Chapter 313 Oregon Laws 2001
AN ACT
SB 20
Relating to professional
accountancy; creating new provisions; amending ORS 673.010, 673.150 and
673.345; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
ORS 673.010 is amended to read:
673.010. As used in ORS 673.010 to 673.457:
(1) “Attest,” “attesting” or “attestation” means the
opinion of a licensee as to the reliability or fairness of information that is
used for guidance in the financial transactions of, accounting for or assessing
the status or performance of, commercial and noncommercial enterprises, whether
public or private, following the completion of an audit, in accordance with
generally accepted accounting and auditing standards. The board by rule shall
further define what constitutes attestation services in conformance, to the
extent possible, with professional standards, including but not limited to the
Statements on Auditing Standards (SAS) for audits or other engagements, the
Statement of Standards for Accounting and Review Services (SSARS) for the
review [or compilation] of financial
statements and the Statements on Standards for Attestation Engagements (SSAE)
for examinations of prospective financial information.
(2) “Board” means the Oregon Board of Accountancy created
by ORS 673.410.
(3) “Business organization” means any form of business
organization authorized by law, including but not limited to a proprietorship,
partnership, corporation, limited liability company, limited liability
partnership or professional corporation.
(4) “Certificate” means a certificate of certified public
accountant issued under ORS 673.040.
(5) “Client” means a person who agrees with a licensee to
receive any professional service from the licensee.
(6) “Commission” means
money or other consideration recognized as a commission under rules adopted by
the board pursuant to section 4 of this 2001 Act.
[(6)] (7) “Contingent fee” means a fee
established for the performance of any professional service and directly or
indirectly paid to a licensee pursuant to an arrangement in which no fee will
be charged unless a specified finding or result is attained, or in which the
amount of the fee is otherwise dependent upon the finding or result of such
service. The board by rule may further
define “contingent fee.” A fee is not contingent if the fee:
(a) Is fixed by courts or other public authorities; or
(b) In tax matters, is determined based on the results of
judicial proceedings or the findings of governmental agencies.
[(7)] (8) “License” means:
(a) A certificate, permit or registration, or a license
issued under ORS 673.100, enabling the holder thereof to practice public
accountancy in this state; or
(b) A certificate, permit, registration or other
authorization issued by a jurisdiction outside this state enabling the holder
thereof to practice public accountancy in that jurisdiction.
[(8)] (9) “Licensee” means the holder of a
license under subsection [(7)(a)] (8)(a) of this section.
[(9)] (10) “Manager” means a manager of a
limited liability company.
[(10)] (11) “Member” means a member of a
limited liability company.
[(11)] (12) “Peer review” means a study,
appraisal or review of one or more aspects of the public accountancy work of a
registered business organization that performs attestation services by a person
or persons permitted under ORS 673.150 to practice public accountancy and
independent of the registered business organization being reviewed.
[(12)] (13) “Permit” means a permit to
practice public accountancy issued under ORS 673.150.
[(13)] (14) “Professional” means arising out
of or related to the specialized knowledge or skills associated with certified
public accountants and public accountants.
[(14)] (15) “Public accountant” means a public
accountant licensed under ORS 673.100.
(16) “Referral fee”
means a fee recognized as a referral fee under rules adopted by the board
pursuant to section 4 of this 2001 Act.
[(15)] (17) “Registration” means the authority
issued under ORS 673.160 by the Oregon Board of Accountancy to a business
organization to practice public accountancy.
[(16)] (18) “Report,” when used with reference
to attestation services, means an opinion or other form of written language
that states or implies assurance as to the reliability of any financial
statements and that also includes or is accompanied by any statement or
implication that the person issuing the report has special knowledge or
competence in public accountancy. 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 issuer is a public accountancy professional or
organization or may arise from the language of the report itself.
(a) “Report” includes any form of written language that:
(A) Disclaims an opinion when the form of language implies
any positive assurance as to the reliability of the financial statements
referred to or special knowledge or competence on the part of the person
issuing the language;
(B) Implies any positive assurance as to the reliability of
the financial statements referred to or special knowledge or competence on the
part of the person issuing the language; or
(C) Relates to the financial affairs of a person and that
is conventionally used by licensees in reports or financial statements.
(b) “Report” does not include:
(A) The following statement signed by a person who does not
hold a certificate, license or permit under ORS 673.010 to 673.457 as long as
the statement is not accompanied by any wording indicating the person is an
accountant or auditor or any other language prohibited by ORS 673.310 or
673.320:
______________________________________________________________________________
The accompanying balance sheet (or ______) of XYZ Company
as of (date), and the related statements of income (or retained earnings or
cash flow) for the year then ended have been prepared by me (us).
The information presented in these financial statements is
the representation of management (owners).
______________________________________________________________________________
(B) Any other financial statements or reports that are not
and do not purport to be in compliance with national standards, including but
not limited to Statements of Standards for Accounting and Review Services
(SSARS) and Statements on Standards for Attestation Engagements (SSAE) adopted
by the board by rule, when the statements or reports are issued by persons not
otherwise subject to regulation by the board under ORS 673.010 to 673.457.
[(17)] (19) “State” means any state, territory
or insular possession of the United States, and the District of Columbia.
[(18)] (20) “Substantial equivalency” means a
determination by the board or its designee that:
(a) The education, examination and experience requirements
contained in the statutes and administrative rules of another jurisdiction are
equivalent to or exceed the education, examination and experience requirements
contained in ORS 673.040, 673.050 and 673.060 and rules of the board issued
thereunder; or
(b) An individual’s education, examination and experience
qualifications are equivalent to or exceed the education, examination and
experience requirements contained in ORS 673.040, 673.050 and 673.060 and rules
of the board issued thereunder.
SECTION 1a.
ORS 673.150 is amended to read:
673.150. (1) Permits to engage in the practice of public
accountancy in this state shall be issued by the Oregon Board of Accountancy
biennially to applicants who are:
(a) Holders of the certificate of certified public
accountant issued under ORS 673.040 to 673.075;
(b) Holders of a license as defined in ORS 673.010 [(7)(b)] (8)(b) issued by another jurisdiction, if the license requirements
meet the education, examination and experience requirements established by the board
by rule as substantially equivalent to the requirements for a certificate under
ORS 673.040, 673.050, 673.060 and 673.075; or
(c) Public accountants licensed under ORS 673.100.
(2) The board by rule shall cause all permits issued under
this section to be renewed biennially.
(3) Applications for permits or for renewals of permits may
be submitted to the board on a form prescribed by the board within such time
periods as the board prescribes by rule. Applications for permits or for
renewals of permits shall be accompanied by a fee determined by the board by
rule.
(4) Applications for renewals of permits shall be
accompanied by evidence satisfactory to the board that the applicant has
complied with continuing education requirements under ORS 673.165 unless those
requirements have been waived by the board.
(5) A permit that is not renewed by the close of the permit
period may be restored upon payment to the board of a delinquent renewal fee in
an amount determined by the board by rule. Any permit that is not renewed
within 60 days after the close of the permit period for which it was issued or
renewed shall lapse. The board may restore a lapsed permit upon payment to it
of all past unpaid renewal fees and the delinquent renewal fee. However, the
board may restore a permit issued or renewed for a permit period that ended
more than five years prior to the date of the application for restoration only
upon demonstration satisfactory to the board that the applicant is qualified to
engage in the practice of public accountancy.
(6) Notwithstanding subsection (3) of this section, the
board may by rule prescribe a reduced fee for renewal of permits of those
certified public accountants and public accountants who have reached the age of
65 years.
SECTION 2.
ORS 673.345 is amended to read:
673.345. [(1) A
certified public accountant or public accountant shall not pay a commission to
obtain a client or accept a commission for a referral to a client of products
or services of others. This section shall not prohibit payments for the
purchase of all or any part of an accounting practice or retirement payments to
individuals presently or formerly engaged in the practice of public accounting
or payments to their heirs or estates.]
[(2) As used in this
section:]
[(a) “Client” means
any person for whom a certified public accountant or public accountant performs
accounting services or to whom financial products, financial services or
securities are sold or provided at the accounting practice of the certified
public accountant or public accountant or through referral to any other
location or business in which the certified public accountant or public
accountant has a material interest.]
[(b) “Commission”
means any money, property or other valuable consideration received, or paid
directly or indirectly, by a certified public accountant or public accountant
because of the purchase by a client of property, products or services of others
or to obtain a client.]
(1)(a) A holder of a
permit under ORS 673.150 or a business organization registered under ORS
673.160, when the conditions set forth in paragraph (b) of this subsection are
present, may not:
(A) Pay a commission to
obtain a client;
(B) Accept a commission
for a referral to a client of products or services of others; or
(C) Accept a commission
for a referral of products or services to be supplied by a client.
(b) The prohibition on
commissions set forth in paragraph (a) of this subsection applies only when the
holder or business organization, or any of the partners, officers,
shareholders, members, managers or owners of the holder or business
organization, performs:
(A) Client attestation
services; or
(B) A compilation of a
financial statement for a client, if the compilation report does not disclose a
lack of independence.
(2)(a) A holder of a
permit under ORS 673.150 or a business organization registered under ORS
673.160 may:
(A) Perform for a
contingent fee any professional service for a client; or
(B) Receive a contingent
fee for any professional service performed for a client.
(b) Notwithstanding
paragraph (a) of this subsection, a holder or business organization may not
accept a contingent fee under paragraph (a) of this subsection from a client
for whom the holder or business organization, or any of the partners, officers,
shareholders, members, managers or owners of the holder or business
organization, performs:
(A) Client attestation
services; or
(B) A compilation of a
financial statement for the client, if the compilation report does not disclose
a lack of independence.
(3) A holder of a permit
under ORS 673.150 or a business organization registered under ORS 673.160 may
not prepare for a contingent fee an original or amended tax return or a claim
for a tax refund for any client.
(4) The prohibitions
described in subsections (1) to (3) of this section apply during the period in
which the holder of a permit under ORS 673.150 or a business organization
registered under ORS 673.160 is engaged to perform any of the services
described in subsection (1)(b) or (2)(b) of this section and during the period
covered by any historical financial statements involved in any of the services.
The Oregon Board of Accountancy by rule may modify the period when the
prohibitions described in subsections (1) to (3) of this section are
applicable.
(5)(a) Any holder of a
permit under ORS 673.150 or business organization registered under ORS 673.160
that expects or accepts a fee for recommending or referring any product or
service to any person or entity, or that pays a referral fee or other valuable
consideration to obtain a client, shall disclose the expectation, acceptance or
payment to the client.
(b) The board by rule
shall specify the manner and form in which disclosures under this subsection
shall be made. The rules shall require that disclosures required by this
subsection:
(A) Be made in clear and
conspicuous writing;
(B) Be made on or before
the time at which the recommendation or referral that is the basis of the fee
is made, or prior to the time the client retains the licensee to whom the
client has been referred and for which a referral fee or other valuable
consideration has been paid; and
(C) Be acknowledged by
the client in a writing that is signed and dated by the client.
(6) This section does
not prohibit:
(a) Payments for the
purchase of all or any part of an accountancy practice; or
(b) Retirement payments
to individuals presently or formerly engaged in the practice of public
accountancy or payments to their heirs or estates.
SECTION 3.
Section 4 of this 2001 Act is added to
and made a part of ORS 673.010 to 673.457.
SECTION 4.
The Oregon Board of Accountancy shall
adopt rules defining the terms “commission” and “referral fee” for purposes of
ORS 673.010 to 673.457.
SECTION 5.
This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2001 Act takes effect on its passage.
Approved by the Governor
June 5, 2001
Filed in the office of
Secretary of State June 5, 2001
Effective date June 5, 2001
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