2011 Louisiana Laws
Revised Statutes
TITLE 37 — Professions and occupations
RS 37:77 — Firm permits to practice; attest experience; peer review

§77. Firm permits to practice; attest experience; peer review

A. The board shall grant or renew permits to practice as a CPA firm to entities that make application and demonstrate their qualifications in accordance with this Section or to CPA firms originally licensed in another state that establish an office in this state. Any firm which has or establishes an office or a place of business in Louisiana from which to offer or perform professional services must hold a permit issued pursuant to this Section in order to provide attest services or to use the title "CPA", "CPAs", "CPA firm", or "firm of Certified Public Accountants". A CPA firm that does not have an office or a place of business in Louisiana shall apply for and hold a permit issued pursuant to this Part in accordance with rules promulgated by the board.

B.(1) Permits shall be initially issued and renewed annually. Applications for such permits shall be made in such form, and in the case of applications for renewal between such dates, as the board may specify. The board shall grant or deny any application for initial issuance of a permit no later than one hundred twenty days after the application is filed in proper form. Issuance or renewal of a permit shall not preclude the board from any further investigation and action against such permit or permit holder. Any permit which is not timely renewed with all required information shall expire on the date specified by the board. Any permit which has expired because of nonrenewal may be reinstated by the board upon payment of the renewal fee and any penalty fees as may be prescribed by the board provided that the applicant is otherwise qualified for the issuance of a permit under this Part.

(2) Where an applicant seeks the opportunity to show that issuance or renewal of a permit was mistakenly denied or where the board is not able to determine whether the application should be granted or denied, the board may issue a provisional permit to the applicant. Such provisional permit shall expire ninety days after its issuance or when the board determines whether or not to issue or renew the permit for which application was made, whichever occurs first.

C.(1) An applicant for initial issuance or renewal of a permit to practice shall be required to show that, notwithstanding any other provision of law, a simple majority of the ownership of the firm in terms of financial interests and voting rights of all partners, officers, shareholders, members, or managers belongs to holders of valid active certificates 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 active certificate issued under R.S. 37:76. Although firms may include nonlicensee owners, the firm and its ownership must comply with rules adopted by the board.

(2) Any CPA firm may include nonlicensee owners provided that:

(a) 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.

(b) All nonlicensee owners are active individual participants in the CPA firm or affiliated entities.

(c) The firm complies with such other requirements as the board may impose.

(3) Any individual licensee or individual granted practice privileges under this Part who is responsible for supervising attest services and who signs or authorizes someone to sign the accountant's report on the financial statements on behalf of the firm shall meet the experience requirements set out in the professional standards for such services promulgated by the American Institute of Certified Public Accountants. In the absence of professional standards concerning such experience requirements promulgated by the American Institute of Certified Public Accountants, the board shall adopt a rule specifying the requisite experience requirements. Such board rule shall be in effect only until such time as the American Institute of Certified Public Accountants promulgates professional standards concerning such experience requirements.

(4) Any individual licensee or any individual granted practice privileges under this Part who signs or authorizes someone to sign the accountant's report on the financial statement on behalf of the firm shall meet the experience requirements promulgated by the American Institute of Certified Public Accountants. In the absence of professional standards concerning such experience requirements promulgated by the American Institute of Certified Public Accountants, the board shall adopt rules specifying the requisite experience requirements. Such board rule shall be in effect only until such time as the American Institute of Certified Public Accountants promulgates professional standards concerning such experience requirements.

D. An applicant for initial issuance or renewal of a permit to practice shall be required to register each office of the firm within this state with the board and to show that all attest services rendered in this state are under the charge of a person holding a valid active certificate.

E. The board shall charge a fee in an amount prescribed by the board for each application for initial issuance or renewal of a permit.

F. Applicants for initial issuance, renewal, or reinstatement of permits shall list in their applications all reasonable and relevant information required by the board which may include but not be limited to all states in which they have applied for or hold permits as CPA firms and list any past denial, revocation, or suspension of a certificate, license, or permit by any other state. Each holder of or applicant for a permit shall notify the board in writing within thirty days after the occurrence of any change in the identities of partners, officers, shareholders, members, or managers whose principal place of business is in this state, any change in the number or location of offices within the state, any change in the identity of those persons in charge of such offices, and any issuance, denial, revocation, or suspension of a permit by any other state.

G. Firms which fall out of compliance with the provisions of this Section due to changes in firm ownership or personnel after receiving or renewing a permit 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 determined by the board shall result in the suspension or revocation of the firm permit.

H.(1) The board shall provide for the regular periodic review of the reports issued by licensees registered with the board for compliance with applicable generally accepted standards. The board shall during such period exempt from the requirements of such review of reports licensees who during such period have been subjected to a professional peer review, the report of which shall be available to the board, approved by and acceptable to the board and conducted pursuant to standards not less stringent than peer review standards applied by the American Institute of Certified Public Accountants and administered by the Society of Louisiana Certified Public Accountants or another state-certified public accountant society. If the professional peer review report is not made available to the board, the licensee shall submit the report to the board in accordance with rules and regulations adopted and promulgated by the board in accordance with the Administrative Procedure Act.

(2)(a) However, in the case of a licensee who qualifies for an exemption from periodic review because of a peer review and who is a member of the Center for Public Company Audit Firms, the peer review report shall have been submitted to the American Institute of Certified Public Accountants or the Society of Louisiana Certified Public Accountants and shall be available to the board.

(b) In the case of a licensee who qualifies for an exemption from periodic review because of a peer review who is not a member of the Center for Public Company Audit Firms, the board shall have received certification from the American Institute of Certified Public Accountants, or the Society of Louisiana Certified Public Accountants or another state certified public accountant society of the licensee's participation in a peer review program and the dates of the licensee's most recent peer review.

(3) The board may adopt rules to:

(a)(i) Establish a program for the scheduled inspection, examination, and review of working papers developed by licensees in connection with the issuance of any audit, review, or compilation report and provide for such a review of all licensees within each three-year period or such longer period as the board may prescribe. The board shall during any such period exempt from the requirement of such review of working papers licensees who during such period have been subjected to a professional peer review, the report of which shall be available to the board, approved by and acceptable to the board and conducted pursuant to standards not less stringent than those applied by the American Institute of Certified Public Accountants and administered by the Society of Louisiana Certified Public Accountants or another state-certified public accountant society. If the professional peer review report is not made available to the board, the licensee shall submit the report to the board in accordance with rules and regulations adopted and promulgated by the board in accordance with the Administrative Procedure Act.

(ii) However, in the case of a peer review qualifying for exemption of a licensee who is a member of the Center for Public Company Audit Firms, the peer review report shall have been submitted to the American Institute of Certified Public Accountants or the Society of Louisiana Certified Public Accountants and shall be available to the board.

(iii) However, in the case of a peer review qualifying a licensee for such exemption, a licensee which is not a member of the Center for Public Company Audit Firms, the board shall have received certification from the American Institute of Certified Public Accountants, or the Society of Louisiana Certified Public Accountants or another state-certified public accountant society, of the licensee's participation in a peer review program and the dates of the licensee's most recent peer review.

(b) Provide that a licensee shall reimburse the board for expenses incurred by the board in connection with its review of the working papers of any such licensee. However, such reimbursable expenses shall include only reasonable travel expenses and a per diem prescribed by the board, and the aggregate amount of such reimbursable expenses shall not exceed the sum of one thousand dollars as to any licensee in any three-year period.

(4)(a) Except as provided in Subparagraph (b) of this Paragraph, the proceedings, records, reports, letters of comment, letters of response, or working papers related to a peer review shall be privileged and shall not be subject to discovery, subpoena, or other means of legal process or introduction into evidence in any civil proceeding. No person, firm, or governmental entity in possession of information or documents related to any proceedings, records, reports, letters of comments, letters of response, or working papers on a peer review shall disclose such information or records to any person, firm, or governmental entity either voluntarily or pursuant to discovery, subpoena, or other means of legal process. No member of a peer review committee or person who was involved in a peer review shall be permitted or required to testify in any civil proceeding as to any matters produced, presented, disclosed, or discussed during or in connection with the peer review, or as to any findings, recommendations, evaluations, opinions, or other actions of any person involved in the peer review.

(b) The privilege in Subparagraph (a) of this Paragraph shall not be construed to:

(i) Establish a privilege with respect to any information or records within the knowledge or possession of a person or firm not obtained from or produced in connection with a peer review.

(ii) Prevent the disclosure, use, or introduction of information or other records privileged by Subparagraph (a) of this Paragraph in any civil proceeding arising out of a dispute between persons conducting a peer review and a licensee subject to a peer review and arising from the performance of a peer review.

(iii) Prevent a designee of the board from disclosing, using, introducing, or testifying with respect to information or records which are relevant in a proceeding before the board pursuant to R.S. 37:79, 80, 81, and 84.

(iv) Prevent designees of the Society of Louisiana Certified Public Accountants from giving the board access to peer review reports or having discussions with a designee of the board concerning peer review reports.

(v) Prevent peer review reports of licensees who participate in the Center for Public Company Audit Firms Peer Review program from being disclosed.

I. All firms holding a valid registration as a certified public accounting firm on June 18, 1999, shall be deemed to have met the initial permit requirements of this Section.

Acts 1979, No. 510, §1; Acts 1989, No. 154, §1; Acts 1991, No. 880, §1, eff. Jan. 1, 1992; Acts 1999, No. 473, §1, eff. June 18, 1999; Acts 2006, No. 214, §1; Acts 2007, No. 102, §1; Acts 2008, No. 203, §1.