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[Status][Bill Documents][Fiscal Note][Bills Directory]
S.B. 226
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ACCOUNTANCY PRACTICE ACT
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: John L. Valentine
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AN ACT RELATING TO OCCUPATIONAL AND PROFESSIONAL LICENSING,
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CORPORATIONS, AND PARTNERSHIPS; RECODIFYING THE CERTIFIED PUBLIC
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ACCOUNTANT LICENSING ACT; AMENDING PROVISIONS RELATING TO
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PROFESSIONAL CORPORATIONS, LIMITED LIABILITY COMPANIES, AND LIMITED
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PARTNERSHIPS TO INTERFACE WITH PROFESSIONAL LICENSING PROVISIONS; AND
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MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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16-11-7, as enacted by Chapter 20, Laws of Utah 1963
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16-11-8, as enacted by Chapter 20, Laws of Utah 1963
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16-11-13, as last amended by Chapter 6, Laws of Utah 1992, Third Special Session
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16-11-14, as last amended by Chapter 277, Laws of Utah 1992
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48-1-48, as enacted by Chapter 61, Laws of Utah 1994
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48-2b-105, as enacted by Chapter 258, Laws of Utah 1991
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ENACTS:
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58-26a-101, Utah Code Annotated 1953
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58-26a-102, Utah Code Annotated 1953
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58-26a-201, Utah Code Annotated 1953
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58-26a-301, Utah Code Annotated 1953
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58-26a-302, Utah Code Annotated 1953
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58-26a-303, Utah Code Annotated 1953
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58-26a-304, Utah Code Annotated 1953
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58-26a-305, Utah Code Annotated 1953
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58-26a-306, Utah Code Annotated 1953
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58-26a-307, Utah Code Annotated 1953
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58-26a-401, Utah Code Annotated 1953
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58-26a-501, Utah Code Annotated 1953
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58-26a-502, Utah Code Annotated 1953
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58-26a-601, Utah Code Annotated 1953
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58-26a-602, Utah Code Annotated 1953
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REPEALS:
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58-26-1, as repealed and reenacted by Chapter 242, Laws of Utah 1990
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58-26-2, as last amended by Chapter 297, Laws of Utah 1993
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58-26-3, as last amended by Chapter 297, Laws of Utah 1993
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58-26-4, as last amended by Chapter 10, Laws of Utah 1997
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58-26-5, as last amended by Chapter 313, Laws of Utah 1994
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58-26-6, as last amended by Chapter 313, Laws of Utah 1994
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58-26-7, as last amended by Chapter 297, Laws of Utah 1993
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58-26-8, as last amended by Chapter 313, Laws of Utah 1994
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58-26-9, as last amended by Chapter 297, Laws of Utah 1993
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58-26-10, as repealed and reenacted by Chapter 242, Laws of Utah 1990
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58-26-11, as last amended by Chapter 313, Laws of Utah 1994
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58-26-12, as repealed and reenacted by Chapter 242, Laws of Utah 1990
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58-26-13, as last amended by Chapter 297, Laws of Utah 1993
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58-26-14, as last amended by Chapter 313, Laws of Utah 1994
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58-26-15, as repealed and reenacted by Chapter 297, Laws of Utah 1993
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58-26-18, as repealed and reenacted by Chapter 242, Laws of Utah 1990
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
16-11-7
is amended to read:
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16-11-7. Issuance of shares of capital stock -- Restrictions.
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(1) A professional corporation may issue the shares of its capital stock and a shareholder
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may voluntarily transfer shares of capital stock in a professional corporation only to:
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(a) persons who are duly licensed to render the same specific professional services as those
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for which the corporation was organized[. A shareholder may voluntarily transfer his shares in a
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professional corporation only to a person who is duly licensed to render the same specific
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professional services as those for which the corporation was organized.]; or
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(b) persons other than those meeting the requirements of Subsection (1)(a) to the extent
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and in the proportions allowed by the applicable licensing act for the profession for which the
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corporation is organized.
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(2) Any shares issued in violation of this section are void.
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Section 2.
Section
16-11-8
is amended to read:
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16-11-8. Requirement to be an officer, director, or shareholder.
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(1) No person may be an officer, director, or shareholder of a professional corporation
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[who is not] unless that person is:
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(a) an individual duly licensed to render the same specific professional services as those
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for which the corporation was organized; [provided, however, a] or
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(b) qualified to be an officer, director, or shareholder under the applicable licensing act for
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the profession for which the corporation is organized.
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(2) Notwithstanding the provisions of Subsection (1), a nonlicensed person may serve as
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secretary or treasurer.
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Section 3.
Section
16-11-13
is amended to read:
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16-11-13. Purchase or redemption of shares of disqualified shareholder.
77
(1) The articles of incorporation may provide for the purchase or redemption of the shares
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of any shareholder upon the [death] failure to qualify or disqualification of [such] that shareholder,
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or the same may be provided in the bylaws or by private agreement. In the absence of such a
80
provision in the articles of incorporation, the bylaws, or by private agreement, the professional
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corporation shall purchase the shares of [a deceased shareholder or] a shareholder [no longer] who
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is not qualified to own shares in [such] the corporation within 90 days after the [death of the
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shareholder] failure to qualify or disqualification of the shareholder[, as the case may be].
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(2) The price for [such] shares purchased under this section shall be their reasonable fair
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value as of the date of [death] failure to qualify or disqualification of the shareholder.
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(3) If the corporation [shall fail] fails to purchase [said] shares [by the end of said 90 days,
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then the executor or administrator or other personal representative of a deceased shareholder or]
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as required by Subsection (1), any disqualified shareholder or personal representative of a
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disqualified shareholder may bring an action in the district court of the county in which the
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principal office or place of practice of the professional corporation is located for the enforcement
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of this [provision] section. The court shall have power to award the plaintiff the reasonable fair
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value of his shares, or within its jurisdiction, may order the liquidation of the corporation. Further,
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if the plaintiff is successful in [such] the action, he shall be entitled to recover a reasonable
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attorney's fee and costs.
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(4) The professional corporation shall repurchase [such] shares as required by this section
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without regard to restrictions upon the repurchase of shares provided by Title 16, Chapter 10a,
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Utah Revised Business Corporation Act.
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Section 4.
Section
16-11-14
is amended to read:
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16-11-14. Annual certificate -- Filing -- Contents -- Filing fee.
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During the month of the anniversary date of incorporation, each professional corporation
101
shall file with the division an annual report as specified by Section
16-10a-1607
, giving the names
102
and residence addresses of all shareholders of the professional corporation as of its anniversary
103
date of incorporation next preceding, and certifying that all of [such] the shareholders are duly
104
licensed to render the same specific professional services as those for which the corporation was
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organized or otherwise qualify to be shareholders pursuant to the applicable licensing act for the
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profession for which the corporation was organized.
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Section 5.
Section
48-1-48
is amended to read:
108
48-1-48. Limited liability partnerships providing professional services.
109
(1) A limited liability partnership organized under Sections
48-1-41
through
48-1-48
to
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render professional services may render only one specific type of professional service, and services
111
ancillary to that type of professional service, and may not engage in any business other than
112
rendering the professional service that it was organized to render and services ancillary to those
113
services.
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(2) A limited liability partnership organized to render professional services:
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(a) may include partners and employees authorized under the laws of the jurisdiction where
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they reside to provide similar services; [and]
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(b) may include partners who are not licensed or registered by the state to render those
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professional services to the extent allowed by the applicable licensing act relating to those
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professional services; and
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[(b)] (c) may render professional services in Utah only through its partners and employees
121
who are licensed or registered by the state to render those professional services.
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(3) A limited liability partnership organized to render professional services shall have the
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powers provided a limited liability partnership under this chapter.
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Section 6.
Section
48-2b-105
is amended to read:
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48-2b-105. Powers.
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(1) Each limited liability company organized and existing under this chapter may:
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(a) sue or be sued, or institute or defend any action, arbitration, or proceeding, whether
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judicial, administrative, or otherwise, in its own name;
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(b) purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use, or
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otherwise deal in or with real or personal property or an interest in real or personal property,
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wherever situated;
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(c) sell, convey, mortgage, pledge, create a security interest in, lease, exchange or transfer,
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or otherwise dispose of all or any part of its property or assets;
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(d) lend money to and otherwise assist its employees and managers;
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(e) purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use,
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employ, sell, mortgage, lend, pledge, otherwise dispose of, or otherwise use or deal in or with:
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(i) shares or other interests in or obligations of other foreign or domestic limited liability
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companies, domestic or foreign corporations, associations, general or limited partnerships, or
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individuals; or
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(ii) direct or indirect obligations of the United States or any other government, state,
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territory, governmental district, or municipality or of any instrumentality of them;
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(f) make contracts or guarantees or incur liabilities, borrow money at such rates of interest
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as the limited liability company may determine, issue its notes, bonds, or other obligations, or
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secure any of its obligations by mortgage or pledge of all or any part of its property, franchises, and
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income;
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(g) lend money for any lawful purpose, invest or reinvest its funds, or take and hold real
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or personal property as security for the payment of funds so loaned or invested;
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(h) conduct its business and maintain offices and exercise the powers granted by this
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chapter within or without this state, in any state, territory, district, or possession of the United
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States or in any foreign country;
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(i) elect or appoint managers and agents of the limited liability company, define their
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duties, and fix their compensation;
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(j) make and alter an operating agreement, not inconsistent with its articles of organization
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or with the laws of this state, for the administration and regulation of its affairs;
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(k) make donations for the public welfare or for charitable, scientific, religious, or
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educational purposes;
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(l) indemnify a member or manager or any other person to the same extent that a
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partnership may indemnify any of the partners, managers, employees, or agents of the partnership
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against expenses actually and reasonably incurred by the member or manager in connection with
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the defense of an action, suit, or proceeding, whether civil or criminal, in which the member or
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manager is made a party;
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(m) cease its activities and surrender its certificate of organization;
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(n) have and exercise all powers necessary or convenient to effect any or all of the
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purposes for which the company is organized;
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(o) transact any lawful business which the members or the managers find to be in aid of
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governmental policy;
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(p) pay pensions and establish pension plans, profit-sharing plans, and other incentive
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plans for any or all of its managers and employees;
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(q) be a promoter, incorporator, general partner, limited partner, member, associate, or
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manager of any corporation, partnership, limited partnership, limited liability company, joint
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venture, trust, or other enterprise; and
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(r) render professional services, if each member of a limited liability company who renders
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professional services in Utah is licensed or registered to render those professional services pursuant
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to applicable Utah law.
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(2) A limited liability company organized to render professional services under this chapter
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may render only one specific type of professional services, and services ancillary to them, and may
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not engage in any business other than rendering the professional services which it was organized
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to render, and services ancillary to them.
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(3) A limited liability company organized to render professional services:
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(a) may include members, managers, and employees authorized under the laws of the
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jurisdiction where they reside to provide similar services;
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(b) may include members who are not licensed or registered by the state to render those
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professional services to the extent allowed by the applicable licensing act relating to those
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professional services;
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[(b)] (c) may render professional services in [Utah] this state only through its members,
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managers, and employees who are licensed or registered by [the] this state [of Utah] to render
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those professional services; and
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[(c)] (d) shall have all of the other powers provided under this section.
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Section 7.
Section
58-26a-101
is enacted to read:
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CHAPTER 26a. CERTIFIED PUBLIC ACCOUNTANT LICENSING ACT
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Part 1. General Provisions
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58-26a-101. Title.
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This chapter is known as the "Certified Public Accountant Licensing Act."
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Section 8.
Section
58-26a-102
is enacted to read:
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58-26a-102. Definitions.
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In addition to the definitions in Section
58-1-102
, as used in this chapter:
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(1) "Accounting experience" means applying accounting and auditing skills and principles
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that are taught as a part of the professional education qualifying a person for licensure under this
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chapter and generally accepted by the profession, under the supervision of a licensed certified
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public accountant.
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(2) "Board" means the Utah Board of Accountancy created in Section
58-26a-201
.
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(3) "Certified Public Accountant" or "CPA" means an individual currently licensed by this
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state or any other state to practice public accountancy or who has been granted a certificate as a
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certified public accountant under prior law or this chapter.
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(4) "Certified Public Accountant firm" or "CPA firm" means a qualified business entity
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holding a valid registration as a Certified Public Accountant firm under this chapter.
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(5) "Client" means the person who retains a licensee for the performance of one or more
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of the services included in the definition of the practice of public accountancy. "Client" does not
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include a CPA's employer when the licensee works in a salaried or hourly rate position.
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(6) "Compilation of financial statements" means the presentation in the form of financial
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statements of information that is the representation of management or owners accompanied by a
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report stating the compilation has been performed in accordance with standards established by the
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American Institute of Certified Public Accountants.
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(7) "Experience" means:
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(a) accounting experience;
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(b) professional experience; or
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(c) qualifying experience.
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(8) "Licensee" means the holder of a current valid license issued under this chapter.
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(9) "Practice of public accounting" means the offer to perform or the performance by a
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person holding himself out as a certified public accountant of one or more kinds of services
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involving the use of auditing or accounting skills including the issuance of reports or opinions on
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financial statements, performing attestation engagements, the performance of one or more kinds
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of advisory or consulting services, or the preparation of tax returns or the furnishing of advice on
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tax matters for a client.
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(10) "Peer review" means a study, appraisal, or review of one or more aspects of the
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professional work of a person or qualified business entity in the practice of public accountancy,
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by a licensee or any other qualified person in accordance with rules adopted pursuant to this
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chapter and who is not affiliated with the person or qualified business entity being reviewed.
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(11) "Professional experience" means experience lawfully obtained while licensed as a
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certified public accountant in another jurisdiction, recognized by rule, in the practice of public
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accountancy performed for a client, which includes expression of assurance or opinion, for at least
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300 hours collectively in the following areas:
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(a) applying Generally Accepted Auditing Standards (GAAS) to the usual and customary
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financial transactions recorded in the accounting records;
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(b) preparing audit working papers in accordance with GAAS covering the examination
236
of the accounts usually found in accounting records;
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(c) planning the audit scope in accordance with GAAS, including the audit program to be
238
followed;
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(d) preparing written explanations and comments on the findings of the examination and
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on the content of the accounting records; and
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(e) preparing and analyzing financial statements in accordance with GAAS.
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(12) "Qualified business entity" means a sole proprietorship, corporation, limited liability
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company, or partnership engaged in the practice of public accountancy.
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(13) "Qualified continuing professional education" means a formal program of education
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that contributes directly to the professional competence of a certified public accountant.
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(14) "Qualifying examinations" means:
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(a) the AICPA Uniform CPA Examination;
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(b) the AICPA Examination of Professional Ethics for CPAs;
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(c) the Utah Laws and Rules Examination; and
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(d) any other examination approved by the board and adopted by the division by rule in
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accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
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(15) "Qualifying experience" means experience in the practice of public accountancy under
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the direction and supervision of a licensed certified public accountant performed for a client, which
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includes expression of assurance or opinion, for at least 300 hours collectively in the following
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areas:
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(a) applying Generally Accepted Auditing Standards (GAAS) to the usual and customary
257
financial transactions recorded in the accounting records;
258
(b) preparing audit working papers in accordance with GAAS covering the examination
259
of the accounts usually found in accounting records;
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(c) planning the audit scope in accordance with GAAS, including the audit program to be
261
followed;
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(d) preparing written explanations and comments on the findings of the examination and
263
on the content of the accounting records; and
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(e) preparing and analyzing financial statements in accordance with GAAS.
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(16) "Report" means:
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(a) when used with reference to financial statements, an opinion, report or other form of
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language that:
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(i) states or implies assurance as to the reliability of any financial statements; or
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(ii) implies that the person or firm issuing it has special knowledge or competence in
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accounting or auditing and specifically includes compilations and reviews; such an implication of
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special knowledge or competence may arise from use by the issuer of the report of names or titles
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indicating that the person or firm is a public accountant or auditor, or from the language of the
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report itself; or
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(b) any disclaimer of opinion when it is conventionally understood to imply any positive
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assurance as to the reliability of the financial statements referred to or language suggesting special
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competence on the part of the person or firm issuing such language; and it includes any other form
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of language that is conventionally understood to imply such assurance or such special knowledge
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or competence.
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(17) "Review of financial statements" means performing inquiry and analytical procedures
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which provide a reasonable basis for expressing limited assurance that there are no material
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modifications that should be made to the statements in order for them to be in conformity with
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generally accepted accounting principles or, if applicable, with another comprehensive basis of
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accounting; and, the issuance of a report on the financial statements stating that a review was
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performed in accordance with the standards established by the American Institute of Certified
285
Public Accountants.
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(18) (a) "Substantial equivalency" means that the education, examination, and experience
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required by another jurisdiction are comparable to or exceed the education, examination, and
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experience requirements of this chapter, or that an individual's education, examination, and
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experience qualifications are comparable to or exceed the education, examination, and experience
290
requirements of this chapter.
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(b) "Substantial equivalency" is determined by the board in accordance with rules made
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by the division in collaboration with the board.
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(19) "Unlawful conduct" is as defined in Sections
58-1-501
and
58-26a-501
.
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(20) "Unprofessional conduct" is as defined in Sections
58-1-501
and
58-26a-502
and as
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may be further defined by rule.
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(21) "Year of experience" means 2,000 hours of cumulative experience.
297
Section 9.
Section
58-26a-201
is enacted to read:
298
Part 2. Board
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58-26a-201. Board.
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(1) There is created the Utah Board of Accountancy consisting of four licensed certified
301
public accountants and one member of the general public.
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(2) The board shall be appointed and shall serve in accordance with Section
58-1-201
.
303
(3) The duties and responsibilities of the board shall be in accordance with Sections
304
58-1-202
and
58-1-203
. In addition, the board shall designate one of its members on a permanent
305
or rotating basis to:
306
(a) assist the division in reviewing complaints concerning the unlawful or unprofessional
307
conduct of a licensee; and
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(b) advise the division in its investigation of these complaints.
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(4) A board member who has, under Subsection (3), reviewed a complaint or advised in
310
its investigation may be disqualified from participating with the board when the board serves as
311
a presiding officer of an administrative proceeding concerning the complaint.
312
Section 10.
Section
58-26a-301
is enacted to read:
313
Part 3. Licensing
314
58-26a-301. Licensure or registration required -- License and registration
315
classifications.
316
(1) (a) A license is required for an individual to engage in the practice of public
317
accounting, except as specifically provided in Section
58-26a-305
or
58-1-307
.
318
(b) Registration with the division is required for a qualified business entity to engage in
319
the practice of public accounting, except as specifically provided in Section
58-26a-305
or
320
58-1-307
.
321
(2) (a) The division shall issue to an individual who qualifies under this chapter a license
322
in the classification of Certified Public Accountant.
323
(b) The division shall issue to a qualified business entity which qualifies under this chapter
324
a registration in the classification of Certified Public Accountant Firm.
325
Section 11.
Section
58-26a-302
is enacted to read:
326
58-26a-302. Qualifications for licensure and registration -- Licensure by
327
endorsement -- Transitional provisions.
328
(1) Each applicant for licensure under this chapter as a certified public accountant shall:
329
(a) submit an application in a form prescribed by the division;
330
(b) pay a fee determined by the department under Section
63-38-3.2
;
331
(c) show evidence of good moral character;
332
(d) submit a certified transcript of credits from an accredited institution acceptable to the
333
board showing:
334
(i) successful completion of a total of 150 semester hours or 225 quarter hours of collegiate
335
level education with a concentration in accounting, auditing, and business;
336
(ii) a baccalaureate degree or its equivalent at a college or university approved by the
337
board; and
338
(iii) compliance with any other education requirements established by rule by the division
339
in collaboration with the board in accordance with Title 63, Chapter 46a, Utah Administrative
340
Rulemaking Act;
341
(e) submit evidence of one year of accounting experience in a form prescribed by the
342
division;
343
(f) submit evidence of having successfully completed the qualifying examinations in
344
accordance with Section
58-26a-306
; and
345
(g) submit to an interview by the board, if requested, for the purpose of examining the
346
applicant's competence and qualifications for licensure.
347
(2) The division may issue a license under this chapter to a person who holds a license as
348
a certified public accountant issued by any other jurisdiction of the United States if the applicant
349
for licensure by endorsement:
350
(a) submits an application in a form prescribed by the division;
351
(b) pays a fee determined by the department under Section
63-38-3.2
;
352
(c) shows evidence of good moral character;
353
(d) submits to an interview by the board, if requested, for the purpose of examining the
354
applicant's competence and qualifications for licensure; and
355
(e) (i) (A) shows evidence of having passed the qualifying examinations; and
356
(B) (I) meets the requirements for licensure which were applicable in this state at the time
357
of the issuance of the applicant's license by the jurisdiction from which the original licensure by
358
satisfactorily passing the AICPA Uniform CPA Examination was issued; or
359
(II) had five years of professional experience after passing the AICPA Uniform CPA
360
Examination upon which the original license was based, within the ten years immediately
361
preceding the application for licensure by endorsement; or
362
(ii) shows evidence that the applicant's education, examination record, and experience are
363
substantially equivalent to the requirements of Subsection (1), as provided by rule.
364
(3) (a) Each applicant for registration as a Certified Public Accountant firm shall:
365
(i) submit an application in a form prescribed by the division;
366
(ii) pay a fee determined by the department under Section
63-38-3.2
;
367
(iii) shall have a CPA license under this chapter held by:
368
(A) its proprietor, in the case of a sole proprietorship;
369
(B) one of its general partners, managers, or members, in the case of a partnership or
370
limited liability company;
371
(C) one of its officers or shareholders, in the case of a corporation; or
372
(D) one of its owners, in the case of any other type of qualified business entity;
373
(iv) designate a CPA licensee who is responsible for on site supervision of operations of
374
the CPA firm; and
375
(v) meet any other requirements established by rule by the division in collaboration with
376
the board in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act;
377
(b) Each separate location of a qualified business entity within the state seeking
378
registration as a Certified Public Accountant firm shall register separately.
379
(c) A Certified Public Accountant firm may include owners who are not licensed under
380
this chapter provided that:
381
(i) more than 50% of the ownership of the Certified Public Accountant firm, including
382
financial interest and voting rights in the firm, is held by individuals who are Certified Public
383
Accountants, licensed under this chapter or another jurisdiction of the United States; and
384
(ii) all nonlicensed owners are active individual participants in the CPA firm.
385
(4) An individual shall have until July 1, 2004, to obtain three years of qualifying
386
experience for licensure without being required to complete the education requirement if that
387
individual:
388
(a) was approved to take the qualifying examinations prior to July 1, 1994, under prior law
389
without completion of the education requirement; and
390
(b) (i) passed the AICPA Uniform CPA Examination prior to July 1, 1994; or
391
(ii) received conditional credits on the AICPA Uniform CPA Examination prior to July
392
1, 1994, and subsequently passed all parts of the AICPA Uniform CPA Examination within six
393
immediately successive examination administrations.
394
Section 12.
Section
58-26a-303
is enacted to read:
395
58-26a-303. Term of license and registration -- Expiration -- Renewal.
396
(1) The division shall issue each license and registration under this chapter in accordance
397
with a two-year renewal cycle established by rule. The division may by rule extend or shorten a
398
renewal cycle by as much as one year to stagger the renewal cycles it administers.
399
(2) At the time of renewal a licensee shall show satisfactory evidence of each of the
400
following renewal requirements:
401
(a) completion of qualified continuing education as required under Section
58-26a-304
;
402
and
403
(b) successful completion of a peer review meeting the requirements established by rule
404
by the division in collaboration with the board.
405
(3) Each license or registration automatically expires on the date shown on the license or
406
registration unless it is renewed in accordance with Section
58-1-308
.
407
Section 13.
Section
58-26a-304
is enacted to read:
408
58-26a-304. Continuing education.
409
(1) As a condition precedent for a license renewal, each licensee shall, during each
410
two-year licensure cycle or other cycle defined by rule, complete 80 hours of qualified continuing
411
professional education in accordance with standards defined by rule.
412
(2) If a renewal cycle is extended or shortened under Section
58-26a-303
, the continuing
413
education hours required for license renewal under this section shall be increased or decreased
414
proportionally.
415
Section 14.
Section
58-26a-305
is enacted to read:
416
58-26a-305. Exemptions from licensure.
417
In addition to the exemptions from licensure in Section
58-1-307
, the following may
418
engage in acts included within the definition of the practice of public accountancy, subject to the
419
stated circumstances and limitations, without being licensed under this chapter:
420
(1) a person licensed by any other state, district, or territory of the United States or any
421
foreign country as a certified public accountant or its equivalent under any other title while
422
temporarily practicing in this state if:
423
(a) the practice is incidental to that person's regular practice outside of this state; and
424
(b) if that person's temporary practice within this state is in conformity with this chapter
425
and rules established under this chapter;
426
(2) an officer, member, partner, or employee of any entity or organization who signs any
427
statement or report in reference to the financial affairs of the entity or organization with a
428
designation of that person's position within the entity or organization;
429
(3) a public official or employee while performing his official duties;
430
(4) a person using accounting or auditing skills, including the preparation of tax returns,
431
management advisory services, and the preparation of financial statements without the issuance
432
of reports; and
433
(5) an employee of a CPA firm registered under this chapter or an assistant to a person
434
licensed under this chapter, working under the supervision of a licensee, if:
435
(a) neither the employee or assistant nor the licensed employer or registered CPA firm
436
represents that the unlicensed person is a certified public accountant; and
437
(b) no accounting or financial statements are issued over the unlicensed person's name.
438
Section 15.
Section
58-26a-306
is enacted to read:
439
58-26a-306. Examination requirements.
440
(1) Before taking the qualifying examinations, an applicant shall:
441
(a) submit an application in a form approved by the division;
442
(b) pay a fee determined by the department under Section
63-38-3.2
;
443
(c) demonstrate completion of the education requirement in Subsection (1)(d); and
444
(d) be approved by the board to take the qualifying examinations.
445
(2) (a) A person must sit for all parts of the AICPA Uniform CPA Examination upon that
446
person's first sitting, and all subsequent sittings, for the examination, unless that person has
447
currently valid conditional credits under Subsection (2)(b).
448
(b) An examinee who successfully passes two or more parts and receives a score of at least
449
50% in each part not passed, on the AICPA Uniform CPA Examination, shall receive conditional
450
credits for those parts passed which may be applied to subsequent examinations. At any of the
451
next six examinations, the examinee is required to take only those parts of the examination for
452
which the examinee has not received conditional credits and shall receive additional conditional
453
credits for any other parts passed. If conditional credits in all remaining parts are not received
454
within six successive examinations after the original conditional credits were received, all credits
455
terminate and a new application for the entire examination must be submitted. Passing the ethics
456
section of the examination does not qualify as a part of the examination which will qualify the
457
examinee for conditional credit.
458
Section 16.
Section
58-26a-307
is enacted to read:
459
58-26a-307. CPA emeritus status -- renewal of license.
460
(1) A person currently licensed as a certified public accountant may, on any renewal date
461
of that license, apply for and obtain a transfer of that license to a status of CPA emeritus
462
registration if:
463
(a) (i) the licensee is at least 60 years of age as of the date of renewal;
464
(ii) the licensee is disabled; or
465
(iii) the board finds other good cause for believing that the licensee will not return to the
466
practice of public accountancy;
467
(b) the licensee makes an application for transfer of status and registration and pays a
468
registration fee determined by the department under Section
63-38-3.2
;
469
(c) the licensee, on application for transfer, certifies that he will not engage in the practice
470
of public accountancy while in the status of CPA emeritus registration; and
471
(d) the licensee is in good standing as a CPA and not subject to any order of revocation,
472
suspension, or probation.
473
(2) Each CPA emeritus registration shall be issued in accordance with a two-year renewal
474
cycle established by rule.
475
(3) CPA emeritus registrants may not engage in the practice of public accountancy.
476
(4) CPA emeritus registrants are not required to fulfill the continuing professional
477
education or peer review provisions of this chapter.
478
(5) Each CPA emeritus registrant is responsible for renewing his registration, according
479
to procedures that the division establishes by rule in collaboration with the board in accordance
480
with Section
58-1-308
.
481
(6) A CPA emeritus registrant may reinstate his CPA license by:
482
(a) submitting an application in a form prescribed by the division;
483
(b) paying a fee determined by the department under Section
63-38-3.2
; and
484
(c) showing evidence of having completed the continuing professional education
485
requirement established by rule.
486
Section 17.
Section
58-26a-401
is enacted to read:
487
Part 4. License Denial and Discipline
488
58-26a-401. Grounds for denial of license -- Disciplinary proceedings.
489
Grounds for refusing to issue a license to an applicant, for refusing to renew the license of
490
a licensee, for revoking, suspending, restricting, or placing on probation the license of a licensee,
491
for issuing a public or private reprimand to a licensee, and for issuing a cease and desist order shall
492
be in accordance with Section
58-1-401
.
493
Section 18.
Section
58-26a-501
is enacted to read:
494
Part 5. Unlawful and Unprofessional Conduct
495
58-26a-501. Unlawful conduct.
496
"Unlawful conduct" includes:
497
(1) using "certified public accountant," "public accountant," "CPA," or any other title,
498
designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person
499
is a certified public accountant, unless that person has:
500
(a) a current license as a certified public accountant issued under this chapter; or
501
(b) (i) a current license or certificate as a certified public accountant issued by any
502
jurisdiction of the United States; and
503
(ii) (A) the use in this state is incidental to primary services being lawfully performed
504
outside of this state; or
505
(B) the division has entered into a reciprocal agreement with that jurisdiction to recognize
506
the license issued by that jurisdiction;
507
(2) a firm assuming or using "certified public accountant," "CPA," or any other title,
508
designation, words, letters, abbreviation, sign, card, or device tending to indicate that the firm is
509
composed of certified public accountants unless each office of the firm in this state:
510
(a) is registered with the division; and
511
(b) meets the requirements of Subsections
58-26a-302
(3)(a)(iii), (iv), and (v);
512
(3) signing or affixing to any accounting or financial statement the person's name or any
513
trade or assumed name used in that person's profession or business, with any wording indicating
514
that the person is an auditor, or with any wording indicating that the person has expert knowledge
515
in accounting or auditing, unless that person is licensed under this chapter and all of the person's
516
offices in this state for the practice of public accountancy are maintained and registered as
517
provided in this chapter; and
518
(4) except as provided in Section
58-26a-305
, engaging in the following conduct if not
519
licensed under this chapter to practice public accountancy:
520
(a) issuing a report on financial statements of any other person, firm, organization, or
521
governmental unit; or
522
(b) issuing a report using any form of language substantially similar to conventional
523
language used by licensees respecting:
524
(i) a review of financial statements; or
525
(ii) a compilation of financial statements.
526
Section 19.
Section
58-26a-502
is enacted to read:
527
58-26a-502. Unprofessional conduct.
528
(1) "Unprofessional conduct" includes:
529
(a) undertaking an engagement when the licensee knows or should know that the licensee
530
could not reasonably expect to complete it with professional competence;
531
(b) making unauthorized disclosures of confidential information obtained in the practice
532
of public accountancy;
533
(c) engaging in any business or activity that creates a conflict of interest with a licensee's
534
practice in the profession when the licensee knows or should know that it is a conflict of interest
535
and the licensee does not fully disclose the conflict of interest in writing to all affected parties;
536
(d) failing to meet the requirements for continuing professional education or peer review
537
required under this chapter;
538
(e) issuing a report on financial statements of a client, other than a report in which a lack
539
of independence is disclosed, or performing an attest engagement subject to the attestation
540
standards of the American Institute of Certified Public Accountants when the licensee is not
541
independent, in fact and appearance, to the client; or
542
(f) receiving compensation, including a commission, for referring or selling services or
543
products of others to a client during the period:
544
(i) that the licensee or CPA firm is engaged by the client for purposes of:
545
(A) an audit or review of a financial statement;
546
(B) a compilation of a financial statement when the licensee or his firm expects, or
547
reasonably might expect, that a third party will use the financial statement and the compilation
548
report and the report does not describe a lack of independence; or
549
(C) an examination of prospective financial information; or
550
(ii) covered by any historical financial statements involved with any of the services listed
551
in Subsection (1)(f)(i).
552
(2) (a) Notwithstanding the provisions of Subsection (1)(f), a licensee or CPA firm that
553
is not prohibited by Subsection (1)(f) from receiving other compensation, including a commission,
554
may receive or agree to receive that other compensation for referral or sale of services or products
555
of others to another person if he discloses in writing the nature, source, and amount of all other
556
compensation prior to making the referral or sale by the licensee or CPA firm.
557
(b) Subsection (1)(f) does not apply to payments received from the sale of an accounting
558
practice or to retirement payments to persons formerly engaged in the practice of public
559
accountancy.
560
Section 20.
Section
58-26a-601
is enacted to read:
561
Part 6. Regulatory and Operating Standards
562
58-26a-601. Ownership of statements, records, schedules, working papers, and
563
memoranda made by licensee.
564
(1) All statements, records, schedules, working papers, and memoranda made by a licensee
565
under this chapter, incident to or in the course of professional service to a client, are the property
566
of the licensee, in the absence of any express agreement between the licensee and the client to the
567
contrary.
568
(2) A licensee may not sell, trade, or bequeath statements, records, schedules, working
569
papers, or memoranda without the consent of the client or the client's personal representative or
570
assignee to anyone other than another licensee or one or more surviving partners or shareholders
571
or new partners or shareholders of the licensee or any combined or merged CPA firm or
572
successors-in-interest to the CPA firm.
573
Section 21.
Section
58-26a-602
is enacted to read:
574
58-26a-602. Privity.
575
A licensee, a CPA firm registered under this chapter, and any employee, partner, member,
576
officer, or shareholder of a licensee or CPA firm are not liable to persons with whom they are not
577
in privity of contract for civil damages resulting from acts, omissions, decisions, or other conduct
578
in connection with professional services performed by that person, except for:
579
(1) acts, omissions, decisions, or conduct that constitute fraud or intentional
580
misrepresentations; or
581
(2) other acts, omissions, decisions, or conduct, if the person performing the professional
582
services:
583
(a) knew that a primary intent of the client was for the professional services to benefit or
584
influence the particular person seeking to establish liability; and
585
(b) did not identify in writing to the client that the professional services performed by the
586
client were not intended to be relied upon by the particular person seeking to establish liability.
587
Section 22. Repealer.
588
This act repeals:
589
Section 58-26-1, Short title.
590
Section 58-26-2, Definitions.
591
Section 58-26-3, Utah Board of Accountancy.
592
Section 58-26-4, Requirements for licensure.
593
Section 58-26-5, Requirements for examination -- Conditioning on the examination.
594
Section 58-26-6, Licensure by endorsement.
595
Section 58-26-7, Conditions for issuance and renewal of licenses -- Quality review --
596
Continuing professional education.
597
Section 58-26-8, Reinstatement of license or certificate suspended for failure to renew
598
or nonpayment of fees.
599
Section 58-26-9, Exemptions from licensure.
600
Section 58-26-10, Exemption from educational and examination requirements.
601
Section 58-26-11, CPA emeritus status and registration.
602
Section 58-26-12, Privity.
603
Section 58-26-13, Certificates or licenses held on April 23, 1990 -- Expiration of
604
certificates.
605
Section 58-26-14, Registration and requirements for firms.
606
Section 58-26-15, Grounds for denial of license -- Disciplinary proceedings.
607
Section 58-26-18, Ownership of statements, records, schedules, working papers, and
608
memoranda made by licensee.
Legislative Review Note
as of 2-11-00 12:39 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.