Reducing Roadblocks to Licensure
Earning and maintaining the CPA license is rightfully a challenging process. However, in South Carolina, several additional barriers to licensure make practicing in the State unnecessarily complicated.
The SCACPA Governmental Affairs Committee has proposed several changes to Chapter 2, Title 40 of the 1976 code as it relates to the regulation of CPAs and Public Accountants. These changes will remove roadblocks to practice in the State and clarify certain areas for licensees and the public, providing uniform application of the law.
The proposed bill, Senate Bill 812, was introduced in the Senate by Thomas Alexander, chair of the Labor Commerce and Industry Committee.
Read about the progress made at the SC Board of Accountancy meeting on October 26.
Full Summary of Changes
Changes to SECTION 40-2-10
updated the Board of Accountancy’s composition, aligning representation to the total licensees’ proper ratios. This change removed one seat formerly populated by a licensed Accounting Practitioner or Public Accountant and replaced that seat with an at-large resident Certified Public Accountant. An additional change to this section gives the BOA a voice in the termination of staff directly serving the board.
contains statute-specific definitions. We recommended updates to current definitions, including compilation, substantial equivalency, resident manager, and State. We also added definitions for electronic files, client records, CPA-prepared records, CPA work products, CPA work papers, owner, firm ownership, non-CPA owners, renewal notification date, renewal due date, and renewal lapse date. These updates meet the profession’s current use. SECTION 40-2-20
Adjustments made in SECTION 40-2-30
allow for firm mobility and align firm mobility with individual mobility removing the mobility exception. Improvements to SECTION 40-2-240 are designed to ensure licensed CPAs who worked within the State under mobility can relocate to this State without additional licensing requirements. The current interpretation of this section has created an unfair advantage for non-resident CPAs working under mobility. The combined improvements in this section utilize the definition of substantial equivalency and modification in SECTION 40-2-35 to remove SC-specific licensure roadblocks resulting in the promotion of the profession and positive economic possibilities in SC.
SECTION 40-22-245 defines the requirements of mobility (the ability of a CPA to practice within South Carolina if licensed outside of this State). Specific language was removed to implement the definition of substantial equivalency, better aligning mobility, and reciprocity.
Improvements to the licensing requirements in SECTION 40-2-35
adjust the education requirements to align with the Uniform Accountancy Act, removing some barriers to licensure.
The required 150 credit hours of education for licensure remain intact. The number of defined course credits is reduced from 36 to 24 hours in the specific accounting courses and other required course categories. The license requirement now excludes introductory accounting courses, consistent with the Uniform Accountancy Act.
The credit hour requirements to sit for the Exam remain unchanged, but the definition of introductory accounting courses and other required courses has been relocated to the definition section. Introductory accounting courses are specifically required to sit for the exam.
Official transcripts from any university holding a current accreditation from an accrediting body approved by the US Department of Education shall be accepted to meet the educational requirements. Modifications in this section further empower the board to review and determine if a course or program of study is substantially equivalent.
Anticipating the new licensing structure described in the joint NASBA/AICPA CPA Evolution Initiative, we made minor adjustments to the required examination language. We also removed language regarding testing windows to align with the continuous testing model.
Adjustments to experience requirements allow verification by a CPA in addition to direct supervision by a CPA to better meet today’s employment needs. Redesigned experience requirements for educators are a direct result of the real-life structural environment educators face.
SECTION 40-2-40 received a general clean-up to align with a recent opinion from the SC Attorney General and to utilize definitions rather than unique language.
SECTION 40-2-70 was updated to allow the use of NASBA tools to determine the eligibility of applicants, add the ability for the Board to issue non-binding opinions, and specify the need for the public to access historic board decisions and interpretations.
provides clarification as to the ownership of a CPA‘s work product and documents. Changes to this section directly relate to updates within the AICPA Code of Ethics and are designed to reduce confusion within the profession and add additional clarity for the public. SECTION 40-2-190
Readability was a focus when modifying SECTION 40-2-250 because renewal and reinstatement of licenses must be clearly defined and documented. Restructuring this section makes the requirements, due dates, and required communications clear to both the licensee and the Board.
Emeritus status SECTION 40-2-270 restricts the rights of a licensee without a reasonable method to return to the profession. Language precluding the licensee from rejoining the profession was removed, similar to someone returning to the workforce after a multi-year leave.
We added SECTION 40-2-275
for “Retired” status. Recognizing the considerable value, knowledge, and experience seasoned CPAs bring to the profession, a proposed change within this section is to reduce the total number of hours required for a Licensee who has attained at least 30 years combined experience as a Licensee in this State and/or in a substantially equivalent state and who has attained at least 55 years of age during a prior license year. “Retired” CPAs may meet the continuing professional education requirement for renewal in this section by documenting completion of one-half the required hours during the immediately preceding calendar year and including no more than one-half any carryover of excess hours provided through a Board regulation. Ethics CPE requirements remain, and no attest work can be performed to comply with the “Retired” status.
There has been significant confusion about misleading professional firm names in SECTION 40-2-335.
Utilizing language provided within the Uniform Accountancy Act clarifies the rules and prohibitions by specifically outlining a misleading CPA Firm name.
SECTION 40-2-340 was relocated to a better section and is now labeled SECTION 40-2-610.