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1 | | AN ACT concerning regulation.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Public Accounting Act is amended by |
5 | | changing Sections 0.03, 5.2, 13, and 16 as follows:
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6 | | (225 ILCS 450/0.03) (from Ch. 111, par. 5500.03)
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7 | | (Section scheduled to be repealed on January 1, 2024)
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8 | | Sec. 0.03. Definitions. As used in this Act, unless the |
9 | | context
otherwise requires:
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10 | | "Accountancy activities" means the services as set forth in |
11 | | Section 8.05 of the Act. |
12 | | "Address of record" means the designated address recorded |
13 | | by the Department in the applicant's, licensee's, or |
14 | | registrant's application file or license file maintained by the |
15 | | Department's licensure maintenance unit. It is the duty of the |
16 | | applicant, licensee, or registrant to inform the Department of |
17 | | any change of address, and those changes must be made either |
18 | | through the Department's website or by directly contacting the |
19 | | Department. |
20 | | "Certificate" means a certificate issued by the Board or |
21 | | University or similar jurisdictions specifying an individual |
22 | | has successfully passed all sections and requirements of the |
23 | | Uniform Certified Public Accountant Examination. A certificate |
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1 | | issued by the Board or University or similar jurisdiction does |
2 | | not confer the ability to use the CPA title and is not |
3 | | equivalent to a registration or license under this Act. |
4 | | "Compilation" means providing a service to be performed in |
5 | | accordance with Statements on Standards for Accounting and |
6 | | Review Services that is presented in the form of financial |
7 | | statements or information that is the representation of |
8 | | management or owners without undertaking to express any |
9 | | assurance on the statements. |
10 | | "CPA" or "C.P.A." means a certified public accountant who |
11 | | holds a license or registration issued by the Department or an |
12 | | individual authorized to use the CPA title under Section 5.2 of |
13 | | this Act. |
14 | | "CPA firm" means a sole proprietorship, a corporation, |
15 | | registered limited liability partnership, limited liability |
16 | | company, partnership, professional service corporation, or any |
17 | | other form of organization issued a license in accordance with |
18 | | this Act or a CPA firm authorized to use the CPA firm title |
19 | | under Section 5.2 of this Act . |
20 | | "CPA (inactive)" means a licensed certified public |
21 | | accountant who elects to have the Department place his or her |
22 | | license on inactive status pursuant to Section 17.2 of this |
23 | | Act. |
24 | | "Financial statement" means a structured presentation of |
25 | | historical financial information, including, but not limited |
26 | | to, related notes intended to communicate an entity's economic |
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1 | | resources and obligations at a point in time or the changes |
2 | | therein for a period of time in accordance with generally |
3 | | accepted accounting principles (GAAP) or other comprehensive |
4 | | basis of accounting (OCBOA). |
5 | | "Other attestation engagements" means an engagement |
6 | | performed in accordance with the Statements on Standards for |
7 | | Attestation Engagements. |
8 | | "Registered Certified Public Accountant" or "registered |
9 | | CPA" means any person who has been issued
a registration under |
10 | | this Act as a Registered Certified Public Accountant.
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11 | | "Report", when used with reference to financial |
12 | | statements, means an opinion, report, or other form of language |
13 | | that states or implies assurance as to the reliability of any |
14 | | financial statements and that also includes or is accompanied |
15 | | by any statement or implication that the person or firm issuing |
16 | | it has special knowledge or competence in accounting or |
17 | | auditing. Such a statement or implication of special knowledge |
18 | | or competence may arise from use by the issuer of the report of |
19 | | names or titles indicating that the person or firm is an |
20 | | accountant or auditor, or from the language of the report |
21 | | itself. "Report" includes any form of language that disclaims |
22 | | an opinion when the form of language is conventionally |
23 | | understood to imply any positive assurance as to the |
24 | | reliability of the financial statements referred to or special |
25 | | competence on the part of the person or firm issuing such |
26 | | language; it includes any other form of language that is |
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1 | | conventionally understood to imply such assurance or such |
2 | | special knowledge or competence. |
3 | | "Licensed Certified Public Accountant" or "licensed CPA" |
4 | | means any person licensed
under this Act as a Licensed |
5 | | Certified Public Accountant.
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6 | | "Committee" means the Public Accountant Registration and |
7 | | Licensure Committee appointed by the Secretary.
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8 | | "Department" means the Department of Financial and |
9 | | Professional Regulation.
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10 | | "License", "licensee", and "licensure" refer to the |
11 | | authorization
to practice under the provisions of this Act.
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12 | | "Peer review" means a study, appraisal, or review of one or
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13 | | more aspects of a CPA firm's or sole practitioner's compliance |
14 | | with applicable accounting, auditing, and other attestation |
15 | | standards adopted by generally recognized standard-setting |
16 | | bodies.
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17 | | "Principal place of business" means the office location |
18 | | designated by the licensee from which the person directs, |
19 | | controls, and coordinates his or her professional services. |
20 | | "Review committee" means any person or persons conducting, |
21 | | reviewing,
administering, or supervising a peer review |
22 | | program.
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23 | | "Secretary" means the Secretary of the Department of |
24 | | Financial and Professional Regulation. |
25 | | "University" means the University of Illinois.
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26 | | "Board" means the Board of Examiners established under |
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1 | | Section 2.
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2 | | "Registration", "registrant", and "registered" refer to |
3 | | the authorization to hold oneself out as or use the title |
4 | | "Registered Certified Public Accountant" or "Certified Public |
5 | | Accountant", unless the context otherwise requires.
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6 | | "Peer Review Administrator" means an organization |
7 | | designated by the Department that meets the requirements of |
8 | | subsection (f) of Section 16 of this Act and other rules that |
9 | | the Department may adopt.
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10 | | (Source: P.A. 98-254, eff. 8-9-13; 99-78, eff. 7-20-15.)
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11 | | (225 ILCS 450/5.2)
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12 | | (Section scheduled to be repealed on January 1, 2024) |
13 | | Sec. 5.2. Substantial equivalency. |
14 | | (a) An individual whose principal place of business is not |
15 | | in this State shall have all the privileges of a person |
16 | | licensed under this Act as a licensed CPA without the need to |
17 | | obtain a license from the Department or to file notice with the |
18 | | Department, if the individual: |
19 | | (1) holds a valid license as a certified public |
20 | | accountant issued by another state that the National |
21 | | Qualification Appraisal Service of the National |
22 | | Association of State Boards of Accountancy has verified to |
23 | | be in substantial equivalence with the CPA licensure |
24 | | requirements of the Uniform Accountancy Act of the American |
25 | | Institute of Certified Public Accountants and the National |
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1 | | Association of State Boards of Accountancy; or |
2 | | (2) holds a valid license as a certified public |
3 | | accountant issued by another state and obtains from the |
4 | | National Qualification Appraisal Service of the National |
5 | | Association of State Boards of Accountancy verification |
6 | | that the individual's CPA qualifications are substantially |
7 | | equivalent to the CPA licensure requirements of the Uniform |
8 | | Accountancy Act of the American Institute of Certified |
9 | | Public Accountants and the National Association of State |
10 | | Boards of Accountancy; however, any individual who has |
11 | | passed the Uniform CPA Examination and holds a valid |
12 | | license issued by any other state prior to January 1, 2012 |
13 | | shall be exempt from the education requirements of Section |
14 | | 3 of this Act for the purposes of this item (2). |
15 | | (a-5) A CPA firm whose principal place of business is not |
16 | | in this State shall have all the privileges of a CPA firm |
17 | | licensed under this Act without the need to obtain a license |
18 | | from the Department or to file notice with the Department if |
19 | | the CPA firm complies with the requirements outlined in |
20 | | Sections 14.4 and 16 through substantial equivalency of their |
21 | | licensed state. |
22 | | (b) Notwithstanding any other provision of law, an |
23 | | individual or CPA firm who offers or renders professional |
24 | | services under this Section, whether in person or by mail, |
25 | | telephone, or electronic means, shall be granted practice |
26 | | privileges in this State and no notice or other submission must |
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1 | | be provided by any such individual or CPA firm . |
2 | | (c) An individual licensee or CPA firm of another state who |
3 | | is exercising the privilege afforded under this Section and the |
4 | | CPA firm that employs such individual licensee , if any, as a |
5 | | condition of the grant of this privilege, hereby simultaneously |
6 | | consents: |
7 | | (1) to the personal and subject matter jurisdiction and |
8 | | disciplinary authority of the Department; |
9 | | (2) to comply with this Act and the Department's rules |
10 | | adopted under this Act; |
11 | | (3) that in the event that the license from the state |
12 | | of the individual's or CPA firm's principal place of |
13 | | business is no longer valid, the individual or CPA firm |
14 | | shall cease offering or rendering accountancy activities |
15 | | as outlined in paragraphs (1) and (2) of Section 8.05 in |
16 | | this State individually or on behalf of a CPA firm; and |
17 | | (4) to the appointment of the state board that issued |
18 | | the individual's or the CPA firm's license as the agent |
19 | | upon which process may be served in any action or |
20 | | proceeding by the Department against the individual or CPA |
21 | | firm . |
22 | | (d) An individual licensee who qualifies for practice |
23 | | privileges under this Section who, for any entity headquartered |
24 | | in this State, performs (i) a financial statement audit or |
25 | | other engagement in accordance with Statements on Auditing |
26 | | Standards; (ii) an examination of prospective financial |
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1 | | information in accordance with Statements on Standards for |
2 | | Attestation Engagements; or (iii) an engagement in accordance |
3 | | with Public Company Accounting Oversight Board Auditing |
4 | | Standards may only do so through a CPA firm licensed under this |
5 | | Act or a CPA firm with practice privileges under this Section .
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6 | | (e) A CPA firm that qualifies for practice privileges under |
7 | | this Section and, for any entity headquartered in this State, |
8 | | performs the following may only do so through an individual or |
9 | | individuals licensed under this Act or an individual or |
10 | | individuals with practice privileges under this Section: |
11 | | (1) a financial statement audit or other engagement in |
12 | | accordance with Statements on Auditing Standards; |
13 | | (2) an examination of prospective financial |
14 | | information in accordance with Statements on Standards for |
15 | | Attestation Engagements; or |
16 | | (3) an engagement in accordance with Public Company |
17 | | Accounting Oversight Board auditing standards. |
18 | | (Source: P.A. 98-254, eff. 8-9-13.)
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19 | | (225 ILCS 450/13) (from Ch. 111, par. 5514)
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20 | | (Section scheduled to be repealed on January 1, 2024)
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21 | | Sec. 13. Application for licensure.
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22 | | (a) A person or CPA firm that wishes to perform accountancy |
23 | | activities in this State, as defined in paragraph (1) of |
24 | | subsection (a) of Section 8.05 of this Act, or use the CPA |
25 | | title
shall make application to the Department
and shall pay |
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1 | | the fee required by rule.
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2 | | Applicants have 3 years from the date of application to |
3 | | complete the
application process. If the process has not been |
4 | | completed in 3 years,
the application shall be denied, the fee |
5 | | forfeited and the applicant must
reapply and meet the |
6 | | requirements in effect at the time of reapplication.
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7 | | (b) Any CPA firm that (i) has an office in this State that |
8 | | uses the title "CPA" or "CPA firm"; (ii) has an office in this |
9 | | State that performs accountancy activities, as defined in |
10 | | paragraph (1) of subsection (a) of Section 8.05 of this Act; or |
11 | | (iii) does not have an office in this State and does not meet |
12 | | the practice privilege requirements as defined in Section 5.2 |
13 | | of this Act , but offers or renders performs services, as set |
14 | | forth in subsection (e) (d) of Section 5.2 of this Act, for a |
15 | | client that is headquartered in this State must hold a license |
16 | | as a CPA firm issued under this Act. |
17 | | (c) (Blank). A CPA firm that does not have an office in |
18 | | this State may perform a review of a financial statement in |
19 | | accordance with the Statements on Standards for Accounting and |
20 | | Review Services for a client with its headquarters in this |
21 | | State and may use the title "CPA" or "CPA firm" without |
22 | | obtaining a license as a CPA firm under this Act, only if the |
23 | | firm (i) performs such services through individuals with |
24 | | practice privileges under Section 5.2 of this Act; (ii) |
25 | | satisfies any peer review requirements in those states in which |
26 | | the individuals with practice privileges under Section 5.2 have |
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1 | | their principal place of business; and (iii) meets the |
2 | | qualifications set forth in paragraph (1) of Section 14.4 of |
3 | | this Act. |
4 | | (d) A CPA firm that is not subject to the requirements of |
5 | | subsection (b) or (c) of this Section may perform professional |
6 | | services that are not regulated under subsection (b) or (c) of |
7 | | this Section while using the title "CPA" or "CPA firm" in this |
8 | | State without obtaining a license as a CPA firm under this Act |
9 | | if the firm (i) performs such services through individuals with |
10 | | practice privileges under Section 5.2 of this Act and (ii) may |
11 | | lawfully perform such services in the state where those |
12 | | individuals with practice privileges under Section 5.2 of this |
13 | | Act have their principal place of business. |
14 | | (Source: P.A. 98-254, eff. 8-9-13.)
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15 | | (225 ILCS 450/16) (from Ch. 111, par. 5517)
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16 | | (Section scheduled to be repealed on January 1, 2024)
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17 | | Sec. 16. Expiration and renewal of licenses; renewal of |
18 | | registration;
continuing education; peer review. |
19 | | (a) The expiration date and renewal period for each license |
20 | | or registration
issued under this Act shall be set by rule.
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21 | | (b) Every holder of a license or registration under this |
22 | | Act may renew such license or registration before the |
23 | | expiration date upon payment of the required renewal fee as set |
24 | | by rule.
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25 | | (c) Every application for renewal of a license by a |
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1 | | licensed CPA who has been licensed under this Act for 3 years |
2 | | or more shall be accompanied or supported by any evidence the |
3 | | Department shall prescribe, in satisfaction of completing , |
4 | | each 3 years, not less than 120 hours of continuing |
5 | | professional education as prescribed by Department rules. Of |
6 | | the 120 hours, not less than 4 hours shall be courses covering |
7 | | the subject of professional ethics. All continuing education |
8 | | sponsors applying to the Department for registration shall be |
9 | | required to submit an initial nonrefundable application fee set |
10 | | by Department rule. Each registered continuing education |
11 | | sponsor shall be required to pay an annual renewal fee set by |
12 | | Department rule. Publicly supported colleges, universities, |
13 | | and governmental agencies located in Illinois are exempt from |
14 | | payment of any fees required for continuing education sponsor |
15 | | registration. Failure by a continuing education sponsor to be |
16 | | licensed or pay the fees prescribed in this Act, or to comply |
17 | | with the rules and regulations established by the Department |
18 | | under this Section regarding requirements for continuing |
19 | | education courses or sponsors, shall constitute grounds for |
20 | | revocation or denial of renewal of the sponsor's registration. |
21 | | (d) Licensed CPAs are exempt from the continuing |
22 | | professional education requirement for the first renewal |
23 | | period following the original issuance of the license. |
24 | | Failure by an applicant for renewal of a license as a |
25 | | licensed CPA to furnish the evidence shall constitute grounds |
26 | | for disciplinary action, unless the Department in its |
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1 | | discretion shall determine the failure to have been due to |
2 | | reasonable cause. The Department, in its discretion, may renew |
3 | | a license despite failure to furnish evidence of satisfaction |
4 | | of requirements of continuing education upon condition that the |
5 | | applicant follow a particular program or schedule of continuing |
6 | | education. In issuing rules and individual orders in respect of |
7 | | requirements of continuing education, the Department in its |
8 | | discretion may, among other things, use and rely upon |
9 | | guidelines and pronouncements of recognized educational and |
10 | | professional associations; may prescribe rules for the |
11 | | content, duration, and organization of courses; shall take into |
12 | | account the accessibility to applicants of such continuing |
13 | | education as it may require, and any impediments to interstate |
14 | | practice of public accounting that may result from differences |
15 | | in requirements in other states; and may provide for relaxation |
16 | | or suspension of requirements in regard to applicants who |
17 | | certify that they do not intend to engage in the performance of |
18 | | accountancy activities, and for instances of individual |
19 | | hardship. |
20 | | The Department shall establish by rule a means for the |
21 | | verification of completion of the continuing education |
22 | | required by this Section. This verification may be accomplished |
23 | | through audits of records maintained by licensees; by requiring |
24 | | the filing of continuing education certificates with the |
25 | | Department; or by other means established by the Department. |
26 | | The Department may establish, by rule, guidelines for |
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1 | | acceptance of continuing education on behalf of licensed CPAs |
2 | | taking continuing education courses in other jurisdictions.
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3 | | (e) For renewals on and after July 1, 2012, as a condition |
4 | | for granting a renewal license to CPA firms and sole |
5 | | practitioners who perform accountancy activities outlined in |
6 | | paragraph (1) of subsection (a) of Section 8.05 under this Act, |
7 | | the Department shall require that the CPA firm or sole |
8 | | practitioner satisfactorily complete a peer review during the |
9 | | immediately preceding 3-year period, accepted by a Peer Review |
10 | | Administrator in accordance with established standards for |
11 | | performing and reporting on peer reviews, unless the CPA firm |
12 | | or sole practitioner is exempted under the provisions of |
13 | | subsection (i) of this Section. A CPA firm or sole practitioner |
14 | | shall, at the request of the Department, submit to the |
15 | | Department a letter from the Peer Review Administrator stating |
16 | | the date on which the peer review was satisfactorily completed. |
17 | | A new CPA firm or sole practitioner shall not be required |
18 | | to comply with the peer review requirements for the first |
19 | | license renewal. A CPA firm or sole practitioner shall undergo |
20 | | its first peer review during the first full renewal cycle after |
21 | | it is granted its initial license.
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22 | | The requirements of this subsection (e) shall not apply to |
23 | | any person providing services requiring a license under this |
24 | | Act to the extent that such services are provided in the |
25 | | capacity of an employee of the Office of the Auditor General or |
26 | | to a nonprofit cooperative association engaged in the rendering |
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1 | | of licensed service to its members only under paragraph (3) of |
2 | | Section 14.4 of this Act or any of its employees to the extent |
3 | | that such services are provided in the capacity of an employee |
4 | | of the association. |
5 | | (f) The Department shall approve only Peer Review |
6 | | Administrators that the Department finds comply with |
7 | | established standards for performing and reporting on peer |
8 | | reviews. The Department may adopt rules establishing |
9 | | guidelines for peer reviews, which shall do all of the |
10 | | following:
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11 | | (1) Require that a peer review be conducted by a |
12 | | reviewer that is independent of the CPA firm reviewed and |
13 | | approved by the Peer Review Administrator under |
14 | | established standards. |
15 | | (2) Other than in the peer review process, prohibit the |
16 | | use or public disclosure of information obtained by the |
17 | | reviewer, the Peer Review Administrator, or the Department |
18 | | during or in connection with the peer review process. The |
19 | | requirement that information not be publicly disclosed |
20 | | shall not apply to a hearing before the Department that the |
21 | | CPA firm or sole practitioner requests be public or to the |
22 | | information described in paragraph (3) of subsection (i) of |
23 | | this Section. |
24 | | (g) If a CPA firm or sole practitioner fails to |
25 | | satisfactorily complete a peer review as required by subsection |
26 | | (e) of this Section or does not comply with any remedial |
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1 | | actions determined necessary by the Peer Review Administrator, |
2 | | the Peer Review Administrator shall notify the Department of |
3 | | the failure and shall submit a record with specific references |
4 | | to the rule, statutory provision, professional standards, or |
5 | | other applicable authority upon which the Peer Review |
6 | | Administrator made its determination and the specific actions |
7 | | taken or failed to be taken by the licensee that in the opinion |
8 | | of the Peer Review Administrator constitutes a failure to |
9 | | comply. The Department may at its discretion or shall upon |
10 | | submission of a written application by the CPA firm or sole |
11 | | practitioner hold a hearing under Section 20.1 of this Act to |
12 | | determine whether the CPA firm or sole practitioner has |
13 | | complied with subsection (e) of this Section. The hearing shall |
14 | | be confidential and shall not be open to the public unless |
15 | | requested by the CPA firm or sole practitioner. |
16 | | (h) The CPA firm or sole practitioner reviewed shall pay |
17 | | for any peer review performed. The Peer Review Administrator |
18 | | may charge a fee to each firm and sole practitioner sufficient |
19 | | to cover costs of administering the peer review program. |
20 | | (i) A CPA firm or sole practitioner shall not be required |
21 | | to comply with the peer review requirements if: |
22 | | (1) Within 3 years before the date of application for |
23 | | renewal licensure, the sole practitioner or CPA firm has |
24 | | undergone a peer review conducted in another state or |
25 | | foreign jurisdiction that meets the requirements of |
26 | | paragraphs (1) and (2) of subsection (f) of this Section. |
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1 | | The sole practitioner or CPA firm shall, at the request of |
2 | | the Department, submit to the Department a letter from the |
3 | | organization administering the most recent peer review |
4 | | stating the date on which the peer review was completed; or |
5 | | (2) Within 2 years before the date of application for |
6 | | renewal licensure, the sole practitioner or CPA firm |
7 | | satisfies all of the following conditions: |
8 | | (A) has not accepted or performed any accountancy |
9 | | activities outlined in paragraph (1) of subsection (a) |
10 | | of Section 8.05 of this Act; and |
11 | | (B) the firm or sole practitioner agrees to notify |
12 | | the Peer Review Administrator within 30 days of |
13 | | accepting an engagement for services requiring a |
14 | | license under this Act and to undergo a peer review |
15 | | within 18 months after the end of the period covered by |
16 | | the engagement; or |
17 | | (3) For reasons of personal health, military service, |
18 | | or other good cause, the Department determines that the |
19 | | sole practitioner or firm is entitled to an exemption, |
20 | | which may be granted for a period of time not to exceed 12 |
21 | | months. |
22 | | (j) If a peer review report indicates that a CPA firm or |
23 | | sole practitioner complies with the appropriate professional |
24 | | standards and practices set forth in the rules of the |
25 | | Department and no further remedial action is required, the Peer |
26 | | Review Administrator shall, after issuance of the final letter |
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1 | | of acceptance, destroy all working papers and documents related |
2 | | to the peer review, other than report-related documents and |
3 | | documents evidencing completion of remedial actions, if any, in |
4 | | accordance with rules established by the Department. |
5 | | (k) (Blank). |
6 | | (Source: P.A. 98-254, eff. 8-9-13; 98-730, eff. 1-1-15 .)
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7 | | Section 99. Effective date. This Act takes effect upon |
8 | | becoming law.
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