AN ACT
Relating to accounting; amending RCW 18.04.015, 18.04.025, 18.04.035,
18.04.045, 18.04.055, 18.04.065, 18.04.105, 18.04.180, 18.04.205, 18.04.215,
18.04.295, 18.04.305, 18.04.335, 18.04.345, 18.04.350, 18.04.390, and
18.04.405; and adding a new section to chapter 18.04 RCW.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
18.04.015 and 1983 c 234 s 2 are each amended to read as follows:
(1)
It is the policy of this state and the purpose of this chapter:
(((1)))
(a) To promote the dependability of information which is used for
guidance in financial transactions or for accounting for or assessing the
status or performance of commercial and noncommercial enterprises, whether
public, private or governmental; and
(((2)))
(b) To protect the public interest by requiring that:
(((a)))
(i) Persons ((engaged in the practice of public accounting be
qualified)) who hold themselves out to the public as certified public
accountants who offer to perform, or perform for clients, professional
services, including but not limited to one or more kinds of services involving
the use of accounting or auditing skills, including the issuance of "audit
reports," "review reports," or "compilation reports"
on financial statements, or one or more kinds of management advisory, or
consulting services, the preparation of tax returns, or the furnishing of
advice on tax matters, perform such services in a competent and professional
manner;
(((b)))
(ii) A public authority be established that is competent to
prescribe and assess the qualifications of certified public accountants
((be established)), including certificate holders who are not
licensed for the practice of public accounting;
(((c)))
(iii) Persons other than certified public accountants refrain from using
the words "audit," "review," and "compilation"
when designating a report customarily prepared by someone knowledgeable in
accounting; and
(((d)))
(iv) The use of accounting titles likely to confuse the public be
prohibited.
(2)
A purpose of chapter ..., Laws of 1992 (this act), revising provisions of
chapter 234, Laws of 1983, is to clarify the authority of the board of
accountancy with respect to the activities of persons holding certificates
under this chapter. Furthermore, it is not the intent of chapter ..., Laws of
1992 (this act) to in any way restrict or limit the activities of persons not
holding certificates under this chapter except as otherwise specifically
restricted or limited by chapter 234, Laws of 1983.
Sec.
2. RCW
18.04.025 and 1986 c 295 s 1 are each amended to read as follows:
Unless
the context clearly requires otherwise, the definitions in this section apply
throughout this chapter.
(1)
"Board" means the board of accountancy created by RCW 18.04.035.
(2)
"Certified public accountant" or "CPA" means a person
holding a certified public accountant certificate ((issued under this
chapter or the accountancy act of any state)).
(3)
"State" includes the states of the United States, the District of
Columbia, Puerto Rico, Guam, and the United States Virgin Islands.
(4)
"((Opinions)) Reports on financial statements" ((are))
means any reports or opinions prepared by certified public
accountants, based on ((examinations)) services performed in accordance
with generally accepted auditing standards, standards for attestation
engagements, or standards for accounting and review services as to whether
the presentation of information used for guidance in financial transactions or
for accounting for or assessing the status or performance of commercial and
noncommercial enterprises, whether public, private, or governmental, conforms
with generally accepted accounting principles or other comprehensive bases of
accounting.
(5)
The "practice of public accounting" means performing ((services as
one skilled in the knowledge and practice of public accounting and preparing
reports designated as "audit reports," "review reports,"
and "compilation reports.")) or offering to perform by a
person or firm holding itself out to the public as a licensee, for a client or
potential client, one or more kinds of services involving the use of accounting
or auditing skills, including the issuance of "audit reports,"
"review reports," or "compilation reports" on financial
statements, or one or more kinds of management advisory, or consulting
services, or the preparation of tax returns, or the furnishing of advice on tax
matters. The "practice of public accounting" shall not include
practices that are permitted under the provisions of RCW 18.04.350(6) by
persons or firms not required to be licensed under this chapter.
(6)
"Firm" means a sole proprietorship, a corporation, or a partnership.
(7)
"CPE" means continuing professional education.
(8)
"Certificate" means a certificate as a certified public accountant
issued under this chapter, or a corresponding certificate issued by another
state or foreign jurisdiction that is recognized in accordance with the
reciprocity provisions of RCW 18.04.180 and section 18 of this act.
(9)
"Licensee" means the holder of ((a certificate who also holds))
a valid license issued under this chapter.
(10)
"License" means a biennial license to practice public accountancy
issued to an individual or firm under this chapter.
(11)
"Quality assurance review" means a process established by and
conducted at the direction of the board of study, appraisal, or review of
one or more aspects of the professional work of a person or firm in the
practice of public accountancy, by a person or persons who hold certificates
and who are not affiliated with the person or firm being reviewed.
(12) "Quality
review" means a study, appraisal, or review of one or more aspects of the
professional work of a person or firm in the practice of public accountancy, by
a person or persons who hold certificates and who are not affiliated with the
person or firm being reviewed, including a peer review, or any internal review
or inspection intended to comply with quality control policies and procedures,
but not including the "quality assurance review" under subsection
(11) of this section.
(13)
"Review committee" means any person carrying out, administering or
overseeing a quality review authorized by the reviewee.
(14)
"Rule" means any rule adopted by the board under authority of this
chapter.
(15)
"Holding out" means any representation to the public by the use of
restricted titles as set forth in RCW 18.04.345 by a person or firm that the
person or firm is a certified public accountant and that the person or firm
offers to perform any professional services to the public as a certified public
accountant. "Holding out" shall not affect or limit a person not
required to hold a certificate under this chapter or a person or firm not
required to hold a license under this chapter from engaging in practices
identified in RCW 18.04.350(6).
Sec.
3. RCW
18.04.035 and 1986 c 295 s 2 are each amended to read as follows:
(1)
There is created a board of accountancy for the state of Washington to be known
as the Washington state board of accountancy. The board shall consist
of ((five)) seven members appointed by the governor. Members of
the board shall include four persons who hold valid certified public
accountant certificates and have been in public practice as certified public
accountants in this state continuously for the previous ten years and two
persons who have held a valid certified public accountant's certificate in this
state for at least ten years. The ((fifth)) seventh member
shall be the public member and shall be a person who is qualified to judge
whether the qualifications, activities, and professional practice of those
regulated under this chapter conform with standards to protect the public
interest.
(2)
The members of the board of accountancy shall be appointed by the governor to a
term of three years. Vacancies occurring during a term shall be filled by
appointment for the unexpired term. Upon the expiration of a member's term of
office, the member shall continue to serve until a successor has been appointed
and has assumed office. The governor shall remove from the board any member
whose certificate or license to practice has been revoked or suspended and may,
after hearing, remove any member of the board for neglect of duty or other just
cause. No person who has served two successive complete terms is eligible for
reappointment. Appointment to fill an unexpired term is not considered a
complete term. In order to stagger their terms, of the two new appointments
made to the board upon the effective date of this act, the first appointed
member shall serve a term of two years initially.
Sec.
4. RCW
18.04.045 and 1986 c 295 s 3 are each amended to read as follows:
(1)
The board shall annually elect a ((chairman)) chair, a ((vice
chairman)) vice-chair, and a secretary from its members.
(2) ((The
board may adopt and amend rules under chapter 34.05 RCW for the orderly conduct
of its affairs and for the administration of this chapter.
(3))) A
majority of the board constitutes a quorum for the transaction of business.
(((4)))
(3) The board shall have a seal which shall be judicially noticed.
(((5)))
(4) The board shall keep records of its proceedings, and of any
proceeding in court arising from or founded upon this chapter. Copies of these
records certified as correct under the seal of the board are admissible in
evidence as tending to prove the content of the records.
(((6)))
(5) The governor shall appoint an executive director of the board, who
shall serve at the pleasure of the governor. The executive director may employ
such personnel as is appropriate for carrying out the purposes of this
chapter. The executive director shall hold a Washington CPA certificate.
The board may ((employ personnel and)) arrange for such volunteer
assistance as it requires to perform its duties. Individuals or committees
assisting the board ((under this subsection (6))) constitute volunteers
for purposes of chapter 4.92 RCW.
(((7)
Each member of the board shall receive compensation as provided under RCW
18.04.080.
(8))) (6)
The board shall file an annual report of its activities with the governor. The
report shall include, but not be limited to, a statement of all receipts and
disbursements. Upon request, the board shall mail a copy of each annual report
to any member of the public.
(7)
In making investigations concerning alleged violations of the provisions of
this chapter and in all proceedings under RCW 18.04.295 or chapter 34.05 RCW,
the board chair, or a member of the board, or a board designee acting in the
chair's place, may administer oaths or affirmations to witnesses appearing
before the board, subpoena witnesses and compel their attendance, take
testimony, and require that documentary evidence be submitted.
(8)
The board may review the publicly available professional work of licensees on a
general and random basis, without any requirement of a formal complaint or
suspicion of impropriety on the part of any particular licensee. If as a result
of such review the board discovers reasonable grounds for a more specific
investigation, the board may proceed under its investigative and disciplinary
rules.
Sec.
5. RCW
18.04.055 and 1986 c 295 s 4 are each amended to read as follows:
The
board may adopt and amend rules under chapter 34.05 RCW for the orderly conduct
of its affairs. The board shall prescribe rules consistent with this
chapter as necessary to implement this chapter. Included may be:
(1)
Rules of procedure to govern the conduct of matters before the board;
(2)
Rules of professional conduct for all certificate and license holders, in
order to establish and maintain high standards of competence and ((integrity
in the profession)) ethics of certified public accountants including
rules dealing with independence, integrity, objectivity, and freedom from
conflicts of interest;
(3) Rules
specifying actions and circumstances deemed to constitute holding oneself out
as a licensee in connection with the practice of public accountancy;
(4)
Rules specifying the manner and circumstances of the use of the titles
"certified public accountant" and "CPA", by holders of
certificates who do not also hold licenses under this chapter;
(5)
Educational requirements to ((set for an)) take the certified public
accountant examination or for the issuance of the certificate or license of
certified public accountant;
(((4)))
(6) Rules designed to ensure that certified public accountants' "((opinions))
reports on financial statements" meet the definitional requirements
for that term as specified in RCW 18.04.025;
(((5)))
(7) Requirements for continuing professional education to maintain or
improve the professional competence of certificate and license holders as a
condition to maintaining their certificate or license to practice under RCW
18.04.215;
(((6)
Regulations)) (8) Rules governing sole proprietors, partnerships,
and corporations practicing public accounting including, but not limited to,
rules concerning their style, name, title, and affiliation with any other
organization, and establishing reasonable practice standards to protect the
public interest;
(((7)))
(9) The board may by rule implement a quality assurance review program
as a means to monitor licensees' quality of practice and compliance with
professional standards. The board may exempt from such program, licensees who
undergo periodic ((peer)) quality reviews in programs of the
American Institute of Certified Public Accountants, National Association of
State Boards of Accountancy, or other programs recognized and approved by the
board ((by rule.));
(((8)))
(10) The board may by rule require firms to obtain professional
liability insurance if in the board's discretion such insurance provides additional
and necessary protection for the public; and
(((9)))
(11) Any other rule which the board finds necessary or appropriate to
implement this chapter.
Sec.
6. RCW
18.04.065 and 1983 c 234 s 24 are each amended to read as follows:
The
board shall set its fees at a level adequate to pay the costs of administering
this chapter. Beginning in the 1993-95 biennium, all fees for certified
public accountants' licenses, certificates, renewals of licenses, renewals of
certificates, and delinquent filings received under the authority of this
chapter shall be deposited in the certified public accountants' account created
by RCW 18.04.105. Appropriation from such account shall be made only for the
cost of administering the provisions of this chapter.
Sec.
7. RCW
18.04.105 and 1991 sp.s. c 13 s 20 are each amended to read as follows:
(1)
The certificate of "certified public accountant" shall be granted by
the board to any person:
(a)
Who is of good character. Good character, for purposes of this section, means
lack of a history of dishonest or felonious acts. The board may refuse to
grant a certificate on the ground of failure to satisfy this requirement only
if there is a substantial connection between the lack of good character of the
applicant and the professional responsibilities of a ((licensee)) certified
public accountant and if the finding by the board of lack of good character
is supported by a preponderance of evidence. When an applicant is found to be
unqualified for a certificate because of a lack of good character, the board
shall furnish the applicant a statement containing the findings of the board
and a notice of the applicant's right of appeal;
(b)
Who has met ((such)) the educational standards established by
rule as the board determines to be appropriate; ((and))
The
board may, in its discretion, waive the educational requirements for any person
if it is satisfied through review of documentation of successful completion of
an equivalency examination that the person's educational qualifications are an
acceptable substitute for the requirements of (b) of this subsection; and
(c)
Who has passed a written examination ((in accounting, auditing, and related
subjects the board determines to be appropriate)).
(2)
The examination described in subsection (1)(c) of this section shall be ((held
by the board and shall take place as often as the board determines to be
desirable, but at least once a year. The board may use all or any part of the
examination or grading service of the American Institute of Certified Public
Accountants or National Association of State Boards of Accountancy to assist it
in performing its duties under this chapter)) in writing, shall be held
twice a year, and shall test the applicant's knowledge of the subjects of
accounting and auditing, and other related fields the board may specify by
rule. The time for holding the examination is fixed by the board and may be
changed from time to time. The board shall prescribe by rule the methods of
applying for and taking the examination, including methods for grading papers
and determining a passing grade required of an applicant for a certificate.
The board shall to the extent possible see to it that the grading of the
examination, and the passing grades, are uniform with those applicable to all
other states. The board may make use of all or a part of the uniform certified
public accountant examination and advisory grading service of the American
Institute of Certified Public Accountants and may contract with third parties
to perform administrative services with respect to the examination as the board
deems appropriate to assist it in performing its duties under this chapter.
(3) ((The
board may, by rule, provide for granting credit to a person for satisfactory
completion of a written examination in any one or more of the subjects
specified in subsection (1)(c) of this section given by the licensing authority
in any other state. These rules shall include requirements the board
determines to be appropriate in order that any examination approved as a basis
for any credit shall, in the judgment of the board, be at least as thorough as
the most recent examination given by the board at the time credit is granted))
An applicant is required to pass all sections of the examination provided
for in subsection (2) of this section in order to qualify for a certificate.
If at a given sitting of the examination an applicant passes two or more but
not all sections, then the applicant shall be given credit for those sections
that he or she passed, and need not take those sections again: PROVIDED, That:
(a)
The applicant took all sections of the examination at that sitting;
(b)
The applicant attained a minimum grade of fifty on each section not passed at
that sitting;
(c)
The applicant passes the remaining sections of the examination within six
consecutive examinations given after the one at which the first sections were
passed;
(d)
At each subsequent sitting at which the applicant seeks to pass additional
sections, the applicant takes all sections not yet passed; and
(e)
In order to receive credit for passing additional sections in a subsequent
sitting, the applicant attains a minimum grade of fifty on sections written but
not passed on the sitting.
(4) ((The
board may, by rule, prescribe the terms and conditions under which a person who
passes the examination in one or more of the subjects indicated in subsection
(1)(c) of this section may be reexamined in only the remaining subjects, giving
credit for the subjects previously passed. It may also provide by rule for a
reasonable waiting period for a person's reexamination in a subject he or she
has failed. A person is entitled to any number of reexaminations, subject to
this subsection and any other rules adopted by the board.
(5)
A person passing the examination in any one or more subjects specified in
subsection (1)(c) of this section shall meet the educational requirements of subsection
(1)(b) of this section in effect on the date the person successfully completes
the requirements of subsection (1)(c) of this section. The board may provide,
by rule, for exceptions to prevent what it determines to be undue hardship to
applicants)) The board may waive or defer any of the
requirements of subsection (3) of this section for candidates transferring
conditional CPA exam credits from other states or for qualifying reciprocity
certification applicants who met the conditioning requirements of the state or
foreign jurisdiction issuing their original certificate.
(((6)))
(5) The board shall charge each applicant an examination fee for the
initial examination under subsection (1) of this section, or for reexamination
under subsection (((4))) (3) of this section for each subject in
which the applicant is reexamined. The applicable fee shall be paid by the
person at the time he or she applies for examination, reexamination, or
evaluation of educational qualifications. Fees for examination, reexamination,
or evaluation of educational qualifications shall be determined by the board
under chapter 18.04 RCW. There is established in the state treasury an account
to be known as the certified public accountants' account. All fees received
from candidates to take any or all sections of the certified public accountant
examination shall be used only for costs related to the examination.
(((7)))
(6) Persons who on June 30, 1986, held certified public accountant
certificates previously issued under the laws of this state shall not be
required to obtain additional certificates under this chapter, but shall
otherwise be subject to this chapter. Certificates previously issued shall,
for all purposes, be considered certificates issued under this chapter and
subject to its provisions.
(((8)
Persons who held qualifications as licensed public accountants but who do not
hold annual permits to practice on July 1, 1983, are not entitled to engage in
the practice of public accounting under this chapter. No person shall use the
term "licensed public accountant" or the designation "LPA."
(9))) (7)
A certificate of a "certified public accountant" under this chapter
is issued on a biennial basis with renewal subject to requirements of
continuing professional education and payment of fees, prescribed by the board.
(((10)))
(8) The board shall adopt rules providing for continuing professional
education for certified public accountants. The rules shall:
(a)
Provide that a certified public accountant ((holding a certificate on July
1, 1986,)) shall verify to the board that he or she has completed at least
((ten days or)) an accumulation of eighty hours of continuing
professional education during the last two-year period to maintain the
certificate;
(b)
Establish continuing professional education requirements;
(c)
Establish when newly certificated public accountants shall verify that they
have completed the required continuing professional education; and
(d) ((Establish
proceedings for revocation, suspension, and reinstatement of certificates for
failure to meet the continuing professional education requirement.
(11))) Provide
that failure to furnish verification of the completion of the continuing
professional education requirement ((constitutes grounds for revocation,
suspension, or failure to renew the certificate)) shall make the
certificate invalid and subject to reinstatement, unless the board
determines that the failure was due to retirement, reasonable cause,
or excusable neglect.
Sec.
8. RCW
18.04.180 and 1949 c 226 s 17 are each amended to read as follows:
The
board shall ((authorize the issuance of a certificate as certified public
accountant to any person who is the holder of a certificate, license, permit or
degree authorizing him to practice as a certified public accountant in any
state, territory, or possession of the United States, providing the
requirements which such person has been called upon to meet in order to obtain
such certificate, license, permit or degree were at least the equivalent of
those for obtaining a certificate to practice as a certified public accountant
in this state: AND PROVIDED, FURTHER, That such state, territory or possession
makes similar provision to authorize a person who holds a valid certificate to
practice in this state as a certified public accountant to practice in such
state, territory or possession as a certified public accountant)) issue
a certificate to a holder of a certificate issued by another state, or shall
issue a certificate and license to a holder of a certificate/valid license
issued by another state that entitles the holder to practice public
accountancy, provided that:
(1)
Such state makes similar provision to grant reciprocity to a holder of a
certificate or certificate and valid license in this state; and
(2)
The applicant meets the continuing professional education requirements of RCW
18.04.105(8); and
(3)
If the application is for a certificate only:
(a)
The applicant passed the examination required for issuance of his or her
certificate with grades that would have been passing grades at that time in
this state; and
(b)
The applicant: Meets all current requirements in this state for issuance of a
certificate at the time application is made; or at the time of the issuance of
the applicant's certificate in the other state, met all the requirements then
applicable in this state; or
(4)
If the application is for a certificate and license:
(a)
The applicant passed the examination required for issuance of his or her
certificate with grades that would have been passing grades at that time in
this state; and
(b)
The applicant: Meets all current requirements in this state for issuance of a
license at the time application is made; or at the time of the issuance of the
applicant's license in the other state, met all the requirements then
applicable in this state; or has had five years of experience within the ten
years immediately preceding application in the practice of public accountancy
that meets the requirements prescribed by the board.
Sec.
9. RCW
18.04.205 and 1986 c 295 s 9 are each amended to read as follows:
(1)
Each office established or maintained in this state for the practice of public
accounting in this state by a certified public accountant, or a partnership or
corporation of certified public accountants, shall register with the board
under this chapter biennially.
(2)
Each office shall be under the direct supervision of a resident licensee
holding a license ((to practice)) under RCW 18.04.215 who may be a sole
proprietor, partner, principal shareholder, or a staff employee.
(3)
The board shall by rule prescribe the procedure to be followed to register and
maintain offices established in this state for the practice of public
accounting.
(4)
Fees for the registration of offices shall be determined by the board. Fees
shall be paid by the applicant at the time the registration form is filed with
the board.
Sec.
10. RCW
18.04.215 and 1986 c 295 s 10 are each amended to read as follows:
(1)
Biennial licenses ((to engage in the practice of public accounting in this
state)) shall be issued by the board:
(a) To
holders of certificates as certified public accountants who have demonstrated,
in accordance with rules issued by the board, one year of public accounting
experience, or such other experience or employment which the board in its
discretion regards as substantially equivalent and who, if their certificate
was issued more than forty-eight months prior to application under this
section, submit to the board satisfactory proof of having completed an
accumulation of eighty hours of continuing professional education during the
twenty-four months preceding the application;
(b) To
firms under RCW 18.04.195, if all offices of the firm in this state are
maintained and registered as required under RCW 18.04.205.
(2) ((All
licenses to practice issued to persons born in an even-numbered year expire on
the last day of June of each even-numbered year. All licenses to practice
issued to persons born in an odd-numbered year expire on the last day of June
of each odd-numbered year. Renewals of licenses to practice issued to
individuals under subsection (1)(a) of this section shall be issued in
accordance with subsection (4) of this section.)) The board shall, by
rule, provide for a system of certificate and license renewal. Applicants
for issuance or renewal of certificates or licenses shall, at the time
of filing their applications, list with the board all states and foreign
jurisdictions in which they hold or have applied for certificates,
permits or licenses to practice.
(3) A
certified public accountant who holds a permit or license issued by another
state, and applies for a license in this state, may practice in this state from
the date of filing a completed application with the board, until the board has
acted upon the application provided the application is made prior to holding
out as a certified public accountant in this state and no sanctions or
investigations, deemed by the board to be pertinent to public accountancy, by
other jurisdictions or agencies are in process.
(4) ((As
a prerequisite to renewal of a license, a person practicing public accounting))
A certified public accountant shall submit to the board satisfactory
proof of having completed ((ten days or)) an accumulation of eighty
hours of continuing education recognized and approved by the board during the
preceding two years. Failure to furnish this evidence as required ((constitutes
grounds for revocation, suspension, or refusal to renew the license in a
proceeding under RCW 18.04.295)) shall make the certificate invalid and
subject to reinstatement procedures, unless the board determines the
failure to have been due to retirement, reasonable cause, or
excusable neglect.
The
board in its discretion may renew a ((biennial)) certificate or
license ((to practice)) despite failure to furnish evidence of
compliance with requirements of continuing professional education upon
condition that the applicant follow a particular program of continuing professional
education. In issuing rules and individual orders with respect to continuing
professional education requirements, the board, among other considerations, may
rely upon guidelines and pronouncements of recognized educational and
professional associations, may prescribe course content, duration, and
organization, and may take into account the accessibility of continuing
education to applicants and instances of individual hardship.
(5)
Fees for ((biennial)) issuance or renewal of certificates and licenses
((to engage in the practice of public accounting)) in this state shall
be determined by the board under chapter 18.04 RCW. Fees shall be paid by the
applicant at the time the application form is filed with the board. The board,
by rule, may provide for proration of fees for certificates and licenses
issued between normal renewal dates.
Sec.
11. RCW
18.04.295 and 1986 c 295 s 11 are each amended to read as follows:
The
board of accountancy shall have the power to revoke, suspend, ((or))
refuse to renew a certificate or license, and may impose a fine in an amount
not to exceed one thousand dollars plus the board's investigative and legal
costs in bringing charges against a certified public accountant, or impose
conditions precedent to renewal of the certificate or license of any
certified public accountant for any of the following causes:
(1)
Fraud or deceit in obtaining a certificate as a certified public accountant, or
in obtaining a license ((to practice public accounting under RCW 18.04.215));
(2)
Dishonesty, fraud, or negligence ((in the practice of public accounting))
while representing oneself as a CPA;
(3) A
violation of any provision of this chapter;
(4) A
violation of a rule of professional conduct promulgated by the board under the
authority granted by this chapter;
(5)
Conviction of a crime or an act constituting a crime under:
(a)
The laws of this state;
(b)
The laws of another state, and which, if committed within this state, would have
constituted a crime under the laws of this state; or
(c)
Federal law;
(6)
Cancellation, revocation, suspension, or refusal to renew the authority to
practice as a certified public accountant by any other state for any cause
other than failure to pay a fee or to meet the requirements of continuing
education in the other state;
(7)
Suspension or revocation of the right to practice matters relating to public
accounting before any state or federal agency;
For
purposes of subsections (6) and (7) of this section, a certified copy of such
revocation, suspension, or refusal to renew shall be prima facie evidence;
(8)
Failure to maintain compliance with the requirements for issuance, renewal, or
reinstatement of the certificate or license, or to report changes to the board;
(9)
Failure to cooperate with the board by:
(a)
Failure to furnish any papers or documents requested or ordered by the board;
(b)
Failure to furnish in writing a full and complete explanation covering the
matter contained in the complaint filed with the board or the inquiry of the
board;
(c)
Failure to respond to subpoenas issued by the board, whether or not the
recipient of the subpoena is the accused in the proceeding.
Sec.
12. RCW
18.04.305 and 1986 c 295 s 12 are each amended to read as follows:
The
board of accountancy may revoke, suspend, or refuse to renew the license issued
to a firm if at any time the firm does not meet the requirements of this
chapter for licensing, or for any of the causes enumerated in RCW 18.04.295, or
for any of the following additional causes:
(1)
The revocation or suspension of the certificate as a certified public accountant
or the revocation or suspension or refusal to renew the certificate or
license of any partner or shareholder; or
(2)
The revocation, suspension, or refusal to renew the license or permit of the
firm, or any partner or shareholder thereof, to practice public accounting in
any other state or foreign jurisdiction for any cause other than failure
to pay a fee or to meet the requirements of continuing professional education
in the other state or foreign jurisdiction.
Sec.
13. RCW
18.04.335 and 1986 c 295 s 14 are each amended to read as follows:
Upon
application in writing and after hearing pursuant to notice, the board may:
(1) ((Reissue
a certificate to a certified public accountant)) Modify the suspension
of, or reissue a certificate or license to, an individual whose certificate
has been revoked or suspended; or
(2)
Modify the suspension of, or reissue ((any)) a license to
((practice which)) a firm whose license has been revoked,
suspended, or which the board has refused to renew.
Sec.
14. RCW
18.04.345 and 1986 c 295 s 15 are each amended to read as follows:
(1) No
person may ((hold himself or herself out to the public, or)) assume or
use the designation "certified public accountant" or "CPA"
or any other title, designation, words, letters, abbreviation, sign, card, or
device tending to indicate that the person is a certified public accountant or
CPA unless the person ((has received a)) holds a valid
certificate as a certified public accountant((, holds a valid license to
practice under RCW 18.04.215, and all of the person's offices in this state for
the practice of public accounting are maintained and registered under RCW
18.04.205)).
(2) No
person may hold himself or herself out to the public and assume or use the
designation "certified public accountant" or "CPA" or any
other title, designation, words, letters, abbreviation, sign, card, or devise
tending to indicate that the person is a certified public accountant or CPA
unless the person holds a valid certificate as a certified public accountant
and holds a valid license to practice under RCW 18.04.215.
(3)
No firm may hold itself out to the public, or assume or use the designation
"certified public accountant" or "CPA" or any other title,
designation, words, letters, abbreviation, sign, card, or device tending to
indicate that the firm is composed of certified public accountants or CPAs,
unless the firm is licensed under RCW 18.04.195, holds a valid license to
practice under RCW 18.04.215, and all offices of the firm in this state for the
practice of public accounting are maintained and registered under RCW
18.04.205.
(((3)))
(4) No person, partnership, or corporation may hold himself, herself, or
itself out to the public, or assume or use along, or in connection with his,
hers, or its name, or any other name the title or designation "certified
accountant," "chartered accountant," "licensed
accountant," "licensed public accountant," "public
accountant," or any other title or designation likely to be confused with
"certified public accountant" or any of the abbreviations
"CA," "LA," "LPA," or "PA," or
similar abbreviations likely to be confused with "CPA." However,
nothing in this chapter prohibits use of the title "accountant" by
any person regardless of whether the person has been granted a certificate or
holds a license under this chapter.
(((4)))
(5) No person may sign, affix, or associate his or her name or any trade
or assumed name used by the person in his or her business to any report
designated as an "audit," "review," or
"compilation," unless the person holds a biennial license to practice
under RCW 18.04.215 and all of the person's offices in this state for the
practice of public accounting are maintained and licensed under RCW 18.04.205.
(((5)))
(6) No person may sign, affix, or associate a firm name to any report
designated as an "audit," "review," or
"compilation," unless the firm is licensed under RCW 18.04.195 and
18.04.215, and all of its offices in this state for the practice of public
accounting are maintained and registered under RCW 18.04.205.
(((6)))
(7) No person, partnership, or corporation not holding a license to
practice under RCW 18.04.215 may hold himself, herself, or itself out to the
public as an "auditor" with or without any other description or
designation by use of such word on any sign, card, letterhead, or in any
advertisement or directory.
(((7)
Nothing contained in this chapter prohibits any person who is the holder of a
valid certified public accountant certificate from assuming or using the
designation "certified public accountant" or "CPA" or any
other title, designation, words, letters, sign, card, or device tending to
indicate that the person is a certified public accountant.))
(8) No
person may assume or use the designation "certified public
accountant" or "CPA" in conjunction with names indicating or
implying that there is a partnership or corporation, if there is in fact no
bona fide partnership or corporation registered under RCW 18.04.195.
(9) No
person, partnership, or corporation holding a license under RCW 18.04.215 may
hold himself, herself, or itself out to the public in conjunction with the
designation "and Associates" or "and Assoc." unless he or
she has in fact a partner or employee who holds a license under RCW 18.04.215.
(((10)
No person, partnership, or corporation may hold himself, herself, or itself out
to the public for the practice of public accounting unless the person,
partnership, or corporation holds a license to practice under RCW 18.04.215 and
all of his or its offices in this state are maintained and registered under RCW
18.04.205.))
Sec.
15. RCW
18.04.350 and 1986 c 295 s 16 are each amended to read as follows:
(1)
Nothing in this chapter prohibits any person not a certified public accountant
from serving as an employee of, or as assistant to, a certified public
accountant or partnership composed of certified public accountants or
corporation of certified public accountants holding a valid license under RCW
18.04.215. However, the employee or assistant shall not issue any accounting
or financial statement over his or her name.
(2)
Nothing in this chapter prohibits a certified public accountant registered in
another state, or any accountant of a foreign country holding a certificate,
degree or license which permits him to practice therein from temporarily
practicing in this state on professional business incident to his regular
practice.
(3)
Nothing in this chapter prohibits a certified public accountant, a partnership,
or corporation of certified public accountants, or any of their employees from
disclosing any data in confidence to other certified public accountants, quality
or peer review teams, partnerships, or corporations of public accountants or
to the board or any of its employees engaged in conducting quality,
quality assurance, or peer reviews, or any one of their employees in connection
with quality or peer reviews of that accountant's accounting and
auditing practice conducted under the auspices of recognized professional
associations.
(4)
Nothing in this chapter prohibits a certified public accountant, a partnership,
or corporation of certified public accountants, or any of their employees from
disclosing any data in confidence to any employee, representative, officer, or
committee member of a recognized professional association, or to the board of
accountancy, or any of its employees or committees in connection with a
professional investigation held under the auspices of recognized professional
associations or the board of accountancy.
(5)
Nothing in this chapter prohibits any officer, employee, partner, or principal
of any organization:
(a)
From affixing his or her signature to any statement or report in reference to
the affairs of the organization with any wording designating the position,
title, or office which he or she holds in the organization; or
(b)
From describing himself or herself by the position, title, or office he or she
holds in such organization.
(6)
Nothing in this chapter prohibits any person, or partnership or corporation
composed of persons not holding a license under RCW 18.04.215 from offering or
rendering to the public bookkeeping, accounting, ((and)) tax services,
((including)) the devising and installing of financial
information systems, ((financial information or data, or preparing
financial)) management advisory, or consulting services, the preparation
of tax returns, or the furnishing of advice on tax matters, the preparation of
financial statements, written statements describing how such financial
statements were prepared, or similar services, provided that persons,
partnerships, or corporations not holding a license under RCW 18.04.215 who
offer or render these services do not designate any written statement as an
"audit report," "review report," or "compilation
report," do not issue any written statement which purports to express or
disclaim an opinion on financial statements which have been audited, and do not
issue any written statement which expresses assurance on financial statements
which have been reviewed.
(7)
Nothing in this chapter prohibits any act of or the use of any words by a
public official or a public employee in the performance of his or her duties.
(8)
Nothing contained in this chapter prohibits any person who holds only a valid
certified public accountant certificate from assuming or using the designation
"certified public accountant" or "CPA" or any other title,
designation, words, letters, sign, card, or device tending to indicate the
person is a certified public accountant, provided, that such person shall not
hold himself or herself out to the public as engaged in the practice of public
accounting unless that person holds a valid license in addition to the
certificate under RCW 18.04.215.
Sec.
16. RCW
18.04.390 and 1986 c 295 s 18 are each amended to read as follows:
(1) In
the absence of an express agreement between the certified public accountant and
the client to the contrary, all statements, records, schedules, working papers,
and memoranda made by a certified public accountant incident to or in the
course of professional service to clients, except reports submitted by a
certified public accountant to a client, are the property of the certified
public accountant.
(2) No
statement, record, schedule, working paper, or memorandum may be sold,
transferred, or bequeathed without the consent of the client or his or her
personal representative or assignee, to anyone other than one or more surviving
partners, shareholders, or new partners or new shareholders of the accountant
or corporation, or any combined or merged partnership or corporation, or
successor in interest.
(3) A
licensee shall furnish to the board or to his or her client or former
client, upon request and reasonable notice:
(a) A
copy of the licensee's working papers, to the extent that such working papers
include records that would ordinarily constitute part of the client's records
and are not otherwise available to the client; and
(b)
Any accounting or other records belonging to, or obtained from or on behalf of,
the client that the licensee removed from the client's premises or received for
the client's account; the licensee may make and retain copies of such documents
of the client when they form the basis for work done by him or her.
(4)
Nothing in this section shall require a licensee to keep any work paper beyond
the period prescribed in any other applicable statute.
Sec.
17. RCW
18.04.405 and 1986 c 295 s 19 are each amended to read as follows:
(1) A
certified public accountant, a partnership or corporation of certified public
accountants, or any of their employees shall not disclose any confidential
information obtained in the course of a professional transaction except with
the consent of the client or former client or as disclosure may be required by
law, legal process, the standards of the profession, or as disclosure of
confidential information is permitted by RCW 18.04.350 (3) and (4),
18.04.295(8), 18.04.390, and this section in connection with quality,
quality assurance, or peer reviews ((and)), investigations,
and any proceeding under chapter 34.05 RCW.
(2)
This section shall not be construed as limiting the authority of this state or
of the United States or an agency of this state, the board, or of the
United States to subpoena and use such information in connection with any
investigation, public hearing, or other proceeding, nor shall this section be
construed as prohibiting a certified public accountant whose professional
competence has been challenged in a court of law or before an administrative
agency from disclosing confidential information as a part of a defense to the
court action or administrative proceeding.
(3)
The proceedings, records, and work papers of a review committee shall be
privileged and shall not be subject to discovery, subpoena, or other means of
legal process or introduction into evidence in any civil action, arbitration,
administrative proceeding, or state accountancy board proceeding and no member
of the review committee or person who was involved in the quality review
process shall be permitted or required to testify in any such civil action,
arbitration, administrative proceeding, or state accountancy board proceeding
as to any matter produced, presented, disclosed, or discussed during or in
connection with the quality review process, or as to any findings,
recommendations, evaluations, opinions, or other actions of such committees, or
any members thereof. Information, documents, or records that are publicly
available are not to be construed as immune from discovery or use in any civil
action, arbitration, administrative proceeding, or state accountancy board
proceeding merely because they were presented or considered in connection with
the quality review process.
NEW
SECTION. Sec. 18. A new
section is added to chapter 18.04 RCW to read as follows:
The
board shall grant a certificate or license as a certified public accountant to
a holder of a permit, license, or certificate issued by a foreign country's
board, agency, or institute, provided that:
(1)
The foreign country where the foreign permit, license, or certificate was
issued is a party to an agreement on trade with the United States that
encourages the mutual recognition of licensing and certification requirements
for the provision of covered services by the parties under the trade agreement;
and
(2)
Such foreign country's board, agency, or institute makes similar provision to
allow a person who holds a valid certificate issued by this state to obtain
such foreign country's comparable permit, license, or certificate; and
(3)
The foreign permit, license, or certificate:
(a)
Was duly issued by such foreign country's board, agency, or institute that
regulates the practice of public accountancy; and
(b) Is
in good standing at the time of the application; and
(c)
Was issued upon the basis of educational, examination, and ethical requirements
substantially equivalent currently or at the time of issuance of the foreign
permit, license, or certificate to those in this state; and
(4)
The applicant has within the twenty-four months prior to application completed
an accumulation of eighty hours of continuing professional education as
required under RCW 18.04.105(8); and
(5) If
the application is for a certificate:
(a)
The applicant's foreign permit, license, or certificate was the type of permit,
license, or certificate requiring the most stringent qualifications if, in the
foreign country, more than one type of permit, license, or certificate is
issued. This state's board shall decide which are the most stringent
qualifications; and
(b)
The applicant has passed a written examination or its equivalent, approved by
the board, that tests knowledge in the areas of United States accounting
principles, auditing standards, commercial law, income tax law, and Washington
state rules of professional ethics; or
(6) If
the application is for a certificate and license:
(a)
The requirements of subsections (1) through (5) of this section are satisfied;
and
(b)
The applicant has within the five years prior to applying for the certificate
and license under this section, demonstrated, in accordance with the rules
issued by the board, one year of public accounting experience, within the
foreign country where the foreign permit, license, or certificate was issued,
equivalent to the experience required under RCW 18.04.215(1)(a) or such other
experience or employment which the board in its discretion regards as
substantially equivalent.
