Kentucky Statutes 325.301 – Firms required to obtain license to practice in Kentucky — Firms exempted from licensure requirement — Criteria for license — Peer Review Oversight Committee — Administrative regulations
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(1) The following firms shall obtain a license to practice in this state:
(a) Any firm with an office located in this state performing attest services, as defined in KRS § 325.220; and
(b) Any firm with an office in this state that uses the title “CPA” or other phrase or abbreviation in any manner described in KRS § 325.410 to suggest it is a certified public accounting firm.
(2) A firm which does not have an office in this state that performs services described in KRS § 325.220 for a client having its home office located in this state or a client who is a resident of this state shall not be required to obtain a license to practice in this state and may use the title “CPA” in the name of the firm if:
(a) The firm complies with the requirements contained in subsections (3)(a) and
(10) of this section;
(b) All services provided by the firm are performed by an individual with a practice privilege granted under KRS § 325.282; and
(c) The firm can legally provide the services in the state where the individual with a practice privilege has his or her principal place of business.
(3) All firms required to obtain a license to practice in this Commonwealth shall meet the following requirements:
(a) Certified public accountants shall hold fifty-one percent (51%) or more of the ownership of the firm in terms of financial interests and voting rights of all partners, officers, shareholders, members, or managers of the firm;
(b) All owners of the firm who are not certified public accountants shall be natural persons actively engaged in the firm’s operations and shall satisfy additional requirements established by the board through promulgation of an administrative regulation;
(c) The name of the firm shall comply with the requirements of KRS § 325.380;
(d) All certified public accountants who are sole proprietors, partners, shareholders, members, officers, directors, or employees of a firm with an office located in this state, who regularly practice in this Commonwealth, shall maintain current licenses to practice issued by the board;
(e) Any individual licensee and any individual qualifying for a practice privilege under this chapter who is responsible for supervising attest services and signs or authorizes someone to sign the report on behalf of the firm shall meet the competency requirements established by the board through promulgation of an administrative regulation; and
(f) The firm shall comply with the provisions of this chapter, the administrative regulations promulgated by the board, and all other laws of this Commonwealth applicable to the firm’s particular form of business organization.
(4) Before a firm may practice in this Commonwealth, the firm manager shall:
(a) Submit an initial application which contains information required by the board through promulgation of an administrative regulation; and
(b) Pay a fee not to exceed two hundred dollars ($200) established by an administrative regulation promulgated by the board.
(5) The firm license shall be renewed on or before August 1 every two (2) years by the firm manager:
(a) Completing the renewal process according to the procedures as established in administrative regulation promulgated by the board; and
(b) Paying the renewal fee, which shall not exceed two hundred dollars ($200), as established by administrative regulation promulgated by the board.
(6) If a firm license has been expired for a period of less than one (1) month and the firm has not violated any other provision of this chapter or the accompanying administrative regulations promulgated thereunder, the firm manager may renew the license by:
(a) Satisfying all the requirements of this subsection, including any requirements established by the board through promulgation of an administrative regulation; and
(b) In addition to the renewal fee, paying a late fee not to exceed one hundred dollars ($100).
(7) A firm with a license expired for a period of longer than one (1) month after the date of expiration shall cease operating immediately. The firm shall not operate until the board approves the issuance of a new license to the firm.
(8) Sole proprietors shall comply with the licensing requirements for firms under this section.
(9) The firm manager shall notify the board in accordance with procedures established in an administrative regulation promulgated by the board, of any change in its licensing information within thirty (30) days. Any change in the name of a firm shall require the filing of an initial application.
(10) (a) All firms that perform attest or compilation services shall enroll in, schedule, undergo, and complete its peer review in an approved peer review program with standards that are equivalent to or better than the peer review program administered by the American Institute of Certified Public Accountants as determined by administrative regulations promulgated by the board.
(b) Every firm shall comply with any requirements or restrictions placed on its license as prescribed by the board in response to the results of peer reviews; and
(c) Every firm shall allow the sponsoring organization to provide the board access to the peer review documents via a secure Web site process, such as Facilitated State Board Access and its successor operated by the American Institute of Certified Public Accountants, or similar system operated by another equivalent sponsoring organization.
(11) Nothing contained in this chapter shall require a certified public accountant or firm of certified public accountants licensed by another state to obtain a license to practice in this Commonwealth if the certified public accountant or firm of certified public accountants enters this Commonwealth solely to:
(a) Conduct a peer review of a firm; or
(b) Perform attestation work, incidental to an engagement which was initiated with a client located outside of the Commonwealth and has extended into the Commonwealth due to common ownership or existence of a subsidiary, assets, or other operations located within the Commonwealth.
(12) A Peer Review Oversight Committee may be appointed by the board to monitor the board-approved peer review program, including sponsoring organizations. The purpose of the committee is to provide reasonable assurance that peer reviews are being conducted and reported in accordance with peer review standards. The board shall promulgate an administrative regulation setting forth the process and procedures of the committee.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 24, sec. 2, effective July 14, 2018. — Amended
2015 Ky. Acts ch. 107, sec. 5, effective June 24, 2015. — Amended 2011 Ky. Acts ch. 31, sec. 2, effective June 8, 2011. — Amended 2008 Ky. Acts ch. 101, sec. 6, effective July 15, 2008. — Amended 2000 Ky. Acts ch. 99, sec. 7, effective July 14,
2000. — Amended 1996 Ky. Acts ch. 24, sec. 2, effective July 15, 1996. — Created
1994 Ky. Acts ch. 248, sec. 1, effective July 15, 1994.
Legislative Research Commission Note (7/14/2018). Under the authority of KRS
7.136(1), the Reviser of Statutes has modified the internal numbering of subsection (10) of this statute from the way it appeared in 2018 Ky. Acts ch. 24, sec. 2. The words in the text were not changed.
Legislative Research Commission Note: (6/24/2015). Under the authority of KRS
7.136(1), the Reviser of Statutes has changed the internal numbering of KRS § 325.220 to place definitions in alphabetical order and changed references to that statute in subsections (1) and (2) of this statute to correspond. No words were changed in this process.
(a) Any firm with an office located in this state performing attest services, as defined in KRS § 325.220; and
Terms Used In Kentucky Statutes 325.301
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Board: means the State Board of Accountancy. See Kentucky Statutes 325.220
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Firm: means a sole proprietorship, partnership, professional service corporation, or any other form of business organization that is authorized to operate under the laws of this Commonwealth, complies with the provisions of this chapter, and is issued a license to practice by the board or is exempt from having to obtain a license pursuant to KRS §. See Kentucky Statutes 325.220
- Firm manager: means a licensee of this state or another state designated by a firm to be responsible for the firm complying with the firm registration and firm licensing requirements contained in this chapter and administrative regulations promulgated thereunder. See Kentucky Statutes 325.220
- License: means a license as a certified public accountant or a firm issued pursuant to this chapter. See Kentucky Statutes 325.220
- Licensee: means a certified public accountant, firm, or public accountant, holding a license to practice issued under this chapter. See Kentucky Statutes 325.220
- Month: means calendar month. See Kentucky Statutes 446.010
- Oversight: Committee review of the activities of a Federal agency or program.
- Peer review: means a practice monitoring process designed to promote quality in attest and compilation services, and protect the public interest. See Kentucky Statutes 325.220
- Public accountant: means a public accountant issued a license to practice by the
Commonwealth of Kentucky under the Public Accounting Act of 1946 as amended. See Kentucky Statutes 325.220 - 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 attested information or compiled financial statements referred to or special competence on the part of the person or firm issuing such language. See Kentucky Statutes 325.220
- Sponsoring organization: means a board-approved professional society or other organization responsible for facilitating and administering a peer review program that is equivalent to or more stringent than a program as outlined in the American Institute of Certified Public Accountants (AICPA)'s current version of the Standards for Performing and Reporting on Peer Reviews, including provisions that provide guidance for administering peer reviews. See Kentucky Statutes 325.220
- State: includes and means any state, territory, or insular possession of the United
States, or the District of Columbia. See Kentucky Statutes 325.220 - Statute: A law passed by a legislature.
(b) Any firm with an office in this state that uses the title “CPA” or other phrase or abbreviation in any manner described in KRS § 325.410 to suggest it is a certified public accounting firm.
(2) A firm which does not have an office in this state that performs services described in KRS § 325.220 for a client having its home office located in this state or a client who is a resident of this state shall not be required to obtain a license to practice in this state and may use the title “CPA” in the name of the firm if:
(a) The firm complies with the requirements contained in subsections (3)(a) and
(10) of this section;
(b) All services provided by the firm are performed by an individual with a practice privilege granted under KRS § 325.282; and
(c) The firm can legally provide the services in the state where the individual with a practice privilege has his or her principal place of business.
(3) All firms required to obtain a license to practice in this Commonwealth shall meet the following requirements:
(a) Certified public accountants shall hold fifty-one percent (51%) or more of the ownership of the firm in terms of financial interests and voting rights of all partners, officers, shareholders, members, or managers of the firm;
(b) All owners of the firm who are not certified public accountants shall be natural persons actively engaged in the firm’s operations and shall satisfy additional requirements established by the board through promulgation of an administrative regulation;
(c) The name of the firm shall comply with the requirements of KRS § 325.380;
(d) All certified public accountants who are sole proprietors, partners, shareholders, members, officers, directors, or employees of a firm with an office located in this state, who regularly practice in this Commonwealth, shall maintain current licenses to practice issued by the board;
(e) Any individual licensee and any individual qualifying for a practice privilege under this chapter who is responsible for supervising attest services and signs or authorizes someone to sign the report on behalf of the firm shall meet the competency requirements established by the board through promulgation of an administrative regulation; and
(f) The firm shall comply with the provisions of this chapter, the administrative regulations promulgated by the board, and all other laws of this Commonwealth applicable to the firm’s particular form of business organization.
(4) Before a firm may practice in this Commonwealth, the firm manager shall:
(a) Submit an initial application which contains information required by the board through promulgation of an administrative regulation; and
(b) Pay a fee not to exceed two hundred dollars ($200) established by an administrative regulation promulgated by the board.
(5) The firm license shall be renewed on or before August 1 every two (2) years by the firm manager:
(a) Completing the renewal process according to the procedures as established in administrative regulation promulgated by the board; and
(b) Paying the renewal fee, which shall not exceed two hundred dollars ($200), as established by administrative regulation promulgated by the board.
(6) If a firm license has been expired for a period of less than one (1) month and the firm has not violated any other provision of this chapter or the accompanying administrative regulations promulgated thereunder, the firm manager may renew the license by:
(a) Satisfying all the requirements of this subsection, including any requirements established by the board through promulgation of an administrative regulation; and
(b) In addition to the renewal fee, paying a late fee not to exceed one hundred dollars ($100).
(7) A firm with a license expired for a period of longer than one (1) month after the date of expiration shall cease operating immediately. The firm shall not operate until the board approves the issuance of a new license to the firm.
(8) Sole proprietors shall comply with the licensing requirements for firms under this section.
(9) The firm manager shall notify the board in accordance with procedures established in an administrative regulation promulgated by the board, of any change in its licensing information within thirty (30) days. Any change in the name of a firm shall require the filing of an initial application.
(10) (a) All firms that perform attest or compilation services shall enroll in, schedule, undergo, and complete its peer review in an approved peer review program with standards that are equivalent to or better than the peer review program administered by the American Institute of Certified Public Accountants as determined by administrative regulations promulgated by the board.
(b) Every firm shall comply with any requirements or restrictions placed on its license as prescribed by the board in response to the results of peer reviews; and
(c) Every firm shall allow the sponsoring organization to provide the board access to the peer review documents via a secure Web site process, such as Facilitated State Board Access and its successor operated by the American Institute of Certified Public Accountants, or similar system operated by another equivalent sponsoring organization.
(11) Nothing contained in this chapter shall require a certified public accountant or firm of certified public accountants licensed by another state to obtain a license to practice in this Commonwealth if the certified public accountant or firm of certified public accountants enters this Commonwealth solely to:
(a) Conduct a peer review of a firm; or
(b) Perform attestation work, incidental to an engagement which was initiated with a client located outside of the Commonwealth and has extended into the Commonwealth due to common ownership or existence of a subsidiary, assets, or other operations located within the Commonwealth.
(12) A Peer Review Oversight Committee may be appointed by the board to monitor the board-approved peer review program, including sponsoring organizations. The purpose of the committee is to provide reasonable assurance that peer reviews are being conducted and reported in accordance with peer review standards. The board shall promulgate an administrative regulation setting forth the process and procedures of the committee.
Effective: July 14, 2018
History: Amended 2018 Ky. Acts ch. 24, sec. 2, effective July 14, 2018. — Amended
2015 Ky. Acts ch. 107, sec. 5, effective June 24, 2015. — Amended 2011 Ky. Acts ch. 31, sec. 2, effective June 8, 2011. — Amended 2008 Ky. Acts ch. 101, sec. 6, effective July 15, 2008. — Amended 2000 Ky. Acts ch. 99, sec. 7, effective July 14,
2000. — Amended 1996 Ky. Acts ch. 24, sec. 2, effective July 15, 1996. — Created
1994 Ky. Acts ch. 248, sec. 1, effective July 15, 1994.
Legislative Research Commission Note (7/14/2018). Under the authority of KRS
7.136(1), the Reviser of Statutes has modified the internal numbering of subsection (10) of this statute from the way it appeared in 2018 Ky. Acts ch. 24, sec. 2. The words in the text were not changed.
Legislative Research Commission Note: (6/24/2015). Under the authority of KRS
7.136(1), the Reviser of Statutes has changed the internal numbering of KRS § 325.220 to place definitions in alphabetical order and changed references to that statute in subsections (1) and (2) of this statute to correspond. No words were changed in this process.