Read the full stored bill text
HB2476 - 572R - H Ver
House Engrossed
certified public
accountants; certification; alternative.
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2476
AN
ACT
Amending sections 32-701, 32-703, 32-721,
32-723, 32-725, 32-729, 32-730, 32-730.02, 32-730.06, 32-731, 32-732, 32-741,
32-741.01, 32-741.02, 32-742, 32-743 and 32-749, Arizona Revised
Statutes; relating to certified public accountants.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 32-701, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-701.
Definitions
In this chapter, unless the context otherwise requires:
1. "Accounting services" means services
that are commonly and historically performed by accountants, including
recording or summarizing financial transactions, bookkeeping, analyzing or
verifying financial information, reporting financial results, financial
planning or providing attest services, compilation services, tax services or
consulting services.
2. "Accredited institution" means any
public or private regionally or nationally accredited college or university
that is accredited by an organization recognized by the council for higher
education accreditation or its successor agency.
3. "Attest services" means the following
services to be performed by the holder of a certificate issued by the board:
(a) Audits or other engagements to be performed in
accordance with the statements on auditing standards adopted by the American
institute of certified public accountants.
(b) Reviews of financial statements to be performed
in accordance with the statements on standards for accounting and review
services adopted by the American institute of certified public accountants.
(c) Any examination of prospective financial
information to be performed in accordance with the statements on standards for
attestation engagements adopted by the American institute of certified public
accountants.
(d) Any engagement to be performed in accordance
with the standards of the public company accounting oversight board or its
successor.
(e) Any examination, review or agreed on procedure
engagement to be performed in accordance with the statements on standards for
attestation engagements adopted by the American institute of certified public
accountants, other than an examination described in subdivision (c) of this
paragraph.
4. "Baccalaureate degree"
means an academic undergraduate degree awarded by an accredited institution or
by a college or university that maintains standards comparable to those of an
accredited institution.
4.
5.
"Board"
means the Arizona state board of accountancy established by section 32-702.
5.
6.
"Business
organization" means a partnership, professional corporation, professional
limited liability company, limited liability company or limited liability
partnership or any other entity that is recognized by the board and that is
established under the laws of any state or foreign country.
6.
7.
"Certified
public accountant" means an individual who has been issued a certificate
of authority by the board to practice as a certified public accountant or who
meets the limited reciprocity privilege requirements pursuant to section 32-725.
7.
8.
"Client"
means a person or entity, other than one's employer, for whom accounting
services are provided.
8.
9.
"Compilation
services" means providing a service of any compilation engagement to be
performed in accordance with the statements on standards for accounting and
review services.
10. "Complaint" means a
written statement from a member of the public or a matter identified by the
board, the board's advisory committees or the BOARD'S staff that involves a
person, a certified public accountant or a firm subject to this chapter
regarding any potential violation of this chapter or rules adopted pursuant to
this chapter.
9.
11.
"Consulting
services" includes management advisory services, litigation support
services, valuation services and other services that require the use of
technical skills, education, observation, experience and knowledge to develop
an analytical approach to process and to present findings, conclusions or
recommendations.
10.
12.
"Conviction"
means a judgment of conviction by any state or federal court of competent
jurisdiction in a criminal cause, regardless of whether an appeal is pending or
could be taken, and includes any judgment or order based on a plea of no contest.
11.
13.
"CPA
designation" means the title "certified public accountant" or
any abbreviation or grammatical derivative of the term "certified public
accountant".
12.
14.
"Disciplinary
action" means any other regulatory sanctions imposed by the board in
combination with, or as an alternative to, relinquishment, revocation or
suspension of a certificate or registration, including the imposition of:
(a) An administrative penalty in an amount not to
exceed $2,000 for each violation of this chapter or rules adopted pursuant to
this chapter.
(b) Restrictions on the scope of the registrant's
practice of accounting.
(c)
Pre-issuance
preissuance
and
post-issuance
postissuance
peer review.
(d) Professional education requirements.
(e) A decree of censure.
(f) Probation requirements best adapted to protect
the public welfare.
(g) Reimbursement of the board's costs of
investigations and
disciplinary
proceedings initiated
under this chapter, including attorney fees.
(h) A requirement for restitution payments to
accounting services clients or to other persons suffering economic loss
resulting from violations of this chapter or rules adopted pursuant to this
chapter.
15. "Disciplinary
proceeding" means a proceeding at which a hearing occurs before the board
or the office of administrative hearings and at which the legal rights, duties
or privileges of an individual or firm subject to this chapter are at issue.
13.
16.
"Employer"
means a person or entity that hires an individual to perform a service and that
directs and controls the manner in which the service is performed.
14.
17.
"Federal
securities laws" means the securities act of 1933, the securities exchange
act of 1934, the public utility holding company act of 1935 and the investment
company act of 1940, as amended.
15.
18.
"Financial
statements":
(a) Means statements and footnotes related to
statements that purport to show a financial position or changes in a financial
position in conformity with generally accepted accounting principles or
other
another
comprehensive basis of
accounting.
(b) Includes balance sheets, statements of income,
statements of retained earnings, statements of cash flows, statements of
changes in equity and other commonly used or recognized summaries of financial
information.
(c) Does not include tax returns or information
contained in tax returns.
16.
19.
"Firm"
means a business organization, a sole proprietorship or an individual who is
registered pursuant to section 32-731.
17.
20.
"Good
cause" means factors that temporarily prevent a registrant from satisfying
a particular requirement in a specific instance as determined by the board and
may include:
(a) A disability.
(b) An illness.
(c) A physical or mental condition.
(d) Military service.
(e) Financial hardship.
(f) A natural disaster.
(g) Any condition or circumstance that the board
deems relevant.
21. "Investigation" means
the processes undertaken during the period between receipt or initiation of a
complaint or initiation of a continuing professional education audit and either
a final disposition by the board or a disciplinary proceeding.
18.
22.
"Jurisdiction"
means, for the purposes of examination, certification, firm registration or
limited reciprocity privilege, the fifty states of the United States, the
District of Columbia, the United States Virgin Islands, Guam, the Commonwealth of
the Northern Mariana Islands or the Commonwealth of Puerto Rico.
19.
23.
"Letter
of concern" means an advisory letter to notify a registrant that, while
the evidence does not warrant disciplinary action, the board believes that the
registrant should modify or eliminate certain practices and that continuation
of the activities that led to the evidence being submitted to the board may
result in board action against the registrant. A letter of concern
is not a disciplinary action.
20.
24.
"Limited
reciprocity privilege" means the permission to practice
as a
certified public accountant
in this state pursuant to section 32-725
for an individual
or firm
whose principal place of
business is outside of this state.
21.
25.
"Management
advisory services" means advisory services consisting of the development
of findings, conclusions or recommendations for the recipient's consideration
and
decision making
decision-making
.
22.
26.
"Office",
for the purposes of firm registration, limited reciprocity privilege and fees,
means any physical location that is used in the practice of accounting in this
state and that is owned, leased, licensed for use or maintained by the firm or
someone under the firm's authority.
27. "Postbaccalaureate
degree" means an academic degree awarded after a baccalaureate degree by
an accredited institution or by a college or university that maintains
standards comparable to those of an accredited institution.
23.
28.
"Practice
of accounting" means providing accounting services for a client or an
employer.
24.
29.
"Registrant"
means any certified public accountant or firm that is registered with the
board.
25.
30.
"Related
courses" means:
(a) Business administration.
(b) Statistics.
(c) Computer science, information systems or data
processing.
(d) Economics.
(e) Finance.
(f) Management.
(g) Business law.
(h) College algebra or more advanced mathematics.
(i) Advanced written communication.
(j) Advanced oral communication.
(k) General ethics.
(l) Marketing.
(m) Other courses that are closely related to the
subject of accounting or that are satisfactory to the board.
26.
31.
"Sole
proprietor" means the owner of a sole proprietorship.
27.
32.
"Sole
proprietorship" means a business that is owned by one individual and that
does not have a legal distinction between the owner and the business.
END_STATUTE
Sec. 2. Section 32-703, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-703.
Powers and duties; rules; executive director; advisory committees
and individuals
A. The primary duty of the board is to protect the
public from unlawful, incompetent, unqualified or unprofessional certified
public accountants
and firms
through certification,
regulation and rehabilitation.
B. The board may:
1. Investigate complaints filed with the board or on
its own motion to determine whether a
certified public accountant
registrant or limited reciprocity PRIVILEGE individual or firm
has
engaged in conduct in violation of this chapter or rules adopted pursuant to
this chapter.
2. Establish and maintain high standards of
competence, independence and integrity in the practice of accounting by a
certified public accountant as required by generally accepted auditing
standards and generally accepted accounting principles and, in the case of
publicly held corporations or enterprises offering securities for sale, in
accordance with state or federal securities agency accounting requirements.
3. Establish reporting requirements that require
registrants to report:
(a) The imposition of any discipline on the right to
practice before the federal securities and exchange commission, the internal
revenue service, any state board of accountancy, other government agencies or
the public company accounting oversight board.
(b) Any criminal conviction, any civil judgment
involving negligence in the practice of accounting by a certified public
accountant and any judgment or order as described in section 32-741,
subsection A, paragraphs 7 and 8.
4. Establish basic requirements for continuing
professional education of certified public accountants, except that the
requirements shall not exceed eighty hours in any
two-year
registration
renewal
period.
5. Adopt procedures concerning disciplinary actions,
administrative hearings and consent decisions.
6. Issue to qualified applicants certificates
executed for and on behalf of the board by the signatures of the president and
secretary of the board.
7. Adopt procedures and rules to administer this
chapter.
8. Require peer review pursuant to rules adopted by
the board on a general and random basis of the professional work of a
registrant engaged in the practice of accounting.
9. Subject to title 41, chapter 4, article 4, employ
an executive director and other personnel that it considers necessary to
administer and enforce this chapter.
10. Appoint accounting and auditing, tax, peer
review, law, certification, continuing professional education or other
committees or individuals as it considers necessary to advise or assist the
board or the board's executive director in administering and enforcing this
chapter.� These committees and individuals serve at the pleasure of the board.
11. Take all action that is necessary and proper to
effectuate the purposes of this chapter.
12. Sue and be sued in
its
the board's
official name as an agency of this state.
13. Adopt and amend rules concerning the definition
of terms, the orderly conduct of the board's affairs and the effective
administration of this chapter.
14. Delegate to the executive director the authority
to:
(a) Approve an applicant to take the uniform
certified public accountant examination pursuant to section 32-723.
(b) Issue a certificate of certified public
accountant pursuant to section 32-721.
(c) Approve an application for firm registration
pursuant to section 32-731.
(d) Approve a registrant's name change and reissue a
certificate of certified public accountant due to the name change.
(e) Approve a registrant's cancellation request
pursuant to section 32-730.02.
(f) Approve a request for retired status pursuant to
section 32-730.04.
(g) Approve reactivation from inactive status or
retired status pursuant to section 32-732.
(h) Approve compliance with peer review requirements
pursuant to this section.
(i) Approve compliance with continuing professional
education audits.
(j) Approve continuing professional education
compliance with decisions and orders.
(k) Terminate decisions and orders based on a
registrant's successful completion of all order requirements.
(l) Approve a request for continuing professional
education reciprocity.
(
m
) Approve a
request for inactive status pursuant to section 32-730.01.
(
n
) Approve
reinstatement from canceled or expired status pursuant to section 32-732.
C. The board or an
authorized agent of the board may:
1. Issue subpoenas to
compel the attendance of witnesses or the production of documents.� If a
subpoena is disobeyed, the board may invoke the aid of any court in requiring
the attendance and testimony of witnesses and the production of documents.
2. Administer oaths and take testimony.
3. Cooperate with the appropriate authorities in
other jurisdictions in investigation and enforcement concerning violations of
this chapter and comparable statutes of other jurisdictions.
4. Receive evidence concerning all matters within
the scope of this chapter.
END_STATUTE
Sec. 3. Section 32-721, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-721.
Certified public accountants; qualifications; rules; definition
A. The board shall issue a certificate of certified
public accountant to any individual who complies with all of the following:
1. Meets the requirements of section 41-1080.
2. Is at least eighteen years of age.
3. Has not engaged in any conduct that would
constitute grounds for revocation or suspension of a certificate or other
disciplinary action pursuant to section 32-741.
4. Meets
the requirements of subsection B, C or D of this section.
B. If
the applicant passes the uniform certified public accountant examination and
has never been certified, registered or licensed as a certified public
accountant in this state or another jurisdiction, the applicant must
comply with both of the following:
1. Have
had at least two thousand hours of paid or unpaid experience, either before or
after passing all sections of the uniform certified public accountant
examination, that has exposed the applicant to and provided the applicant with
experience in the practice of accounting.� The applicant's experience must be
sufficient to demonstrate the applicant's ability for critical inquiry and
analysis of financial accounting information, including balance sheets, income
statements, cash flow statements or tax returns and the applicant's ability to
communicate, either orally or in writing, on the results of an inquiry or
analysis of that information to an employer, client or third party.
2. Present
satisfactory evidence that the person has successfully obtained a baccalaureate
degree or higher degree from an accredited institution or a college or
university that maintains standards comparable to those of an accredited
institution and that the applicant has completed at least one hundred fifty
semester hours of education of which:
(a) At
least thirty-six semester hours are nonduplicative accounting courses of
which at least thirty semester hours are upper-level courses.
(b) At
least thirty semester hours are related courses.
present
satisfactory evidence to the board that the applicant meets at least of one of
the following:
1. has
obtained a baccalaureate degree and has at least two years of EXPERIENCE.
2. has
obtained a baccalaureate degree and thirty additional semester hours and has at
least one year of experience.
3. has
obtained a postbaccalaureate degree and at least one year of experience.
C. If
the applicant passes the uniform certified public accountant examination or the
international qualification examination and has a certificate, registration or
license to practice as a certified public accountant in another jurisdiction and
the applicant has never had a certificate issued by the board expire or be
relinquished or revoked, at least one of the following
shall
must
apply:
1. The
certificate, registration or license is issued by a jurisdiction whose
requirements are determined by the board to be substantially equivalent to the
requirements prescribed in subsection B of this section.
2. The
applicant has a baccalaureate degree or its equivalent or a higher degree from
an accredited institution or a college or university that maintains standards
comparable to those of an accredited institution and either of the following applies:
(a) The
applicant has been employed as a certified public accountant in the practice of
accounting for at least three years and has completed at least one hundred
fifty semester hours of education that includes both of the following:
(i) At
least twenty-four semester hours of nonduplicative accounting courses, of
which twelve semester hours are upper-level courses.
(ii) At
least eighteen semester hours in related courses.
(b) The
applicant has been employed as a certified public accountant in the practice of
accounting for at least five of the ten preceding years and has completed both
of the following:
(i) At
least twenty-four semester hours of nonduplicative accounting courses, of
which twelve semester hours are upper-level courses.
(ii) At
least eighteen semester hours in related courses.
2. The
applicant has been employed as a certified public accountant in the practice of
accounting for at least three years and has obtained either:
(
a
) a
Postbaccalaureate degree.
(
b
) a
Baccalaureate degree and thirty additional semester hours.
3. The
applicant has been employed as a certified public accountant in the practice of
accounting for at least five of the ten preceding years and has obtained a
baccalaureate degree.
3.
4.
The
applicant has been employed as a certified public accountant in the practice of
accounting for at least ten of the fifteen preceding years.
D. If
an applicant passes the international uniform certified public accountant
qualification examination of the American institute of certified public
accountants,
all
both
of the
following apply:
1. The
applicant's country has a mutual recognition agreement with the national
association of state boards of accountancy that has been adopted by the board.
2. The board recognizes that the applicant's
qualifications are substantially equivalent to the qualifications of certified
public accountants in the United States in the areas of education, examination
and experience.
e. The board shall adopt rules
regarding the number of semester hours of accounting courses and related
courses required to fulfill the requirements of subsections b and c of this
section.
f. for the purposes of this section,
"experience" means any verified paid or unpaid EXPERIENCE providing
ACCOUNTING services through employment gained in government industry, academia
or public practice in which one year equals two thousand hours.
END_STATUTE
Sec. 4. Section 32-723, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-723.
Uniform certified public accountant examination; qualifications;
notification of grades; appeals
A. A person shall
not
be
permitted
allowed
to take the uniform
certified public accountant examination
unless
if
the person presents satisfactory evidence that the person
has
successfully
obtained
either
a
baccalaureate degree or a
higher degree from an accredited
institution or a college or university that maintains standards comparable to
those of an accredited institution.� The evidence must show both of the
following:
1. At least twenty-four semester
hours of nonduplicative accounting courses of which twelve semester hours are
upper-level courses.
2. At least eighteen semester hours in
related courses.
� postbaccalaureate degree that includes
a number of semester hours of accounting courses and related courses as
determined by The board by rule.
B. The board may contract with a public or private
entity
for the
administration of
to administer
the examination.� The examination may be
conducted under a uniform examination system.
C. Within a
reasonable time after the examination
,
the board or its
contracted agent shall notify each candidate of the candidate's grade.� Any
candidate may request a grade review or an appeal by submitting a uniform
certified public accountant examination score review or appeal form to the
board or the board's contracted agent.
END_STATUTE
Sec. 5. Section 32-725, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-725.
Limited reciprocity privilege; qualifications; business
organizations; definition
A. The limited reciprocity privilege may be
exercised by an individual who is not a resident of this state and who meets
the requirements of this section.
B. To qualify to exercise the limited reciprocity
privilege, an individual must:
1. Have a principal place of business that is not in
this state.
2. Not have or represent to have an office in this
state.
3. Not be the subject of suspension or revocation of
a certificate as provided by section 32-741 or relinquishment of a
certificate as provided by section 32-730.06.
4. Hold a valid registration, certificate or license
as a certified public accountant issued by another jurisdiction and either of
the following applies:
(a) The other jurisdiction requires as
a condition of licensure that an individual has all of the following:
(i) At least one hundred fifty
semester hours of college education, including a baccalaureate degree or a
higher degree that is conferred by an accredited institution or a college or
university that maintains standards that are comparable to those of an
accredited institution.
(ii) A passing grade on the uniform
certified public accountant examination.
(iii) At least one year of experience
in the practice of accounting that has been verified.
(b) The individual meets the
qualifications prescribed in section 32-721, subsection C.
(
a
) The
individual meets the qualifications prescribed in either:
(
i
) Section
32-721, subsection a.
(
ii
) Section
32-4302.
(
b
) the
individual holds a valid active registration, certificate or license as a
certified public accountant from any jurisdiction as of December 31, 2024.
C. An individual
qualifying
who qualifies
for limited reciprocity privilege under this
section is considered to have qualifications that are substantially equivalent
to the requirements prescribed pursuant to this chapter and has all of the
privileges of registrants, certificate holders or licensees in this state
without obtaining a registration, certificate or license under this chapter.
D. An individual
qualifying
who qualifies
for limited reciprocity privilege under this
section may use the CPA designation and may offer or practice accounting in
person or by mail, telephone or electronic means.� A notice, fee or other
submission is not required.� The individual is subject to the requirements
prescribed in subsection E of this section.
E. Each individual who holds a registration,
certificate or license issued by another jurisdiction and who exercises the
limited reciprocity privilege and each partnership, corporation or other entity
engaging in the practice of accounting as provided by this section, as a
condition of exercising the privilege provided by this section:
1. Shall:
(a) Comply with article 3 of this chapter and rules
adopted pursuant to article 3 of this chapter. In any investigation
or
other
proceedings
disciplinary proceeding
conducted pursuant to article 3 of this
chapter, an individual claiming permission to practice as a certified public
accountant in this state under the limited reciprocity privilege has the burden
of demonstrating that the applicable requirements of subsection B of this
section have been satisfied.
(b) Cease the offering or practicing of accounting
in person or by mail, telephone or electronic means in this state if the
individual no longer satisfies the requirements of subsection B of this section
or the partnership, corporation or other entity no longer satisfies the
requirements of subsection G of this section.
2. Is subject to:
(a) The personal and subject matter jurisdiction of
the board and the power of the board to investigate complaints and take
disciplinary action.
(b) Service by either of the following:
(i) The appointment of the state board that issued
the registration, certificate or license to the individual as agent, on whom
process may be served in any action or proceeding against the person by the
board.
(ii) Directly on the person.
F. Any individual who holds a valid registration,
certificate or license as a certified public accountant issued by another
jurisdiction or a foreign country, whose principal place of business is not in
this state and who does not otherwise qualify under this section for limited
reciprocity privilege may enter this state and provide services if the services
are limited to the following:
1. Expert witness services.
2. Teaching or lecturing.
3. Other services as determined by the board.
G. A business organization formed under the laws of
another jurisdiction relating to the practice of accounting in that
jurisdiction may use the CPA designation in this state and may engage in the
practice of accounting in this state, including the provision of attest
services, without having to register as a firm if all of the following apply:
1. The business organization is owned by or employs
an individual who is a limited reciprocity privilege holder pursuant to this
section.
2. The business organization is in good standing in
its principal place of business under the laws of that jurisdiction relating to
the practice of accounting.
3. The principal place of business of the limited
reciprocity privilege holder is a recognized place of business for the practice
of accounting by the business organization.
4. The business organization does not have an office
in this state and does not represent that it has an office in this state.
5. The business organization holds an active permit
or registration as a certified public accountant firm in another jurisdiction.
6. The practice of accounting is performed by or
under the direct supervision of an individual who is qualified for the limited
reciprocity privilege under this section.
H. For the purposes of this section, "principal
place of business" means the office designated by the individual or firm
as the principal location for the individual's or firm's practice of
accounting.
END_STATUTE
Sec. 6. Section 32-729, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-729.
Fees
The board shall establish and collect:
1. A uniform fee from an applicant for each initial
examination and reexamination application pursuant to section 32-723 to
cover reasonable costs of reviewing the applicant's eligibility to take the
examination and facilitating the applicant to take the examination until the
applicant passes all sections.
2. A uniform fee from each applicant for a
certificate to be issued pursuant to section 32-721.
3. A uniform registration fee of at least
one hundred
$100
and not more than
three hundred dollars
$300
from each
applicant for registration as a certified public accountant pursuant to section
32-730. The registration fee is due during the month of the
anniversary of the registrant's birth. Registrants for less than two
years shall be charged on a pro rata basis for the remainder of the
registration period. The board shall establish and collect a late
fee, if applicable, of not more than
one hundred dollars
$100
.
4. A uniform registration fee of at least
one hundred dollars
$100
and not more than
three hundred dollars
$300
from each
applicant for registration as a firm pursuant to section 32-730. The
registration fee is due during the month of the anniversary of the effective
date of the firm's formation.
Registrants for less
than two years shall be charged on a pro rata basis for the remainder of the
registration period.
The board shall establish and collect a
late fee, if applicable, of not more than
one hundred dollars
$100
. The board shall not charge a fee for the
registration of additional offices of the same firm or for the registration of
a sole proprietorship or an individual who is required to register as a firm
pursuant to section 32-731.
5. A uniform application fee in an amount to be
determined by the board
to reinstate
for
reinstatement
pursuant to this chapter.
6. A uniform registration fee of
fifty
dollars
$50
for retired status registration as
described in section 32-730.04.
The
registration fee is due during the month of the anniversary of the REGISTRANT'S
birth.� Registrants for less than two years shall be charged on a pro rata
basis for the remainder of the registration period.
The board
shall establish and collect a late fee, if applicable, and it is the intent of
the legislature that the fee be not more than
one hundred dollars
$100
.
END_STATUTE
Sec. 7. Section 32-730, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-730.
Biennial registration; continuing professional education
A. Except as provided in subsection B of this
section and in section 32-4301, the board shall require
every
each
certified public accountant and firm to register once
every two years with the board and pay a registration fee pursuant to section
32-729.
B. The registration fee for certified public
accountants may be reduced or waived by the board for registrants with a
disability to a degree precluding the continuance of their practice for six
months or more
prior to
before
the
due date of any
renewal
registration
fee.
C. At the time of registration,
every
each
certified public accountant, as a prerequisite to
biennial registration, shall submit to the board satisfactory proof in a manner
prescribed by the board that the registrant has completed the continuing
professional education requirements established by the board. The
board may grant a full or partial exemption from continuing professional
education requirements or an extension of time to complete the continuing
professional education requirements for registrants on a demonstration of good
cause.
END_STATUTE
Sec. 8. Section 32-730.02, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-730.02.
Canceled status
A. A registrant may cancel a certificate or
registration by submitting a written request on a form prescribed by the
board. A registrant whose certificate or registration is under
investigation or
a disciplinary order by the board, except for
suspension for nonregistration pursuant to section 32-741.01, or against
whom disciplinary proceedings have been initiated may not cancel the
certificate or registration.
B.
An individual whose certificate has
been
A registrant whose certificate or registration is
canceled shall not assume or use the CPA designation while the certificate
or registration
remains on canceled status unless the
individual
or firm
qualifies for limited reciprocity
privilege pursuant to section 32-725.
END_STATUTE
Sec. 9. Section 32-730.06, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-730.06.
Relinquished status; acknowledgment
A. A registrant may relinquish a certificate or firm
registration pending or
in lieu
instead
of an investigation or disciplinary proceeding or while under a disciplinary
order. The board shall consider a relinquishment tendered by a
registrant pursuant to this section and shall determine whether to accept the
relinquishment.
The board may offer relinquishment to
a registrant pursuant to this section.�
The board shall issue an order
documenting its decision.
B. An individual whose certificate, or an
individual, sole proprietor or business organization whose firm registration,
has been relinquished shall not assume or use the CPA designation.
C. If the board accepts the relinquishment of a
certificate of a certified public accountant or registration of a firm,
in order to complete the relinquishment
the registrant shall
acknowledge that
an investigation or
disciplinary
proceedings have
proceeding has
been
initiated against the registrant pursuant to article 3 of this chapter and that
the registrant relinquishes the right to practice accounting as a� certified
public accountant or firm in this state. The registrant shall
acknowledge that the registrant understands both of the following:
1. If the registrant chooses to apply for
reinstatement of
a
new
certificate or firm
registration, the registrant shall meet all requirements for
certification
or firm registration pursuant to section 32-731
reinstatement
pursuant to section 32-732
.
2. In deciding whether to
issue a new
reinstate a
certificate or firm registration to the
registrant, the board will consider all disciplinary actions currently pending
against the registrant and any other matters
it
the board
determines to be appropriate.
END_STATUTE
Sec. 10. Section 32-731, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-731.
Firms; registration requirements; performance of attest services
and compilation services; definition
A. Except as provided in section 32-725,
subsection G, once every two years each of the following shall pay the
registration fee pursuant to section 32-729 and register with the board
as a firm:
1. A business organization that meets all of the
following criteria:
(a) Has a simple majority of the ownership, in terms
of direct and indirect financial interests and voting rights, that belongs to
holders in good standing of certificates or licenses as certified public
accountants in any jurisdiction.
(b) Has an office in this state.
(c) Either:
(i) Performs attest services or compilation
services.
(ii) Uses the CPA designation in its firm name.
2. A sole proprietorship that meets all of the
following criteria:
(a) Has an owner that is a certified public
accountant in good standing in this state.
(b) Has an office in this state.
(c) Either:
(i) Performs attest services or compilation
services.
(ii) Uses the CPA designation in its business name,
unless the business name is the name of the sole proprietor as registered with
the board.
3. An individual who meets both of the following
criteria:
(a) Is a certified public accountant in good
standing in this state.
(b) Either:
(i) Performs attest services or compilation services
in this state, other than as an owner or employee of a sole proprietorship or
business organization required to register under paragraph 1 or 2 of this
subsection or in the capacity as an employee of a governmental entity.
(ii) Uses the CPA designation, unless the name used
is the name of the individual as registered with the board.
B. Attest services or compilation services shall be
provided only through a registered firm in good standing in this state.� Any
attest services or compilation services reports issued by a firm must be signed
by a person who is certified pursuant to this chapter or qualified to exercise
the limited reciprocity privilege pursuant to section 32-725, subsection
G.
C. An application or
registration pursuant to this section shall be made by an owner of the firm who
is a certified public accountant in good standing. A firm that is
registered pursuant to this section may use the CPA designation in connection
with its firm name as provided for by the board in its rules.
D. A firm that applies or registers pursuant to this
section shall list in its application or registration all jurisdictions in
which the firm has any disciplinary actions, other than for failure to timely
renew a registration,
register a
license
or permit, by any other jurisdiction.
E. Except as provided in subsection F of this
section, an applicant for registration or a firm registered pursuant to this
section shall notify the board in writing within one month of any change in
owners that results in less than a simple majority of the ownership in terms of
direct and indirect financial interests and voting rights that belong to
holders in good standing of certificates or licenses as certified public
accountants in any jurisdiction.
F. The board or the board's executive director may
grant a reasonable period of time for the firm to take corrective action to
maintain its qualifications as a firm.
G. Professional corporations that are composed of
certified public accountants shall meet the requirements of title 10, chapter
20 and any additional nonconflicting requirements contained in this section.
H. Limited liability companies, professional limited
liability companies and limited liability partnerships composed of certified
public accountants shall meet the requirements of title 29, chapter 5 or 7 and
any additional nonconflicting requirements contained in this section.
I. A registrant may not use any firm name other than
the firm name that is registered with the board.
J. For the purposes of this section, "good
standing" means:
1. For an individual, a status that allows the
individual to use the CPA designation and to perform accounting services for a
fee or other compensation.
2. For a firm, a status that allows the firm to use
the CPA designation.
END_STATUTE
Sec. 11. Section 32-732, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-732.
Reactivation from inactive or retired status; reinstatement from
canceled, expired, relinquished or revoked status
A. A certified public accountant with a certificate
status of inactive or retired may request that the certified public
accountant's certificate be reactivated if all of the following apply:
1. The registrant files an application
for renewal
on the form prescribed by the board and pays the
registration fee pursuant to section 32-729.
2. The registrant submits proof that the registrant
has satisfied continuing professional education requirements as prescribed by
the board.
3. Either:
(a) The registrant affirms that the registrant has
not engaged in any conduct during the period of time that the certificate was
in inactive or retired status that would constitute a reason to revoke or
suspend the certificate pursuant to section 32-741.
(b) The board determines that good cause exists for
the conduct.
B. An individual with a certificate status of
canceled, who does not qualify for certification by reciprocity pursuant to
section 32-721, subsection C, may request that the individual's
certificate be reinstated if all of the following apply:
1. The registrant files an application for
reinstatement on the form prescribed by the board and pays the reinstatement
application fee pursuant to section 32-729.
2. The registrant submits proof that the registrant
has satisfied continuing professional education requirements as prescribed by
the board.
3. Either:
(a) The registrant affirms that the individual has
not engaged in any conduct during the period of time that the certificate was
in canceled status that would constitute a reason to suspend or revoke the
certificate pursuant to section 32-741.
(b) The board determines that good cause exists for
the conduct.
4. On board approval of reinstatement, pays the
registration fee pursuant to section 32-729.
C. An individual with a certificate status of
expired, relinquished or revoked may request that the individual's certificate
be reinstated if the individual meets all the following requirements:
1. The requirements prescribed by subsection B,
paragraphs 1, 2 and 4 of this section.
2. If prescribed by a board relinquishment or
revocation order, presents satisfactory evidence from an accredited institution
or a college or university that maintains standards comparable to those of an
accredited institution that the individual has
completed at least
one hundred fifty semester hours of education as follows:
(a) At least thirty-six semester hours
of accounting courses of which at least thirty semester hours are upper-level
courses.
(b) At least thirty semester hours of
accounting-related courses.
� obtained a
baccalaureate degree or postbaccalaureate degree. The board shall
adopt rules regarding the number of semester hours of accounting courses and
related courses required to fulfill this requirement.
3. If prescribed by a board relinquishment or
revocation order, presents evidence that the individual has retaken and passed
the uniform certified public accountant examination.
4. Demonstrates through substantial evidence
presented to the board that the individual is completely rehabilitated with
respect to the conduct that was pending or outstanding at the time the
certificate was relinquished or revoked or that occurred before or after the
certificate expired. Demonstration of rehabilitation includes evidence of the
following:
(a) The individual has not engaged in any conduct
that, if the individual had been registered during the period the conduct
occurred, would have constituted a basis for revocation or suspension pursuant
to section 32-741.
(b) The individual's civil rights have been fully
restored pursuant to statute or an applicable recognized judicial or
gubernatorial order with respect to any criminal conviction that constitutes
any part of the basis for the relinquishment or revocation or that occurred
before or after the certificate expired.
(c) The individual has addressed or remedied any
complaints, investigations or board-ordered requirements that were pending or
outstanding at the time of expiration, relinquishment or revocation.
(d) The individual has made restitution as ordered
by the board or by a court of competent jurisdiction as a result of the
individual's violation of this chapter or rules adopted pursuant to this
chapter.
(e) Other evidence of rehabilitation that the board
deems appropriate.
D. Except as otherwise provided in subsection C of
this section, the board may not issue a certificate to an individual whose
certificate has been revoked until five years after the effective date of
revocation.� If the revocation is based only on section 32-741,
subsection A, paragraph 1 or 2 and the criminal conviction is ultimately
reversed on appeal, the board shall enter an order vacating the revocation.
E. An individual, sole proprietor or business
organization whose firm registration has been canceled may request that the
firm registration be reinstated if the individual, sole proprietor or business
organization does all of the following:
1. Files an application for reinstatement on the
form prescribed by the board and pays the reinstatement application fee
pursuant to section 32-729.
2. Meets the requirements of section 32-731.
3. On board approval of reinstatement, pays the
registration fee pursuant to section 32-729.
F. An individual, sole proprietor or business
organization whose firm registration has expired or been relinquished or
revoked may request that the firm registration be reinstated if the individual,
sole proprietor or business organization meets all of the following
requirements:
1. The requirements prescribed by subsection E of
this section.
2. Demonstrates through substantial evidence
presented to the board that the firm is completely rehabilitated with respect
to the conduct that was pending or outstanding at the time the registration was
relinquished or revoked or that occurred before or after the registration
expired. Demonstration of rehabilitation includes evidence of the following:
(a) The firm or any owner of the firm has not
engaged in any conduct that, if the firm had been registered during the period
the conduct occurred, would have constituted a basis for revocation or
suspension pursuant to section 32-741.
(b) The firm has addressed or remedied any
complaints, investigations or board-ordered requirements that were pending or
outstanding at the time of expiration, relinquishment or revocation.
(c) The firm has made restitution as ordered by the
board or by a court of competent jurisdiction as a result of any violation of
this chapter or rules adopted pursuant to this chapter.
(d) Other evidence of rehabilitation that the board
deems appropriate.
END_STATUTE
Sec. 12. Section 32-741, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-741.
Revocation or suspension of certificate or registration; summary
suspension; disciplinary actions; letter of concern
A. After notice and an opportunity for a hearing,
the board may revoke or suspend any certificate granted under this chapter and
may take disciplinary action concerning the holder of any certificate for any
of the following causes:
1. Conviction of a felony under the laws of any
jurisdiction or of the United States if civil rights have not been restored
pursuant to title 13, chapter 9 or
other
another
applicable recognized judicial or gubernatorial order.
2. Conviction of any crime that has a reasonable
relationship to the practice of accounting by a certified public accountant,
including crimes involving accounting or tax violations, dishonesty, fraud,
misrepresentation, embezzlement, theft, forgery, perjury or breach of fiduciary
duty, regardless of whether civil rights have been restored.
3. Fraud or deceit in obtaining a certificate as a
certified public accountant under this chapter.
4. Dishonesty, fraud or gross or continuing
negligence in the practice of accounting.
5. Discipline to the holder of any certificate or
other authority to practice or refusal to
renew
register
the certificate or other authority to practice as a
certified public accountant by any other jurisdiction or foreign country for
any cause other than failure to pay license or registration fees.
6. Violation of any of the provisions of this
chapter, of title 44, chapter 12, article 13 or of any fraud provisions of the
federal securities laws.
7. Final judgment in a civil action if the court
makes findings of accounting violations, dishonesty, fraud, misrepresentation
or breach of fiduciary duty.
8. Final judgment or
order in a civil action or administrative proceeding if the court or agency
makes findings of violations of any fraud provisions of the laws of any
jurisdiction or federal securities laws.
9. Violation of any decision, order or rule issued
or adopted by the board.
10. Suspension or revocation for cause of the right
to practice before the federal securities and exchange commission or any other
governmental body or agency or the public company accounting oversight board or
its successor.
11. Offering or accepting commissions or contingency
fees for services rendered for clients for whom attest services are also
offered or rendered in the performance of the practice of accounting unless:
(a) The fee is fixed by a court or another public
authority.
(b) In a tax matter, the fee is determined based on
the results of a judicial proceeding or the finding of a governmental agency.
12. Failing to disclose to a client that the
registrant has received or expects to receive a commission from a third party
for any engagement, services or product sales involving services other than
attest services.
13. Making any false or misleading statement or
verification in support of an application for a certificate, registration or
permit filed by another person.
14. Making a false or misleading statement:
(a) To the board or its designated agent.
(b) On a form required by the board.
(c) In written correspondence to the board.
15. Failing to respond in writing or furnish
information in a timely manner to the board or its designated agent, if the
information is legally requested by the board and is in the registrant's
possession or control.
B. Pursuant to title 41, chapter 6, article 10, the
board may summarily suspend the certificate of any certified public accountant
pending proceedings for revocation or other disciplinary action on the receipt
of either of the following:
1. A notice of conviction of any crime that has a
reasonable relationship to the practice of accounting, including crimes
involving accounting or tax violations, dishonesty, fraud, misrepresentation,
embezzlement, theft, forgery, perjury or breach of fiduciary duty or of any
felony.
2. A final judgment or order in a civil action or
administrative proceeding in which the court or agency made findings of
violations of any fraud provisions of the laws of any jurisdiction or federal
securities laws.
C. The board may take disciplinary action against a
holder of a certificate issued pursuant to this chapter who is practicing
accounting even if the person is not representing to the public that the person
is a certified public accountant and even if the person is practicing
accounting in a firm that is not registered by the board.
D. The board may issue a letter of concern if, in
the opinion of the board, there is insufficient evidence to support
disciplinary action against the registrant, but the board believes, as a result
of information ascertained during an investigation, that continuation of the
activities that led to the investigation may result in future board action
against the registrant. A registrant may file a response with the
board within thirty days after receipt of a letter of concern. Letters
of concern issued by the board and records kept by the board in connection with
investigations leading to letters of concern are confidential and are not
public records.
END_STATUTE
Sec. 13. Section 32-741.01, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-741.01.
Suspension for nonregistration; expiration of certificate or
registration
A. The certificate or registration of any registrant
who fails to timely register and pay the
biennial
registration fee as required by section 32-729 is automatically suspended
without prior notice or a hearing.
B. A registrant whose certificate or registration is
suspended shall not assume or use the CPA designation while the registrant's
certificate or registration remains on suspended status.
C. A suspension under this section is vacated when
the board has determined that the registrant has paid all past due fees and has
satisfied all other requirements for
renewal
registration
.
D. If the registrant fails to
renew
register
the registrant's certificate or registration
within three months after the date of suspension, the certificate or
registration expires.
END_STATUTE
Sec. 14. Section 32-741.02, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-741.02.
Suspension for noncompliance with continuing education
requirements; expiration of certificate
A. After notice and an opportunity for a hearing,
the board shall suspend the certificate of any registrant who fails to show
proof of compliance with the continuing professional education requirements
established by the board pursuant to section 32-730.
B. A registrant whose certificate is suspended shall
not assume or use the CPA designation while the registrant's certificate
remains on suspended status.
C. A suspension issued under this section is vacated
when the board has determined that the registrant has complied with the
continuing professional education requirements and has satisfied all other
requirements for
renewal
registration
.
D. If the registrant fails to meet the requirements
of subsection C of this section within six months after the date of suspension,
the certificate expires
.
END_STATUTE
Sec. 15. Section 32-742, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-742.
Revocation or suspension of firm's registration; failure to
register or reinstate; reinstatement; relinquishment
After notice and an opportunity for a hearing, the board may
either
revoke or suspend a firm's registration or
may
take disciplinary action for any of the causes enumerated in
section 32-741, subsection A or for either of the following:
1. The relinquishment, revocation or suspension of
any certificate issued by the board to any owner of the firm. This
paragraph does not apply to a suspension for nonregistration pursuant to
section 32-741.01.
2. The failure to comply with section 32-731,
subsection E.
END_STATUTE
Sec. 16. Section 32-743, Arizona Revised
Statutes, is amended to read:
START_STATUTE
32-743.
Disciplinary proceedings; notice; hearings; attorney general
representation; judicial review
A. The board may initiate
disciplinary
proceedings under this chapter, for cause, either on its own motion or a
verified complaint pursuant to title 41, chapter 6, article 10.
B. A written notice stating the nature of the charge
or charges against
the holder of a certificate
a registrant
and the time and place of
the
a
hearing before the board on the charges shall be served
not less than
at least
twenty days
prior to
before
the date of the hearing
either personally or by mailing a copy of the notice,
by
certified mail, to the address last known to the board.
C. If, after having been served with the notice of
hearing, the person fails to appear at the hearing and defend, the board may
proceed to hear evidence against the person and may enter
such
an
order as
shall be
is
justified by the evidence.
D. At all hearings the attorney general of this
state, one of the attorney general's assistants or a special assistant
designated by the attorney general shall appear and represent the board.
E. The decision of the board shall be by majority
vote.� Any person aggrieved by the decision may file a motion for a rehearing
pursuant to title 41, chapter 6, article 10.
F. Except as provided in section 41-1092.08,
subsection H, the board's final decision is subject to judicial review pursuant
to title 12, chapter 7, article 6.
END_STATUTE
Sec. 17. Section 32-749, Arizona Revised Statutes, is amended to read:
START_STATUTE
32-749.
Confidential nature of information acquired by accountants;
privilege; conditions for disclosure; public records; exceptions
A.
Certified
public accountants
registrants
practicing in this
state shall not be required to divulge, nor shall they voluntarily divulge,
client records or information they have received by reason of the confidential
nature of their employment. Information derived from or as a result
of a professional source shall be kept confidential as provided in this
section, but this section does not modify, change or affect the criminal or
bankruptcy laws of this state or the United States or limit the authority of
this state or any agency of this state to subpoena and use the information in
connection with any investigation, public hearing or other proceeding.
B. The board shall not require a registrant to
disclose taxpayer information protected from disclosure by section 42-2069
or section 43-381 except as provided by those sections.
C. This section and section 32-744 do not
prohibit the disclosure of information for:
1. Compliance with ethical investigations or
practice monitoring programs conducted by the board or private professional
organizations pursuant to programs preapproved by the board. These
programs include, but are not limited to, quality and peer
reviews. The scope of quality and peer reviews may include
subsequent, remedial or corrective actions. Disclosure of information under
this paragraph
shall
does
not
destroy its confidentiality and privilege
nor
or
relieve any registrant of the obligation of confidentiality.�
The registrants to whom the information is provided shall be bound by this
section.
2. Access by the board or its duly authorized agents
or employees during business hours to examine and copy any documents, reports,
records or other physical evidence of any person being investigated by the
board on its own motion or as the result of a complaint received, if the
documents, reports, records or evidence relates to the competence or
professional conduct of the registrant who is being investigated.
D. Records the board maintains in exercising its
statutory duties are presumed to be public records pursuant to title 39,
chapter 1, article 2 and are generally accessible for inspection and
copying. Exceptions to the public records presumption include
investigations of registrants
,
except for
continuing professional education audits
. The board shall
treat as confidential information the complaint, the investigation report, the
testimony and documents submitted in support of the complaint or gathered in the
investigation, including information obtained pursuant to section 32-721,
and any correspondence related to the complaint or investigation.� After the
initial analysis under section 32-742.01, if the board opens an
investigation file on a complaint, the details and records of the complaint and
investigation shall remain confidential. However the fact that a
complaint or investigation is pending and the nature of the complaint shall be
public. The board shall not disclose this confidential information to
any person except law enforcement authorities and, to the extent deemed
necessary to conduct the investigation, the subject of the investigation,
persons whose complaints are being investigated and witnesses questioned in the
course of the investigation. Except for client records or
information and any information from which the client or the client's property
may be identified, the information made confidential under this subsection
becomes public record if the board institutes civil enforcement or disciplinary
proceedings or issues a consent order in lieu of disciplinary
proceedings. If the board dismisses the matter with no disciplinary
action, the board may disclose the information relating to the matter only with
the consent of the registrant or entity under investigation.
END_STATUTE
Sec. 18.
Effective date
This act is effective from and after
December 31, 2026.
Sec. 19.
Short title
This act may be cited as the
"Certified Public Accounting Act of 2026".