|
Senate Engrossed |
|
State of Arizona Senate Fifty-fourth Legislature Second Regular Session 2020
|
|
CHAPTER 72
|
|
SENATE BILL 1131 |
|
|
AN ACT
amending sections 32‑701, 32‑703, 32‑725, 32‑730.01, 32‑730.03, 32‑730.04, 32‑731, 32‑732, 32‑742 and 32‑747, Arizona Revised Statutes; relating to certified public accountants.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 32-701, Arizona Revised Statutes, is amended to read:
32-701. Definitions
In this chapter, unless the context otherwise requires:
1. "Accounting services" means services that are commonly and historically performed by accountants, including recording or summarizing financial transactions, bookkeeping, analyzing or verifying financial information, reporting financial results, financial planning or providing attest services, compilation services, tax services or consulting services.
2. "Accredited institution" means any public or private regionally or nationally accredited college or university that is accredited by an organization recognized by the council for higher education accreditation or its successor agency.
3. "Attest services" means the following services to be performed by the holder of a certificate issued by the board:
(a) Audits or other engagements to be performed in accordance with the statements on auditing standards adopted by the American institute of certified public accountants.
(b) Reviews of financial statements to be performed in accordance with the statements on standards for accounting and review services adopted by the American institute of certified public accountants.
(c) Any examination of prospective financial information to be performed in accordance with the statements on standards for attestation engagements adopted by the American institute of certified public accountants.
(d) Any engagement to be performed in accordance with the standards of the public company accounting oversight board or its successor.
(e) Any examination, review or agreed on procedure engagement to be performed in accordance with the statements on standards for attestation engagements adopted by the American institute of certified public accountants, other than an examination described in subdivision (c) of this paragraph.
4. "Board" means the Arizona state board of accountancy established by section 32‑702.
5. "Business organization" means a partnership, professional corporation, professional limited liability company, limited liability company or limited liability partnership or any other entity that is recognized by the board and that is established under the laws of any state or foreign country.
6. "Certified public accountant" means an individual who has been issued a certificate of authority by the board to practice as a certified public accountant or who meets the limited reciprocity privilege requirements pursuant to section 32‑725.
7. "Client" means a person or entity, other than one's employer, for whom accounting services are provided.
8. "Compilation services" means providing a service of any compilation engagement to be performed in accordance with the statements on standards for accounting and review services.
9. "Consulting services" includes management advisory services, litigation support services, valuation services and other services that require the use of technical skills, education, observation, experience and knowledge to develop an analytical approach to process and to present findings, conclusions or recommendations.
10. "Conviction" means a judgment of conviction by any state or federal court of competent jurisdiction in a criminal cause, regardless of whether an appeal is pending or could be taken, and includes any judgment or order based on a plea of no contest.
11. "CPA designation" means the title "certified public accountant" or any abbreviation or grammatical derivative of the term "certified public accountant".
12. "Disciplinary action" means any other regulatory sanctions imposed by the board in combination with, or as an alternative to, relinquishment, revocation or suspension of a certificate or registration, including the imposition of:
(a) An administrative penalty in an amount not to exceed two thousand dollars $2,000 for each violation of this chapter or rules adopted pursuant to this chapter.
(b) Restrictions on the scope of the registrant's practice of accounting.
(c) Pre-issuance and post-issuance peer review.
(d) Professional education requirements.
(e) A decree of censure.
(f) Probation requirements best adapted to protect the public welfare.
(g) Reimbursement of the board's costs of investigations and proceedings initiated under this chapter, including attorney fees.
(h) A requirement for restitution payments to accounting services clients or to other persons suffering economic loss resulting from violations of this chapter or rules adopted pursuant to this chapter.
13. "Employer" means a person or entity that hires an individual to perform a service and that directs and controls the manner in which the service is performed.
14. "Federal securities laws" means the securities act of 1933, the securities exchange act of 1934, the public utility holding company act of 1935 and the investment company act of 1940, as amended.
15. "Financial statements":
(a) Means statements and footnotes related to statements that purport to show a financial position or changes in a financial position in conformity with generally accepted accounting principles or other comprehensive basis of accounting.
(b) Includes balance sheets, statements of income, statements of retained earnings, statements of cash flows, statements of changes in equity and other commonly used or recognized summaries of financial information.
(c) Does not include tax returns or information contained in tax returns.
16. "Firm" means a business organization, a sole proprietorship or an individual who is registered pursuant to section 32‑731.
17. "Good cause" means factors that temporarily prevent a registrant from satisfying a particular requirement in a specific instance as determined by the board and may include:
(a) A disability.
(b) An illness.
(c) A physical or mental condition.
(d) Military service.
(e) Financial hardship.
(f) A natural disaster.
(g) Any condition or circumstance that the board deems relevant.
18. "Jurisdiction" means, for the purposes of examination, certification, firm registration or limited reciprocity privilege, the fifty states of the United States, the District of Columbia, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands or the Commonwealth of Puerto Rico.
19. "Letter of concern" means an advisory letter to notify a registrant that, while the evidence does not warrant disciplinary action, the board believes that the registrant should modify or eliminate certain practices and that continuation of the activities that led to the evidence being submitted to the board may result in board action against the registrant. A letter of concern is not a disciplinary action.
20. "Limited reciprocity privilege" means the permission to practice as a certified public accountant in this state pursuant to section 32‑725 for an individual whose principal place of business is outside of this state.
21. "Management advisory services" means advisory services consisting of the development of findings, conclusions or recommendations for the recipient's consideration and decision making.
22. "Office", for the purposes of firm registration, limited reciprocity privilege and fees, means any physical location that is used in the practice of accounting in this state and that is owned, leased, licensed for use or maintained by the firm or someone under the firm's authority.
23. "Practice of accounting" means providing accounting services for a client or an employer.
24. "Registrant" means any certified public accountant or firm that is registered with the board.
25. "Related courses" means:
(a) Business administration.
(b) Statistics.
(c) Computer science, information systems or data processing.
(d) Economics.
(e) Finance.
(f) Management.
(g) Business law.
(h) College algebra or more advanced mathematics.
(i) Advanced written communication.
(j) Advanced oral communication.
(k) General ethics.
(l) Marketing.
(m) Other courses that are closely related to the subject of accounting and or that are satisfactory to the board.
26. "Sole proprietor" means the owner of a sole proprietorship.
27. "Sole proprietorship" means a business that is owned by one individual and that does not have a legal distinction between the owner and the business.
Sec. 2. Section 32-703, Arizona Revised Statutes, is amended to read:
32-703. Powers and duties; rules; executive director; advisory committees and individuals
A. The primary duty of the board is to protect the public from unlawful, incompetent, unqualified or unprofessional certified public accountants through certification, regulation and rehabilitation.
B. The board may:
1. Investigate complaints filed with the board or on its own motion to determine whether a certified public accountant has engaged in conduct in violation of this chapter or rules adopted pursuant to this chapter.
2. Establish and maintain high standards of competence, independence and integrity in the practice of accounting by a certified public accountant as required by generally accepted auditing standards and generally accepted accounting principles and, in the case of publicly held corporations or enterprises offering securities for sale, in accordance with state or federal securities agency accounting requirements.
3. Establish reporting requirements that require registrants to report:
(a) The imposition of any discipline on the right to practice before the federal securities and exchange commission, the internal revenue service, any state board of accountancy, other government agencies or the public company accounting oversight board.
(b) Any criminal conviction, any civil judgment involving negligence in the practice of accounting by a certified public accountant and any judgment or order as described in section 32‑741, subsection A, paragraphs 7 and 8.
4. Establish basic requirements for continuing professional education of certified public accountants, except that the requirements shall not exceed eighty hours in any registration renewal period.
5. Adopt procedures concerning disciplinary actions, administrative hearings and consent decisions.
6. Issue to qualified applicants certificates executed for and on behalf of the board by the signatures of the president and secretary of the board.
7. Adopt procedures and rules to administer this chapter.
8. Require peer review pursuant to rules adopted by the board on a general and random basis of the professional work of a registrant engaged in the practice of accounting.
9. Subject to title 41, chapter 4, article 4, employ an executive director and other personnel that it considers necessary to administer and enforce this chapter.
10. Appoint accounting and auditing, tax, peer review, law, certification, continuing professional education or other committees or individuals as it considers necessary to advise or assist the board or the board's executive director in administering and enforcing this chapter. These committees and individuals serve at the pleasure of the board.
11. Take all action that is necessary and proper to effectuate the purposes of this chapter.
12. Sue and be sued in its official name as an agency of this state.
13. Adopt and amend rules concerning the definition of terms, the orderly conduct of the board's affairs and the effective administration of this chapter.
14. Delegate to the executive director the authority to:
(a) Approve an applicant to take the uniform certified public accountant examination pursuant to section 32‑723.
(b) Issue a certificate of certified public accountant pursuant to section 32‑721.
(c) Approve an application for firm registration pursuant to section 32‑731.
(d) Approve a registrant's name change and reissue a certificate of certified public accountant due to the name change.
(e) Approve a registrant's cancellation request pursuant to section 32‑730.02.
(f) Approve a request for retired status pursuant to section 32‑730.04.
(g) Approve reactivation from inactive status or retired status pursuant to section 32‑732.
(h) Approve compliance with peer review requirements pursuant to this section.
(i) Approve compliance with continuing professional education audits.
(j) Approve continuing professional education compliance with decisions and orders.
(k) Terminate decisions and orders based on a registrant's successful completion of all order requirements.
(l) Approve a request for continuing professional education reciprocity.
C. The board or an authorized agent of the board may:
1. Issue subpoenas to compel the attendance of witnesses or the production of documents. If a subpoena is disobeyed, the board may invoke the aid of any court in requiring the attendance and testimony of witnesses and the production of documents.
2. Administer oaths and take testimony.
3. Cooperate with the appropriate authorities in other jurisdictions in investigation and enforcement concerning violations of this chapter and comparable statutes of other jurisdictions.
4. Receive evidence concerning all matters within the scope of this chapter.
Sec. 3. Section 32-725, Arizona Revised Statutes, is amended to read:
32-725. Limited reciprocity privilege; qualifications; definition
A. The limited reciprocity privilege may be exercised by an individual who is not a resident of this state and who meets the requirements of this section.
B. To qualify to exercise the limited reciprocity privilege, an individual must:
1. Have a principal place of business that is not in this state.
2. Not have or represent to have an office in this state.
3. Not be the subject of suspension or revocation of a certificate as provided by section 32‑741 or relinquishment of a certificate as provided by section 32‑730.06.
4. Hold a valid registration, certificate or license as a certified public accountant issued by another jurisdiction and either of the following applies:
(a) The other jurisdiction requires as a condition of licensure that an individual has all of the following:
(i) At least one hundred fifty semester hours of college education, including a baccalaureate degree or a higher degree that is conferred by an accredited institution or a college or university that maintains standards that are comparable to those of an accredited institution.
(ii) A passing grade on the uniform certified public accountant examination.
(iii) At least one year of experience in the practice of accounting that has been verified.
(b) The individual meets the qualifications prescribed in section 32‑721, subsection C.
C. An individual qualifying for limited reciprocity privilege under this section is considered to have qualifications that are substantially equivalent to the requirements prescribed pursuant to this chapter and has all of the privileges of registrants, certificate holders or licensees in this state without obtaining a registration, certificate or license under this chapter.
D. An individual qualifying for limited reciprocity privilege under this section may use the CPA designation and may offer or practice accounting in person or by mail, telephone or electronic means. A notice, fee or other submission is not required. The individual is subject to the requirements prescribed in subsection E of this section.
E. Each individual who holds a registration, certificate or license issued by another jurisdiction and who exercises the limited reciprocity privilege and each partnership, corporation or other entity engaging in the practice of accounting as provided by this section, as a condition of exercising the privilege provided by this section:
1. Shall:
(a) Comply with article 3 of this chapter and rules adopted pursuant to article 3 of this chapter. In any investigation or other proceedings conducted pursuant to article 3 of this chapter, an individual claiming permission to practice as a certified public accountant in this state under the limited reciprocity privilege has the burden of demonstrating that the applicable requirements of subsection B of this section have been satisfied.
(b) Cease the offering or practicing of accounting in person or by mail, telephone or electronic means in this state if the individual no longer satisfies the requirements of subsection B of this section or the partnership, corporation or other entity no longer satisfies the requirements of subsection G of this section.
2. Is subject to:
(a) The personal and subject matter jurisdiction of the board and the power of the board to investigate complaints and take disciplinary action.
(b) Service by either of the following:
(i) The appointment of the state board that issued the registration, certificate or license to the individual as agent, on whom process may be served in any action or proceeding against the person by the board.
(ii) Directly on the person.
F. Any individual who holds a valid registration, certificate or license as a certified public accountant issued by another jurisdiction or a foreign country, whose principal place of business is not in this state and who does not otherwise qualify under this section for limited reciprocity privilege may enter this state and provide services if the services are limited to the following:
1. Expert witness services.
2. Teaching or lecturing.
3. Other services as determined by the board.
G. A partnership, corporation or other entity business organization formed under the laws of another jurisdiction relating to the practice of accounting in that jurisdiction may use the CPA designation in this state and may engage in the practice of accounting in this state, including the provision of attest services, without having to register as a firm if all of the following apply:
1. The partnership, corporation or other entity business organization is owned by or employs an individual who is a limited reciprocity privilege holder pursuant to this section.
2. The partnership, corporation or other entity business organization is in good standing in its principal place of business under the laws of that jurisdiction relating to the practice of accounting.
3. The principal place of business of the limited reciprocity privilege holder is a recognized place of business for the practice of accounting by the partnership, corporation or other entity business organization.
4. The partnership, corporation or other entity business organization does not have an office in this state and does not represent that it has an office in this state.
5. The partnership, corporation or other entity business organization holds an active permit or registration as a certified public accountant firm in another jurisdiction.
6. The practice of accounting is performed by or under the direct supervision of an individual who is qualified for the limited reciprocity privilege under this section.
H. For the purposes of this section, "principal place of business" means the office designated by the individual or firm as the principal location for the individual's or firm's practice of accounting.
Sec. 4. Section 32-730.01, Arizona Revised Statutes, is amended to read:
32-730.01. Inactive status; exception
A. A registrant who meets all of the following requirements may request that the registrant's certificate be placed on inactive status:
1. Completes the forms prescribed by the board.
2. Does not provide attest services or compilation services in this state.
3. Does not provide accounting services for a fee or other compensation in this state.
4. Does not have a certificate under a disciplinary order by the board, except for suspension for nonregistration pursuant to section 32‑741.01.
5. Does not have disciplinary proceedings initiated against the registrant.
B. A registrant whose certificate is on inactive status:
1. Shall continue to register once every two years with the board and pay fifty percent of the registration fee and one hundred percent of any applicable late fee pursuant to section 32‑729.
2. Shall not do any of the following:
(a) Provide attest services or compilation services in this state.
(b) Provide accounting services for a fee or other compensation in this state.
(c) Assume or use the CPA designation in this state unless accompanied by the word "inactive".
C. A registrant The board may reactivate an a registrant's inactive certificate only once.
D. A certificate expires if it has been inactive for more than six years.
E. Subsections C and D of this section do not apply if inactive status is approved by the board for good cause based on a registrant's disability.
Sec. 5. Section 32-730.03, Arizona Revised Statutes, is amended to read:
32-730.03. Expired status
A. A registrant's certificate or registration is expired expires if the registrant fails to reinstate the certificate or registration within twelve months after it has been suspended pursuant to section 32‑741.01 or 32‑741.02 or fails to reinstate a certificate that has been on inactive status pursuant to section 32‑730.01 for more than six years. Any of the following applies:
1. Section 32‑730.01, subsection D.
2. Section 32‑741.01, subsection D.
3. Section 32‑741.02, subsection D.
4. The registrant fails to meet firm registration requirements prescribed by this chapter and is not granted or exhausts an extension of time to comply with firm registration requirements pursuant to section 32‑731, subsection F.
B. An individual A registrant whose certificate or registration has expired shall not assume or use the CPA designation while the certificate remains on expired status unless the individual qualifies for limited reciprocity privilege pursuant to section 32‑725.
Sec. 6. Section 32-730.04, Arizona Revised Statutes, is amended to read:
32-730.04. Retired status
A. A registrant who meets all of the following requirements may request that the registrant's certificate be placed on retired status:
1. Completes the forms prescribed by the board.
2. Is at least fifty‑five years of age.
3. Has been a certified public accountant in one or more jurisdictions for at least twenty years.
4. Does not have a certificate under a disciplinary order by the board, except for suspension for nonregistration pursuant to section 32‑741.01.
5. Does not have disciplinary proceedings initiated against the registrant.
6. Does not provide attest services or compilation services in this state.
7. Does not provide accounting services for a fee or other compensation in this state.
B. A registrant whose certificate is on retired status:
1. Shall continue to register once every two years with the board and pay a registration fee and all of an applicable late fee as prescribed by section 32‑729.
2. Shall not do any of the following:
(a) Provide attest services or compilation services in this state.
(b) Provide accounting services for a fee or other compensation in this state.
(c) Assume or use the CPA designation in this state unless accompanied by the word "retired" or the abbreviation "RET".
Sec. 7. Section 32-731, Arizona Revised Statutes, is amended to read:
32-731. Certified public accountant firm registration requirements; performance of attest services and compilation services; definition
A. Except as provided in section 32‑725, subsection G, once every two years each of the following shall pay the registration fee pursuant to section 32‑729 and register with the board as a firm:
1. A business organization that meets all of the following criteria:
(a) Has a simple majority of the ownership, in terms of direct and indirect financial interests and voting rights, that belong belongs to holders in good standing of certificates or licenses as certified public accountants in any jurisdiction.
(b) Has an office in this state.
(c) Either:
(i) Provides Performs attest services or compilation services.
(ii) Uses the CPA designation in its firm name.
2. A sole proprietorship that meets all of the following criteria:
(a) Has an owner that is a certified public accountant in good standing in this state.
(b) Has an office in this state.
(c) Either:
(i) Performs attest services or compilation services.
(ii) Uses the CPA designation in its firm business name, unless the firm business name is the name of the sole proprietor as registered with the board.
3. An individual who meets both of the following criteria:
(a) Is a certified public accountant in good standing in this state.
(b) Either:
(i) Performs attest services or compilation services in this state, other than as an owner or employee of a sole proprietorship or business organization required to register under paragraph 1 or 2 of this subsection or in the capacity as an employee of a governmental entity.
(ii) Uses the CPA designation, unless the name used is the name of the individual as registered with the board.
B. Attest services or compilation services shall be provided only through a registered firm in good standing in this state. Any attest services or compilation services reports issued by a firm must be signed by a person who is certified pursuant to this chapter or qualified to exercise the limited reciprocity privilege pursuant to section 32‑725, subsection G.
C. An application or registration pursuant to this section shall be made by an owner of the firm who is a certified public accountant in good standing. A firm that is registered pursuant to this section may use the CPA designation in connection with its firm name as provided for by the board in its rules.
D. A firm that applies or registers pursuant to this section shall list in its application or registration all jurisdictions in which the firm has any disciplinary actions, other than for failure to timely renew a registration, license or permit, by any other jurisdiction.
E. Except as provided in subsection F of this section, an applicant for registration or a firm registered pursuant to this section shall notify the board in writing within one month of any change in owners that results in less than a simple majority of the ownership in terms of direct and indirect financial interests and voting rights that belong to holders in good standing of certificates or licenses as certified public accountants in any jurisdiction.
F. The board or the board's executive director may grant a reasonable period of time for the firm to take corrective action to maintain its qualifications as a firm.
G. Professional corporations that are composed of certified public accountants shall meet the requirements of title 10, chapter 20 and any additional nonconflicting requirements contained in this section.
H. Limited liability companies, professional limited liability companies and limited liability partnerships composed of certified public accountants shall meet the requirements of title 29, chapter 4 or 5 and any additional nonconflicting requirements contained in this section.
I. A registrant may not use any firm name other than the firm name that is registered with the board.
J. For the purposes of this section, "good standing" means:
1. For an individual, a status that allows the individual to use the CPA designation and to perform accounting services for a fee or other compensation.
2. For a firm, a status that allows the firm to use the CPA designation.
Sec. 8. Section 32-732, Arizona Revised Statutes, is amended to read:
32-732. Reactivation from inactive or retired status; reinstatement from canceled, expired, relinquished or revoked status
A. A certified public accountant with a certificate status of inactive or retired may request that the certified public accountant's certificate be reactivated if all of the following apply:
1. The registrant files an application for renewal on the form prescribed by the board and pays the registration fee pursuant to section 32‑729.
2. The registrant submits proof that the registrant has satisfied continuing professional education requirements as prescribed by the board.
3. Either:
(a) The registrant affirms that the registrant has not engaged in any conduct during the period of time that the certificate was in inactive or retired status that would constitute a reason to revoke or suspend the certificate pursuant to section 32‑741.
(b) The board determines that good cause exists for the conduct.
B. An individual with a certificate status of canceled, who does not qualify for certification by reciprocity pursuant to section 32‑721, subsection C, may request that the individual's certificate be reinstated if all of the following apply:
1. The registrant files an application for reinstatement on the form prescribed by the board and pays the reinstatement application fee pursuant to section 32‑729.
2. The registrant submits proof that the registrant has satisfied continuing professional education requirements as prescribed by the board.
3. Either:
(a) The registrant affirms that the individual has not engaged in any conduct during the period of time that the certificate was in canceled status that would constitute a reason to suspend or revoke the certificate pursuant to section 32‑741.
(b) The board determines that good cause exists for the conduct.
4. On board approval of reinstatement, pays the registration fee pursuant to section 32-729.
C. An individual with a certificate status of expired, relinquished or revoked may request that the individual's certificate be reinstated if the individual meets all the following requirements:
1. The requirements prescribed by subsection B, paragraphs 1, 2 and 4 of this section.
2. Unless waived If prescribed by a board relinquishment or revocation order, presents satisfactory evidence from an accredited institution or a college or university that maintains standards comparable to those of an accredited institution that the individual has completed at least one hundred fifty semester hours of education as follows:
(a) At least thirty-six semester hours of accounting courses of which at least thirty semester hours are upper-level courses.
(b) At least thirty semester hours of accounting‑related courses.
3. If prescribed by a board relinquishment or revocation order, presents evidence that the individual has retaken and passed the uniform certified public accountant examination.
4. Demonstrates through substantial evidence presented to the board that the individual is completely rehabilitated with respect to the conduct that was pending or outstanding at the time the certificate was relinquished or revoked or that occurred before or after the certificate expired. Demonstration of rehabilitation includes evidence of the following:
(a) The individual has not engaged in any conduct that, if the individual had been registered during the period the conduct occurred, would have constituted a basis for revocation or suspension pursuant to section 32‑741.
(b) The individual's civil rights have been fully restored pursuant to statute or an applicable recognized judicial or gubernatorial order with respect to any criminal conviction that constitutes any part of the basis for the relinquishment or revocation or that occurred before or after the certificate expired.
(c) The individual has addressed or remedied any complaints, investigations or board-ordered requirements that were pending or outstanding at the time of expiration, relinquishment or revocation.
(d) The individual has made restitution as ordered by the board or by a court of competent jurisdiction as a result of the individual's violation of this chapter or rules adopted pursuant to this chapter.
(e) Other evidence of rehabilitation that the board deems appropriate.
D. Except as otherwise provided in subsection C of this section, the board may not issue a certificate to an individual whose certificate has been revoked until five years after the effective date of revocation. If the revocation is based only on section 32‑741, subsection A, paragraph 1 or 2 and the criminal conviction is ultimately reversed on appeal, the board shall enter an order vacating the revocation.
E. An individual, sole proprietor or business organization whose firm registration has been canceled may request that the firm registration be reinstated if the individual, sole proprietor or business organization does all of the following:
1. Files an application for reinstatement on the form prescribed by the board and pays the reinstatement application fee pursuant to section 32‑729.
2. Meets the requirements of section 32‑731.
3. On board approval of reinstatement, pays the registration fee pursuant to section 32‑729.
F. An individual, sole proprietor or business organization whose firm registration has expired or been relinquished or revoked may request that the firm registration be reinstated if the individual, sole proprietor or business organization meets all of the following requirements:
1. The requirements prescribed by subsection E of this section.
2. Demonstrates through substantial evidence presented to the board that the firm is completely rehabilitated with respect to the conduct that was pending or outstanding at the time the registration was relinquished or revoked or that occurred before or after the registration expired. Demonstration of rehabilitation includes evidence of the following:
(a) The firm or any owner of the firm has not engaged in any conduct that, if the firm had been registered during the period the conduct occurred, would have constituted a basis for revocation or suspension pursuant to section 32‑741.
(b) The firm has addressed or remedied any complaints, investigations or board-ordered requirements that were pending or outstanding at the time of expiration, relinquishment or revocation.
(c) The firm has made restitution as ordered by the board or by a court of competent jurisdiction as a result of any violation of this chapter or rules adopted pursuant to this chapter.
(d) Other evidence of rehabilitation that the board deems appropriate.
Sec. 9. Section 32-742, Arizona Revised Statutes, is amended to read:
32-742. Revocation or suspension of firm's registration; failure to renew or reinstate; reinstatement; relinquishment
A. After notice and an opportunity for a hearing, the board shall revoke a firm's registration if at any time the firm does not have all the qualifications prescribed by this chapter and has not been granted an extension of time to comply with firm registration requirements pursuant to section 32‑731, subsection F.
B. After notice and an opportunity for a hearing, the board may revoke or suspend a firm's registration or may take disciplinary action for any of the causes enumerated in section 32‑741, subsection A or for any either of the following additional causes:
1. The relinquishment, revocation or suspension of any certificate issued by the board to any owner of the firm. This paragraph does not apply to a suspension for nonregistration pursuant to section 32‑741.01.
2. The failure to comply with section 32‑731, subsection E.
Sec. 10. Section 32-747, Arizona Revised Statutes, is amended to read:
32-747. CPA designation; title; use; unlawful use
A. A registrant or an individual or firm that qualifies for the limited reciprocity privilege under section 32‑725 shall be known as a certified public accountant or certified public accounting firm and may use the CPA designation with the exact name as registered with the board unless the status of the registrant, individual or firm is canceled, expired, suspended, relinquished or revoked.
B. An individual or firm when referring to accounting or accounting practices shall not assume or use the CPA designation unless the individual or firm is qualified pursuant to subsection A of this section.
C. This section does not apply to or affect or limit the right to continuous use of a firm name, or a modification of a firm name, by successor firms formed by the remaining owner or owners or added owner or owners even though the individuals whose names are included in the firm name are not owners, but the successor firm shall conform to all other provisions of this chapter. This section does not apply to or affect or limit the right to continuous use of a professional corporation's name as provided pursuant to this chapter or title 10, chapter 20 or a professional limited liability company's name pursuant to this chapter or title 29, chapter 4.
D. The displaying or uttering by a registrant or an individual or firm that qualifies for the limited reciprocity privilege under section 32‑725 of any card, sign, advertisement or other printed, engraved or written instrument or device bearing a name and intended to be confused with the CPA designation is prima facie evidence in a prosecution, proceeding or hearing brought under this section that the registrant, individual or firm so displayed caused or procured the displaying or uttering of the card, sign, advertisement or other printed, engraved or written instrument or device.
E. A firm may not refer to itself as a CPA firm unless it has a simple majority of the ownership, in terms of direct and indirect financial interests and voting rights, that belong belongs to holders in good standing of certificates or licenses as certified public accountants in any jurisdiction.
APPROVED BY THE GOVERNOR JUNE 5, 2020.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 5, 2020.