Public Act 098-0730
 
HB4707 EnrolledLRB098 17321 ZMM 52417 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Public Accounting Act is amended by
changing Sections 8.05, 14.2, 14.4, 16, and 17.1 as follows:
 
    (225 ILCS 450/8.05)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 8.05. Accountancy activities.
    (a) Accountancy activities are services performed by a CPA,
including:
        (1) signing, affixing, or associating the names used by
    a person or CPA firm to any report expressing an assurance
    on a financial statement or disclaiming an opinion on a
    financial statement based on an audit or examination of
    that statement or to express assurance on a financial
    statement;
        (2) other attestation engagements not otherwise
    defined in paragraph (1); or
        (3) offering to perform or performing one or more types
    of the following services involving the use of professional
    skills or competencies: accounting, management, financial
    or consulting services, compilations, internal audit,
    preparation of tax returns, furnishing advice on tax
    matters, bookkeeping, or representations of taxpayers;
    this includes the teaching of any of these areas at the
    college or university level.
    (b) If offering or performing accountancy activities using
the CPA title set forth in paragraphs (1), (2), and (3) of
subsection (a) of this Section, then:
        (1) the activities identified in paragraph (1) of
    subsection (a) may only be performed by licensed CPAs;
        (2) the activities identified in paragraph (2) of
    subsection (a) may only be performed by licensed or
    registered CPAs; and
        (3) the activities identified in paragraph (3) of
    subsection (a) are not restricted to licensed or registered
    CPAs, subject to the provisions of Section 9 9.02 of this
    Act.
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/14.2)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 14.2. Licensure by endorsement.
    (a) The Department shall issue a license as a licensed CPA
to any applicant who holds a current, valid, and unrevoked
license as a certified public accountant issued from another
state with equivalent educational requirements and examination
standards, applies to the Department on forms supplied by the
Department, and pays the required fee, provided:
        (1) the individual applicant is determined by the
    Department to possess qualifications substantially
    equivalent to this State's current licensing requirements;
        (2) at the time the applicant received his or her
    license, the applicant possessed qualifications
    substantially equivalent to the qualifications for
    licensure then in effect in this State; or
        (3) the applicant has, after passing the examination
    upon which his or her license to practice was based, not
    less than 4 years of experience as outlined in Section 14
    of this Act within the 10 years immediately before the
    application.
    (b) In determining the substantial equivalency of any
state's requirements to Illinois' requirements, the Department
may rely on the determinations of the National Qualification
Appraisal Service of the National Association of State Boards
of Accountancy or such other qualification appraisal service as
it deems appropriate.
    (c) Applicants have 3 years from the date of application to
complete the application process. If the process has not been
completed in 3 years, the application shall be denied, the fee
shall be forfeited, and the applicant must reapply and meet the
requirements in effect at the time of reapplication.
    (d) Any individual who is the holder of a current, valid,
and not previously disciplined license as a certified public
accountant of any state and has applied in writing to the
Department in form and substance satisfactory to the Department
for a license as a licensed CPA may perform accountancy
activities as set forth in Section 8.05 until the earlier of
the following dates:
        (1) the expiration of 6 months after filing the written
    application; or
        (2) the denial of the application by the Department.
    Any individual performing accountancy activities under
this subsection (d) shall be subject to discipline in the same
manner as an individual licensed under this Act.
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/14.4)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 14.4. Qualifications for licensure as a CPA firm. The
Department may license as licensed CPA firms individuals or
entities meeting the following requirements:
        (1) A majority of the ownership of the firm, in terms
    of financial interests and voting rights of all partners,
    officers, shareholders, or members, or belongs to persons
    licensed or registered in some state. All partners,
    officers, shareholders, or members, whose principal place
    of business is in this State and who have overall
    responsibility for accountancy activities in this State,
    as defined in paragraph (1) of subsection (a) of Section
    8.05 of this Act, must hold a valid license as a licensed
    CPA issued by this State. An individual exercising the
    practice privilege afforded under Section 5.2 who performs
    services for which a firm license is required under
    subsection (d) of Section 5.2 shall not be required to
    obtain an individual license under this Act.
        (2) All owners of the CPA firm, whether licensed as a
    licensed CPA or not, shall be active participants in the
    CPA firm or its affiliated entities and shall comply with
    the rules adopted under this Act.
        (3) It shall be lawful for a nonprofit cooperative
    association engaged in rendering an auditing and
    accounting service to its members only to continue to
    render that service provided that the rendering of auditing
    and accounting service by the cooperative association
    shall at all times be under the control and supervision of
    licensed CPAs.
        (4) An individual who supervises services for which a
    license is required under paragraph (1) of subsection (a)
    of Section 8.05 of this Act, who signs or authorizes
    another to sign any report for which a license is required
    under paragraph (1) of subsection (a) of Section 8.05 of
    this Act, or who supervises services for which a CPA firm
    license is required under subsection (d) of Section 5.2 of
    this Act shall hold a valid, active licensed CPA license
    from this State or another state considered to be
    substantially equivalent under paragraph (1) of subsection
    (a) of Section 5.2.
        (5) The CPA firm shall designate to the Department in
    writing an individual licensed as a licensed CPA under this
    Act or, in the case of a firm that must have a CPA firm
    license pursuant to subsection (b) of Section 13 of this
    Act, a licensee of another state who meets the requirements
    set out in paragraph (1) or (2) of subsection (a) of
    Section 5.2 of this Act, who shall be responsible for the
    proper licensure of the CPA firm.
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/16)  (from Ch. 111, par. 5517)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 16. Expiration and renewal of licenses; renewal of
registration; continuing education; peer review.
    (a) The expiration date and renewal period for each license
or registration issued under this Act shall be set by rule.
    (b) Every holder of a license or registration under this
Act may renew such license or registration before the
expiration date upon payment of the required renewal fee as set
by rule.
    (c) Every application for renewal of a license by a
licensed CPA who has been licensed under this Act for 3 years
or more shall be accompanied or supported by any evidence the
Department shall prescribe, in satisfaction of completing,
each 3 years, not less than 120 hours of continuing
professional education as prescribed by Department rules. Of
the 120 hours, not less than 4 hours shall be courses covering
the subject of professional ethics. All continuing education
sponsors applying to the Department for registration shall be
required to submit an initial nonrefundable application fee set
by Department rule. Each registered continuing education
sponsor shall be required to pay an annual renewal fee set by
Department rule. Publicly supported colleges, universities,
and governmental agencies located in Illinois are exempt from
payment of any fees required for continuing education sponsor
registration. Failure by a continuing education sponsor to be
licensed or pay the fees prescribed in this Act, or to comply
with the rules and regulations established by the Department
under this Section regarding requirements for continuing
education courses or sponsors, shall constitute grounds for
revocation or denial of renewal of the sponsor's registration.
    (d) Licensed CPAs are exempt from the continuing
professional education requirement for the first renewal
period following the original issuance of the license.
    Failure by an applicant for renewal of a license as a
licensed CPA to furnish the evidence shall constitute grounds
for disciplinary action, unless the Department in its
discretion shall determine the failure to have been due to
reasonable cause. The Department, in its discretion, may renew
a license despite failure to furnish evidence of satisfaction
of requirements of continuing education upon condition that the
applicant follow a particular program or schedule of continuing
education. In issuing rules and individual orders in respect of
requirements of continuing education, the Department in its
discretion may, among other things, use and rely upon
guidelines and pronouncements of recognized educational and
professional associations; may prescribe rules for the
content, duration, and organization of courses; shall take into
account the accessibility to applicants of such continuing
education as it may require, and any impediments to interstate
practice of public accounting that may result from differences
in requirements in other states; and may provide for relaxation
or suspension of requirements in regard to applicants who
certify that they do not intend to engage in the performance of
accountancy activities, and for instances of individual
hardship.
    The Department shall establish by rule a means for the
verification of completion of the continuing education
required by this Section. This verification may be accomplished
through audits of records maintained by licensees; by requiring
the filing of continuing education certificates with the
Department; or by other means established by the Department.
    The Department may establish, by rule, guidelines for
acceptance of continuing education on behalf of licensed CPAs
taking continuing education courses in other jurisdictions.
    (e) For renewals on and after July 1, 2012, as a condition
for granting a renewal license to CPA firms and sole
practitioners who perform accountancy activities outlined in
paragraph (1) of subsection (a) of Section 8.05 under this Act,
the Department shall require that the CPA firm or sole
practitioner satisfactorily complete a peer review during the
immediately preceding 3-year period, accepted by a Peer Review
Administrator in accordance with established standards for
performing and reporting on peer reviews, unless the CPA firm
or sole practitioner is exempted under the provisions of
subsection (i) of this Section. A CPA firm or sole practitioner
shall, at the request of the Department, submit to the
Department a letter from the Peer Review Administrator stating
the date on which the peer review was satisfactorily completed.
    A new CPA firm or sole practitioner shall not be required
to comply with the peer review requirements for the first
license renewal. A CPA firm or sole practitioner shall undergo
its first peer review during the first full renewal cycle after
it is granted its initial license.
    The requirements of this subsection (e) shall not apply to
any person providing services requiring a license under this
Act to the extent that such services are provided in the
capacity of an employee of the Office of the Auditor General or
to a nonprofit cooperative association engaged in the rendering
of licensed service to its members only under paragraph (3) of
Section 14.4 of this Act or any of its employees to the extent
that such services are provided in the capacity of an employee
of the association.
    (f) The Department shall approve only Peer Review
Administrators that the Department finds comply with
established standards for performing and reporting on peer
reviews. The Department may adopt rules establishing
guidelines for peer reviews, which shall do all of the
following:
        (1) Require that a peer review be conducted by a
    reviewer that is independent of the CPA firm reviewed and
    approved by the Peer Review Administrator under
    established standards.
        (2) Other than in the peer review process, prohibit the
    use or public disclosure of information obtained by the
    reviewer, the Peer Review Administrator, or the Department
    during or in connection with the peer review process. The
    requirement that information not be publicly disclosed
    shall not apply to a hearing before the Department that the
    CPA firm or sole practitioner requests be public or to the
    information described in paragraph (3) of subsection (i) of
    this Section.
    (g) If a CPA firm or sole practitioner fails to
satisfactorily complete a peer review as required by subsection
(e) of this Section or does not comply with any remedial
actions determined necessary by the Peer Review Administrator,
the Peer Review Administrator shall notify the Department of
the failure and shall submit a record with specific references
to the rule, statutory provision, professional standards, or
other applicable authority upon which the Peer Review
Administrator made its determination and the specific actions
taken or failed to be taken by the licensee that in the opinion
of the Peer Review Administrator constitutes a failure to
comply. The Department may at its discretion or shall upon
submission of a written application by the CPA firm or sole
practitioner hold a hearing under Section 20.1 of this Act to
determine whether the CPA firm or sole practitioner has
complied with subsection (e) of this Section. The hearing shall
be confidential and shall not be open to the public unless
requested by the CPA firm or sole practitioner.
    (h) The CPA firm or sole practitioner reviewed shall pay
for any peer review performed. The Peer Review Administrator
may charge a fee to each firm and sole practitioner sufficient
to cover costs of administering the peer review program.
    (i) A CPA firm or sole practitioner shall not be required
to comply with the peer review requirements if:
        (1) Within 3 years before the date of application for
    renewal licensure, the sole practitioner or CPA firm has
    undergone a peer review conducted in another state or
    foreign jurisdiction that meets the requirements of
    paragraphs (1) and (2) of subsection (f) of this Section.
    The sole practitioner or CPA firm shall, at the request of
    the Department, submit to the Department a letter from the
    organization administering the most recent peer review
    stating the date on which the peer review was completed; or
        (2) Within 2 years before the date of application for
    renewal licensure, the sole practitioner or CPA firm
    satisfies all of the following conditions:
            (A) has not accepted or performed any accountancy
        activities outlined in paragraph (1) of subsection (a)
        of Section 8.05 of this Act; and
            (B) the firm or sole practitioner agrees to notify
        the Peer Review Administrator within 30 days of
        accepting an engagement for services requiring a
        license under this Act and to undergo a peer review
        within 18 months after the end of the period covered by
        the engagement; or
        (3) For reasons of personal health, military service,
    or other good cause, the Department determines that the
    sole practitioner or firm is entitled to an exemption,
    which may be granted for a period of time not to exceed 12
    months.
    (j) If a peer review report indicates that a CPA firm or
sole practitioner complies with the appropriate professional
standards and practices set forth in the rules of the
Department and no further remedial action is required, the Peer
Review Administrator shall, after issuance of the final letter
of acceptance, destroy all working papers and documents related
to the peer review, other than report-related documents and
documents evidencing completion of remedial actions, if any, in
accordance with rules established by the Department.
    (k) (Blank).
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/17.1)  (from Ch. 111, par. 5518.1)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 17.1. Restoration.
    (a) Any registered CPA who has permitted his or her
registration to expire or who has had his or her registration
on inactive status may have his or her registration restored by
making application to the Department and filing proof
acceptable to the Department as defined by rule of his or her
fitness to have his or her registration restored, which may
include sworn evidence certifying to active practice in another
jurisdiction satisfactory to the Department and by paying the
required restoration fee.
    (b) Any licensed CPA who has permitted his or her license
to expire or who has had his or her license on inactive status
may have his or her license restored by (1) making application
to the Department and filing proof acceptable to the Department
as defined by rule of his or her fitness to have his or her
license restored, including sworn evidence certifying to
active practice in another jurisdiction satisfactory to the
Department, (2) and by paying the required restoration fee, (3)
and by submitting proof of the required continuing education
and (4) in the case of a sole practitioner, satisfactory
completion of peer review outlined in subsection (e) of Section
16, unless exempt from peer review under subsection (i) of
Section 16.
    (c) Any firm that has permitted its license to expire may
have its license restored by (1) making application to the
Department and filing proof acceptable to the Department as
defined by rule of its fitness to have its license restored,
including sworn evidence certifying to active practice in
another jurisdiction satisfactory to the Department, (2)
paying the required restoration fee, and (3) satisfactory
completion of peer review outlined in subsection (e) of Section
16, unless exempt from peer review under subsection (i) of
Section 16.
    (d) If the licensed CPA or registered CPA has not
maintained an active practice in another jurisdiction
satisfactory to the Department, the Department shall
determine, by an evaluation program established by rule,
fitness to resume active status and may require the applicant
to complete a period of supervised experience.
    Any licensed CPA or registered CPA whose license or
registration expired while he or she was (1) in Federal Service
on active duty with the Armed Forces of the United States, or
the State Militia called into service or training, or (2) in
training or education under the supervision of the United
States preliminary to induction into the military service, may
have his or her license or registration renewed reinstated or
restored without paying any lapsed renewal and restoration fees
if within 2 years after honorable termination of such service,
training or education except under conditions other than
honorable, he or she furnished the Department with satisfactory
evidence to the effect that he or she has been so engaged and
that his or her service, training, or education has been so
terminated.
(Source: P.A. 98-254, eff. 8-9-13.)

Effective Date: 1/1/2015