71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 236
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)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Limits prohibition on payment or receipt of commissions by
certain public accountants to specified services. Limits
prohibition on receipt of contingent fees by certain public
accountants to specified services.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to professional accountancy; amending ORS 673.010 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) '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' in the context
of attestation services. + } 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) '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) 'Licensee' means the holder of a license under subsection
(7)(a) of this section.
(9) 'Manager' means a manager of a limited liability company.
(10) 'Member' means a member of a limited liability company.
(11) '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) 'Permit' means a permit to practice public accountancy
issued under ORS 673.150.
(13) 'Professional' means arising out of or related to the
specialized knowledge or skills associated with certified public
accountants and public accountants.
(14) 'Public accountant' means a public accountant licensed
under ORS 673.100.
(15) 'Registration' means the authority issued under ORS
673.160 by the Oregon Board of Accountancy to a business
organization to practice public accountancy.
(16) '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) 'State' means any state, territory or insular possession
of the United States, and the District of Columbia.
(18) '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 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) 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 service of a holder of a
permit under ORS 673.150 or a business organization registered
under ORS 673.160 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. The board by rule may specify the manner and form in
which disclosures under this subsection shall be made.
(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. { + 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. + }
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