1976 South Carolina Code of Laws
Unannotated
Updated through the end of the 2000 Session

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Title 40 - Professions and Occupations

CHAPTER 2.

ACCOUNTANTS

ARTICLE 1.

REGULATION OF CERTIFIED PUBLIC ACCOUNTANTS AND PUBLIC ACCOUNTANTS

SECTION 40-2-10. Persons deemed to be practicing as certified public accountants.

A person is deemed to be practicing public accounting as a certified public accountant within the meaning of this article who displays a sign or in any way holds himself out as a certified public accountant.

SECTION 40-2-20. Persons deemed to be practicing as public accountants.

A person is deemed to be practicing public accounting as a public accountant within the meaning of this article who displays a sign or in any way holds himself out as a public accountant.

SECTION 40-2-30. Certificate of registration; registration of partnerships; use of title implying partnership.

(A) It is unlawful for a person to hold himself out as a certified public accountant or to use the title "certified public accountant" or the designation "CPA" in this State unless the person has obtained a certificate of registration from the South Carolina Board of Accountancy as provided in this article. It is unlawful for a partnership to hold itself out as a partnership of certified public accountants unless it is registered with the South Carolina Board of Accountancy and:

(1) at least one general partner is a certified public accountant of this State in good standing;

(2) each resident manager in charge of an office of the firm in this State is a certified public accountant of this State in good standing. Application for registration must be made upon the affidavit of a general partner of the partnership who is a certified public accountant of this State in good standing. The board shall determine whether the applicant is eligible for registration. A partnership which is registered may use the words "certified public accountants" or the designation "CPA's" in connection with its partnership name. Notification must be given the board, within one month, after the admission to or withdrawal of a partner from a registered partnership.

(B) No person may assume or use the title or designation "certified public accountant" in conjunction with names indicating or implying that there is a partnership or in conjunction with the designation "and Company" or "and Co." or a similar designation if there is in fact no bona fide partnership; however, a sole proprietor or partnership lawfully using that title or designation in conjunction with names or designation on July 1, 1965, may continue to do so if the person or partnership otherwise complies with this article.

SECTION 40-2-40. Public accountant licenses; registration of partnerships; use of title implying partnership.

It is unlawful for a person to hold himself out as a public accountant or to use the title "public accountant" or the designation "PA" in this State unless the person has obtained a license as a public accountant from the South Carolina Board of Accountancy as provided in this article. It is unlawful for a partnership to hold itself out as a partnership of public accountants unless it is registered as a partnership by the South Carolina Board of Accountancy and:

(1) at least one general partner is a certified public accountant or a public accountant of this State in good standing;

(2) each resident manager in charge of an office of the firm in this State is a certified public accountant or a public accountant of this State in good standing.

Application for registration must be made upon the affidavit of a general partner of the partnership who is a public accountant of this State in good standing. The board shall determine whether the applicant is eligible for the license. A partnership which is registered may use the words "public accountants" or the designation "PAs" in connection with its partnership name. Notification must be given the board, within one month, after the admission to or withdrawal of a partner from a registered partnership.

SECTION 40-2-50. Prohibited acts.

(A) No person may sign or affix his name or any trade or assumed name used by him in his profession or business, or a partnership name, with wording indicating that he is a certified public accountant or public accountant, or that the partnership is composed of certified public accountants or public accountants, or with any wording indicating that he has, or the partnership is composed of persons having, expert knowledge in accounting or auditing, to any opinion or certificate attesting in any way to the reliability of a representation in regard to a person or organization embracing financial information or facts respecting compliance with conditions established by law or contract including, but not limited to, statutes, ordinances, regulations, grants, loans, and appropriations, unless he or it holds a certificate of registration or license issued pursuant to this article. This subsection does not prohibit an officer, employee, partner, or principal of an organization from affixing his signature to a statement or report in reference to the financial affairs of the organization with any wording designating the position, title, or office which he holds in the organization, and this subsection does not prohibit an act of a public official or public employee in the performance of his duties.

(B) No person, not registered or licensed under this article, may sign or affix the name of a professional association with wording indicating that it is a professional association performing services as accountants or auditors or composed of accountants or auditors or persons having expert knowledge in accounting or auditing, to an opinion or certificate attesting in any way to the existence or nonexistence of facts in regard to a person or organization including, but not limited to, facts relating to financial position and results of operations and facts relating to compliance with a contract, law, ordinance, or regulation.

(C) No person, partnership, or professional association not registered or licensed under this article may permit his or its name to be associated with statements purporting to show financial position or results of operations in regard to a person or organization in a manner as to imply that he has, or it is composed of, persons having expert knowledge in accounting or auditing, or in a manner as to state or imply that he or it is licensed under Article 3 unless he or it declaims an opinion on the statements and in connection with the statements indicates clearly that the statements were not audited by him or it and that he or it is prohibited by law from expressing an opinion on the statements. This subsection does not require an officer, employee, partner, or principal of an organization affixing his signature to a statement or report in reference to the financial affairs of the organization with wording designating the position, title, or office which he holds in the organization to state a disclaimer, and this subsection does not apply to an act of a public official or public employee in the performance of his duties.

(D) No person or partnership, not registered or licensed under this article, and no professional association, may hold himself or itself out to the public as an "accountant" or "auditor" by use of a title composed of or indicating either or both by words on a sign, card, letterhead, or in an advertisement or directory, without plainly indicating that the person, partnership, or professional association does not hold a registration or license. This subsection does not prohibit an officer, employee, partner, or principal of an organization from describing himself by the position, title, or office he holds in the organization, and this subsection does not prohibit any act of a public official or public employee in the performance of his duties.

(E) No person, partnership, or professional association shall assume or use the title or designation "certified accountant", "chartered accountant", "enrolled accountant", "licensed accountant", "registered accountant", or any other title or designation likely to be confused with "certified public accountant" or "public accountant", or any of the abbreviations "CA", "AP", "EA", "RA", or "LA", or similar abbreviations likely to be confused with "CPA" or "PA". A person or partnership registered or licensed under this article as a certified public accountant or public accountant or as a firm of certified public accountants or public accountants may hold himself or itself out to the public as an "accountant" or "auditor" or as a firm of accountants or auditors.

A person admitted to practice before the Internal Revenue Service as an enrolled agent or an enrolled actuary may use the abbreviation "EA".

SECTION 40-2-55. Contingency fees or commissions; written contract.

A certified public accountant may charge a contingency fee or commission, or both, for performing services under this chapter if the client and the certified public accountant enter into a separate written contract, executed by both parties, specifying the terms of the contingency fee or commission, or both, for each transaction to be conducted. No contingency fee or commission is payable or enforceable in the absence of a clearly executed written contract.

SECTION 40-2-60. Licensing of professional associations.

Professional associations may be licensed and operate as certified public accountants, public accountants, and accounting practitioners and must be governed by this chapter and any provision applying to partnerships in this chapter requiring certain qualifications or requirements of a partner or partners must apply to a member or members of the professional association. All persons licensed as certified public accountants, public accountants, and accounting practitioners may practice and operate in any form or manner provided by law. For purposes of this chapter, "professional association" means professional association or professional corporation.

SECTION 40-2-70. Board of accountancy created.

There is created the South Carolina Board of Accountancy which shall carry out the purposes and enforce the provisions of this chapter. The members of the board must be appointed by the Governor.

SECTION 40-2-80. Board qualifications; terms; vacancy; removal.

The board consists of nine members: five licensed certified public accountants, two licensed public accountants or licensed accounting practitioners, and two public members who are not engaged in the practice of public accounting, have no financial interest in the profession of public accounting, and have no immediate family member in the profession of public accounting. As used in this section, "immediate family member" is defined in Section 8-13-100(18). Members must be appointed by the Governor for terms of three years and until their successors are appointed and qualify. Vacancies may be filled by the Governor for unexpired terms. The Governor shall remove a member of the board for neglect of duty or other just cause.

SECTION 40-2-100. Quorum.

A majority of the membership of the board constitutes a quorum and action must be by majority vote. The board may provide for proxy voting by absent members.

SECTION 40-2-110. Oaths; election of officers.

The members of the board shall qualify by taking the oath of office before a notary public or other officer empowered to administer oaths and a record of this must be filed in the office of the Secretary of State. At the first meeting of the board after each annual appointment the board shall elect a chairman, a vice-chairman, and a secretary-treasurer. The secretary-treasurer shall obtain a bond as the board directs.

SECTION 40-2-120. Compensation.

Members may receive per diem and expenses for each day actually engaged in the duties of the office and mileage at the rate provided by law for state employees for all distances necessarily traveled in going to and from the meetings of the board. These expenses must be paid from fees and licenses received by the board under this article and no part of the salary or other expenses of the board may be paid out of the State Treasury.

SECTION 40-2-130. Meetings.

Regular meetings for purpose of examinations must be held at least once a year at such place and time as the chairman of the board considers most convenient for applicants. Due notice of meetings for examinations must be given by publication in papers selected by the chairman. The chairman may call from time to time other meetings necessary to the business of the board and shall call a meeting at any time upon the written request of three members of the board.

SECTION 40-2-140. Powers of board generally.

The board may prescribe rules, regulations, and bylaws, in harmony with this chapter, for its own proceedings and government and for the examination of applicants for the practice of accounting. The board may promulgate and amend regulations of professional conduct appropriate to establish and maintain a high standard of integrity and dignity in the profession of public accountancy. Within sixty days after the promulgation of a regulation or amendment, the board shall mail copies of the regulation or amendment to each holder of a license issued under this article, with a notice advising him of the effective date of the regulation or amendment. Failure to mail the regulation, amendment, or notice to all license holders does not affect the validity of the regulation or amendment. The board, or any member of the board, may issue subpoenas to compel the attendance of witnesses and the production of documents and may administer oaths, take testimony, hear proofs, and receive exhibits in evidence for all purposes required in the discharge of its duties. In case of disobedience to a subpoena the board may invoke the aid of an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 in requiring the attendance and testimony of witnesses and the production of documentary evidence and shall adopt a seal to be affixed to all its official documents.

SECTION 40-2-150. Collection of fees.

The board shall collect fees which must be deposited in the general fund of the State, in an amount to at least equal the amount appropriated annually in the general appropriations act for the Board of Accountancy.

SECTION 40-2-160. Annual report.

The board shall make an annual report as provided by law as soon as practicable after the close of its fiscal year which shall end on June thirtieth.

SECTION 40-2-170. Certified public accountant examinations.

A person, before beginning to practice as a certified public accountant in this State, shall pass an examination before the Board of Accountancy in accounting and auditing and related subjects as the board determines to be appropriate.

SECTION 40-2-180. Qualifications of applicant for examination.

(A) An applicant making application for examination shall submit evidence satisfactory to the board that the applicant:

(1) is at least eighteen years of age;

(2) does not have a history of dishonest or felonious acts;

(3) has the following educational background:

(a) Before July 1, 1997, each applicant must have a baccalaureate degree from a college or university recognized by the board including a minimum of twenty-four hours or the equivalent in accounting hours.

(b) After June 30, 1997, each applicant must have at least one hundred fifty semester hours of college education including a baccalaureate or higher degree conferred by a college or university acceptable to the board, the total educational program to include an accounting concentration or equivalent as determined by board rule to be appropriate.

(B) The educational requirements are waived for a candidate who is a South Carolina public accountant licensed and in good standing under this article or who, on July 1, 1965, was practicing as a public accountant or who then was employed as a staff accountant in this State by anyone practicing public accounting.

SECTION 40-2-190. Time and manner of conducting examination; prior experience; credit for examination taken in other state.

The examination provided for in Section 40-2-170 must be held by the board at least once each year.

The board shall advertise the dates of the examinations at least eight weeks before the date set in a newspaper so as to provide adequate statewide notice. Beginning in 1986, the dates set in a newspaper must be at least by September first for the November examination and by March first for the May examination.

The board may make use of all or any part of the uniform certified public accountants' examination or advisory grading service as it considers appropriate to assist it in performing its duties.

A candidate for the certificate of certified public accountant who has successfully completed the examination required under Section 40-2-170 has no status as a certified public accountant unless and until he has the requisite experience and has received his certificate as a certified public accountant. The experience required is either:

(1) two years of accounting experience in public, governmental, or private employment under the direct supervision and review of a certified public accountant or public accountant licensed to practice accounting in some state or territory of the United States or the District of Columbia;

(2) five years' experience teaching accounting in a college or university recognized by the board; or

(3) a combination of experience determined by the board to be substantially equivalent to items (1) and (2); however, this experience shall not require a minimum number of hours in auditing financial statements.

The board by regulation may provide for granting a credit to a candidate for satisfactory completion of a written examination in one or more of the subjects provided in Section 40-2-170 given by the licensing authority in another state if at the time he took the examination he was not a resident of this State. The regulation must include requirements the board determines appropriate in order that an examination approved as a basis for credit is, in the judgment of the board, at least as thorough as that included in the most recent examination given by the board at the time of the granting of credit.

The board by regulation may prescribe the terms and conditions under which a candidate who passes the examination in one or more of the subjects provided by Section 40-2-170 may be reexamined in only the remaining subjects, with credit for the subjects previously passed. It also may provide by regulation for a reasonable waiting period for a candidate's reexamination in a subject he has failed.

The board shall charge each candidate a fee, to be determined by the board, not in excess of two hundred dollars for the initial examination provided for in Section 40-2-170.

Fees for reexamination provided by this section are charged by the board in amounts determined by it, but not in excess of eighty dollars for each subject in which the candidate is reexamined.

An application for examination or reexamination as prescribed by the board must be submitted and the applicable fee paid at least five weeks before the date of the examination. The application must be submitted and the applicable fee paid by September fifteenth for the November examination and by March fifteenth for the May examination.

SECTION 40-2-200. Certificates of registrations.

Certificates of registration as a certified public accountant issued by the board must be signed by the chairman and secretary-treasurer, and the board shall collect from the recipient a fee to be fixed by the board.

A person who holds a certificate of registration as a certified public accountant under this article, which is in full force and effect, may be styled and known as a "certified public accountant" and also may use the designation "CPA". A certified public accountant also may be known as a "public accountant". The board shall maintain a list of certified public accountants.

A person who holds a license as a public accountant under this article, which is in full force and effect, may be styled and known as a "public accountant" and also may use the designation "PA". The board shall maintain a list of public accountants.

SECTION 40-2-210. Register.

The board shall keep a register in which must be recorded the names of all persons examined and whether or not the applicants successfully passed the examination or any part of the examination.

SECTION 40-2-220. Record of certificates.

Before a certificate is issued it must be numbered and recorded in a book kept by the secretary-treasurer of the board. In all legal proceedings this record of certificates or a certified copy of the record is evidence of the facts stated in the record.

SECTION 40-2-230. Effect of article on persons holding certificates on July 1, 1965.

Persons who, on July 1, 1965, held certified public accountant certificates issued under the laws of this State are not required to obtain additional certificates under this article, but are subject to all other provisions of this article, and these certificates, for all purposes, must be considered certificates issued under this article and subject to this article.

SECTION 40-2-240. Waiver of examination.

(A) The board, upon application in writing, may waive the examination referred to in Section 40-2-170 and issue a certificate to a person who is the holder of a certificate, or the equivalent, as a certified public accountant issued under the laws of any state or territory of the United States or the District of Columbia and:

(1) who has the qualifications required by this article and the regulations of the board; or

(2) when, in the judgment of the board, the requirements for issuing or granting certificates in the other state, territory, or the District of Columbia are substantially equivalent to the requirements established by this article and the regulations of the board, and the other state or political subdivision of the United States grants the same privileges to holders of certificates issued by this State.

(B) The board, upon application in writing, may waive the examination referred to in Section 40-2-170 and issue a certificate to a holder of a foreign designation, granted in a foreign country entitling the holder to engage in the practice of public accountancy if:

(1) the foreign authority which granted the designation makes similar provisions to allow a person who holds a valid certificate issued by this State to obtain the foreign authority's comparable designation;

(2) the foreign designation:

(a) was issued by a foreign authority that regulates the practice of public accountancy and the foreign designation has not expired or been revoked or suspended;

(b) entitles the holder to issue reports upon financial statements; and

(c) was issued upon the basis of educational, examination, and experience requirements by the foreign authority or by law; and

(3) the applicant:

(a) received the designation based on educational and examination standards substantially equivalent to those in effect in this State at the time the foreign designation was granted;

(b) completed an experience requirement substantially equivalent to the requirement set out in Section 40-2-190 and regulations of the board; and

(c) passed a uniform qualifying examination in national standards acceptable to the board.

SECTION 40-2-250. Requisites for nonresidents.

A person who holds a valid and unrevoked certificate as a certified public accountant issued under the authority of a state of the United States or who lawfully practices as a registered and licensed public accountant in a state of the United States, and who resides without the State of South Carolina, may hold himself out within South Carolina as a certified public accountant or as a public accountant if he registers with the board and complies with its regulations regarding registration. A fee to be fixed by the board must be charged for the registration or reregistration. A partnership, each partner of which is a certified public accountant in good standing of some state of the United States or a registered or licensed public accountant lawfully practicing in some state of the United States, may be considered one person for the purposes of this section.

SECTION 40-2-270. Renewal of certificate or license; violations.

A registered certified public accountant, public accountant, or accounting practitioner who desires to continue to practice in this State must meet the following requirements on or before the dates indicated:

(1) pay to the secretary of the board annually on or before July first a license fee, to be fixed by the board; and

(2) annually, on or before the last day of February of each year, file with the board, on a form or forms prescribed by the board for this purpose, a certificate of compliance with the continuing education requirements necessary for license renewals as required by Section 40-2-380.

The board, by regulation, may provide a penalty not to exceed five hundred dollars for each violation for failure to comply with item (1) or (2) above.

Upon payment of the fee, any penalty required, and filing of the certificate in proper form, the secretary of the board shall issue a license entitling the applicant to practice in this State until July first of the following year.

The board may, in its discretion, reduce or waive the above requirements in cases of illness, mental or physical incapacity, retirement from practice, and similar situations.

SECTION 40-2-280. Revocation of certificate or license.

In case of default in payment by a person, the person's certificate of registration as a certified public accountant or license as a public accountant must be revoked by the board upon twenty days' notice in writing by the secretary-treasurer of the time and place of considering the revocation. The deposit of the notice in the United States post office addressed to the person at his last known place of residence or business and registered postage prepaid is presumed to be due and legal service of the notice. No certificate of registration as a certified public accountant or license as a public accountant may be revoked for nonpayment if the person notified pays a penalty as imposed by the board, not exceeding seventy-five dollars. A person whose certificate of registration as a certified public accountant or license as a public accountant has been revoked for failure to pay his renewal fee may apply to have it regranted to him upon payment to the board of penalties established and all renewal fees that should have been paid had the certificate of registration as a certified public accountant or license as a public accountant not been revoked.

SECTION 40-2-290. Disciplinary action.

(A) After notice and hearing pursuant to Section 40-2-310, the board may revoke a certificate as a certified public accountant or license as a public accountant issued under this article; suspend a certificate or license for a period of not more than five years; reprimand, censure, or limit the scope of practice of a certificate holder or licensee; impose an administrative fine not exceeding one thousand dollars; or place a certificate holder or licensee on probation, all with or without terms, conditions, and limitations, for:

(1) fraud or deceit in obtaining a certificate or license;

(2) cancellation, revocation, suspension, or refusal to renew authority to engage in the practice of public accountancy in another state, territory of the United States, or the District of Columbia, for any cause;

(3) revocation or suspension of the right to practice before a state or federal agency;

(4) dishonesty, fraud, or gross negligence in the practice of public accountancy or in the filing or failure to file the certificate holder's or licensee's own income tax returns;

(5) violation of a provision of this article or a regulation promulgated by the board under the authority granted by this article;

(6) violation of a rule of professional conduct promulgated by the board under the authority granted by this article;

(7) conviction of a felony, or a crime, an element of which is dishonesty or fraud, under the laws of the United States, of this State, or any other state if the acts involved would have constituted a crime under the laws of this State. The record of conviction, or a copy of the record, certified by the clerk of court or the judge in whose court the conviction is had, is conclusive evidence of the conviction. The word "conviction" includes a plea of guilty or a plea of nolo contendere;

(8) performance of a fraudulent act while holding a certificate or license under this article; or

(9) conduct reflecting adversely upon the certificate holder's or licensee's fitness to engage in the practice of public accountancy.

(B) In lieu of or in addition to a remedy specifically provided in subsection (A), the board may require one or both of the following requirements of a certificate holder or licensee:

(1) a quality review conducted in a fashion as the board may require; or

(2) satisfactory completion of continuing professional education programs as the board may specify.

A "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 or licenses and who are not affiliated with the person or firm being reviewed.

(C) In a proceeding in which a remedy imposed by subsections (A) and (B) of this section is imposed, the board also may require the respondent certificate holder or licensee to pay the costs of the proceeding.

SECTION 40-2-300. Revocation or suspension of registration or license of partnership.

After notice and hearing, as provided in Section 40-2-310, the board shall revoke the registration or license of a partnership if at any time it does not meet the requirements prescribed by Section 40-2-30 or 40-2-40 and may revoke or suspend the registration or license of a partnership for any of the causes enumerated in Section 40-2-290 or for:

(1) the revocation or suspension of the certificate of registration or the revocation or suspension or refusal to renew the license to practice of a partner; or

(2) the cancellation, revocation, suspension, or refusal to renew the authority of the partnership or a partner to practice public accounting in another state for a cause other than failure to pay an annual registration fee in another state.

SECTION 40-2-310. Proceedings before board.

(A) The board may initiate proceedings under this article either on its own motion or on the complaint of a person.

(B) A written notice, stating the nature of the charge against the accused and the time and place of the hearing before the board on the charge, must be served on the accused not less than thirty days before the date of the hearing, either personally or by mailing a copy by registered mail to the address of the accused last known to the board.

(C) If, after having been served with the notice of hearing as provided for in subsection (D), the accused fails to appear at the hearing and defend, the board may proceed to hear evidence against the accused and may enter an order as is justified by the evidence, which order must be final unless the accused petitions for a review as provided for in subsection (I); however, within thirty days from the date of an order, upon showing of good cause for failing to appear and defend, the board may reopen the proceedings and may permit the accused to submit evidence in his behalf.

(D) At a hearing the accused may appear in person and by counsel produce evidence and witnesses on his own behalf, cross-examine witnesses, and examine evidence as may be produced against him. The accused must be entitled, on application to the board, to the issuance of subpoenas to compel the attendance of witnesses on his behalf.

(E) The board is not bound by technical rules of evidence.

(F) A record of the hearings must be kept and filed with the board.

(G) At all hearings the Attorney General of this State, or one of his assistants designated by him, or other legal counsel as may be employed, shall appear and represent the board.

(H) The decision of the board must be by majority vote, except a decision to revoke the permit must be by unanimous vote of those voting.

(I) A person adversely affected by an order of the board may obtain a review by filing a written petition for review with an administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, within thirty days after the entry of the order. The petition shall state the grounds upon which the review is asked. A copy of the petition must be served upon a member of the board, and the board shall certify and file with the administrative law judge as provided under Article 5 of Chapter 23 of Title 1, a copy of the record upon which the order complained of was entered. The administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, may, in its discretion, stay the effect of the board's order pending its determination of the case.

SECTION 40-2-320. Issuance, reissuance or modification of revoked or suspended certificate or license.

Upon application in writing and after hearing pursuant to notice, the board may issue a new certificate to a certified public accountant whose certificate has been revoked or may permit the reregistration of anyone whose registration has been revoked or may reissue or modify the suspension of a license to practice public accounting which has been revoked or suspended.

SECTION 40-2-330. Registration of offices.

An office established or maintained in this State for the practice of public accounting by a certified public accountant or partnership or professional association of certified public accountants or public accountant or partnership or professional association of public accountants must be registered under this article with the board, but no fee may be charged for registration. An office must be under the direct supervision of a resident manager who may be either a partner or a staff employee holding a license under this article which is in full force and effect. The board must be advised of change of management of an office in each location.

SECTION 40-2-340. Violations.

A person who violates a provision of this article is guilty of a misdemeanor and, upon conviction, must be fined not less than fifty dollars or more than two hundred dollars or imprisoned not less than twenty days or more than sixty days. Each violation constitutes a separate offense and each day's violation constitutes a separate offense.

SECTION 40-2-350. Injunctive relief.

In addition to another remedy or criminal prosecution, if it appears to the board that a person violated a provision of this article or a regulation or order of the board or a law of this State relating to accountancy, the board may file a suit in equity in its own name, or in the name of the State, on its own relation, and by its counsel, with an administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, alleging the facts and praying for a temporary restraining order or permanent injunction against the person, restraining the person from violating the law, regulation, or order, or commanding the person to obey the law, regulation, or order.

Upon proper application, and showing that the person is not registered or that a renewal certificate has not been applied for or that registration has been denied, revoked or suspended, or that the law or regulation or order has been or is about to be violated or disobeyed, which showing may be made by affidavit, the administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, shall issue a temporary restraining order or injunction and, upon final hearing, shall grant and issue an injunction, including mandatory injunction, upon finding the truth and sufficiency of the allegations of the petition. An administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, may enforce the injunction by punishment for contempt and by other process as is permitted to circuit courts and shall make other orders as its discretion and the rules require. The injunction may be limited in time, perpetual or conditional, as may be necessary and proper to the enforcement of this article or the regulations or orders of the board or the law of this State relating to accountancy.

SECTION 40-2-360. Effect of statements, records, etc. made by accountant.

All statements, records, schedules, working papers, and memoranda made by a certified public accountant or public accountant incident to or in the course of professional service to clients, except reports submitted to a client, are the property of the accountant, in the absence of an express agreement between the accountant and the client to the contrary.

SECTION 40-2-370. Construction of statutes or regulations.

If a statute or regulation of a state agency requires that reports, financial statements, audits, and other documents for a department, division, board, commission, or agency of this State be prepared by a certified public accountant, the requirement must be construed to mean licensed public accountants or certified public accountants.

SECTION 40-2-380. Promulgation of regulations.

(A) The board shall promulgate regulations implementing the requirements and reporting for continuing education which must be met by certified public accountants, public accountants, and accounting practitioners. The board shall require no less than sixty hours of continuing educational activities in a two-year period; however, this continuing education requirement shall not prescribe a minimum number of hours in accounting and/or auditing subjects. The board shall require compliance with the regulations as a prerequisite to the issuance of a current license to practice as a certified public accountant, public accountant, or accounting practitioner. The requirements may be waived by the board in individual cases for good cause.

In promulgating these regulations, the board shall recognize the following as meeting the continuing educational requirements:

(1) professional development programs of national and state accounting organizations. Only class hours, or the equivalent, and not students' hours devoted to preparation are counted;

(2) technical sessions at meetings of national and state accounting organizations and their chapters;

(3) courses offered by colleges, universities, technical education centers, and other appropriate educational institutions, including credit and noncredit courses. Each semester-hour credit equals fifteen hours toward the requirement; each quarter-hour credit equals ten hours. In noncredit courses, each classroom hour equals one qualifying hour;

(4) other activities, methods, procedures, devices, and programs which, in the opinion of the board, contribute directly to the professional competence of the licensee.

(B) The board also shall promulgate regulations for forms of practice, contingent fees, and commissions which shall conform to the professional standards of the American Institute of Certified Public Accountants as of December 31, 1996, or the National Association of Boards of Accountancy, or both.

ARTICLE 3.

REGULATION OF ACCOUNTING PRACTITIONERS

SECTION 40-2-510. Persons deemed to be engaged in practice.

A person, firm, or professional association not exempt under Section 40-2-530 is considered to be engaged in the practice of offering to render and rendering to the public the services which are regulated by this article if the person, firm, or professional association:

(1) offers to prospective clients in South Carolina to perform for compensation one or more of these services:

(a) the development, recording, analysis, or presentation of financial information including, but not limited to, the preparation of financial statements; or

(b) advice or assistance in regard to accounting controls, systems, and procedures; and

(2) in any manner holds himself or itself out to the public in South Carolina as skilled in one or more of the types of services described in item (1).

SECTION 40-2-520. Unlicensed practice.

(A) No professional association, person, or partnership, other than a person or partnership holding a permit to practice issued pursuant to this article, may engage in the practice defined in Section 40-2-510 unless he or it plainly indicates on all signs, cards, letterheads, advertisements, and directories used to disclose his or its practice or business that he or it does not hold a license to practice under this article.

(B) No professional association, person, or partnership, other than a person or partnership holding a permit to practice issued pursuant to this article, may assume or use the title or designation "Accounting Practitioner" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person is an accounting practitioner or that the partnership is composed of accounting practitioners or that the person, partnership, or professional association is authorized under this article to engage in the practice defined under Section 40-2-510.

SECTION 40-2-530. Exemptions.

Nothing contained in this article:

(1) applies to a certified public accountant or public accountant who holds a license to practice issued under the law of South Carolina and no provision of this article applies to a partnership of certified public accountants or public accountants which holds a permit to practice issued under South Carolina authority;

(2) applies to a person, firm, or professional association which plainly indicates on all signs, cards, letterheads, advertisements, and directories used to disclose his or its practice or business that he or it does not hold a license to practice under this article;

(3) prohibits a person from serving as an employee of a person, partnership, or professional association if the employee does not engage in the practice defined in Section 40-2-510 on his own account;

(4) prohibits a person, partnership, or professional association from offering to prepare or from preparing a tax return with respect to taxes imposed by a governmental authority, whether federal, state, or local, and this article does not prevent a person from advising clients in connection with tax matters;

(5) prohibits a person, partnership, or professional association holding a license or permit issued by another state, territory, or the District of Columbia, which authorizes the person, partnership, or professional association to engage in the other jurisdiction in the type of practice described in Section 40-2-510, from temporarily practicing in this State as an incident to his or its regular practice outside of this State if the temporary practice is conducted in conformity with the rules of ethical conduct promulgated by the board;

(6) applies to the affixing of the signature or name of an officer, employee, partner, or principal of an organization to a statement or report in reference to the financial affairs of the organization with wording designating the position, title, or office which he holds in the organization, and the provisions of this article do not apply to an act of a public official or public employee in the performance of his duties;

(7) applies to the offering or rendering of data processing services by mechanical or electronic means or to the offering or rendering of services in connection with the operation, sale, lease, rental, or installation of mechanical or electronic bookkeeping or data processing equipment or to the sale, lease, rental, or installation of this equipment.

SECTION 40-2-540. Authority of board.

The South Carolina Board of Accountancy shall examine, license, and discipline accounting practitioners. The board may charge a reasonable fee for examinations, not exceeding the fee charged for certified public accountants' examinations.

SECTION 40-2-550. Applicant qualifications.

In order to be eligible for licensing under this article as an accounting practitioner, an applicant may not hold another license granted under this chapter and must:

(1) not have any history of dishonest or felonious acts;

(2) be a resident of this State or have a place of business in this State, or, as an employee, be regularly employed in this State;

(3) be at least eighteen years of age; and

(4) meet one or more of these requirements:

(a) pass a written examination approved by the board, which is designed to test the applicant's basic knowledge of the subjects described in Section 40-2-510(1) and which may consist of two parts of the examination administered to certified public accountant applicants or another examination as the board may prescribe.

(b) have a bachelor's degree with a major in accounting as determined by the board from a four-year college or university accredited by the Southern Association of Colleges and Schools or from a college or university having equivalent standards as determined by the board.

(c) be licensed and hold a current annual permit to practice in this State as a certified public accountant or public accountant if the person surrenders his license and permit to practice as a certified public accountant or public accountant upon being licensed as an accounting practitioner.

SECTION 40-2-560. Issuance of licenses and permits.

(A) Licenses must be issued by the board to persons satisfying the requirements of Section 40-2-550 upon the payment of a license fee in an amount to be determined by the board.

(B) Permits to engage in the practice defined in Section 40-2-510 must be issued by the board for annual periods expiring on the last day of June to persons and partnerships as follows:

(1) A person holding a license issued pursuant to Section 40-2-510(1)(a), upon payment of a permit fee in an amount to be determined by the board. The board may reduce or waive the fee in case of illness, mental or physical incapacity, retirement from practice, or for similar situations. Failure of a licensee to pay the fee for a permit to practice within three years from the expiration date of the permit to practice last obtained or used or within three years from the date upon which the licensee was granted the license if no permit was ever issued to the person, deprives the person of the right to the permit unless the board determines the failure to have been caused by excusable neglect. The decision of the board is final. A renewal fee for the issuance of the original license must be in an amount the board determines.

(2) Partnerships, without payment of a permit fee, which meet the following standards:

(a) At least one general partner must be an accounting practitioner of this State in good standing.

(b) Each partner must be lawfully engaged in the practice, as defined in Section 40-2-510, in some state of the United States.

(c) Each resident manager in charge of an office must be an accounting practitioner of this State in good standing.

(3) File with the secretary of the board on a form prescribed by the board for this purpose a certificate of compliance with the continuing education requirements necessary for license renewal as required by Section 40-2-380. In case of default in the payment of the license fee by a person, Section 40-2-280 applicable to certified public accountants and public accountants applies in all respects to accounting practitioners.

SECTION 40-2-570. Disciplinary action.

(A) After notice and hearing pursuant to Section 40-2-310 the board may revoke a license or permit as accounting practitioner issued under this article; suspend a license or permit for a period of not more than five years; reprimand, censure, or limit the scope of practice of a license or permit holder; impose an administrative fine not exceeding one thousand dollars; or place a license or permit holder on probation, all with or without terms, conditions, and limitation, for any one or more of these reasons:

(1) fraud or deceit in obtaining a license or permit;

(2) cancellation, revocation, or suspension of, or refusal to renew authority to engage in the practice of public accountancy in another state, territory of the United States, or the District of Columbia for any cause;

(3) revocation or suspension of the right to practice before a state or federal agency;

(4) dishonesty, fraud, or gross negligence in the practice of public accounting or in filing or failure to file the license or permit holder's own income tax return;

(5) violation of a provision of this article or Article 1 or a regulation promulgated by the board under the authority granted by this chapter;

(6) violation of a rule of professional conduct promulgated by the board under the authority granted by this chapter;

(7) conviction of a felony, or any crime an element of which is dishonesty or fraud, under the laws of the United States, of this State, or another state if the acts involved would have constituted a crime under the laws of this State. The record of conviction or a copy of the record, certified by the clerk of court or the judge in whose court the conviction is had, is conclusive evidence of the conviction and "conviction" shall include a plea of guilty or a plea of nolo contendere;

(8) performance of a fraudulent act while holding a license or permit under this article; or

(9) conduct reflecting adversely upon the license or permit holder's fitness to engage in the practice of public accountancy.

(B) In lieu of or in addition to a remedy specifically provided in subsection (A), the board may require one or more of these requirements of a license or permit holder:

(1) a quality review conducted in a fashion as the board may require; or

(2) satisfactory completion of continuing professional education programs as the board may specify.

A "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 or licenses and who are not affiliated with the person or firm being reviewed.

(C) In a proceeding in which a remedy imposed by subsections (A) and (B) is imposed, the board also may require the respondent license or permit holder to pay the costs of the proceeding.

SECTION 40-2-580. Initiation of proceedings; procedures.

The board may initiate proceedings under this article on its own motion or on the complaint of a person, and the procedures provided in Article 1 for these proceedings are applicable and binding in procedures under this article.

SECTION 40-2-590. Violations.

A person who violates a provision of this article is guilty of a misdemeanor and, upon conviction, must be fined not less than fifty dollars or more than two hundred dollars or imprisoned not less than twenty days or more than sixty days. Each violation constitutes a separate offense and each day's violation constitutes a separate offense.

SECTION 40-2-600. Partnerships between public accountants and accounting practitioners.

Nothing contained in this article may be construed to prohibit the formation of partnerships by and between public accountants and accounting practitioners if all members of the partnerships and all resident managers of offices of the partnerships are licensed under this chapter as public accountants or accounting practitioners and if the partnerships apply for an annual permit in the manner prescribed in this article for other partnerships.





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