Bill 582

                    Current Status

Bill Number:                       582
Type of Legislation:               General Bill GB
Introducing Body:                  Senate
Introduced Date:                   19970326
Primary Sponsor:                   Drummond
All Sponsors:                      Drummond and Leatherman 
Drafted Document Number:           res1356.jwd
Companion Bill Number:             3764
Residing Body:                     Senate
Current Committee:                 Labor, Commerce and Industry
                                   Committee 12 SLCI
Subject:                           Accountants, accountancy;
                                   registration, experience
                                   requirements; continuing
                                   education

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

Senate  19980317  Recommitted to Committee                 12 SLCI
Senate  19970522  Committee report: Favorable with         12 SLCI
                  amendment
Senate  19970326  Introduced, read first time,             12 SLCI
                  referred to Committee

Indicates Matter Stricken
Indicates New Matter

COMMITTEE REPORT

May 22, 1997

S. 582

S. Printed 5/22/97--S.

Read the first time March 26, 1997.

To whom was referred a Bill (S. 582), to amend Section 40-2-30, Code of Laws of South Carolina, 1976, relating to use of the title and designations as "Certified Public Accountant", etc., respectfully

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

Amend the bill, as and if amended, Section 40-2-380(B), page 4, line 6, after /standards/ by inserting /, as of December 31, 1996,/.

Amend the bill further by striking SECTION 4 in its entirety and inserting:

/SECTION 4. Within ninety days of this act's effective date, the Board of Accountancy shall promulgate the regulations required by Section 40-2-380(B) as contained in SECTION 3 of this act./

Renumber sections to conform.

Amend title to conform.

J. VERNE SMITH, for Committee.

A BILL

TO AMEND SECTION 40-2-30, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO USE OF THE TITLE AND DESIGNATIONS AS "CERTIFIED PUBLIC ACCOUNTANT" AND THE FORM OF PRACTICES THAT MAY BE USED, SO AS TO DELETE SPECIFIC PROVISIONS REGARDING THE FORM OF PRACTICE IN ORDER FOR THE FIRM TO HOLD ITSELF OUT AS A PARTNERSHIP; TO AMEND SECTION 40-2-190, RELATING TO REGISTRATION REQUIREMENTS, SO AS TO DELETE THE PROVISION THAT THE EXPERIENCE REQUIREMENT MUST BE EXPERIENCE SATISFACTORY TO THE SOUTH CAROLINA BOARD OF ACCOUNTANCY, TO PROHIBIT A MINIMUM EXPERIENCE REQUIREMENT FOR AUDITING FINANCIAL STATEMENTS; TO AMEND SECTION 40-2-380, RELATING TO THE PROMULGATION OF REGULATIONS BY THE BOARD OF ACCOUNTANCY SO AS TO REQUIRE THAT THE REGULATIONS CONFORM TO AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS STANDARDS FOR CONTINGENT FEES, COMMISSIONS, AND FORMS OF PRACTICE, AND TO PROHIBIT THE BOARD FROM REQUIRING A MINIMUM NUMBER OF HOURS OF CONTINUING EDUCATION IN ACCOUNTING OR AUDITING SUBJECTS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 40-2-30 of the 1976 Code is amended to read:

"Section 40-2-30. (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 partner personally engaged within this State in the practice of public accounting as a member of the partnership is a certified public accountant of this State in good standing;

(3) Each partner is a certified public accountant in good standing of some state of the United States;

(4) (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 2. The fourth unnumbered paragraph of Section 40-2-190 of the 1976 Code is amended to read:

"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 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). 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; however, this experience shall not require a minimum number of hours in auditing financial statements."

SECTION 3. Section 40-2-380 of the 1976 Code is amended to read:

"Section 40-2-380. 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 which conform to the American Institute of Certified Public Accountants professional standards for contingent fees, commissions, and form of practice."

SECTION 4. Until such time as the Board of Accountancy promulgates regulations as required by Section 40-2-380(B) of the 1976 Code, as added by Section 3 of this act, the professional standards of the American Institute of Certified Public Accountants for contingent fees, commissions, and forms of practice apply to persons licensed as accountants pursuant to Chapter 2, Title 40 of the 1976 Code.

SECTION 5. This act takes effect upon approval by the Governor.