CHAPTER 198
FORMERLY
SENATE BILL NO. 203
AS AMENDED BY SENATE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER I, TITLE 24, DELAWARE CODE, RELATING TO THE PRACTICE OF CERTIFIED PUBLIC ACCOUNTANCY IN THIS STATE.
Be it enacted by the General Assembly of the State of Dektivare:
Section 1. Amend Chapter 1, Title 24, Delaware code, by striking said Chapter in its entirety and substituting in lieu thereof the following:
"CHAPTER 1. ACCOUNTANTS, CERTIFIED PUBLIC
§101. Definitions.
For purposes of this Chapter, unless the context indicates differently:
"Board" means the State Board of Accountancy. "Certificate" means a certificate of certified public accountant.
"Certificate of Authorization" means an authorization issued by the Board to a partnership or corporation to engage in the practice of certified public accountancy.
"Certified Public Accountant" means the holder of a certificate of certified public accountant issued by the Board pursuant to the provisions of this Chapter or prior law of this State.
"State" means the State of Delaware.
§102. Board of Accountancy; appointment; term; qualifications; vacancies; removal of member.
The State Board of Accountancy heretofore established under the laws of this State is continued. The Board shall consist of five members, four of whom shall be certified public accountants who are engaged in practice as certified public accountants in this State. The fifth member shall be a practicing attorney in this State. The five persons constituting the State Board of Accountancy on the effective date of this Chapter shall continue in office as members of the Board until the expiration of the terms for which they were appointed. Upon the expiration of the term of any member, his successor shall be appointed by the Governor for a term of three years. No person who has served two successive complete terms shall be eligible for reappointment until after the lapse of one year. Appointment to fill an unexpired term is not to be considered a complete term. Each member shall hold office until his successor is appointed and qualified. Any vacancy in the membership of the Board shall be filled by the Governor for the unexpired portion of the three year term. The Governor shall remove from the Board any member whose certificate of certified public accountant or right to practice has been revoked or suspended and may, after hearing, remove any member of the Board for neglect of duty or other just cause.
§103. Election of officers; by-laws; quorum.
The Board shall elect annually from its members a president and a secretary. The Board may adopt and promulgate such by-laws as may be necessary to govern its proceedings, to define the duties of its officers and to effectuate the intent and purpose of this Chapter. A majority of the members of the Board shall constitute a quorum for the transaction of all business.
than $10 per day for the time actually expended, plus reimbursement for all necessary travelling expenses incurred in the performance of his duties under this Chapter.
§105. Certified public accountant; who may use title; status of.
Each person who has been granted a certificate of certified public accountant by the Board under this Chapter shall be known and styled as a certified public accountant. No other person, partnership, firm or corporation, except as provided in section 106 and section 111 of this Chapter, shall assume such title, or the title of certified accountant, or chartered accountant, or the abbreviations C.P.A. or C.A. or any other words, letters, or abbreviations tending to indicate that the person, firm or corporation so using the same is a certified public accountant.
§0. Status of existing certificates preserved.
Any person legally authorized to practice as a certified public accountant in this State at the time this Chapter takes effect shall thereafter possess the same rights and privileges as persons to whom certificates of certified public accountant shall be issued pursuant to this Chapter, subject howe'ver, to the power of the Board, as provided in this Chapter, to suspend or revoke the certificate of such person or censure or reprimand such person for any of the causes set forth in this Chapter.
§1. Certificate, requirements for obtaining.
(a) The certificate of certified public accountant shall be granted by the Board to any person who:
( I) has attained the age of eighteen years;
(2) is of good moral character;
(3) has resided in this State continuously for twelve or more months immediately preceding the due date of his application for examination, or continuously for twelve or more months immediately preceding the due date of such application has been employed in this State by a person, partnership or corporation engaged in the practice of certified public accountancy in this State; and,
(4) meets one of the following education and experience requirements:
(A) holds a Masters Degree conferred by a college or university recognized by the Board at the time of graduation, with a concentration in acccounting, or what the Board determines to be substantially the equivalent of such concentration; and has at least one year's accounting experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; or has not less than one year's experience as an accountant in government, commerce, industry, or other field of endeavor, which in the opinion of the Board is substantially equivalent to one year's experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; or
() holds a Baccalaureate Degree, conferred by a college or university recognized by the Board at the time of graduation, with a concentration in accounting, or what the Board determines to be substantially the equivalent of such concentration; and has at least two years' accounting experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; or has not less than two years' experience as an accountant in government, commerce, industry, or other field of endeavor, which in the opinion of the Board is substantially equivalent to two years' experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; or
(A) holds a degree from a two-year college, accredited by the Middle States Association of Colleges and Secondary Schools, the Accrediting Commission of the Association of Independent Colleges and Schools, or a similar accrediting association recognized by the Board at the time of graduation, with a concentration in accounting, or what the Board determines to be substantially the equivalent of such concentration; and has at least four years' accounting experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; or has not less than four years' experience as an accountant in government, commerce industry, or other field of endeavor, which in the opinion of the Board is substantially equivalent to four years' experience as an employee of a person, partnership, or corporation engaged in the practice of certified public accountancy; and
(5) Except as otherwise provided in Section 110 of this Chapter, after meeting the requirements of (a) (1) (2) (3) and (4) of this section shall have successfully passed the Uniform Certified Public Accountant Examination and such other examinations as the Board may determine to be appropriate.
(b) A candidate who has met the education requirement, or who expects to meet it within 120 days following the examination, shall be eligile to take the examination without waiting until he meets the experience requirement provided he also meets the requirements of (a) (1), (2), and (3) of this section. In the case of any candidate admitted to the examination on the expectation that he will complete his education requirement within 120 days, no certificate shall be issued, nor shall credit for the examination or any part of it be given, unless such education requirement is in fact completed within that time or within such time as the Board in its discretion may determine upon application.
() A candidate for the certificate of certified public accountant who has successfuly completed the examination under section 107 (a) (5) shall ,have no status as a certified public accountant, unless and until he has the requisite education and experience and has received from the Board his certificate as a certified public accountant.
(d) The Board may require an applicant to appear in person before the Board in connection with his application for a certificate as certified public accountant.
(a) All examinations provided for in this Chapter shall be in writing and shall be conducted by the Board. The time and place of holding examinations shall be duly advertised for not less than three consecutive days in one daily newspaper with general circulation in this State and not less than thirty days prior to the due date for applications to take each examination.
(b) The Board shall by regulation prescribe the terms and conditions for granting credit to a candidate for his satisfactory completion of a written examination in any one or more of the subjects of the Uniform Certified Public Accountant Examination given by the Board or by the licensing authority in any other jurisdiction. The Board may by regulation prescribe the terms and conditions for granting credit to a candidate for his satisfactory completion of a written examination in any other subject or subjects given by the Board or by the licensing authority in any other jurisdiction.
(c) A person who has previously taken the examination under this chapter and regulations of the board in effect on December 31, 1975, shall continue to be permitted to take the examination and receive a certificate in accordance with such prior laws and regulations.
(d) The examinations shall take place as often as the Uniform Certified Public Accountant Examination is available from and at such times as specified by the American Institute of Certified Public Accountants, or its successor organization.
§109. General Powers of the Board.
The Board shall have the following powers:
(a) To provide for and to regulate the issuance of certificates and to issue a certificate of certified public accountant to any person, (1) who meets the general qualifications and education and experience requirements provided herein and who passes the examination required by the Board, or (2) who meets the requirements for the issuance of a certificate by reciprocity.
(b) To prescribe the place of examination for the certificate of certified public accountant. The Board shall use the Uniform Certified Public Accountant Examination, the AdviSory Grading Service of the American Institute of Certified Public Accountants or its successor organization, and in addition may use such other examinations as it determines to be appropriate in performing its duties hereunder;
(c) To provide for and to regulate the issuance of certificates of authorization to a partnership or corporation that meets the qualifications and requirements of section 111 of this Chapter;
() .To suspend for a fixed term or revoke the certificate of any certified public accountant or the certificate of authorization of any partnership or corporation, or to censure, reprimand or warn the holder of any such certificate as provided for in section 112 of this Chapter;
(a) To arrange for assistance in the performance of its duties, and to administer and enforce the laws of the State relating to practice by certified public accountants, and to request the Attorney General to bring a prosecution for a violation of this Chapter;
() To keep minutes and records of all its transactions and proceedings. Copies thereof, duly certified by the Secretary of the Board, shall be received as evidence in all courts of this State;
of State Boards of Accountancy or its successor organization, and to pay such dues as said association shall establish, to send delegates to the annual meeting of the Association and to defray their expenses;
(h) To adopt, promulgate and enforce such administrative rules and regulations not inconsistent with this Chapter, or other laws of this State, as it deems necessary to carry into effect the provisions of this Chapter; and,
() To promulgate, amend and enforce rules of professional conduct appropriate to establish and maintain a high standard of integrity and dignity in the profession of certified public accountancy.
§110. Waiver of Examination.
(a) The Board may waive the examination of, and issue a certificate as Certified Public Accountant to, any person possessing qualifications equivalent to those set forth in section 107 (a) (1), (2), (4) and (5) of this Chapter who at the time of application for said certificates:
(1) is engaged full-time in the practice of certified public accountancy in this State; and,
(2) is the holder of a "C.P.A." certificate under the laws of another jurisdiction, provided the requirements for such certificate in the jurisdiction which has granted it to the applicant are, in the opinion of the Board, equivalent to those provided in this Chapter; or is the holder of a currently valid certificate, license or degree, or a foreign country constituting a recognized qualification for the practice of public accountancy in such country, which in the opinion of the Board, is comparable to that of a certified public accountant of this State.
(b) In the event such holder of an out-of-state certificate (or such holder of a foreign certificate, license, or degree) meets all the requirements for a certificate as a certified public accountant other than being engaged full-time in the practice of certified public accountancy in this State, the Board may, in its descretion, issue to him a temporary certificate. The temporary certificate shall be effective only until the Board shall notify him that he has met the requirement for full-time practice or, absent such notice, until it expires by its own terms. In no event shall a temporary certificate be in effect for more than one year after the date of its issuance.
§111. Partnerships and corporations composed of certified public accountants; certificate of authorization.
(a) The practice of certified public accountancy in this State by a partnership which has been issued a certificate of authorization is permitted, provided that:
(1) Each partner thereof is a certified public accountant in good standing of some jurisdiction; and
(2) At least one general partner thereof is a certified public accountant in good standing of this State; or each resident manager in charge of an office of the firm in this State is certified public accountant in good standing of this State.
(b) The practice of certified public accountancy in this State by a corporation incorporated under Title 8, Chapter 6 Delaware Code or under a similar statute of another jurisdiction, is permitted, provided that:
(1) The sole purpose and business of the corporation is to furnish to the public services not inconsistent with this Chapter and the regulations of the Board; provided, however, that the corporation may invest its funds in a manner not incompatible with the practice of certified public accountancy; and Each shareholder of the corporation is a certified public accountant of some jurisdiction in good standing and principally employed by the corporation or actively engaged in its business; and
(2) The principal officer of the corporation and any officer or director having authority over the practice or certified public accountancy by the corporation is a certified public accountant of some jurisdiction in good standing; and
(3) At least one shareholder of the corporation is a certified public accountant of this State in good standing; or each resident manager in charge of an office of the corporation in this State is a certified public accountant of this State in good standing; and
(4) The corporation is in compliance with such other rules and regulations pertaining to corporations practicing certified public accountancy in this State as the Board may prescribe.
(c) A partnership or corporation desiring a certificate of authorization shall file with the Board an application, supported by affidavit, listing the names and addresses of all officers, board members, partners, resident managers and principals of the partnership or corporation and together with any other information required by the Board. The same information must be set forth in a verified statement filed annually with the Board as of July 1. In the event there is any change in any of these persons during the year, such change shall be filed with the Board within 30 days after the effective date of such change. The application for the certificate of authorization shall be made upon the affidavit of a general partner or shareholder who is a certified public accountant of this State in good standing. If no general partner or shareholder is a certified public accountant of this State, the application for the certificate of authorization shall be made upon the join affidavit of a general partner, or the principal officer of the corporation, together with the resident manager of each office maintained in this State. The Board shall in each case determine whether the applicant is eligible for receipt of a certificate of authorization. A partnership or corporation which is issued a certificate of authorization by the Board may use the words "Certified Public Accountants" or the abbreviation "C.P.A.'s."
§112. Revocation; suspension; censure; notice.
(a) After notice and hearing the Board may suspend for a period not to exceed two years or may revoke any certificate of certified public accountant or certificate of authorization issued under this Chapter or other law of this State, or may censure, reprimand or warn any holder of such certificates, for any one or any combination of the following causes:
(1) Fraud or deceit in obtaining a certificate or certified public accountant, or certificate or authorization;
(2) Dishonesty, fraud, or gross negligence in the practice of certified public accountancy;
(3) Violation of a rule of professional conduct promulgated by the Board under the authority granted by this Chapter;
(4) Entering a plea of guilty or nolo contendere to, or being found guilty of a felony under the laws of any state or of the United States;
(5) Entering a plea of guilty or nolo contendere to, or being found guilty of any crime, an element of which is dishonesty or fraud, under the laws of any state or of the United States;
(6) Cancellation, revocation, suspension or refusal to renew the authority of an individual, partnership or corporation, or any partner or shareholder thereof to practice certified public accountancy in any other state for any cause other than failure to pay an annual registration fee in such other state;
(7) Suspension or revocation of the right to practice before any state or federal agency; and,
(8) Any dishonorable, unethical or unprofessional conduct likely to deceive, defraud or harm the public.
(b) After notice and hearing the Board may suspend for a period not to exceed two years or may revoke the certificate of authorization of a partnership or corporation, if any partner, shareholder, officer, director or principal thereof has committed any act or has been found guilty of any conduct which would authorize a revocation or suspension of the certificate or a certified public accountant under the provisions of this section;
(c) After notice and hearing the Board shall revoke the certificate of authorization of a partnership or corporation if at any time it does not have or meet all the qualifications prescribed by section III. In its discretion, and for good cause shown, the Board may stay such order of revocation for a period of time not to exceed one year to permit the partnership or corporation to re-quality for registration.
§113. Disciplinary action; procedure.
(a) The Board or any aggrieved person may prefer any charge or charges against any individual holding a certificate of certified public accountant or any partnership or corporation holding a certificate of authorization. Such charge or charges shall be in writing and shall be sworn to by the person or persons making them and shall be filed with the secretary of the Board.
(b) Upon the filing of such charge or charges with the Board, which states matters of fact which in the opinion of a majority of the Board would, if true, be sufficient cause for
censure or more severe disciplinary action, the Board shall fix a time and place for a hearing of such charge or charges.
(c) A copy of the charge or charges together with a notice of time and place of hearing, shall be personally served on the accused, or sent by registered or certified mail to the last known address of such individual, partnership or corporation at least 30 days before the date fixed for the hearing. At any hearing, the accused individual shall have the right to appear in person or by counsel or both. A partnership or corporation may be represented at such hearing by a duly authorized representative of such partnership or corporation who shall be a partner or shareholder thereof and a certified public accountant of this State in good standing or by counsel or both. At any hearing, the accused individual, partnership or corporation shall have the right to cross-examine witnesses in defense of such charges, and to produce evidence and witnesses on behalf of the accused. If the accused fails to appear at said hearing, the Board may proceed to hear and determine the validity of the charges against the accused. The accused shall be entitled, on application to the Board, to the issuance of subpoenas to compel the attendance of witnesses and the production of documents on behalf of the accused.
(d) The Board or any member thereof may issue subpoenas to compel the attendance of witnesses and the production of documents and may administer oaths, take testimony, hear proofs, and receive exhibits in evidence in connection with, or upon hearing under, this Chapter. In case of disobedience to a subpoena, the Board may invoke the aid of any court of this State in requiring the attendance and testimony of witnesses and the production of documentary evidence. The Board shall not be bound by technical rules of evidence. A stenographic record of the hearings shall be kept and a transcript thereof filed with the Board. At all hearings, the Attorney General of this State, or one of his deputies designated by him, or such other legal counsel as may be employed by the Board, shall appear and represent the Board.
(e) If, after such hearing, a majority of the Board vote in favor of sustaining the charges, the Board may suspend or revoke the certificate of the accused person or the certificate of authorization of the accused partnership or corporation or may warn, censure or reprimand such accused person, partnership or corporation. The written decision of the Board shall be delivered personally to the accused or sent by registered or certified mail to the last known address of the accused.
(a) Any person, partnership or corporation affected by any action of the Board in denying, suspending, revoking or refusing to renew a certificate or certified public accountant or certificate of authorization may appeal therefrom to the Superior Court within 30 days from the date of receipt of the written decision of the Board.
(b) In case of every appeal to the Superior Court, the cause shall be determined by the Court from the record, which shall include a typewritten copy of the evidence and the findings of the Board. The Board shall file with the Court a certified transcript of the record before the Board within 15 days after service on the Board of notice of the appeal. The Court may reverse, affirm or modify the findings of the Board, or remand the cause to the Board for a rehearing. In case any cause shall be remanded to the Board for a rehearing, the procedure and rights of all parties to such cause shall be the same as in the case of the original hearing before the Board.
Upon application in writing, and after hearing pursuant to notice, the Board may issue a new certificate to a certified public accountant or a certificate of authorization to a partnership or corporation whose certificate has been revoked or modify the suspension of any certificate or certificate of authorization which has been suspended.
§116. Ownership of working papers.
All statements, records, schedules, working papers and memoranda made by a certified public accountant incident to or in the course of professional service to clients by such certified public accountant, except reports submitted by a certified public accountant to a client, shall be and remain the property of such certified public accountant in the absence of an express agreement between the certified public accountant and the client to the contrary. No such statement, record, schedule, working paper, or memorandum shall be sold, transferred, or bequeathed, without the consent of the client or his personal representative or assignee, to anyone other than one or more surviving partners or new partners of such accountant or to his corporation.
§0. Register, publication of.
The Board shall have printed and published annually for public distribution a register which shall contain the names, arranged in alphabetical order and addresses, of all persons, partnerships and corporations holding certificates to practice under this chapter, the names of members of the Board, and other matters as may be deemed proper by the Board. A copy of such register shall be mailed to each certificate holder.
The Board shall by regulation establish fees to be charged which shall not be less than:
(a) $50 to an applicant for each examination or re- examination in all subjects;
() $25 to an applicant for each re-examination in less than all subjects;
(c) $50 to an applicant for a certificate who is a certified public accountant registered or licensed under the laws of another state or territory of the United States, or of any foreign government.
§119. Annual report and receipts.
The Board shall report annually to the Governor the number of certificates issued and receipts and expenses under this Chapter. All income shall be deposited to the credit of the State Treasurer as part of the General Fund of the State in accordance with Chapter 61 of Title 29.
§120. Violations and penalties; jurisdiction.
(a) Any person who represents himself to the public as having a certificate provided for in this Chapter, or assumes to practice as a certified public accountant in this State without having received such certificate, or having received such certificate provided for in this Chapter, thereafter loses the same by revocation or suspension and continues to practice as a certified public accountant, or otherwise wrongfully uses such title or any other title mentioned in section 105 of this Chapter, or violates any of the provisions of this Chapter, shall be fined not less than $100 nor more than $500 or imprisoned not more than six months or both.
(b) Any partnership or corporation that engages in the practice of certified public accountancy in this State without having received a certificate of authorization from the Board, or having received such certificate thereafter loses the same by revocation or suspension and continues to engage in the practice of certified public accountancy in this State, or violates any of the provisions of this Chapter shall be fined not less than $200 nor more than $1000. Where a partnership or corporation engages in the practice of certified public accountancy in this State in violation of this Chapter every partner of such partnership and every officer, director, shareholder or principal of such corporation shall be deemed to be in violation of this Chapter.
(c) The Superior Court of this State shall have exclusive original jurisdiction of any violation of this Chapter, notwithstanding any other law of this State to the contrary.
§121. Injunction against unlawful practice.
The Chancery Court may, in an action at the suit of the Attorney General or of the Board, prevent and restrain any person, partnership or corporation from engaging in the practice of certified public accountancy in this State who has not first obtained the certificate of certified public accountant or certificate of authorization as provided in this Chapter or prevent and restrain the violation by any person, partnership or corporation of the provisions of this Chapter.
Section 2. If any provision of this act or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.
Section 3. This Act shall become effective on January 1, 1976