OK
Oklahoma Senate Bill SB816

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB816 Compare Versions

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5353 STATE OF OKLAHOMA
5454
5555 1st Session of the 58th Legislature (2021)
5656
5757 SENATE BILL 816 By: Dugger
5858
5959
6060
6161
6262
6363 AS INTRODUCED
6464
6565 An Act relating to the Oklahoma Accountancy Act;
6666 amending 59 O.S. 2011, Section 15.1 A, as last amended
6767 by Section 1, Chapter 327, O.S.L. 2019 (59 O.S. Supp.
6868 2020, Section 15.1A), which relates to definitions;
6969 modifying definitions; providing an effective date;
7070 and declaring an emergency.
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7575 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
7676 SECTION 1. AMENDATORY 59 O.S. 2011, Section 15.1A, as
7777 last amended by Section 1, Chapter 327, O.S.L. 2019 (59 O.S. Supp.
7878 2020, Section 15.1A), is amended to read as follows:
7979 Section 15.1A. As used in the Oklahoma Accou ntancy Act:
8080 1. “Accountancy” means the profession or practice of
8181 accounting;
8282 2. “AICPA” means the American Institute of Certified Public
8383 Accountants;
8484 3. “Applicant” means an individual or entity tha t has made
8585 application to the Board for a certificate, license, or permit and
8686 said application has no t been approved;
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138138 4. “Assurance” means independent professional services that
139139 improve the quality of information, or its context, for decision
140140 makers;
141141 5. “Attest” means providing the following services:
142142 a. any audit or other engagement to be performed in
143143 accordance with the Statements on Auditing Standards
144144 (SAS),
145145 b. any review of a financial statement to be performed i n
146146 accordance with the Statements on Sta ndards for
147147 Accounting and Review Services (SSARS),
148148 c. any engagement examination of prospective finan cial
149149 information to be performed in accordance with the
150150 Statements on Standards for Attestation Engagements
151151 (SSAE), and
152152 d. any engagement to be performed in accordan ce with the
153153 Auditing Standards of the Public Company Accounting
154154 Oversight Board (PCAOB) , and
155155 e. any examination, review or agreed upon procedures
156156 engagement to be performed in accordance with
157157 Statements on Standards for Attestation Engagements
158158 (SSAE), other than the examination descr ibed in
159159 subparagraph c of paragraph 34 of this section.
160160 The statements on standards specified in this definition shall
161161 be adopted by reference by the Board pursuant to rulemaking and
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213213 shall be those developed for general applicat ion by recognized
214214 national accountancy o rganizations, such as the AICPA, IFAC and the
215215 PCAOB;
216216 6. “Audit” can only be performed by an individual or entity who
217217 is registered with the Board and holding a valid permit issued
218218 pursuant to the Oklahoma Accountanc y Act or an entity that is exempt
219219 from registration under paragraph 3 of subsection A of Section 15.15
220220 of this title, or an individual granted practice privileges under
221221 Section 15.12A of this title, and means a systematic investigat ion
222222 or appraisal of info rmation, procedures, or operations performed in
223223 accordance with generally accepted auditing s tandards in the United
224224 States, for the purpose of determin ing conformity with established
225225 criteria and communicating the results to interes ted parties;
226226 7. “Board” means the Oklahoma Accountancy Board;
227227 8. “Candidate” means an individual who has been quali fied and
228228 approved by the Board to take an examination for a certificate or
229229 license;
230230 9. “Certificate” means the Oklahoma document issued by the
231231 Board to a candidate upon successful completion of the certified
232232 public accountant examination designating the h older as a certified
233233 public accountant pursuant to the law s of Oklahoma. “Certificate”
234234 shall also mean the Oklahoma document issued by rec iprocity to an
235235 individual who has previously been certified in anothe r
236236 jurisdiction;
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288288 10. “Certified public accountan t” means any person who has
289289 received a certificate from th e Board or other jurisdictions;
290290 11. “Client” means the individual or entity whic h retains a
291291 registrant, an individual granted practice privileges und er Section
292292 15.12A of this title, or a firm exemp t from the permit and
293293 registration requirements under Sect ion 15.15C of this title and
294294 which also is exempt from the registration requireme nt of paragraph
295295 3 of subsection A of Section 15.15 of this title to perform
296296 professional services;
297297 12. “Compilation” when used with reference to financial
298298 statements, means presenting information in the form of financial
299299 statements which is the representat ion of management or o wners
300300 without undertaking to express any assu rance on the statements;
301301 13. “CPA” or “C.P.A.” means certified public accountant;
302302 14. “Designated manager” means the Oklahoma certified public
303303 accountant or public accountant appointed by the firm partners or
304304 shareholders to be responsible for the admini stration of the office;
305305 15. “Designee” means the National Association of State Boards
306306 of Accountancy (NASBA) or other entities so designated by the Board;
307307 16. “Entity” means an organization whether for profit or not,
308308 recognized by the State of Oklahoma t o conduct business;
309309 17. “Examination” means the test sections of Auditing and
310310 Attestation, Business Environment and Concepts, Financial Accounting
311311 and Reporting, and Regulation or their su ccessors, administered ,
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363363 supervised, and graded by, or at the direct ion of, the Board or
364364 other jurisdiction that is required for a certificate as a certified
365365 public accountant or a license as a public accountant all or any
366366 part of the Uniform Certified Pu blic Accountant's Examin ation or
367367 tests for competency in auditing, at testation, business environment
368368 and concepts, financial accounting and reporting and accounting
369369 regulations as approved or designated b y the Board;
370370 18. “Executive director” means the chief administrative officer
371371 of the Board;
372372 19. “Financial statements ” means statements and footnotes
373373 related thereto that undertake to present an actual or anticipated
374374 financial position as of a point in time, or results of operations,
375375 cash flow, or changes in fi nancial position for a period of time, in
376376 conformity with genera lly accepted accounting principles or another
377377 comprehensive basis of accounting. The term does not include
378378 incidental financial data included in management advisory service
379379 reports to support recommendations to a client; nor does it include
380380 tax returns and supporting schedules;
381381 20. “Firm” means an entity that is either a sole
382382 proprietorship, partnership, professional limited liability company,
383383 professional limited liability partnership, limit ed liability
384384 partnership or professiona l corporation, or any oth er professional
385385 form of organization organized u nder the laws of the State of
386386 Oklahoma or the laws of another jurisdiction and issued a permit in
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438438 accordance with Section 15.15A of this title o r exempt from the
439439 permit requirement un der Section 15.15C of thi s title and which also
440440 is exempt from the registration requirement of paragraph 3 of
441441 subsection A of Section 15.15 of this title, including individual
442442 partners or shareholders, that is engaged in accountancy;
443443 21. “Holding out” means any representation by an individual
444444 that he or she holds a certificate or license and a valid permit, or
445445 by an entity that it holds a valid permit. Any such representation
446446 is presumed to invite the public to rely upo n the professional
447447 skills implied by the certificate or licen se and valid permit in
448448 connection with the servi ces or products offered;
449449 22. “Home office” means the location specified by the client as
450450 the address to which a service described in Section 15.12 A of this
451451 title is directed;
452452 23. “IFAC” means the Internatio nal Federation of Accountants;
453453 24. “Individual” means a human being;
454454 25. “Jurisdiction” means any state or territory of the United
455455 States and the District of Columbia;
456456 26. “License” means the Oklahoma document issued by the Board
457457 to a candidate upon suc cessful completion of the public accountant
458458 examination designating the holder as a public accou ntant pursuant
459459 to the laws of Oklahoma. “License” shall also mean the Oklahoma
460460 document issued by the Board by reciprocity to a public accountant
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512512 who has previously been licensed by examination in another
513513 jurisdiction;
514514 27. “Management advisory services”, also known as “management
515515 consulting services”, “management services”, “business advisory
516516 services” or other similar designation, hereinafter collectively
517517 referred to as “MAS”, means the function of providin g advice and/or
518518 technical assistance, performed in accordance with standards for MAS
519519 engagements and MAS consultations such as those issued by the
520520 American Institute of Certified Public Accountants, where the
521521 primary purpose is to help the client improve t he use of its
522522 capabilities and resources to achi eve its objectives including but
523523 not limited to:
524524 a. counseling management in analysis, planning,
525525 organizing, operating, risk management and controlling
526526 functions,
527527 b. conducting special studies, preparing reco mmendations,
528528 proposing plans and programs, and providing advice and
529529 technical assistance in their implementation,
530530 c. reviewing and suggesting impro vement of policies,
531531 procedures, systems, methods , and organization
532532 relationships, and
533533 d. introducing new idea s, concepts, and methods to
534534 management.
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586586 MAS shall not include recommendations and comments prepared as a
587587 direct result of observations made while p erforming an audit,
588588 review, or compilation of financial state ments or while providing
589589 tax services, including tax consultations;
590590 28. “NASBA” means the National Association of State Boards of
591591 Accountancy;
592592 29. “PA” or “P.A.” means public accountant;
593593 30. “Partnership” means a contractual relationship based upon a
594594 written, oral, or implied agreement between two or more individuals
595595 who combine their resources an d activities in a joint enterprise and
596596 share in varying degrees and by specific agreement in the ma nagement
597597 and in the profits or losses. A partnership may be general or
598598 limited as the laws of this state def ine those terms;
599599 31. “PCAOB” means the Public Company Accounting Oversight
600600 Board;
601601 32. “Peer Review” means a review performed pursuant to a set of
602602 peer review rules established by the Board. The term “peer review”
603603 also encompasses the term “quality review”;
604604 33. “Permit” means the written authority gr anted annually by
605605 the Board to individuals or firms to practice public accounting in
606606 Oklahoma, which is issued pursuant to the Oklahoma Accountancy Act;
607607 34. a. “Practice of public accounting ”, also known as
608608 “practice public accounting”, “practice” and “practice
609609 accounting”, refers to the activities of a registrant,
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661661 an individual granted practice privile ges under
662662 Section 15.12A of this title, or a firm exempt from
663663 the permit and registration requirements under Section
664664 15.15C of this title in reference to acc ountancy. An
665665 individual or firm shall be deemed to be engaged in
666666 the practice of public accounting if the individual or
667667 firm holds itself out to the public in any manner as
668668 one skilled in the knowledge, scie nce, and practice of
669669 accounting and auditing, ta xation and management
670670 advisory services and is qualified to render such
671671 professional services as a certified public accountant
672672 or public accountant, and perform s the following:
673673 (1) maintains an office for the transaction of
674674 business as a certified public a ccountant or
675675 public accountant,
676676 (2) offers to prospective clients to perform or who
677677 does perform on behalf of clients professional
678678 services that involve or requ ire an audit,
679679 verification, investigation, certi fication,
680680 presentation, or review of financial t ransactions
681681 and accounting records or an attestation
682682 concerning any other written assertion,
683683 (3) prepares or certifies for clients reports on
684684 audits or investigations of books or records of
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736736 account, balance sheets, and other financial,
737737 accounting and relat ed schedules, exhibits,
738738 statements, or reports which are to be used for
739739 publication or for the purp ose of obtaining
740740 credit, or for filing with a court of law or with
741741 any governmental agency, or for any other
742742 purpose,
743743 (4) generally or incidentally to the wo rk described
744744 herein, renders professional services to clients
745745 in any or all matters relating to acc ounting
746746 procedure and to the recording, presentation , or
747747 certification of financial information or data,
748748 (5) keeps books, or prepares trial balances,
749749 financial statements, or reports, all as a part
750750 of bookkeeping services for clients,
751751 (6) prepares or signs as the tax preparer, tax
752752 returns for clients, consults with clients on tax
753753 matters, conducts studies for cli ents on tax
754754 matters and prepares reports for cli ents on tax
755755 matters, unless the services are uncompensated
756756 and are limited solely to the registrant ’s, or
757757 the registrant’s spouse’s lineal and collateral
758758 heirs,
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810810 (7) prepares personal financial or investment p lans
811811 or provides to clients products or services of
812812 others in implementation of personal financial or
813813 investment plans, or
814814 (8) provides management advisory services to clients.
815815 b. Except for an individual gra nted practice privileges
816816 under Section 15.12A of this title or a firm exempt
817817 from the permit and registration requirements under
818818 Section 15.15C of this title, an individual or firm
819819 not holding a certificate, license or permit shall not
820820 be deemed to be enga ged in the practice of public
821821 accounting if the individual or firm does not hold
822822 itself out, solicit, or advertise for clients using
823823 the certified public accountant or public accountant
824824 designation and engages only in the following
825825 services:
826826 (1) keeps books, or prepares trial balances,
827827 financial statements, or reports,; provided, such
828828 instruments do not use the terms “audit”,
829829 “audited”, “exam”, “examined”, “review” or
830830 “reviewed” or are not exhibited as having been
831831 prepared by a certified public accountant o r
832832 public accountant. Except for an individual
833833 granted practice privileges under Section 15.12A
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885885 of this title or a firm exempt from the permit
886886 and registration requirements under Section
887887 15.15C of this title, nonregistrants may use the
888888 following disclaimer language in connection with
889889 financial statements and be in compliance with
890890 the Oklahoma Accountan cy Act: “I (we) have not
891891 audited, examined or reviewed the accompanying
892892 financial statements and a ccordingly do not
893893 express an opinion or any other form of a ssurance
894894 on them.”,
895895 (2) prepares or signs as the tax preparer, tax
896896 returns for clients, consults w ith clients on tax
897897 matters, conducts studies for clients on tax
898898 matters and prepares reports for cl ients on tax
899899 matters,
900900 (3) prepares personal financial or in vestment plans
901901 or provides to clients products o r services of
902902 others in implementation of personal financial or
903903 investment plans, or
904904 (4) provides management advisory services to clients.
905905 c. Only permit holders, individuals granted practice
906906 privileges under Section 15.12A of this title, or
907907 firms exempt from the permit and registration
908908 requirements under Section 15.15C of this title and
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960960 who also meet the requirements of paragraph 3 of
961961 subsection A of Section 15.15 of this title may render
962962 or offer to render a ny attest service, as defined
963963 herein, or issue a report on financial state ments
964964 which purport to be in compliance with the Statements
965965 on Standards for Accou nting and Review Services
966966 (SSARS). This restriction shall not prohibit any act
967967 of a public official or public employee in the
968968 performance of that p erson’s duties. This rest riction
969969 shall not be construed to prohibit the performance by
970970 any unlicensed indiv idual of other services as set out
971971 in subparagraph b of this paragraph.
972972 d. A person is not deemed to be practicing public
973973 accounting within the mean ing of this section solely
974974 by displaying an Oklahoma CPA certificate or a PA
975975 license in an office, identifyi ng himself or herself
976976 as a CPA or PA on letterhead or business cards, or
977977 identifying himself or hers elf as a CPA or PA.
978978 However, the designation of CPA or PA on such
979979 letterheads, business cards, public signs,
980980 advertisements, publications directed to clien ts or
981981 potential clients, financial or t ax documents of a
982982 client, performance of any attest service o r issuance
983983 of a report constitutes the practice of public
984984
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10351035 accounting and requires a permit, practice privileges
10361036 under Section 15.12A of this title, or an ex emption
10371037 from the permit and registratio n requirements under
10381038 Section 15.15C of this title;
10391039 35. “Preissuance review” means a review preformed pursuan t to a
10401040 set of procedures that include review of engagement document,
10411041 report, and clients’ financial statements in order to permit the
10421042 reviewer to assess compliance with all applicable professional
10431043 standards;
10441044 36. “Principal place of business ” means the office location
10451045 designated by the licensee for the purposes of substantial
10461046 equivalency and reciprocity;
10471047 37. “Professional corporation ” means a corporation organized
10481048 pursuant to the laws of this state;
10491049 38. “Professional” means arising out of or related to th e
10501050 specialized knowledge or skills associated with CPAs or PAs;
10511051 39. “Public accountant” means any individual who has received a
10521052 license from the Board;
10531053 40. “Public interest” means the collective well -being of the
10541054 community of people and institutions the p rofession serves;
10551055 41. “Qualification applicant” means an individual who has made
10561056 application to the Board t o qualify to become a candidate for
10571057 examination;
10581058
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11091109 42. “Registrant” means a CPA, PA, or firm composed of certified
11101110 public accountants or public accou ntants or combination of b oth
11111111 currently registered with the Board pursuant to the authority of the
11121112 Oklahoma Accountancy Act;
11131113 43. “Report”, when used with reference to any attest or
11141114 compilation service, means an opinion, report or other form of
11151115 language that states or implies assur ance as to the reliability of
11161116 the attested information or complied financial state ments, and that
11171117 also includes or is acc ompanied by any statement or implication that
11181118 the person or firm issuing it has special knowledge or competen ce in
11191119 accounting or auditi ng. Such a statement or implication of special
11201120 knowledge or competence may arise from use by the issuer of the
11211121 report of names or titles indicating that the person or firm is an
11221122 accountant or auditor, or from the language of the report itself.
11231123 The term “report” includes any form of language which disclaims an
11241124 opinion when such form of language is conventionally understood to
11251125 imply any positive assurance as to the reliability of the attested
11261126 information or compiled financial state ments referred to and/or
11271127 special competence on the part of the person or firm issuing such
11281128 language; and it includes any other form of language tha t is
11291129 conventionally understood to imply such assurance and/or such
11301130 special knowledge or competence. This def inition is not intended to
11311131 include a report prepared by a person not holding a certificate or
11321132 license or not granted practice privileges under Sect ion 15.12A of
11331133
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11841184 this title. However, such report shall not ref er to “audit”,
11851185 “audited”, “exam”, “examined”, “review” or “reviewed”, nor use the
11861186 language “in accordance with standards established by the American
11871187 Institute of Certified Public Accountants ” or successor of said
11881188 entity, or governmental agency approved by the Board, except for the
11891189 Internal Revenue Servi ce. Except for an individ ual granted practice
11901190 privileges under Section 15.12A of this title or a firm exemp t from
11911191 the permit and registration requ irements under Section 15.15C of
11921192 this title, nonregistrants m ay use the following disclaimer language
11931193 in connection with financial stat ements not to be in violation of
11941194 the Oklahoma Accountancy Act: “I (we) have not audited, examined,
11951195 or reviewed the accom panying financial statements and accordingly do
11961196 not express an opinion or any other form of assurance on them .”;
11971197 44. “Representation” means any oral or written communication
11981198 including but not limited to the use of ti tle or legends on
11991199 letterheads, business cards, office doors, advertisements, and
12001200 listings conveying the fact that an individual or entity holds a
12011201 certificate, license or perm it;
12021202 45. “Review”, when used with reference to financial statements,
12031203 means a registrant or an individual granted practice privileges
12041204 under Section 15.12A of this title, that also meets the requirements
12051205 of paragraph 3 of subsection A of Section 15.15 of thi s title or a
12061206 firm exempt from the permit and registration requirements under
12071207 Section 15.15C of this title performing inquiry and analytical
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12591259 procedures that provide the registran t with a reasonable basis for
12601260 expressing limited assurance that there are no ma terial
12611261 modifications that should be made to the statements in order for
12621262 them to be in conformity with generally accepted acco unting
12631263 principles or, if applicable, with another co mprehensive basis of
12641264 accounting; and
12651265 46. “Substantial equivalency” is a determination by the
12661266 Oklahoma Accountancy Board or its designee that:
12671267 a. the education, examination and experience requirements
12681268 contained in the statutes and administrative rules of
12691269 another jurisdiction are comparable to, or exceed, the
12701270 education, examination an d experience requirements
12711271 contained in the AICPA/NASBA Uniform Accountancy Act,
12721272 or
12731273 b. that an individual certified public acc ountant’s or
12741274 public accountant’s education, examinat ion and
12751275 experience qualifications are c omparable to or exceed
12761276 the education, examination and experience requirements
12771277 contained in the Oklahoma Accountancy Act and rules of
12781278 the Board.
12791279 In ascertaining subst antial equivalency as used in the Oklahoma
12801280 Accountancy Act, the Board or its designee shall take into account
12811281 the qualifications wi thout regard to the sequence in which
12821282 experience, education, or examination requirements were attained.
12831283
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13341334 SECTION 2. This act shall become effective July 1, 2021.
13351335 SECTION 3. It being immediately necess ary for the preservation
13361336 of the public peace, health or safety, an emergency is hereby
13371337 declared to exist, by reason whereof thi s act shall take effect and
13381338 be in full force from and after its passage and ap proval.
13391339
13401340 58-1-1099 NP 1/21/2021 3:15:04 PM