§ 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 §â€‚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 §â€‚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 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 accountant's
report on the financial statements on behalf of the firm shall meet the experience
requirement as set out in professional standards for these 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 §â€‚5-3.1-7; and
(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 §â€‚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 these services; and
(v) Any individual licensee who signs or authorizes another licensee to sign the accountant's
report on the financial statements on behalf of the firm shall meet the experience
requirement as set out in professional standards for these 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 §â€‚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 that 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 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 peer-review requirements prescribed in §â€‚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 §â€‚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 the 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.