326.292. Issuance of reports on financial statements, license required--use of CPA or CA title, when--violations, penalty.
Issuance of reports on financial statements, license required--use ofCPA or CA title, when--violations, penalty.
326.292. 1. Only licensees may issue a report on financialstatements of any person, firm, organization or governmental unit or offerto render or render any attest service. Such restriction shall notprohibit any act of a public official or public employee in the performanceof the person's duties as such; nor prohibit the performance by anynonlicensee of other services involving the use of accounting skills,including the preparation of tax returns, management advisory services andthe preparation of nonattest financial statements. Nonlicensees mayprepare financial statements and issue nonattest transmittals orinformation thereon which do not purport to be in compliance with theStatements on Standards for Accounting and Review Services (SSARS).
2. Only certified public accountants shall use or assume the titlecertified public accountant, or the abbreviation CPA or any other title,designation, words, letters, abbreviation, sign, card or device tending toindicate that such person is a certified public accountant. Nothing inthis section shall prohibit:
(1) A certified public accountant whose certificate was in full forceand effect, issued pursuant to the laws of this state prior to August 28,2001, and who does not engage in the practice of public accounting,auditing, bookkeeping or any similar occupation, from using the titlecertified public accountant or abbreviation CPA;
(2) A person who holds a certificate, then in force and effect,issued pursuant to the laws of this state prior to August 28, 2001, and whois regularly employed by or is a director or officer of a corporation,partnership, association or business trust, in his or her capacity as such,from signing, delivering or issuing any financial, accounting or relatedstatement, or report thereon relating to such corporation, partnership,association or business trust provided the capacity is so designated, andprovided in the signature line the title CPA or certified public accountantis not designated.
3. No firm shall provide attest services or assume or use the titlecertified public accountants or the abbreviation CPAs, or any other title,designation, words, letters, abbreviation, sign, card or device tending toindicate that such firm is a certified public accounting firm unless:
(1) The firm holds a valid permit issued under section 326.289 or isa firm exempt from the permit requirement under subdivisions (2) and (3) ofsubsection 1 of section 326.289 and complies with all other applicableprovisions of that section; and
(2) Ownership of the firm is in accord with section 326.289 and rulespromulgated by the board.
4. Only persons holding a valid license or permit issued undersection 326.280 or 326.289, or persons qualifying for the privilege topractice under section 326.283, and firms exempt from the permitrequirement under subsection 1 of section 326.289, shall assume or use thetitle certified accountant, chartered accountant, enrolled accountant,licensed accountant, registered accountant, accredited accountant or anyother title or designation likely to be confused with the titles certifiedpublic accountant or public accountant, or use any of the abbreviations CA,LA, RA, AA or similar abbreviation likely to be confused with theabbreviation CPA or PA. The title enrolled agent or EA shall only be usedby individuals so designated by the Internal Revenue Service. Nothing inthis section shall prohibit the use or issuance of a title for nonattestservices provided that the organization and the title issued by theorganization existed prior to August 28, 2001.
5. (1) Nonlicensees shall not use language in any statement relatingto the financial affairs of a person or entity that is conventionally usedby certified public accountants in reports on financial statements.Nonlicensees may use the following safe harbor language:
(a) For compilations:"I (We) have prepared the accompanying (financial statements) of (name ofentity) as of (time period) for the (period) then ended. This presentationis limited to preparing in the form of a financial statement informationthat is the representation of management (owners). I (We) have not auditedor reviewed the accompanying financial statements and accordingly do notexpress an opinion or any other form of assurance on them.";
(b) For reviews:"I (We) reviewed the accompanying (financial statements) of (name ofentity) as of (time period) for the (period) then ended. These financialstatements (information) are (is) the responsibility of the company'smanagement. I (We) have not audited the accompanying financial statementsand accordingly do not express an opinion or any other form of assurance onthem.".
(2) Only persons or firms holding a valid license or permit issuedunder section 326.280 or 326.289 shall assume or use any title ordesignation that includes the words accountant or accounting in connectionwith any other language, including the language of a report, that impliesthat the person or firm holds a license or permit or has special competenceas an accountant or auditor; provided, however, that this subsection shallnot prohibit any officer, partner, principal, member, manager or employeeof any firm or organization from affixing such person's own signature toany statement in reference to the financial affairs of the firm ororganization with any wording designating the position, title or officethat the person holds therein nor prohibit any act of a public official oremployee in the performance of the person's duties as such. Nothing inthis subsection shall prohibit the singular use of "accountant" or"accounting" for nonattest purposes.
6. Licensees signing or authorizing someone to sign reports onfinancial statements when performing attest, review or compilation servicesshall provide those services in accordance with professional standards asdetermined by the board by rule.
7. No licensee or firm holding a permit under sections 326.280 to326.289 shall use a professional or firm name or designation that ismisleading about the legal form of the firm, or about the persons who arepartners, principals, officers, members, managers or shareholders of thefirm, or about any other matter.
8. None of the foregoing provisions of this section shall apply to aperson or firm holding a certification, designation, degree or licensegranted in a foreign country entitling the holder to engage in the practiceof public accounting or its equivalent in the country whose activities inthis state are limited to the provision of professional services to personsor firms who are residents of, governments of, or business entities of thecountry in which the person holds the entitlement, who performs no attest,review or compilation services and who issues no reports with respect tothe financial statements of any other persons, firms or governmental unitsin this state, and who does not use in this state any title or designationother than the one under which the person practices in such country,followed by a translation of such title or designation into the Englishlanguage, if it is in a different language, and by the name of suchcountry.
9. No licensee whose license is issued under section 326.280 orissued pursuant to prior law shall perform attest services through anycertified public accounting firm that does not hold a valid permit issuedunder section 326.289.
10. Nothing herein shall prohibit a practicing attorney or firm ofattorneys from preparing or presenting records or documents customarilyprepared by an attorney or firm of attorneys in connection with theattorney's professional work in the practice of law.
11. Nothing herein shall prohibit any trustee, executor,administrator, referee or commissioner from signing and certifyingfinancial reports incident to his or her duties in that capacity.
12. Nothing herein shall prohibit any director or officer of acorporation, partner or a partnership, sole proprietor of a businessenterprise, member of a joint venture, member of a committee appointed bystockholders, creditors or courts, or an employee of any of the foregoing,in his or her capacity as such, from signing, delivering or issuing anyfinancial, accounting or related statement, or report thereon, relating tothe corporation, partnership, business enterprise, joint venture orcommittee, provided the capacity is designated on the statement or report.
13. (1) A licensee shall not for a commission recommend or refer toa client any product or service, or for a commission recommend or refer anyproduct or service to be supplied by a client, or receive a commission,when the licensee also performs for that client:
(a) An audit or review of a financial statement; or
(b) A compilation of a financial statement when the licensee expects,or reasonably may expect, that a third party will use the financialstatement and the licensee's compilation report does not disclose a lack ofindependence; or
(c) An examination of prospective financial information.
Such prohibition applies during the period in which the licensee is engagedto perform any of the services listed above and the period covered by anyhistorical financial statements involved in such listed services.
(2) A licensee who is not prohibited by this section from performingservices for or receiving a commission and who is paid or expects to bepaid a commission shall disclose in writing that fact to any person orentity to whom the licensee recommends or refers a product or service towhich the commission relates.
(3) Any licensee who accepts a referral fee for recommending orreferring any service of a licensee to any person or entity or who pays areferral fee to obtain a client shall disclose in writing the acceptance orpayment to the client.
14. (1) A licensee shall not:
(a) Perform for a contingent fee any professional services for, orreceive a fee from, a client for whom the licensee or the licensees's firmperforms:
a. An audit or review of a financial statement; or
b. A compilation of a financial statement when the licensee expects,or reasonably might expect, that a third party will use the financialstatement and the licensee's compilation report does not disclose a lack ofindependence; or
c. An examination of prospective financial information;
(b) Prepare an original tax return or claim for a tax refund for acontingent fee for any client; or
(c) Prepare an amended tax return or claim for a tax refund for acontingent fee for any client, unless permitted by board rule.
(2) The prohibition in subdivision (1) of this subsection appliesduring the period in which the licensee is engaged to perform any of thoseservices and the period covered by any historical financial statementsinvolved in any services.
(3) A contingent fee is a fee established for the performance of anyservice pursuant to an arrangement in which no fee will be charged unless aspecified finding or result is attained, or in which the amount of the feeis otherwise dependent upon the finding or result of the service. Solelyfor purposes of this section, fees are not regarded as being contingent iffixed by courts or other public authorities, or, in tax matters, ifdetermined based on the results of judicial proceedings or the findings ofgovernmental agencies. A licensee's fees may vary depending, for example,on the complexity of services rendered.
15. Any person who violates any provision of subsections 1 to 5 ofthis section shall be guilty of a class A misdemeanor. Whenever the boardhas reason to believe that any person has violated this section it maycertify the facts to the attorney general of this state or bring otherappropriate proceedings.
(L. 2001 H.B. 567, A.L. 2002 H.B. 1600, A.L. 2008 S.B. 788)