December 17, 2015, Introduced by Reps. Afendoulis, Poleski, Clemente and Howrylak and referred to the Committee on Regulatory Reform.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 720 and 728 (MCL 339.720 and 339.728), section
720 as amended by 2010 PA 215 and section 728 as amended by 2014 PA
177.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 720. (1) As used in this article:
(a)
"Attest" means providing any
of the following financial
statement
services, but does not include providing a compilation:
(i) Any An audit or other engagement
to be performed in
accordance with the statements on auditing standards.
(ii) Any A review of a financial
statement to be performed in
accordance with the statements on standards for accounting and
review services.
(iii) Any An examination of
prospective financial information
to be performed in accordance with the statements on standards for
attestation engagements.
(iv) Any An engagement to be
performed in accordance with the
public company accounting oversight board auditing standards.
(v) An examination, review, or agreed-upon procedures
engagement to be performed in accordance with the statements on
standards for attestation engagements, other than an examination
described in subparagraph (iii).
(b) "Certified public accountant" means an individual who is
either of the following:
(i) Qualified by education, examination, and experience to
engage or offer to engage in the practice of public accounting as
evidenced by the issuance of a certificate as a certified public
accountant under section 725 or 726 and a license or registration
issued under section 727.
(ii) An individual whose principal place of business is not in
this state and who satisfies the requirements set forth in section
727a.
(c)
"Client" means a person an individual or entity that
engages a licensee or licensee's employer to receive any service in
the practice of public accounting.
(d) "Compilation" means providing a service to be performed in
accordance with statements on standards for accounting and review
services that are presenting, in the form of financial statements,
information that is the representation of management or owners
without undertaking to express any assurance on the statements.
(e) "Firm" means a corporation, partnership, limited liability
company, unincorporated association, sole proprietorship operating
under an assumed name, or other legal entity.
(f) "Home office" means the location specified by the client
as the address to which a service described in subdivision (a) or
(d) is directed.
(g) Subject to subsection (2), "practice of public accounting"
means rendering or offering to render an opinion on or attesting to
or offering to attest to the reliability of a representation or
estimate, including, but not limited to, the giving of an opinion
in
substance that financial information as set forth presents
fairly
the condition of the entity reviewed or audited, in regard
to
an entity embracing 1 or more of the following:1 or more of the
following types of information concerning the entity that is the
subject
of the opinion present fairly the condition of the entity:
(i) Financial or other information about which the opinion is
given.
(ii) Facts respecting the entity's compliance with conditions
established by law or contract, including, but not limited to, a
statute, ordinance, regulation, grant, loan, or appropriation.
(iii) The scope of the accounting procedures rendered in
connection
with the presentation of a the
entity's financial
statement.
(h) "Principal place of business" means the office location
designated by the licensee for the purposes of substantial
equivalency and reciprocity.
(i)
"Report", when used with reference to financial
statements,
an attest or compilation
service, means an opinion,
report, or other form of language that states or implies assurance
as
to the reliability of any attested
information or compiled
financial statements and that also includes, or is accompanied by,
any
statement or implication that the person individual or firm
issuing it has special knowledge or competence in accounting or
auditing. Such a statement or implication of special knowledge or
competence may arise from use by the issuer of the report of names
or
titles indicating that the person individual or firm is an
accountant or auditor or from the language of the report itself.
Report
includes any form of language which that disclaims an
opinion when that form of language is conventionally understood to
imply any positive assurance as to the reliability of the attested
information or compiled financial statements referred to or special
competence
on the part of the person individual
or firm issuing
such
that language, or both, and includes any other form of
language that is conventionally understood to imply that assurance
or special knowledge and competence, or both.
(2) In addition to the definition set forth in subsection
(1)(g), practice of public accounting includes 1 or more of the
following
activities when performed or offered to be performed by a
person
an individual who is holding himself or herself out as a
certified public accountant for a client or a potential client:
(a)
The issuance of reports on financial statements.in
connection with any attest or compilation services.
(b) One or more kinds of management advisory, financial
advisory, or consulting services, including, but not limited to,
business valuation, forensic accounting, and fraud examination
services.
(c) The preparation of tax returns.
(d) The furnishing of advice on tax matters.
Sec. 728. (1) A firm shall apply for and obtain a Michigan
license under this article in order to engage in the practice of
public accounting in this state if either of the following apply:
(a) The firm establishes or maintains an office in this state.
(b) An individual who represents the firm performs any
engagement described in section 720(1)(a)(i), (iii), or (iv) for
any client that has its home office in this state.
(2)
Reports produced pursuant to engagements A report produced
pursuant to an engagement described in subsection (1)(b) may be
supervised or signed, or the report's signature may be authorized
for the firm, by an individual who is practicing public accounting
in Michigan under section 727a.
(3) A firm that is applying for licensure under this article
shall meet both of the following requirements:
(a) At least a simple majority of the equity and voting rights
of the firm are held directly or beneficially by individuals who
are licensed in good standing as certified public accountants of
this state or another state or the equivalent in another licensing
jurisdiction acceptable to the board. Owners who are not certified
public accountants must be active individual participants in the
firm or its affiliated entities. An individual with practice
privileges under section 727a who performs services for which a
firm license is required under this section is not required to
obtain a certificate under section 726 or a registration or license
under section 727.
(b) All attest and compilation services provided by the firm
in this state are performed under the supervision of an individual
who is licensed and in good standing as a certified public
accountant in this state or another state or the equivalent in
another licensing jurisdiction acceptable to the board.
(4) A firm shall notify the department of any change in
address within 30 days of the change.
(5) A firm that is not required to obtain a Michigan license
under subsection (1) may perform a review engagement in accordance
with the statements on standards for accounting and review
services, perform an examination, other than an engagement
described in section 720(1)(a)(iii), a review, or agreed-upon
procedures engagement in accordance with the statements on
standards for attestation engagements, or perform a compilation for
a client that has its home office in this state, may use the title
"CPA" or "CPA firm", and may practice public accountancy as
authorized in this section without a license issued under
subsection (1) only if it meets both of the following conditions:
(a) It has met the requirements in subsection (3)(a) and (b)
and section 729(2).
(b) It performs those services through an individual who has
practice privileges under section 727a.
(6) A firm that is not required to obtain a Michigan license
under subsection (1) and that is not seeking to practice under
subsection (5) may perform other professional services within the
practice of public accountancy while using the title "CPA" or "CPA
firm" in this state without a license issued under subsection (1)
only if it meets both of the following conditions:
(a) It performs those services through an individual with
practice privileges under section 727a.
(b) It can lawfully do so in the licensing jurisdiction where
those individuals with practice privilege have their principal
place of business.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.