Assigned to COMPS FOR
COMMITTEE
Assigned to COMPS FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
Purpose
Modifies firm registration and certified public accountant designation requirements with the Arizona Board of Accountancy. Expands the authority of the Board's executive director.
Background
The Arizona Board of Accountancy (Board) protects the public from unlawful, incompetent, unqualified or unprofessional certified public accountants (CPAs). The Board is charged with issuing certificates, implementing regulation, investigating activities, overseeing rehabilitation and adopting rules and procedures for exams and peer reviews pertaining to CPAs, and may take all necessary and proper actions to implement accountancy statutes (A.R.S. § 32‑702).
The Board issues CPA licenses to applicants who: 1) are at least 18 years old; 2) are of good moral character; 3) have not been convicted of any outlined violation; and 4) meet accountancy examination, experience and education requirements (A.R.S. § 32-721).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
a) applicants for the CPA exam;
b) applications for firm registration;
c) registrant name changes;
d) certificate reissuance;
e) registrant cancelation, retired status, or reactivation request; and
f) compliance with peer review or educational audit requirements.
2. Allows an individual to request that the Board review an action taken by the executive director of the Board.
3. Requires a business organization to register as a firm if:
a) a majority of its owners are CPAs;
b) it has an office in the state; and
c) it either provides attest services or uses the CPA designation.
4. Requires a sole proprietorship to register as a firm if:
a) it is owned by a CPA;
b) it holds an office in the state; and
c) it either provides attest services or uses the CPA designation.
5. Requires an individual who is a CPA and preforms attest services to register as a firm.
6. Limits performance of attest services to only a registered firm in good standing.
7. Requires a firm to notify the Board of a change in ownership that results in less than a majority of owners being CPAs.
8. Prohibits the Board from charging registration fees to sole proprietorships or individuals.
9. Prohibits registrants from providing attest services upon request of inactive or retired status, rather than once inactive or retired status is granted.
10. Permits the Board to reinstate certification for applicants with inactive, retired or cancelled status if good cause exists for certain conduct during inactivity.
11. Conforms requirements for the reinstatement of expired licenses to requirements for relinquished or revoked licenses.
12. Prohibits individuals who have, or represent to have, an office in Arizona from receiving the limited reciprocity.
13. Removes the requirement on firms with relinquished or revoked registration to submit a signed document to the Board before reinstatement occurs.
14. Requires firms with relinquished, revoked or expired registration to make restitution as ordered by the Board or a court before reinstatement.
15. Prohibits a registrant from using a firm name that is different from the name registered with the Board.
16. Prohibits any unqualified individual or firm from adopting the CPA designation when referring to accounting or accounting practices.
17. Removes definitions of and references to practice of public accountant and public accountant.
18. Defines business organization as a partnership, professional, corporation, professional limited liability company, limited liability company, limited liability partnership or any other entity recognized by the Board.
19. Defines CPA designation as the title Certified Public Accountant or any other abbreviation of Certified Public Accountant.
20. Defines office as any physical location used in the practice of accounting in this state that is owned, leased, licensed for use, or maintained by the firm or someone under the firm's authority.
21. Defines sole proprietorship as a business owned by one individual that does not have a legal distinction between the owner and the business.
22. Defines good standing as a status that allows an individual or firm to use a CPA designation.
23. Removes from the definition of accounting services the compiling of financial statements.
24. Repeals the definitions of attestation and attestation function.
25. Includes in the definition of firm sole proprietorships and individuals registered with the Board.
26. Makes technical and conforming changes.
27. Becomes effective on the general effective date.
Prepared by Senate Research
February 8, 2018
GH/JP/lb