Section 1420.5  Definitions

 

"Act" means the Illinois Public Accounting Act [225 ILCS 450].

 

"AICPA" means the American Institute of Certified Public Accountants.

 

"Board" means the Board of Examiners established under Section 2 of the Act.

 

"Client" means the person or entity that retains a CPA or CPA firm for the performance of accountancy activities.

 

"Committee" means the Public Accountant Registration and Licensure Committee appointed by the Secretary. 

 

"CPA" 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 the Act. 

 

"CPA Firm" means a sole proprietorship, corporation, registered limited liability partnership, limited liability company, partnership, professional service corporation, or any other form of organization issued a license in accordance with the Act.

 

"CPE" means continuing professional education.

 

"CPE Sponsor" means a continuing professional education sponsor as set forth in Section 1420.72.

 

"Department" means the Illinois Department of Financial and Professional Regulation.

 

"Director" means the Director of the Department of Financial and Professional Regulation-Division of Professional Regulation.

 

"Division" means the Department of Financial and Professional Regulation-Division of Professional Regulation.

 

"NASBA" means the National Association of State Boards of Accountancy.

 

"PRRC" means a Peer Review Report Committee.

 

"Society" means the Illinois CPA Society Peer Review Alliance.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.10  Experience

 

a)         The Division shall license individuals who have received CPA certificates issued by the Board (see 23 Ill. Adm. Code 1400), not been subject to discipline under Section 20.01 of the Act and Section 1420.200 of this Part, and had at least one year of full-time experience, or its equivalent, providing any type of service or advice involving the use of accounting, attest, management advisory, financial advisory, tax or consulting skills that may be gained through employment in government, industry, academia, or public practice.  Applicants may only receive experience after completing 120 hours of undergraduate education and having obtained a baccalaureate degree with an accounting concentration or equivalent.

 

b)         The term "year" shall be 12 months with an average of at least 20 work days per month during which the applicant was engaged in full-time employment equal to 1500 hours or more annually.

 

c)         If an individual works part-time for more than one year, but less than four years, and gains 2000 hours of experience, the individual has met the equivalent of "one year of full-time experience" required by subsection (a).

 

d)         Verification of the experience required by this Section shall be completed and signed by an applicant's designated supervisor or the authorized agent of the employer.

 

(Source:  Amended at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.20  Application for Licensure as a Certified Public Accountant

 

a)         An applicant for licensure as a CPA shall submit the following to the Division:

 

1)         A completed and signed application on forms provided by the Division;

 

2)         Certification of the issuance of a valid and unrevoked Illinois CPA certificate, issued by the Board or current registration as a CPA with the Division;

 

3)         Proof of the experience required by Section 1420.10;

 

4)         The required fee set forth in Section 1420.40; and

 

5)         If the applicant's CPA certificate from the Board was issued more than 4 years prior to the application for a license as a licensed CPA under this Section, the applicant shall submit proof acceptable to the Division of having completed not less than 90 hours of verifiable CPE, including 4 hours covering the subject of professional ethics(see Section 1420.70) within the 3 years immediately preceding the application.

 

b)         As set forth in Section 5.1 of the Act, foreign accountants shall comply with this Section.

 

(Source:  Amended at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.25  Application for Licensure as a Registered Certified Public Accountant

(Repealed)

 

(Source:  Repealed at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.30  Application for Licensure as a Certified Public Accounting Firm

 

a)         For purposes of this Section:

 

1)         "Applicant Firm" or "Firm" shall include:

 

A)        A sole proprietorship, corporation, registered limited liability partnership, limited liability company, partnership, professional service corporation, or any other form of organization determined by the Division or other regulatory authority to be authorized or entitled to conduct business in this State and meeting requirements of the Act relating to the performance of accountancy activities in this State;

 

B)        A public accounting unit consisting of an individual licensee operating under an assumed name, including but not limited to a business name, that contains such words as "and Company", "and Associates" or similar words indicating that others take part in the conduct of the business.

 

2)         "Member" includes a partner in a partnership, officer or shareholder in a corporation, member of a limited liability company and any other person (natural or otherwise) who or that is the owner of an interest in an applicant firm and who has responsibility for accountancy activities in this State as set forth in Section 14.4 of the Act.

 

b)         An applicant firm seeking licensure shall submit:

 

1)         A completed and signed application on forms provided by the Division;

 

2)         The required fee set forth in Section 1420.40; and

 

3)         An affidavit stating:

 

A)        The name, address and license number of each member personally engaged in Illinois in the performance of accountancy activities;

 

B)        The name, address and license number of each person who shall be responsible for the proper licensure of an office of the firm in Illinois; and

 

C)        The majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders or members belongs to persons licensed or registered in some state, and that the partners, officers, shareholders or members whose principal place of business is in this State and who perform accountancy activities in this State hold a valid license issued by this State.

 

c)         Every CPA firm licensed under the Act shall notify the Division of any change in members at the time of renewal.

 

d)         An individual exercising the practice privilege afforded under Section 5.2 of the Act who performs services for which a CPA firm license is required under Section 5.2(d) of the Act shall not be required to obtain an individual CPA license.

 

e)         Effective December 31, 2016, any professional service corporation applying for licensure to practice accountancy activities in Illinois shall be issued a CPA firm license, so long as all requirements set forth in the Act and this Section are met.

 

f)         Effective December 31, 2018, all actively licensed professional service corporations practicing accountancy activities in Illinois shall be issued a CPA firm license under the Act, so long as all requirements of the Act and this Section are met.

 

(Source:  Amended at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.35  Temporary Practice (Repealed)

 

(Source:  Repealed at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.40  Fees

 

a)         The fee for application as a licensed CPA is $120;

 

b)         The fee for renewal of a license as a licensed CPA is $40 per year;

 

c)         The fee for renewal of a license as a registered CPA is $30 per year;

 

d)         The fee for application as a licensed CPA firm is $120;

 

e)         The fee for renewal of a license as a CPA firm is $40 per year;

 

f)         The fee for restoration of a license from inactive status is the current renewal fee;

 

g)         The fee for restoration of a license as a licensed CPA, registered CPA, CPA firm, or CPE sponsor, other than from inactive status, is $50 plus all lapsed renewal fees, not to exceed $260;

 

h)         The fee for certification of a licensee's record is $20;

 

i)          The fee for application to be a CPE sponsor is $150.  Publicly supported colleges, universities and governmental agencies located in Illinois are exempt from payment of fees for CPE sponsor application and renewal;

 

j)          The renewal fee for CPE sponsors shall be $150 per year.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.50  Endorsement

 

a)         Any person currently licensed in another jurisdiction who desires to obtain a license as a licensed CPA by endorsement shall submit:

 

1)         A completed and signed application on forms provided by the Division;

 

2)         Certification from the jurisdiction of original licensure of the issuance of an unrevoked license showing the applicant possesses qualifications substantially equivalent to this State's current licensing requirements and whether the records of the licensing authority contain any record of disciplinary action taken or pending.  If the qualifications by which an individual was licensed were not substantially equivalent, after passing the examination upon which the license to practice was based, an applicant shall have not less than 4 years of experience in the performance of accountancy activities within the 10 years immediately preceding the date of application;

 

3)         Certification from the jurisdiction of current licensure stating:

 

A)        The date of issuance of the applicant's license;

 

B)        Whether the records of the licensing authority contain any record of disciplinary action taken or pending; and

 

4)         The required fee set forth in Section 1420.40.

 

b)         In determining the substantial equivalency of any state's requirements to Illinois' requirements, the Division may rely on the determinations of NASBA.

 

c)         Letter of Authorization

 

1)         In accordance with Section 14.2(d) of the Act, a letter of authorization may be issued to the applicant upon receipt of the following:

 

A)        A completed and signed application on forms provided by the Division;

 

B)        The required fee set forth in Section 1420.40; and

 

C)        Certification from a jurisdiction of current licensure stating the date of issuance of the applicant's license and whether the records of the licensing authority contain any record of disciplinary action taken or pending.

 

2)         The letter of authorization shall allow the applicant to perform accountancy activities as set forth in Section 8.05 of the Act for no longer than 6 months, or until denial of the application by the Department if sooner. Any individual performing accountancy activities under this subsection (c) shall be subject to discipline as if fully licensed under the Act.

 

(Source:  Amended at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.60  Restoration

 

a)         A person seeking restoration of a license as a registered CPA that has been expired or been placed on inactive status for 5 years or more shall submit:

 

1)         A completed and signed application for restoration on forms provided by the Division; and

 

2)         The required fee set forth in Section 1420.40. 

 

b)         A person seeking restoration of a license as a licensed CPA that has been expired or been placed on inactive status for 5 years or more shall submit:

 

1)         A completed and signed application on forms provided by the Division;

 

2)         The required fee set forth in Section 1420.40;

 

3)         Proof of completion of required CPE set forth in Section 1420.70 in the 3 years immediately preceding the application for restoration; and

 

4)         One of the following:

 

A)        Verification of employment completed by an employer, co-worker or client;

 

B)        Verification of employment and certification of licensure from the licensing authority, stating the dates of licensure and whether the records of the licensing authority contain any record of disciplinary action taken or pending;

 

C)        Verification of employment attesting to the applicant's performance of accountancy activities in a jurisdiction where licensure is not required;

 

D)        An affidavit attesting to military service as provided in Section 17.1 of the Act; or

 

E)        Other proof acceptable to the Division of the applicant's fitness to have the license restored.

 

c)         A person seeking restoration of a license that has been expired or been placed on inactive status for less than 5 years shall have the license restored upon payment of the required fee set forth in Section 1420.40.  A licensed CPA must also submit proof of completion of required CPE set forth in Section 1420.70. The CPE hours must have been obtained within the 3 years immediately preceding the application for restoration.  However, any licensee whose license expired while in military service set forth in Section 17.1 of the Act shall be excused from the payment of any lapsed renewal fees if the application for restoration is made within 2 years after honorable discharge from military service.

 

d)         Any person seeking restoration of a license within 2 years after honorable discharge from military service as set forth in Section 17.1 of the Act will be required to pay only the current renewal fee and will not be required to submit proof of meeting the CPE requirements set forth in Section 1420.70.

 

e)         When the accuracy of any submitted documentation or the relevance or sufficiency of the course work or experience is questioned by the Division because of lack of information, discrepancies, conflicts in information, or a need for clarification, the licensee seeking restoration of a license will be requested to provide information as may be necessary.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.70  Continuing Professional Education

 

a)         Continuing Professional Education Hour Requirements

 

1)         In order to renew a license as a licensed CPA, a licensed CPA shall complete 120 hours of CPE every 3-year renewal period. Of the 120 hours, at least 4 hours shall be courses covering the subject of professional ethics.  A licensed CPA is exempt from CPE requirements for the first renewal following the original issuance of the license.  Licensees shall maintain CPE records for not less than 6 years.

 

2)         A registered CPA is exempt from CPE requirements.

 

3)         Each approved CPE course, program or activity shall be measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credits (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. Courses that are part of the curriculum of a university, college or other educational institution shall be awarded CPE course credit at the rate of 15 credit hours for each semester hour, or 10 credit hours for each quarter hour of school credit awarded.

 

4)         CPE credit will be allowed for programs or courses taken toward the satisfaction of CPE requirements in other states.

 

5)         CPE hours earned in excess of the 120-hour requirement during any 3-year renewal period shall not be eligible for use as credit in a subsequent renewal cycle.

 

b)         Approved CPE

 

1)         CPE is professional development activities that are formal and informal learning opportunities contributing directly to a licensee's knowledge, ability or competence to perform professional responsibilities.  CPE may be verifiable or nonverifiable, as set forth in subsections (b)(3) and (4).

 

2)         CPE should address a licensee's current and future work environment, current knowledge and skills level, and desired or needed additional competencies to meet future opportunities and/or professional responsibilities. Courses, programs or activities shall include as their subject matter one or more of the following fields of study:

 

A)        Accounting

 

B)        Accounting (Governmental)

 

C)        Auditing

 

D)        Auditing (Governmental)

 

E)        Behavioral Ethics

 

F)         Business Law

 

G)        Business Management & Organization (including practice development)

 

H)        Communications and Marketing

 

I)         Computer Software and Applications

 

J)         Economics

 

K)        Finance

 

L)        Information Technology

 

M)       Management Services

 

N)        Personal Development (e.g., principle-centered leadership, career planning, time management)

 

O)        Personnel/HR

 

P)         Production

 

Q)        Regulatory Ethics

 

R)        Specialized Knowledge

 

S)         Statistics

 

T)         Taxes

 

3)         Verifiable CPE is learning activities that include, but are not limited to, attending, developing, teaching or presenting CPE that can be independently confirmed by a CPE sponsor. 

 

A)        Verifiable CPE shall:

 

i)          Be developed and presented by persons with education and/or experience in the subject matter of the CPE to ensure compliance with the standards stated in this Section and Section 1420.72;

 

ii)         Include some mechanism by which the participants evaluate the quality of the program;

 

iii)        Specify the course objectives, level of knowledge necessary for, and prerequisites to, enrollment, if any, course content, any necessary advance preparation, teaching methods to be used, and the number of CPE hours that will be earned;

 

iv)        Provide each participant with a certificate or other proof of attendance that must include the name, address and authorized signature of the approved sponsor, the name and address of the participant, the title of the course, the number of hours actually attended in each topic, and the date the CPE was given. CPE sponsors shall also provide each participant with an outline of the subject matter. If the CPE sponsor is a CPA firm licensed under the Act, and the CPE is given in a CPA firm, the sponsor will not be required to provide certificates of attendance to the employees of the CPA firm attending the CPE, but must maintain an attendance log containing an authorized signature of the CPA firm offering the CPE; and

 

v)         Include the following self-study CPE:

 

•           Interactive self-study CPE using interactive learning methodologies that simulate the classroom learning process by employing computer software, other technology or administrative systems that provide significant, ongoing, interactive feedback to the learner regarding the learning process. Interactive self-study CPE shall qualify for full credit.  Internet-based live programs (concurrent simulcasts of group live programs or webcasts) are treated as "live" programs and not interactive self-study CPE.

 

•           Noninteractive self-study CPE that does not employ interactive features. Examples include videos, books and audiotapes for which the participant must complete and submit an examination for grading without knowledge of which questions are answered incorrectly or why. Credit hours for noninteractive self-study CPE shall be allowed on the basis of one-half of the average completion time determined by the sponsor. Noninteractive self-study CPE shall qualify if it meets all other requirements of this Section and Section 1420.72, it indicates average completion time on the course material, and it provides some mechanism or process by which to provide evidence of satisfactory completion by the licensee beyond certification by the licensee. In no case shall credit for noninteractive self-study CPE be given for more than 60 hours during any renewal period.  Additionally, not more than 80 hours during any renewal period may consist of a combination of interactive and noninteractive self-study CPE.

 

B)        A licensee who serves as an instructor, speaker or discussion leader of an approved provider will be allowed CPE credit for actual presentation time, plus actual preparation time of up to 2 hours for each hour of presentation. CPE credit shall not be allowed for repeat presentations of the same CPE. In no case shall more than 60 hours of credit be given for presentation or preparation time during any renewal period.

 

C)        CPE credit will be allowed for authorship of published articles and books, provided the subject matter of the article or book complies with this Section and Section 1420.72. CPE credit shall be allowed for actual time spent in writing or researching, but in no case shall more than 30 hours of credit be given during any renewal period.

 

D)        Acceptable evidence of completion of verifiable CPE includes:

 

i)          For live group CPE or real time internet-based CPE (such as webinars), other than in-firm CPE, a certificate or other verification supplied by the CPE sponsor.

 

ii)         For self-study CPE, a certificate supplied by the CPE sponsor after satisfactory completion of an examination.

 

iii)        For instruction credit, a certificate or other verification supplied by the CPE sponsor.

 

iv)        For a university or college course that is successfully completed for credit, a record or transcript of the grade the participant received.

 

v)         For a university or college noncredit course, a certificate of attendance issued by a representative of the university or college.

 

vi)        For published articles, books or development/review of CPE, a copy of the publication (or in the case of a CPE program, course development documentation) that names the writer or author or contributor, a statement from the writer supporting the number of CPE hours claimed, and the name and contact information of the independent reviewers or publisher.

 

4)         Nonverifiable CPE is independent or informal learning activities that may not be independently confirmed by a CPE sponsor.

 

A)        Nonverifiable CPE includes the following:

 

i)          Attendance at CPE coordinated and presented by a person, CPA firm, association, corporation or group, other than a recognized CPE sponsor;

 

ii)         Participation and work on technical committees of an international, national or state professional association or member organization;

 

iii)        Professional reading of published materials that does not provide a certificate of completion or an assessment process; or

 

iv)        Consultation with outside experts or research in a subject area new to the licensee (e.g., how to report discontinued operations) or when regulations or standards have changed (e.g., accounting for leases). Credit may not be claimed for repeat consultations or research in the same subject area when regulations or standards have not changed significantly.

 

B)        Acceptable evidence for completion of nonverifiable CPE shall include all of the following:

 

i)          For CPE coordinated and presented by a person, CPA firm, association, corporation or group, other than a recognized CPE sponsor, acceptable evidence shall include a certificate or other verification if supplied by the program sponsor.  Acceptable evidence must include copies of the course agenda, program materials or other documents attributable to the learning activity.

 

ii)         For CPE listed in subsections (b)(4)(A)(ii) through (iv), acceptable evidence must include all of the following:

 

•           The nature of the CPE (e.g., research topic or specific new competency acquired) and the source;

 

•           The dates on which the CPE was undertaken;

 

•           The number of hours attributed to the CPE;

 

•           Details of the relevance of the CPE to the participant's current or future professional development; and

 

•           Copies of consultation memorandums, minutes or other documents attributed to the CPE.

 

C)        Not more than 10 hours shall be claimed for each of the nonverifiable activities listed in subsections (b)(4)(A)(ii) through (iv) during any renewal period. Not more than 60 hours during any renewal period may consist of a combination of all nonverifiable activities defined in subsection (b)(4).

 

5)         Not more than 24 hours during any renewal period may consist of personal development CPE.

 

c)         Licensees with an address of record outside of Illinois who are actively licensed as a CPA by the state in their address of record shall be considered compliant with the CPE requirements of this Section if the licensee has complied with the CPE renewal requirements of the state in their address of record.

 

d)         The Division may periodically audit CPE course information submitted by licensees.  It is the responsibility of each renewal applicant to retain or otherwise produce evidence of CPE compliance pursuant to subsection (a)(1).

 

e)         Waiver of CPE Requirements

 

1)         Any renewal applicant seeking renewal of a license without having fully complied with these CPE requirements shall submit to the Division a renewal application, the required fee set forth in Section 1420.40, a statement setting forth the facts concerning noncompliance, and a request for waiver of the CPE requirements on the basis of these facts.  A request for waiver shall be made prior to the renewal date.  If the Division finds from such statement or any other evidence submitted that extreme hardship has been shown for granting a waiver, the Division shall waive enforcement of CPE requirements for the renewal period for which the applicant has applied.

 

2)         Extreme hardship shall be determined on an individual basis and is defined as an inability to devote sufficient hours to fulfilling the CPE requirements during the applicable prerenewal period because of:

 

A)        Full-time service in the armed forces of the United States of America during a substantial part of the prerenewal period;

 

B)        An incapacitating illness documented by a statement from a currently licensed physician; or

 

C)        Other similar extenuating circumstances.

 

3)         Any renewal applicant who, prior to the expiration date of the license, submits a request for a waiver, in whole or in part, as set forth in this Section and Section 1420.72, shall be deemed to be in good standing until the final decision on the waiver request is made by the Division.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.72  Continuing Professional Education Sponsors

 

a)         CPE may be earned for verified attendance at or participation in any course or program given or approved by one of the following:

 

1)         AICPA;

 

2)         Illinois CPA Society;

 

3)         A university or college approved by its governing board in the State of Illinois, or equivalent public authority governing board if in another jurisdiction, to award accounting degrees;

 

4)         CPE sponsored or approved by other states or other state CPA societies;

 

5)         A person, CPA firm, association, corporation or any other group that applies pursuant to subsection (b) and has been licensed and authorized by the Division to coordinate and present CPE; or

 

6)         NASBA and persons, CPA firms, associations, corporations or other groups that are members of NASBA's National Registry of CPE Sponsors or Quality Assurance Service Program.

 

b)         An entity seeking a CPE sponsor license, including those set forth in subsections (a)(1) through (5), shall submit:

 

1)         A completed and signed application on forms provided by the Division;

 

2)         The required fee set forth in Section 1420.40, with the exception of CPE sponsors set forth in subsection (a)(3); 

 

3)         Certification that:

 

A)        All CPE offered by the sponsor for CPE credit will comply with this Section and Section 1420.70;

 

B)        The CPE sponsor will verify attendance at all CPE and will maintain attendance records for not less than 6 years; and

 

C)        Upon request by the Division, the sponsor will submit evidence necessary to establish compliance with the requirements of Section 1420.70 and this Section.

 

c)         Upon failure of any CPE sponsor to comply with the requirements of Section 1420.70 and this Section, the Division shall issue a written notification to the CPE sponsor that it must remedy its noncompliance prior to providing further CPE.

 

d)         CPE sponsors' CPE may be disapproved if the CPE sponsor fails to provide information to the Division.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.75  Peer Review

 

a)         Establishment of Peer Review Program

 

1)         Pursuant to Section 16(e) of the Act, the Division establishes a Peer Review Program to monitor a CPA firm's and sole practitioner's compliance with applicable accounting, auditing and other attestation standards adopted by generally recognized standard-setting bodies. The program may include education, remediation, disciplinary sanctions or other corrective action in which performance does not comply with professional or regulatory standards.

 

2)         The Division shall not require any CPA firm or sole practitioner to become a member of any Peer Review Administrator.

 

b)         Standards for Peer Reviews

The Division adopts the AICPA Standards for Performing and Reporting on Peer Reviews (2017, no later amendments or editions apply) and related Interpretations (2018, no later amendments or editions apply), 1211 Avenue of the Americas, New York NY 10036-8775, for reviews commencing on or after January 1, 2009, and, for public company audit firms, the firm inspection standards required under the Sarbanes-Oxley Act of 2002 (SOX) (18 USC 7201 et seq.) as its minimum standards for review.

 

c)         Peer Review Administrators

 

1)         The Division, upon recommendation of the Committee, approves the following as Qualified Peer Review Administrators:

 

A)        The AICPA;

 

B)        The AICPA National Peer Review Committee;

 

C)        The Society;

 

D)        Other state CPA societies;

 

E)        Other organizations that are fully involved in the administration of the AICPA Peer Review Program; and

 

F)         The Public Company Accounting Oversight Board (PCAOB).

 

2)         A Peer Review Administrator not listed in subsection (c)(1) shall submit an application to the Division, on forms provided by the Division, to receive authorization to act as a Peer Review Administrator.

 

3)         To qualify as a Peer Review Administrator, an entity must annually submit a peer review plan of administration to the Division for review and approval. The plan of administration must:

 

A)        Establish a PRRC, and subcommittees as needed, and provide professional staff as needed for the operation of the peer review program;

 

B)        Establish a program to communicate to CPA firms and sole practitioners participating in the peer review program the latest developments in peer review standards and the most common findings in the peer reviews conducted by the Peer Review Administrator;

 

C)        Establish procedures for resolving any disagreement that may arise out of the performance of a peer review;

 

D)        Establish procedures to resolve matters that may lead to the dismissal of a CPA firm or sole practitioner from the peer review program;

 

E)        Establish procedures to evaluate and document the performance of each reviewer, which may lead to the disqualification of a reviewer who does not meet the AICPA standards;

 

F)         Require the maintenance of records of peer reviews conducted under the program in accordance with the record retention rules of the AICPA; and

 

G)        Provide reports on the results of the peer review program to the Division upon request.

 

4)         A Peer Review Administrator shall submit its plan of administration on forms provided by the Division.  Peer Review Administrators set forth in subsection (c)(1) are exempt from the plan of administration submission requirements.

 

5)         A Peer Review Administrator is subject to oversight by the Division for the purpose of carrying out the provisions of the Act.

 

d)         Enrollment and Participation

 

1)         For renewals on or after July 1, 2012, satisfactory completion of a peer review is required as a condition for renewal of a license for each CPA firm or sole practitioner who performs accountancy activities outlined in Section 8.05(a)(1) of the Act. For purposes of this Section, satisfactory completion shall be defined as follows:

 

A)        Peer reviews of CPA firms and sole practitioners that are accepted by the PRRC without remedial or corrective actions shall be considered completed when accepted.

 

B)        Peer reviews of CPA firms and sole practitioners that are accepted by the PRRC subject to any identified remedial or corrective actions shall be considered accepted on the date the CPA firm or sole practitioner signs an acceptance letter from the PRRC agreeing to complete the remedial or corrective actions and shall be considered completed when the CPA firm or sole practitioner completes the remedial or corrective actions to the satisfaction of the PRRC. The Division may grant renewal of a CPA firm's or sole practitioner's license upon the acceptance of its peer review, rather than upon the completion of its peer review.

 

C)        Pursuant to Section 16(g) of the Act, the Division may hold a hearing for any CPA firm or sole practitioner that fails to satisfactorily complete a peer review or comply with any remedial or corrective actions determined necessary by the PRRC.

 

2)         Each CPA firm or sole practitioner required to participate under Section 16(e) of the Act shall be enrolled in the program of an approved Peer Review Administrator and shall comply with the review due date assigned by an approved Peer Review Administrator. It is the responsibility of the CPA firm or sole practitioner required to complete a peer review to schedule and satisfactorily complete a peer review prior to the expiration date set for renewal.  Failure to schedule a peer review with an approved Peer Review Administrator in sufficient time to enable the Peer Review Administrator to accept the review, as determined by the Peer Review Administrator, by the renewal date shall not constitute an excuse for failure to satisfactorily complete the peer review required for renewal.

 

3)         The Division, in its discretion, may accept extensions granted by the Peer Review Administrator to complete a review. Extensions exceeding 3 months beyond the original due date established by the Peer Review Administrator must be approved by the Division and only for reasonable cause.  Reasonable cause shall be determined on an individual basis by the Division and be defined as an inability to fulfill the peer review requirements during the applicable prerenewal period due to:

 

A)        Full-time service by a sole practitioner in the Armed Forces of the United States of America during a substantial part of the prerenewal period;

 

B)        A temporary incapacitating illness of a sole practitioner documented by a statement from a currently licensed physician;

 

C)        Undue hardship (including, but not limited to, prolonged hospitalization, family illness, CPA firm dissolution or reorganization); or

 

D)        Other similar extenuating circumstances.

 

4)         A CPA firm or sole practitioner may choose from among the list of Qualified Peer Review Administrators in subsection (c) to administer its peer review; but must comply with all requirements of the Peer Review Administrator in which it is enrolled. 

 

5)         A CPA firm or sole practitioner choosing to change to another Peer Review Administrator may do so provided that the CPA firm or sole practitioner authorizes the previous Peer Review Administrator to communicate to the succeeding Peer Review Administrator any outstanding corrective actions related to the CPA firm's or sole practitioner's most recent review.  Any outstanding actions must be corrected and the peer review satisfactorily completed in accordance with subsections (d)(1)(A) and (B) prior to transfer between Peer Review Administrators.

 

6)         An out-of-state CPA firm practicing in this State pursuant to a practice privilege provided for in Section 5.2(d) of the Act must comply with the peer review program of the state in which the CPA firm is licensed.

 

7)         An out-of-state CPA firm practicing in this State pursuant to a practice privilege provided for in Section 5.2(d) of the Act from a state without a peer review program must comply with the peer review requirements set forth in Section 16(e) of the Act.

 

8)         An out-of-state CPA firm practicing in this State pursuant to a practice privilege provided for in Section 5.2(d) of the Act must submit proof of satisfactory completion of a peer review (or equivalent) at the request of the Division.

 

9)         In the event a CPA firm's or sole practitioner's practice is sold, dissolved or merged with the practice of one or more CPA firms or sole practitioners, determination of successor or predecessor CPA firms, peer review year-end and peer review due date, if any, will be determined by the Peer Review Administrator.

 

e)         Effect of Successive Substandard Reviews

 

1)         CPA firms and sole practitioners enrolled in a Peer Review Program are required under the AICPA Standards for Performing and Reporting on Peer Reviews to cooperate with the Peer Reviewer, Peer Review Administrator, PRRC, and AICPA Peer Review Board or its equivalent in all matters related to the review that could impact the CPA firm's or sole practitioner's enrollment in the program.

 

2)         If a CPA firm or sole practitioner receives a system or engagement review with a peer review rating of pass with deficiencies or fail, the Peer Review Administrator shall send notification to the CPA firm or sole practitioner, or its successor, via certified mail, or other delivery method providing proof of receipt, that failure to receive a report rating of pass on its next system or engagement review may be deemed failure to cooperate under subsections (e)(3) and (4).

 

3)         If a CPA firm or sole practitioner, or its successor, receives two consecutive system or engagement reviews with a peer review rating of pass with deficiencies or fail, the Peer Review Committee shall assess whether the CPA firm or sole practitioner, or its successor, has failed to cooperate in all matters related to the review.

 

4)         If a CPA firm or sole practitioner, or its successor, is deemed to have failed to cooperate, the Peer Review Committee may refer the CPA firm or sole practitioner, or its successor, to the AICPA Peer Review Board, or its equivalent, to consider whether a hearing should be held regarding the CPA firm's or sole practitioner's, or its successor's, termination from the Peer Review Program.

 

5)         If a CPA firm or sole practitioner, or its successor, is deemed to have cooperated in all matters related to the review, the CPA firm or sole practitioner, or its successor, shall complete any required remedial or corrective actions to the satisfaction of the PRRC and undergo another peer review within 3½ years after the due date of the prior review. 

 

6)         If a CPA firm or sole practitioner, or its successor, receives a third consecutive peer review rating of pass with deficiencies or fail, the Peer Review Committee shall refer the CPA firm or sole practitioner, or its successor, to the AICPA Peer Review Board, or its equivalent, to consider whether a hearing will be held regarding the CPA firm's or sole practitioner's, or its successor's termination from the Peer Review Program.

 

7)         The Division, in its discretion, may require any CPA firm or sole practitioner that has received a report with a peer review rating of pass with deficiencies or fail to be subject to remedial action as determined by the Division.

 

f)         PRRC Qualifications and Responsibilities

 

1)         PRRC members are subject to the qualifications and have the responsibilities outlined in the AICPA Standards for Performing and Reporting on Peer Reviews and related guidance.

 

2)         Each PRRC member must comply with the confidentiality requirements of Section 16(f)(2) of the Act. The Peer Review Administrator may annually require its PRRC members to sign a statement acknowledging their appointments and the responsibilities and obligations of their appointments.

 

g)         Division Access to Results of CPA Firm's or Sole Practitioner's Peer Reviews

 

1)         A CPA firm or sole practitioner shall submit the following peer review documents promptly upon Division request:

 

A)        Peer review report;

 

B)        Letter of response, if applicable;

 

C)        Acceptance letter;

 

D)        Letter signed by the reviewed CPA firm accepting the peer review documents with the understanding that the CPA firm agrees to take certain actions, if applicable; and

 

E)        Letter notifying the reviewed CPA firm that certain required actions have been completed, if applicable.

 

2)         To comply with the Division's request in subsection (g)(1), the Peer Review Administrator for CPA firms or sole practitioners shall post the documents listed in subsection (g)(1) within 45 days after the Division's request to the AICPA Facilitated State Board Access website, to which the Division shall have access.

 

3)         Documents received under this Section are subject to the confidentiality provisions stated in the Act.

 

h)         The Division may consider the recommendation of the Public Accountant Registration and Licensure Committee regarding peer review in the State of Illinois.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.80  Renewals

 

a)         Individuals

Every license issued to an individual under the Act shall expire on September 30 every 3 years.  The holder of a license may renew the license during the 2 months preceding the expiration date by submitting the fee required by Section 1420.40 and meeting the CPE requirements set forth in Section 1420.70.

 

b)         CPA Firms

Every license for a CPA firm shall expire on November 30 every 3 years. CPA firms may renew their license during the 2 months preceding the expiration date by submitting the fee required by Section 1420.40, notification of any change in members residing in Illinois, and verification that the CPA firm continues to meet the qualifications set forth in Section 14 of the Act.

 

c)         CPE Sponsors

Every license for a CPE sponsor shall expire on December 31 every year. CPE sponsors may renew their license during the 2 months preceding the expiration date by submitting the fee required by Section 1420.40 and verification that the CPE sponsor continues to meet the qualifications set forth in Section 1420.72.

 

d)         It is the responsibility of each licensee to notify the Division of any change of address or email address of record. Failure to receive a renewal form from the Division shall not constitute an excuse for failure to renew.

 

e)         Practicing or offering to practice on a license that has expired shall be considered unlicensed activity and shall be grounds for discipline pursuant to Section 9 of the Act, except as set forth in Section 17.2 of the Act.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.85  Inactive Status

 

a)         A licensed or registered CPA who notifies the Division, on forms provided by the Department, may place the license or registration on inactive status and shall be excused from paying renewal fees until he or she notifies the Department in writing of the intention to resume active practice under the restoration provisions in Section 1420.60.

 

b)         Any person violating Section 17.2(d), (e) or (f) of the Act shall be considered to be practicing without a license or registration and shall be subject to the disciplinary provisions of the Act.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.90  Annual Report of the Committee (Repealed)

 

(Source:  Repealed at 40 Ill. Reg. 3692, effective March 11, 2016)

 

Section 1420.100  Conduct of Hearings (Repealed)

 

(Source:  Repealed at 19 Ill. Reg. 16258, effective November 28, 1995)

 

Section 1420.110  Granting Variances

 

The Director may grant variances from this Part in individual cases when he/she finds that:

 

a)         The provision from which the variance is granted is not statutorily mandated;

 

b)         No party will be materially injured by the granting of the variance; and

 

c)         The rule from which the variance is granted would, if applied in the particular case, be unreasonable or unnecessarily burdensome.

 

(Source:  Amended at 44 Ill. Reg. 184, effective January 3, 2020)

 

Section 1420.200  Unprofessional Conduct

 

a)         Pursuant to Section 20.01(a)(12) of the Act, unprofessional conduct in the practice of accountancy activities shall include, but not be limited to:

 

1)         Knowingly misrepresenting facts and, when engaged in accountancy activities, including the rendering of tax and management advisory services;

 

2)         Undertaking any engagement that a licensee cannot reasonably expect to complete with professional competence;

 

3)         Permitting his, her or its name to be used in conjunction with any forecast of future transactions in a manner that may lead to the belief that the licensee vouches for the achievability of the forecast;

 

4)         Committing an act that violates public policy or is discreditable to the public accounting profession;

 

5)         Failure to disclose a referral fee to a client for recommending or referring any service of a CPA to any entity or who pays a referral fee to obtain a client;

 

6)         Engaging in any business or occupation that impairs the objectivity of a licensee's judgment in connection with the rendering of professional services;

 

7)         Practicing accountancy activities in a form of organization not permitted by Illinois law or regulation;

 

8)         Practicing under a CPA firm name that is misleading.  For the purposes of Section 1400.200, an owner surviving the death or withdrawal of all other owners may continue to practice under a name that includes the name of past owners for up to two years after becoming a sole practitioner;

 

9)         Discriminating against clients on the basis of race, gender, religion, age, national origin, political affiliation, social or economic status, choice of lifestyle, or sexual orientation; and

 

10)        Directly or indirectly giving to or receiving from any person any fee, commission, rebate or other form of compensation for any professional services not actually rendered.

 

b)         The Division hereby incorporates by reference the AICPA Code of Professional Conduct (2015, no later editions or amendments included), 1211 Avenue of the Americas, New York NY 10036-8775, as its minimum standards for professional conduct.

 

(Source:  Added at 40 Ill. Reg. 3692, effective March 11, 2016)