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| [ Introduced ] | [ Enrolled ] | [ Senate Amendment 001 ] |
91_HB2194eng HB2194 Engrossed LRB9104858ACtm 1 AN ACT to amend the Public Accounting Act. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Public Accounting Act is amended 5 by changing Sections 5, 9.1, and 14 and by adding Sections 6 14.2 and 14.3 as follows: 7 (225 ILCS 450/5) (from Ch. 111, par. 5506) 8 Sec. 5. Certification of out-of-State accountants. 9 (a) The Board may issue a certificate as a certified 10 public accountant, without examination, to any applicant who 11 holds a valid unrevoked certificate as a certified public 12 accountant issued under the laws of any other state or 13 territory of the United States or the District of Columbia, 14 provided: 15 (1) that the state that issued the certificate has 16 certification requirements that have been determined by 17 the Board to be substantially equivalent to the 18 certification requirements of Illinois and grants similar 19 rights to those that Illinois grants to certificate 20 holders; 21 (2) that the state that issued the certificate has 22 certification requirements that the Department has 23 determined not to be substantially equivalent to the 24 certification requirements of Illinois or does not grant 25 similar rights to Illinois certificate holders, but the 26 Board determines that the individual applicant possesses 27 personal qualifications substantially equivalent to 28 Illinois' certification requirements; or 29 (3) that the applicant does not qualify under 30 subsections (1) or (2) above, but the following 31 conditions are met: HB2194 Engrossed -2- LRB9104858ACtm 1 (A)(a)the certificate was granted to the 2 applicant on the basis of the Uniform Certified 3 Public Accountant examination; and 4 (B)(b)the educational qualifications of the 5 applicant for a certificate, at the time of the 6 written examination, were equivalent to the 7 educational qualifications then required of 8 applicants for admission to the Illinois examination 9 for certified public accountant or, the applicant 10 has, after passing the examination upon which his or 11 her certificate was based, not less than 5 years of 12 experience in the practice of public accounting 13 within the 10 years immediately preceding this 14 application, otherwise reasonably considered 15 acceptable by the Board. 16 (b) In determining the substantial equivalency of the 17 requirements for certification or the rights granted to 18 certificate holders pursuant to this Section, the Board may 19 rely on the determinations of the National Qualification 20 Appraisal Service of the National Association of State Boards 21 of Accountancy or any other qualification appraisal service, 22 as it deems appropriate. 23 (Source: P.A. 88-36.) 24 (225 ILCS 450/9.1) (from Ch. 111, par. 5510.1) 25 Sec. 9.1. Temporary practice. 26 (a) An individual whose principal place of business is 27 not in this State and who has a license or permit to practice 28 as a certified public accountant from any state that has 29 requirements that the Department has determined to be 30 substantially equivalent to the licensing requirements of 31 this State and grants similar rights to those that Illinois 32 grants to a licensee, shall have all the privileges of a 33 licensee under this Act without the need to obtain a license HB2194 Engrossed -3- LRB9104858ACtm 1 under this Act. 2 (a-5) An individual whose principal place of business is 3 not in this State and who has a valid license or permit to 4 practice as a certified public accountant from any state that 5 has requirements that Department has determined are not 6 substantially equivalent to the licensing requirements of 7 this State or does not grant similar rights to those that 8 Illinois grants to a licensee, but who the Department 9 determines possesses personal qualifications substantially 10 equivalent to Illinois licensure requirements, shall have all 11 the privileges of a licensee under this Act without the need 12 to obtain a license or certificate under this Act.Licensed13certified public accountants of other States and Territories14of the United States or the District of Columbia who do not15reside or have an office in this State may temporarily16practice public accounting in this State on professional17business incident to their regular practice without licensure18pursuant to this Act. Such temporary practice must be19conducted in accordance with the relevant provisions of this20Act and rules and regulations adopted hereunder, including21provisions relating to disciplinary action.22 (b) A foreign accountant who holds a license, 23 certificate, or degree in a foreign country constituting a 24 recognized qualification for the practice of public 25 accounting and who does not reside or have an office in this 26 State may temporarily practice public accounting in this 27 State or professional business incident to his or her regular 28 practice without licensure under this Act provided the 29 standards, including examination, governing issuance of the 30 foreign license, certificate, or degree are substantially 31 equivalent to those in Illinois, and the foreign jurisdiction 32 in question grants equal recognition to Illinois accountants. 33 (c) The Department may, by rule, require that any person 34 practicing in this State under the provisions of subsections HB2194 Engrossed -4- LRB9104858ACtm 1 (a), (a-5), or (b) of this Section notify the Department of 2 his or her intent to practice in this State under the 3 provisions of this Section. Anyone practicing in this State 4 under the provisions of this Section shall be subject to the 5 personal and subject matter jurisdiction of the Department, 6 and shall comply with this Act and all rules promulgated 7 hereunder. By practicing in this State under the provisions 8 of this Section, the person shall be deemed to consent to the 9 appointment of the licensing authority of the jurisdiction 10 which granted his or her license as agent upon whom process 11 may be served in any action or proceeding by the Department 12 against the person. 13 (Source: P.A. 88-36.) 14 (225 ILCS 450/14) (from Ch. 111, par. 5515) 15 Sec. 14. Qualifications. The Department shall license as 16 public accountants the following: 17 (a) All persons who have received or who hereafter 18 receive certificates as certified public accountants from the 19 Board, who have had at least one year of full-time experience 20 , or its equivalent, providing any type of service or advice 21 involving the use of accounting, attest, management advisory, 22 financial advisory, tax, or consulting skills, which may be 23 gained through employment in government, industry, academia, 24 or public practice.either on the professional staff of a25practicing public accountant of this or any other state or in26a responsible audit position including work of a type27normally directed toward the expression of an independent28opinion on financial statements in a governmental agency29either: (1) in auditing the books and accounts or financial30activities of partnerships, corporations or other persons31engaged in 3 or more distinct lines of commercial or32industrial business in accordance with generally accepted33auditing standards; or (2) in auditing the books and accountsHB2194 Engrossed -5- LRB9104858ACtm 1or financial activities of 3 or more distinct governmental2agencies or independent organizational units, not an employer3of the applicant, in accordance with generally accepted4auditing standards, and in which the results of such auditing5are reported to a third party; or (3) in reviewing financial6statements and supporting material covering the financial7condition and operations of entities engaged in 3 or more8distinct lines of commercial or industrial business to9determine the reliability and fairness of the financial10reporting and compliance with generally accepted accounting11principles and applicable laws and governmental regulations;12or who provide satisfactory evidence to the Committee,13established herein, of such other experience or employment as14the Committee may consider substantially equivalent thereto.15 If the applicant's certificate was issued more than 4 16 years prior to the application for an internal license under 17 this Section, the applicant shall submit any evidence the 18 Department may require showing the applicant has completed 19 not less than 90 hours of continuing professional education 20 acceptable to the Department within the 3 years immediately 21 preceding the date of application. 22 The Committee shall be the sole and final judge of the 23 qualification of experience under this section. 24 (b) All partnerships, limited liability companies, or 25 corporations, or other entities engaged in the practice of 26 public accounting in this State and meeting the following 27 requirements: 28 (1) (Blank)At least one partner, member of a29limited liability company, or shareholder in a30corporation must be licensed as a public accountant by31the Department under the provisions of this Act and must32be a holder of an effective unrevoked registration card;33and each partner, member of a limited liability company,34or shareholder of a corporation personally engaged inHB2194 Engrossed -6- LRB9104858ACtm 1this State in the practice of public accounting and each2person in charge of an office of the firm in this State3must be so licensed and must be a holder of such a card. 4 (2) A majority of the ownership of the firm, in 5 terms of financial interests and voting rights of all 6 partners, officers, shareholders, members, or managers, 7 belongs to persons licensed in some state, and the 8 partners, officers, shareholders, members, or managers 9 whose principal place of business is in this State and 10 who practice public accounting in this State, as defined 11 in Section 8 of this Act, hold a valid license issued by 12 this State.Each partner, member of a limited liability13company, or shareholder of a corporation not personally14engaged in this State in the practice of public15accounting must be a certified public accountant or be16otherwise authorized to practice accounting in some State17or Territory of the United States, in the District of18Columbia or in a foreign country or a political19subdivision thereof.20 (3) It shall be lawful for a nonprofit cooperative 21 association engaged in rendering an auditing and 22 accounting service to its members only, to continue to 23 render that service provided that the rendering of 24 auditing and accounting service by the cooperative 25 association shall at all times be under the control and 26 supervision of public accountants. 27 (4) The Department may adopt rules and regulations 28 as necessary to provide for the practice of public 29 accounting by business entities that may be otherwise 30 authorized by law to conduct business in Illinois. 31 The Director shall appoint a Public Accountant 32 Registration Committee as follows: 7 persons who shall be 33 appointed by and shall serve in an advisory capacity to the 34 Director. Six members must be licensed public accountants, HB2194 Engrossed -7- LRB9104858ACtm 1 in good standing, and must be actively engaged in the 2 practice of public accounting in this State, and one member 3 of the public, who is not licensed under this Act, or a 4 similar Act of another jurisdiction, and, who has no 5 connection with the accounting or public accounting 6 profession. Members shall serve 4 year terms and until their 7 successors are appointed and qualified. No member shall be 8 reappointed to the Committee for more than 2 terms. 9 Appointments to fill vacancies shall be made in the same 10 manner as original appointments, for the unexpired portion of 11 the vacated term. The membership of the Committee should 12 reasonably reflect representation from the geographic areas 13 in this State. 14 The members of the Committee appointed by the Director 15 shall receive reasonable compensation, to be determined by 16 the Department, for the necessary, legitimate, and 17 authorized expenses approved by the Department. All expenses 18 shall be paid from the Registered Certified Public 19 Accountants' Administration and Disciplinary Fund. 20 The Director may terminate the appointment of any member 21 for cause. 22 The Committee shall present an annual report to the 23 Department the content of which shall be specified by rule. 24 The Director shall consider the advice and 25 recommendations of the Committee on questions involving 26 standards of professional conduct, discipline and 27 qualifications of candidates and licensees under this Act. 28 (Source: P.A. 88-36.) 29 (225 ILCS 450/14.2 new) 30 Sec. 14.2. Licensure by reciprocity. 31 (a) The Department shall issue a license as a public 32 accountant to any applicant who holds a valid unrevoked 33 license or permit to practice as a certified public HB2194 Engrossed -8- LRB9104858ACtm 1 accountant issued under the laws of any other state or 2 territory of the United States or the District of Columbia, 3 provided: 4 (1) that the state that issued the license or 5 permit to practice has licensure requirements that have 6 been determined by the Department to be substantially 7 equivalent to the licensure requirements of this State 8 and grants similar rights to Illinois licensees; or 9 (2) that the state that issued the license or 10 permit to practice has requirements that the Department 11 has determined not to be substantially equivalent with 12 the licensure requirements of this State or does not 13 grant similar rights to Illinois licensees, but the 14 individual applicant is determined by the Department to 15 possess personal qualifications substantially equivalent 16 to this State's licensing requirements; or 17 (3) that the applicant does not qualify under 18 paragraphs (1) or (2) above, but the following conditions 19 are met: 20 (A) the license or permit to practice was 21 granted to the applicant on the basis of the uniform 22 CPA examination; and 23 (B) the educational qualifications of the 24 applicant for a license or other permit to practice, 25 at the time of the written examination, were 26 equivalent to the educational qualifications then 27 required of applicants for admission to the Illinois 28 examination for certified public accountants or the 29 applicant has, after passing the examination upon 30 which his or her license or other permit to practice 31 was based, not less than 4 years of experience in 32 the practice of public accounting within the 10 33 years immediately before the application. 34 (b) In determining the substantial equivalency of any HB2194 Engrossed -9- LRB9104858ACtm 1 state's requirements to Illinois' requirements, the 2 Department may rely on the determinations of the National 3 Qualification Appraisal Service of the National Association 4 of State Boards of Accountancy or such other qualification 5 appraisal service as it deems appropriate. 6 (225 ILCS 450/14.3 new) 7 Section 14.3. Additional requirements for firms. In 8 addition to the ownership requirements set forth in 9 subsection (b) of Section 14, all firms licensed under this 10 Act shall meet the following requirements: 11 (a) All owners of the firm who are not licensed shall be 12 active participants in the firm or its affiliated entities. 13 (b) An individual who supervises services for which a 14 license is required under Section 8 of this Act or who signs 15 or authorizes another to sign any report for which a license 16 is required under Section 8 of this Act shall hold a valid, 17 unrevoked license from this State and shall comply with such 18 additional experience requirements as may be required by rule 19 of the Department. 20 (c) The firm shall require that all owners of the firm, 21 whether or not certified or licensed under this Act, comply 22 with rules promulgated under this Act. 23 (d) The firm shall designate to the Department in 24 writing an individual licensed under this Act who shall be 25 responsible for the proper registration of the firm. 26 Section 99. Effective date. This Act takes effect upon 27 becoming law.