TITLE 5
Businesses and Professions

CHAPTER 5-3.1
Public Accountancy

SECTION 5-3.1-9


§ 5-3.1-9 Permits for practice units.

(a) Permits to engage in the practice of public accounting in this state as a practice unit shall be issued by the board, upon application therefore and payment of the required fee, to an entity that demonstrates its qualifications in accordance with this chapter or to certified public accounting firms originally licensed in another state that establish an office in this state. A practice unit must hold a permit issued under this section in order to provide attest and compilation services as defined or to use the title "CPAs" or "CPA firm." An applicant entity for initial issuance or renewal of a permit to practice under this section shall be required to register each office of the firm within this state with the board and to show that all attest and compilation services as defined in this chapter rendered in this state are under the charge of a person holding a valid certificate issued under this chapter, or the corresponding provision of prior law or some other state.

(b) An entity shall satisfy the following requirements:

(1) For corporations, general partnerships, joint ventures, limited liability partnerships, and limited liability companies:

(i) The principal purpose and business of the partnership must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(ii) A majority of the ownership of the entity, in terms of financial interests and voting rights of all partners, shareholders or members, belongs to holders of a certificate who shall hold a certificate and a permit from some state, and such partners, shareholders, or members, whose principal place of business is in this state and who perform professional services in this state, hold a valid permit issued under this chapter or are public accountants registered under § 5-3.1-7. Although firms may include non-licensee owners, the firm and its ownership and all parties must comply with rules promulgated by the board. For firms of public accountants, a majority of the ownership of the firm, in terms of financial interests and voting rights, must belong to holders of permits under § 5-3.1-7, and provided, that any such entity, as defined by this subsection, may include non-licensee owners, provided that:

(A) The entity designates a licensee of this state, who is responsible for the proper registration of the firm and identifies that individual to the board;

(B) All non-licensee owners are active individual participants in the entity;

(C) The entity complies with such other requirements as the board may impose by rule;

(D) Any individual licensee who is responsible for supervising attest and compilation services and signs or authorizes another licensee to sign the accountant's report on the financial statements on behalf of the firm, shall meet the experience requirements as set out in professional standards for such services;

(E) Any individual licensee who signs or authorizes another licensee to sign the accountants' report on the financial statements on behalf of the firm shall meet the experience requirement as set out in professional standards for such services.

(iii) At least one partner, shareholder, or member must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under § 5-3.1-7;

(iv) The address of every office of the entity located in this state must be listed in the application for the permit.

(2) For a sole proprietorship:

(i) The principal purpose and business of the sole proprietorship must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(ii) The sole proprietor must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under § 5-3.1-7;

(iii) The address of every office of the sole proprietorship located in this state must be listed in the application for the permit.

(iv) Any individual licensee who is responsible for supervising attest and compilation services and signs or authorizes another licensee to sign the accountant's report on the financial statements on behalf of the sole proprietor shall meet the experience requirements as set out in professional standards for such services; and

(v) Any individual licensee who signs or authorizes another licensee to sign the accountants' report on the financial statements on behalf of the firm shall meet the experience requirement as set out in professional standards for such services.

(c) Application for a permit under this section must be made upon the affidavit of the partner, shareholder, member, or sole proprietor who holds a permit to practice in this state under § 5-3.1-7 as a certified public accountant or a public accountant. All applications for a permit under this section must include, in addition to any other information required by this chapter or by rule or regulation of the board to be stated in the application, a list of all other states in which the entity has applied for or holds a permit. Upon receipt of the application, the board shall determine whether the entity is eligible for a permit. In the event the board determines the entity is ineligible for a permit under this section, that determination shall be stated in writing and delivered to the applicant at the address that is stated in the application.

(d) All applicants for, or holders of, a permit under this section shall notify the board in writing within thirty (30) days of the occurrence of the event:

(1) Of any change in the identities of the partners, officers, directors, or shareholders who are personally engaged in this state in the practice of public accounting;

(2) Of any change in the number or location of offices within this state required to be listed in the application pursuant to this section;

(3) Of any change in the identities of the persons supervising the offices;

(4) Of any issuance, denial, revocation, or suspension of a permit by any other state. The board may prescribe fees, which are to be paid by the applicants or holders upon the notification; and

(5) Of a reduction below a majority of the ownership in the entity in terms of financial interests and voting rights.

(e) All permits issued by the board under this section subsequent to January 1, 2009, shall be valid for a period of three (3) years and shall expire on the last day of June of the year in which the permit is scheduled to expire unless the permit is renewed in accordance with the provisions of this section. To transition existing licensees to a three-year (3) licensing cycle, the board shall have the authority and discretion in 2008 to issue permits under this section that are valid for one, two (2), or three (3) years. All such permits issued during 2008 shall expire upon the last day of June of the year in which the permit is scheduled to expire. The board's authority to issue permits valid for one or two (2) years shall cease as of December 31, 2008.

Effective January 1, 2009, permits issued pursuant to this section may be renewed for a period of three (3) years, and the renewed permit shall expire on the last day of June of the year in which the renewed permit is scheduled to expire, unless the renewed permit is again renewed by its holder. All applications for renewal of permits under this section shall be submitted to the board by February 15 of the year in which a permit or renewed permit is scheduled to expire. All applicants for permit renewal shall satisfy the quality review requirements prescribed in § 5-3.1-10.

(f) Fees to be paid upon application for initial issuance or renewal of a permit under this section shall be established, from time to time, by the board. Fees shall be paid at the time the application is filed with the board.

(g) An annual permit to engage in the practice of public accounting in this state shall be issued by the board, upon application for it and payment of the required fee, to the office of the auditor general, provided the office is in compliance with § 5-3.1-10.

(h) An entity that falls out of compliance with the provisions of this section due to changes in firm ownership or personnel, after receiving or renewing a permit, shall take corrective action to bring the firm into compliance as quickly as possible. The board may grant a reasonable period of time for a firm to take such corrective action. Failure to bring the firm into compliance within a reasonable period as defined by the board will result in the suspension or revocation of the permit.

History of Section.
(P.L. 1995, ch. 159, § 2; P.L. 2001, ch. 336, § 1; P.L. 2007, ch. 146, § 1; P.L. 2007, ch. 151, § 1; P.L. 2009, ch. 310, § 23; P.L. 2016, ch. 344, § 1; P.L. 2016, ch. 362, § 1.)