3538 - 64 -
1 COMMONWEALTH RELATING TO CERTIFICATION, REGISTRATION [OF],
2 LICENSING AND PRACTICE BY CERTIFIED PUBLIC ACCOUNTANTS, [AND ALL
3 OTHERS REGISTERED OR HOLDING LICENSES UNDER THIS ACT] PUBLIC
4 ACCOUNTANTS AND FIRMS AND TO INSTRUCT AND REQUIRE ITS AGENTS TO
5 SEEK AN INJUNCTION, OR BRING A PROSECUTION FOR A VIOLATION OF
6 THIS ACT.
7 (8) TO KEEP MINUTES AND RECORDS OF ALL ITS TRANSACTIONS AND
8 PROCEEDINGS. [COPIES THEREOF DULY CERTIFIED BY THE SECRETARY OF
9 THE BOARD SHALL BE RECEIVED AS EVIDENCE IN ALL COURTS AND
10 ELSEWHERE.] TO THE EXTENT REQUIRED BY THE ACT OF JUNE 21, 1957
11 (P.L.390, NO.212), REFERRED TO AS THE RIGHT-TO-KNOW LAW, THE
12 DEPARTMENT SHALL FURNISH COPIES OF SUCH MINUTES AND RECORDS TO
13 THE PUBLIC UPON REQUEST AND MAY ESTABLISH A REASONABLE FEE FOR
14 SUCH COPIES WHICH SHALL NOT EXCEED THE COST OF REPRODUCTION.
15 (9) TO BECOME A MEMBER OF THE NATIONAL ASSOCIATION OF STATE
16 BOARDS OF ACCOUNTANCY, OR A SIMILAR ORGANIZATION, AND PAY SUCH
17 DUES AS SAID ASSOCIATION SHALL ESTABLISH AND TO SEND MEMBERS OF
18 THE BOARD AND STAFF AS DELEGATES TO THE MEETINGS OF [THE] THAT
19 ASSOCIATION AND DEFRAY THEIR EXPENSES.
20 (10) TO ADOPT, PROMULGATE AND ENFORCE [SUCH] RULES AND
21 REGULATIONS CONSISTENT WITH THE PROVISIONS OF THIS ACT
22 ESTABLISHING REQUIREMENTS OF CONTINUING EDUCATION AND PEER
23 REVIEW TO BE MET BY CERTIFIED PUBLIC ACCOUNTANTS [AND], PUBLIC
24 ACCOUNTANTS [REGISTERED UNDER THIS ACT] AND FIRMS AS A CONDITION
25 FOR RENEWAL OF BIENNIAL LICENSES TO ENGAGE IN THE PRACTICE OF
26 PUBLIC ACCOUNTING IN THIS COMMONWEALTH. SUCH RULES AND
27 REGULATIONS SHALL INCLUDE, BUT NOT BE LIMITED TO, ANALYSIS OF
28 CONTINUING EDUCATION RECORDS BY A CONSULTANT WHOSE ANALYSIS
29 SHALL COVER LICENSEE FORMS AND RECORDS OF CONTINUING EDUCATION
30 SPONSORS. THE ANALYSIS SHALL BE DESIGNED TO DETERMINE COMPLIANCE
19950H1782B3538 - 65 -
1 WITH ALL CONTINUING EDUCATION REGULATIONS OF THE BOARD,
2 INCLUDING ATTENDANCE OF LICENSEES, QUALIFICATIONS OF SPONSORS
3 AND QUALIFICATIONS OF COURSES FOR CREDIT.
4 (11) TO PROMULGATE AND AMEND RULES OF PROFESSIONAL CONDUCT,
5 UNIFORMLY APPLICABLE TO CERTIFIED PUBLIC ACCOUNTANTS AND PUBLIC
6 ACCOUNTANTS [REGISTERED UNDER THIS ACT], APPROPRIATE TO
7 ESTABLISH AND MAINTAIN A HIGH STANDARD OF INTEGRITY, OBJECTIVITY
8 AND DIGNITY [IN THE PROFESSION OF PUBLIC ACCOUNTING.] BY
9 CERTIFIED PUBLIC ACCOUNTANTS, PUBLIC ACCOUNTANTS AND FIRMS. THE
10 BOARD SHALL INCLUDE IN THOSE RULES OF PROFESSIONAL CONDUCT
11 PROVISIONS REGULATING THE PAYMENT AND ACCEPTANCE OF COMMISSIONS
12 BY LICENSEES.
13 (12) TO ADOPT, PROMULGATE AND ENFORCE SUCH ADMINISTRATIVE
14 RULES AND REGULATIONS NOT INCONSISTENT WITH THIS ACT, OR OTHER
15 ACTS, AS ARE NECESSARY AND PROPER TO CARRY INTO EFFECT THE
16 PROVISIONS OF THIS ACT.
17 [(13) TO SUBMIT ANNUALLY, TO THE PROFESSIONAL LICENSURE
18 COMMITTEE OF THE HOUSE AND THE CONSUMER PROTECTION AND
19 PROFESSIONAL LICENSURE COMMITTEE OF THE SENATE, A DESCRIPTION OF
20 THE TYPES OF COMPLAINTS RECEIVED, STATUS OF THE CASES, BOARD
21 ACTION WHICH HAS BEEN TAKEN AND LENGTH OF TIME FROM THE INITIAL
22 COMPLAINT TO FINAL BOARD RESOLUTION.
23 (14) TO SUBMIT WITHIN A REASONABLE TIME FOLLOWING THE
24 BIENNIAL REPORTING PERIOD ENDING DECEMBER 31, 1985, TO THE
25 PROFESSIONAL LICENSURE COMMITTEE OF THE HOUSE AND THE CONSUMER
26 PROTECTION AND PROFESSIONAL LICENSURE COMMITTEE OF THE SENATE, A
27 LIST OF NAMES OF CONTINUING EDUCATION SPONSORS APPROVED BY THE
28 BOARD AND A SUMMARY OF THE TYPES OF CONTINUING EDUCATION
29 COURSES, INDICATING THE COURSE CONTENT AND SUBJECT MATTER, TAKEN
30 BY CURRENT LICENSEES IN ACCORDANCE WITH SECTION 8.2 OF THIS ACT
19950H1782B3538 - 66 -
1 DURING SUCH BIENNIAL REPORTING PERIOD.]
2 (15) TO SUBMIT ANNUALLY TO THE HOUSE AND SENATE
3 APPROPRIATIONS COMMITTEES, NOT LATER THAN FIFTEEN DAYS AFTER THE
4 GOVERNOR HAS SUBMITTED HIS BUDGET TO THE GENERAL ASSEMBLY, A
5 COPY OF THE BUDGET REQUEST FOR THE UPCOMING YEAR [WHICH] THAT
6 THE BOARD PREVIOUSLY SUBMITTED TO THE DEPARTMENT.
7 (16) TO ENGAGE CONSULTANTS AS MAY BE DEEMED NECESSARY TO
8 CARRY OUT AND ENFORCE THE PROVISIONS OF THIS ACT.
9 (B) THE BOARD SHALL NOT REQUIRE A PHOTOGRAPH AS PART OF AN
10 APPLICATION FOR A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT.
11 SECTION 3.1. [GENERAL QUALIFICATIONS.--A PERSON] EXAMINATION
12 AND ISSUANCE OF CERTIFICATE.--(A) AN INDIVIDUAL SHALL BE
13 PERMITTED TO TAKE THE EXAMINATION FOR THE CERTIFICATE OF
14 CERTIFIED PUBLIC ACCOUNTANT [AND THE CERTIFICATE SHALL BE
15 GRANTED BY THE BOARD TO ANY PERSON (A) WHO IS] IF THE
16 INDIVIDUAL:
17 (1) AT THE TIME THE INDIVIDUAL FIRST SITS FOR THE
18 EXAMINATION:
19 (I) IS A RESIDENT OF THIS COMMONWEALTH[,];
20 (II) IS ENROLLED IN OR HAS GRADUATED FROM A COLLEGE OR
21 UNIVERSITY IN THIS COMMONWEALTH[, OR IS ENGAGED IN PUBLIC
22 ACCOUNTING THEREIN AT THE TIME HE FIRST SITS FOR THE
23 EXAMINATION, AND (B) WHO HAS]; OR
24 (III) IS EMPLOYED IN THIS COMMONWEALTH UNDER THE SUPERVISION
25 OF A LICENSEE.
26 (2) HAS ATTAINED THE AGE OF EIGHTEEN YEARS [AND (C) WHO IS].
27 (3) IS OF GOOD MORAL CHARACTER[, AND (D) WHO MEETS].
28 (4) MEETS THE EDUCATION REQUIREMENTS OF [EDUCATION AND
29 EXPERIENCE AS HEREINAFTER PROVIDED AND (E) WHO, WITH RESPECT TO
30 GRANTING A CERTIFICATE SHALL HAVE PASSED A WRITTEN EXAMINATION
19950H1782B3538 - 67 -
1 AS PROVIDED IN] SECTION [3.] 4 OF THIS ACT.
2 (B) THE EXAMINATION SHALL BE HELD AT LEAST TWICE IN EACH
3 CALENDAR YEAR AND SIMULTANEOUSLY IN AT LEAST TWO COUNTIES OF
4 THIS COMMONWEALTH AND SHALL BE A WRITTEN EXAMINATION IN BUSINESS
5 LAW AND PROFESSIONAL RESPONSIBILITIES, AUDITING, ACCOUNTING AND
6 REPORTING, AND FINANCIAL ACCOUNTING AND REPORTING. THE BOARD MAY
7 USE ALL PARTS OF THE UNIFORM CERTIFIED PUBLIC ACCOUNTANTS'
8 EXAMINATION AND ADVISORY GRADING SERVICE OF THE AMERICAN
9 INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS TO ASSIST IN
10 PERFORMING ITS DUTIES HEREUNDER.
11 (C) SUBJECT TO SUCH REGULATIONS AS THE BOARD MAY ADOPT
12 GOVERNING REEXAMINATIONS, A CANDIDATE SHALL BE ENTITLED TO
13 RETAKE THE EXAMINATION.
14 (D) AN INDIVIDUAL WHO HAS PREVIOUSLY TAKEN AN EXAMINATION
15 FOR A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT UNDER THE
16 PROVISIONS OF A PRIOR LAW OF THIS COMMONWEALTH SHALL CONTINUE TO
17 BE PERMITTED TO TAKE THE EXAMINATION AND RECEIVE A CERTIFICATE
18 SUBJECT TO SUCH PRIOR PROVISIONS AND APPLICABLE REGULATIONS.
19 (E) A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT SHALL BE
20 ISSUED BY THE BOARD UPON APPLICATION BY AN INDIVIDUAL WHO HAS
21 PASSED THE EXAMINATION AND MEETS THE EXPERIENCE REQUIREMENTS
22 PROVIDED FOR IN SECTION 4.1 OF THIS ACT.
23 SECTION 4. EDUCATION [AND EXPERIENCE] REQUIREMENTS.--(A)
24 BEFORE [ANY PERSON] AN INDIVIDUAL IS PERMITTED TO TAKE THE
25 EXAMINATION [OR IS ISSUED A CERTIFICATE OF CERTIFIED PUBLIC
26 ACCOUNTANT], THE BOARD SHALL BE SATISFIED THAT, EXCEPT AS
27 PROVIDED IN SUBSECTION (B), HE HAS [COMPLIED WITH THE FOLLOWING
28 REQUIREMENTS]:
29 (1) [GRADUATION] GRADUATED WITH A BACCALAUREATE DEGREE FROM
30 A COLLEGE OR UNIVERSITY APPROVED AT THE TIME OF GRADUATION BY
19950H1782B3538 - 68 -
1 THE DEPARTMENT OF EDUCATION[, PURSUANT TO POLICIES AND STANDARDS
2 PROMULGATED BY THE STATE BOARD OF EDUCATION, OR AN EDUCATION
3 WHICH IS THE EQUIVALENT THEREOF, AND COMPLETION OF AT LEAST
4 TWELVE SEMESTER CREDITS IN ACCOUNTING SUBJECTS OF A CONTENT
5 SATISFACTORY TO THE BOARD, NOT NECESSARILY AS PART OF HIS
6 UNDERGRADUATE WORK, AND AT LEAST TWO YEARS OF PUBLIC ACCOUNTING
7 EXPERIENCE OR TWO YEARS EXPERIENCE AS AN AUDITOR WITH A UNIT OF
8 FEDERAL, STATE OR LOCAL GOVERNMENT INCLUDING, BUT NOT LIMITED
9 TO, EMPLOYMENT WITH THE DEPARTMENT OF THE AUDITOR GENERAL;
10 PROVIDED THAT THE PUBLIC ACCOUNTING EXPERIENCE OR THE EXPERIENCE
11 AS AN AUDITOR WITH A UNIT OF GOVERNMENT WAS OF A CALIBER
12 SATISFACTORY TO THE BOARD, REQUIRED THE USE OF AUDITING SKILLS
13 AND WAS SUPERVISED BY A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
14 ACCOUNTANT, OR] AND ALSO COMPLETED AT LEAST TWENTY-FOUR SEMESTER
15 CREDITS IN ACCOUNTING, AUDITING, BUSINESS LAW, FINANCE AND TAX
16 SUBJECTS OF A CONTENT SATISFACTORY TO THE BOARD, NOT NECESSARILY
17 AS A PART OF HIS UNDERGRADUATE WORK;
18 (2) [GRADUATION] GRADUATED WITH A MASTER'S DEGREE [IN
19 ACCOUNTING OR BUSINESS ADMINISTRATION OR AN EQUIVALENT MASTER'S
20 DEGREE] OR OTHER POST-GRADUATE DEGREE FROM A COLLEGE OR
21 UNIVERSITY APPROVED AT THE TIME OF GRADUATION BY THE DEPARTMENT
22 OF EDUCATION[, PURSUANT TO POLICIES AND STANDARDS PROMULGATED BY
23 THE STATE BOARD OF EDUCATION, AND COMPLETION OF] AND COMPLETED
24 AT LEAST [TWELVE] TWENTY-FOUR SEMESTER CREDITS IN ACCOUNTING,
25 AUDITING, BUSINESS LAW, FINANCE AND TAX SUBJECTS OF A CONTENT
26 SATISFACTORY TO THE BOARD, NOT NECESSARILY AS PART OF HIS
27 UNDERGRADUATE OR GRADUATE WORK[, AND AT LEAST ONE YEAR OF PUBLIC
28 ACCOUNTING EXPERIENCE OR ONE YEAR EXPERIENCE AS AN AUDITOR WITH
29 A UNIT OF FEDERAL, STATE OR LOCAL GOVERNMENT INCLUDING, BUT NOT
30 LIMITED TO, EMPLOYMENT WITH THE DEPARTMENT OF THE AUDITOR
19950H1782B3538 - 69 -
1 GENERAL; PROVIDED THAT THE PUBLIC ACCOUNTING EXPERIENCE OR THE
2 EXPERIENCE AS AN AUDITOR WITH A UNIT OF GOVERNMENT WAS OF A
3 CALIBER SATISFACTORY TO THE BOARD, REQUIRED THE USE OF AUDITING
4 SKILLS AND WAS SUPERVISED BY A CERTIFIED PUBLIC ACCOUNTANT OR
5 PUBLIC ACCOUNTANT.]; OR
6 [(3) SUBJECT TO THE GENERAL QUALIFICATIONS OF SECTION 3.1,
7 THE DEPARTMENT, UPON AUTHORIZATION BY THE BOARD, SHALL ISSUE A
8 CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT TO A PERSON WHO HAS
9 QUALIFIED FOR PERMISSION TO TAKE THE EXAMINATION UNDER SECTION
10 4(A)(1) OR (2) PROVIDED HE HAS PASSED THE WRITTEN EXAMINATION OF
11 THE BOARD IN GENERAL ACCOUNTING, THEORY OF ACCOUNTS, ACCOUNTING
12 PRACTICE, AUDITING AND RELATED SUBJECTS.]
13 (4) GRADUATED WITH A BACCALAUREATE OR HIGHER DEGREE FROM A
14 COLLEGE OR UNIVERSITY APPROVED AT THE TIME OF GRADUATION BY THE
15 DEPARTMENT OF EDUCATION AND COMPLETED A TOTAL OF ONE HUNDRED
16 FIFTY SEMESTER CREDITS OF POST-SECONDARY EDUCATION, INCLUDING AT
17 LEAST TWENTY-FOUR SEMESTER CREDITS OF ACCOUNTING, AUDITING,
18 BUSINESS LAW, FINANCE AND TAX SUBJECTS OF A CONTENT SATISFACTORY
19 TO THE BOARD, AND AN ADDITIONAL TWELVE SEMESTER CREDITS IN
20 ACCOUNTING, AUDITING AND TAX SUBJECTS OF A CONTENT SATISFACTORY
21 TO THE BOARD, NOT NECESSARILY AS PART OF HIS UNDERGRADUATE OR
22 GRADUATE WORK.
23 [(B) AS AN ALTERNATIVE TO SECTION 4(A)(1) AND (2), A PERSON
24 SHALL BE PERMITTED TO TAKE THE EXAMINATION WITHOUT MEETING THE
25 EXPERIENCE REQUIREMENTS AS PROVIDED IN SECTION 4(B)(3) AND (4)
26 HEREOF, IF THE BOARD SHALL BE SATISFIED THAT HE HAS COMPLIED
27 WITH ONE OF THE FOLLOWING REQUIREMENTS:
28 (1) GRADUATION WITH A BACCALAUREATE DEGREE FROM A COLLEGE OR
29 UNIVERSITY APPROVED AT THE TIME OF GRADUATION BY THE DEPARTMENT
30 OF EDUCATION, OR AN EDUCATION WHICH IS THE EQUIVALENT THEREOF,
19950H1782B3538 - 70 -
1 AND COMPLETION OF AT LEAST TWENTY-FOUR SEMESTER CREDITS IN
2 ACCOUNTING SUBJECTS OF A CONTENT SATISFACTORY TO THE BOARD, NOT
3 NECESSARILY AS A PART OF HIS UNDERGRADUATE WORK, OR
4 (2) GRADUATION WITH A MASTER'S DEGREE OR A DOCTOR'S DEGREE
5 FROM A COLLEGE OR UNIVERSITY APPROVED AT THE TIME OF GRADUATION
6 BY THE DEPARTMENT OF EDUCATION AND COMPLETION OF AT LEAST
7 TWENTY-FOUR SEMESTER CREDITS IN ACCOUNTING SUBJECTS OF A CONTENT
8 SATISFACTORY TO THE BOARD, NOT NECESSARILY AS PART OF HIS
9 UNDERGRADUATE OR GRADUATE WORK.
10 (3) SUBJECT TO THE GENERAL QUALIFICATIONS OF SECTION 3.1,
11 THE DEPARTMENT, UPON AUTHORIZATION BY THE BOARD, SHALL ISSUE A
12 CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT TO A PERSON WHO HAS
13 QUALIFIED FOR PERMISSION TO TAKE THE EXAMINATION UNDER SECTION
14 4(B)(1) PROVIDED HE HAS PASSED THE WRITTEN EXAMINATION OF THE
15 BOARD IN GENERAL ACCOUNTING, THEORY OF ACCOUNTS, ACCOUNTING
16 PRACTICE, AUDITING AND RELATED SUBJECTS AND, FURTHER PROVIDED HE
17 HAS AT LEAST TWO YEARS OF PUBLIC ACCOUNTING EXPERIENCE OR TWO
18 YEARS EXPERIENCE AS AN AUDITOR WITH A UNIT OF FEDERAL, STATE OR
19 LOCAL GOVERNMENT INCLUDING, BUT NOT LIMITED TO, EMPLOYMENT WITH
20 THE DEPARTMENT OF THE AUDITOR GENERAL; PROVIDED THAT THE PUBLIC
21 ACCOUNTING EXPERIENCE OR THE EXPERIENCE AS AN AUDITOR WITH A
22 UNIT OF GOVERNMENT WAS OF A CALIBER SATISFACTORY TO THE BOARD,
23 REQUIRED THE USE OF AUDITING SKILLS AND WAS SUPERVISED BY A
24 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT.
25 (4) SUBJECT TO THE GENERAL QUALIFICATIONS OF SECTION 3.1,
26 THE DEPARTMENT, UPON AUTHORIZATION BY THE BOARD, SHALL ISSUE A
27 CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT TO A PERSON WHO HAS
28 QUALIFIED FOR PERMISSION TO TAKE THE EXAMINATION UNDER SECTION
29 4(B)(2) PROVIDED HE HAS PASSED THE WRITTEN EXAMINATION OF THE
30 BOARD IN GENERAL ACCOUNTING, THEORY OF ACCOUNTS, ACCOUNTING
19950H1782B3538 - 71 -
1 PRACTICE, AUDITING AND RELATED SUBJECTS, FURTHER PROVIDED HE HAS
2 AT LEAST ONE YEAR OF PUBLIC ACCOUNTING EXPERIENCE OR ONE YEAR
3 EXPERIENCE AS AN AUDITOR WITH A UNIT OF FEDERAL, STATE OR LOCAL
4 GOVERNMENT INCLUDING, BUT NOT LIMITED TO, EMPLOYMENT WITH THE
5 DEPARTMENT OF THE AUDITOR GENERAL; PROVIDED THAT THE PUBLIC
6 ACCOUNTING EXPERIENCE OR THE EXPERIENCE AS AN AUDITOR WITH A
7 UNIT OF GOVERNMENT WAS OF A CALIBER SATISFACTORY TO THE BOARD,
8 REQUIRED THE USE OF AUDITING SKILLS AND WAS SUPERVISED BY A
9 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT.
10 (C) NOTWITHSTANDING THE PROVISIONS OF SECTION 4(B) ABOVE,
11 THE BOARD SHALL PERMIT AN APPLICANT TO TAKE THE EXAMINATION
12 DURING THE FINAL TERM, SEMESTER OR QUARTER OF THE SCHOOL YEAR IN
13 WHICH HE WILL GRADUATE, IF IT IS REASONABLY EXPECTED THAT HE
14 WILL FULFILL THE EDUCATIONAL REQUIREMENTS OF SECTION 4(B) AND
15 RECEIVE THE REQUIRED DEGREE: PROVIDED, HOWEVER, THAT HE MUST
16 RECEIVE THE REQUIRED DEGREE WITHIN NINETY DAYS AFTER THE DATE OF
17 THE EXAMINATION IN ORDER TO FULFILL THE EDUCATIONAL REQUIREMENTS
18 SET FORTH IN SECTION 4(B).
19 (D) SUBJECT TO SUCH REGULATIONS AS THE BOARD MAY ADOPT
20 GOVERNING REEXAMINATIONS, A CANDIDATE SHALL BE ENTITLED TO
21 RETAKE THE EXAMINATION REFERRED TO IN SECTION 4(A)(3) AND (B)(3)
22 AND (4).
23 (E) SERVICE IN THE ARMED FORCES OF THE UNITED STATES
24 SUBSEQUENT TO JULY 1, 1940, SHALL BE SUBSTITUTED FOR THE
25 EXPERIENCE REQUIREMENTS IN SECTION 4(A)(1) AND (B)(3) ABOVE, ON
26 THE BASIS OF ONE MONTH'S EXPERIENCE CREDIT FOR EACH SIX MONTHS'
27 SERVICE: PROVIDED, THAT THE MAXIMUM CREDIT FOR SUCH SERVICE
28 SHALL BE SIX MONTHS.
29 (F) A PERSON WHO HAS PREVIOUSLY TAKEN THE EXAMINATION UNDER
30 THE PROVISIONS OF A PRIOR CPA LAW OF THIS COMMONWEALTH SHALL
19950H1782B3538 - 72 -
1 CONTINUE TO BE PERMITTED TO TAKE THE EXAMINATION AND RECEIVE A
2 CERTIFICATE SUBJECT TO SUCH PRIOR PROVISIONS.]
3 (G) THE BOARD SHALL PERMIT AN APPLICANT TAKING THE
4 EXAMINATION FOR THE FIRST TIME WITHIN ONE YEAR AFTER THE
5 EFFECTIVE DATE OF THIS SUBSECTION, TO TAKE THE EXAMINATION
6 DURING THE FINAL TERM, SEMESTER OR QUARTER OF THE SCHOOL YEAR IN
7 WHICH HE WILL GRADUATE, IF IT IS REASONABLY EXPECTED THAT HE
8 WILL FULFILL THE EDUCATIONAL REQUIREMENTS OF SUBSECTION (A) AND
9 RECEIVE THE REQUIRED DEGREE WITHIN NINETY DAYS AFTER THE DATE OF
10 THE EXAMINATION.
11 SECTION 4. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
12 SECTION 4.1. EXPERIENCE REQUIREMENTS.--(A) AN INDIVIDUAL
13 SHALL BE ISSUED THE CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT
14 UNDER SECTION 3.1(E) OF THIS ACT AFTER THE INDIVIDUAL HAS
15 COMPLIED WITH THE FOLLOWING EXPERIENCE REQUIREMENTS:
16 (1) AN INDIVIDUAL TAKING THE EXAMINATION ON THE BASIS OF
17 HAVING SATISFIED THE EDUCATION REQUIREMENTS IN SECTION 4(A)(1)
18 OF THIS ACT SHALL HAVE COMPLETED AT LEAST TWO YEARS OF
19 EXPERIENCE.
20 (2) AN INDIVIDUAL TAKING THE EXAMINATION ON THE BASIS OF
21 HAVING SATISFIED THE EDUCATION REQUIRED IN SECTION 4(A)(2) OF
22 THIS ACT SHALL NEED ONLY ONE YEAR OF QUALIFYING EXPERIENCE.
23 (3) BEGINNING ON JANUARY 1, 2000, AN INDIVIDUAL TAKING THE
24 EXAMINATION ON THE BASIS OF HAVING SATISFIED THE EDUCATION
25 REQUIRED IN SECTION 4(A)(4) OF THIS ACT SHALL NEED ONLY ONE YEAR
26 OF QUALIFYING EXPERIENCE.
27 (B) THE EXPERIENCE REQUIRED UNDER SUBSECTION (A) MUST:
28 (1) BE IN PUBLIC ACCOUNTING OR AS AN INTERNAL AUDITOR OR AN
29 AUDITOR WITH A UNIT OF FEDERAL, STATE OR LOCAL GOVERNMENT.
30 (2) BE OF A CALIBER SATISFACTORY TO THE BOARD.
19950H1782B3538 - 73 -
1 (3) SATISFY THE REQUIREMENTS OF SUBSECTION (D).
2 (4) HAVE BEEN SUPERVISED BY AN INDIVIDUAL WHO IS CURRENTLY
3 LICENSED TO PRACTICE PUBLIC ACCOUNTING AS A CERTIFIED PUBLIC
4 ACCOUNTANT OR PUBLIC ACCOUNTANT IN THIS COMMONWEALTH OR ANOTHER
5 STATE.
6 (C) INDIVIDUALS TAKING THE EXAMINATION FOR THE FIRST TIME
7 AFTER JANUARY 1, 2000, MUST COMPLETE THE EXPERIENCE REQUIRED BY
8 THIS SECTION WITHIN ONE HUNDRED TWENTY MONTHS PRECEDING THE DATE
9 OF APPLICATION FOR A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT
10 UNDER SECTION 3.1(E) OF THIS ACT. INDIVIDUALS TAKING THE
11 EXAMINATION BEFORE JANUARY 1, 2000, NEED NOT ATTAIN THE
12 EXPERIENCE REQUIRED BY THIS SECTION WITHIN ANY PARTICULAR PERIOD
13 OF TIME.
14 (D) THE EXPERIENCE REQUIRED UNDER SUBSECTION (A)(1) MUST
15 INCLUDE NOT LESS THAN EIGHT HUNDRED HOURS OF ATTEST ACTIVITY,
16 AND THE EXPERIENCE REQUIRED UNDER SUBSECTION (A)(2) OR (4) MUST
17 INCLUDE NOT LESS THAN FOUR HUNDRED HOURS OF ATTEST ACTIVITY.
18 SECTION 5. SECTION 5 OF THE ACT, AMENDED MARCH 7, 1984
19 (P.L.106, NO.23), IS AMENDED TO READ:
20 SECTION 5. CERTIFICATES ISSUED BY DOMESTIC RECIPROCITY.--(A)
21 WITHOUT REQUIRING [A WRITTEN EXAMINATION] THE EXAMINATION
22 OTHERWISE REQUIRED UNDER SECTION 3.1(E) OF THIS ACT, THE BOARD
23 MAY, IN ITS DISCRETION, ISSUE A CERTIFICATE OF CERTIFIED PUBLIC
24 ACCOUNTANT TO A HOLDER OF A CERTIFICATE OF CERTIFIED PUBLIC
25 ACCOUNTANT THEN IN FULL FORCE AND EFFECT ISSUED [AS THE RESULT
26 OF A WRITTEN EXAMINATION] BY ANY OTHER STATE [OR FEDERAL
27 DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED STATES:
28 PROVIDED, THAT] FOLLOWING PASSAGE OF A WRITTEN EXAMINATION IF
29 THE APPLICANT SHALL SUBMIT EVIDENCE SATISFACTORY TO THE BOARD
30 THAT HE:
19950H1782B3538 - 74 -
1 (1) POSSESSES THE GENERAL QUALIFICATIONS SPECIFIED IN
2 SECTION 3.1(A) OF THIS ACT[; THAT HE], HAS PASSED THE WRITTEN
3 EXAMINATION REQUIRED TO PRACTICE AS A CERTIFIED PUBLIC
4 ACCOUNTANT UNDER THE LAWS OF [SUCH] THE OTHER STATE [OR FEDERAL
5 DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED STATES;
6 THAT HE], MEETS THE CONTINUING EDUCATION REQUIREMENTS SPECIFIED
7 IN SECTION 8.2(B) OF THIS ACT[; AND THAT HE HAS AT LEAST TWO
8 YEARS OF PUBLIC ACCOUNTING] AND HAS THE EXPERIENCE[.] REQUIRED
9 UNDER SECTION 4.1 OF THIS ACT TO RECEIVE THE CERTIFICATE IN THIS
10 COMMONWEALTH; OR
11 (2) HAS PASSED THE WRITTEN EXAMINATION REQUIRED TO PRACTICE
12 AS A CERTIFIED PUBLIC ACCOUNTANT UNDER THE LAWS OF THE OTHER
13 STATE AND HAS HELD A CERTIFICATE AND LICENSE TO PRACTICE PUBLIC
14 ACCOUNTING FOR THE IMMEDIATELY PRECEDING FIVE YEARS IN ANOTHER
15 STATE.
16 (B) AN APPLICANT FOR A CERTIFICATE UNDER THIS SECTION SHALL
17 LIST IN THE APPLICATION ALL STATES AND FOREIGN JURISDICTIONS IN
18 WHICH THE APPLICANT HAS APPLIED FOR OR HOLDS A DESIGNATION OR
19 CERTIFICATE TO PRACTICE PUBLIC ACCOUNTING.
20 (C) EACH HOLDER OF A CERTIFICATE ISSUED UNDER THIS SECTION
21 SHALL NOTIFY THE BOARD IN WRITING WITHIN THIRTY DAYS AFTER ITS
22 OCCURRENCE OF ANY ISSUANCE, DENIAL, REVOCATION OR SUSPENSION OF
23 HIS DESIGNATION, CERTIFICATE OR LICENSE TO PRACTICE PUBLIC
24 ACCOUNTING OR THE COMMENCEMENT OF A DISCIPLINARY OR ENFORCEMENT
25 ACTION AGAINST HIM OR HIS FIRM BY ANY STATE OR FOREIGN
26 JURISDICTION.
27 SECTION 6. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
28 SECTION 5.1. CERTIFICATES ISSUED BY FOREIGN RECIPROCITY.--
29 WITHOUT REQUIRING THE EXAMINATION OTHERWISE REQUIRED UNDER
30 SECTION 3.1(E) OF THIS ACT, THE BOARD MAY IN ITS DISCRETION
19950H1782B3538 - 75 -
1 ISSUE A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT TO A HOLDER
2 OF A FOREIGN DESIGNATION, GRANTED AND THEN IN FULL FORCE IN A
3 FOREIGN COUNTRY OR OTHER JURISDICTION THAT IS NOT A STATE,
4 ENTITLING THE HOLDER THEREOF TO ENGAGE IN THE PRACTICE OF PUBLIC
5 ACCOUNTING IF ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED:
6 (1) PURSUANT TO A DULY ENACTED FREE TRADE AGREEMENT, THE
7 FOREIGN JURISDICTION THAT GRANTED THE DESIGNATION MAKES SIMILAR
8 PROVISION TO ALLOW AN INDIVIDUAL WHO HOLDS A VALID CERTIFICATE
9 OF CERTIFIED PUBLIC ACCOUNTANT ISSUED BY THIS COMMONWEALTH TO
10 OBTAIN SUCH FOREIGN JURISDICTION'S COMPARABLE DESIGNATION.
11 (2) THE FOREIGN DESIGNATION:
12 (I) WAS DULY ISSUED BY A DULY CONSTITUTED AUTHORITY WITHIN
13 THE FOREIGN JURISDICTION THAT REGULATES THE PRACTICE OF PUBLIC
14 ACCOUNTING AND THE FOREIGN DESIGNATION HAS NOT EXPIRED OR BEEN
15 REVOKED OR SUSPENDED.
16 (II) ENTITLES THE HOLDER TO ISSUE REPORTS.
17 (III) WAS ISSUED UPON THE BASIS OF EDUCATIONAL, EXAMINATION
18 AND EXPERIENCE REQUIREMENTS ESTABLISHED BY THE FOREIGN AUTHORITY
19 OR BY LAW.
20 (3) THE APPLICANT:
21 (I) RECEIVED THE DESIGNATION BASED ON EDUCATIONAL AND
22 EXAMINATION STANDARDS SUBSTANTIALLY EQUIVALENT TO THOSE IN
23 EFFECT IN THIS COMMONWEALTH AT THE TIME THE FOREIGN DESIGNATION
24 WAS GRANTED.
25 (II) COMPLETED AN EXPERIENCE REQUIREMENT SUBSTANTIALLY
26 EQUIVALENT TO THE REQUIREMENTS SET FORTH IN SECTION 4.1 OF THIS
27 ACT IN THE JURISDICTION THAT GRANTED THE FOREIGN DESIGNATION OR
28 HAS COMPLETED FIVE YEARS OF EXPERIENCE IN THE PRACTICE OF PUBLIC
29 ACCOUNTING IN THIS COMMONWEALTH OR MEETS SUCH OTHER REQUIREMENTS
30 AS MAY BE PRESCRIBED BY THE BOARD BY RULE WITHIN THE TEN YEARS
19950H1782B3538 - 76 -
1 IMMEDIATELY PRECEDING THE APPLICATION.
2 (III) PASSED A UNIFORM QUALIFYING EXAMINATION IN NATIONAL
3 STANDARDS.
4 (B) AN APPLICANT FOR A CERTIFICATE UNDER THIS SECTION SHALL
5 LIST IN THE APPLICATION ALL STATES AND FOREIGN JURISDICTIONS IN
6 WHICH THE APPLICANT HAS APPLIED FOR OR HOLDS A DESIGNATION OR
7 CERTIFICATE TO PRACTICE PUBLIC ACCOUNTING.
8 (C) EACH HOLDER OF A CERTIFICATE ISSUED UNDER THIS SECTION
9 SHALL NOTIFY THE BOARD IN WRITING WITHIN THIRTY DAYS AFTER ITS
10 OCCURRENCE OF ANY ISSUANCE, DENIAL, REVOCATION OR SUSPENSION OF
11 HIS DESIGNATION, CERTIFICATE OR LICENSE TO PRACTICE PUBLIC
12 ACCOUNTING OR THE COMMENCEMENT OF A DISCIPLINARY OR ENFORCEMENT
13 ACTION AGAINST HIM OR HIS FIRM BY ANY STATE OR FOREIGN
14 JURISDICTION.
15 SECTION 7. SECTION 6 OF THE ACT, AMENDED MARCH 7, 1984
16 (P.L.106, NO.23), IS REENACTED TO READ:
17 SECTION 6. FEES.--(A) ALL FEES REQUIRED UNDER THE
18 PROVISIONS OF THIS ACT SHALL BE FIXED BY THE BOARD, BY
19 REGULATION AND SHALL BE SUBJECT TO REVIEW IN ACCORDANCE WITH THE
20 ACT OF JUNE 25, 1982 (P.L.633, NO.181), KNOWN AS THE "REGULATORY
21 REVIEW ACT." IF THE REVENUES GENERATED BY FEES, FINES AND CIVIL
22 PENALTIES IMPOSED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT
23 ARE NOT SUFFICIENT TO MATCH EXPENDITURES OVER A TWO-YEAR PERIOD,
24 THE BOARD SHALL INCREASE THOSE FEES BY REGULATION, SUBJECT TO
25 REVIEW IN ACCORDANCE WITH THE "REGULATORY REVIEW ACT," SUCH THAT
26 THE PROJECTED REVENUES WILL MEET OR EXCEED PROJECTED
27 EXPENDITURES.
28 (B) IF THE BUREAU OF PROFESSIONAL AND OCCUPATIONAL AFFAIRS
29 DETERMINES THAT THE FEES ESTABLISHED BY THE BOARD ARE INADEQUATE
30 TO MEET THE MINIMUM ENFORCEMENT EFFORTS REQUIRED, THEN THE
19950H1782B3538 - 77 -
1 BUREAU, AFTER CONSULTATION WITH THE BOARD, SHALL INCREASE THE
2 FEES BY REGULATION, SUBJECT TO REVIEW IN ACCORDANCE WITH THE
3 "REGULATORY REVIEW ACT," SUCH THAT ADEQUATE REVENUES ARE RAISED
4 TO MEET THE REQUIRED ENFORCEMENT EFFORT.
5 SECTION 8. SECTION 7 OF THE ACT IS AMENDED TO READ:
6 SECTION 7. STATUS OF EXISTING [CERTIFICATES] RIGHTS
7 PRESERVED.--ANY PERSON LEGALLY AUTHORIZED TO PRACTICE [AS A
8 CERTIFIED PUBLIC ACCOUNTANT] PUBLIC ACCOUNTING IN THIS
9 COMMONWEALTH AT THE TIME THIS ACT OR ANY AMENDMENT OF THIS ACT
10 TAKES EFFECT SHALL THEREAFTER POSSESS THE SAME RIGHTS AND
11 PRIVILEGES AS PERSONS TO WHOM CERTIFICATES OF CERTIFIED PUBLIC
12 ACCOUNTANT SHALL BE ISSUED [PURSUANT TO] UNDER THIS ACT,
13 SUBJECT, HOWEVER, TO THE POWER OF THE BOARD, AS PROVIDED IN THIS
14 ACT, TO [SUSPEND OR REVOKE THE CERTIFICATE OF] DISCIPLINE ANY
15 SUCH PERSON [OR CENSURE ANY SUCH PERSON] FOR ANY OF THE CAUSES
16 SET FORTH IN THIS ACT AND SUBJECT TO THE POWER OF THE BOARD TO
17 PROVIDE FOR AND TO REQUIRE PERMITS TO PRACTICE.
18 SECTION 9. SECTIONS 8.2, 8.3, 8.4, 8.5, 8.6 AND 8.7 OF THE
19 ACT, AMENDED MARCH 7, 1984 (P.L.106, NO.23), ARE AMENDED TO
20 READ:
21 SECTION 8.2. LICENSES TO PRACTICE.--(A) BIENNIAL LICENSES
22 TO ENGAGE IN THE PRACTICE OF PUBLIC ACCOUNTING IN THIS
23 COMMONWEALTH SHALL BE ISSUED BY THE [DEPARTMENT] DEPARTMENT OF
24 STATE UPON PAYMENT OF THE BIENNIAL LICENSING FEE TO (I) HOLDERS
25 OF THE CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT ISSUED BY THIS
26 COMMONWEALTH AND PUBLIC ACCOUNTANTS REGISTERED [UNDER THIS ACT]
27 IN THIS COMMONWEALTH WHO SHALL HAVE FURNISHED EVIDENCE
28 SATISFACTORY TO THE BOARD OF COMPLIANCE WITH THE REQUIREMENTS OF
29 SUBSECTION (B) OF THIS SECTION AND (II) [PARTNERSHIPS AND
30 CORPORATIONS REGISTERED UNDER SECTIONS 8.3 TO 8.6 OF THIS ACT]
19950H1782B3538 - 78 -
1 QUALIFIED ASSOCIATIONS LICENSED UNDER SECTION 8.8 OF THIS ACT.
2 LICENSES TO PRACTICE [ISSUED SEPTEMBER 1, 1983] SHALL EXPIRE ON
3 THE LAST DAY OF APRIL OF [1986 AND ON THE LAST DAY OF APRIL OF
4 ALTERNATE YEARS THEREAFTER,] EVEN-NUMBERED YEARS OR ON SUCH
5 OTHER BIENNIAL EXPIRATION DATES AS THE DEPARTMENT MAY FIX.
6 [LICENSES MAY BE RENEWED, BIENNIALLY, FOR A PERIOD OF TWO YEARS
7 BY SUCH CERTIFIED PUBLIC ACCOUNTANTS AND PUBLIC ACCOUNTANTS UPON
8 COMPLETION OF THE CONTINUING EDUCATION REQUIREMENT AND UPON
9 PAYMENT OF THE BIENNIAL FEE. A CERTIFIED PUBLIC ACCOUNTANT OR A
10 PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT WHO IS NOT ENGAGED
11 IN THE PRACTICE OF PUBLIC ACCOUNTING MAY REQUEST THE BOARD, IN
12 WRITING, TO PLACE HIS NAME ON THE INACTIVE ROLL AND THUS PROTECT
13 HIS RIGHT TO OBTAIN A LICENSE AT SUCH TIME AS HE MAY BECOME
14 ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING. THE BOARD, IN ITS
15 DISCRETION, MAY ALSO REVIEW EACH CASE OF FAILURE TO APPLY FOR
16 SUCH BIENNIAL LICENSE AND DETERMINE WHETHER SUCH FAILURE WAS DUE
17 TO REASONABLE CAUSE.]
18 (A.1) A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT WHO
19 IS NOT ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING MAY REQUEST
20 THE BOARD, IN WRITING, TO PLACE HIS NAME ON THE INACTIVE ROLL
21 AND THUS PROTECT HIS RIGHT TO OBTAIN A LICENSE AT SUCH TIME AS
22 HE MAY BECOME ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING.
23 (B) EACH [SUBSEQUENT PERIOD, EACH] CERTIFIED PUBLIC
24 ACCOUNTANT AND PUBLIC ACCOUNTANT FILING AN APPLICATION FOR A
25 LICENSE OR A RENEWAL THEREOF TO ENGAGE IN THE PRACTICE OF PUBLIC
26 ACCOUNTING IN THIS COMMONWEALTH MUST, DURING THE REPORTING
27 PERIOD IMMEDIATELY PRECEDING [A] THE CURRENT BIENNIAL [DATE]
28 PERIOD, COMPLETE EIGHTY HOURS OF CONTINUING EDUCATION, IN
29 PROGRAMS APPROVED BY THE BOARD. THE REPORTING PERIOD FOR
30 [LICENSES TO BE ISSUED MAY 1, 1986 SHALL BE SEPTEMBER 1, 1983 TO
19950H1782B3538 - 79 -
1 DECEMBER 31, 1985] LICENSEES SHALL BE JANUARY 1 OF EVEN-NUMBERED
2 YEARS TO DECEMBER 31 OF ODD-NUMBERED YEARS. NO CARRY-OVER OF
3 CREDITS SHALL BE PERMITTED FROM ONE BIENNIAL LICENSE PERIOD TO
4 ANOTHER. THE CONTINUING EDUCATION REQUIREMENT SHALL NOT APPLY TO
5 [PARTNERSHIPS, CORPORATIONS OR ASSOCIATIONS] FIRMS BUT SHALL
6 APPLY TO ALL NATURAL PERSONS WHO APPLY FOR A LICENSE OR A
7 RENEWAL THEREOF UNDER THIS SECTION.
8 (C) FAILURE BY [AN APPLICANT FOR RENEWAL] A LICENSED
9 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT APPLYING FOR
10 RENEWAL OF HIS BIENNIAL LICENSE TO FURNISH EVIDENCE OF
11 COMPLETION OF THE REQUIRED NUMBER OF HOURS OF ACCEPTABLE
12 CONTINUING EDUCATION SHALL CONSTITUTE GROUNDS FOR DENIAL OR
13 REFUSAL TO RENEW SUCH LICENSE, UNLESS THE BOARD, IN ITS
14 DISCRETION, SHALL DETERMINE SUCH FAILURE TO HAVE BEEN DUE TO
15 REASONABLE CAUSE, IN WHICH CASE THE BOARD SHALL GRANT AN
16 EXTENSION.
17 (D) IN ISSUING RULES, REGULATIONS AND INDIVIDUAL ORDERS WITH
18 RESPECT TO REQUIREMENTS OF CONTINUING EDUCATION, THE BOARD[, IN
19 ITS DISCRETION,] MAY RELY UPON GUIDELINES AND PRONOUNCEMENTS OF
20 RECOGNIZED EDUCATIONAL AND PROFESSIONAL ORGANIZATIONS; MAY
21 PRESCRIBE FOR CONTENT, DURATION AND ORGANIZATION OF COURSES;
22 SHALL TAKE INTO ACCOUNT THE ACCESSIBILITY OF SUCH CONTINUING
23 EDUCATION AS IT MAY REQUIRE, AND ANY IMPEDIMENTS TO INTERSTATE
24 PRACTICE OF PUBLIC ACCOUNTING WHICH MAY RESULT FROM DIFFERENCES
25 IN SUCH REQUIREMENTS IN OTHER STATES; AND MAY PROVIDE FOR
26 RELAXATION OR SUSPENSION OF SUCH REQUIREMENTS IN INSTANCES OF
27 INDIVIDUAL HARDSHIP SUCH AS FOR REASONS OF HEALTH, MILITARY
28 SERVICE OR OTHER GOOD CAUSE.
29 (E) A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT WHO
30 IS ALSO CERTIFIED, REGISTERED OR LICENSED TO PRACTICE PUBLIC
19950H1782B3538 - 80 -
1 ACCOUNTING IN ANY OTHER STATE OR FOREIGN JURISDICTION SHALL
2 REPORT THIS INFORMATION TO THE BOARD ON THE BIENNIAL RENEWAL
3 APPLICATION. ANY DISCIPLINARY ACTION TAKEN IN ANY OTHER STATE OR
4 FOREIGN JURISDICTION SHALL BE REPORTED TO THE BOARD ON THE
5 BIENNIAL RENEWAL APPLICATION OR WITHIN THIRTY DAYS OF
6 DISPOSITION, WHICHEVER IS SOONER. MULTIPLE CERTIFICATION,
7 REGISTRATION OR LICENSURE SHALL BE NOTED BY THE BOARD ON THE
8 RECORD OF THE CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT,
9 AND THE OTHER STATE OR FOREIGN JURISDICTION SHALL BE NOTIFIED BY
10 THE BOARD WITHIN THIRTY DAYS AFTER ANY DISCIPLINARY ACTION IS
11 TAKEN AGAINST THE CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
12 ACCOUNTANT IN THIS COMMONWEALTH.
13 (F) AN INITIAL OR RENEWAL LICENSE SHALL NOT BE ISSUED AFTER
14 APRIL 30, 2000, TO A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
15 ACCOUNTANT PRACTICING AS A SOLE PRACTITIONER UNLESS HE COMPLIES
16 WITH THE REQUIREMENTS OF SECTION 8.9 OF THIS ACT.
17 [SECTION 8.3. PARTNERSHIPS COMPOSED SOLELY OF CERTIFIED
18 PUBLIC ACCOUNTANTS.--A PARTNERSHIP COMPOSED SOLELY OF CERTIFIED
19 PUBLIC ACCOUNTANTS ENGAGED IN THIS COMMONWEALTH IN THE PRACTICE
20 OF PUBLIC ACCOUNTING SHALL REGISTER WITH THE BOARD AS A
21 PARTNERSHIP OF CERTIFIED PUBLIC ACCOUNTANTS, PROVIDED IT MEETS
22 THE FOLLOWING REQUIREMENTS:
23 (1) AT LEAST ONE PARTNER THEREOF MUST BE A CERTIFIED PUBLIC
24 ACCOUNTANT OF THIS COMMONWEALTH AND A CURRENT LICENSEE, AND
25 (2) EACH PARTNER THEREOF PERSONALLY ENGAGED WITHIN THIS
26 COMMONWEALTH IN THE PRACTICE OF PUBLIC ACCOUNTING AS A MEMBER
27 THEREOF (I) MUST BE A CERTIFIED PUBLIC ACCOUNTANT OF THIS
28 COMMONWEALTH AND A CURRENT LICENSEE, OR (II) MUST BE A CERTIFIED
29 PUBLIC ACCOUNTANT OF SOME STATE OR FEDERAL DISTRICT, TERRITORY
30 OR INSULAR POSSESSION OF THE UNITED STATES IN GOOD STANDING AND
19950H1782B3538 - 81 -
1 MUST HAVE FILED WITH THE BOARD, BUT NOT HAVE BEEN REFUSED BY THE
2 BOARD, AN APPLICATION FOR A CERTIFICATE OF CERTIFIED PUBLIC
3 ACCOUNTANT OF THIS COMMONWEALTH BY RECIPROCITY AND AFTER HAVING
4 RECEIVED SUCH CERTIFICATE MUST HAVE FILED FOR, BUT NOT BEEN
5 REFUSED, A LICENSE UNDER SECTION 8.2 OF THIS ACT, AND
6 (3) EACH PARTNER THEREOF ENGAGED IN THE PRACTICE OF PUBLIC
7 ACCOUNTING IN THE UNITED STATES MUST BE A CERTIFIED PUBLIC
8 ACCOUNTANT OF SOME STATE OR FEDERAL DISTRICT, TERRITORY OR
9 INSULAR POSSESSION OF THE UNITED STATES IN GOOD STANDING, AND
10 (4) EACH INDIVIDUAL IN CHARGE OF AN OFFICE OF A PARTNERSHIP
11 IN THIS COMMONWEALTH MUST BE A CERTIFIED PUBLIC ACCOUNTANT OF
12 THIS COMMONWEALTH AND A CURRENT LICENSEE.
13 SECTION 8.4. CORPORATIONS COMPOSED SOLELY OF CERTIFIED
14 PUBLIC ACCOUNTANTS.--A PROFESSIONAL CORPORATION OR A
15 PROFESSIONAL ASSOCIATION COMPOSED SOLELY OF CERTIFIED PUBLIC
16 ACCOUNTANTS ORGANIZED IN THIS COMMONWEALTH OR ANY OTHER STATE OR
17 TERRITORY OF THE UNITED STATES OR DISTRICT OF COLUMBIA, AND
18 ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING IN THIS
19 COMMONWEALTH AS CERTIFIED PUBLIC ACCOUNTANTS, SHALL REGISTER
20 WITH THE BOARD AND FILE WITH THE BOARD A COPY OF ITS ARTICLES OF
21 INCORPORATION, OR ARTICLES OF ASSOCIATION, AND A COPY OF ITS
22 BYLAWS, AND SUCH PROFESSIONAL CORPORATION, OR PROFESSIONAL
23 ASSOCIATION SHALL AT ALL TIMES HAVE THE FOLLOWING
24 CHARACTERISTICS:
25 (1) THE NAME UNDER WHICH THE PROFESSIONAL CORPORATION OR
26 PROFESSIONAL ASSOCIATION RENDERS PROFESSIONAL SERVICES SHALL
27 CONTAIN ONLY THE NAME OF THE CERTIFIED PUBLIC ACCOUNTANT IN THE
28 CASE OF A SOLE PRACTITIONER, THE NAMES OF ONE OR MORE OF THE
29 PRESENT OR FORMER ASSOCIATES OR SHAREHOLDERS OR OF PARTNERS WHO
30 WERE ASSOCIATED WITH A PREDECESSOR ACCOUNTING FIRM. NO NAME OF A
19950H1782B3538 - 82 -
1 PROFESSIONAL CORPORATION, OR PROFESSIONAL ASSOCIATION SHALL
2 INCLUDE THE WORDS CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
3 ACCOUNTANT, OR ANY ABBREVIATIONS THEREOF. IMPERSONAL OR
4 FICTITIOUS NAMES, AS WELL AS NAMES WHICH INDICATE A SPECIALTY,
5 ARE PROHIBITED.
6 (2) THE PROFESSIONAL CORPORATION, OR PROFESSIONAL
7 ASSOCIATION SHALL NOT PROVIDE SERVICES THAT ARE INCOMPATIBLE
8 WITH THE PRACTICE OF PUBLIC ACCOUNTING.
9 (3) ALL SHAREHOLDERS OF THE PROFESSIONAL CORPORATION OR
10 ASSOCIATES OF THE PROFESSIONAL ASSOCIATION SHALL BE PERSONS DULY
11 QUALIFIED TO PRACTICE AS CERTIFIED PUBLIC ACCOUNTANTS IN A STATE
12 OR TERRITORY OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA,
13 AND ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING. AT LEAST ONE
14 SHAREHOLDER OF A PROFESSIONAL CORPORATION MUST BE A CERTIFIED
15 PUBLIC ACCOUNTANT OF THIS COMMONWEALTH, AND EACH SHAREHOLDER
16 THEREOF PERSONALLY ENGAGED WITHIN THIS COMMONWEALTH IN THE
17 PRACTICE OF PUBLIC ACCOUNTING AS A SHAREHOLDER THEREOF, MUST BE
18 A CERTIFIED PUBLIC ACCOUNTANT OF THIS COMMONWEALTH. EACH
19 INDIVIDUAL IN CHARGE OF AN OFFICE OF A PROFESSIONAL CORPORATION
20 IN THIS COMMONWEALTH MUST BE A CERTIFIED PUBLIC ACCOUNTANT OF
21 THIS COMMONWEALTH AND A CURRENT LICENSEE. AT LEAST ONE ASSOCIATE
22 OF A PROFESSIONAL ASSOCIATION MUST BE A CERTIFIED PUBLIC
23 ACCOUNTANT OF THIS COMMONWEALTH AND EACH ASSOCIATE THEREOF
24 PERSONALLY ENGAGED WITHIN THIS COMMONWEALTH IN THE PRACTICE OF
25 PUBLIC ACCOUNTING AS AN ASSOCIATE THEREOF, MUST BE A CERTIFIED
26 PUBLIC ACCOUNTANT OF THIS COMMONWEALTH. EACH INDIVIDUAL IN
27 CHARGE OF AN OFFICE OF A PROFESSIONAL ASSOCIATION IN THIS
28 COMMONWEALTH MUST BE A CERTIFIED PUBLIC ACCOUNTANT OF THIS
29 COMMONWEALTH AND A CURRENT LICENSEE. SHAREHOLDERS OR ASSOCIATES
30 SHALL AT ALL TIMES OWN THEIR SHARES OR INTEREST IN THEIR OWN
19950H1782B3538 - 83 -
1 RIGHT AND SHALL BE THE REAL AND BENEFICIAL OWNERS OF SUCH EQUITY
2 CAPITAL OR INTEREST ASCRIBED TO THEM.
3 (4) IN THE CASE OF PROFESSIONAL CORPORATIONS, TRANSFER OF
4 SHARES SHALL BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF
5 JULY 9, 1970 (P.L.461, NO.160), KNOWN AS THE "PROFESSIONAL
6 CORPORATION LAW." IN THE CASE OF PROFESSIONAL ASSOCIATIONS,
7 PROVISIONS SHALL BE MADE REQUIRING ANY ASSOCIATE WHO CEASES TO
8 BE ELIGIBLE TO BE AN ASSOCIATE TO DISPOSE OF ALL OF HIS INTEREST
9 WITHIN A REASONABLE PERIOD TO A PERSON QUALIFIED TO BE AN
10 ASSOCIATE OR TO THE ASSOCIATION. IF MUTUAL AGREEMENT CANNOT BE
11 REACHED, AND IF THE METHOD OF DETERMINING THE SALE PRICE OF THE
12 INTEREST OF AN ASSOCIATE IS NOT EXPRESSED IN THE ARTICLES OF
13 ASSOCIATION, THE FAIR VALUE OF SUCH INTEREST SHALL BE DETERMINED
14 BY THE AMERICAN ARBITRATION ASSOCIATION.
15 (5) THE PRINCIPAL EXECUTIVE OFFICER OF A PROFESSIONAL
16 CORPORATION SHALL BE A SHAREHOLDER AND A DIRECTOR, AND TO THE
17 EXTENT POSSIBLE, ALL OTHER DIRECTORS AND OFFICERS SHALL BE
18 CERTIFIED PUBLIC ACCOUNTANTS. THE PRINCIPAL EXECUTIVE OFFICER OF
19 A PROFESSIONAL ASSOCIATION SHALL BE AN ASSOCIATE AND A GOVERNOR
20 AND, TO THE EXTENT POSSIBLE, ALL OTHER GOVERNORS AND OFFICERS
21 SHALL BE CERTIFIED PUBLIC ACCOUNTANTS. LAY DIRECTORS, GOVERNORS,
22 AND OFFICERS SHALL NOT EXERCISE ANY AUTHORITY WHATSOEVER OVER
23 PROFESSIONAL MATTERS.
24 (6) THE RIGHT TO PRACTICE AS A PROFESSIONAL CORPORATION OR
25 PROFESSIONAL ASSOCIATION SHALL NOT CHANGE THE OBLIGATION OF ITS
26 SHAREHOLDERS, DIRECTORS, OFFICERS, ASSOCIATES, OR BOARD OF
27 GOVERNORS AND OTHER EMPLOYES TO COMPLY WITH THE RULES OF
28 PROFESSIONAL CONDUCT PROMULGATED BY THE BOARD.
29 (7) IN ADDITION TO THE LIABILITY PROVISIONS OF THE
30 "PROFESSIONAL CORPORATION LAW," THE PROFESSIONAL CORPORATION
19950H1782B3538 - 84 -
1 SHALL CARRY PROFESSIONAL LIABILITY INSURANCE OR MAINTAIN
2 UNIMPAIRED CAPITAL IN ACCORDANCE WITH REGULATIONS PROMULGATED BY
3 THE BOARD. IN ADDITION TO THE LIABILITY PROVISIONS OF THE ACT OF
4 AUGUST 7, 1961 (P.L.941, NO.416), KNOWN AS THE "PROFESSIONAL
5 ASSOCIATION ACT," THE PROFESSIONAL ASSOCIATION SHALL CARRY
6 PROFESSIONAL LIABILITY INSURANCE OR MAINTAIN UNIMPAIRED CAPITAL
7 IN ACCORDANCE WITH REGULATIONS PROMULGATED BY THE BOARD.
8 LIABILITY SHALL NOT BE LIMITED BY THE FORMATION OF SUBSIDIARY OR
9 AFFILIATED CORPORATIONS OR ASSOCIATIONS EACH WITH ITS OWN
10 LIMITED AND UNRELATED LIABILITY.
11 SECTION 8.5. PARTNERSHIPS, COMPOSED OF CERTIFIED PUBLIC
12 ACCOUNTANTS AND PUBLIC ACCOUNTANTS OR SOLELY OF PUBLIC
13 ACCOUNTANTS.--A PARTNERSHIP, COMPOSED OF CERTIFIED PUBLIC
14 ACCOUNTANTS AND PUBLIC ACCOUNTANTS OR SOLELY OF PUBLIC
15 ACCOUNTANTS, ENGAGED IN THIS COMMONWEALTH IN THE PRACTICE OF
16 PUBLIC ACCOUNTING SHALL REGISTER WITH THE BOARD AS A PARTNERSHIP
17 OF PUBLIC ACCOUNTANTS PROVIDED IT MEETS THE FOLLOWING
18 REQUIREMENTS:
19 (1) AT LEAST ONE PARTNER THEREOF MUST BE A CERTIFIED PUBLIC
20 ACCOUNTANT OR A PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT AND
21 A CURRENT LICENSEE, AND
22 (2) EACH PARTNER THEREOF PERSONALLY ENGAGED WITHIN THIS
23 COMMONWEALTH IN THE PRACTICE OF PUBLIC ACCOUNTING AS A MEMBER
24 THEREOF (I) MUST BE A CERTIFIED PUBLIC ACCOUNTANT OR A PUBLIC
25 ACCOUNTANT REGISTERED UNDER THIS ACT AND A CURRENT LICENSEE, OR
26 (II) MUST BE A CERTIFIED PUBLIC ACCOUNTANT OF SOME STATE OR
27 FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED
28 STATES IN GOOD STANDING AND MUST HAVE FILED WITH THE BOARD, BUT
29 NOT HAVE BEEN REFUSED BY THE BOARD, AN APPLICATION FOR
30 CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT OF THIS COMMONWEALTH
19950H1782B3538 - 85 -
1 BY RECIPROCITY AND AFTER HAVING RECEIVED SUCH CERTIFICATE, MUST
2 HAVE FILED FOR, BUT NOT HAVE BEEN REFUSED, A LICENSE UNDER
3 SECTION 8.2 OF THIS ACT, AND
4 (3) EACH INDIVIDUAL IN CHARGE OF AN OFFICE OF A PARTNERSHIP
5 IN THIS COMMONWEALTH MUST BE A CERTIFIED PUBLIC ACCOUNTANT OR A
6 PUBLIC ACCOUNTANT OF THIS COMMONWEALTH AND A CURRENT LICENSEE.
7 SECTION 8.6. CORPORATIONS, COMPOSED OF CERTIFIED PUBLIC
8 ACCOUNTANTS AND PUBLIC ACCOUNTANTS OR SOLELY OF PUBLIC
9 ACCOUNTANTS.--A PROFESSIONAL CORPORATION OR A PROFESSIONAL
10 ASSOCIATION, COMPOSED OF CERTIFIED PUBLIC ACCOUNTANTS AND PUBLIC
11 ACCOUNTANTS OR SOLELY OF PUBLIC ACCOUNTANTS, ORGANIZED UNDER THE
12 LAWS OF THIS COMMONWEALTH AND ENGAGED IN THE PRACTICE OF PUBLIC
13 ACCOUNTING IN THIS COMMONWEALTH AS PUBLIC ACCOUNTANTS, SHALL
14 REGISTER WITH THE BOARD AND FILE WITH THE BOARD A COPY OF ITS
15 ARTICLES OF INCORPORATION, OR ARTICLES OF ASSOCIATION, AND A
16 COPY OF ITS BYLAWS, AND SUCH PROFESSIONAL CORPORATION, OR
17 PROFESSIONAL ASSOCIATION SHALL AT ALL TIMES HAVE THE FOLLOWING
18 CHARACTERISTICS:
19 (1) THE NAME UNDER WHICH THE PROFESSIONAL CORPORATION OR
20 PROFESSIONAL ASSOCIATION RENDER PROFESSIONAL SERVICES SHALL
21 CONTAIN ONLY THE NAME OF THE PUBLIC ACCOUNTANT IN THE CASE OF A
22 SOLE PRACTITIONER, THE NAMES OF ONE OR MORE OF THE PRESENT OR
23 FORMER ASSOCIATES OR SHAREHOLDERS OR OF PARTNERS WHO WERE
24 ASSOCIATED WITH A PREDECESSOR ACCOUNTING FIRM. NO NAME OF A
25 PROFESSIONAL CORPORATION, OR PROFESSIONAL ASSOCIATION SHALL
26 INCLUDE THE WORDS CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
27 ACCOUNTANT, OR ANY ABBREVIATIONS THEREOF. IMPERSONAL OR
28 FICTITIOUS NAMES, AS WELL AS NAMES WHICH INDICATE A SPECIALTY,
29 ARE PROHIBITED.
30 (2) THE PROFESSIONAL CORPORATION OR PROFESSIONAL ASSOCIATION
19950H1782B3538 - 86 -
1 SHALL NOT PROVIDE SERVICES THAT ARE INCOMPATIBLE WITH THE
2 PRACTICE OF PUBLIC ACCOUNTING.
3 (3) ALL SHAREHOLDERS OF THE PROFESSIONAL CORPORATION OR
4 ASSOCIATES OF THE PROFESSIONAL ASSOCIATION SHALL BE PERSONS DULY
5 QUALIFIED TO PRACTICE AS CERTIFIED PUBLIC ACCOUNTANTS IN A STATE
6 OR TERRITORY OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA,
7 OR AS PUBLIC ACCOUNTANTS REGISTERED UNDER THIS ACT, AND ENGAGED
8 IN THE PRACTICE OF PUBLIC ACCOUNTING. AT LEAST ONE SHAREHOLDER
9 OF A PROFESSIONAL CORPORATION MUST BE A CERTIFIED PUBLIC
10 ACCOUNTANT, OR A PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT AND
11 EACH SHAREHOLDER THEREOF PERSONALLY ENGAGED WITHIN THIS
12 COMMONWEALTH IN THE PRACTICE OF PUBLIC ACCOUNTING AS A
13 SHAREHOLDER THEREOF, MUST BE A CERTIFIED PUBLIC ACCOUNTANT, OR A
14 PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT. EACH INDIVIDUAL IN
15 CHARGE OF AN OFFICE OF A PROFESSIONAL CORPORATION IN THIS
16 COMMONWEALTH MUST BE A CERTIFIED PUBLIC ACCOUNTANT AND A CURRENT
17 LICENSEE. AT LEAST ONE ASSOCIATE OF A PROFESSIONAL ASSOCIATION
18 MUST BE A CERTIFIED PUBLIC ACCOUNTANT, OR A PUBLIC ACCOUNTANT
19 REGISTERED UNDER THIS ACT AND EACH ASSOCIATE THEREOF PERSONALLY
20 ENGAGED WITHIN THIS COMMONWEALTH IN THE PRACTICE OF PUBLIC
21 ACCOUNTING AS AN ASSOCIATE THEREOF, MUST BE A CERTIFIED PUBLIC
22 ACCOUNTANT, OR A PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT.
23 EACH INDIVIDUAL IN CHARGE OF AN OFFICE OF A PROFESSIONAL
24 ASSOCIATION IN THIS COMMONWEALTH MUST BE A CERTIFIED PUBLIC
25 ACCOUNTANT, OR A PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT AND
26 A CURRENT LICENSEE. SHAREHOLDERS OR ASSOCIATES SHALL AT ALL
27 TIMES OWN THEIR SHARES OF INTEREST IN THEIR OWN RIGHT AND SHALL
28 BE THE REAL AND BENEFICIAL OWNERS OF SUCH EQUITY CAPITAL OR
29 INTEREST ASCRIBED TO THEM.
30 (4) IN THE CASE OF PROFESSIONAL CORPORATIONS, TRANSFER OF
19950H1782B3538 - 87 -
1 SHARES SHALL BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF
2 JULY 9, 1970 (P.L.461, NO.160), KNOWN AS THE "PROFESSIONAL
3 CORPORATION LAW." IN THE CASE OF PROFESSIONAL ASSOCIATIONS,
4 PROVISIONS SHALL BE MADE REQUIRING ANY ASSOCIATE WHO CEASES TO
5 BE ELIGIBLE TO BE AN ASSOCIATE TO DISPOSE OF ALL OF HIS INTEREST
6 WITHIN A REASONABLE PERIOD TO A PERSON QUALIFIED TO BE AN
7 ASSOCIATE OR TO THE ASSOCIATION. IF MUTUAL AGREEMENT CANNOT BE
8 REACHED, AND IF THE METHOD OF DETERMINING THE SALE PRICE OF THE
9 INTEREST OF AN ASSOCIATE IS NOT EXPRESSED IN THE ARTICLES OF
10 ASSOCIATION, THE FAIR VALUE OF SUCH INTEREST SHALL BE DETERMINED
11 BY THE AMERICAN ARBITRATION ASSOCIATION.
12 (5) THE PRINCIPAL EXECUTIVE OFFICER OF A PROFESSIONAL
13 CORPORATION SHALL BE A SHAREHOLDER AND A DIRECTOR, AND TO THE
14 EXTENT POSSIBLE, ALL OTHER DIRECTORS AND OFFICERS SHALL BE
15 CERTIFIED PUBLIC ACCOUNTANTS, OR PUBLIC ACCOUNTANTS REGISTERED
16 UNDER THIS ACT. THE PRINCIPAL EXECUTIVE OFFICER OF A
17 PROFESSIONAL ASSOCIATION SHALL BE AN ASSOCIATE AND A GOVERNOR
18 AND, TO THE EXTENT POSSIBLE, ALL OTHER GOVERNORS AND OFFICERS
19 SHALL BE CERTIFIED PUBLIC ACCOUNTANTS, OR PUBLIC ACCOUNTANTS
20 REGISTERED UNDER THIS ACT. LAY DIRECTORS, GOVERNORS, AND
21 OFFICERS SHALL NOT EXERCISE ANY AUTHORITY WHATSOEVER OVER
22 PROFESSIONAL MATTERS.
23 (6) THE RIGHT TO PRACTICE AS A PROFESSIONAL CORPORATION OR
24 PROFESSIONAL ASSOCIATION SHALL NOT CHANGE THE OBLIGATION OF ITS
25 SHAREHOLDERS, DIRECTORS, OFFICERS, ASSOCIATES, OR BOARD OF
26 GOVERNORS AND OTHER EMPLOYES TO COMPLY WITH THE RULES OF
27 PROFESSIONAL CONDUCT PROMULGATED BY THE BOARD.
28 (7) IN ADDITION TO THE LIABILITY PROVISIONS OF THE
29 "PROFESSIONAL CORPORATION LAW," THE PROFESSIONAL CORPORATION
30 SHALL CARRY PROFESSIONAL LIABILITY INSURANCE OR MAINTAIN
19950H1782B3538 - 88 -
1 UNIMPAIRED CAPITAL IN ACCORDANCE WITH REGULATIONS PROMULGATED BY
2 THE BOARD. IN ADDITION TO THE LIABILITY PROVISIONS OF THE ACT OF
3 AUGUST 7, 1961 (P.L.941, NO.416), KNOWN AS THE "PROFESSIONAL
4 ASSOCIATION ACT," THE PROFESSIONAL ASSOCIATION SHALL CARRY
5 PROFESSIONAL LIABILITY INSURANCE OR MAINTAIN UNIMPAIRED CAPITAL
6 IN ACCORDANCE WITH REGULATIONS PROMULGATED BY THE BOARD.
7 LIABILITY SHALL NOT BE LIMITED BY THE FORMATION OF SUBSIDIARY OR
8 AFFILIATED CORPORATIONS OR ASSOCIATIONS EACH WITH ITS OWN
9 LIMITED AND UNRELATED LIABILITY.
10 SECTION 8.7. REGISTRATION OF PUBLIC ACCOUNTANTS.--ANY PERSON
11 (I) WHO IS A RESIDENT OF THIS COMMONWEALTH OR HAS A PLACE OF
12 BUSINESS THEREIN, AND (II) WHO HAS ATTAINED THE AGE OF EIGHTEEN
13 YEARS, AND (III) WHO IS OF GOOD MORAL CHARACTER, AND (IV) MEETS
14 THE REQUIREMENTS OF CLAUSE (1) OR (2) TO THE SATISFACTION OF THE
15 BOARD AS SET FORTH IN CLAUSE (3) MAY REGISTER WITH THE BOARD AS
16 A PUBLIC ACCOUNTANT WITHIN TWELVE (12) MONTHS FROM PUBLICATION
17 IN THE PENNSYLVANIA BULLETIN OF THE ANNOUNCEMENT THAT
18 APPLICATION FORMS ARE AVAILABLE AND NOT THEREAFTER:
19 (1) PERSONS WHO HELD THEMSELVES OUT TO THE PUBLIC AS PUBLIC
20 ACCOUNTANTS AND WHO WERE ENGAGED AS PRINCIPALS (AS DISTINGUISHED
21 FROM EMPLOYES) WITHIN THIS COMMONWEALTH (I) ON OR BEFORE
22 DECEMBER 8, 1976 IN THE PRACTICE OF PUBLIC ACCOUNTING AS THEIR
23 PRINCIPAL OCCUPATION, OR (II) AT ANY TIME WITHIN SIX (6) YEARS
24 PRIOR TO DECEMBER 8, 1976.
25 (2) PERSONS SERVING IN THE ARMED FORCES OF THE UNITED STATES
26 OF AMERICA ON OR BEFORE DECEMBER 8, 1976 WHO IMMEDIATELY PRIOR
27 TO ENTERING SUCH SERVICE HELD THEMSELVES OUT TO THE PUBLIC AS
28 PUBLIC ACCOUNTANTS AND WERE ENGAGED AS PRINCIPALS (AS
29 DISTINGUISHED FROM EMPLOYES) WITHIN THIS COMMONWEALTH IN THE
30 PRACTICE OF PUBLIC ACCOUNTING AS THEIR PRINCIPAL OCCUPATION.
19950H1782B3538 - 89 -
1 (2.1) THE TIME FOR REGISTRATION FOR PERSONS WHO MEET THE
2 REQUIREMENTS OF CLAUSE (1) OR (2) SHALL BE TWELVE (12) MONTHS
3 FROM PUBLICATION IN THE PENNSYLVANIA BULLETIN OF THE
4 ANNOUNCEMENT THAT THEY ARE ELIGIBLE FOR REGISTRATION AND THAT
5 APPLICATION FORMS ARE AVAILABLE.
6 (3) IN ORDER TO MEET THE REQUIREMENTS OF CLAUSES (1) AND
7 (2), THE APPLICANT MUST FURNISH THE BOARD WITH EVIDENCE THAT HE,
8 AS A PRINCIPAL (AS DISTINGUISHED FROM AN EMPLOYE), HAS HELD
9 HIMSELF OUT TO THE PUBLIC AS BEING ENGAGED IN THE PRACTICE OF
10 PUBLIC ACCOUNTING AS HIS PRINCIPAL OCCUPATION.
11 (4) THE BOARD SHALL IN EACH CASE DETERMINE WHETHER THE
12 APPLICANT QUALIFIED FOR REGISTRATION. ANY INDIVIDUAL WHO IS SO
13 REGISTERED AND WHO HOLDS A PERMIT ISSUED UNDER SECTION 8.2 OF
14 THIS ACT SHALL BE STYLED AND KNOWN AS A "PUBLIC ACCOUNTANT."
15 (5) THE DEPARTMENT SHALL CHARGE A FEE FOR REGISTRATION
16 HEREUNDER.
17 (6) PERSONS WHO HAVE REGISTERED AS PROVIDED IN THIS SECTION
18 AND WHOSE QUALIFICATIONS AS SET FORTH IN THEIR REGISTRATION
19 APPLICATIONS ARE IN COMPLIANCE WITH THIS SECTION MAY CONTINUE TO
20 HOLD THEMSELVES OUT TO THE PUBLIC AS PUBLIC ACCOUNTANTS AND
21 ENGAGE AS PRINCIPALS IN THE PRACTICE OF PUBLIC ACCOUNTING WITHIN
22 THIS COMMONWEALTH AND SHALL NOT BE SUBJECT TO SECTIONS 12, 14,
23 15, 16 AND 16.2 FOR A PERIOD OF ONE (1) YEAR FROM THE ENACTMENT
24 HEREOF BUT THEREAFTER SHALL BE SUBJECT TO THE PROVISIONS OF
25 SECTIONS 12, 14, 15, 16 AND 16.2.]
26 SECTION 10. THE ACT IS AMENDED BY ADDING SECTIONS TO READ:
27 SECTION 8.8. LICENSING OF FIRMS.--(A) AN ASSOCIATION SHALL
28 NOT PRACTICE PUBLIC ACCOUNTING IN THIS COMMONWEALTH UNLESS IT IS
29 A QUALIFIED ASSOCIATION, HAS BEEN GRANTED A LICENSE TO PRACTICE
30 AND SATISFIES THE REQUIREMENTS OF THIS SECTION AT ALL TIMES
19950H1782B3538 - 90 -
1 WHILE IT IS A LICENSEE. A NEW FIRM SHALL APPLY FOR ITS INITIAL
2 LICENSE WITHIN THIRTY DAYS AFTER ITS FORMATION; THEREAFTER, THE
3 FIRM'S LICENSE SHALL BE SUBJECT TO RENEWAL IN ACCORDANCE WITH
4 SECTION 8.2 OF THIS ACT.
5 (B) THE INITIAL AND ALL RENEWAL LICENSE APPLICATIONS BY A
6 FIRM SHALL:
7 (1) LIST THE NAME, HOME ADDRESS AND LICENSE NUMBER OF EACH
8 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT WHO OWNS AN
9 EQUITY INTEREST DIRECTLY OR INDIRECTLY IN THE FIRM AND WHO IS A
10 LICENSEE.
11 (2) LIST THE NAME AND HOME ADDRESS OF EACH QUALIFIED
12 NONLICENSEE WHO OWNS AN EQUITY INTEREST IN THE FIRM IF THE
13 PRINCIPAL RESIDENCE OR THE OFFICE OUT OF WHICH THE INDIVIDUAL
14 PRINCIPALLY PRACTICES IS LOCATED IN THIS COMMONWEALTH.
15 (3) INCLUDE A STATEMENT THAT THE FIRM IS IN COMPLIANCE WITH
16 SUBSECTIONS (D) AND (E).
17 (C) AN INITIAL OR RENEWAL LICENSE SHALL NOT BE ISSUED TO A
18 FIRM AFTER APRIL 30, 2000, UNLESS THE FIRM COMPLIES WITH THE
19 REQUIREMENTS OF SECTION 8.9 OF THIS ACT.
20 (D) A FIRM SHALL SATISFY ALL OF THE FOLLOWING REQUIREMENTS:
21 (1) AT LEAST ONE GENERAL PARTNER IF THE FIRM IS A
22 PARTNERSHIP, ONE RECORD AND BENEFICIAL OWNER OF COMMON SHARES IF
23 THE FIRM IS A CORPORATION, OR ONE OWNER OF A SIMILAR EQUITY
24 INTEREST IF THE FIRM IS ANY OTHER FORM OF QUALIFIED ASSOCIATION,
25 SHALL BE A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT WHO
26 IS A LICENSEE.
27 (2) EXCEPT AS PROVIDED IN SUBSECTIONS (E) AND (F), EACH
28 SHAREHOLDER, PARTNER, MEMBER OR OTHER OWNER OF AN EQUITY
29 INTEREST IN THE FIRM MUST BE THE HOLDER OF A CURRENT LICENSE TO
30 PRACTICE PUBLIC ACCOUNTING AS A CERTIFIED PUBLIC ACCOUNTANT OR
19950H1782B3538 - 91 -
1 PUBLIC ACCOUNTANT UNDER THE LAWS OF THIS COMMONWEALTH OR ANOTHER
2 JURISDICTION. THIS CLAUSE SHALL NOT:
3 (I) APPLY IN THE CASE OF A PERSON WHO WITHDRAWS FROM A FIRM
4 FOR SUCH PERIOD AS MAY BE REASONABLE UNDER THE CIRCUMSTANCES TO
5 PERMIT THE FIRM TO COMPLY WITH THIS REQUIREMENT; OR
6 (II) PROHIBIT PAYMENTS BY A FIRM TO A FORMER EQUITY OWNER OR
7 HIS ESTATE IN CONNECTION WITH HIS WITHDRAWAL FROM THE FIRM.
8 (3) EACH INDIVIDUAL IN CHARGE OF AN OFFICE THAT PERFORMS ANY
9 ATTEST ACTIVITY OR BUSINESS UNIT OF THE FIRM IN THIS
10 COMMONWEALTH SHALL BE A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
11 ACCOUNTANT WHO IS A LICENSEE.
12 (4) THE PRINCIPAL EXECUTIVE OFFICER OF THE FIRM SHALL BE A
13 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT WHO HOLDS A
14 CURRENT LICENSE TO PRACTICE PUBLIC ACCOUNTING IN THIS
15 COMMONWEALTH OR ANOTHER STATE.
16 (5) AN INDIVIDUAL WHO DOES NOT HOLD A CURRENT LICENSE TO
17 PRACTICE PUBLIC ACCOUNTING AS A CERTIFIED PUBLIC ACCOUNTANT OR
18 PUBLIC ACCOUNTANT IN THIS COMMONWEALTH OR ANOTHER STATE OR
19 FOREIGN JURISDICTION SHALL NOT ASSUME ULTIMATE RESPONSIBILITY
20 FOR ANY ATTEST ACTIVITY.
21 (E) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A QUALIFIED
22 NONLICENSEE MAY OWN AN EQUITY INTEREST IN A FIRM IF ALL OF THE
23 FOLLOWING CONDITIONS ARE MET:
24 (1) ALL OF THE QUALIFIED NONLICENSEES OWNING EQUITY
25 INTERESTS IN THE FIRM SHALL NOT:
26 (I) OWN IN THE AGGREGATE EQUITY INTERESTS IN THE FIRM
27 ENTITLING THEM TO CAST MORE THAN ONE-THIRD OF THE VOTES ON ANY
28 ISSUE OR TO RECEIVE MORE THAN ONE-THIRD OF ANY DIVIDEND OR OTHER
29 DISTRIBUTION OF PROFITS OR ASSETS OF THE FIRM; OR
30 (II) CONSTITUTE MORE THAN ONE-THIRD IN NUMBER OF THE OWNERS
19950H1782B3538 - 92 -
1 OF EQUITY INTERESTS IN THE FIRM.
2 (2) THE QUALIFIED NONLICENSEE SHALL NOT HOLD HIMSELF OUT AS
3 A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT.
4 (3) THE QUALIFIED NONLICENSEE SHALL BE PERMITTED TO
5 DESIGNATE OR REFER TO HIMSELF AS A PRINCIPAL, OWNER, OFFICER,
6 MEMBER OR SHAREHOLDER OF THE FIRM. THE QUALIFIED NONLICENSEE MAY
7 ALSO USE SUCH OTHER TITLES AS MAY BE AUTHORIZED BY THE
8 REGULATIONS OF THE BOARD.
9 (4) THE QUALIFIED NONLICENSEE SHALL NOT:
10 (I) HAVE PLEADED GUILTY TO, ENTERED A PLEA OF NOLO
11 CONTENDERE TO OR BEEN FOUND GUILTY OR BEEN CONVICTED OF A FELONY
12 UNDER THE LAWS OF THIS COMMONWEALTH OR ANY OTHER JURISDICTION;
13 OR
14 (II) BE IN VIOLATION OF ANY REGULATION OF THE BOARD
15 REGARDING THE CHARACTER OR CONDUCT OF A QUALIFIED NONLICENSEE
16 WHO IS THE OWNER OF AN EQUITY INTEREST IN A FIRM.
17 (5) THE PARTICIPATION OF THE QUALIFIED NONLICENSEE IN THE
18 BUSINESS OF THE FIRM MUST BE THE PRINCIPAL OCCUPATION OF THE
19 INDIVIDUAL AND SHALL BE IN THE NATURE OF PROVIDING SERVICES TO
20 THE FIRM OR CLIENTS OF THE FIRM AND NOT SOLELY AS AN INVESTOR OR
21 IN ANOTHER COMMERCIAL OR PASSIVE CAPACITY.
22 (6) THE QUALIFIED NONLICENSEE HAS GRADUATED WITH A
23 BACCALAUREATE OR HIGHER DEGREE FROM A COLLEGE OR UNIVERSITY
24 APPROVED AT THE TIME OF GRADUATION BY THE DEPARTMENT OF
25 EDUCATION.
26 (7) THE QUALIFIED NONLICENSEE SHALL COMPLY WITH ALL
27 APPLICABLE PROVISIONS OF THIS ACT AND THE REGULATIONS OF THE
28 BOARD.
29 (F) AN EQUITY INTEREST IN A FIRM MAY BE OWNED INDIRECTLY BUT
30 ONLY IF ALL OF THE ULTIMATE, INDIRECT BENEFICIAL OWNERS OF THE
19950H1782B3538 - 93 -
1 EQUITY INTEREST ARE LICENSEES.
2 (G) IN ACCORDANCE WITH THE PROCEDURE REFERRED TO IN SECTION
3 9 OF THIS ACT, THE BOARD MAY REVOKE THE LICENSE TO PRACTICE OF A
4 FIRM IF AT ANY TIME IT IS IN VIOLATION OF ANY OF THE PROVISIONS
5 OF THIS SECTION.
6 SECTION 8.9. PEER REVIEW.--(A) AS A CONDITION FOR GRANTING
7 A FIRM A RENEWAL LICENSE, OR AN INITIAL LICENSE IN THE CASE OF A
8 FIRM THAT HAS PREVIOUSLY BEEN ENGAGED IN PRACTICE IN ANOTHER
9 JURISDICTION, THE BOARD SHALL REQUIRE THAT THE FIRM UNDERGO A
10 PEER REVIEW IN ACCORDANCE WITH THIS SECTION UNLESS THE FIRM
11 MEETS ONE OF THE EXEMPTIONS IN SUBSECTION (G). THE FIRM SHALL
12 SUBMIT TO THE BOARD WITH ITS LICENSE APPLICATION A LETTER FROM
13 THE ORGANIZATION ADMINISTERING THE FIRM'S MOST RECENT PEER
14 REVIEW STATING THE DATE ON WHICH THE PEER REVIEW WAS COMPLETED.
15 THE BOARD SHALL NOT REQUIRE SUBMITTAL OF THE LETTER OF
16 ACCEPTANCE, PEER REVIEW REPORT, LETTER OF COMMENT, LETTER OF
17 RESPONSE OR WORKING PAPERS RELATED TO THE PEER REVIEW PROCESS.
18 AS USED IN THIS SECTION, THE TERM "FIRM" INCLUDES, BUT IS NOT
19 LIMITED TO, A SOLE PRACTITIONER.
20 (B) A FIRM WITH LESS THAN THREE LICENSEES SHALL NOT BE
21 REQUIRED TO UNDERGO A PEER REVIEW MORE FREQUENTLY THAN ONCE
22 EVERY FIVE YEARS AND A FIRM WITH THREE OR MORE LICENSEES SHALL
23 NOT BE REQUIRED TO UNDERGO A PEER REVIEW MORE FREQUENTLY THAN
24 ONCE EVERY THREE YEARS, EXCEPT THAT:
25 (1) THE BOARD MAY ORDER A FIRM THAT HAS BEEN DISCIPLINED
26 UNDER SECTION 9.1 OF THIS ACT OR THAT HAS BEEN ORDERED TO TAKE
27 REMEDIAL ACTION UNDER SUBSECTION (E) TO UNDERGO A PEER REVIEW
28 MORE FREQUENTLY.
29 (2) A NEW FIRM THAT IS NOT SUBJECT TO SUBSECTION (J) SHALL
30 UNDERGO ITS FIRST PEER REVIEW WITHIN EIGHTEEN MONTHS AFTER IT IS
19950H1782B3538 - 94 -
1 GRANTED ITS INITIAL LICENSE.
2 (C) THE BOARD SHALL ADOPT REGULATIONS ESTABLISHING
3 GUIDELINES FOR PEER REVIEWS WHICH SHALL:
4 (1) REQUIRE THAT A PEER REVIEW BE CONDUCTED PURSUANT TO A
5 PROGRAM AND STANDARDS APPROVED BY THE BOARD. THE BOARD SHALL
6 APPROVE ONLY PEER REVIEW PROGRAMS THAT THE BOARD FINDS COMPLY
7 WITH ESTABLISHED STANDARDS FOR PERFORMING AND REPORTING ON PEER
8 REVIEWS.
9 (2) REQUIRE THAT A PEER REVIEW BE CONDUCTED BY A REVIEWER
10 THAT IS INDEPENDENT OF THE FIRM REVIEWED, QUALIFIED PURSUANT TO
11 BOARD RULES AND APPROVED BY THE ORGANIZATION ADMINISTERING THE
12 PEER REVIEW PROGRAM.
13 (3) OTHER THAN IN THE PEER REVIEW PROCESS, PROHIBIT THE USE
14 OR PUBLIC DISCLOSURE OF INFORMATION OBTAINED BY THE REVIEWER,
15 ANY ORGANIZATION ADMINISTERING AN APPROVED PEER REVIEW PROGRAM
16 OR THE BOARD DURING OR IN CONNECTION WITH THE PEER REVIEW
17 PROCESS. THE REQUIREMENT THAT INFORMATION NOT BE PUBLICLY
18 DISCLOSED SHALL NOT APPLY TO A HEARING BEFORE THE BOARD THAT THE
19 FIRM REQUESTS BE PUBLIC UNDER SUBSECTION (E) OR TO THE
20 INFORMATION DESCRIBED IN SUBSECTION (H)(3).
21 (D) (1) THE PEER REVIEW OF A FIRM THAT PERFORMS ONE OR MORE
22 AUDITS OF HISTORICAL FINANCIAL STATEMENTS OR EXAMINATIONS OF
23 PROSPECTIVE FINANCIAL INFORMATION SHALL INCLUDE AN ONSITE STUDY
24 AND EVALUATION OF A REPRESENTATIVE SELECTION OF AUDIT,
25 EXAMINATION, REVIEW AND COMPILATION REPORTS, THE FINANCIAL
26 INFORMATION UPON WHICH THOSE REPORTS WERE BASED AND THE
27 ASSOCIATED WORKING PAPERS. THE ONSITE REVIEW SHALL INCLUDE
28 ADDITIONAL PROCEDURES RELATING TO THE FIRM'S SYSTEM OF QUALITY
29 CONTROL SUFFICIENT TO PROVIDE THE REVIEWER WITH A REASONABLE
30 BASIS UPON WHICH TO ISSUE A PEER REVIEW REPORT.
19950H1782B3538 - 95 -
1 (2) THE PEER REVIEW OF A FIRM THAT PERFORMS NO AUDIT OR
2 EXAMINATION ENGAGEMENTS BUT DOES PERFORM ONE OR MORE REVIEW
3 ENGAGEMENTS SHALL BE REQUIRED ONLY TO BE AN OFFSITE STUDY AND
4 EVALUATION OF A REPRESENTATIVE SELECTION OF REPORTS ISSUED BY
5 THE FIRM AND THE FINANCIAL INFORMATION UPON WHICH THOSE REPORTS
6 WERE BASED; BUT, IF SUCH A FIRM ELECTS TO HAVE AN ONSITE REVIEW,
7 THAT REVIEW SHALL ALSO BE ACCEPTABLE. THE OFFSITE REVIEW SHALL
8 NOT BE REQUIRED TO INCLUDE A STUDY OF THE ASSOCIATED WORKING
9 PAPERS BUT SHALL INCLUDE PROCEDURES AND INQUIRIES SUFFICIENT TO
10 PROVIDE THE REVIEWER WITH A REASONABLE BASIS UPON WHICH TO ISSUE
11 A PEER REVIEW REPORT.
12 (3) A FIRM THAT DOES NOT PERFORM ANY AUDITS OR REVIEWS,
13 REGARDLESS OF WHETHER OR NOT THE FIRM PERFORMS COMPILATIONS,
14 SHALL BE EXEMPT FROM THE REQUIREMENT TO UNDERGO A PEER REVIEW TO
15 THE EXTENT PROVIDED IN SUBSECTION (G)(2).
16 (E) IF A FIRM DOES NOT COMPLY WITH ANY REMEDIAL ACTIONS
17 DETERMINED APPROPRIATE BY THE ADMINISTERING ORGANIZATION, THE
18 ADMINISTERING ORGANIZATION SHALL REFER THE MATTER TO THE BOARD
19 TO DETERMINE IF FURTHER ACTION UNDER THIS SUBSECTION IS
20 WARRANTED. THE BOARD MAY AT ITS DISCRETION OR SHALL UPON
21 SUBMISSION OF A WRITTEN APPLICATION BY THE FIRM HOLD A HEARING
22 TO DETERMINE WHETHER THE FIRM COMPLIES WITH THE APPROPRIATE
23 PROFESSIONAL STANDARDS AND PRACTICES. THE HEARING SHALL BE
24 CONFIDENTIAL AND SHALL NOT BE OPEN TO THE PUBLIC UNLESS
25 REQUESTED BY THE FIRM. IF THE BOARD AFTER CONDUCTING A HEARING
26 DETERMINES THAT THE FIRM COMPLIES WITH THE APPROPRIATE
27 PROFESSIONAL STANDARDS AND PRACTICES, IT SHALL ISSUE AN ORDER
28 REQUIRING THE REVIEWER AND THE ADMINISTERING ORGANIZATION TO
29 TAKE ANY NECESSARY ACTION TO RECORD AND IMPLEMENT THE BOARD'S
30 DETERMINATION AND TO RESTORE THE STATUS OF COMPLIANCE OF THE
19950H1782B3538 - 96 -
1 FIRM. HOWEVER, IF THE BOARD AFTER CONDUCTING THE HEARING
2 DETERMINES THAT THE FIRM DOES NOT COMPLY WITH THE APPROPRIATE
3 PROFESSIONAL STANDARDS AND PRACTICES, IT MAY ISSUE AN ORDER THAT
4 REQUIRES BOTH OF THE FOLLOWING:
5 (1) REMEDIAL ACTION, WHICH MAY INCLUDE ANY OR ALL OF THE
6 FOLLOWING:
7 (I) REQUIRING EMPLOYES OF THE FIRM TO COMPLETE GENERAL OR
8 SPECIFIC CONTINUING PROFESSIONAL EDUCATION COURSES.
9 (II) REQUIRING THE FIRM TO UNDERGO A PEER REVIEW MORE
10 FREQUENTLY THAN EVERY THREE YEARS.
11 (III) ANY OTHER REMEDIAL ACTION SPECIFIED BY THE BOARD.
12 (2) AN AFFIDAVIT FROM THE FIRM SUBMITTED WITHIN THE TIME
13 SPECIFIED BY THE BOARD INDICATING COMPLETION OF THE REQUIRED
14 REMEDIAL ACTIONS.
15 (F) THE FIRM REVIEWED SHALL PAY FOR ANY PEER REVIEW
16 PERFORMED.
17 (G) A FIRM SHALL BE EXEMPT FROM THE REQUIREMENT TO UNDERGO A
18 PEER REVIEW IF ALL OF THE FOLLOWING APPLY:
19 (1) WITHIN THREE YEARS BEFORE THE DATE OF APPLICATION FOR
20 INITIAL OR RENEWAL LICENSURE, THE FIRM HAS UNDERGONE A PEER
21 REVIEW CONDUCTED IN ANOTHER STATE OR FOREIGN JURISDICTION WHICH
22 MEETS THE REQUIREMENTS OF SUBSECTION (C)(1) AND (2). THE FIRM
23 SHALL SUBMIT TO THE BOARD A LETTER FROM THE ORGANIZATION
24 ADMINISTERING THE FIRM'S MOST RECENT PEER REVIEW STATING THE
25 DATE ON WHICH THE PEER REVIEW WAS COMPLETED.
26 (2) THE FIRM SATISFIES ALL OF THE FOLLOWING CONDITIONS:
27 (I) DURING THE PRECEDING TWO YEARS, THE FIRM HAS NOT
28 ACCEPTED OR PERFORMED ANY AUDIT OR REVIEW ENGAGEMENT.
29 (II) WITHIN THE NEXT TWO YEARS, THE FIRM DOES NOT INTEND TO
30 ACCEPT OR PERFORM ANY AUDIT OR REVIEW ENGAGEMENT.
19950H1782B3538 - 97 -
1 (III) THE FIRM AGREES TO NOTIFY THE BOARD WITHIN THIRTY DAYS
2 OF ACCEPTING AN AUDIT OR REVIEW ENGAGEMENT AND TO UNDERGO A PEER
3 REVIEW WITHIN EIGHTEEN MONTHS OF COMMENCING SUCH ACTIVITIES.
4 (3) FOR REASONS OF PERSONAL HEALTH, MILITARY SERVICE OR
5 OTHER GOOD CAUSE, THE BOARD DETERMINES THAT THE FIRM IS ENTITLED
6 TO AN EXEMPTION FOR A PERIOD OF TIME NOT TO EXCEED TWELVE
7 MONTHS.
8 (H) IN ANY CIVIL ACTION, ARBITRATION OR ADMINISTRATIVE
9 PROCEEDING, REGARDLESS OF WHETHER A LICENSEE IS A PARTY THERETO,
10 ALL OF THE FOLLOWING SHALL APPLY:
11 (1) THE PROCEEDINGS, RECORDS (INCLUDING, WITHOUT LIMITATION,
12 LETTERS OF ACCEPTANCE, PEER REVIEW REPORTS, LETTERS OF COMMENT
13 AND LETTERS OF RESPONSE) AND WORKING PAPERS RELATED TO THE PEER
14 REVIEW PROCESS OF ANY REVIEWER, ADMINISTERING ORGANIZATION OR
15 BOARD MEMBER ARE PRIVILEGED AND NOT SUBJECT TO DISCOVERY,
16 SUBPOENA OR OTHER MEANS OF LEGAL PROCESS AND MAY NOT BE
17 INTRODUCED INTO EVIDENCE.
18 (2) NO EMPLOYE, MEMBER OR AGENT OF AN ADMINISTERING
19 ORGANIZATION, REVIEWER OR BOARD MEMBER SHALL BE PERMITTED OR
20 REQUIRED TO TESTIFY AS TO ANY MATTERS PRODUCED, PRESENTED,
21 DISCLOSED OR DISCUSSED DURING OR IN CONNECTION WITH THE PEER
22 REVIEW PROCESS OR BE REQUIRED TO TESTIFY TO ANY FINDING,
23 RECOMMENDATION, EVALUATION, OPINION OR OTHER ACTIONS OF ANY
24 PERSON IN CONNECTION WITH THE PEER REVIEW PROCESS.
25 (3) NO PRIVILEGE EXISTS UNDER THIS SUBSECTION:
26 (I) FOR INFORMATION PRESENTED OR CONSIDERED IN THE PEER
27 REVIEW PROCESS THAT WAS OTHERWISE AVAILABLE TO THE PUBLIC.
28 (II) FOR MATERIAL NOT PREPARED IN CONNECTION WITH A PEER
29 REVIEW MERELY BECAUSE THEY SUBSEQUENTLY ARE PRESENTED OR
30 CONSIDERED AS PART OF THE PEER REVIEW PROCESS.
19950H1782B3538 - 98 -
1 (III) IN CONNECTION WITH AN ADMINISTRATIVE PROCEEDING OR
2 RELATED CIVIL ACTION BROUGHT FOR THE PURPOSE OF ENFORCING THIS
3 SECTION.
4 (I) IF A PEER REVIEW REPORT INDICATES THAT A FIRM COMPLIES
5 WITH THE APPROPRIATE PROFESSIONAL STANDARDS AND PRACTICES SET
6 FORTH IN THE REGULATIONS OF THE BOARD, THE ADMINISTERING
7 ORGANIZATION SHALL DESTROY ALL WORKING PAPERS AND DOCUMENTS,
8 OTHER THAN REPORT-RELATED DOCUMENTS, RELATED TO THE PEER REVIEW
9 WITHIN NINETY DAYS AFTER ISSUANCE TO THE FIRM OF THE LETTER OF
10 ACCEPTANCE BY THE ADMINISTERING ORGANIZATION. IF A PEER REVIEW
11 LETTER OF ACCEPTANCE INDICATES THAT CORRECTIVE ACTION BY A FIRM
12 IS REQUIRED, THE ADMINISTERING ORGANIZATION MAY RETAIN DOCUMENTS
13 AND REPORTS RELATED TO THE PEER REVIEW UNTIL COMPLETION OF THE
14 NEXT PEER REVIEW OR OTHER AGREED-TO CORRECTIVE ACTIONS.
15 (J) IN THE EVENT THE PRACTICES OF TWO OR MORE FIRMS ARE
16 MERGED OR OTHERWISE COMBINED, THE SURVIVING FIRM SHALL RETAIN
17 THE PEER REVIEW YEAR OF THE LARGEST FIRM, AS DETERMINED BY THE
18 NUMBER OF ACCOUNTING AND AUDITING HOURS OF EACH OF THE
19 PRACTICES. IN THE EVENT THAT THE PRACTICE OF A FIRM IS DIVIDED
20 OR A PORTION OF ITS PRACTICE IS SOLD OR OTHERWISE TRANSFERRED,
21 ANY FIRM ACQUIRING SOME OR ALL OF THE PRACTICE THAT DOES NOT
22 ALREADY HAVE ITS OWN REVIEW YEAR SHALL RETAIN THE REVIEW YEAR OF
23 THE FORMER FIRM. IN THE EVENT THAT THE FIRST PEER REVIEW OF A
24 FIRM THAT WOULD OTHERWISE BE REQUIRED BY THIS SUBSECTION WOULD
25 BE LESS THAN TWELVE MONTHS AFTER ITS PREVIOUS REVIEW, A REVIEW
26 YEAR SHALL BE ASSIGNED BY THE ADMINISTERING ORGANIZATION SO THAT
27 THE FIRM'S NEXT PEER REVIEW OCCURS AFTER NOT LESS THAN TWELVE
28 MONTHS OF OPERATION, BUT NOT LATER THAN EIGHTEEN MONTHS OF
29 OPERATION.
30 (K) (1) NONE OF THE FOLLOWING PERSONS SHALL BE HELD TO HAVE
19950H1782B3538 - 99 -
1 VIOLATED ANY CRIMINAL LAW OR TO BE CIVILLY LIABLE BY REASON OF
2 THE PERFORMANCE BY HIM OR IT OF ANY DUTY, FUNCTION OR ACTIVITY
3 UNDER THIS SECTION SO LONG AS THE PERSON HAS NOT ENGAGED IN
4 RECKLESSNESS OR WILLFUL MISCONDUCT:
5 (I) REVIEWERS;
6 (II) THE ADMINISTERING ORGANIZATION OR ANY OF ITS MEMBERS,
7 EMPLOYEES OR AGENTS OR ANY PERSON FURNISHING PROFESSIONAL
8 COUNSEL OR SERVICES TO THE ADMINISTERING ORGANIZATION; OR
9 (III) BOARD MEMBERS.
10 (2) SUBSECTION (H) SHALL NOT APPLY TO THE DEFENSE OF A CLAIM
11 ALLEGING CONDUCT NOT PROTECTED UNDER CLAUSE (1).
12 (L) THIS SECTION SHALL APPLY AS FOLLOWS:
13 (1) EXCEPT AS PROVIDED IN CLAUSE (2), THIS SECTION SHALL
14 TAKE EFFECT ON (THE LEGISLATIVE REFERENCE BUREAU SHALL INSERT
15 HERE THE EFFECTIVE DATE OF THIS AMENDATORY ACT). THIS CLAUSE
16 INCLUDES WITHOUT LIMITATION EFFECTIVENESS FOR THE PURPOSES OF
17 PERMITTING THE BOARD TO PROMULGATE THE REGULATIONS UNDER
18 SUBSECTION (C) AND OF APPLYING SUBSECTIONS (H) AND (K).
19 (2) THIS SECTION SHALL NOT BECOME APPLICABLE TO FIRMS AND NO
20 FIRM SHALL BE REQUIRED TO UNDERGO A PEER REVIEW UNDER THIS
21 SECTION, UNTIL MAY 1, 2000; EXCEPT THAT THIS SECTION SHALL NOT
22 BECOME APPLICABLE UNTIL MAY 1, 2004, TO A FIRM THAT HAS NOT
23 ACCEPTED OR PERFORMED ANY AUDIT ENGAGEMENTS DURING THE PERIOD
24 MAY 1, 1998, THROUGH APRIL 30, 2004.
25 SECTION 11. SECTIONS 9, 9.1, 9.2 AND 9.3 OF THE ACT, AMENDED
26 MARCH 7, 1984 (P.L.106, NO.23), ARE AMENDED TO READ:
27 SECTION 9. DISCIPLINARY PROCEDURE [FOR THE SUSPENSION AND
28 REVOCATION OF CERTIFICATES]; APPEALS.--[THE] (A) EXCEPT AS
29 PROVIDED IN SECTION 2.3(C) OF THIS ACT, THE PROCEDURE TO BE
30 FOLLOWED IN THE [SUSPENSION AND REVOCATION OF CERTIFICATES,
19950H1782B3538 - 100 -
1 REGISTRATIONS OR LICENSES TO PRACTICE UNDER THIS ACT, CENSURE OF
2 CERTIFICATE HOLDERS OR REGISTRANTS,] REVOCATION OF A FIRM'S
3 LICENSE UNDER SECTION 8.8(G) OF THIS ACT OR THE IMPOSITION OF
4 DISCIPLINE UNDER SECTION 9.1 OF THIS ACT, AND IN APPEALS TAKEN
5 FROM DISCIPLINARY ACTIONS OF THE BOARD SHALL BE THAT PRESCRIBED
6 [BY THE ACT, APPROVED THE FOURTH DAY OF JUNE, ONE THOUSAND NINE
7 HUNDRED FORTY-FIVE (PAMPHLET LAWS 1388), KNOWN AS THE
8 ADMINISTRATIVE AGENCY LAW, AND ITS AMENDMENTS, AND ANY GENERAL
9 RULES OF ADMINISTRATIVE PRACTICE AND PROCEDURE] UNDER 2 PA.C.S.
10 CH. 5 SUBCH. A (RELATING TO PRACTICE AND PROCEDURE OF
11 COMMONWEALTH AGENCIES) AND CH. 7 SUBCH. A (RELATING TO JUDICIAL
12 REVIEW OF COMMONWEALTH AGENCY ACTION), 1 PA. CODE PART II
13 (RELATING TO GENERAL RULES OF ADMINISTRATIVE PRACTICE AND
14 PROCEDURE) AND APPLICABLE REGULATIONS PROMULGATED BY THE BOARD
15 [PURSUANT TO SAID ACT].
16 (B) THE BOARD SHALL REQUIRE AN INDIVIDUAL WHOSE
17 CERTIFICATION HAS BEEN SUSPENDED OR REVOKED TO RETURN HIS
18 CERTIFICATE OR TO CERTIFY IN SUCH MANNER AS THE BOARD DIRECTS
19 THAT IT WAS LOST, STOLEN OR DESTROYED. FAILURE TO COMPLY WITH
20 THE BOARD'S DIRECTIONS SHALL BE A MISDEMEANOR OF THE THIRD
21 DEGREE.
22 SECTION 9.1. [REVOCATION OR SUSPENSION OF CERTIFICATE,
23 REGISTRATION OR LICENSE.--] GROUNDS FOR DISCIPLINE.--(A) IN
24 ACCORDANCE WITH THE PROCEDURE [REFERRED TO] PROVIDED IN SECTION
25 9 OF THIS ACT, THE BOARD[, BY A MAJORITY VOTE OF ITS MAXIMUM
26 AUTHORIZED MEMBERSHIP AS PROVIDED BY LAW, OR BY A MAJORITY VOTE
27 OF THE DULY QUALIFIED AND CONFIRMED MEMBERSHIP OR A MINIMUM OF
28 SEVEN AFFIRMATIVE VOTES, WHICHEVER IS GREATER, IF THE MEMBERSHIP
29 OF THE BOARD IS LESS THAN ITS AUTHORIZED MEMBERSHIP AS PROVIDED
30 BY LAW,] MAY REVOKE [OR], SUSPEND [ANY], LIMIT OR OTHERWISE
19950H1782B3538 - 101 -
1 RESTRICT THE CERTIFICATE OF A CERTIFIED PUBLIC ACCOUNTANT OR THE
2 REGISTRATION OF [THOSE REGISTERED UNDER THIS ACT, OR] A PUBLIC
3 ACCOUNTANT, MAY REVOKE, SUSPEND [OR REFUSE TO RENEW], LIMIT OR
4 OTHERWISE RESTRICT ANY LICENSE ISSUED UNDER [OF] THIS ACT, [OR]
5 MAY CENSURE OR PUBLICLY REPRIMAND THE HOLDER OF ANY [SUCH]
6 CERTIFICATE, REGISTRATION OR LICENSE, MAY REQUIRE COMPLETION OF
7 GENERAL OR A SPECIFIC NUMBER OF CONTINUING PROFESSIONAL
8 EDUCATION COURSES OR MAY REQUIRE MORE FREQUENT PEER REVIEW OR
9 OTHER REMEDIAL ACTION FOR ANY ONE OR ANY COMBINATION OF THE
10 FOLLOWING CAUSES:
11 (1) FRAUD OR DECEIT IN OBTAINING A CERTIFICATE [AS] OF
12 CERTIFIED PUBLIC ACCOUNTANT OR IN OBTAINING REGISTRATION UNDER
13 THIS ACT OR IN OBTAINING A LICENSE TO PRACTICE UNDER THIS ACT.
14 (2) DISHONESTY, FRAUD OR GROSS NEGLIGENCE IN THE PRACTICE OF
15 PUBLIC ACCOUNTING.
16 (3) VIOLATION OF ANY OF THE PROVISIONS OF SECTION 12 OF THIS
17 ACT.
18 (4) VIOLATION OF A RULE OF PROFESSIONAL CONDUCT PROMULGATED
19 BY THE BOARD UNDER THE AUTHORITY GRANTED BY THIS ACT.
20 (5) PLEADING GUILTY TO, ENTERING A PLEA OF NOLO
21 CONTENDERE[,] TO OR BEING FOUND GUILTY OF A FELONY UNDER [THE
22 LAWS OF ANY STATE OR FEDERAL DISTRICT, TERRITORY OR INSULAR
23 POSSESSION OF THE UNITED STATES OR OF THE UNITED STATES.] ANY
24 FEDERAL OR STATE LAW OR THE LAWS OF ANY FOREIGN JURISDICTION.
25 (6) PLEADING GUILTY TO, ENTERING A PLEA OF NOLO
26 CONTENDERE[,] TO OR BEING FOUND GUILTY OF ANY CRIME, AN ELEMENT
27 OF WHICH IS DISHONESTY OR FRAUD UNDER [THE LAWS OF ANY STATE OR
28 FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED
29 STATES OR OF THE UNITED STATES.] ANY FEDERAL OR STATE LAW OR THE
30 LAWS OF ANY FOREIGN JURISDICTION.
19950H1782B3538 - 102 -
1 (6.1) PLEADING GUILTY TO, ENTERING A PLEA OF NOLO CONTENDERE
2 TO OR BEING FOUND GUILTY OF VIOLATING ANY FEDERAL OR STATE
3 REVENUE LAW OR THE REVENUE LAWS OF ANY FOREIGN JURISDICTION.
4 (7) CANCELLATION, REVOCATION, SUSPENSION OR REFUSAL TO RENEW
5 HIS AUTHORITY TO PRACTICE AS A CERTIFIED PUBLIC ACCOUNTANT[,] OR
6 PUBLIC ACCOUNTANT [OR FOREIGN ACCOUNTANT] BY ANY OTHER STATE OR
7 [FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED
8 STATES] FOREIGN JURISDICTION FOR ANY CAUSE OTHER THAN FAILURE TO
9 PAY A REGISTRATION OR OTHER FEE IN SUCH OTHER STATE OR [FEDERAL
10 DISTRICT, TERRITORY OR INSULAR POSSESSION.] FOREIGN
11 JURISDICTION.
12 (8) SUSPENSION OR REVOCATION OF THE RIGHT TO PRACTICE BEFORE
13 ANY [STATE OR] FEDERAL OR STATE GOVERNMENTAL AGENCY.
14 (10) FAILURE OF [A CERTIFICATE HOLDER OR REGISTRANT]
15 CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT TO FURNISH
16 EVIDENCE OF [SATISFACTION] COMPLETION OF THE REQUIREMENTS [OF]
17 FOR CONTINUING EDUCATION [AS REQUIRED BY THE BOARD UNDER AND
18 PURSUANT TO] UNDER SECTION 8.2 OF THIS ACT OR TO MEET ANY
19 CONDITIONS [IN] WITH RESPECT [OF] TO CONTINUING EDUCATION
20 [WHICH] THAT THE BOARD MAY HAVE ORDERED IN RESPECT [OF] TO SUCH
21 [CERTIFICATE HOLDER OR REGISTRANT] CERTIFIED PUBLIC ACCOUNTANT
22 OR PUBLIC ACCOUNTANT UNDER THAT SECTION.
23 [(11) CONDUCT DISCREDITABLE TO THE PUBLIC ACCOUNTING
24 PROFESSION.]
25 (12) FAILURE OF A FIRM OR SOLE PROPRIETORSHIP TO SATISFY THE
26 PEER REVIEW REQUIREMENTS IN SECTION 8.9 OF THIS ACT.
27 (13) FAILURE OF A FIRM TO SATISFY ANY OF THE ORGANIZATIONAL
28 REQUIREMENTS IN SECTION 8.8(D) OF THIS ACT.
29 (14) CONDUCT THAT BRINGS THE PROFESSION OF PUBLIC ACCOUNTING
30 INTO DISREPUTE OR THAT LOWERS PUBLIC ESTEEM FOR THE PROFESSION.
19950H1782B3538 - 103 -
1 (15) VIOLATION OF AN ORDER OF THE BOARD.
2 (16) ENGAGING IN UNPROFESSIONAL CONDUCT. DISCIPLINE MAY BE
3 IMPOSED UNDER THIS CLAUSE WHETHER OR NOT ACTUAL INJURY OR LOSS
4 TO A CLIENT IS ESTABLISHED.
5 (B) THE FACT THAT A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
6 ACCOUNTANT IS ON INACTIVE STATUS UNDER SECTION 8.2(A.1) OF THIS
7 ACT OR THAT A PERSON DOES NOT HOLD A CURRENT LICENSE FOR ANY
8 REASON SHALL NOT LIMIT OR OTHERWISE AFFECT THE POWER OF THE
9 BOARD TO DISCIPLINE HIM OR IT AS PROVIDED IN SUBSECTION (A).
10 (C) FOR THE PURPOSES OF THIS SECTION ONLY, "UNPROFESSIONAL
11 CONDUCT" MEANS:
12 (1) UNDERTAKING TO PERFORM PROFESSIONAL SERVICES THAT THE
13 CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT OR FIRM CANNOT
14 REASONABLY EXPECT TO COMPLETE WITH PROFESSIONAL COMPETENCE;
15 (2) FAILURE TO EXERCISE DUE PROFESSIONAL CARE IN THE
16 PERFORMANCE OF PROFESSIONAL SERVICES;
17 (3) FAILURE TO ADEQUATELY PLAN AND SUPERVISE THE PERFORMANCE
18 OF PROFESSIONAL SERVICES;
19 (4) FAILURE TO OBTAIN SUFFICIENT DATA TO AFFORD A REASONABLE
20 BASIS FOR CONCLUSIONS OR RECOMMENDATIONS IN RELATION TO ANY
21 PROFESSIONAL SERVICES PERFORMED; OR
22 (5) FAILURE TO COMPLY WITH ANY STANDARD PROMULGATED BY ANY
23 RECOGNIZED PUBLIC OR PRIVATE STANDARD-SETTING BODY THAT IS
24 APPLICABLE TO THE PROFESSIONAL SERVICE BEING PERFORMED.
25 SECTION 9.2. REINSTATEMENT.--[UPON] (A) EXCEPT AS PROVIDED
26 IN SUBSECTION (B), UPON APPLICATION IN WRITING AND AFTER HEARING
27 PURSUANT TO NOTICE, THE BOARD MAY [REISSUE] REINSTATE OR MODIFY
28 THE SUSPENSION OF ANY LICENSE TO PRACTICE WHICH HAS BEEN
29 SUSPENDED. [UNLESS ORDERED TO DO SO BY A COURT, THE BOARD SHALL
30 NOT REINSTATE THE CERTIFICATE OF A PERSON TO PRACTICE AS A
19950H1782B3538 - 104 -
1 CERTIFIED PUBLIC ACCOUNTANT OR THE REGISTRATION OF A PERSON TO
2 PRACTICE AS A PUBLIC ACCOUNTANT WHICH HAS BEEN REVOKED, AND SUCH
3 PERSON SHALL BE REQUIRED TO APPLY FOR A CERTIFICATE IN
4 ACCORDANCE WITH SECTION 3.1 IF HE DESIRES TO PRACTICE AT ANY
5 TIME AFTER SUCH REVOCATION.] REINSTATEMENT SHALL NOT BE GRANTED
6 UNDER THIS SUBSECTION:
7 (1) TO AN INDIVIDUAL UNLESS HE DEMONSTRATES THAT HE HAS
8 COMPLETED THE BIENNIAL CONTINUING EDUCATION REQUIREMENTS THAT HE
9 WOULD HAVE BEEN REQUIRED TO COMPLETE DURING THE IMMEDIATELY
10 PRECEDING TWO FULL REPORTING PERIODS IF HIS LICENSE HAD NOT BEEN
11 SUSPENDED.
12 (2) UNLESS THE PERSON SEEKING REINSTATEMENT PAYS THE CURRENT
13 BIENNIAL LICENSING FEE PLUS A REINSTATEMENT FEE.
14 (B) AN INDIVIDUAL WHOSE LICENSE HAS BEEN SUSPENDED FOR MORE
15 THAN FIVE YEARS SHALL NOT BE ELIGIBLE TO APPLY FOR REINSTATEMENT
16 OF THE LICENSE, BUT INSTEAD MUST TAKE THE EXAMINATION AND APPLY
17 FOR A CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT IN ACCORDANCE
18 WITH SECTION 3.1 OF THIS ACT.
19 (C) UNLESS ORDERED TO DO SO BY A COURT, THE BOARD SHALL NOT
20 REINSTATE THE CERTIFICATE OF A PERSON TO PRACTICE AS A CERTIFIED
21 PUBLIC ACCOUNTANT OR THE REGISTRATION OF A PERSON TO PRACTICE AS
22 A PUBLIC ACCOUNTANT WHICH HAS BEEN REVOKED[, AND SUCH]. A PERSON
23 [SHALL BE REQUIRED TO] WHOSE CERTIFICATION OR REGISTRATION HAS
24 BEEN REVOKED MAY TAKE THE EXAMINATION AND APPLY FOR A
25 CERTIFICATE IN ACCORDANCE WITH SECTION 3.1 [IF HE DESIRES TO
26 PRACTICE AT ANY TIME AFTER SUCH REVOCATION] OF THIS ACT NOT LESS
27 THAN FIVE YEARS AFTER HIS CERTIFICATE OR REGISTRATION WAS
28 REVOKED IF HE DESIRES TO RESUME THE PRACTICE OF PUBLIC
29 ACCOUNTING.
30 (D) A PERSON WHOSE LICENSE TO PRACTICE HAS EXPIRED FOR
19950H1782B3538 - 105 -
1 FAILURE TO MAKE BIENNIAL REGISTRATION OR WHO HAS BEEN ON THE
2 INACTIVE ROLL UNDER SECTION 8.2(A.1) OF THIS ACT MAY HAVE THE
3 LICENSE REINSTATED UPON COMPLIANCE WITH THE FOLLOWING:
4 (1) IN THE CASE OF AN INDIVIDUAL, PRESENTATION TO THE BOARD
5 OF SATISFACTORY EVIDENCE OF HAVING COMPLETED ONE HUNDRED SIXTY
6 HOURS OF CONTINUING EDUCATION IN PROGRAMS APPROVED BY THE BOARD
7 UNDER SECTION 8.2(D) OF THIS ACT WITHIN FOUR YEARS PRECEDING THE
8 DATE OF THE APPLICATION FOR REINSTATEMENT, AT LEAST EIGHTY HOURS
9 OF WHICH MUST HAVE BEEN COMPLETED WITHIN TWO YEARS PRECEDING THE
10 DATE OF THE APPLICATION FOR REINSTATEMENT.
11 (2) PAYMENT OF THE CURRENT BIENNIAL LICENSING FEE PLUS A
12 REINSTATEMENT FEE.
13 [SECTION 9.3. REVOCATION OR SUSPENSION OF PARTNERSHIP OR
14 CORPORATION REGISTRATION OR LICENSE.--IN ACCORDANCE WITH THE
15 PROCEDURE REFERRED TO IN SECTION 9 OF THIS ACT, THE BOARD SHALL
16 REVOKE THE REGISTRATION AND LICENSE 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 12. SECTION 10 OF THE ACT IS AMENDED 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 13. SECTIONS 11, 11.1, 12, 13 AND 14 OF THE ACT,
26 AMENDED MARCH 7, 1984 (P.L.106, NO.23), ARE AMENDED TO READ:
27 SECTION 11. OWNERSHIP OF WORKING PAPERS.--(A) ALL
28 STATEMENTS, RECORDS, SCHEDULES, WORKING PAPERS AND MEMORANDA
29 PREPARED BY A LICENSEE OR A PARTNER, SHAREHOLDER, MEMBER OR
30 OTHER OWNER OF AN EQUITY INTEREST IN A FIRM, OR AN OFFICER,
19950H1782B3538 - 106 -
1 DIRECTOR [OR], EMPLOYE OR AGENT OF A LICENSEE INCIDENT TO OR IN
2 THE COURSE OF RENDERING SERVICES TO A CLIENT PURSUANT TO THE
3 PRACTICE OF PUBLIC [ACCOUNTANCY] ACCOUNTING, EXCEPT REPORTS
4 SUBMITTED TO A CLIENT AND STATEMENTS, RECORDS, SCHEDULES,
5 WORKING PAPERS AND MEMORANDA PROVIDED BY A CLIENT TO A LICENSEE
6 OR A PARTNER, SHAREHOLDER, MEMBER OR OTHER OWNER OF AN EQUITY
7 INTEREST IN A FIRM, OR AN OFFICER, DIRECTOR [OR], EMPLOYE OR
8 AGENT OF A LICENSEE, SHALL BE AND REMAIN THE PROPERTY OF THE
9 LICENSEE IN THE ABSENCE OF AN EXPRESS AGREEMENT BETWEEN THE
10 LICENSEE AND THE CLIENT TO THE CONTRARY. NO SUCH STATEMENT,
11 RECORD, SCHEDULE, WORKING PAPER OR MEMORANDUM SHALL BE SOLD,
12 TRANSFERRED OR BEQUEATHED, WITHOUT THE CONSENT OF THE CLIENT OR
13 HIS PERSONAL REPRESENTATIVE, SUCCESSOR OR ASSIGNEE, TO ANYONE
14 OTHER THAN ONE OR MORE SURVIVING OR NEW PARTNERS [OR], MEMBERS,
15 SHAREHOLDERS OR [NEW PARTNERS OR SHAREHOLDERS] OTHER OWNERS OF
16 AN EQUITY INTEREST OF THE LICENSEE OR ANY COMBINED OR MERGED
17 FIRM OR SUCCESSOR IN INTEREST TO THE LICENSEE. NOTHING IN THIS
18 SECTION SHALL BE CONSTRUED AS PROHIBITING ANY TEMPORARY TRANSFER
19 OF WORKING PAPERS OR OTHER MATERIAL IN THE COURSE OF COMPLYING
20 WITH THE PEER REVIEW PROVISIONS OF THIS ACT OR AS OTHERWISE
21 INTERFERING WITH THE DISCLOSURE OF INFORMATION PURSUANT TO
22 SECTION 8.9 OF THIS ACT.
23 (B) IN ADDITION TO ANY STATEMENTS, RECORDS, SCHEDULES,
24 WORKING PAPERS, MEMORANDA OR REPORTS REQUIRED TO BE FURNISHED OR
25 RETURNED TO THE CLIENT IN ACCORDANCE WITH SUBSECTION (A), A
26 LICENSEE SHALL FURNISH TO HIS OR ITS CLIENT OR FORMER CLIENT[,]
27 UPON REQUEST MADE WITHIN A REASONABLE TIME AFTER ORIGINAL
28 ISSUANCE OF THE DOCUMENT IN QUESTION:
29 (1) A COPY OF A TAX RETURN OF THE CLIENT.
30 (2) A COPY OF ANY REPORT OR OTHER DOCUMENT ISSUED BY THE
19950H1782B3538 - 107 -
1 LICENSEE TO OR FOR SUCH CLIENT AND NOT FORMALLY WITHDRAWN OR
2 DISAVOWED BY THE LICENSEE PRIOR TO THE REQUEST.
3 (3) A COPY OF THE LICENSEE'S WORKING PAPERS TO THE EXTENT
4 THAT SUCH WORKING PAPERS INCLUDE RECORDS THAT WOULD ORDINARILY
5 CONSTITUTE PART OF THE CLIENT'S RECORDS AND ARE NOT OTHERWISE
6 AVAILABLE TO THE CLIENT. HOWEVER, A LICENSEE MAY REQUIRE THAT
7 FEES DUE THE LICENSEE WITH RESPECT TO COMPLETED ENGAGEMENTS BE
8 PAID BEFORE SUCH INFORMATION IS PROVIDED.
9 (4) ANY ACCOUNTING OR OTHER RECORDS BELONGING TO, OR
10 OBTAINED FROM OR ON BEHALF OF, THE CLIENT [WHICH] THAT THE
11 LICENSEE REMOVED FROM THE CLIENT'S PREMISES OR RECEIVED FOR THE
12 CLIENT'S ACCOUNT. THE LICENSEE MAY MAKE AND RETAIN COPIES OF
13 SUCH DOCUMENTS OF THE CLIENT WHENEVER THOSE DOCUMENTS FORM THE
14 BASIS FOR WORK DONE BY HIM.
15 (5) IF A LICENSEE CAN DOCUMENT COMPLIANCE WITH THE FOREGOING
16 REQUIREMENTS, HE NEED NOT COMPLY WITH SUBSEQUENT REQUESTS TO
17 AGAIN PROVIDE SUCH INFORMATION.
18 SECTION 11.1. PRIVILEGED [COMMUNICATION] COMMUNICATIONS.--
19 EXCEPT BY PERMISSION OF THE CLIENT [OR PERSON OR ENTITY]
20 ENGAGING HIM OR THE HEIRS, SUCCESSORS OR PERSONAL
21 REPRESENTATIVES OF [SUCH] A CLIENT [OR PERSON OR ENTITY, A
22 CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT, PARTNERSHIP OR
23 CORPORATION, HOLDING A LICENSE TO PRACTICE UNDER THIS ACT, OR A
24 PERSON EMPLOYED BY A CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
25 ACCOUNTANT, PARTNERSHIP, OR A DIRECTOR OF OR A PERSON EMPLOYED
26 BY A PROFESSIONAL CORPORATION HOLDING A LICENSE TO PRACTICE
27 UNDER THIS ACT, OR AN ASSOCIATE OF OR A PERSON EMPLOYED BY A
28 PROFESSIONAL ASSOCIATION HOLDING A LICENSE TO PRACTICE UNDER
29 THIS ACT], A LICENSEE OR A PERSON EMPLOYED BY A LICENSEE SHALL
30 NOT BE REQUIRED TO, AND SHALL NOT VOLUNTARILY, DISCLOSE OR
19950H1782B3538 - 108 -
1 DIVULGE INFORMATION OF WHICH HE MAY HAVE BECOME POSSESSED UNLESS
2 THE SHARING OF CONFIDENTIAL INFORMATION IS WITHIN THE PEER
3 REVIEW PROCESS. THIS PROVISION ON CONFIDENTIALITY SHALL PREVENT
4 THE BOARD FROM RECEIVING REPORTS RELATIVE TO AND IN CONNECTION
5 WITH ANY PROFESSIONAL SERVICES AS A CERTIFIED PUBLIC ACCOUNTANT,
6 PUBLIC ACCOUNTANT[, PARTNERSHIP OR CORPORATION] OR FIRM. THE
7 INFORMATION DERIVED FROM OR AS THE RESULT OF SUCH PROFESSIONAL
8 SERVICES SHALL BE DEEMED CONFIDENTIAL AND PRIVILEGED[: PROVIDED,
9 HOWEVER, THAT NOTHING HEREIN]. NOTHING IN THIS SECTION SHALL BE
10 TAKEN OR CONSTRUED AS PROHIBITING THE DISCLOSURE OF INFORMATION
11 REQUIRED TO BE DISCLOSED BY THE STANDARDS OF THE PROFESSION IN
12 REPORTING ON THE EXAMINATION OF FINANCIAL STATEMENTS, OR IN
13 MAKING DISCLOSURES IN A COURT OF LAW OR IN DISCIPLINARY
14 INVESTIGATIONS OR PROCEEDINGS WHEN THE PROFESSIONAL SERVICES OF
15 THE CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT[, PARTNERSHIP
16 OR CORPORATION] OR FIRM ARE AT ISSUE IN AN ACTION, INVESTIGATION
17 OR PROCEEDING IN WHICH THE CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
18 ACCOUNTANT[, PARTNERSHIP OR CORPORATION ARE PARTIES] OR FIRM IS
19 A PARTY.
20 SECTION 12. UNLAWFUL ACTS.--(A) IT IS UNLAWFUL FOR ANY
21 PERSON [(1) TO ASSUME OR] TO HOLD HIMSELF OUT AS OR OTHERWISE
22 USE THE TITLE OR DESIGNATION "CERTIFIED PUBLIC ACCOUNTANT," OR
23 THE ABBREVIATION "CPA," OR ANY OTHER TITLE, DESIGNATION, WORDS,
24 LETTERS[,] OR ABBREVIATION[, SIGN, CARD OR DEVICE,] TENDING TO
25 INDICATE THAT [SUCH] THE PERSON IS A CERTIFIED PUBLIC ACCOUNTANT
26 OR ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTING UNLESS [SUCH]
27 THE PERSON HAS RECEIVED[,] OR HAS BEEN NOTIFIED IN WRITING BY
28 THE BOARD THAT HE HAS QUALIFIED TO RECEIVE A CERTIFICATE OF
29 CERTIFIED PUBLIC ACCOUNTANT ISSUED BY THIS COMMONWEALTH, WHICH
30 IS NOT REVOKED OR SUSPENDED[, OR (2) TO ASSUME OR USE SUCH
19950H1782B3538 - 109 -
1 TITLE, DESIGNATION OR ABBREVIATION IN THE PRACTICE OF PUBLIC
2 ACCOUNTING UNLESS HE HAS RECEIVED OR HAS BEEN NOTIFIED IN
3 WRITING THAT HE HAS QUALIFIED TO RECEIVE A CERTIFICATE OF
4 CERTIFIED PUBLIC ACCOUNTANT BY THIS COMMONWEALTH AND UNLESS HE
5 IS A CURRENT LICENSEE].
6 (B) IT IS UNLAWFUL FOR ANY PERSON TO HOLD HIMSELF OUT OR
7 OTHERWISE USE THE TITLE "CERTIFIED PUBLIC ACCOUNTANT," "PUBLIC
8 ACCOUNTANT" OR ANY ABBREVIATION THEREOF, OR THE LETTERS "CPA" OR
9 "PA" BY VIRTUE OF ANY CERTIFICATE, REGISTRATION OR [PERMIT]
10 LICENSE ILLEGALLY OR FRAUDULENTLY OBTAINED BY [SUCH] THE PERSON,
11 OR ISSUED UNLAWFULLY OR THROUGH ANY FRAUDULENT REPRESENTATION OR
12 DECEIT, OR MISSTATEMENT OF MATERIAL FACT OR FRAUDULENT
13 CONCEALMENT OF A MATERIAL FACT MADE OR INDUCED OR AIDED OR
14 ABETTED BY [SUCH] THE PERSON.
15 (C) IT IS UNLAWFUL FOR ANY PARTNERSHIP [OR], CORPORATION OR
16 OTHER ASSOCIATION TO [ASSUME OR] HOLD ITSELF OUT AS OR OTHERWISE
17 USE THE TITLE OR DESIGNATION "CERTIFIED PUBLIC ACCOUNTANT[,]" OR
18 "PUBLIC ACCOUNTANT" OR THE ABBREVIATION ["CPA,"] "CPA" OR "PA,"
19 OR ANY OTHER TITLE, DESIGNATION, WORDS, LETTERS[,] OR
20 ABBREVIATION[, SIGN, CARD OR DEVICE,] TENDING TO INDICATE THAT
21 [SUCH] THE PARTNERSHIP [OR], CORPORATION OR OTHER ASSOCIATION IS
22 COMPOSED OF OR INCLUDES CERTIFIED PUBLIC ACCOUNTANTS[, UNLESS
23 SUCH] OR PUBLIC ACCOUNTANTS UNLESS THE PARTNERSHIP [OR],
24 CORPORATION [IS REGISTERED AS A PARTNERSHIP OR CORPORATION OF
25 CERTIFIED PUBLIC ACCOUNTANTS UNDER SECTIONS 8.3 AND 8.4 OF THIS
26 ACT AND IS A CURRENT LICENSEE] OR OTHER ASSOCIATION HOLDS A
27 CURRENT LICENSE UNDER SECTION 8.8 OF THIS ACT.
28 [(D) IT IS UNLAWFUL FOR ANY PERSON, PARTNERSHIP OR
29 CORPORATION TO SELL OR OFFER TO SELL OR FRAUDULENTLY OBTAIN,
30 FURNISH OR PROCURE ANY CERTIFICATE, REGISTRATION OR LICENSE
19950H1782B3538 - 110 -
1 UNDER THE PROVISIONS OF THIS ACT OR CAUSE OR AID OR ABET ANOTHER
2 PERSON SO TO DO.
3 (E) IT IS UNLAWFUL FOR ANY PERSON OR PERSONS TO ENGAGE IN
4 THE PRACTICE OF PUBLIC ACCOUNTING IN THIS COMMONWEALTH AS A
5 LIMITED PARTNERSHIP PROVIDING FOR LIMITED LIABILITY OF THE
6 MEMBERS OR PARTNERS.]
7 (F) EXCEPT AS [PRESCRIBED] PROVIDED IN THIS SUBSECTION OR IN
8 SUBSECTIONS (A) AND (C), [WITH RESPECT TO CERTIFIED PUBLIC
9 ACCOUNTANTS,] IT IS UNLAWFUL FOR ANY PERSON[, PARTNERSHIP, OR
10 CORPORATION] TO USE A TITLE[, INCLUDING] THAT INCLUDES THE WORD
11 "CERTIFIED" AS A PART THEREOF, OR ANY OTHER TITLE OR DESIGNATION
12 LIKELY TO BE CONFUSED WITH "CERTIFIED PUBLIC ACCOUNTANT," OR ANY
13 TITLE OR DESIGNATION IMPLYING OR CONNOTING ACCREDITATION BY [A
14 STATE OR FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION OF
15 THE UNITED STATES,] ANY JURISDICTION FOR THE PRACTICE OF ANY
16 TYPE OF BOOKKEEPING, ACCOUNTING, AUDITING, TAX OR OTHER
17 PROFESSIONAL PRACTICE RELATED THERETO, OR TO USE ANY
18 ABBREVIATION OF SUCH TITLE OR DESIGNATION. IT IS NOT A VIOLATION
19 OF THIS SUBSECTION FOR AN INDIVIDUAL:
20 (1) EXCEPT AS PROVIDED IN CLAUSE (2), TO USE A TITLE OR
21 DESIGNATION THAT INCLUDES THE WORD "ACCREDITED" OR "CERTIFIED,"
22 OR AN ABBREVIATION OF SUCH A TITLE OR DESIGNATION, IF THE TITLE
23 OR DESIGNATION HAS BEEN CONFERRED BY A PRIVATE ORGANIZATION
24 AFTER EVALUATION OF THE INDIVIDUAL'S CREDENTIALS OR
25 QUALIFICATIONS AND IF WHEN THE TITLE OR DESIGNATION IS USED ON
26 THE INDIVIDUAL'S STATIONERY IT IS ACCOMPANIED BY A STATEMENT
27 THAT IT HAS BEEN CONFERRED BY AN ORGANIZATION NOT AFFILIATED
28 WITH THE FEDERAL OR ANY STATE GOVERNMENT; OR
29 (2) TO USE THE DESIGNATION "CERTIFIED FINANCIAL PLANNER," OR
30 AN ABBREVIATION OF THAT DESIGNATION, IF THE DESIGNATION HAS BEEN
19950H1782B3538 - 111 -
1 CONFERRED BY A PRIVATE ORGANIZATION AFTER EVALUATION OF THE
2 INDIVIDUAL'S CREDENTIALS OR QUALIFICATIONS.
3 [(G) IT IS UNLAWFUL FOR ANY PERSON TO ASSUME OR USE THE
4 TITLE OR DESIGNATION "CERTIFIED PUBLIC ACCOUNTANT" OR "PUBLIC
5 ACCOUNTANT" IN CONJUNCTION WITH NAMES INDICATING OR IMPLYING
6 THAT THERE IS A PARTNERSHIP OR CORPORATION, OR IN CONJUNCTION
7 WITH THE DESIGNATION "AND COMPANY" OR "AND CO" OR A SIMILAR
8 DESIGNATION, IF THERE IS, IN FACT, NO BONA FIDE PARTNERSHIP OR
9 CORPORATION REGISTERED UNDER SECTIONS 8.3 THROUGH 8.6: PROVIDED,
10 THAT A SOLE PROPRIETOR OR PARTNERSHIP LAWFULLY USING SUCH TITLE
11 OR DESIGNATION IN CONJUNCTION WITH SUCH NAMES OR DESIGNATION
12 PRIOR TO NOVEMBER 1, 1961 MAY CONTINUE TO DO SO IF HE, OR IT,
13 OTHERWISE COMPLIES WITH THE PROVISIONS OF THIS ACT: AND FURTHER
14 PROVIDED, THAT ANY PUBLIC ACCOUNTANT REGISTERED UNDER THIS ACT
15 USING THE TITLE OR DESIGNATION PUBLIC ACCOUNTANT OR THE
16 ABBREVIATION "PA" IN CONJUNCTION WITH SUCH NAMES OR DESIGNATION
17 PRIOR TO THE EFFECTIVE DATE OF THIS ACT MAY CONTINUE TO DO SO IF
18 HE OTHERWISE COMPLIES WITH THE PROVISIONS OF THIS ACT.
19 (H) IT IS UNLAWFUL FOR ANY PERSON TO SIGN OR AFFIX A
20 PARTNERSHIP OR CORPORATE NAME TO ANY OPINION OR CERTIFICATE
21 ATTESTING IN ANY WAY TO THE RELIABILITY OF ANY REPRESENTATION OR
22 ESTIMATE IN REGARD TO ANY PERSON OR ORGANIZATION EMBRACING (1)
23 FINANCIAL INFORMATION OR (2) FACTS RESPECTING COMPLIANCE WITH
24 CONDITIONS ESTABLISHED BY LAW OR CONTRACT, INCLUDING BUT NOT
25 LIMITED TO, STATUTES, ORDINANCES, REGULATIONS, GRANTS, LOANS,
26 AND APPROPRIATIONS, TOGETHER WITH ANY WORDING, ACCOMPANYING OR
27 CONTAINED IN SUCH OPINION OR CERTIFICATE, WHICH INDICATES THAT
28 SUCH PARTNERSHIP OR CORPORATION IS COMPOSED OF OR EMPLOYS (I)
29 ACCOUNTANTS OR AUDITORS OR (II) PERSONS HAVING EXPERT KNOWLEDGE
30 IN ACCOUNTING OR AUDITING, UNLESS THE PARTNERSHIP OR CORPORATION
19950H1782B3538 - 112 -
1 IS A CURRENT LICENSEE.
2 (I) IT IS UNLAWFUL FOR A CERTIFIED PUBLIC ACCOUNTANT, PUBLIC
3 ACCOUNTANT, PARTNERSHIP OR CORPORATION, ENGAGED IN THE PRACTICE
4 OF PUBLIC ACCOUNTANCY, TO USE A PROFESSIONAL OR FIRM NAME WHICH
5 IS MISLEADING AS TO THE LEGAL FORM OF THE FIRM, OR AS TO THE
6 PERSONS WHO ARE PARTNERS, OFFICERS OR SHAREHOLDERS OF THE FIRM,
7 OR AS TO ANY OTHER MATTER: PROVIDED, HOWEVER, THAT THE NAMES OF
8 ONE OR MORE FORMER PARTNERS OR SHAREHOLDERS MAY BE INCLUDED IN
9 THE NAME OF A FIRM OR ITS SUCCESSOR.]
10 (J) IT IS UNLAWFUL FOR ANY PERSON TO [ASSUME OR] HOLD
11 HIMSELF OUT AS OR OTHERWISE USE THE TITLE OR DESIGNATION "PUBLIC
12 ACCOUNTANT" OR THE ABBREVIATION "PA" OR ANY OTHER TITLE,
13 DESIGNATION, WORDS, LETTERS[,] OR ABBREVIATION[, SIGN, CARD OR
14 DEVICE,] TENDING TO INDICATE THAT [SUCH] THE PERSON IS A PUBLIC
15 ACCOUNTANT, UNLESS SUCH PERSON IS REGISTERED AS A PUBLIC
16 ACCOUNTANT [UNDER SECTION 8.7 OF THIS ACT] AND IS A [CURRENT]
17 LICENSEE, OR UNLESS SUCH PERSON HAS RECEIVED, OR HAS BEEN
18 NOTIFIED IN WRITING BY THE BOARD THAT HE HAS QUALIFIED TO
19 RECEIVE A CERTIFICATE AS CERTIFIED PUBLIC ACCOUNTANT ISSUED BY
20 THIS COMMONWEALTH [AND IS A CURRENT LICENSEE].
21 [(K) IT IS UNLAWFUL FOR ANY PARTNERSHIP OR CORPORATION TO
22 ASSUME OR USE THE TITLE OR DESIGNATION "PUBLIC ACCOUNTANT" OR
23 THE ABBREVIATION "PA" OR ANY OTHER TITLE, DESIGNATION, WORDS,
24 LETTERS, ABBREVIATION, SIGN, CARD OR DEVICE, TENDING TO INDICATE
25 THAT SUCH PARTNERSHIP OR CORPORATION IS COMPOSED OF PUBLIC
26 ACCOUNTANTS, UNLESS SUCH PARTNERSHIP OR CORPORATION IS
27 REGISTERED AS A PARTNERSHIP OR CORPORATION OF PUBLIC ACCOUNTANTS
28 UNDER SECTION 8.5 OR 8.6 OF THIS ACT, OR AS A PARTNERSHIP OR
29 CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS UNDER SECTION 8.3 OR
30 8.4 OF THIS ACT AND IS A CURRENT LICENSEE; AND EACH MANAGER IN
19950H1782B3538 - 113 -
1 CHARGE OF AN OFFICE OF THE FIRM IN THIS COMMONWEALTH IS A
2 CERTIFIED PUBLIC ACCOUNTANT OR A PUBLIC ACCOUNTANT REGISTERED
3 UNDER THIS ACT AND IS A CURRENT LICENSEE.]
4 (L) IT IS UNLAWFUL FOR ANY PERSON, PARTNERSHIP OR
5 CORPORATION TO [ASSUME OR] HOLD HIMSELF OR ITSELF OUT AS OR
6 OTHERWISE USE THE TITLE OR DESIGNATION "CERTIFIED ACCOUNTANT,"
7 "CHARTERED ACCOUNTANT," "ENROLLED ACCOUNTANT," "LICENSED
8 ACCOUNTANT," "REGISTERED ACCOUNTANT," "LICENSED PUBLIC
9 ACCOUNTANT," "REGISTERED PUBLIC ACCOUNTANT[,]" OR "ACCREDITED
10 ACCOUNTANT[,]" OR ANY OTHER TITLE OR DESIGNATION LIKELY TO BE
11 CONFUSED WITH "CERTIFIED PUBLIC ACCOUNTANT" OR "PUBLIC
12 ACCOUNTANT," OR ANY [OF THE ABBREVIATIONS "CA," "EA," "RA,"
13 "LA," "RPA," "LPA," OR "AA,"] ABBREVIATION OF ANY OF THOSE
14 PROHIBITED TITLES OR DESIGNATIONS OR SIMILAR ABBREVIATIONS
15 LIKELY TO BE CONFUSED WITH ["CPA": PROVIDED, HOWEVER, THAT
16 ANYONE WHO] "CPA," EXCEPT THAT A PERSON WHO IS A [CURRENT]
17 LICENSEE MAY HOLD HIMSELF OUT TO THE PUBLIC AS AN "ACCOUNTANT,"
18 "AUDITOR" OR "ACCOUNTANT AND [AUDITOR".] AUDITOR." IT IS NOT A
19 VIOLATION OF THIS CLAUSE FOR AN INDIVIDUAL DESIGNATED BY THE
20 INTERNAL REVENUE SERVICE AS AN ENROLLED AGENT TO USE THAT TITLE
21 OR THE ABBREVIATION "EA."
22 (L.1) IT IS UNLAWFUL FOR ANY PERSON TO SELL OR OFFER TO SELL
23 OR FRAUDULENTLY OBTAIN, FURNISH OR PROCURE ANY CERTIFICATE,
24 REGISTRATION OR LICENSE UNDER THE PROVISIONS OF THIS ACT OR
25 CAUSE OR AID OR ABET ANOTHER PERSON TO DO SO.
26 (L.2) IT IS UNLAWFUL FOR ANY PERSON THAT IS NOT A LICENSEE
27 TO SIGN, AFFIX A FIRM NAME TO OR OTHERWISE ISSUE ANY:
28 (1) REPORT; OR
29 (2) OPINION, CERTIFICATE OR OTHER COMMUNICATION RESPECTING
30 COMPLIANCE WITH CONDITIONS ESTABLISHED BY LAW OR CONTRACT,
19950H1782B3538 - 114 -
1 INCLUDING, BUT NOT LIMITED TO, STATUTES, ORDINANCES,
2 REGULATIONS, GRANTS, LOANS AND APPROPRIATIONS, TOGETHER WITH ANY
3 WORDING, ACCOMPANYING OR CONTAINED IN SUCH OPINION OR
4 CERTIFICATE, THAT INDICATES THAT THE PERSON IS COMPOSED OF OR
5 EMPLOYS:
6 (I) ACCOUNTANTS OR AUDITORS; OR
7 (II) PERSONS HAVING EXPERT KNOWLEDGE IN ACCOUNTING OR
8 AUDITING.
9 (L.3) IT IS UNLAWFUL FOR A LICENSEE TO USE A PROFESSIONAL OR
10 FIRM NAME THAT THE LICENSEE IS PROHIBITED FROM USING BY OTHER
11 APPLICABLE PROVISION OF LAW, OR THAT IS MISLEADING AS TO THE
12 PERSONS WHO ARE PARTNERS, OFFICERS, MEMBERS, DIRECTORS,
13 EMPLOYEES OR SHAREHOLDERS OF THE FIRM OR AS TO ANY OTHER MATTER,
14 EXCEPT THAT THE NAMES OF ONE OR MORE FORMER PARTNERS,
15 SHAREHOLDERS OR MEMBERS MAY BE INCLUDED IN THE NAME OF A FIRM OR
16 ITS SUCCESSOR.
17 (M) IT IS UNLAWFUL FOR ANY PERSON WHO IS NOT A LICENSEE TO
18 SIGN OR AFFIX HIS NAME OR ANY TRADE OR ASSUMED NAME USED BY HIM
19 IN HIS PROFESSION OR BUSINESS TO [ANY OPINION OR CERTIFICATE
20 ATTESTING IN ANY WAY TO THE RELIABILITY OF ANY REPRESENTATION OR
21 ESTIMATE IN REGARD TO ANY PERSON OR ORGANIZATION EMBRACING (1)
22 FINANCIAL INFORMATION OR (2) FACTS RESPECTING COMPLIANCE WITH
23 CONDITIONS ESTABLISHED BY LAW OR CONTRACT, INCLUDING, BUT NOT
24 LIMITED TO] OR OTHERWISE ISSUE ANY:
25 (1) REPORT; OR
26 (2) OPINION, CERTIFICATE OR OTHER COMMUNICATION RESPECTING
27 COMPLIANCE WITH CONDITIONS ESTABLISHED BY LAW OR CONTRACT,
28 INCLUDING, BUT NOT LIMITED TO, STATUTES, ORDINANCES,
29 REGULATIONS, GRANTS, LOANS[,] AND APPROPRIATIONS, TOGETHER WITH
30 ANY WORDING ACCOMPANYING OR CONTAINED IN SUCH [OPINION OR
19950H1782B3538 - 115 -
1 CERTIFICATE] REPORT OR OTHER COMMUNICATION, WHICH INDICATES:
2 (I) THAT HE IS AN ACCOUNTANT OR AUDITOR[,]; OR
3 (II) THAT HE HAS EXPERT KNOWLEDGE IN ACCOUNTING OR
4 AUDITING[, UNLESS HE IS A CURRENT LICENSEE: PROVIDED, HOWEVER,
5 THAT THE].
6 THE PROVISIONS OF THIS SUBSECTION SHALL NOT PROHIBIT ANY
7 OFFICER, EMPLOYE, PARTNER, OR PRINCIPAL OF ANY ORGANIZATION FROM
8 AFFIXING HIS SIGNATURE TO ANY [STATEMENT OR] REPORT OR OTHER
9 COMMUNICATION IN REFERENCE TO THE AFFAIRS OF [SAID] THE
10 ORGANIZATION WITH ANY WORDING DESIGNATING THE POSITION, TITLE,
11 OR OFFICE WHICH HE HOLDS IN [SAID] THE ORGANIZATION, NOR SHALL
12 THE PROVISIONS OF THIS SUBSECTION PROHIBIT ANY ACT OF A PUBLIC
13 OFFICIAL OR PUBLIC EMPLOYE IN THE PERFORMANCE OF HIS DUTIES AS
14 SUCH.
15 (N) IT IS UNLAWFUL FOR ANY PERSON[, PARTNERSHIP OR
16 CORPORATION] NOT A [CURRENT] LICENSEE TO HOLD HIMSELF OR ITSELF
17 OUT TO THE PUBLIC AS AN "AUDITOR" OR AS AN "ACCOUNTANT AND
18 AUDITOR" [BY USE OF EITHER DESIGNATION ON ANY SIGN, CARD,
19 LETTERHEAD, OR IN ANY ADVERTISEMENT OR DIRECTORY: PROVIDED,
20 HOWEVER, THAT THIS]. THIS SUBSECTION SHALL NOT PROHIBIT ANY
21 OFFICER, EMPLOYE, PARTNER, OR PRINCIPAL OF ANY ORGANIZATION FROM
22 DESCRIBING HIMSELF BY THE POSITION, TITLE OR OFFICE HE HOLDS IN
23 [SUCH] THE ORGANIZATION, NOR SHALL THIS SUBSECTION PROHIBIT ANY
24 ACTION OF A PUBLIC OFFICIAL OR PUBLIC EMPLOYE IN THE PERFORMANCE
25 OF HIS DUTIES AS SUCH.
26 (O) IT IS UNLAWFUL FOR ANY PERSON[, PARTNERSHIP OR
27 CORPORATION TO INDICATE BY PRINTED OR WRITTEN STATEMENT, SIGN,
28 CARD OR OTHER DEVICE THAT SUCH PERSON, FOREIGN ACCOUNTANT,
29 PARTNERSHIP OR CORPORATION HOLDS MEMBERSHIP IN] TO HOLD HIMSELF
30 OR ITSELF OUT AS A MEMBER OF ANY SOCIETY, ASSOCIATION OR
19950H1782B3538 - 116 -
1 ORGANIZATION OF CERTIFIED PUBLIC ACCOUNTANTS OR PUBLIC
2 ACCOUNTANTS, UNLESS SUCH PERSON HOLDS A VALID CERTIFICATE OF
3 CERTIFIED PUBLIC ACCOUNTANT ISSUED BY THIS COMMONWEALTH OR BY
4 SOME STATE OR [FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION
5 OF THE UNITED STATES,] IS REGISTERED AS A [FOREIGN ACCOUNTANT OR
6 AS A] PUBLIC ACCOUNTANT [UNDER SECTION 8.7, AND IN THE CASE OF A
7 PARTNERSHIP OR CORPORATION, THEY ARE REGISTERED UNDER SECTIONS
8 8.3 THROUGH 8.6 OF THIS ACT.] IN THIS COMMONWEALTH, OR IN THE
9 CASE OF A FIRM, IS LICENSED UNDER SECTION 8.8 OF THIS ACT.
10 (P) IT IS UNLAWFUL FOR ANY PERSON NOT A LICENSEE TO ENGAGE
11 IN THE PRACTICE OF PUBLIC ACCOUNTING IN THIS COMMONWEALTH.
12 SECTION 13. ACTS NOT UNLAWFUL.--(A) NOTHING CONTAINED IN
13 THIS ACT SHALL PROHIBIT ANY PERSON NOT A CERTIFIED PUBLIC
14 ACCOUNTANT OR A PUBLIC ACCOUNTANT [REGISTERED UNDER THIS ACT]
15 FROM SERVING AS AN EMPLOYE OF OR AN ASSISTANT TO A CERTIFIED
16 PUBLIC ACCOUNTANT, A PUBLIC ACCOUNTANT[, A PARTNERSHIP OF
17 CERTIFIED PUBLIC ACCOUNTANTS OR PUBLIC ACCOUNTANTS OR A
18 CORPORATION, HOLDING A CURRENT LICENSE ISSUED UNDER SECTION 8.2
19 OF THIS ACT, OR A FOREIGN ACCOUNTANT REGISTERED UNDER SECTION
20 8.1 OF THIS ACT: PROVIDED, THAT SUCH] OR FIRM, BUT AN EMPLOYE OR
21 ASSISTANT SHALL NOT ISSUE ANY REPORT OR ACCOUNTING OR FINANCIAL
22 STATEMENT OVER HIS NAME.
23 (B) NOTHING CONTAINED IN THIS ACT SHALL PROHIBIT A CERTIFIED
24 PUBLIC ACCOUNTANT, OR [PARTNERSHIP OR CORPORATION] ASSOCIATION
25 COMPOSED OF CERTIFIED PUBLIC ACCOUNTANTS, OF ANOTHER STATE [OR
26 FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION OF THE UNITED
27 STATES, AND] WHO IS CONCURRENTLY ENGAGED IN PUBLIC PRACTICE IN
28 SUCH STATE[, FEDERAL DISTRICT, TERRITORY OR INSULAR POSSESSION]
29 FROM TEMPORARILY PRACTICING IN THIS COMMONWEALTH ON PROFESSIONAL
30 BUSINESS[: PROVIDED, THAT SUCH] IF THE PRACTICE IS CONDUCTED IN
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1 CONFORMITY WITH THE REGULATIONS AND RULES GOVERNING TEMPORARY
2 PRACTICE PROMULGATED BY THE BOARD.
3 (C) NOTHING CONTAINED IN THIS ACT SHALL PROHIBIT [PERSONS,
4 PARTNERSHIPS OR CORPORATIONS OTHER THAN AS DEFINED IN THIS ACT]
5 A PERSON WHILE NOT HOLDING HIMSELF OUT AS A CERTIFIED PUBLIC
6 ACCOUNTANT, PUBLIC ACCOUNTANT OR LICENSEE FROM OFFERING AND
7 RENDERING BOOKKEEPING AND SIMILAR TECHNICAL SERVICES OR OTHER
8 SERVICES INVOLVING THE USE OF ACCOUNTING SKILLS, INCLUDING THE
9 PREPARATION OF TAX RETURNS AND THE PREPARATION [OR COMPILATION]
10 OF FINANCIAL [STATEMENTS] INFORMATION WITHOUT ISSUING A REPORT
11 OR OTHER COMMUNICATION THAT EXPRESSES AN OPINION OR ASSURANCE ON
12 THE STATEMENTS. [THESE PERSONS, PARTNERSHIPS OR CORPORATIONS MAY
13 USE THE TITLE OR DESIGNATION "ACCOUNTANT" OR "ACCOUNTANTS."] A
14 LETTER OR OTHER TEXT THAT ACCOMPANIES FINANCIAL INFORMATION
15 PREPARED UNDER THIS SUBSECTION SHALL NOT CONSTITUTE A REPORT OR
16 OTHER COMMUNICATION THAT EXPRESSES AN OPINION OR ASSURANCE, IF
17 IT IS LIMITED TO THE FOLLOWING WORDING:
18 THE ACCOMPANYING FINANCIAL INFORMATION OF (COMPANY) AS OF
19 (DATE AND YEAR), AND FOR THE YEAR THEN ENDED HAVE BEEN
20 PREPARED BY (ME/US).
21 THIS FINANCIAL INFORMATION IS THE REPRESENTATION OF THE
22 MANAGEMENT (OWNERS) OF (COMPANY).
23 A PERSON WHO PREPARES FINANCIAL INFORMATION AS PERMITTED BY THIS
24 SUBSECTION MAY USE THE TITLE OR DESIGNATION "ACCOUNTANT" OR
25 "ACCOUNTANTS" AND MAY REFER TO THE SERVICES BEING PROVIDED AS
26 "ACCOUNTING" IF THE PERSON INCLUDES IN ANY LETTER OR OTHER TEXT
27 ACCOMPANYING THE FINANCIAL INFORMATION THE FOLLOWING STATEMENT:
28 I AM NOT A CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC
29 ACCOUNTANT.
30 WE ARE NOT CERTIFIED PUBLIC ACCOUNTANTS OR PUBLIC
19950H1782B3538 - 118 -
1 ACCOUNTANTS.
2 SECTION 14. INJUNCTION AGAINST UNLAWFUL ACT.--WHENEVER IN
3 THE JUDGMENT [OF A MAJORITY OF THE MAXIMUM AUTHORIZED
4 MEMBERSHIP] OF THE BOARD [AS PROVIDED BY LAW, OR IN THE JUDGMENT
5 OF A MAJORITY OF THE DULY QUALIFIED AND CONFIRMED MEMBERSHIP OR
6 A MINIMUM OF SEVEN MEMBERS, WHICHEVER IS GREATER, IF THE
7 MEMBERSHIP OF THE BOARD IS LESS THAN ITS AUTHORIZED MEMBERSHIP
8 AS PROVIDED BY LAW,] ANY PERSON[, PARTNERSHIP OR CORPORATION,]
9 HAS ENGAGED OR IS ABOUT TO ENGAGE IN ANY ACTS OR PRACTICES WHICH
10 CONSTITUTE OR WILL CONSTITUTE A VIOLATION OF THIS ACT, THE BOARD
11 OR ITS AGENTS MAY MAKE APPLICATION TO THE APPROPRIATE COURT FOR
12 AN ORDER ENJOINING SUCH ACTS OR PRACTICES AND, UPON A SHOWING BY
13 THE BOARD THAT [SUCH] THE PERSON[, PARTNERSHIP OR CORPORATION]
14 HAS ENGAGED OR IS ABOUT TO ENGAGE IN ANY SUCH ACTS OR PRACTICES,
15 AN INJUNCTION, RESTRAINING ORDER OR SUCH OTHER ORDER AS MAY BE
16 APPROPRIATE SHALL BE GRANTED BY [SUCH] THE COURT WITHOUT BOND.
17 SECTION 14. SECTION 15 OF THE ACT IS AMENDED TO READ:
18 SECTION 15. SINGLE ACT EVIDENCE OF PRACTICE.--THE WILLFUL OR
19 KNOWING DISPLAY OR UTTERING BY A PERSON[, PARTNERSHIP OR
20 CORPORATION] OF A CARD, SIGN, ADVERTISEMENT OR OTHER PRINTED,
21 ENGRAVED OR WRITTEN INSTRUMENT OR DEVICE BEARING A PERSON'S
22 NAME[, OR THE NAME OF A PARTNERSHIP OR CORPORATION] IN
23 CONJUNCTION WITH THE WORDS "CERTIFIED PUBLIC ACCOUNTANT" OR
24 "PUBLIC ACCOUNTANT" OR ANY ABBREVIATION THEREOF OR ANY
25 DESIGNATION PROHIBITED BY THIS ACT, SHALL BE PRIMA FACIE
26 EVIDENCE IN ANY PROSECUTION, PROCEEDING OR HEARING THAT THE
27 PERSON[, PARTNERSHIP OR CORPORATION] WHOSE NAME IS SO DISPLAYED,
28 CAUSED OR PROCURED THE DISPLAY OR UTTERING OF [SUCH] THE CARD,
29 SIGN, ADVERTISEMENT OR OTHER PRINTED, ENGRAVED, OR WRITTEN
30 INSTRUMENT OR DEVICE AND THAT [SUCH PERSON, PARTNERSHIP OR
19950H1782B3538 - 119 -
1 CORPORATION] THE PERSON IS HOLDING HIMSELF OR ITSELF OUT TO BE A
2 CERTIFIED PUBLIC ACCOUNTANT OR A PUBLIC ACCOUNTANT. IN ANY
3 PROSECUTION OR PROCEEDING UNDER THIS ACT, EVIDENCE OF THE
4 COMMISSION OF A SINGLE ACT PROHIBITED BY THIS ACT[,] SHALL BE
5 SUFFICIENT TO JUSTIFY AN INJUNCTION OR A CONVICTION WITHOUT
6 EVIDENCE OF A GENERAL COURSE OF CONDUCT.
7 SECTION 15. SECTION 16 OF THE ACT, AMENDED MARCH 7, 1984
8 (P.L.106, NO.23), IS AMENDED TO READ:
9 SECTION 16. PENALTIES.--(A) [ANY PERSON, PARTNERSHIP OR
10 CORPORATION VIOLATING] A PERSON WHO VIOLATES ANY OF THE
11 PROVISIONS OF SECTION 12 OF THIS ACT SHALL BE GUILTY OF A
12 MISDEMEANOR OF THE THIRD DEGREE AND UPON CONVICTION THEREOF
13 SHALL BE SENTENCED TO PAY A FINE NOT EXCEEDING TWO THOUSAND FIVE
14 HUNDRED DOLLARS ($2,500) OR SUFFER IMPRISONMENT NOT EXCEEDING
15 ONE (1) YEAR, OR BOTH.
16 (B) THE [RIGHT OF THE BOARD TO SUSPEND AND REVOKE
17 CERTIFICATES AND LICENSES ISSUED UNDER THIS ACT AND THE RIGHT TO
18 CENSURE CERTIFICATE HOLDERS OR REGISTRANTS] DISCIPLINARY POWERS
19 OF THE BOARD SHALL BE IN ADDITION TO THE PENALTIES SET FORTH IN
20 THIS SECTION.
21 (C) IN ADDITION TO ANY OTHER CIVIL REMEDY [OR], CRIMINAL
22 PENALTY OR DISCIPLINE PROVIDED FOR IN THIS ACT, THE BOARD[, BY A
23 VOTE OF THE MAJORITY OF THE MAXIMUM NUMBER OF THE AUTHORIZED
24 MEMBERSHIP OF THE BOARD AS PROVIDED BY LAW, OR BY A VOTE OF THE
25 MAJORITY OF THE DULY QUALIFIED AND CONFIRMED MEMBERSHIP OR A
26 MINIMUM OF SEVEN MEMBERS, WHICHEVER IS GREATER,] MAY LEVY A
27 CIVIL PENALTY OF UP TO ONE THOUSAND DOLLARS ($1,000) ON ANY
28 [CURRENT LICENSEE WHO VIOLATES ANY PROVISION OF THIS ACT OR ON
29 ANY PERSON WHO PRACTICES ACCOUNTING WITHOUT BEING PROPERLY
30 LICENSED TO DO SO UNDER THIS ACT.] PERSON FOR A VIOLATION OF ANY
19950H1782B3538 - 120 -
1 PROVISION OF THIS ACT. THE BOARD SHALL LEVY [THIS] A CIVIL
2 PENALTY ONLY AFTER AFFORDING THE ACCUSED PARTY THE OPPORTUNITY
3 FOR A HEARING, AS PROVIDED IN TITLE 2 OF THE PENNSYLVANIA
4 CONSOLIDATED STATUTES (RELATING TO ADMINISTRATIVE LAW AND
5 PROCEDURE). THE MAXIMUM CIVIL PENALTY THAT MAY BE LEVIED BY THE
6 BOARD SHALL NOT BE MORE THAN TWO HUNDRED THOUSAND DOLLARS
7 ($200,000) FOR ANY RELATED SERIES OF VIOLATIONS.
8 (D) ALL FINES AND CIVIL PENALTIES IMPOSED IN ACCORDANCE WITH
9 THIS SECTION SHALL BE PAID INTO THE PROFESSIONAL LICENSURE
10 AUGMENTATION ACCOUNT.
11 SECTION 16. SECTIONS 16.1 AND 16.2 OF THE ACT ARE AMENDED TO
12 READ:
13 [SECTION 16.1. CONSTRUCTION.--IF ANY PROVISION OF THIS ACT
14 OR THE APPLICATION THEREOF TO ANYONE OR TO ANY CIRCUMSTANCES IS
15 HELD INVALID, THE REMAINDER OF THE ACT AND THE APPLICATION OF
16 SUCH PROVISION TO OTHERS OR OTHER CIRCUMSTANCES SHALL NOT BE
17 AFFECTED THEREBY.]
18 SECTION 16.2. AUDITS LIMITED TO CERTIFIED PUBLIC ACCOUNTANTS
19 AND PUBLIC ACCOUNTANTS [REGISTERED UNDER THIS ACT].--WHENEVER
20 ANY STATUTE [OR RULES AND REGULATIONS OR ORDERS], REGULATION OR
21 ORDER OF A DEPARTMENT, BOARD, AGENCY OR COMMISSION HERETOFORE OR
22 HEREAFTER ENACTED OR ADOPTED REQUIRES THE AUDIT OR EXAMINATION
23 OF FINANCES, ACCOUNTS, FINANCIAL STATEMENTS, BOOKS AND RECORDS
24 OR REPORTS OF [(1)] ANY:
25 (1) DEPARTMENT, DIVISION, BOARD, BUREAU, OFFICE, COMMISSION
26 OR AGENCY OF THIS COMMONWEALTH [OR];
27 (2) [OF ANY] MUNICIPAL AUTHORITY OR OTHER AUTHORITY OR
28 POLITICAL SUBDIVISION WITHIN THIS COMMONWEALTH[, OR];
29 (3) [OF ANY] CORPORATION, [JOINT STOCK] JOINT-STOCK COMPANY,
30 NONPROFIT CORPORATION, ASSOCIATION, COOPERATIVE OR [JOINT STOCK]
19950H1782B3538 - 121 -
1 JOINT-STOCK ASSOCIATION OR ANY OTHER BUSINESS OR PROFESSIONAL
2 ENTITY; OR
3 (4) [OF ANY] ELEEMOSYNARY INSTITUTION,
4 BY A CERTIFIED PUBLIC ACCOUNTANT, PUBLIC ACCOUNTANT, INDEPENDENT
5 ACCOUNTANT OR AUDITOR, COMPETENT PUBLIC ACCOUNTANT OR OTHER
6 PERSON PURPORTING TO HAVE EXPERT KNOWLEDGE OF ACCOUNTING AND
7 AUDITING, [SUCH] THE REQUIREMENT SHALL BE CONSTRUED TO MEAN
8 [CERTIFIED PUBLIC ACCOUNTANT OR PUBLIC ACCOUNTANT REGISTERED
9 UNDER THIS ACT: PROVIDED HOWEVER, THAT NOTHING] A LICENSEE.
10 NOTHING IN THIS SECTION SHALL BE CONSTRUED TO AFFECT THE
11 ELIGIBILITY OF ANY PERSON TO SERVE AS AN ELECTED AUDITOR IN A
12 POLITICAL [SUBDIVISIONS] SUBDIVISION.
13 SECTION 17. SECTION 17 OF THE ACT IS REENACTED TO READ:
14 SECTION 17. REPEALS.--THE ACT, APPROVED THE TWENTY-NINTH DAY
15 OF MARCH, ONE THOUSAND EIGHT HUNDRED NINETY-NINE (PAMPHLET LAWS
16 21), ENTITLED "AN ACT TO ESTABLISH A BOARD FOR THE EXAMINATION
17 OF ACCOUNTANTS, TO PROVIDE FOR THE GRANTING OF CERTIFICATES TO
18 ACCOUNTANTS, AND TO PROVIDE A PUNISHMENT FOR THE VIOLATION OF
19 THIS ACT," AND ITS AMENDMENTS ARE HEREBY REPEALED.
20 SECTION 421, ACT OF APRIL 9, 1929 (P.L.177, NO.175), KNOWN AS
21 "THE ADMINISTRATIVE CODE OF 1929," IS REPEALED.
22 ALL OTHER ACTS OR PARTS OF ACTS INCONSISTENT HEREWITH ARE
23 HEREBY REPEALED.
24 SECTION 18. THIS ACT SHALL TAKE EFFECT IN 60 DAYS.
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