99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2434

 

Introduced 2/9/2016, by Sen. Pamela J. Althoff

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 450/0.03  from Ch. 111, par. 5500.03
225 ILCS 450/5.2
225 ILCS 450/13  from Ch. 111, par. 5514

    Amends the Illinois Public Accounting Act. Allows a certified public accountant (CPA) firm whose principal place of business is not in this State to have all the privileges of a CPA firm licensed under the Act without the need to obtain a license from the Department of Financial and Professional Regulation or to file notice with the Department if the CPA firm complies with specified substantial equivalency requirements; makes conforming changes. Provides that firms that do not meet the certain requirements but offer or render services in the State must hold a license issued under the Act. Effective immediately.


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A BILL FOR

 

SB2434LRB099 15867 MLM 40178 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Accounting Act is amended by
5changing Sections 0.03, 5.2, and 13 as follows:
 
6    (225 ILCS 450/0.03)  (from Ch. 111, par. 5500.03)
7    (Section scheduled to be repealed on January 1, 2024)
8    Sec. 0.03. Definitions. As used in this Act, unless the
9context otherwise requires:
10    "Accountancy activities" means the services as set forth in
11Section 8.05 of the Act.
12    "Address of record" means the designated address recorded
13by the Department in the applicant's, licensee's, or
14registrant's application file or license file maintained by the
15Department's licensure maintenance unit. It is the duty of the
16applicant, licensee, or registrant to inform the Department of
17any change of address, and those changes must be made either
18through the Department's website or by directly contacting the
19Department.
20    "Certificate" means a certificate issued by the Board or
21University or similar jurisdictions specifying an individual
22has successfully passed all sections and requirements of the
23Uniform Certified Public Accountant Examination. A certificate

 

 

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1issued by the Board or University or similar jurisdiction does
2not confer the ability to use the CPA title and is not
3equivalent to a registration or license under this Act.
4    "Compilation" means providing a service to be performed in
5accordance with Statements on Standards for Accounting and
6Review Services that is presented in the form of financial
7statements or information that is the representation of
8management or owners without undertaking to express any
9assurance on the statements.
10    "CPA" or "C.P.A." means a certified public accountant who
11holds a license or registration issued by the Department or an
12individual authorized to use the CPA title under Section 5.2 of
13this Act.
14    "CPA firm" means a sole proprietorship, a corporation,
15registered limited liability partnership, limited liability
16company, partnership, professional service corporation, or any
17other form of organization issued a license in accordance with
18this Act or a CPA firm authorized to use the CPA firm title
19under Section 5.2 of this Act.
20    "CPA (inactive)" means a licensed certified public
21accountant who elects to have the Department place his or her
22license on inactive status pursuant to Section 17.2 of this
23Act.
24    "Financial statement" means a structured presentation of
25historical financial information, including, but not limited
26to, related notes intended to communicate an entity's economic

 

 

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1resources and obligations at a point in time or the changes
2therein for a period of time in accordance with generally
3accepted accounting principles (GAAP) or other comprehensive
4basis of accounting (OCBOA).
5    "Other attestation engagements" means an engagement
6performed in accordance with the Statements on Standards for
7Attestation Engagements.
8    "Registered Certified Public Accountant" or "registered
9CPA" means any person who has been issued a registration under
10this Act as a Registered Certified Public Accountant.
11    "Report", when used with reference to financial
12statements, means an opinion, report, or other form of language
13that states or implies assurance as to the reliability of any
14financial statements and that also includes or is accompanied
15by any statement or implication that the person or firm issuing
16it has special knowledge or competence in accounting or
17auditing. Such a statement or implication of special knowledge
18or competence may arise from use by the issuer of the report of
19names or titles indicating that the person or firm is an
20accountant or auditor, or from the language of the report
21itself. "Report" includes any form of language that disclaims
22an opinion when the form of language is conventionally
23understood to imply any positive assurance as to the
24reliability of the financial statements referred to or special
25competence on the part of the person or firm issuing such
26language; it includes any other form of language that is

 

 

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1conventionally understood to imply such assurance or such
2special knowledge or competence.
3    "Licensed Certified Public Accountant" or "licensed CPA"
4means any person licensed under this Act as a Licensed
5Certified Public Accountant.
6    "Committee" means the Public Accountant Registration and
7Licensure Committee appointed by the Secretary.
8    "Department" means the Department of Financial and
9Professional Regulation.
10    "License", "licensee", and "licensure" refer to the
11authorization to practice under the provisions of this Act.
12    "Peer review" means a study, appraisal, or review of one or
13more aspects of a CPA firm's or sole practitioner's compliance
14with applicable accounting, auditing, and other attestation
15standards adopted by generally recognized standard-setting
16bodies.
17    "Principal place of business" means the office location
18designated by the licensee from which the person directs,
19controls, and coordinates his or her professional services.
20    "Review committee" means any person or persons conducting,
21reviewing, administering, or supervising a peer review
22program.
23    "Secretary" means the Secretary of the Department of
24Financial and Professional Regulation.
25    "University" means the University of Illinois.
26    "Board" means the Board of Examiners established under

 

 

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1Section 2.
2    "Registration", "registrant", and "registered" refer to
3the authorization to hold oneself out as or use the title
4"Registered Certified Public Accountant" or "Certified Public
5Accountant", unless the context otherwise requires.
6    "Peer Review Administrator" means an organization
7designated by the Department that meets the requirements of
8subsection (f) of Section 16 of this Act and other rules that
9the Department may adopt.
10(Source: P.A. 98-254, eff. 8-9-13; 99-78, eff. 7-20-15.)
 
11    (225 ILCS 450/5.2)
12    (Section scheduled to be repealed on January 1, 2024)
13    Sec. 5.2. Substantial equivalency.
14    (a) An individual whose principal place of business is not
15in this State shall have all the privileges of a person
16licensed under this Act as a licensed CPA without the need to
17obtain a license from the Department or to file notice with the
18Department, if the individual:
19        (1) holds a valid license as a certified public
20    accountant issued by another state that the National
21    Qualification Appraisal Service of the National
22    Association of State Boards of Accountancy has verified to
23    be in substantial equivalence with the CPA licensure
24    requirements of the Uniform Accountancy Act of the American
25    Institute of Certified Public Accountants and the National

 

 

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1    Association of State Boards of Accountancy; or
2        (2) holds a valid license as a certified public
3    accountant issued by another state and obtains from the
4    National Qualification Appraisal Service of the National
5    Association of State Boards of Accountancy verification
6    that the individual's CPA qualifications are substantially
7    equivalent to the CPA licensure requirements of the Uniform
8    Accountancy Act of the American Institute of Certified
9    Public Accountants and the National Association of State
10    Boards of Accountancy; however, any individual who has
11    passed the Uniform CPA Examination and holds a valid
12    license issued by any other state prior to January 1, 2012
13    shall be exempt from the education requirements of Section
14    3 of this Act for the purposes of this item (2).
15    (a-5) A CPA firm whose principal place of business is not
16in this State shall have all the privileges of a CPA firm
17licensed under this Act without the need to obtain a license
18from the Department or to file notice with the Department if
19the CPA firm complies with the requirements outlined in
20Sections 14.4 and 16 through substantial equivalency of their
21licensed state.
22    (b) Notwithstanding any other provision of law, an
23individual or CPA firm who offers or renders professional
24services under this Section, whether in person or by mail,
25telephone, or electronic means, shall be granted practice
26privileges in this State and no notice or other submission must

 

 

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1be provided by any such individual or CPA firm.
2    (c) An individual licensee or CPA firm of another state who
3is exercising the privilege afforded under this Section and the
4CPA firm that employs such individual licensee, if any, as a
5condition of the grant of this privilege, hereby simultaneously
6consents:
7        (1) to the personal and subject matter jurisdiction and
8    disciplinary authority of the Department;
9        (2) to comply with this Act and the Department's rules
10    adopted under this Act;
11        (3) that in the event that the license from the state
12    of the individual's or CPA firm's principal place of
13    business is no longer valid, the individual or CPA firm
14    shall cease offering or rendering accountancy activities
15    as outlined in paragraphs (1) and (2) of Section 8.05 in
16    this State individually or on behalf of a CPA firm; and
17        (4) to the appointment of the state board that issued
18    the individual's or the CPA firm's license as the agent
19    upon which process may be served in any action or
20    proceeding by the Department against the individual or CPA
21    firm.
22    (d) An individual licensee who qualifies for practice
23privileges under this Section who, for any entity headquartered
24in this State, performs (i) a financial statement audit or
25other engagement in accordance with Statements on Auditing
26Standards; (ii) an examination of prospective financial

 

 

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1information in accordance with Statements on Standards for
2Attestation Engagements; or (iii) an engagement in accordance
3with Public Company Accounting Oversight Board Auditing
4Standards may only do so through a CPA firm licensed under this
5Act or a CPA firm with practice privileges under this Section.
6    (e) A CPA firm that qualifies for practice privileges under
7this Section and, for any entity headquartered in this State,
8performs the following may only do so through an individual or
9individuals licensed under this Act or an individual or
10individuals with practice privileges under this Section:
11        (1) a financial statement audit or other engagement in
12    accordance with Statements on Auditing Standards;
13        (2) an examination of prospective financial
14    information in accordance with Statements on Standards for
15    Attestation Engagements; or
16        (3) an engagement in accordance with Public Company
17    Accounting Oversight Board Auditing Standards.
18(Source: P.A. 98-254, eff. 8-9-13.)
 
19    (225 ILCS 450/13)  (from Ch. 111, par. 5514)
20    (Section scheduled to be repealed on January 1, 2024)
21    Sec. 13. Application for licensure.
22    (a) A person or CPA firm that wishes to perform accountancy
23activities in this State, as defined in paragraph (1) of
24subsection (a) of Section 8.05 of this Act, or use the CPA
25title shall make application to the Department and shall pay

 

 

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1the fee required by rule.
2    Applicants have 3 years from the date of application to
3complete the application process. If the process has not been
4completed in 3 years, the application shall be denied, the fee
5forfeited and the applicant must reapply and meet the
6requirements in effect at the time of reapplication.
7    (b) Any CPA firm that (i) has an office in this State that
8uses the title "CPA" or "CPA firm"; (ii) has an office in this
9State that performs accountancy activities, as defined in
10paragraph (1) of subsection (a) of Section 8.05 of this Act; or
11(iii) does not have an office in this State and does not meet
12the practice privilege requirements as defined in Section 5.2
13of this Act, but offers or renders performs services, as set
14forth in subsection (e) (d) of Section 5.2 of this Act, for a
15client that is headquartered in this State must hold a license
16as a CPA firm issued under this Act.
17    (c) (Blank). A CPA firm that does not have an office in
18this State may perform a review of a financial statement in
19accordance with the Statements on Standards for Accounting and
20Review Services for a client with its headquarters in this
21State and may use the title "CPA" or "CPA firm" without
22obtaining a license as a CPA firm under this Act, only if the
23firm (i) performs such services through individuals with
24practice privileges under Section 5.2 of this Act; (ii)
25satisfies any peer review requirements in those states in which
26the individuals with practice privileges under Section 5.2 have

 

 

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1their principal place of business; and (iii) meets the
2qualifications set forth in paragraph (1) of Section 14.4 of
3this Act.
4    (d) A CPA firm that is not subject to the requirements of
5subsection (b) or (c) of this Section may perform professional
6services that are not regulated under subsection (b) or (c) of
7this Section while using the title "CPA" or "CPA firm" in this
8State without obtaining a license as a CPA firm under this Act
9if the firm (i) performs such services through individuals with
10practice privileges under Section 5.2 of this Act and (ii) may
11lawfully perform such services in the state where those
12individuals with practice privileges under Section 5.2 of this
13Act have their principal place of business.
14(Source: P.A. 98-254, eff. 8-9-13.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.