SB2434eng 99TH GENERAL ASSEMBLY

SB2434 Engrossed LRB099 15867 MLM 40178 b

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Public Accounting Act is amended by changing Sections 0.03, 5.2, and 13 as follows:

(225 ILCS 450/0.03) (from Ch. 111, par. 5500.03)

(Section scheduled to be repealed on January 1, 2024)

Sec. 0.03. Definitions. As used in this Act, unless the context otherwise requires:

"Accountancy activities" means the services as set forth in Section 8.05 of the Act.

"Address of record" means the designated address recorded by the Department in the applicant's, licensee's, or registrant's application file or license file maintained by the Department's licensure maintenance unit. It is the duty of the applicant, licensee, or registrant to inform the Department of any change of address, and those changes must be made either through the Department's website or by directly contacting the Department.

"Certificate" means a certificate issued by the Board or University or similar jurisdictions specifying an individual has successfully passed all sections and requirements of the Uniform Certified Public Accountant Examination. A certificate issued by the Board or University or similar jurisdiction does not confer the ability to use the CPA title and is not equivalent to a registration or license under this Act.

"Compilation" means providing a service to be performed in accordance with Statements on Standards for Accounting and Review Services that is presented in the form of financial statements or information that is the representation of management or owners without undertaking to express any assurance on the statements.

"CPA" or "C.P.A." 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 this Act.

"CPA firm" means a sole proprietorship, a corporation, registered limited liability partnership, limited liability company, partnership, professional service corporation, or any other form of organization issued a license in accordance with this Act or a CPA firm authorized to use the CPA firm title under Section 5.2 of this Act.

"CPA (inactive)" means a licensed certified public accountant who elects to have the Department place his or her license on inactive status pursuant to Section 17.2 of this Act.

"Financial statement" means a structured presentation of historical financial information, including, but not limited to, related notes intended to communicate an entity's economic resources and obligations at a point in time or the changes therein for a period of time in accordance with generally accepted accounting principles (GAAP) or other comprehensive basis of accounting (OCBOA).

"Other attestation engagements" means an engagement performed in accordance with the Statements on Standards for Attestation Engagements.

"Registered Certified Public Accountant" or "registered CPA" means any person who has been issued a registration under this Act as a Registered Certified Public Accountant.

"Report", when used with reference to financial statements, means an opinion, report, or other form of language that states or implies assurance as to the reliability of any 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. "Report" includes any form of language that disclaims an opinion when the form of language is conventionally understood to imply any positive assurance as to the reliability of the financial statements referred to or special competence on the part of the person or firm issuing such language; it includes any other form of language that is conventionally understood to imply such assurance or such special knowledge or competence.

"Licensed Certified Public Accountant" or "licensed CPA" means any person licensed under this Act as a Licensed Certified Public Accountant.

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

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

"License", "licensee", and "licensure" refer to the authorization to practice under the provisions of this Act.

"Peer review" means a study, appraisal, or review of one or more aspects of a CPA firm's or sole practitioner's compliance with applicable accounting, auditing, and other attestation standards adopted by generally recognized standard-setting bodies.

"Principal place of business" means the office location designated by the licensee from which the person directs, controls, and coordinates his or her professional services.

"Review committee" means any person or persons conducting, reviewing, administering, or supervising a peer review program.

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

"University" means the University of Illinois.

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

"Registration", "registrant", and "registered" refer to the authorization to hold oneself out as or use the title "Registered Certified Public Accountant" or "Certified Public Accountant", unless the context otherwise requires.

"Peer Review Administrator" means an organization designated by the Department that meets the requirements of subsection (f) of Section 16 of this Act and other rules that the Department may adopt.

(Source: P.A. 98-254, eff. 8-9-13; 99-78, eff. 7-20-15.)

(225 ILCS 450/5.2)

(Section scheduled to be repealed on January 1, 2024)

Sec. 5.2. Substantial equivalency.

(a) An individual whose principal place of business is not in this State shall have all the privileges of a person licensed under this Act as a licensed CPA without the need to obtain a license from the Department or to file notice with the Department, if the individual:

(1) holds a valid license as a certified public accountant issued by another state that the National Qualification Appraisal Service of the National Association of State Boards of Accountancy has verified to be in substantial equivalence with the CPA licensure requirements of the Uniform Accountancy Act of the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy; or

(2) holds a valid license as a certified public accountant issued by another state and obtains from the National Qualification Appraisal Service of the National Association of State Boards of Accountancy verification that the individual's CPA qualifications are substantially equivalent to the CPA licensure requirements of the Uniform Accountancy Act of the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy; however, any individual who has passed the Uniform CPA Examination and holds a valid license issued by any other state prior to January 1, 2012 shall be exempt from the education requirements of Section 3 of this Act for the purposes of this item (2).

(a-5) A CPA firm whose principal place of business is not in this State shall have all the privileges of a CPA firm licensed under this Act without the need to obtain a license from the Department or to file notice with the Department if the CPA firm complies with the requirements outlined in Sections 14.4 and 16 through substantial equivalency of their licensed state.

(b) Notwithstanding any other provision of law, an individual or CPA firm who offers or renders professional services under this Section, whether in person or by mail, telephone, or electronic means, shall be granted practice privileges in this State and no notice or other submission must be provided by any such individual or CPA firm.

(c) An individual licensee or CPA firm of another state who is exercising the privilege afforded under this Section and the CPA firm that employs such individual licensee, if any, as a condition of the grant of this privilege, hereby simultaneously consents:

(1) to the personal and subject matter jurisdiction and disciplinary authority of the Department;

(2) to comply with this Act and the Department's rules adopted under this Act;

(3) that in the event that the license from the state of the individual's or CPA firm's principal place of business is no longer valid, the individual or CPA firm shall cease offering or rendering accountancy activities as outlined in paragraphs (1) and (2) of Section 8.05 in this State individually or on behalf of a CPA firm; and

(4) to the appointment of the state board that issued the individual's or the CPA firm's license as the agent upon which process may be served in any action or proceeding by the Department against the individual or CPA firm.

(d) An individual licensee who qualifies for practice privileges under this Section who, for any entity headquartered in this State, performs (i) a financial statement audit or other engagement in accordance with Statements on Auditing Standards; (ii) an examination of prospective financial information in accordance with Statements on Standards for Attestation Engagements; or (iii) an engagement in accordance with Public Company Accounting Oversight Board Auditing Standards may only do so through a CPA firm licensed under this Act or a CPA firm with practice privileges under this Section.

(e) A CPA firm that qualifies for practice privileges under this Section and, for any entity headquartered in this State, performs the following may only do so through an individual or individuals licensed under this Act or an individual or individuals with practice privileges under this Section:

(1) a financial statement audit or other engagement in accordance with Statements on Auditing Standards;

(2) an examination of prospective financial information in accordance with Statements on Standards for Attestation Engagements; or

(3) an engagement in accordance with Public Company Accounting Oversight Board Auditing Standards.

(Source: P.A. 98-254, eff. 8-9-13.)

(225 ILCS 450/13) (from Ch. 111, par. 5514)

(Section scheduled to be repealed on January 1, 2024)

Sec. 13. Application for licensure.

(a) A person or CPA firm that wishes to perform accountancy activities in this State, as defined in paragraph (1) of subsection (a) of Section 8.05 of this Act, or use the CPA title shall make application to the Department and shall pay the fee required by rule.

Applicants have 3 years from the date of application to complete the application process. If the process has not been completed in 3 years, the application shall be denied, the fee forfeited and the applicant must reapply and meet the requirements in effect at the time of reapplication.

(b) Any CPA firm that (i) has an office in this State that uses the title "CPA" or "CPA firm"; (ii) has an office in this State that performs accountancy activities, as defined in paragraph (1) of subsection (a) of Section 8.05 of this Act; or (iii) does not have an office in this State and does not meet the practice privilege requirements as defined in Section 5.2 of this Act, but offers or renders performs services, as set forth in subsection (e) (d) of Section 5.2 of this Act, for a client that is headquartered in this State must hold a license as a CPA firm issued under this Act.

(c) (Blank). A CPA firm that does not have an office in this State may perform a review of a financial statement in accordance with the Statements on Standards for Accounting and Review Services for a client with its headquarters in this State and may use the title "CPA" or "CPA firm" without obtaining a license as a CPA firm under this Act, only if the firm (i) performs such services through individuals with practice privileges under Section 5.2 of this Act; (ii) satisfies any peer review requirements in those states in which the individuals with practice privileges under Section 5.2 have their principal place of business; and (iii) meets the qualifications set forth in paragraph (1) of Section 14.4 of this Act.

(d) A CPA firm that is not subject to the requirements of subsection (b) or (c) of this Section may perform professional services that are not regulated under subsection (b) or (c) of this Section while using the title "CPA" or "CPA firm" in this State without obtaining a license as a CPA firm under this Act if the firm (i) performs such services through individuals with practice privileges under Section 5.2 of this Act and (ii) may lawfully perform such services in the state where those individuals with practice privileges under Section 5.2 of this Act have their principal place of business.

(Source: P.A. 98-254, eff. 8-9-13.)

Section 99. Effective date. This Act takes effect upon becoming law.