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2009 Texas Code
OCCUPATIONS CODE
TITLE 5. REGULATION OF FINANCIAL AND LEGAL SERVICES
CHAPTER 901. ACCOUNTANTS

OCCUPATIONS CODE

TITLE 5. REGULATION OF FINANCIAL AND LEGAL SERVICES

SUBTITLE A. FINANCIAL SERVICES

CHAPTER 901. ACCOUNTANTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 901.001. SHORT TITLE. (a) This chapter may be cited as

the Public Accountancy Act.

(b) A reference in law to the Public Accountancy Act of 1979 or

the Public Accountancy Act of 1991 means this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.002. GENERAL DEFINITIONS. (a) In this chapter:

(1) "Attest service" means:

(A) an audit or other engagement required by the board to be

performed in accordance with the auditing standards adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board;

(B) an engagement required by the board to be performed in

accordance with standards for accounting and review services

adopted by the American Institute of Certified Public Accountants

or another national accountancy organization recognized by the

board;

accordance with standards for attestation engagements adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board; or

(D) any other assurance service required by the board to be

performed in accordance with professional standards adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board.

(2) "Board" means the Texas State Board of Public Accountancy.

(3) "Certificate" means a certificate issued to a certified

public accountant.

(4) "Certified public accountant" means a person who holds a

certificate issued under this chapter or who practices in this

state under Section 901.462.

(5) "Certified public accountancy firm" means a person who holds

a firm license or a firm that practices in this state under

Section 901.461.

(6) "Client" means a person who enters into an agreement with a

license holder or a license holder's employer to receive a

professional accounting service.

(7) "Corporation" means a corporation authorized by a statute

applicable to this state or by an equivalent law of another state

or a foreign country, including a professional public accounting

corporation organized under The Texas Professional Corporation

Act (Article 1528e, Vernon's Texas Civil Statutes).

(8) "Firm" means a sole proprietorship, partnership,

corporation, limited liability company, or other business entity

engaged in the practice of public accountancy.

(9) "Firm license" means a license issued under Subchapter H.

(10) "License" means a license issued under Subchapter I.

(11) "Peer review" means the study, appraisal, or review of the

professional accounting work of a public accountancy firm that

performs attest services by a certificate holder who is not

affiliated with the firm.

(12) "Professional accounting services" or "professional

accounting work" means services or work that requires the

specialized knowledge or skills associated with certified public

accountants, including:

(A) issuing reports on financial statements;

(B) providing management or financial advisory or consulting

services;

(D) providing advice in tax matters.

(13) "Public accountant" means a person authorized to practice

public accountancy under the Public Accountancy Act of 1945

(Article 41a, Vernon's Texas Civil Statutes).

(b) The board by rule may define "financial statement" to comply

with the standards adopted by generally recognized bodies

responsible for setting accounting standards.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 1, eff. September 1, 2007.

Sec. 901.0021. MEANING AND IMPLICATION OF REPORT. (a) In this

chapter, a reference to a report used with respect to a financial

statement means an opinion, report, or other document, including

an assurance prepared in accordance with standards for accounting

and review services adopted by the American Institute of

Certified Public Accountants or another national accountancy

organization recognized by the board, that:

(1) states or implies assurance as to the reliability of the

financial statement; and

(2) includes or is accompanied by a statement or implication

that the person issuing the opinion, report, or other document

has special knowledge or competence in accounting or auditing.

(b) A statement or implication of assurance as to the

reliability of a financial statement or as to the special

knowledge or competence of the person issuing the opinion,

report, or other document includes any form of language that is

conventionally understood to constitute such a statement or

implication.

competence in accounting or auditing may arise from:

(1) the use by the issuer of the opinion, report, or other

document of a name or title indicating that the person is an

accountant or auditor; or

(2) the language of the opinion, report, or other document

itself.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 2, eff. Sept. 1,

2001.

Sec. 901.003. PRACTICE OF PUBLIC ACCOUNTANCY. (a) In this

chapter, "practice of public accountancy" means:

(1) the performance for a client by a person who is certified,

licensed, or registered under this chapter of a service that

involves the use of accounting, attesting, or auditing skills;

(2) the performance or offer of performance for a client or

potential client by a person who represents to the public that

the person is certified, licensed, or registered under this

chapter of a service that involves the use of accounting,

attesting, or auditing skills;

(3) the performance of activities of a person or practice unit

licensed under this chapter in:

(A) preparing or reporting on a financial statement or report

that is to be used by an investor, the management of an

organization, a third party, or a financial institution, unless

the report is prepared for internal use only; or

(B) preparing a tax return that is filed with a taxing

authority; or

(4) the supervision of an activity described by Subdivision (3).

(b) For purposes of this section, a service that involves the

use of accounting, attesting, or auditing skills includes:

(1) issuing a report on or preparing a financial statement;

(2) providing management or financial advisory or consulting

services; and

(3) preparing a tax return or advising or consulting on a tax

matter.

public that the person is certified, licensed, or registered

under this chapter if the person makes an oral or written

representation that the person is certified, licensed, or

registered. A written representation includes a representation

communicated by office sign, business card, letterhead, or

advertisement. A representation does not include:

(1) the display of an original certificate or registration

unless a license is also displayed;

(2) a representation made by a faculty member of an educational

institution solely in connection with the duties of the person as

a faculty member; or

(3) a representation in a book, article, or other publication,

or a representation made in connection with the promotion of the

publication, unless the representation includes an offer to

perform a service or to sell a product other than the

publication.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 3, eff. Sept. 1,

2001.

Sec. 901.004. CONSTRUCTION; LIMITATIONS. (a) This chapter does

not:

(1) restrict an official act of a person acting in the person's

capacity as:

(A) an officer of the state or of a county, municipality, or

other political subdivision, including a county auditor;

(B) an officer of a federal department or agency; or

Paragraph (A) or (B);

(2) prohibit a person who is not a certified public accountant

or public accountant from serving as an employee of:

(A) a certified public accountant or public accountant licensed

by the board; or

(B) a firm composed of certified public accountants or public

accountants licensed by the board;

(3) prohibit a person licensed by the federal government as an

enrolled agent from performing an act or using a designation

authorized by federal law;

(4) prohibit an attorney or firm of attorneys from preparing or

presenting records or documents customarily prepared by an

attorney or firm of attorneys in connection with the attorney's

or firm's professional work in the practice of law; or

(5) prohibit an employee, officer, or director of a financial

institution, as defined by Section 201.101, Finance Code, from

preparing or presenting records or documents when lawfully acting

within the scope of the activities of the institution.

(b) A person who serves as an employee as described by

Subsection (a)(2) may not issue an accounting or financial

statement over the employee's name.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 4, eff. Sept. 1,

2001.

Sec. 901.005. FINDINGS; PUBLIC POLICY; PURPOSE. (a) The

practice of public accountancy is a learned profession that

requires specialized education and experience. That practice has

historically been defined to include a broad range of financial,

advisory, and attest services, including:

(1) issuing a report on a financial statement;

(2) preparing a tax return;

(3) providing advice in a tax matter;

(4) providing management or financial advisory or consulting

services;

(5) recommending the sale of a product if the recommendation

requires or implies accounting or auditing skill; and

(6) providing litigation support services.

(b) The attest service is part of the practice of public

accountancy. That service provides assurance to the public,

especially the public markets, that the management of commercial

entities has reasonably described the financial status of those

entities. That assurance contributes to the strength of the

economy and public markets of this state and to the soundness and

reliability of the financial system. The strength of the

financial system in this state is supported by the competence,

integrity, and expertise of the persons who attest to financial

statements in this state.

competence and integrity of certified public accountants in all

of its dealings with certified public accountants and not merely

in connection with their performance of the attest service.

(d) The terms "accountant" and "auditor," and derivations,

combinations, and abbreviations of those terms, have an

implication of competence in the profession of public accountancy

on which the public relies in personal, business, and public

activities and enterprises.

(e) The policy of this state and the purpose of this chapter

are to provide that:

(1) the admission of persons to the practice of public

accountancy require education and experience commensurate with

the requirements of the profession;

(2) a person who represents that the person practices public

accountancy be qualified to do so;

(3) a person licensed as a certified public accountant:

(A) maintain high standards of professional competence,

integrity, and learning; and

(B) demonstrate competence and integrity in all dealings with

the public that rely on or imply the special skills of a

certified public accountant and not merely in connection with the

performance of the attest service;

(4) areas of specialized practice require special training; and

(5) the activities and competitive practices of persons

practicing public accountancy be regulated to be free of

commercial exploitation to provide the public with a high level

of professional competence at reasonable fees by independent,

qualified persons.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 5, eff. Sept. 1,

2001.

Sec. 901.006. APPLICATION OF SUNSET ACT. The Texas State Board

of Public Accountancy is subject to Chapter 325, Government Code

(Texas Sunset Act). Unless continued in existence as provided by

that chapter, the board is abolished and this chapter expires

September 1, 2015.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 1, eff. Sept. 1,

2003.

SUBCHAPTER B. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

Sec. 901.051. BOARD MEMBERSHIP. (a) The Texas State Board of

Public Accountancy consists of 15 members appointed by the

governor with the advice and consent of the senate as follows:

(1) 10 certified public accountant members, at least eight of

whom are, on the date of appointment:

(A) a sole practitioner; or

(B) an owner or employee of a certified public accountancy firm;

and

(2) five public members who are not:

(A) licensed under this chapter; or

(B) financially involved in an organization subject to board

regulation.

(b) Each member of the board must be a United States citizen.

the race, color, disability, sex, religion, age, or national

origin of the appointee.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 6, eff. Sept. 1,

2001.

Sec. 901.052. ELIGIBILITY OF PUBLIC MEMBERS. A person is not

eligible for appointment as a public member of the board if the

person or the person's spouse:

(1) is registered, certified, or licensed by an occupational

regulatory agency in the field of public accountancy;

(2) is employed by or participates in the management of a

business entity or other organization regulated by the board or

receiving funds from the board;

(3) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

regulated by the board or receiving funds from the board; or

(4) uses or receives a substantial amount of tangible goods,

services, or funds from the board, other than compensation or

reimbursement authorized by law for board membership, attendance,

or expenses.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a) In

this section, "Texas trade association" means a cooperative and

voluntarily joined statewide association of business or

professional competitors in this state designed to assist its

members and its industry or profession in dealing with mutual

business or professional problems and in promoting their common

interest.

(b) A person may not be a member of the board and may not be a

board employee employed in a "bona fide executive,

administrative, or professional capacity," as that phrase is used

for purposes of establishing an exemption to the overtime

provisions of the federal Fair Labor Standards Act of 1938 (29

U.S.C. Section 201 et seq.), and its subsequent amendments, if:

(1) the person is acting in the capacity of an officer,

executive board or executive committee member, employee, or paid

consultant of a Texas trade association in the field of public

accountancy; or

(2) the person's spouse is acting in the capacity of an officer,

executive board or executive committee member, manager, or paid

consultant of a Texas trade association in the field of public

accountancy.

general counsel to the board if the person is required to

because of the person's activities for compensation on behalf of

a profession related to the operation of the board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 2, eff. Sept. 1,

2003.

Sec. 901.054. TERMS. (a) Board members serve staggered

six-year terms.

(b) A board member who has served all or part of six consecutive

years is not eligible for reappointment until the second

anniversary of the expiration date of the member's most recent

term.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.055. OFFICERS; EXECUTIVE COMMITTEE. (a) The governor

shall designate a member of the board as presiding officer. The

presiding officer serves in that capacity at the will of the

governor.

(b) The board shall annually elect from its members an assistant

presiding officer, secretary, treasurer, and other officers the

board considers necessary to serve with the presiding officer on

the executive committee.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.056. GROUNDS FOR REMOVAL. (a) It is a ground for

removal from the board that a member:

(1) does not have at the time of taking office the

qualifications required by Section 901.051;

(2) does not maintain during service on the board the

qualifications required by Section 901.051;

(3) is ineligible for membership under Section 901.052 or

901.053;

(4) cannot, because of illness or disability, discharge the

member's duties for a substantial part of the member's term; or

(5) is absent from more than half of the regularly scheduled

board meetings that the member is eligible to attend during a

calendar year without an excuse approved by a majority vote of

the board.

(b) The validity of an action of the board is not affected by

the fact that it is taken when a ground for removal of a board

member exists.

ground for removal exists, the executive director shall notify

the presiding officer of the board of the potential ground. The

presiding officer shall then notify the governor and the attorney

general that a potential ground for removal exists. If the

potential ground for removal involves the presiding officer, the

executive director shall notify the next highest ranking officer

of the board, who shall then notify the governor and the attorney

general that a potential ground for removal exists.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 3, eff. Sept. 1,

2003.

Sec. 901.057. PER DIEM; REIMBURSEMENT. (a) A board member is

entitled to receive:

(1) $100 for each day that the member conducts board business;

and

(2) reimbursement for actual and necessary expenses incurred in

performing board functions.

(b) The board by rule may determine the activities that

constitute board business.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.058. MEMBER EQUALITY. A board member who is not a

certified public accountant has the same authority,

responsibility, and duties as any other board member.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.059. TRAINING. (a) A person who is appointed to and

qualifies for office as a member of the board may not vote,

deliberate, or be counted as a member in attendance at a meeting

of the board until the person completes a training program that

complies with this section.

(b) The training program must provide the person with

information regarding:

(1) this chapter;

(2) the programs operated by the board;

(3) the role and functions of the board;

(4) the rules of the board, with an emphasis on the rules that

relate to disciplinary and investigatory authority;

(5) the current budget for the board;

(6) the results of the most recent formal audit of the board;

(7) the requirements of:

(A) the open meetings law, Chapter 551, Government Code;

(B) the public information law, Chapter 552, Government Code;

Code; and

(D) other laws relating to public officials, including

conflict-of-interest laws; and

(8) any applicable ethics policies adopted by the board or the

Texas Ethics Commission.

reimbursement, as provided by the General Appropriations Act, for

the travel expenses incurred in attending the training program

regardless of whether the attendance at the program occurs before

or after the person qualifies for office.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 4, eff. Sept. 1,

2003.

SUBCHAPTER C. EXECUTIVE DIRECTOR AND OTHER BOARD PERSONNEL

Sec. 901.101. EXECUTIVE DIRECTOR AND PERSONNEL. The board shall

employ an executive director, independent contractors, and

personnel selected by the executive director as necessary to

assist the board in performing its duties.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.102. DIVISION OF RESPONSIBILITIES. The board shall

develop and implement policies that clearly separate the

policy-making responsibilities of the board and the management

responsibilities of the executive director and the staff of the

board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 5, eff. Sept. 1,

2003.

Sec. 901.103. QUALIFICATIONS AND STANDARDS OF CONDUCT

INFORMATION. The board shall provide, as often as necessary, to

its members and employees information regarding their:

(1) qualifications for office or employment under this chapter;

and

(2) responsibilities under applicable laws relating to standards

of conduct for state officers or employees.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.104. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS.

(a) The executive director or the executive director's designee

shall develop an intra-agency career ladder program. The program

must require intra-agency postings of all nonentry level

positions concurrently with any public posting.

(b) The executive director or the executive director's designee

shall develop a system of annual performance evaluations. All

merit pay for board employees must be based on the system

established under this subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.105. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT. (a)

The executive director or the executive director's designee shall

prepare and maintain a written policy statement that implements a

program of equal employment opportunity to ensure that all

personnel decisions are made without regard to race, color,

disability, sex, religion, age, or national origin.

(b) The policy statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, training, and promotion of

personnel, that show the intent of the board to avoid the

unlawful employment practices described by Chapter 21, Labor

Code; and

(2) an analysis of the extent to which the composition of the

board's personnel is in accordance with federal and state law and

a description of reasonable methods to achieve compliance with

federal and state law.

(1) be updated annually;

(2) be reviewed by the Commission on Human Rights for compliance

with Subsection (b)(1); and

(3) be filed with the governor's office.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 6, eff. Sept. 1,

2003.

SUBCHAPTER D. BOARD POWERS AND DUTIES

Sec. 901.151. GENERAL POWERS AND DUTIES OF BOARD. (a) The

board shall:

(1) administer this chapter;

(2) adopt rules the board determines are necessary or advisable

to administer this chapter;

(3) keep a record of each proceeding conducted before or action

taken by the board; and

(4) keep an official seal.

(b) On its own motion or on the complaint of any person, the

board may initiate:

(1) proceedings to determine the eligibility of a person for

examination, certification, registration, or licensing under this

chapter; or

(2) disciplinary proceedings under Subchapter K.

other assistance from any source to administer this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.152. ADVISORY COMMITTEES. (a) The board may appoint

advisory committees to perform the advisory functions assigned to

the committees by the board.

(b) A member of an advisory committee who is not a member of the

board may not receive compensation for service on the committee.

The member may receive reimbursement for actual and necessary

expenses incurred in performing committee functions as provided

by Section 2110.004, Government Code.

board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.1525. APPOINTMENT OF BOARD COMMITTEES. (a) The board

may appoint policy-making and working committees to assist the

board in performing its responsibilities under this chapter. The

board's policy-making committees shall assist the board in

establishing policies, drafting rules, setting budgets,

representing the board, and performing other oversight duties

necessary to administer this chapter. The board's working

committees shall assist the board in carrying out the board's

functions, including reviewing enforcement cases and other

licensing matters. In establishing committees, the board shall

maintain the distinction between the types of committees

authorized by this section.

(b) A person may not serve on a policy-making committee unless

the person is a board member. A working committee may consist of

members who are members of the board and members who are not

board members. A member of a working committee who is not a board

member may participate as a full voting member of the committee.

(1) the person is acting in the capacity of an officer,

executive board or executive committee member, employee, or paid

consultant of a Texas trade association in the field of public

accountancy;

(2) the person's spouse is acting in the capacity of an officer,

executive board or executive committee member, manager, or paid

consultant of a Texas trade association in the field of public

accountancy; or

(3) the person is required to register as a lobbyist under

Chapter 305, Government Code, because of the person's activities

for compensation on behalf of a profession related to the

operation of the board.

(d) For purposes of Subsection (c), "Texas trade association"

has the meaning assigned by Section 901.053.

(e) A committee member who is not a member of the board is

subject to the same financial disclosure requirements that apply

to a member of the board, except that the financial disclosures

shall be maintained by the executive director.

(f) A committee member who is not a member of the board may not

serve on the committee if the member:

(1) violates Subsection (c);

(2) cannot, because of illness or disability, discharge the

member's duties for a substantial time;

(3) is absent from more than half of the regularly scheduled

meetings of the committee that the member is eligible to attend

during a calendar year unless the absence is excused by a

majority vote of the committee; or

(4) does not comply with Subsection (e).

(g) The board shall adopt rules that provide that a committee

member shall refrain from participating in the discussion of and

may not vote on an issue before a committee in which the member

has a personal or financial interest. A committee member who is

not permitted to vote on a matter described by this subsection

shall state at the time of the vote the reason why the member is

not voting on the matter.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 8, eff. Sept. 1,

2003.

Sec. 901.153. ENFORCEMENT COMMITTEES. (a) The board may

appoint enforcement committees. An enforcement committee operates

as a board working committee. The membership of each enforcement

committee must include at least one public member of the board.

(b) An enforcement committee shall consider and make

recommendations to the board on matters relating to the

enforcement of this chapter and board rules.

each enforcement committee's duties.

(d) In appointing the members of an enforcement committee, the

board must determine whether a prospective committee member who

is a license holder under this chapter has been the subject of

any disciplinary action under this chapter. A license holder who

has been found in violation of this chapter may not serve on an

enforcement committee.

(e) A board member who serves on an enforcement committee that

participates in the investigation of a specific complaint may not

participate in any subsequent disciplinary proceeding of the

board that pertains to the complaint and may not vote on the

final disposition of the case. The board shall adopt rules

necessary to implement the requirements of this subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 9, eff. Sept. 1,

2003.

Sec. 901.154. FEES. (a) The board shall set the fee for the

issuance of a certificate under this chapter and the fee for the

issuance or renewal of a license under this chapter in an amount

not to exceed $250.

(b) The board may increase the fee for the issuance or renewal

of a license as necessary to cover the costs of enforcing this

chapter.

provided by this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.155. SCHOLARSHIP TRUST FUND FOR FIFTH-YEAR ACCOUNTING

STUDENTS. (a) The fee for the issuance or renewal of a license

under this chapter is the amount of the fee set by the board

under Section 901.154 together with the fee increase imposed

under Section 901.406 and an additional $10 annual fee to be

deposited to the credit of the scholarship trust fund for

fifth-year accounting students.

(b) The scholarship trust fund for fifth-year accounting

students is held by the board outside the state treasury and may

be used only to:

(1) provide scholarships under Subchapter N to accounting

students in the fifth year of a program designed to qualify each

student to apply for certification as a certified public

accountant; and

(2) pay administrative costs under Subsection (c).

under Subsection (a) and to disburse the money may not exceed 10

percent of the total money collected.

(d) Notwithstanding Section 404.071, Government Code, interest

earned on amounts in the scholarship trust fund for fifth-year

accounting students shall be credited to that fund.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 1, eff. September 1, 2009.

Sec. 901.156. RULES OF PROFESSIONAL CONDUCT. The board shall

adopt rules of professional conduct to:

(1) establish and maintain high standards of competence and

integrity in the practice of public accountancy; and

(2) ensure that the conduct and competitive practices of license

holders serve the purposes of this chapter and the best interest

of the public.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.1565. RULES ON CONSEQUENCES OF CRIMINAL CONVICTION.

(a) The board shall adopt rules necessary to comply with Chapter

53.

(b) In its rules under this section, the board shall list the

specific misdemeanor offenses for which a conviction would

constitute grounds for the board to take action under Section

53.021. With regard to a misdemeanor conviction in another state,

the board shall develop a process for determining whether the

conviction is for an offense listed in the rules required by this

subsection.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 10, eff. Sept. 1,

2003.

Sec. 901.157. RULES FOR SPECIALIZATION. The board by rule may

recognize an area of specialization in the practice of public

accountancy if the area of specialization is generally recognized

by other bodies that regulate or issue authoritative

pronouncements in the field of public accountancy.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.158. RULES RESTRICTING COMPETITIVE PRACTICES. The

board in its rules of professional conduct may regulate the

competitive practices of a license holder as necessary to ensure

that the license holder does not engage in a competitive practice

that:

(1) impairs the independence or quality of a service provided

by a license holder;

(2) impairs or restricts the public's opportunity to obtain

professional accounting services of high quality at a reasonable

price; or

(3) unreasonably restricts competition among license holders.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 7, eff. Sept. 1,

2001.

Sec. 901.159. PEER REVIEW. (a) The board by rule shall provide

for a peer review program to review the work product of a license

holder or of the certified public accountancy firm in which the

license holder is a member, in lieu of the license holder, to the

extent necessary to comply with any applicable standards adopted

by generally recognized bodies responsible for setting accounting

standards. Peer review must include a verification that each

individual in a certified public accountancy firm who is

responsible for supervising attest services and who signs or

authorizes another person to sign an accountant's reports on

financial statements on behalf of the firm meets the competency

requirements of the professional standards that apply to those

services.

(b) The board by rule shall establish a fee in an amount not to

exceed $200 to be paid by a certified public accountancy firm, or

by a license holder who is not a member of a certified public

accountancy firm, for each peer review required by the board

under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 7, eff. Sept. 1,

2001.

Sec. 901.160. AVAILABILITY AND CONFIDENTIALITY OF CERTAIN BOARD

FILES. (a) The board shall make available at the board's

offices in Austin any file maintained or information gathered or

received by the board from a third party regarding a license

applicant or current or former license holder for inspection by

the applicant or license holder during normal business hours.

(b) A license applicant or current or former license holder may

authorize the board in writing to make available for inspection

by a designated person or by the public any information gathered

or received by the board from a third party regarding the

applicant or license holder.

(b), the following information gathered or received by the board

is confidential and not subject to disclosure under Chapter 552,

Government Code:

(1) information regarding the qualifications of an applicant or

license holder to be certified as a certified public accountant;

(2) information regarding the qualifications of an applicant or

firm license holder to be issued a firm license as a certified

public accountancy firm; and

(3) information regarding a disciplinary action under Subchapter

K against a license holder or an applicant to take the uniform

CPA examination, before a public hearing on the matter.

(d) A final order of the board relating to a disciplinary action

against a license holder, including a reprimand, that results

from an informal proceeding or a formal public hearing is subject

to disclosure to the public and is available on request.

(e) The board may disclose information that is confidential

under this section to another governmental, regulatory, or law

enforcement agency engaged in an enforcement action. The board by

rule shall adopt guidelines to assist the board in exercising its

authority to share information under this subsection. Subsections

(a) and (c) do not apply to information disclosed under this

subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 8, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 11, eff. Sept. 1, 2003.

Sec. 901.161. PRIVILEGE FOR CERTAIN INFORMATION. (a) Any

statement or record prepared or an opinion formed in connection

with a positive enforcement or peer review is privileged and is

not:

(1) subject to discovery, subpoena, or other means of legal

compulsion for release to a person other than the board; or

(2) admissible as evidence in a judicial or administrative

proceeding other than a board hearing.

(b) The privilege provided by Subsection (a) does not apply to

information involved in a dispute between a reviewer and the

person, including an entity, who is the subject of the review.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 9, eff. Sept. 1,

2001.

Sec. 901.162. IMMUNITY FROM LIABILITY. (a) Each board member

and each officer, director, or employee of a state agency, board,

or commission is immune from liability arising out of a

disclosure made to the board in connection with a complaint filed

with the board.

(b) The board and each board member is immune from liability to

a person for damages incident to:

(1) the board's investigation of the person; or

(2) any complaint, charge, or proceeding that results from the

investigation.

the board, and volunteer member of a constructive enforcement

committee of the board harmless from any cost, damage, or

attorney's fees arising from a claim or suit against that person

for an action taken by the person in good faith in the discharge

of the board's responsibilities.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 10, eff. Sept. 1,

2001.

Sec. 901.163. STATISTICAL ANALYSIS OF COMPLAINTS. (a) The

board shall develop and maintain a system for tracking a

complaint filed with the board against a person who holds a

license or firm license.

(b) At the time the board files an annual report under Section

901.164, the board shall also report a statistical analysis of

the disciplinary actions taken by the board during the preceding

year. The report must contain a statistical analysis of:

(1) the number of complaints received;

(2) the number of complaints resolved and the manner in which

they were resolved;

(3) a categorization of complaints received and the number of

complaints in each category;

(4) the average length of time required to resolve a complaint

for each category of complaints; and

(5) other information the board determines necessary.

during a reporting period, the board shall report that a

complaint was not received in that category.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 11, eff. Sept. 1,

2001.

Sec. 901.164. ANNUAL FISCAL REPORT. (a) The board shall file

annually with the governor and the presiding officer of each

house of the legislature a complete and detailed report

accounting for all funds received and disbursed by the board

during the preceding calendar year.

(b) The report must be in the form and reported in the time

provided by the General Appropriations Act.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.165. RULES FOR ATTEST SERVICES. (a) The board by rule

shall specify those services that constitute attest services.

(b) Attest services are required to be performed in accordance

with professional standards. The board may adopt by reference the

standards developed for general application by the American

Institute of Certified Public Accountants or another nationally

recognized accountancy organization.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 12, eff. Sept. 1,

2001.

Sec. 901.166. AUTHORITY TO ISSUE SUBPOENA, ADMINISTER OATH, AND

RECEIVE EVIDENCE. (a) The board may issue a subpoena to compel

the attendance of a relevant witness or the production, for

inspection and copying, of relevant documents, records, and other

evidence, maintained by electronic or other means, that is in

this state.

(b) The board may administer oaths and take testimony and other

evidence regarding any matter under the board's jurisdiction.

acting through the attorney general, may file suit to enforce the

subpoena in a district court in Travis County or in a county in

which a hearing conducted by the board may be held.

(d) On finding that good cause exists for issuing the subpoena,

the court shall order the person to comply with the subpoena. The

court may punish a person who fails to obey the court order.

(e) The board shall pay a reasonable fee for photocopies

subpoenaed under this section in an amount not to exceed the

amount the board may charge for copies of its own records.

(f) The reimbursement of the expenses of a witness whose

attendance is compelled under this section is governed by Section

2001.103, Government Code.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 12, eff. Sept. 1,

2003.

Sec. 901.167. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE

RESOLUTION POLICY. (a) The board shall develop and implement a

policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008,

Government Code, for the adoption of board rules; and

(2) appropriate alternative dispute resolution procedures under

Chapter 2009, Government Code, to assist in the resolution of

internal and external disputes under the board's jurisdiction.

(b) The board's procedures relating to alternative dispute

resolution must conform, to the extent possible, to any model

guidelines issued by the State Office of Administrative Hearings

for the use of alternative dispute resolution by state agencies.

(1) coordinate the implementation of the policy adopted under

Subsection (a);

(2) serve as a resource for any training necessary for

implementation of the negotiated rulemaking or alternative

dispute resolution procedures; and

(3) collect data on the effectiveness of the procedures

implemented by the board.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 13, eff. Sept. 1,

2003.

Sec. 901.168. TECHNOLOGY POLICY. The board shall develop and

implement a policy requiring the executive director and board

employees to research and propose appropriate technological

solutions to improve the board's ability to perform its

functions. The technological solutions must:

(1) ensure that the public is able to easily find information

about the board on the Internet;

(2) ensure that persons who want to use the board's services are

able to:

(A) interact with the board through the Internet; and

(B) access any service that can be provided effectively through

the Internet; and

(3) be cost-effective and developed through the board's planning

processes.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 14, eff. Sept. 1,

2003.

SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND COMPLAINT

PROCEDURES

Sec. 901.201. PUBLIC INTEREST INFORMATION. (a) The board shall

prepare information of public interest describing the functions

of the board and the procedures by which complaints are filed

with and resolved by the board.

(b) The board shall make the information available to the public

and appropriate state agencies.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.202. COMPLAINTS. The board by rule shall establish

methods by which consumers and service recipients are notified of

the name, mailing address, and telephone number of the board for

the purpose of directing a complaint to the board. The board may

require that notice:

(1) on each registration form, application, or written contract

for services of a person regulated under this chapter; or

(2) in a bill for service provided by a person regulated under

this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.203. COMPLAINT INFORMATION. (a) The board shall

maintain a file on each written complaint filed with the board.

The file must include:

(1) the name of the person who filed the complaint;

(2) the date the complaint is received by the board;

(3) the subject matter of the complaint;

(4) the name of each person contacted in relation to the

complaint;

(5) a summary of the results of the review or investigation of

the complaint; and

(6) an explanation of the reason the file was closed, if the

board closed the file without taking action other than to

investigate the complaint.

(b) The board shall provide to the person filing the complaint

and to each person who is a subject of the complaint a copy of

the board's policies and procedures relating to complaint

investigation and resolution.

complaint, shall notify the person filing the complaint and each

person who is a subject of the complaint of the status of the

investigation unless the notice would jeopardize an undercover

investigation.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 15, eff. Sept. 1,

2003.

Sec. 901.204. PUBLIC PARTICIPATION. (a) The board shall

develop and implement policies that provide the public with a

reasonable opportunity to appear before the board and to speak on

any issue under the board's jurisdiction.

(b) The board shall prepare and maintain a written plan that

describes how a person who does not speak English or who has a

physical, mental, or developmental disability may be provided

reasonable access to the board's programs.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER F. CERTIFICATE REQUIREMENTS

Sec. 901.251. CERTIFICATE REQUIRED. (a) A person who is an

individual may not engage in the practice of public accountancy

unless the person holds a certificate issued under this chapter

or practices in this state under a privilege under Section

901.462.

(b) The board shall issue a certificate to a person who meets

the applicable requirements of this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 2, eff. September 1, 2007.

Sec. 901.252. ELIGIBILITY REQUIREMENTS. To be eligible to

receive a certificate, a person must:

(1) be of good moral character as determined under Section

901.253;

(2) meet the education requirements established under Section

901.254 or 901.255;

(3) pass the uniform CPA examination;

(4) meet the work experience requirements established under

Section 901.256; and

(5) pass an examination on the rules of professional conduct as

determined by board rule.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.253. CHARACTER INVESTIGATION. (a) The board shall

ensure that an applicant to take the uniform CPA examination or

to receive a certificate is of good moral character as

demonstrated by a lack of history of dishonest or felonious acts.

(b) The board by rule may adopt a system to investigate an

applicant's background.

maintained by a law enforcement agency, including the Department

of Public Safety and the Federal Bureau of Investigation

identification division, to investigate the qualifications of an

individual who applies to take the uniform CPA examination or to

be certified or issued a firm license under this chapter.

(d) The board may require the applicant to submit a complete set

of fingerprints. If an applicant does not provide a complete set

of fingerprints on request of the board, the board may:

(1) deny the applicant's application to take the uniform CPA

examination; or

(2) refuse to issue a certificate to the applicant.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 13, eff. Sept. 1,

2001.

Sec. 901.254. EDUCATION REQUIREMENTS. To be eligible to take

the uniform CPA examination, an applicant must:

(1) hold a baccalaureate or graduate degree, or its equivalent

as determined by board rule, conferred by a board-recognized

institution of higher education; and

(2) complete at least 150 semester hours or quarter-hour

equivalents in board-recognized courses, including an accounting

concentration or equivalent courses as determined by board rule.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 14, eff. Sept. 1,

2001.

Sec. 901.255. SPECIAL EDUCATION REQUIREMENTS FOR PART-TIME

STUDENT. (a) This section applies only to an applicant to take

the uniform CPA examination who:

(1) was enrolled in an accounting program on September 1, 1994;

(2) notified the board not later than September 1, 1997, of the

applicant's intent to take the examination;

(3) is enrolled in fewer than 12 semester hours in each semester

that the applicant attends a college or university; and

(4) completes the accounting program not later than September 1,

2002.

(b) To be eligible to take the uniform CPA examination, an

applicant subject to this section must:

(1) hold a baccalaureate or graduate degree, or its equivalent

as determined by board rule, conferred by a board-recognized

institution of higher education; and

(2) complete at least:

(A) 30 semester hours or quarter-hour equivalents in

board-recognized accounting courses, as defined by board rule;

and

(B) 20 semester hours or quarter-hour equivalents in

board-recognized accounting-related courses in other areas of

business administration.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.256. WORK EXPERIENCE REQUIREMENTS. (a) To be eligible

to receive a certificate, a person must complete:

(1) at least two years of work experience under the supervision

of a certified public accountant; or

(2) at least one year of work experience acceptable to the

board, including experience providing a service or advice

involving accounting, attest services, management or financial

advisory or consulting services, tax services, or other services

the board considers appropriate for an accountant, if the person:

(A) has completed at least 150 semester hours of college

credits; or

(B) holds a graduate degree.

(b) The board by rule shall define the work experience that is

acceptable for purposes of this section.

The board may not consider a petition from another entity in

resolving a dispute under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 15, eff. Sept. 1,

2001.

Sec. 901.257. OATH AND CERTIFICATE FEE. Before the board issues

a certificate to a person, the person must:

(1) take an oath, administered by a board member or by another

person authorized to administer oaths, to support:

(A) the constitution and laws of this state and the United

States; and

(B) the board's rules; and

(2) pay a fee for the certificate in an amount set by board rule

not to exceed $50.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.258. TRANSFER OF COMPLETE EXAMINATION CREDIT BETWEEN

STATES. (a) The board may accept the completion of the uniform

CPA examination given by the licensing authority of another state

if:

(1) the examination was prepared and graded by the American

Institute of Certified Public Accountants or, if doing so would

result in a greater degree of reciprocity with the examination

results of other states, the National Association of State Boards

of Accountancy; and

(2) the applicant met the requirements in effect in this state

at the time the credit was earned.

(b) The board may transfer to the licensing authority of another

state active credits earned as a result of completing the uniform

CPA examination in this state.

(1) a fee in an amount not to exceed $100 to receive credits

from another licensing authority; and

(2) a fee in an amount not to exceed $50 to transfer credits to

another licensing authority.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.259. CERTIFICATION BASED ON RECIPROCITY. (a) The

board shall issue a certificate to a person who holds a

certificate or license issued by another state if the person:

(1) satisfies at least one of the following:

(A) holds a certificate or license as a certified public

accountant from a state that the National Association of State

Boards of Accountancy's National Qualification Appraisal Service

has verified as having education, examination, and experience

requirements for certification or licensure that are comparable

to or exceed the requirements for licensure as a certified public

accountant of The American Institute of Certified Public

Accountants/National Association of State Boards of Accountancy

Uniform Accountancy Act and the board determines that the

licensure requirements of that Act are comparable to or exceed

the licensure requirements of this chapter;

(B) obtains from the National Association of State Boards of

Accountancy's National Qualification Appraisal Service

verification that the individual's education, examination, and

experience qualifications are comparable to or exceed the

requirements for licensure as a certified public accountant of

The American Institute of Certified Public Accountants/National

Association of State Boards of Accountancy Uniform Accountancy

Act and the board determines that the licensure requirements of

that Act are comparable to or exceed the licensure requirements

of this chapter;

state other than the requirement providing the grades necessary

to pass the uniform CPA examination;

(D) met the requirements in effect for issuance of a

certificate in this state on the date the person was issued a

certificate by the other state; or

(E) has completed at least four years of experience practicing

public accountancy, if the experience:

(i) occurred after the person passed the uniform CPA examination

and within the 10 years preceding the date of application; and

(ii) satisfies requirements established by board rule; and

(2) has met the continuing professional education requirements

that apply to a license holder under this chapter for the

three-year period preceding the date of application.

(b) The board shall issue a certificate by reciprocity to the

extent required by a United States treaty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 16, eff. Sept. 1,

2001.

Sec. 901.260. CERTIFICATE BASED ON FOREIGN CREDENTIALS. (a)

The board may issue a certificate to an applicant who holds a

substantially equivalent foreign credential if:

(1) the foreign jurisdiction that granted the credential has an

analogous provision allowing a person who holds a certificate

issued by this state to obtain that foreign jurisdiction's

comparable credential;

(2) the foreign credential:

(A) entitles the holder to issue reports on financial

statements;

(B) was issued by a foreign jurisdiction that regulates the

practice of public accountancy on the basis of education,

examination, and experience requirements established by the

jurisdiction; and

probated; and

(3) the applicant:

(A) received the credential based on education and examination

requirements that are comparable to or exceed those in effect in

this state on the date that the foreign credential was granted;

(B) satisfied one of the following:

(i) completed an experience requirement in the jurisdiction that

granted the foreign credential that is comparable to or exceeds

the experience requirements established under this chapter;

(ii) completed at least four years of professional accounting

experience in this state; or

(iii) within the 10 years preceding the date of the application,

has met equivalent requirements prescribed by board rule;

board covering national standards; and

(D) passed an examination acceptable to the board covering the

laws, rules, and code of ethical conduct in effect in this state.

(b) An applicant for a certificate under Subsection (a) must

list in the application each jurisdiction, foreign and domestic,

in which the applicant has applied for or holds a credential to

practice public accountancy. Each holder of a certificate issued

under Subsection (a) shall notify the board in writing of the

issuance, denial, revocation, suspension, limitation, or

probation of a credential or the commencement of a disciplinary

or enforcement action by any jurisdiction not later than the 30th

day after the effective date of that action.

substantially equivalent to a certificate issued under this

chapter is not subject to judicial review.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 17, eff. Sept. 1,

2001.

SUBCHAPTER G. UNIFORM CPA EXAMINATION

Sec. 901.301. ADMINISTRATION; BOARD RULES. (a) The board shall

conduct or contract with another person to conduct uniform CPA

examinations administered under this chapter.

(b) The board by rule may establish the:

(1) manner in which a person may apply for the examination;

(2) time, date, and place for the examination;

(3) manner in which the examination is conducted; and

(4) manner in which a person's examination score is reported to

the person.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 1, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 18, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14.006(a), eff. Sept.

1, 2003.

Sec. 901.302. APPLICATION OF INTENT. (a) The board may

establish an application of intent for a person pursuing a

certificate.

(b) The board shall maintain an application of intent filed

under this section as an active application until the second

anniversary of the date the application is filed.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.303. FILING FEE. The board by rule may set a filing

fee in an amount not to exceed $100 to be paid by an applicant at

the time the applicant files an initial application to take the

uniform CPA examination.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.304. EXAMINATION FEE. (a) For each examination or

reexamination, the board by rule shall apportion an amount of the

total examination fee among the parts of the examination that an

applicant is eligible to take on a particular examination date.

For each examination or reexamination, the board shall collect a

fee set by board rule not to exceed the cost of administering the

examination.

(b) Repealed by Acts 2003, 78th Leg., ch. 525, Sec. 28.

examination fee paid by an applicant who:

(1) fails to attend the examination; and

(2) presents the board with a satisfactory reason for that

failure.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 2, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 19, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 16, 28, eff. Sept. 1,

2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14.006(b), eff. Sept.

1, 2003.

Sec. 901.305. FREQUENCY OF EXAMINATION. A uniform CPA

examination shall be administered under this chapter as often as

necessary but at least once each year.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 3, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 20, eff. Sept. 1,

2001.

Sec. 901.306. CONTENT AND SECURITY OF EXAMINATION. (a) The

board may use or require the use of all or part of the uniform

CPA examination and any related service available from:

(1) the American Institute of Certified Public Accountants; or

(2) the National Association of State Boards of Accountancy.

(b) The examination must test the person's knowledge of

accounting, auditing, and any other subject the board determines

is appropriate.

not release a copy of any question or answer to any person.

(d) The board by rule may adopt a system to maintain the

security and integrity of the examination process.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 4, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 21, eff. Sept. 1,

2001.

Sec. 901.307. GRADING EXAMINATION. (a) The board by rule

shall:

(1) adopt a method for grading the examination; and

(2) establish the criteria for passing the examination.

(b) Rules adopted under this section must, to the extent

possible, be uniform with those of other states.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 5, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 22, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14.006(c), eff. Sept.

1, 2003.

Sec. 901.308. EXAMINATION RESULTS. (a) The board shall send to

each examinee the examinee's results not later than the 30th day

after the date the board receives the results.

(b) The board may withhold delivery of the examination results

if:

(1) board action is pending; and

(2) the examinee is precluded from receiving the results until

the action is resolved.

by a national testing service will be delayed for more than 120

days after the examination date, the board shall notify the

examinee of the reason for the delay before the 120th day.

(d) A person who fails a paper examination is entitled to

inspect the examination questions and the person's answers not

later than the 91st day after the date the board receives the

results. An inspection must be by appointment at the board's

offices during regular office hours. The person's grade must be

clearly shown on the examination. A copy of the examination

questions or answers may not be made.

(e) If requested in writing by a person who fails an

examination, the board shall provide to the person an analysis of

the person's performance on the examination.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 6, eff. Sept. 1,

2001.

Sec. 901.309. REEXAMINATION. A person who fails all or part of

an examination may apply for a subsequent examination, subject to

the board's satisfaction that the person meets the requirements

of this chapter relating to the person's moral character and

education.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.310. CONDITIONAL EXAMINATION CREDIT. (a) The board by

rule shall award conditional credit to a person who:

(1) passes two or more subjects in a single examination;

(2) takes each part of the examination the person is eligible to

take; and

(3) attains a minimum grade of 50 percent on each part of the

examination the person does not pass.

(b) The board shall award credit to a person who attains a

passing score on a subsequent examination if the person:

(1) takes each part of the examination the person is eligible to

take; and

(2) attains a minimum grade of 50 percent on each part of the

examination that the person does not pass.

examination if the person receives credit for each subject by

receiving conditional credit after September 1, 1989, and passing

the remaining subjects within the six consecutive examinations

following the examination for which the person receives

conditional credit.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.311. RESTRUCTURE OF EXAMINATION. If the uniform CPA

examination is restructured, the board by rule shall determine

the manner in which credit for a subject is integrated into the

new structure.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.312. TRANSFER OF PARTIAL EXAMINATION CREDIT BETWEEN

STATES. (a) The board may accept the partial completion of the

uniform CPA examination given by the licensing authority of

another state if:

(1) the examination was prepared and graded by the American

Institute of Certified Public Accountants or, if doing so would

result in a greater degree of reciprocity with the examination

results of other states, the National Association of State Boards

of Accountancy;

(2) the credit is active in the other state; and

(3) at the time the credit was earned, the applicant met the

requirements in effect in the other state and the other state's

standards are equal to or higher than the standards prescribed by

this chapter.

(b) The board may transfer to the licensing authority of another

state active credits earned as a result of partially completing

the uniform CPA examination in this state.

(1) a fee in an amount not to exceed $100 to receive credits

from another licensing authority; and

(2) a fee in an amount not to exceed $50 to transfer credits to

another licensing authority.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER H. FIRM LICENSE REQUIREMENTS

Sec. 901.351. FIRM LICENSE REQUIRED. (a) A firm may not

provide attest services or use the title "CPA's," "CPA Firm,"

"Certified Public Accountants," "Certified Public Accounting

Firm," or "Auditing Firm" or a variation of one of those titles

unless the firm holds a firm license issued under this subchapter

or practices in this state under a privilege under Section

901.461.

(a-1) A firm is required to hold a firm license under this

subchapter if the firm:

(1) establishes or maintains an office in this state; or

(2) performs for an entity with its principal office in this

state:

(A) a financial statement audit or other engagement that is to

be performed in accordance with the Statements on Auditing

Standards;

(B) an examination of prospective financial information that is

to be performed in accordance with the Statements on Standards

for Attestation Engagements; or

auditing standards of the Public Company Accounting Oversight

Board or its successor.

(b) The board shall grant or renew a firm license to practice as

a certified public accountancy firm to:

(1) a firm that applies and demonstrates the necessary

qualifications in accordance with this subchapter; or

(2) a firm originally licensed as a certified public accountancy

firm in another state that:

(A) is required to hold a firm license under Subsection (a-1);

and

(B) demonstrates the necessary qualifications in accordance with

this subchapter.

automatically revoked and may not be renewed if the firm does not

maintain a license as a certified public accountancy firm in the

other state.

(d) A firm license must be renewed annually.

(e) The board by rule shall specify:

(1) the form of the application for a firm license;

(2) the fee for an original or renewal firm license, which may

be based on the number of owners, members, partners,

shareholders, or employee license holders in this state, not to

exceed $25 for each of those persons; and

(3) the requirements for renewal of a firm license.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 23, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 3, eff. September 1, 2007.

Sec. 901.352. APPLICATION FOR FIRM LICENSE OR REGISTRATION. (a)

An applicant for a firm license or registration must provide the

board with satisfactory evidence of eligibility for a firm

license or registration.

(b) The board may examine an application and may refuse to issue

a firm license or register an applicant who does not meet the

standards imposed under this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 23, eff. Sept. 1,

2001.

Sec. 901.353. RESIDENT MANAGER. (a) An office established or

maintained in this state by a firm of certified public

accountants, a firm of public accountants, or a person described

by Section 901.355 must be under the direct supervision of a

resident manager who:

(1) is an owner, member, partner, shareholder, or employee of

the firm or person that occupies the office; and

(2) is licensed under this chapter.

(b) A resident manager may serve in that capacity in only one

office at a time except as authorized by board rule. The board by

rule may establish a registration procedure under which a person

may serve as resident manager of more than one office at a time.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 23, eff. Sept. 1,

2001.

Sec. 901.354. FIRM LICENSE INFORMATION AND ELIGIBILITY. (a) An

applicant for initial issuance or renewal of a firm license must

show that a majority of the ownership of the firm, in terms of

financial interests and voting rights, belongs to persons who

hold certificates issued under this chapter or are licensed in

another state. A firm and its owners shall comply with board

rules regardless of whether the firm includes owners who are not

license holders.

(b) A certified public accountancy firm may include individuals

as owners who are not license holders if:

(1) the firm designates to the board as responsible for the

firm's license and the supervision of the firm:

(A) a license holder who resides in this state; or

(B) if the firm is required under Section 901.351(a-1)(2) to

hold a firm license, an individual practicing under a privilege

under Section 901.462;

(2) each owner who is not a license holder and who is a resident

of this state as determined by board rule:

(A) is actively involved in the firm or an affiliated entity;

(B) is of good moral character as demonstrated by a lack of

history of dishonest or felonious acts;

college or university acceptable to the board or equivalent

education as determined by the board;

(D) maintains any professional designation held by the

individual in good standing with the appropriate organization or

regulatory body that is identified or used in an advertisement,

letterhead, business card, or other firm-related communication;

(E) has passed an examination on the rules of professional

conduct as determined by board rule;

(F) complies with the rules of professional conduct as

determined by board rule; and

(G) maintains professional continuing education applicable to

license holders as required by board rule; and

(3) the firm and the owners who are not license holders comply

with board disciplinary actions and other requirements the board

may impose by rule.

background of individual owners who are not license holders under

this chapter.

(d) The board may obtain criminal history record information

maintained by the Department of Public Safety, the Federal Bureau

of Investigation identification division, and other law

enforcement agencies to investigate the qualifications of an

individual who is not a license holder under this chapter.

(e) The board may require an individual who is not a license

holder under this chapter to submit a complete set of

fingerprints. If the individual does not provide the complete set

of fingerprints on request, the board may refuse to allow that

individual to become an owner of a certified public accountancy

firm and may cancel or refuse to issue or renew a firm license to

the firm.

(f) An applicant for issuance or renewal of a firm license under

this section must register each office of the firm in this state

and show that all attest services performed in this state and

each office in this state are under the supervision of a person

who holds a certificate issued under this chapter or by another

state.

(g) An application for a firm license under this chapter must be

made on an affidavit of the owner, an officer, or the general

partner of the firm, as applicable, stating:

(1) the name of the firm;

(2) the firm's post office address in this state if the firm has

an office in this state;

(3) the address of the firm's principal office;

(4) the address of each office of the firm in this state if the

firm has an office in this state;

(5) the name of the resident manager of each office of the firm

in this state; and

(6) the name, residence, and post office address of:

(A) each partner, member, shareholder, or other owner; and

(B) if the firm is a partnership, each shareholder of a partner

that is a professional corporation.

(h) A sole proprietorship is eligible for a firm license if the

sole proprietor and each resident manager of an office of the

sole proprietorship in this state are certified public

accountants in good standing.

(i) The board shall determine whether an applicant is eligible

for a firm license under this section. The board by rule shall

define "good standing" for purposes of this section.

(j) A certified public accountancy firm shall notify the board

not later than the 31st day after the date on which information

in the affidavit is changed, including information regarding the

admission or withdrawal of an owner or resident manager.

(k) A certified public accountancy firm that is no longer in

compliance with this section because of a change in firm

ownership or personnel that occurs after the firm receives or

renews a firm license shall report that fact to the board not

later than the 30th day after the date the firm ceases to be in

compliance and shall take corrective action to bring the firm

into compliance. Failure to bring the firm into compliance within

a reasonable time as determined by board rule is grounds for the

suspension or revocation of the firm's firm license.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 23, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 4, eff. September 1, 2007.

Sec. 901.355. REGISTRATION FOR CERTAIN FOREIGN APPLICANTS. (a)

The holder of a certificate, license, or degree authorizing the

person to practice public accountancy in a foreign country may

or degree issued by the foreign country, if the board determines

that the standards under which the applicant was certified or

otherwise authorized to practice public accountancy were at least

as high as the standards of this state at the time that authority

was granted.

(b) To register with the board under this section, the person

must pay:

(1) the fee for issuance of a license as provided by Section

901.154; and

(2) a processing fee in an amount set by the board not to exceed

$250.

registration in the manner provided for renewal of a license

under Subchapter I.

(d) A person's registration under this section is automatically

revoked and may not be renewed if the person does not maintain

the authority to practice public accountancy in the other

country. The board shall adopt rules to ensure that the person

maintains that authority.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 23, eff. Sept. 1,

2001.

SUBCHAPTER I. LICENSE REQUIREMENTS, ISSUANCE, AND RENEWAL

Sec. 901.401. LICENSE REQUIRED. (a) An individual who holds a

certificate issued under this chapter must also hold a license

issued under this chapter.

(b) Each office in this state of a certified public accountancy

firm or a firm of public accountants must hold a license issued

under this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 24, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 5, eff. September 1, 2007.

Sec. 901.402. ELIGIBILITY REQUIREMENTS; GENERAL PROHIBITION.

(a) On payment of the required fees, the board shall issue a

license to an applicant who:

(1) holds a certificate issued under this chapter; or

(2) holds a firm license issued under this chapter.

(b) The board may not issue a license to or renew the license of

a person who does not meet the licensing requirements of:

(1) this chapter; or

(2) the rules adopted under this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 25, eff. Sept. 1,

2001.

Sec. 901.403. APPLICATION FOR AND RENEWAL OF LICENSE. (a) The

board shall specify:

(1) the form of the application for a license;

(2) the term of a license; and

(3) the requirements for renewal of a license.

(b) The board by rule may adopt a system under which licenses

expire on various dates during the year. For the year in which

the license expiration date is changed, the board shall prorate

license fees on a monthly basis so that each license holder pays

only that portion of the license fee that is allocable to the

number of months during which the license is valid. On renewal of

the license on the new expiration date, the total license renewal

fee is payable.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 26, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 17, eff. Sept. 1, 2003.

Sec. 901.404. NOTICE OF LICENSE EXPIRATION. (a) Not later than

the 30th day before the expiration date of a person's license,

the board shall send written notice of the impending license

expiration to the person at the person's last known address

according to the board's records.

(b) The board shall determine the amount of the renewal fee and

shall mail notice of that amount to the person within the time

provided by Subsection (a).

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 18, eff. Sept. 1,

2003.

Sec. 901.405. PROCEDURE FOR RENEWAL. (a) A person who is

otherwise eligible to renew a license may renew an unexpired

license by paying the required renewal fee to the board before

the expiration date of the license. A person whose license has

expired may not engage in activities that require a license until

the license has been renewed.

(b) A person whose license has been expired for 90 days or less

may renew the license by paying to the board a renewal fee that

is equal to 1-1/2 times the normally required renewal fee.

days but less than one year may renew the license by paying to

the board a renewal fee that is equal to two times the normally

required renewal fee.

(d) A person whose license has been expired for at least one

year but less than two years may renew the license by paying to

the board a renewal fee that is equal to three times the normally

required renewal fee.

(e) A person whose license has been expired for two years or

more may not renew the license. The person may obtain a new

license by complying with the requirements and procedures,

including the examination requirements, for obtaining an original

license.

(f) A person who was licensed in this state, moved to another

state, and is currently licensed and has been in practice in the

other state for the two years preceding the date of application

may obtain a new license without reexamination. A person

described by this subsection whose license has been revoked under

Section 901.502(3) or (4) may obtain a new license under this

subsection. A person described by this subsection must pay to

the board a fee that is equal to two times the normally required

renewal fee for the license and is not subject to additional fees

under Section 901.408.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 19, eff. Sept. 1,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 6, eff. September 1, 2007.

Sec. 901.406. FEE INCREASE. (a) The fee for the issuance of a

certificate under this chapter and the fee for the issuance or

renewal of a license under this chapter is the amount of the fee

set by the board under Section 901.154 and a fee increase of

$200.

(b) For each fee increase collected under this section, $50

shall be deposited to the credit of the foundation school fund

and $150 shall be deposited in the general revenue fund.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.407. ADDITIONAL FEE. (a) Each license holder shall

pay to the board a biennial fee of $200 in each year that the

license holder is not required to pay a fee for the issuance or

renewal of a license. The fee provided for by this section is due

not later than the first anniversary of the date the license

holder was last required to pay a fee for the issuance or renewal

of the license.

(b) Not later than the 31st day before the date the additional

fee is due, the board shall send written notice that the fee is

due to the license holder at the license holder's last known

address according to the board's records.

$50 on a license holder who does not pay the additional fee on or

before the date the fee is due. The board by rule may impose

additional late fees.

(d) Each additional fee collected under this section shall be

deposited as provided by Section 901.406(b).

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.408. CONSEQUENCE OF FAILURE TO PAY CERTAIN FEES. (a)

A person, other than a person described by Section 901.405(f),

who fails to pay the license renewal fee or the additional fee

imposed under Section 901.407, as applicable, and any late fee

before the first anniversary of the due date of the renewal fee

or additional fee may renew the person's license only by

submitting to the board an application for renewal accompanied by

payment of:

(1) all accrued fees, including late fees; and

(2) the direct administrative costs incurred by the board in

renewing the person's license.

(b) The board by rule shall prescribe the information to be

included in an application for renewal under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 7, eff. September 1, 2007.

Sec. 901.409. FEE REDUCTION FOR RETIRED OR DISABLED PERSONS.

The board by rule may establish a reduced fee to issue or renew

the license of a person who does not engage in the practice of

public accountancy because of retirement or permanent disability.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.410. FEE EXEMPTION FOR CERTAIN LICENSE HOLDERS. The

fee increase imposed under Section 901.406 and the additional fee

imposed under Section 901.407 do not apply to a license holder

who is:

(1) an employee of the federal government, the government of

another state, or a municipal or county government of this state

and who is restricted by virtue of that employment from engaging

in the practice of public accountancy outside the scope of

employment; or

(2) an employee of a state agency that has authorized the

payment of the fee increase and additional fee for the license

holder.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1018, Sec. 1, eff. June 15, 2007.

Sec. 901.411. CONTINUING PROFESSIONAL EDUCATION. (a) A license

holder who is an individual shall participate in a program of

continuing professional education designed to maintain

professional competency. The program must comply with rules

adopted by the board.

(b) The board may recognize a continuing professional education

course only if the course directly contributes to the license

holder's professional competence.

continuing professional education by a license holder to coincide

with the person's license renewal date.

(d) The board by rule may exempt certain license holders,

including license holders who are disabled, retired, or not

associated with accounting, as defined by board rule, from all or

part of the requirements of this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 27, eff. Sept. 1,

2001.

SUBCHAPTER J. PRACTICE OF PUBLIC ACCOUNTANCY

Sec. 901.451. USE OF TITLE OR ABBREVIATION FOR "CERTIFIED PUBLIC

ACCOUNTANT." (a) A person may not assume or use the title or

designation " certified public accountant," the abbreviation

"CPA," or any other title, designation, word, letter,

abbreviation, sign, card, or device tending to indicate that the

person is a certified public accountant unless the person holds a

certificate under this chapter.

(b) A person may not provide attest services or assume or use

the title "certified public accountants," the abbreviation

"CPAs," or any other title, designation, word, letter,

abbreviation, sign, card, or device tending to indicate that the

person is a certified public accountancy firm unless:

(1) the person holds a firm license issued under this chapter or

practices in this state under a privilege under Section 901.461;

(2) ownership of the person complies with the requirements of

this chapter and rules adopted by the board; and

(3) the person complies with board rules authorizing the

practice.

the abbreviation "CPA" may not be used in connection with an

office that is required to be under the supervision of a resident

manager under Section 901. 353 unless the resident manager holds

a certificate and a license issued under this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 29, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 9, eff. September 1, 2007.

Sec. 901.452. USE OF TITLE OR ABBREVIATION FOR "PUBLIC

ACCOUNTANT." A person may not assume or use the title or

designation "public accountant" or any other title, designation,

word, letter, abbreviation, sign, card, or device tending to

indicate that the person is a public accountant, or a firm

composed of public accountants, unless:

(1) the person is certified and licensed under this chapter; and

(2) each of the person's offices in this state for the practice

of public accounting is maintained and practices under a firm

license as required under Subchapter H.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 29, eff. Sept. 1,

2001.

Sec. 901.453. USE OF OTHER TITLES OR ABBREVIATIONS. (a) Except

as provided by Subsection (b), a person may not assume or use:

(1) a title or designation likely to be confused with "certified

public accountant" or "public accountant," including "certified

accountant," "chartered accountant," "enrolled accountant,"

"licensed accountant," "registered accountant," or "accredited

accountant"; or

(2) an abbreviation likely to be confused with "CPA," including

"CA," "PA," "EA," "RA," "LA," or "AA."

(b) A person may hold the person out to the public as an

"accountant," "auditor," or any combination of those terms or

assert that the person has expertise in accounting or auditing

only if:

(1) the person holds a license issued under this chapter and

each of the person's offices in this state for the practice of

public accounting is maintained and practices under a firm

license as required under Subchapter H; or

(2) the person practices under a privilege under Section 901.461

or 901.462.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 29, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 10, eff. September 1, 2007.

Sec. 901.454. TITLE USED BY CERTAIN OUT-OF-STATE OR FOREIGN

ACCOUNTANTS. (a) A person who is an accountant of another state

may use the title under which the accountant is generally known

in the state from which the accountant received a certificate,

license, or degree if:

(1) the person holds a license issued under this chapter or

practices in this state under a privilege under Section 901.461

or 901.462; and

(2) any of the person's offices established or maintained in

this state for the practice of public accountancy are licensed

under this chapter.

(b) A person who holds a certification, degree, license, or

other credential granted in a foreign jurisdiction that entitles

the person to engage in the practice of public accountancy or its

equivalent in that jurisdiction may use in this state any title

or designation under which the person practices in the foreign

jurisdiction, followed by a translation of the title or

designation into English if it is in a different language and by

the name of that jurisdiction, if:

(1) the person's activities in this state are limited to the

provision of professional accounting services to persons who are

residents, governments, or business entities of that foreign

jurisdiction; and

(2) the person does not perform attest services or issue reports

on the financial statements of any other person in this state.

title held in the country from which the person received a

certificate, license, or degree, and shall indicate the name of

the country.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 29, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 11, eff. September 1, 2007.

Sec. 901.455. NAME REQUIREMENTS AND RESTRICTIONS. (a) The name

or designation assumed or used by a license holder must include:

(1) the individual's name, if the license holder is an

individual;

(2) the name of at least one current or former partner, if the

license holder is a partnership; or

(3) the name of at least one current or former shareholder, if

the license holder is a corporation.

(b) A license holder may not assume or use a name that is

misleading as to the legal form of the license holder's firm or

as to the persons who are partners, officers, or shareholders of

the firm. A firm licensed under this chapter may assume or use

the designation "and company" or "and associates," or any

abbreviation of those terms, only if at least two persons

licensed under this chapter are involved in the practice of the

firm.

practice public accountancy under a corporate name indicating

that it is engaged in that practice.

(d) A license holder may not use a trade name or descriptive

words indicating the character or grade of service offered,

except as authorized by board rule.

(e) A firm that practices under Section 901.461 must use the

firm name that it uses in the state in which it is licensed and

has its principal place of business.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 30, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 12, eff. September 1, 2007.

Sec. 901.456. REPORTS ON FINANCIAL STATEMENTS; USE OF NAME OR

SIGNATURE ON CERTAIN DOCUMENTS. (a) Only a license holder or a

person who practices under a privilege under Section 901.461 or

901.462 may issue a report on a financial statement of another

person or otherwise perform or offer to perform an attest

service.

(b) A person who is not a license holder and who does not

practice under a privilege under Section 901.461 or 901.462:

(1) may not use language in any statement related to the

financial affairs of a person that is conventionally used by

license holders in reports on financial statements;

(2) may prepare financial statements; and

(3) may issue nonattest transmittals or information regarding

nonattest transmittals if the transmittals or information do not

purport to be in compliance with standards for accounting and

review services adopted by the American Institute of Certified

Public Accountants or another national accountancy organization

recognized by the board.

who is not a license holder without violating Subsection (b):

"(I/We) have prepared the accompanying balance sheet of (client's

name) as of (date) and the related statements of income, retained

earnings, and cash flow changes in financial position for the

(period then ended). These financial statements, which are the

representation of management and which are presented to be used

for federal income tax purposes, (are/are not) in agreement with

the company's financial records. Management has elected to omit

substantially all informative disclosures with respect to these

financial statements. If the omitted disclosures were included in

the above financial statements, they might influence the user's

conclusion concerning the company's financial position, results

of operations, and/or changes in financial position. (I/We) do

not express any form of assurance with respect to these financial

statements."

(d) Unless a person is in compliance with this chapter, the

person may not sign on or affix to an accounting or financial

statement, or an opinion on, report on, or certificate to an

accounting or financial statement, the person's name or a trade

or assumed name used by the person in the person's profession or

business with any wording indicating that the person:

(1) is an accountant or auditor; or

(2) has expert knowledge in accounting or auditing.

(e) This section does not prohibit:

(1) a partner, officer, employee, or principal of an

organization from signing a statement or report regarding the

financial affairs of the organization with wording that

designates the position, office, or title held by the person in

the organization;

(2) any act of a public official or public employee in the

performance of the person's duties as a public official or public

employee; or

(3) the performance by a person who is not a license holder of a

service that is not an attest service and that involves the use

of bookkeeping skills, including:

(A) the preparation of tax returns;

(B) management advisory services; or

of reports.

(f) A license holder or an individual who practices under a

privilege under Section 901.462 who performs attest services must

provide those services in accordance with standards adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 31, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 13, eff. September 1, 2007.

Sec. 901.457. ACCOUNTANT-CLIENT PRIVILEGE. (a) A license

holder or a partner, member, officer, shareholder, or employee of

a license holder may not voluntarily disclose information

communicated to the license holder or a partner, member,

shareholder, or employee of the license holder by a client in

connection with services provided to the client by the license

holder or a partner, member, shareholder, or employee of the

license holder, except with the permission of the client or the

client's representative.

(b) This section does not prohibit a license holder from

disclosing information that is required to be disclosed:

(1) by the professional standards for reporting on the

examination of a financial statement;

(2) under a summons under the provisions of the Internal Revenue

Code of 1986 and its subsequent amendments, the Securities Act of

1933 (15 U.S.C. Section 77a et seq.) and its subsequent

amendments, or the Securities Exchange Act of 1934 (15 U.S.C.

Section 78a et seq.) and its subsequent amendments or under a

court order if the summons or order:

(A) is addressed to the license holder;

(B) mentions the client by name; and

(3) in an investigation or proceeding conducted by the board;

(4) in an ethical investigation conducted by a professional

organization of certified public accountants; or

(5) in the course of a peer review under Section 901.159.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 31, eff. Sept. 1,

2001.

Sec. 901.458. LOSS OF INDEPENDENCE. (a) In this section,

"direct labor cost" means:

(1) the total compensation paid to a person who performs

services; and

(2) the employer payroll expenses related to that compensation,

including workers' compensation insurance premiums, social

security contributions, costs of participating in retirement

plans, group insurance costs, and unemployment taxes.

(b) A person creates a presumption of loss of independence if

the person:

(1) holds a certificate or firm license issued under this

chapter; and

(2) performs or offers to perform an attest service for

compensation that is less than the direct labor cost reasonably

expected to be incurred in performing the service.

charitable organization as defined by board rule.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 32, eff. Sept. 1,

2001.

Sec. 901.459. APPLICABILITY OF PARTNERSHIP REQUIREMENTS TO

PARTNER. Each partner in a partnership governed by this chapter

is subject to the statutory requirements and rules that apply to

the partnership.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.460. PERFORMING ATTEST SERVICES. (a) A certificate

holder may perform attest services only in a certified public

accountancy firm.

(b) An individual who is a license holder or practices under a

privilege under Section 901.462 and who is responsible for

supervising attest services or signs or authorizes another person

to sign an accountant's reports on financial statements on behalf

of a certified public accountancy firm must meet the competency

requirements of the professional standards that apply to those

services.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 33, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 14, eff. September 1, 2007.

Sec. 901.461. PRACTICE BY CERTAIN OUT-OF-STATE FIRMS. (a) A

certified public accountancy firm that is licensed and has its

primary place of business in another state and is not required to

hold a firm license under Section 901.351(a-1) may practice in

this state without a firm license or notice to the board if the

firm's practice in this state is performed by an individual who

holds a license under this chapter or who practices under a

privilege under Section 901.462.

(b) A firm described by Subsection (a) may exercise all the

practice privileges of a firm license holder, except that the

firm:

(1) may not perform the services described by Section

901.351(a-1); and

(2) may perform the services described by Sections

901.002(a)(1)(B) and (D) for an entity with its home office in

this state only if:

(A) the firm meets the requirements of Sections 901.354(a) and

(b);

(B) the firm complies with the board's peer review program under

Section 901.159; and

license under this chapter or practices under a privilege under

Section 901.462.

condition of the privilege of practicing without a firm license:

(1) is subject to the personal and subject matter jurisdiction

and disciplinary authority of the board;

(2) must comply with this chapter and board rules; and

(3) is considered to have appointed the regulatory agency of the

state that issued the firm's license as the firm's agent on whom

process may be served in any action or proceeding by the board

against the firm.

(d) A firm practicing under a privilege under this section shall

promptly cease offering or rendering professional services in

this state if the firm's license to practice as a certified

public accountancy firm in the state in which the firm's primary

place of business is no longer valid.

Added by Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 15, eff. September 1, 2007.

Sec. 901.462. PRACTICE BY OUT-OF-STATE PRACTITIONER WITH

SUBSTANTIALLY EQUIVALENT QUALIFICATIONS. (a) An individual who

holds a certificate or license as a certified public accountant

issued by another state and whose principal place of business is

not in this state may exercise all the privileges of certificate

and license holders of this state without obtaining a certificate

or license under this chapter if:

(1) the National Association of State Boards of Accountancy's

National Qualification Appraisal Service has verified that the

other state has education, examination, and experience

requirements for certification or licensure that are comparable

to or exceed the requirements for licensure as a certified public

accountant of The American Institute of Certified Public

Accountants/National Association of State Boards of Accountancy

Uniform Accountancy Act and the board determines that the

licensure requirements of that Act are comparable to or exceed

the licensure requirements of this chapter; or

(2) the individual obtains from the National Association of

State Boards of Accountancy's National Qualification Appraisal

Service verification that the individual's education,

examination, and experience qualifications are comparable to or

exceed the requirements for licensure as a certified public

accountant of The American Institute of Certified Public

Accountants/National Association of State Boards of Accountancy

Uniform Accountancy Act and the board determines that the

licensure requirements of that Act are comparable to or exceed

the licensure requirements of this chapter.

(b) An individual who meets the requirements of Subsection

(a)(1) or (2) and who offers or renders professional services in

person or by mail, telephone, or electronic means may practice

public accountancy in this state without notice to the board.

section, as a condition of the privilege of practicing without a

certificate or license:

(1) is subject to the personal and subject matter jurisdiction

and disciplinary authority of the board;

(2) must comply with this chapter and the board's rules; and

(3) is considered to have appointed the regulatory agency of the

state that issued the individual's certificate or license as the

agent on whom process may be served in any action or proceeding

by the board against the individual.

(d) An individual who practices under a privilege under this

section shall promptly cease offering or rendering professional

services in this state if the individual's certificate or license

in the state of the individual's principal place of business is

no longer valid.

(e) An individual practicing under this section must practice

through a firm that holds a license under this chapter if, for an

entity with its principal office in this state, the individual

performs:

(1) a financial statement audit or other engagement that is to

be performed in accordance with the Statements on Auditing

Standards;

(2) an examination of prospective financial information that is

to be performed in accordance with the Statements on Standards

for Attestation Engagements; or

(3) an engagement that is to be performed in accordance with

auditing standards of the Public Company Accounting Oversight

Board or its successor.

Added by Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 15, eff. September 1, 2007.

SUBCHAPTER K. PROHIBITED PRACTICES AND DISCIPLINARY PROCEDURES

Sec. 901.501. DISCIPLINARY POWERS OF BOARD. (a) On a

determination that a ground for discipline exists under Section

901.502, after notice and hearing as provided by Section 901.509,

the board may:

(1) revoke a certificate, firm license, or practice privilege

issued under this chapter;

(2) suspend under any terms a certificate, firm license,

practice privilege, or license issued under this chapter for a

period not to exceed five years;

(3) refuse to renew a license;

(4) place a license holder on probation;

(5) reprimand a license holder;

(6) limit the scope of a license holder's practice;

(7) require a license holder to complete a peer review program

conducted in the manner prescribed by the board;

(8) require a license holder to complete a continuing education

program specified by the board;

(9) impose on a license holder the direct administrative costs

incurred by the board in taking action under Subdivisions (1)

through (8);

(10) require a license holder to pay restitution as provided by

Section 901.6015;

(11) impose an administrative penalty under Subchapter L; or

(12) impose any combination of the sanctions provided by this

subsection.

(b) If a person's license suspension is probated, the board may

require the person to:

(1) report regularly to the board on matters that are the basis

of the probation;

(2) limit practice to the areas prescribed by the board; or

(3) continue or renew professional education until the license

holder attains a degree of skill satisfactory to the board in

those areas that are the basis of the probation.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 34, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 20, eff. Sept. 1, 2003.

Sec. 901.502. GROUNDS FOR DISCIPLINARY ACTION. The board may

discipline a person under Section 901.501 for:

(1) fraud or deceit in obtaining a certificate, firm license, or

license under this chapter;

(2) fraud, dishonesty, or gross negligence in the performance of

services as a license holder, including:

(A) knowingly participating in the preparation of a false or

misleading financial statement or tax return; or

(B) failing to file the license holder's own income tax return;

(3) the failure of a person who is certified or required to hold

a firm license under this chapter to obtain a license not later

than the third anniversary of the date on which the person was

certified or required to obtain a firm license;

(4) the failure of a person who is licensed under this chapter

to renew the license not later than the third anniversary of the

date on which the person most recently obtained or renewed the

license;

(5) a violation of Subchapter J;

(6) a violation of a rule of professional conduct adopted by the

board;

(7) a revocation or suspension of the certificate or firm

license or a revocation, suspension, or refusal to renew the

license of the person's partner, member, or shareholder;

(8) a revocation, cancellation, placement on probation,

limitation on the scope of practice, or suspension by another

state, or a refusal of renewal by another state, of the authority

issued by that state to the person, or to the person's partner,

member, or shareholder, to engage in the practice of public

accountancy for a reason other than the failure to pay the

appropriate authorization fee;

(9) a revocation or suspension of, or a voluntary consent decree

concerning, the right of the person, or of the person's partner,

member, or shareholder, to practice before a state or federal

agency for a reason the board determines warrants its action;

(10) a final conviction of or the imposition of deferred

adjudication for an offense under the laws of any state or the

United States that:

(A) is a felony; or

(B) includes fraud or dishonesty as an element of the offense;

(11) conduct indicating lack of fitness to serve the public as a

professional accountant; or

(12) a violation by a license holder or an owner of a certified

public accountancy firm who is not a license holder of:

(A) this chapter;

(B) professional standards adopted by the board; or

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 34, eff. Sept. 1,

2001.

Sec. 901.503. BOARD ACTION INVOLVING APPLICANT. (a) On a

determination that a ground for discipline exists under

Subsection (b), after notice and hearing as provided by Section

901.509, the board may:

(1) deny an individual's application to take the uniform CPA

examination;

(2) prohibit an individual from taking the uniform CPA

examination for a period not to exceed five years; or

(3) void an individual's uniform CPA examination grades.

(b) The board may discipline an individual under Subsection (a)

for:

(1) fraud or deceit on an application for the uniform CPA

examination;

(2) cheating on the uniform CPA examination;

(3) a final conviction of or the imposition of deferred

adjudication for an offense under the laws of any state or the

United States that:

(A) is a felony; or

(B) includes fraud or dishonesty as an element of the offense;

(4) conduct indicating lack of fitness to serve the public as a

professional accountant.

fee paid by a person whose application for examination is denied

under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 21, eff. Sept. 1,

2003.

Sec. 901.504. LICENSE REVOCATION BASED ON VIOLATION OF CHAPTER.

After notice and hearing as provided by Section 901.509, the

board:

(1) may revoke a license that was issued or renewed in violation

of this chapter or a rule adopted under this chapter; and

(2) shall revoke the firm license of a sole proprietorship,

partnership, corporation, limited liability company, or other

business entity that does not meet each qualification for a firm

license prescribed by this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 34, eff. Sept. 1,

2001.

Sec. 901.5045. EMERGENCY SUSPENSION. (a) On determining that a

license holder is engaged in or about to engage in an act of

fraud or a violation of this chapter and that the license

holder's continued practice constitutes an immediate threat to

the public welfare, the board may issue an order suspending the

license holder's license without notice or a hearing. The board

shall immediately serve notice of the suspension on the license

holder.

(b) The notice required by Subsection (a) must:

(1) be personally served on the license holder or be sent by

registered or certified mail, return receipt requested, to the

license holder's last known address according the board's

records;

(2) state the grounds for the suspension; and

(3) inform the license holder of the right to a hearing on the

suspension order.

section is entitled to request a hearing on the suspension not

later than the 30th day after the date of receipt of notice of

the suspension. Not later than the fifth day after the date a

hearing is requested, the board shall issue a notice of hearing

as provided by Section 901.509.

(d) The hearing shall be held not later than the fifth day after

the date notice of hearing is issued, unless the parties agree to

a later date. A hearing on a suspension order under this section

is subject to Chapter 2001, Government Code. If the hearing is

before an administrative law judge, after the hearing, the

administrative law judge shall recommend to the board whether to

uphold, vacate, or modify the suspension order.

(e) A suspension order issued under this section remains in

effect until further action is taken by the board. If the

administrative law judge's recommendation under Subsection (d) is

to vacate the order, the board shall determine whether to vacate

the order not later than the second day after the date of the

recommendation.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 22, eff. Sept. 1,

2003.

Sec. 901.505. PROCEDURE PENDING FINAL CONVICTION OF CERTAIN

OFFENSES. (a) On conviction of a person of an offense under the

laws of any state or the United States that is a felony or that

includes fraud or dishonesty as an element of the offense, after

notice and hearing as provided by Section 901.509, the board may:

(1) suspend a certificate or firm license issued under this

chapter; or

(2) suspend or refuse to renew a license issued under this

chapter.

(b) The period of the suspension or refusal to renew begins on

the date of conviction and ends on the date the conviction

becomes final or is reversed, set aside, or modified as provided

by Subsection (d).

further notice and hearing, take disciplinary action under

Section 901.501.

(d) If the conviction is reversed, set aside, or modified so

that the underlying offense is not a felony or an offense that

includes fraud or dishonesty as an element of the offense, the

board shall reinstate the certificate, firm license, or license

suspended under this section. A reinstatement under this

subsection does not limit the board's right to take other

disciplinary action authorized by this subchapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 35, eff. Sept. 1,

2001.

Sec. 901.506. VOLUNTARY SURRENDER OF CERTIFICATE OR FIRM

LICENSE. (a) Subject to board approval, a person who holds a

certificate or firm license issued under this chapter may resign

and surrender the certificate or firm license to the board at any

time and for any reason.

(b) A person who resigns and surrenders a certificate or firm

license may not apply for reinstatement of the certificate or

firm license. The person may be issued a new certificate or firm

license on completion of all requirements for the issuance of an

original certificate or firm license. The board may not issue a

certificate to an individual who previously resigned a

certificate unless:

(1) after the date of resignation, the individual completes the

examination requirement for a new certificate; or

(2) on application, the board waives the examination

requirement.

must, if applicable, disclose in the application the fact that

the person previously resigned and surrendered a certificate or

firm license during the course of a disciplinary investigation or

proceeding conducted by the board. The board shall consider that

fact in determining whether to issue a new certificate or firm

license to the person.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 36, eff. Sept. 1,

2001.

Sec. 901.507. REINSTATEMENT. On receipt of a written

application, and after notice and hearing, the board may:

(1) issue a new certificate to an individual whose certificate

was revoked;

(2) issue a new firm license to a person whose firm license was

revoked;

(3) reinstate a suspended license or modify the terms of the

suspension;

(4) approve a previously denied application to take the uniform

CPA examination; or

(5) reinstate an individual's previously voided uniform CPA

examination grades.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 36, eff. Sept. 1,

2001.

Sec. 901.508. RIGHT TO HEARING. (a) If the board proposes to

take disciplinary action against a person under this subchapter,

the person is entitled to a hearing before the board or a

hearings officer appointed by the board.

(b) The board shall establish procedures by which a decision to

take disciplinary action under this subchapter is made by or is

appealable to the board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.509. NOTICE OF HEARING. (a) The board shall provide

written notice of a hearing under this subchapter to the person

who is the subject of the proposed disciplinary action not later

than the 21st day before the date of the hearing.

(b) The notice must state:

(1) the time and place of the hearing; and

(2) the nature of each charge against the person.

certified mail to the person's last known address.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.510. LEGAL REPRESENTATION AT HEARING. The attorney

general or an attorney employed by the board shall represent the

board at each hearing under this subchapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.511. DISCIPLINARY ACTION FOR ACT COMMITTED IN ANOTHER

STATE. (a) A license holder of this state who offers to perform

or performs professional accounting services or who uses the

license holder's title as a certified public accountant in

another state or jurisdiction is subject to disciplinary action

in this state for an act committed in the other state or

jurisdiction for which the license holder would be subject to

discipline as a license holder of the other state or

jurisdiction.

(b) The board shall investigate any complaint made by the

regulatory agency of another state or jurisdiction concerning a

license holder of this state.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 37, eff. Sept. 1,

2001.

SUBCHAPTER L. ADMINISTRATIVE PENALTY

Sec. 901.551. IMPOSITION OF ADMINISTRATIVE PENALTY. The board

may impose an administrative penalty on a person regulated under

this chapter who violates this chapter or a rule or order adopted

under this chapter in a manner that constitutes a ground for

disciplinary action.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.552. AMOUNT OF PENALTY. (a) The amount of an

administrative penalty may not exceed $100,000 for each

violation.

(b) In determining the amount of the penalty, the board shall

consider:

(1) the seriousness of the violation, including:

(A) the nature, circumstances, extent, and gravity of any

prohibited act; and

(B) the hazard or potential hazard to the public;

(2) the economic damage to property caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter a future violation;

(5) efforts to correct the violation; and

(6) any other matter that justice may require.

this subchapter that prescribes ranges in the amounts of

administrative penalties to be imposed for specified types of

conduct and circumstances.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 23, eff. Sept. 1,

2003.

Sec. 901.553. REPORT AND NOTICE OF VIOLATION AND PENALTY. (a)

If, after examination of a possible violation and the facts

relating to that violation, the board determines that a violation

has occurred, the board shall issue a preliminary report stating:

(1) the facts on which the determination is based;

(2) the fact that an administrative penalty is to be imposed;

and

(3) the amount of the penalty.

(b) Not later than the 10th day after the date the report is

issued, the board shall send a copy of the report by certified

mail to the person charged with the violation, together with a

statement of the person's right to a hearing relating to the

alleged violation and the amount of the penalty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.554. PENALTY TO BE PAID OR HEARING REQUESTED. (a) Not

later than the 20th day after the date the person receives the

report, the person may:

(1) make a written request for a hearing; or

(2) pay the administrative penalty to the board.

(b) Failure to request a hearing or pay the penalty within the

time provided by this section waives the right to a hearing under

this chapter.

committed a violation and a penalty is to be imposed, the board

shall:

(1) provide written notice to the person of the board's

findings; and

(2) enter an order requiring the person to pay the penalty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.555. HEARING. (a) If the person requests a hearing,

the board shall conduct a hearing in the manner provided for a

contested case hearing under Chapter 2001, Government Code.

(b) If the board determines after a hearing that the person

committed the alleged violation, the board shall:

(1) provide written notice to the person of the findings

established by the hearing and the amount of the administrative

penalty imposed; and

(2) enter an order requiring the person to pay any penalty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.556. OPTIONS FOLLOWING DECISION: PAY OR APPEAL. (a)

Not later than the 30th day after the date the board's order

becomes final as provided by Section 2001.144, Government Code,

the person shall:

(1) pay the administrative penalty; or

(2) file a petition for judicial review contesting the fact of

the violation, the amount of the penalty, or both.

(b) Within the 30-day period, a person who acts under Subsection

(a)(2) may stay enforcement of the penalty by:

(1) paying the penalty to the board for placement in an escrow

account;

(2) giving to the board a supersedeas bond in a form approved by

the board that:

(A) is for the amount of the penalty; and

(B) is effective until judicial review of the board's order is

final; or

(3) filing with the board an affidavit of the person stating

that the person is financially unable to pay the penalty and is

financially unable to give the supersedeas bond.

section waives the right to judicial review of the board's order.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.557. COLLECTION OF PENALTY. If the person does not pay

the administrative penalty and the enforcement of the penalty is

not stayed, the board may refer the matter to the attorney

general for collection of the penalty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.558. REMITTANCE OF PENALTY AND INTEREST. (a) If after

judicial review, the administrative penalty is reduced or is not

upheld by the court, the board shall:

(1) remit the appropriate amount, plus accrued interest, to the

person if the person paid the penalty; or

(2) execute a release of the bond if the person posted a

supersedeas bond.

(b) The interest paid under Subsection (a) is paid at the rate

charged on loans to depository institutions by the New York

Federal Reserve Bank. The interest shall be paid for the period

beginning on the date the penalty is paid and ending on the date

the penalty is remitted.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER M. OTHER PENALTIES AND ENFORCEMENT PROVISIONS

Sec. 901.601. CEASE AND DESIST ORDER. (a) If it appears to the

board that a person is engaging in an act or practice that

constitutes the practice of public accountancy without a license

under this chapter, the board, after notice and an opportunity

for a hearing, may issue a cease and desist order prohibiting the

person from engaging in that activity.

(b) A violation of an order under this section constitutes

grounds for imposition of an administrative penalty under

Subchapter L. Notwithstanding Section 901.552, the amount of an

administrative penalty for a violation of an order under this

section may not exceed $25,000.

this section that prescribes ranges in the amounts of

administrative penalties to be imposed for specified types of

conduct and circumstances that violate an order under this

section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 38, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 24, eff. Sept. 1, 2003.

Sec. 901.6015. RESTITUTION. (a) The board may order a license

holder to pay restitution under Section 901.501(a)(10) to a

person harmed by the license holder's:

(1) violation of this chapter; and

(2) failure to fulfill the terms of a contract with the person.

(b) The amount of restitution ordered under this section may not

exceed the actual amount paid by the person to the license holder

under the contract.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 25, eff. Sept. 1,

2003.

Sec. 901.602. CRIMINAL PENALTY. (a) A person commits an

offense if the person violates this chapter. Each violation is a

separate offense.

(b) Except as otherwise provided by this subsection, an offense

under this section is a Class B misdemeanor. An offense under

this section that involves intentional fraud is punishable as:

(1) a state jail felony if it is shown on the trial of the

offense that the violation resulted in a monetary loss of less

than $10,000 or did not result in a monetary loss;

(2) a felony of the third degree if it is shown on the trial of

the offense that the violation resulted in a monetary loss of at

least $10,000 but less than $100,000; or

(3) a felony of the second degree if it is shown on the trial of

the offense that the violation resulted in a monetary loss of at

least $100,000.

district court in:

(1) Travis County, if the complaint is filed against a person

who is licensed under this chapter or is not a resident of this

state; or

(2) the county in which the person resides, if the complaint is

filed against a person who is a resident of this state but is not

licensed under this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 39, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 26, eff. Sept. 1, 2003.

Sec. 901.603. INTERVENTION IN ACTION. Subject to approval by

the board, a license holder or a professional organization of

certified public accountants may intervene in an action by the

board or may bring an action in the name of the license holder or

professional organization to enforce any provision of this

chapter against a person who does not hold a license or firm

license.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 40, eff. Sept. 1,

2001.

Sec. 901.604. SINGLE ACT AS EVIDENCE OF PRACTICE. In an action

brought under this chapter, evidence of a single act prohibited

by this chapter is sufficient to justify a penalty, injunction,

restraining order, or conviction without evidence of a general

course of conduct.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 40, eff. Sept. 1,

2001.

Sec. 901.605. APPOINTMENT OF SECRETARY OF STATE AS AGENT. A

person who is not a resident of this state and who applies for a

certificate or firm license is considered to have appointed the

secretary of state as the applicant's agent for service of

process in any action or proceeding against the applicant arising

out of any transaction connected with or incidental to

professional accounting services performed by the applicant while

the applicant holds a certificate or firm license.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 40, eff. Sept. 1,

2001.

Sec. 901.606. IMMUNITY FROM LIABILITY. (a) A person acting in

good faith who voluntarily reports or assists in the

investigation of a report of an alleged violation of this chapter

or who testifies or otherwise participates in an administrative

or judicial proceeding arising from a report or investigation of

an alleged violation of this chapter is immune from civil or

criminal liability that might otherwise be incurred or imposed.

(b) A person who reports the person's own violation of this

chapter or who acts in bad faith or with malicious purpose in

reporting an alleged violation of this chapter is not immune from

civil or criminal liability.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 27, eff. Sept. 1,

2003.

SUBCHAPTER N. SCHOLARSHIPS FOR FIFTH-YEAR ACCOUNTING STUDENTS

Sec. 901.651. DEFINITION. In this subchapter, "fifth-year

accounting student" means a student enrolled in the additional

hours of study required by Section 901.254.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.652. PUBLIC PURPOSE. The scholarships required by this

subchapter serve a public purpose of the state as described by

Section 901.155.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.653. SCHOLARSHIPS. The board shall establish and

administer, using funds collected and appropriated for that

purpose and in accordance with this subchapter and board rules,

scholarships for fifth-year accounting students.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.654. FACTORS. (a) Scholarships shall be established

and administered in a manner that the board determines best

serves the public purpose of the scholarships.

(b) In determining what best promotes the public purpose, the

board shall consider at a minimum the following factors relating

to each person applying for a scholarship under this section:

(1) financial need;

(2) ethnic or racial minority status; and

(3) scholastic ability and performance.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.655. RULES. (a) The board shall adopt rules as

necessary for the administration of this subchapter.

(b) The board shall adopt rules relating to the establishment of

the scholarships under Section 901.653, including rules providing

eligibility criteria and the determination of the amount of each

scholarship.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.656. SCHOLARSHIP REGULATIONS. (a) The board, in

consultation with the advisory committee appointed under Section

901.657, shall determine the maximum amount of any scholarship

awarded under this subchapter. The scholarship may be spent by

the recipient on the expenses for tuition, fees, books, supplies,

and living expenses incurred by the student in connection with

the student's fifth year of an accounting program. Scholarships

shall be made available to eligible students attending:

(1) any institution of higher education; or

(2) any nonprofit independent institution approved by the Texas

Higher Education Coordinating Board under Section 61.222,

Education Code.

(b) The board may award a scholarship under this subchapter only

to an eligible student who intends to take the written

examination conducted by the board for the purpose of granting a

certificate of "certified public accountant." An applicant for a

scholarship under this subchapter shall state such an intent by

filing a form provided by the board stating an intent to take the

examination.

recipient in the form of periodic partial payments throughout the

school year. The board by rule shall determine the manner in

which these payments are made.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.657. ADVISORY COMMITTEE. (a) The board shall appoint

an eight-member advisory committee to advise the board concerning

scholarships provided under this subchapter. The advisory

committee consists of:

(1) a presiding officer named by the board;

(2) one representative named by the board;

(3) one representative named by the Texas Society of Certified

Public Accountants;

(4) a Texas representative of the American Accounting

Association named by that organization;

(5) one representative named by the National Association of

Black Accountants;

(6) one representative named by the American Association of

Hispanic Certified Public Accountants; and

(7) two representatives named by the Texas Higher Education

Coordinating Board who are the chairmen of accounting departments

at Texas colleges and universities, at least one of whom must be

a representative of a private college or university and at least

one other of whom must be a representative from a college or

university that primarily serves minority students.

(b) The costs of participation on an advisory committee of a

member representing a particular organization or agency shall be

borne by that member of the organization or agency the member

represents.

advisory committee specifically shall advise the board on:

(1) how the scholarships provided for under this subchapter

should be established and administered to best promote the public

purpose of the scholarships;

(2) the amount of money needed to adequately fund the

scholarships and the maximum amount that may be awarded in any

given year to an individual student; and

(3) any priorities among the factors identified by Section

901.654.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.658. FUNDING. The board may:

(1) use without appropriation, in accordance with Article 8930,

Revised Statutes, this subchapter, and Section 901.155, any money

from the trust fund established under Section 901.155; and

(2) accept gifts, grants, and donations of real or personal

property from any entity, subject to limitations or conditions

set by law, for the purposes of this subchapter.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.659. MINORITY AND DISADVANTAGED STUDENT INTERNSHIPS.

(a) The board shall adopt rules to encourage internships for

minority and disadvantaged students and certified public

accountant examination candidates who notify the board not later

than 90 days after the date of being accepted into an accounting

internship program.

(b) The rules adopted by the board shall include standards for

appropriate recognition of an accounting firm for its efforts in

training and hiring minority or disadvantaged students.

Transferred from Education Code, Subchapter N, Chapter 61 and

amended by Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 2, eff. September 1, 2009.

Sec. 901.660. REPORT ON ACCOUNTANT SCHOLARSHIP PROGRAM. (a)

Before January 15 of each odd-numbered year, the board shall

report to the legislature concerning the scholarship program for

fifth-year accounting students administered by the board under

this subchapter.

(b) The report expenses shall be included in the administrative

costs allocated to the board under Section 901.155. The report

must include:

(1) the number and amount of scholarships awarded in the two

calendar years preceding the year in which the report is due; and

(2) the number of minority students, by racial or ethnic

background, who have been awarded scholarships under the program

in that two-year period.

Added by Acts 1991, 72nd Leg., ch. 533, Sec. 33, eff. Sept. 1,

1991.

Redesignated from Education Code, Section 61.081 and amended by

Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 3, eff. September 1, 2009.

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2009 Texas Code OCCUPATIONS CODE TITLE 5. REGULATION OF FINANCIAL AND LEGAL SERVICES CHAPTER 901. ACCOUNTANTS

2009 Texas Code
OCCUPATIONS CODE
TITLE 5. REGULATION OF FINANCIAL AND LEGAL SERVICES
CHAPTER 901. ACCOUNTANTS