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 Accy 1.101 is repealed and recreated to read: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.”
(2) All definitions included in the American Institute of Certified Public Accountants’ Code of Professional Conduct shall apply only to the document adopted by reference.
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036-8775
SECTION 7. Accy 1.102 is amended to read:
Accy 1.102 Integrity and objectivity. No person licensed to practice as a certified public accountant, as defined in the statutes, shall knowingly misrepresent facts, and when engaged in the practice of public accounting, including the rendering of tax and management advisory services, shall not subordinate his or her judgment to others. In tax practice, a member may resolve doubt in favor of the client as long as there is reasonable support for that position.
SECTION 8. Accy 1.202 is amended to read:
Accy 1.202 Auditing standards. (1) A person licensed to practice as a certified public accountant shall not permit the certified public accountant's name to be associated with financial statements in such a manner as to imply that the certified public accountant is acting as an independent public accountant unless the certified public accountant has complied with the applicable generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants. Statements on auditing standards used by the American Institute of Certified Public Accountants auditing standards executive committee board are, for purposes of this rule, considered to be interpretations of the generally accepted auditing standards, and departures from such statements must be justified by those who do not follow them.
SECTION 9. Accy 1.301 (2) (d), and (4) are amended to read:
Accy 1.301 (2) (d) To preclude a certified public accountant from responding to an inquiry made by the Professional Ethics Division of the American Institute of Certified Public Accountants, by the duly constituted investigative or disciplinary body of a state society of certified public accountants, or under any state statutes or under the standards of the Securities and Exchange Commission or the Public Company Accounting Oversight Board.
(4) The prohibition in sub. (1) against disclosure of confidential information obtained in the course of a professional engagement does not apply to disclosure of such information when required to properly discharge the certified public accountant's responsibility according to the profession's standards. The prohibition would not apply, for example, to disclosure, as required by AU-C section 561 560 of Statement on Auditing Standards No. 1, regarding the of subsequent discovery of facts existing at the date of the auditor's report which would have affected the auditor's report had the auditor been aware of such facts.
SECTION 10. Accy 1.302 (1) and (3) are amended to read:
Accy 1.302 (1) Contingent fees, commissions and referral fees. (1) Contingent Fees. Except as provided in sub. (3) (2), a certified public accountant may charge a contingent fee provided the accountant and the client make a contingent fee agreement in writing, signed by the client, which states the method by which the fee is to be determined and describes all costs and expenses to be charged to the client. Upon conclusion of the contingent fee matter, the accountant shall provide the client with a written statement showing the fee and all the costs and expenses charged to the client.
(3) Commissions. Except as provided in sub. (5) (4) a certified public accountant may receive a commission provided that at the time the referral or recommendation is made, the accountant informs the client in writing of the amount and reason for the commission.
SECTION 11. Accy 1.401(2) (a), (2) (c) and (2) (e) 2. are amended to read:
Accy 1.401 (2) (a) Client’s records and accountant’s workpapers. Retention of client records after a demand is made for them is an act discreditable to the profession in violation of this section. It would be a violation of the code to retain a client's records to enforce payment. A certified public accountant's working papers are his or her property are the property of the certified public accountant property and need not be surrendered to the client. However, in some instances working papers will contain data which that should properly be reflected in the client's books and records but which that for convenience have not been duplicated therein, with the result that the client's records are incomplete. In such instances, the portion of the working papers containing such data constitutes part of the client's records, and copies should be made available to the client upon request. If a certified public accountant is engaged to perform certain work for a client and the engagement is terminated prior to the completion of such work, the certified public accountant is required to return or furnish copies of only those records originally given to the certified public accountant by the client. Examples of working papers that are considered to be the client's records would include:
(c) Duty discharged. Once the certified public accountant has returned the client's records or furnished the copies of such records and/or and necessary supporting data, the obligation has been discharged in this regard and it is not necessary to comply with any subsequent requests to again furnish such records.
(e) 2. On conviction for willful failure to file an income tax return or other document which, the certified public accountant as an individual is required by law to file, for filing a false or fraudulent income tax return or other document on his or her or a client's behalf, or for willful aiding in the preparation and/or and presentation of a false or fraudulent income tax return of a client, or the willful making of a false representation in connection with the determination, collection or refund of any tax, whether it be in his or her own behalf or in behalf of a client, the board will initiate charges in every instance.
SECTION 12. Accy. 1.401 (2) (f) is repealed and recreated to read:
Accy 1.401 (2) (f) A certified public accountant shall provide a 48-hour written notification to the board after being convicted of a crime.
SECTION 13. Accy 1.405 is repealed and recreated to read:
Accy 1.405 Firm Names. (1) Individuals or firms may practice as a certified public accountant in any form of business organization form permitted by state law. No person licensed to practice as a certified public accountant may practice under a firm name which that is misleading as to the type of organization. A misleading CPA Firm name is one of the following:
(a) A name that contains any representation that would be likely to cause a reasonable person to misunderstand or be confused about the legal form of the firm, or about who are the owners or members of the firm, such as a reference to a type of organization or an abbreviation thereof which does not accurately reflect the form under which the firm is organized, for example:
1. The name implies the existence of a corporation when the firm is not a corporation such as through the use of the words “corporation”, “incorporated”, “Ltd.”, “professional corporation”, or an abbreviation thereof as part of the firm name if the firm is not incorporated or is not a professional corporation.
2. The name implies the existence of a partnership when there is not a partnership such as by use of the term “partnership” or “limited liability partnership” or the abbreviation “LLP” if the firm is not such an entity.
3. The name includes the name of an individual who is not a CPA if the title “CPAs” is included in the firm name.
4. The name includes information about or indicates an association with persons who are not members of the firm except as provided in subs. (3) and (4).
5. The name includes the terms "& Company," "& Associate," or "Group," but the firm does not include, in addition to the named partner, shareholder, owner, or member, at least one other unnamed partner, shareholder, owner, member, or staff employee.
(b) A name that contains any representation that would be likely to cause a reasonable person to have a false or unjustified expectation of favorable results or capabilities, through the use of a false or unjustified statement of fact as to any material matter.
