STAND. COM. REP. NO. 737

Honolulu, Hawaii

, 2005

RE: S.B. No. 120

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 120 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC ACCOUNTANCY,"

begs leave to report as follows:

The purpose of this measure is to eliminate the experience equivalency for licensure as a certified public accountant (CPA).

The Hawaii Association of Public Accountants and numerous entities and individuals involved in the accounting profession testified in support of this measure. Testimony in opposition to the measure was received from the Internal Revenue Service, Department of Taxation, State Auditor, Board of Public Accountancy (Board), and numerous entities and individuals involved in the accounting profession.

The law governing the practice of public accountancy establishes experiential requirements for licensure as a certified public accountant. To qualify for a license, an applicant must have either fifteen hundred chargeable hours in the performance of audits or two years of professional experience in the practice of public accountancy. The Board is authorized to allow experience in private or government accounting or auditing to be substituted for the public accountancy experience. This measure repeals that authorization.

 

Your Committee has amended this measure:

(1) To retain the experience equivalency for purposes of qualifying for a CPA license, to clarify its scope to include experience in attestation, tax preparation, and tax consulting, and to require the narrow construction of the equivalency provision;

(2) To define "attestation" for purposes of the equivalency provision and to require the Board of Public Accountancy to adopt rules incorporating industry standards by reference;

(3) To require that the certification of a license applicant's experience be made by a CPA holding a permit to practice who directly supervised the applicant's professional experience;

(4) To require two years of professional experience in the practice of public accountancy for a permit to practice and to provide that holders of Hawaii CPA and public accountant licenses prior to December 31, 2005, are deemed to have met the experience requirement;

(5) To require four hours of continuing professional education for licensure and the same amount of ethics education biannually for license renewal; and

(6) By inserting an effective date of July 1, 2050 to encourage and facilitate a further discussion of the issues.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 120, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 120, S.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Housing,

____________________________

RON MENOR, Chair