Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1998, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 340-H.F.No. 2308
An act relating to accountants; modifying licensing
provisions; providing for firm licensure; authorizing
rulemaking; amending Minnesota Statutes 1996, sections
326.165; 326.17; 326.18; 326.19; 326.20; 326.211;
326.212, subdivisions 1, 4, 5, and by adding a
subdivision; 326.22, subdivision 2; 326.223; 326.228;
and 326.229, subdivisions 3, 4, 6, and by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapter 326; repealing Minnesota Statutes
1996, sections 326.191; 326.21; and 326.225.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1996, section 326.165, is
amended to read:
326.165 [BOARD OF ACCOUNTANCY POLICY; DEFINITIONS.]
Subdivision 1. [PURPOSE.] It is the policy of this state
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
noncommercial enterprises, whether public, private, or
governmental. The public interest requires that persons engaged
in the practice of public accounting be qualified; that a public
authority competent to prescribe and assess the qualifications
of public accountants be established; that the expression of any
form of assurance or of opinions on financial statements be
reserved to persons who demonstrate their ability and fitness to
observe and apply the standards of the accounting profession;
and that the use of accounting titles likely to confuse the
public be prohibited.
Subd. 1a. [SCOPE.] For the purposes of sections 326.165 to
326.229, the definitions in this section have the meanings given.
Subd. 2. [PRACTICE OF PUBLIC ACCOUNTING.] The "practice of
public accounting" is: (a) (1) holding one's self out to the
public as skilled in the knowledge and practice of
accounting; or (b) (2) expressing any form of assurance on
financial statements; or (c) (3) expressing opinions on
financial statements for credit purposes, for use in courts and
for other purposes involving third parties.
Subd. 3. [ASSURANCE OR OPINIONS ON FINANCIAL STATEMENTS.] "
Assurance or opinions on financial statements" are any opinions
or assurance expressed in accordance with generally accepted
auditing standards or other authoritative professional standards
as to the fairness of presentation of information which is used
for guidance in financial transactions or for accounting for or
assessing the status or performance of commercial and
noncommercial enterprises, whether public, private, or
governmental.
Subd. 4. [CPA.] "CPA" means certified public accountant.
Subd. 5. [FINANCIAL STATEMENTS.] "Financial statements"
means a presentation of financial data, including accompanying
notes, if any, intended to communicate an entity's economic
resources and/or obligations at a point in time, or the changes
therein for a period of time, in accordance with generally
accepted accounting principles or a comprehensive basis of
accounting other than generally accepted accounting principles.
Incidental financial data to support recommendations to a
client, management advisory service reports, or tax returns and
supporting schedules do not constitute financial statements.
The statement, affidavit, or signature of preparers required on
tax returns neither constitutes an opinion on financial
statements nor requires a disclaimer of the opinion.
Subd. 6. [FIRM.] "Firm" means an entity of CPAs or LPAs
organized as a CPA or LPA partnership, professional corporation,
professional limited liability company, or professional limited
liability partnership, any cooperative auditing organization as
specified in section 326.192, subdivision 4, or any CPA or LPA
practice in any other form of business organization authorized
by law for use by CPAs and LPAs, including individual partners
or shareholders.
Subd. 7. [LPA.] "LPA" means licensed public accountant.
Licensed public accountants are those accountants who were
eligible for licensure on July 1, 1979, under the law in effect
on that date and who were issued a license as a licensed public
accountant by the board at that time.
Sec. 2. Minnesota Statutes 1996, section 326.17, is
amended to read:
326.17 [BOARD OF ACCOUNTANCY.]
(a) A board of accountancy is created to carry out the
purposes and enforce the provisions of sections 326.165 to
326.229. It consists of between seven and nine citizens of this
state appointed by the governor as provided in this section.
Two shall be public members as defined by section 214.02, five
shall be currently actively licensed certified public
accountants, and two shall be actively licensed public
accountants under the provisions of sections 326.165 to
326.229. When the number of licensed public accountants in this
state drops below 100, their representation on the board of
accountancy shall drop to one and the board shall consist of two
public members, five currently actively licensed certified
public accountants, and one actively licensed public
accountant. At the time when the number of licensed public
accountants in this state drops below 25, the licensed public
accountants shall lose their representation on the board, except
that the licensed public accountant then serving on the board
shall be allowed to complete the term of office and. The board
shall then consist of two public members and five currently
actively licensed certified public accountants.
(b) Membership terms, compensation of members, removal of
members, the filling of membership vacancies, and fiscal year
and reporting requirements shall be as provided in sections
214.07 to 214.09. The provision of staff, administrative
services, and office space; the review and processing of
complaints; the setting of board fees; and other provisions
relating to board operations shall be as provided in chapter 214
and sections 326.165 to 326.229.
Sec. 3. Minnesota Statutes 1996, section 326.18, is
amended to read:
326.18 [BOARD, DUTIES, OFFICERS, RULES, EXAMINATIONS.]
Subdivision 1. [MEMBERS AND OFFICERS.] A majority of
the qualified members of the board constitutes a quorum. The
board shall elect one of its number as chair, another as
vice-chair, and another as secretary and treasurer, who shall
hold their respective offices for a term of one year and until
their successors are elected. The affirmative vote of a
majority of the qualified members of the board is considered the
action of the board.
Subd. 2. [DUTIES.] The board shall enforce the standard of
general education;, the standard of special education in the
science and art of accounting;, and the standard of good
character and general public experience, as prescribed in
sections 326.165 to 326.229, in all examinations conducted
thereunder.
Subd. 3. [RULES.] The board shall make rules for the
conduct of applicants' examinations and the character and scope
of the examinations, the method and time of filing applications
for examinations and their form and contents, and all other
rules proper to carry into effect the purposes of sections
326.165 to 326.229. The board shall make rules to govern
administration of the board, examinations, issuance of
certificates, licensing, professional conduct and discipline,
continuing education, fees, and practice monitoring.
Subd. 4. [EXAMINATION.] The board may make use of all or
any part of the uniform certified public accountant examination
and advisory grading service provided by the American Institute
of Certified Public Accountants if it deems it appropriate to
assist it in performing its duties. These examinations shall be
conducted by the board of accountancy. The examinations shall
take place as often as may be convenient in the opinion of the
board. The board may make rules necessary to implement and
enforce sections 326.165 to 326.229, and 214.12, including but
not limited to rules of professional conduct, pertaining to
individuals, partnerships and corporations practicing public
accounting which it deems consistent with or required by the
public welfare and rules of continuing education to be met by
persons licensed under sections 326.165 to 326.229.
Subd. 5. [RECORDS, CERTIFICATES, AND LICENSES.] (a) The
board shall keep records of its proceedings, an accurate list of
all applications made, licenses and certificates issued, and
licenses and certificates revoked disciplined pursuant to
section 326.229, and shall keep proper financial records in
which there shall be entered a complete statement of the cash
receipts and disbursements. All records of the board shall be
subject to chapter 13.
(b) The board shall issue to each person who satisfies the
examination requirements of section 326.19, subdivision 1, a
certified public accountant certificate and shall maintain a
record of that issuance. The board shall issue a license as a
certified public accountant to each holder of a certified public
accountant certificate who satisfies the experience requirements
for a license as a certified public accountant or to a person
who has been issued a certified public accountant certificate
under section 326.19, subdivision 3. The board shall maintain a
record of the issuance. It shall adopt and provide itself with
a seal with a band inscribed "Certified Public Accountant, State
of Minnesota," with the coat of arms of Minnesota in the center,
which seal shall be affixed to each certificate of the certified
public accountant issued under sections 326.17 326.165 to
326.229.
(c) The board shall issue to each person who qualifies for
a license under sections 326.17 326.165 to 326.229 as a licensed
public accountant a certificate as a licensed public accountant
and shall maintain a record of that issuance. It shall adopt
and provide itself with a seal with a band inscribed "Licensed
Public Accountant, State of Minnesota," with the coat of arms of
Minnesota in the center, which seal shall be affixed to each
certificate of the licensed public accountant, issued under
sections 326.17 326.165 to 326.229. All records of the board
shall be open to the inspection of the public at the office of
its secretary.
Sec. 4. Minnesota Statutes 1996, section 326.19, is
amended to read:
326.19 [LICENSURE; QUALIFICATIONS OF CERTIFIED PUBLIC
ACCOUNTANTS; CERTIFICATES AND LICENSING.]
Subdivision 1. [CERTIFICATES AND LICENSES AS CERTIFIED
PUBLIC ACCOUNTANTS.] (a) A certified public accountant
certificate shall be granted to any person:
(a) (1) who has attained the age of 18 years; and
(b) (2) who is of good character; and
(c) (3) who has successfully completed an examination in
the subjects and at the times the board may prescribe in its
rules; and
(4) who meets all other requirements for issuance of a
certificate, including payment of required fees.
(b) The examination shall be administered by the board only
to a candidate who holds:
(i) (1) holds a master's degree with a major in accounting
from a college or university that is fully accredited by the
North Central Association of Colleges and Secondary Schools, or
an equivalent accrediting association, or who has in the opinion
of the board at least an equivalent education a recognized
accrediting agency listed with the United States Department of
Education; or
(ii) (2) holds a baccalaureate degree, with a major in
accounting, from a college or university that is fully
accredited by the North Central Association of Colleges and
Secondary Schools, or an equivalent accrediting association, or
whose credits are acceptable to the University of Minnesota for
admission to graduate study, a recognized accrediting agency
listed with the United States Department of Education or who has
in the opinion of the board at least an equivalent education; or
(iii) (3) holds a baccalaureate degree from a college or
university that is fully accredited by the North Central
Association of Colleges and Secondary Schools, or an equivalent
accrediting association, or whose credits are acceptable to the
University of Minnesota for admission to graduate study, or a
recognized accrediting agency listed with the United States
Department of Education and who has in the opinion of the board
at least an equivalent education, or providing at least one year
of experience of the type specified in subdivision 4, has been
completed; or
(iv) (4) provides evidence of having completed two or more
years of study with passing grade average or above from a
college or, university that is fully accredited by the North
Central Association of Colleges and Secondary Schools, or an
equivalent accrediting association, or whose credits are
acceptable to the University of Minnesota for admission to
graduate study, or a, technical college, or a Minnesota licensed
private vocational school which fulfills the requirements of
sections 141.21 to 141.36, that is fully accredited by a
recognized accrediting agency listed with the United States
Department of Education or who has in the opinion of the board
at least an equivalent education, providing that at least three
years experience of the type specified in subdivision 4, has
been completed; or
(v) (5) holds a diploma as a graduate of an accredited high
school or who has in the opinion of the board at least an
equivalent education, providing that at least five years
experience of the type specified in subdivision 4 has been
completed.
Subd. 2. [EXPERIENCE.] A certified public accountant
license shall be granted to any person who has been issued a
certified public accountant certificate under subdivision 3.
Those persons holding certified public accountant certificates
issued under subdivision 1 who meet all other requirements for
licensure, including payment of required fees, shall be granted
licenses as certified public accountants, providing that they
have completed the following required experience of the type
specified in subdivision 4 in addition to any experience
required in subdivision 1, clause (c)(i) to (v) paragraph (b):
(i) (1) for those whose educational qualifications meet the
requirements of subdivision 1, paragraph (b), clause (c)(i) (1),
the experience requirement is one year;
(ii) (2) for those whose educational qualifications meet
the requirements of subdivision 1, paragraph (b), clause
(c)(ii) (2), the experience requirement is two years;
(iii) (3) for those whose educational and experience
qualifications meet the requirements of subdivision 1, paragraph
(b), clause (c)(iii) (3), the additional required experience is
two years;
(iv) (4) for those whose educational and experience
qualifications meet the requirements of subdivision 1, paragraph
(b), clause (c)(iv) (4), the additional required experience is
two years; and
(v) (5) for those whose educational and experience
qualifications meet the requirements of subdivision 1, paragraph
(b), clause (c)(v) (5), the additional required experience is
one year.
Subd. 3. [CERTIFICATE AND LICENSE WITHOUT EXAMINATION.]
The state board of accountancy may, in its discretion, waive the
examination of, and may issue a certificate and license as, a
certified public accountant to any person possessing the
qualifications mentioned in this section, who:
(a) (1) is the holder of a C.P.A. CPA license or
certificate, issued under the laws of another state, provided
the requirements for the license or certificate in the state
which has granted it to the applicant are, in the opinion of the
state board of accountancy, equivalent to those herein
provided in subdivisions 1 and 2; or
(b) shall be (2) is the holder of a degree or certificate
of certified public accountant or chartered accountant, or the
equivalent thereof, issued in any foreign country, provided that
the requirements for the degree or certificate are equivalent to
those herein provided in subdivisions 1 and 2 for the license of
certified public accountant in this state.; or
(c) Shall (3) has in another jurisdiction have completed
successfully an examination which, in the opinion of the board,
is comparable to that prescribed by the board in its rules and
provided that such the person has satisfied the other
requirements of subdivisions 1 and 2.
Subd. 4. [QUALIFYING EXPERIENCE FOR EXAMINATION AND
GRANTING OF LICENSE.] Qualifying experience for subdivisions 1,
2, and 3 include public accounting experience:
(1) as a staff employee of a certified public
accountant or, licensed public accountant, or a firm of
certified public accountants or public accountants, or a
corporation formed licensed for the practice of public
accounting; or
(2) as an auditor in the office of the legislative auditor
or state auditor, or as an auditor or examiner with any other
agency of government, which experience, in the opinion of the
board is equally comprehensive and diversified; or
(3) as a self-employed public accountant or as a partner in
a firm of public accountants; or
(4) in any combination of the foregoing capacities.
Sec. 5. [326.192] [LICENSURE; QUALIFICATIONS OF FIRMS.]
Subdivision 1. [APPLICATION.] Upon application made upon
the affidavit of a general partner of the partnership, secretary
of the corporation, or member of the limited liability company
or partnership who is a CPA or a LPA of this state in good
standing, the board shall issue a firm license. The license
shall be valid for a period prescribed by the board, unless the
license is revoked sooner. The application shall confer upon
the board the consent of the partnership, corporation, or
limited liability company or partnership, and of the general
partner, secretary, or member making the application, to the
board's jurisdiction over the acts of the partnership and its
partners or agents, of the corporation and its shareholders or
agents within the state, or of the limited liability company or
partnership and its members or agents.
Subd. 2. [CPA FIRMS.] No partnership, corporation, or
limited liability company or partnership shall style itself as a
firm of CPAs unless:
(1) all partners, shareholders, or members resident in this
state are CPAs of this state;
(2) all managers in charge of offices maintained in this
state are CPAs of this state;
(3) all partners, shareholders, or members, wherever
situated, are CPAs of one of the states or territories or of the
District of Columbia; and
(4) the partnership, corporation, or limited liability
company or partnership is duly licensed under this section.
Subd. 3. [LPA FIRMS.] No partnership, corporation, or
limited liability company or partnership shall style itself as a
firm of LPAs unless:
(1) all partners, shareholders, or members resident in this
state are LPAs or CPAs of this state;
(2) all managers in charge of offices maintained in this
state are LPAs or CPAs of this state;
(3) all partners, shareholders, or members, wherever
situated, are LPAs of this state or CPAs of one of the states or
territories or the District of Columbia; and
(4) the partnership, corporation, or limited liability
company or partnership is duly licensed under this section.
Subd. 4. [COOPERATIVE AUDITING ORGANIZATION.] Any
cooperative auditing organization organized under chapter 308A
is qualified for a cooperative auditing service license and may
style itself as a licensed cooperative auditing service if:
(1) for a minimum of one year prior to July 1, 1979, it
rendered auditing or accounting of business analysis services to
its members only; and
(2) its managers in charge of offices maintained in this
state are certified public accountants or licensed public
accountants of this state.
Cooperative auditing services shall comply with all requirements
imposed by sections 326.165 to 326.229 and the board's rules
governing firms.
Sec. 6. Minnesota Statutes 1996, section 326.20, is
amended to read:
326.20 [RENEWAL; UNLICENSED PRACTICE.]
Subdivision 1. [LICENSE RENEWAL OF CERTIFIED PUBLIC
ACCOUNTANTS AND LICENSED PUBLIC ACCOUNTANTS.] (a) Every holder
of a certified public accountant CPA license or a licensed
public accountant an LPA license issued by the board, if
engaged, or intending to be engaged, in public the practice of
public accounting within this state at any time during a
calendar year, shall renew the license as active as prescribed
by the board by rule.
(b) Every holder of a CPA license or an LPA license issued
by the board, who does not intend to actively engage in the
practice of public accounting within this state at any time
during a calendar year, shall renew the license as inactive or
active, as prescribed by the board by rule under authority
granted in section 326.18, subdivision 3. Previously licensed
individuals who do not actively engage in the practice of public
accounting in any manner or who do not hold out as CPAs or LPAs
in any manner are not required to obtain a license nor may the
board require those individuals to surrender their
certificates. The board must provide for the relicensing of
those individuals if they wish to return to the practice of
public accounting.
(c) The board may establish temporary, active, and inactive
licenses and adopt rules, under authority granted in section
326.18, subdivision 3, governing them.
(d) The board shall, upon application made by any holder of
an unrevoked Minnesota or unsuspended license as a certified
public accountant CPA or unrevoked or unsuspended Minnesota
license as a licensed public accountant LPA, renew the license
which shall be good for a period prescribed by the board, unless
the said certificate or license shall sooner be is revoked or
suspended during that period. Interim licenses shall be issued
to individuals who have satisfied the provisions of
sections 326.17 326.165 to 326.229 within the year. If a
license has been conditioned, limited, or otherwise restricted
or disciplined pursuant to section 326.229, any other condition,
limitation, or discipline shall remain for the term of the
board's order imposing the condition, limitation, or other
discipline, notwithstanding renewal of the license.
(e) The CPA certificates of persons who fail to renew their
licenses as required by this subdivision for more than two years
after expiration shall be automatically revoked by order of the
board. This includes all persons who, on the effective date of
this section, did not hold an active or an inactive license in
1996, 1997, and 1998. The orders may be issued by the board
without following the procedures of chapter 14, provided the
board notifies each such person by mail at the person's last
known address on file with the board at least three days prior
to the issuance of any such order. No such notice is required
if the last communication sent by the board to a licensee was
returned to the board by the United States Postal Service as
undeliverable and with no forwarding address. Certificates so
revoked by the board may be reinstated, if at all, pursuant to
section 326.229, subdivision 7. This paragraph shall not apply
to previously licensed individuals who have notified the board
that they will not hold out as CPAs or LPAs in any manner or
practice public accounting in any manner.
Subd. 2. [LICENSURE OF PARTNERSHIPS AND CORPORATIONS.]
Every partnership or corporation in which one or more certified
public accountants or licensed public accountants of this state
is a partner or shareholder, if it is engaged, or intends to be
engaged, in public practice within this state at any time shall
be licensed by the state board of accountancy for that period.
Upon application made upon the affidavit of a general partner of
the partnership or secretary of the corporation who is a
certified public accountant or a licensed public accountant of
this state in good standing, the board shall issue a license
which shall be good for a period prescribed by the board, unless
the license shall sooner be revoked. Interim licenses shall be
issued to partnerships or corporations which have satisfied the
provisions of this subdivision. The application shall confer
upon the board the consent of the partnership or corporation,
and of the general partner or secretary making the application,
to the board's jurisdiction over the acts of the partnership and
its partners or agents or of the corporation and its
shareholders or agents within the state.
No partnership or corporation shall style itself as a firm
of certified public accountants unless (a) all partners or
shareholders resident in this state are certified public
accountants of this state, (b) all managers in charge of offices
maintained in this state are certified public accountants of
this state, (c) all partners or shareholders, wherever situated,
are certified public accountants of one of the states or
territories or of the District of Columbia and (d) the
partnership or corporation is duly licensed under this section.
No partnership or corporation shall style itself as a firm
of licensed public accountants unless (a) all partners or
shareholders resident in this state are licensed public
accountants or certified public accountants of this state, (b)
all managers in charge of offices maintained in this state are
licensed public accountants or certified public accountants of
this state, (c) all partners or shareholders, wherever situated,
are licensed public accountants of this state or certified
public accountants of one of the states or territories or the
District of Columbia and (d) the partnership or corporation is
duly licensed under this section.
Any cooperative auditing organization organized under
chapter 308A (a) which for a minimum of one year prior to July
1, 1979, has been rendering auditing, accounting of business
analysis services to its members only, and (b) whose managers in
charge of offices maintained in this state are certified public
accountants or licensed public accountants of this state, shall
be deemed to be qualified for a cooperative auditing service
license and may style itself as a licensed cooperative auditing
service.
Subd. 3. [UNLICENSED PRACTICE.] It shall be is unlawful
for any certified public accountant CPA or any LPA, or a firm
defined under section 326.165, subdivision 6, partnership
containing one or more certified public accountants to engage in
public the practice of public accounting within this state
unless such certified public accountant or the CPA, LPA,
partnership or firm defined under section 326.165, subdivision
6, is duly licensed as provided by this section. A partnership
shall be deemed in public practice within this state if it
performs professional accounting services for a fee. A
certified public accountant shall be deemed in public practice
within this state if the accountant performs professional
accounting services for a fee within this state to the extent
required by sections 326.165 to 326.229.
Subd. 4. [TAX CLEARANCE CERTIFICATE.] (a) Notwithstanding
subdivisions 1 and 2, the board may not issue or renew a license
under sections 326.165 to 326.229 if the commissioner of revenue
notifies the board and the licensee or applicant for a license
that the licensee or applicant owes the state delinquent taxes
in the amount of $500 or more. The board may issue or renew the
license only if (1) the commissioner of revenue issues a tax
clearance certificate and (2) the commissioner of revenue or the
licensee or applicant forwards a copy of the clearance to the
board. The commissioner of revenue may issue a clearance
certificate only if the licensee or applicant does not owe the
state any uncontested delinquent taxes.
(b) For purposes of this subdivision, the following terms
have the meanings given.
(1) "Taxes" are all taxes payable to the commissioner of
revenue, including penalties and interest due on those taxes.
(2) "Delinquent taxes" do not include a tax liability if
(i) an administrative or court action that contests the amount
or validity of the liability has been filed or served, (ii) the
appeal period to contest the tax liability has not expired, or
(iii) the licensee or applicant has entered into a payment
agreement to pay the liability and is current with the payments.
(c) When a licensee or applicant is required to obtain a
clearance certificate under this subdivision, a contested case
hearing must be held if the licensee or applicant requests a
hearing in writing to the commissioner of revenue within 30 days
of the date of the notice provided in paragraph (a). The
hearing must be held within 45 days of the date the commissioner
of revenue refers the case to the office of administrative
hearings. Notwithstanding any law to the contrary, the licensee
or applicant must be served with 20 days' notice in writing
specifying the time and place of the hearing and the allegations
against the licensee or applicant. The notice may be served
personally or by mail.
(d) The board shall require all licensees or applicants to
provide their social security number and Minnesota business
identification number on all license applications. Upon request
of the commissioner of revenue, the board must provide to the
commissioner of revenue a list of all licensees and applicants,
including the name and address, social security number, and
business identification number. The commissioner of revenue may
request a list of the licensees and applicants no more than once
each calendar year.
Sec. 7. [326.201] [PRACTICE MONITORING.]
The board shall, by rule adopted under authority granted in
section 326.18, subdivision 3, provide for a practice monitoring
program designed to ensure the competency of licensees engaged
in the practice of public accountancy in this state. The
program shall be designed to promote remediation of deficiencies
in lieu of removal from or restriction of practice. However,
this shall not be construed to prohibit the board from imposing
discipline, including removal from or restriction of practice,
where necessary and appropriate to protect the public. The
board may determine which classes of licensees and what types of
practice shall be subject to practice monitoring based on the
need to protect the public. For those licensees subject to the
rules, renewal of the license is conditional upon compliance
with the rules.
Sec. 8. Minnesota Statutes 1996, section 326.211, is
amended to read:
326.211 [PROHIBITED ACTS.]
Subdivision 1. [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE
BY INDIVIDUAL.] Except as permitted by the board, no person
shall assume or use the title or designation "certified public
accountant," or the abbreviation "C.P.A. CPA" or any other
title, designation, words, letters, abbreviation, sign, card, or
device tending to indicate or imply that the person is a
certified public accountant, unless the person has received a
certificate as a certified public accountant under sections
326.17 326.165 to 326.229, holds a license issued under sections
326.17 326.165 to 326.229 which is not revoked or suspended, and
has all offices in this state for the practice of public
accounting maintained and licensed as to the extent required
under section 326.20 by sections 326.165 to 326.229.
Subd. 2. [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE BY
INDIVIDUAL ENTITY.] No partnership or, corporation, or limited
liability company or partnership shall assume or use the title
or designation "certified public accountant," or the
abbreviation "C.P.A. CPA," or any other title, designation,
words, letters, abbreviation, sign, card, or device tending to
indicate or imply that the partnership or, corporation, or
limited liability company or partnership is composed of
certified public accountants, unless the partnership or,
corporation, or limited liability company or partnership is
licensed as a partnership or, corporation, or limited liability
company or partnership of certified public accountants under
section 326.20 326.192 and all offices of the partnership or,
corporation, or limited liability company or partnership in this
state for the practice of public accounting are maintained and
licensed as required under section 326.20 326.192.
Subd. 3. [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY
INDIVIDUAL.] No person shall assume or use the title or
designation "licensed public accountant" or any other title,
designation, words, letters, abbreviation, sign, card, or device
tending to indicate or imply that the person is a licensed
public accountant, unless the person is licensed as a licensed
public accountant under section 326.191 326.20, and all of the
person's offices in this state for the practice of public
accounting are maintained and licensed as required under section
326.20 326.192, or unless the person has received a certificate
as a certified public accountant under section 326.19, holds a
license issued under section 326.19 or 326.20, and all of the
person's offices in this state for the practice of public
accounting are maintained and licensed as required under section
326.20 326.192.
Subd. 4. [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY
PARTNERSHIP OR CORPORATION ENTITY.] No partnership or,
corporation, or limited liability company or partnership shall
assume or use the title or designation "licensed public
accountant" or any other title, designation, words, letters,
abbreviation, sign, card, or device tending to indicate or imply
that the partnership or, corporation, or limited liability
company or partnership is composed of licensed public
accountants, unless the partnership or, corporation, or limited
liability company or partnership is licensed as a partnership,
corporation, or limited liability company or partnership of
licensed public accountants under section 326.20 326.192, and
all offices of the partnership or, corporation, or limited
liability company or partnership in this state for the practice
of public accounting are maintained and licensed as required
under section 326.20 326.192.
Subd. 5. [PROHIBITED AND PERMITTED TITLES.] No person,
partnership, or corporation, or limited liability company or
partnership shall assume or use the title or designation
"certified accountant," "chartered accountant," "enrolled
accountant," "licensed accountant," "public accountant,"
"accredited accountant," "accounting practitioner," "registered
accountant," or any other title or designation likely to be
confused with "certified public accountant," or "licensed public
accountant," or any of the abbreviations "C.A. CA," "L.A. LA,"
"P.A. PA," "R.A. RA," "A.A. AA," "A.P. AP," or similar
abbreviations likely to be confused with "C.P.A. CPA" or "L.P.A
LPA." Anyone who holds a current license issued under sections
326.18 and section 326.19 or 326.20 and all of whose offices in
this state for the practice of public accounting are maintained
and licensed as required under section 326.20 326.192 may hold
out to the public as an "auditor."
Subd. 6. [FINANCIAL STATEMENT BY INDIVIDUAL.] No person's
name shall be signed or affixed by the person nor shall any
trade or assumed name be used by the person professionally or in
business to any opinion or certificate attesting in any way to
the reliability of any representation or estimate in regard to
any person or organization embracing (1) financial information,
or (2) facts respecting compliance with conditions established
by law or contract, including, but not limited to, statutes,
ordinances, rules, grants, loans, and appropriations, together
with any wording accompanying or contained in the opinion or
certificate, which indicates (a) that the person is an
accountant or auditor or (b) that the person has expert
knowledge in accounting or auditing, without holding a current
license issued under section 326.19 or 326.20 and all of the
person's offices in this state for the practice of public
accounting are maintained and licensed under section 326.20
326.192. The provisions of this subdivision shall not prohibit
any officer, employee, partner, or principal of any organization
from affixing that person's signature to any statement or report
in reference to the affairs of the organization with any wording
designating the position, title, or office which the person
holds in the organization, nor shall the provisions of this
subdivision prohibit any act of a public official or public
employee in the performance of duties.
Subd. 7. [FINANCIAL STATEMENT BY PARTNERSHIP OR,
CORPORATION, OR LIMITED LIABILITY COMPANY OR PARTNERSHIP.] No
person shall sign or affix a partnership or, corporate, or
limited liability company or partnership name to any opinion or
certificate attesting in any way to the reliability of any
representation or estimate in regard to any person or
organization embracing (a) financial information, or (b) facts
respecting compliance with conditions established by law or
contract, including, but not limited to, statutes, ordinances,
rules, grants, loans, and appropriations, together with any
wording accompanying or contained in the opinion or certificate
which indicates that the partnership or, corporation, or limited
liability company or partnership is composed of or employs (1)
accountants, or auditors or (2), persons having expert knowledge
in accounting or auditing, unless the partnership or,
corporation, or limited liability company or partnership is
licensed under sections 326.17 to 326.229.
Subd. 8. [AUDITOR; USE OF TITLE.] No person,
partnership or, corporation, or limited liability company or
partnership not licensed under section 326.18 sections 326.19 to
326.20 shall assume or use the title "auditor" on any sign,
card, letterhead, or in any advertisement or directory without
indicating thereon or therein that the person, partnership or,
corporation, or limited liability company or partnership does
not hold such a license, provided that this subdivision shall
not prohibit any officer, employee, partner, or principal of any
organization from being described by the position, title, or
office that person holds in the organization, nor shall this
subdivision prohibit any act of a public official or public
employee in the performance of duties.
Subd. 9. [TITLE INDICATING PARTNERSHIP OR, CORPORATION, OR
LIMITED LIABILITY COMPANY OR PARTNERSHIP.] (a) No person shall
assume or use the title or designation "certified public
accountant" or "licensed public accountant" in conjunction with
names indicating or implying that there is a partnership or,
corporation, or limited liability company or partnership, if
there is no bona fide partnership or, corporation, or limited
liability company or partnership licensed under section 326.20
326.192.
(b) No person shall assume or use the title or designation
"certified public accountant" or "licensed public accountant" in
conjunction with the designation "and Company," "and Co.," "and
Associates," "Co.," or a similar designation if, in any such
case, there is in fact no bona fide partnership or, corporation,
or limited liability company or partnership with more than one
shareholder licensed under section 326.20 326.192.
(c) A sole proprietor, partnership, or corporation lawfully
using the title or designation in conjunction with the names or
designation on July 1, 1992, may continue to do so if otherwise
in compliance with the provisions of sections 326.165 to 326.229
until December 31, 1999.
Subd. 10. [UNLICENSED CORPORATION; PROHIBITED USE OF
TITLE.] No partnership, corporation, or limited liability
company or partnership, other than one licensed under sections
326.17 326.165 to 326.229, and in compliance with the rules of
the board, shall style itself as certified public accountants or
licensed public accountants, or use the abbreviation
"C.P.A. CPA" or "L.P.A. LPA" in connection with its corporate
name.
Sec. 9. Minnesota Statutes 1996, section 326.212,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEES; ASSISTANTS.] Nothing contained
in sections 326.17 326.165 to 326.229 shall prohibit any person
not a certified public accountant or licensed public accountant
from serving as an employee of, or an assistant to, a certified
public accountant or licensed public accountant, or
partnership or, corporation, or limited liability company or
partnership composed of certified public accountants or licensed
public accountants, provided that the person shall not issue any
accounting or financial statement over the person's name.
Sec. 10. Minnesota Statutes 1996, section 326.212,
subdivision 4, is amended to read:
Subd. 4. [PERSONS PREPARING UNAUDITED FINANCIAL
STATEMENTS.] Nothing contained in sections 326.165 to 326.229
shall prohibit any person, partnership or, corporation, or
limited liability company or partnership, not licensed under
sections 326.165 to 326.229, from preparing and presenting
unaudited financial statements and unaudited schedules on
printed forms or the letterheads letterhead of the preparer if
they are clearly marked on each page, "unaudited." Any person
or entity who prepares unaudited financial statements and
unaudited schedules for a client for a fee is subject to section
326.229 and the practice of the person or entity may be
disciplined by the board as provided for in section 326.229.
The board may discipline a person or entity based on violations
of sections 326.165 to 326.229, the board's rules, or
misrepresentations made by such person or entity regarding the
work the person or entity performed.
Sec. 11. Minnesota Statutes 1996, section 326.212,
subdivision 5, is amended to read:
Subd. 5. [TAX RETURNS.] Nothing contained in sections
326.165 to 326.229 shall prohibit any person, partnership or,
corporation, or limited liability company or partnership, not
licensed under sections 326.165 to 326.229, from preparing tax
returns.
Sec. 12. Minnesota Statutes 1996, section 326.212, is
amended by adding a subdivision to read:
Subd. 6. [MAINTAIN OR SURRENDER LICENSE.] Once licensed, a
certified public accountant or licensed public accountant in
order to perform any of the services listed in section 326.165,
subdivision 2, shall maintain an active license.
Sec. 13. Minnesota Statutes 1996, section 326.22,
subdivision 2, is amended to read:
Subd. 2. [ANNUAL LICENSE FEE.] Each person or,
partnership, corporation, or limited liability company or
partnership to whom a license is issued shall pay a renewal fee
at the rate set by the board for such year.
Sec. 14. Minnesota Statutes 1996, section 326.223, is
amended to read:
326.223 [EQUIVALENCY.]
Whenever any statute or rule, city charter, ordinance, or
other similar statute or rule of any other political subdivision
of the state of Minnesota specifically requires professional
services to be performed by a certified public accountant, the
requirement shall be construed to mean certified public
accountant or licensed public accountant.
Sec. 15. Minnesota Statutes 1996, section 326.228, is
amended to read:
326.228 [COMPLAINT COMMITTEE.]
The board shall establish a complaint committee to
investigate, mediate, or initiate administrative or legal
proceedings on behalf of the board with respect to complaints
filed with or information received by the board alleging or
indicating violations of sections 326.165 to 326.229. The
complaint committee shall consist of three members of the board,
one of whom shall be a certified public accountant, and one of
whom shall be a licensed public accountant. When the licensed
public accountants lose their representation on the board
pursuant to section 326.17, the complaint committee shall
consist of three members of the board, two of whom shall be
certified public accountants.
Sec. 16. Minnesota Statutes 1996, section 326.229,
subdivision 3, is amended to read:
Subd. 3. [CEASE AND DESIST ORDERS.] (a) The board, or the
complaint committee if authorized by the board, may issue and
have served upon a licensee who has previously been subject to a
disciplinary order by the board, an unlicensed person or, an
unlicensed certificate holder, or a firm an order requiring the
licensee, unlicensed person or, unlicensed certificate holder,
or firm to cease and desist from the act or practice
constituting a violation of the statute, rule, or order. The
order shall be calculated to give reasonable notice of the
rights of the licensee, unlicensed person, or unlicensed
certificate holder, or firm to request a hearing and shall state
the reasons for the entry of the order. No such order shall be
issued until an investigation of the facts has been conducted
pursuant to section 214.10.
(b) Service of the order is effective when the order is
served on the licensee, unlicensed person, unlicensed
certificate holder, firm, or counsel of record personally or by
certified mail to the most recent address provided to the board
for the licensee, unlicensed person, unlicensed certificate
holder, firm, or counsel of record.
(c) Unless otherwise agreed by the board, or the complaint
committee if authorized by the board, and the person requesting
the hearing, the hearing shall be held no later than 30 days
after the request for the hearing is received by the board.
(d) The administrative law judge shall issue a report
within 30 days of the close of the contested case hearing
record, notwithstanding Minnesota Rules, part 1400.8100, subpart
3. Within 30 days after receiving the report and any exceptions
to it, the board shall issue a further order vacating,
modifying, or making permanent the cease and desist orders as
the facts require.
(e) If no hearing is requested within 30 days of service of
the order, the order becomes final and remains in effect until
it is modified or vacated by the board.
(f) If the person to whom a cease and desist order is
issued fails to appear at the hearing after being duly notified,
the person is in default and the proceeding may be determined
against that person upon consideration of the cease and desist
order, the allegations of which may be considered to be true.
(g) In lieu of or in addition to the order provided in
paragraph (a), the board may require the applicant, licensee,
unlicensed certificate holder, or firm to provide to the board a
true and complete list of the person's clientele so that they
can, if deemed necessary, be notified of the board's action.
Failure to do so, or to provide an incomplete or inaccurate
list, is an act discreditable.
Sec. 17. Minnesota Statutes 1996, section 326.229,
subdivision 4, is amended to read:
Subd. 4. [ACTIONS AGAINST APPLICANTS, LICENSEES, OR
CERTIFICATE HOLDERS.] (a) The board may, by order, deny, refuse
to renew, suspend for not more than five years, temporarily
suspend, or revoke the application, certificate, or license of a
person; censure or reprimand that person; prohibit that person
from preparing tax returns or unaudited financial statements;
refuse to permit a person to sit for examination, or refuse to
release the person's examination grades if the board finds that
the order is in the public interest and that, based on a
preponderance of the evidence presented, the applicant,
licensee, or certificate holder:
(1) has violated a statute, rule, or order that the board
has issued or is empowered to enforce;
(2) has engaged in conduct or acts that are fraudulent,
deceptive, or dishonest whether or not the conduct or acts
relate to the practice of public accounting, providing that the
fraudulent, deceptive, or dishonest conduct or acts reflect
adversely on the person's ability or fitness to engage in the
practice of public accounting;
(3) has engaged in conduct or acts that are negligent or
otherwise in violation of the standards established by Minnesota
Rules, parts 1100.4700 and 1100.4800, where the conduct or acts
relate to the practice of public accounting;
(4) has been convicted of or, has pled guilty or nolo
contendere to, or is sentenced as a result of the commission of
a felony or crime, an element of which is dishonesty or fraud,
or has been shown to have or admitted to having engaged in acts
or practices tending to show that the applicant, licensee, or
certificate holder is incompetent or has engaged in conduct
reflecting adversely on the person's ability or fitness to
engage in the practice of public accounting whether or not a
plea was entered or withheld;
(5) employed fraud or deception in obtaining a certificate,
license, renewal, or reinstatement or in passing all or a
portion of the examination;
(6) has had the person's public accounting license,
certificate, right to examine, or other similar authority
revoked, suspended, canceled, limited, or not renewed for cause,
or has committed unprofessional acts for which the person was
otherwise disciplined or sanctioned, including, but not limited
to, being ordered to or agreeing to cease and desist from
prescribed conduct, in any state, commonwealth, or territory of
the United States, in the District of Columbia, or in any
foreign country;
(7) has had the person's right to practice before any
federal, state, or other government agency revoked, suspended,
canceled, limited, or not renewed for cause, or has committed
unprofessional acts for which the person was otherwise
disciplined or sanctioned, including, but not limited to, being
ordered to or agreeing to cease and desist from prescribed
conduct;
(8) failed to meet any requirement for the issuance or
renewal of the person's license or certificate; or
(9) with respect to temporary suspension orders, has
committed an act, engaged in conduct, or committed practices
that may result or may have resulted, in the opinion of the
board or the complaint committee if authorized by the board, in
an immediate threat to the public.
(b) In lieu of or in addition to any remedy provided in
paragraph (a), the board may require, as a condition of
continued licensure, possession of certificate, termination of
suspension, reinstatement of license or certificate,
examination, or release of examination grades, that the person:
(1) submit to a quality review of the person's ability,
skills, or quality of work, conducted in such fashion and by
such persons, entity, or entities as the board may require; and
(2) complete to the satisfaction of the board such
continuing professional education courses as the board may
specify.
(c) Service of the order is effective if the order is
served on the applicant, licensee, firm, certificate holder,
person, or counsel of record personally or by certified mail to
the most recent address provided to the board for the licensee,
certificate holder, applicant, person, or counsel of record.
The order shall state the reasons for the entry of the order.
(d) All hearings required by this subdivision shall be
conducted in accordance with chapter 14 except with respect to
temporary suspension orders, as provided for in subdivision 5,
paragraph (e).
Sec. 18. Minnesota Statutes 1996, section 326.229, is
amended by adding a subdivision to read:
Subd. 4a. [OTHER ACTIONS AGAINST APPLICANTS, LICENSEES, OR
CERTIFICATE HOLDERS.] (a) In addition to the remedies authorized
by subdivision 4, the board may enter into an agreement with the
applicant, licensee, or certificate holder for corrective action
and may unilaterally issue a warning to an applicant, licensee,
or certificate holder.
(b) The board shall not use agreements for corrective
action or warnings in any situation where the applicant,
licensee, or certificate holder has been convicted of or pled
guilty or nolo contendere to a felony or crime and such felony
or crime is the basis of the board's action against the
applicant, licensee, or certificate holder; where the conduct of
the applicant, licensee, or certificate holder indicates a
pattern of repeated violations of subdivision 4, paragraph (a),
or the rules of the board; or where the board concludes that the
conduct of the applicant, licensee, or certificate holder will
not be deterred other than by disciplinary action pursuant to
subdivision 3, 4, or 5.
(c) Agreements for corrective action may be used by the
board, or the complaint committee if authorized by the board,
where the violation committed by the applicant, licensee, or
certificate holder does not warrant disciplinary action pursuant
to subdivision 3, 4, or 5, but where the board, or the complaint
committee if authorized by the board, determines that corrective
action is required to prevent further such violations and to
otherwise protect the public. Warnings may be used by the
board, or the complaint committee if authorized by the board,
where the violation of the application, licensee, or certificate
holder is de minimis, does not warrant disciplinary action
pursuant to subdivision 3, 4, or 5, and does not require
corrective action to protect the public.
(d) Agreements for corrective action shall not be
considered disciplinary action against the person's application,
license, or certificate. However, agreements for corrective
action are public data. Warnings shall not be considered
disciplinary action against the person's application, license,
or certificate and are private data.
Sec. 19. Minnesota Statutes 1996, section 326.229,
subdivision 6, is amended to read:
Subd. 6. [VIOLATION; PENALTIES; COSTS OF PROCEEDING.] (a)
The board may impose a civil penalty not to exceed $2,000 per
violation upon a person who violates an order, statute, or rule
that the board has issued or is empowered to enforce.
(b) The board may, in addition, impose a fee to reimburse
the board for all or part of the cost of the proceedings,
including reasonable investigative costs, resulting in
disciplinary or corrective action authorized by this section,
the imposition of civil penalties, or the issuance of a cease
and desist order. The fee may be imposed when the board shows
that the position of the person who violates a statute, rule, or
order that the board has issued or is empowered to enforce is
not substantially justified, unless special circumstances make
an award unjust, notwithstanding the provisions of Minnesota
Rules, part 1400.8401. The costs include, but are not limited
to, the amount paid by the board for services from the office of
administrative hearings, attorney and reasonable investigative
fees, court reporters, witnesses, reproduction of records, board
members' per diem compensation, board staff time, and expense
incurred by board members and staff.
(c) All hearings required by this subdivision shall be
conducted in accordance with chapter 14.
Sec. 20. [INSTRUCTION TO REVISOR.]
The revisor shall renumber the definitions in Minnesota
Statutes, section 326.165, in alphabetical order, as a separate
section and shall correct references to those sections in
Minnesota Statutes and Minnesota Rules.
Sec. 21. [REPEALER.]
Minnesota Statutes 1996, sections 326.191; 326.21; and
326.225, are repealed.
Presented to the governor March 27, 1998
Signed by the governor March 31, 1998, 10:46 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes