CR 15-002 Rule Text

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.”

(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.

(3) The AICPA Code of Professional Conduct is available electronically at http://pub.aicpa.org/codeofconduct/Ethics.aspx or may be obtained from:

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: