CHAPTER 619
H.P. 1738 - L.D. 2444
An Act to Clarify the Law on Ownership of Certified Public Accounting Firms and to Establish a Peer Review Program
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 32 MRSA §12201, sub-§6-A is enacted to read:
6-A. Peer review. "Peer review" means a study, appraisal or review of one or more aspects of the professional work of a certified public accountancy firm that provides a defined service by a person or persons who are licensed as certified public accountants and who are not affiliated with the certified public accountancy firm being reviewed.
Sec. 2. 32 MRSA §12252, sub-§3, as repealed and replaced by PL 1999, c. 200, §1, is amended to read:
3. Firm permits required. The Notwithstanding Title 13, section 710 and Title 31, section 611, the following provisions apply to the issuance of individual firm permits.
A. An applicant for initial issuance or renewal of a permit to practice under this section shall show that a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members or managers, belongs to holders of certificates who are licensed in a state and that all partners, officers, shareholders, members or managers whose principal place of business is in this State and who perform professional services in this State hold valid individual permits issued by the board. At least a simple majority of the ownership of a public accounting firm, in terms of financial interests and voting rights, must belong to holders of permits issued by the board. Firms may include nonlicensee owners in accordance with paragraph B.
B. A certified public accountancy firm or public accountancy firm may include nonlicensee owners as long as:
(1) All nonlicensee owners are individuals who actively participate in the certified public accountancy firm or public accountancy firm; and
(2) The firm complies with such other requirements as the board may impose by rule.
Sec. 3. 32 MRSA §12252, sub-§8 is enacted to read:
8. Peer review for certified public accountancy firms. Effective January 1, 2001, the board shall require, as a condition to the granting or renewal of permits to certified public accountancy firms, that each applicant that provides a defined service other than compilations successfully participate in an approved peer review program. Participation in such a program is governed by the following.
A. If the firm provides a defined service other than compilations as of the date of the initial granting or first renewal of a certified public accountancy firm's permit following December 15, 2000, a peer review must be completed within 18 months after the initial granting or first renewal of the permit following December 15, 2000. After December 15, 2000, the firm must undergo a peer review every 3 years for as long as it provides a defined service other than compilations. The firm may satisfy this requirement by showing evidence of the satisfactory completion of a peer review within 18 months prior to January 1, 2001.
B. A certified public accountancy firm that does not provide a defined service other than compilations is not required to undergo a peer review if the firm annually confirms in writing to the board that it does not provide a defined service other than compilations. A certified public accountancy firm that subsequently provides a defined service other than compilations must undergo a peer review within 18 months after the fiscal year end of the first defined services engagement other than compilations that it accepts. Subsequent peer reviews are governed by the provisions of paragraph A.
The board is authorized to adopt rules to carry out the intent of this subsection. Rules adopted pursuant to this subsection are routine technical rules pursuant to Title 5, chapter 375, subchapter II-A.
Sec. 4. 32 MRSA §12275, sub-§3, as amended by PL 1999, c. 200, §2, is further amended to read:
3. Use of title. A firm may not assume or use the title or designation "certified public accountant," the abbreviation "CPA" or any other title, designation, words, letters, abbreviation, sign, card or device indicating that the firm is composed of certified public accountants, unless:
A. The firm holds a valid permit issued under section 12252; and
B. Fifty-one percent A simple majority of all partners, officers and, shareholders, members or managers of the firm hold certificates.
Effective August 11, 2000, unless otherwise indicated.
| Revisor of Statutes Homepage | Subject Index | Search | Laws of Maine | Maine Legislature |
