Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB1253 Compare Versions

Version 1 (Old)

Version 2 (New)

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4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	2nd Session of the 58th Legislature (2022)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 1253 By: Dugger and Stanley of the
7	37		Senate
8	38
9	39		and
10	40
11	41		Kendrix of the House
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17	47		An Act relating to the Oklahoma Accountancy A ct;
18	48		amending 59 O.S. 2021, Section 15.1A, which relates
19	49		to definitions; modifying definition to include
20	50		certain examination; updating statutory language; and
21	51		providing an effective date .
22	52
23	53
24	54
25	55
26	56
27		-	SUBJECT: Oklahoma Accountancy Act def initions
28		-
29	57		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
30		-
31	58		SECTION 1. AMENDATORY 59 O.S. 2021, Section 15. 1A, is
32	59		amended to read as follows:
33		-
34	60		Section 15.1A. As used in the Oklahoma Accountancy Act:
35		-
36	61		1. "Accountancy" means the profession or practice of
37	62		accounting;
38		-
39	63		2. "AICPA" means the American Inst itute of Certified Public
40	64		Accountants;
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41	91
42	92		3. "Applicant" means an individual or entity tha t has made
43	93		application to the Board for a certificate, license, or permit and
44	94		said application has not been approved;
45		-
46		-
47		-	ENR. S. B. NO. 1253 Page 2
48	95		4. "Assurance" means independent professional ser vices that
49	96		improve the quality of i nformation, or its context, for decision
50	97		makers;
51		-
52	98		5. "Attest" means providing the following services:
53		-
54	99		a. any audit or other engagement to be performed in
55	100		accordance with the Statements on Auditing Standards
56	101		(SAS),
57		-
58	102		b. any review of a financial statement to be performed in
59	103		accordance with the Statements on Sta ndards for
60	104		Accounting and Review Services (SSARS),
61		-
62	105		c. any engagement performed in accordance with the
63	106		Statements on Standards for Attestation Engagements
64	107		(SSAE), and
65		-
66	108		d. any engagement to be performed in accordance with the
67	109		Auditing Standards of the Public Company Accounting
68	110		Oversight Board (PCAOB).
69		-
70	111		The statements on standards specified in this definition shall
71	112		be adopted by reference by the Board pursuant to rulemaking a nd
72	113		shall be those developed for gen eral application by recogniz ed
73	114		national accountancy o rganizations, such as the AICPA, IFAC and the
74	115		PCAOB;
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75	142
76	143		6. "Audit" can only be performed by an individual or entity who
77	144		is registered with the Board and holding a valid p ermit issued
78	145		pursuant to the Oklaho ma Accountancy Act, or an in dividual granted
79	146		practice privileges under Section 15.12A of this title, and means a
80	147		systematic investigation or appraisal of information, procedures, or
81	148		operations performed in accordance with generally accepted auditing
82	149		standards in the United States, fo r the purpose of determin ing
83	150		conformity with established criteria and communicating the results
84	151		to interested parties;
85		-
86	152		7. "Board" means the Oklahoma Accountancy Board;
87		-
88		-
89		-	ENR. S. B. NO. 1253 Page 3
90	153		8. "Candidate" means an individual who has been qualified and
91	154		approved by the Board to take an examination for a certificate or
92	155		license;
93		-
94	156		9. "Certificate" means the Oklahoma document issued by the
95	157		Board to a candidate upon successful completion of the certified
96	158		public accountant examination designating the holder as a certified
97	159		public accountant pursuant to the law s of Oklahoma. "Certificate"
98	160		shall also mean the Oklahoma document issued by reciprocity to an
99	161		individual who has previously been certified in another
100	162		jurisdiction;
101		-
102	163		10. "Certified public accountant " means any person who has
103	164		received a certificate from th e Board or other jurisdictions;
104		-
105	165		11. "Client" means the individual or entity which retains a
106	166		registrant, an individual granted practice privileges under Section
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107	194		15.12A of this title, or a firm exempt fro m the permit and
108	195		registration requirements under Sect ion 15.15C of this title to
109	196		perform professional services;
110		-
111	197		12. "Compilation" when used with reference to financial
112	198		statements, means presenting information in the form of financial
113	199		statements which is t he representation of managem ent or owners
114	200		without undertaking to express any assurance on the statements;
115		-
116	201		13. "CPA" or "C.P.A." means certified public accountant;
117		-
118	202		14. "Designated manager" means the Oklahoma certified pu blic
119	203		accountant or public accountan t appointed by the firm part ners or
120	204		shareholders to be responsible for the administration of the office;
121		-
122	205		15. "Designee" means the National Association of State Boards
123	206		of Accountancy (NASBA) or other entities so designate d by the Board;
124		-
125	207		16. "Entity" means an organization whether for profit or not,
126	208		recognized by the State of Oklahoma this state to conduct business;
127		-
128	209		17. "Examination" means the test sections of Auditing and
129	210		Attestation, Business Environment and Concepts, Fin ancial Accounting
130	211		and Reporting, and Regulation or their successors, admi nistered,
131	212		supervised, and graded by, or at the direction of, the Board or
132		-
133		-	ENR. S. B. NO. 1253 Page 4
134	213		other jurisdiction that is required for a certificate as a certified
135	214		public accountant or a license as a publ ic accountant all or any
136	215		part of the Uniform Certified Public Accountant Examination
137	216		developed and scored by the American Institute of Cert ified Public
138	217		Accountants as approved or designated by the Board;
139	218
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140	245		18. "Executive director" means the chief administra tive officer
141	246		of the Board;
142		-
143	247		19. "Financial statements" means statements and footnotes
144	248		related thereto that undertake to present an actual or anticipated
145	249		financial position as of a point in time, or results of operations,
146	250		cash flow, or changes in financial position for a period of time, in
147	251		conformity with generally accepted acco unting principles or another
148	252		comprehensive basis of accounting. The term does not include
149	253		incidental financial data included in management advisory service
150	254		reports to support recomme ndations to a client; nor does it include
151	255		tax returns and supporting sche dules;
152		-
153	256		20. "Firm" means an entity that is either a sole
154	257		proprietorship, partnership, professional limited liability company,
155	258		professional limited liability partnership, limited liabi lity
156	259		partnership or professional corporation, or any other professional
157	260		form of organization organized under the laws of the State of
158	261		Oklahoma this state or the laws of another jurisdiction and issued a
159	262		permit in accordance with Section 15.15A of this titl e or exempt
160	263		from the permit requirement under Section 15.15C of this title ,
161	264		including individual partners or shareholders, that is engaged in
162	265		accountancy;
163		-
164	266		21. "Holding out" means any representation by an individual
165	267		that he or she holds a certificate or li cense and a valid per mit, or
166	268		by an entity that it holds a valid permit. Any such re presentation
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167	296		is presumed to invite the public to rely upon the professional
168	297		skills implied by the certificate or license and valid permit in
169	298		connection with the services or products offered;
170		-
171	299		22. "Home office" means the location specified by the client as
172	300		the address to which a service described in Section 15.12A of this
173	301		title is directed;
174		-
175	302		23. "IFAC" means the International Federation of Accountants;
176		-
177		-	ENR. S. B. NO. 1253 Page 5
178		-
179	303		24. "Individual" means a human being;
180		-
181	304		25. "Jurisdiction" means any state or territory of the United
182	305		States and the District of Columbia;
183		-
184	306		26. "License" means the Oklahoma document issued by the Board
185	307		to a candidate upon successful completion of the public accountant
186	308		examination designating the hol der as a public accountant pursuant
187	309		to the laws of Oklahoma. "License" shall also mean the Oklahoma
188	310		document issued by the Board by reciprocity to a public accountant
189	311		who has previously been licensed by examination in another
190	312		jurisdiction;
191		-
192	313		27. "Management advisory services", also known as "management
193	314		consulting services", "management services", "business advisory
194	315		services" or other similar designation, hereinafter collectively
195	316		referred to as "MAS", means the function of providing advi ce and/or
196	317		technical assistance, performed in accordance with standards for MAS
197	318		engagements and MAS consultations such as those issued by the
198	319		American Institute of Certified Public Accountants, where the
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199	347		primary purpose is to help the client improve the use of its
200	348		capabilities and resources to achieve its objectives including but
201	349		not limited to:
202		-
203	350		a. counseling management in analysis, planning,
204	351		organizing, operating, risk management and controlling
205	352		functions,
206		-
207	353		b. conducting special studies, preparing recommenda tions,
208	354		proposing plans and programs, and providing advice and
209	355		technical assistance i n their implementation,
210		-
211	356		c. reviewing and suggesting improvement of policies,
212	357		procedures, systems, methods, and organization
213	358		relationships, and
214		-
215	359		d. introducing new ideas, con cepts, and methods to
216	360		management.
217		-
218	361		MAS shall not include recommendations and comments prepared as a
219	362		direct result of observations made while performing an audit,
220		-
221		-	ENR. S. B. NO. 1253 Page 6
222	363		review, or compilation of financial statements or while providing
223	364		tax services, including tax consultations;
224		-
225	365		28. "NASBA" means the National Association of State Boards of
226	366		Accountancy;
227		-
228	367		29. "PA" or "P.A." means public accountant;
229		-
230	368		30. "Partnership" means a contractual relationship based upon a
231	369		written, oral, or implied agreement between two or more individuals
232	370		who combine their resources and activities in a joint enterprise and
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233	398		share in varying degrees and by specific agreement in the management
234	399		and in the profits or losses. A partnership may be general or
235	400		limited as the laws of this state define th ose terms;
236		-
237	401		31. "PCAOB" means the Public Company Accounting Oversight
238	402		Board;
239		-
240	403		32. "Peer Review" means a review performed pursuant to a set of
241	404		peer review rules established by the Board. The term "peer review"
242	405		also encompasses the term "quality review";
243		-
244	406		33. "Permit" means the written authority granted annually by
245	407		the Board to individuals or firms to practice public accounting in
246	408		Oklahoma, which is issued pursuant to the Oklahoma Accountancy Act;
247		-
248	409		34. a. "Practice of public accounting ", also known as
249	410		"practice public accounting ", "practice" and "practice
250	411		accounting", refers to the activitie s of a registrant,
251	412		an individual granted practice privileges under
252	413		Section 15.12A of this title, or a firm exempt from
253	414		the permit and registration requirements under Sectio n
254	415		15.15C of this title in reference to accountancy. An
255	416		individual or firm shall be deemed to be engaged in
256	417		the practice of public accounting if the individual or
257	418		firm holds itself out to the public in any manner as
258	419		one skilled in the knowledge, science, a nd practice of
259	420		accounting and auditing, taxation and management
260	421		advisory services an d is qualified to render such
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261	449		professional services as a certified public accountant
262	450		or public accountant, and performs the following:
263		-
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266	451		(1) maintains an office for the trans action of
267	452		business as a certified public accountant or
268	453		public accountant,
269		-
270	454		(2) offers to prospective clients to perform or who
271	455		does perform on behalf of clients professional
272	456		services that involve or require an audit,
273	457		verification, investigation, certificati on,
274	458		presentation, or review of financial transactions
275	459		and accounting records or an a ttestation
276	460		concerning any other written assertion,
277		-
278	461		(3) prepares or certifies for clients reports on
279	462		audits or investigations of books or records of
280	463		account, balance sheets, and other financial,
281	464		accounting and related schedules, exhibits,
282	465		statements, or reports which are to be used for
283	466		publication or for the purpose of obtaining
284	467		credit, or for filing with a court of law or with
285	468		any governmental agency, or for any other
286	469		purpose,
287		-
288	470		(4) generally or incidentally to the work described
289	471		herein, renders professional services to clients
290	472		in any or all matters relating to accounting
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291	500		procedure and to the recording, presentation, or
292	501		certification of financial information or data,
293		-
294	502		(5) keeps books, or prepares tr ial balances,
295	503		financial statements, or reports, all as a part
296	504		of bookkeeping services for clients,
297		-
298	505		(6) prepares or signs as the tax preparer, tax
299	506		returns for clients, consults with clients on tax
300	507		matters, conducts studies for clients o n tax
301	508		matters and prepares reports for clients on tax
302	509		matters, unless the services a re uncompensated
303	510		and are limited solely to the registrant 's, or
304	511		the registrant's spouse's lineal and collateral
305	512		heirs,
306		-
307		-
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309	513		(7) prepares personal financial or investment plans
310	514		or provides to clients products or services of
311	515		others in implementation of personal f inancial or
312	516		investment plans, or
313		-
314	517		(8) provides management advisory services to clients.
315		-
316	518		b. Except for an individual granted practice privileges
317	519		under Section 15.12A of this title or a firm exemp t
318	520		from the permit and registration requirements under
319	521		Section 15.15C of this title, an individual or firm
320	522		not holding a certificate, license or permit shall not
321	523		be deemed to be engaged in the practice of public
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322	551		accounting if the indivi dual or firm does not hold
323	552		itself out, solicit, or advertise for clients using
324	553		the certified public accountant or public accountant
325	554		designation and engages only in the following
326	555		services:
327		-
328	556		(1) keeps books, or prepares trial balances,
329	557		financial statements, o r reports, provided s uch
330	558		instruments do not use the terms "audit",
331	559		"audited", "exam", "examined", "review" or
332	560		"reviewed" or are not exhibited as having been
333	561		prepared by a certified public accountant or
334	562		public accountant. Except for an individual
335	563		granted practice privileges un der Section 15.12A
336	564		of this title or a firm exempt from the perm it
337	565		and registration requirements under Section
338	566		15.15C of this title, nonregistrants may use the
339	567		following disclaimer language in connection with
340	568		financial statements and be in compliance with
341	569		the Oklahoma Accountancy Act: "I (we) have not
342	570		audited, examined or reviewed the accompanying
343	571		financial statements and accordingly do not
344	572		express an opinion or any other form of assurance
345	573		on them.",
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347	601		(2) prepares or signs as the tax pre parer, tax
348	602		returns for clients, consults with clients on tax
349	603		matters, conducts studi es for clients on tax
350		-
351		-	ENR. S. B. NO. 1253 Page 9
352	604		matters and prepares reports for clients on tax
353	605		matters,
354		-
355	606		(3) prepares personal financial or investment plans
356	607		or provides to clients products or servic es of
357	608		others in implementation of personal financial or
358	609		investment plans, or
359		-
360	610		(4) provides management advisory services to clients.
361		-
362	611		c. Only permit holders, individuals granted practice
363	612		privileges under Section 15.12A of this title, or
364	613		firms exempt from the permit and registrati on
365	614		requirements under Section 15.15C of this title may
366	615		render or offer to render any attest service, as
367	616		defined herein, or issue a report on financial
368	617		statements which purport to be in compliance with the
369	618		Statements on Standards for Ac counting and Review
370	619		Services (SSARS). This restriction shall not prohibit
371	620		any act of a public official or public employee in the
372	621		performance of that person 's duties. This restriction
373	622		shall not be construed to prohibit the performance by
374	623		any unlicensed individual of other ser vices as set out
375	624		in subparagraph b of this paragraph.
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376	651
377	652		d. A person is not deemed to be practicing public
378	653		accounting within the meaning of this section solely
379	654		by displaying an Oklahoma CPA certificate or a PA
380	655		license in an office, identi fying himself or hers elf
381	656		as a CPA or PA on letterhead or business cards, or
382	657		identifying himself or herself as a CPA or PA.
383	658		However, the designation of CPA or PA on such
384	659		letterheads, business cards, public signs,
385	660		advertisements, publications directed to cl ients or
386	661		potential clients, financial or tax documents of a
387	662		client, performance of a ny attest service or issuance
388	663		of a report constitutes the practice of public
389	664		accounting and requires a permit, practice privileges
390	665		under Section 15.12A of this title, or an exemption
391	666		from the permit and registration requirements under
392	667		Section 15.15C of thi s title;
393		-
394		-
395		-	ENR. S. B. NO. 1253 Page 10
396	668		35. "Preissuance review" means a review preformed pursuant to a
397	669		set of procedures that include review of engagement document,
398	670		report, and clients' financial statements in order to per mit the
399	671		reviewer to assess compliance with all applicable profe ssional
400	672		standards;
401		-
402	673		36. "Principal place of business " means the office location
403	674		designated by the licensee for the purposes of substantial
404	675		equivalency and reciprocity;
405	676
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406	703		37. "Professional corporation" means a corporation organized
407	704		pursuant to the laws of th is state;
408		-
409	705		38. "Professional" means arising out of or related to the
410	706		specialized knowledge or skills associated with CPAs or PAs;
411		-
412	707		39. "Public accountant" means any individual who has received a
413	708		license from the Board;
414		-
415	709		40. "Public interest" means the collective well-being of the
416	710		community of people and institutions the profession serves;
417		-
418	711		41. "Qualification applicant " means an individual who has made
419	712		application to the Boar d to qualify to becom e a candidate for
420	713		examination;
421		-
422	714		42. "Registrant" means a CPA, PA, or firm composed of certified
423	715		public accountants or public accountants or combination of both
424	716		currently registered with the Board pursuant to the authority of the
425	717		Oklahoma Accountancy Act;
426		-
427	718		43. "Report", when used with reference to any attest or
428	719		compilation service, means an opinion, report or other form of
429	720		language that states or implies assurance as to the reliability of
430	721		the attested information or complied financial st atements, and that
431	722		also includes or is accompanied by any statement or implication t hat
432	723		the person or firm issuing it has special knowledge or competence in
433	724		accounting or auditing. Such a statement or implication of special
434	725		knowledge or competence may ari se from use by the is suer of the
435	726		report of names or titles indicating that the perso n or firm is an
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436	754		accountant or auditor, or from the language of the report itself.
437	755		The term "report" includes any form of language which disclaims an
438		-
439		-	ENR. S. B. NO. 1253 Page 11
440	756		opinion when such form of language is conve ntionally understood to
441	757		imply any positive assurance as to the reliability of the attested
442	758		information or compiled financial statements referred to and/or
443	759		special competence on the part of the person or firm issuing such
444	760		language; and it includes any other form of language that is
445	761		conventionally understood to imply su ch assurance and/or such
446	762		special knowledge or competence. This definition is not intended to
447	763		include a report prepared by a person not holding a certificate or
448	764		license or not granted practice privileges under Section 15.12A of
449	765		this title. However, such r eport shall not refer to "audit",
450	766		"audited", "exam", "examined", "review" or "reviewed", nor use the
451	767		language "in accordance with standards established by the American
452	768		Institute of Certified Pu blic Accountants" or successor of said
453	769		entity, or governmental agency approved by the Board, except for the
454	770		Internal Revenue Service. Except for an individual granted practice
455	771		privileges under Section 15.12A of this title or a firm ex empt from
456	772		the permit and registration requirements under Section 15.15C of
457	773		this title, nonregistrants may use the following disclaimer language
458	774		in connection with financial statements not to be in violation of
459	775		the Oklahoma Accountancy Act: "I (we) have not audited, examined,
460	776		or reviewed the accompanying financial statements and according ly do
461	777		not express an opinion or any other form of assurance on them. ";
462	778
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463	805		44. "Representation" means any oral or written communication
464	806		including but not limited to the use of title or legends on
465	807		letterheads, business cards, office doors, advertisements, and
466	808		listings conveying the fact that an individual or entity holds a
467	809		certificate, license or permit;
468		-
469	810		45. "Review", when used with reference to financial statements,
470	811		means a registrant or an indivi dual granted practice privileges
471	812		under Section 15.12A of this t itle, or a firm exempt from the permit
472	813		and registration requirements under Section 15.15C of this title
473	814		performing inquiry and analytical procedures that provide the
474	815		registrant with a reasonabl e basis for expressing limited assurance
475	816		that there are no mate rial modifications that should be made to the
476	817		statements in order for them to be in conformity with generally
477	818		accepted accounting principles or, if applicable, with another
478	819		comprehensive basis of accounting; and
479		-
480	820		46. "Substantial equivalency " is a determination by the
481	821		Oklahoma Accountancy Board or its designee that:
482		-
483		-	ENR. S. B. NO. 1253 Page 12
484		-
485	822		a. the education, examination and experience requirements
486	823		contained in the statutes and administrative rules o f
487	824		another jurisdiction are comparable to, or exceed, the
488	825		education, examination and experience requirements
489	826		contained in the AICPA/NASBA Uniform Accountancy Act,
490	827		or
491	828
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492	855		b. that an individual certified public accountant 's or
493	856		public accountant's education, examination and
494	857		experience qualifications are comparable to or exceed
495	858		the education, examination and experience requirements
496	859		contained in the Oklahoma Accountancy Act and rules of
497	860		the Board.
498		-
499	861		In ascertaining substantial equivalency as used in the Oklahoma
500	862		Accountancy Act, the Board or its designee shall take into account
501	863		the qualifications with out regard to the sequence in which
502	864		experience, education, or examination requirements were attained.
503		-
504	865		SECTION 2. This act shall become effective November 1 , 2022.
505	866
506		-
507		-	ENR. S. B. NO. 1253 Page 13
508		-	Passed the Senate the 16th day of February, 2022.
509		-
510		-
511		-
512		-	Presiding Officer of the Senate
513		-
514		-
515		-	Passed the House of Representatives the 18th day of April, 2022.
516		-
517		-
518		-
519		-	Presiding Officer of the House
520		-	of Representatives
521		-
522		-	OFFICE OF THE GOVERNOR
523		-	Received by the Office of the Governor this _______ _____________
524		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
525		-	By: _______________________________ __
526		-	Approved by the Governor of the State of Oklahoma this _____ ____
527		-	day of ___________________, 20_______, at _______ o'clock _______ M.
528		-
529		-	_________________________________
530		-	Governor of the State of Oklahoma
531		-
532		-
533		-	OFFICE OF THE SECRETARY OF STATE
534		-	Received by the Office of the Secretary of State this _______ ___
535		-	day of __________________, 20 _______, at _______ o'clock _______ M.
536		-	By: _______________________________ __
	867	+	COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
	868	+	04/06/2022 - DO PASS.