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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 816 By: Dugger
AS INTRODUCED
An Act relating to the Oklahoma Accountancy Act;
amending 59 O.S. 2011, Section 15.1 A, as last amended
by Section 1, Chapter 327, O.S.L. 2019 (59 O.S. Supp.
2020, Section 15.1A), which relates to definitions;
modifying definitions; providing an effective date;
and declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 59 O.S. 2011, Section 15.1A, as
last amended by Section 1, Chapter 327, O.S.L. 2019 (59 O.S. Supp.
2020, Section 15.1A), is amended to read as follows:
Section 15.1A. As used in the Oklahoma Accou ntancy Act:
1. “Accountancy” means the profession or practice of
accounting;
2. “AICPA” means the American Institute of Certified Public
Accountants;
3. “Applicant” means an individual or entity tha t has made
application to the Board for a certificate, license, or permit and
said application has no t been approved;
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4. “Assurance” means independent professional services that
improve the quality of information, or its context, for decision
makers;
5. “Attest” means providing the following services:
a. any audit or other engagement to be performed in
accordance with the Statements on Auditing Standards
(SAS),
b. any review of a financial statement to be performed i n
accordance with the Statements on Sta ndards for
Accounting and Review Services (SSARS),
c. any engagement examination of prospective finan cial
information to be performed in accordance with the
Statements on Standards for Attestation Engagements
(SSAE), and
d. any engagement to be performed in accordan ce with the
Auditing Standards of the Public Company Accounting
Oversight Board (PCAOB) , and
e. any examination, review or agreed upon procedures
engagement to be performed in accordance with
Statements on Standards for Attestation Engagements
(SSAE), other than the examination descr ibed in
subparagraph c of paragraph 34 of this section.
The statements on standards specified in this definition shall
be adopted by reference by the Board pursuant to rulemaking and
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shall be those developed for general applicat ion by recognized
national accountancy o rganizations, such as the AICPA, IFAC and the
PCAOB;
6. “Audit” can only be performed by an individual or entity who
is registered with the Board and holding a valid permit issued
pursuant to the Oklahoma Accountanc y Act or an entity that is exempt
from registration under paragraph 3 of subsection A of Section 15.15
of this title, or an individual granted practice privileges under
Section 15.12A of this title, and means a systematic investigat ion
or appraisal of info rmation, procedures, or operations performed in
accordance with generally accepted auditing s tandards in the United
States, for the purpose of determin ing conformity with established
criteria and communicating the results to interes ted parties;
7. “Board” means the Oklahoma Accountancy Board;
8. “Candidate” means an individual who has been quali fied and
approved by the Board to take an examination for a certificate or
license;
9. “Certificate” means the Oklahoma document issued by the
Board to a candidate upon successful completion of the certified
public accountant examination designating the h older as a certified
public accountant pursuant to the law s of Oklahoma. “Certificate”
shall also mean the Oklahoma document issued by rec iprocity to an
individual who has previously been certified in anothe r
jurisdiction;
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10. “Certified public accountan t” means any person who has
received a certificate from th e Board or other jurisdictions;
11. “Client” means the individual or entity whic h retains a
registrant, an individual granted practice privileges und er Section
15.12A of this title, or a firm exemp t from the permit and
registration requirements under Sect ion 15.15C of this title and
which also is exempt from the registration requireme nt of paragraph
3 of subsection A of Section 15.15 of this title to perform
professional services;
12. “Compilation” when used with reference to financial
statements, means presenting information in the form of financial
statements which is the representat ion of management or o wners
without undertaking to express any assu rance on the statements;
13. “CPA” or “C.P.A.” means certified public accountant;
14. “Designated manager” means the Oklahoma certified public
accountant or public accountant appointed by the firm partners or
shareholders to be responsible for the admini stration of the office;
15. “Designee” means the National Association of State Boards
of Accountancy (NASBA) or other entities so designated by the Board;
16. “Entity” means an organization whether for profit or not,
recognized by the State of Oklahoma t o conduct business;
17. “Examination” means the test sections of Auditing and
Attestation, Business Environment and Concepts, Financial Accounting
and Reporting, and Regulation or their su ccessors, administered ,
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supervised, and graded by, or at the direct ion of, the Board or
other jurisdiction that is required for a certificate as a certified
public accountant or a license as a public accountant all or any
part of the Uniform Certified Pu blic Accountant's Examin ation or
tests for competency in auditing, at testation, business environment
and concepts, financial accounting and reporting and accounting
regulations as approved or designated b y the Board;
18. “Executive director” means the chief administrative officer
of the Board;
19. “Financial statements ” means statements and footnotes
related thereto that undertake to present an actual or anticipated
financial position as of a point in time, or results of operations,
cash flow, or changes in fi nancial position for a period of time, in
conformity with genera lly accepted accounting principles or another
comprehensive basis of accounting. The term does not include
incidental financial data included in management advisory service
reports to support recommendations to a client; nor does it include
tax returns and supporting schedules;
20. “Firm” means an entity that is either a sole
proprietorship, partnership, professional limited liability company,
professional limited liability partnership, limit ed liability
partnership or professiona l corporation, or any oth er professional
form of organization organized u nder the laws of the State of
Oklahoma or the laws of another jurisdiction and issued a permit in
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accordance with Section 15.15A of this title o r exempt from the
permit requirement un der Section 15.15C of thi s title and which also
is exempt from the registration requirement of paragraph 3 of
subsection A of Section 15.15 of this title, including individual
partners or shareholders, that is engaged in accountancy;
21. “Holding out” means any representation by an individual
that he or she holds a certificate or license and a valid permit, or
by an entity that it holds a valid permit. Any such representation
is presumed to invite the public to rely upo n the professional
skills implied by the certificate or licen se and valid permit in
connection with the servi ces or products offered;
22. “Home office” means the location specified by the client as
the address to which a service described in Section 15.12 A of this
title is directed;
23. “IFAC” means the Internatio nal Federation of Accountants;
24. “Individual” means a human being;
25. “Jurisdiction” means any state or territory of the United
States and the District of Columbia;
26. “License” means the Oklahoma document issued by the Board
to a candidate upon suc cessful completion of the public accountant
examination designating the holder as a public accou ntant pursuant
to the laws of Oklahoma. “License” shall also mean the Oklahoma
document issued by the Board by reciprocity to a public accountant
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who has previously been licensed by examination in another
jurisdiction;
27. “Management advisory services”, also known as “management
consulting services”, “management services”, “business advisory
services” or other similar designation, hereinafter collectively
referred to as “MAS”, means the function of providin g advice and/or
technical assistance, performed in accordance with standards for MAS
engagements and MAS consultations such as those issued by the
American Institute of Certified Public Accountants, where the
primary purpose is to help the client improve t he use of its
capabilities and resources to achi eve its objectives including but
not limited to:
a. counseling management in analysis, planning,
organizing, operating, risk management and controlling
functions,
b. conducting special studies, preparing reco mmendations,
proposing plans and programs, and providing advice and
technical assistance in their implementation,
c. reviewing and suggesting impro vement of policies,
procedures, systems, methods , and organization
relationships, and
d. introducing new idea s, concepts, and methods to
management.
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MAS shall not include recommendations and comments prepared as a
direct result of observations made while p erforming an audit,
review, or compilation of financial state ments or while providing
tax services, including tax consultations;
28. “NASBA” means the National Association of State Boards of
Accountancy;
29. “PA” or “P.A.” means public accountant;
30. “Partnership” means a contractual relationship based upon a
written, oral, or implied agreement between two or more individuals
who combine their resources an d activities in a joint enterprise and
share in varying degrees and by specific agreement in the ma nagement
and in the profits or losses. A partnership may be general or
limited as the laws of this state def ine those terms;
31. “PCAOB” means the Public Company Accounting Oversight
Board;
32. “Peer Review” means a review performed pursuant to a set of
peer review rules established by the Board. The term “peer review”
also encompasses the term “quality review”;
33. “Permit” means the written authority gr anted annually by
the Board to individuals or firms to practice public accounting in
Oklahoma, which is issued pursuant to the Oklahoma Accountancy Act;
34. a. “Practice of public accounting ”, also known as
“practice public accounting”, “practice” and “practice
accounting”, refers to the activities of a registrant,
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an individual granted practice privile ges under
Section 15.12A of this title, or a firm exempt from
the permit and registration requirements under Section
15.15C of this title in reference to acc ountancy. An
individual or firm shall be deemed to be engaged in
the practice of public accounting if the individual or
firm holds itself out to the public in any manner as
one skilled in the knowledge, scie nce, and practice of
accounting and auditing, ta xation and management
advisory services and is qualified to render such
professional services as a certified public accountant
or public accountant, and perform s the following:
(1) maintains an office for the transaction of
business as a certified public a ccountant or
public accountant,
(2) offers to prospective clients to perform or who
does perform on behalf of clients professional
services that involve or requ ire an audit,
verification, investigation, certi fication,
presentation, or review of financial t ransactions
and accounting records or an attestation
concerning any other written assertion,
(3) prepares or certifies for clients reports on
audits or investigations of books or records of
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account, balance sheets, and other financial,
accounting and relat ed schedules, exhibits,
statements, or reports which are to be used for
publication or for the purp ose of obtaining
credit, or for filing with a court of law or with
any governmental agency, or for any other
purpose,
(4) generally or incidentally to the wo rk described
herein, renders professional services to clients
in any or all matters relating to acc ounting
procedure and to the recording, presentation , or
certification of financial information or data,
(5) keeps books, or prepares trial balances,
financial statements, or reports, all as a part
of bookkeeping services for clients,
(6) prepares or signs as the tax preparer, tax
returns for clients, consults with clients on tax
matters, conducts studies for cli ents on tax
matters and prepares reports for cli ents on tax
matters, unless the services are uncompensated
and are limited solely to the registrant ’s, or
the registrant’s spouse’s lineal and collateral
heirs,
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(7) prepares personal financial or investment p lans
or provides to clients products or services of
others in implementation of personal financial or
investment plans, or
(8) provides management advisory services to clients.
b. Except for an individual gra nted practice privileges
under Section 15.12A of this title or a firm exempt
from the permit and registration requirements under
Section 15.15C of this title, an individual or firm
not holding a certificate, license or permit shall not
be deemed to be enga ged in the practice of public
accounting if the individual or firm does not hold
itself out, solicit, or advertise for clients using
the certified public accountant or public accountant
designation and engages only in the following
services:
(1) keeps books, or prepares trial balances,
financial statements, or reports,; provided, such
instruments do not use the terms “audit”,
“audited”, “exam”, “examined”, “review” or
“reviewed” or are not exhibited as having been
prepared by a certified public accountant o r
public accountant. Except for an individual
granted practice privileges under Section 15.12A
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of this title or a firm exempt from the permit
and registration requirements under Section
15.15C of this title, nonregistrants may use the
following disclaimer language in connection with
financial statements and be in compliance with
the Oklahoma Accountan cy Act: “I (we) have not
audited, examined or reviewed the accompanying
financial statements and a ccordingly do not
express an opinion or any other form of a ssurance
on them.”,
(2) prepares or signs as the tax preparer, tax
returns for clients, consults w ith clients on tax
matters, conducts studies for clients on tax
matters and prepares reports for cl ients on tax
matters,
(3) prepares personal financial or in vestment plans
or provides to clients products o r services of
others in implementation of personal financial or
investment plans, or
(4) provides management advisory services to clients.
c. Only permit holders, individuals granted practice
privileges under Section 15.12A of this title, or
firms exempt from the permit and registration
requirements under Section 15.15C of this title and
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who also meet the requirements of paragraph 3 of
subsection A of Section 15.15 of this title may render
or offer to render a ny attest service, as defined
herein, or issue a report on financial state ments
which purport to be in compliance with the Statements
on Standards for Accou nting and Review Services
(SSARS). This restriction shall not prohibit any act
of a public official or public employee in the
performance of that p erson’s duties. This rest riction
shall not be construed to prohibit the performance by
any unlicensed indiv idual of other services as set out
in subparagraph b of this paragraph.
d. A person is not deemed to be practicing public
accounting within the mean ing of this section solely
by displaying an Oklahoma CPA certificate or a PA
license in an office, identifyi ng himself or herself
as a CPA or PA on letterhead or business cards, or
identifying himself or hers elf as a CPA or PA.
However, the designation of CPA or PA on such
letterheads, business cards, public signs,
advertisements, publications directed to clien ts or
potential clients, financial or t ax documents of a
client, performance of any attest service o r issuance
of a report constitutes the practice of public
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accounting and requires a permit, practice privileges
under Section 15.12A of this title, or an ex emption
from the permit and registratio n requirements under
Section 15.15C of this title;
35. “Preissuance review” means a review preformed pursuan t to a
set of procedures that include review of engagement document,
report, and clients’ financial statements in order to permit the
reviewer to assess compliance with all applicable professional
standards;
36. “Principal place of business ” means the office location
designated by the licensee for the purposes of substantial
equivalency and reciprocity;
37. “Professional corporation ” means a corporation organized
pursuant to the laws of this state;
38. “Professional” means arising out of or related to th e
specialized knowledge or skills associated with CPAs or PAs;
39. “Public accountant” means any individual who has received a
license from the Board;
40. “Public interest” means the collective well -being of the
community of people and institutions the p rofession serves;
41. “Qualification applicant” means an individual who has made
application to the Board t o qualify to become a candidate for
examination;
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42. “Registrant” means a CPA, PA, or firm composed of certified
public accountants or public accou ntants or combination of b oth
currently registered with the Board pursuant to the authority of the
Oklahoma Accountancy Act;
43. “Report”, when used with reference to any attest or
compilation service, means an opinion, report or other form of
language that states or implies assur ance as to the reliability of
the attested information or complied financial state ments, and that
also includes or is acc ompanied by any statement or implication that
the person or firm issuing it has special knowledge or competen ce in
accounting or auditi ng. Such a statement or implication of special
knowledge or competence may arise from use by the issuer of the
report of names or titles indicating that the person or firm is an
accountant or auditor, or from the language of the report itself.
The term “report” includes any form of language which disclaims an
opinion when such form of language is conventionally understood to
imply any positive assurance as to the reliability of the attested
information or compiled financial state ments referred to and/or
special competence on the part of the person or firm issuing such
language; and it includes any other form of language tha t is
conventionally understood to imply such assurance and/or such
special knowledge or competence. This def inition is not intended to
include a report prepared by a person not holding a certificate or
license or not granted practice privileges under Sect ion 15.12A of
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this title. However, such report shall not ref er to “audit”,
“audited”, “exam”, “examined”, “review” or “reviewed”, nor use the
language “in accordance with standards established by the American
Institute of Certified Public Accountants ” or successor of said
entity, or governmental agency approved by the Board, except for the
Internal Revenue Servi ce. Except for an individ ual granted practice
privileges under Section 15.12A of this title or a firm exemp t from
the permit and registration requ irements under Section 15.15C of
this title, nonregistrants m ay use the following disclaimer language
in connection with financial stat ements not to be in violation of
the Oklahoma Accountancy Act: “I (we) have not audited, examined,
or reviewed the accom panying financial statements and accordingly do
not express an opinion or any other form of assurance on them .”;
44. “Representation” means any oral or written communication
including but not limited to the use of ti tle or legends on
letterheads, business cards, office doors, advertisements, and
listings conveying the fact that an individual or entity holds a
certificate, license or perm it;
45. “Review”, when used with reference to financial statements,
means a registrant or an individual granted practice privileges
under Section 15.12A of this title, that also meets the requirements
of paragraph 3 of subsection A of Section 15.15 of thi s title or a
firm exempt from the permit and registration requirements under
Section 15.15C of this title performing inquiry and analytical
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procedures that provide the registran t with a reasonable basis for
expressing limited assurance that there are no ma terial
modifications that should be made to the statements in order for
them to be in conformity with generally accepted acco unting
principles or, if applicable, with another co mprehensive basis of
accounting; and
46. “Substantial equivalency” is a determination by the
Oklahoma Accountancy Board or its designee that:
a. the education, examination and experience requirements
contained in the statutes and administrative rules of
another jurisdiction are comparable to, or exceed, the
education, examination an d experience requirements
contained in the AICPA/NASBA Uniform Accountancy Act,
or
b. that an individual certified public acc ountant’s or
public accountant’s education, examinat ion and
experience qualifications are c omparable to or exceed
the education, examination and experience requirements
contained in the Oklahoma Accountancy Act and rules of
the Board.
In ascertaining subst antial equivalency as used in the Oklahoma
Accountancy Act, the Board or its designee shall take into account
the qualifications wi thout regard to the sequence in which
experience, education, or examination requirements were attained.
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SECTION 2. This act shall become effective July 1, 2021.
SECTION 3. It being immediately necess ary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof thi s act shall take effect and
be in full force from and after its passage and ap proval.
58-1-1099 NP 1/21/2021 3:15:04 PM