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Public Act 100-0419


 

Public Act 0419 100TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 100-0419
 
SB0899 EnrolledLRB100 05774 SMS 15797 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 0.03, 5.2, 13, and 16 and adding Section 14.5
as follows:
 
    (225 ILCS 450/0.03)  (from Ch. 111, par. 5500.03)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 0.03. Definitions. As used in this Act, unless the
context otherwise requires:
    "Accountancy activities" means the services as set forth in
Section 8.05 of the Act.
    "Address of record" means the designated address recorded
by the Department in the applicant's, licensee's, or
registrant's application file or license file maintained by the
Department's licensure maintenance unit. It is the duty of the
applicant, licensee, or registrant to inform the Department of
any change of address, and those changes must be made either
through the Department's website or by directly contacting the
Department.
    "Certificate" means a certificate issued by the Board or
University or similar jurisdictions specifying an individual
has successfully passed all sections and requirements of the
Uniform Certified Public Accountant Examination. A certificate
issued by the Board or University or similar jurisdiction does
not confer the ability to use the CPA title and is not
equivalent to a registration or license under this Act.
    "Compilation" means providing a service to be performed in
accordance with Statements on Standards for Accounting and
Review Services that is presented in the form of financial
statements or information that is the representation of
management or owners without undertaking to express any
assurance on the statements.
    "Coordinator" means the CPA Coordinator.
    "CPA" or "C.P.A." means a certified public accountant who
holds a license or registration issued by the Department or an
individual authorized to use the CPA title under Section 5.2 of
this Act.
    "CPA firm" means a sole proprietorship, a corporation,
registered limited liability partnership, limited liability
company, partnership, professional service corporation, or any
other form of organization issued a license in accordance with
this Act or a CPA firm authorized to use the CPA firm title
under Section 5.2 of this Act.
    "CPA (inactive)" means a licensed certified public
accountant who elects to have the Department place his or her
license on inactive status pursuant to Section 17.2 of this
Act.
    "Financial statement" means a structured presentation of
historical financial information, including, but not limited
to, related notes intended to communicate an entity's economic
resources and obligations at a point in time or the changes
therein for a period of time in accordance with generally
accepted accounting principles (GAAP) or other comprehensive
basis of accounting (OCBOA).
    "Other attestation engagements" means an engagement
performed in accordance with the Statements on Standards for
Attestation Engagements.
    "Registered Certified Public Accountant" or "registered
CPA" means any person who has been issued a registration under
this Act as a Registered Certified Public Accountant.
    "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 any
financial statements and that also includes or is accompanied
by any statement or implication that the person or firm issuing
it has special knowledge or competence in accounting or
auditing. Such a statement or implication of special knowledge
or competence 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, or from the language of the report
itself. "Report" includes any form of language that disclaims
an opinion when the form of language is conventionally
understood to imply any positive assurance as to the
reliability of the financial statements referred to or special
competence on the part of the person or firm issuing such
language; it includes any other form of language that is
conventionally understood to imply such assurance or such
special knowledge or competence.
    "Licensed Certified Public Accountant" or "licensed CPA"
means any person licensed under this Act as a Licensed
Certified Public Accountant.
    "Committee" means the Public Accountant Registration and
Licensure Committee appointed by the Secretary.
    "Department" means the Department of Financial and
Professional Regulation.
    "License", "licensee", and "licensure" refer to the
authorization to practice under the provisions of this Act.
    "Peer review" means a study, appraisal, or review of one or
more aspects of a CPA firm's or sole practitioner's compliance
with applicable accounting, auditing, and other attestation
standards adopted by generally recognized standard-setting
bodies.
    "Principal place of business" means the office location
designated by the licensee from which the person directs,
controls, and coordinates his or her professional services.
    "Review committee" means any person or persons conducting,
reviewing, administering, or supervising a peer review
program.
    "Secretary" means the Secretary of the Department of
Financial and Professional Regulation.
    "University" means the University of Illinois.
    "Board" means the Board of Examiners established under
Section 2.
    "Registration", "registrant", and "registered" refer to
the authorization to hold oneself out as or use the title
"Registered Certified Public Accountant" or "Certified Public
Accountant", unless the context otherwise requires.
    "Peer Review Administrator" means an organization
designated by the Department that meets the requirements of
subsection (f) of Section 16 of this Act and other rules that
the Department may adopt.
(Source: P.A. 98-254, eff. 8-9-13; 99-78, eff. 7-20-15.)
 
    (225 ILCS 450/5.2)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 5.2. Substantial equivalency.
    (a) An individual whose principal place of business is not
in this State shall have all the privileges of a person
licensed under this Act as a licensed CPA without the need to
obtain a license from the Department or to file notice with the
Department, if the individual:
        (1) holds a valid license as a certified public
    accountant issued by another state that the National
    Qualification Appraisal Service of the National
    Association of State Boards of Accountancy has verified to
    be in substantial equivalence with the CPA licensure
    requirements of the Uniform Accountancy Act of the American
    Institute of Certified Public Accountants and the National
    Association of State Boards of Accountancy; or
        (2) holds a valid license as a certified public
    accountant issued by another state and obtains from the
    National Qualification Appraisal Service of the National
    Association of State Boards of Accountancy verification
    that the individual's CPA qualifications are substantially
    equivalent to the CPA licensure requirements of the Uniform
    Accountancy Act of the American Institute of Certified
    Public Accountants and the National Association of State
    Boards of Accountancy; however, any individual who has
    passed the Uniform CPA Examination and holds a valid
    license issued by any other state prior to January 1, 2012
    shall be exempt from the education requirements of Section
    3 of this Act for the purposes of this item (2).
    (a-5) A CPA firm whose principal place of business is not
in this State shall have all the privileges of a CPA firm
licensed under this Act without the need to obtain a license
from the Department or to file notice with the Department if
the CPA firm complies with the requirements outlined in
Sections 14.4 and 16 through substantial equivalency of their
licensed state.
    (b) Notwithstanding any other provision of law, an
individual or CPA firm who offers or renders professional
services under this Section, whether in person or by mail,
telephone, or electronic means, shall be granted practice
privileges in this State and no notice or other submission must
be provided by any such individual or CPA firm.
    (c) An individual licensee or CPA firm of another state who
is exercising the privilege afforded under this Section and the
CPA firm that employs such individual licensee, if any, as a
condition of the grant of this privilege, hereby simultaneously
consents:
        (1) to the personal and subject matter jurisdiction and
    disciplinary authority of the Department;
        (2) to comply with this Act and the Department's rules
    adopted under this Act;
        (3) that in the event that the license from the state
    of the individual's or CPA firm's principal place of
    business is no longer valid, the individual or CPA firm
    shall cease offering or rendering accountancy activities
    as outlined in paragraphs (1) and (2) of Section 8.05 in
    this State individually or on behalf of a CPA firm; and
        (4) to the appointment of the state board that issued
    the individual's or the CPA firm's license as the agent
    upon which process may be served in any action or
    proceeding by the Department against the individual or CPA
    firm.
    (d) An individual licensee who qualifies for practice
privileges under this Section who, for any entity headquartered
in this State, performs (i) a financial statement audit or
other engagement in accordance with Statements on Auditing
Standards; (ii) an examination of prospective financial
information in accordance with Statements on Standards for
Attestation Engagements; or (iii) an engagement in accordance
with Public Company Accounting Oversight Board Auditing
Standards may only do so through a CPA firm licensed under this
Act or a CPA firm with practice privileges under this Section.
    (e) A CPA firm that qualifies for practice privileges under
this Section and, for any entity headquartered in this State,
performs the following may only do so through an individual or
individuals licensed under this Act or an individual or
individuals with practice privileges under this Section:
        (1) a financial statement audit or other engagement in
    accordance with Statements on Auditing Standards;
        (2) an examination of prospective financial
    information in accordance with Statements on Standards for
    Attestation Engagements; or
        (3) an engagement in accordance with Public Company
    Accounting Oversight Board auditing standards.
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/13)  (from Ch. 111, par. 5514)
    (Section scheduled to be repealed on January 1, 2024)
    Sec. 13. Application for licensure.
    (a) A person or CPA firm that wishes to perform accountancy
activities in this State, as defined in paragraph (1) of
subsection (a) of Section 8.05 of this Act, or use the CPA
title shall make application to the Department and shall pay
the fee required by rule.
    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
forfeited and the applicant must reapply and meet the
requirements in effect at the time of reapplication.
    (b) Any CPA firm that (i) has an office in this State that
uses the title "CPA" or "CPA firm"; (ii) has an office in this
State that performs accountancy activities, as defined in
paragraph (1) of subsection (a) of Section 8.05 of this Act; or
(iii) does not have an office in this State and does not meet
the practice privilege requirements as defined in Section 5.2
of this Act, but offers or renders performs services, as set
forth in subsection (e) (d) of Section 5.2 of this Act, for a
client that is headquartered in this State must hold a license
as a CPA firm issued under this Act.
    (c) (Blank). A CPA firm that does not have an office in
this State may perform a review of a financial statement in
accordance with the Statements on Standards for Accounting and
Review Services for a client with its headquarters in this
State and may use the title "CPA" or "CPA firm" without
obtaining a license as a CPA firm under this Act, only if the
firm (i) performs such services through individuals with
practice privileges under Section 5.2 of this Act; (ii)
satisfies any peer review requirements in those states in which
the individuals with practice privileges under Section 5.2 have
their principal place of business; and (iii) meets the
qualifications set forth in paragraph (1) of Section 14.4 of
this Act.
    (d) A CPA firm that is not subject to the requirements of
subsection (b) or (c) of this Section may perform professional
services that are not regulated under subsection (b) or (c) of
this Section while using the title "CPA" or "CPA firm" in this
State without obtaining a license as a CPA firm under this Act
if the firm (i) performs such services through individuals with
practice privileges under Section 5.2 of this Act and (ii) may
lawfully perform such services in the state where those
individuals with practice privileges under Section 5.2 of this
Act have their principal place of business.
(Source: P.A. 98-254, eff. 8-9-13.)
 
    (225 ILCS 450/14.5 new)
    Sec. 14.5. CPA Coordinator; duties. The Secretary shall
appoint a CPA Coordinator, who shall hold a currently valid CPA
license or registration. The Coordinator shall not practice
during the term of his or her appointment. The Coordinator
shall be exempt from all fees related to his or her CPA license
or registration that come due during his or her employment. In
appointing the Coordinator, the Secretary shall give due
consideration to recommendations made by members,
organizations, and associations of the CPA and accounting
profession. The Coordinator shall:
        (1) act as Chairperson of the Committee, ex officio,
    without a vote;
        (2) be the direct liaison between the Department, the
    profession, and CPA and accounting organizations and
    associations;
        (3) prepare and circulate to licensees any educational
    and informational material that the Department deems
    necessary for providing guidance or assistance to
    licensees;
        (4) appoint any necessary committees to assist in the
    performance of the functions and duties of the Department
    under this Act; and
        (5) subject to the administrative approval of the
    Secretary, supervise all activities relating to the
    regulation of the CPA profession.
 
    (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 comply
with the Department's rules adopted under this Act and agree to
notify the Peer Review Administrator within 30 days after
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. 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; 98-730, eff. 1-1-15.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/25/2017