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| Montana Administrative Register Notice 24-201-49 | No. 2 01/22/2016 | |
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BEFORE THE BOARD OF PUBLIC ACCOUNTANTS DEPARTMENT OF LABOR AND INDUSTRY STATE OF MONTANA
TO: All Concerned Persons
1. On February 23, 2016, at 9:00 a.m., a public hearing will be held in the Large Conference Room, 301 South Park Avenue, 4th Floor, Helena, Montana, to consider the proposed amendment, adoption, and repeal of the above-stated rules.
2. The Department of Labor and Industry (department) will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Board of Public Accountants (board) no later than 5:00 p.m., on February 12, 2016, to advise us of the nature of the accommodation that you need. Please contact Grace Berger, Board of Public Accountants, 301 South Park Avenue, P.O. Box 200513, Helena, Montana 59620-0513; telephone (406) 841-2244; Montana Relay 1 (800) 253-4091; TDD (406) 444-2978; facsimile (406) 841-2305; or [email protected] (board's e-mail).
3. GENERAL REASONABLE NECESSITY STATEMENT: The 2015 legislature enacted Chapter 169, Laws of 2015 (House Bill 44), creating a single license type for public accountants and eliminating the issuance of certificates, permits, and licenses for licensed public accountants (LPA). The bill was signed by the Governor on April 2, 2015 and became effective in July and October, 2015. As a result of the legislation, the board is no longer authorized to issue certificate only and LPA levels of licensing. The board is therefore amending certain rules and adopting new rules to further implement provisions of this 2015 legislation, including striking references to "permits" and "certificates" throughout the rules. The board formed a task force to review the rules to implement the provisions of House Bill 44. While reviewing the rules, the task force determined other amendments, additions, and deletions to the rules were appropriate and recommended such rule changes to the board. In the interest of saving money, the board concluded it is reasonably necessary to amend and repeal certain existing rules, and adopt new rules at this time, in addition to those implementing House Bill 44. Where additional specific bases for a proposed action exist, the board will identify those reasons immediately following the rule.
4. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:
24.201.301 DEFINITIONS (1) through (14) remain the same. (15) "MRA" means Mutual Recognition Agreement. (15) through (22) remain the same, but are renumbered (16) through (23). (24) through (34) remain the same.
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: The board is amending this rule to add a definition for a Mutual Recognition Agreement, as used by the board to determine which foreign licensees are qualified to obtain a Montana CPA license in an expedited process, and who may attest to experience for a CPA license applicant. The board currently uses these agreements, but is now clarifying the process with the amendments to this rule and ARM 24.201.529. The board office receives questions on the process for foreign licensees to obtain a Montana license and the board is attempting to seek clarification.
24.201.410 FEE SCHEDULE (1) remains the same. (a) (transfer of grades and licensure) $ (b) (c)
and inactive (f) Renewal fee for retired licensee 25 (i) and (j) remain the same, but are renumbered (g) and (h). (2) and (3) remain the same.
AUTH: 37-1-134, IMP: 37-1-134, 37-1-141, 37-50-204, 37-50-209,
REASON: After assessing the time and cost of evaluating and approving a license applicant by various application methods, the board determined that all applications require the same amount of staff preparation and board scrutiny. The board notes that it is no longer more complicated, and therefore more costly, for transfers of grades or license applications for credentialing and reciprocity applicants. The board is therefore reducing these application fees at (1)(a) and (c) to ensure that fees are maintained to comply with 37-1-134, MCA, by providing the amount of money usually needed for the operation of board services. The board is eliminating certificate only application fees at (1)(d)-(f) to implement HB 44. The board is reducing the active license renewal fee at new (1)(e) to address the board's cash reserves and comply with 37-1-134, MCA, to provide the amount of money usually needed for the operation of board services. The board acknowledges the national discussion about how states are going to address the current wave of retirement age CPAs and the movement to allow some limited, uncompensated activity for retired CPAs. Montana currently has a retired CPA status, but it terminates after two years. The board is now establishing a renewable retired status and fee to allow retired practitioners to identify as CPAs retired beyond the two years currently allowed by statute. The new renewal fee at (1)(f) is a minimal fee and will allow retired licensees to maintain the status as long as renewal fees are paid. The board estimates that the proposed fee changes will affect approximately 2,052 credentialing, reciprocity, and renewal applicants, and decrease annual revenue by approximately $53,225. Authority and implementation citations are being amended to accurately reflect all statutes implemented through the rule and provide the complete sources of the board's rulemaking authority.
24.201.415 USE OF CPA/LPA DESIGNATION (1) An individual whose principal place of business is in Montana, who is not otherwise in the practice of public accounting, but providing financial or consulting services to the public, must have (2) Montana (3) remains the same. (4) A person holding a certificate only does not have an active license and may not hold themselves out to the public as a CPA/LPA or use the CPA/LPA designation.
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-301, 37-50-325, 37-50-335, MCA
REASON: With the elimination of certificate only licenses, the board determined it is reasonably necessary to add (4) and specify that a certificate only level of license does not equal a license to practice public accounting in Montana.
24.201.501 EDUCATION REQUIREMENTS TO SIT FOR EXAM (1) To qualify to sit for the Uniform CPA Exam as a Montana candidate the candidate must have: (a) (i) remains the same. (ii) at least 24 semester hours (36 quarter hours) in nonaccounting, general business courses. Examples of business courses include information systems, business law, finance, economics, marketing, ethics, organizational behavior, quantitative applications in business, and communication skills (b) 120 semester hours of education from a college or university. (a) through (f) remain the same. (5) remains the same, but is renumbered (4). (7) remains the same, but is renumbered (5).
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-302,
REASON: The board is amending the title and content of this rule to add clarity. This rule specifies what the education requirements are to sit for the Uniform CPA Exam, but the caption and content was confusing for exam candidates. This amendment will clearly set forth the current requirements to qualify to sit for the exam and eliminate confusing language that set education requirements for prior exam administrations. Implementation citations are being amended to delete reference to a repealed statute.
24.201.502 ACCOUNTING AND AUDITING EXPERIENCE REQUIREMENTS (1) To be issued (2) remains the same. (a) is attested to by a holder of a permit to practice that was current at the time of attestation, under the supervision or direction of a fully licensed individual from a professional accounting body with a MRA with NASBA and the AICPA, or for military experience evaluated by the board based on information provided by the applicant's commanding officer; and (b) and (c) remain the same.
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
REASON: The board recognizes that CPA applicants may obtain experience under different circumstances. The board recognizes foreign licensees from jurisdictions with a MRA to obtain a license in Montana, and is amending (2)(a) to enable these foreign licensees to attest to experience for a license applicant to qualify for a CPA license. The board has recently had a number of foreign applicants express difficulty in getting attestation on experience from a U.S. CPA.
24.201.503 APPLICANT (a) and (b) remain the same. (c) meet the education requirements of (i) meet the education requirements of ARM 24.201.501; (ii) meet the education waiver requirements of ARM 24.201.528; or (iii) for applicants with exam dates prior to November 1997, meet the following education requirements: (A) An applicant who has examination scores for an examination administered prior to or in May 1996 must have graduated from a college or university accredited at the time of the applicant's graduation with: (I) a baccalaureate degree, with a concentration in accounting, including 24 semester hours (36 quarter hours) of accounting, auditing, and tax courses, and 18 semester hours (27 quarter hours) in other areas of business such as business law, management, marketing, economics, and finance. The other areas of business shall include no more than six semester hours (nine quarter hours) in one area; or (II) a baccalaureate degree, with a concentration other than accounting and five years of employment experience at a public accounting firm, or in industry or government in a responsible financial position; or (III) a baccalaureate degree, with a concentration other than accounting and related courses in other areas of business administration which the board considers to be an equivalent education, including 12 semester hours (18 quarter hours) of accounting, auditing, and tax courses, and nine semester hours (14 quarter hours) in other areas of business such as business law, management, marketing, economics, and finance. The nine semester hours (14 quarter hours) shall include no more than three semester hours (five quarter hours) in one area. (B) An applicant who has examination scores for an examination administered in November 1996 or May 1997 must have graduated from a college or university then accredited to offer a baccalaureate degree subsequent to passing the exam, and completed 24 semester hours (36 quarter hours) of accounting, auditing, and tax courses, and 18 semester hours (27 quarter hours) in other areas of business such as business law, management, marketing, economics, and finance. The 18 semester hours (27 quarter hours) shall include no more than six semester hours (nine quarter hours) in one area. (d) pass the Uniform Certified Public Accountant exam in accordance with ARM 24.201.516 or 24.201.517; (e) pass the comprehensive professional ethics for CPAs course developed by the AICPA (f) meet the experience requirement of ARM 24.201.502; and (g) provide a license verification if currently holding or have ever held a professional license in another state. (2) Applicants for initial license who did not sit for the exam as a Montana candidate must submit official transcripts for all domestic education to CPAES for evaluation in reference to Montana education requirements.
AUTH: 37-1-131, 37-50-201, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-302, 37-50-305, MCA
REASON: The board determined it is reasonably necessary to clearly set forth the requirements for obtaining a Montana CPA license by consolidating all requirements in this single rule. The board is also amending the title, as license applicants found it confusing. All requirements for licensing are currently in rule or statute. These amendments will provide a clear roadmap for applicants to obtain licensure by addressing the varying education requirements in the past and describing those requirements based on examination dates. Authority and implementation citations are being amended to accurately reflect all statutes implemented through the rule and provide the complete sources of the board's rulemaking authority.
24.201.504 MILITARY TRAINING OR EXPERIENCE (1) Pursuant to 37-1-145, MCA, the board shall accept relevant military training, service, or education toward the requirements for licensure (2) remains the same. (3) An applicant must submit satisfactory evidence of receiving military training, service, or education that is equivalent to relevant licensure requirements (a) through (4) remain the same.
AUTH: 37-1-145, MCA IMP: 37-1-145, MCA
24.201.510 CERTIFIED PUBLIC ACCOUNTANT EXAMINATION (1) through (3) remain the same. (4) In addition to all other supporting documents, all foreign (5) through (8) remain the same.
AUTH: 37-1-131, 37-50-204, MCA IMP: 37-1-131, 37-50-204, 37-50-302,
REASON: The board is amending (4) to clarify that foreign education must be evaluated. Use of the term "credentials" is confusing because foreign licensees have various designations, which do not count toward meeting the education requirements. Many foreign applicants try to have designation credentials evaluated to meet this requirement and the board is now clarifying that this is not allowed. Implementation citations are being amended to delete reference to a repealed statute.
24.201.517 ACCEPTANCE OF EXAMINATION CREDITS (1) An applicant who has never held a
AUTH: 37-1-131, 37-50-203, IMP: 37-50-302,
REASON: Authority and implementation citations are being amended to provide the complete sources of the board's rulemaking authority and delete reference to a repealed statute.
24.201.528 OUT-OF-STATE (2) The board may waive the education requirements and issue a (a) passed the examination required for issuance of the (b) had four (c) maintained a (d) and (e) remain the same. (3) Incomplete applications for licensure
AUTH: 37-50-203, IMP: 37-1-304,
REASON: The board is amending this rule to implement HB 44 and clarify who is eligible to apply for a Montana license by out of state application. The board requires out of state applicants to hold active licenses in their original jurisdiction. The term "unencumbered" was not clear to out of state applicants, so the board is amending (1) to clarify that the out of state licenses must not have any restrictions in place due to disciplinary or administrative actions. It is reasonably necessary to add the reference to ARM 24.201.503 to clarify that an applicant who holds a license in another state must meet the experience requirement. Although currently in place, the board notes that this requirement has been confusing for out of state applicants to determine. Authority and implementation citations are being amended to provide the complete sources of the board's rulemaking authority, accurately reflect all statutes implemented through the rule, and delete references to repealed statutes.
24.201.529 FOREIGN (a) remains the same. (b) provide evidence that the foreign (c) and (d) remain the same. (e) provide evidence of having met an equivalent experience requirement obtained under the supervision or direction of a chartered accountant, Instituto Mexicano de Contradores Publicos, Hong Kong Institute of Certified Public Accountants, or certified public accountant (f) meet the continuing professional education requirements established under
AUTH: 37-1-131, 37-50-203, MCA IMP:
REASON: The board is amending (1)(f) to reflect the amendment of 37-1-306, MCA, and reference the continuing education requirements in rule. Implementation citations are being amended to accurately reflect all statutes implemented through the rule and delete references to repealed statutes.
24.201.535 INACTIVE TO ACTIVE (1) A (2) A (3) An inactive (4) An inactive (5) Montana
AUTH: 37-1-319, 37-50-203, MCA
REASON: The board is amending (2) to clarify that inactive licensees cannot represent themselves to the public as holding a CPA license. This limitation is currently in force, but the board is amending the rule in response to many inquiries from inactive licensees.
24.201.537 RETIRED STATUS (1) A (2) An individual on retired status may apply for their (3) Montana
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-1-141, 37-50-101, 37-50-325, MCA
REASON: The board acknowledges the national discussion about how states are going to address the current wave of retirement age CPAs and the movement to allow some limited, uncompensated activity for retired CPAs. Montana currently has a retired CPA status, but it terminates after two years. The board is now amending (1) to establish a renewable retired status and allow retired practitioners to identify as CPAs retired beyond the two years currently allowed by statute. The board is also setting a nominal renewal fee in ARM 24.201.410 for this extended status. Currently, there is no road map in rule to restore a retired license to active status. The board is amending (2) to clearly set forth the requirements to restore a retired license to active status.
24.201.704 INDEPENDENCE (1) Independence, where required by professional standards, is essential to establishing and maintaining the public's faith and confidence in, and reliance on, the information reported on by the (a) Independence in fact is the state of mind that permits a (b) Independence in appearance is the avoidance of circumstances that would cause a reasonable and informed third-party, having knowledge of all relevant information, to reasonably conclude that the integrity, objectivity, or professional skepticism of the
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.705 INTEGRITY AND OBJECTIVITY (1) Integrity is a character trait demonstrated by acting honestly, candidly, and not knowingly misrepresenting facts, accommodating deceit, or subordinating ethical principles. Acting with integrity is essential to maintaining credibility and public trust. It incorporates both the spirit and substance in the application of the ethical and technical standards that govern the profession, or in the absence thereof, what is just and right. A (2) Objectivity is a distinguishing feature of the accounting profession and is critical to maintaining the public's trust and confidence. It is a state of mind that imposes the obligation to be impartial and free of bias that may result from conflicts of interest or subordination of judgment. Objectivity requires a
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.706 COMPETENCE (1) A firm, (a) a firm, (b) a firm, (c) a firm,
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.707 DISCREDITABLE ACTS (1) A firm, (a) (b) has a final determination made by a court or administrative agency of competent jurisdiction and is no longer subject to appeal, that a violation of any antidiscrimination laws of the U.S., a state or municipality, including those related to sexual and other forms of harassment; (c) solicits or knowingly discloses the Uniform CPA Examination questions or answers without AICPA's written authorization; (d) fails to comply with applicable federal, state, or local laws or regulations regarding the timely filing of a personal tax return or tax return of the firm that the licensee has the authority to timely file; (e) fails to timely remit all payroll and other taxes collected on behalf of others; (f) makes, or permits or directs another to make materially false and misleading entries in financial statements or records; (g) fails to correct an entity's financial statements that are materially false and misleading when the licensee has the authority to record an entry; (h) signs, or permits or directs another to sign a document containing false and misleading information; (i) departs from acceptable standards, unless disclosure in the financial statement or report, as applicable, that such standards were not followed and the applicable reasons; (j) enters into or directs or knowingly permits another to enter into a contract for performance of attest services that are subject to the requirements of regulatory entities that includes indemnification or limitation of liability provisions that would cause the regulated entity to be in violation of such requirements or disqualify a licensee from providing such services to the regulated entity; (k) whose employment relationship is terminated, retains originals or copies from the firm's clients, or proprietary information, without the firm's permission, unless a contractual arrangement with the firm allows such action; or (l) discloses confidential information obtained from a prospective client or nonclient without consent.
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
REASON: The board determined it is reasonably necessary to amend the list of discreditable acts to more closely reflect the Uniform Accountancy Act (UAA) and the AICPA Code of Conduct. Discreditable acts are those that a licensee might perform as a professional that would dishonor the profession. This more complete list informs licensees of what the board has determined to be unacceptable, discreditable acts. The board is relocating (1)(b) to ARM 24.201.2410 as a more appropriate location.
24.201.708 DUE PROFESSIONAL CARE (1) Due care imposes upon the
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.709 COMMISSIONS (1) A firm, (2) A firm, (3) Any firm, (4) remains the same.
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.710 CONTINGENT FEES (1) A firm, (2) A firm, (3) A firm,
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.718 APPLICABLE STANDARDS (1) A (2) The board incorporates by reference the following standards, as they exist as of July 1, (a) through (3) remain the same.
AUTH: 37-50-203, MCA IMP: 2-4-307, 37-50-203, 37-50-325, MCA
REASON: The board determined it is reasonably necessary to update to the current versions of the standards that the board has adopted and incorporated by reference. Amending the standards date will require licensees to comply with the current version of the standards. This will eliminate the need for Montana licensees to follow antiquated standards and risk violating professional standards in other jurisdictions
24.201.720 CONFIDENTIALITY (1) A (a) This rule must not be construed to prohibit a (2) Members of the board and professional practice reviewers shall not disclose any confidential client information which comes to their attention from firms,
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.723 RECORDS (1) A firm, (a) remains the same. (b) a copy of any report or other document issued by the firm, (c) any accounting or other records which the firm, (d) a copy of the firm's, (2) remains the same. (3) Retention by a firm, (4) A firm's,
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.726 ADVERTISING (1) A firm, (a) through (e) remain the same. (f) states or implies that the firm, (g) through (i) remain the same.
AUTH: 37-1-131, 37-50-203, MCA IMP: 37-1-131, 37-50-203, 37-50-325, MCA
24.201.1103 PEER REVIEW ENROLLMENT (1) (a) and (b) remain the same. (c) a compilation; (d) any examination, review, or agreed upon procedures engagements to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE) (e) an engagement of a non-issuer performed in accordance with PCAOB standards and is not subject to PCAOB inspection. (2) (a) through (5) remain the same. (6) The
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: Following a comment received in a prior rules project, the board is amending (1) to clarify that even firms performing engagements according to PCAOB standards, and therefore not required to have PCAOB inspection or review, are still subject to mandatory peer review. The board notes that this has been an understood requirement, but was not previously outlined in rule. The board is also amending (2) to clarify that firms must authorize board access to peer review results through a secure web site to allow board monitoring of firm compliance. Although not a new process, the board determined it should be clearly delineated in rule.
24.201.1105 PARTICIPATION IN PEER REVIEW (1) Any firm that is dropped from or terminated by a board-approved peer review program for any reason shall have 21 days to provide written notice to the board of such termination or drop and to request authorization from the board to enroll in another board-approved peer review program. (2) In the event a firm is merged, otherwise combined, dissolved, or separated, the peer review program shall determine which firm is considered to be the succeeding firm. The succeeding firm shall retain its peer review status and the review due date. A separated firm that is not the succeeding firm may not use the peer review results of the original firm. (3) remains the same.
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: The board is amending (2) to address question by firms regarding who retains the results of a firm peer review when some licensees from the reviewed firm leave to form another firm.
24.201.1108 ALTERNATIVES AND EXEMPTIONS (1) Exemption of the Montana peer review requirement will apply to: (a) and (b) remain the same. (2) Alternative programs to the board-approved peer review program of the AICPA, administered by the
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: Because MSCPA is defined in the definition rule, the board determined that it does not need to be spelled out in this rule.
24.201.2101 RENEWALS (1) Renewal licenses (2) All firms must annually register with the board by December 31. Annual registration must include all of the items of a new firm registration found in [NEW RULE I] and the level and type of public accounting services provided since the last firm registration.
AUTH: 37-1-131, 37-50-201, 37-50-203, MCA IMP: 37-1-141, 37-50-203, 37-50-314, MCA
REASON: The board is amending this rule to clearly delineate all renewal requirements found throughout statutes and rules and align with firm registration provisions being established in NEW RULE I.
24.201.2106 BASIC CONTINUING EDUCATION REQUIREMENT (1) (2) (3) Applicants for a permit to practice must meet the basic requirement of CPE by December 31 of the third year following the year of the initial issuance of the Montana permit (example: If an individual received their (4) remains the same.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA
REASON: The board is amending this rule to remove an unnecessary provision from (1)(a) following the transition from a fiscal year to calendar year continuing education requirement. Additionally, the board is updating the example for CPE compliance in (3) with current dates.
24.201.2120 STANDARDS FOR FORMAL CONTINUING EDUCATION PROGRAMS, PROGRAMS WHICH QUALIFY, AND ACCEPTABLE SUBJECT MATTER AND PROGRAMS (1) A program qualifies as acceptable continuing education if it is a formal group or self-study program of learning, which contributes directly to the professional competence of an individual (2) through (2)(n) remain the same. (o) areas other than those listed above may be acceptable if the (3) remains the same.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA IMP: 37-1-306, 37-50-203, 37-50-314, MCA
24.201.2124 STANDARDS FOR CPE REPORTING (1) through (1)(f) remain the same. (g) NASBA National Registry of CPE Sponsors ID (2) through (4) remain the same.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA IMP: 37-1-306, 37-50-203, 37-50-314, MCA
REASON: The board is amending this rule and ARM 24.201.2137 because NASBA has combined their two CPE certification programs into one and changed the name.
24.201.2137 CREDIT FOR FORMAL SELF-STUDY PROGRAMS (1) Formal self-study programs shall receive continuing education credit equal to the amount granted by the sponsor, if the sponsor is a NASBA National Registry of CPE Sponsors (a) and (2) remain the same.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA
24.201.2145 REPORTING REQUIREMENTS (1) Reporting of actual courses/credits is not required, unless the individual is selected for a random CPE audit as outlined in ARM 24.201.2148, or the individual must otherwise prove compliance for licensure purposes (i.e.,
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA IMP: 37-1-306, 37-50-203, 37-50-314, MCA
REASON: The provisions of Senate Bill 76 eliminate the requirement to provide CPE when renewing an expired license. The board is amending this list to accurately reflect who must report CPE.
24.201.2148 VERIFICATION (1) (2) Only documentation as outlined in ARM 24.201.2124, in support of the basic CPE requirement, shall be submitted.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA IMP: 37-1-131, 37-1-306, 37-50-203, 37-50-314, MCA
REASON: As an administrative requirement, the board is amending (1) to require all licensees selected for CPE audit to report CPE and provide documentation using the NASBA CPE tracking system. As a result of utilizing the NASBA CPE system, the board is amending this rule to no longer require duplicate submission of CPE documentation.
24.201.2154 EXTENSION OR HARDSHIP EXCEPTION (1) remains the same. (a) To request an extension or exception, an individual must submit the appropriate form and fees prior to the CPE requirement deadline of December 31. The board will grant a hardship exception on a case-by-case basis.
AUTH: 37-1-319, 37-50-201, 37-50-203, MCA IMP: 37-1-306, 37-50-203, 37-50-314, MCA
REASON: Currently, licensees seeking an extension or exception to the CPE requirement must file the request prior to the CPE deadline. The board is amending this rule to further clarify the mandatory timeframe for the board to consider such a request.
24.201.2402 EXERCISE OF PRACTICE PRIVILEGE IN OTHER JURISDICTIONS (1) Any
AUTH: 37-50-201, 37-50-203, MCA IMP:
REASON: Implementation citations are being amended to accurately reflect the statutes implemented through the rule.
24.201.2410 ENFORCEMENT AGAINST (a) through (c) remain the same. (d) performance of any fraudulent act while holding a (e) failure of a Montana (f) remains the same. (g) receiving a "fail" peer review report, or second or subsequent "pass with deficiency" peer review report; (h) failure of a firm to comply with conditions imposed by the peer review program as a result of a "pass with deficiencies" or "failed" peer review classification; (i) failure of a firm, licensee, or practice privilege holder to comply with professional conduct rules established in ARM Title 24, chapter 201, subchapter 7; (g) and (h) remain the same, but are renumbered (j) and (k).
AUTH: 37-1-131, 37-1-136, 37-1-319, 37-50-203, MCA IMP: 37-1-136, 37-1-316, 37-1-319, 37-50-325, MCA
REASON: The board is consolidating actions from other rules that could result in disciplinary action by the board against a licensee, including inadequate work discovered through peer review or failure to comply with professional conduct. 5. The proposed new rules provide as follows:
NEW RULE I FIRMS - REGISTRATION (1) New firms, firms that have a name change, or firms that are merged or otherwise combined or separated must immediately file a new firm registration application with the board. (2) New firm registrations must include: (a) a completed firm registration application; (b) a list of all satellite offices in this state; (c) the designated accountant who is responsible for the proper registration of the firm; (d) an attestation that the firm meets the firm ownership requirements of 37-50-330, MCA; and (e) an attestation that all persons with an ownership interest in the firm are actively participating in the business of the firm.
AUTH: 37-50-203, MCA IMP: 37-50-335, MCA
REASON: The board determined it is reasonably necessary to adopt NEW RULE I and consolidate all requirements for firm registration into one location. While all are current requirements, they must be sought throughout board statute and rules.
NEW RULE II APPROVED PEER REVIEW SPONSORING ORGANIZATIONS, PROGRAMS, AND PEER REVIEW STANDARDS (1) The board shall approve peer review sponsoring organizations, programs, and standards. (2) The board adopts the AICPA, the MSCPA, and other peer review programs administered by entities fully involved in the administration of the AICPA peer review programs, as approved sponsoring organizations, without further requirements. (3) Any board-approved peer review program and any peer reviewer performing a peer review under this subchapter shall utilize the AICPA Standards for Performing and Reporting on Peer Reviews or equivalent as determined by the board. (4) A sponsoring organization, other than those who administer the AICPA peer review program, must provide evidence that the overall program and standards, including procedures, guidelines, oversight process, training materials, and related documents are equivalent to those of the AICPA Peer Review Program. (5) For firms required to be registered with and inspected by the PCAOB, the board approves the PCAOB's inspection process for reviewing practices subject to its authority, and those firm's practice areas that are subject to PCAOB's inspection process are not included in the scope of the board's peer review programs. Firms receiving inspections under the PCAOB are also required to meet the peer review requirements of the board that covers the portion of the firm's practice not subject to the PCAOB inspection process if the firm performs those services.
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: The board received several suggestions during the last rule review for a mechanism allowing board approval of peer review programs that do not administer the AICPA peer review program. The board is adopting NEW RULE II to outline the requirements and benchmarks that a non-AICPA-administered peer review program must meet to be considered for board approval.
6. The rules proposed to be repealed are as follows:
24.201.412 FEE ABATEMENT found at ARM page 24-22537
AUTH: 37-1-131, 37-17-202, MCA IMP: 17-2-302, 17-2-303, 37-1-134, MCA
REASON: House Bill 560 moved the board from a state special revenue fund to a statutorily appropriated fund. As a result, the board is no longer appropriated on an annual basis and this rule adopting the department fee abatement rule is no longer necessary.
24.201.701 DEFINITIONS found at ARM page 24-22605
AUTH: 37-50-203, MCA IMP: 37-50-203, MCA
REASON: The board combined all definitions into ARM 24.201.301 during the last rule project. This rule was inadvertently omitted from the consolidation and is being repealed as it contains definitions already included in the combined rule.
24.201.2114 OUT-OF-STATE APPLICANTS SEEKING A MONTANA PERMIT TO PRACTICE - CONTINUING EDUCATION REQUIREMENT found at ARM page 24-22875
AUTH: 37-50-201, 37-50-203, MCA
REASON: The board is repealing this rule as it is confusing to applicants and unnecessary. All CPE requirements are contained in other board rules.
7. Concerned persons may present their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to the Board of Public Accountants, 301 South Park Avenue, P.O. Box 200513, Helena, Montana 59620-0513, by facsimile to (406) 841-2305, or e-mail to [email protected], and must be received no later than 5:00 p.m., February 23, 2016.
8. An electronic copy of this notice of public hearing is available at www.publicaccountant.mt.gov (department and board's web site). The department strives to make the electronic copy of this notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems, and that technical difficulties in accessing or posting to the e-mail address do not excuse late submission of comments.
9. The board maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this board. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding all board administrative rulemaking proceedings or other administrative proceedings. The request must indicate whether e-mail or standard mail is preferred. Such written request may be sent or delivered to the Board of Public Accountants, 301 South Park Avenue, P.O. Box 200513, Helena, Montana 59620-0513; faxed to the office at (406) 841-2305; e-mailed to [email protected]; or made by completing a request form at any rules hearing held by the agency.
10. The bill sponsors contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsors were contacted on April 23, 2015, by regular mail, and on June 12, 2015, by electronic mail.
11. With regard to the requirements of 2-4-111, MCA, the board has determined that the amendment of ARM 24.201.301, 24.201.415, 24.201.501, 24.201.502, 24.201.503, 24.201.504, 24.201.510, 24.201.517, 24.201.528, 24.201.529, 24.201.535, 24.201.537, 24.201.704, 24.201.705, 24.201.706, 24.201.707, 24.201.708, 24.201.709, 24.201.710, 24.201.718, 24.201.720, 24.201.723, 24.201.726, 24.201.1103, 24.201.1105, 24.201.1108, 24.201.2101, 24.201.2106, 24.201.2120, 24.201.2124, 24.201.2137, 24.201.2145, 24.201.2148, 24.201.2154, 24.201.2402, and 24.201.2410 will not significantly and directly impact small businesses. With regard to the requirements of 2-4-111, MCA, the board has determined that the amendment of ARM 24.201.410 will significantly and directly impact small businesses and prepared a small business impact analysis regarding these amendments. A reduction in active license renewal fees will have a negative fiscal impact on the board but will benefit individual licensees and the approximately 500 registered CPA firms employing those licensees, many of whom pay the annual individual licensee renewal fee for their licensed professional employees and owners. The reduction of renewal fees will affect approximately 2000 active licensees, resulting in a loss of board revenue of $50,000 annually. The decrease in individual renewal fees will result in lower overall fees paid by the registered firms to the board. The alternative was to leave the individual active renewal fee the same. With regard to the requirements of 2-4-111, MCA, the board has determined that the adoption of NEW RULES I and II will not significantly and directly impact small businesses. With regard to the requirements of 2-4-111, MCA, the board has determined that the repeal of ARM 24.201.412, 24.201.701, and 24.201.2114 will not significantly and directly impact small businesses. Documentation of the board's above-stated determinations is available upon request to the Board of Public Accountants, 301 South Park Avenue, P.O. Box 200513, Helena, Montana 59620-0513, by facsimile to (406) 841-2305, or e-mail to [email protected].
12. Grace Berger, executive officer, has been designated to preside over and conduct this hearing.
BOARD OF PUBLIC ACCOUNTANTS LINDA HARRIS, CPA, PRESIDING OFFICER
/s/ DARCEE L. MOE /s/ PAM BUCY Darcee L. Moe Pam Bucy, Commissioner Rule Reviewer DEPARTMENT OF LABOR AND INDUSTRY
Certified to the Secretary of State January 11, 2016 |
A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact [email protected].
