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Accy 1.301(1) (1) No person licensed to practice as a certified public accountant shall disclose any confidential information obtained in the course of a professional engagement except with the consent of the client or through the due process of law.
Accy 1.301(2) (2) This rule shall not be construed:
Accy 1.301(2)(a) (a) To relieve such a person of the obligations under ss. Accy 1.202 and 1.203.
Accy 1.301(2)(b) (b) To affect in any way compliance with a validly issued subpoena or summons enforceable by order of a court,
Accy 1.301(2)(c) (c) To prohibit review of such a person's professional practices as a part of voluntary quality review under authorization of the American Institute of Certified Public Accountants or the Wisconsin Society of Certified Public Accountants, or
Accy 1.301(2)(d) (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.
Accy 1.301(3) (3) Members of the ethics division and trial board of the American Institute of Certified Public Accountants and professional practice reviewers under American Institute of Certified Public Accountants authorization, or their state society counterparts, shall not disclose any confidential client information which comes to their attention from such persons in disciplinary proceedings or otherwise in carrying out their official responsibilities. However, this prohibition shall not restrict the exchange of information with an aforementioned duly constituted investigative or disciplinary body.
Accy 1.301(4) (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 section 561 of Statement on Auditing Standards No. 1, 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.
Accy 1.301 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; cr. (4), Register, December, 1974, No. 228, eff. 1-1-75; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, March, 1993, No. 447; CR 03-071: am. (1), (2) (a), (c), (d) and (3), cons. and renum. (4) (intro.) and (a) to be (4) and am. Register May 2004 No. 581, eff. 6-1-04.
Accy 1.302 Accy 1.302 Contingent fees, commissions and referral fees.
Accy 1.302(1)(1)Contingent fees. Except as provided in sub. (3), 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.
Accy 1.302(2) (2)Certain contingent fees prohibited. No certified public accountant may receive a contingent fee from any person for whom the accountant performs attest services during the period of the attest services engagement or the period covered by any historical financial statements involved in the attest services.
Accy 1.302(3) (3)Commissions. Except as provided in sub. (5), 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.
Accy 1.302(4) (4)Certain commissions prohibited. No certified public accountant may receive a commission from any person for whom the accountant performs attest services, or may receive a commission for any products or services sold to any person for whom the accountant performs attest services, during the period of the attest services or the period covered by any historical financial statement involved in the attest services.
Accy 1.302(5) (5)Referral fees. No certified public accountant may receive a referral fee unless all of the following apply:
Accy 1.302(5)(a) (a) The certified public accountant who accepts the referral fee discloses to the client, in writing, at the time the referral is made, the amount of and reason for the referral fee.
Accy 1.302(5)(b) (b) The certified public accountant who pays the referral fee discloses to the client, in writing, within 30 days after the referral is made, the amount of and reason for the referral fee.
Accy 1.302(6) (6)Exceptions. This section shall not prohibit payments for the purchase of an accounting practice or retirement payments to individuals formerly engaged in the practice of public accounting or payments to their heirs or estates.
Accy 1.302 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; r. and recr. Register, February, 1990, No. 410, eff. 3-1-90; CR 03-071: r. (1) (intro.) and (a), renum. (1) (b) to (k) to be Accy 1.003 (2) to (14), renum (2) to (7) to be (1) to (6) and am. (1) to (5), Register May 2004 No. 581, eff. 6-1-04.
subch. V of ch. Accy 1 Subchapter V — Other Responsibilities and Practices
Accy 1.401 Accy 1.401 Acts discreditable.
Accy 1.401(1)(1) No person licensed to practice as a certified public accountant, as defined in the statutes, shall commit an act discreditable to the profession.
Accy 1.401(2) (2) Interpretations of this section, not intended to be all-inclusive, are as follows:
Accy 1.401(2)(a) (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 and need not be surrendered to the client. However, in some instances working papers will contain data which should properly be reflected in the client's books and records but which 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:
Accy 1.401(2)(a)1. 1. Worksheets in lieu of books of original entry (e.g., listings and distributions of cash receipts or cash disbursements on columnar working paper).
Accy 1.401(2)(a)2. 2. Worksheets in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar depreciation records.
Accy 1.401(2)(a)3. 3. All adjusting and closing journal entries and supporting details. (If the supporting details are not fully set forth in the explanation of the journal entry, but are contained in analyses of accounts in the accountant's working papers, then copies of such analyses must be furnished to the client.)
Accy 1.401(2)(a)4. 4. Consolidating or combining journal entries and worksheets and supporting detail used in arriving at final figures incorporated in an end product such as financial statements or tax returns.
Accy 1.401(2)(b) (b) Working papers. Any working papers developed by the certified public accountant incident to the performance of an engagement which do not result in changes to the client's records or are not in themselves part of the records ordinarily maintained by such clients are considered to be solely "accountant's working papers" and are not the property of the client. For example, the certified public accountant may make extensive analyses of inventory or other accounts as part of the selective audit procedures. Even if such analyses have been prepared by client personnel at the request of the certified public accountant, they nevertheless are considered to be part of the accountant's working papers. Only to the extent such analyses result in changes to the client's records would the certified public accountant be required to furnish the details from the working papers in support of the journal entries recording such changes, unless the journal entries themselves contain all necessary details.
Accy 1.401(2)(c) (c) Duty discharged. Once the certified public accountant has returned the client's records or furnished the copies of such records and/or 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.
Accy 1.401(2)(d) (d) Copies to the client. If the certified public accountant has retained copies of a client's records already in possession of the client, the certified public accountant is not required to return such copies to the client.
Accy 1.401(2)(e) (e) Conviction of a crime. Conviction of a crime the circumstances of which substantially relate to the practice of accounting is an act discreditable to the profession in violation of this section. As enumerated below, the board shall act as follows:
Accy 1.401(2)(e)1. 1. On conviction of a felony, the circumstances of which substantially relate to the practice of accounting the board will initiate charges in every instance.
Accy 1.401(2)(e)2. 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 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.
Accy 1.401(2)(e)3. 3. On conviction of a misdemeanor the circumstances of which substantially relate to the practice of accounting the board will review the circumstances and the nature of the act resulting in conviction. Each such situation will be considered by the board as an informal complaint. The minutes of the board will reflect the fact of review and the resulting disposition of the informal complaint. Such convictions that are professionally related and related to good moral character can be the basis for bringing formal charges and subsequent board action.
Accy 1.401(2)(e)4. 4. On conviction for failure to act with integrity and trustworthiness with information or property of others, the board will initiate charges in every instance.
Accy 1.401(2)(f) (f) A certified public accountant shall notify the board in writing within 60 days after being convicted of a crime.
Accy 1.401(2)(g) (g) Receiving fees for services not performed. The deliberate receipt and retention of a fee from a client for services not performed when the client has been given reason to believe that there should be performance, or the withholding of services and receiving a retainer or fee when the services agreed upon have knowingly been withheld, are acts discreditable to the profession. The amount or rate of charge for services is a contractual matter between the certified public accountant and the client, and except as related to the provision, the board does not have authority to set or regulate fees or for taking jurisdiction in such matters. The term "services not performed" means situations in which the actual work for which payment is received is not done.
Accy 1.401(2)(h) (h) Discrimination in employment practices. Discrimination based on race, color, religion, sex, age or national origin in hiring, promotion or salary practices is presumed to constitute an act discreditable to the profession in violation of this section.
Accy 1.401 History History: Cr. Register June, 1974, No. 222, eff. 7-1-74; cr. (2), Register, February, 1976, No. 242, eff. 4-1-76; am. (2) (b), Register, July, 1979, No. 283, eff. 9-1-79; renum. from Accy 1.501 and am. (2) (intro.) (a) and (b), cr. (2) (d) and (e), Register, July, 1980, No. 295, eff. 8-1-80; am. (2) (b) intro. and cr. (2) (b) 4., Register, April, 1981, No. 304, eff. 5-1-81; am. (2) (d), renum. (2) (e) to be Accy 1.402 (2) (e), Register, June, 1982, No. 318, eff. 7-1-82; cr. (2) (bm), Register, April, 1985, No. 352, 5-1-85; CR 03-071: am. (1), (2) (intro.) and (a) (intro.), cons. and renum. (2) (am) (intro.) and 1. to be (2) (b) and am., renum. (2) (an) to (d) to be (2) (c) to (h) and am. (2) (c) to (g) Register May 2004 No. 581, eff. 6-1-04.
Accy 1.402 Accy 1.402 Advertising or other forms of solicitation. No certified public accountant may advertise or solicit a client in a manner that is false, fraudulent, misleading or deceptive.
Accy 1.402 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; cr. (2), Register, December, 1974, No. 228, eff. 1-1-75; r. and recr. (2) (a), (g), (j) and (n), Register, February, 1976, No. 242, eff. 4-1-76; r. and recr. Register, July, 1978, No. 271, eff. 9-1-78; renum. from Accy 1.502 and am. (2) (intro.), Register, July, 1980, No. 295, eff. 8-1-80; am. (1) and (2) (c), (2) (e) renum. from Accy 1.401 (2) (e), Register, June, 1982, No. 318, eff. 7-1-82; r. and recr. Register, April, 1986, No. 364, eff. 5-1-86; CR 03-071: am. Register May 2004 No. 581, eff. 6-1-04.
Accy 1.404 Accy 1.404 Incompatible occupations.
Accy 1.404(1) (1) A person who is engaged in practice as a certified public accountant, as defined in the statutes, shall not concurrently engage in any business or occupation which would create a conflict of interest rendering professional services.
Accy 1.404(2) (2) Interpretations of sub. (1) not intended to be all-inclusive, are as follows:
Accy 1.404(2)(a) (a) Engaging concurrently with the practice of public accounting in any business or occupation inconsistent with the certified public accountant's responsibilities under the Wisconsin rules of conduct would constitute involvement in an incompatible occupation prohibited by sub. (1).
Accy 1.404(2)(b) (b) The proscription in sub. (1) applies to any business or occupation which:
Accy 1.404(2)(b)1. 1. Detracts from the public image of the profession, as for example, on legal grounds, or involves conduct which would constitute an act discreditable to the profession.
Accy 1.404(2)(b)2. 2. Impairs the certified public accountant's objectivity in rendering professional services to clients.
Accy 1.404(2)(b)3. 3. Inherently involves responsibilities which are likely to conflict with the certified public accountant's responsibility to others arising out of the client-certified public accountant relationship.
Accy 1.404(2)(c) (c) A conflict of interest exists when a certified public accountant or firm of such persons who are licensed to practice in Wisconsin becomes associated with or employed by a nonlicensed individual or firm offering accounting, tax, or consulting services, such as those customarily provided by certified public accountants, in a manner and with representation or implication that third parties could interpret or conclude that attest services are performed or offered by both the nonlicensed individual or firm and the certified public accountant. A conflict of interest also exists if the services of the licensed certified public accountant or firm of such persons can be influenced or decisions altered by the noncertified associate or employer.
Accy 1.404(2)(d) (d) A conflict of interest exists when a certified public accountant who is not licensed permits his or her status as a certified public accountant to be used or publicized in a manner or situation that third parties could assume or conclude that attest services are being performed or offered by or through nonlicensed individuals or firms.
Accy 1.404 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; cr. (2), Register, February, 1976, No. 242, eff. 4-1-76; r. and recr. Register, July, 1978, No. 271, eff. 9-1-78; cr (2), Register, July, 1979, No. 283, eff. 9-1-79; renum. from Accy 1.504, Register, July, 1980, No. 295, eff. 8-1-80; am. (2) (intro.) and (a), Register, April, 1981, No. 304, eff. 5-1-81; cr. (2) (c) and (d), Register, June, 1982, No. 318, eff. 7-1-82; am. (2) (b) 1., Register, April, 1985, No. 352, eff. 5-1-85; CR 03-071: am. (1) and (2) (a) to (d) Register May 2004 No. 581, eff. 6-1-04.
Accy 1.405 Accy 1.405 Form of practice and name.
Accy 1.405(1) (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 is misleading as to the type of organization. However, names of one or more past partners or shareholders may be included in the firm name of a successor partnership or corporation. Also a partner or shareholder surviving the death or withdrawal of all other partners or shareholders may continue to practice under the partnership or corporation name for up to 2 years after becoming a sole practitioner or shareholder.
Accy 1.405(2) (2) No person or firm engaged in practice as a certified public accountant may use a business name or designation that is misleading as to the number of individuals with an equity in the firm. A sole proprietor may not use a name implying multiple ownership such as "& Co." or "& Company" or "& Associates," or "Firm" or "Associates" or "Company," and a firm with multiple ownership may not use the name so that multiple ownership is not disclosed. A firm with multiple ownership may not imply in the firm's name that there are owners of the firm in addition to those specifically mentioned in the firm's name when no additional owners exist.
Accy 1.405(3) (3) An interpretation of this section, not intended to be all-inclusive, is that a certified public accountant in the practice of public accounting may have a financial interest in a commercial corporation which performs for the public services of a type performed by certified public accountants and whose characteristics do not conform to resolutions of The Council of the American Institute of Certified Public Accountants, provided such interest is not material to the corporation's net worth, and the certified public accountant's interest in and relation to the corporation is solely that of an investor.
Accy 1.405 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; cr. (2), Register, December, 1974, No. 228, eff. 1-1-75; r. and recr. (1) (a), renum. (2) to be (3) and cr. (2), Register, February, 1976, No. 242, eff. 4-1-76; renum. from Accy 1.505 and am. (3) (intro.), Register, July, 1980, No. 295, eff. 8-1-80; am. (2) (intro.) and (a), Register, April, 1981, No. 304, eff. 5-1-81; am. (3) (a), Register, June, 1982, No. 318, eff. 7-1-82; am. (2), Register, July, 1983, No. 331, eff. 8-1-83; am. (1) (intro.) and (a), Register, January, 1985, No. 349, eff. 2-1-85; r. (1) (b), Register, February, 1990, No. 410, eff. 3-1-90; am. (1) (a), Register, February, 1992, No. 434, eff. 3-1-92; r. and recr. (1) (intro.), Register, May, 1994, No. 461, eff. 6-4-94; CR 03-071: cons. and renum. (1) (intro.), (a) to be (1) and (3) (intro.), (a) to be (3) and am., r. (1) (c), am. (2) Register May 2004 No. 581, eff. 6-1-04.
Accy 1.406 Accy 1.406 Practice while suspended. No person who is licensed to practice as a certified public accountant, who has been suspended, shall practice as a certified public accountant during the period of such suspension.
Accy 1.406 History History: Cr. Register, June, 1974, No. 222, eff. 7-1-74; renum. from Accy 1.506, Register, July, 1980, No. 295, eff. 8-1-80; CR 03-071: am. Register May 2004 No. 581, eff. 6-1-04.
Accy 1.407 Accy 1.407Communications. A certified public accountant shall, when requested, respond to communications from the board within 30 days of the mailing of such communications by registered or certified mail.
Accy 1.407 History History: Cr. Register, July, 1978, No. 271, eff. 9-1-78; renum. from Accy 1.507, Register, July, 1980, No. 295, eff. 8-1-80.
Accy 1.408 Accy 1.408 Ownership requirements.
Accy 1.408(1) (1) In this section "ownership interest" means any equity or voting interest in a firm.
Accy 1.408(2) (2) An applicant for a license as a certified public accounting firm shall demonstrate that more than 50% of the ownership interest of the firm is held by individuals who hold certificates or licenses to practice as a certified public accountant issued under the laws of any state or foreign country.
Accy 1.408(3) (3) A firm applying for licensure meets the ownership requirement under sub. (2) in the following circumstances:
Accy 1.408(3)(a) (a) If the applicant is a sole proprietorship and the owner holds a certificate and license to practice as a certified public accountant issued under the laws of this state.
Accy 1.408(3)(b) (b) If the applicant is organized as a service corporation and more than 50% of the voting rights are held by individuals who are certified public accountants.
Accy 1.408(3)(c) (c) If the applicant is organized as a business corporation and more than 50% of the voting rights are held by individuals who are certified public accountants.
Accy 1.408(3)(d) (d) If the applicant is organized as a partnership or limited liability partnership and more than 50% of the voting rights are held by individuals who are certified public accountants.
Accy 1.408(3)(e) (e) If the applicant is organized as a limited liability company and more than 50% of the voting rights are held by individuals who are certified public accountants.
Accy 1.408(4) (4) An applicant firm with ownership characteristics other than those identified in sub. (3) may submit information about the ownership interests of all members of the firm to the board. The board may determine that more than 50% of the ownership interest of the firm is held by individuals who hold certificates or licenses to practice as a certified public accountant. In making this determination the board shall consider whether ownership interest of all members of the firm results in control and management of the firm by individuals who hold certificates or licenses to practice as a certified public accountant.
Accy 1.408 History History: CR 02-052: cr. Register December 2002 No. 564, eff. 1-1-03.
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