Reference is to the bill as introduced.
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Section 40-2-10(A) of the 1976 Code amended to read:
"Section 40-2-10.
(A)(1) There is created the
South Carolina Board of Accountancy which is responsible for the
administration and enforcement of this chapter. The board shall
consist of nine eleven members appointed
by the Governor, all of whom must be residents of this
State; and:
(a)
five of whom must be there must
be one resident licensed certified public
accountants accountant from each
congressional district;
(b)
two of whom members must be
a licensed public accountants
accountant or a licensed accounting
practitioners practitioner; and
(c)
two of whom must be members
must be from the public at large of the
public, one of whom must be an attorney licensed in
this State, who:
(i)
are not engaged in the
practice of public accounting,;
(ii)
have no financial interest in the profession of public
accounting,; and
(iii)
have no immediate family member in the profession
of public accounting. As used in this section, 'immediate family
member' is defined in Section 8-13-100(18).
(2)
Members are appointed for terms of four years and
serve until their successors are appointed and qualify.
Vacancies must be filled by the Governor for the unexpired
portions of the term in the manner of the original
appointment. The Governor shall remove a member of the board
in accordance with Section 1-3-240.
(3)
Failure by a licensed certified public
accountant to maintain residency in the district for which he is
appointed shall result in the forfeiture of his
office."
SECTION 2. A. Section 40-2-20(2) of the 1976 Code is amended to read:
"(2) 'Attest'
means providing the following financial statement
services:
(a)
an audit or other engagement to be performed in accordance
with the Statements on Auditing Standards (SAS);
(b)
a review of a financial statement to be performed in
accordance with the Statements on Standards for Accounting and
Review Services (SSARS);
(c)
an examination of prospective financial information to be
performed in accordance with the Statements on Standards for
Attestation Engagements (SSAE); or
(d)
any engagement to be performed in accordance with Public
Company Accounting Oversight Board (PCAOB) Auditing
Standards.; or
(e)
any examination, review, or agreed upon
procedure to be performed in accordance with the SSAE, other
than an examination described in item (c)."
B. Section 40-2-20(15) of the 1976 Code is amended to read:
"(15) 'Practice of
accounting' means:
(a)
Issuing a report on financial statements of a person,
firm, organization, or governmental unit or offering to render
or rendering any attest or compilation service. This restriction
does not prohibit any act of a public official or public
employee in the performance of that person's duties or prohibit
the performance by a nonlicensee of other services involving the
use of accounting skills, including the preparation of tax
returns, management advisory services, and the preparation of
financial statements without the issuance of reports on
the financial statement; or
(b)
using or assuming the title 'Certified Public Accountant'
or the abbreviation 'CPA' or any other title, designation,
words, letters, abbreviation, sign, card, or device tending to
indicate that the person is a certified public accountant."
C. SECTION 40-2-20(17) of the 1976 Code is amended to read:
"(17) 'Report',
when used with reference to financial
statements any attest or compilation service,
means an opinion, report, or other form of language that states
or implies assurance as to the reliability of a
the attested information or compiled financial statement
and that also includes or is accompanied by a statement or
implication that the person or firm issuing it has special
knowledge or competency in accounting or auditing. This
statement or implication of special knowledge or competency may
arise from use by the issuer of the report of names or titles
indicating that the person or firm is an accountant or auditor.
The term 'report' includes any form of language which disclaims
an opinion when the form of language is conventionally
understood to imply positive assurance as to the reliability of
the attested information or compiled financial statements
referred to or special competency on the part of the person or
firm issuing such language, or both; and it includes any other
form of language that is conventionally understood to imply such
assurance or such special knowledge or competency, or
both."
SECTION 3. A. Section 40-2-30(B) of the 1976 Code is amended to read:
"(B) Only licensed
certified public accountants or public accountants or
individuals qualifying for a practice privilege pursuant to
Section 40-2-245 may issue a report on financial statements of a
person, firm, organization, or governmental unit or offer to
render or render any attest or compilation service as defined,
except as provided in Section 40-2-340. This restriction does
not prohibit an act of a public official or public employee in
the performance of that person's duties or prohibit the
performance by any nonlicensee of other services involving the
use of accounting skills, including the preparation of tax
returns, management advisory services, and the preparation of
financial statements without the issuance of reports on
the financial statements."
B. Section 40-2-30(H) and (I) of the 1976 Code is amended to read:
"(H) This section
does not apply to a person or firm holding a certification,
designation, degree, or license granted in a foreign country
entitling the holder to engage in the practice of public
accountancy or its equivalent in that country; whose activities
in this State are limited to the provision of professional
services to persons or firms who are residents of, governments
of, or business entities of the country in which the person
holds the entitlement; who performs no attest or compilation
services and who issues no reports, as defined in this
chapter, with respect to the financial
statements information of any other persons,
firms, or governmental units in this State; and who does not use
in this State any title or designation other than the one under
which the person practices in their country, followed by a
translation of the title or designation into the English
language, if it is in a different language, and by the name of
the country.
(I)(1) Firms that do
not have an office in this State, and that do not perform the
services described in Section 40-2-20(2)(a) (audits), (c)
(examinations), or (d) (services under PCAOB Auditing Standards)
for a client having its home office in this State, may engage in
the practice of accounting, without obtaining a registration
pursuant to Section 40-2-40, as specified in this
subsection.
(2)
A firm described in subsection (I)(1) may perform services
described in Section 40-2-20(2)(b), 2(e) or (5) for a
client having its home office in this State, may engage in the
practice of accounting, as specified in this section, and may
use the title 'CPA' or 'CPA firm' only if the firm:
(a)
has the qualifications described in Section 40-2-40(C) and
Section 40-2-255(C); and
(b)
performs these services through an individual with
practice privileges under Section 40-2-245.
(3)
A firm described in subsection (I)(1) that is not subject
to the requirements of subsection (I)(2) may perform other
professional services within the practice of accounting while
using the title 'CPA' or 'CPA firm' in this State only if the
firm:
(a) performs these
services through an individual with practice privileges under
Section 40-2-245; and
(b) can lawfully do so
in the state where these individuals with practice privileges
have their principal place of business.
(4)
Notwithstanding any other provision of this section, it is
not a violation of this section for a firm that does not hold a
valid permit under Section 40-2-40 and which does not have an
office in this State to provide its professional services or to
engage in the practice of accounting so long as it complies with
the requirements of subsection (I)(2) or (3), whichever is
applicable."
SECTION 4. Section 40-2-35(B) through (G) of the 1976 Code is amended to read:
"(B)(1)
In addition to other requirements
established by law and for the purpose of determining an
applicant's eligibility for licensure to practice as a certified
public accountant, the board may require a state criminal
records check, including fingerprints, performed by the South
Carolina Law Enforcement Division, and a national criminal
records check, including fingerprints, performed by the Federal
Bureau of Investigation. The results of these criminal records
checks must be reported to the board. The South Carolina Law
Enforcement Division is authorized to retain the fingerprints
for certification purposes and for notification of the board
regarding criminal charges. The board shall keep information
received pursuant to this section confidential, except that
information relied upon in denying licensure may be disclosed as
may be necessary to support the administrative action.
(2)
Notwithstanding any other provision of law to
the contrary, the dismissal of a prosecution of fraudulent
intent in drawing a dishonored check by reason of want of
prosecution or proof of payment of restitution and
administrative costs must not be used as evidence of a lack of
good moral character for the purposes of disqualifying a person
seeking licensure or renewal of licensure pursuant to this
chapter.
(3)
The applicant must bear all costs associated
with conducting criminal record checks.
(C) To meet
the educational requirement as part of the one hundred fifty
semester hours of education, the applicant must demonstrate
successful completion of:
(1)
at least thirty-six semester hours of accounting in
courses that are applicable to a baccalaureate, masters, or
doctoral degree and which cover financial accounting, managerial
accounting, taxation, and auditing, of which at least
twenty-four semester hours must be taught at the junior level or
above; and
(2)
at least thirty-six semester hours of business courses
that are applicable to a baccalaureate, masters, or doctoral
degree and which may include macro and micro economics, finance,
business law, management, computer science, marketing, and
accounting hours not counted in item (1).
(C)(D)
The board shall accept a transcript from a college
or university accredited by the Southern Association of Colleges
and Schools or another regional accrediting association having
the equivalent standards or an independent senior college in
South Carolina certified by the State Department of Education
for teacher training, and accounting and business programs
accredited by the American Assembly of Collegiate Schools of
Business (AACSB) or any other accrediting agency having
equivalent standards. Official transcripts signed by the college
or university registrar and bearing the college or university
seal must be submitted to demonstrate education and degree
requirements. Photocopies of transcripts must not be
accepted.
(D)(E)
An applicant may apply for examination by
submitting forms approved by the board. In order for an
application to be considered a completed application, all blanks
and questions on the application form must be completed and
answered and all applicable documentation must be attached
and:
(1)
the application must be accompanied by the submission of
photo identification, fingerprints, or other identification
information as considered necessary to ensure the integrity of
the exam administration;
(2)
application fees must accompany the application. Fees for
the administration of the examination must recover all costs for
examination administration. The fees required for each
examination must be published to applicants on the application
form. If a check in payment of examination fees fails to clear
the bank, the application is considered incomplete and the
application must be returned to the candidate;
(3)
the applicant must have on record with the board official
transcripts from a college or university approved by the board
demonstrating successful completion of one hundred twenty
semester hours credit, including:
(a)
at least twenty-four semester hours of accounting in
courses that are applicable to a baccalaureate, masters, or
doctoral degree and which cover financial accounting, managerial
accounting, taxation, and auditing; and
(b)
at least twenty-four semester hours of business courses
that are applicable to a baccalaureate, masters, or doctoral
degree and which may include macro and micro economics, finance,
business law, management, computer science, marketing, and
accounting hours not counted in item (a).
(E)(F)
A candidate must pass all sections of the
examination provided for in Section 40-2-35(A)(2) in
order to qualify for a certificate.
(1)
Upon the implementation of a computer-based examination, a
candidate may take the required test sections individually and
in any order. Credit for any test section passed is valid for
eighteen months from the actual date the candidate took that
test section, without having to attain a minimum score on any
failed test section and without regard to whether the candidate
has taken other test sections.
(a)
A candidate must pass all four test sections of the
Uniform CPA Examination within a rolling eighteen-month period,
which begins on the date that the first test section is passed.
The board by regulation may provide additional time to an
applicant on active military service. The board also may
accommodate any hardship which results from the conditions of
administration of the examination.
(b)
A candidate cannot retake a failed test section in the
same examination window. An examination window refers to a
three-month period in which candidates have an opportunity to
take the CPA examination. If all four test sections of the
Uniform CPA Examination are not passed within the rolling
eighteen-month period, credit for any test section passed
outside the eighteen-month period expires and that test section
must be retaken.
(c)
A candidate who applies for a license more than
three years after the date upon which the candidate passed the
past section of the Uniform CPA Examination must document one
hundred and twenty hours of acceptable continuing professional
education in order to qualify, in addition to all other
requirements imposed by this section.
(2)
A candidate may arrange to have credits for passing
sections of the examination under the jurisdiction of another
state or territory of the United States transferred to this
State. Credits transferred for less than all sections of the
examination are subject to the same conditional credit rules as
if the examination had been taken in South Carolina.
(F)(G)
An applicant may demonstrate experience as
follows:
(1)
Experience may be gained in either full-time or part-time
employment. Two thousand hours of part-time accounting
experience is equivalent to one year. Experience may not accrue
more rapidly than forty hours per week.
(2)
The five years of teaching experience provided for in
Section 40-2-35(A)(4)(b) consists of five years of full-time
teaching of accounting courses at a college or university
accredited by the Southern Association of Colleges and Schools
or another regional accrediting association having equivalent
standards or an independent senior college in South Carolina
certified by the State Department of Education for teacher
training.
(a)
In order for teaching experience to qualify as full-time
teaching, the applicant must have been employed on a full-time
basis as defined by the educational institution where the
experience was obtained; however, teaching less
fewer than twelve semester hours per
year semester, or the equivalent in
quarter hours, must not be considered as full-time teaching
experience.
(b)
Experience credit for teaching on a part-time basis
qualifies on a pro rata basis based upon the number of semester
hours required for full-time teaching at the educational
institution where the teaching experience was obtained.
(c)
Teaching experience may not accrue more rapidly than
elapsed chronological time.
(d)
An applicant must not be granted credit for full-time
teaching completed in less than one academic year.
(e)
An applicant must not be granted more than one full-time
teaching year credit for teaching completed within one calendar
year.
(f)
Teaching experience must not be granted for teaching
subjects outside the field of accounting. Subjects considered to
be outside the field of accounting include, but are not limited
to, business law, finance, computer applications, personnel
management, economics, and statistics.
(g)
Of the five years of full-time teaching experience, credit
for teaching accounting principles courses or fundamental
accounting (below intermediate accounting) may not exceed two
full-time teaching years and the remaining three full-time
teaching years' experience must be obtained in teaching courses
above accounting principles.
(h)
Accounting courses considered to be above accounting
principles include, but are not limited to, intermediate
accounting, advanced accounting, auditing, income tax, financial
accounting, management accounting, and cost accounting.
(i)
Experience other than public accounting experience counts
only in proportion to duties which, in the opinion of the board,
contribute to competence in public accounting.
(j)
The board may require other information as it considers
necessary to determine the acceptability of experience
including, but not limited to, review of work papers and other
work products, review of time records, and interviews with
applicants and supervisors.
(3)
For purposes of this subsection, 'experience'
shall have the same meaning as 'appropriate experience' in
Section 40-2-35(A)(4); however, if the applicant obtained the
experience seven or more years before submitting an application,
the applicant shall have obtained an additional six months of
experience within two years before submitting the
application."
SECTION 5. Section 40-2-40 of the 1976 Code is amended to read:
"Section 40-2-40.
(C) Qualifications for registration as
a certified public accountant firm are as follows:
(1)
A super majority, sixty-six and two-thirds
percent simple majority of the ownership of the
firm in terms of financial interests and voting rights of all
partners, officers, shareholders, members or managers must
belong to certified public accountants currently licensed in
some state. Although firms may include nonlicensed owners,
the firm and its ownership must comply with regulations
promulgated by the board. The noncertified public
accountant owner All nonlicense owners must be
actively engaged as a member of the firm
active individual participants in the firm or
its affiliated entities in providing
services to the firm's clients. Ownership by investors or
commercial enterprises is prohibited.
(2)
Partners, officers, shareholders, members, or managers
whose principal place of business is in this State, and who
perform professional services in this State, must hold a valid
license issued pursuant to this section. An individual who has
practice privileges under Section 40-2-245 who performs services
for which a firm permit is required pursuant to Section
40-2-245(D) must not be required to obtain a license from this
State pursuant to Section 40-2-35.
(3)
For firms registering under subsection (B)(1)(a) or (b),
there must be a designated resident manager in charge of each
office in this State who must be a certified public accountant
licensed in this State.
(4)
Noncertified public accountant owners must not assume
ultimate responsibility for any financial statement, attest, or
compilation engagement.
(5)
Noncertified public accountant owners shall abide by the
code of professional ethics adopted pursuant to this
chapter.
(6)
Owners shall at all times maintain ownership equity in
their own right and must be the beneficial owners of the equity
capital ascribed to them. Provision must be made for the
ownership to be transferred to the firm or to other qualified
owners if the noncertified public accountant ceases to be
actively engaged a an active individual
participant in the firm.
(7)(a)
This section applies only to noncertified public
accountant owners who are residents of this State.
(b)
Noncertified public accountant owners must
complete the same number of hours of continuing professional
education as licensed certified public accountants in this
State.
(c)
Noncertified public accountant owners who are
licensed professionals subject to continuing education
requirements applicable to that profession may complete the
required number of continuing professional education hours in
courses offered or accepted by organizations or regulatory
bodies governing that profession, and also must complete the
same number of hours of continuing professional education as
licensed certified public accountants in this State.
(8)
A certified public accountant firm and its
designated resident manager under subitem (3) are responsible
for the following in regards to a noncertified public accountant
owner:
(a)
a noncertified public accountant owner shall
comply with all applicable accountancy statutes and regulations;
and
(b)
a noncertified public accountant owner shall be
of good moral character and shall not engage in any conduct
that, if committed by a licensee, would constitute a violation
of the regulations promulgated by the board.
(D) Registration
must be initially issued and renewed annually. Applications for
registration must be made in such form, and in the case of
applications for renewal, between such dates as the board by
regulation may specify, and the board shall grant or deny any
such application after filing in proper form.
(E) An applicant for
initial issuance or renewal of a registration to practice
pursuant to this chapter shall register each office of
the firm within this State with the board and shall
demonstrate that all attest and compilation services rendered in
this State are under the charge of a person holding a valid
license issued pursuant to this section or the corresponding
provision of prior law or of some other state.
(F) The board
shall may charge a fee for each
application for initial issuance or renewal of a registration
issued pursuant to this section."
SECTION 6. Section 40-2-80 of the 1976 Code is amended by adding:
"(H)(1)
In an investigation or disciplinary proceeding
concerning a licensee, the department may require a state
criminal records check, including fingerprints, performed by the
South Carolina Law Enforcement Division, and a national criminal
records check, including fingerprints, performed by the Federal
Bureau of Investigation. The results of these criminal records
checks must be reported to the department. The South Carolina
Law Enforcement Division is authorized to retain the
fingerprints for certification purposes and for notification of
the department regarding criminal charges. The department shall
keep information received pursuant to this section confidential,
except that information relied upon in an administrative action
may be disclosed as may be necessary to support the
administrative action.
(2)
Notwithstanding any other provision of this section or
any other provision of law, the dismissal of a prosecution of
fraudulent intent in drawing a dishonored check by reason of
want of prosecution or proof of payment of restitution and
administrative costs must not be used as evidence of performance
of a fraudulent act for disciplinary purposes.
(3) Costs of
conducting a criminal records check are the responsibility of
the department and may be recovered as administrative costs
associated with an investigation or hearing pursuant to this
chapter unless ordered by the department as a cost in a
disciplinary proceeding."
SECTION 7. Section 40-2-250 of the 1976 Code is amended to read:
"Section 40-2-250.
(A) A licensee shall file an
application for renewal on or before January
February first of each calendar the
following year.
(B) The application for
renewal of a license must include:
(1)
current information concerning practice status;
(2)
a verified continuing education report;
(3)
renewal fee, if any.
(C)
The A licensee shall file a
verified report of continuing education must
on or before February first and document forty hours of
acceptable continuing education each during
the immediately preceding calendar year. Not more than
twenty percent of the required hours may be in personal
development subjects. A licensee is not required to report
continuing education for the year in which the initial license
was obtained. The board by regulation may provide for the
carryover of excess hours of continuing education not to exceed
twenty hours a year. No carryover is allowed from a year in
which continuing education was not required.
(D) A license
not renewed If a licensee does not file an
application for renewal on or before
January February first, the
license is considered revoked
lapsed. Continued practice after January
February fifteenth must may be
sanctioned as unlicensed practice of accounting.
(E) Renewal
applications filed or completed after January
February fifteenth are subject to a reinstatement fee in
the amount of five hundred dollars. A person may not practice on
a revoked lapsed license."
SECTION 8. Section 40-2-255 of the 1976 Code is amended to read:
"Section 40-2-255.
(A) A registrant shall file an
application for renewal of the calendar-year registration
on or before January February first of
each calendar the following year.
(B) The application for
renewal of a registration shall include:
(1)
current information concerning ownership;
(2)
current information concerning the identity of the
licensee in charge of the office;
(3)
renewal fee, if any.
(C) As a condition of
renewal of registration, an applicant who engages in attest or
compilation services, or both, must provide evidence of
satisfactory completion of peer review no more frequently than
once every three years. Peer review must be conducted in a
manner as the board specifies by regulation. This review must
include a verification that individuals in the firm, who are
responsible for supervising attest or compilation services, or
both, and who sign or authorize someone to sign the accountant's
report on the financial statements on behalf of the firm, meet
the competency requirements set out in the professional
standards for these services and these regulations must:
(1)
include reasonable provision for compliance
by require an applicant that
can to show that it the
applicant has, within the preceding three years, undergone a
peer review that is a satisfactory equivalent to peer review as
generally required pursuant to this subsection;
(2)
require, with respect to peer
reviews, that they to be subject to
oversight by a body established or sanctioned by the board,
which shall periodically report to the board on program review
effectiveness under its charge and provide to the board a
listing of firms that have participated in a peer review
program;
(3)
require, with respect to peer review, that
the peer reviews processes
to be operated conducted and that
work and documents be maintained in a manner designed to
preserve confidentiality of documents furnished or generated in
the course of the review.
(D) A
registration not renewed If a registrant does not
file an application for renewal on or before
January February first, the
registration is considered revoked
lapsed. Continued practice after January
February fifteenth must may be
sanctioned as unlicensed practice of accounting."
SECTION 9. Section 40-2-560(C) of the 1976 code is amended to read:
"(C) A partnership, firm, or registrant must file an application in accordance with Section 40-2-40 and Section 40-2-255."
SECTION 10. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.