Title 24 Professions and Occupations - Delaware

Legislative Council, General Assembly State of Delaware

Title 24 Professions and Occupations

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Title 24 - Professions and Occupations

Chapter 1

BOARD OF ACCOUNTANCY

? 101 Objectives and functions.

---The primary objective of the Board of Accountancy, to which all other objectives and purposes are secondary, is to protect the general public (specifically those persons who are direct recipients of services regulated by this chapter) from unsafe practices, including incompetent auditing, accounting and tax services rendered by certificate and permit holders, and from occupational practices which tend to reduce competition or fix the price of services rendered. Secondary objectives of the Board include maintaining minimum standards of competency in accounting, auditing and tax services rendered by certificate and permit holders and maintaining minimum standards in the delivery of such services to the public. In meeting its objectives, the Board shall develop standards assuring professional competence, shall monitor complaints brought against practitioners regulated by the Board, adjudicate such complaints at formal hearings, promulgate rules and regulations, and impose sanctions where necessary against practitioners.

(71 Del. Laws, c. 139, ? 1.)

? 102 Definitions.

---The following definitions shall apply, unless the definition is inappropriate for the context: ---(1) "AICPA" means the American Institute of Certified Public Accountants. ---(2) "Attest" means providing the following services: ---a. Any audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS); ---b. Any review of a financial statement to be performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS); ---c. Any examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE); ---d. Any engagement to be performed in accordance with the standards of the PCAOB; and ---e. Any examination, review, or agreed upon procedures engagement to be performed in accordance with the SSAE, other than an examination described in paragraph (2)c. of this section. ---(3) "Board" means the Delaware State Board of Accountancy. ---(4) "Certificate" means a certificate of "certified public accountant" issued by the Board pursuant to this chapter or the prior law of this State, or a corresponding certificate of certified public accountancy issued after examination under the law of any other state. ---(5) "Certified public accountant" means the holder of a permit to practice certified public accountancy. ---(6) "Certified public accounting" or "the practice of certified public accountancy" means the performance, or offer to perform, for a client or a potential client, by a person or firm holding itself out to the public as a CPA permit holder, of 1 or more kinds of services involving the use of accounting or auditing skills, including the issuance of reports or financial statements, or of 1 or more kinds of management advisory, financial advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters. ---(7) "Client" means a person or entity that agrees with a permit holder or permit holder's employer to receive any professional service. ---(8) "Compilation" means providing a service to be performed in accordance with, and as defined by, Statements on Standards for Accounting and Review Services (SSARS). ---(9) "Division" means the State of Delaware Division of Professional Regulation. ---(10) "Firm" means a sole proprietorship, partnership, corporation or any other entity authorized under Delaware law or a similar statute of another state. ---(11) "Licensee" means an individual or firm licensed under this title or under corresponding law in another jurisdiction. ---(12) "NASBA" means the National Association of State Boards of Accountancy. ---(13) "Nonpublic entity" means an entity other than one whose securities trade in a public market either on a stock exchange (domestic or foreign) or in the over-the-counter market, including securities quoted only locally or regionally, or an entity that makes a filing with a regulatory agency in preparation for the sale of any of its securities in a public market. ---(14) "PCAOB" means the Public Company Accounting Oversight Board. ---(15) "Peer review" means a board-approved study, appraisal, or review of 1 or more aspects of the attest and compilation services rendered by an individual or firm permit holder performed by a person or persons who hold Delaware permits or are duly licensed in another jurisdiction and who are not affiliated with the individual or firm permit holder being reviewed. ---(16) "Permit" or "permit to practice" means a permit issued by the Board to practice either public accountancy or certified public accountancy. ---(17) "Principal place of business" means the office location designated by the licensee. ---(18) "Public accountant" means the holder of a permit to practice public accountancy. ---(19) "Public accounting" or "practice of public accountancy" means the performance, or offer to perform, for a client or a potential client, by a person or firm holding itself out to the public as a permit holder, of 1 or more kinds of services involving the use of

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accounting or auditing skills, including the issuance of reports or financial statements, or of 1 or more kinds of management advisory, financial advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters. ---(20) "Regulation" means any rule or regulation duly adopted by the Board. ---(21) "Report" when used with reference to any attest or compilation service, means an opinion, report, or other form of language that states or implies assurance as to the reliability of the attested information or compiled financial statements and that also includes or is accompanied by any statement or implication that the person 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 or firm is an accountant or auditor, or from the language of the report itself. The term "report" includes any form of language which disclaims an opinion when such 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 and/or special competence on the part of the person or firm issuing such language; and it includes any other form of language that is conventionally understood to imply such assurance and/or such special knowledge or competence. ---(22) "State" means any state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana Islands, and Guam; except that "this State" means the State of Delaware. ---(23) "Substantial equivalency" is a determination by the Board of Accountancy or its designee that the education, examination and experience requirements contained in the statutes and administrative rules of another jurisdiction are comparable to, or exceed the education, examination and experience requirements contained in the Uniform Accountancy Act or that an individual CPA's education, examination and experience qualifications are comparable to or exceed the education, examination and experience requirements contained in the Uniform Accountancy Act. In ascertaining substantial equivalency as used in this act the Board shall take into account the qualifications without regard to the sequence in which experience, education or examination requirements were attained. ---(24) "Substantially related" means the nature of the criminal conduct, for which the person was convicted, has a direct bearing on the fitness or ability to perform 1 or more of the duties or responsibilities necessarily related to accountancy. (60 Del. Laws, c. 198, ? 1; 65 Del. Laws, c. 167, ? 1; 71 Del. Laws, c. 139, ? 1; 74 Del. Laws, c. 262, ? 1; 75 Del. Laws, c. 128, ? 1; 76 Del. Laws, c. 418, ? 1; 80 Del. Laws, c. 247, ? 1.)

? 103 Board of Accountancy; appointments; qualifications; term; vacancies.

---(a) There is created a State Board of Accountancy which shall administer and enforce this chapter. ---(b) The Board shall consist of 9 members who are residents of this State and are appointed by the Governor, as follows:

---(1) Five certified public accountants, all of whom must hold active permits to practice certified public accountancy; ---(2) One public accountant who holds a valid permit to practice public accountancy; ---(3) Two members from the public at large; and ---(4) One public member who is employed full time in the field of post-secondary accounting education. ---(c) To serve on the Board, the public members referred to in paragraph (b)(3) of this section, shall not be nor ever have been a certified public accountant or public accountant, nor a member of the immediate family of a certified public accountant or public accountant; shall not be nor ever have been employed by a person or firm which provides certified public accounting or public accounting services; shall not have a material financial interest in the providing of goods and services to any person or firm which provides accounting services; nor have been engaged in an activity directly related to accounting services. The public members shall be accessible to inquiries, comments and suggestions from the general public. ---(d) Except as provided in subsection (e) of this section, each member shall serve for a term of 3 years and may succeed himself or herself for 1 additional term. Each term of office shall expire on the date specified in the appointment; however, the board member shall remain eligible to participate in board proceedings unless and until replaced by the Governor. ---(e) A person who has never served on the Board may be appointed to the Board for 2 consecutive terms, but no such person shall thereafter be eligible for 2 consecutive appointments. No person who has been twice appointed to the Board or who has served on the Board for 6 years within any 9-year period shall again be appointed to the Board until an interim period of at least 3 years has expired since such person last served. ---(f) Any act or vote by a person appointed in violation of this section shall be invalid. An amendment or revision of this chapter is not sufficient cause for any appointment or attempted appointment in violation of subsection (e) of this section, unless such amendment or revision amends this section to permit such an appointment. ---(g) No member of the Board of Accountancy, while serving on the Board, shall be an officer (president, chairperson, president-elect, vice president, secretary or treasurer) of a professional accounting organization, including the American Institute of Certified Public Accountants (AICPA), the Delaware Society of Certified Public Accountants (DSCPA), the National Society of Public Accountants (NSPA), the Delaware Association of Public Accountants (DAPA) or any other professional accounting association. ---(h) The provisions set forth for "employees" in Chapter 58 of Title 29 shall apply to members of the Board and to all agents appointed or otherwise employed by the Board. ---(i) Any member who is absent without adequate reason for 3 consecutive meetings or fails to attend at least half of all regular business meetings during any calendar year shall be guilty of neglect of duty. ---(j) Each member of the Board shall be compensated at an appropriate and reasonable level as determined by the Division and may be

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reimbursed for meeting-related travel expenses at the State's approved rate. (27 Del. Laws, c. 98, ? 2; Code 1915, ? 980; 32 Del. Laws, c. 48, ? 2; Code 1935, ? 1091; 46 Del. Laws, c. 110, ? 1; 24 Del. C. 1953, ? 101; 50 Del. Laws, c. 167, ? 1; 55 Del. Laws, c. 193; 60 Del. Laws, c. 198, ? 1; 65 Del. Laws, c. 167, ? 1; 67 Del. Laws, c. 368, ? 1; 70 Del. Laws, c. 186, ? 1; 71 Del. Laws, c. 139, ? 1; 76 Del. Laws, c. 418, ? 2; 80 Del. Laws, c. 247, ? 1.)

? 104 Officers; meetings; conduct of business; quorum; absences.

---(a) The Board shall hold a regularly scheduled business meeting at least once in each quarter of a calendar year and at such other times as the president may deem necessary, or at the request of a majority of Board members. ---(b) The Board shall elect annually from its members a president and a secretary. Each officer shall serve for 1 year and shall not succeed himself or herself for more than 2 consecutive years. ---(c) A majority of members of the Board shall constitute a quorum for the transaction of all business and no disciplinary action shall be taken without the affirmative vote of at least 5 members. ---(d) Minutes of all meetings shall be recorded and copies shall be maintained by the Division. At any hearing in which evidence is presented, a record from which a verbatim transcript can be prepared shall be made. The expense of preparing any transcript shall be incurred by the person requesting it.

(27 Del. Laws, c. 98, ? 2; Code 1915, ? 980; 32 Del. Laws, c. 48, ? 2; Code 1935, ? 1091; 46 Del. Laws, c. 110, ? 1; 24 Del. C. 1953, ? 101; 50 Del. Laws, c. 167, ? 1; 55 Del. Laws, c. 193; 60 Del. Laws, c. 198, ? 1; 65 Del. Laws, c. 167, ? 1; 70 Del. Laws, c. 186, ? 1; 71 Del. Laws, c. 139, ? 1.)

? 105 Powers and duties.

---(a) The Board of Accountancy shall have the authority to: ---(1) Formulate rules and regulations, with appropriate notice to those affected. Each rule or regulation shall implement or clarify a specific section of this chapter. All rules and regulations shall be promulgated in accordance with the procedures specified in the Administrative Procedures Act, Chapter 101 of Title 29; ---(2) Designate the application form to be used by all applicants and to process all applications; ---(3) Designate an examination to be taken by persons applying for a permit, as follows: ---a. The Board shall adopt the Uniform Certified Public Accountant Examination as the national examination to be taken by all applicants for licensure as certified public accountants and use the advisory grading service of the American Institute of Certified Public Accountants (AICPA), or its successor organization. ---b. The Board shall adopt the examination recognized by the National Society of Public Accountants (NSPA) as the national examination to be taken by applicants for permits as public accountants and use the advisory grading service of the NSPA. ---c. The Division shall have the power to review, approve and execute all contracts for examination services; ---(4) Provide notice and information to applicants regarding their applications; ---(5) Designate the requirements for the issuance of permits to practice consistent with the provisions of this chapter; ---(6) [Repealed]. ---(7) Issue permits to practice to individuals and firms who meet the qualifications of this chapter; ---(8) Require the completion of continuing education requirements for all licensees; ---(9) Evaluate certified records to determine whether an applicant for a permit to practice, who has been previously licensed or certified, or who has held a certificate and/or permit in another jurisdiction, has engaged in any act or offense that would be grounds for disciplinary action under this chapter and whether there are disciplinary proceedings or unresolved complaints pending against such applicants for such acts or offenses; ---(10) Refer all complaints from licensees and the public concerning accountants and the practice of public accounting or certified public accounting, or concerning practices of the Board or of the profession, or concerning the unlicensed practice of public accountancy or certified public accountancy, to the Division for investigation pursuant to ? 8735 of Title 29 and assign a member of the Board to assist the Division in an advisory capacity with the investigation of the technical aspects of the complaint. Such member shall recuse himself or herself from the deliberations on the complaint; ---(11) Conduct hearings and issue orders in accordance with procedures established pursuant to this chapter, the Administrative Procedures Act (Chapter 101 of Title 29) and ? 8735 of Title 29. Where such provisions conflict with the provisions of this chapter, this chapter shall govern. The Board shall determine whether or not a person or firm shall be subject to a disciplinary hearing, and, if so, shall conduct such hearing in accordance with this chapter, the Administrative Procedures Act (Chapter 101 of Title 29) and ? 8735 of Title 29; ---(12) Where it has been determined, after a disciplinary hearing, that penalties or sanctions should be imposed, to designate and impose the appropriate sanction or penalty after time for appeal has lapsed; ---(13) Bring proceedings in the courts for the enforcement of this chapter; ---(14) To become a member of the National Association of State Boards of Accountancy or its successor organization and to pay such dues which that association shall establish; to send delegates to its meetings; and to assist members attending that association's meetings; and ---(15) To require all applicants for permits to practice to obtain a passing grade on the Code of Ethics examination administered and

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