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.