STAND. COM. REP. NO.445
Honolulu, Hawaii
, 2001
RE: S.B. No. 837
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committees on Commerce, Consumer Protection and Housing and Judiciary, to which was referred S.B. No. 837 entitled:
"A BILL FOR AN ACT RELATING TO PUBLIC ACCOUNTANCY,"
beg leave to report as follows:
The purpose of this measure is to establish a public accountancy licensing program consistent with national professional standards and uniform law.
The Department of Commerce and Consumer Affairs (DCCA), Board of Public Accountancy (Board), Hawaii Society of Certified Public Accountants, and numerous individuals testified in support of this measure. The Hawaii Association of Public Accountants and numerous individuals testified in opposition to this measure.
House Concurrent Resolution No. 18, House Draft 1, 2000 Regular Session, directed the DCCA, the Board, and professional accounting organizations to develop omnibus legislation for the regulation of the profession of certified public accountancy consistent with the standards of the American Institute of Certified Public Accountants and the Uniform Accountancy Act as recommended by the National Association of State Boards of Accountancy. This measure is a result of those efforts.
This measure adopts the regulatory framework of the Uniform Accountancy Act which will enhance interstate reciprocity and the practice of public accountancy across state lines. Among its other features, this measure:
(1) Requires the licensing of accounting firms;
(2) Discontinues the issuance of permits to practice to individuals;
(3) Establishes a peer review program and peer review oversight body;
(4) Requires firms that perform attest or compilation engagements and individuals who perform compilation engagements to undergo a peer review triennially to obtain a permit;
(5) Reduces the experiential requirement for certification from two years to one year; and
(6) Retains the educational requirement of one hundred fifty semester hours for licensure, but reduces the educational requirement to sit for the certification examination to a baccalaureate degree or its equivalent, which is approximately one hundred twenty-four semester hours.
Your Committees find that some of the provisions in the licensure scheme effected by this measure have raised concerns among licensees. In particular, the educational requirement of one hundred fifty college semester hours is viewed as a deterrent or barrier to entry into the profession. Additionally, concerns were expressed about the peer review requirement, and the ownership of certified public accountancy (CPA) firms by non-CPAs.
Upon careful consideration, your Committees have amended this measure to:
(1) Delay the implementation of the peer review requirement for an additional two years to December 31, 2005;
(2) Clarify filing requirements for firms applying for a permit to practice accountancy;
(3) Allow only active licensees, rather than inactive licensees, to issue reports on financial statements or render attest or compilation services;
(4) Repeal the current one hundred fifty semester hours educational requirement for licensure and re-establish the requirement effective January 1, 2004; and
(5) Allow applicants for licensure who either pass or hold conditional credits for the licensure examination before January 1, 2004, to satisfy the educational requirements by complying with the requirements in effect immediately prior to December 31, 2000.
Your Committees have also made technical, nonsubstantive amendments to this measure for purposes of clarity and consistency and to reflect preferred drafting style.
Finally, in order to facilitate a continuing dialogue on the issues presented by this measure, your Committees have further amended the measure by inserting an effective date of July 1, 2050.
As affirmed by the records of votes of the members of your Committees on Commerce, Consumer Protection and Housing and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 837, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 837, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Commerce, Consumer Protection and Housing and Judiciary,
|
____________________________ BRIAN KANNO, Chair |
____________________________ RON MENOR, Chair |
|