Current Status Bill Number:View additional legislative information at the LPITS web site.3427 Ratification Number:497 Act Number:447 Introducing Body:House Subject:Relating to the regulation of certified public accountants, public accountants, and accounting practitioners
(A447, R497, H3427)
AN ACT TO AMEND SECTIONS 40-1-190, 40-1-200, 40-1-240, AND 40-1-560, ALL AS AMENDED, AND 40-1-50, 40-1-150, 40-1-180, 40-1-250, 40-1-360, 40-1-510, 40-1-520, 40-1-530, AND 40-1-550, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REGULATION OF CERTIFIED PUBLIC ACCOUNTANTS, PUBLIC ACCOUNTANTS, AND ACCOUNTING PRACTITIONERS, SO AS TO CHANGE REFERENCES FROM CORPORATION TO PROFESSIONAL ASSOCIATION; PROVIDE THAT THE BOARD OF ACCOUNTANCY COLLECT FEES AND DEPOSIT THE FEES IN THE GENERAL FUND OF THE STATE; PROVIDE THAT AN APPLICANT FOR EXAMINATION MUST DEMONSTRATE THAT HE DOES NOT HAVE A HISTORY OF DISHONEST OR FELONIOUS ACTS AND THAT HE HAS A BACCALAUREATE DEGREE AND A MINIMUM OF TWENTY-FOUR HOURS OR THE EQUIVALENT IN ACCOUNTING AND PROVIDE FOR A WAIVER OF EDUCATIONAL REQUIREMENTS FOR A PUBLIC ACCOUNTANT WHO IS PRACTICING ON JULY 1, 1965; PROVIDE THAT THE DATES SET IN A NEWSPAPER FOR THE EXAMINATION TO PRACTICE AS A CERTIFIED PUBLIC ACCOUNTANT MUST APPEAR IN THE NEWSPAPER BY SEPTEMBER FIRST FOR THE NOVEMBER EXAMINATION AND BY MARCH FIRST FOR THE MAY EXAMINATION AND THE APPLICATION MUST BE SUBMITTED ON THESE DATES AND TO INCREASE THE INITIAL EXAMINATION FEE FOR A CERTIFIED PUBLIC ACCOUNTANT FROM ONE HUNDRED DOLLARS TO TWO HUNDRED DOLLARS AND THE FEE FOR REEXAMINATION FROM FORTY DOLLARS TO EIGHTY DOLLARS; PROVIDE THAT THE FEE FOR A CERTIFICATE OF REGISTRATION AS A CERTIFIED PUBLIC ACCOUNTANT IS FIXED BY THE BOARD INSTEAD OF TWENTY-FIVE DOLLARS; PROVIDE THAT THE WAIVER OF EXAMINATION FOR A CERTIFIED PUBLIC ACCOUNTANT DOES NOT APPLY TO A PERSON WHO HOLDS A CERTIFICATE OR DEGREE OF A FOREIGN COUNTRY; PROVIDE THAT THE FEE FOR NONRESIDENT CERTIFIED PUBLIC ACCOUNTANT IS FIXED BY THE BOARD INSTEAD OF THIRTY-EIGHT DOLLARS; TO MAKE A TECHNICAL CORRECTION BY STRIKING COURT AND INSERTING COURSE; REMOVE THE GRANDFATHER PROVISIONS FOR ACCOUNTING PRACTITIONERS WHO ARE LICENSED TO PRACTICE AS OF JUNE 11, 1969, OR JULY 1, 1970, RESPECTIVELY, AND TO STRIKE A SIMILAR PROVISION FOR MEMBERS OF THE ARMED FORCES; PROVIDE THAT DEFAULT IN PAYMENT OF THE LICENSE FEE BY AN ACCOUNTING PRACTITIONER SHALL RESULT IN REVOCATION OF THE CERTIFICATE OF REGISTRATION OR LICENSE; REAUTHORIZE THE EXISTENCE OF THE SOUTH CAROLINA BOARD OF ACCOUNTANCY; AND TO REPEAL SECTION 40-1-260 RELATING TO PERSONS ENTITLED TO REGISTRATION AS A PUBLIC ACCOUNTANT UNTIL JANUARY 1, 1972.
Be it enacted by the General Assembly of the State of South Carolina:
Regulation of certified public accountants
SECTION 1. Section 40-1-50 of the 1976 Code is amended to read:
"Section 40-1-50. (a) No person shall sign or affix his name or any trade or assumed name used by him in his profession or business, or a partnership name, with any wording indicating that he is a certified public accountant or public accountant, or that such partnership is composed of certified public accountants or public accountants, or with any wording indicating that he has, or such 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 any representation in regard to any person or organization embracing (1) financial information or (2) 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. The provisions of this subsection do not prohibit any officer, employee, partner, or principal of any organization from affixing his signature to any 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, nor do the provisions of this subsection prohibit any act of a public official or public employee in the performance of his duties as such.
(b) No person, not registered or licensed under this article, shall sign or affix the name of a professional association with any 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 any opinion or certificate attesting in any way to the existence or nonexistence of facts in regard to any person or organization including, but not limited to, facts relating to financial position and results of operations and facts relating to compliance with any contract, law, ordinance, or regulation.
(c) No person, partnership, or professional association not registered or licensed under this article shall permit his or its name to be associated with statements purporting to show financial position or results of operations in regard to any person or organization in such manner as to imply that he has, or it is composed of, persons having expert knowledge in accounting or auditing, or in such manner as to state or imply that he or it is licensed under Article 3 of this chapter unless he or it declaims an opinion on the statements and in connection therewith 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. The provisions of this subsection do not require any officer, employee, partner, or principal of any organization affixing his signature to any statement or report in reference to the financial affairs of such organization with any wording designating the position, title, or office which he holds in the organization to state such a disclaimer, nor do the provisions of this subsection apply to any act of a public official or public employee in the performance of his duties as such.
(d) No person or partnership not registered or licensed under this article, and no professional association, shall 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 such words on any sign, card, letterhead, or in any advertisement or directory, without plainly indicating thereon or therein that the person, partnership, or professional association does not hold a registration or license. This subsection does not prohibit any officer, employee, partner, or principal of any organization from describing himself by the position, title, or office he holds in such organization, nor does this subsection prohibit any act of a public official or public employee in the performance of his duties as such.
(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'. Any 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 out to the public as an 'accountant' or 'auditor' or, as the case may be, as a firm of accountants or auditors."
Fees
SECTION 2. Section 40-1-150 of the 1976 Code is amended to read:
"Section 40-1-150. 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."
Applicants
SECTION 3. Section 40-1-180 of the 1976 Code is amended to read:
"Section 40-1-180. Each applicant making application for examination shall submit evidence satisfactory to the Board that he (a) is a bona fide resident of this State at least eighteen years of age and (b) does not have any history of dishonest or felonious acts and (c) has 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.
The educational requirements are waived for a candidate who is a South Carolina public accountant duly licensed and in good standing under this article or who, on July 1, 1965, was practicing as a public accountant or who was then employed as a staff accountant in this State by anyone practicing public accounting."
Examination
SECTION 4. Section 40-1-190 of the 1976 Code, as last amended by Act 457 of 1982, is further amended to read:
"Section 40-1-190. The examination described in Section 40-1-170 must be held by the Board at least once each year.
The Board shall advertise the dates of the examinations at least eight weeks prior to 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 40-1-170 shall have 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 two years of accounting experience under the direct supervision and review of a certified public accountant or public accountant licensed to practice, whether in public, governmental, or private employment. The experience must include experience, satisfactory to the Board, in applying generally accepted auditing standards to financial statements prepared in accordance with generally accepted accounting principles.
The Board may by regulation provide for granting a credit to a candidate for satisfactory completion of a written examination in any one or more of the subjects provided in Section 40-1-170 given by the licensing authority in any other state of the United States if at the time he took the examination he was not a resident of this State. The regulation must include requirements as the Board determines appropriate in order that any examination approved as a basis for any such 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 may by regulation prescribe the terms and conditions under which a candidate who passes the examination in one or more of the subjects provided by Section 40-1-170 may be reexamined in only the remaining subjects, with credit for the subjects previously passed. It may also provide by regulation for a reasonable waiting period for a candidate's reexamination in a subject he has failed.
The educational requirement must be 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.
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 40-1-170.
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 prior to the date of the examination. Beginning in 1986 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."
Certificates of registration
SECTION 5. Section 40-1-200 of the 1976 Code, as last amended by Act 436 of 1980, is further amended to read:
"Section 40-1-200. 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.
Any 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 may also use the designation 'CPA'. Any certified public accountant may also be known as a 'public accountant'. The Board shall maintain a list of certified public accountants.
Any 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 may also use the designation 'PA'. The Board shall maintain a list of public accountants."
Examination may be waived
SECTION 6. Section 40-1-240 of the 1976 Code, as last amended by Act 436 of 1980, is further amended to read:
"Section 40-1-240. The Board may, upon application in writing, waive the examination referred to in Section 40-1-170 and issue a certificate to any person who has the qualifications required by this article and the regulations of the Board when the person submits to the Board evidence as to such qualifications required by the Board and when (a) the person for not less than one year has been the holder of a certificate, license, or degree in another state constituting a recognized qualification for the practice of public accounting in that state and (b) the standards prescribed by law or the regulations and examinations conducted in that state are, in the opinion of the Board, fully equivalent to the standards in this State.
Any nonresident obtaining a certificate in this State under the provisions of this section shall pay such application, certificate, and license fees as are required of bona fide residents of this State and is subject to such regulations and restrictions as are required of bona fide residents who are recipients of certificates of registration under this article."
Persons holding certificates in any state may
practice
SECTION 7. Section 40-1-250 of the 1976 Code is amended to read:
"Section 40-1-250. Any person who holds a valid and unrevoked certificate as a certified public accountant issued under the authority of any state of the United States or who lawfully practices as a registered and licensed public accountant in any 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, as the case may be, if he registers with the Board and complies with its regulations regarding such registration. A fee to be fixed by the Board must be charged for such 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, as the case may be, 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."
Statements, reports, etc. property of
accountant
SECTION 8. Section 40-1-360 of the 1976 Code is amended to read:
"Section 40-1-360. 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."
Regulation of accountants
SECTION 9. Section 40-1-510 of the 1976 Code is amended to read:
"Section 40-1-510. A person, firm, or professional association, not exempted under Section 40-1-530 of this article, 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:
(a) who offers to prospective clients in South Carolina to perform for compensation, services of one or more of the following types:
(1) the development, recording, analysis, or presentation of financial information including, but not limited to, the preparation of financial statements; or
(2) advice or assistance in regard to accounting controls, systems, and procedures; and
(b) who 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 subsection (a) above."
Accountants must be licensed
SECTION 10. Section 40-1-520 of the 1976 Code is amended to read:
"Section 40-1-520. (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 40-1-510 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, shall 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 such person is an accounting practitioner or that such partnership is composed of accounting practitioners or that such person, partnership, or professional association is authorized under this article to engage in the practice defined under Section 40-1-510."
Applicability of article
SECTION 11. Section 40-1-530 of the 1976 Code is amended to read:
"Section 40-1-530. Nothing contained in this article:
(a) applies to any certified public accountant or public accountant who holds a license to practice as such issued under the law of South Carolina, nor does any provision of this article apply to any partnership of certified public accountants or public accountants which holds a permit to practice such as issued under South Carolina authority.
(b) applies to any 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.
(c) prohibits any person from serving as an employee of any person, partnership, or professional association provided that the employee does not engage in the practice defined in Section 40-1-510 on his own account.
(d) prohibits any person, partnership, or professional association from offering to prepare, or from preparing, any tax return with respect to any tax imposed by any governmental authority, whether federal, state, or local, nor does this article prevent any person from advising clients in connection with tax matters.
(e) prohibits any person, partnership, or professional association holding a license or permit issued by another state, territory, or the District of Columbia, which license or permit authorizes the person, partnership, or professional association to engage in such other jurisdiction in the type of practice described in Section 40-1-510, from temporarily practicing in this State as an incident to his or its regular practice outside of this State if such temporary practice is conducted in conformity with the rules of ethical conduct promulgated by the Board.
(f) applies to the affixing of the signature or name of any officer, employee, partner, or principal of any organization to any statement or report in reference to the financial affairs of such organization with any wording designating the position, title, or office which he holds in the organization, nor do the provisions of this article apply to any act of a public official or public employee in the performance of his duties as such.
(g) applies to the offering or rendering of data processing services by mechanical or electronic means, nor 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, nor to the sale, lease, rental, or installation of such equipment."
Eligibility
SECTION 12. Section 40-1-550 of the 1976 Code is amended to read:
"Section 40-1-550. In order to be eligible for licensing under this article as an accounting practitioner, an applicant shall not hold any other license granted under this chapter and must:
(a) not have any history of dishonest or felonious acts;
(b) be a resident of this State or have a place of business herein, or, as an employee, be regularly employed herein;
(c) be at least eighteen years of age; and
(d) meet the requirements in one or more of subitem (1), (2), or (3) specified below:
(1) pass a written examination approved by the Board, which is designed to test the applicant's basic knowledge of the subjects described in subitems (1) and (2) of Section 40-1-510 (a), and which may consist of two parts of the examination administered to certified public accountant applicants or such other examination as the Board may prescribe.
(2) 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.
(3) be licensed and hold a current annual permit to practice in this State as a certified public accountant or public accountant if such person surrenders his license and permit to practice as a certified public accountant or public accountant upon being licensed as an accounting practitioner."
Certificate of compliance
SECTION 13. Item (3) of subsection (b) of Section 40-1-560 of the 1976 Code, as last amended by Act 279 of 1984, is further amended to read:
"(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 40-1-380. In case of default in the payment of the license fee by any person, the provisions of Section 40-1-280 applicable to certified public accountants and public accountants apply in all respects to accounting practitioners."
Board reauthorized
SECTION 14. In accordance with the provisions of Section 7 of Act 608 of 1978, the South Carolina Board of Accountancy is reauthorized for six years.
Repeal
SECTION 15. Section 40-1-260 of the 1976 Code is repealed.
Time effective
SECTION 16. This act shall take effect upon approval by the Governor.