§ 5-3.1-16 - Acts declared unlawful.
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 personshall hold himself or herself out to the public as a certified publicaccountant 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 publicaccountant or CPA, unless that person has been issued a permit to practiceunder § 5-3.1-7.
(b) No entity shall provide attest or compilation services orassume or use the designation "certified public accountants" or "CPAs" or anyother title, designation, words, letters, abbreviation, sign, card, or devicetending to indicate that the practice unit is composed of certified publicaccountants 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 andrules promulgated by the board.
(c) No person shall hold himself or herself out to the publicas 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 topractice in this state issued under § 5-3.1-7. This subsection does notapply to those persons qualified under subsection (a) of this section to holdthemselves out to the public as certified public accountants and to use thedesignation "certified public accountant" or "CPA".
(d) No entity shall provide attest or compilation services orassume or use the designation "public accountants" or "PAs" or any other title,designation, words, letters, abbreviation, sign, card, or device tending toindicate 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 shallassume or use the title or designation "certified accountant", "charteredaccountant", "enrolled accountant", "licensed accountant", "registeredaccountant", "accredited accountant", or any other title or designation likelyto be confused with "certified public accountant" or "public accountant", anyof the abbreviations "CA", "RA", "LA", "AA", or similar abbreviation likely tobe confused with "CPA" or "PA"; provided, that anyone who holds a permit topractice under § 5-3.1-7 may hold himself or herself out to the public asan "accountant" or "auditor". The title "Enrolled Agent" or the abbreviation"EA" may only be used by those individuals so designated by the InternalRevenue Service. In addition, the board may at its discretion allow titles orabbreviations to be used which do not mislead the public and for whichappropriate certification or accreditation by a national organization can bedemonstrated.
(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 nameused by him, her, or it in the person's or entity's business or profession orpractice unit to any attest or compilation reports unless the individual holdsa permit to practice under § 5-3.1-7 or 5-3.1-8, and unless the practiceunit holds a permit to practice under § 5-3.1-9.
(g) No person or entity not holding a permit to practiceunder this chapter shall hold himself, herself, or itself out to the public asan "accountant" or "auditor", whether or not the term is accompanied by anyother description or designation, on any sign, card, or letterhead, or in anyadvertisement or directory.
(h) No person holding a permit shall assume or use aprofessional or firm name or designation that is misleading about the legalform of the firm, or the persons who are partners, officers, members, managersor shareholders of the firm, or about any other matter; provided, however, thatnames of one or more former partners, members, managers or shareholders may beincluded in the name of a firm or its successor.
(i) No person or entity shall hold himself, herself, oritself out to the public as being qualified for the practice of publicaccounting unless the person or entity holds a permit to practice under thischapter.
(j) The provisions of subsections (a), (c), and (e) of thissection do not prohibit any accountant licensed by a foreign country who holdsan 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 isknown in his or her own country, translated into the English language, followedby the name of the country from which his or her certificate, license, ordegree was issued, as required by § 5-3.1-8.
(k) Any person or practice unit that is found to haveviolated any provision of this section by a court of competent jurisdiction isliable to the board for reasonable attorneys' fees in connection with theproceeding in which the finding was made.
(l) A licensee, practice unit, or affiliated entity shall notdirectly or indirectly for a commission, recommend or refer to a client anyproduct or service, or for a commission, recommend or refer any product orservice 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 orcompilation services or reports. This prohibition applies during the period inwhich the licensee or practice unit or affiliated entity is engaged to performany services listed above and the period covered by any historical financialstatements involved in such listed services.
(2) A licensee, practice unit, or affiliated entity who isnot prohibited by this section from performing services for or receiving acommission, and who is paid or expects to be paid a commission, shall disclosethat fact to any person or entity to whom the licensee, practice unit, oraffiliated entity recommends or refers a product or service to which thecommission relates. The disclosure must be made in writing contemporaneouslywith or prior to the referral or recommendation.
(3) Any licensee, practice unit, or affiliated entity whoaccepts a referral fee for recommending or referring any service of a licenseeto any person or entity or who pays a referral fee to obtain a client shalldisclose 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" isdefined as an entity in which the licensee, and/or any member and/or employeeof the practice unit, has more than an aggregate twenty percent (20%) direct orindirect financial interest.
(5) A licensee or practice unit in public practice who is notprohibited by this section from performing service for or receiving acommission shall comply with all applicable federal and state securities laws,rules promulgated thereunder, and registration requirements.
(m) A licensee, practice unit, or affiliated entity shallnot: perform for a contingent fee any professional services for, or receivesuch a fee from, a client for whom the licensee or practice unit performs anyattest or compilation services or reports; or prepare an original or amendedtax return or claim for a tax refund for a contingent fee for any client.
(2) The prohibitions in subdivision ( l )(1) of this sectionapply during the period in which the licensee is engaged to perform any of theservices listed above and the period covered by any historical financialstatements 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 anarrangement in which no fee will be charged unless a specified finding orresult is attained, or in which the amount of the fee is otherwise dependentupon the finding or result of such service. Solely for purposes of thissection, fees are not regarded as being contingent if fixed by courts or otherpublic authorities, or, in tax matters, if determined based on the results ofjudicial proceedings or the findings of governmental agencies. A licensee'sfees may vary depending, for example, on the complexity of services rendered.
(4) For purposes of this section, an "affiliated entity" isdefined as any entity in which the licensee, or any member or employee of thepractice unit, has more than an aggregate twenty percent (20%) direct orindirect financial interest.
(5) Any licensee who receives a contingent fee pursuant tothis section shall comply with all applicable federal and state securitieslaws, rules promulgated thereunder, and registration requirements.