2005 Idaho Code - 54-214 — FIRM REGISTRATION -- PEER REVIEW

                                  TITLE  54
                    PROFESSIONS, VOCATIONS, AND BUSINESSES
                                  CHAPTER 2
                                 ACCOUNTANTS
    54-214.  FIRM REGISTRATION -- PEER REVIEW. (1) The board shall register
firms that make application and demonstrate their qualifications therefor in
accordance with the following subsections of this section or to firms
originally licensed in another state that establish an office in this state. A
firm must be registered with the board in order to provide attest services or
compilation reports or in order to use the titles "CPAs," "CPA firm," "LPAs"
or "LPA firm." Firms must register with the board annually on such form and
between such dates as the board may specify by rule. The board may charge a
fee for each registration for initial issuance or renewal of a registration
under this section as set forth in section 54-212, Idaho Code, and as
prescribed by the rules of the board.
    (2)  An applicant for initial registration or renewal of a registration to
practice under this section shall demonstrate that:
    (a)  Notwithstanding any other provision of law, a simple majority of the
    beneficial ownership of the firm belongs to holders of a certificate who
    are licensed in some state, and such partners, officers, shareholders,
    members or managers, whose principal place of business is in this state,
    and who perform professional services in this state, hold a valid
    certificate and license issued by this state. Although a firm may include
    nonlicensee owners the firm and its ownership must comply with rules
    promulgated by the board.
    (b)  Any firm may include nonlicensee owners provided that:
         (i)   The firm designates a licensee of this state, who is
         responsible for the proper registration of the firm and identifies
         that individual to the board.
         (ii)  All nonlicensees are active individual participants in the firm
         or affiliated entities.
         (iii) The firm complies with such other requirements as the board may
         impose by rule.
    (c)  Any licensee who is responsible for supervising attest services or
    compilation reports or who signs or authorizes someone to sign a report on
    financial statements on behalf of the firm, shall meet the competency
    requirements of the professional standards for such services.
    (3)  Firms registered to practice under this section shall be required to
register each office of the firm within this state with the board and to show
that all attest and compilation reports rendered in this state are under the
charge of a person holding a valid certificate and license issued by this
state or some other state.
    (4)  A firm registering under this section shall list all states in which
it has applied for or holds permits as a firm and list any past denial,
revocation or suspension of a permit by any other state. Each firm registered
under this section shall notify the board in writing, within thirty (30) days
following any change in the identities of partners, officers, shareholders or
members whose principal place of business is in this state, any change in the
number or location of offices within this state, any change in the identity of
the persons in charge of such offices, and any issuance, denial, revocation or
suspension of a permit by any other state.
    (5)  Firms which fall out of compliance with the provisions of this
section due to changes in firm ownership or personnel, after registration,
shall take corrective action to bring the firm back into compliance as quickly
as possible. The board may grant a reasonable period of time for a firm to
take such corrective action. Failure to bring the firm back into compliance
within a reasonable period as defined by the board may result in penalties as
prescribed by board rule.
    (6)  As a condition of registration renewal under this section, the board,
by rule, shall require firms to comply with peer review requirements as
specified by rule. Such review shall include a verification that individuals
in the firm who are responsible for supervising attest and compilation reports
and who sign or authorize someone to sign a report on financial statements on
the behalf of the firm meet the competency requirements set out in the
professional standards for such services. The rules concerning peer review
shall require:
    (a)  Peer reviews to be subject to oversight by an oversight body
    established by board rule which will periodically report to the board on
    the effectiveness of the review program under its charge, and provide to
    the board a listing of firms that have participated in a peer review
    program that is satisfactory to the board; and
    (b)  The peer review processes to be operated and documents maintained in
    a manner designed to preserve confidentiality, and that neither the board
    nor any third party, other than the oversight body, shall have access to
    documents furnished or generated in the course of the review.
    (7)  Information discovered solely as a result of a firm's peer review
shall not be grounds for suspension or revocation of a license.