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SSHB 147: "An Act relating to the Board of Public Accountancy; relating to the licensure of public accountants; and relating to the practice of public accounting."

00 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 147 01 "An Act relating to the Board of Public Accountancy; relating to the licensure of public 02 accountants; and relating to the practice of public accounting." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 08.04.080 is amended to read: 05 Sec. 08.04.080. Adoption of rules. The board may adopt rules of professional 06 conduct to establish and maintain a high standard of integrity and dignity in the 07 profession of public accounting. At least 30 days before the adoption of any rule or 08 amendment, the board shall send a notice [MAIL COPIES] of the proposed rule or 09 amendment [TOGETHER WITH A NOTICE OF ITS EFFECTIVE DATE] to each 10 holder of a license or permit issued under this chapter to the address of the license or 11 permit holder last known to the board. 12 * Sec. 2. AS 08.04.110 is amended to read: 13 Sec. 08.04.110. Personal requirements. An applicant for a certified public 14 accountant license shall be [AT LEAST 19 YEARS OF AGE AND] of good moral

01 character. 02 * Sec. 3. AS 08.04.195(a) is amended to read: 03 (a) Notwithstanding AS 08.04.110 - 08.04.190, the board may issue a license 04 to engage in the practice of public accounting to an applicant who holds a license, or 05 its equivalent, issued by another state if the applicant 06 (1) passed the Uniform Certified Public Accountant Examination of 07 the American Institute of Certified Public Accountants in order to receive the 08 applicant's initial license from the other state; 09 (2) [HAS FOUR YEARS OF EXPERIENCE OUTSIDE THE STATE 10 IN THE PRACTICE OF PUBLIC ACCOUNTING OR] meets the accounting 11 experience [EQUIVALENT] requirements established by the board by regulation; 12 [THE FOUR YEARS MUST OCCUR AFTER THE APPLICANT PASSES THE 13 EXAMINATION REQUIRED IN (1) OF THIS SUBSECTION AND WITHIN THE 14 10 YEARS IMMEDIATELY PRECEDING THE APPLICANT'S APPLICATION 15 UNDER THIS CHAPTER;] 16 (3) is not the subject of review procedures, disciplinary proceedings, or 17 unresolved complaints related to the applicant's license from another state; and 18 (4) is of good moral character. 19 * Sec. 4. AS 08.04 is amended by adding a new section to read: 20 Sec. 08.04.565. Prohibited acts. An individual licensed under AS 08.04.105 21 may not perform attest functions through a partnership, limited liability company, 22 corporation, or other business entity unless the partnership, limited liability company, 23 corporation, or other business entity holds a valid permit issued under AS 08.04.240. 24 * Sec. 5. AS 08.04.662 is amended to read: 25 Sec. 08.04.662. Confidential communications. (a) A license holder, a permit 26 holder, a practice privilege holder, an out-of-state exemption holder, or a partner, an 27 officer, a shareholder, a member, or an employee of a license holder, a permit holder, 28 an out-of-state exemption holder, or a practice privilege holder may not reveal 29 information communicated to the license holder, permit holder, out-of-state exemption 30 holder, or practice privilege holder by a client about a matter concerning which the 31 client has employed the license holder, permit holder, out-of-state exemption holder,

01 or practice privilege holder in a professional capacity. This section does not apply to 02 (1) information required to be disclosed by the standards of the public 03 accounting profession in reporting on the examination of financial statements; 04 (2) the release of information the client has authorized the license 05 holder, permit holder, out-of-state exemption holder, or practice privilege holder to 06 reveal; 07 (3) information revealed as part of the discovery of evidence related to 08 a court or administrative proceeding or introduced in evidence in a court or 09 administrative proceeding; 10 (4) information revealed in ethical investigations conducted by private 11 professional organizations; [OR] 12 (5) information revealed in the course of a quality review under 13 AS 08.04.426; or 14 (6) information disclosed 15 (A) under applicable state or federal laws or regulations; or 16 (B) as required by the Public Company Accounting 17 Oversight Board. 18 (b) Client information obtained by the board under (a)(3) - (6) [(a)(3) - (5)] of 19 this section is confidential and is not a public record for purposes of AS 40.25.110 - 20 40.25.140. 21 * Sec. 6. AS 08.04.680(1) is amended to read: 22 (1) "attest function" means 23 (A) an audit or other engagement, if the performance of the 24 audit or other engagement is established by the Statements on Auditing 25 Standards; 26 (B) a review of a financial statement, if the performance of the 27 review is established by the Statements on Standards for Accounting and 28 Review Services; 29 (C) an examination of prospective financial information, if the 30 performance of the examination is established by the Statements on Standards 31 for Attestation Engagements; [OR]

01 (D) an engagement, if the performance of the engagement is 02 established by the Auditing Standards of the Public Company Accounting 03 Oversight Board; or 04 (E) any examination, review, or agreed upon procedure to 05 be performed in accordance with the standards on attestation 06 engagements as 07 (i) developed by national accountancy organizations, 08 including the American Institute of Certified Public Accountants 09 and the Public Company Accounting Oversight Board; and 10 (ii) adopted by the board in regulation; 11 * Sec. 7. AS 08.04.680(19) is amended to read: 12 (19) "report," when used with reference to an attest or compilation 13 service, 14 (A) [FINANCIAL STATEMENTS,] means 15 (i) an opinion, report, or other form of language that 16 states or implies assurance as to the reliability of financial statements 17 and that also contains [INCLUDES] or is accompanied by a statement 18 or implication that the person issuing it has special knowledge or 19 competency in accounting or auditing, which [; A STATEMENT OR 20 IMPLICATION OF SPECIAL KNOWLEDGE OR COMPETENCE] 21 may arise from use by the issuer of the report of names or titles 22 indicating that the issuer is a certified public accountant or auditor, or 23 from the language of the report itself; 24 (ii) [EXCEPT AS PROVIDED IN THIS 25 PARAGRAPH, "REPORT" INCLUDES] any form of language that 26 disclaims an opinion when the form of the language is conventionally 27 understood to imply a positive assurance as to the reliability of the 28 financial statements referred to or special competence on the part of the 29 person issuing the language; 30 (iii) [AND "REPORT" INCLUDES] any other form of 31 language that is conventionally understood to imply that [SUCH]

01 assurance or [SUCH] special knowledge or competence; 02 (B) ["REPORT"] does not include 03 (i) [(A)] a compilation of financial statement language 04 that does not express or imply assurance or special knowledge or 05 competence; or 06 (ii) [(B)] the following disclaimer language when used 07 by a person without a license, a practice privilege, or an out-of-state 08 exemption in connection with financial statements: 09 [(i)] "I (we) have prepared the accompanying (financial 10 statements) of (name of entity) as of (time period) for 11 the (period) then ended. This presentation is limited to 12 preparing, in the form of financial statements, 13 information that is the representation of management 14 (owners)."; or 15 [(ii)] "I (we) have not audited or reviewed the 16 accompanying financial statements and, accordingly, do 17 not express an opinion or any other form of assurance on 18 them."; 19 * Sec. 8. AS 08.04.680(20) is amended to read: 20 (20) "state" means a state of the United States, the District of 21 Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, 22 Guam, the United States Virgin Islands, and American Samoa. 23 * Sec. 9. AS 08.04.120(b), 08.04.180, 08.04.580, 08.04.590, 08.04.595, and 08.04.598 are 24 repealed.