September 6, 2005, Introduced by Senators BISHOP, GOSCHKA, KUIPERS, STAMAS, GILBERT, GEORGE, TOY, PATTERSON, CROPSEY, BASHAM, THOMAS, ALLEN, VAN WOERKOM, McMANUS and BARCIA and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 601, 602, 721, 723, 725, 729, 732, 734, and
735 (MCL 339.601, 339.602, 339.721, 339.723, 339.725, 339.729,
339.732, 339.734, and 339.735), section 601 as amended by 1998 PA
250, section 602 as amended by 1981 PA 83, sections 721, 723, 729,
732, 734, and 735 as added by 1997 PA 10, and section 725 as
amended by 1998 PA 380.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 601. (1) A person shall not engage in or attempt to
engage in the practice of an occupation regulated under this act or
use a title designated in this act unless the person possesses a
license or registration issued by the department for the
occupation.
(2) A school, institution, or person shall not operate or
attempt to operate a barber college, school of cosmetology, or real
estate school unless the school, institution, or person is licensed
or approved by the department.
(3)
A person, school, or institution which that
violates
subsection (1) or (2) is guilty of a misdemeanor, punishable by a
fine of not more than $500.00, or imprisonment for not more than 90
days, or both.
(4)
A person, school, or institution which that
violates
subsection (1) or (2) a second or any subsequent time is guilty of
a misdemeanor, punishable, except as provided in section 735, by a
fine of not more than $1,000.00, or imprisonment for not more than
1 year, or both.
(5) Notwithstanding the existence and pursuit of any other
remedy, an affected person may maintain injunctive action to
restrain or prevent a person from violating subsection (1) or (2).
If successful in obtaining injunctive relief, the affected person
shall be entitled to actual costs and attorney fees.
(6) Nothing
in this This act shall does
not apply to a
person engaging in or practicing the following:
(a) Interior design.
(b) Building design.
(c)
Any activity for which the person is licensed under 1929
PA
266, MCL 338.901 to 338.917 the
state plumbing act, 2002 PA
733, MCL 338.3511 to 338.3569.
(d) Any activity for which the person is licensed under the
Forbes mechanical contractors act, 1984 PA 192, MCL 338.971 to
338.988.
(e) Any activity for which the person is licensed under the
electrical administrative act, 1956 PA 217, MCL 338.881 to 338.892.
(7) As used in subsection (5), "affected person" means a
person directly affected by the actions of a person suspected of
violating subsection (1) or (2) and includes, but is not limited
to, a licensee or registrant, a board established pursuant to this
act, a person who has utilized the services of the person engaging
in or attempting to engage in an occupation regulated under this
act or using a title designated by this act without being licensed
or registered by the department, or a private association composed
primarily of members of the occupation in which the person is
engaging in or attempting to engage in or in which the person is
using a title designated under this act without being registered or
licensed by the department.
(8)
An investigation may be conducted under article 6 5 to
enforce this section. A person who violates this section shall be
subject
to the strictures prescribed in this
section and section
506.
(9) The remedies under this section are independent and
cumulative. The use of 1 remedy by a person shall not bar the use
of other lawful remedies by that person or the use of a lawful
remedy by another person.
(10) An interior designer may perform services in connection
with the design of interior spaces including preparation of
documents relative to finishes, systems furniture, furnishings,
fixtures, equipment, and interior partitions that do not affect the
building mechanical, structural, electrical, or fire safety
systems.
Sec.
602. A person, school, or institution which that
violates
a section of this act or a rule or order promulgated or
issued under this act shall be assessed 1 or more of the following
penalties:
(a) Placement of a limitation on a license or certificate of
registration for an occupation regulated under articles 8 to 25.
(b) Suspension of a license or certificate of registration.
(c) Denial of a license, certificate of registration, or
renewal of a license or certificate of registration.
(d) Revocation of a license or certificate of registration.
(e)
A civil An
administrative fine to be paid to the
department, not to exceed $10,000.00.
(f) Censure.
(g) Probation.
(h) A requirement that restitution be made.
Sec. 721. (1) The state board of accountancy is created.
(2) Six members of the board shall be certified public
accountants who hold a certificate as a certified public
accountant, who are licensed under section 727, and who have
practiced in this state as certified public accountants for not
less than 5 years. Three members shall be representative of the
general public, 1 of whom shall be an attorney who is a member in
good standing in the bar of this state. One of the 9 members of the
board shall be a full-time instructor of accounting above the
elementary level at an accredited college or university.
(3) The director may promulgate the following rules:
(a) Rules of professional conduct for establishing and
maintaining high standards of competence and integrity in the
practice of public accounting.
(b) Rules governing corporations practicing public accounting,
consistent with the professional service corporation act, 1962 PA
192, MCL 450.221 to 450.235.
(c) Rules governing educational and experience requirements
for the issuance of a certificate as a certified public accountant.
(d) Rules of procedure governing the conduct of matters before
the board.
(e) Rules governing the recognition of educational
institutions by the board.
(f) Rules governing continuing education as required by
section 729.
(g) Any other rules considered necessary by the director to
implement and enforce this article.
Sec. 723. (1) Each licensed or registered individual holder of
a certificate as a certified public accountant shall be known as a
certified public accountant and a person shall not use that title
or the abbreviation "CPA" or any other word, words, letters, or
figures to indicate that the person using them is a certified
public accountant unless the use is specifically approved by the
board. Use of the terms "certified accountant", "chartered
accountant", "public accountant", and "registered accountant" and
the abbreviations "C.A.", "P.A.", and "R.A." is specifically
prohibited as being prima facie misleading to the public.
(2) Except as provided in section 724, a person shall not
engage in the practice of public accounting either in the person's
own name, under an assumed name, or as a member of a firm or as an
employee, unless the person holds a certificate as a certified
public accountant and a license as a certified public accountant
issued under this article.
(3) Unless use of a term is specifically approved by the
board, the display or uttering by a person of a card, sign,
advertisement, directory listing, or other printed, engraved, or
written instrument or device bearing a person's name in conjunction
with a title described in subsection (1) shall be prima facie
evidence that the person whose name is so displayed caused or
procured the display or uttering of the card, sign, advertisement,
directory listing, or other printed, engraved, or written
instrument or device. Evidence of the commission of a single act
prohibited by this article is sufficient to justify an injunction
or a conviction without evidence of a general course of conduct.
(4) Each licensed firm may use the designation "certified
public accountants" in connection with the firm name, except that a
licensed firm having only 1 member may use only the designation
"certified public accountant". An unlicensed firm shall not use the
designation "certified public accountants", "certified
accountants", "chartered accountants", "public accountants", or
"registered accountants" or the abbreviation "C.P.A.", "CPA",
"CPAs", "C.A.", "P.A.", or "R.A." in connection with the firm name.
(5) A person that violates this section or a rule or order
promulgated or issued under this section is liable for a civil fine
of not more than $25,000.00 per violation. The attorney
representing a political subdivision or the prosecuting attorney of
the county may bring an action under this subsection in a court of
competent jurisdiction.
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) After
July 1, 2003, shall have 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) Except
as otherwise provided in this subsection, an 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). An individual shall be
considered
to have fulfilled the educational requirements of this
subsection
if he or she is scheduled to receive his or her
baccalaureate
degree with a concentration in accounting from an
educational
institution approved by the board, within 30 days after
the
date of the examination required under subsection (3), as
certified
by the chief academic officer of the educational
institution.
If an individual fails to fulfill the educational
requirements
of the educational institution within 30 days of the
examination,
then the board shall not credit the examination
results
to the applicant.
(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) Subject
to subsections (5) and (6) and until July 1,
2003,
an An applicant for a certificate as a certified public
accountant
shall have 2 years of qualifying experience, and ,
after
July 1, 2003, 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 which
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)
Until July 1, 2003, an individual who has done both of the
following
is considered to have received the equivalent of 1 year
of
qualifying experience under subsection (4):
(a)
Has earned a graduate degree in accounting or its
equivalent
at an educational institution approved by the board.
(b)
Has completed a curriculum in public accounting as
prescribed
in rules promulgated by the director.
(6)
Until July 1, 2003, an individual who has done all of the
following
is considered to have received the equivalent of 2 years
of
qualifying experience under subsection (4):
(a)
Has earned a graduate degree in accounting or its
equivalent
at an educational institution approved by the board and
has
completed a curriculum in public accounting as prescribed in
rules
promulgated by the director.
(b)
Has completed at least 2 years as a full-time instructor
of
accounting in subjects above the elementary level prescribed in
rules
promulgated by the director.
(5) (7)
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) In order to renew As
a condition of license
renewal, an individual license, a 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.
(2) The board may make exceptions from the continuing
education
requirements of this subsection (1) for reasons of
health, military service, or other good cause.
(2) Beginning March 1, 2007, 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.
Sec. 732. (1) Except by written permission of the client or
the heir, successor, or personal representative of the client to
whom the information pertains, a licensee, or a person employed by
a licensee, shall not disclose or divulge and shall not be required
to disclose or divulge information relative to and in connection
with an examination or audit of, or report on, books, records, or
accounts that the licensee or a person employed by the licensee was
employed to make. Except as otherwise provided in this section, the
information derived from or as the result of professional service
rendered by a certified public accountant is confidential and
privileged.
(2)
Subsection (1) does not prohibit a any of the following:
(a) A certified public accountant, whose professional
competence has been challenged in a court of law or before an
administrative agency, from disclosing information otherwise
confidential and privileged as part of a defense in the court
action or administrative hearing.
(b) (3)
Subsection (1) does not prohibit the The
disclosure
of information required to be disclosed in the course of practice
monitoring programs and ethical investigations conducted by a
licensed certified public accountant. In such cases, the
information disclosed to another licensed certified public
accountant in the course of practice monitoring programs and
ethical investigations is confidential and privileged to the same
degree and in the same manner as provided for in subsection (1).
(c) A licensee, or a person employed by a licensee, from
disclosing information otherwise privileged and confidential to
appropriate law enforcement or governmental agencies when the
licensee, or person employed by the licensee, has knowledge that
forms a reasonable basis to believe that a client has committed a
violation of federal or state law or a local governmental
ordinance.
(3) Documents or records in the possession of the department
pertaining to a review, an investigation, or disciplinary actions
under this article are exempt from disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246, unless the
records or documents are used for either or both of the following
purposes:
(a) As evidence in a contested case held by the department.
(b) As a basis for formal action by the department and until
the action is resolved by a final order issued by the board.
Sec. 734. (1) A holder of a certificate as a certified public
accountant, a registration, or a license is subject to the
penalties of section 602 for 1 or more of the following:
(a) Fraud or deceit in obtaining a certificate as a certified
public accountant, a license to practice public accounting, or a
registration under this article.
(b) Dishonesty, fraud, or negligence in the practice of public
accounting.
(c) Violation of a rule of professional conduct promulgated
under this article.
(d) Conviction of a felony under the laws of this or another
state or the United States or conviction of a crime, an element of
which is dishonesty, fraud, or negligence, under the laws of this
or another state or of the United States, including, but not
limited to, the failure to file a personal federal, state, or local
income tax return.
(e) Cancellation, revocation, suspension, or refusal to renew
authority to practice as a certified public accountant by another
state for a cause other than failure to pay a licensure or other
required fee in that state.
(f) Suspension or revocation for cause of the right to engage
in the practice of public accounting before a state or federal
agency.
(g) Conduct discreditable to the public accounting profession.
(h) Determination of mental incompetency by a court of law.
(i) A violation of this article or a rule promulgated under
this article.
(j) A violation of the provisions of section 604.
(k) A violation of professional standards regarding the
issuance of reports on financial statements; 1 or more kinds of
management advisory, financial advisory, or consulting services;
the preparation of tax returns; or the furnishing of advice on tax
matters.
(2) Notwithstanding section 602(e), a person that violates
this section or a rule or order promulgated or issued under this
section is liable for an administrative fine of not more than
$25,000.00 per violation.
(3) Within 30 days after a final determination rendered by a
federal or state administrative agency or a judgment or conviction
issued by a federal or state court, a licensee or registrant shall
report to the department in writing or electronically a
determination, order, judgment, or conviction regarding a violation
in which dishonesty, fraud, or negligence is an element of that
determination, order, judgment, or conviction.
Sec.
735. A person who violates section
723 723(1) through
(4) is guilty of a misdemeanor, felony
punishable by a fine of
not
more than $5,000.00 $25,000.00, or imprisonment for not more
than
1 year 5 years, or both.