326.289. Issuance and renewal of permits, procedure.
Issuance and renewal of permits, procedure.
326.289. 1. The board may grant or renew permits to practice as acertified public accounting firm to applicants that demonstrate theirqualifications in accordance with this chapter.
(1) The following shall hold a permit issued under this chapter:
(a) Any firm with an office in this state, as defined by the board byrule, performing attest services;
(b) Any firm with an office in this state that uses the title "CPA"or "CPA firm"; and
(c) Any firm that does not have an office in this state performingattest services for a client having a home office in this state.
(2) A firm which does not have an office in this state may performcompilation and review services for a client having a home office in thisstate and may use the title "CPA" or "CPA firm" without a permit issuedunder this section only if it:
(a) Has the qualifications described in subsections 4 and 9 of thissection; and
(b) Performs such services through an individual with the privilegeto practice under subsection 1 of section 326.283.
(3) A firm which is not subject to the requirements of subdivisions(1) or (2) of this subsection may perform other professional services whileusing the title "CPA" or "CPA firm" in this state without a permit issuedunder this section only if it:
(a) Has qualifications described in subsection 4 of this section;
(b) Performs such services through an individual with the privilegeto practice under section 326.283; and
(c) Can lawfully do so in the state where said individual withprivilege to practice has his or her principal place of business.
2. Permits shall be initially issued and renewed for periods of notmore than three years or for a specific period as prescribed by board rulefollowing issuance or renewal.
3. The board shall determine by rule the form for application andrenewal of permits and shall annually determine the fees for permits andtheir renewals.
4. An applicant for initial issuance or renewal of a permit topractice under this section shall be required to show that:
(1) A simple majority of the ownership of the firm, in terms offinancial interests and voting rights of all partners, officers,principals, shareholders, members or managers, belongs to licensees who arelicensed in some state, and the partners, officers, principals,shareholders, members or managers, whose principal place of business is inthis state and who perform professional services in this state arelicensees under section 326.280 or the corresponding provision of priorlaw. Although firms may include nonlicensee owners, the firm and itsownership shall comply with rules promulgated by the board;
(2) Any certified public accounting firm may include owners who arenot licensees provided that:
(a) The firm designates a licensee of this state, or in the case of afirm which must have a permit under this section designates a licensee ofanother state who meets the requirements of section 326.283, who isresponsible for the proper registration of the firm and identifies thatindividual to the board;
(b) All nonlicensee owners are active individual participants in thecertified public accounting firm or affiliated entities;
(c) All owners are of good moral character; and
(d) The firm complies with other requirements as the board may imposeby rule;
(3) Any licensee, initially licensed on or after August 28, 2001, whois responsible for supervising attest services, or signs or authorizessomeone to sign the licensee's report on the financial statements on behalfof the firm, shall meet competency requirements as determined by the boardby rule which shall include one year of experience in addition to theexperience required under subdivision (6) of subsection 1 of section326.280 and shall be verified by a licensee. The additional experiencerequired by this subsection shall include experience in attest worksupervised by a licensee;
(4) Any licensee who is responsible for supervising review servicesor signs or authorizes someone to sign review reports shall meet thecompetency requirements as determined by board by rule which shall includeexperience in review services.
5. An applicant for initial issuance or renewal of a permit topractice shall register each office of the firm within this state with theboard and show that all attest, review and compilation services rendered inthis state are under the charge of a licensee.
6. No licensee or firm holding a permit under this chapter shall usea professional or firm name or designation that is misleading as to:
(1) The legal form of the firm;
(2) The persons who are partners, officers, members, managers orshareholders of the firm; or
(3) Any other matter.
The names of one or more former partners, members or shareholders may beincluded in the name of a firm or its successor unless the firm becomes asole proprietorship because of the death or withdrawal of all otherpartners, officers, members or shareholders. A firm may use a fictitiousname if the fictitious name is registered with the board and is nototherwise misleading. The name of a firm shall not include the name orinitials of an individual who is not a present or a past partner, member orshareholder of the firm or its predecessor. The name of the firm shall notinclude the name of an individual who is not a licensee.
7. Applicants for initial issuance or renewal of permits shall listin their application all states in which they have applied for or holdpermits as certified public accounting firms and list any past denial,revocation, suspension or any discipline of a permit by any other state.Each holder of or applicant for a permit under this section shall notifythe board in writing within thirty days after its occurrence of any changein the identities of partners, principals, officers, shareholders, membersor managers whose principal place of business is in this state; any changein the number or location of offices within this state; any change in theidentity of the persons in charge of such offices; and any issuance,denial, revocation, suspension or any discipline of a permit by any otherstate.
8. Firms which fall out of compliance with the provisions of thissection due to changes in firm ownership or personnel after receiving orrenewing a permit shall take corrective action to bring the firm back intocompliance as quickly as possible. The board may grant a reasonable periodof time for a firm to take such corrective action. Failure to bring thefirm back into compliance within a reasonable period as defined by theboard may result in the suspension or revocation of the firm permit.
9. The board shall require by rule, as a condition to the renewal ofpermits, that firms undergo, no more frequently than once every threeyears, peer reviews conducted in a manner as the board shall specify. Thereview shall include a verification that individuals in the firm who areresponsible for supervising attest, review and compilation services or signor authorize someone to sign the accountant's report on the financialstatements on behalf of the firm meet the competency requirements set outin the professional standards for such services, provided that any suchrule:
(1) Shall include reasonable provision for compliance by a firmshowing that it has within the preceding three years undergone a peerreview that is a satisfactory equivalent to peer review generally requiredunder this subsection;
(2) May require, with respect to peer reviews, that peer reviews besubject to oversight by an oversight body established or sanctioned byboard rule, which shall periodically report to the board on theeffectiveness of the review program under its charge and provide to theboard a listing of firms that have participated in a peer review programthat is satisfactory to the board; and
(3) Shall require, with respect to peer reviews, that the peer reviewprocesses be operated and documents maintained in a manner designed topreserve confidentiality, and that the board or any third party other thanthe oversight body shall not have access to documents furnished orgenerated in the course of the peer review of the firm except as providedin subdivision (2) of this subsection.
10. Prior to January 1, 2008, licensees who perform fewer than threeattest services during each calendar year shall be exempt from therequirements of subsection 9 of this section.
11. The board may, by rule, charge a fee for oversight of peerreviews, provided that the fee charged shall be substantially equivalent tothe cost of oversight.
12. In connection with proceedings before the board or upon receiptof a complaint involving the licensee performing peer reviews, the boardshall not have access to any documents furnished or generated in the courseof the performance of the peer reviews except for peer review reports,letters of comment and summary review memoranda. The documents shall befurnished to the board only in a redacted manner that does not specificallyidentify any firm or licensee being peer reviewed or any of their clients.
13. The peer review processes shall be operated and the documentsgenerated thereby be maintained in a manner designed to preserve theirconfidentiality. No third party, other than the oversight body, the board,subject to the provisions of subsection 12 of this section, or theorganization performing peer review shall have access to documentsfurnished or generated in the course of the review. All documents shall beprivileged and closed records for all purposes and all meetings at whichthe documents are discussed shall be considered closed meetings undersubdivision (1) of section 610.021, RSMo. The proceedings, records andworkpapers of the board and any peer review subjected to the board processshall be privileged and shall not be subject to discovery, subpoena orother means of legal process or introduction into evidence at any civilaction, arbitration, administrative proceeding or board proceeding. Nomember of the board or person who is involved in the peer review processshall be permitted or required to testify in any civil action, arbitration,administrative proceeding or board proceeding as to any matters produced,presented, disclosed or discussed during or in connection with the peerreview process or as to any findings, recommendations, evaluations,opinions or other actions of such committees or any of its members;provided, however, that information, documents or records that are publiclyavailable shall not be subject to discovery or use in any civil action,arbitration, administrative proceeding or board proceeding merely becausethey were presented or considered in connection with the peer reviewprocess.
(L. 2001 H.B. 567, A.L. 2002 H.B. 1600, A.L. 2008 S.B. 788)