MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Business and Financial Institutions

By: Senator(s) Kirby

AN ACT TO AMEND SECTION 73-33-1, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE STATUS OF A RETIRED CERTIFIED PUBLIC ACCOUNTANT; TO REQUIRE THAT A CERTIFIED PUBLIC ACCOUNTANT WHO IS PRACTICING PUBLIC ACCOUNTING BE ASSOCIATED AND REGISTERED WITH A CPA FIRM AND TO ESTABLISH MINIMUM QUALIFICATIONS FOR SUCH CPA FIRM; TO CODIFY SECTION 73-33-2, MISSISSIPPI CODE OF 1972, TO PROVIDE DEFINITIONS OF CERTIFIED PUBLIC ACCOUNTANT (CPA), CPA FIRM, CAPS PRACTICING PUBLIC ACCOUNTING, AND OTHER TERMS; AND TO DELETE THE REQUIREMENT THAT A CERTIFIED PUBLIC ACCOUNTANT HOLD A SEPARATE LICENSE TO PRACTICE PUBLIC ACCOUNTING; TO AMEND SECTION 73-33-5, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE STATE BOARD OF PUBLIC ACCOUNTANCY TO ISSUE PERMITS TO CERTIFIED PUBLIC ACCOUNTANT FIRMS; TO AMEND SECTION 73-33-7, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE STATE BOARD OF PUBLIC ACCOUNTANCY TO CHARGE ANNUAL CERTIFICATE, LICENSE AND PERMIT FEES; TO AMEND SECTION 73-33-9, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT A HOLDER OF A RECIPROCAL LICENSE BE ASSOCIATED WITH A FIRM THAT HAS A PERMIT ISSUED BY THE BOARD; TO AMEND SECTION 73-33-11, MISSISSIPPI CODE OF 1972, TO REVISE THE PROCEDURE BY WHICH THE STATE BOARD OF PUBLIC ACCOUNTANCY MAY REVOKE, CANCEL OR SUSPEND CERTIFICATES, LICENSES AND PERMITS OR TAKE OTHER DISCIPLINARY ACTION AGAINST A REGISTRANT; TO AMEND SECTION 73-33-13, MISSISSIPPI CODE OF 1972, TO MAKE IT A MISDEMEANOR TO REPRESENT THAT A CERTIFIED PUBLIC ACCOUNTANT FIRM WITHOUT A CURRENT PERMIT IS LICENSED TO PRACTICE PUBLIC ACCOUNTING; TO AMEND SECTION 73-33-15, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT A CERTIFIED PUBLIC ACCOUNTANT BE ASSOCIATED WITH A REGISTERED FIRM TO PRACTICE PUBLIC ACCOUNTING; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 73-33-1, Mississippi Code of 1972, is amended as follows:

73-33-1. Any person residing or having a place for the regular transaction of business in the State of Mississippi being of good moral character, and who shall have received from the State Board of Public Accountancy a license certifying his qualifications as a certified public accountant as hereinafter provided, shall be styled or known as a certified public accountant, and it shall be unlawful for any other person or persons to assume such title or use any letters, abbreviations or words to indicate that such person using same is a certified public accountant, unless, at the discretion of the board, such person has been granted use of the title of "certified public

A certified public accountant practicing public accounting must be associated and registered with a certified public accountant firm. A firm permit to practice public accounting shall not be issued to any individual(s) who do not hold a certified public accountant license or reciprocal certified public accountant license issued by the board.

In order to obtain and maintain a firm permit, a certified public accountant firm located in the State of Mississippi must demonstrate:

(a) That it is wholly owned by natural persons and not owned in whole or in part by business entities;

(b) That not less than two-thirds (2/3) of the owners hold certified public accountant licenses;

(c) That not less than two-thirds (2/3) of the ownership interest in the certified public accountant firm is held by natural persons holding certified public accountant licenses; and

(d) That the certified public accountant members of the firm are registered and in good standing with the board.

In order to obtain and maintain a firm permit, a certified public accountant firm having its principal place of business located outside of the State of Mississippi that practices public accounting for clients who are Mississippi residents or have their principal place of business domiciled in Mississippi shall demonstrate:

(a) That it is wholly owned by natural persons and not owned in whole or in part by business entities;

(b) That not less than two-thirds (2/3) of the owners hold certified public accountant licenses;

(c) That not less than two-thirds (2/3) of the ownership interest in the certified public accountant firm is held by natural persons holding certified public accountant licenses; and

(d) That the certified public accountant members of the firm performing work for Mississippi domiciled clients are registered and in good standing with the board.

Any person who is not a certified public accountant and has an ownership interest on January 1, 1998, in a certified public accountant firm which is otherwise entitled to receive a permit, shall be entitled to retain such interest by proper notification with the board on or before July 1, 1998, in a form as prescribed by the board. Through this notification such individual submits himself or herself to the jurisdiction of the board and may have ownership interest rights revoked by the board upon the commission of such misconduct as the board may identify by regulation.

No person or persons shall engage in the practice of public accounting as defined herein as a sole proprietor, partnership or professional corporation or other business organization allowed by law, unless and until each office of said sole proprietor, partnership or professional corporation or business organization located in Mississippi has registered with and been issued a firm permit by the State Board of Public Accountancy.

SECTION 2. The following shall be codified as Section 73-33-2, Mississippi Code of 1972:

73-33-2. For the purposes of this chapter, unless context requires otherwise:

"Certified public accountant," "CPA," or "licensee" means an individual who holds a license issued by the Mississippi State Board of Public Accountancy to practice public accounting, and the term "license" is used synonymously for the terms "certificate" or "certification."

"Certified public accountant firm" or "CPA firm" means any sole proprietorship, professional corporation, partnership, joint venture, professional association or other business organization or office thereof allowable under state law, having certified public accountants as not less than two-thirds (2/3) of its natural person owners and holders of not less than two-thirds (2/3) of the ownership interest, maintained for the purpose of performing or offering to perform public accounting.

"Practice of, or practicing, CPA public accounting or CPA public accountancy" means the performance, the offering to perform, or maintaining an office by a person, persons or firm holding itself out to the public as certified public accountant(s) or CPA firm, for a client or potential client, or certified public accountant(s) or CPA firm performing one or more kinds of services involving the use of accounting or auditing skills, including but not limited to the issuance of reports on financial statements, or of one or more kinds of management advisory, financial advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters.

"Firm permit to practice public accounting" means a permit issued by the Mississippi State Board of Public Accountancy permitting a certified public accountant firm to practice public accounting, and "permit holder" means a certified public accountant firm holding such permit.

SECTION 3. Section 73-33-5, Mississippi Code of 1972, is amended as follows:

73-33-5. The Mississippi State Board of Public Accountancy is hereby authorized with the following powers and duties:

(a) To adopt a seal;

(b) To govern its proceedings;

(c) To set the fees and to regulate the time, manner and place of conducting examinations to be held under this chapter. Beginning February 1, 1995, a total of one hundred fifty (150) collegiate-level semester hours of education including a baccalaureate degree or its equivalent at a college or university acceptable to the board shall be required in order to sit for the examination by candidates who have not previously sat for the examination. The total education program shall include an accounting concentration or the equivalent as determined by the board to be appropriate by rules and regulations. The examination shall cover a knowledge of the "theory of accounts," "accounting practice," "auditing," "business law as affecting accountancy," and such other branches of knowledge pertaining to accountancy as the board may deem proper;

(d) To initiate investigations of certified public accountant and certified public accountant firm practices;

(e) To notify applicants who have failed an examination within one hundred twenty (120) days of such failure and in what branch or branches deficiency was found;

(f) To adopt and enforce such rules and regulations concerning certified public accountant examinee and licensee qualifications and practices and certified public accountant firm permits and practices as the board considers necessary to maintain the highest standard of proficiency in the profession of certified public accounting and for the protection of the public interest. The standards of practice by certified public accountants and certified public accountant firms shall include generally accepted auditing and accounting standards as recognized by the Mississippi State Board of Public Accountancy;

(g) To issue certified public accountant licenses under the signature and the official seal of the board as provided in this chapter; and to issue permits to practice public accounting to certified public accountant firms pursuant to such rules and regulations as may be promulgated by the board;

(h) To employ personnel;

(i) To contract for services and rent; and

(j) To adopt and enforce all such rules and regulations as shall be necessary for the administration of this chapter; provided, however, no adoption or modification of any rules or regulations of the board shall become effective unless any final action of the board approving such adoption or modification shall occur at a time and place which is open to the public and for which notice by mail of such time and place and the rules and * * * regulations proposed to be adopted or modified has been given at least thirty (30) days prior thereto to every person who is licensed and registered with the board.

Each application or filing made under this section shall include the Social Security number(s) of the applicant in accordance with Section 93-11-64, Mississippi Code of 1972.

SECTION 4. Section 73-33-7, Mississippi Code of 1972, is amended as follows:

73-33-7. The Mississippi State Board of Public Accountancy shall be authorized to charge each applicant a fee to applicants for a certified public accountant license. In addition, the board shall be authorized to charge a fee to applicants for a firm permit to practice. All fees shall be in such amounts as to be determined by the board and paid when the application is filed.

On or before January 1 of each year hereafter, each holder of a certified public accountant license issued by the Mississippi State Board of Public Accountancy and each certified public accountant firm holding a permit to practice public accounting shall pay a reasonable annual registration fee in such amount as to be determined by the board. If any certified public accountant or firm fails to register and pay the annual registration fee, on or before January 1, notice of such default shall be sent to the certified public accountant or firm by certified mail to the delinquent registrants last known address as shown by the records of said board. The license of any certified public accountant and the permit to practice of any firm who fails to register and pay the annual registration fee within ten (10) days after notice is given, * * * shall be automatically cancelled, and the board shall enter the cancellation on its records.

Any person who has lost a certified public accountant license or a firm which has lost a permit to practice in this state by failure to register and pay the annual registration fee, may be again * * * licensed or have a firm permit reinstated by said board without reexamination, provided such person or firm shall again comply with the requirements of this chapter, file application for registration and pay all fees due said board according to law or regulation of the board.

Out of the funds collected under this chapter shall be paid the expenses of the members of the board, including mileage, hotel expenses and per diem compensation as provided in Section 25-3-69, for the time expended in carrying out the duties of the office; provided, however, no expense incurred by said board shall ever be charged against the funds of the state in excess of amounts collected under this section.

SECTION 5. Section 73-33-9, Mississippi Code of 1972, is amended as follows:

73-33-9. The Mississippi State Board of Public Accountancy may, in its discretion, issue a reciprocal certified public accountant license to practice to any holder of any certified public accountant's certificate or license issued under the law of another state, which shall entitle the holder to use the abbreviation, "CPA," in this state provided that the state issuing the original certificate or license grants similar privileges to the certified public accountants of this state. The fee for license and permit registration shall be in such amount as to be determined by the board. Such license shall not allow the holder thereof to engage in the practice of public accounting as a certified public accountant unless the holder is associated with and registered with a firm and meets the requirements of the Mississippi State Board of Public Accountancy.

SECTION 6. Section 73-33-11, Mississippi Code of 1972, is amended as follows:

73-33-11. The Mississippi State Board of Public Accountancy may revoke, suspend or take other appropriate action with respect to any * * * license or permit issued pursuant to this chapter * * * for any unprofessional conduct * * *, or for other sufficient cause, by the licensee or permit holder. The board shall provide written notice to the accused at least twenty (20) days prior to hearing on any action by the board. Notice may be achieved by certified mail (with the addressee's receipt required) or by personal service to the licensee or permit holder. Notice shall consist of an order of the board or letter from the executive director stating the cause for such contemplated action and appointing a day and a place for a full hearing thereon by said board * * *. No * * * license or permit shall be cancelled or revoked until a hearing shall have been given to the holder thereof according to law. In addition, if the board shall find that any noncertificated public accountant (non-CPA) partial owner of a certified public accountant firm has violated any of the board rules and regulations regarding such class of owners, the board is authorized to require such non-CPA to divest himself of any ownership interests within a six-month period.

The members of the board are hereby empowered to sit as a trial board; to administer oaths (or affirmations); to summon any witness and to compel his attendance and/or his testimony, under oath (or affirmation) before such board; to compel the production before it, of any book, paper or document by the owner or custodian thereof; and/or to compel any officer to produce, at such hearing a copy of any public record (not privileged from public inspection by law) in his official custody, certified to, by him. The board shall elect one of its members to serve as clerk, to issue summons and other processes, and to certify copies of its records or, the board may delegate such duties to the executive director.

The accused * * * may appear in person and/or by counsel or, in the instance of a firm permit holder through its manager and/or counsel to defend such charges. If the accused does not appear or answer, judgment may be entered by default, provided the board finds that proper service was made on the accused.

The minutes of the board shall be recorded in an appropriate minute book permanently maintained by the board at its office.

In a proceeding conducted under this section by the board for disciplinary action against a licensee, permit holder, or non-CPA partial owner, those reasonable costs that are expended by the board in the investigation and conduct of a proceeding for discipline including, but not limited to, the cost of service of process, court reporters, expert witnesses, investigators and legal fees may be imposed on the accused.

Such costs shall be paid to the board upon the expiration of the period allowed for appeal of such penalties under this section, or may be paid sooner if the guilty party elects. Money collected by the board under this section shall be deposited to the credit of the board's special fund in the State Treasury.

In case of a decision adverse to the accused, appeal shall be made within thirty (30) days from the day on which decision is made, * * * to the circuit court of the county in which the misconduct and/or unprofessional conduct was alleged to have been committed, and the order of the board shall not take effect until the expiration of said thirty (30) days.

In case of an appeal, * * * bond for costs in the circuit court shall be given as in other cases; and the order of the board shall not take effect until such appeal shall have been finally disposed of by the court or courts.

The board may, at any time, reinstate a license or permit if it finds that such reinstatement is justified.

In addition to the reasons specified in the first paragraph of this section, the board shall be authorized to suspend the license of any licensee for being out of compliance with an order for support, as defined in Section 93-11-153. The procedure for suspension of a license for being out of compliance with an order for support, and the procedure for the reissuance or reinstatement of a license suspended for that purpose, and the payment of any fees for the reissuance or reinstatement of a license suspended for that purpose, shall be governed by Section 93-11-157 or 93-11-163, as the case may be. Actions taken by the board in suspending a license when required by Section 93-11-157 or 93-11-163 are not actions from which an appeal may be taken under this section. Any appeal of a license suspension that is required by Section 93-11-157 or 93-11-163 shall be taken in accordance with the appeal procedure specified in Section 93-11-157 or 93-11-163, as the case may be, rather than the procedure specified in this section. If there is any conflict between any provision of Section 93-11-157 or 93-11-163 and any provision of this chapter, the provisions of Section 93-11-157 or 93-11-163, as the case may be, shall control.

SECTION 7. Section 73-33-13, Mississippi Code of 1972, is amended as follows:

73-33-13. If any person shall: (a) falsely represent himself to the public as having received a certified public accountant license or falsely represent a firm in which he has an ownership interest to the public as having received a firm permit as provided in this chapter; or (b) falsely assume to practice as a certified public accountant; or (c) falsely use the abbreviation, "C.P.A.," or any similar words or word, letters or letter to indicate that the person using the same is a certified public accountant, without having received a certified public accountant license * * * as provided in this chapter; or (d) if any person having received a certified public accountant license and having lost such license by cancellation, revocation or suspension as provided by this chapter, shall continue to use the "CPA" abbreviation, use the words certified public accountant, or practice public accounting after losing his license; or (e) if any person shall represent that a CPA firm with a suspended or revoked permit in which he has an ownership interest is entitled to perform such practice--he shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a criminal fine of not less than Five Hundred Dollars ($500.00) or of not more than Five Thousand Dollars ($5,000.00), or by imprisonment in the county jail for not longer than six (6) months, or by both such fine and imprisonment, in the discretion of the court for each such an offense.

SECTION 8. Section 73-33-15, Mississippi Code of 1972, is amended as follows:

73-33-15. (1) It shall be unlawful for any person, except a registered public accountant, who is associated and registered with a firm permit holder and/or for any firm, except for a certified public accountant firm that holds a valid CPA firm permit to practice public accounting issued pursuant to this chapter to:

(a) Issue, sign or permit his name or firm name to be associated with any report, transmittal letter or other written communication issued as a result of an examination of financial statements or financial information which contains either an expression of opinion or other attestation as to the fairness, accuracy or reliability of such financial statements;

(b) Offer to perform, or perform, for the public, public accounting, tax consulting or other accounting-related services while holding himself out as a certified public accountant or as a firm of certified public accountants or certified public accountant firm; or

(c) Maintain an office or other facility for the transaction of business as a certified public accountant or certified public accountant firm.

(2) Any person or firm violating subsection (1) of this section shall be guilty of a misdemeanor, and may, upon conviction therefor, be punished by a criminal fine of not less than Five Hundred Dollars ($500.00) nor more than Five Thousand Dollars ($5,000.00), or by imprisonment in the county jail for not less than ten (10) days nor more than six (6) months, or by both such fine and imprisonment in the discretion of the court.

(3) The provisions of paragraph (a) of subsection (1) of this section shall not be construed to apply to an attorney licensed to practice law in this state; to a person for making statements as to his own business; to an officer or salaried employee of a firm, partnership or corporation for making an internal audit, statement or tax return for the same; to a bookkeeper for making an internal audit, statement or tax return for his employer, whose books he regularly keeps for a salary; to a receiver, a trustee or fiduciary as to any statement or tax return with reference to the business or property entrusted to him as such; to any federal, state, county, district or municipal officer as to any audit, statement, or tax return made by him in the discharge of the duties of such office.

SECTION 9. This act shall take effect and be in force from and after July 1, 1998.