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S. 491
STATUS INFORMATION
General Bill
Sponsors: Senator McConnell
Document Path: l:\council\bills\nbd\11296ac07.doc
Introduced in the Senate on February 27, 2007
Currently residing in the Senate Committee on Labor, Commerce and Industry
Summary: Accountants
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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2/27/2007 Senate Introduced and read first time SJ-3
2/27/2007 Senate Referred to Committee on Labor, Commerce and Industry
SJ-3
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND SECTION 40-2-10, AS AMENDED, SECTION 40-2-90, SECTION 40-2-340, AS AMENDED, AND ARTICLE 3, CHAPTER 2, TITLE 40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE LICENSURE AND REGULATION OF ACCOUNTANTS, INCLUDING ACCOUNTING PRACTITIONERS, SO AS TO CHANGE THE TERM "ACCOUNTING PRACTITIONER" TO "LICENSED ACCOUNTANT" AND TO REQUIRE A LICENSED ACCOUNTANT TO PASS AN EXAMINATION OFFERED BY THE ACCREDITATION COUNCIL FOR ACCOUNTANCY, OR AN EQUIVALENT EXAMINATION APPROVED BY THE BOARD.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 40-2-10(A) of the 1976 Code, as amended by Act 289 of 2004, is further amended to read:
"(A) There is created the South Carolina Board of Accountancy which is responsible for the administration and enforcement of this chapter. The board shall consist of nine members appointed by the Governor, all of whom must be residents of this State; five of whom must be licensed certified public accountants, two of whom must be licensed public accountants or licensed accounting practitioners, and two of whom must be members of the public 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 are appointed for terms of four years and serve until their successors are appointed and qualify. Vacancies must be filled by the Governor for the unexpired portions of the term. The Governor shall remove a member of the board in accordance with Section 1-3-240."
SECTION 2. Section 40-2-90(A) of the 1976 Code, as added by Act 289 of 2004, is amended to read:
"(A) If the Department of Labor, Licensing and Regulation or the board has reason to believe that a licensee or registrant has violated a provision of this chapter or a regulation promulgated pursuant to this chapter or that a licensee has become unfit to practice as a certified public accountant, or a public licensed accountant, or an accounting practitioner the department shall present its evidence to the board and the board may, in accordance with the Administrative Procedures Act, take action as authorized by law. The board may designate a hearing officer or panel to conduct hearings or take other action as may be necessary."
SECTION 3. Section 40-2-340 of the 1976 Code, as amended by Act 289 of 2004, is further amended to read:
"Section 40-2-340. An accounting practitioner A licensed accountant or a firm of accounting practitioners licensed accountants is permitted to associate his or the firm's name with compiled financial statements as defined by Professional Standards for Accounting and Review Services, provided the following disclaimer is used:
'I (we) have compiled the accompanying balance sheet of XYZ Company as of December 31, XXXX, and the related statements of income, retained earning and cash flows for the year then ended, in accordance with statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A compilation is limited to presenting, in the form of financial statements, information that is the representation of management (owners). I (we) have not audited or reviewed the accompanying financial statements and I am (we are) prohibited by law from expressing an opinion on them'."
SECTION 4. Article 3, Chapter 2, Title 40 of the 1976 Code is amended to read:
Section 40-2-510. 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. (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' 'Licensed Accountant' or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person is an accounting practitioner a licensed accountant or that the partnership is composed of accounting practitioners licensed accountants 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. 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. The South Carolina Board of Accountancy shall examine, license, and discipline accounting practitioners licensed accountants. The board may charge a reasonable fee for examinations, not exceeding the fee charged for certified public accountants' examinations.
Section 40-2-550. In order to be eligible for licensing under this article as an accounting practitioner a licensed accountant, 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 these requirements:
(a) pass an 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 parts of the examination administered to certified public accountant applicants or another examination as the board may prescribe consists of the Accredited Business Accountant examination offered by the Accreditation Council for Accountancy and Taxation or other equivalent nationally accredited examination offered by the same or another vendor designed for the same specific purpose and approved by the board; and
(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;
(5) surrenders, if licensed and holds a current annual permit to practice in this State as a certified public accountant or public accountant, his license and permit to practice as a certified public accountant or public accountant upon being licensed as an accounting practitioner a licensed accountant.
Section 40-2-560. (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) A licensee must file an application for renewal in accordance with Section 40-2-250.
(C) A partnership, firm, or registrant must file an application in accordance with Section 40-2-255.
(D) Partnerships, without payment of a permit fee, which meet the following standards:
(1) at least one general partner must be an accounting practitioner a licensed accountant of this State in good standing;
(2) each partner must be lawfully engaged in the practice, as defined in Section 40-2-520, in a state of the United States;
(3) each resident manager in charge of an office must be an accounting practitioner a licensed accountant of this State in good standing.
Section 40-2-570. (A) After notice and hearing pursuant to Section 40-2-310 the board may revoke a license or permit as accounting practitioner licensed accountant 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 ten 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. 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. 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. Nothing contained in this article may be construed to prohibit the formation of partnerships by and between public accountants and accounting practitioners licensed accountants 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 licensed accountants and if the partnerships apply for an annual permit in the manner prescribed in this article for other partnerships."
SECTION 5. This act takes effect upon approval by the Governor.
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