§ 5-3.1-9 - Permits for practice units.
SECTION 5-3.1-9
§ 5-3.1-9 Permits for practice units.– (a) Permits to engage in the practice of public accounting in this state as apractice unit shall be issued by the board, upon application therefore andpayment of the required fee, to an entity that demonstrates its qualificationsin accordance with this chapter or to certified public accounting firmsoriginally licensed in another state that establish an office in this state. Apractice unit must hold a permit issued under this section in order to provideattest and compilation services as defined or to use the title "CPAs" or "CPAfirm." An applicant entity for initial issuance or renewal of a permit topractice under this section shall be required to register each office of thefirm within this state with the board and to show that all attest andcompilation services as defined in this chapter rendered in this state areunder the charge of a person holding a valid certificate issued under thischapter, or the corresponding provision of prior law or some other state.
(b) An entity shall satisfy the following requirements:
(1) For general partnerships, joint ventures, limitedliability partnerships and limited liability companies:
(i) The principal purpose and business of the partnershipmust be to furnish public accounting services to the public not inconsistentwith this chapter and the rules and regulations of the board;
(ii) A majority of the ownership of the entity, in terms offinancial interests and voting rights of all partners, shareholders or members,belongs to holders of a certificate who shall hold a certificate and a permitfrom some state, and such partners, shareholders or members, whose principalplace of business is in this state and who perform professional services inthis state, hold a valid permit issued under this chapter or are publicaccountants registered under § 5-3.1-7. Although firms may includenon-licensee owners, the firm and its ownership and all parties must complywith rules promulgated by the board. For firms of public accountants, amajority of the ownership of the firm, in terms of financial interests andvoting rights, must belong to holders of permits under § 5-3.1-7, andprovided, that any such entity as defined by this subsection may includenon-licensee owners provided that:
(A) The entity designates a licensee of this state, who isresponsible for the proper registration of the firm and identifies thatindividual to the board;
(B) All non-licensee owners are active individualparticipants in the entity;
(C) The entity complies with such other requirements as theboard may impose by rule;
(D) Any individual licensee who is responsible forsupervising attest and compilation services and signs or authorizes anotherlicensee to sign the accountant's report on the financial statements on behalfof the firm, shall meet the experience requirements as set out in professionalstandards for such services;
(E) Any individual licensee who signs or authorizes anotherlicensee to sign the accountants' report on the financial statements on behalfof the firm shall meet the experience requirement as set out in professionalstandards for such services.
(iii) At least one partner, shareholder or member must be acertified public accountant or a public accountant holding a certificate orauthority under this chapter and a permit to practice in this state under§ 5-3.1-7;
(iv) The address of every office of the entity located inthis state must be listed in the application for the permit.
(2) For a sole proprietorship:
(i) The principal purpose and business of the soleproprietorship must be to furnish public accounting services to the public notinconsistent with this chapter and the rules and regulations of the board;
(ii) The sole proprietor must be a certified publicaccountant or a public accountant holding a certificate or authority under thischapter and a permit to practice in this state under § 5-3.1-7;
(iii) The address of every office of the sole proprietorshiplocated in this state must be listed in the application for the permit.
(iv) Any individual licensee who is responsible forsupervising attest and compilation services and signs or authorizes anotherlicensee to sign the accountant's report on the financial statements on behalfof the sole proprietor shall meet the experience requirements as set out inprofessional standards for such services; and
(v) Any individual licensee who signs or authorizes anotherlicensee to sign the accountants' report on the financial statements on behalfof the firm shall meet the experience requirement as set out in professionalstandards for such services.
(c) Application for a permit under this section must be madeupon the affidavit of the partner, shareholder, member or sole proprietor whoholds a permit to practice in this state under § 5-3.1-7 as a certifiedpublic accountant or a public accountant. All applications for a permit underthis section must include, in addition to any other information required bythis chapter or by rule or regulation of the board to be stated in theapplication, a list of all other states in which the entity has applied for orholds a permit. Upon receipt of the application, the board shall determinewhether the entity is eligible for a permit. In the event the board determinesthe entity is ineligible for a permit under this section, that determinationshall be stated in writing and delivered to the applicant at the address thatis stated in the application.
(d) All applicants for or holders of a permit under thissection shall notify the board in writingwithin thirty (30) days of theoccurrence of the event:
(1) Of any change in the identities of the partners,officers, directors, or shareholders who are personally engaged in this statein the practice of public accounting;
(2) Of any change in the number or location of offices withinthis state required to be listed in the application pursuant to this section;
(3) Of any change in the identities of the personssupervising the offices;
(4) Of any issuance, denial, revocation, or suspension of apermit by any other state. The board may prescribe fees, which are to be paidby the applicants or holders upon the notification; and
(5) Of a reduction below a majority of the ownership in theentity in terms of financial interests and voting rights.
(e) All permits issued by the board under this sectionsubsequent to January 1, 2009, shall be valid for a period of three (3) yearsand shall expire on the last day of June of the year in which the permit isscheduled to expire unless the permit is renewed in accordance with theprovisions of this section. To transition existing licensees to a three (3)year licensing cycle, the board shall have the authority and discretion in 2008to issue permits under this section that are valid for one, two (2), or three(3) years. All such permits issued during 2008 shall expire upon the last dayof June of the year in which the permit is scheduled to expire. The board'sauthority to issue permits valid for one or two (2) years shall cease as ofDecember 31, 2008.
Effective January 1, 2009, permits issued pursuant to thissection may be renewed for a period of three (3) years, and the renewed permitshall expire on the last day of June of the year in which the renewed permit isscheduled to expire, unless the renewed permit is again renewed by its holder.All applications for renewal of permits under this section shall be submittedto the board by February 15 of the year in which a permit or renewed permit isscheduled to expire. All applicants for permit renewal shall satisfy thequality review requirements prescribed in § 5-3.1-10.
(f) Fees to be paid upon application for initial issuance orrenewal of a permit under this section shall be established from time to timeby the board. Fees shall be paid at the time the application is filed with theboard.
(g) An annual permit to engage in the practice of publicaccounting in this state shall be issued by the board, upon application for itand payment of the required fee, to the office of the auditor general providedthe office is in compliance with § 5-3.1-10.
(h) An entity which falls out of compliance with theprovisions of this section due to changes in firm ownership or personnel, afterreceiving or renewing a permit, shall take corrective action to bring the firminto compliance as quickly as possible. The board may grant a reasonable periodof time for a firm to take such corrective action. Failure to bring the firminto compliance within a reasonable period as defined by the board will resultin the suspension or revocation of the permit.