Full Text of HB4707 98th General Assembly
HB4707eng 98TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 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 by | 5 | | changing Sections 8.05, 14.2, 14.4, 16, and 17.1 as follows: | 6 | | (225 ILCS 450/8.05) | 7 | | (Section scheduled to be repealed on January 1, 2024) | 8 | | Sec. 8.05. Accountancy activities. | 9 | | (a) Accountancy activities are services performed by a CPA, | 10 | | including: | 11 | | (1) signing, affixing, or associating the names used by | 12 | | a person or CPA firm to any report expressing an assurance | 13 | | on a financial statement or disclaiming an opinion on a | 14 | | financial statement based on an audit or examination of | 15 | | that statement or to express assurance on a financial | 16 | | statement; | 17 | | (2) other attestation engagements not otherwise | 18 | | defined in paragraph (1); or | 19 | | (3) offering to perform or performing one or more types | 20 | | of the following services involving the use of professional | 21 | | skills or competencies: accounting, management, financial | 22 | | or consulting services, compilations, internal audit, | 23 | | preparation of tax returns, furnishing advice on tax |
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| 1 | | matters, bookkeeping, or representations of taxpayers; | 2 | | this includes the teaching of any of these areas at the | 3 | | college or university level. | 4 | | (b) If offering or performing accountancy activities using | 5 | | the CPA title set forth in paragraphs (1), (2), and (3) of | 6 | | subsection (a) of this Section, then: | 7 | | (1) the activities identified in paragraph (1) of | 8 | | subsection (a) may only be performed by licensed CPAs; | 9 | | (2) the activities identified in paragraph (2) of | 10 | | subsection (a) may only be performed by licensed or | 11 | | registered CPAs; and | 12 | | (3) the activities identified in paragraph (3) of | 13 | | subsection (a) are not restricted to licensed or registered | 14 | | CPAs, subject to the provisions of Section 9 9.02 of this | 15 | | Act.
| 16 | | (Source: P.A. 98-254, eff. 8-9-13.)
| 17 | | (225 ILCS 450/14.2)
| 18 | | (Section scheduled to be repealed on January 1, 2024)
| 19 | | Sec. 14.2. Licensure by endorsement.
| 20 | | (a) The Department shall issue a
license as a licensed CPA | 21 | | to any applicant
who holds a current, valid, and unrevoked | 22 | | license as a certified public accountant issued from another | 23 | | state with equivalent educational requirements and examination | 24 | | standards, applies to the Department on forms supplied by the | 25 | | Department, and pays the required fee,
provided:
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| 1 | | (1) the individual applicant is determined by the | 2 | | Department
to possess
qualifications substantially | 3 | | equivalent to this State's current
licensing requirements;
| 4 | | (2) at the time the applicant received his or her | 5 | | license, the applicant possessed qualifications
| 6 | | substantially equivalent to the qualifications for | 7 | | licensure then in effect in
this State; or
| 8 | | (3) the applicant has, after passing the examination | 9 | | upon which his or her
license to practice was based, not | 10 | | less than 4 years of
experience as outlined in Section 14 | 11 | | of this Act within the 10 years immediately
before the | 12 | | application.
| 13 | | (b) In determining the substantial equivalency of any
| 14 | | state's requirements to Illinois' requirements, the
Department | 15 | | may rely on the determinations of the National
Qualification | 16 | | Appraisal Service of the National Association
of State Boards | 17 | | of Accountancy or such other qualification
appraisal service as | 18 | | it deems appropriate.
| 19 | | (c) Applicants have 3 years from the date of application to | 20 | | complete the application process. If the process has not been | 21 | | completed in 3 years, the application shall be denied, the fee | 22 | | shall be forfeited, and the applicant must reapply and meet the | 23 | | requirements in effect at the time of reapplication.
| 24 | | (d) Any individual who is the holder of a current, valid, | 25 | | and not previously disciplined license as a certified public | 26 | | accountant of any state and has applied in writing to the |
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| 1 | | Department in form and substance satisfactory to the Department | 2 | | for a license as a licensed CPA may perform accountancy | 3 | | activities as set forth in Section 8.05 until the earlier of | 4 | | the following dates: | 5 | | (1) the expiration of 6 months after filing the written | 6 | | application; or | 7 | | (2) the denial of the application by the Department. | 8 | | Any individual performing accountancy activities under | 9 | | this subsection (d) shall be subject to discipline in the same | 10 | | manner as an individual licensed under this Act. | 11 | | (Source: P.A. 98-254, eff. 8-9-13.)
| 12 | | (225 ILCS 450/14.4) | 13 | | (Section scheduled to be repealed on January 1, 2024) | 14 | | Sec. 14.4. Qualifications for licensure as a CPA firm. The | 15 | | Department may license as licensed CPA firms individuals or | 16 | | entities meeting the following requirements: | 17 | | (1) A majority of the ownership of the firm, in terms | 18 | | of financial interests and voting rights of all partners, | 19 | | officers, shareholders, or members, or belongs to persons | 20 | | licensed or registered in some state. All partners, | 21 | | officers, shareholders, or members, whose principal place | 22 | | of business is in this State and who have overall | 23 | | responsibility for accountancy activities in this State, | 24 | | as defined in paragraph (1) of subsection (a) of Section | 25 | | 8.05 of this Act, must hold a valid license as a licensed |
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| 1 | | CPA issued by this State. An individual exercising the | 2 | | practice privilege afforded under Section 5.2 who performs | 3 | | services for which a firm license is required under | 4 | | subsection (d) of Section 5.2 shall not be required to | 5 | | obtain an individual license under this Act. | 6 | | (2) All owners of the CPA firm, whether licensed as a | 7 | | licensed CPA or not, shall be active participants in the | 8 | | CPA firm or its affiliated entities and shall comply with | 9 | | the rules adopted under this Act. | 10 | | (3) It shall be lawful for a nonprofit cooperative | 11 | | association engaged in rendering an auditing and | 12 | | accounting service to its members only to continue to | 13 | | render that service provided that the rendering of auditing | 14 | | and accounting service by the cooperative association | 15 | | shall at all times be under the control and supervision of | 16 | | licensed CPAs. | 17 | | (4) An individual who supervises services for which a | 18 | | license is required under paragraph (1) of subsection (a) | 19 | | of Section 8.05 of this Act, who signs or authorizes | 20 | | another to sign any report for which a license is required | 21 | | under paragraph (1) of subsection (a) of Section 8.05 of | 22 | | this Act, or who supervises services for which a CPA firm | 23 | | license is required under subsection (d) of Section 5.2 of | 24 | | this Act shall hold a valid, active licensed CPA license | 25 | | from this State or another state considered to be | 26 | | substantially equivalent under paragraph (1) of subsection |
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| 1 | | (a) of Section 5.2. | 2 | | (5) The CPA firm shall designate to the Department in | 3 | | writing an individual licensed as a licensed CPA under this | 4 | | Act or, in the case of a firm that must have a CPA firm | 5 | | license pursuant to subsection (b) of Section 13 of this | 6 | | Act, a licensee of another state who meets the requirements | 7 | | set out in paragraph (1) or (2) of subsection (a) of | 8 | | Section 5.2 of this Act, who shall be responsible for the | 9 | | proper licensure of the CPA firm.
| 10 | | (Source: P.A. 98-254, eff. 8-9-13.)
| 11 | | (225 ILCS 450/16) (from Ch. 111, par. 5517)
| 12 | | (Section scheduled to be repealed on January 1, 2024)
| 13 | | Sec. 16. Expiration and renewal of licenses; renewal of | 14 | | registration;
continuing education ; peer review . | 15 | | (a) The expiration date and renewal period for each license | 16 | | or registration
issued under this Act shall be set by rule.
| 17 | | (b) Every holder of a license or registration under this | 18 | | Act may renew such license or registration before the | 19 | | expiration date upon payment of the required renewal fee as set | 20 | | by rule.
| 21 | | (c) Every application for renewal of a license by a | 22 | | licensed CPA who has been licensed under this Act for 3 years | 23 | | or more shall be accompanied or supported by any evidence the | 24 | | Department shall prescribe, in satisfaction of completing, | 25 | | each 3 years, not less than 120 hours of continuing |
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| 1 | | professional education as prescribed by Department rules. Of | 2 | | the 120 hours, not less than 4 hours shall be courses covering | 3 | | the subject of professional ethics. All continuing education | 4 | | sponsors applying to the Department for registration shall be | 5 | | required to submit an initial nonrefundable application fee set | 6 | | by Department rule. Each registered continuing education | 7 | | sponsor shall be required to pay an annual renewal fee set by | 8 | | Department rule. Publicly supported colleges, universities, | 9 | | and governmental agencies located in Illinois are exempt from | 10 | | payment of any fees required for continuing education sponsor | 11 | | registration. Failure by a continuing education sponsor to be | 12 | | licensed or pay the fees prescribed in this Act, or to comply | 13 | | with the rules and regulations established by the Department | 14 | | under this Section regarding requirements for continuing | 15 | | education courses or sponsors, shall constitute grounds for | 16 | | revocation or denial of renewal of the sponsor's registration. | 17 | | (d) Licensed CPAs are exempt from the continuing | 18 | | professional education requirement for the first renewal | 19 | | period following the original issuance of the license. | 20 | | Failure by an applicant for renewal of a license as a | 21 | | licensed CPA to furnish the evidence shall constitute grounds | 22 | | for disciplinary action, unless the Department in its | 23 | | discretion shall determine the failure to have been due to | 24 | | reasonable cause. The Department, in its discretion, may renew | 25 | | a license despite failure to furnish evidence of satisfaction | 26 | | of requirements of continuing education upon condition that the |
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| 1 | | applicant follow a particular program or schedule of continuing | 2 | | education. In issuing rules and individual orders in respect of | 3 | | requirements of continuing education, the Department in its | 4 | | discretion may, among other things, use and rely upon | 5 | | guidelines and pronouncements of recognized educational and | 6 | | professional associations; may prescribe rules for the | 7 | | content, duration, and organization of courses; shall take into | 8 | | account the accessibility to applicants of such continuing | 9 | | education as it may require, and any impediments to interstate | 10 | | practice of public accounting that may result from differences | 11 | | in requirements in other states; and may provide for relaxation | 12 | | or suspension of requirements in regard to applicants who | 13 | | certify that they do not intend to engage in the performance of | 14 | | accountancy activities, and for instances of individual | 15 | | hardship. | 16 | | The Department shall establish by rule a means for the | 17 | | verification of completion of the continuing education | 18 | | required by this Section. This verification may be accomplished | 19 | | through audits of records maintained by licensees; by requiring | 20 | | the filing of continuing education certificates with the | 21 | | Department; or by other means established by the Department. | 22 | | The Department may establish, by rule, guidelines for | 23 | | acceptance of continuing education on behalf of licensed CPAs | 24 | | taking continuing education courses in other jurisdictions.
| 25 | | (e) For renewals on and after July 1, 2012, as a condition | 26 | | for granting a renewal license to CPA firms and sole |
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| 1 | | practitioners who perform accountancy activities outlined in | 2 | | paragraph (1) of subsection (a) of Section 8.05 under this Act, | 3 | | the Department shall require that the CPA firm or sole | 4 | | practitioner satisfactorily complete a peer review during the | 5 | | immediately preceding 3-year period, accepted by a Peer Review | 6 | | Administrator in accordance with established standards for | 7 | | performing and reporting on peer reviews, unless the CPA firm | 8 | | or sole practitioner is exempted under the provisions of | 9 | | subsection (i) of this Section. A CPA firm or sole practitioner | 10 | | shall, at the request of the Department, submit to the | 11 | | Department a letter from the Peer Review Administrator stating | 12 | | the date on which the peer review was satisfactorily completed. | 13 | | A new CPA firm or sole practitioner shall not be required | 14 | | to comply with the peer review requirements for the first | 15 | | license renewal. A CPA firm or sole practitioner shall undergo | 16 | | its first peer review during the first full renewal cycle after | 17 | | it is granted its initial license.
| 18 | | The requirements of this subsection (e) shall not apply to | 19 | | any person providing services requiring a license under this | 20 | | Act to the extent that such services are provided in the | 21 | | capacity of an employee of the Office of the Auditor General or | 22 | | to a nonprofit cooperative association engaged in the rendering | 23 | | of licensed service to its members only under paragraph (3) of | 24 | | Section 14.4 of this Act or any of its employees to the extent | 25 | | that such services are provided in the capacity of an employee | 26 | | of the association. |
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| 1 | | (f) The Department shall approve only Peer Review | 2 | | Administrators that the Department finds comply with | 3 | | established standards for performing and reporting on peer | 4 | | reviews. The Department may adopt rules establishing | 5 | | guidelines for peer reviews, which shall do all of the | 6 | | following:
| 7 | | (1) Require that a peer review be conducted by a | 8 | | reviewer that is independent of the CPA firm reviewed and | 9 | | approved by the Peer Review Administrator under | 10 | | established standards. | 11 | | (2) Other than in the peer review process, prohibit the | 12 | | use or public disclosure of information obtained by the | 13 | | reviewer, the Peer Review Administrator, or the Department | 14 | | during or in connection with the peer review process. The | 15 | | requirement that information not be publicly disclosed | 16 | | shall not apply to a hearing before the Department that the | 17 | | CPA firm or sole practitioner requests be public or to the | 18 | | information described in paragraph (3) of subsection (i) of | 19 | | this Section. | 20 | | (g) If a CPA firm or sole practitioner fails to | 21 | | satisfactorily complete a peer review as required by subsection | 22 | | (e) of this Section or does not comply with any remedial | 23 | | actions determined necessary by the Peer Review Administrator, | 24 | | the Peer Review Administrator shall notify the Department of | 25 | | the failure and shall submit a record with specific references | 26 | | to the rule, statutory provision, professional standards, or |
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| 1 | | other applicable authority upon which the Peer Review | 2 | | Administrator made its determination and the specific actions | 3 | | taken or failed to be taken by the licensee that in the opinion | 4 | | of the Peer Review Administrator constitutes a failure to | 5 | | comply. The Department may at its discretion or shall upon | 6 | | submission of a written application by the CPA firm or sole | 7 | | practitioner hold a hearing under Section 20.1 of this Act to | 8 | | determine whether the CPA firm or sole practitioner has | 9 | | complied with subsection (e) of this Section. The hearing shall | 10 | | be confidential and shall not be open to the public unless | 11 | | requested by the CPA firm or sole practitioner. | 12 | | (h) The CPA firm or sole practitioner reviewed shall pay | 13 | | for any peer review performed. The Peer Review Administrator | 14 | | may charge a fee to each firm and sole practitioner sufficient | 15 | | to cover costs of administering the peer review program. | 16 | | (i) A CPA firm or sole practitioner shall not be required | 17 | | to comply with the peer review requirements if: | 18 | | (1) Within 3 years before the date of application for | 19 | | renewal licensure, the sole practitioner or CPA firm has | 20 | | undergone a peer review conducted in another state or | 21 | | foreign jurisdiction that meets the requirements of | 22 | | paragraphs (1) and (2) of subsection (f) of this Section. | 23 | | The sole practitioner or CPA firm shall, at the request of | 24 | | the Department, submit to the Department a letter from the | 25 | | organization administering the most recent peer review | 26 | | stating the date on which the peer review was completed; or |
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| 1 | | (2) Within 2 years before the date of application for | 2 | | renewal licensure, the sole practitioner or CPA firm | 3 | | satisfies all of the following conditions: | 4 | | (A) has not accepted or performed any accountancy | 5 | | activities outlined in paragraph (1) of subsection (a) | 6 | | of Section 8.05 of this Act; and | 7 | | (B) the firm or sole practitioner agrees to notify | 8 | | the Peer Review Administrator within 30 days of | 9 | | accepting an engagement for services requiring a | 10 | | license under this Act and to undergo a peer review | 11 | | within 18 months after the end of the period covered by | 12 | | the engagement; or | 13 | | (3) For reasons of personal health, military service, | 14 | | or other good cause, the Department determines that the | 15 | | sole practitioner or firm is entitled to an exemption, | 16 | | which may be granted for a period of time not to exceed 12 | 17 | | months. | 18 | | (j) If a peer review report indicates that a CPA firm or | 19 | | sole practitioner complies with the appropriate professional | 20 | | standards and practices set forth in the rules of the | 21 | | Department and no further remedial action is required, the Peer | 22 | | Review Administrator shall, after issuance of the final letter | 23 | | of acceptance, destroy all working papers and documents related | 24 | | to the peer review, other than report-related documents and | 25 | | documents evidencing completion of remedial actions, if any, in | 26 | | accordance with rules established by the Department. |
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| 1 | | (k) (Blank). | 2 | | (Source: P.A. 98-254, eff. 8-9-13.)
| 3 | | (225 ILCS 450/17.1) (from Ch. 111, par. 5518.1)
| 4 | | (Section scheduled to be repealed on January 1, 2024)
| 5 | | Sec. 17.1. Restoration. | 6 | | (a) Any registered CPA who has permitted his or her | 7 | | registration to expire or who has had his or her registration | 8 | | on inactive status may have his or her registration restored by | 9 | | making application to the Department and filing proof | 10 | | acceptable to the Department as defined by rule of his or her | 11 | | fitness to have his or her registration restored, which may | 12 | | include sworn evidence certifying to active practice in another | 13 | | jurisdiction satisfactory to the Department and by paying the | 14 | | required restoration fee.
| 15 | | (b) Any licensed CPA who has permitted
his or her license | 16 | | to expire
or who has had his or her license on inactive status | 17 | | may have his or her license restored
by (1) making application | 18 | | to the Department and filing proof
acceptable to the
Department | 19 | | as defined by rule of his or her fitness to have his or her | 20 | | license restored, including
sworn
evidence certifying to | 21 | | active practice in another jurisdiction satisfactory
to the | 22 | | Department , (2) and by paying the required restoration fee , (3)
| 23 | | and by submitting proof of the
required continuing education | 24 | | and (4) in the case of a sole practitioner, satisfactory | 25 | | completion of peer review outlined in subsection (e) of Section |
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| 1 | | 16, unless exempt from peer review under subsection (i) of | 2 | | Section 16 . | 3 | | (c) Any firm that has permitted its license to expire may | 4 | | have its license restored by (1) making application to the | 5 | | Department and filing proof acceptable to the Department as | 6 | | defined by rule of its fitness to have its license restored, | 7 | | including sworn evidence certifying to active practice in | 8 | | another jurisdiction satisfactory to the Department, (2) | 9 | | paying the required restoration fee, and (3) satisfactory | 10 | | completion of peer review outlined in subsection (e) of Section | 11 | | 16, unless exempt from peer review under subsection (i) of | 12 | | Section 16. | 13 | | (d) If the licensed CPA or registered CPA has not | 14 | | maintained an active
practice in another
jurisdiction | 15 | | satisfactory to the Department, the Department shall | 16 | | determine,
by an evaluation program established by rule, | 17 | | fitness to resume active status
and may require the applicant | 18 | | to complete a period of supervised
experience.
| 19 | | Any licensed CPA or registered CPA whose license or | 20 | | registration expired
while he or she was (1) in
Federal Service | 21 | | on active duty with the Armed Forces of the United States,
or | 22 | | the State Militia called into service or training, or (2) in | 23 | | training
or education under the supervision of the United | 24 | | States preliminary to
induction
into the military service, may | 25 | | have his or her license or registration renewed reinstated or | 26 | | restored
without
paying any lapsed renewal and restoration fees |
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| 1 | | if within 2 years after
honorable termination
of such service, | 2 | | training or education except under conditions other than
| 3 | | honorable, he or she furnished
the Department with satisfactory | 4 | | evidence to the effect that he or she
has been
so engaged and | 5 | | that his or her service, training, or education has been so | 6 | | terminated.
| 7 | | (Source: P.A. 98-254, eff. 8-9-13.)
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