1-201. Membership; appointment; qualifications;
term; vacancies; removal. (a) There is hereby created a board of
accountancy, hereinafter referred to as the board. The board shall be composed of seven members
who shall be appointed by the governor and shall be citizens of the
(b) Each member of the board shall
serve for a term of three years and until a successor is appointed and
qualified. Vacancies in the board shall
be filled by appointment of the governor for the unexpired term.
(c) The governor shall remove from the board
any certified public accountant member who does not hold a permit to practice
as a certified public accountant in this state.
After a hearing conducted in accordance with the provisions of the
1-202. Organization; officers; meetings; records;
powers and duties; rules and regulations.
(a) Each year the
board shall meet and organize by electing a chairperson and a vice-chairperson
from its membership. The board shall
appoint a secretary, who need not be a member of the board. The board shall meet at the call of the
chairperson but not less than twice each year and shall have a seal. The chairperson and the secretary of the
board shall have the power to administer oaths.
(b) The board shall keep records of all
proceedings and actions by and before it.
In any proceedings in court, civil or criminal, arising out of or
founded upon any provisions of this act, copies of such records which are
certified as correct by the secretary of the board under the seal of the board
shall be admissible in evidence and shall be prima facie evidence of the
correctness of the contents thereof.
(c) The board may:
(1) provide for certification, notification
and registration and issue permits to practice in accordance with the provisions
of this act;
(2) adopt, amend and revoke rules and
regulations governing its administration and enforcement of this act, including
but not limited to: (A) Educational
qualifications required under K.S.A. 1-302a and amendments thereto; (B)
experience qualifications required under K.S.A. 1-302b and amendments thereto;
(C) continuing professional education qualifications required under K.S.A.
1-310 and amendments thereto; (D) professional conduct directed to controlling
the quality of services by licensees, and dealing among other things with
independence, integrity and objectivity, competence and technical standards,
responsibilities to the public and clients, commissions and referral fees,
contingent fees, advertising, firm names, discreditable acts and communication
with the board; (E) professional standards applicable to licensees; (F) the
manner and circumstances of use of the titles “certified public accountant” and
“C.P.A.”; (G) peer reviews required in K.S.A. 1-501 and amendments thereto; (H)
the definition of substantial equivalency for purposes of K.S.A. 2000 Supp.
1-322 and amendments thereto; and (I) such other rules and regulations as the
board may deem necessary to regulate the practice of certified public
accountancy.
(d) The board shall:
(1) Keep accounts of its receipts and
disbursements;
(2) keep a register of
(3)
deny, revoke, suspend and reinstate certificates, notifications, firm
registrations and permits; and
(4) initiate proceedings, hold hearings and
do all things necessary to regulate the practice of certified public
accountancy.
(e) Any statements on standards and guides
imposed by the board shall meet the standards or guides developed for general
application either by the American institute of certified public accountants or
the division of accounts and reports which are in effect on July 1, 2001, or
any later version as adopted by the board in rules and regulations.
(f) A majority of the board shall constitute a quorum for the transaction of any business at any meeting of the board.
1-203.
Compensation and expenses. Members of the
board of accountancy attending meetings of such board, or attending a
subcommittee meeting thereof authorized by such board, shall be paid
compensation, subsistence allowances, mileage and other expenses as provided in
K.S.A. 75-3223.
1-204. Disposition of moneys; board of accountancy
fee fund. There is hereby created the board of
accountancy fee fund. The board of accountancy
shall remit all moneys received by or for it from fees, charges or penalties to
the state treasurer at least monthly.
Upon receipt of each such remittance, the state treasurer shall deposit
the entire amount thereof in the state treasury. Twenty percent of each such deposit shall be
credited to the state general fund and the balance shall be credited to the
board of accountancy fee fund. All
expenditures from the board of accountancy fee fund shall be made in accordance
with appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the chairperson of the board of
accountancy or by a person or persons designated by the chairperson.
1-301. Fees; determination and fixing amounts;
notification of permit holders. (a) The board shall charge and collect a fee
from each applicant for a
(b) The board shall adopt rules and
regulations fixing the fees provided to be charged and collected under this
section, which shall be as follows:
(1) for issuance of a certificate
(initial or duplicate) an amount not to exceed $50;
(2) for issuance of a reciprocal
certificate an amount not to exceed $250;
(3) for issuance or renewal of a
permit to practice for the holder of a
(4) for issuance or renewal of a
permit to practice for the holder of a Kansas certificate whose permit is
issued or renewed for a period of 12 months or less, an amount equal to ˝ the
amount of the fee fixed under paragraph (3), subject to paragraph (6);
(5) for issuance of a duplicate permit
to practice for the holder of a
(6) for reinstatement of a permit to
practice in the case of the holder of a Kansas certificate who had in some
prior year held a permit to practice but who did not hold such a permit for the
year immediately preceding the period for which a permit to practice is
requested, or who, if holding a permit to practice for such period immediately
preceding applies for renewal subsequent to the expiration date of such permit,
an amount equal to 1 ˝ times the amount of the fee then fixed under paragraph
(3) or paragraph (4), whichever is applicable;
(7) for notification or renewal of
notification required pursuant to K.S.A. 2000 Supp. 1-322, and amendments
thereto, an amount not to exceed $150; and
(8) for annual firm registration, an
amount not to exceed $50;
(9) for renewing a firm registration
after the expiration, an amount equal to 1 ˝ times the amount of the fee then
fixed under paragraph (8);
(10) for examination application
processing by the board, an amount not to exceed $150.
(c) On or before May 30 each year, the board shall determine the amount of funds that will be required during the ensuing year to carry out and enforce the provisions of law administered by the board and may adopt rules and regulations to change any fees fixed under this section as may be necessary, subject to the limitations prescribed by this section. Upon changing any renewal fees as provided by this section, the board shall immediately notify all holders of permits to practice of the amount of such fees. The fees fixed by the board and in effect under this section immediately prior to the effective date of this act shall continue in effect until such fees are fixed by the board by rules and regulations as provided by this section.
1-302. Qualifications for certificate; refusal to
grant on moral character grounds. (a) The certificate of certified public
accountant shall be known as the Kansas certificate and shall be granted by the
board to any person of good moral character who: (1) Is a resident of this state or has a
place of business or is employed therein; (2) meets the educational
requirements prescribed by K.S.A. 1-302a, and amendments thereto; and (3) has
passed an examination in accounting and auditing and in such other related
subjects as the board may determine to be appropriate.
(b) The board may refuse to
grant a certificate on the ground of failure to satisfy the good moral
character requirement subject to notice and an opportunity for the person to be
heard pursuant to the
1-302a. Education requirement for admission
to examination. (a)
The education requirement prescribed by K.S.A. 1-302, and amendments thereto,
is satisfied if the applicant meets all of the following requirements:
(1) Is the
holder of a baccalaureate or higher academic degree from a college or
university approved by the board;
(2) has been
awarded credit by a college or university approved by the board for at least
150 semester hours, with a concentration in accounting; and
(3) the
credit for the concentration in accounting is accepted by the board.
(b) An applicant for admission to take
the initial examination in this state as required in K.S.A. 1-302, and
amendments thereto, must submit evidence satisfactory to the board or to the
examination service that the applicant meets the requirements of subsection
(a).
(c) The board may define, by rules and
regulations, the term “concentration in accounting”. The board may also prescribe, by rules and
regulations, the type and amount of credit submitted pursuant to subsection
(a).
1-302b. Qualifications for permit to practice;
supervisory qualifications; licensees of other states relocating business to
(b) Any individual permit holder who
is responsible for supervising attest or compilation services and signs or authorizes
someone to sign the accountant’s report on any attest or compilation service on
behalf of the firm, shall meet the experience or competency requirements, as
adopted by the board through rules and regulations.
(c) Any individual permit holder who signs
or authorizes someone to sign the accountant’s report on any attest or
compilation service on behalf of the firm, shall meet the experience or
competency requirement of subsection (b).
(d) As an alternative to
the requirements of subsection (a), an individual with an active license issued
by another state who establishes such individual’s principal place of business
in this state shall request the issuance of both a certificate and a permit to
practice from the board prior to establishing such principal place of
business. The board may issue both a
certificate and permit to such individual who obtains from the NASBA national
qualification appraisal service verification that such individual’s CPA
qualifications are substantially equivalent to the CPA licensure requirements
of the uniform accountancy act. An
application under this section may be made through the NASBA qualifications
appraisal service or similar organization approved by the board. Any individual meeting the requirements set
forth in this subsection who is denied a certificate and a permit to practice
shall have the opportunity to be heard pursuant to the
1-304. Frequency of examinations; re-examinations, conditions.
(a) Each
examination provided for by this act shall take place as often as may be
necessary in the opinion of the board, but not less frequently than once each
year.
(b) After considering the need for uniformity
with other states, the board may prescribe, by rule and regulation, the examination
process, including but not limited to, the administration of the examination,
application process, methods of grading, credit and determining a passing
grade.
(c) The board may contract with third parties to
perform administrative services with respect to the examination.
1-306. Exemption
from certificate and examination requirements for certain persons. Persons who on July 1, 1951, held certified
public accountant's certificates heretofore issued under the laws of this state
shall not be required to secure additional certificates under this act or a
1-307. Waiver of examination; conditions;
requirements. (a) The board, in its discretion, may waive
the examination of and may issue a certificate to a holder of a certificate as
“certified public accountant” issued under the laws of any state upon a showing
that:
(1) The applicant passed the examination
required for issuance of the applicant’s
certificate with grades that would have been passing grades at that time in
this state; and
(2) the applicant (A) meets all current
requirements in this state for the issuance of a certificate at the time
application is made, (B) at the time of the issuance of the applicant’s
certificate in the other state, met all such requirements then applicable in
this state or, (C) had four years’ experience of the type described in
subsection (a) of K.S.A. 1-302b, and amendments thereto, after passing the
examination upon which the applicant’s certificate was based and within the 10
years immediately preceding the application.
(b) The board shall issue a
certificate to a holder of a foreign designation, granted in a foreign country
entitling the holder thereof to engage in the practice of certified public
accountancy, provided that:
(1) The foreign authority which granted the
designation makes similar provision to allow a person who holds a valid
certificate issued by this state to obtain such foreign authority’s comparable
designation;
(2) the foreign designation: (A) Was duly issued by a foreign authority
that regulates the practice of certified public accountancy and the foreign
designation has not expired or been revoked or suspended; (B) entitles the
holder to issue reports upon financial statements; and (C) was issued upon the
basis of educational, examination and experience requirements established by
the foreign authority or by law;
(3) the applicant: (A) Received the designation, based on
educational and examination standards substantially equivalent to those in
effect in this state at the time the foreign designation was granted; (B)
completed an experience requirement, substantially equivalent to the requirement
set out in K.S.A. 1-302b, and amendments thereto, in the jurisdiction which
granted the foreign designation; and (C) passed a uniform qualifying
examination in national standards and an examination on the laws, regulations
and code of ethical conduct in effect in this state acceptable to the board;
and
(4) the applicant shall in the
application list all jurisdictions, foreign and domestic, in which the
applicant has applied for or holds a designation to practice public
accountancy.
Each holder of a certificate issued under this subsection shall notify the board in writing, within 30 days after its occurrence, of any issuance, denial, revocation or suspension of a designation or commencement of a disciplinary or enforcement action by any jurisdiction. The board has the sole authority to interpret the application of the provisions of this subsection.
1-308. Entities authorized to practice; annual
registration; fee; partner, shareholder and member requirements; designation of
responsible permit holder; firm name; notification of board upon changes. (a)
Notwithstanding any other provision of
(1) At least one general partner,
shareholder or member thereof must be a certified public accountant of this
state holding a valid permit to practice;
(2) each partner, shareholder or member who
is a certified public accountant thereof personally engaged within this state
in a practice of certified public accounting must be a certified public accountant
of this state holding a valid permit to practice;
(3) each partner, shareholder or member who is a certified public accountant thereof must be a certified public accountant in some state in good standing;
(4) each resident manager in charge of
an office of the firm in this state must be a certified public accountant of
this state holding a valid permit to practice; and
(5) at least a simple majority of the
ownership of the firm, in the terms of equity capital and voting rights of all
partners, shareholders and/or members, belongs to the holders of valid licenses
to practice as certified public accountants in some state. All nonlicensee owners must be of good moral
character and must be natural persons actively participating in the business of
the firm or entities, such as partnerships, corporations or other business
associations, that are affiliated with the firm, provided that each ultimate
beneficial owner of an equity interest in such an affiliated entity shall be a
natural person actively participating in the business of the firm or affiliated
entity. Although firms may include
nonlicensee owners there shall be at least one certified public accountant who
has ultimate responsibility for all the services provided by the firm and, the
firm and its ownership must comply with rules and regulations promulgated by
the board. Any firm which is denied
registration pursuant to this section shall be entitled to notice and an
opportunity to be heard pursuant to the
(b) A professional corporation in
partnership with one or more corporations or individuals shall not be
registered with the board as a partnership unless such a partnership was
registered prior to January 1, 2007.
(c) The term “resident” as used in
this section, shall include a person engaged in practice as a certified public
accountant in this state, who spends all or the greater part of such person’s
time during business hours in this state, but who resides in another state.
(d) Each firm shall register prior to
engaging in the practice of certified public accountancy in this state and
shall renew the firm’s registration annually.
Each firm shall designate a permit holder of this state who is
responsible for the proper registration of the firm and shall identify that
individual to the board by affidavit of a general partner, manager or officer
of the firm. A fee may be charged for
the registration of a firm.
(e) A firm that is not registered in accordance with this section shall not use the words “certified public accountants” or the abbreviation “CPA” in connection with its name. Notification shall be given the board, within one month, after the admission or withdrawal of a partner, shareholder or member from any firm so registered. Firms which fall out of compliance with the provisions of this section due to changes in firm ownership or personnel shall take corrective action to bring the firm back into compliance as quickly as possible. The board may grant a reasonable period of time for a firm to take such corrective action. Failure to bring the firm back into compliance within a reasonable period as determined by the board will result in the suspension or revocation of the firm permit.
1-310. Permit to practice; to whom issued;
expiration; renewal; peer review program participation and continuing education
requirements; reinstatement upon failure to renew. (a)
Permits to engage in the practice of certified public accountancy in this state
shall be issued by the board to persons who have met the requirements under
K.S.A. 1-302b, and amendments thereto.
(b) Each holder of a Kansas
certificate, which is numbered with an odd number, who is qualified under
K.S.A. 1-302b, and amendments thereto, shall have a permit to practice issued
or renewed on a biennial basis which shall expire on the next July 1 which
occurs after the date the permit was issued or renewed and which occurs in an
odd-numbered year.
(c) Each holder of a Kansas
certificate, which is numbered with an even number, who is qualified under
K.S.A. 1-302b, and amendments thereto, shall have a permit to practice issued
or renewed on a biennial basis which shall expire on the next July 1 which
occurs after the date the permit was issued or renewed and which occurs in an
even-numbered year.
(d) A person may renew a permit within
12 months of its expiration date if such person submits a complete and
sufficient renewal application together with the fee prescribed by K.S.A.
1-301, and amendments thereto.
(e) As a condition for renewal of a
permit to practice, the board shall require all permit holders to furnish with
such applicant’s renewal application, evidence of participation in continuing
education in accounting, auditing, or related areas of at least 80 hours during
the two-year period for renewal unless the board waives all or a portion of the
continuing education requirements.
(f) The board may exempt from the
continuing education requirements an individual who holds a permit from another
state if:
(1) The permit holder has a principal place
of business located outside the state of
(2) the permit holder verifies to the board’s satisfaction that such person has met the continuing education requirements of the state in which the principal place of business is located;
(3) the
board considers the continuing education requirements of the state in which the
principal place of business is located to be substantially equivalent to those
of Kansas; and
(4) the state in which the principal
place of business is located extends the same exemption to
(g) A person who fails to renew a permit within 12 months after its expiration may apply for reinstatement by making application on a form provided by the board, submitting a reinstatement fee as prescribed by K.S.A. 1-301 and amendments thereto, and submitting proof that such person has obtained 40 hours of qualifying continuing education within the preceding 12 months prior to applying for reinstatement.
1-311. Grounds for denial, revocation or suspension
of permit, certificate, notification or registration; additional administrative
sanctions or remedies; proceedings. (a) The board may deny an application for a
Kansas certificate, revoke or suspend any certificate issued under the laws of
this state or may revoke, suspend or refuse to renew any permit issued under
K.S.A. 1-310 and amendments thereto, and any notification issued pursuant to
K.S.A. 2000 Supp. 1-322 and amendments thereto, may censure the holder of any such permit, certificate, or
notification, limit the scope of practice of any permit holder, and may impose
an administrative fine not exceeding $2,000, for any one or any combination of
the following causes:
(1) Fraud, dishonesty or deceit in obtaining
a certificate, permit, registration or notification;
(2) cancellation, revocation,
suspension or refusal to renew a person’s authority to practice for
disciplinary reasons in any other jurisdiction for any cause;
(3) failure, on the part of a holder of a
permit to practice or notification to maintain compliance with the requirements
for issuance or renewal of such permit, or notification;
(4) revocation or suspension of the
right to practice by the PCAOB or any state or federal agency;
(5) dishonesty, fraud or gross negligence
in the practice of certified public accountancy;
(6)
failure to comply with applicable federal or state requirements
regarding the timely filing of the person’s personal tax returns, the tax
returns of the person’s firm or the timely remittance of payroll and other
taxes collected on behalf of others;
(7) violation of any provision of this
act or rule and regulation of the board except for a violation of a rule of
professional conduct;
(8) willful violation of a rule of
professional conduct;
(9) violation of any order of the
board;
(10) conviction of any felony, or of
any crime an element of which is dishonesty or fraud, under the laws of the
(11) performance of any fraudulent act
while holding a
(12) making any false or misleading
statement or verification, in support of an application for a certificate,
permit, notification or firm registration filed by another;
(13) failure to establish timely
compliance with peer review pursuant to K.S.A. 1-501, and amendments thereto;
and
(14) any conduct reflecting adversely
on a person’s fitness to practice certified public accountancy.
(b) In lieu of or in addition to any
remedy specifically provided in subsection (a), the board may require of a
permit holder satisfactory completion of such continuing education programs as
the board may specify.
(c) All administrative
proceedings pursuant to this section shall be conducted in accordance with the
provisions of the
1-312. Grounds for revocation or suspension of
partnerships, professional corporations.
(a) Except as
provided in subsection (b), the board may deny an application to register a
firm, revoke or suspend a firm’s registration, censure a firm, limit the scope
of practice of a firm or impose such remedial action as it deems necessary to
protect the public interest, or both, and impose an administrative fine not
exceeding $2,000 for any one or any combination of the following causes:
(1)Failure to meet the
requirements of K.S.A. 1-308 and amendments thereto;
(2) fraud, dishonesty or deceit
in obtaining a registration;
(3) revocation or suspension of
a firm’s right to practice by the PCAOB or any state or federal agency;
(4) dishonesty, fraud or gross
negligence in the practice of certified public accountancy;
(5) violation of any provision
of chapter 1 of the Kansas Statutes Annotated and rules and regulations
promulgated by the board except for a violation of a rule of professional
conduct;
(6) willful violation of a rule
of professional conduct;
(7) violation of any order of
the board;
(8) cancellation, revocation,
suspension or refusal to renew the authority of a firm to practice certified
public accountancy in any other state;
(9) conviction of any felony, or
of any crime an element of which is dishonesty, deceit or fraud, under the laws
of the United States, of Kansas or of any other state, if the acts involved
would have constituted a crime under the laws of Kansas; or
(10) failure to establish timely
compliance with peer review pursuant to K.S.A. 1-501 and amendments thereto;
(b) In actions arising under
peer review for reports modified for matters relating to attest services, the
board may take such remedial action as it deems necessary to protect the public
interest. However, the board may not
limit the scope of practice of attest services of a firm or limit the scope of
practice of attest services of any permit holder under K.S.A. 1-311, and
amendments thereto, for failure to timely comply with generally accepted
accounting principles, generally accepted auditing standards and other similarly
recognized authoritative technical standards unless:
(1) The firm has received at
least two modified peer review reports during 12 consecutive years relating to
attest services and the board finds that the firm has exhibited a course of conduct
that reflects a pattern of noncompliance with applicable professional standards
and practices; or
(2) the firm has failed to abide
by remedial measures required by a peer review committee or the board.
(c) Nothing in subsection (b)
shall be construed to preclude the board from: Limiting the scope of practice
of attest services of a firm or limiting the scope of practice of attest
services of a permit holder under K.S.A. 1-311, and amendments thereto; or
taking such remedial action as the board deems necessary to protect the public
interest, after a review of an adverse peer review report based on matters
relating to attest services if the board determines that the firm failed to
comply with generally accepted accounting principles, generally accepted
auditing standards and other similarly recognized authoritative technical
standards.
(d) After considering AICPA standards on peer
review, the board may define, by rules and regulations, the terms “modified”
and “adverse.”
(e) At the time of suspension or revocation of a
firm’s registration, the board may suspend or revoke the permit to practice of
a member, shareholder or partner of a firm if the permit holder is the only
(f) All administrative
proceedings pursuant to this section shall be conducted in accordance with the
provisions of the
(g) The board shall not have the
power to assess fines under this section if a fine has been assessed for the
same or similar violation under the provisions of subsection (a) of K.S.A.
1-311 and amendments thereto.
1-315. Reissuance of revoked or suspended
certificate, registration or
permit. The board may reissue the
1-316. Unlawful acts; penalty. (a)
It is unlawful for any person to practice certified public accountancy unless
the person holds a
(b) It is unlawful for any firm to practice
certified public accountancy as a certified public accounting firm or CPA firm
unless the firm is registered with the board pursuant to K.S.A. 1-308 and
amendments thereto.
(c) It is unlawful for any person,
except the holder of a valid certificate, to use or assume the title “certified
public accountant” or to use the abbreviation “CPA” or any other title,
designation, words, letters, abbreviation, sign, card or device likely to be
confused with “certified public accountant.”
The use of the term “public accountant” without the word “certified”
shall not be interpreted as implying that one is a certified public accountant.
(d) Except as provided by this
subsection, no person holding a permit or firm holding a registration under
this act shall use a professional or firm name or designation that is
misleading as to: (1) The legal form of
the firm; (2) the persons who are partners, officers, members, managers or
shareholders of the firm; or (3) any other matter. The names of one or more former partners,
members or shareholders may be included in the name of a firm or its successor
unless the firm becomes a sole proprietorship because of the death or
withdrawal of all other partners, officers, members or shareholders. The use of a fictitious name by a firm is
permissible if the fictitious name is registered with the board and is not
otherwise misleading. The name of a firm
may not include the name of an individual who is neither a present nor a past
partner, member or shareholder of the firm or its predecessor. The name of the firm may not include the name
of an individual who is not a certified public accountant.
(e) It is unlawful for any person,
except the holder of a
(f) Any person who violates any provision of this section shall be guilty of a misdemeanor, and upon conviction thereof, shall be subject to a fine of not more than $1,000, or to imprisonment for not more than one year, or by both such fine and imprisonment.
1-318. Enjoining unlawful acts. Whenever
in the judgment of the board any person or firm, or both, has engaged, or is
about to engage, in any acts or practices which constitute, or will constitute,
a violation of K.S.A. 1-316 and amendments thereto, or any valid rules and
regulations of the board, the board may make application to the appropriate
court for an order enjoining such acts or practices, and upon a showing by the
board that such person or firm, or both, has engaged, or is about to engage, in
any such acts or practices, an injunction, restraining order, or such other
order as may be appropriate shall be granted by such court without bond.
1-319. Acts constituting prima facie evidence for
injunction. (a) The display or assertion in any media
form or public communication a person’s name in conjunction with the words
“certified public accountant” or any abbreviation thereof shall be prima facie
evidence in any action for an injunction brought under K.S.A. 1-318, and
amendments thereto, that the person whose name is so displayed or asserted
caused or procured the display or assertion and that such person is holding
such person out to be the holder of a certificate or the holder of a permit to
practice issued under K.S.A. 1-310 and amendments thereto.
(b) In any action under K.S.A.
1-318, and amendments thereto, evidence of the commission of a single act
prohibited by this act or the act of which this section is amendatory shall be
sufficient to justify an injunction without evidence of a general course of
conduct.
1-321. Definitions.
When used in chapter
1 of the Kansas Statutes Annotated, and amendments thereto, the following terms
shall have the meanings indicated:
(a) “Actively participate” means
participation that is continuous as one’s primary occupation.
(b) “affiliated entity” means one that
provides services to the CPA firm or provides services to the public that are
complementary to those provided by the CPA firm.
(c) “AICPA” means the American institute
of certified public accountants.
(d) “Attest” means providing the
following financial statement services:
(1) Any audit or other engagement to be
performed in accordance with the statements on auditing standards (SAS);
(2) any audit to be performed in accordance
with the
(3) any review of a financial statement to be performed in accordance with the statements on standards for accounting and review services (SSARS);
(4) any engagement, except a
compilation, to be performed in accordance with the statements on standards for
attestation engagements (SSAE); and
(5)
any engagement to be performed in accordance with the standards of the
PCAOB.
(e) “Board” means the
(f) “Certificate” means a certificate
as a certified public accountant issued under K.S.A. 1-302 and amendments
thereto, or a certificate as a certified public accountant issued after
examination under the law of any other state.
(g) “Client” means a person or entity
that agrees with a permit holder to receive any professional service.
(h) “Compilation” means providing a
service to be performed in accordance with the statements on standards for
accounting and review services (SSARS) or performed in accordance with the
statements on standards for attestation engagements (SSAE) that is presented in
the form of financial statements or information that is the representation of
management or both, without undertaking to express any assurance on the
statements.
(i) “Equity capital” means (1) capital
stock, capital accounts, capital contributions or undistributed earnings of a
registered firm as referred to in K.S.A. 1-308 and amendments thereto; and (2)
loans and advances to a registered firm made or held by its owners. “Equity capital” does not include an interest
in bonuses, profit sharing plans, defined benefit plans or loans to a
registered firm from banks, financial institutions or other third parties that
do not actively participate in such registered firm.
(j)
“Firm” means:
(1)
An individual who operates as a sole practitioner and who issues reports
subject to peer review; or
(2)
any business organization including, but not limited to, a general
partnership, lijmited liability partnership, general corporation, professional
corporation or limited liability company.
(k) “Good moral character” means lack of a
history of professional dishonesty or other felonious acts.
(l) “Active license” means a
certificate or a permit to practice issued by another state that is currently
in force and authorizes the holder to practice certified public accountancy.
(m) “Licensee” means the holder of a
certificate or a permit to practice issued by this state or another state.
(n) “Manager” means a manager of a
limited liability company.
(o) “Member” means a member of a
limited liability company.
(p) “NASBA” means the national
association of state boards of accountancy.
(q) “Nonattest” means providing the
following services:
(1) The preparation of tax returns and
providing advice on tax matters;
(2) the preparation of any compilation;
(3) management advisory, consulting, litigation support and assurance services, except for attest services;
(4) financial planning; and
(5) any other financial service not
included in the statements on auditing standards, the statements on standards
for accounting and review services, the standards for attestation engagements
as developed by the American institute of certified public accountants or as
defined by the board.
(r)
“PCAOB means the public company accounting oversight board created by
the Sarbanes-Oxley act of 2002.
(s) “Practice of certified public
accountancy” means performing or offering to perform attest or nonattest services
for the public while using the designation “certified public accountant” or
“CPA” in conjunction with such services.
(t) “Practice of public accountancy”
means performing or offering to perform attest or nonattest services for the
public by a person not required to have a permit to practice or a firm not
required to register with the board.
(u) “Professional” means arising out
of or related to the specialized knowledge or skills associated with CPAs.
(v) “Report,” when used with reference
to financial statements, means an opinion, report or other form of language
that states or implies assurance as the reliability of any financial statements
and that also includes or is accompanied by any statement or implication that
the person or firm issuing it has special knowledge or competence in accounting
or auditing. Such a statement or
implication of special knowledge or competence may arise from use, by the
issuer of the report, of names or titles indicating that the person or firm is
an accountant or auditor or from the language of the report itself. The term report includes any form of language
which disclaims an opinion when such form of language is conventionally
understood to imply any positive assurance as to the reliability of the
financial statements referred to or special competence on the part of the
person or firm issuing such language; and it includes any other form of
language that is conventionally understood to imply such assurance or such
special knowledge or competence.
(w) “Rule” means any rule or
regulation adopted by the board .
(x) “State” means any state of the
(y) “Substantial equivalency” is a
determination by the board of accountancy or its designee that the education,
examination and experience requirements contained in the statutes and
administrative rules of another jurisdiction are comparable to, or exceed the
education, examination and experience requirements contained in the uniform
accountancy act or that an individual CPA’s education, examination and
experience qualifications are comparable to or exceed the education,
examination and experience requirements contained in the uniform accountancy
act.
(z) “Uniform accountancy act” means
model legislation issued by the AICPA and NASBA in existence on July 1, 2000.
1-322. Reciprocity for individuals licensed in other
states; notification, application, renewal, fee; conditions; disciplinary
actions. (a) (1) An individual whose principal place
of business is not in this state having an active license to practice certified
public accountancy from any state which the NASBA national qualification
appraisal service, or similar organization approved by the board, has verified
to be in substantial equivalence with the CPA licensure requirements of the
uniform accountancy act may be presumed to have qualifications substantially
equivalent to this state’s requirements and may be granted all the privileges
of permit holders of this state without the need to obtain a permit issued
under K.S.A. 1-310 and amendments thereto, or registration issued under K.S.A.
1-308 and amendments thereto; or
(2) an individual whose principal place of
business is not in this state having an active license to practice certified
public accountancy from any state which the NASBA national qualification
appraisal service, or similar organization approved by the board, has not
verified to be in substantial equivalency with the CPA licensure requirements
of the uniform accountancy act may be presumed to have qualifications
substantially equivalent to this state’s requirements and may be granted all
the privileges of permit holders of this state without the need to obtain a
permit to practice issued under K.S.A. 1-310 and amendments thereto, or
registration issued under K.S.A. 1-308 and amendments thereto, if such
individual obtains from the NASBA national qualification appraisal service, or
similar organization approved by the board, verification that such individual’s
CPA qualifications are substantially equivalent to the CPA licensure
requirements of the uniform accountancy act.
Any person meeting the requirements set forth in this section who is
denied the right to practice in this state under this section shall have the
opportunity to be heard pursuant to the
(b) Individuals seeking to practice
certified public accountancy in
(c) The board may charge a fee for
such notification and a renewal of such notification pursuant to K.S.A. 1-301
and amendments thereto.
(d) Any licensee of another state
exercising the privilege afforded under subsection (a), as a condition of the
grant of this privilege:
(1) Consents to the personal and subject
matter jurisdiction of this board, and to the appointment of the state
regulatory body that initially issued the licensee’s certificate as the agent
upon whom process may be served in any action or proceeding by the Kansas board
against the licensee; and
(2) agrees to comply with this act and the board’s rules and regulations.
(e)
A holder of a permit to practice issued by this state offering or rendering
services or using a CPA title in another state may be subject to disciplinary
action in this state for an act committed in another state for which the permit
holder would be subject to discipline for an act committed in the other
state. The board may investigate any
complaint made by the board of accountancy of another state.
1-401. Certified public accountants; ownership of
working papers; client communications, privileged, exception; availability of
documents and information for peer reviews and board investigations. (a)
Except as otherwise provided in this section, all statements, records,
schedules and memoranda, commonly known as working papers, made by a certified
public accountant, or by any employee of a certified public accountant,
incident to, or in the course of professional service to clients by such
certified public accountant, except reports delivered to a client by such
certified public accountant, shall be and
remain the property of such certified public accountant in the absence
of a written agreement between the certified public accountant and the client
to the contrary.
(b) No certified public accountant shall
be examined through judicial process or proceedings without the consent of the
client as to any communication made by the client to the certified public
accountant in person or through the media of books of account and
financial
records, or as to advice, reports or working papers given or made thereon in
the course of professional employment, nor shall a secretary, stenographer,
clerk or assistant of a certified public accountant be examined without the
consent of the client concerned, concerning any fact the knowledge of which any
such person has acquired in such capacity or relationship with the certified
public accountant. Nothing in this
section shall be construed as limiting the authority of this state or of the
United States or any agency of this state or of the United States to subpoena
books of account, financial records, reports or working papers or other
documents and use such information in connection with any investigation, public
hearing or court proceeding. This
privilege shall not exist when any such communication is material to the
defense of an action against a certified public accountant and as otherwise
provided by this section.
(c) Nothing in subsection (a) shall
prohibit a certified public accountant, or any employee of a certified public
accountant, from disclosing any data to any other certified public accountant,
or anyone employed by a certified public accountant in connection with peer
reviews of such certified public accountant’s accounting and auditing practice. Nothing in subsection (a) shall prohibit the
board of accountancy from securing working papers in connection with any
investigation authorized under law.
Nothing in subsection (b) shall prohibit a certified public accountant or
anyone employed by a certified public accountant from disclosing any data to
any other certified public accountant or anyone employed by a certified public
accountant in connection with peer reviews of such certified public
accountant’s accounting and auditing practice nor shall such disclosure waive
the privilege. Persons conducting such
peer reviews shall be subject to the same duty of confidentiality in regard to
such data as is applicable to certified public accountants under this section.
(d) As used in this section,
“certified public accountant” means a person who holds a permit from the board
of accountancy to engage in practice as a certified public accountant in this
state.
1-402. Liability for professional negligence;
restrictions. No person, proprietorship, partnership or
registered firm authorized to practice as a certified public accountant
pursuant to article 3 of chapter 1 of the Kansas Statutes Annotated, or any
employee, agent, partner, officer, shareholder or member thereof, shall be
liable to any person or entity for civil damages resulting from acts,
omissions, decisions or other conduct amounting to negligence in the rendition
of professional accounting services unless:
(a) The plaintiff directly engaged such
person, proprietorship or registered firm to perform the professional
accounting services; or
(b) (1) the defendant knew at the time
of the engagement or the defendant and the client mutually agreed after the
time of the engagement that the professional accounting services rendered the
client would be made available to the plaintiff, who was identified in writing
to the defendant; and (2) the defendant knew that the plaintiff intended to
rely upon the professional accounting services rendered the client in
connection with specified transactions described in writing.
1-403. Same;
effect on common law. The provisions
of this act are not intended to alter or modify existing common law rules of
liability except as otherwise stated herein.
1-501. Quality review or peer review; condition for
renewal of permit to practice; purpose; time; cost; alternative program;
criteria; remedial program; revocation or suspension of permit, when; waiver,
conditions; actions and reports privileged, when.
(a) The
board may require as a condition for renewal of a firm registration that a firm
that provides attest services undergo a peer review and submit evidence of such
so that the board may determine the degree of the firm’s compliance with generally
accepted accounting principles, generally accepted auditing standards and other
similarly recognized authoritative technical standards. The reviews shall occur at least once every
three years with the cost of such review to be borne by the firm.
(b) A firm’s completion of a peer
review program endorsed or supported by the AICPA or other substantially
similar programs shall satisfy the requirements of this section. The board shall provide for oversight of
these programs by adoption of rules and regulations.
(c) A firm at the time of application,
may request in writing upon forms provided by the board, a waiver from the
review requirement. The board may grant
a waiver if the firm does not perform or has not performed any attest services
during the twelve-month period preceding the date of application or for good
cause as determined by the board.
A firm granted a waiver on the basis that
the firm does not perform or intend to perform attest services shall
immediately notify the board if the firm engages in such practice and thus
becomes subject to the review.
(d) Except as provided by K.S.A.
60-437, and amendments thereto, and subsections (e) and (g) of this section,
any reports, statements, memoranda, transcripts, findings, records, or working
papers prepared and any opinions formulated, in connection with any peer review
shall be privileged and shall not be subject to discovery, subpoena or other
means of legal compulsion for their release to any person or entity or be
admissible in evidence in any judicial or administrative proceeding, except
that such privilege shall not exist when the material in question is involved
in a dispute between a reviewer and the person or firm being reviewed.
(e) Nothing in subsection (d) shall
limit the authority of the board to require a person whose work is the subject
of a peer review or a firm to provide a copy of an adverse or modified peer
review report and any responses to report deficiencies from the person or firm
and any document identifying follow-up requirements for the purpose of
determining the person’s or firm’s compliance with generally accepted
accounting principles, generally accepted auditing standards and other
similarly recognized authoritative technical standards, provided however, the
board may not request or require a person or firm subject to a peer review to
provide a peer review report or any other document contained in this section
unless the peer review report has been accepted by a report acceptance
committee under the peer review program after December 31, 2001.
(f)
After considering AICPA standards on peer review, the board may define,
by rules and regulations, the terms “modified” and “adverse”.
(g) In any proceeding before the board
in which discussion or admission into evidence of peer review report documents
identified in subsection (e) is proposed, the board or presiding officer shall
conduct that portion of the proceeding in closed session. In closing a portion of such proceeding, the
board or presiding officer may exclude any person from the proceeding except
the person whose work is the subject of peer review, members of the permit
holder’s firm, the attorneys representing the parties, the board’s attorneys,
necessary witnesses and a court reporter.
The board or presiding officer shall make the portions of the agency
record in which such documents are disclosed subject to a protective order
prohibiting further disclosure.
Documents that are privileged under subsection (d) and that are considered
during a closed proceeding shall not be subject to discovery, subpoena or other
means of legal compulsion for their release to any person or entity. No person in attendance at a closed portion
of such proceeding shall at a subsequent civil, criminal or administrative
hearing, be required to testify regarding the existence or content of a
document privileged under subsection (d) which was disclosed in a closed
portion of a proceeding, nor shall such testimony be admitted into evidence in
any subsequent civil, criminal or administrative hearing. All other evidence shall be presented as part
of the proceeding in an open meeting.
Offering any testimony or records in the open portion of a proceeding
shall not be deemed a waiver of the peer review privilege created in subsection
(d).
(h) No person who participates in the
conduct of any peer review within the scope of this section shall be liable in
damages to any person for any action taken or recommendation made in connection
with the peer review process.