STATE OF WISCONSIN
ACCOUNTING EXAMINING BOARD
------------------------------------------------------------------------------------------------------------
IN THE MATTER OF RULEMAKING
:
PROPOSED ORDER OF THE
PROCEEDINGS BEFORE THE
:
ACCOUNTING EXAMINING BOARD
ACCOUNTING EXAMINING BOARD
:
ADOPTING RULES
:
(CLEARINGHOUSE RULE )
------------------------------------------------------------------------------------------------------------
PROPOSED ORDER
An order of the Accounting Examining Board to
repeal Accy 3.01, 3.03 (1) (Note),
3.05 (1) (b) 2. and 3. and (c) and (2) and (3),
3.055, 3.07, 3.08, 4.035, 5.06, 7.01, 7.02
7.035 (5), 7.04 (2),
7.06
,
chs.
Accy 7
and
8
(titles) and
Accy
9.01
;
to renumber
Accy 3.10,
4.01, 4.03, 4.037
, 4.04, 4.05, 4.06
,
4.07 (2),
5.02
, 5.04 5.05, 5.07,
7.04 (1),
7.05, 8.01, 8.02, 8.03 (1) to (6), 8.05,
ch.
Accy 9
(title),
Accy
9.02, 9.03, 9.04, 9.05
,
and
9.06;
to renumber and amend
Accy 3.02, 3.03, 3.04, 3.05
(title), (1) (intro.) and (a)
, 3.06, 3.09, 3.11),
4.02
, 4.07
, 5.01, 5.03
,
7.03
, 7.035, 7.04, 8.04,
and
9.02 (Note);
to consolidate, renumber and amend
Accy 3.05 (1) (b) (intro.) and 1.;
to amend
A
ccy. 1.001 (1) and (3) and ,
1.003
(intro.),
ch.
Accy 1
,
subch
II (title) Accy 1
.102,
1.202, 1.301 (2) (d) and (4), 1.302 (1) and (3), 1.401 (2) (a), (2) (c) and (2) (e) 2.
,
to repeal and recreate
Accy 1.101, 1.
401 (2) (f)
and,
1.405
;
to create
Accy 1.003 (2m), (2r) and (7
m), ch
.
Accy 2
(title)
, ch
.
Accy 2
,
subch
. I (title)
,
Accy 2.001 and
2.002,
ch.
Accy 2
subch
.
II
,
III
, and
IV
(title
s
)
,
Accy
2.101 (1) (Note),
2.101 (3), (4) and (5),
2.205,
and
2.305
(1)
(g),
ch.
Accy 2
,
subch. V
(title)
, Accy 2.401 (2),
ch
.
Accy
3
(title), ch.
Accy 3
, subchs. I, II, and III (titles), ch.
Accy
4
(title)
,
ch
.
Accy 5
(title),
subchs. I, II,
III,
IV (title
s
)
,
Accy
5.401 (1) (a) to (d) and (2)
, and
5.403, ch.
Accy 6
, subch.
I (title)
Accy
6.001,
6.002,
ch.
Accy 6
, subchs
II
,
III
,
and
IV (title
s
)
,
Accy 6.303 and
6.304, relating to updating accounting practices and standards.
Analysis prepared by the Department of Safety and Professional Services.
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ANALYSIS
Statutes interpreted:
Statutory authority:
Explanation of agency authority:
Pursuant to ss.
15.08 (5) (b)
, and
227.11 (2) (a)
, Stats., the Accounting Examining Board (Board) is empowered by the legislature to promulgate rules that will provide guidance within the accounting profession and that interpret the statutes it enforces or administers. An express grant of rule writing authority with regard to peer review is found in Section
442.087 (3)
, Stats. The Board seeks to promulgate rules that will provide guidance within the profession with regards to the qualifications for certification
and licensure
, qualifications for examination, and requirements for pee
r review
.
Related statute or rule:
None.
Plain language analysis:
The Accounting Examining Board undertook a comprehensive review of the rules governing accounting practice in Wisconsin. During the time the Board was conducting its review legislation passed that greatly impacted becoming
a
certified
public
accountant in Wisconsin.
2013 Wisconsin Act 21
affected the accreditation standard within the rules. Before Act 21, applicants for a certified public accountant certificate were to have received a bachelor’s degree from an institution accredited by the Commission on Institution of Higher Education of the North Central Association of Colleges and Schools or its regional equivalence.
2013 Wisconsin Act 21
changed the accreditation standard to include institutions of higher education that are accredited b
y an accrediting agency
recognized b
y the secretary of the federal D
epartment of
E
ducation. The proposed rule would eliminate all references to the former accreditation body and update pertinent provisions with the new accreditation standard.
2013 Wisconsin Act 210
modified the qualifications for sitting for the accountancy exam. Before Act 210
,
individuals had to complete 150 semester hours of education
and possess a baccalaureate
degree or higher before taking the exam. Act 210 reduced the number of required semester hours of education from 150 to 120 semester hours
and eliminated the
baccalaureate or higher degree
as a
req
uirement
to take
the exam. The proposed rule will a
mend the affected
provisions to implement this statutory change.
Lastly, t
he Board
decided to adopt
the American Institute of Certified Public Account’s (AICPA) Code of Professional Conduct, a
nd update the p
eer review chapter
with new terms
.
Summary of, and comparison with, existing or proposed federal regulation:
None.
Comparison with rules in adjacent states:
Illinois
: Illinois requires 150 college or university semester hours with an accounting concentration to be admitted to take the certified public accountant examination. The
150 hours must include a baccalaureate or higher degree conferred by an academic institution a
cceptable to the B
oard. 225 I
ll Comp. Stat.
450/3. The B
oard recognizes institutions of higher education accredited by a regional accrediting association recognized by the Council for Higher Education Accreditation or the U.S. Department of Education. The Board also recognizes business schools accredited by the Association of Advance Collegiate Schools of Business or the Association of Collegiate Business Schools and Programs. 23 Ill. Adm. Code 1400.90 (c) (2) (H)
.
Iowa
:
Qualifications for a certificate as a certified public accountant in Iowa includes completion of at least 150 semester hours of college level education and receiving a baccalaureate or higher degree by a college or university recognized by the Board. Iowa Code §542.5 (7). The Board recognizes institutions accredited by the American Assembly of Collegiate Schools of Business.193A IAC 3.2. Other qualifications include one year of verified experience and successful completion of the uniform certified accountant’s examination. 193
A
IAC 3.1.
Michigan
: Certification requirements in Michigan include the completion of a least 150 semester hours of college education including a baccalaureate degree or higher with a concentration in accounting. Mich. Admin. Code
r.
338.5116 (1). For
purposes of accreditation the B
oard recognizes the North Central Association of Colleges and Schools Commission on Institutions of Higher Education.
Mich. Admin. Code r.
338.5115. Qualifying experience for certification includes 2,000 hours of experience within a period of not less than one calendar year and not more than 5 calenda
r years. Mich. Admin. Code r.
338.5117 (1).
Minnesota:
The requirements for certificati
o
n include
the completion of one year of experience and 150 semester hours or 225 quarter hours at a college or university accredited by a recognized accrediting agency listed with the United States Department of Education, or an equivalent accrediting association. Minn. Stat. §3261.03 Subd.6 . Before taking the examination an applicant is required to have a “baccalaureate or higher degree, with a major in accounting or a major in business with accounting emphasis, or an equivalent education, from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education or an equivalent accrediting association.” Minn. Stat. §3261.03 Subd. 3.
Summary of factual data and analytical methodologies:
The
methodologies used in drafting the proposed rule include comparing
2013 Wisconsin Act 21
and
2013 Wisconsin Act 210
with
current administrative rules c
oncerning accounting practice, reviewing s
tatutes and administrative code
from neighboring states, and obtaining feedback from members of the Accounting Examining Board.
Analysis and supporting documents used to determine effect on small business or in preparation of economic impact
analysis
:
Fiscal Estimate and Economic Impact Analysis:
These proposed rules do not have an economic impact on small businesses, as defined in s.
227.114 (1)
, Stats. The Department’s Regulatory Review Coordinator may be contacted by email at
Tom.Engels@wisconsin.gov
, or b
y calling (608) 266-8608.
Effect on small business
:
These proposed rules do not have an economic impact on small businesses, as defined in s.
227.114 (1)
, Stats. The Department’s Regulatory Review Coordinator may be contacted by email at
Tom.Engels@wisconsin.gov
, or by calling (608) 266-8608.
Agency contact person
:
Shawn Leatherwood, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8935, Madison, Wisconsin 53708; telephone 608-261-4438; email at
Shancethea.Leatherwood@wisconsin.gov
.
Place where comments are to be submitted and deadline for submission
:
Comments may be submitted to
Shawn Leatherwood, Administrative Rules Coordinator Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8935, or by email to
Shancethea.Leatherwood@wisconsin.gov
.
Comments m
ust be received on or before February 17, 2015
o be included in the record of rule-making proceedings
.
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TEXT OF RULE
SECTION 1. Accy 1.001 (1) is amended to read:
Accy 1.001
Applicability
of rules of conduct to certified public accountants
.
Chapters
Accy 1
to
9
6
apply
to a person who practices as a certified public accountant in this state.
SECTION 2. Accy 1.001 (3) is amended
to read:
Accy 1.001 (3)
A certified public accountant shall not permit others to carry out acts on
his or her
the
accountant’s
behalf, either with or without compensation, which, if carried out by the certified public accountant, would violate chs.
Accy 1
to
9
6
.
SECTION
3
. Accy 1.003 (intro.) is amended to read:
Accy 1.003 Definitions
. As used in chs.
Accy 1
to
9
6
.
SECTION
4.
Accy
1.003 (2m), (2r), and (7
m) are created to read:
Accy 1.003 (2m) “Board” means the accounting examining board.
Accy 1.003 (2r
) “Certified public accountant” has the meaning given in s.
442.02 (1m)
, Stats.
Accy 1.003 (7
m)
“Finan
cial statements”
means statements and footnotes related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, cash flow, or changes in financial position for a period of time, in conformity with generally accepted accounting principles or another comprehensive basis of accounting. The term does not include incidental financial data included in management advisory service reports to support recommendations to a client; nor does it include tax returns and supporting schedules
.
SECTION 5. Subchap
ter II (title) in chapter Accy 1
is amended to read:
SUBCHAPTER II
(title)
INDEPENDENCE
PROFESSIONAL
CONDUCT,
INTEGRITY AND OBJECTIVITY
SECTION 6.
Accy 1.101 is repealed and recreated to read:
Accy 1.101 Professional
c
onduct
.
(1)
The board adopts by reference the “Code of Professional Conduct” published by the American Institute of Ce
rtified Public Accountants,
effective as of December 15, 2014
,
except that r
eferences to “member” are
replaced by “
a person licensed to practice as a certified public accountant.
”
(2) All definitions included in the American Institute of Certified Public Accountants’ Code of Professional Conduct shall apply only to the document adopted by reference.
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036-8775
SECTION
7
. Accy 1.102 is amended to read:
Accy 1.102
Integrity and objectivity
. No person licensed to practice as a certified public accountant
,
as defined in the statutes, shall knowingly misrepresent facts, and when engaged in the practice of public accounting, including the rendering of tax and
management advisory services, shall not subordinate his or her judgment to others
.
In tax practice, a member may resolve doubt in favor of the client as long as there is reasonable support for that position
.
S
ECTION
8
. Accy 1.202 is
amended to read:
Accy 1.202
Auditing
standards
.
(1)
A person licensed to practice as a certified public accountant shall not permit the certified public accountant's name to be associated with financial statements in such a manner as to imply that the certified public accountant is acting as an independent public accountant unless the certified public accountant has complied with the applicable generally accepted auditing standards promulgated by the American Institute o
f Certified Public Accountants.
Statements on auditing standards used by the American Institute of Certified Public Accountants
auditing standards
executive committee
board
are, for purposes of this rule, considered to be interpretations of the generally accepted auditing standards, and departures from such statements must be justified by those who do not follow them
.
SECTION 9.
Accy 1.301 (2)
(d), and (4) are
amended to read:
Accy 1.301
(2)
(d)
To preclude a certified public accountant from responding to an inquiry made by the Professional Ethics Division of the American Institute of Certified Public Accountants, by the duly constituted investigative or disciplinary body of a state society of certified public accountants, or under any state statutes
or under the standards of the Securities and Exchange Commission or the Public Company Accounting Oversight Board
.
(4)
The prohibition in sub. (1) against disclosure of confidential information obtained in the course of a professional engagement does not apply to disclosure of such information when required to properly discharge the certified public accountant's responsibility according to the profession's standards. The prohibition would not apply, for example, to disclosure, as required by
AU-C
section
561
560
of Statement on Auditing Standards
No. 1
,
regarding the
of
subsequent discovery of facts existing at the date of the auditor's report which would have affected the auditor's report had the auditor been aware of such facts.
SECTION 10. Accy 1.302 (1) and (3) are amended to read:
Accy 1.
3
0
2 (1) Contingent fees, commissions and referral fees
. (1)
Contingent Fees
.
Except as
provided
in sub.
(3)
(2)
, a certified public accountant may charge a contingent fee provided the accountant and the client make a contingent fee agreement in writing, signed by the client, which states the method by which the fee is to be determined and describes all costs and expenses to be charged to the client. Upon conclusion of the contingent fee matter, the accountant shall provide the client with a written statement showing the fee and all the costs and expenses charged to the client.
(3)
Commissions.
Except as provided in sub.
(5)
(4)
a certified public accountant may receive a commission provided that at the time the referral or recommendation is made, the accountant informs the client in writing of the amount and reason for the commission.
SE
CTION 11
. Accy 1.401
(2) (a)
, (2) (c) and (2) (e) 2.
are
amended to read:
Accy 1.401
(2) (a)
Client’s records and accountant’s workpapers.
Retention of client records after a demand is made for them is an act discreditable to the profession in violation of this section. It would be a violation of the code to retain a client's records to enforce payment.
A certified public accountant's working papers
are his or her
property
are
the property of the certified public accoun
t
ant
property
and need not be surrendered to the client. However, in some instances working papers will contain data
which
that
should properly be reflected in the client's books and records but
which
that
for convenience have not been duplicated therein, with the result that the client's records are incomplete. In such instances, the portion of the working papers containing such data constitutes part of the client's records, and copies should be made available to the client upon request. If a certified public accountant is engaged to perform certain work for a client and the engagement is terminated prior to the completion of such work, the certified public accountant is required to return or furnish copies of only those records originally given to the certified public accountant by the client. Examples of working papers that are considered to be the client's records would include:
(c)
Duty discharged
. Once the certified public accountant has returned the client's records or furnished the copies of such records
and/or
and
necessary supporting data, the obligation has been discharged in this regard and it is not necessary to comply with any subsequent requests to again furnish such records
.
(e) 2.
On conviction for willful failure to file an income tax return or other document which, the certified public accountant as an individual is required by law to file, for filing a false or fraudulent income tax return or other document on
his or her
or a client's behalf, or for willful aiding in the preparation
and/or
and
presentation of a false or fraudulent income tax return of a client, or the willful making of a false representation in connection with the determination, collection or refund of any tax, whether it be in his or her own behalf or in behalf of a client, the board will initiate charges in every instance.
SECTION 1
2
. Accy. 1.401 (2) (f
) is repealed and recreated to read:
Accy 1.401
(2)
(f
)
A certified public accountant shall provide a 48-hour written notification to the board after being convicted of a crime.
SECTION 1
3
. Accy 1.405 is repealed and recreated to read:
Accy 1.405 Firm Names
.
(1)
Individuals or firms may practice as a certified public accountant in any form of business organization
form
permitted by state law.
No person licensed to practice as a certified public accountant may practice under a firm name
which
that
is misleading as to the type of organization. A
misleading CPA Firm name is one of the following:
(a)
A name that
c
ontains any representation that would be likely to cause a reasonable person to misunderstand or be confused about the legal form of the firm, or about who are the owners or members of the firm, such as a reference to a type of organization or an abbreviation thereof which does not accurately reflect the form under which the firm is organized, for example:
1.
The name
i
mplies the existence of a corporation when the firm is not a corporation such as through the use of the words “corporation”, “incor
porated”, “Ltd.”, “professional
corporation”, or an abbreviation thereof as part of the firm name if the firm is not incorporated or is not a professional corporation.
2.
The name i
mplies the existence of a partnership when there is not a partnership such as by use of the term “partnership” or “limited liability partnership” or the abbreviation “LLP” if the firm is not such an entity.
3.
The name i
ncludes the name of an individual who is not a CPA if the title “CPAs” is included in the firm name.
4.
The name i
ncludes information about or indicates an association with persons who are not members of the firm
except as provided in subs. (3) and (4)
.
5.
The name i
ncludes the terms "& Company
," "& Associate," or "Group,"
but the firm does not include, in addition to the named partner, shareholder
,
owner, or member, at least one other unnamed partner, shareholder, owner, member, or staff employee.
(b)
A name that c
ontains any representation that would be likely to cause a reasonable person to have a false or unjustified expectation of favorable results or capabilities, through the use of a false or unjustified statement of fact as to any material matter.
(c)
A name that c
laims or implies the ability to influence a regulatory body or official
;
(d)
A name that i
ncludes the name of an owner whose license has been revoked f
or disciplinary reasons by the b
oard, whereby the licensee has been prohibited from practicing public accountancy or prohibited from using the title C
PA or holding oneself out as a certified p
ublic
a
ccountant.
(2)
As long as they do not violate this subchapter, all of the following are permissible types of CPA
firm
names:
(a)
A firm name that includes the names of one or more former or present
owners.
(b) A firm name that excludes the names of one o
r more former or present owners.
(c) A firm name that uses the CPA
title as part of the firm name when all named individuals are owners of the firm who hold such title or are former owners who held such title at the time they
ceased to be owners of the firm.
(d) A firm name that includes the name of a non-CPA owner if
the CPA
title
is not a part of the firm name.
(3)
A network firm may use a common brand name, or share common initials as part of the firm name.
(4)
A network firm may use the network name as the firm’s name provided it also shares one or more of the following characteristics with other firms in the network:
(a) Common control, as defined by generally accepted accounting principles in the U
.S.
, among the firms through ownership, management, or other means.
(b) Profits or costs, excluding costs of operating the association, costs developing audit methodologies, manuals and training courses, and other costs that are immaterial to the firm.
(c) Common business strategy that involves ongoing collaboration amongst the firms whereby the firms are responsible for implementing the association’s strategy and are held accountable for performance pursuant to that
strategy.
(d) Significant part of professional resources.
(e) Common quality control policies and procedures that participating firms are required to implement and that are monitored by the association.
SECTION 1
4
.
Chapter
Accy 2
(title) is created to read:
CHAPTER ACCY 2 (title)
INDIVIDUAL LICENSURE
SECTION 1
5
.
Subchapter I (title) of
chapter Accy 2
(
precedes s.
Accy 2.001
)
is created to read:
SUBCHAPTER I (title)
AUTHORITY AND
DEFINITIONS
SECTION 16
. Accy 2.001
is created to read:
SECTION 1
7
. Accy 2.002 is created to read:
Accy 2.002 Definitions
. In this chapter:
(1
)
“Accredited”
means a school or institution of higher learning listed by and accrediting agency recognized by the secretary of the federal department of education on or after July 5, 2013.
Note
: For a listing of accrediting agencies recognized by the secretary of the federal department of education, see
http:/www2.ed.gov/admins/finaid/accred/accreditation_pg6.html.
(2
)
“Bachelor’s degree” means a baccalaureate degree normally conferred by universities and colleges at the completion of at least a 4-year, full-time, academic-year program of study.
Note
: Some students complete the 4-yer bachelor’s degree in less than 4 years by attending summer school or maximum course loads over a number of academic semesters.
SECTION 1
8
.
Subchapter II (title) of chapter Accy 2 (precedes s.
Accy 2.101
) is
created to read:
SUBCHAPTER II (title)
APPLICATION FOR CERTIFICATION
OF INDIVIDUALS
SECTION 1
9
.
Accy 2.101 (Note) is created to read:
Note: Application forms are available upon request to the board’s office at 1400 East Washington Avenue, P.O. Box 8935, Madison WI 53708-8935 or by email at
www.dsps.wi.gov
. An applicant with a disability will be provided reasonable accommodations.
SECTION 20
.
Accy 2.101 (3), (4) and (5) are created to read:
Accy 2.101 (3) Evidence of at least one year of public accounting experience or its equivalence as required by s.
Accy 2.403
and s.
442.04 (5) (b) 5.
, Stats.
(4) Evidence that the applicant has successfully passed each section of the uniform certified public accountant examination.
(5) Successful completion of the open book professional ethics examination on statutes and rules governing the practice of public accounting in Wisconsin a set forth in Accy 2.30
6
.
SECTION 21.
Subchapter III (title) in chapter Accy 2
(precedes s.
Accy 2.201
)
is created to read:
SUBCHAPTER III (title)
EDUCATION
SECTION 22. Accy 2.205 is created to read:
Accy 2.205
Requirements
for
renewal
and reinstatement of individual licensees
.
(1)
Renewal before 5 years
.
An individual certified public accountant who files an application fo
r renewal of a license within 5
years after
the renewal date may renew his or her
license by filing with the board
all
of the following
:
(a) An application for renewal on a form prescribed by the department.
(2)
Renewal after 5 years or more
. An individual certified public accountant who files an application for renewal 5 years or more after the renewal date may be renewed by filing with the board all of the following:
(a) An application for renewal on a form prescribed by the department.
(b
) The fee determined by the Department under s.
440.05 (1
)
(a)
, Stats., plus the applicable late renewal fee specified in s.
440.08 (3)
, Stats.
(c) Verification of successful completion
of examinations specified in s
.
Accy 2.301
, or
education
specified in s
.
Accy
2.202
or both as may
be
prescribe
d by the board
.
(3
)
Reinstatement.
An individual certified public accountant whose license has been surrendered
or revoked
or
who
has a license with unmet disciplinary requirements which has not been renewed within 5 years or more after the renewal date may be reinstated by filing with the board all of the following:
(a) Evidence of the completion of the requirements under sub. 2 (c).
(b) Evidence of completion of disciplinary requirements, if applicable.
(c) Evidence of rehabilitation or change in circumstances warranting reinstatement of the credential.
SECTION 2
3
. Accy 2.305
(1)(g) is created to read:
Accy 2.30
5
(1) (g) Falsifying or misrepresenting education
al
credential
s
or other information required for admission to the examination
SECTION 2
4
. Subchapter IV (title) of
chapter Accy 2
(precedes s.
Accy 2.301
)
is created to read:
SUBCHAPTER IV (title)
EXAMINATION
SECTION 2
5
.
Subchapter V (title) of chapter Accy 2 (preceded s.
2.401
) is created to read:
SUBCHAPTER V
EXPERIENCE
SECTION 26.
Accy 2.401 (2) is created to read:
Accy 2.401 (2) Experience may consist of providing any type of services or advice using accounting, attest, compilation, management advisory, financial advisory, tax or related consulting skills.
SECTION 2
7
. Chapter Accy 3 (title) is repealed and recreated to read:
CHAPTER ACCY 3 (title)
ENDORSEMENT
SECTION 2
8
. Subchapter I (title) of chapter Accy 3 (precedes s.
Accy 3.001
) is created to read:
SUBCHAPTER I (title)
AUTHORITY AND DEFINITIONS
SECTION 2
9
. Accy 3.01 is repealed.
SECTION 30
.
Accy
3.02
is renumbered Accy 2.301
and
amended to read:
Accy 2.301 Examination
. A candidate for certified public accountant certificate shall successfully pass the certified public accountant examination set forth in
s.
Accy 3.03
s.
Accy 2.302
and the professional ethics examination set forth in
s.
Accy
3.10
s
.
Accy 2.30
6
.
SECTION 31
. Accy 3.03 is renumbered Accy 2.302
and
amended to read:
Accy
2.302
Certified public accountant examination
. (1) The subjects covering the discipline
of accounting in the certified public accountant examination shall be as
provided
in the 4 sections of the
by the
board of examiners of the American institute of certified public accountants uniform certified public accountant examination. The passing grade on each section is 75 or higher.
SECTION 3
2
. Accy 3.03
(1)
(
Note
)
is repealed.
SECTION 3
3
. Accy 3.04
is renumbered Accy 2.303
and
amended to read:
Accy 2.303 Education
required for examination
. A c
andidate for the certified public accountant examination must
possess a bachelor's or higher degree with a resident major in accounting, as defined in s.
Accy 7.02 (3)
, or the reasonable equivalence of a resident major in accounting, as defined in s.
Accy 7.03 (1)
, or reasonably expect to receive a degree with a resident major in accounting
or its reasonable equivalence within 45 days following the date of examination
complete 120 semester hours of education
which shall count towards the 150 semester hours of education required under ch.
Accy
2.202
SECTION 3
4
.
Accy 3.05
(title), (1) (intro.) and (a) are
renumbe
red Accy 2.101
(title), (intro.) and (1)
and
Accy 2.101 (title) and (intro.) as renumbered are
amended to read:
Accy 2.101
Examination
Application
.
A candidate
for the certified public accountant examination
applying
for a certificat
e as a certified public accountant
shall apply on an application form provided by the board
and file the application in the board office no later than 60 days prior to the examination date
. The application shall be supported by all of the following:
SECTION 3
5
. Accy 3.05 (1) (b) (intro.) and 1.
a
re consolidated, renumbered Accy 2.101 (2) and amended to read:
Accy 2.101 (2)
Proof of fulfilling the educational requirements
specified in
s.
442.04 (5)
by submitting
either:
c
ertified copies of transcripts for all academic work completed at an institution as defined
in
s.
442.04 (4
) (a)
, Stats
.
s.
442.04 (5) (a)
, Stats
.,
at least one of
which must
reflect the
award of a bachelor’s or higher degree
,
with 150 semester hours in an accounting concentration or the reasonable equivalence of an accounting concentration as determined by the board
if the candidate has graduated prior to filing the application
.
SECTION 3
6
. Accy 3.05 (1) (b) 2. and 3. a
nd (c) and (2) and (3) are repealed.
SECTION
3
7
. Accy 3.055
is
repealed.
SECTION 3
8
. Accy 3.06 is renumbered Accy 2.304
and Accy 2.304 (title), (1), (3) and (4) as renumbered are a
mended to read:
Accy
2.304
Examination
Candidates for examination
. (title)
(1) A candidate shall be allowed to sit for each section of the uniform certified public accountant examination individually
and in any order
.
(3) A candidate must pass all
(
4
)
sections of the uniform certified public accountant examination within a rolling 18-month period
which
that
begins on the date that the first section is passed.
(4) If
all 4
sections
any
section
of
the uniform certified public accountant examination
are
is
not passed within the rolling 18-month period, credit for any section passed outside the 18-month period shall expire and that section shall be retaken.
SECTION 39
.
Accy
3.07 and 3.08 are
repealed
.
SECTION 40
. Accy 3.09 is renumbered Accy 2.30
5
and
2.305 (1) (intro.) (a) to (d), (2) and (4) as renumbered are
amended to read:
Accy 2.305
Cheating on examination
.
(1)
(intro.)
Cheating on the certified public accountant examination is a serious breach of integrity and indicates a lack of good professional character. Cheating on an examination includes
, but is not limited to
the following
:
(a) Communications concerning an examination being
written
taken
between candidates inside or
outside of the examination room, or copying another's answers.
(b) Communications concerning an examination being
written
taken
with accomplices outside of the examination room.
(c) Substitution by a candidate of another person to sit in the examination room for the candidate and
write
take
one
or more of the examination questions or papers for the candidate.
(
d) Reference to "crib notes," test books
,
or
other materials
,
or electronic media other than that provided to the candidate as part of the examination,
inside or outside
of
the examination room during periods examinations are being
written
taken
.
(2)
Penalties imposed by the board for cheating on the examination shall be related to the seriousness of the offense. Cheating which was planned in advance is the most serious offense. Penalties may include the entering of a failing grade on all sections
written
taken
for the examinations in which cheating occurred and suspension of the right to
write
take
the next scheduled examination after the examination in which cheating occurred
.
or to the
Penalties may also include
entering of a failing grade on all sections
written
taken
for
the examinations in which cheating occurred and suspension of the right to
write
take
the exam
ination
for as many as the next 6 scheduled examinations after the examination in which cheating occurred
. Time within which conditional credit previously earned for passing part of the examination may be extended by board action in situations where penalties are levied, and by as long as the period of suspension.
(4) Other jurisdictions to which a candidate may apply to
write
take
the certified public accountant examination during a period of
suspension of the right to
write
take the exam
ination
shall be notified o
f
the penalty levied in Wisconsin.
SECTION 41
. Ac
cy 3.10 is renumbered Accy 2.306
.
SECTION
42
.
Subchapter II (title) of chapter Accy 3 (precedes s.
Accy 3.101
) is created to read:
SUBCHAPTER II (title)
CERTIFICATION BY ENDORSEMENT
SECTION 4
3
. Ac
cy 3.11 is renumbered Accy 2.307
and
Accy 2.307
(1)
,
as renumbered is
amended to read:
Accy 2.307
Examination review
.
(1)
Applicants for certified public accountant examination may request a review of their
examination papers from the American Institute of certified public accountants advisory grading service
exam
ination
from the National Association of State Boa
r
ds of Accountancy
.
SECTION 44
. Subchapter III (title) of chapter Accy 3 (precedes s.
Accy 3.201
) is created to read:
SUBCHAPTER III
FOREIGN ENDORSEMENT CANDIDATES
SECTION
45
.
Chapter Accy 4 (title) is repealed and recreated to read:
CHAPTER ACCY 4
ENFORCEMENT
Subch. I
AUTHORITY
Subch. II DISCIPLINE
Accy 4.101 Grounds for discipline
. (1) Dishonesty, fraud, or deceit in obtaining a certificate or a license, including the submission to the board of any knowingly false or forged evidence in, or support of, an application for a certificate or license including cheating on an examination.
(2) Knowingly making misleading, deceptive, or untrue representations in the performance of services.
(3) Using the CPA title or providing attest or compilation services in this state without a certificate or license or without properly qualifying to practice across state lines.
(4) Using or attempting to use a certificate or license which has been suspended or revoked.
(5) Making any false, misleading, or deceptive statement, in support of an application for a license filed by another.
(6) Failure to comply with professional standards as to the attest or compilation competency requirements for those who supervise attest or compilation engagements and sign reports on financial statements or other compilation communications with respect to financial statements.
(7) Failure to comply with the applicable peer
review requirements set out in Accy 6.
(8) Conduct reflecting adversely upon the licensee’s fitness to perform services including all of the following:
(a)
Adjudication as mentally incompetent
(b)Incompetence, including all of the following
1. Gross negligence, recklessness, or repeated acts of negligence in the licensee’s record of professional practice.
2. Any condition, whether physical or mental, that endangers the public by impairing skill and care in providing professional services.
(9) Presenting as one’s own a license issued to another.
(10) Concealment of information regarding violations by other licensees when questioned or requested by the board.
(11) Willfully failing to file a report or record required by state or federal law; willfully impeding or obstructing the filing of such a report or record, or inducing another person to impede or obstruct such filing by another; and the making or filing of such a report or record which one knows to be false. A finding, adjudication, consent order or conviction by a federal or state court, agency or regulatory authority or the Public Company Accounting Oversight Board that a licensee has willfully failed to file a required report or record shall be prima facie evidence of a violation of this section.
(12)
Active or stayed revocation or suspension of any occupational license or other privilege to practice any licensed occupation by or before any state, federal, foreign or other licensing or regulatory authority, provided the grounds for the revocation or suspension include wrongful conduct such as fraud, dishonesty, or deceit or any other conduct which evidences an unfitness of the applicant to practice public accountancy.
SECTION
47
. Accy 4.01 is renumbered
Accy 5.301.
SECTION 48
.
Accy 4.02 is renumbered Accy 5.101
and
as renumbered
is amended to read:
Accy 5.101 Firm
l
icense
.
A firm shall meet the ownership requirements of s.
442.08 (2) (c) 2.
, Stats., and be licensed as a certified public accountant if any member of the firm practices as a certified public accountant in Wisconsin
other than on a temporary basis as described in s.
442.025 (4)
, Stats
.
An individual licensed as a CPA may only provide attest services as define
d
in s.
442.001 (1)
, Stats., in a CPA firm that has a firm license.
SECTION 49.
Accy 4.03 is renumbered Accy 5.201.
SECTION 50
.
Accy 4.035 is repealed.
SECTION 51
.
Accy 4.037 is renumbered Accy 5.102.
SECTION 52
. Accy
4.04 is renumbered Accy 5.302.
SECTION 5
3
.
Accy 4.05 is renumbered Accy 5.
402.
SECTION 5
4
. Accy 4.06 is renumbered Accy
5.303.
SECTION 5
5
. Accy 4.07
(1)
is renumbered Accy 5.401
(1) (intro.)
and
amended to read:
Accy. 5.401 Change in member of a firm
.
(1)
The board is to be notified in writing of changes in the member of the firm or firm name
or any of the following
no later than 30 days after the change.
SECTION
56
.
Accy 4.07 (2) is renumbered 5.401 (3).
SECTION 57
. Chapter Accy 5 (title) is repealed and recreated to read:
CHAPTER ACCY 5 (title)
FIRM
LICENSURE
SECTION 58
.
Subchapter I (title) in chapter Accy 5 (precedes s.
Accy 5.101
) is created to read:
SUBCHAPTER I (title)
APPLICATION FOR FIRM LICENUSRE
SECTION 59
.
Accy 5.01 is renumbered Accy 2.401
(1)
and is
amended to read:
Accy 2.401 Review
dates
of
candidate’s experience
.
(1)
Following the successful passing of
the written
each section
of the
uniform CPA examination and upon written request by a candidate, a candidate's experience shall be reviewed by the board. The written request shall include employer verification statements and information on experience to update the experience data already in the candidate's file. Such evaluation will determine whether the candidate qualifies at that time under the requirement of having at least one year of public accounting experience or its equivalent, the sufficiency of the experience or the equivalency to be judged by the examining board. The board shall inform the candidate if additional experience is needed. Upon gaining the required additional experience, the candidate shall notify the board and provide verification.
SECTION 60
. Accy 5.02
is renumbered Accy 2.402.
SECTION 61
. Accy 5.03 is renumbered Accy 2.403
and amended
to read:
Accy 2.403 Public accounting experience
.
An individual must have at least one year of public accounting experience or its equivalent as determined by the board
. Experience shall be acquired after the applicant
has earned
a degree described in s.
442.04
Stats., that qualifies the applicant to take the CPA
examination
120
s
emester hours from an accredited college or university with a concentration in
accounting
. This experience must have been acquired within 5 years of applying for the certification as a certified public accountant
.
SECTION
6
2
. Accy 5.04 and 5.05
ar
e renumbered Accy 2.404 and 2.405
.
SECTION 63
.
Accy
5.06 is repealed.
SECTION 6
4
. Acc
y 5.07 is renumbered Accy 2.406
.
SECTION 65
. Subchapter II (title) in chapter Accy 5 (precedes
s.
Accy 5.201
) is created to read:
SUBCHAPTER II (title)
SOLE PROPRIETOR
SECTION 6
6
. Subchapter III (title) in chapter Accy 5 (precedes
s.
Accy 5.301
) is created to read:
SUBCHAPTER III (title)
OFFICE
SECTION 67
. Subchapter IV (title) in chapter Accy 5 (precedes s.
Accy 5.401
) is created to read:
SUBCHAPTER IV
MEMBER
SECTION
6
8. Accy 5.401 (1) (a) to (d) and (2) are created to read:
Accy 5.401 (1) (a) Formation of a new firm.
(b) Termination of a firm.
(c) Change in the management of any branch office in this state.
(d) Establishment of a new branch office or the closing or change of address of a branch office in this state.
(2) The board is to be notified in writing of any addition of a partner, member, manager or shareholder or the retirement, withdrawal or death of a partner, member, manager or shareholder as of January 1 of each year.
SECTION
69
. Accy 5.403 is created to read:
Accy 5.403 Internet practice
. A CPA firm offering or rendering professional services via a web site shall provide in the web site’s homepage, a name, an address, and a principal state of licensure as a means for regulators and the public to contact a responsible licensee in charge at the firm regarding complaints, questions, or regulatory compliance.
SECTION 7
0
. Subchapter I
in chapter Accy 6
i
s created to read:
SUBCHAPTER I (title)
AUTHORITY AND DEFINITIONS
Accy 6.002 Definitions
. As used in this chapter
(1) “
Board-
approved review program" means the peer reviewer’s entire peer review process, including the standards for administering performing and reporting on peer reviews, oversight procedures, training and related guidance materials.
(2)
"Engagement review" means to read the financial statements and other information submitted by the reviewed firm or required under applicable professional standards, and the accountant's report on those statements and that information, of a firm that performs at its highest level of service only services under SSARS or services under the SSAE not included in a system review. The objective of an engagement review is to determine whether the engagements submitted for review conform to applicable professional standards in all material respects.
(3) “PCAOB” means the Public Company Accounting Oversight Board that conducts firm inspection of certified public accounting firms’ Securities and Exchange Commission issuer practices and other engagements subject to its inspection process.
(4) “Peer review” means a board-approved study
, appraisal, or review of one or more aspects of the attest or compilation work of a licensee of a registered firm in the practice of public accounting, by a person or pe
rsons who hold licenses in this
jurisdiction and who are not affiliated with the person or firm being reviewed
(5) “Peer review p
rogram” includes the entire peer review process, including the standards for administering, performing and reporting on peer reviews, oversight procedures, training, and related guidance and materials.
(6)
“Peer
review r
eports” are repo
rts issued by the peer reviewer or peer
review
ing firm in accordance with b
oard-approved peer review standards
.
(7) “Peer review standards” are board-a
pproved professional standards for administering, performing and reporting on peer reviews.
(8) “Peer reviewer
” is a certified publi
c accountant or
accounting firm responsible for conducting the peer review holding a valid and active license to practice public accounting in good standing by this state who meets the peer reviewer requirements established in the
board-
approved peer review standards
.
(9) “SAS” means the Statements on Auditing S
tandards issued by the auditing standards board of the American Institute of Certified Public Accountants.
(10) “SSAE” means the Statements on Standards for Attestation E
ngagements issued by the auditing standards board
, the accounting and review services committee, and the consulting services executive committee
of the American Institute of Certified Public Accountants
.
(11) “
SSARS” means the
Statements on Standards for Accounting and Review S
ervices issued by the accounting and review services committee of the American Institute of Certified Public Accountants.
(12) “System review” means
to review a firm that, at the firm's highest level of service, performs engagements under the SAS or the Government Auditing Standards (Yellow Book), examinations of prospective financial statements under the SSAE,
or audits of
non-SEC issuers pursuant to the standards of the Public Company Accounting Oversight Board. A system review includes determining whether the firm's system of quality control for its accounting and auditing practice is designed and enforced to provide the firm with reasonable assurance of performing and reporting
in conformity with applicable professional standards, including the Statements on Quality Control Standards, No. 8 of the American Institute of Certified Public Accountants in all material respects.
SECTION
71.
Subchapter II (title) in chapter Accy 6 (precedes s.
Accy 6.101
) is created to read:
SUBCHAPTER II (title)
FIRM RENEWAL
SECTION
72.
Subchapter III (title) om chapter Accy 6 (precedes s.
Accy 6.201
) is created to read:
SUBCHAPTER III (title)
REPORTS
SECTION
73.
Subchapter IV (title) in chapter Accy 6 (precedes s.
Accy 6.301
) is created to read:
SUBCHAPTER IV
(title)
CONDUCTING P
EER REVIEWS
SECTION
7
4
. Accy 6.303 and Accy 6.304 are created to read:
Accy 6.303
Extensions
. (1)The
b
oard may accept extensions for
completing peer reviews as long as
the
b
oard is notified by the firm within 14 days from the date of the letter from the
s
ponsoring
o
rganization granting the extension
. Extensions will be granted for the following reasons:
(a) Health
(b) Military services
(c) Other good cause clearly outside of the control of the public accounting firm.
Accy 6.304
Firm structure changes
.
In the event a firm is merged,
otherwise combined, dissolved,
or
separated, the peer reviewer
shall determine which firm is considered to be the succeeding firm. The succeeding firm shall retain its peer review status and the review due date.
SECTION 75
.
Chapter Accy 7 (title) and
Accy 7.01, 7.02, 7.035 (5), and 7.04 (2) are repealed.
SEC
TION 76
. Accy 7.06 is repealed.
SECTOIN 77
. Accy 7.03 is renumbered Accy 2.201
and
as renumbered Accy 2.201
(2)
is amended to read:
Accy 2.201 (2)
An applicant for a certificate as a certified public accountant shall submit to the board an official transcript or transcripts of all academic work completed evidencing the awarding of a bachelor's or higher degree and a written request for an equivalency evaluation. Course work for equivalency may be accepted only if completed at
an institution
accredited by the North Central Association of Colleges and Schools or its regional equivalent
a
school or institution listed by an accrediting agency recognized by the secretary of the federal department of
education
or
if it could be transferred to an accredited institution for credit toward the institution's accounting major.
SECTION 78
. Accy 7.035 is renumbered Accy 2.202
and
Accy 2.202 (intro.), (1), (2), (3) intro.) and
(a), (4) (a),
and (Note) are amended to read:
Accy
2.202
Education required
to take the examination
for certification
.
A
person may not take the examination leading to the
candidate applying for a
certificate to practice as a certified public accountant
unless the person has
must complete
,
as part of the 150 semester hours education,
met
one of the following conditions:
(
1) Earned a graduate degree with a concentration in accounting from an accounting program or department that is accredited by
an accrediting agency recognized by the board
an accrediting agency recognized by the secretary of the federal department of education
.
(
2) Earned a graduate degree from a business school or college of business that is accredited by an accrediting agency recognized by the
board
secretary of the federal department of education
and completed at least 24 semester hours in accounting at the undergraduate level or 15 semester hours at the graduate level, or an equivalent combination, including courses covering the subjects of financial accounting, auditing,
U.S
.
taxation, and management accounting.
(3) Earned a baccalaureate degree with a major in accounting from a business school or college of business that is accredited by an accrediting agency recognized by the
board
secretary of the federal department of education
including all of the following:
(
a) At least 24 semester hours in accounting at the undergraduate or graduate level, including courses covering the subjects of financial accounting, auditing,
U.S
.
taxation
,
business law
,
and management accounting.
(
4) Having obtained the reasonable equivalent of an accounting concentration by having earned a baccalaureate or higher degree from an accredited educational institution including all of the following:
(a) At least 24 semester hours of accounting, including courses covering the subjects of financial accounting, auditing,
U.S.
taxation, and management accounting.
Note
: In accounting, the courses covering the subjects of financial accounting, auditing, taxation, and management accounting under s
.
Accy 7.035 (3) (a)
and
(4) (a)
s.
Accy 2.202 (3) (a)
and
(4) (a)
,would normally be all courses taken beyond the introduction level.
SECTION 79
. Accy 7.04 (1) is renumbered Accy 2.203.
SECTION 80
. Accy 7.05 is renumbered Accy 3.101.
SECTION
8
1
. Accy 7.07 is renumbered Accy 2.204.
SECTION
82.
Chapter Accy 8 (title) is repealed.
SECTION
8
3
. Accy 8.01 is renumbered Accy 3.001.
SECTION 84
. Accy 8.02 is renumbered Accy 3.002
.
SECTION 85
. Accy 8.03
(1) to (6) are
renumbered Accy 3.102
(1) to (5)
.
SECTION
86
.
Accy 8.04 is renumbered Accy 3.201 and
A
ccy 3.201 (2)
as renumbered
is amended to read:
Accy 3.201 (2)
Except as provided in s.
Accy 3.202
, education qualifications in foreign countries are not comparable to those in Wisconsin.
As no foreign school is accredited by
the
North Central Association of Colleges and Schools or its regional equivalent
an accrediting agency that is recognized by the secretary of the federal department of education
, evidence of acceptance without deficiency into a graduate program in a school accredited by
the North Central Association of Colleges and Schools or its regional equivalent
an agency that is recognized by the secretary of the federal department of education
will be accepted as evidence of equivalence for a bachelor's or higher degree. The education acquired must constitute the reasonable equivalence of
a resident major
in
accounting
as set forth in
s.
Accy 7.03
s.
Accy 2.201
.
SECTION 87
. Accy 8.05 is renumbered Accy 3.202.
SECTION
88.
Chapter Accy 9 (title) is renumbered Chapter Accy 6 (title)
SECTION 89
.
Accy 9.01 is repealed.
SECTION
90
.
Accy 9.02 is renumbered Accy
6.101
.
SECTION 9
1
. Accy 9.02
(
Note
)
is renumbered Accy 6.101
(
Note
)
and
is amended to read:
Note:
The following questions are intended to assist firms in determining whether a peer review is required for renewal. An affirmative response to any part of any question means that a peer review is required. Caution: This list is not exclusive. Refer to the standards if in doubt.
D
oes your firm audit SEC clients, including employer-sponsored plans required
to file a form 11-K with the SEC?
Does your firm currently perform the following types of engagements?
Statements on Auditing Standards (SASs) - Audits?
Agreed-upon procedures?
Statements on Standards for Accounting and Review Services (SSARS)?
Reviews of financial statements?
Compilations of financial statements with disclosures?
Compilations of financial statements where "Selected Information-Substantially
All Disclosures Required Are Not Included?"
Compilations of financial statements that omit substantially all disclosures?
Statements on Standards for Attestation Engagements (SSAE)
?
International
Financial Reporting
Standards
(IFRS)
or International Auditing Standards (IAS)
?
Examinations of prospective financial statements under SAARS?
Compilations of prospective financial statements under SAARS?
Agreed-upon procedures of prospective financial statements?
Examinations of written assertions?
Reviews of written assertions?
Agreed-upon procedures of written assertions?
Engagements under Government Auditing Standards (Yellow Book)?
PCAOB Auditing Standards
?
PCAOB Attestation Standards
?
Or any requirement for work performed as subject to requirements of the AICPA peer review program.
SECTION 92
.
Accy 9.03 and 9.04 are renumbered Accy 6.201 and 6.202
.
SECTION 93
.
Accy 9.05 and 9.06 are
renumbered Accy 6.301 and 6.302.
Section
94
. EFFECTIVE DATE.
The rules adopted in this order shall take effect on the first day of the third month following publication in the Wisconsin Administrative Register, pursuant to s.
227.22 (2) (intro.)
, Stats.
------------------------------------------------------------------------------------------------------------
(END OF TEXT OF RULE)
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Dated _________________
Agency __________________________________
Board Chairperson
Accounting Examining Board
