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 904
 
                         Senate Bill 282
 
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 Governor John A. Kitzhaber,
  M.D., for Oregon Board of Accountancy)
 
 
                             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.
 
  Allows certified public accountants and public accountants to
accept commissions, referral fees and contingent fees except
under certain circumstances. Requires accountant who accepts
commission or referral fee to disclose information about
acceptance.
 
                        A BILL FOR AN ACT
Relating to professional accountancy; amending ORS 673.010,
  673.150 and 673.345.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. 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) Except as provided in subsections (2) and (3) of this
section, a certified public accountant or public accountant
licensed under ORS 673.010 to 673.457 may accept commissions,
referral fees and contingent fees.
 
  (2) A licensee may not accept a commission or referral fee for
recommending or referring a product or service to a client, or
for recommending or referring a product or service supplied by a
client, if the licensee also performs any of the following
services for the client:
  (a) An audit or review of a financial statement;
  (b) A compilation of a financial statement when the licensee
expects, or reasonably might expect, that a third party will use
the financial statement, and the licensee's compilation report
does not disclose a lack of independence; or
  (c) An examination of prospective financial information.
  (3) A licensee may not accept a contingent fee for:
  (a) The preparation of an original or amended tax return or
claim for a tax refund for a client.
  (b) The performance of a professional service for a client when
the licensee or the licensee's firm performs any of the following
services for the client:
  (A) An audit or review of a financial statement;
  (B) A compilation of a financial statement when the licensee
expects, or reasonably might expect, that a third party will use
the financial statement, and the licensee's compilation report
does not disclose a lack of independence; or
  (C) An examination of prospective financial information.
  (4) The prohibitions described in subsections (2) and (3) of
this section apply during the period in which the licensee
performs any of the services listed in subsection (2) or (3) of
this section and the period covered by any historical financial
statements involved with the services listed in subsection (2) or
(3) of this section.
  (5) A licensee who is not prohibited by subsection (2) of this
section from accepting a commission or referral fee, and who is
paid or expects to be paid a commission or referral fee, shall
disclose that fact to any person to whom the licensee recommends
or refers a product or service related to the commission or
referral fee.
  (6) A licensee who accepts a referral fee for recommending or
referring any service of another licensee to any person, or who
pays a referral fee to obtain a client, shall disclose that
acceptance or payment to the person or client. + }
  SECTION 2. 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' has the meaning defined by the board by
rule. + }
    { - (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. 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) 'Contingent fee' means a fee established for the
performance of any service pursuant to an arrangement in which a
fee will not 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 the service. A fee is not
contingent if the fee is fixed by courts or other public
authorities or, in tax matters, is determined based on the
results of judicial proceedings or the findings of governmental
agencies. The board may further define by rule what constitutes a
contingent fee. + }
    { - (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' has the meaning defined by the board
by rule. + }
    { - (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 3. 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.
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