71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
Senate Bill 20
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senator David Nelson for
Oregon Society of Certified Public Accountants)
CHAPTER ................
AN ACT
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
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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;
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(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
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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
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(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
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is declared to exist, and this 2001 Act takes effect on its
passage. + }
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Passed by Senate March 19, 2001
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 17, 2001
...........................................................
Speaker of House
Enrolled Senate Bill 20 (SB 20-A) Page 6
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled Senate Bill 20 (SB 20-A) Page 7