Bill Summary – FastDemocracy

SECOND REGULAR SESSION
                        HOUSE BILL NO. 1797
                               103RD GENERAL ASSEMBLY


                               INTRODUCED BY REPRESENTATIVE MCGIRL.

     5199H.01I                                                                    JOSEPH ENGLER, Chief Clerk


                                                AN ACT
     To repeal sections 326.256, 326.277, 326.280, 326.283, 326.286, 326.289, 326.292, and
           326.310, RSMo, and to enact in lieu thereof eight new sections relating to public
           accounting, with penalty provisions.


     Be it enacted by the General Assembly of the state of Missouri, as follows:

             Section A. Sections 326.256, 326.277, 326.280, 326.283, 326.286, 326.289, 326.292,
 and 326.310, RSMo, are repealed and eight new sections enacted in lieu thereof, to be known
 as sections 326.256, 326.277, 326.280, 326.283, 326.286, 326.289, 326.292, and 326.310, to
 read as follows:
             326.256. 1. As used in this chapter, the following terms mean:
         (1) "AICPA", the American Institute of Certified Public Accountants;
         (2) "Attest" or "attest services", providing the following services:
         (a) Any audit or other engagement to be performed in accordance with the Statements
 on Auditing Standards (SAS);
         (b) Any examination of prospective financial information to be performed in
 accordance with the Statements on Standards for Attestation Engagements (SSAE);
         (c) Any engagement to be performed in accordance with the auditing standards and
 rules of the Public Company Accounting Oversight Board (PCAOB);
         (d) Any review of a financial statement to be performed in accordance with the
 Statements on Standards for Accounting and Review Services (SSARS); or
         (e) Any examination, review, or agreed upon procedures engagement to be performed
 in accordance with the SSAE, other than an examination described in paragraph (b) of this
 subdivision;

     EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
     intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language.
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         (3) "Board", the Missouri state board of accountancy established under section
 326.259 or its predecessor pursuant to prior law;
         (4) "Certificate", a certificate issued under section 326.060 prior to August 28, 2001;
         (5) "Certified public accountant" or "CPA", the holder of a certificate or license as
 defined in this section;
         (6) "Certified public accounting firm", "CPA firm" or "firm", a sole proprietorship, a
 corporation, a partnership or any other form of organization issued a permit or otherwise
 authorized to practice under section 326.289;
         (7) "Client", a person or entity that agrees with a licensee or licensee's employer to
 receive any professional service;
         (8) "Compilation", providing a service to be performed in accordance with
 Statements on Standards for Accounting and Review Services (SSARS) that is presented in
 the form of financial statements information that is the representation of management
 (owners) without undertaking to express any assurance on the statements;
         (9) "License", a license issued under section 326.280, or privilege to practice under
 section 326.283; or, in each case, an individual license or permit issued pursuant to
 corresponding provisions of prior law;
         (10) "Licensee", the holder of a license as defined in this section;
         (11) "Manager", a manager of a limited liability company;
         (12) "Member", a member of a limited liability company;
         (13) "NASBA", the National Association of State Boards of Accountancy;
         (14) "PCAOB", the Public Company Accounting Oversight Board;
         (15) "Peer review", a study, appraisal or review of one or more aspects of the
 professional work of a [licensee or] certified public accounting firm that performs attest or
 compilation services, by licensees who are not affiliated either personally or through their
 certified public accounting firm being reviewed pursuant to the Standards for Performing and
 Reporting on Peer Reviews promulgated by the AICPA or such other standard adopted by
 regulation of the board which meets or exceeds the AICPA standards;
         (16) "Permit", a permit to practice as a certified public accounting firm issued under
 section 326.289 or corresponding provisions of prior law or pursuant to corresponding
 provisions of the laws of other states;
         (17) "Principal place of business", the office location designated by the licensee for
 purposes of [substantial equivalency] mobility and reciprocity;
         (18) "Professional", arising out of or related to the specialized knowledge or skills
 associated with certified public accountants;
         (19) "Public accounting":
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          (a) Performing or offering to perform for an enterprise, client or potential client one
 or more services involving the use of accounting or auditing skills, or one or more
 management advisory or consulting services, or the preparation of tax returns or the
 furnishing of advice on tax matters by a person, firm, limited liability company or
 professional corporation using the title "C.P.A." or "P.A." in signs, advertising, directory
 listing, business cards, letterheads or other public representations;
          (b) Signing or affixing a name, with any wording indicating the person or entity has
 expert knowledge in accounting or auditing to any opinion or certificate attesting to the
 reliability of any representation or estimate in regard to any person or organization embracing
 financial information or facts respecting compliance with conditions established by law or
 contract, including but not limited to statutes, ordinances, rules, grants, loans and
 appropriations; or
          (c) Offering to the public or to prospective clients to perform, or actually performing
 on behalf of clients, professional services that involve or require an audit or examination of
 financial records leading to the expression of a written attestation or opinion concerning these
 records;
          (20) "Report", when used with reference to any attest or compilation service, means
 an opinion, report or other form of language that states or implies assurance as to the
 reliability of the attested information or compiled 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. The term report includes any form of language which disclaims an opinion
 when such form of language is conventionally understood to imply any positive assurance as
 to the reliability of the attested information or compiled financial statements referred to or
 special competence on the part of the person or firm issuing such language, and includes any
 other form of language that is conventionally understood to imply such assurance or such
 special knowledge or competence;
          (21) "State", any state of the United States, the District of Columbia, Puerto Rico, the
 U.S. Virgin Islands, the Commonwealth of the Northern Mariana Islands, and Guam; except
 that "this state" means the state of Missouri;
          (22) ["Substantial equivalency" or "substantially equivalent", a determination by the
 board of accountancy or its designee that the education, examination and experience
 requirements contained in the statutes and administrative rules of another jurisdiction are
 comparable to or exceed the education, examination and experience requirements contained
 in this chapter or that an individual certified public accountant's education, examination and
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 experience qualifications are comparable to or exceed the education, examination and
 experience requirements contained in this chapter;
         (23)] "Transmittal", any transmission of information in any form, including but not
 limited to any and all documents, records, minutes, computer files, disks or information.
         2. The statements on standards specified in this section shall be adopted by reference
 by the board pursuant to rulemaking and shall be those developed for general application by
 the AICPA or other recognized national accountancy organization as prescribed by board rule.
             326.277. 1. Prior to June 30, 2021, for an applicant to be eligible to apply for the
 examination, the applicant shall fulfill the education requirements of subdivision (4) of
 subsection 1 of section 326.280.
         2. On or after June 30, 2021, for an applicant to be eligible to apply for the
 examination, the applicant shall:
         (1) Provide proof that the applicant has [completed at least one hundred twenty
 semester hours of college education] obtained a baccalaureate degree at an accredited
 college or university recognized by the board, with an accounting concentration or equivalent
 as determined by the board by rule;
         (2) Be at least eighteen years of age; and
         (3) Be of good moral character.
             326.280. 1. A license shall be granted by the board to any person who meets the
 requirements of this chapter and who:
         (1) Is a resident of this state or has a place of business in this state or, as an employee,
 is regularly employed in this state;
         (2) Has attained the age of eighteen years;
         (3) Is of good moral character;
         (4) [Either] Meets one of the following educational requirements:
         (a) [Applied for the initial examination prior to June 30, 1999, and] Holds a
 baccalaureate degree conferred by an accredited college or university recognized by the
 board, with [a concentration in accounting or the substantial equivalent of a concentration in
 accounting as determined by the board] the total educational program including an
 accounting concentration or equivalent as determined by board rule to be appropriate;
 [or]
         (b) [Applied for the initial examination on or after June 30, 1999, and has at least one
 hundred fifty semester hours of college education, including a baccalaureate or higher degree
 conferred by] Has obtained a baccalaureate degree and completed at least thirty
 additional semester hours of college education at an accredited college or university
 recognized by the board, with the total educational program including an accounting
 concentration or equivalent as determined by board rule to be appropriate; or
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         (c) Holds a postbaccalaureate degree conferred by an accredited college or
 university recognized by the board, with the total educational program including an
 accounting concentration or equivalent as determined by board rule to be appropriate;
         (5) Has passed an examination in accounting, auditing and such other related subjects
 as the board shall determine is appropriate; and
         (6) (a) Either:
         a. Has had one year of experience for an applicant who is applying for licensure on
 the basis of the educational requirement in paragraph (b) or (c) of subdivision (4) of this
 subsection; or
         b. Has had two years of experience for an applicant who is applying for licensure
 on the basis of the educational requirement in paragraph (a) of subdivision (4) of this
 subsection.
         (b) Experience shall be verified by a licensee and shall include any type of service or
 advice involving the use of accounting, attest, compilation, management advisory, financial
 advisory, tax or consulting skills including governmental accounting, budgeting or auditing.
 The board shall promulgate rules and regulations concerning the verifying licensee's review
 of the applicant's experience.
         2. The board may prescribe by rule the terms and conditions for reexaminations and
 fees to be paid for reexaminations.
         3. A person who, on August 28, 2001, holds an individual permit issued pursuant to
 the laws of this state shall not be required to obtain additional licenses pursuant to sections
 326.280 to 326.286, and the licenses issued shall be considered licenses issued pursuant to
 sections 326.280 to 326.286. However, such persons shall be subject to the provisions of
 section 326.286 for renewal of licenses.
         4. Upon application, the board may issue a temporary license to an applicant pursuant
 to this subsection for a person who has made a prima facie showing that the applicant meets
 all of the requirements for a license and possesses the experience required. The temporary
 license shall be effective only until the board has had the opportunity to investigate the
 applicant's qualifications for licensure pursuant to subsection 1 of this section and notify the
 applicant that the applicant's application for a license has been granted or rejected. In no
 event shall a temporary license be in effect for more than twelve months after the date of
 issuance nor shall a temporary license be reissued to the same applicant. No fee shall be
 charged for a temporary license. The holder of a temporary license which has not expired,
 been suspended or revoked shall be deemed to be the holder of a license issued pursuant to
 this section until the temporary license expires, is terminated, suspended or revoked.
         [5. Prior to June 30, 2021, an applicant for an examination who meets the educational
 requirements of subdivision (4) of subsection 1 of this section or who reasonably expects to
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 meet those requirements within sixty days after the examination shall be eligible for
 examination if the applicant also meets the requirements of subdivisions (2) and (3) of
 subsection 1 of this section. For an applicant admitted to examination on the reasonable
 expectation that the applicant will meet the educational requirements within sixty days, no
 license shall be issued nor credit for the examination or any part thereof given unless the
 educational requirement is in fact met within the sixty-day period.]
             326.283. 1. (1) (a) An individual whose principal place of business, domicile, or
 residency is not in this state and who holds a valid and unrestricted license in good standing
 to practice public accounting from any state [which the board or its designee has determined
 by rule to be in substantial equivalence with the licensure requirements of this chapter, or if
 the individual's qualifications are substantially equivalent to the licensure requirements of this
 chapter, shall be presumed to have qualifications substantially equivalent to this state's
 requirements and] shall have all the privileges of licensees of this state without the need to
 obtain a license or to otherwise notify or register with the board or pay any fee[. Provided,
 however], provided that at the time of initial licensure, the individual was required to
 show evidence of having passed the Uniform Certified Public Accountant Examination
 and of having met one of the following requirements:
         a. A baccalaureate degree conferred by an accredited college or university, with
 the total educational program including an accounting concentration or equivalent, and
 not less than two years of experience, both as defined by board rule;
         b. A baccalaureate degree and the completion of at least thirty additional
 semester hours of college education at an accredited college or university, with the total
 educational program including an accounting concentration or equivalent, and not less
 than one year of experience, both as defined by board rule; or
         c. A postbaccalaureate degree conferred by an accredited college or university,
 with the total educational program including an accounting concentration or equivalent,
 and not less than one year of experience, both as defined by board rule.
         (b) An individual whose principal place of business, domicile, or residency is not
 in this state; who holds a valid and unrestricted license in good standing to practice
 public accounting from any state as of December 31, 2024; and who, as of such date, has
 practice privileges in this state under this subdivision shall continue to have all the
 privileges of licensees in this state without the need to obtain a license or otherwise
 notify or register with the board or pay any fee.
         (c) The board may by rule require individuals with a valid but restricted license to
 obtain a license.
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         (2) An individual who qualifies for the privilege to practice under this section may
 offer or render professional services in this state, whether in person, by mail, telephone, or
 electronic means, and no notice or other submission shall be required of any such individual.
         (3) An individual licensee of another state exercising the privilege afforded under this
 section and the firm which employs such licensee hereby simultaneously consent, as a
 condition of the grant of this privilege:
         (a) To the personal and subject matter jurisdiction and disciplinary authority of the
 board;
         (b) To comply with this chapter and the board's rules;
         (c) That in the event the license from any state is no longer valid or unrestricted, the
 individual shall cease offering or rendering professional services in this state individually and
 on behalf of a firm; and
         (d) To the appointment of the state board that issued the individual's license as his or
 her agent upon whom process may be served in any action or proceeding by this board against
 the individual.
         (4) An individual who has been granted the privilege to practice under this section
 who performs attest or compilation services shall comply with the provisions of section
 326.289.
         (5) Nothing in this chapter shall prohibit temporary practice in this state for
 professional business incidental to a CPA's regular practice outside this state. "Temporary
 practice" means that practice related to the direct purpose of an engagement for a client
 located outside this state, which engagement began outside this state and extends into this
 state through common ownership, existence of a subsidiary, assets or other operations located
 within this state.
         2. A licensee of this state offering or rendering services or using his or her certified
 public accountant title in anoth