PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 98-24-053.
Title of Rule: WAC 4-25-730 Experience.
Purpose: To prescribe the experience required for issuance of an initial license to practice public accounting as a certified public accountant (CPA) in Washington state.
Statutory Authority for Adoption: RCW 18.04.055, 18.04.215 (1)(a).
Statute Being Implemented: RCW 18.04.215 (1)(a).
Summary: Lists the requirements individuals must meet to obtain a license - definition, timing, experience in public accounting, experience other than in public accounting, experience documentation, examination of experience documentation.
Reasons Supporting Proposal: RCW 18.04.215 was amended by the 1999 legislature to require the board to issue three-year licenses to persons who have demonstrated one year in public accounting and who have completed 120 hours of continuing professional education during the 36 months preceding application and to require CPAs to submit to the board satisfactory proof of completion of 120 hours of continuing education during the preceding three years. Board's existing experience rule conflicts with the new statute. The proposed changes would conform the current rule to the new statute.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, 210 East Union, Suite A, Olympia, (360) 664-9194.
Name of Proponent: Board of Accountancy, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: RCW 18.04.215 (1)(a) directs the board to issue licenses to CPA certificate holders who have demonstrated one year of public accounting experience, or such other experience or employment which the board in its discretion regards as substantially equivalent. The rule prescribes the specific experience requirements individuals must meet to obtain the license.
Proposal Changes the Following Existing Rules: Changes the number of hours of continuing education an applicant for an initial license (who passes the CPA examination prior to May 1988) must complete to supplement experience that is older than five years old to conform with 1999 legislation.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rule will have negligible economic impact on the accounting profession.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. RCW 34.05.328 does not apply to rules that clarify language of a rule without changing its effect.
Hearing Location: Western Washington University, Viking Addition, Room 461, Bellingham, Washington, on July 29, 1999, at 1:30 p.m.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by July 22, 1999, TDD (800) 833-6384, or (360) 664-9194.
Submit Written Comments to: Dana M. McInturff, P.O. Box 9131, Olympia, WA 98507-9131, fax (360) 664-9190, by July 27, 1999.
Date of Intended Adoption: July 30, 1999.
June 11, 1999
Dana M. McInturff, CPA
Executive Director
by Cheryl M. Sexton
OTS-3150.1
AMENDATORY SECTION(Amending WSR 93-12-068, filed 5/27/93,
effective 7/1/93)
WAC 4-25-730
Experience.
Experience required for issuance of an initial license shall meet the requirements of this section:
(1) Experience definition and timing: One year of
experience shall consist of full-time employment of no less than
two thousand hours. For purposes of computing work experience
for a part-time employee, two thousand hours shall constitute one
year. Employment may be for one or more employers, with or
without compensation, and may consist of any combination of
full-time and part-time employment. For an applicant who passed
the uniform certified public accounting examination prior to May
1988, experience obtained more than five years prior to
application for initial license shall be supplemented by
((eighty)) one hundred twenty hours of continuing education
during the ((two)) three-year period prior to application. For
an applicant who passed the examination in May 1988, or
thereafter, this experience must cover a minimum twelve-month
period and must be obtained no more than five years prior to
applying for a license.
(2) Experience in public accounting:
(a) An applicant shall show he/she has had employment for a period of one year as a staff accountant under the direct supervision of a currently licensed certified public accountant who is actively engaged in the practice of public accounting and is a member of a firm licensed to practice public accounting. Experience shall be in a CPA firm that participates in a board approved peer or quality review of its accounting or auditing practice. Qualifying experience for purposes of this section shall mean the performance of services as one skilled in the knowledge and practice of public accounting, including performance of accounting or auditing procedures, issuance of reports on financial statements, performance of management advisory or other consulting services, preparation of tax returns and furnishing advice on tax matters.
(b) Public accounting services shall be performed for clients of a certified public accountant or a firm of certified public accountants in compliance with the board's rules and must regularly involve the exercise of independent judgment and the application of appropriate technical and behavioral standards such as the standards contained in the Code of Professional Ethics, Generally Accepted Auditing Standards, Statement of Responsibilities in Tax Practice, Statement on Standards for Management Advisory Services, Statement on Standards for Accounting and Review Services, Statement on Standards for Attestation Engagements and other similar practice standards issued by the American Institute of Certified Public Accountants.
(3) Experience other than in public accounting:
(a) The experience required, as stated in subsection (2) of this section, may also be met by work experience, not including in-classroom training, performed under the direct supervision of a currently licensed certified public accountant in a commercial or governmental organization which has filed a sponsorship agreement with the board, acceptable to the board, which among other things specifies:
(i) The scope of accounting, auditing, consulting, and other services performed within the organization;
(ii) The professional education and on-job training provided to an applicant prior to application; and
(iii) The program of review and supervision performed by the internal review committee within the organization which administers the agreement.
(b) Qualifying work experience must be of a type and at a level equivalent to that performed in public accounting practice and must regularly involve the exercise of independent judgment and the application of the appropriate technical and behavioral standards.
(4) Experience affidavit: The experience claimed by an applicant shall be verified by the certified public accountant or firm of certified public accountants supervising the applicant on an experience affidavit form provided by the board.
(5) Examination of experience documentation:
(a) Any licensee who has furnished evidence of an applicant's experience to the board shall upon request by the board explain in writing or in person the information so provided.
(b) The board may require an interview or an inspection of documentation relating to an applicant's experience. Any licensee having custody of such documentation shall produce it upon request by the board.
(c) Any licensee who refuses to provide the evidence or documentation of the applicant's experience, requested by an applicant or by the board, shall upon request by the board explain in writing or in person the basis for such refusal.
(6) Reciprocity: An applicant who applies for initial license in this state shall be required to document experience obtained in another jurisdiction which is equivalent to the requirements of this state.
[Statutory Authority: RCW 18.04.055. 93-12-068, § 4-25-730, filed 5/27/93, effective 7/1/93.]