61H1-21.001: Independence
61H1-21.002: Integrity and Objectivity
61H1-21.005: Contingent Fees
61H1-21.006: Communication with Client of Another Licensee
PURPOSE AND EFFECT: The Board proposes the rule amendment in order to clarify language concerning the certified public accountant.
SUMMARY: Language concerning the certified public accountant will be clarified.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared. The Board determined the proposed rule will not have an impact on small business.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 473.304, 473.315, 473.319 FS., s. 2, Chapter 97-35, Laws of Florida.
LAW IMPLEMENTED: 473.315 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN FAW.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Veloria Kelly, Division Director, Board of Accountancy, 240 N.W. 76th Dr., Suite A, Gainesville, Florida 32607
THE FULL TEXT OF THE PROPOSED RULE IS:
61H1-21.001 Independence.
(1) A licensed firm shall not express an opinion on financial statements (as that term is defined in the Standards for Independence) of an enterprise or on the reliability of an assertion by one party for use by another (third) party unless the firm is active licensed and independent with respect to such enterprise or the party making the assertion. A licensed firm is also precluded from expressing such an opinion if the firm is aware that an individual in the firm is not independent and that individual is a covered certified public accountant licensee or is otherwise required to be independent. A certified public accountant licensed individual shall not express such an opinion unless the certified public accountant individual is independent with respect to such enterprise or the party making the assertion. A certified public accountant licensed individual is also precluded from expressing such an opinion if he or she is aware that an individual in the firm is not independent and that individual is a covered certified public accountant licensee or is otherwise required to be independent. All covered certified public accountants licensees and all other individuals who are required to be independent are required to disclose to the firm that they are not independent prior to the issuance of such an opinion; failure to do so is a violation of this rule. All firms are required to adopt appropriate policies to implement the disclosure requirement and to monitor compliance therewith.
(2) In order to delineate the standards against which a certified public accountant’s licensee’s independence or lack thereof is to be judged, the Board has created a document entitled “Standards for Determining Independence in the Practice of Public Accountancy for CPAs Practicing Public Accountancy in the State of Florida” (effective 5-1-2003, revised 12-31-2004) (hereinafter “Standards for Independence”) which document is hereby incorporated by reference in this Rule. The standards contained in the “Standards for Independence” are similar to those contained in the Code of Professional Conduct promulgated by the American Institute of Certified Public Accountants.
(3) In order to be considered independent a certified public accountant licensee must comply with the requirements set out in the “Standards for Independence” and the requirements of this rule.
Rulemaking Specific Authority 473.304, 473.315 FS. Law Implemented 473.315 FS. History–New 12-4-79, Amended 2-3-81, 10-28-85, Formerly 21A-21.01, Amended 10-20-86, Formerly 21A-21.001, Amended 5-21-03, 1-31-05,________.
61H1-21.002 Integrity and Objectivity.
A certified public accountant shall not knowingly misrepresent facts, and, when engaged in the practice of public accounting, shall not subordinate his/her judgment to others including but not limited to clients, employers or other third parties. In tax practice, a certified public accountant licensee may resolve doubt in favor of his/her client as long as there is reasonable support for his/her position.
Rulemaking Specific Authority 473.304, 473.315 FS. Law Implemented 473.315 FS. History–New 12-4-79, Formerly 21A-21.02, Amended 6-4-86, Formerly 21A-21.02, 21A-21.002, Amended________.
61H1-21.005 Contingent Fees.
(1) No certified public accountant or firm A licensee shall not accept a fee contingent upon the findings or results of such services if the service is of the type for which a commission or referral fee could not be accepted (See Rule 61H1-21.003, F.A.C.).
(2) No certified public accountant or firm A licensee shall not accept a contingent fee for tax filings with the federal, state, or local government unless the findings are those of the tax authorities and not those of the certified public accountant or firm licensee. Unless the certified public accountant or firm licensee has specific reason to know that the filing will be reviewed in detail by the taxing authorities, the findings will be presumed to be those of the certified public accountant or firm licensee and a contingent fee is not permissible. An original or amended federal tax return or a claim for refund cannot be prepared for a contingent fee since the findings are not considered to be those of the taxing authority. If the taxing authority has begun an audit, any findings will be considered those of the taxing authority and a contingent fee may be accepted. Fees to be fixed by courts or other public authorities, which are of an indeterminate amount at the time a public accounting service is undertaken, shall not be regarded as contingent fees for the purposes of this rule. However, a certified public accountant’s or firm’s licensee’s fee may vary depending, for example, on the complexity of the service rendered.
Rulemaking Specific Authority 473.304, 473.319 FS., s. 2, Chapter 97-35, Laws of Florida. Law Implemented 473.319 FS., s. 2, Chapter 97-35, Laws of Florida. History–New 12-4-79, Formerly 21A-21.05, 21A-21.005, Amended 11-30-93, 2-23-98,________.
61H1-21.006 Communication with Client of Another Certified Public Accountant Licensee.
If a client of one certified public accountant or firm licensee requests a second certified public accountant or firm licensee to provide professional advice on accounting or auditing matters in connection with an expression of opinion, the second certified public accountant or firm licensee must consult with the first certified public accountant or firm licensee, after obtaining the client's consent, to make certain that the (the second certified public accountant or firm licensee) is aware of all the relevant facts.
Rulemaking Specific Authority 473.304, 473.315 FS. Law Implemented 473.315 FS. History–New 12-4-79, Amended 2-3-81, Formerly 21A-21.06, 21A-21.006, Amended________.