AN
ACT Relating to the public accountancy act; 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, 18.04.183,
18.04.185, 18.04.195, 18.04.205, 18.04.215, 18.04.295, 18.04.305, 18.04.335,
18.04.345, 18.04.350, 18.04.370, 18.04.380, 18.04.390, and 18.04.405; creating
a new section; prescribing penalties; providing an effective date; providing an
expiration date; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
18.04.015 and 1992 c 103 s 1 are each amended to read as follows:
(1)
It is the policy of this state and the purpose of this chapter:
(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
(b)
To protect the public interest by requiring that:
(i)
Persons 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)) licensees or certificate
holders conduct themselves in a competent, ethical, and professional
manner;
(ii)
A public authority be established that is competent to prescribe and assess the
qualifications of certified public accountants, including certificate holders
who are not licensed for the practice of public accounting;
(iii)
Persons other than ((certified public accountants)) licensees
refrain from using the words "audit," "review," and
"compilation" when designating a report customarily prepared by
someone knowledgeable in accounting; ((and))
(iv)
A public authority be established to provide for consumer alerts and public
protection information to be published regarding persons or firms who violate
the provisions of this act or board rule and to provide general consumer protection
information to the public; and
(v)
The use of accounting titles likely to confuse the public be prohibited.
(2)
The purpose of this act is to make revisions to chapter 234, Laws of 1983
and chapter 103, Laws of 1992 to: Fortify the public protection provisions of
this act; establish one set of qualifications to be a licensee; revise the
regulations of certified public accountants; make revisions in the ownership of
certified public accounting firms; assure to the greatest extent possible that
certified public accountants from Washington state are substantially equivalent
with certified public accountants in other states and can therefore perform the
duties of certified public accountants in as many states and countries as
possible; assure certified public accountants from other states and countries
have met qualifications that are substantially equivalent to the certified
public accountant qualifications of this state; and clarify the authority of
the board of accountancy with respect to the activities of persons holding
licenses and certificates under this chapter. It is not the intent of this act
to in any way restrict or limit the activities of persons not holding licenses
or certificates under this chapter except as otherwise specifically restricted
or limited by chapter 234, Laws of 1983 and chapter 103, Laws of 1992.
(3)
A purpose of chapter 103, Laws of 1992, 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 103, Laws of 1992 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 1999 c 378 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)
"Certificate holder" means the holder of a certificate as a
certified public accountant who has not become a licensee, has maintained CPE
requirements, and who does not practice public accounting.
(3)
"Certified public accountant" or "CPA" means a person
holding a certified public accountant license or certificate.
(((3)))
(4) "State" includes the states of the United States, the
District of Columbia, Puerto Rico, Guam, and the United States Virgin Islands.
(((4)))
(5) "Reports on financial statements" means any reports or
opinions prepared by ((certified public accountants)) licensees,
based on 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. "Reports on
financial statements" does not include services referenced in RCW
18.04.350(6) provided by persons not holding a license under this chapter.
(((5)))
(6) The "practice of public accounting" means performing 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)))
(7) "Firm" means a sole proprietorship, a corporation, or a
partnership. "Firm" also means a limited liability company formed under
chapter 25.15 RCW.
(((7)))
(8) "CPE" means continuing professional education.
(((8)))
(9) "Certificate" means a certificate as a certified public
accountant issued prior to July 1, 2001, as authorized under the
provisions of 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 18.04.183)).
(((9)))
(10) "Licensee" means the holder of a ((valid)) license
to practice public accountancy issued under this chapter.
(((10)))
(11) "License" means a license to practice public accountancy
issued to an individual under this chapter, or a license issued to a
firm under this chapter.
(((11)))
(12) "Manager" means a manager of a limited liability company
licensed as a firm under this chapter.
(13)
"NASBA" means the national association of state boards of
accountancy.
(14)
"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)) attest work of a ((person))
licensee or licensed firm in the practice of public accountancy,
by a person or persons who hold ((certificates)) licenses and who
are not affiliated with the person or firm being reviewed.
(((12)
"Quality review")) (15) "Peer review" means a
study, appraisal, or review of one or more aspects of the ((professional))
attest work of a ((person)) licensee or licensed
firm in the practice of public accountancy, by a person or persons who hold ((certificates))
licenses 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)))
(14) of this section.
(((13)))
(16) "Review committee" means any person carrying out,
administering or overseeing a ((quality)) peer review authorized
by the reviewee.
(((14)))
(17) "Rule" means any rule adopted by the board under
authority of this chapter.
(((15)))
(18) "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)) holds a
license under this chapter and that the person or firm offers to perform
any professional services to the public as a ((certified public accountant))
licensee. "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))).
(19)
"Natural person" means a living, human being.
(20)
"Inactive" means the certificate is in an inactive status because a
person who held a valid certificate before July 1, 2001, has not met the
current requirements of licensure and has been granted inactive certificate
holder status through an approval process established by the board.
Sec.
3. RCW
18.04.035 and 1992 c 103 s 3 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. Effective June 30, 2001, the
board shall consist of ((seven)) nine members appointed by the
governor. Members of the board shall include ((four)) six
persons who ((hold valid certified public accountant certificates and have
been in public practice as certified public accountants)) have been
licensed 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 seventh)) Three members
shall be ((the)) public members ((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, including one public member qualified to represent the
interests of clients of individuals and firms licensed under this chapter.
(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 June 11, 1992, the first
appointed member shall serve a term of two years initially.
Sec.
4. RCW
18.04.045 and 1992 c 103 s 4 are each amended to read as follows:
(1)
The board shall annually elect a chair, a vice-chair, and a secretary from its
members.
(2)
A majority of the board constitutes a quorum for the transaction of business.
(3)
The board shall have a seal which shall be judicially noticed.
(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.
(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 valid Washington ((CPA certificate))
license. The board may arrange for such volunteer assistance as it
requires to perform its duties. Individuals or committees assisting the board
constitute volunteers for purposes of chapter 4.92 RCW.
(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.
(9)
The board may provide for consumer alerts and public protection information to
be published regarding persons or firms who violate the provisions of this
chapter or board rule and may provide general consumer protection information
to the public.
(10)
As provided in RCW 18.04.370, the board may enter into stipulated agreements
and orders of assurance with persons who have violated the provisions of RCW
18.04.345 or certify the facts to the prosecuting attorney of the county in
which such person resides for criminal prosecution.
Sec.
5. RCW
18.04.055 and 1992 c 103 s 5 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))
licensees, certificate holders, and nonlicensee owners of licensed firms,
in order to establish and maintain high standards of competence and 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)
Rules specifying the educational requirements to take the certified
public accountant examination ((or for the issuance of the certificate or
license of certified public accountant));
(6)
Rules designed to ensure that ((certified public accountants')) licensees'
"reports on financial statements" meet the definitional requirements
for that term as specified in RCW 18.04.025;
(7)
Requirements for ((continuing professional education)) CPE to
maintain or improve the professional competence of ((certificate and license
holders)) licensees as a condition to maintaining their ((certificate
or)) license ((to practice)) and certificate holders as a
condition to maintaining their certificate under RCW 18.04.215;
(8)
Rules governing ((sole proprietors, partnerships, and corporations
practicing public accounting)) firms issuing or offering to issue
reports on financial statements or using the title "certified public
accountant" or "CPA" including, but not limited to, rules
concerning their style, name, title, and affiliation with any other
organization, and establishing reasonable practice and ethical standards
to protect the public interest;
(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 ((quality)) peer reviews in programs of the American
Institute of Certified Public Accountants, ((National Association of State
Boards of Accountancy)) NASBA, or other programs recognized and
approved by the board;
(10)
The board may by rule require licensed firms to obtain professional
liability insurance if in the board's discretion such insurance provides
additional and necessary protection for the public; ((and))
(11)
Rules specifying the experience requirements in order to qualify for a
license;
(12)
Rules specifying the requirements for certificate holders to qualify for a
license under this chapter which must include provisions for meeting CPE and
experience requirements prior to application for licensure;
(13)
Rules specifying the registration requirements, including ethics examination
and fee requirements, for resident nonlicensee partners, shareholders, and
managers of licensed firms;
(14)
Rules specifying the ethics CPE requirements for certificate holders and owners
of licensed firms, including the process for reporting compliance with those
requirements;
(15)
Rules specifying the experience and CPE requirements for licensees offering or
issuing reports on financial statements; and
(16)
Any other rule which the board finds necessary or appropriate to implement this
chapter.
Sec.
6. RCW
18.04.065 and 1992 c 103 s 6 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,))
registrations of nonlicensee partners, shareholders, and managers of
licensed firms, renewals of licenses, renewals of registrations of
nonlicensee partners, shareholders, and managers of licensed firms,
renewals of certificates, reinstatements of lapsed licenses, reinstatements
of lapsed certificates, reinstatements of lapsed registrations of nonlicensee
partners, shareholders, and managers of licensed firms, practice privileges
under RCW 18.04.350, 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 2000 c 171 s 2 are each amended to read as follows:
(1)
((The certificate of "certified public accountant")) A
license to practice public accounting 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)) license 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 and ethical
responsibilities of a ((certified public accountant)) licensee
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)) license 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 the educational standards established by rule as the board
determines to be appropriate;
((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)) an examination;
(d)
Who has had one year of experience which is gained:
(i)
Through the use of accounting, issuing reports on financial statements, management
advisory, financial advisory, tax, tax advisory, or consulting skills;
(ii)
While employed in government, industry, academia, or public practice; and
(iii)
Meeting the competency requirements in a manner as determined by the board to
be appropriate and established by board rule; and
(e)
Who has paid appropriate fees as established by rule by the board.
(2)
The examination described in subsection (1)(c) of this section ((shall be 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)) examinations and determining a
passing grade required of an applicant for a ((certificate)) license.
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. The
board shall establish by rule provisions for transitioning to a new examination
structure or to a new media for administering the examination.
(3)
((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 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.
(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 (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.
(((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.
(7)
A certificate of a "certified public accountant" under this chapter
is issued every three years with renewal subject to requirements of continuing
professional education and payment of fees, prescribed by the board.
(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 shall verify to the board that he or
she has completed at least an accumulation of one hundred twenty hours of
continuing professional education during the last three-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;
(d)
Provide that failure to furnish verification of the completion of the
continuing professional education requirement 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; and
(e)
Provide for transition from existing to new continuing professional education
requirements.
(9)
The board may adopt by rule new CPE standards that differ from those in
subsection (8) of this section or RCW 18.04.215 if: (a) The new standards are
consistent with the continuing professional education standards of other states
so as to provide to the greatest extent possible, consistent national
standards; and (b) the new standards are at least as strict as the standards
set forth in subsection (8) of this section or RCW 18.04.215.))
(4)
Persons who on June 30, 2001, held valid certificates previously issued under
this chapter shall be deemed to be certificate holders, subject to the
following:
(a)
Certificate holders may, prior to June 30, 2004, petition the board to become
licensees by documenting to the board that they have gained one year of
experience through the use of accounting, issuing reports on financial
statements, management advisory, financial advisory, tax, tax advisory, or
consulting skills, without regard to the eight-year limitation set forth in (b)
of this subsection, while employed in government, industry, academia, or public
practice.
(b)
Certificate holders who do not petition to become licensees prior to June 30,
2004, may after that date petition the board to become licensees by documenting
to the board that they have one year of experience acquired within eight years
prior to applying for a license through the use of accounting, issuing reports
on financial statements, management advisory, financial advisory, tax, tax
advisory, or consulting skills in government, industry, academia, or public
practice.
(c)
Certificate holders who petition the board pursuant to (a) or (b) of this
subsection must also meet competency requirements in a manner as determined by
the board to be appropriate and established by board rule.
(d)
Any certificate holder petitioning the board pursuant to (a) or (b) of this
subsection to become a licensee must submit to the board satisfactory proof of
having completed an accumulation of one hundred twenty hours of CPE during the
thirty-six months preceding the date of filing the petition.
(e)
Any certificate holder petitioning the board pursuant to (a) or (b) of this subsection
to become a licensee must pay the appropriate fees established by rule by the
board.
(5)
Certificate holders shall comply with the prohibition against the practice of
public accounting in RCW 18.04.345.
(6)
Persons who on June 30, 2001, held valid certificates previously issued under
this chapter are deemed to hold inactive certificates, subject to renewal as
inactive certificates, until they have petitioned the board to become licensees
and have met the requirements of subsection (4) of this section. No individual
who did not hold a valid certificate before July 1, 2001, is eligible to obtain
an inactive certificate.
(7)
Persons deemed to hold inactive certificates under subsection (6) of this
section shall comply with the prohibition against the practice of public
accounting in subsection (8)(b) of this section and RCW 18.04.345, but are not
required to display the term inactive as part of their title, as required by
subsection (8)(a) of this section until renewal. Certificates renewed to any persons
after June 30, 2001, are inactive certificates and the inactive certificate
holders are subject to the requirements of subsection (8) of this section.
(8)
Persons holding an inactive certificate:
(a)
Must use or attach the term "inactive" whenever using the title CPA
or certified public accountant or referring to the certificate, and print the
word "inactive" immediately following the title, whenever the title
is printed on a business card, letterhead, or any other document, including documents
published or transmitted through electronic media, in the same font and font
size as the title; and
(b)
Are prohibited from practicing public accounting.
Sec.
8. RCW
18.04.180 and 1992 c 103 s 8 are each amended to read as follows:
(1)
The board shall 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)))
(a) Such state makes similar provision to grant reciprocity to a holder
of a ((certificate or)) valid certificate ((and valid)) or
license in this state; ((and
(2))) (b)
The applicant meets the ((continuing professional education)) CPE
requirements of RCW ((18.04.105(8))) 18.04.215(5); ((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))) (c)
The applicant meets the good character requirements of RCW 18.04.105(1)(a); and
(d)
The applicant passed the examination required for issuance of his or her
certificate or license 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.
(2)
The board may accept NASBA's designation of the applicant as substantially
equivalent to national standards as meeting the requirement of subsection
(1)(d) of this section.
(3)
A licensee who has been granted a license under the reciprocity provisions of
this section shall notify the board within thirty days if the license or
certificate issued in the other jurisdiction has lapsed or if the status of the
license or certificate issued in the other jurisdiction becomes otherwise
invalid.
Sec.
9. RCW
18.04.183 and 1999 c 378 s 3 are each amended 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)) license 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, experience, 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 thirty-six months prior to application completed
an accumulation of one hundred twenty hours of ((continuing professional
education)) CPE as required under RCW ((18.04.105(8))) 18.04.215(5).
The board shall provide for transition from existing to new ((continuing
professional education)) CPE requirements; ((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))) (6)
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)))
(7) The applicant has within the ((five)) eight years
prior to applying for ((the certificate and)) a 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))) 18.04.105(1)(d)
or such other experience or employment which the board in its discretion
regards as substantially equivalent.
The
board may adopt by rule new CPE standards that differ from those in subsection
(4) of this section or RCW 18.04.215 if the new standards are consistent with
the ((continuing professional education)) CPE standards of other
states so as to provide to the greatest extent possible, consistent national
standards.
A
licensee who has been granted a license under the reciprocity provisions of
this section shall notify the board within thirty days if the permit, license,
or certificate issued in the other jurisdiction has lapsed or if the status of
the permit, license, or certificate issued in the other jurisdiction becomes
otherwise invalid.
Sec.
10. RCW
18.04.185 and 1999 c 378 s 4 are each amended to read as follows:
(((1)
Application for certification as certified public accountants by persons who
are not residents of this state constitutes appointment of the secretary of
state as an agent for service of process in any action or proceeding against
the applicants arising from any transaction, activity, or operation connected
with or incidental to the practice of public accounting in this state by
nonresident holders of certified public accountant certificates.
(2)))
Application for a license to practice public accounting in this state by a
certified public accountant or CPA firm who holds a license or permit to
practice issued by another state constitutes the appointment of the secretary
of state as an agent for service of process in any action or proceeding against
the applicant arising from any transaction or operation connected with or
incidental to the practice of public accounting in this state by the holder of
the license to practice.
Sec.
11. RCW
18.04.195 and 1999 c 378 s 5 are each amended to read as follows:
(1)
A sole proprietorship engaged in business in this state ((in the
practice of public accounting)) and offering to issue or issuing reports
on financial statements or using the title CPA or certified public accountant
shall license, as a firm, every three years with the board ((as a
firm)).
(a)
((The principal purpose and business of the firm shall be to furnish
services to the public which are consistent with this chapter and the rules of
the board.
(b))) The
((person)) sole proprietor shall ((be a certified public
accountant holding)) hold a license to practice under RCW
18.04.215((.));
(((c)))
(b) Each resident ((licensee)) person in charge of an
office ((of the sole proprietorship engaged in this state in the practice of
public accounting)) located in this state shall ((be a certified
public accountant holding)) hold a license to practice under RCW
18.04.215; and
(c)
The licensed firm must meet competency requirements established by rule by the
board.
(2)
A partnership engaged in business in this state ((in the practice of
public accounting)) and offering to issue or issuing reports on
financial statements or using the title CPA or certified public accountant
shall license as a firm every three years with the board ((as a
partnership of certified public accountants)), and shall meet the following
requirements:
(a)
((The principal purpose and business of the partnership shall be to furnish
services to the public which are consistent with this chapter and the rules of
the board;
(b))) At
least one general partner of the partnership shall ((be a certified public
accountant holding)) hold a license to practice under RCW 18.04.215;
(((c)))
(b) Each resident ((licensee)) person in charge of an
office ((of the partnership)) in this state ((and each resident
partner personally engaged within this state in the practice of public
accounting)) shall ((be a certified public accountant holding)) hold
a license to practice under RCW 18.04.215;
(c)
A simple majority of the ownership of the licensed firm in terms of financial
interests and voting rights of all partners or owners shall be held by natural
persons who are licensees or holders of a valid license issued under this
chapter or by another state that entitles the holder to practice public
accounting in this state. The principal partner of the partnership and any
partner having authority over issuing reports on financial statements shall
hold a license under this chapter or issued by another state that entitles the
holder to practice public accounting in this state; and
(d)
The licensed firm must meet competency requirements established by rule by the
board.
(3)
A corporation ((organized for the practice of public accounting and))
engaged in business in this state ((in the practice of public
accounting)) and offering to issue or issuing reports on financial
statements or using the title CPA or certified public accountant shall
license as a firm every three years with the board ((as a corporation
of certified public accountants)) and shall meet the following
requirements:
(a)
((The principal purpose and business of the corporation shall be to furnish
services to the public which are consistent with this chapter and the rules of
the board; and
(b)
Each shareholder of the corporation shall be a certified public accountant of
some state holding a license to practice and shall be)) A
simple majority of the ownership of the licensed firm in terms of financial
interests and voting rights of all shareholders or owners shall be held by
natural persons who are licensees or holders of a valid license issued under
this chapter or by another state that entitles the holder to practice public
accounting in this state and is principally employed by the corporation or
actively engaged in its business. ((No other person may have any interest
in the stock of the corporation.)) The principal officer of the
corporation and any officer or director having authority over ((the practice
of public accounting by the corporation)) issuing reports on financial
statements shall ((be a certified public accountant of some state
holding)) hold a license ((to practice)) under this
chapter or issued by another state that entitles the holder to practice public
accounting in this state;
(((c)))
(b) At least one shareholder of the corporation shall ((be a
certified public accountant holding)) hold a license ((to
practice)) under RCW 18.04.215;
(((d)))
(c) Each resident ((licensee)) person in charge of an
office ((of the corporation)) located in this state ((and each
shareholder or director personally engaged within this state in the practice of
public accounting)) shall ((be a certified public accountant holding))
hold a license ((to practice)) under RCW 18.04.215;
(((e)))
(d) A written agreement shall bind the corporation or its shareholders
to purchase any shares offered for sale by, or not under the ownership or
effective control of, a qualified shareholder, and bind any holder not a
qualified shareholder to sell the shares to the corporation or its qualified
shareholders. The agreement shall be noted on each certificate of corporate
stock. The corporation may purchase any amount of its stock for this purpose,
notwithstanding any impairment of capital, as long as one share remains
outstanding; ((and
(f))) (e)
The corporation shall comply with any other rules pertaining to corporations
practicing public accounting in this state as the board may prescribe; and
(f)
The licensed firm must meet competency requirements established by rule by the
board.
(4)
A limited liability company engaged in business in this state ((in
the practice of public accounting)) and offering to issue or issuing
reports on financial statements or using the title CPA or certified public
accountant shall license as a firm every three years with the board
((as a limited liability company of certified public accountants)), and
shall meet the following requirements:
(a)
((The principal purpose and business of the limited liability company shall
be to furnish services to the public which are consistent with this chapter and
the rules of the board;
(b))) At
least one ((manager)) member of the limited liability company
shall ((be a certified public accountant holding)) hold a license
((to practice)) under RCW 18.04.215;
(((c)))
(b) Each resident manager or member in charge of an office ((of the
limited liability company)) located in this state ((and each
resident manager or member personally engaged within this state in the practice
of public accounting)) shall ((be a certified public accountant holding))
hold a license ((to practice)) under RCW 18.04.215;
(c)
A simple majority of the ownership of the licensed firm in terms of financial
interests and voting rights of all owners shall be held by natural persons who
are licensees or holders of a valid license issued under this chapter or by
another state that entitles the holder to practice public accounting in this
state. The principal member or manager of the limited liability company and
any member having authority over issuing reports on financial statements shall
hold a license under this chapter or issued by another state that entitles the
holder to practice public accounting in this state; and
(d)
The licensed firm must meet competency requirements established by rule by the
board.
(5)
Application for a license as a firm shall be made upon the affidavit of the
proprietor or person designated as managing partner, member, or
shareholder for Washington. This person shall ((be a certified public
accountant holding)) hold a license ((to practice)) under RCW
18.04.215. The board shall determine in each case whether the applicant is
eligible for a license. A partnership ((or)), corporation, or
limited liability company which is licensed to practice under RCW 18.04.215
may use the designation "certified public accountants" or
"CPAs" in connection with its partnership, limited liability
company, or corporate name. The board shall be given notification within
ninety days after the admission or withdrawal of a partner ((or)),
shareholder, or member engaged in this state in the practice of public
accounting from any partnership ((or)), corporation, or limited
liability company so licensed.
(6)
Licensed firms which fall out of compliance with the provisions of this
section due to changes in firm ownership or personnel, after receiving or
renewing a license, shall notify the board in writing within thirty days of its
falling out of compliance and propose a time period in which they will come
back into compliance. The board may grant a reasonable period of time for a
firm to be in compliance with the provisions of this section. Failure to bring
the firm into compliance within a reasonable period of time, as determined by
the board, may result in suspension, revocation, or imposition of conditions on
the firm's license.
(7)
Fees for the license as a firm and for notification of the board of the
admission or withdrawal of a partner ((or)), shareholder, or
member shall be determined by the board. Fees shall be paid by the firm at
the time the license application form or notice of admission or withdrawal of a
partner ((or)), shareholder, or member is filed with the
board.
(8)
Nonlicensee owners of licensed firms are:
(a)
Required to fully comply with the provisions of this chapter and board rules;
(b)
Required to be a natural person;
(c)
Required to be an active individual participant in the licensed firm or
affiliated entities as these terms are defined by board rule; and
(d)
Subject to discipline by the board for violation of this chapter.
(9)
Resident nonlicensee owners of licensed firms are required to meet:
(a)
The ethics examination, registration, and fee requirements as established by
the board rules; and
(b)
The ethics CPE requirements established by the board rules.
Sec.
12. RCW
18.04.205 and 1999 c 378 s 6 are each amended to read as follows:
(1)
Each office established or maintained in this state for the ((practice of
public accounting)) purpose of offering to issue or issuing reports on
financial statements in this state ((by a certified public accountant,
or a partnership or corporation of certified public accountants)) or
that uses the title "certified public accountant" or "CPA,"
shall register with the board under this chapter every three years.
(2)
Each office shall be under the direct supervision of a resident licensee
holding a license 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)) purpose of offering to issue or issuing reports on
financial statements or that use the title "certified public
accountant" or "CPA."
(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.
13. RCW
18.04.215 and 1999 c 378 s 7 are each amended to read as follows:
(1)
Three-year licenses 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 one hundred twenty hours of continuing professional education
during the thirty-six months preceding the application;)) persons
meeting the requirements of RCW 18.04.105(1), 18.04.180, or 18.04.183.
(b)
To certificate holders meeting the requirements of RCW 18.04.105(4).
(c)
To firms under RCW 18.04.195, ((if all offices of the firm in this state are
maintained and registered as required under)) meeting the requirements
of RCW 18.04.205.
(2)
The board shall, by rule, provide for a system of certificate and license
renewal and reinstatement. Applicants for ((issuance or))
renewal ((of certificates or licenses)) or reinstatement 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)
An inactive certificate is renewed every three years with renewal subject to
the requirements of ethics CPE and the payment of fees, prescribed by the
board. Failure to renew the inactive certificate shall cause the inactive
certificate to lapse and be subject to reinstatement. The board shall adopt
rules providing for fees and procedures for renewal and reinstatement of
inactive certificates.
(4)
A license is issued every three years with renewal subject to requirements of
CPE and payment of fees, prescribed by the board. Failure to renew the license
shall cause the license to lapse and become subject to reinstatement. Persons
holding a lapsed license are prohibited from using the title "CPA" or
"certified public accountant." Persons holding a lapsed license are
prohibited from practicing public accountancy. The board shall adopt rules
providing for fees and procedures for issuance, renewal, and reinstatement of
licenses.
(5)
The board shall adopt rules providing for CPE for licensees and certificate
holders. The rules shall:
(a)
Provide that a licensee shall verify to the board that he or she has completed
at least an accumulation of one hundred twenty hours of CPE during the last
three-year period to maintain the license;
(b)
Establish CPE requirements; and
(c)
Establish when new licensees shall verify that they have completed the required
CPE.
(6)
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)))
(7) A ((certified public accountant)) licensee shall
submit to the board satisfactory proof of having completed an accumulation of
one hundred twenty hours of ((continuing education)) CPE
recognized and approved by the board during the preceding three years. Failure
to furnish this evidence as required shall make the ((certificate invalid))
license lapse and subject to reinstatement procedures, unless the board
determines the failure to have been due to retirement((,)) or
reasonable cause((, or excusable neglect)).
The
board in its discretion may renew a certificate or license despite failure to
furnish evidence of compliance with requirements of ((continuing
professional education)) CPE upon condition that the applicant
follow a particular program of ((continuing professional education)) CPE.
In issuing rules and individual orders with respect to ((continuing
professional education)) CPE 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)) CPE to ((applicants)) licensees and
certificate holders and instances of individual hardship.
(((5)))
(8) Fees for ((issuance or)) renewal or reinstatement of
certificates and licenses in this state shall be determined by the board under this
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 or
certificates issued between normal renewal dates.
Sec.
14. RCW
18.04.295 and 2000 c 171 s 1 are each amended to read as follows:
The
board ((of accountancy)) shall have the power to: Revoke,
suspend, ((or)) refuse to renew ((a)), or reinstate a license
or certificate ((or license, and may)); impose a fine in an
amount not to exceed ((one)) ten thousand dollars plus the
board's investigative and legal costs in bringing charges against a certified
public accountant, ((or)) a certificate holder, a licensee, a
licensed firm, or a nonlicensee holding an ownership interest in a licensed
firm; may impose full restitution to injured parties; may impose conditions
precedent to renewal of ((the)) a certificate or a license
((of any certified public accountant)); or may prohibit a nonlicensee
from holding an ownership interest in a licensed firm, for any of the
following causes:
(1)
Fraud or deceit in obtaining a ((certificate as a certified public
accountant, or in obtaining a)) license, or in any filings with the
board;
(2)
Dishonesty, fraud, or negligence while representing oneself as a ((CPA))
nonlicensee owner holding an ownership interest in a licensed firm, a
licensee, or a certificate holder;
(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)) CPE 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)) a 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;
(10)
Failure by a nonlicensee owner of a licensed firm to comply with the
requirements of this chapter or board rule; and
(11)
Failure to comply with an order of the board.
Sec.
15. RCW
18.04.305 and 1992 c 103 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)) sole-practitioner's license or the revocation or
suspension or refusal to renew the ((certificate or)) license of any
partner, manager, member, or shareholder; ((or))
(2)
The revocation, suspension, or refusal to renew the license ((or permit))
of the firm, or any partner, manager, member, 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 CPE requirements of
((continuing professional education in)) the other state or foreign
jurisdiction;
(3)
Failure by a nonlicensee owner of a licensed firm to comply with the
requirements of this chapter or board rule; or
(4)
Failure of the firm to comply with the requirements of this chapter or board
rule.
Sec.
16. RCW
18.04.335 and 1997 c 58 s 812 are each amended to read as follows:
(1)
Upon application in writing and after hearing pursuant to notice, the board
may:
(a)
Modify the suspension of, or reissue a certificate or a license to, an
individual whose certificate or license has been revoked or suspended;
or
(b)
Modify the suspension of, or reissue a license to a firm whose license has been
revoked, suspended, or which the board has refused to renew.
(2)
In the case of suspension for failure to comply with a support order under
chapter 74.20A RCW ((or a residential or visitation order under chapter
26.09 RCW)), if the person has continued to meet all other requirements for
reinstatement during the suspension, reissuance of a certificate or a
license shall be automatic upon the board's receipt of a release issued by the
department of social and health services stating that the individual is in
compliance with the order.
Sec.
17. RCW
18.04.345 and 1999 c 378 s 8 are each amended to read as follows:
(1)
No person may assume or use the designation "certified public accountant-inactive"
or "CPA-inactive" or any other title, designation, words,
letters, abbreviation, sign, card, or device tending to indicate that the
person is a certified public accountant-inactive or CPA-inactive
unless the person holds a ((valid)) certificate ((as a certified
public accountant)). Persons holding only a certificate may not
practice public accounting.
(2)
No person may hold himself or herself out to the public ((and)) 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 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 as offering to issue or issuing
reports on financial statements, 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.
(4)
No person, partnership, limited liability company, or corporation offering
accounting services to the public 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.))
(5)
No licensed firm may operate under an alias, a firm name, title, or
"DBA" that differs from the firm name that is registered with the
board.
(6)
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 license to practice under RCW 18.04.215 and a firm license
under RCW 18.04.195, and all of the person's offices in this state ((for
the practice of public accounting are maintained and)) are licensed
under RCW 18.04.205.
(((6)))
(7) 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.
(((7)))
(8) No person, partnership, limited liability company, 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.
(((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.))
Sec.
18. RCW
18.04.350 and 1992 c 103 s 15 are each amended to read as follows:
(1)
Nothing in this chapter prohibits any person not ((a certified public
accountant)) holding a license from serving as an employee of a
firm licensed((, 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)) (a) An individual, whose principal place of business is not
in this state, who has a valid certificate or license as a certified public
accountant from another state, and (i) whose state of licensure has education,
examination, and experience requirements that are deemed by the board to be
substantially equivalent to this state's requirements or (ii) who, as an
individual, has education, examination, and experience that are deemed by the
board to be substantially equivalent to this state's requirement shall have all
the privileges of license holders of this state without the need to obtain a
license under RCW 18.04.105 or 18.04.195. However, such individuals shall notify
the board, under such circumstances and in such manner as the board determines
by rule, of their intent to enter the state under this section. The board
shall have the authority to establish a fee for the practice privilege granted
under this section by rule.
(b)
An individual that enters the state under this section and is granted this
practice privilege shall abide by this chapter and the rules adopted under this
chapter and shall be subject to discipline for violation of this chapter.
However, such individual is exempt from the continuing education requirements
of this chapter provided the individual has met the continuing education
requirements of the state in which the individual holds a valid certificate or
license. The board may accept NASBA's designation of the individual's state as
substantially equivalent to national standards, or NASBA's designation of the
applicant as substantially equivalent to national standards, as meeting the
requirement for a certified public accountant to be substantially equivalent to
this state's requirements.
(c)
Any certificate or license holder of another state exercising the privilege
afforded under this section consents, as a condition of the grant of this
privilege:
(i)
To the personal and subject matter jurisdiction of the board;
(ii)
To the appointment of the state board which issued the certificate or license
as their agent upon whom process may be served in any action or proceeding by
this state's board against the certificate holder or licensee.
(d)
A licensee of this state offering or rendering services or using their
certified public accountant title in another state shall be subject to
disciplinary action in this state for an act committed in another state for
which the certificate or permit holder would be subject to discipline for an
act committed in the other state provided the board receives timely
notification of the act. Notwithstanding RCW 18.04.295, the board may
investigate any complaint made by the board of accountancy of another state.
(3)
Nothing in this chapter prohibits a ((certified public accountant, a
partnership, or corporation of certified public accountants)) licensee,
a licensed firm, or any of their employees from disclosing any data in
confidence to other certified public accountants, quality assurance or
peer review teams, partnerships, limited liability companies, 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)) licensee,
a licensed firm, 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)) firm composed of persons not holding a license under
RCW 18.04.215 from offering or rendering to the public bookkeeping, accounting,
tax services, the devising and installing of financial information systems,
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, limited
liability companies, 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-inactive" or
"CPA-inactive" or any other title, designation, words,
letters, sign, card, or device tending to indicate the person is a ((certified
public accountant)) certificate holder, provided, that such person
((shall)) does 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)) perform
or offer to perform for the public one or more kinds of services involving the
use of accounting or auditing skills, including issuance of reports on
financial statements or of one or more kinds of management advisory, financial
advisory, consulting services, the preparation of tax returns, or the
furnishing of advice on tax matters.
(9) Nothing in this chapter prohibits the 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. Nothing in this
chapter prohibits the use of the title "enrolled agent" or the
designation "EA" by any person regardless of whether the person has
been granted a certificate or holds a license under this chapter if the person
is properly authorized at the time of use to use the title or designation by
the United States department of the treasury. The board shall by rule allow
the use of other titles by any person regardless of whether the person has been
granted a certificate or holds a license under this chapter if the person using
the titles or designations is authorized at the time of use by a nationally
recognized entity sanctioning the use of board authorized titles.
Sec.
19. RCW
18.04.370 and 1983 c 234 s 19 are each amended to read as follows:
(1)
Any person who violates any provision of this chapter, shall be guilty of a crime,
as follows:
(a)
Any person who violates any provision of this chapter is guilty of a
misdemeanor, and upon conviction thereof, shall be subject to a fine of not
more than ((one)) ten thousand dollars, or to imprisonment for
not more than six months, or to both such fine and imprisonment.
(b)
Notwithstanding (a) of this subsection, any person who uses a professional
title intended to deceive the public, in violation of RCW 18.04.345, having
previously entered into a stipulated agreement and order of assurance with the
board, is guilty of a felony, and upon conviction thereof, is subject to a fine
of not more than ten thousand dollars, or to imprisonment for not more than two
years, or to both such fine and imprisonment.
(2)
With the exception of first time violations of RCW 18.04.345, subject to
subsection (3) of this section whenever the board has reason to believe
that any person is violating the provisions of this chapter it shall certify
the facts to the prosecuting attorney of the county in which such person
resides or may be apprehended and the prosecuting attorney shall cause
appropriate proceedings to be brought against such person.
(3)
The board may elect to enter into a stipulated agreement and orders of
assurance with persons in violation of RCW 18.04.345 who have not previously
been found to have violated the provisions of this chapter. The board may
order full restitution to injured parties as a condition of a stipulated
agreement and order of assurance.
(4)
Nothing herein contained shall be held to in any way affect the power of the
courts to grant injunctive or other relief as above provided.
Sec.
20. RCW
18.04.380 and 1986 c 295 s 17 are each amended to read as follows:
(1)
The display or presentation by a person of a card, sign, advertisement, or
other printed, engraved, or written instrument or device, bearing a
person's name in conjunction with the words "certified public
accountant" or any abbreviation thereof((, or "licensed public
accountant" or any abbreviation thereof, or "public accountant"
or any abbreviation thereof,)) shall be prima facie evidence in any action
brought under this chapter that the person whose name is so displayed, caused
or procured the display or presentation of the card, sign, advertisement, or
other printed, engraved, or written instrument or device, and that the person
is holding himself or herself out to be a licensee, a certified public
accountant, or a ((public accountant holding a license to practice))
person holding a certificate under this chapter.
(2)
The display or presentation by a person of a card, sign, advertisement, or
other printed, engraved, or written instrument or device, bearing a person's
name in conjunction with the words certified public accountant-inactive or any
abbreviation thereof is prima facie evidence in any action brought under this
chapter that the person whose name is so displayed caused or procured the
display or presentation of the card, sign, advertisement, or other printed,
engraved, or written instrument or device, and that the person is holding
himself or herself out to be a certified public accountant-inactive under this
chapter.
(3) In any ((such)) action under subsection (1) or
(2) of this section, evidence of the commission of a single act prohibited
by this chapter is sufficient to justify an injunction or a conviction without
evidence of a general course of conduct.
Sec.
21. RCW
18.04.390 and 1992 c 103 s 16 are each amended to read as follows:
(1)
In the absence of an express agreement between the ((certified public
accountant)) licensee or licensed firm and the client to the
contrary, all statements, records, schedules, working papers, and memoranda
made by a ((certified public accountant)) licensee or licensed firm
incident to or in the course of professional service to clients, except reports
submitted by a ((certified public accountant to a client)) licensee
or licensed firm, are the property of the ((certified public accountant))
licensee or licensed firm.
(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))
licensee, partnership, limited liability company, or corporation, or any
combined or merged partnership, limited liability company, 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 or electronic documents, to the
extent that such working papers or electronic documents 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 or
electronic document beyond the period prescribed in any other applicable
statute.
(5)
Nothing in this section should be construed as prohibiting any temporary
transfer of workpapers or other material necessary in the course of carrying
out peer reviews or as otherwise interfering with the disclosure of information
pursuant to RCW 18.04.405.
Sec.
22. RCW
18.04.405 and 1992 c 103 s 17 are each amended to read as follows:
(1)
A ((certified public accountant, a partnership or corporation of certified
public accountants)) licensee, certificate holder, or licensed firm,
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, 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 confidential information obtained by
a licensee, or any of their employees in the course of a professional
transaction in connection with any investigation, public hearing, or other
proceeding, nor shall this section be construed as prohibiting a licensee or
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))
peer 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)) peer
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 assurance
or peer review process.
NEW
SECTION. Sec. 23. (1)
By December 1, 2002, the board of accountancy shall report to the senate
committee on labor, commerce, and financial institutions and the house
committee on commerce and labor, or successor committees, on the implementation
of this act, including but not limited to the provisions governing nonlicensee
owners of CPA firms and the fiscal impacts.
(2)
This section does not affect the board's authority to proceed with
implementation of this act.
(3)
This section expires January 1, 2003.
NEW
SECTION. Sec. 24. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and takes effect July 1, 2001.
