MISSISSIPPI LEGISLATURE
2017 Regular Session
To: Insurance
By: Representative Formby
AN ACT TO AMEND SECTION 73-33-1, MISSISSIPPI CODE OF 1972, TO REQUIRE EVERY FIRM ENGAGING IN THE PRACTICE OF PUBLIC ACCOUNTING IN THE STATE OF MISSISSIPPI TO CARRY ERRORS AND OMISSIONS INSURANCE COVERAGE IN AN AMOUNT OF AT LEAST ONE HUNDRED THOUSAND DOLLARS PER OCCURRENCE THAT COVERS EVERY PERSON ASSOCIATED OR REGISTERED WITH THE FIRM ENGAGING IN THE PRACTICE OF PUBLIC ACCOUNTING IN THE STATE OF MISSISSIPPI; TO AMEND SECTION 73-33-5, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE STATE BOARD OF PUBLIC ACCOUNTANCY TO ADOPT RULES AND REGULATIONS REQUIRING PROOF OF SUCH ERRORS AND OMISSIONS INSURANCE; 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. (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 such person qualifies for a practice privilege under Section 73-33-17, or at the discretion of the board, such person has been granted use of the title of "certified public accountant retired" by the Mississippi State Board of Public Accountancy or has received a reciprocal certified public accountant license from the State Board of Public Accountancy.
(2) A certified public accountant practicing public accounting under a Mississippi license must be associated and registered with a certified public accountant firm.
(3) The State Board of Public Accountancy shall grant and renew permits to practice as a CPA firm to applicants that demonstrate their qualifications in accordance with this section.
(a) The following shall hold a permit issued under this section: any firm with an office in this state that practices public accountancy or that uses the title "CPA" or "CPA firm," and any firm that does not have an office in this state but performs the services described in Section 73-33-17(4) for a client having its home office in this state.
(b) A firm that does not have an office in this state may perform a review of a financial statement to be performed in accordance with Statements on Standards for Accounting and Review Services, or a compilation as defined in Section 73-33-2(d), for a client having its home office in this state and may use the title "CPA" and "CPA firm" without a permit issued under this section only if such firm has the qualifications described in subsection (4), complies with the peer review requirements set forth by board rule, and performs such services through an individual with practice privileges under Section 73-33-17.
(c) A firm that is not subject to the requirements of paragraph (a) or (b) of this subsection may perform other professional services within the practice of public accountancy while using the title "CPA" and "CPA firm" in this state without a permit issued under this section only if such firm performs such services through an individual with practice privileges under Section 73-33-17 and such firm can lawfully do so in the state where the individuals with practice privileges have their principal place of business.
(4) In order to obtain and maintain a firm permit, a certified public accountant firm shall be required to show the following:
(a) It is wholly owned by natural persons and not owned in whole or in part by business entities; and
(b) A simple majority of the ownership of the firm in terms of financial interests and/or voting rights hold certified public accountant licenses in any state; however, the individuals whose principal place of business is in Mississippi and who perform professional services in this state shall hold a Mississippi certified public accountant license, and that individuals who qualify for practice privileges under Section 73-33-17 who perform services for which a firm permit is required under Section 73-33-17(4) shall not be required to obtain a certificate pursuant to Section 73-33-3 or 73-33-9.
(5) Any certified public accountant firm may include nonlicensee owners, provided that:
(a) The firm designates a licensee of this state who is responsible for the proper registration of the firm and identifies that individual to the board; or in the case of a firm without a Mississippi office which must have a permit pursuant to subsection (3)(a), the firm designates a licensee of another state who meets the requirements provided in Section 73-33-17;
(b) All nonlicensee owners are active individual participants in the certified public accountant firm or affiliated entities; and
(c) The firm complies with such other requirements as the board may impose by rule.
(6) Unless exempt from the firm permit requirement under Section 73-33-1(3), no person or persons shall engage in the practice of public accounting as defined herein as a partnership, joint venture or professional corporation, sole proprietor, or other business organization allowed by law, unless and until each business organization or office thereof located inside the State of Mississippi has registered with and been issued a firm permit by the State Board of Public Accountancy.
(7) Every firm engaging in the practice of public accounting in the State of Mississippi must carry errors and omissions insurance coverage in an amount of at least One Hundred Thousand Dollars ($100,000.00) per occurrence that covers every person associated or registered with the firm engaging in the practice of public accounting in the State of Mississippi.
SECTION 2. 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. To be admitted to the examination, a candidate must have completed a baccalaureate degree of at least one hundred twenty (120) collegiate-level semester hours of education or its equivalent at a college or university acceptable to the board. The education program shall include an accounting concentration or the equivalent as determined by the board to be appropriate in its rules and regulations. The examination shall cover branches of knowledge pertaining to accountancy as the board may deem proper. A total of one hundred fifty (150) collegiate-level semester hours of education shall be required before the board shall accept an application for a certified public accountant license under this chapter;
(d) To initiate investigations of certified public accountant and certified public accountant firm practices;
(e) To notify applicants who have failed an examination 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 or electronic 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.
(k) To adopt and enforce rules and regulations that require any person or firm engaging in the practice of public accounting in the State of Mississippi to show proof to the board of errors and omissions coverage required under Section 73-33-1(7).
SECTION 3. This act shall take effect and be in force from and after July 1, 2017.