CHAPTER 81
HOUSE BILL No. 2938
An Act relating to the practice of accountancy; concerning the
regulation thereof; amending
K.S.A. 1-201, 1-204 and 1-302a and K.S.A. 1999 Supp. 1-202, 1-301,
1-302, 1-302b, 1-
307, 1-308, 1-310, 1-311, 1-316 and 1-319 and repealing the
existing sections; also re-
pealing K.S.A. 1-317.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. When used in this
act, the following terms have the
meanings indicated:
(a) ``Actively participate'' means
participation that is continuous as
one's primary occupation.
(b) ``affiliated entity'' means one that
provides services to the CPA
firm or provides services to the public that are complementary to
those
provided by the CPA firm.
(c) ``AICPA'' means the American
institute of certified public ac-
countants.
(d) ``Attest'' means providing the
following financial statement serv-
ices:
(1) Any audit or other engagement to be
performed in accordance
with the statements on auditing standards (SAS);
(2) any audit to be performed in
accordance with the Kansas munic-
ipal audit guide;
(3) any review of a financial statement
or compilation of a financial
statement to be performed in accordance with the statements on
stan-
dards for accounting and review services (SSARS);
(4) any examination of prospective
financial information to be per-
formed in accordance with the statements on standards for
attestation
engagements (SSAE); and
(5) the statements on standards and guide
specified in this act shall
be adopted by reference by the board pursuant to rulemaking and
shall
be those developed for general application by the AICPA or the
Kansas
division of accounts and reports.
(e) ``Board'' means the Kansas board of
accountancy established un-
der K.S.A. 1-201 and amendments thereto.
(f) ``Certificate'' means a certificate
as a certified public accountant
issued under K.S.A. 1-302 and amendments thereto, or a certificate
as a
certified public accountant issued after examination under the law
of any
other state.
(g) ``Client'' means a person or entity
that agrees with a permit holder
to receive any professional service.
(h) ``Equity capital'' means (1) capital
stock, capital accounts, capital
contributions or undistributed earnings of a registered firm as
referred
to in K.S.A. 1-308 and amendments thereto; and (2) loans and
advances
to a registered firm made or held by its owners. ``Equity capital''
does not
include an interest in bonuses, profit sharing plans, defined
benefit plans
or loans to a registered firm from banks, financial institutions or
other
third parties that do not actively participate in such registered
firm.
(i) ``Good moral character'' means lack
of a history of professional
dishonesty or other felonious acts.
(j) ``Active license'' means a
certificate or a permit to practice issued
by another state that is currently in force and authorizes the
holder to
practice certified public accountancy.
(k) ``Licensee'' means the holder of a
certificate or a permit to prac-
tice issued by this state or another state.
(l) ``Manager'' means a manager of a
limited liability company.
(m) ``Member'' means a member of a
limited liability company.
(n) ``NASBA'' means the national
association of state boards of ac-
countancy.
(o) ``Nonattest'' means providing the
following services:
(1) The preparation of tax returns and
providing advice on tax mat-
ters;
(2) management advisory, consulting,
litigation support and assur-
ance services, except for attest services;
(3) financial planning; and
(4) any other financial service not
included in the statements on au-
diting standards, the statements on standards for accounting and
review
services, the standards for attestation engagements as developed by
the
American institute of certified public accountants or as defined by
the
board.
(p) ``Practice of certified public
accountancy'' means performing or
offering to perform attest or nonattest services for the public
while using
the designation ``certified public accountant'' or ``C.P.A.'' in
conjunction
with such services.
(q) ``Practice of public accountancy''
means performing or offering to
perform attest or nonattest services for the public by a person not
re-
quired to have a permit to practice or a firm not required to
register with
the board.
(r) ``Professional'' means arising out of
or related to the specialized
knowledge or skills associated with CPAs.
(s) ``Report,'' when used with reference
to financial statements,
means an opinion, report or other form of language that states or
implies
assurance as the reliability of any financial statements and that
also in-
cludes or is accompanied by any statement or implication that the
person
or firm issuing it has special knowledge or competence in
accounting or
auditing. Such a statement or implication of special knowledge or
com-
petence 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
lan-
guage which disclaims an opinion when such form of language is
conven-
tionally understood to imply any positive assurance as to the
reliability of
the financial statements referred to or special competence on the
part of
the person or firm issuing such language; and it includes any other
form
of language that is conventionally understood to imply such
assurance or
such special knowledge or competence.
(t) ``Rule'' means any rule or regulation
adopted by the board.
(u) ``State'' means any state of the
United States, the District of Co-
lumbia, Puerto Rico, the U.S. Virgin Islands and Guam; except that
``this
state'' means the state of Kansas.
(v) ``Substantial equivalency'' is a
determination by the board of ac-
countancy or its designee that the education, examination and
experience
requirements contained in the statutes and administrative rules of
another
jurisdiction are comparable to, or exceed the education,
examination and
experience requirements contained in the uniform accountancy act
or
that an individual CPA's education, examination and experience
qualifi-
cations are comparable to or exceed the education, examination and
ex-
perience requirements contained in the uniform accountancy act.
(w) ``Uniform accountancy act'' means
model legislation issued by the
AICPA and NASBA. The board shall adopt the act by reference
pursuant
to rulemaking. The board shall adopt the version of the act in
existence
on July 1, 2000.
New Sec. 2. (a) (1) An individual
whose principal place of business
is not in this state having an active license to practice certified
public
accountancy from any state which the NASBA national qualification
ap-
praisal service, or similar organization approved by the board, has
verified
to be in substantial equivalence with the CPA licensure
requirements of
the uniform accountancy act may be presumed to have qualifications
sub-
stantially equivalent to this state's requirements and may be
granted all
the privileges of permit holders of this state without the need to
obtain
a permit issued under K.S.A. 1-310 and amendments thereto, or
regis-
tration issued under K.S.A. 1-308 and amendments thereto; or
(2) an individual whose principal place
of business is not in this state
having an active license to practice certified public accountancy
from any
state which the NASBA national qualification appraisal service, or
similar
organization approved by the board, has not verified to be in
substantial
equivalency with the CPA licensure requirements of the uniform
ac-
countancy act may be presumed to have qualifications substantially
equiv-
alent to this state's requirements and may be granted all the
privileges of
permit holders of this state without the need to obtain a permit to
practice
issued under K.S.A. 1-310 and amendments thereto, or registration
issued
under K.S.A. 1-308 and amendments thereto, if such individual
obtains
from the NASBA national qualification appraisal service, or similar
or-
ganization approved by the board, verification that such
individual's CPA
qualifications are substantially equivalent to the CPA licensure
require-
ments of the uniform accountancy act. Any person meeting the
require-
ments set forth in this section who is denied the right to practice
in this
state under this section shall have the opportunity to be heard
pursuant
to the Kansas administrative procedures act.
(b) Individuals seeking to practice
certified public accountancy in
Kansas pursuant to subsection (a) shall notify the board prior to
com-
mencing practice in this state. Such individuals shall have a
reasonable
amount of time from the date of such notification to the board to
com-
plete an application of notification provided by the board and
shall renew
such notification on a biennial basis. The board may enact rules
and reg-
ulations governing notification and renewal. Individuals entering
the state
to provide attest services under this section shall be required to
provide
proof of having a peer review in accordance with K.S.A. 1-501 and
amend-
ments thereto, or similar requirements as approved by the
board.
(c) The board may charge a fee for such
notification and a renewal
of such notification pursuant to K.S.A. 1-301 and amendments
thereto.
(d) Any licensee of another state
exercising the privilege afforded
under subsection (a), as a condition of the grant of this
privilege:
(1) Consents to the personal and subject
matter jurisdiction of this
board, and to the appointment of the state regulatory body that
initially
issued the licensee's certificate as the agent upon whom process
may be
served in any action or proceeding by the Kansas board against the
li-
censee; and
(2) agrees to comply with this act and
the board's rules and regula-
tions.
(e) A holder of a permit to practice
issued by this state offering or
rendering services or using a CPA title in another state may be
subject
to disciplinary action in this state for an act committed in
another state
for which the permit holder would be subject to discipline for an
act
committed in the other state. The board may investigate any
complaint
made by the board of accountancy of another state.
Sec. 3. K.S.A. 1-201 is hereby
amended to read as follows: 1-201. (a)
(1) There is hereby created a board of
accountancy, hereinafter referred
to as the board. The board shall be composed of seven members
who
shall be appointed by the governor and shall be citizens of the
United
States and residents of the state of Kansas. Five members of the
board
shall be certified public accountants who hold permits to practice
as cer-
tified public accountants in this state and who are in active
practice as
such. Subject to provision (2) of this subsection, one
member shall be a
licensed municipal public accountant who is in active
practice as such,
and one member and two members shall
represent the general public.
Any member of the board who is appointed to represent the
general
public shall be a person whose business, occupation or profession
requires
a reliance on and understanding of financial statements and their
use.
(2) The membership of the board
shall be composed as provided in
provision (1) until such time as the number of persons in
active practice
as licensed municipal public accountants is less than 25,
as determined
by the board. At such time, upon the expiration of the term
of the incum-
bent licensed municipal public accountant member, a person
who is rep-
resentative of the general public shall be appointed as a
successor to that
member. Thereafter, the board shall be composed of five
certified public
accountant members who have the qualifications required by
provision
(1) for accountant members, and two members representative
of the gen-
eral public who have the qualifications required by
provision (1) for mem-
bers representing the general public.
(b) Each member of the board shall serve
for a term of three years
and until a successor is appointed and qualified, except
that the first
member of the board appointed to represent the general
public shall
serve for a term of four years. Vacancies in the
board shall be filled by
appointment of the governor for the unexpired term.
(c) The governor shall remove from the
board any certified public
accountant member who does not hold a permit to practice as a
certified
public accountant in this state. After a hearing conducted in
accordance
with the provisions of the Kansas administrative procedure act, the
gov-
ernor may remove any member of the board for neglect of duty or
other
just cause.
Sec. 4. K.S.A. 1999 Supp. 1-202 is
hereby amended to read as fol-
lows: 1-202. (a) Each year the board shall meet and organize by
electing
a chairperson and a vice-chairperson from its membership. The
board
shall appoint a secretary, who need not be a member of the board.
The
board may adopt such rules and regulations as it may deem
necessary for
the proper administration of its duties and the carrying
out of the pur-
poses of this act. The board shall meet at the
call of the chairperson but
not less than twice each year and shall have a seal. The
chairperson and
the secretary of the board shall have the power to administer
oaths.
(b) The board shall keep records of all
proceedings and actions by
and before it. In any proceedings in court, civil or criminal,
arising out of
or founded upon any provisions of this act, copies of such records
which
are certified as correct by the secretary of the board under the
seal of the
board shall be admissible in evidence and shall be prima facie
evidence
of the correctness of the contents thereof.
(c) The board, from time to time,
shall may: (1) Adopt, amend,
and
revoke rules of professional conduct;
(2) (1) provide
for certification, notification and registration and
issue
permits to practice in accordance with the provisions of this
act;
(3) keep accounts of its receipts
and disbursements;
(4) keep a register of Kansas
certificates issued by the board;
(5) revoke, suspend and reinstate
certificates, registrations and per-
mits;
(6) initiate proceedings and hold
hearings and do all things necessary
to carry out the intent of this act.
(2) adopt, amend and revoke rules and
regulations governing its ad-
ministration and enforcement of this act, including but not
limited to: (A)
Educational qualifications required under K.S.A. 1-302a and
amendments
thereto; (B) experience qualifications required under K.S.A.
1-302b and
amendments thereto; (C) continuing professional education
qualifications
required under K.S.A. 1-310 and amendments thereto; (D)
professional
conduct directed to controlling the quality of services by
licensees, and
dealing among other things with independence, integrity and
objectivity,
competence and technical standards, responsibilities to the
public and
clients, commissions and referral fees, contingent fees,
advertising, firm
names, discreditable acts and communication with the board; (E)
profes-
sional standards applicable to licensees; (F) the manner and
circumstances
of use of the titles ``certified public accountant'' and
``C.P.A.''; (G) peer
reviews required in K.S.A. 1-501 and amendments thereto; (H) the
defi-
nition of substantial equivalency for purposes of section 2 and
amend-
ments thereto; and (I) such other rules and regulations as the
board may
deem necessary to regulate the practice of certified public
accountancy.
(d) The board shall: (1) Keep accounts
of its receipts and disburse-
ments; (2) keep a register of Kansas certificates issued by the
board; (3)
deny, revoke, suspend and reinstate certificates, notifications,
firm reg-
istrations and permits; and (4) initiate proceedings, hold
hearings and do
all things necessary to regulate the practice of certified
public account-
ancy.
(d) (e) A
majority of the board shall constitute a quorum for the trans-
action of any business at any meeting of the board.
Sec. 5. K.S.A. 1-204 is hereby
amended to read as follows: 1-204.
There is hereby created the board of accountancy fee fund. The
board
of accountancy shall remit all moneys received by or for it from
fees,
charges or penalties to the state treasurer at least monthly. Upon
receipt
of each such remittance, the state treasurer shall deposit the
entire
amount thereof in the state treasury. Twenty percent
(20%) of each such
deposit shall be credited to the state general fund and the balance
shall
be credited to the board of accountancy fee fund. All expenditures
from
the board of accountancy fee fund shall be made in accordance
with
appropriation acts upon warrants of the director of accounts and
reports
issued pursuant to vouchers approved by the
chairman chairperson of the
board of accountancy or by a person or persons designated by
him or her
the chairperson.
Sec. 6. K.S.A. 1999 Supp. 1-301 is
hereby amended to read as fol-
lows: 1-301. (a) The board shall charge and collect a fee from each
ap-
plicant for a Kansas certificate or notification and shall
charge and collect
a fee for a permit to practice as a certified public accountant in
this state.
The board may require that fees paid under the state board
of account-
ancy act be paid directly to the examination
service by the person taking
the examination. Each such fee payable to the board or the
examination
service shall accompany the appropriate application. No portion of
any
fee shall be returned to the applicant unless the board determines
there
is just cause for a refund.
(b) The board shall adopt rules and
regulations fixing the fees pro-
vided to be charged and collected under this section, which shall
be as
follows:
(1) For initial admission to any required
examination, an amount not
to exceed $200. If an applicant fails to pass the required
examination, a
complete reexamination may be taken upon payment of an additional
fee
of not to exceed $175 for each such complete reexamination. If an
ap-
plicant fails to pass part of the required examination, a partial
reexami-
nation may be taken upon payment of an additional fee of not to
exceed
$150 for each such partial reexamination;
(2) for issuance of a certificate
(initial or duplicate) an amount not to
exceed $50;
(3) for issuance of a reciprocal
certificate an amount not to exceed
$250;
(4) for issuance or renewal of a permit
to practice for the holder of
a Kansas certificate, an amount not to exceed $150, subject to
paragraphs
(5) and (7);
(5) for issuance or renewal of a permit
to practice for the holder of
a Kansas certificate whose permit is issued or renewed for a period
of 12
months or less, an amount equal to 1/2 the amount of the fee fixed
under
paragraph (4), subject to paragraph (7);
(6) for issuance of a duplicate permit to
practice for the holder of a
Kansas certificate, an amount not to exceed $25;
(7) for issuance or
renewal reinstatement of a permit to practice
in
the case of the holder of a Kansas certificate who had in some
prior year
held a permit to practice but who did not hold such a permit for
the year
immediately preceding the period for which a permit to practice is
re-
quested, or who, if holding a permit to practice for such period
imme-
diately preceding applies for renewal subsequent to the expiration
date
of such permit, an amount equal to 1 1/2 times the amount of
the fee
then fixed under paragraph (3) or paragraph (4), whichever is
applicable;
(8) to proctor the uniform certified
public accountant examination to
a candidate of another state who is temporarily in this state at
the time
of the examination an amount not to exceed $200 per
examination.;
(9) for notification or renewal of
notification required pursuant to
section 2, and amendments thereto, an amount not to exceed $150;
and
(10) for annual firm registration, an
amount not to exceed $50.
(c) On or before May 30 each year, the
board shall determine the
amount of funds that will be required during the ensuing year to
carry
out and enforce the provisions of law administered by the board and
may
adopt rules and regulations to change any fees fixed under this
section as
may be necessary, subject to the limitations prescribed by this
section.
Upon changing any renewal fees as provided by this section, the
board
shall immediately notify all holders of permits to practice of the
amount
of such fees. The fees fixed by the board and in effect under this
section
immediately prior to the effective date of this act shall continue
in effect
until such fees are fixed by the board by rules and regulations as
provided
by this section.
Sec. 7. K.S.A. 1999 Supp. 1-302 is
hereby amended to read as fol-
lows: 1-302. (a) The certificate of having passed
the certified public ac-
countant shall be known as the Kansas certificate and shall be
granted by
the board to any person (a) of good moral
character who: (1) Is a resident
of this state or has a place of business or is employed
therein, (b) who;
(2) meets the applicable educational
requirements prescribed by K.S.A.
1-302a, and amendments thereto,; and
(c) who (3) has passed a
written
an examination in accounting and auditing and in such other
related sub-
jects as the board may determine to be appropriate.
(b) The board may refuse to grant a
certificate on the ground of fail-
ure to satisfy the good moral character requirement subject to
notice and
an opportunity for the person to be heard pursuant to the Kansas
admin-
istrative procedures act.
Sec. 8. K.S.A. 1-302a is hereby
amended to read as follows: 1-302a.
(a) Prior to June 30, 1997, an applicant for admission to
the examination
required in K.S.A. 1-302, and amendments thereto, must
submit evidence
satisfactory to the board of accountancy of at least one of
the following:
(1) A baccalaureate, master's or
higher academic degree from a col-
lege or university recognized by the board or completion of
coursework
which consists of at least 124 semester hours and which is
the equivalent
of a baccalaureate degree as attested to by a college or
university recog-
nized by the board and, in either case, with a
concentration in accounting;
or
(2) A baccalaureate, master's or
higher academic degree from a col-
lege or university recognized by the board, without regard
to course of
study completed, and evidence that the applicant has
completed two years
of practical public accounting experience.
(a) The education requirement
prescribed by K.S.A. 1-302, and
amendments thereto, is satisfied by successful completion of
course work
consisting of at least 150 semester hours, with a concentration
in account-
ing, at a college or university recognized by the board and the
applicant
is the holder of a baccalaureate or higher academic
degree.
(b) On and after June 30, 1997, an
applicant for admission to take
the initial examination in this state as required in K.S.A.
1-302, and
amendments thereto, must submit evidence satisfactory to the board
of
accountancy that the applicant has successfully completed
coursework
consisting of at least 150 semester hours, with a concentration in
account-
ing, at a college or university recognized by the board and that
the ap-
plicant is the holder of a baccalaureate or higher academic
degree.
(c) The board of accountancy may define
by rules and regulations the
term ``concentration in accounting,'' as the same is to be applied
each
place such term occurs in this section and K.S.A. 1-302b, and
amend-
ments thereto.
(d) The board, by rules and regulations,
may provide for admittance
to an the examination in this state
of persons who will have met the
education requirements, as provided in this section, within 90 days
after
the examination to which admitted, but no report on the examination
of
any such person shall be made unless such person shall have met
the
education requirements as provided in this section.
Sec. 9. K.S.A. 1999 Supp. 1-302b is
hereby amended to read as fol-
lows: 1-302b. (a) No applicant who holds a Kansas certificate
issued by
the board shall receive a permit to practice in this state as a
certified
public accountant until the applicant submits evidence satisfactory
to the
board of having completed one year of accounting experience
obtained
under the direct supervision of a certified public
accountant holding a
valid permit to practice. This experience shall
include providing any type
of service or advice involving the use of attest or nonattest
skills all of
which was verified by a certified public accountant holding an
active
license to practice, meeting requirements prescribed by the
board by rule.
This experience would be acceptable if it was gained through
employment
in government, industry, academia or public practice.
(b) Before the certified public
accountant undertakes to perform and
sign any audit, review or the examination of a projection
or forecast, such
accountant must submit evidence satisfactory to the board
of having a
total of two years' accounting experience. The two years'
experience re-
quired by this section must include: (1) One year of
practical public ac-
counting experience which shall include at least 1,000
hours of extensive
participation in the examination of financial statements in
accordance
with generally accepted auditing standards for third party
reliance and
which shall be acquired under the direct supervision of a
person who
holds a permit to practice as a certified public accountant
in Kansas or in
another state and who is practicing as a sole proprietor or
with a part-
nership, including a limited liability partnership, or
professional corpo-
ration or association, limited liability company or general
corporation
which is comprised of practicing certified public
accountants; or (2) (A)
one year of accounting experience satisfactory to the board
obtained un-
der the direct supervision of a certified public accountant
holding a valid
permit to practice, and (B) prior to their issuance, a
review by a qualified
permit holder, of the first 1,000 hours of audits, reviews
and examination
of projections or forecasts performed and signed by the
certified public
accountant. Prior to commencing an engagement covered by
this subsec-
tion, the permit holder shall notify the board in writing
of the name of
the client, type of report to be issued and the name of the
qualified permit
holder who will perform the preissuance review.
Any individual permit
holder who is responsible for supervising attest services and
signs or au-
thorizes someone to sign the accountant's report on any audit,
review,
compilation or the examination of prospective financial
information on
behalf of the firm, shall meet the experience or competency
requirements,
as adopted by the board through rules and regulations.
(c) The accounting experience
required under this act shall be de-
fined by rules and regulations of the board of
accountancy. Any individual
permit holder who signs or authorizes someone to sign the
accountant's
report on any audit, review, compilation or the examination of
prospective
financial information on behalf of the firm, shall meet the
experience or
competency requirement of subsection (b).
(d) As an alternative to the
requirements of subsection (a), an indi-
vidual with an active license issued by another state who
establishes such
individual's principal place of business in this state shall
request the is-
suance of both a certificate and a permit to practice from the
board prior
to establishing such principal place of business. The board may
issue both
a certificate and permit to such individual who obtains from the
NASBA
national qualification appraisal service verification that such
individual's
C.P.A. qualifications are substantially equivalent to the C.P.A.
licensure
requirements of the uniform accountancy act. An application
under this
section may be made through the NASBA qualifications appraisal
service
or similar organization approved by the board. Any individual
meeting
the requirements set forth in this subsection who is denied a
certificate
and a permit to practice shall have the opportunity to be heard
pursuant
to the Kansas administrative procedures act.
Sec. 10. K.S.A. 1999 Supp. 1-307 is
hereby amended to read as fol-
lows: 1-307. (a) The board, in its discretion, may waive the
examination
of and may issue a Kansas certificate to a holder
of a certificate as ``cer-
tified public accountant'' issued under the laws of any state upon
a show-
ing that:
(1) The applicant passed the examination
required for issuance of the
applicant's certificate with grades that would have been passing
grades at
the time in this state; and
(2) the applicant (A) meets all current
requirements in this state for
the issuance of a certificate at the time application is made,
or (B) at the
time of the issuance of the applicant's certificate in the other
state, met
all such requirements then applicable in this state or, (C)
had five four
years' experience outside this state in the practice of
public accountancy
of the type described in subsection (a) of K.S.A. 1-302b, and
amendments
thereto, after passing the examination upon which the
applicant's certif-
icate was based and within the 10 years immediately preceding the
ap-
plication.
(b) The board shall issue a certificate
to a holder of a foreign desig-
nation, granted in a foreign country entitling the holder thereof
to engage
in the practice of certified public accountancy, provided
that:
(1) The foreign authority which granted
the designation makes sim-
ilar provision to allow a person who holds a valid certificate
issued by this
state to obtain such foreign authority's comparable
designation;
(2) the foreign designation: (A) Was duly
issued by a foreign authority
that regulates the practice of certified public accountancy
and the foreign
designation has not expired or been revoked or suspended; (B)
entitles
the holder to issue reports upon financial statements; and (C) was
issued
upon the basis of educational, examination and experience
requirements
established by the foreign authority or by law;
(3) the applicant: (A) Received the
designation, based on educational
and examination standards substantially equivalent to those in
effect in
this state at the time the foreign designation was granted; (B)
completed
an experience requirement, substantially equivalent to the
requirement
set out in K.S.A. 1-302b, and amendments thereto, in the
jurisdiction
which granted the foreign designation; and (C) passed a uniform
quali-
fying examination in national standards and an examination on the
laws,
regulations and code of ethical conduct in effect in this state
acceptable
to the board; and
(4) the applicant shall in the
application list all jurisdictions, foreign
and domestic, in which the applicant has applied for or holds a
designation
to practice public accountancy.
Each holder of a certificate issued under this
subsection shall notify
the board in writing, within 30 days after its occurrence, of any
issuance,
denial, revocation or suspension of a designation or commencement
of a
disciplinary or enforcement action by any jurisdiction. The board
has the
sole authority to interpret the application of the provisions of
this sub-
section.
Sec. 11. K.S.A. 1999 Supp. 1-308 is
hereby amended to read as fol-
lows: 1-308. (a) A partnership, including a limited
liability partnership,
may engage in practice in this state as certified public
accountants, if it
registers annually with the board and
Notwithstanding any other provi-
sion of Kansas law, any individual who operates as a sole
practitioner and
who issues reports subject to peer review, any general
partnership, limited
liability partnership, general corporation, professional
corporation or lim-
ited liability company, hereafter referred to as a ``firm'' may
be organized
for the practice of certified public accountancy and may engage
in the
practice in this state if it registers annually with the board,
it complies
with requirements established by rules and regulations adopted
by the
board for such registration, and it meets the following
requirements:
(1) At least one general partner,
shareholder or member thereof must
be a certified public accountant of this state holding a valid
permit to
practice;
(2) each partner, shareholder or
member who is a certified public
accountant thereof personally engaged within this state in a
practice of
certified public accounting as a member
thereof must be a certified public
accountant of this state holding a valid permit to practice;
(3) each partner, shareholder or
member who is a certified public
accountant thereof must be a certified public accountant in
some state in
good standing; and
(4) each resident manager in charge of an
office of the firm in this
state must be a certified public accountant of this state holding a
valid
permit to practice.; and
(5) at least a simple majority of the
ownership of the firm, in the terms
of equity capital and voting rights of all partners,
shareholders and/or
members, belongs to the holders of valid licenses to practice as
certified
public accountants in some state. All nonlicensee owners must be
of good
moral character and must be natural persons actively
participating in the
business of the firm or entities, such as partnerships,
corporations or other
business associations, that are affiliated with the firm,
provided that each
ultimate beneficial owner of an equity interest in such an
affiliated entity
shall be a natural person actively participating in the business
of the firm
or affiliated entity. Although firms may include nonlicensee
owners, the
firm and its ownership must comply with rules and regulations
promul-
gated by the board. Any firm which is denied registration
pursuant to
this section shall be entitled to notice and an opportunity to
be heard
pursuant to the Kansas administrative procedures act.
(b) Nothing in this section shall
prohibit a professional corporation
from practicing in partnership with one or more corporations or
individ-
uals and being registered with the board as a partnership under
this sec-
tion if:
(1) The professional corporation
is duly organized under the profes-
sional corporation law of Kansas and remains in good
standing thereun-
der;
(2) all qualified shareholders
hold valid permits to practice as certified
public accountants and, if engaged in the practice within
this state, hold
a valid permit to practice issued by the
board;
(3) each resident manager in
charge of an office of the partnership
in this state is a certified public accountant of this
state holding a valid
permit to practice issued by the board;
and
(4) each individual practicing in
partnership with the professional cor-
poration is a certified public accountant holding a valid
permit to practice
and, if engaged in the practice within this state, holds a
valid permit to
practice issued by the board.
(c) The term ``resident'' as used in this
section, shall include a person
engaged in practice as a certified public accountant in this state,
who
spends all or the greater part of such person's time during
business hours
in this state, but who resides in another state.
(d) Application for registration
under this section shall be made upon
the affidavit of a general partner of the partnership. If
the general partner
making application is a professional corporation, the
affidavit submitted
on its behalf shall be executed by the president or
secretary of such cor-
poration. The board shall in each case determine whether
the applicant
is eligible for registration. No The firm shall
designate a permit holder of
this state who is responsible for the proper registration of the
firm and
shall identify that individual to the board by affidavit of a
general partner,
manager or officer of the firm. A fee shall
may be charged for the regis-
tration of a partnership firm.
(e) A partnership
firm which is so registered in accordance with this
section may use the words ``certified public accountants'' or the
abbre-
viation ``C.P.A.'' in connection with its
partnership name. Notification
shall be given the board, within one month, after the admission or
with-
drawal of a partner, shareholder or member from any
partnership firm so
registered. Firms which fall out of compliance with the
provisions of this
section due to changes in firm ownership or personnel shall take
corrective
action to bring the firm back into compliance as quickly as
possible. The
board may grant a reasonable period of time for a firm to take
such
corrective action. Failure to bring the firm back into
compliance within
a reasonable period as determined by the board will result in
the suspen-
sion or revocation of the firm permit. A firm that does not do
business in
Kansas shall register with the board prior to the date the firm
opens a
Kansas office.
(f) A professional corporation,
limited liability company or general
corporation which was organized for the practice of
certified public ac-
countancy and which maintains an office in this state, may
engage in the
practice in this state if it registers annually with the
board and if it is in
compliance with requirements established by rules and
regulations
adopted by the board for such registration, which
requirements shall be
similar to the requirements prescribed by this section for
the registration
of partnerships. A professional corporation, limited
liability company or
general corporation which is so registered may use the
words ``certified
public accountants'' or the abbreviation ``C.P.A.'' in
connection with its
name. No fee shall be charged for the registration of these
firms.
(g) For the purposes of chapter 1
of the Kansas Statutes Annotated,
``registered firm'' means any entity registered in
accordance with K.S.A.
1-308 and amendments thereto.
Sec. 12. K.S.A. 1999 Supp. 1-310 is
hereby amended to read as fol-
lows: 1-310. (a) Permits to engage in the practice
as a of certified public
accountant accountancy in this state shall
be issued by the board to per-
sons who are holders of Kansas certificates issued under
the laws of this
state and who have met the requirements under
K.S.A. 1-302b, and
amendments thereto.
(b) Commencing on July 1, 1981,
each holder of a Kansas certificate
Each holder of a Kansas certificate, which is numbered with
an odd num-
ber, who is qualified under K.S.A. 1-302b, and amendments thereto,
shall
have their a permit to practice issued or
renewed for a period on a bi-
ennial basis which shall expire on July 1, 1983.
Commencing on July 1,
1983, in order to issue or renew permits to practice for
such holders on
a biennial basis, each such permit shall be issued or
renewed for a period
ending on the next July 1 which occurs after the
date the permit was
issued or renewed and which occurs in an odd-numbered year.
(c) Commencing on July 1, 1981,
each Each holder of a Kansas cer-
tificate, which is numbered with an even number, who is qualified
under
K.S.A. 1-302b, and amendments thereto, shall have
their a permit to
practice issued or renewed for a period on a
biennial basis which shall
expire on July 1, 1982. Commencing on July 1, 1982, in
order to issue or
renew permits to practice for such holders on a biennial
basis, each such
permit shall be issued or renewed for a period ending
on the next July 1
which occurs after the date the permit was issued or renewed and
which
occurs in an even-numbered year.
(d) Failure to renew a permit
before expiration thereof shall not de-
prive any Kansas certificate holder of the right to renew
but in such cases
the holder shall pay the renewal fee prescribed by
paragraph (7) of sub-
section (b) of K.S.A. 1-301, and amendments
thereto A person may renew
a permit within 12 months of its expiration date if such person
submits a
complete and sufficient renewal application together with the
fee pre-
scribed by K.S.A. 1-301, and amendments thereto.
(e) As a condition for renewal of a
permit to practice, the board may
shall require permit holders to furnish with
their such applicant's renewal
application, evidence of participation in a peer review program
prescribed
by unless waived pursuant to K.S.A. 1-501,
and amendments thereto, and
participation in continuing education in accounting, auditing, or
related
areas of at least 80 hours during the two-year period for renewal
unless
the board waives all or a portion of the continuing education
require-
ments. The board may adopt rules and regulations regarding
peer review
and continuing education including the number of continuing
education
hours required for each year of the two-year period and the type of
con-
tinuing education.
(f) The board may exempt from the
continuing education require-
ments an individual who holds a permit from another state if:
(1) The permit holder has a principal
place of business located out-
side the state of Kansas;
(2) the permit holder verifies to the
board's satisfaction that such
person has met the continuing education requirements of the state
in
which the principal place of business is located;
(3) the board considers the continuing
education requirements of the
state in which the principal place of business is located to be
substantially
equivalent to those of Kansas; and
(4) the state in which the principal
place of business is located extends
the same exemption to Kansas permit holders who practice in that
state.
(g) Persons who are holders of
permits to practice issued by the board
under subsection (b) of K.S.A. 1-302b, prior to its
amendment by this act,
shall be considered to have satisfied the experience
requirement imposed
by such subsection and shall have the right to have such
permits renewed
without meeting the experience requirement. A
person who fails to renew
a permit within 12 months after its expiration may apply for
reinstatement
by making application on a form provided by the board,
submitting a
reinstatement fee as prescribed by K.S.A. 1-301 and amendments
thereto,
and submitting proof that such person has obtained 40 hours of
qualifying
continuing education within the preceding 12 months prior to
applying
for reinstatement.
Sec. 13. K.S.A. 1999 Supp. 1-311 is
hereby amended to read as fol-
lows: 1-311. (a) The board may deny an application for a Kansas
certifi-
cate, revoke or suspend any certificate issued under the
laws of this state
including a Kansas certificate, or any registration granted under
K.S.A.
1-308, and amendments thereto, or may revoke, suspend or refuse
to
renew any permit issued under K.S.A. 1-310 and amendments
thereto,
and any notification issued pursuant to section 2 and amendments
thereto,
may censure the holder of any such permit, certificate,
notification or
registration, limit the scope of practice of any permit
holder, and may
impose an administrative fine not exceeding $1,000
$2,000, for any one
or any combination of the following causes:
(1) Fraud or deceit in obtaining
a Kansas certificate, in obtaining
registration with the board under any law of this state, or
in obtaining a
permit to practice as a certified public accountant, or
renewal thereof,
under K.S.A. 1-310 and amendments thereto;
(2) dishonesty, fraud or gross
negligence in practice as a public ac-
countant;
(3) violation of any of the
provisions of subpart (2)(B) of subsection
(b) of K.S.A. 1-302b or 1-316 and amendments
thereto;
(4) willful violation of a rule
of professional conduct promulgated by
the board under the authority granted by K.S.A. 1-202, and
amendments
thereto;
(5) conviction of a felony under
the laws of any state or of the United
States;
(6) conviction of any crime, an
essential element of which is dishon-
esty or fraud, under the laws of any state or of the United
States;
(7) cancellation, revocation,
suspension or refusal to renew the au-
thority to practice as a certified public accountant or a
public accountant
in any state or foreign country; or
(8) failure to comply with the
quality review program required by
K.S.A. 1-310, and amendments thereto.
(1) Fraud or deceit in obtaining a
certificate, permit, registration or
notification;
(2) cancellation, revocation,
suspension or refusal to renew a person's
authority to practice for disciplinary reasons in any other
jurisdiction for
any cause;
(3) failure, on the part of a holder
of a permit to practice or notifi-
cation and a registered firm to maintain compliance with the
requirements
for issuance or renewal of such permit, notification or
registration;
(4) revocation or suspension of the
right to practice before any state
or federal agency;
(5) dishonesty, fraud or gross
negligence in the practice of certified
public accountancy or in the filing or failure to file the
certificate holder's
own income tax returns;
(6) violation of any provision of this
act or rule and regulation of the
board except for a violation of a rule of professional
conduct;
(7) willful violation of a rule of
professional conduct;
(8) violation of any order of the
board;
(9) conviction of any felony, or of
any crime an element of which is
dishonesty or fraud, under the laws of the United States, of
Kansas or of
any other state, if the acts involved would have constituted a
crime under
the laws of Kansas;
(10) performance of any fraudulent act
while holding a Kansas cer-
tificate;
(11) making any false or misleading
statement or verification, in sup-
port of an application for a certificate, permit, notification
or registration
filed by another; or
(12) any conduct reflecting adversely
on a permit holder's fitness to
practice certified public accountancy.
(b) In lieu of or in addition to any
remedy specifically provided in
subsection (a), the board may require of a permit holder
satisfactory com-
pletion of such continuing education programs as the board may
specify.
(b) (c) All
administrative proceedings pursuant to this section shall
be conducted in accordance with the provisions of the Kansas
adminis-
trative procedure act and the act for judicial review and civil
enforcement
of agency actions.
Sec. 14. K.S.A. 1999 Supp. 1-316 is
hereby amended to read as fol-
lows: 1-316. (a) It is unlawful for any person, except the
holder of a valid
permit issued under K.S.A. 1-310, and amendments thereto,
or any firm,
unless it is registered under the provisions of K.S.A.
1-308, and amend-
ments thereto, to affix or cause to be affixed the
signature of any such
person or firm to any accounting or financial statement,
opinion, report
or certificate to any accounting or financial statement
with any word in-
dicating that such person or firm, or its members, officers
or employees,
are certified public accountants to practice
certified public accountancy
unless the person holds a valid permit to practice issued by the
board
pursuant to K.S.A. 1-310 and amendments thereto.
(b) It is unlawful for any firm to
practice certified public accountancy
as a certified public accounting firm or C.P.A. firm unless the
firm is
registered with the board pursuant to K.S.A. 1-308 and
amendments
thereto.
(b) (c) It is
unlawful for any person, except the holder of a valid
Kansas certificate, to use or assume the title ``certified public
accountant''
or to use the abbreviation ``C.P.A.'' or any other title,
designation, words,
letters, abbreviation, sign, card or device likely to be confused
with ``cer-
tified public accountant.'' The use of the term ``public
accountant'' without
the word ``certified'' shall not be interpreted as implying that
one is a
certified public accountant.
(c) (d) Except as
provided by this subsection, no person holding a
permit or firm holding a registration under this act shall use a
professional
or firm name or designation that is misleading as to: (1) The legal
form
of the firm; (2) the persons who are partners, officers, members,
man-
agers or shareholders of the firm; or (3) any other matter. The
names of
one or more former partners, members or shareholders may be
included
in the name of a firm or its successor unless the firm becomes a
sole
proprietorship because of the death or withdrawal of all other
partners,
officers, members or shareholders. The use of a fictitious
name by a firm
is permissible if the fictitious name is registered with the board
and is not
otherwise misleading. The name of a firm may not include the name
of
an individual who is neither a present nor a past partner, member
or
shareholder of the firm or its predecessor. The name of the firm
may not
include the name of an individual who is not a certified public
accountant.
(e) It is unlawful for any person,
except the holder of a permit to
practice to issue a report on financial statements that
references the Amer-
ican institute of certified public accountants. The practice of
public ac-
countancy by persons not required to hold a Kansas permit to
practice,
including public accountants, is not prohibited or regulated by
the pro-
visions of this act, except for the provisions of this section,
K.S.A. 1-308
and amendments thereto, K.S.A. 1-318 and amendments thereto
and
K.S.A. 1-319, and amendments thereto. The title ``enrolled
agent'' may
only be used by individuals so designated by the federal
internal revenue
service.
(d) (f) Any
person who violates any provision of this section shall be
guilty of a misdemeanor, and upon conviction thereof, shall be
subject to
a fine of not more than $500 $1,000, or to
imprisonment for not more
than one year, or by both such fine and imprisonment.
Sec. 15. K.S.A. 1999 Supp. 1-319 is
hereby amended to read as fol-
lows: 1-319. (a) The display or uttering by a person of a
card, or other
printed, engraved, or written instrument or device,
bearing in any media
form or public communication a person's name in conjunction
with the
words ``certified public accountant'' or any abbreviation thereof
shall be
prima facie evidence in any action for an injunction brought under
K.S.A.
1-318, and amendments thereto, that the person whose name is so
dis-
played or uttered caused or procured the display or
uttering of such card,
or other printed, engraved, or written instrument or
device, utterance
and that such person is holding such person out to be the holder of
a
Kansas certificate issued pursuant to K.S.A. 1-302 and amendment
thereto
or the holder of a permit to practice issued under K.S.A. 1-310
and
amendments thereto.
(b) In any action under K.S.A. 1-318, and
amendments thereto, evi-
dence of the commission of a single act prohibited by this act or
the act
of which this section is amendatory shall be sufficient to justify
an in-
junction without evidence of a general course of conduct.
Sec. 16. K.S.A. 1-201, 1-204, 1-302a and 1-317 and
K.S.A. 1999
Supp. 1-202, 1-301, 1-302, 1-302b, 1-307, 1-308, 1-310, 1-311,
1-316 and
1-319 are hereby repealed.
Sec. 17. This act shall take effect and be in
force from and after its
publication in the statute book.
Approved April 7, 2000.
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