AB725: Bill Text

LRB-4286/1

MED&MPG:cjs&wlj

2015 - 2016 LEGISLATURE

2015 Assembly BILL 725

January 15, 2016 - Introduced by Representative Kooyenga, cosponsored by Senator Marklein. Referred to Committee on State Affairs and Government Operations.

AB725,1,5 An Act to repeal 442.04 (5) (c); and to amend 442.04 (5) (b) 3. and 442.04 (5) (b) 4. of the statutes; relating to: continuing education and examination requirements for certified public accountants and modifying various administrative rules promulgated by the Accounting Examining Board relating 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 Section 1. 442.04 (5) (b) 3. of the statutes is amended to read:

AB725,3,6 442.04 (5) (b) 3. The person has completed at least 150 semester hours of education with an accounting concentration at an institution that include course work in accounting and business subjects, as determined by the examining board, and has received a bachelor's or higher degree with an accounting concentration from an institution, except as provided in par. (c).

AB725,2 Section 2. 442.04 (5) (b) 4. of the statutes is amended to read:

AB725,3,13 442.04 (5) (b) 4. Except as provided in s. 442.05, the person has successfully passed an examination in such subjects affecting accountancy and business as the examining board considers necessary. A person is not eligible to take the examination under this subdivision unless the person has completed at least 120 semester hours under subd. 3. of education at an institution that include course work in accounting and business subjects, as determined by the examining board.

AB725,3 Section 3. 442.04 (5) (c) of the statutes is repealed.

AB725,4 Section 4. Accy 1.001 (1) of the administrative code is amended to read:

AB725,3,17 Accy 1.001 (1) Chapters Accy 1 to 9 6 apply to a person who practices as a certified public accountant in this state.

AB725,5 Section 5. Accy 1.001 (2) of the administrative code is amended to read:

AB725,4,2 Accy 1.001 (2) A certified public accountant may be held responsible for compliance with the rules of the examining board by any person associated with the certified public accountant in a firm who is either under his or her supervision or is a member of the firm.

AB725,6 Section 6. Accy 1.001 (3) of the administrative code is amended to read:

AB725,4,7 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.

AB725,7 Section 7. Accy 1.002 (1) and (2) of the administrative code are amended to read:

AB725,4,14 Accy 1.002 (1) A person licensed as a certified public accountant that has significant influence over a CPA-related business is considered to be practicing as a certified public accountant in the CPA-related business and all persons with ownership interest in the business shall follow the rules of the examining board in the operation of the CPA-related business.

AB725,4,18 (2) A person who operates a business and is licensed as a certified public accountant and who advertises or otherwise holds out as a certified public accountant shall follow the rules of the examining board in the operation of any business.

AB725,8 Section 8. Accy 1.003 (intro.) of the administrative code is amended to read:

AB725,4,20 Accy 1.003 Definitions. (intro.) As used in chs. Accy 1 to 9 6:

AB725,9 Section 9. Accy 1.003 (2m), (2r) and (7m) of the administrative code are created to read:

AB725,4,23 Accy 1.003 (2m) "Board" means the accounting examining board.

AB725,4,25 (2r) "Certified public accountant" or "CPA" means a person considered to be in practice as a certified public accountant under s. 442.02, Stats.

AB725,5,8 (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. "Financial statements" 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.

AB725,10 Section 10. Subchapter II (title) of chapter Accy 1 [precedes Accy 1.101] of the administrative code is amended to read:

AB725,5,11 Chapter accy 1

AB725,5,12 subchapter II