ACCOUNTING FIRM REQUIREMENTS                                                       H.B. 5220 (H-1):

                                                                               SUMMARY OF HOUSE-PASSED BILL

                                                                                                         IN COMMITTEE

House Bill 5220 (as passed by the House)

Sponsor:  Representative Tim Kelly

House Committee:  Regulatory Reform

Senate Committee:  Regulatory Reform

Date Completed:  5-14-14

CONTENT

The bill would amend Article 7 (Public Accounting) of the Occupational Code to do the following:

-- Delete a requirement that certain officers of an accounting firm applying for licensure under Article 7 be licensed as a certified public accountant (CPA).

-- Require that certain services provided by an accounting firm be performed under the supervision of a CPA.

-- Delete a requirement that a firm applying for licensure under Article 7 have filed a certificate of authority under the Business Corporations Act.

The Code requires a firm to apply for and obtain a Michigan license under Article 7 in order to engage in the practice of public accounting in the State, if the firm establishes or maintains an office in Michigan or an individual who represents the firm performs certain functions for any client that has its home office in Michigan.

The principal officer of a firm that is applying for licensure, and each officer or director having authority for the practice of public accounting by the firm, must be licensed in good standing as a CPA in Michigan or another state or have the equivalent of a CPA in another licensing jurisdiction. The bill, instead, would require that all attest and compilation services provided by the firm in Michigan be performed under the supervision of an individual who was licensed and in good standing as a CPA in Michigan or another state or had the equivalent of a CPA in another licensing jurisdiction.

The bill also would delete a requirement that a firm applying for licensure under Article 7 have filed the required certificate of authority with the Department of Licensing and Regulatory Affairs pursuant to the Business Corporations Act, if applicable.

MCL 339.728                                                           Legislative Analyst:  Patrick Affholter

FISCAL IMPACT

The bill would have no fiscal impact on State or local government.

                                                                                        Fiscal Analyst:  Josh Sefton

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.