SB474: Bill Text

LRB-4950/1

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2001 - 2002 LEGISLATURE

2001 Senate BILL 474

February 28, 2002 - Introduced by Senators Burke, Baumgart, Cowles, Darling and Hansen, cosponsored by Representatives Musser, Miller, Turner and Wasserman. Referred to Committee on Universities, Housing, and Government Operations.

SB474,1,3 An Act to renumber 442.001 (1); and to create 442.001 (1d), 442.11 (14) and 442.11 (15) of the statutes; relating to: opinions and reports issued by certified public accountants concerning a client's financial statements.

Analysis by the Legislative Reference Bureau

This bill prohibits a certified public accountant (CPA), a CPA's employee, and an accounting firm from expressing an opinion about any financial statement of a client to someone other than the client, if the CPA, employee, or firm performs consulting services for the client; the total value of the consulting services exceeds $10,000; and the client issues securities or, if the client is a nonprofit entity, either the client's assets exceed $5,000,000 or the client's annual federal gross revenue, including gifts, exceeds $5,000,000. The prohibition does not apply after December 31, 2002.

Beginning on January 1, 2003, the bill also prohibits a CPA, a CPA's employee, and an accounting firm from issuing a report on financial statements that results from performing attest services for a client, if, during the period addressed by the report, the CPA, employee, or firm performs consulting services for the client; the total value of the consulting services exceeds $10,000; and the client issues securities or, if the client is a nonprofit entity, either the client's assets exceed $5,000,000 or the client's annual federal gross revenue, including gifts, exceeds $5,000,000. Under current law, "attest services" includes an audit, a review of financial statements, and an examination of prospective financial information, if all such services are performed according to rules established by the accounting examining board.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB474, s. 1 Section 1. 442.001 (1) of the statutes, as created by Wisconsin Act 16, is renumbered 442.001 (1m).

SB474, s. 2 Section 2. 442.001 (1d) of the statutes is created to read:

SB474,2,5 442.001 (1d) "Affiliate of a firm" means any person who directly or indirectly controls, is controlled by, or is under common control with, a firm.

SB474, s. 3 Section 3. 442.11 (14) of the statutes is created to read:

SB474,2,17 442.11 (14) Beginning on the effective date of this subsection .... [revisor inserts date], as a certified public accountant, employee of a certified public accountant, member of a firm licensed under s. 442.08 (2), or affiliate of a firm licensed under s. 442.08 (2), expresses an opinion about any financial statement of a client to someone other than the client, if such certified public accountant, employee, member, or affiliate performs or has performed consulting services for the client; the total value of the consulting services exceeds $10,000; and the client issues or has issued securities, as defined in s. 551.02 (13), or, if the client is a nonprofit entity, either the client's assets exceed $5,000,000 or the client's annual federal gross revenue, including gifts, exceeds $5,000,000. This subsection does not apply after December 31, 2002.

SB474, s. 4 Section 4. 442.11 (15) of the statutes is created to read:

SB474,3,7 442.11 (15) Beginning on January 1, 2003, as a certified public accountant, employee of a certified public accountant, member of a firm licensed under s. 442.08 (2), or affiliate of a firm licensed under s. 442.08 (2), issues a report on financial statements that results from performing attest services for a client, if, during the period addressed by the report, such certified public accountant, employee, member, or affiliate performs or has performed consulting services for the client; the total value of the consulting services exceeds $10,000; and the client issues or has issued securities, as defined in s. 551.02 (13), or, if the client is a nonprofit entity, the client's assets exceed $5,000,000 or the client's annual federal gross revenue, including gifts, exceeds $5,000,000.

SB474,3,8 (End)