Stricken language would be deleted from and underlined language would be added to present law.
Act 428 of the Regular Session
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 432 3
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By: Senator J. Petty 5
By: Representative Warren 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING ACCOUNTANTS; TO 9
AMEND THE DEFINITION OF SUBSTANTIAL EQUIVALENCY FOR 10
THE PRACTICE OF ACCOUNTANCY; AND FOR OTHER PURPOSES. 11
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Subtitle 14
TO AMEND THE LAW CONCERNING ACCOUNTANTS; 15
AND TO AMEND THE DEFINITION OF 16
SUBSTANTIAL EQUIVALENCY FOR THE PRACTICE 17
OF ACCOUNTANCY. 18
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
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SECTION 1. Arkansas Code § 17 -12-306(d), concerning examination fees 22
for the initial licensure of an accountant, is amended to read as follows: 23
(d)(1) The Except as provided under subdivision (d)(2) of this 24
section, the applicable fees payable pursuant to this section shall be paid 25
by the applicant at the time he or she applies for examination or 26
reexamination. 27
(2) An applicant eligible for a program of the board in which 28
the board waives or assumes any applicable examination fees is not required 29
to pay a fee at the time he or she applies for examination or reexamination 30
under subdivision (d)(1) of this section. 31
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SECTION 2. The introductory language of Arkansas Code § 17 -12-308(a), 33
concerning reciprocity for the licensure of an accountant, is amended to read 34
as follows: 35
(a) With regard to applicants that do not qualify for reciprocity 36 SB432
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under the substantial equivalency standard set out in § 17-12-311, the The 1
Arkansas State Board of Public Accountancy shall issue a certificate as a 2
certified public accountant to a holder of a certificate, license, or permit 3
issued by another state upon a showing that: 4
5
SECTION 3. Arkansas Code § 17 -12-309(a), concerning experience 6
requirements for the initial issuance of a certificate for an accountant, is 7
amended to read as follows: 8
(a) An applicant for initial issuance of a certificate under this 9
subchapter shall show that the applicant has had at least one (1) year of 10
experience. 11
12
SECTION 4. Arkansas Code § 17 -12-311 is amended to read as follows: 13
17-12-311. Substantial equivalency. 14
(a)(1) An individual whose principal place of business is not in this 15
state and who holds a valid license as a certified public accountant from a 16
state which the NASBA National Qualification Appraisal Service has verified 17
to be in substantial equivalence with the CPA licensure requirements of the 18
AICPA/NASBA Uniform Accountancy Act: To promote the professional practice of 19
accountancy within and outside the State of Arkansas, the Arkansas State 20
Board of Public Accountancy may: 21
(A)(1) Shall be presumed to have qualifications 22
substantially equivalent to this state's requirements; Determine substantial 23
equivalency requirements and provide the parameters encompassing substantial 24
equivalency; and 25
(B)(2) Shall have all the privileges of licensees of this 26
state without the need to obtain a certificate under § 17 -12-301 or § 17-12-27
308 or a license under § 17 -12-313 or § 17-12-501; and Promulgate any rules 28
necessary to define or promote substantial equivalency and provide the 29
parameters encompassing substantial equivalency. 30
(C) May offer or render professional services in person, 31
by mail, by telephone, or by electronic means without notifying the Arkansas 32
State Board of Public Accountancy or paying a fee. 33
(2)(A) An individual whose principal place of business is not in 34
this state and who holds a valid license as a certified public accountant 35
from a state which the NASBA National Qualification Appraisal Service has not 36 SB432
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verified to be in substantial equivalence with the CPA licensure requirements 1
of the AICPA/NASBA Uniform Accountancy Act: 2
(i) Shall be presumed to have qualifications 3
substantially equivalent to the requirements of this state; 4
(ii) Shall have all the privileges of licensees of 5
this state without the need to obtain a certificate under § 17 -12-301 or § 6
17-12-308 or a license under § 17 -12-313 or § 17-12-501 if the individual 7
obtains from the NASBA National Qualification Appraisal Service verification 8
that the individual's CPA qualifications are substantially equivalent to the 9
CPA licensure requirements of the AICPA/NASBA Uniform Accountancy Act; and 10
(iii) May offer or render professional services, 11
whether in person, by mail, by telephone, or by electronic means without 12
notifying the board or paying a fee. 13
(B) An individual who passed the Uniform CPA Examination 14
and holds a valid license issued by any other state before January 1, 2012, 15
may be exempt from the education requirement in § 17 -12-302 for purposes of 16
this subdivision (a)(2). 17
(3) An individual licensee of another state exercising the 18
privilege afforded under this section and the firm that employs that 19
individual licensee consent and agree, as a condition of the exercise of this 20
privilege to: 21
(A) The personal and subject matter jurisdiction and 22
disciplinary authority of the board; 23
(B) Comply with this chapter and the board's rules; 24
(C) Cease offering or rendering professional services in 25
this state individually and on behalf of a firm if the license from the state 26
of the individual's principal place of business is no longer valid; and 27
(D) The appointment of the board that issued his or her 28
license as his or her agent upon whom process may be served in an action or 29
proceeding by the board against the licensee. 30
(4) An individual who qualifies for practice privileges under 31
this section may perform the following services for a client with its home 32
office in this state only through a firm that has registered under § 17 -12-33
401: 34
(A) A financial statement audit or other engagement to be 35
performed in accordance with the “Statements on Auditing Standards”; 36 SB432
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(B) An examination of prospective financial information to 1
be performed in accordance with “Statements on Standards for Attestation 2
Engagements”; or 3
(C) An engagement to be performed in accordance with PCAOB 4
standards. 5
(b) A licensee of this state offering or rendering services or using 6
his or her CPA title in another state shall be subject to disciplinary action 7
in this state for an act committed in another state for which the licensee 8
would be subject to discipline for an act committed in the other state. 9
(c) The board may investigate any complaint made by the board of 10
accountancy of another state. 11
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SECTION 5. Arkansas Code § 17 -12-504(g), concerning the reinstatement 13
of a lapsed accountant license, is amended to read as follows: 14
(g)(1) Upon application received within three (3) years following the 15
expiration on or before July 1 following the lapse of a license, the board 16
may reinstate a lapsed the license. if the applicant: 17
(2) A license may be reinstated if the applicant: 18
(A)(1) Pays a reinstatement fee determined by the board; 19
and 20
(B)(2) Complies with continuing professional education and 21
any other requirements applicable to : the reinstatement of the license on or 22
before the date of the application for reinstatement. 23
(i) The renewal of the license at the date of its 24
expiration; and 25
(ii) The reinstatement of the license at the date of the 26
application for reinstatement. 27
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SECTION 6. Arkansas Code § 17 -12-504(h), concerning the revocation of 29
a lapsed accountant license, is amended to read as follows: 30
(h)(1) Any license or registration that is not reinstated within three 31
(3) years following expiration shall be void for which a reinstatement 32
application has not been received on or before July 1 following the lapse of 33
a license shall, after notice and a hearing, be revoked by the board and 34
shall not be subject to renewal or reinstatement. 35
(2) The holder of a void revoked license or registration may 36 SB432
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apply for a new license or registration under § 17-12-301 et seq. or § 17-12-1
401 et seq. 2
(3) The board may require the applicant to comply with 3
educational or other requirements deemed appropriate by the board, including 4
successful completion of the examination identified in § 17-12-304 in order 5
to obtain a new license. 6
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SECTION 7. Arkansas Code § 17 -12-507 is amended to read as follows: 8
17-12-507. Quality review of each practice unit. Practice review. 9
(a) The Arkansas State Board of Public Accountancy may by rule require 10
as a condition for the renewal of a license a quality practice review of each 11
practice unit maintained every certified public accountant and firm licensed 12
in this state. 13
(b)(1) The practice review shall identify any type of report issued by 14
a licensee including without limitation: 15
(1) Compilation services; or 16
(2) Attest services as defined under § 17 -12-103. 17
(c) The practice review shall be conducted annually on one -third (1/3) 18
of the active licensees on a rotating basis. 19
(d)(1) A licensee that is selected for a practice review and whose 20
highest level of report issuance is a compilation report shall also be 21
subject to a quality review. 22
(2) The board may charge the accountant or firm reviewed licensee 23
a fee for each a: 24
(A) Quality review of each practice unit; and 25
(B) Follow-up action to a quality review that is not in 26
conformity with applicable professional standards. 27
(3) The amount of the fee shall be established by board rule. 28
(4) The licensee shall submit the latest report issued after the 29
date of his or her last quality review submission for each type of 30
compilation report. 31
(5) A person acting on behalf of the board in a quality review 32
program under this section shall be an officer or employee of the State of 33
Arkansas for the purpose of: 34
(A) Immunity from civil liability under § 19-10-301 et 35
seq.; and 36 SB432
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(B) Payment of actual damages on behalf of state officers 1
or employees under § 21-9-201 et seq. 2
(6)(A) Except as provided under subdivision (d)(6)(B) of this 3
section, all financial statements, working papers, and other documents 4
obtained from an applicant for quality review shall be confidential and shall 5
not be subject to public inspection, including without limitation documents 6
exempt under the Freedom of Information Act of 1967, § 25 -19-101 et seq. 7
(B) A document under subdivision (d)(6)(A) of this section 8
may be: 9
(i) Disclosed pursuant to a court order; or 10
(ii) Introduced as evidence in a relevant proceeding 11
before the board. 12
(e) A peer review shall be obtained by a licensee who issues a report 13
identified under subdivision (b)(2) of this section. 14
(f)(1)(A) Notwithstanding any provision to the contrary in this 15
chapter, a certified public accountant or firm of certified public 16
accountants currently licensed by another state or a foreign country shall 17
not be required to obtain a license under this chapter for the purpose of 18
conducting a peer review of a licensee in this state as defined by board 19
rule. 20
(B) A certified public accountant or firm of certified 21
public accounts under subdivision (f)(1)(A) of this section may use the 22
applicable title of “certified public accountant” or the abbreviation “CPA” 23
only in conjunction with the peer review activities identified under 24
subdivision (f)(1)(A) of this section. 25
(2) A certified public accountant or firm of certified public 26
accountants licensed in this state or in another jurisdiction shall meet the 27
standards adopted by the board to accomplish the goals of this chapter in 28
order to perform a peer review of a licensee under this chapter. 29
(c)(1) The quality review shall consist of either a uniform or random 30
annual submission by each licensee of the following kinds of reports issued 31
by that licensee during the twelve -month period immediately preceding the 32
date of submission, if reports were issued during the period: 33
(A) A compilation report; 34
(B) A review report; 35
(C) An agreed-upon procedures report; 36 SB432
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(D) An audit report; 1
(E) An audit report under a federal grant program or other 2
government program; and 3
(F) An examination of prospective financial information. 4
(2) If none of the above reports were issued during the twelve 5
(12) months immediately preceding the date of submission, a licensee is 6
required to submit reports issued since the date of its last quality review 7
survey submission. 8
(d) All persons acting on behalf of the board in a quality review 9
program under this section shall be considered officers or employees of the 10
State of Arkansas for purposes of: 11
(1) Immunity from civil liability pursuant to § 19-10-301 et 12
seq.; and 13
(2) Payment of actual damages on behalf of state officers or 14
employees pursuant to § 21-9-201 et seq. 15
(e) All financial statements, working papers, or other documents 16
obtained from applicants for quality review shall be confidential and shall 17
not be subject to public inspection except pursuant to an order of a court of 18
competent jurisdiction. However, the documents may be introduced as evidence 19
in any relevant proceedings before the board. 20
(f) For purposes of this section, a “practice unit” shall be deemed to 21
be any firm registered with the board under § 17-12-401 et seq., and any 22
licensee not employed by or associated with any firm registered with the 23
board under § 17-12-401 et seq. but who has issued one (1) or more 24
compilation reports. 25
(g)(1) Notwithstanding any provision to the contrary in this chapter, 26
a certified public accountant, public accountant, or firm of certified public 27
accountants or public accountants currently licensed by another state or 28
foreign country shall not be required to obtain a license under this chapter 29
for the sole purpose of conducting peer review as defined by board rule of a 30
licensee in this state and may use the applicable title “certified public 31
accountant” or “public accountant” or abbreviation “CPA” or “PA” solely in 32
conjunction with the peer review activities. 33
(2) Any certified public accountant, public accountant, or firm 34
of certified public accountants or public accountants, whether licensed in 35
this state or in another jurisdiction, shall meet standards adopted by the 36 SB432
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board to accomplish the goals of this chapter in order to qualify to perform 1
peer review of licensees under this chapter. 2
(h) Effective January 1, 2019, licensees that are required to enroll 3
in peer review under § 17-12-508 are exempt from the requirements of this 4
section and the rules of the board implementing this section. 5
(i) The requirements of subdivisions (c)(1)(B) -(F) of this section 6
expire on December 31, 2018. 7
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APPROVED: 4/3/25 10
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