LRB-4286/1
MED&MPG:cjs&wlj
2015 - 2016 LEGISLATURE
January 15, 2016 - Introduced by Representative Kooyenga, cosponsored by
Senator Marklein. Referred to Committee on State Affairs and Government
Operations.
AB725,1,5
1An Act to repeal 442.04 (5) (c); and
to amend 442.04 (5) (b) 3. and 442.04 (5)
2(b) 4. of the statutes;
relating to: continuing education and examination
3requirements for certified public accountants and modifying various
4administrative rules promulgated by the Accounting Examining Board
5relating to accounting.
Analysis by the Legislative Reference Bureau
Overview
This bill 1) revises provisions in the statutes concerning educational
requirements to become a certified public accountant, or CPA; 2) reorganizes and
makes various revisions to the rules of the Accounting Examining Board, which
issues CPA certificates and licenses; and 3) requires the board to study the feasibility
of establishing continuing education requirements for CPAs.
Changes to statutes
Current law provides that a CPA certificate may be granted only to a person
who has completed at least 150 semester hours of education with an accounting
concentration at an institution, except that if an applicant does not have an
accounting concentration, the board may review other educational experience and
grant the CPA certificate if it determines that such other experience provides the
reasonable equivalence of an accounting concentration. This bill deletes the
requirement that an applicant for a CPA certificate have an accounting
concentration at an institution or its reasonable equivalence and instead requires
that an applicant for a CPA certificate have completed course work in accounting and
business subjects, as determined by the board.
Current law does not contain specific continuing education requirements for
CPAs licensed by the board. This bill requires the board to research the feasibility
of rules establishing such continuing education requirements and to report its
findings and recommendations to the legislature.
Changes to rules
The bill makes various substantive and organizational changes to
administrative rules promulgated by the board, including all of the following:
1. Specifying the number of semester hours of and subjects in which a person
must have completed course work in order to take a CPA exam or to receive a CPA
certificate.
2. Revising provisions concerning peer reviews for CPA firms, including adding
provisions regarding peer reviews in the case of firm structure changes and
extensions for peer-review deadlines. The bill also repeals provisions regarding
board approval of peer-review programs and instead lists qualifying peer-review
programs, which are limited to the peer-review process developed and maintained
by the American Institute of Certified Professional Accountants and administered
by the Wisconsin Institute of Certified Professional Accountants or a corresponding
administrator approved in another state.
3. Adopting by reference the most recent version of the American Institute of
Certified Public Accountants' Code of Professional Conduct and establishing a list
of grounds for discipline of a licensee.
4. Specifying what experience constitutes qualifying experience to be eligible
for a CPA certificate. The bill also provides that experience must be obtained after
completing 120 semester hours of qualifying education at an accredited institution.
5. Specifically prohibiting a CPA from providing attest services, except when in
a licensed CPA firm.
6. Revising provisions concerning permissible CPA firm names, requiring
notices for certain changes to CPA firms, and establishing requirements for CPA
firms offering services via an Internet site.
7. Revising provisions concerning the CPA examination and repealing
references to having an accounting major or its reasonable equivalence.
8. Repealing a provision concerning the release of reports by the board on
statistical studies of CPA examination results.
9. Requiring that a CPA convicted of a crime notify the board within 48 hours
after being convicted, instead of within 60 days.
10. Revising provisions concerning late renewal of licenses and reinstatement
of surrendered or revoked licenses.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB725,1
1Section
1. 442.04 (5) (b) 3. of the statutes is amended to read:
AB725,3,62
442.04
(5) (b) 3. The person has completed at least 150 semester hours of
3education
with an accounting concentration at an institution
that include course
4work in accounting and business subjects, as determined by the examining board,
5and has received a bachelor's or higher degree
with an accounting concentration from
6an institution, except as provided in par. (c).
AB725,2
7Section
2. 442.04 (5) (b) 4. of the statutes is amended to read:
AB725,3,138
442.04
(5) (b) 4. Except as provided in s. 442.05, the person has successfully
9passed an examination in such subjects affecting accountancy
and business as the
10examining board considers necessary. A person is not eligible to take the
11examination under this subdivision unless the person has completed at least 120
12semester hours
under subd. 3. of education at an institution that include course work
13in accounting and business subjects, as determined by the examining board.
AB725,3
14Section
3. 442.04 (5) (c) of the statutes is repealed.
AB725,4
15Section
4. Accy 1.001 (1) of the administrative code is amended to read:
AB725,3,1716
Accy 1.001
(1) Chapters Accy 1 to
9
6 apply to a person who practices as a
17certified public accountant in this state.
AB725,5
18Section
5. Accy 1.001 (2) of the administrative code is amended to read:
AB725,4,219
Accy 1.001
(2) A certified public accountant may be held responsible for
20compliance with the rules of the
examining board by any person associated with the
1certified public accountant in a firm who is either under his or her supervision or is
2a member of the firm.
AB725,6
3Section
6. Accy 1.001 (3) of the administrative code is amended to read:
AB725,4,74
Accy 1.001
(3) A certified public accountant shall not permit others to carry out
5acts on
his or her the accountant's behalf, either with or without compensation,
6which, if carried out by the certified public accountant, would violate chs. Accy 1 to
7 9 6.
AB725,7
8Section
7. Accy 1.002 (1) and (2) of the administrative code are amended to
9read:
AB725,4,1410
Accy 1.002
(1) A person licensed as a certified public accountant that has
11significant influence over a CPA-related business is considered to be practicing as
12a certified public accountant in the CPA-related business and all persons with
13ownership interest in the business shall follow the rules of the
examining board in
14the operation of the CPA-related business.
AB725,4,18
15(2) A person who operates a business and is licensed as a certified public
16accountant and who advertises or otherwise holds out as a certified public
17accountant shall follow the rules of the
examining board in the operation of any
18business.
AB725,8
19Section
8. Accy 1.003 (intro.) of the administrative code is amended to read:
AB725,4,20
20Accy 1.003 Definitions. (intro.) As used in chs. Accy 1 to
9 6:
AB725,9
21Section
9. Accy 1.003 (2m), (2r) and (7m) of the administrative code are
22created to read:
AB725,4,2323
Accy 1.003
(2m) "Board" means the accounting examining board.
AB725,4,25
24(2r) "Certified public accountant" or "CPA" means a person considered to be in
25practice as a certified public accountant under s. 442.02, Stats.
AB725,5,8
1(7m) "Financial statements" means statements and footnotes related thereto
2that undertake to present an actual or anticipated financial position as of a point in
3time, or results of operations, cash flow, or changes in financial position for a period
4of time, in conformity with generally accepted accounting principles or another
5comprehensive basis of accounting. "Financial statements" does not include
6incidental financial data included in management advisory service reports to
7support recommendations to a client; nor does it include tax returns and supporting
8schedules.
AB725,10
9Section
10. Subchapter II (title) of chapter Accy 1 [precedes Accy 1.101] of the
10administrative code is amended to read:
AB725,5,11
11Chapter accy 1
AB725,5,1212
subchapter II
AB725,5,15
13INDEPENDENCE PROFESSIONAL
14
CONDUCT, INTEGRITY
,15
AND OBJECTIVITY
AB725,11
16Section
11. Accy 1.101 of the administrative code is repealed and recreated to
17read:
AB725,5,22
18Accy 1.101 Professional conduct. (1) The board adopts by reference the
19"Code of Professional Conduct" published by the American Institute of Certified
20Public Accountants, effective as of December 15, 2014, except that references to
21"member" are replaced by "a person licensed to practice as a certified public
22accountant."
AB725,5,24
23(2) All definitions included in the American Institute of Certified Public
24Accountants' Code of Professional Conduct shall apply only within that document.
AB725,6,2
1Note: The AICPA Code of Professional Conduct is available electronically at
2http://pub.aicpa.org/codeofconduct/Ethics.aspx or may be obtained from:
AB725,6,33
American Institute of Certified Public Accountants
AB725,6,44
1211 Avenue of the Americas
AB725,6,55
New York, NY 10036-8775
AB725,12
6Section
12
. Accy 1.102 of the administrative code is renumbered Accy 1.102
7(intro.) and amended to read:
AB725,6,10
8Accy 1.102 Integrity and objectivity. (intro.) No person licensed to practice
9as a certified public accountant
, as defined in the statutes, shall knowingly may do
10any of the following:
AB725,6,11
11(1) Knowingly misrepresent facts
, and when.
AB725,6,15
12(2) When engaged in the practice of public accounting, including the rendering
13of tax and management advisory services,
shall not subordinate his or her judgment
14to others.
In tax practice, a member may resolve doubt in favor of the client as long
15as there is reasonable support for that position.
AB725,13
16Section
13
. Accy 1.201 (1) (intro.) of the administrative code is amended to
17read:
AB725,6,2118
Accy 1.201
(1) (intro.)
All persons
A person licensed to practice as a certified
19public accountant
, as defined in the statutes, shall comply with
all of the following
20general standards as interpreted by bodies designated by the American Institute of
21Certified Public Accountants Council, and must justify any departures therefrom
.:
AB725,14
22Section
14. Accy 1.202 of the administrative code is amended to read:
AB725,7,8
23Accy 1.202 Auditing standards. A person licensed to practice as a certified
24public accountant shall not permit the certified public accountant's name to be
25associated with financial statements in such a manner as to imply that the certified
1public accountant is acting as an independent public accountant unless the certified
2public accountant has complied with the applicable generally accepted auditing
3standards promulgated by the American Institute of Certified Public Accountants.
4Statements on auditing standards used by the American Institute of Certified Public
5Accountants auditing standards
executive committee
board are, for purposes of this
6rule chapter, considered to be interpretations of the generally accepted auditing
7standards, and departures from such statements must be justified by those who do
8not follow them.
AB725,15
9Section
15. Accy 1.301 (2) (d) and (4) of the administrative code are amended
10to read:
AB725,7,1611
Accy 1.301
(2) (d) To preclude a certified public accountant from responding to
12an inquiry made by the Professional Ethics Division of the American Institute of
13Certified Public Accountants, by the duly constituted investigative or disciplinary
14body of a state society of certified public accountants, or under any state statutes
or
15the standards of the Securities and Exchange Commission or the Public Company
16Accounting Oversight Board.
AB725,7,24
17(4) The prohibition in sub. (1) against disclosure of confidential information
18obtained in the course of a professional engagement does not apply to disclosure of
19such information when required to properly discharge the certified public
20accountant's responsibility according to the profession's standards. The prohibition
21would not apply, for example, to disclosure, as required by
AU-C section
561 560 of
22Statement on Auditing Standards
No. 1 , of, regarding the subsequent discovery of
23facts existing at the date of the auditor's report which would have affected the
24auditor's report had the auditor been aware of such facts.
AB725,16
1Section
16. Accy 1.302 (1) and (3) of the administrative code are amended to
2read:
AB725,8,93
Accy 1.302
(1) Contingent fees. Except as provided in sub.
(3) (2), a certified
4public accountant may charge a contingent fee provided the accountant and the
5client make a contingent fee agreement in writing, signed by the client, which states
6the method by which the fee is to be determined and describes all costs and expenses
7to be charged to the client. Upon conclusion of the contingent fee matter, the
8accountant shall provide the client with a written statement showing the fee and all
9the costs and expenses charged to the client.