SB-0191, As Passed Senate, February 15, 2007
SUBSTITUTE FOR
SENATE BILL NO. 191
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 725 and 729 (MCL 339.725 and 339.729), as
amended by 2005 PA 278.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 725. (1) The department shall issue a certificate as a
certified public accountant to an individual who meets all of the
following requirements:
(a) Is of good moral character.
(b) Has complied with the education requirements of subsection
(2).
(c) Has passed an examination meeting the requirements of
subsection (3).
(d) Has complied with the experience requirements of
subsection (4).
(e) Has completed at least 150 semester hours of college
education, including a baccalaureate degree or higher degree with a
concentration in accounting, at an educational institution approved
by the board.
(2) An individual who has completed a curriculum required for
a baccalaureate degree with a concentration in accounting at an
educational institution approved by the board may sit for the
examination required under subsection (3).
(3) An applicant for a certificate as a certified public
accountant shall pass an examination in accounting, auditing, and
other related subjects, acceptable to the department and the board,
that is given reciprocal status in the plurality of states as
compared to other examinations.
(4) An applicant for a certificate as a certified public
accountant
shall have 2 years of qualifying experience, and an
applicant
for a certificate as a certified public accountant shall
have
1 year of qualifying experience
under the direction and
supervision of a licensed certified public accountant of this or
another state in either of the following:
(a) The practice of public accounting with experience obtained
in 1 financial audit and in all of the following areas that may be
performed under the direction and supervision of a licensed
certified public accountant while the applicant was meeting the
education requirements of subsection (2):
(i) The application of a variety of auditing procedures and
techniques to the usual and customary financial transactions
recorded in accounting records.
(ii) The preparation of working papers covering the examination
of the accounts usually found in accounting records for audit,
review, and compilation.
(iii) The participation in the planning of the program of work
including the selection of the procedures to be followed for audit,
review, and compilation.
(iv) The participation in the preparation of reports, including
written explanations and comments on the findings of the
examinations and on the content of the accounting records.
(v) The participation in the preparation and analysis of
financial statements together with explanations and notes.
(b) The practice of public accounting with a governmental
agency involving either of the following:
(i) The auditing of the books and accounts or financial
activities of persons engaged in 3 or more distinct lines of
commercial or industrial business in accordance with generally
accepted auditing standards or generally accepted government
auditing standards.
(ii) The auditing of the books and accounts of financial
activities of 3 or more distinct governmental agencies or
independent organizational units other than an employer of the
applicant in accordance with generally accepted auditing standards
or generally accepted government auditing standards, and in which
the results of the auditing are reported to a third party.
(5) In complying with the requirement of subsection (4) that
an applicant shall have performed 1 financial audit, an applicant
may submit an audit performed under the direction and supervision
of a licensed certified public accountant who is not the
applicant's employer or an audit performed while the applicant was
meeting the educational requirements of subsection (2).
Sec. 729. (1) As a condition of license renewal, an individual
licensee shall complete at least 40 hours of continuing education
for each year since the issuance of the original license or the
last renewal. Of the 40 hours of continuing education credits, the
board shall not require more than 8 of those hours to be in the
areas of auditing and accounting. The board may make exceptions
from the continuing education requirements of this subsection for
reasons of health, military service, or other good cause.
(2)
Beginning March 1, 2007, each Each
licensed firm and sole
practitioner that performs attest services, including audits,
reviews, and compilations that are relied upon by third parties,
shall participate in a peer review program established by rule of
the department and approved by the board. An applicant for renewal
or relicensure shall submit to the department at the time of
renewal or relicensure proof of peer review obtained within the 3
years immediately preceding the application. A firm or sole
practitioner required to participate in a peer review program under
this subsection shall notify the department within 30 days after
receipt of an adverse report or second modified peer review report.
Verbal testimony or documents, or both, pertaining to a peer review
shall be considered confidential and shall be exempt from
disclosure to the department, except in the case of an adverse or
second consecutive modified opinion.
(3) The peer review requirements under subsection (2) for
licensees become effective as follows:
(a) For licensed firms and sole practitioners whose attest
services include audits, beginning March 1, 2008.
(b) For licensed firms and sole practitioners whose attest
services include compilation with disclosures relied upon by third
parties, or review, or both compilation with disclosures and
review, but not audits under subdivision (a), beginning March 1,
2009.
(c) For licensed firms and sole practitioners whose attest
services include compilation without disclosures relied upon by
third parties, but not audits under subdivision (a) or any
compilation with disclosures relied upon by third parties, or
review, or both compilation with disclosures and review under
subdivision (b), beginning March 1, 2010.