It is enacted by the General Assembly as follows:

SECTION 1. Chapter 5-3 of the General Laws entitled "Public Accountancy" is hereby repealed in its entirety.

{DEL 5-3-1. Title. -- DEL} {DEL This chapter may be cited as the "Public Accountancy Act of 1984". DEL}

{DEL 5-3-2. Policy and purpose. -- DEL} {DEL It is the policy of this state and the purpose of this chapter:

(a) To promote the dependability of information which is used for guidance in financial transactions or for accounting for or assessing the status or performance of commercial and non-commercial enterprises, whether public, private, or governmental;

(b) To protect the public interest by requiring that persons engaged in the practice of public accounting be qualified;

(c) To establish a public authority competent to prescribe and assess the qualifications of public accountants;

(d) To ensure that those persons;

(i) auditing or examining financial statements and issuing a report expressing or disclaiming an opinion on a financial statement;

(ii) reviewing financial statements and issuing a report expressing limited assurance on a financial statement;

(iii) compiling financial statements and issuing a compilation report on those statements, demonstrate their ability and fitness to observe and apply the standards of the accounting profession; and

(e) To protect the public from confusion over the use of accounting titles. DEL}

{DEL 5-3-3. Definitions. -- DEL} {DEL As used in this chapter the following terms shall be construed as follows:

(a) Authority. The privilege to the designation as a "Public Accountant" as properly approved and granted by the public accountants advisory commission under former section 5-3-6 (P. L. 1962, Ch. 228, Section 1, as amended by P. L. 1970, Ch. 272, Section 1).

(b) Board. The board of accountancy, a public authority created by section 5-3-4.

(c) Certified public accountant or CPA. A person holding a certified public accountant certificate issued under this chapter or previously issued under the laws of this state or the accountancy act or similar law of any other state.

(d) Opinions on financial statements. Any reports based on examinations in accordance with generally accepted auditing standards as to whether the presentation of information used for guidance in financial transactions or for accounting for or assessing the status or performance of commercial and non-commercial enterprises, whether public, private, or governmental, is in conformity with generally accepted accounting principles or other comprehensive basis of accounting.

(e) Permit. The privilege to practice public accounting as renewed periodically by the board. Use of the term "permit" in reference to out-of-state practitioners shall encompass similar appellations.

(f) Practice of public accounting or practicing public accounting. The performance or the offering to perform, in an independent posture, for a client or potential client, of one

(1) or more kinds of services involving the use of accounting or auditing skills, in connection with the issuance of reports on financial statements.

(g) Principal residence. The state in which a person has a right to register to vote for, or a right to vote in, general elections and in which he or she qualifies to file a resident state income tax return.

(h) Public accountant. A person holding an authority and a permit to practice public accounting on the effective date of this chapter as previously issued under the laws of this state.

(i) Report. A brief description based on the accountant's professional judgment conveying the nature and extent of services performed and the degree of responsibility assumed for the client's representations contained in the related financial statements.

(j) State. The states of the United States, the District of Columbia, Puerto Rico, Guam and the U. S. Virgin Islands. The term "this state" means the State of Rhode Island.

(k) Quality review. A study, appraisal, or review of one or more aspects of the professional work of a person or firm in the practice of public accountancy, by a person or persons who hold certificates and who are not affiliated with the person or firm being reviewed. DEL}

{DEL 5-3-4. Board of accountancy. -- DEL} {DEL (a) There is hereby created a board of accountancy in and for the state of Rhode Island, to be known as the Rhode Island board of accountancy. The board shall consist of five (5) members. All members shall be appointed by the governor. Membership of the board shall consist of: three (3) members who hold certified public accountant certificates and valid permits to practice as certified public accountants in this state and who are in public practice as certified public accountants in this state and one (1) member who holds an authority and valid permit to practice as a public accountant in this state, all four (4) of whom shall have at least five (5) years experience in a full-time practice of public accountancy; and one (1) member from the public sector who shall have had professional or practical experience in the use of accounting services and financial statements, so as to be qualified to evaluate whether the qualifications, activities, and professional practice of those regulated under this chapter conform with the rules and regulations to protect the public interest. The board member from the public sector shall be designated as the public's member to the board for the term of service so appointed. Except as otherwise provided, the term of the members of the board shall be five (5) years. No member of the board shall be associated in the practice of accountancy, either individually or as a member of a firm, with any other member of the board. The members of the board appointed and serving as such under prior law at the effective date of this chapter shall serve out the terms for which they were originally appointed, as members of the board created by this section. The first new incoming board member shall hold office for a term expiring one (1) year following the expiration of the term of the most senior board member of those board members then serving on the effective date of this chapter. The second new incoming board member shall hold office for a term expiring three (3) years following ;the expiration of the term of the most senior board member of those board members then serving on the effective date of this chapter. Vacancies occurring during a term shall be filled by appointment for the unexpired term by the Governor. Upon the expiration of his term of office, a member shall continue to serve until his successor shall have been appointed and shall have assumed office. The governor shall remove from the board any member whose certificate, authority or permit to practice has been revoked or suspended pursuant to section 5-3-12. No person who has served one (1) complete term shall be eligible for reappointment. Appointment to fill an unexpired term is not to be considered as a complete term.

(b) The board shall consist of a chairman, a vice-chairman, a secretary, a treasurer and a public member. Officers shall serve in accordance with board seniority commencing with the office of treasurer. The board shall meet at such times and places as may be fixed by the board and in any event shall meet no less than four (4) times each year. The board may adopt, and amend from time to time, rules and regulations for the orderly conduct of its affairs and for the administration of this chapter. Four (4) members of the board shall constitute a quorum for the transaction of business. The board shall have a seal which shall be judicially noticed. The board shall keep records of its proceedings, and in any proceeding in court, civil or criminal, arising out of or founded upon any provision of this chapter, copies of said records certified as correct under the seal of the board shall be admissible in evidence. The board may employ such personnel and arrange for such assistance as it may require for the performance of its duties.

(c) Each member of the board shall receive compensation in the amount of thirty dollars ($30.00) for each day or portion thereof spent in the discharge of official duties to a maximum of seven hundred and fifty dollars ($750.00) per year and shall be reimbursed for actual and necessary expenses incurred in the discharge of official duties.

(d) All fees and monies derived under the provision of this chapter shall be paid to and received by the general treasurer of the state of Rhode Island, who shall keep the monies in a restricted receipt account. All monies in such restricted receipt account shall be used to reimburse the board for expenses incurred in the administration and enforcement of this chapter. The board treasurer is authorized and directed to draw his orders upon the general treasurer for payment from the restricted receipt account, upon receipt by the board treasurer of vouchers authenticated by the chairman, vice chairman or secretary of the board.

(e) The board shall file an annual report of its activities with the governor and the general assembly of this state. The report shall include, but not be limited to, a statement of all receipts and disbursements and a listing of all certified public accountants; public accountants; accountants licensed by foreign countries who are registered under this chapter; partnerships, corporations, offices registered under this chapter; and limited permits to practice and permits to practice issued under this chapter. The board shall mail a copy of each annual report upon request in writing to any person, office, partnership or corporation listed, or to any member of the public.

(f) The board shall prescribe such rules and regulations not inconsistent with the provisions of this chapter as it deems consistent with, or required by, the public welfare and policy set forth in section 5-3-2.

Such rules and regulations may include:

(1) Rules and regulation of procedure for governing the conduct of matters before the board.

(2) Rules and regulations of professional conduct for establishing and maintaining high standards of competence and integrity in the profession of public accounting.

(3) Rules and regulations governing educational and experience requirements for issuance of the certificate of certified public accountant.

(4) Rules and regulations establishing requirements of continuing education to promote the professional competence of holders of permits to practice under section 5-3-11 as a condition to their continuing in the practice of public accounting.

(5) Rules and regulations governing partnerships and corporations practicing public accounting including, but not limited to, rules and regulations concerning their style, name, title, and affiliation with any other organization, and establishing reasonable standards with respect to professional liability insurance.

(6) Rules and regulations for reviewing and monitoring professional performance.

(7) Any other rules and regulations which the board deems necessary or appropriate in exercising its functions under this chapter.

(g) The promulgation of any rule, regulation, or amendment thereto under subsection (f) or under any other provision of this chapter shall be in accordance with section 42-35-3 of the general laws of the state of Rhode Island. The board shall mail a copy of any proposed rule, regulation, or amendment to each holder of a certificate under section 5-3-5, an authority under section 5-3-7, or a permit or limited permit to practice under section 5-3-11 with a notice of the proposed effective date of the rule, regulation or amendment and requesting the submission of comments in a prescribed timely manner. Any comments shall be advisory in nature. The failure to mail any proposed rule, regulation, amendment, or notice to all permit holders because of delivery limitations shall not affect the validity of any proposed rule, regulation, or amendment.

h) The board may from time to time establish one or more advisory committees as it deems necessary in the performance of its duties and responsibilities. The authority and term of an advisory committee may be permanent or temporary in nature as determined by the board. DEL}

{DEL 5-3-5. Certified public accountants. -- DEL} {DEL (a) The certificate of "certified public accountant" shall be issued by the board to any person:

(1) Who is of good character;

(2) Who has a principal residence in Rhode Island as defined in section 5-3-3 or a primary place of employment in Rhode Island;

(3) Who has a baccalaureate degree conferred by a college or university recognized by the board, the total educational program of which includes an accounting concentration or its equivalent and courses in such related subjects as the board shall determine to be appropriate; provided, however, that (i) after July 1, 1999 the education requirement for a certificate, which must be met before an applicant is eligible to apply for the examination prescribed in section 5-3-5(A)(4) shall be at least one hundred fifty (150) semester hours of college education including a baccalaureate or higher degree conferred by a college or university acceptable to the board, the total educational program to include an accounting concentration or equivalent as determined by board rule to be appropriate;

(4) Who shall have passed written examinations in accounting and auditing and such related subjects as the board shall determine to be appropriate;

(5) Who shall have two (2) years' public accounting experience; or who shall have one (1) years' public accounting experience and a master's or doctorate degree in accounting, business administration or other related curriculi from a college or university recognized by the board, provided, however, that he or she has satisfactorily completed such number of semester hours in accounting, auditing and business courses as prescribed by board rules and regulations; and

(6) Who, if an out-of-state individual, has passed all parts of the uniform certified public accounting examination in another jurisdiction (but has not received a certificate in that jurisdiction) and has established a principal residence in Rhode Island or a primary place of employment in Rhode Island preparatory to seeking a certificate issued by the state of Rhode Island; provided, however, the out-of-state individual shall:

(A) have complied with the longer of: (i) the experience requirement in the jurisdiction in which the uniform examination was taken; or (ii) the Rhode Island experience requirement; and

(B) satisfactorily comply with such other requirements as the board shall reasonably determine to be appropriate.

(b) The board, in its discretion, may accept the educational credits for any candidate if it is satisfied, by appropriate means of evaluation, that those educational qualifications are an acceptable substitute for the requirements of subdivision (a)(3) of this section or in its discretion may waive the residency or primary place of employment requirements relating to the issuance of a certificate as stated in subdivision (a)(2) of this section.

(c) The examination described in subdivision (a)(4) of this section shall be held by the board and shall take place as often as the board shall determine to be desirable, but not less frequently than once each year. The board may make such use of any or all parts of the uniform certified public accountant examination and advisory grading service provided by the American institute of certified public accountants as it deems appropriate to assist it in performing its duties hereunder.

(d) The board may, by rule or regulation, provide for granting credit to a candidate for his satisfactory completion of a written examination in any one or more of the subjects specified in subdivision (a)(4) of this section given by the licensing authority in any other state. Those rules and regulations shall include such requirements as the board shall determine to be appropriate in order that any examination approved as a basis for any credit shall, in the judgment of the board, be at least as thorough as the most recent examination given by the board at the time of the granting of the credit.

The board may, by rule or regulation, prescribe the terms and conditions under which a candidate who passes the examination in one or more of the subjects indicated in subdivision (a)(4) of this section may be re-examined in only the remaining subjects, with credit for the subjects previously passed. It may also provide by rule or regulation for a reasonable waiting period for a candidate's re-examination in a subject previously failed. Subject to the foregoing and to such other rules and regulations as the board may adopt governing re-examinations, a candidate shall be entitled to any number of re-examinations.

Except as the board may otherwise provide by rule or regulation in order to prevent what it determines to be undue hardship to candidates, a candidate granted credit for satisfactory examination in any one or more subjects specified in subdivision (a)(4) of this section shall have met the educational requirement of subdivisions (a)(3) or (a)(5) of this section in effect on the date of the examination by which the candidate successfully completes the examination under subdivision (a)(4) of this section.

(e) The board shall charge each candidate a fee for the initial examination under subsection (a) of this section; for re-examination under subsection (d) of this section for each subject in which the candidate is re-examined; or for evaluation of a candidate's educational qualifications under subsection (b) of this section. The applicable fee shall be paid by the candidate at the time of application for examination, re-examination, or evaluation of educational qualifications. Fees for examination, re-examination, or evaluation of educational qualifications shall be determined by the board. The liability of the board to a candidate of an examination or re-examination shall be limited to the amount of the fee received therefor.

(f) Persons who, on July 1, 1984, hold certified public accountant certificates previously issued under the laws of this state shall not be required to obtain additional certificates under this chapter, but shall otherwise be subject to all provisions of this chapter; and those certificates previously issued shall, for all purposes, be considered certificates issued under this chapter and subject to the provisions hereof. Reinstatement power shall be vested in the board for those certificates suspended or revoked prior to July 1, 1984 for those persons properly applying in accordance with section 5-3-15. Persons who on July 1, 1984, hold certified public accountant certificates, who were estopped from obtaining a permit to practice because of governmental-employment restrictions may apply for a permit to practice under section 5-3-11 within a period of one (1) year following the termination of that employment.

(g) The board shall, upon payment of a fee to be determined by the board by rule and regulation, issue a certificate to a holder of a certificate issued by another state, provided that:

(1) the applicant meets all current requirements in this state at the time application is made;

(2) at the time of the issuance of the applicant's certificate in the other state, the applicant met all requirements then applicable in this state;

(3) if the applicant meets all current requirements in this state except the education or experience requirement of this state or passed the examination under different credit provisions then applicable in this state, then either:

(A) the applicant has five (5) years of experience in the practice of public accountancy within the ten (10) years prior to application; or

(B) the applicant has five (5) years of experience in the practice of public accountancy over a longer or earlier period and has completed fifteen (15) current semester hours of accounting, auditing and such other related subjects as the board may specify by rule, at an accredited institution; and has one year of current experience in the practice of public accountancy. DEL}

{DEL 5-3-6. Registration of accountants licensed by foreign countries. -- DEL} {DEL (a) The board may, in its discretion, permit the registration of any person who is the holder of a certificate, license, or degree in a foreign country constituting a recognized qualification for the practice of public accounting in that country, which at the time of application is then in full force and effect. A person registered under this section shall use only the title under which he or she is generally known in his or her own country, translated into the English language, followed by the name of the country from which he or she received his or her certificate, license, or degree. The registration shall qualify the holder to apply for an annual limited permit to engage in the practice of public accounting in this state under section 5-3-11. The application shall constitute the appointment of the secretary of state as an agent for service of process in any action or proceeding arising out of any transaction or operation connected with or incidental to the practice of public accounting in this state by such annual limited permit holder.

(b) The board shall charge a fee to each person who applies for registration under this section. The fee shall be paid in U.S. currency at the time application is made. Fees charged under this section shall be established by board rule or regulation. DEL}

{DEL 5-3-7. Public accountants. -- DEL} {DEL (a) Persons who on the effective date of this chapter hold an authority as a public accountant and hold a permit to practice previously issued under the laws of this state shall be entitled to continue to be known as public accountants or to use the designation "PA" provided that those persons continue to hold a permit to practice under section 5-3-11. Those persons shall otherwise be subject to all the provisions of this chapter.

(b) After the effective date of this chapter, no person except those qualified under subsection (a) of this section shall be entitled to an authority as a public accountant or PA or be issued a permit to practice under section 5-3-11.

(c) Persons who held an authority as a public accountant or PA but who do not hold a permit to practice on the effective date of this chapter shall not be entitled to a permit to practice under section 5-3-11. Those persons shall no longer use the term public accountant or the designation PA in any way. However, reinstatement power shall be vested in the board for those permits suspended or revoked prior to the effective date of this chapter for those persons properly applying in accordance with section 5-3-15. Persons approved and granted authority but who were estopped from obtaining a permit to practice because of governmental-employment restrictions may apply for a permit to practice under section 5-3-11 within one (1) year following termination of that employment. DEL}

{DEL 5-3-8. Partnerships and corporations composed of certified public accountants -- Registration thereof. -- DEL} {DEL (a) A partnership engaged in this state in the practice of certified public accounting shall register with the board annually as a partnership of certified public accountants, and shall meet the following requirements:

(1) The principal purpose and business of the partnership must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) Each partner thereof must be a certified public accountant of some state who holds a permit to practice;

(3) At least one partner thereof must be a certified public accountant holding a permit to practice under section 5-3-11; and

(4) Each manager in charge of an office of the partnership in this state and each partner thereof personally engaged within this state as a member thereof must be a certified public accountant holding a permit to practice under section 5-3-11.

(b) A corporation organized for the practice of public accounting engaged in this state in the practice of certified public accounting shall register with the board annually as a corporation of certified public accountants, and shall meet the following requirements:

(1) The principal purpose and business of the corporation must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) Each shareholder of the corporation must be a certified public accountant of some state who holds a permit to practice and must be principally employed by the corporation or actively engaged in its business. No other person shall have any interest in the stock of the corporation. The principal officer of the corporation and any officer or director having management responsibility over the practice of public accounting by the corporation must be a certified public accountant of some state holding a permit to practice;

(3) At least one shareholder of the corporation must be a certified public accountant holding a permit to practice under section 5-3-11;

(4) Each manager in charge of an office of the corporation in this state and each shareholder or director personally engaged within this state must be a certified public accountant holding a permit to practice under section 5-3-11;

(5) In order to facilitate compliance with the provisions of this section relating to the ownership of stock, there must be evidence of a restriction binding the corporation or its shareholders to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder and binding any holder not a qualified shareholder to sell those shares to the corporation or the qualified shareholders. The agreement must be noted on each certificate of corporate stock. The corporation may purchase any amount of its stock for this purpose, notwithstanding any impairment of capital, so long as one share remains outstanding; and

(6) The corporation must be in compliance with such other regulations pertaining to corporations practicing public accounting in this state as the board may prescribe.

(c) Application for registration must be made upon the affidavit of a partner or shareholder who is a certified public accountant holding a permit to practice under section 5-3-11. The board shall, in each case, determine whether the applicant is eligible for registration. In the event the board determines an applicant to be ineligible, this determination shall be made in writing and shall be subject to the applicant's right to a hearing on the denial. A partnership or corporation which is so registered and which holds a permit to practice under section 5-3-11 may use the designation "certified public accountants" or "CPAs" in connection with its partnership or corporate name. Notification shall be given the board, within 30 days after the admission to or withdrawal from any partnership or corporation so registered, of a partner or shareholder engaged in this state in the practice of public accounting.

(d) Fees for the registration of partnerships or corporations and for notification of the board of the admission or withdrawal of a partner or shareholder shall be established from time to time by the board. Fees shall be paid by the applicant at the time the registration form, notice of admission or withdrawal of a partner or shareholder is filed with the board. DEL}

{DEL 5-3-9. Partnerships and corporations composed of public accountants -- Filing thereof. -- DEL} {DEL (a) A partnership (other than a partnership registered under section 5-3-8) engaged in this state in the practice of public accounting shall register with the board annually as a partnership of public accountants and shall meet the following requirements:

(1) The principal purpose and business of the partnership must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) Each partner must be a certified public accountant of some state who holds a permit to practice or a public accountant holding a permit to practice under section 5-3-11;

(3) At least one partner thereof must be a certified public accountant or a public accountant holding a permit to practice under section 5-3-11; and

(4) Each manager in charge of an office of the partnership in this state and each partner thereof must be a certified public accountant or a public accountant holding a permit to practice under section 5-3-11.

(b) A corporation (other than a corporation registered under section 5-3-8) organized for the practice of public accounting engaged in this state in the practice of public accounting shall register with the board annually as a corporation of public accountants and shall meet the following requirements:

(1) The principal purpose and business of the corporation must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) Each shareholder of the corporation must be a certified public accountant of some state holding a permit to practice or a public accountant holding a permit to practice under section 5-3-11 and must be principally employed by the corporation or actively engaged in its business. No other person shall have any interest in the stock of the corporation. The principal officer of the corporation and any officer or director having management responsibility over the practice of public accounting by the corporation must be a certified public accountant or a public accountant holding a permit to practice;

(3) Each manager in charge of an office of the corporation in this state and each shareholder or director thereof must be a certified public accountant or a public accountant holding a permit to practice under section 5-3-11;

(4) In order to facilitate compliance with the provisions of this section relating to the ownership of stock, there must be evidence of a restriction binding the corporation or its shareholders to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder and binding any holder not a qualified shareholder to sell those shares to the corporation or its shareholders. The agreement must be noted on each certificate of corporate stock. The corporation may purchase any amount of its stock for this purpose, notwithstanding any impairment of capital, so long as one share remains outstanding; and

(5) The corporation must be in compliance with such other regulations pertaining to corporations practicing public accounting in this state as the board may prescribe.

(c) Application for registration must be made upon the affidavit of a partner or shareholder who holds a permit to practice under section 5-3-11 as a certified public accountant or as a public accountant. The board shall, in each case, determine whether the applicant is eligible for registration. In the event the board determines an applicant to be ineligible, this determination shall be made in writing and shall be subject to the applicant's right to a hearing on the denial. A partnership or corporation which is so registered and which holds permit to practice under section 5-3-11 may use the designation "public accountants" or "PAs" in connection with its partnership or corporate name. Notification shall be given the board, within 30 days, after the admission to or withdrawal from any partnership or corporation so registered, of a partner or shareholder engaged in this state in the practice of public accounting.

(d) Fees for the registration of partnerships or corporations and for notification of the board of the admission or withdrawal of a partner or shareholder shall be determined from time to time by the board. Fees shall be paid by the applicant at the time the registration form or notice of admission or withdrawal of a partner or shareholder is filed with the board. DEL}

{DEL 5-3-10. Offices -- Registration thereof. -- DEL} {DEL (a) Each office established or maintained in this state for the practice of public accounting in this state by a certified public accountant, a partnership or corporation of certified public accountants, a public accountant, or a partnership or corporation of public accountants, shall be registered annually with the board. Each office shall be under the direct supervision of a manager holding a permit to practice under section 5-3-11, who may be either a sole-proprietor, partner, shareholder, or a staff employee, provided that:

(1) the designation "certified public accountant" or "CPA" is limited to firms of certified public accountants and shall not be used in connection with the office unless the manager is the holder of a certificate as a certified public accountant and a permit to practice under section 5-3-11, both of which shall be in full force and effect; and

(2) the designation "public accountant" shall not be used in connection with the office unless the manager is the holder of an authority as a public accountant under section 5-3-7 or the holder of a certificate as a certified public accountant and a permit to practice under section 5-3-11, both of which shall be in full force and effect. The manager may serve in such capacity at only one office.

(b) Each office established or maintained in this state for the limited practice of public accounting in this state by an accountant licensed by a foreign country who is registered under section 5-3-6 and who holds an annual limited permit to practice public accounting under section 5-3-11 shall be registered annually with the board. Each office shall be under the direct supervision of an accountant licensed by a foreign country who is registered under section 5-3-6 and who holds an annual limited permit to practice under section 5-3-11. Each office shall be designated only by the name and title of the accountant licensed by a foreign country, translated into the English language, under whose direct supervision the office operates, followed by the name of the foreign country.

(c) The board shall, by rule and regulation, prescribe the procedure to be followed in effecting the registration and maintenance of offices established in this state for the practice of public accounting or for the limited practice of public accounting in this state.

(d) Fees for the registration of offices shall be determined from time to time by the board. Fees shall be paid by the applicant at the time the registration form is filed with the board. DEL}

{DEL 5-3-11. Annual permits to practice public accounting and annual limited permits to practice public accounting. -- DEL} {DEL (a) Annual permits to engage in the practice of public accounting in this state shall be issued by the board to:

(1) Certified public accountants qualified by the board as a person:

(a) Who is of good character;

(b) Who has a principal residence in Rhode Island as defined in section 5-3-3 or a primary place of employment in Rhode Island;

(c) Who has a baccalaureate degree conferred by a college or university recognized by the board, the total educational program of which includes an accounting concentration or its equivalent and courses in such related subjects as the board shall determine to be appropriate; provided, however, that: After July 1, 1999 the education requirement which must be met before an applicant is eligible to apply for the examination prescribed in section 5-3-11(a)(1)(d), for a certificate, shall be at least one hundred fifty (150) semester hours of college education including a baccalaureate or higher degree conferred by a college or university acceptable to the board, the total educational program to include an accounting concentration or equivalent as determined by board rule to be appropriate.

(d) Who shall have passed written examinations in accounting and auditing and such related subjects as the board shall determine to be appropriate:

(e) Who shall have two (2) years' public accounting experience; or who shall have one (1) years' public accounting experience and a master's or doctorate degree in accounting, business administration or other related curriculi from a college or university recognized by the board, provided, however, that he or she has satisfactorily completed such number of semester hours in accounting, auditing and business courses as prescribed by board rules and regulations; and

(f) Who, if an out-of-state individual, has passed all parts of the uniform certified public accounting examination in another jurisdiction (but has not received a certificate in that jurisdiction) and has established a principal residence in Rhode Island; provided, however, such out-of-state individual (i) shall have complied with the longer of (1) the experience requirement in the jurisdiction in which said uniform examination was taken or (2) the Rhode Island experience requirement, and (ii) shall satisfactorily comply with such other requirements as the board shall reasonably determine to be appropriate.

(g) The board, in its discretion, may accept the educational credits for any candidate if it is satisfied, by appropriate means of evaluation, that such educational qualification are an acceptable substitute for the requirements of subsection 5-3-11(a)(1)(c) or in its discretion may waive the residency or primary place of employment requirements relating to the issuance of a certificate as stated in subsection 5-3-11(a)(1)(b).

(h) The examination described in subsection 5-3-11(a)(1)(d) shall be held by the board and shall take place as often as the board shall determine to be desirable, but not less frequently than once each year. The board may make such use of any or all parts of the uniform certified public accountant examination and advisory grading service provided by the American Institute of Certified Public Accountants as it deems appropriate to assist it in performing its duties hereunder.

(i) The board may, by rule or regulation, provide for granting credit to a candidate for his satisfactory completion of a written examination in any one or more of the subjects specified in subsection 5-3-11(a)(1)(d) given by the licensing authority in any other state. Such rules and regulation shall include such requirements as the board shall determine to be appropriate in order that any examination approved as a basis for any credit shall, in the judgment of the board, be at least as thorough as the most recent examination given by the board at the time of the granting of such credit.

The board may, by rule or regulation, prescribe the terms and conditions under which a candidate who passes the examination in one or more of the subjects indicated in subsection 5-3-11(a)(1)(d) may be re-examined in only the remaining subjects, with credit for the subjects previously passed. It may also provide by rule or regulation for a reasonable waiting period for a candidate's re-examination in a subject previously failed. Subject to the foregoing and to such other rules and regulations as the board may adopt governing re-examinations, a candidate shall be entitled to any number of re-examinations.

Except as the board may otherwise provide by rule or regulation in order to prevent what it determines to be undue hardship to candidates, a candidate granted credit for satisfactory examination in any one or more subjects specified in subsection 5-3-11(a)(1)(d) shall have met the educational requirement of subsections 5-3-11(a)(1)(c) or 5-3-11(a)(1)(e) in effect on the date of the examination by which the candidate successfully completes the examination under subsection 5-3-11(a)(1)(d).

(j) The board shall charge each candidate a fee for the initial examination under subsection 5-3-11(a)(1)(d); for re-examination under subsection 5-3-11(a)(1)(i) for each subject in which the candidate is re-examined, or for evaluation of a candidate's educational qualifications under subsection 5-3-11(g). The applicable fee shall be paid by the candidate at the time of application for examination, re-examination, or evaluation of educational qualifications. Fees for examination, re-examination, or evaluation of educational qualifications shall be determined by the board. The liability of the board to a candidate of an examination or re-examination shall be limited to the amount of the fee received therefor.

(k) Persons who, on the effective date of this chapter, hold certified public accountant certificates previously issued under the laws of this state shall not be required to obtain additional certificates under this chapter, but shall otherwise be subject to all provisions of this chapter; and such certificates previously issued shall, for all purposes, be considered certificates issued under this chapter and subject to the provisions hereof. Reinstatement power shall be vested in the board for those certificates suspended or revoked prior to the effective date of this chapter for those persons properly applying in accordance with section 5-3-15. Persons who on the effective date of this chapter, hold certified public accountant certificates, who were estopped from obtaining a permit to practice because of governmental employment restrictions may apply for a permit to practice under section 5-3-11, within a period of one (1) year following the termination of such employment.

(l) The board shall, upon payment of a fee to be determined by the board by rule and regulation, issue a certificate to a holder of a certificate issued by another state, provided that

(i) the applicant meets all current requirements in this state at the time application is made;

(ii) at the time of the issuance of the applicant's certificate in the other state, the applicant met all requirements then applicable in this state;

(iii) if the applicant meets all such requirements except the education or experience requirement of this state or passed the examination under different credit provision then applicable in this state, then either;

(a) the applicant has five (5) years of such experience in the practice of public accountancy within the ten (10) years prior to application; or

(b) the applicant has five (5) years of such experience over a longer or earlier period and has completed fifteen (15) current semester hours of accounting, auditing and such other related subjects as the board may specify by rule, at an accredited institution; and has one (1) year of current experience in the practice of public accountancy.

(m) The board shall require, as a condition to renew permits under this section, that applicants undergo quality reviews conducted no more frequently than once every three (3) years in such manner and producing such satisfactory result as the board may specify, provided, however, that any such requirement (1) shall be promulgated reasonably in advance of the time when it is first required to be met, and (2) shall include reasonable provision for compliance by an applicant's showing that it has undergone a satisfactory quality review performed for other purposes, such as the various quality and peer review programs performed by the American Institute of Certified Public Accountants which was substantially equivalent to quality reviews generally required pursuant to this subsection and completion of such review was within the three (3) years immediately preceding the renewal period.

(i) The proceedings, records and work papers, of a quality review committee pursuant to section 5-3-11(m) shall be privileged and shall not be subject to discovery, subpoena or other means of legal process or introduction into evidence in any civil action, arbitration, administrative proceeding or state accountancy board proceeding, and no member of the review committee or person who was involved in the quality review process shall be permitted or required to testify in any such civil action, arbitration, administrative proceeding or state accountancy board proceeding as to any matters produced, presented, disclosed or discussed during or in connection with the quality review process, or as to any findings, recommendations, evaluations, opinions, or other actions of such committees, or any members thereof; provided, however, that information, documents, or records that are publicly available are not to be construed as immune from discovery or use in any civil action, arbitration, administrative proceeding or state accountancy board proceeding merely because they were presented or considered in connection with the quality review process. Further, the privilege created by this statute also does not apply to materials prepared in connection with a particular engagement merely because they happen to subsequently be presented or considered as part of the quality review process; nor does it apply to disputed between review committees and persons or forms subject to a quality review arising from the performance of the quality review.

(2) Public accountants qualified under section 5-3-7; and

(3) Partnerships and corporations as registered under sections 5-3-8 or 5-3-9, provided all offices of those partnerships and corporations in this state are maintained and registered as required under section 5-3-10.

Renewals of permits to practice issued to individuals under subdivision (a)(1) or (a)(2) of this section shall be issued pursuant to subsection (c).

An applicant for issuance or renewal of a permit to practice shall at the time of filing the application list with the board all states in which he, she, or it holds or have made application for a permit to practice. All permits to practice shall expire on the last day of June of each year and may be renewed for a period of one year.

(b) A certified public accountant who holds a permit to practice issued by another state and who practices in this state shall apply for a permit to practice in this state. From the date of filing of the completed application with the board, the applicant shall be deemed qualified to practice and may practice public accounting in this state until the board has acted upon the application. The application shall constitute the appointment of the secretary of state as an agent for service of process in any action or proceeding arising out of any transaction or operation connected with or incidental to the practice of public accounting in this state by the applicant.

(c) On the last day of June annually, every application for renewal of a permit to practice by any person shall be accompanied or supported by such evidence as the board shall prescribe of satisfaction of the requirements of continuing professional education as promulgated by board regulations. Failure by an applicant for renewal of a permit to practice to furnish that evidence shall constitute ground for revocation, suspension, or refusal to renew the permit in a proceeding under section 5-3-12, unless the board in its discretion shall determine that the failure due to reasonable cause or excusable neglect.

(d) Annual limited permits to engage in the practice of public accounting in this state shall be issued by the board to accountants licensed by foreign countries who are registered under section 5-3-6. Those permits shall be issued in the name of the registrant followed by the recognized accounting designation by which he or she is known in his or her own country, translated into the English language, followed by the name of the country. Annual limited permits to engage in the practice of public accounting qualify the holder to practice public accounting in this state solely on matters concerning residents, governments, and corporations or other business entities (including their division, subsidiaries, or affiliates) of the foreign country in which the person registered holds his or her recognized qualification for the practice of public accounting. An applicant for issuance or renewal of an annual limited permit to practice shall at the time of filing the application list with the board all states in which the applicant holds or has made application for permits or limited permits to practice. Holders of annual limited permits to practice issued under this chapter shall notify the board within thirty (30) days of having been issued permits or limited permits in a state or states other than those listed with the board at the time of the application for the current limited permit to practice. All annual limited permits to practice shall expire on the last day of June of each year and may be renewed for a period of one year.

(e) Holders of annual limited permits to engage in the practice of public accounting shall not be required to meet the requirements of continuing education established under subsection (c) of this section. However, if the licensing authority of the foreign country in which the holder of the annual limited permit holds the recognized qualification for the practice of public accounting has established requirements for continuing education, the applicant for an annual limited permit shall file an affidavit of compliance with that country's continuing education requirements at the time of application.

(f) Fees for the issuance and renewal of annual permits to engage in the practice of public accounting in this state shall be established from time to time by the board. Fees shall be paid by the applicant at the time application is filed with the board.

(g) Fees for the issuance and renewal of annual limited permits to engage in the practice of public accounting in this state shall be established from time to time by the board. Fees shall be paid by the applicant in U.S. currency at the time the application is filed with the board. DEL}

{DEL 5-3-12. Revocation or suspension of a certificate, authority, registration or permit to practice. -- DEL} {DEL After notice and hearing as provided in section 5-3-14, the board may suspend for a period not to exceed two (2) years or may revoke any certificate issued under section 5-3-5; any authority issued under section 5-3-7; or any registration granted under section 5-3-6, 5-3-8, 5-3-9, 5-3-10, or any prior law; or may revoke, suspend, or refuse to renew any annual permit to practice or annual limited permit to practice issued under section 5-3-11; or may censure in writing the holder of any such permit for any one or more of the following causes:

(a) Fraud or deceit in obtaining a certificate as a certified public accountant or in obtaining registration under this chapter or in obtaining an annual permit to practice or annual limited permit to practice public accounting under section 5-3-11.

(b) Dishonesty, fraud, or gross negligence in the practice of public accounting.

(c) Violation of any of the provisions of this chapter.

(d) Violation of a rule of professional conduct promulgated by the board under the authority granted by this chapter.

(e) Conviction of or pleading guilty or nolo contendere to a crime or an act constituting a crime in a court of competent jurisdiction of this or any other state or federal court, of forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion, conspiracy to defraud, misappropriation of funds, tax evasion, or any other similar offense or offenses involving moral terpitude.

(f) Cancellation, revocation, suspension, or refusal to renew the certificate and/or permit to practice as a certified public accountant or permit to practice as a public accountant by any other state for any cause other than failure to pay a fee or to meet the requirements of continuing education in that other state.

(g) Suspension or revocation of the right to practice before any state or federal agency.

(h) Conduct discreditable to the public accounting profession.

(i) With respect to accountants registered under section 5-3-6, in addition to the above causes, subsections (a) through (h), the following additional causes shall apply: cancellation, revocation, suspension, or refusal to renew the registrant's certificate, license, or degree in a foreign country constituting the recognized qualification for the practice of public accounting with the board recognized as qualifying the accountant for registration under section 5-3-6 and for issuance of an annual limited permit to practice under section 5-3-11. DEL}

{DEL 5-3-13. Revocation or suspension of partnership or corporation registration or permit to practice. -- DEL} {DEL After notice and hearing as provided in section 5-3-14, the board shall revoke or suspend the registration of any partnership or corporation issued under section 5-3-8 or section 5-3-9 or permit to practice issued under section 5-3-11, if at any time it does not meet all the qualifications prescribed by the section under which it qualified for registration. After notice and hearing as provided in section 5-3-14, the board may revoke or suspend the registration of a partnership or corporation; may revoke, suspend, or refuse to renew its permit to practice issued under section 5-3-11; or may censure in writing the holder of any such permit to practice for any of the causes enumerated in section 5-3-12 or for any of the following additional causes:

(a) The revocation or suspension of the certificate of certified public accountant or authority as a public accountant, or the revocation or suspension or refusal to renew the permit to practice of any partner or shareholder.

(b) The cancellation, revocation, suspension, or refusal to renew the registration of the partnership or corporation, or of any partner or shareholder thereof, to practice public accounting in any other state for any cause other than failure to pay a fee or to meet the requirements of continuing education in that other state. DEL}

{DEL 5-3-14. Initiation of proceedings -- hearings before board -- Appeals -- Notice to other states. -- DEL} {DEL (a) The board may initiate proceedings under this chapter against a certificate holder or permit holder either on its own motion, on the complaint of any person, or upon receiving notification from another state board of accountancy of its decision to:

(1) revoke or suspend practice privileges granted in that state to a holder of a certified public accountant certificate or a public accountant authority of this state; or

(2) revoke, suspend, refuse to renew the practice privileges of a holder of a permit, certificate, or authority, or censure in writing the holder of a permit to practice in that state, who also holds a permit to practice under section 5-3-11.

(b) A written notice stating the nature of the charge or charges against the permit holder, certificate holder or authority holder and the time and place of the hearing before the board on those charges shall be served on the permit holder not less than twenty (20) days prior to the date of the hearing either personally or by mailing a copy thereof by registered mail to the address of the permit holder last known to the board.

c) If, after having been served with the notice of hearing as provided for herein, the permit holder fails to appear at the hearing and defend, the board may proceed to hear evidence against the permit holder and may enter such order as shall be justified by the evidence, which order shall be final unless the permit holder petitions for a review thereof as provided herein; provided, however, that within thirty (30) days from the date of any order, upon a showing of good cause for failing to appear and defend, the board may reopen the proceedings and may permit the permit holder to submit evidence in his, her or its behalf.

(d) At any hearing, the permit holder may appear in person or may be represented by counsel; may produce evidence and witnesses on his, her, or its behalf; may cross-examine witnesses; and may examine such evidence as might be produced against him, her, or it. A partnership may be represented before the board by counsel or by any partner thereof. A corporation may be represented before the board by counsel or by any shareholder thereof. The permit holder shall be entitled, on written application to the board, to the issuance of subpoenas to compel the attendance of witnesses on his, her, or its behalf.

(e) The board or any member thereof may issue subpoenas to compel the attendance of witnesses and the production of documents and may administer oaths, take testimony, hear proofs, and receive exhibits in evidence in connection with or upon hearing under this chapter. In case of disobedience to a subpoena, the board may petition the superior court to require the attendance and testimony of witnesses and the production of documentary evidence.

(f) The board shall not be bound by strict rules of procedure or by the laws of evidence in the conduct of its proceedings but its determination shall be based upon sufficient legal evidence to sustain it.

(g) A stenographic record of the hearings shall be kept and a transcript thereof filed with the board.

(h) At all hearings, the attorney general of this state or such other legal counsel as may be employed, shall appear and represent the board.

(i) The decision of the board shall be made by vote in accordance with rules and regulations established under section 5-3-4.

(j) Anyone adversely affected by any order of the board may appeal the order by filing an appeal with the superior court within thirty (30) days after the entry of the order. A copy of the notice of appeal shall be forthwith served upon the secretary of the board. The board shall certify and file in the court a transcript of the record upon which the order complained of was entered within thirty (30) days after receipt of the notice of appeal.

The court may affirm, modify, or set aside the board's order in whole or in part or may remand the case to the board for further evidence and may, in its discretion, stay the effect of the board's order pending its determination of the case.

(k) On rendering a decision to:

(1) Revoke or suspend a certificate issued under section 5-3-5;

(2) Revoke or suspend an authority granted under any prior laws of this state;

(3) Revoke or suspend a registration granted under this chapter or any prior law; or

(4) Revoke, suspend, refuse to renew, or censure in writing the holder of a permit or annual limited permit to practice issued under section 5-3-11; the board shall examine its records to determine whether the permit holder holds a certificate, an authority, or a permit or annual limited permit to practice in any other state. If the board determines that the permit holder holds a certificate , an authority, or a permit or annual limited permit to practice in any other state, the board shall notify the board of accountancy of that other state of its decision by mail after the expiration of the thirty-day appeal period, and shall include in the notice an indication whether or not the permit holder has appealed the decision. DEL}

{DEL 5-3-15. Reinstatement. -- DEL} {DEL Upon application in writing or after hearing pursuant to notice, the board may:

(a) Reissue a certificate to a certified public accountant whose certificate has been revoked or suspended;

(b) Reissue the authority of a public accountant whose authority has been revoked or suspended;

(c) Reissue the registration of an accountant licensed by a foreign country whose registration has been revoked or suspended; or

(d) Modify the suspension of or reissue any permit or any registration to practice or annual limited permit to practice public accounting which has been revoked, suspended, or which the board has refused to renew. DEL}

{DEL 5-3-16. Acts declared unlawful. -- DEL} {DEL (a) Except as permitted by the board pursuant to section 5-3-17(b), no person shall hold himself or herself out to the public, assume or use the designation "certified public accountant" or "CPA" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a certified public accountant or CPA, unless that person has received a certificate as a certified public accountant, holds a permit to practice under section 5-3-11 which is not revoked or suspended, and all of that person's offices in this state for the practice of public accounting are maintained and registered as required under section 5-3-10.

(b) No partnership or corporation shall hold itself out to public accounting are maintained and registered under section 5-3-10.

(g) No person shall sign, affix, or associate a partnership or corporate name to any of the following enumerated reports or attempt to prepare or prepare so as to mislead the public, a report having the appearance or import of any of the following enumerated reports:

(1) Report expressing or disclaiming an opinion on a financial statement based on an audit or examination of that statement; or

(2) Report expressing limited assurance on a financial statement based on a review of that statement; or

(3) Report on a financial statement based on a compilation of that statement, unless the partnership or corporation is registered under section 5-3-8 or section 5-3-9, holds a permit to practice under section 5-3-11, and all of its offices in this state for the practice of public accounting are maintained and registered as required under section 5-3-10.

(h) No person, partnership, or corporation not holding a permit to practice under section 5-3-11 shall hold himself, herself, or itself out to the public as an "accountant" or "auditor", with or without any other description or designation, by use of either or both of those words on any sign, card, letterhead, or in any advertisement or directory.

(i) No person shall assume or use the designation "certified public accountant" or "CPA" or "public accountant" or "PA" in conjunction with names indicating or implying that there is a partnership or corporation or in conjunction with the designation "and Company" or "and Co." or a similar designation if, in any such case, there is in fact no bona fide partnership or corporation registered under section 5-3-8 or 5-3-9.

(j) No person, partnership, or corporation shall hold himself, herself, or itself out to the public for the practice of public accounting unless that person, partnership, or corporation holds a permit to practice under section 5-3-11 and all of his, her, or its offices in this state are registered and maintained under section 5-3-10.

(k) The provisions of subsections (a), (c), and (e) of this section shall not prohibit any accountant licensed by a foreign country who has registered under section 5-3-6 and who holds an annual limited permit to engage in the practice of public accounting under section 5-3-11 from using the accounting designation by which he or she is known in his or her own country, translated into the English language followed by the name of the country from which his or her certificate, license or degree was issued.

(l) No certificate holder may accept a payment, including a commission, for the referral of products or services of others to a client nor make a payment, including a commission, to obtain a client, except that this section shall not prohibit payments for the purchase of an accounting practice or retirement payments to individuals formerly engaged in the practice of public accounting or payments to their heirs or estates. DEL}

{DEL 5-3-16.1. Other activities. -- DEL} {DEL In addition to the activities set out in section 5-3-3(f) a certificate holder may engage in one (1) or more kinds of management advisory, or consulting services, or the preparation of tax returns, or the funding of advice on tax matters. DEL}

{DEL 5-3-17. Exceptions -- Acts not prohibited. -- DEL} {DEL (a) Nothing contained in this chapter shall be construed as prohibiting any person not a certified public accountant or a public accountant from serving as an employee of or an assistant to a certified public accountant, a public accountant, a partnership or corporation composed of certified public accountants, or a partnership or corporation composed of public accountants holding a permit to practice under section 5-3-11; provided, however, that the employee or assistant shall not issue any accounting or financial statement or report over his or her name.

(b) Nothing contained in this chapter shall be construed as prohibiting any person who is the holder of a certificate as a "certified public accountant" which has not been revoked or suspended by the board or by another state board of accountancy from assuming or using the designation "certified public accountant" or "CPA" or any other title, designation, words, letters, sign, card, or device tending to indicate that that person is a certified public accountant; provided, however, that the provisions of this subsection shall not be construed to authorize the use of those designations in connection with the practice of public accounting in this state unless the person using those designations holds a current permit issued by the board.

(c) Nothing contained in this chapter or in any other law of this state shall be construed as prohibiting a certified public accountant, a public accountant, a partnership or corporation of certified public accountants, a partnership or corporation of public accountants, or any employees of the foregoing from disclosing any information in confidence to other certified public accountants, public accountants, peer review teams, partnerships or corporations of public accountants engaged in conducting peer reviews, or any employees of the foregoing, in connection with peer reviews of such accountant's accounting and auditing practice conducted under the auspices of a recognized professional association.

(d) Nothing contained in this chapter or in any other law of this state shall be construed as prohibiting a certified public accountant, a public accountant, a partnership or corporation of certified public accountants, a partnership or corporation of public accountants, or any employees of the foregoing, from disclosing any information in confidence to any employee, representative, officer, or committee member of a recognized professional association or to the board of accountancy or any of its employees or committees in connection with a professional ethics investigation held under the auspices of a recognized professional association or the board of accountancy.

(e) The provisions of subsection (f), (g), and (h) of section 5-3-16 shall not prohibit any officer, employee, partner, or principal of any organization:

(1) From affixing his or her signature to any statement or report in reference to the affairs of that organization with any wording designating the position, title, or office which he or she holds in that organization; or

(2) From describing himself, or herself by the position, title, or office he or she holds in the organization. Nor shall those provisions prohibit any act of a public official or a public employee in performance of his or her duties as a public official or public employee.

(f) Nothing contained in this chapter shall be construed as prohibiting any person, partnership or corporation not holding a permit under section 5-3-11 from offering or rendering to the public bookkeeping services, including devising and installing systems, recording and presentation of financial information or data, preparing financial statements or similar services, preparation of tax returns, or the furnishing of advice on tax matters; provided, however, that persons, partnerships, or corporations not holding a permit under section 5-3-11 who offer or render the above-mentioned services shall not:

(1) Audit or examine a financial statement and issue a report expressing or disclaiming an opinion on that statement;

(2) Review a financial statement and issue a report expressing limited assurance on that statement; or

(3) Compile a financial statement and issue a compilation report on that statement. Nor shall those persons, partnerships, or corporations attempt to prepare or prepare a report in any manner having the appearance or import of the three above enumerated categories so as to mislead the public. DEL}

{DEL 5-3-18. Injunction against unlawful acts. -- DEL} {DEL Whenever, in the judgment of the board, any person has engaged, or is about to engage, in any acts or practices which constitute, or will constitute, a violation of this chapter, the board may make application to the superior court for an order enjoining those acts or practices, and upon a showing by the board that the person has engaged, or is about to engage, in any of those acts or practices, an injunction, restraining order, or such other order as may be appropriate shall be granted by the court without bond. DEL}

{DEL 5-3-19. Penalty for violations. -- DEL} {DEL Any person who violates any provision of this chapter shall be guilty of a misdemeanor; and upon conviction thereof, shall be subject to a fine of not more than one thousand dollars ($1,000.00) in the case of an individual and not more than five thousand dollars ($5,000.00) in the case of a partnership or corporation or to imprisonment for not more than one (1) year or both the fine and imprisonment. Whenever the board has reason to believe that any person is liable to punishment under this section, it may certify the facts to the attorney general of this state who may, in his or her discretion, cause appropriate proceedings to be brought. DEL}

{DEL 5-3-20. Use of card, sign, or advertisement as evidence -- Single act sufficient evidence. -- DEL} {DEL The display or presentation of a card, sign, advertisement, or other printed, engraved, or written instrument or device bearing a person's name in conjunction with the words "certified public accountant" or any abbreviation thereof, or "public accountant" or any abbreviation thereof, except as permitted by this chapter, shall be prima facie evidence in any action brought under section 5-3-18 or 5-3-19 that the person whose name is so displayed caused or procured the display or presentation of that card, sign, advertisement, or other printed, engraved, or written instrument or device and that the person is holding himself or herself out to the public as a certified public accountant or as a public accountant, as the case may be. In any such action, evidence of the commission of a single act prohibited by this chapter shall be sufficient to justify an injunction or a conviction without evidence of a general course of conduct. DEL}

{DEL 5-3-21. Ownership of accountants' working papers. -- DEL} {DEL All statements, records, schedules, working papers, memoranda and such other data, including but not limited to, a data bank, retained by a certified public accountant, public accountant, a partnership or corporation composed of certified public accountants, or a partnership or corporation composed of public accountants, incident to or in the course of professional services rendered to clients by that accountant or firm, except reports submitted by a certified public accountant, public accountant, or firm to a client, shall be and remain the property of that accountant or firm, in the absence of an express agreement between that accountant or firm and the client to the contrary. No such statement, record, schedule, working paper, memorandum or such other data, including, but no limited to, a data bank, shall be sold, transferred, or bequeathed, without the written consent of the client or his, her or its personal representative or assignee, to anyone other than one (1) or more surviving partners, stockholders, new partners or new stockholders of that permit holder, or any combined or merged firm or successor in interest to the permit holder. DEL}

{DEL 5-3-22. Confidential communications. -- DEL} {DEL (a) No certified public accountant, public accountant, partnership or corporation of certified public accountants, partnership or corporation of public accountants, or any of their employees, including, but not limited to clerks, para-professionals and students under work study programs on a paid or pro bono basis, shall disclose any confidential information obtained in the course of a professional engagement except with the written consent of the client or former client, or as disclosure may be required by law, legal process, the standards of the profession, or as disclosure of confidential information is permitted by subsection (c) or (d) of section 5-3-17 in connection with peer reviews or ethics investigations. DEL}

(b) This section shall not be construed as limiting the authority of this state or of the United States or an agency or court of this state or of the United States to subpoena and use that information in connection with any investigation, public hearing or other proceeding; nor shall this section be construed as prohibiting a certified public accountant or a public accountant whose professional competence has been challenged in a court of law or before an administrative agency from disclosing confidential information as a part of a defense to the court action or administrative proceeding. DEL}

{DEL 5-3-23. Construction. -- DEL} {DEL If any provision of this chapter or the application thereof to anyone or to any circumstance is held invalid, the remainder of the chapter and the application of that provision to others or other circumstances shall not be affected thereby. DEL}

{DEL 5-3-24. Repeal provisions -- Effect of prior laws, rules and regulations. -- DEL} {DEL All other acts or parts of acts in conflict with this chapter are hereby repealed; provided, however, that nothing contained in this chapter shall invalidate or affect any action taken under any law in effect prior to the effective date hereof; nor invalidate or affect any proceeding instituted under that law before the effective date hereof; nor invalidate the rules and regulations utilized by the board until new rules and regulations are promulgated within a reasonable time. DEL}

SECTION 2. Title 5 of the General Laws entitled "Businesses and Professions" is hereby amended by adding thereto the following chapter:

{ADD 5-3.1-1. Title. -- ADD} {ADD This chapter may be cited as the "Accountancy Act of 1995". ADD}

{ADD 5-3.1-2. Policy and purpose. -- ADD} {ADD It is the policy of this state and the purpose of this chapter: (a) To promote the dependability of information which is used for guidance in financial transaction or for accounting for or assessing the financial status or performance of commercial, noncommercial, and governmental enterprises;

(b) To protect the public interest by requiring that persons professing special competence in accountancy or offering assurance as to the reliability or fairness of presentation of such information demonstrate their qualification to do so, and that persons who have not demonstrated and maintained such qualifications, including but not limited to certificate holders not in public practice, not be permitted to hold themselves out as having such special competence or to offer such assurance;

(c) to regulate the professional conduct of persons licensed as having special competence in accountancy, in all aspects of the practice of public accountancy;

(d) To establish a public authority competent to prescribe and assess the qualifications of and to regulate the professional conduct of practitioners of public accountancy; and

(e) To prohibit the use of titles relating to the practice of public accountancy which are likely to mislead the public as to the status or competence of the persons using such titles. ADD}

{ADD 5-3.1-3. Definitions. -- ADD} {ADD As used in this chapter, unless the context otherwise requires, the following terms shall be construed as follows: (a) Authority. An authority to practice as a public accountant in this state granted by the public accountants advisory commission under former section 5-3-6, (P.L. 1962, chapter 228, Section 1, as amended by P.L. 1970, chapter 272, Section 1).

(b) Board. The board of accountancy, a public authority created by section 5-3.1-4.

(c) Certificate. A certificate as certified public accountant issued under this chapter or corresponding provisions of prior law, or a corresponding certificate as certified public accountant issued after examination under the law of any other state

(d) Certified public accountant or CPA. A person holding a certificate issued under this chapter or corresponding provisions of prior law or under the accountancy act or similar law of any other state.

(e) Licensee. The holder of a certificate, authority or permit issued under this chapter or under the prior laws of this state.

(f) Permit. A permit to practice public accountancy issued under sections 5-3.1-7, 5-3.1-8, or 5-3.1-9, or under corresponding provisions of prior law, or under corresponding provisions of the law of any other state.

(g) Practice of (or practicing) public accounting or accountancy. The performance of or the offering to perform, in an independent posture, for a client or potential client, one or more kinds of services involving the use of accounting or auditing skills, in connection with the issuance of reports on financial statements.

(h) Practice Unit. A sole proprietorship, corporation, partnership or other entity engaged in the practice of public accounting in this state. For the purpose of this chapter, the office of the Auditor General shall be considered a practice unit.

(i) Principal residence. The state in which a person has the right to register to vote for, or the right to vote in, general elections and in which he or she qualifies to file a resident state income tax return.

(j) Public accountant or PA. A person holding an authority as a public accountant issued under the prior laws of this state.

(k) Quality review. A study, appraisal, or review of one or more aspects of the professional work of a practice unit engaged in the practice of public accountancy in this state, by licensee(s) who are not affiliated with the practice unit being reviewed.

(l) Report. An opinion, report, or other form of language that states or implies assurance as to the reliability of financial statements and that also includes or is accompanied by a statement or implication that the person or practice unit issuing such financial statements has special knowledge or competence in accounting or auditing. 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 such issuer 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 language is conventionally understood to imply any positive assurance as to the reliability of the financial statements referred to and/or any special competence on the part of the person or practice unit issuing such language; and it includes also any other form of language that is conventionally understood to imply such assurance and/or such special knowledge or competence.

(m) State. The states of the United States, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. The term "this state" means the State of Rhode Island. ADD}

{ADD 5-3.1-4. Board of accountancy. -- ADD} {ADD (a) There is hereby created a board of accountancy in and for the state of Rhode Island, to be known as the Rhode Island board of accountancy. The board shall consist of five (5) members. All members shall be appointed by the governor. Membership of the board shall consist of three (3) members who hold certificates and valid permits to practice as certified public accountants in this state and who are in public practice as certified public accountants in this state, and one (1) member who holds an authority and a valid permit to practice as a public accountant in this state, all four (4) of whom shall have at least five (5) years' experience in a full-time practice of public accountancy; the fifth member of the board shall be from the public sector and shall have such professional or practical experience in the use of accounting services and financial statements so as to the qualified to evaluate whether the qualifications, activities, and professional practice of those persons and firms regulated under this chapter conform with the standards established to protect the public interest. The board member from the public sector shall be designated as the public's member to the board for the term of service so appointed. Except as otherwise provided, the term of the members of the board shall be five (5) years. No member of the board shall be associated in the practice of accountancy, either individually or as a member of a firm, with any other member of the board. The members of the Rhode Island board of accountancy appointed and serving as such under prior law on the effective date of this act shall serve out the terms for which they were originally appointed as members of the board created by this section. Vacancies occurring during any term shall be filled by appointment by the governor for the unexpired term. Upon the expiration of his or her term of office, a member shall continue to serve until his or her successor shall have been appointed and shall have assumed office. The governor shall remove from the board any member whose certificate, authority or permit has been revoked, suspended, or not renewed. No person who has served two (2) consecutive complete terms shall be eligible for reappointment. Serving the remainder of an unexpired term upon appointment by the governor to fill a vacancy on the board shall not be considered as serving a complete term.

(b) The board shall elect annually from among its members a chairman and such other officers as it deems appropriate. The board shall meet at such times and places as may be fixed by the board and in any event shall meet no less than four (4) times each year. Three (3) members of the board shall constitute a quorum for the transaction of business. The board shall have a seal which shall be judicially noticed. The board shall retain or arrange for the retention of all applications and documents under oath that are filed with the board, and shall maintain a registry of the names and addresses or all licensees. The board shall keep records of its proceedings, and in any proceeding in court, civil or criminal, arising out of or founded upon any provision of this chapter, copies of said records certified as correct under the seal of the board shall be admissible in evidence.

(c) Each member of the board shall receive compensation in the amount of thirty dollars ($30.00) for each day or portion thereof spent in the discharge of official duties as such a member, to a maximum of seven hundred and fifty dollars ($750) per year, and shall be reimbursed for actual and necessary expenses incurred in the discharge of such duties.

(d) All fees and monies derived under the provisions of this chapter shall be paid to and received by the general treasurer of the State of Rhode Island, who shall keep such monies in a restricted receipt account. All monies in the restricted receipt account shall be used to reimburse the board for expenses incurred in the administration and enforcement of this chapter. The board treasurer is authorized and directed to draw orders upon the general treasurer for payment from the restricted receipt account upon receipt by the board treasurer of vouchers authenticated by the chairman, vice chairman, or secretary of the board.

(e) The board shall file an annual report of its activities with the governor and the general assembly of this state. The report shall include, but not be limited to, a statement of all receipts and disbursements and a listing of all current licensees. The board shall mail a copy of any such annual report upon request in writing to any licensee and to any member of the public.

(f) The board shall prescribe such rules and regulations not inconsistent with the provisions of this chapter as it deems consistent with, or required by, the public welfare and policy set forth in section 5-3.1-2. Such rules and regulations may include:

(1) Rules and regulations of procedure for governing the conduct of matters before the board;

(2) Rules and regulations of professional conduct for establishing and maintaining high standards of competence and integrity in the profession of public accounting;

(3) Rules and regulations governing educational and experience requirements for the issuance of certificates;

(4) Rules and regulations establishing requirements for continuing education to promote the professional competence of holders of permits, which the board may require such holders to meet as a condition of their continuing in the practice of public accounting;

(5) Rules and regulations governing practice units engaged in the practice of public accounting, including but not limited to rules and regulations concerning their style, name, title, and affiliation with any other organization, and establishing reasonable standards with respect to professional liability insurance;

(6) Rules and regulations for reviewing and monitoring professional performance and conducting quality reviews;

(7) Any other rules and regulations which the board deems necessary or appropriate in exercising its functions under this chapter.

(g) The promulgation of any rule, regulation, or amendment thereto under subsection (f) or under any other provision of this chapter shall be in accordance with section 42-35-3.

(h) The board may employ such personnel and arrange for such assistance, legal or otherwise, as it may require for the performance of its duties. It also may, from time to time, establish one or more advisory committees as it deems necessary in the performance of such duties. The authority and term of any such advisory committee may be permanent or temporary in nature as determined by the board.

(i) In addition to its rulemaking authority, the board shall have the power to take all action that is necessary and proper to effectuate the purposes of this chapter, including the power:

(1) To sue and be sued in its official name as an agency of this state;

(2) To investigate all complaints and charges of unprofessional conduct, including but not limited to such conduct specified under section 5-3.1-12, against any licensee or any applicant for a certificate or permit, and to hold hearings, in accordance with the provisions of section 5-3.1-14, to determine whether such complaints and charges are substantiated;

(3) To appoint one (1) or more members of the board, legal counsel, and/or an independent investigator to act on behalf of the board in investigating the conduct of any licensee, or of any applicant for a certificate or permit, or in the alternative to appoint a probable cause committee to investigate such conduct on its behalf, such committee to be comprised of licensees in good standing, as the board shall determine; and

(4) To issue subpoenas, administer oaths, and summon and examine witnesses in connection with any investigation conducted under authority of this chapter. If a subpoena is disobeyed, the board may invoke the aid of any court of competent jurisdiction in this state to require the attendance and testimony of witnesses and the production of documentary evidence.

(j) The board and its members and agents shall be immune from personal liability for actions taken in good faith in the discharge of the board's responsibilities, and the State of Rhode Island shall indemnify the board and such members and agents for, and shall hold them harmless from, any and all costs, damages, and reasonable attorneys' fees arising from or related in any way to claims or actions against them with respect to matters to which such immunity applies. ADD}

{ADD 5-3.1-5. Certified public accountants. -- ADD} {ADD (a)Upon application therefor and payment of the required fee, the board shall issue a certificate to any person:

(1) Who is of good character;

(2) Who has a principal residence in Rhode Island as defined in section 5-3.1-3 or a primary place of employment in Rhode Island:

(3) Who, before applying for the examinations prescribed in subdivision (a)(4), has received a baccalaureate degree from a college or university acceptable to the board, the total educational program of which includes an accounting concentration or its equivalent and courses in such related subjects as the board shall determine to be appropriate; provided, however, that after July 1, 1999, the education requirement for a certificate, which must be met before an applicant is eligible to apply for the examinations prescribed in subdivision (a)(4), shall be at least one hundred fifty (150) semester hours of college education, including a baccalaureate or higher degree conferred by a college or university acceptable to the board, the total educational program of which shall include an accounting concentration or equivalent as determined by board rule to be appropriate;

(4) Who shall have passed written examinations in accounting and auditing and such related subjects as the board shall deem appropriate and shall specify by rule;

(5) Who shall have two (2) years' public accounting experience, or who shall have one (1) year's public accounting experience and a master's or doctorate degree in accounting, business administration, or other related curriculum from a college or university recognized by the board; and who has satisfactorily completed such number of semester hours in accounting, auditing, and other business courses as shall be prescribed by board rules and regulations; and

(6) Who, if an out-of-state individual, (i) has passed all parts of the uniform certified public accountant examination in another jurisdiction (but has not received a certificate or similar certification in that jurisdiction); (ii) has established a principal residence in Rhode Island or a primary place of employment in Rhode Island preparatory to seeking a certificate from this state; (iii) has complied with the longer of (A) the experience requirement in the jurisdiction in which the uniform examination was taken or (B) the Rhode Island experience requirement; (iv) has complied with the educational requirements under subdivision (a)(3); and (v) has satisfactorily complied with such other requirements as the board by rule or regulation shall reasonable determine to be appropriate.

(b) The board, in its discretion, may accept the educational credits of any person who is a candidate for a certificate if it is satisfied, by appropriate means of evaluation, that such credits are an acceptable substitute for the credit requirements of subdivision (a)(3) of this section. The board, in its discretion, may waive the residency or primary place of employment requirements relating to the issuance of a certificate as stated in subdivisions (a)(2) and (a)(6) of this section

(c) The examinations described in subdivision (a)(4) of this section shall be held by the board and shall take place as often as the board shall determine to be desirable, but in any event not less frequently than once each year. The board shall prescribe by rule the procedures to be followed in applying for and conducting the examinations and the methods to be used in grading the examinations and determining a passing grade. The board may make such use of any or all parts of the uniform certified public accountant examination and advisory grading service provided by the American Institute of Certified Public Accountants, and may contract with third parties to perform such administrative services with respect to the examinations, as the board may deem appropriate to assist it in performing its duties hereunder.

(d) The board may, by rule or regulation, provide for the granting of credit to a candidate for the satisfactory completion by such candidate of a written examination in any one or more of the subjects referred to in subdivision (a)(4) of this section which shall be given by the licensing authority in any other state. Any such rules and regulations shall include the requirement that any examination approved as a basis for the granting of credit shall, in the judgment of the board at the time of the granting of such credit, be at least as thorough as the most recent examination given by the board in the subject or subjects tested. The board may also, by rule or regulation, prescribe terms and conditions under which a candidate who passes the examination in one or more of the subjects referred to in subdivision (a)(4) of this section may be reexamined in the remaining subjects, with credit given for the subjects previously passed. It also may provide by rule or regulation for a reasonable waiting period for a candidate's reexamination in a subject previously failed. Subject to the foregoing and to such other rules and regulations as the board may adopt governing reexaminations, a candidate shall be entitled to any number of reexaminations. Except as the board may otherwise provide by rule or regulation in order to prevent what it determines to be undue hardship to candidates, a candidate granted credit for satisfactory examination in any one or more of the subjects referred to in subdivision (a)(4) of this section shall have met the educational requirement of subdivision (a)(3) or a (a)(5) of this section in effect on the date of the examination by which the candidate successfully completes the examination under subdivision (a)(4) of this section.

(e) The board shall charge each candidate for a certificate a fee for the initial examination under subsection (a) of this section, for reexamination under subsection (d) of this section for each subject in which the candidate is reexamined, and for evaluation of a candidate's educational qualifications under subsection (b) of this section. The applicable fee shall be paid by the candidate at the time of application for such examination, reexamination, reexamination, or evaluation, as the case may be. Fees for examination, reexamination, and evaluation of educational qualifications shall be determined by the board and set forth in the rules and regulations issued thereby. The liability of the board to a candidate taking an examination or reexamination shall be limited to the amount of the fee received therefor.

(f) Persons who on July 1, 1995 hold a certificate issued under the laws of this state prior to such date shall not be required to obtain an additional certificate under this chapter, but shall other wise be subject to all the provisions of this chapter; such certificate previously issued shall, for all purposes, be considered a certificate issued under this chapter and subject to the provisions hereof. Reinstatement power shall be vested in the board with respect to those certificates suspended or revoked prior to July 1, 1995, and the holder thereof may have such certificates reissued upon application therefor in accordance with section 5-3.1-15. Persons holding certificates on July 1, 1995 who are estopped from obtaining a permit under government employment restrictions may apply for a permit under section 5-3.1-7 within one (1) year following termination of that employment, and upon obtaining such permit may engage in the practice of public accounting in this state as a certified public accountant subject to the provisions of this chapter.

(g)(1) The board shall, upon application therefor and payment of a fee to be determined by the board and promulgated by rule or regulation, issue a certificate to a holder of a certificate to a holder of a certificate issued by another state, provided that: (A) the applicant meets all current requirements in this state at the time application is made; and (B) at the time of the issuance of the applicant's certificate in such other state, the applicant met all requirements then applicable in this state.

(2) If the holder of a certificate issued by another state meets all current requirements in this state except the educational or experience requirements of this state as set forth in this section, or passed the examination under different credit provisions then applicable in this state, the board shall issue a certificate to such applicant upon application therefor and upon payment of the required fee, provided that: (A) the applicant has five (5) years of experience in the practice of public accountancy within the ten (10) years immediately prior to such application; or (B) the applicant has five (5) years of experience in the practice of public accountancy over a longer or earlier period and has completed fifteen (15) current semester hours of accounting, auditing, and such other related subject as the board may specify by rule, at an accredited institution, and has one (1) year of current experience in the practice of public accountancy.

(h) An applicant for issuance of a certificate under this section shall list in the application all other states in which the applicant has applied for or holds a certificate. Each applicant for or holder of a certificate issued under this section shall, within thirty (30) days of the occurrence of such event, notify the board in writing of the issuance, denial, revocation, or suspension of a certificate by any other state, or of the commencement of a disciplinary or enforcement action against the applicant or holder by any other state

{ADD 5-3.1-6. Public accountants. -- ADD} {ADD (a) Persons who on July 1, 1995 hold an authority as a public accountant and a permit issued under the prior laws of this state may continue to engage in the practice of public accounting in this state as public accountants and may thereafter continue to use the designation "PA", provided that such persons continue to hold a permit issued under the laws of this state and otherwise remain in compliance with this chapter.

(b) Persons who on July 1, 1995 hold an authority as a public accountant but do not hold a permit issued under the prior laws of this state shall no longer engage in the practice of public accounting as public accountants in this state and shall no longer use the term "public accountant" or the designation "PA"; provided, however, that the board may reinstate the holder of an authority whose permit has been suspended, revoked, or not renewed prior to July 1, 1995 upon application for reinstatement under section 5-3.1-15. An application for reinstatement under section 5-3.1-15 shall include evidence of the applicant's authority to practice as a public accountant in this state prior to July 1, 1995, and such other evidence as the board may require. Upon reinstatement, the applicant may engage in the practice of public accounting in this state as a public accountant, may hold himself or herself out to the public as a public accountant, and may thereafter use the designation "PA", provided that such applicant continues to hold a permit issued under the laws of this state and otherwise remains in compliance with this chapter. Notwithstanding the foregoing, persons holding an authority on July 1, 1995 who are estopped from obtaining a permit under government employment restrictions may apply for a permit under section 5-3.1-7 within one (1) year following termination of that employment, and upon obtaining such permit may engage in the practice of public accounting in this state as a public accountant subject to the provisions of this chapter.

(c) After July 1, 1995, no person, except those qualified under subsections (a) or (b) of this section, shall be entitled to an authority or be issued a permit to practice, or be known as or hold himself or herself out to the public as a public accountant, or otherwise be entitled to exercise the rights of a public accountant under this chapter. ADD}

{ADD 5-3.1-7. Permits for public accountants and certified public accountants. -- ADD} {ADD (a) Annual permits to engage in the practice of public accounting in this state shall be issued by the board, upon application therefor and payment of the required fee, to certified public accountants qualified under section 5-3.1-5 and to public accountants qualified under section 5-3.1-6. All such permits shall expire on the last day of June of each year unless the same shall be renewed in accordance with subsection (c) hereof. Permits may be renewed for a period of one (1) year.

(b) A certified public accountant who holds a permit issued by another state and who desires to practice in this state shall apply for a permit in this state. Upon the date of filing the completed application with the board, the applicant shall be deemed qualified to practice and may practice public accounting in this state pending board review of the application, provided that the applicant meets all other requirements applicable thereto under this chapter. Submission of the application shall constitute the appointment of the secretary of state as an agent for the applicant for service of process in any action or proceeding arising out of any transaction or operation connected with or incidental to the practice of public accounting in this state by the applicant.

(c) Applications for renewal of a permit under this section shall be submitted to the board by February 15 of each year and shall be accompanied by evidence that the applicant has satisfied the continuing professional education requirements promulgated by board regulation. Such evidence shall be in such form as the board may require. Failure to furnish such evidence shall constitute grounds for refusal to renew the permit unless the board in its discretion determines that such failure was due to reasonable cause or excusable neglect.

(d) Applications for renewal of a permit under this section shall also identify the practice unit, if any, with which the applicant is affiliated. In the event such practice unit fails to comply with sections 5-3.1-9 or 5-3.1-10 the Board may refuse to renew the applicant's individual permit if the Board determines that such applicant was personally and substantially responsible for the failure of the practice unit to meet the requirements of sections 5-3.1-9 and 5-3.1-10.

(e) All applicants for a permit under this section shall list in the application all other states in which the applicant has applied for or holds a permit to practice. Each applicant for or holder of a permit issued under this section shall, within thirty (30) days of the occurrence of such event, notify the board in writing (1) of the issuance, denial, revocation, or suspension of a permit by any other state, and (2) of the commencement of a disciplinary or enforcement action against the applicant or holder by any other state.

(f) Fees for the issuance and renewal of permits under this section shall be established from time to time by the board. The required fee shall be paid by the applicant at the time the application is filed with the board. ADD}

{ADD 5-3.1-8. Permits for accountants licensed by foreign countries. -- ADD} {ADD (a) An annual limited permit to engage in the practice of public accounting in this state may be issued by the board, upon application therefor and payment of the required fee, to any person who is the holder of a certificate, license, or degree from a foreign country constituting a recognized qualification for the practice of public accounting in that country, provided that (1) the board determines that the requirements for obtaining such certificate, license, or degree are substantially equivalent to those set forth under this chapter for obtaining a certificate in this state, (2) such certificate, license or degree at the time of application is then in full force and effect, and (3) the applicant meets all other requirements under this section. In the event the board determines that the requirements for obtaining such certificate, license, or degree are not substantially equivalent to those set forth hereunder for obtaining a certificate in this state, the board may require, as a condition to granting a permit under this section, that the applicant sit for and pass the written examinations required of candidates for a certificate under subdivision (a)(4) of section 5-3.1-5. Any permit issued under this section shall be issued in the name of the applicant followed by the recognized accounting designation by which he or she is known in the country where licensed, translated into the English language, followed by the name of such country. Annual limited permits to engage in the practice of public accounting shall qualify the holder to practice public accounting in this state solely with respect to matters concerning residents, governments, and corporations or other business entities (including the divisions, subsidiaries, or affiliates thereof, if any) of the foreign country in which the holder is licensed to practice public accounting. A person who is issued a permit under this section, when engaging in the practice of public accounting in this state, shall use only such title under which he or she is generally known in his or her own country, translated into the English language, and shall indicate after such title the name of the country from which he or she received his or her certificate, license, or degree.

(b) All annual limited permits issued under this section shall expire on the last day of June of each year and may be renewed for a period of one (1) year in accordance with subsection (c) hereof. Submission of the application for original issuance or renewal of an annual limited permit shall constitute the appointment of the secretary of state as an agent for the applicant for service of process in any action or proceeding arising out of any transaction or operation connected with or incidental to the practice of public accounting in this state by the applicant.

(c) Applications for renewal of an annual limited permit shall be submitted to the board by February 15 of each year and shall be accompanied by evidence of satisfaction of the continuing professional education requirements promulgated by board regulation. Such evidence shall be in such form as the board may require. Failure to furnish such evidence shall constitute grounds for refusal to renew the permit unless the board in its discretion determines that such failure was due to reasonable cause or excusable neglect. Notwithstanding the foregoing, the board, in its discretion, may waive the above continuing education requirements if (1) the licensing authority of the foreign country in which the holder of the annual limited permit is licensed has established requirements for continuing education for practitioners of public accounting, (2) the applicants has filed with the board an affidavit stating that he or she is in compliance with those continuing education requirements at the time of the application for renewal, and (3) the board determines that such continuing education requirements are substantially equivalent to those promulgated by the board under this chapter.

(d) An application for a permit under this section shall in the application list all other jurisdictions in which the applicant has applied for or holds a certificate, license, or degree to practice public accountancy or a permit to practice. Each applicant for or holder of a permit hereunder shall, within thirty (30) days of the occurrence of such event, notify the board in writing (1) of the issuance, denial, revocation, or suspension of any such certificate, license, degree, or permit, or (2) of the commencement of any disciplinary or enforcement action against such applicant or holder by any jurisdiction. An applicant hereunder also shall list in the application the address of every office established or maintained in this state for the limited practice of public accounting. All such offices shall be under the direct supervision of an accountant licensed by a foreign country who holds an annual limited permit to practice issued under this section, and shall be designated by the name and title of such accountant. Such title shall be translated into the English language and followed by the name of the foreign country where the accountant is licensed. All applicants for or holders of a permit under this section shall notify the board in writing, within thirty (30) days of the occurrence of such event, (1) of any change in the number or location of offices within this state required to be listed in the application, and (2) of any change in the identities of the persons supervising such offices.

(e) The board shall charge a fee to each person who makes application for original issuance or renewal of a permit under this section. The fee shall be paid in U.S. currency at the time the application is made. Fees charged under this section shall be established by the board. ADD}

{ADD 5-3.1-9. Permits for practice units. -- ADD} {ADD (a) An annual permit to engage in the practice of public accounting in this state shall be issued by the board, upon application therefor and payment of the required fee, to any partnership composed of certified public accountants and /or public accountants which satisfies the following requirements:

(1) The principal purpose and business of the partnership must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) Each partner thereof must hold (i) a certificate and a permit from some state, or (ii) and authority as a public accountant and a permit to practice in this state under section 5-3.1-7;

(3) At least one (1) shareholder of the corporation must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under section 5-3.1-7;

(4) Every manager of every office of the corporation located in this state and every shareholder and director personally engaged in the business of the corporation within this state must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under section 5-3.1-7. No manager of an office of the corporation may serve in such capacity at more than one (1) office of the corporation located in this state;

(5) The address of every office of the corporation located in this state must be listed in the application for the permit;

(6) In order to facilitate compliance with the provisions of this section relating to the ownership of stock, there must be evidence of a restriction binding the corporation or its shareholders to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder and binding any holder not a qualified shareholder to sell those shares to the corporation or the qualified shareholders. Such restriction must be noted on each certificate of corporate stock. The corporation may purchase any amount of its stock for this purpose, notwithstanding any impairment of capital, so long as one (1) share remains outstanding. For purposes of this subdivision, a qualified shareholder shall be any shareholder of the corporation who meets the qualifications specified in this subsection (b); and

(7) The corporation must be in compliance with such other regulations pertaining to corporations practicing public accounting in this state as the board may prescribe.

(c) An annual permit to engage in the practice of public accounting in this state shall be issued by the board, upon application therefor and payment of the required fee, to any sole proprietorship owned by a certified public accountant or public accountant which satisfies the following requirements:

(1) The principal purpose and business of the sole proprietorship must be to furnish public accounting services to the public not inconsistent with this chapter and the rules and regulations of the board;

(2) The sole proprietor must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under section 5-3.1-7;

(3) Every manager of every office of the sole proprietorship located in this state must be a certified public accountant or a public accountant holding a certificate or authority under this chapter and a permit to practice in this state under section 5-3.1-7. No manager of an office of the sole proprietorship may serve in such capacity at more than one (1) office of the sole proprietorship located in this state; and

(4) The address of every office of the sole proprietorship located in this state must be listed in the application for the permit.

(d) Application for a permit under this section must be made upon the affidavit of the sole proprietor or of a partner or shareholder who holds a permit to practice in this state under section 5-3.1-7 as a certified public accountant or a public accountant. All applications for a permit under this section must include, in addition to any other information required by this chapter or by rule or regulation of the board to be set forth therein, a list of all other states in which the applicant has applied for or holds a permit. Upon receipt of the application, the board shall determine whether the applicant is eligible for a permit. In the event the board determines the applicant to be ineligible for a permit under this section, such determination shall be set forth in writing and delivered to the applicant at such address as shall be set forth in the application. ADD}

{ADD (e) All applicants for or holders of a permit under this section shall notify the board in writing, within thirty (30) days of the occurrence of such event, ADD}

{ADD (1) of any change in the identities of the partners, officers, directors, or shareholders thereof who are personally engaged in this state in the practice of public accounting; ADD}

{ADD (2) of any change in the number or location of offices within this state required to be listed in the application pursuant to this section; ADD}

{ADD (3) of any change in the identities of the persons supervising such offices; and ADD}

{ADD (4) of any issuance, denial, revocation, or suspension of a permit by any other state. The board may prescribe fees which are to be paid by such applicants or holders upon such notification. ADD}

{ADD (f) All permits issued by the board under this section shall expire on the last day of June of each year unless the same shall be renewed in accordance with the provisions hereof. Permits may be renewed for a period of one (1) year, and shall expire on the last day of June in the year following the year in which they are renewed unless they are again renewed by their holders. All applications for renewal of permits hereunder shall be submitted to the board by February 15 of each year. All applicants for permit renewal shall satisfy the quality review requirements set forth in section 5-3.1-10. ADD}

{ADD (g) Fees to be paid upon application for initial issuance or renewal of a permit under this section shall be established from time to time by the board. Fees shall be paid at the time the application is filed with the board. ADD}

{ADD (h) An annual permit to engage in the practice of public accounting in this state shall be issued by the board, upon application therefor and payment of the required fee, to the office of the auditor general provided the office is in compliance with section 5-3.1-10. ADD}

{ADD 5-3.1-10. Quality reviews. -- ADD} {ADD (a) The board shall require, as a condition to the renewal of permits for practice units under section 5-3.1-9, that applicants undergo quality reviews conducted no more frequently than one every three (3) years in such manner and with such satisfactory result as the board may specify; provided, however, that such requirement (a) shall be promulgated reasonably in advance of the time when it must first be met, and (b) shall provide for compliance by an applicant upon the showing that it has undergone a satisfactory quality review performed for other purposes (such as those performed by the American Institute of Certified Public Accountants in connection with its quality and peer review programs) which was substantially equivalent to the review required under this subsection, and that such review was completed within the three (3) years immediately preceding the renewal period. ADD}

{ADD (b) The proceedings, records, and work papers of a quality review committee appointed by the board for the purpose of conducting quality reviews under this subsection shall be privileged and shall not be subject to discovery, subpoena, or other means of legal process or introduction into evidence in any civil action, arbitration, administrative proceeding, or state accountancy board proceeding, and no member of the quality review committee or other person involved in the quality review process shall be permitted or required to testify in any such civil action, arbitration, administrative proceeding, or state accountancy board proceeding as to any matters produced, presented, disclosed, or discussed during or in connection with the quality review process, or as to any findings, recommendations, evaluations, opinions, or other actions of such committees or any members thereof; provided, however, that information, documents, or records that are publicly available are not to be construed as immune from discovery or use in civil actions, arbitration proceedings, administrative proceedings, or state accountancy board proceedings merely because they were presented or considered in connection with the quality review process. The privilege created by this statute also shall not apply to materials prepared in connection with a particular engagement merely because they are subsequently presented or considered as part of the quality review process; nor shall it apply to disputes between review committees and practice units subject to a quality review arising from the performance of the review. The privilege likewise shall not apply, notwithstanding any provision in this section to the contrary, with respect to the board or its members, who shall, so long as they are acting in their official capacities, have access to any and all records, reports, work papers and other documents and materials which may at any time have been in the possession of or prepared by a quality review committee during the performance of its duties. ADD}

{ADD 5-3.1-11. Hearing on denial by board. -- ADD} {ADD Any person or practice unit aggrieved by a decision of the board not to (a) issue a certificate under section 5-3.1-5, (b) issue a permit to practice under section 5-3.1-7, 5-3.1-8, or 5-3.1-9, or (c) renew any such permit, as the case may be, may request a hearing before the board on such denial. Such request shall be in the form of a written petition, containing such information as the board may by rule or regulation require, and shall be submitted to the board within ten (10) days of the board's written decision denying such certificate, permit or renewal thereof. ADD}

{ADD 5-3.1-12. Revocation or suspension of certificate, authority or permit. -- ADD} {ADD After notice and hearing as provided in section 5-3.1-14, the board may (a) suspend, for a period not to exceed two (2) years, or revoke any certificate issued under section 5-3.1-5, or any predecessor provision thereof, and any authority as a public accountant issued under the prior laws of this state; (b) revoke or suspend any permit issued under section 5-3.1-7, 5-3.1-8, 5-3.1-9, or their predecessor provisions; and (c) reprimand or censure in writing, limit the scope of practice of, impose an administrative fine upon (not to exceed $1,000), or place on probation, all with or without terms, conditions, or limitations, a licensee, for any one or more of the following causes: ADD}

{ADD (1) Fraud or deceit in obtaining a certificate or permit under this chapter; ADD}

{ADD (2) Dishonesty, fraud, or gross negligence in the practice of public accounting or in the filing or failing to file the licensee's own income tax returns; ADD}

{ADD (3) Violation of any of the provisions of this chapter; ADD}

{ADD (4) Violation of any rules and regulations, including but not limited to any rules of professional conduct, promulgated by the board under the authority granted by this chapter; ADD}

{ADD (5) Conviction of or pleading guilty or nolo contendere to a crime or an act constituting a crime of forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion, conspiracy to defraud, misappropriation of funds, tax evasion, or any other similar offense or offenses involving moral turpitude, in a court of competent jurisdiction of this or any other state or in federal court; ADD}

{ADD (6) Cancellation, revocation, or suspension of, or refusal to renew the licensee's certificate or permit from another state by such other state for any cause other then failure to pay a fee or to meet the requirements of continuing education in that other state; ADD}

{ADD (7) Suspension or revocation of the right to practice public accounting before any state or federal agency; ADD}

{ADD (8) With respect to accountants licensed by foreign countries, cancellation, revocation, suspension, or refusal to renew such person's certificate, license, or degree evidencing his or her qualification to practice public accounting by the foreign country issuing the same, such certificate, license, or degree having qualified the accountant for issuance of an annual limited permit to practice under section 5-3.1-8 ADD}

{ADD (9) Failure to furnish the board or any persons acting on behalf thereof such information as may legally be requested by the board; ADD}

{ADD (10) Any conduct reflecting adversely upon the licensee's fitness to engage in the practice of public accountancy; and ADD}

{ADD (11) Any other conduct discreditable to the public accounting profession. ADD}

{ADD 5-3.1-13. Revocation or suspension of practice unit permit. -- ADD} {ADD After notice and hearing as provided in section 5-3.1-14, the board may revoke or suspend the permit of any practice unit issued under section 5-3.1-9 if at any time such practice unit fails to meet all the qualifications prescribed under said section 5-3.1-9. After notice and hearing as provided in section 5-3.1-14, the board may revoke or suspend the permit of a practice unit issued under section 5-3.1-9, and may censure in writing, limit the scope of practice of, impose an administrative fine upon (not to exceed $1,000), or place on probation, all with or without terms, conditions, or limitations, the holder of any such permit, for any cause enumerated in section 5-3.1-12 and for any of the following additional causes: ADD}

{ADD (a) With respect to partnership and corporate practice units, the revocation or suspension of the certificate or authority of, or the revocation, suspension, or refusal by the board to renew the permit of , any partner or shareholder thereof; and ADD}

{ADD (b) Cancellation, revocation, suspension, or refusal to renew the permit of the practice unit, or of any partner or shareholder thereof or of the sole proprietor, to practice public accounting in any other state by such state for any cause other than failure to pay a fee or to meet the requirements of continuing education in that other state. ADD}

{ADD 5-3.1-14. Initiation of proceedings -- Hearings before board -- Appeals -- Notice to other states. -- ADD} {ADD (a) The board may initiate proceedings under this chapter against a licensee either on its own motion, on the complaint of any person, upon the finding of probable cause by a probable cause committee appointed by the board pursuant to section 5-3.1-4, or upon receiving notification from another state board of accountancy of its decision to (1) revoke, suspend, or refuse to renew the practice privileges granted in that state to the licensee, or (2) censure in writing, limit the scope of practice of, impose an administrative fine upon, or place on probation such licensee. ADD}

{ADD (b) A written notice stating the nature of the charge or charges against the licensee and the time and place of the hearing before the board on such charges shall be served on such licensee not less then twenty (20) days prior to the date of the hearing either personally or by mailing a copy thereof by certified mail, return receipt requested, to the address of the licensee last known to the board. ADD}

{ADD (c) If, after being served with the notice of hearing as provided for herein, the licensee fails to appear at the hearing and to defend against the charges stated, the board may proceed to hear evidence against the licensee and may enter such order as shall be justified by the evidence. Any such order shall be final unless the licensee petitions for a review thereof as provided herein; provided, however, that within thirty (30) days from the date of any order, upon a showing of good cause for failing to appear and defend, the board may reopen the proceedings and may permit the licensee to submit evidence in his, her, or its behalf. ADD}

{ADD (d) At any hearing hereunder, the licensee may (1) appear in person or be represented by counsel; (2) produce evidence and witnesses on his, her, or its behalf; (3) cross-examine witnesses; and (4) examine such evidence as might be produced. A partnership may be represented before the board by counsel or by any partner thereof. A corporation may be represented before the board by counsel or by any shareholder thereof. A sole proprietorship may be represented before the board by counsel or by the sole proprietor. The licensee shall be entitled, on written application to the board, to the issuance of subpoenas to compel the attendance of witnesses on the licensee's behalf. ADD}

{ADD (e) The board or any member thereof may issue subpoenas to compel the attendance of witnesses and the production of documents, and may administer oaths, take testimony, hear proofs, and receive exhibits in evidence in connection with or upon hearing under this chapter. In case of disobedience to a subpoena, the board may petition the superior court to require the attendance and testimony of witnesses and the production of documentary evidence. ADD}

{ADD (f) The board shall not be bound by strict rules of procedure or by the laws of evidence in the conduct of its proceedings, but any determination of the board shall be based upon sufficient legal evidence to sustain such determination. ADD}

{ADD (g) A stenographic record of all hearings hereunder shall be kept and a transcript thereof filed with the board. ADD}

{ADD (h) At all hearings, the attorney general of this state, or such other legal counsel as may be employed, shall appear and represent the board. ADD}

{ADD (i) The decision of the board shall be made by vote in accordance with rules and regulations established under section 5-3.1-4. ADD}

{ADD (j) Any appeal from the decision of the board, by a person or persons adversely affected thereby, shall be governed by section 42-35.1-15. ADD}

{ADD (k) On rendering a decision to (1) revoke or suspend a certificate issued under the laws of this state, (2) revoke or suspend an authority as a public accountant issued under the prior laws of this state, (3) revoke, suspend, or refuse to renew a permit issued under the laws of this state, or (4) censure in writing, limit the scope of practice of , impose and administrative fine upon, or place on probation a licensee, the board shall examine its records to determine whether the licensee holds a certificate or a permit to practice in any other state. If the board determines that the licensee in fact holds such a certificate or permit, the board shall forthwith notify the board of accountancy of such other state by mail of its decision hereunder, and shall include in such notice an indication as to whether or not the licensee has appealed such decision. ADD}

{ADD (l) The board may, in its discretion, order any licensee against whom proceedings have been initiated under section 5-3.1-12 or 5-3.1-13 to reimburse the board for any and all fees, expenses, and costs incurred by the board in connection with such proceedings, including attorneys' fees. Such fees shall be paid within thirty (30) days from the date they are assessed and may be reviewed in accordance with section 42-35-15. ADD}

{ADD 5-3.1-15. Reinstatement. -- ADD} {ADD (a) Upon application in writing or after hearing pursuant to notice, the board may:

(1) Reissue a certificate to a certified public accountant whose certificate has been revoked or suspended;

(2) Reissue an authority to a public accountant whose authority has been revoked or suspended; and

(3) Modify the suspension of or reissue any permit which has been revoked or suspended, or which the board has previously refused to renew.

(b) The board shall by rule specify the manner in which applications under this section shall be made, the time within which they shall be made, and the circumstances in which hearings will be held thereon. ADD}

{ADD 5-3.1-16. Acts declared unlawful. -- ADD} {ADD (a) Except as permitted by the board pursuant to section 5-3.1-18(b), no person shall hold himself or herself out to the public as a certified public accountant, or assume or use the designation "certified public accountant" or "CPA" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a certified public accountant or CPA, unless such person has been issued a permit to practice under section 5-3.1-7.

(b) No partnership, corporation or sole proprietorship shall hold itself out to the public as being engaged in the practice of certified public accounting, or assume or use the designation "certified public accountants" or "CPAs" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such practice unit is composed of certified public accountants or CPAs, unless

(1) the practice unit holds a permit to practice under section 5-3.1-9;

(2) every partner, shareholder, officer, director, and every manager of every office of the practice unit is the holder of a certificate from some state; and

(3) every partner, shareholder, officer, and director personally engaged in the business of the practice unit within this state holds a permit issued under section 5-3.1-7.

(c) Except as otherwise provided below, no person shall hold himself or herself out to the public as a public accountant, or assume or use the designation "public accountant" or "PA" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a public accountant or PA, unless such person holds an authority as a public accountant and a permit to practice in this state issued under section 5-3.1-7. This subsection shall not apply to those persons qualified under subsection (a) to hold themselves out to the public as certified public accountants and to use the designation "certified public accountant" or "CPA".

(d) No partnership, corporation or sole proprietorship shall hold itself out to the public as being engaged in the practice of public accounting, or assume or use the designation "public accountants" or "PAs" or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such practice unit is composed of public accountants or PAs, unless the practice unit holds a permit to practice under section 5-3.1-9.

(e) No person, partnership, corporation, or sole proprietorship shall hold himself, herself, or itself out to the public as, or assume or use alone, or in connection with his, her, or its name, or any other name, the title or designation "certified accountant", "chartered accountant", "enrolled accountant", "licensed accountant", "registered accountant", "accredited accountant", or any other title or designation likely to be confused with "certified public accountant" or "public accountant", and shall not assume or use alone, or in connection with his, her, or its name, or any other name, the abbreviation "CA", "EA", "RA", "LA", "AA",or similar abbreviation likely to be confused with "CPA" or "PA"; provided, however, that anyone who holds a permit to practice under section 5-3.1-7 may hold himself or herself out to the public as an "accountant" or "auditor".

(f) No person shall prepare or attempt to prepare, or sign, affix, or associate his or her name or any trade name used by him or her in his or her business or profession to any of the following enumerated reports or any report in any manner having the appearance or import of any of the following enumerated reports, unless he or she holds a permit to practice under section 5-3.1-7 or 5-3.1-8, and unless his or her practice unit holds a permit to practice under section 5-3.1-9:

(1) a report expressing or disclaiming an opinion on a financial statement based on an audit or examination of that statement;

(2) a report expressing limited assurance on a financial statement based on a review of that statement; or

(3) a report on a financial statement based on a compilation of that statement.

(g) No person shall prepare or attempt to prepare on behalf of the partnership, corporation or sole proprietorship with which he or she is affiliated, or sign, affix, or associate the name of such practice unit to any of the following enumerated reports or any report having the appearance or import of any of the following enumerated reports, unless such practice unit hold a permit to practice under section 5-3.1-9:

(1) a report expressing or disclaiming an opinion on a financial statement based on an audit or examination of that statement;

(2) a report expressing limited assurance on a financial statement based on a review of that statement; or

(3) a report on a financial statement based on a compilation of that statement.

(h) No person, partnership, corporation, or sole proprietorship not holding a permit to practice under this chapter shall hold himself, herself, or itself out to the public as an "accountant" or "auditor", whether or not such term is accompanied by any other description or designation, on any sign, card, or letterhead, or in any advertisement or directory.

(i) No person shall assume or use the designation "certified public accountant" or "CPA" or "public accountant" or "PA" in conjunction with names of other persons so as to indicate or imply that there is a practice unit comprised of such persons which is engaged in the practice of public accounting, or in conjunction with the designation "and Company" or "and Co." or a similar designation, if, in such case, there is in fact no bona fide partnership, corporation, or sole proprietorship holding a permit under section 5-3.1-9.

(j) No person, partnership, corporation, or sole proprietorship shall hold himself, herself, or itself out to the public as being qualified for the practice of public accounting unless such person, partnership, corporation, or sole proprietorship holds a permit to practice under this chapter.

(k) The provisions of subsections (a), (c), and (e) of this section shall not prohibit any accountant licensed by a foreign country who holds an annual limited permit to engage in the practice of public accounting under section 5-3.1-8 from using the accounting designation by which he or she is known in his or her own country, translated into the English language, followed by the name of the country from which his or her certificate, license, or degree was issued, as required by section 5-3.1-8. ADD}

{ADD (l) No licensee, in connection with the practice of public accounting, may accept a payment, including a commission, for the recommendation or referral of products or services of others to a client, or for the recommendation or referral of products or services to be supplied by a client. ADD}

{ADD (m) Any person, partnership, corporation, or sole proprietorship that is found to have violated any provision of this section by a court of competent jurisdiction shall be liable to the board for reasonable attorneys' fees in connection with the proceeding in which such finding was made. ADD}

{ADD 5-3.1-17. Other activities. -- ADD} {ADD In addition to the activities set out in section 5-3.1-3(g), a licensee may engage in one or more kinds of management, advisory, or consulting services, and in the preparation of tax returns and the furnishing of advice on tax matters. ADD}

{ADD 5-3.1-18. Exceptions -- Acts not prohibited. -- {ADD (a) Nothing contained in this chapter shall be construed as prohibiting any person not a certified public accountant or public accountant from serving as an employee of or an assistant to a licensee; provided, however, that such employee or assistant shall not issue any accounting or financial statement or report over his or her name.

(b) Nothing contained in this chapter shall be construed as prohibiting any person who is the holder of a certificate issued by this state or any other state which has not been revoked or suspended by the board or by the board of accountancy of such other state from assuming or using the designation "certified public accountant" or "CPA" or any other title, designation, words, letters, sign, card, or device tending to indicate that such person is a certified public accountant; provided, however, that the provisions of this subsection shall not be construed to authorized the use of those designations in connection with the practice of public accounting in this state unless the person using such designations holds a permit to practice issued by the board.

(c) Nothing contained in this chapter or in any other law of this state shall be construed as prohibiting a licensee or any employee of a licensee from disclosing any information in confidence to other licensees engaged in conducting peer reviews, or any employees or agents of the foregoing, in connection with peer reviews which are conducted under the auspices of a recognized professional association or under this chapter.

(d) Nothing contained in this chapter or in any other law of this state shall be construed as prohibiting a licensee or any employee of a licensee from disclosing any information in confidence to any employee, representative, officer, or committee member of a recognized professional association or to the board or any of its employees or committees in connection with a professional ethics investigation held under the auspices of such professional association or the board.

(e) The provisions of subsection (f), (g), and (h) of section 5-3.1-16 shall not prohibit any officer, employee, partner, or principal of any organization from affixing his or her signature to any statement or report in reference to the affairs of that organization with any wording designating the position, title, or office which he or she holds in that organization, or from describing himself or herself by the position, title, or office which he or she holds in the organization; nor shall those provisions prohibit any act of a public official or a public employee in the performance of his or her duties as a public official or public employee. proprietorship not holding a permit under this chapter from offering or rendering to the public bookkeeping services, including devising and installing system, recording and presentation of financial information or date, preparing financial statements or similar services, preparation of tax returns, or the furnishing of advice on tax matters; provided, however, that no such person, partnership, corporation, or sole proprietorship shall (1) audit or examine a financial statement and issue a report expressing or disclaiming an opinion on that statement, (2) review a financial statement and issue a report expressing limited assurance on that statement, or (3) compile a financial statement and issue a compilation report on that statement; nor shall any such person, partnership, corporation, or sole proprietorship attempt to prepare or prepare a report in any manner having the appearance or import of any report enumerated above so as to mislead the public. ADD}

{ADD 5-3.1-19. Injunction against unlawful acts. -- {ADD Whenever, in the judgment of the board, any person, partnership, corporation, or sole proprietorship has engaged, or is about to engage, in any acts or practices which constitute, or will constitute, a violation of this chapter, the board may make application to the superior court for an order enjoining those acts or practices, and upon a showing by the board that the person, partnership, corporation, or sole proprietorship has engaged, or is about to engage, in any of those acts or practices, an injunction, restraining order, or such other order as may be appropriate shall be granted by the court without bond. In any instance of the granting of an injunction or order by the superior court under this section, the court shall award the board reasonable attorneys' fees. ADD}

{ADD 5-3.1-20. Penalty for violations. -- ADD} {ADD Any person, partnership, corporation, or sole proprietorship that violates any provision of this chapter shall be guilty of a misdemeanor, and upon conviction thereof, shall be subject to (1), in the case of an individual, a fine of not more than one thousand dollars ($1,000) or imprisonment for not more than one (1) year, or both, or (2), in the case of a partnership or corporation, a fine of not more than five thousand dollars ($5,000). Whenever the board has reason to believe that any person or organization is liable to punishment under this section, it may certify the facts to the attorney general of this state who may, in his or her discretion, cause appropriate proceedings to be brought. ADD}

{ADD 5-3.1-21. Use of card, sign, or advertisement as evidence -- Single act sufficient evidence. -- ADD} {ADD The display or presentation of a card, sign, advertisement, or other printed, engraved, or written instrument or device bearing a person's or organization's name in conjunction with the words "certified public accountant(s)" or "public accountant(s)", or any abbreviation thereof, except as permitted by this chapter, shall be prima facie evidence in any action brought under section 5-3.1-19 or 5-3.1-20 that the person or organization whose name is so displayed caused or procured the display or presentation of that card, sign, advertisement, or other printed, engraved, or written instrument or device and that the person or organization is holding himself, herself, or itself out to the public as a certified public accountant or public accountant, or as a practice unit composed of certified public accountants and/or public accountants, as the case may be. In any such action, evidence of the commission of a single act prohibited by this chapter shall be sufficient to justify an injunction or a conviction need not be established for such purpose. ADD}

{ADD 5-3.1-22. Ownership of accountants' working papers. -- ADD} {ADD All statements, records, schedules, working papers, memoranda, and such other data, including but not limited to a data bank, which are retained by a practice unit incident to or in the course of professional services rendered to clients thereby, except reports submitted by such practice unit to a client, shall be and remain the property of that practice unit in the absence of an express agreement to the contrary between the practice unit and the client. No such statement, record, schedule, working paper, memorandum, or other data shall be sold, transferred, or bequeathed, without the written consent of the client or his, her, or its personal representative or assignee, to anyone or any organization other than, in the case of a partnership or corporation, one or more surviving partners, shareholders, new partners, or new shareholders thereof, or any organization resulting from the combination or merger of the practice unit, or any other successor in interest to such practice unit. ADD}

{ADD 5-3.1-23. Confidential communications. -- ADD} {ADD (a) No licensee or any employee of a licensee, including but not limited to clerks, paraprofessionals, and students under work-study programs on a paid or pro bono basis, shall disclose any confidential information obtained in the course of a professional engagement except with the written consent of the client or former client, or as disclosure of confidential information is permitted by subsection (c) or (d) of section 5-3.1-18 in connection with peer reviews or board investigations.

(b) This section shall not be construed as limiting the authority of this state or of the United States or of an agency or court of this state or of the United States to subpoena and use such confidential information in connection with any investigation, public hearing, or other proceeding; nor shall this section be construed as prohibiting a certified public accountant or public accountant whose professional competence has been challenged in a court of law or before an administrative agency from disclosing confidential information as part of a defense to the court action or administrative proceeding. ADD}

{ADD 5-3.1-24. Construction. -- ADD} {ADD If any provision of this chapter or the application thereof to anyone or to any circumstance is held invalid, the remainder of this chapter, or the application of such provision to others or other circumstances, as the case may be, shall not be affected thereby. ADD}

{ADD 5-3.1-25. Repeal provisions -- Effect of prior laws, rules, and regulations. -- ADD} {ADD All other acts or parts of acts in conflict with this chapter are hereby repealed; provided, however, that nothing contained in this chapter shall invalidate or affect any action taken under any law in effect prior to July 1, 1995; nor invalidate or affect any proceeding instituted under that law before July 1, 1995; nor invalidate the rules and regulations promulgated by the Rhode Island board of accountancy under such prior law, such rules and regulations (to the extent the same are not inconsistent with the provisions of this chapter) to remain in full force and effect until new rules and regulations are promulgated by the board. ADD}

SECTION 3. This act shall take effect July 1, 1995.