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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-2-12 SO AS TO PROVIDE THAT THE BOARD OF ACCOUNTANCY SHALL HIRE AN EXECUTIVE DIRECTOR TO PERFORM CERTAIN FUNCTIONS AND AN INVESTIGATOR TO CONDUCT INVESTIGATIONS, AND THE SECRETARY OF STATE SHALL PROVIDE COUNSEL TO THE BOARD AND EMPLOY OTHER COUNSEL AS IT CONSIDERS NECESSARY; BY ADDING SECTION 40-2-14 SO AS TO PROVIDE THE RESPONSIBILITIES OF THE OFFICE OF THE SECRETARY OF STATE TO THE BOARD; BY ADDING SECTION 40-2-16 SO AS TO PROVIDE THE DISPOSITION OF CERTAIN REVENUE RECEIVED BY THE SECRETARY OF STATE, AND CERTAIN REQUIREMENTS FOR THE BUDGET; BY ADDING SECTION 40-2-115 SO AS TO PROVIDE THE BOARD'S JURISDICTION; BY ADDING SECTION 40-2-195 SO AS TO MAKE CERTAIN COMMUNICATIONS OF THE BOARD PRIVILEGED; BY ADDING SECTION 40-2-205 SO AS TO PROVIDE A VIOLATION CONSTITUTES A MISDEMEANOR SUBJECT TO CERTAIN PENALTIES; BY ADDING SECTION 40-2-515 SO AS TO PROVIDE A DISCLAIMER FOR AN ACCOUNTING PRACTITIONER TO USE WHEN ASSOCIATING HIS NAME WITH CERTAIN FINANCIAL STATEMENTS COMPILED BY HIM; TO AMEND SECTION 40-1-40, RELATING TO CERTAIN BOARDS ADMINISTERED BY THE DEPARTMENT OF LABOR, LICENSING AND REGULATION, SO AS TO REMOVE THE BOARD OF ACCOUNTANCY FROM THE LIST OF BOARDS ADMINISTERED BY THE DEPARTMENT; TO AMEND SECTION 40-2-10, AS AMENDED, RELATING TO THE SOUTH CAROLINA BOARD OF ACCOUNTANCY, SO AS TO PROVIDE THAT THE BOARD IS CREATED UNDER THE OFFICE OF THE SECRETARY OF STATE, TO DEVOLVE THE DUTIES, RESPONSIBILITIES, AND FUNCTIONS OF THE EXISTING BOARD TO THE NEW BOARD, AMONG OTHER THINGS; TO AMEND SECTION 40-2-20, AS AMENDED, RELATING TO CERTAIN DEFINITIONS, SO AS TO REMOVE THE DEFINITION OF "DEPARTMENT" AND PROVIDE A DEFINITION FOR "SECRETARY"; TO AMEND SECTION 40-2-70, AS AMENDED, RELATING TO POWERS AND DUTIES OF THE BOARD, SO AS TO REMOVE LANGUAGE MAKING THE BOARD'S POWERS CUMULATIVE TO GENERAL POWERS AND DUTIES OF BOARDS DESCRIBED IN SECTION 40-1-70; TO AMEND SECTION 40-2-80, AS AMENDED, RELATING TO INVESTIGATIONS OF COMPLAINTS ALLEGING VIOLATIONS, SO AS TO SUBSTITUTE "SECRETARY OF STATE" FOR "DEPARTMENT", AND TO PROVIDE DISCIPLINARY ACTIONS THE BOARD MAY TAKE FOR A VIOLATION; TO AMEND SECTION 40-2-90, RELATING TO HEARING PROCEDURES FOR A VIOLATION, SO AS TO SUBSTITUTE "SECRETARY OF STATE" FOR "DEPARTMENT"; TO AMEND SECTION 40-2-100, AS AMENDED, RELATING TO EQUITABLE REMEDIES AVAILABLE FOR A VIOLATION; TO AMEND SECTION 40-2-110, AS AMENDED, RELATING TO REVOCATION, SUSPENSION, OR PROBATION OF A LICENSE, SO AS TO MODIFY THE PENALTIES AVAILABLE FOR A VIOLATION BY A LICENSEE; TO AMEND SECTION 40-2-170, AS AMENDED, RELATING TO THE COST OF INVESTIGATING AND PROSECUTING AN ALLEGED VIOLATION, SO AS TO PROVIDE FAILURE TO TIMELY MAKE AN ORDERED PAYMENT WILL RESULT IN COLLECTION OF RELATED COSTS IN ACCORDANCE WITH SECTION 40-2-180 RATHER THAN SECTION 40-1-180; TO AMEND SECTION 40-2-180, AS AMENDED, RELATING TO UNPAID COSTS BECOMING JUDGMENT, SO AS TO SUBSTITUTE "SECRETARY OF STATE" FOR "DEPARTMENT", AND TO REMOVE LANGUAGE PROVIDING A COST OR FINE IMPOSED MUST BE PAID IN ACCORDANCE WITH SECTION 40-1-180; TO AMEND SECTION 40-2-210, AS AMENDED, RELATING TO EQUITABLE REMEDIES AVAILABLE FOR A VIOLATION OF THE LICENSING AND REGULATION REQUIREMENTS OF THIS CHAPTER, SO AS TO REMOVE LANGUAGE REQUIRING A REMEDY BE MADE PURSUANT TO SECTION 40-1-210; TO AMEND SECTION 40-2-570, AS AMENDED, RELATING TO DISCIPLINARY ACTION AVAILABLE TO THE BOARD FOR A VIOLATION, SO AS TO REMOVE LANGUAGE REQUIRING A HEARING BE MADE PURSUANT TO SECTION 40-2-310; TO AMEND SECTION 40-2-580, AS AMENDED, RELATING TO INITIATION OF PROCEEDINGS, SO AS TO REMOVE LANGUAGE PROVIDING A PROCEDURE AVAILABLE IN ARTICLE 1, CHAPTER 40 IS APPLICABLE AND BINDING ON A PROCEDURE IN THIS ARTICLE; AND TO REPEAL SECTION 40-2-340 RELATING TO A CERTAIN DISCLAIMER.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-12. (A) The board shall employ an executive director who shall serve at the pleasure of the Secretary of State. The executive director shall direct the affairs of the board; keep records of all proceedings, transactions, communications, and official acts of the board; be custodian of all records of the board; and perform duties that the board may require. The executive director shall call a meeting of the board at the direction of the chair of the board or upon the written request of three or more board members.
(B) The board shall employ an investigator who shall conduct investigations at the direction of the board and other staff necessary to carry out the requirements of this chapter.
(C) The Office of the Secretary of State shall provide counsel to the board. In addition, subject to the approval of the Secretary of State, the board may employ other counsel as it considers necessary."
SECTION 2. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-14. (A)(1) The Office of the Secretary of State is responsible for all administrative, fiscal, investigative, inspectional, clerical, secretarial, and license renewal operations and activities of the board.
(2) The Secretary shall employ and supervise personnel necessary to effectuate the provisions of this article for the board. When hiring a person charged with evaluating or administering professional qualifications or licensing standards, the Secretary may select from a list of three candidates submitted by the board. The authority to remove an employee of the Office of the South Carolina Secretary of State is vested with the Secretary.
(3) The Secretary shall establish compensation for personnel assigned to the board as he considers necessary and appropriate for the administration of this article. Compensation and necessary expenses incurred in the performance of duties by personnel assigned to the board must be paid as an expense of the board in the administration of this article.
(4) The Secretary shall enter into contracts and agreements the Secretary considers necessary or incidental to carry out the provisions of this article to provide for all services required by the board.
(5) A board member must be compensated for his services at the usual rate for mileage, subsistence, and per diem as provided by law for members of state boards, committees, and commissions. Board members may be reimbursed for actual and necessary expenses incurred in connection with and as a result of their work as members of the board. The Secretary, within the limits set by the Comptroller General, shall establish reimbursement standards for travel and other expenses incurred by a board member in the performance of the board member's official duties. Compensation and reimbursements paid to a board member under this subsection must be paid as an expense of the board in the administration of this article and the board's chapter and must be paid from the fees received by the board pursuant to the provisions of this article or in a manner prescribed by the Secretary.
(6) The Secretary shall maintain a separate account for funds collected on behalf of the board and shall indicate the expenses allotted to the board. The Secretary may perform additional administrative functions requested by the board.
(B)(1) The Secretary shall keep a record of the proceedings of the board and shall maintain a registry of all applications for licensure and registration. The registry shall include the name, age, and last known address of an applicant; the place of business of the applicant; the education, experience, and other qualifications of the applicant; the type of examination required; whether or not an authorization to practice was granted; the date of the action of the Secretary; and other information considered necessary by the board.
(2) Except as otherwise required by law, the record of the board's proceedings and its registry of applicants must be open to public inspection, and a copy of the registry must be provided upon request and payment of a fee.
(3) Records of the board and its registry are prima facie evidence of its proceedings, and a copy certified by the Secretary under seal is admissible as evidence with the same force and effect as the original.
(C) The Secretary may prepare and publish a roster for the board containing the names and places of businesses of persons licensed under this article. A copy of the roster must be provided upon request and upon payment of a fee that may not exceed the cost of printing and distribution of the roster.
(D)(1) Initial fees for the board must be established by the board and shall serve as the base for necessary administrative adjustments. The board, on at least an annual basis, shall provide the Secretary with a statement of anticipated expenditures, program changes, and other information that may be used in determining fees for the next annual period.
(2) Fees for the board must be assessed, collected, and adjusted on behalf of the board by the Secretary in accordance with this article. Fees may be adjusted annually to ensure that they are sufficient but not excessive to cover expenses, including the total of the direct and indirect costs to the State, for the operation of the board. Fees must be deposited in accounts established for the board.
(3) The following steps must be used in the development and analysis of fee structures:
(a) Determine current financial position of the program. Each month, the Office of the Secretary of State's administrative section shall prepare statements reflecting monthly revenue collection activity and related program expenses for each board program. The financial standing of a board program must be reviewed annually.
(b) Project future activity and related costs of the program. By reviewing historical volume information and adjusting trends to reflect changes in the industry, changes in the program, indicators from the board members to the staff, and general economic indicators, project program activity including, but not limited to, renewals and new applicants for the upcoming two to three years. Based on these population projections, forecast program revenues using the current fee structure. With input from the board and the staff, analyze related program direct board costs for the upcoming two to three years, based on historical trends, changes in program requirements, changes to expenditure centers, and changes in staffing requirements. To these direct costs, add the program's proportionate share of other related costs of the program including, but not limited to, administration of exams, agency administration, and information systems to arrive at the total program cost.
(c) Determine the projected financial position of the program, propose changes where necessary, and compare the total projected revenue at the current fees to the total projected costs of the program over the next two to three years. If the current fees and the projected program activity do not support the projected program's expenses, develop alternative fee structures that would ensure the program's continuing financial stability as required by law.
(d) Present findings to the Secretary and staff for discussion, revision, evaluation, and adoption. While developing fee analyses, maintain communications with staff and agency management to ensure all necessary factors are evaluated and cost savings, efficiencies, and alternative cost-reduction scenarios are pursued. Present fee analyses to board staff and management for discussion and revision where necessary. Propose alternatives to the Secretary for consideration when preparing to adopt proposed fee schedules to achieve a structure sufficient to support the program.
(e) All fees are nonrefundable.
(E) Where appropriate, the Secretary shall adopt the necessary procedures to implement the annual renewal of authorizations to practice in a manner as to ensure that the number of renewals is reasonably and evenly distributed throughout each two-year period. During any transition, fees must be proportionate to the annual fee.
(F)(1) The board may elect to delegate to the Secretary the authority to issue an authorization to practice to an applicant whose proof of qualifications falls within established guidelines set by the board.
(2) The board may elect to delegate to the Secretary the authority to deny an authorization to practice to an applicant who has committed an act that would be grounds for disciplinary action under this article or the licensing act of the board, who has failed to comply with a final order of a board, or who has failed to demonstrate the basic qualifications or standards for practice authorization contained in the board's licensing act. The applicant may appeal the denial to the board that has final regulatory decision-making authority for reconsideration. The board may uphold the denial, order issuance of the authorization to practice, or order issuance of the authorization to practice upon conditions set by the board. If the administrative decision is upheld, the applicant may reapply at the end of a twelve-month period.
(G) The Secretary shall suspend an authorization to practice issued pursuant to this article if the person to whom the authorization was granted submits to the board a check, money draft, or similar instrument for payment of a fee which is not honored by the financial institution named. The suspension becomes effective ten days following delivery by certified mail of written notice of the dishonor and the impending suspension to the person's address. Upon notification of suspension, the person may reinstate the authorization to practice upon payment of the fee and penalties required under statute or regulation. This suspension is exempt from the Administrative Procedures Act.
(H) The Office of the Secretary of State may prepare an annual report for submission to the Governor and the General Assembly. It is the duty of the Secretary to notify and seek approval of the board at least thirty days in advance of filing with Legislative Council as required by Section 1-23-30 of a proposed change in a regulation which may affect the practice or service of the licensing board."
SECTION 3. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-16. (A) Administrative fee and fine revenue received pursuant to this chapter in a fiscal year may be retained by the Secretary of State to offset the expenses of enforcing this chapter. A fee collected pursuant to this chapter must be transmitted to the State Treasurer and deposited in a fund separate and distinct from the state general fund and used by the Secretary for the purpose of administering the provisions of this chapter.
(B) The budget of the board must include adequate funds for the expenses of administering the provisions of this chapter, which may include, but are not limited to, the costs of conducting investigations, of taking testimony, and of procuring the attendance of witnesses before the board or its committees; all legal proceedings undertaken for the enforcement of this chapter; participation in national efforts to regulate the accounting profession; and educational and licensing programs for the benefit of the public, the licensees, and their employees. Initial fees must be established by the board and shall serve as the basis for necessary adjustments in accordance with Section 40-2-14(D)."
SECTION 4. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-115. The board has jurisdiction over the actions committed or omitted by current and former licensees during the entire period of licensure. The board has jurisdiction to act on a matter that arises during the authorization to practice period."
SECTION 5. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-195. (A) A communication, whether oral or written, made by or on behalf of a person to the Secretary, board, or a person designated by the Secretary or board to investigate or hear matters relating to the discipline of a licensee, whether by complaint or testimony, is privileged and no action or proceeding, civil or criminal, may be brought against the person by or on whose behalf the communication is made, except upon proof that the communication was made with malice.
(B) Nothing in this article may be construed as prohibiting the respondent or the respondent's legal counsel from exercising the respondent's constitutional right of due process under the law or as prohibiting the respondent from normal access to the charges and evidence filed against the respondent as part of due process under the law.
(C) Notwithstanding the provisions of this section, a final order of the board disciplining a licensee or revoking the registration of a firm is public information."
SECTION 6. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-205. A person who practices or offers to practice a regulated profession or occupation in this State in violation of this article or who knowingly submits false information for the purpose of obtaining a license is guilty of a misdemeanor and, upon conviction, must be imprisoned not more than one year or fined not more than fifty thousand dollars."
SECTION 7. Article 1, Chapter 2, Title 40 of the 1976 Code is amended by adding:
"Section 40-2-515. An accounting practitioner or firm of accounting practitioners 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 8. Section 40-1-40 of the 1976 Code is amended to read:
"Section 40-1-40. (A) The purpose of the Division of Professional and Occupational Licensing, South Carolina Department of Labor, Licensing and Regulation, is to protect the public through the regulation of professional and occupational licensees and the administration of boards charged with the regulation of professional and occupational practitioners.
(B) The following boards and the professions and occupations they license or otherwise regulate must be administered by the Department of Labor, Licensing and Regulation pursuant to this article:
Board of Accountancy
Board of Architectural Examiners
Athletic Commission
Auctioneers Commission
Board of Barber Examiners
Accessibility Committee of the Building Codes Council
Building Code Council
Board of Chiropractic Examiners
Contractors' Licensing Board
Board of Cosmetology
Board of Dentistry
Engineers and Land Surveyors Board
Environmental Certification Board
Board of Registration for Foresters
Board of Funeral Service
Board of Registration for Geologists
Manufactured Housing Board
Board of Medical Examiners
Modular Buildings Board of Appeals
Board of Nursing
Long Term Health Care Administrators Board
Board of Occupational Therapy
Board of Examiners in Opticianry
Board of Examiners in Optometry
Board of Pharmacy
Board of Physical Therapy Examiners
Pilotage Commission
Board of Podiatry Examiners
Board of Examiners for Licensure of Professional Counselors and Marital and Family Therapists
Board of Examiners in Psychology
Board of Pyrotechnic Safety
Real Estate Appraisers Board
Real Estate Commission
Residential Builders Commission
Board of Social Work Examiners
Board of Examiners in Speech-Language Pathology and Audiology
Board of Veterinary Medical Examiners
(C) Each regulatory board within the department is a separate board.
(D) The Department of Labor, Licensing and Regulation is a member of the Governor's executive cabinet and must be headed by a director who must be appointed by the Governor with the advice and consent of the Senate, subject to removal from office by the Governor pursuant to Section 1-3-240(B). The director shall supervise the department under the direction and control of the Governor and shall exercise other powers and perform other duties as the Governor requires."
SECTION 9. Section 40-2-10 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-10. (A)(1) There is created a Board of Accountancy within the Office of the Secretary of State.
(2) The Board of Accountancy established in subsection (A) and previously operating in the Department of Labor, Licensing and Regulation, is continued and reestablished as a new board in the Office of the Secretary of State. The duties, functions, and responsibilities of the Board of Accountancy are devolved upon the Office of the Secretary of State effective July 1, 2008. All personnel, files, property, appropriations, carry forward funds from the Board of Accountancy, and full-time equivalent positions of the Department of Labor, Licensing and Regulation supporting the Board of Accountancy also must be transferred to the Office of the Secretary of State effective July 1, 2008. The staff must be hired and supervised by the Secretary of State or the his designee, and shall continue to exercise their present Department of Labor, Licensing and Regulation duties and responsibilities under the auspices of the Office of the Secretary of State and shall perform other functions and duties as the Secretary of State prescribes.
(3) The State Budget and Control Board shall assist with actions necessary to accomplish this transfer in consultation with the agency heads of the transferring and receiving agencies.
(4) The Office of the Secretary of State shall have the responsibility of enforcing this chapter and may by regulation establish rules and procedures for the implementation of the provisions of this chapter.
(B) There is created the South Carolina Board of Accountancy which The board is responsible for the administration and enforcement of this chapter. The board and shall consist of nine members appointed by the Governor, all of whom:
(1) all must be residents of this State;
(2) five of whom must be licensed certified public accountants,;
(3) two of whom must be licensed public accountants or licensed accounting practitioners,; and
(4) two of whom must be members of the public who are not engaged in the practice of public accounting, have no without a financial interest in the profession of public accounting, and have no without an 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).
(C) Members are A member is appointed for terms a term of four years and serve serves until their successors are his successor is appointed and qualify qualified. Vacancies A vacancy must be filled by the Governor for the unexpired portions portion of the term. The Governor shall remove a member of the board in accordance with Section 1-3-240.
(B)(D) The board annually shall elect annually from among its members a chairman, a vice chairman, and a Secretary. The board shall meet at least two times a year at places fixed by the chairman. Meetings A meeting of the board must be open to the public except those unless concerned with investigations an investigation under Sections 40-2-80 and 40-2-90 and except as necessary to protect confidential information in accordance with pursuant to a board regulations regulation or other state law. A majority of the board members in office constitutes a quorum at any a meeting of the board. A board member shall attend meetings or provide proper notice and justification of his inability to attend. Unexcused absences from meetings may result in removal from the board as provided for in Section 1-3-240.
(C)(E) The board shall have a seal which that must be judicially noticed. In any court proceeding, a civil or criminal court proceeding, arising out of or founded upon any a provision of this chapter, copies of any records a copy of a record certified as a true copies copy under the seal of the board are is admissible in evidence as proving to prove the contents of these records content of the record.
(D) All monies collected by the Department of Labor, Licensing and Regulation from fees authorized to be charged by this chapter must be received and accounted for by the Department of Labor, Licensing and Regulation and must be deposited in the State Treasury. The budget of the board must include adequate funds for the expenses of administering the provisions of this chapter, which may include, but is not limited to, the costs of conducting investigations, of taking testimony, and of procuring the attendance of witnesses before the board or its committees; all legal proceedings undertaken for the enforcement of this chapter; participation in national efforts to regulate the accounting profession, and educational and licensing programs for the benefit of the public, the licensees and their employees. Initial fees must be established by the board and shall serve as the basis for necessary adjustments in accordance with Section 40-1-50(D).
(E)(F) The board may appoint committees or persons, to advise or assist it in the administration and enforcement of this chapter, as it sees fit."
SECTION 10. Section 40-2-20 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-20. As used in this chapter:
(1) 'AICPA' means the American Institute of Certified Public Accountants or successor organizations.
(2) 'Attest means providing the following financial statement services:
(a) an audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS); or
(b) a review of a financial statement to be performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS); or
(c) an examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE).
(3) 'Board' means the South Carolina Board of Accountancy. (4) 'Client' means a person or entity that agrees with a licensee or licensee's employer to receive any a professional service.
(5) 'Compilation' means providing a service to be performed in accordance with Statements on Standards for Accounting and Review Services (SSARS) that which presents in the form of financial statements, information representative of management (owners) without undertaking expression of any an assurance on the statements.
(6) 'Department' means the Department of Labor, Licensing and Regulation 'Secretary' means the South Carolina Secretary of State or his official designee.
(7) 'Direct' means the person supervised in the usual line of authority or is in a staff position reporting to the supervisor. Direct supervision means a clear-cut personal connection to the employee being supervised, marked by a firsthand knowledge and association.
(8) 'Experience' means providing any a type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax, or consulting skills whether gained through employment in government, industry, academia, or public practice.
(9) 'Firm' means a sole proprietorship, a corporation, a partnership or any other form of organization registered under this chapter. 'Firm' includes a person or persons practicing public accounting in the form of a proprietorship, partnership, limited liability partnership, limited liability company, or professional corporation or association.
(10) 'License' means authorization to practice as issued under this chapter.
(11) 'Licensee' means the holder of a license.
(12) 'Manager' means a licensee in responsible charge of an office.
(13) 'NASBA' means the National Association of State Boards of Accountancy.
(14) 'Peer review' means a study, appraisal, or review of one or more aspects of the professional work of a licensee of the board or a firm registered with the board that performs attest or compilation services by a person or persons who hold certificates and who are not affiliated with the certificate holder or certified public accountant firm being reviewed.
(15) 'Practice of accounting' means:
(a) issuing a report on financial statements of a person, firm, organization, or governmental unit or offering to render or rendering any an attest or compilation service. This restriction does not prohibit any an act of a public official or public employee in the performance of that person's duties or prohibit the performance by a nonlicensee of other services involving the use of accounting skills, including the preparation of tax returns, management advisory services, and the preparation of financial statements without the issuance of reports on the financial statement; or
(b) using or assuming the title 'Certified Public Accountant' or the abbreviation 'CPA' or any other another title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person is a certified public accountant.
(16) 'Professional' means arising out of or related to the specialized knowledge or skills associated with licensees.
(17) 'Report', when used with reference to financial statements, means an opinion, report, or other form of language that states or implies assurance as to the reliability of a financial statement and that also includes or is accompanied by a statement or implication that the person or firm issuing it has special knowledge or competency in accounting or auditing. This statement or implication of special knowledge or competency may arise from use by the issuer of the report of names or titles indicating that the person or firm is an accountant or auditor. The term 'report includes any form of language which disclaims an opinion when the form of language is conventionally understood to imply positive assurance as to the reliability of the financial statements referred to or special competency on the part of the person or firm issuing such language, or both; and it includes any other another form of language that is conventionally understood to imply such this assurance or such special knowledge or competency, or both.
(18) 'Resident manager' means a responsible party for a firm. (19) 'Registration' means an authorization to practice as a firm issued under this chapter.
(20) 'State' means any a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam; except that 'this State' means the State of South Carolina.
(21) 'Substantial equivalency' is a determination by the Board of Accountancy or its designee that the education, examination, and experience requirements contained in the statutes and administrative rules of another jurisdiction are comparable to, or exceed the education, examination, and experience requirements contained in this chapter, or that an individual licensee's education, examination, and experience qualifications are comparable to or exceed the education, examination, and experience requirements contained in this chapter.
(22) 'Supervision' means having jurisdiction, oversight, or authority over the practice of accounting and over the people who practice accounting."
SECTION 11. Section 40-2-70 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-70. In addition to the powers and duties provided in Section 40-1-70, The board may:
(1) determine the eligibility of applicants for examination and licensure;
(2) examine applicants for licensure including, but not limited to:
(a) prescribing the subjects, character, and manner of licensing examinations;
(b) preparing, administering, and grading the examination or assisting in the selection of a contractor to prepare, administer, or grade the examination; and
(c) charging, or authorizing a third party administering the examination to charge, each applicant a fee in an adequate amount to cover examination costs;
(3) establish criteria for issuing, renewing, and reactivating authorizations for qualified applicants to practice, including issuing active or permanent, temporary, limited, and inactive licenses or other categories as may be created;
(4) adopt a code of professional ethics appropriate to the profession;
(5) evaluate and approve continuing education course hours and programs;
(6) conduct hearings on alleged violations of this chapter and regulations promulgated under this chapter;
(7) participate in national efforts to regulate the accounting profession;
(8) discipline licensees or registrants a licensee or registrant in a manner provided for in this chapter;
(9) project future activity of the program based on historical trends and program requirements, including the cost of licensure and renewal, conducting investigations and proceedings, participating in national efforts to regulate the accounting profession, and providing educational programs for the benefit of the public and licensees and their employees;
(10) issue safe harbor language nonlicensees may use in connection with financial statements, transmittals, or financial information which does not purport to be in compliance with the Statements on Standards for Accounting and Review Services (SSARS);
(11) promulgate regulations that have been submitted to the director at least thirty days in advance of filing with the Legislative Council as required by Section 1-23-30, including, but not limited to, a schedule of fees for examination, licensure, and regulation; and
(12) promulgate standards for peer review."
SECTION 12. Section 40-2-80 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-80. (A) The department Secretary, upon receipt of a complaint or other information suggesting violation of this chapter or of regulations promulgated pursuant to this chapter, shall conduct an appropriate investigation to determine whether there is probable cause to institute proceedings. An investigation under this section is not a prerequisite to conducting proceedings if a determination of probable cause can be made without investigation. In aid of investigations, the administrator of the board may issue subpoenas to compel witnesses to testify or to produce evidence, or both.
(B) The board may designate persons of appropriate competency to assist in an investigation.
(C) The results of an investigation must be presented to the board. If these results indicate a violation has occurred or a licensee is unfit to practice in the profession, the board may take disciplinary action in accordance with the Administrative Procedures Act. A disciplinary action only may be taken after a matter is presented to the board and voted on by the board. The board may designate a hearing officer or hearing panel to conduct a hearing or take another action it considers necessary under this action.
(D) For the purpose of an investigation under this section, the department Secretary may administer oaths and issue subpoenas for the attendance and testimony of witnesses and the production and examination of books, papers, and records on behalf of the board or, upon request, on behalf of a party to the case. Upon failure to obey a subpoena or to answer questions propounded by the board or its hearing officer or panel, the board may apply to the Administrative Law Court for an order requiring compliance with the subpoena.
(E) The testimony and documents submitted in support of the complaint or gathered in the investigation must be treated as confidential information and must not be disclosed to any person except law enforcement authorities and, to the extent necessary in order to conduct the investigation, the subject of the investigation, persons whose complaints are being investigated, and witnesses questioned in the course of the investigation.
(F) The board may review the publicly available professional work of licensees, and all professional work submitted to the State, on a general and random basis, without any requirement of a formal complaint or suspicion of impropriety. If as a result of a review the board discovers reasonable grounds for a more specific investigation, the board may proceed under subsections (A) through (E).
(G) If the department Secretary receives information indicating a possible violation of state or federal law, the department he may provide that information, to the extent the department he considers necessary, to the appropriate state or federal law enforcement agency or regulatory body."
SECTION 13. 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 Secretary 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, a public accountant, or an accounting practitioner, the department Secretary 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 14. Section 40-2-100 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-100. (A) If the board has reason to believe that a person is violating or intends to violate a provision of this chapter or a regulation promulgated pursuant to this chapter, in addition to all other remedies, it may order the person immediately to cease and desist from engaging in the conduct. If the person is practicing accountancy without being licensed pursuant to this chapter, is violating an order of the board, a provision of this chapter, or a regulation promulgated pursuant to this chapter, the board also may apply, in accordance with the rules of the Administrative Law Court for a temporary restraining order. A board member or the Director of the Department of Labor, Licensing and Regulation or another employee of the department, the Secretary, or an employee of the Secretary may not be held liable for damages resulting from a wrongful temporary restraining order.
(B) The board may seek from the Administrative Law Court other equitable relief to enjoin the violation or intended violation of this chapter or a regulation promulgated pursuant to this chapter."
SECTION 15. Section 40-2-110 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-110. (A) After notice and hearing pursuant to the Administrative Procedures Act, the board may revoke, suspend, refuse to renew, reprimand, censure, or limit the scope of practice of a licensee and impose an administrative fine not exceeding ten thousand dollars per violation. The board also may place a licensee on probation, require a peer review as the board may specify, or require satisfactory completion of a continuing professional education program as the board may specify, all with or without terms, conditions, and limitations, for any one or more of the following reasons:
(1) conviction of a felony, or of any a crime with an element of dishonesty or fraud, under the laws of the United States, of this State, or of any other another state if the acts involved constitute a crime under state laws;
(2) conduct reflecting adversely upon the licensee's fitness to perform services as a licensee;
(3) use of a false, fraudulent, or forged statement or document, or committal of a fraudulent, deceitful, or dishonest act, or omission of a material fact in obtaining licensure pursuant to this chapter;
(4) intentional use of a false or fraudulent statement in a document connected with the practice of the individual's profession or occupation;
(5) obtaining fees or assistance in obtaining fees under fraudulent circumstances;
(6) failure to comply with established professional standards, including standards set by federal or state law or regulation;
(7) violation of the code of professional ethics adopted by the board or of the AICPA Professional Standards: Code of Professional Conduct;
(8) failure to respond to requests for information or to cooperate in investigations on behalf of the board;
(9) engagement or aid of another, intentionally or knowingly, directly or indirectly, in unlicensed practice of accounting;
(10) failure to disclose or disclaim the appropriate license status of a person or entity not holding a license but associated with financial statements;
(11) engagement in advertising or other forms of solicitation or use of a firm name in a manner that is false, misleading, deceptive, or tending to promote unsupported claims;
(12) the revocation, suspension, reprimand, or other discipline of the right to practice by the licensee in any other another state or by a federal agency for a cause other than the failure to pay an annual registration fee;
(13) intentionally or knowingly, directly or indirectly, having violated, aided, or abetted in the violation or conspiracy to violate this article or a regulation promulgated under this article;
(14) having committed a dishonorable, unethical, or unprofessional act that is likely to deceive, defraud, or harm the public;
(15) having been convicted of or having pled guilty to or nolo contendere to a felony or a crime involving drugs or moral turpitude;
(16) having practiced the profession or occupation while under the influence of alcohol or drugs to such a degree as to render him unfit to practice his profession or occupation;
(17) having sustained a physical or mental disability which renders further practice dangerous to the public; or
(18) having violated a provision of this article or of a regulation promulgated under this article.
(B) After notice and hearing, as provided in Section 40-2-90, the board shall revoke the registration of a firm if at any time it does not meet the requirements prescribed by Section 40-2-40 and also may revoke, suspend, refuse to renew, reprimand, censure, or limit the scope of practice of a registrant and impose an administrative fine not to exceed ten thousand dollars per violation for any of the causes enumerated in subsection (A) or for In addition, the board may:
(1) issue a public reprimand;
(2) place a licensee on probation or restrict or suspend the individual's license for a definite or indefinite time and prescribe conditions to be met during probation, restriction, or suspension, including, but not limited to, satisfactory completion of additional education, a supervisory period, or continuing education;
(3) permanently suspend, refuse to renew, or revoke the license of a registrant or reprimand, censure, or limit the scope of practice; and
(4) impose an administrative fine not to exceed ten thousand dollars per violation for a cause of action provided in subsection (A) or:
(1)(a) the revocation or suspension or refusal to renew the license to practice of a member of a firm;
(2)(b) the revocation, suspension, reprimand, or other discipline of the right to practice by the firm in any other another state or by a federal agency for a cause other than the failure to pay an annual registration fee; or
(3)(c) the failure to notify the board in writing, within thirty days after its occurrence, of any a revocation, suspension, reprimand, or other discipline of the right to practice by the licensee in any other another state or by a federal agency.
(C) A final order of the board disciplining a licensee under this section is public information.
(D) Upon a determination by the board that discipline is not appropriate, the board may issue a nondisciplinary letter of caution.
(E) The board may establish a procedure to allow a licensee who has been issued a public reprimand to petition the board for expungement of the reprimand from the licensee's record.
(F) Licensees A licensee of this State offering or rendering services or using their who offers or renders a service or uses his 'Certified Public Accountant' title in another state are is subject to disciplinary action in this State for an act committed in another state for which the licensee would be subject to discipline.
(G) After notice and hearings, as provided in Section 40-2-90, the board shall revoke the registration of a firm who fails to meet a requirement of Section 40-2-40."
SECTION 16. Section 40-2-170(C) of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"(C) Failure to make timely payment in accordance with the order results in the collection of costs in accordance with Section 40-1-180 40-2-180."
SECTION 17. Section 40-2-180 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-180. (A) All costs and fines A cost and fine imposed pursuant to this chapter are is due and payable immediately upon imposition or at the time indicated by final order of the board. Unless the costs and fines are cost or fine is paid within sixty days of the date they are it is due, the order becomes a judgment and may be filed and executed upon in the same manner as a judgment in the court of common pleas, and the board may collect costs and attorney's fees incurred in executing the judgment. Interest at the legal rate accrues on the amount due from the date imposed until the date paid. All costs and fines A cost and fine imposed pursuant to this chapter must be paid in accordance with and are subject to the collection and enforcement provisions of Section 40-1-180 and is subject to the collection and enforcement provisions of the Setoff Debt Collection Act.
(B) All fines and costs A fine and cost collected under this chapter must be remitted by the department Secretary to the State Treasurer and deposited in a special fund established for the department Office of the Secretary of State to defray the administrative costs associated with investigations and hearings under this chapter."
SECTION 18. Section 40-2-210 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-210. If the board believes that a person or firm has engaged, or is about to engage, in an act or practice which that constitutes or will constitute a violation of Section 40-2-30, the board may issue a cease and desist order. The board may also apply to the Administrative Law Court pursuant to Section 40-1-210 for an order enjoining these acts or practices, and upon a showing by the board that the person or firm has engaged or is about to engage in these acts or practices, the division shall grant an injunction, restraining order, or other order as may be considered appropriate. For each violation, The Administrative Law Court may impose a fine of no more than ten thousand dollars for a violation."
SECTION 19. Section 40-2-570 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"Section 40-2-570. (A) After notice and hearing, pursuant to Section 40-2-310 the board may:
(1) revoke a license or permit as accounting practitioner issued under this article;
(2) suspend a license or permit for a period of not more than five years;
(3) reprimand, censure, or limit the scope of practice of a license or permit holder;
(4) impose an administrative fine not exceeding ten thousand dollars; or
(5) place a license or permit holder on probation, all with or without terms, conditions, and limitation for any one or more of these reasons:
(1a) fraud or deceit in obtaining a license or permit;
(2b) 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;
(3c) revocation or suspension of the right to practice before a state or federal agency;
(4d) 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;
(5e) violation of a provision of this article or Article 1 or a regulation promulgated by the board under the authority granted by this chapter;
(6f) violation of a rule of professional conduct promulgated by the board under the authority granted by this chapter;
(7g) 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;
(8h) performance of a fraudulent act while holding a license or permit under this article; or
(9i) 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 20. Section 40-2-580 of the 1976 Code, as last amended by Act 289 of 2004, is further amended to read:
"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 21. Section 40-2-340 of the 1976 Code is repealed.
SECTION 22. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 23. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 24. This act takes effect July 1, 2008.
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