CR 15-002 Rule Text

ss. 442.04, 442.05, 442.08, Stats.

Statutory authority:

ss. 15.08 (5) (b), 227.11 (2), 442.087 (3), Stats.

Explanation of agency authority:

Pursuant to ss. 15.08 (5) (b), and 227.11 (2) (a), Stats., the Accounting Examining Board (Board) is empowered by the legislature to promulgate rules that will provide guidance within the accounting profession and that interpret the statutes it enforces or administers. An express grant of rule writing authority with regard to peer review is found in Section 442.087 (3), Stats. The Board seeks to promulgate rules that will provide guidance within the profession with regards to the qualifications for certification and licensure, qualifications for examination, and requirements for peer review.

Related statute or rule:

None.

Plain language analysis:

The Accounting Examining Board undertook a comprehensive review of the rules governing accounting practice in Wisconsin. During the time the Board was conducting its review legislation passed that greatly impacted becoming a certified public accountant in Wisconsin. 2013 Wisconsin Act 21 affected the accreditation standard within the rules. Before Act 21, applicants for a certified public accountant certificate were to have received a bachelor’s degree from an institution accredited by the Commission on Institution of Higher Education of the North Central Association of Colleges and Schools or its regional equivalence. 2013 Wisconsin Act 21 changed the accreditation standard to include institutions of higher education that are accredited by an accrediting agency recognized by the secretary of the federal Department of Education. The proposed rule would eliminate all references to the former accreditation body and update pertinent provisions with the new accreditation standard.

2013 Wisconsin Act 210 modified the qualifications for sitting for the accountancy exam. Before Act 210, individuals had to complete 150 semester hours of education and possess a baccalaureate degree or higher before taking the exam. Act 210 reduced the number of required semester hours of education from 150 to 120 semester hours and eliminated the baccalaureate or higher degree as a requirement to take the exam. The proposed rule will amend the affected provisions to implement this statutory change.

Lastly, the Board decided to adopt the American Institute of Certified Public Account’s (AICPA) Code of Professional Conduct, and update the peer review chapter with new terms.

Summary of, and comparison with, existing or proposed federal regulation:

None.

Comparison with rules in adjacent states:

Illinois: Illinois requires 150 college or university semester hours with an accounting concentration to be admitted to take the certified public accountant examination. The 150 hours must include a baccalaureate or higher degree conferred by an academic institution acceptable to the Board. 225 Ill Comp. Stat. 450/3. The Board recognizes institutions of higher education accredited by a regional accrediting association recognized by the Council for Higher Education Accreditation or the U.S. Department of Education. The Board also recognizes business schools accredited by the Association of Advance Collegiate Schools of Business or the Association of Collegiate Business Schools and Programs. 23 Ill. Adm. Code 1400.90 (c) (2) (H).

Iowa:   Qualifications for a certificate as a certified public accountant in Iowa includes completion of at least 150 semester hours of college level education and receiving a baccalaureate or higher degree by a college or university recognized by the Board. Iowa Code §542.5 (7). The Board recognizes institutions accredited by the American Assembly of Collegiate Schools of Business.193A IAC 3.2. Other qualifications include one year of verified experience and successful completion of the uniform certified accountant’s examination. 193A IAC 3.1.

Michigan: Certification requirements in Michigan include the completion of a least 150 semester hours of college education including a baccalaureate degree or higher with a concentration in accounting. Mich. Admin. Code r. 338.5116 (1). For purposes of accreditation the Board recognizes the North Central Association of Colleges and Schools Commission on Institutions of Higher Education. Mich. Admin. Code r. 338.5115. Qualifying experience for certification includes 2,000 hours of experience within a period of not less than one calendar year and not more than 5 calendar years. Mich. Admin. Code r. 338.5117 (1).

Minnesota: The requirements for certification include the completion of one year of experience and 150 semester hours or 225 quarter hours at a college or university accredited by a recognized accrediting agency listed with the United States Department of Education, or an equivalent accrediting association. Minn. Stat. §3261.03 Subd.6 . Before taking the examination an applicant is required to have a “baccalaureate or higher degree, with a major in accounting or a major in business with accounting emphasis, or an equivalent education, from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education or an equivalent accrediting association.” Minn. Stat. §3261.03 Subd. 3.

Summary of factual data and analytical methodologies:

The methodologies used in drafting the proposed rule include comparing 2013 Wisconsin Act 21 and 2013 Wisconsin Act 210 with current administrative rules concerning accounting practice, reviewing statutes and administrative code from neighboring states, and obtaining feedback from members of the Accounting Examining Board.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis:

Fiscal Estimate and Economic Impact Analysis:

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department’s Regulatory Review Coordinator may be contacted by email at [e-mail], or by calling [phone].

Effect on small business:

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department’s Regulatory Review Coordinator may be contacted by email at [e-mail], or by calling [phone].

Agency contact person:

Shawn Leatherwood, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8935, Madison, Wisconsin 53708; telephone [phone]; email at [e-mail].

Place where comments are to be submitted and deadline for submission:

Comments may be submitted to Shawn Leatherwood, Administrative Rules Coordinator Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8935, or by email to [e-mail]. Comments must be received on or before February 17, 2015 o be included in the record of rule-making proceedings.

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TEXT OF RULE

SECTION 1. Accy 1.001 (1) is amended to read:

Accy 1.001 Applicability of rules of conduct to certified public accountants. Chapters Accy 1 to 9 6 apply to a person who practices as a certified public accountant in this state.

SECTION 2. Accy 1.001 (3) is amended to read:

Accy 1.001 (3) A certified public accountant shall not permit others to carry out acts on his or her the accountant’s behalf, either with or without compensation, which, if carried out by the certified public accountant, would violate chs. Accy 1 to 9 6.

SECTION 3. Accy 1.003 (intro.) is amended to read:

Accy 1.003 Definitions. As used in chs. Accy 1 to 9 6.

SECTION 4. Accy 1.003 (2m), (2r), and (7m) are created to read:

Accy 1.003 (2m) “Board” means the accounting examining board.

Accy 1.003 (2r) “Certified public accountant” has the meaning given in s. 442.02 (1m), Stats.

Accy 1.003 (7m) “Financial statements” means statements and footnotes related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, cash flow, or changes in financial position for a period of time, in conformity with generally accepted accounting principles or another comprehensive basis of accounting. The term does not include incidental financial data included in management advisory service reports to support recommendations to a client; nor does it include tax returns and supporting schedules.

SECTION 5. Subchapter II (title) in chapter Accy 1 is amended to read:

SUBCHAPTER II (title)

INDEPENDENCE PROFESSIONAL CONDUCT, INTEGRITY AND OBJECTIVITY

SECTION 6. Accy 1.101 is repealed and recreated to read:

Accy 1.101 Professional conduct. (1) The board adopts by reference the “Code of Professional Conduct” published by the American Institute of Certified Public Accountants, effective as of December 15, 2014, except that references to “member” are replaced by “a person licensed to practice as a certified public accountant.”