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| [ Engrossed ] | [ Enrolled ] | [ Senate Amendment 001 ] |
91_HB2194
LRB9104858ACtm
1 AN ACT to amend the Public Accounting Act.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Public Accounting Act is amended
5 by changing Sections 5, 9.1, and 14 and by adding Sections
6 14.2 and 14.3 as follows:
7 (225 ILCS 450/5) (from Ch. 111, par. 5506)
8 Sec. 5. Certification of out-of-State accountants.
9 (a) The Board may issue a certificate as a certified
10 public accountant, without examination, to any applicant who
11 holds a valid unrevoked certificate as a certified public
12 accountant issued under the laws of any other state or
13 territory of the United States or the District of Columbia,
14 provided:
15 (1) that the state that issued the certificate has
16 certification requirements that have been determined by
17 the Board to be substantially equivalent to the
18 certification requirements of Illinois and grants similar
19 rights to those that Illinois grants to certificate
20 holders;
21 (2) that the state that issued the certificate has
22 certification requirements that the Department has
23 determined not to be substantially equivalent to the
24 certification requirements of Illinois or does not grant
25 similar rights to Illinois certificate holders, but the
26 Board determines that the individual applicant possesses
27 personal qualifications substantially equivalent to
28 Illinois' certification requirements; or
29 (3) that the applicant does not qualify under
30 subsections (1) or (2) above, but the following
31 conditions are met:
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1 (A) (a) the certificate was granted to the
2 applicant on the basis of the Uniform Certified
3 Public Accountant examination; and
4 (B) (b) the educational qualifications of the
5 applicant for a certificate, at the time of the
6 written examination, were equivalent to the
7 educational qualifications then required of
8 applicants for admission to the Illinois examination
9 for certified public accountant or, the applicant
10 has, after passing the examination upon which his or
11 her certificate was based, not less than 5 years of
12 experience in the practice of public accounting
13 within the 10 years immediately preceding this
14 application, otherwise reasonably considered
15 acceptable by the Board.
16 (b) In determining the substantial equivalency of the
17 requirements for certification or the rights granted to
18 certificate holders pursuant to this Section, the Board may
19 rely on the determinations of the National Qualification
20 Appraisal Service of the National Association of State Boards
21 of Accountancy or any other qualification appraisal service,
22 as it deems appropriate.
23 (Source: P.A. 88-36.)
24 (225 ILCS 450/9.1) (from Ch. 111, par. 5510.1)
25 Sec. 9.1. Temporary practice.
26 (a) An individual whose principal place of business is
27 not in this State and who has a license or permit to practice
28 as a certified public accountant from any state that has
29 requirements that the Department has determined to be
30 substantially equivalent to the licensing requirements of
31 this State and grants similar rights to those that Illinois
32 grants to a licensee, shall have all the privileges of a
33 licensee under this Act without the need to obtain a license
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1 under this Act.
2 (a-5) An individual whose principal place of business is
3 not in this State and who has a valid license or permit to
4 practice as a certified public accountant from any state that
5 has requirements that Department has determined are not
6 substantially equivalent to the licensing requirements of
7 this State or does not grant similar rights to those that
8 Illinois grants to a licensee, but who the Department
9 determines possesses personal qualifications substantially
10 equivalent to Illinois licensure requirements, shall have all
11 the privileges of a licensee under this Act without the need
12 to obtain a license or certificate under this Act. Licensed
13 certified public accountants of other States and Territories
14 of the United States or the District of Columbia who do not
15 reside or have an office in this State may temporarily
16 practice public accounting in this State on professional
17 business incident to their regular practice without licensure
18 pursuant to this Act. Such temporary practice must be
19 conducted in accordance with the relevant provisions of this
20 Act and rules and regulations adopted hereunder, including
21 provisions relating to disciplinary action.
22 (b) A foreign accountant who holds a license,
23 certificate, or degree in a foreign country constituting a
24 recognized qualification for the practice of public
25 accounting and who does not reside or have an office in this
26 State may temporarily practice public accounting in this
27 State or professional business incident to his or her regular
28 practice without licensure under this Act provided the
29 standards, including examination, governing issuance of the
30 foreign license, certificate, or degree are substantially
31 equivalent to those in Illinois, and the foreign jurisdiction
32 in question grants equal recognition to Illinois accountants.
33 (c) The Department may, by rule, require that any person
34 practicing in this State under the provisions of subsections
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1 (a), (a-5), or (b) of this Section notify the Department of
2 his or her intent to practice in this State under the
3 provisions of this Section. Anyone practicing in this State
4 under the provisions of this Section shall be subject to the
5 personal and subject matter jurisdiction of the Department,
6 and shall comply with this Act and all rules promulgated
7 hereunder. By practicing in this State under the provisions
8 of this Section, the person shall be deemed to consent to the
9 appointment of the licensing authority of the jurisdiction
10 which granted his or her license as agent upon whom process
11 may be served in any action or proceeding by the Department
12 against the person.
13 (Source: P.A. 88-36.)
14 (225 ILCS 450/14) (from Ch. 111, par. 5515)
15 Sec. 14. Qualifications. The Department shall license as
16 public accountants the following:
17 (a) All persons who have received or who hereafter
18 receive certificates as certified public accountants from the
19 Board, who have had at least one year of full-time experience
20 , or its equivalent, providing any type of service or advice
21 involving the use of accounting, attest, management advisory,
22 financial advisory, tax, or consulting skills, which may be
23 gained through employment in government, industry, academia,
24 or public practice. either on the professional staff of a
25 practicing public accountant of this or any other state or in
26 a responsible audit position including work of a type
27 normally directed toward the expression of an independent
28 opinion on financial statements in a governmental agency
29 either: (1) in auditing the books and accounts or financial
30 activities of partnerships, corporations or other persons
31 engaged in 3 or more distinct lines of commercial or
32 industrial business in accordance with generally accepted
33 auditing standards; or (2) in auditing the books and accounts
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1 or financial activities of 3 or more distinct governmental
2 agencies or independent organizational units, not an employer
3 of the applicant, in accordance with generally accepted
4 auditing standards, and in which the results of such auditing
5 are reported to a third party; or (3) in reviewing financial
6 statements and supporting material covering the financial
7 condition and operations of entities engaged in 3 or more
8 distinct lines of commercial or industrial business to
9 determine the reliability and fairness of the financial
10 reporting and compliance with generally accepted accounting
11 principles and applicable laws and governmental regulations;
12 or who provide satisfactory evidence to the Committee,
13 established herein, of such other experience or employment as
14 the Committee may consider substantially equivalent thereto.
15 If the applicant's certificate was issued more than 4
16 years prior to the application for an internal license under
17 this Section, the applicant shall submit any evidence the
18 Department may require showing the applicant has completed
19 not less than 90 hours of continuing professional education
20 acceptable to the Department within the 3 years immediately
21 preceding the date of application.
22 The Committee shall be the sole and final judge of the
23 qualification of experience under this section.
24 (b) All partnerships, limited liability companies, or
25 corporations, or other entities engaged in the practice of
26 public accounting in this State and meeting the following
27 requirements:
28 (1) (Blank) At least one partner, member of a
29 limited liability company, or shareholder in a
30 corporation must be licensed as a public accountant by
31 the Department under the provisions of this Act and must
32 be a holder of an effective unrevoked registration card;
33 and each partner, member of a limited liability company,
34 or shareholder of a corporation personally engaged in
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1 this State in the practice of public accounting and each
2 person in charge of an office of the firm in this State
3 must be so licensed and must be a holder of such a card.
4 (2) A majority of the ownership of the firm, in
5 terms of financial interests and voting rights of all
6 partners, officers, shareholders, members, or managers,
7 belongs to persons licensed in some state, and the
8 partners, officers, shareholders, member, or managers
9 whose principal place of business is in this State and
10 who practice public accounting in this State, as defined
11 in Section 8 of this Act, hold a valid license issued by
12 this State. Each partner, member of a limited liability
13 company, or shareholder of a corporation not personally
14 engaged in this State in the practice of public
15 accounting must be a certified public accountant or be
16 otherwise authorized to practice accounting in some State
17 or Territory of the United States, in the District of
18 Columbia or in a foreign country or a political
19 subdivision thereof.
20 (3) It shall be lawful for a nonprofit cooperative
21 association engaged in rendering an auditing and
22 accounting service to its members only, to continue to
23 render that service provided that the rendering of
24 auditing and accounting service by the cooperative
25 association shall at all times be under the control and
26 supervision of public accountants.
27 (4) The Department may adopt rules and regulations
28 as necessary to provide for the practice of public
29 accounting by business entities that may be otherwise
30 authorized by law to conduct business in Illinois.
31 The Director shall appoint a Public Accountant
32 Registration Committee as follows: 7 persons who shall be
33 appointed by and shall serve in an advisory capacity to the
34 Director. Six members must be licensed public accountants,
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1 in good standing, and must be actively engaged in the
2 practice of public accounting in this State, and one member
3 of the public, who is not licensed under this Act, or a
4 similar Act of another jurisdiction, and, who has no
5 connection with the accounting or public accounting
6 profession. Members shall serve 4 year terms and until their
7 successors are appointed and qualified. No member shall be
8 reappointed to the Committee for more than 2 terms.
9 Appointments to fill vacancies shall be made in the same
10 manner as original appointments, for the unexpired portion of
11 the vacated term. The membership of the Committee should
12 reasonably reflect representation from the geographic areas
13 in this State.
14 The members of the Committee appointed by the Director
15 shall receive reasonable compensation, to be determined by
16 the Department, for the necessary, legitimate, and
17 authorized expenses approved by the Department. All expenses
18 shall be paid from the Registered Certified Public
19 Accountants' Administration and Disciplinary Fund.
20 The Director may terminate the appointment of any member
21 for cause.
22 The Committee shall present an annual report to the
23 Department the content of which shall be specified by rule.
24 The Director shall consider the advice and
25 recommendations of the Committee on questions involving
26 standards of professional conduct, discipline and
27 qualifications of candidates and licensees under this Act.
28 (Source: P.A. 88-36.)
29 (225 ILCS 450/14.2 new)
30 Sec. 14.2. Licensure by reciprocity.
31 (a) The Department shall issue a license as a public
32 accountant to any applicant who holds a valid unrevoked
33 license or permit to practice as a certified public
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1 accountant issued under the laws of any other state or
2 territory of the United States or the District of Columbia,
3 provided:
4 (1) that the state that issued the license or
5 permit to practice has licensure requirements that have
6 been determined by the Department to be substantially
7 equivalent to the licensure requirements of this State
8 and grants similar rights to Illinois licensees; or
9 (2) that the state that issued the license or
10 permit to practice has requirements that the Department
11 has determined not to be substantially equivalent with
12 the licensure requirements of this State or does not
13 grant similar rights to Illinois licensees, but the
14 individual applicant is determined by the Department to
15 possess personal qualifications substantially equivalent
16 to this State's licensing requirements; or
17 (3) that the applicant does not qualify under
18 paragraphs (1) or (2) above, but the following conditions
19 are met:
20 (A) the license or permit to practice was
21 granted to the applicant on the basis of the uniform
22 CPA examination; and
23 (B) the educational qualifications of the
24 applicant for a license or other permit to practice,
25 at the time of the written examination, were
26 equivalent to the educational qualifications then
27 required of applicants for admission to the Illinois
28 examination for certified public accountants or the
29 applicant has, after passing the examination upon
30 which his or her license or other permit to practice
31 was based, not less than 4 years of experience in
32 the practice of public accounting within the 10
33 years immediately before the application.
34 (b) In determining the substantial equivalency of any
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1 state's requirements to Illinois' requirements, the
2 Department may rely on the determinations of the National
3 Qualification Appraisal Service of the National Association
4 of State Boards of Accountancy or such other qualification
5 appraisal service as it deems appropriate.
6 (225 ILCS 450/14.3 new)
7 Section 14.3. Additional requirements for firms. In
8 addition to the ownership requirements set forth in
9 subsection (b) of Section 14, all firms licensed under this
10 Act shall meet the following requirements:
11 (a) All owners of the firm who are not licensed shall be
12 active participants in the firm or its affiliated entities.
13 (b) An individual who supervises services for which a
14 license is required under Section 8 of this Act or who signs
15 or authorizes another to sign any report for which a license
16 is required under Section 8 of this Act shall hold a valid,
17 unrevoked license from this State and shall comply with such
18 additional experience requirements as may be required by rule
19 of the Department.
20 (c) The firm shall require that all owners of the firm,
21 whether or not certified or licensed under this Act, comply
22 with rules promulgated under this Act.
23 (d) The firm shall designate to the Department in
24 writing an individual licensed under this Act who shall be
25 responsible for the proper registration of the firm.
26 Section 99. Effective date. This Act takes effect upon
27 becoming law.