TITLE 5
Businesses and Professions
CHAPTER 5-3.1
Public Accountancy
SECTION 5-3.1-16
§ 5-3.1-16 Acts declared unlawful.
(a) Except as permitted by the board pursuant to § 5-3.1-18(b), no person
shall hold himself or herself out to the public as a certified public
accountant or assume or use the designation "certified public accountant" or
"CPA" or any other title, designation, words, letters, abbreviation, sign,
card, or device tending to indicate that the person is a certified public
accountant or CPA, unless that person has been issued a permit to practice
under § 5-3.1-7.
(b) No entity shall provide attest or compilation services or
assume or use the designation "certified public accountants" or "CPAs" or any
other title, designation, words, letters, abbreviation, sign, card, or device
tending to indicate that the practice unit is composed of certified public
accountants or CPAs, unless:
(1) The practice unit holds a permit to practice under §
5-3.1-9;
(2) Ownership of the firm is in accord with this chapter and
rules promulgated by the board.
(c) No person shall hold himself or herself out to the public
as a public accountant, or assume or use the designation "public accountant" or
"PA" or any other title, designation, words, letters, abbreviation, sign, card,
or device tending to indicate that the person is a public accountant or PA,
unless that person holds an authority as a public accountant and a permit to
practice in this state issued under § 5-3.1-7. This subsection does not
apply to those persons qualified under subsection (a) of this section to hold
themselves out to the public as certified public accountants and to use the
designation "certified public accountant" or "CPA".
(d) No entity shall provide attest or compilation services or
assume or use the designation "public accountants" or "PAs" or any other title,
designation, words, letters, abbreviation, sign, card, or device tending to
indicate that the practice unit is composed of public accountants or PAs,
unless the practice unit holds a permit to practice under § 5-3.1-9.
(e) No person or entity not holding a valid permit shall
assume or use the title or designation "certified accountant", "chartered
accountant", "enrolled accountant", "licensed accountant", "registered
accountant", "accredited accountant", or any other title or designation likely
to be confused with "certified public accountant" or "public accountant", any
of the abbreviations "CA", "RA", "LA", "AA", or similar abbreviation likely to
be confused with "CPA" or "PA"; provided, that anyone who holds a permit to
practice under § 5-3.1-7 may hold himself or herself out to the public as
an "accountant" or "auditor". The title "Enrolled Agent" or the abbreviation
"EA" may only be used by those individuals so designated by the Internal
Revenue Service. In addition, the board may at its discretion allow titles or
abbreviations to be used which do not mislead the public and for which
appropriate certification or accreditation by a national organization can be
demonstrated.
(f) No person or entity shall prepare or attempt to prepare,
or sign, affix, or associate the person's or entity's name or any trade name
used by him, her, or it in the person's or entity's business or profession or
practice unit to any attest or compilation reports unless the individual holds
a permit to practice under § 5-3.1-7 or 5-3.1-8, and unless the practice
unit holds a permit to practice under § 5-3.1-9.
(g) No person or entity not holding a permit to practice
under this chapter shall hold himself, herself, or itself out to the public as
an "accountant" or "auditor", whether or not the term is accompanied by any
other description or designation, on any sign, card, or letterhead, or in any
advertisement or directory.
(h) No person holding a permit shall assume or use a
professional or firm name or designation that is misleading about the legal
form of the firm, or the persons who are partners, officers, members, managers
or shareholders of the firm, or about any other matter; provided, however, that
names of one or more former partners, members, managers or shareholders may be
included in the name of a firm or its successor.
(i) No person or entity shall hold himself, herself, or
itself out to the public as being qualified for the practice of public
accounting unless the person or entity holds a permit to practice under this
chapter.
(j) The provisions of subsections (a), (c), and (e) of this
section do not prohibit any accountant licensed by a foreign country who holds
an annual limited permit to engage in the practice of public accounting under
§ 5-3.1-8 from using the accounting designation by which he or she is
known in his or her own country, translated into the English language, followed
by the name of the country from which his or her certificate, license, or
degree was issued, as required by § 5-3.1-8.
(k) Any person or practice unit that is found to have
violated any provision of this section by a court of competent jurisdiction is
liable to the board for reasonable attorneys' fees in connection with the
proceeding in which the finding was made.
(l)(1) A licensee, practice unit, or affiliated entity shall
not directly or indirectly for a commission, recommend or refer to a client any
product or service, or for a commission, recommend or refer any product or
service to be supplied by a client, or receive a commission, when the licensee,
practice unit, or affiliated entity also performs for that client any attest or
compilation services or reports. This prohibition applies during the period in
which the licensee or practice unit or affiliated entity is engaged to perform
any services listed above and the period covered by any historical financial
statements involved in such listed services.
(2) A licensee, practice unit, or affiliated entity who is
not prohibited by this section from performing services for or receiving a
commission, and who is paid or expects to be paid a commission, shall disclose
that fact to any person or entity to whom the licensee, practice unit, or
affiliated entity recommends or refers a product or service to which the
commission relates. The disclosure must be made in writing contemporaneously
with or prior to the referral or recommendation.
(3) Any licensee, practice unit, or affiliated entity who
accepts a referral fee for recommending or referring any service of a licensee
to any person or entity or who pays a referral fee to obtain a client shall
disclose the acceptance or payment to the client. The disclosure must be made,
in writing, contemporaneously with or prior to the referral or recommendation.
(4) For purposes of this section, an "affiliated entity" is
defined as an entity in which the licensee, and/or any member and/or employee
of the practice unit, has more than an aggregate twenty percent (20%) direct or
indirect financial interest.
(5) A licensee or practice unit in public practice who is not
prohibited by this section from performing service for or receiving a
commission shall comply with all applicable federal and state securities laws,
rules promulgated thereunder, and registration requirements.
(m)(1) A licensee, practice unit, or affiliated entity shall
not: perform for a contingent fee any professional services for, or receive
such a fee from, a client for whom the licensee or practice unit performs any
attest or compilation services or reports; or prepare an original or amended
tax return or claim for a tax refund for a contingent fee for any client.
(2) The prohibitions in subdivision ( l )(1) of this section
apply during the period in which the licensee is engaged to perform any of the
services listed above and the period covered by any historical financial
statements involved in any such listed services.
(3) Except as stated in the next sentence, a "contingent fee"
is a fee established for the performance of any service pursuant to an
arrangement in which no fee will be charged unless a specified finding or
result is attained, or in which the amount of the fee is otherwise dependent
upon the finding or result of such service. Solely for purposes of this
section, fees are not regarded as being contingent if fixed by courts or other
public authorities, or, in tax matters, if determined based on the results of
judicial proceedings or the findings of governmental agencies. A licensee's
fees may vary depending, for example, on the complexity of services rendered.
(4) For purposes of this section, an "affiliated entity" is
defined as any entity in which the licensee, or any member or employee of the
practice unit, has more than an aggregate twenty percent (20%) direct or
indirect financial interest.
(5) Any licensee who receives a contingent fee pursuant to
this section shall comply with all applicable federal and state securities
laws, rules promulgated thereunder, and registration requirements.
History of Section.
(P.L. 1995, ch. 159, § 2; P.L. 2001, ch. 87, § 1; P.L. 2001, ch. 336,
§ 1; P.L. 2009, ch. 310, § 23.)