Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately regulate the practice of public accountancy in the commonwealth, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Chapter 13 of the General Laws is hereby amended by striking out section 33, as appearing in the 1984 Official Edition, and inserting in place thereof the following section:-

Section 33. (a) There shall be a board of public accountancy, in this section and in sections thirty-four and thirty-five called the board, consisting of five members, to be appointed by the governor. Each member shall be a citizen of the commonwealth. Four of the members shall hold a valid biennial permit issued under section eighty-seven B of chapter one hundred and twelve and shall have been actively engaged on his own account or as a member of a partnership in the practice of public accountancy for at least seven years, or as an officer, director, or shareholder of a professional corporation organized pursuant to chapter one hundred fifty-six A. Three of the members shall be certified public accountants holding certificates issued under section eighty-seven A of chapter one hundred and twelve, or under prior laws of the commonwealth, and the fourth member shall be a public accountant registered under the laws of the commonwealth. The fifth member shall be a representative of the public, subject to the provisions of section nine B.

Upon the expiration of the term of a member his successor, qualified as aforesaid, shall be appointed by the governor for a term of five years.

The governor shall remove from the board any accountant member whose certificate of registration or license has become void, or has been revoked or suspended.

(b) There shall be a public accountants administrative committee, hereinafter and in sections thirty-four and thirty-five called the "committee", consisting of the public accountant member of the board, who shall be a member ex officio, the representative of the public member of the board, and three members to be appointed by the board. Each appointive member of the committee shall be a citizen of the commonwealth, a public accountant registered under the laws of the commonwealth, and the holder of a valid biennial permit issued under section eighty-seven B of chapter one hundred and twelve, and shall have been actively engaged on his own account or as a member of a partnership in the practice of public accountancy for at least five years, or as an officer, director, or shareholder of a professional corporation organized pursuant to chapter one hundred and fifty-six A.

Each appointive member of the committee shall serve for a term of three years. Vacancies occurring during a term shall be filled by appointment for the unexpired term. Upon the expiration of his term of office a member shall continue to serve until his successor shall have been appointed and shall have qualified. The board shall remove from the committee any member whose registration or biennial license has become void, or has been revoked or suspended, and may, after hearing, remove any member of the committee for just cause. Before entering office, each member shall be sworn to the faithful performance of his duties.

The committee shall have the following powers and duties and shall be vested with the powers of the board with respect to such powers and duties, subject, however, to the provisions of clause (4):-

(1) to investigate complaints and to initiate and conduct investigations or hearings, with or without the filing of any complaint, and to obtain information and evidence, relating to any matter involving the conduct of public accountants, and any violation or alleged violation of any of the provisions of sections eighty-seven A to eighty-seven E, inclusive, of chapter one hundred and twelve;

(2) to pass upon the qualifications of any applicant for registration as a public accountant or as a partnership of public accountants, or as a professional corporation of public accountants organized pursuant to chapter one hundred and fifty-six A, and to register qualified applicants;

(3) to advise the board in any and all matters affecting public accountants; serve as a liaison between the board and the public accountants, keep informed on contemplated actions of the board primarily affecting public accountants, and to have access to the files of the board for the purpose of carrying out its advisory duties;

(4) to make recommendations and forward a report to the board on any matter on which the committee is authorized to act, which recommendations and report the board may accept or reject in whole or in part. The foregoing clause (4) shall not apply to clause (2).

Whenever any statute or rule or regulation of any agency of the commonwealth or any political subdivision thereof, requires that any reports, financial statements, audits, and other documents for any department, division, board, commission or agency of the commonwealth or any political subdivision thereof be prepared by certified public accountants, such requirements shall be construed to mean public accountants or certified public accountants.

SECTION 2. Subsection (a) of section 34 of said chapter 13, as so appearing, is hereby amended by inserting after the third paragraph the following paragraph:-

Meetings of the board shall be open to the public except insofar as they are concerned with investigations under the provisions of section eighty-seven A? to eighty-seven E, inclusive, of chapter one hundred and twelve and except as may be necessary to protect information which is required to be kept confidential by board rules or by the laws of the commonwealth. The board shall have a seal which shall be judicially noticed. The board shall retain or arrange for the retention of all applications and all documents under oath which are filed with the board, and records of its proceedings, and shall maintain a registry of the names and addresses of all licensees. A duplicate list shall also be open to inspection in the office of the secretary of state. In any proceedings in court, civil or criminal, arising out of or founded upon any provisions of said sections eighty-seven A? to eighty-seven E, copies of any of said records certified as true copies under the seal of the board shall be admissible in evidence as tending to prove the contents of said records.

SECTION 3. Said chapter 13 is hereby further amended by striking out section 35, as so appearing, and inserting in place thereof the following section:-

Section 35. Each member of the board shall receive fifty dollars for each day or part of a day actually spent in the performance of his duties, but in any one year not more than three thousand dollars shall be paid to any member. Each member shall be reimbursed for his actual and necessary expenses incurred in the discharge of his official duties. Each appointive member of the committee shall receive thirty dollars for each day or part of a day actually spent in the performance of his duties, but in any one year not more than two thousand dollars shall be paid to any member. Each member shall be reimbursed for his actual and necessary expenses incurred in the discharge of his official duties. The public accountant member of the board shall receive compensation as a board member whether he performs duties as a board member or as a committee member, but shall not receive more than three thousand dollars in any one year for such duties.

The board shall employ an executive secretary, who shall be a certified public accountant, and shall determine his salary. The executive secretary shall not be subject to the provisions of sections forty-five to fifty, inclusive, of chapter thirty, or to the provisions of chapter thirty-one. The board may appoint such committees or persons to advise it or assist it in such administration as it may see fit. It may seek counsel to advise and assist it as may be provided by the attorney general.

SECTION 4. Chapter 112 of the General Laws is hereby amended by striking out sections 87A to 87E, inclusive, and inserting in place thereof the following nine sections:-

Section 87A. As used in sections eighty-seven A? to eighty-seven E, inclusive, the following words shall, unless the context requires otherwise, have the following meanings:-

"Board", the board of public accountancy established under the provisions of section thirty-three of chapter thirteen.

"Certificate", a certificate issued to a certified public accountant under the provisions of section eighty-seven A? or a certificate issued to a public accountant issued under the provisions of section eighty-seven C or a corresponding certificate as a certified public accountant issued after examination under the laws of any other state.

"Committee", the public accountants administrative committee.

"Firm", a corporation or a partnership.

"Licensee", the holder of a certificate issued under the provisions of section eighty-seven B or eighty-seven B?.

"Practice of public accountancy", the performance or the offering to perform by a person or firm holding itself out to the public as a licensee, for a client or potential client, of one or more kinds of services involving the use of accounting or auditing skills, including the issuance of reports on financial statements, or of one or more kinds of management advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters.

"Quality review", a study, appraisal, or review of one or more aspects of the professional work of a person or firm in the practice of public accountancy, by a person or persons who hold licenses and who are not affiliated with the person or firm being reviewed.

"Report", when used with reference to financial statements, an opinion, report or other form of language which states or implies assurance as to the reliability of any financial statements and which also includes or is accompanied by any statement or implication that the person or firm issuing it has special knowledge or competence in accounting or auditing. Such a statement or implication of special knowledge or competency may arise from use by the issuer of the report of names or titles indicating that he or it is an accountant or auditor, or from the language of the report itself. The term "report" includes any form of language which disclaims an opinion when such form of language is conventionally understood to imply a positive assurance as to the reliability of the financial statements referred to or special competence on the part of the person or firm issuing such language; and it includes any other form of language that is conventionally understood to imply such assurance and such special knowledge or competence.

Section 87A?. The board shall have the power to sue and be sued in its official name as an agency of the commonwealth; to issue subpoenas to compel the attendance of witnesses and the production of documents; to administer oaths; to take testimony and to receive evidence concerning all matters within its jurisdiction. In case of disobedience of a subpoena, the board may invoke the aid of any court of the commonwealth in requiring the attendance and testimony of witnesses and the production of documentary evidence. The board, its members and its agents, shall be immune from personal liability for actions taken in good faith in the discharge of the board's responsibilities, and the commonwealth shall hold the board, its members and its agents, harmless from all costs, damages and attorneys' fees arising from claims and suits against them with respect to matters to which such immunity applies.

The board may adopt such rules as it deems necessary which shall include, but not be limited to:

(1) rules governing the board's meetings and the conduct of its business;

(2) rules of procedure governing the conduct of investigations and hearings by the board;

(3) rules specifying the educational and experience qualifications for the issuance of certificates under section eighty-seven A?, and the continuing professional education required for renewal of licenses under the provisions of paragraph (e) of section eighty-seven B;

(4) rules of professional conduct directed to controlling the quality and probity of the practice of public accountancy by license holders, and dealing among other things with independence, integrity and objectivity; competence and technical standards; responsibilities to the public; and responsibilities to clients;

(5) rules regarding quality reviews that may be required to be performed under provisions of this chapter.

At least sixty days prior to the proposed effective date of any rule or amendment thereto or any other provisions of sections eighty-seven A? to eighty-seven E, inclusive, the board shall publish notice of such proposed action and of a public hearing to be held, no more than thirty days prior to such effective date, in accordance with chapter thirty A.

The board shall grant the certificate of certified public accountant to any person who meets the requirements of good character, education, experience and examination, and who pays the fees established by the commissioner of administration and finance.

Good character for purposes of this section means lack of a history of dishonest or felonious acts. The board may refuse to grant a certificate on the grounds of failure to satisfy this requirement only if there is a substantial connection between the lack of good character of the applicant and the professional responsibilities of a licensee, and if the finding of the board of lack of good character is supported by clear and convincing evidence. When an applicant is found to be unqualified for a certificate because of lack of good character, the board shall furnish the applicant a statement containing the findings of the board, a complete record of the evidence upon which the determination was based, and a notice of the applicant's right of appeal.

The educational requirement for a certificate, which must be met no later than one hundred and twenty days after an applicant sits for the examination, shall be at least a bachelor's degree or its equivalent from a college or university approved by the board with an accounting concentration or its equivalent as approved by the board. No person shall be required to have an accounting concentration as a prerequisite to the granting of a certificate until July first, nineteen hundred and ninety-two.

The experience requirement for a certificate shall be:

(1) Three years of public practice, or its equivalent, as approved by the board, with a bachelor's degree.

(2) Two years of public practice, or its equivalent, as approved by the board, with a bachelor's degree supplemented by a master's degree; provided, however, that the applicant's education has included twenty-four semester hours, or the equivalent thereof, in the study of accounting.

(3) At the board's discretion:

(i) one year of requisite experience for every three full years of service in field audit work with the United States Government in Grade 7 or for field audit work of any agency of the commonwealth or a subdivision thereof equivalent to United States Government Grade 7; provided, however, that, in the opinion of the board, it is substantially equivalent to that of public accounting practice, or

(ii) one year of requisite experience for every two full years of service in field audit work with the United States Government in Grade 9 or higher or for field audit work of any agency of the commonwealth or subdivision thereof equivalent to United States Government Grade 9 or higher and; provided further, that, in the opinion of the board, it is substantially equivalent to that of public accounting practice.

(a) The examination required to be passed as a condition for the granting of a certificate shall be in writing, shall be held twice a year, and shall test the applicant's knowledge of the subjects of accounting theory, accounting practice, auditing, business law, and such other related subjects as the board may specify by rule. An applicant who is a member of the Massachusetts bar shall not be required to take the written examination in business law. But in order to be excused from this examination an applicant must present a certificate from the clerk of the supreme judicial court attesting to the fact that the applicant is a member of the bar in good standing. The time for holding such examination shall be fixed by the board and may be changed from time to time. The board shall prescribe by rule the methods of applying for and conducting the examination, including methods for grading papers and determining a passing grade entitling an applicant to a certificate; provided, however, that the board shall, to the extent possible, see to it that the grading of the examination and the passing grades are uniform with those applicable in all other states. The board may make such use of all or any part of the uniform certified public accountant examination and the advisory grading service of the American Institute of Certified Public Accountants and may contract with third parties to perform such administrative services with respect to the examination, as it deems appropriate to assist it in performing it duties hereunder.

(b) An applicant shall be required to pass all parts of the examination provided for in paragraph (a) in order to qualify for a certificate. If at a given sitting of the examination an applicant passes two or more but not all parts, with the accounting practice part of the examination being treated for this purpose as two parts, then the applicant shall be given credit for those parts that he has passed and need not sit for reexamination in those parts; provided that:-

(1) the applicant wrote all parts of the examination at that sitting;

(2) the applicant attained a minimum grade of fifty on each of the parts not passed at that sitting;

(3) the applicant passes the remaining parts of the examination within six consecutive examinations given after the one at which the first parts were passed;

(4) at each subsequent examination at which the applicant seeks to pass any additional parts, the applicant writes all parts not yet passed; and

(5) in order to receive credit for passing additional parts in any such subsequent sitting, the applicant attains such grades on parts written but not passed on such sitting as specified by the board by rule.

(c) An applicant shall be given credit for any and all parts of any examination passed in another state if such credit would have been given, under then applicable requirements, if the applicant had taken the examination in the commonwealth.

(d) The board may in particular cases waive or defer any of the requirements of paragraphs (b) and (c) regarding the circumstances in which the various parts of the examination must be passed upon a showing that, by reasons of circumstances beyond the applicant's control, he was unable to meet such requirements.

The board may charge, or provide for a third party administering the examination to charge, each applicant a fee for each part of the examination or reexamination taken by the applicant.

Section 87B. The board shall grant or renew licenses to practice public accountancy to persons who make application and demonstrate their qualifications therefor in accordance with the following paragraphs:-

(a) Licenses shall be initially issued, and renewed, for periods of two years. Each such license shall expire on the last day of June of the next year following the year of issuance of renewal. Applications for such licenses shall be made in such form, and in the case of applications for renewal between such dates, as the board shall by rule specify; and the board shall grant or deny any such application no later than ninety days after the application is filed in proper form. In any case where the applicant seeks the opportunity to show that issuance of a renewal of a license was mistakenly denied, or where the board is not able to determine whether it should be granted or denied, the board may issue to the applicant a provisional license, which shall expire ninety days after its issuance or when the board determines whether or not to issue or renew the license for which application was made, whichever shall first occur.

(b) An applicant for initial issuance of a license under this section shall show that he holds a valid certificate.

(c) If an applicant has received a license which has not been renewed for at least two renewal periods the applicant will be required to complete at least one hundred and sixty hours of qualified continuing professional education within twenty-four months prior to issue, of which at least eighty hours must be in the attest function. On the subsequent renewal of the biennial license, said applicant will be given no credit for the prior said one hundred and sixty hours.

(d) The board shall issue a license to a holder of a certificate issued by another state upon a showing that:-

(1) The applicant passed the examination required for issuance of his certificate with grades that would have been passing grades at the time in the commonwealth;

(2) The applicant

(A) meets all current requirements in the commonwealth for issuance of a certificate at the time application is made; or

(B) at the time of the issuance of the applicant's certificate in the other state, met all such requirements then applicable in the commonwealth; or

(C) had five years of experience in the practice of public accountancy or equivalent, meeting requirements prescribed by the board by rule, after passing the examination upon which his certificate was based and within the ten years immediately preceding his application; and

(3) The applicant meets the requirements of paragraphs (1) and (2) of (d),

(e) An applicant for renewal of a license under this section shall show that he has fulfilled requirements of continuing professional education since the license was last renewed, or, if never renewed, first issued, of such general kinds and in such subjects and number of hours as shall have been specified by the board by rule. The board may provide by rule that fulfillment of continuing professional education requirements of other states will be accepted in lieu of the foregoing requirements. The board may also provide by rule for pro-rated continuing professional education requirements to be met by applicants whose initial licenses were issued substantially less than two years prior to the renewal date; and it may prescribe by rule special lesser requirements to be met by applicants for license renewal whose prior license lapsed substantially prior to their applications for renewal, and as to whom it would in consequence be inequitable to require a full compliance with all requirements of continuing professional education that would otherwise have been applicable to the period of lapse.

(f) The board shall, after payment of a fee, issue an initial license or renewal.

(g) Applicants for initial issuance or renewal of license under this section shall in their applications list all states and foreign countries in which they have applied for or hold certificates, licenses or foreign licenses; and each holder of or applicant for a license under this section shall notify the board in writing, within thirty days after its occurrence, of any issuance, denial, revocation or suspension of a certificate, license, or foreign license, by another state or country.

Section 87B?. The board shall grant or renew licenses to practice public accountancy to firms that make application and demonstrate their qualifications therefor in accordance with the following paragraphs:-

(a) Licenses shall be issued initially, and renewed, for periods of two years but in any event expiring on the last day of June of the next year following issuance or renewal. Applications for licenses shall be made in such form, and in the case of applications for renewal between such dates, as the board may by rule specify; and the board shall grant or deny any such application no later than ninety days after the application is filed in proper form. In any case where the applicant seeks the opportunity to show that issuance or renewal of a license was mistakenly denied, or where the board is not able to determine whether it should be granted or denied, the board may issue to the applicant a provisional license, which shall expire ninety days after its issuance or when the board determines whether or not to issue or renew the license for which application was made, whichever shall first occur.

(b) An applicant for initial issuance or renewal of a license to practice under this section shall be required to show that each partner, officer or shareholder who regularly works in the commonwealth holds a valid individual license to practice issued under section eighty-seven B and that each other partner, officer or shareholder holds a certificate and is licensed to practice public accountancy in some other state.

(c) An applicant for initial issuance or renewal of a license to practice under this section shall be required to register each office of the firm within the commonwealth with the board, and to show that each such office is under the charge of a person holding a valid license to practice issued under section eighty-seven B.

(d) The board shall issue an initial license or renewal upon payment of a fee.

(e) Applicants for initial issuance or renewal of licenses under this section shall in their application list all states in which they have applied for or hold licenses to practice public accountancy; and each holder of or applicant for a license under this section shall notify the board in writing, within thirty days after its occurrence, of any change in the identities of partners, officers, or shareholders who work within the commonwealth, any change in the number or location of offices within the commonwealth, any change in the identity of the persons in charge of such office, and any issuance, denial, revocation or suspension of a license by any other state.

(f) A partnership engaged in the commonwealth in the practice of public accounting may register with the board as a partnership of certified public accountants; provided, however, that

(1) each partner thereof personally and regularly engaged within the commonwealth in the practice of public accounting as a member thereof is a certified public accountant registered under section eighty-seven A? and holds a valid biennial license issued under section eighty-seven B or is a professional corporation registered under paragraph (g);

(2) each active partner thereof who is a resident of the United States is a certified public accountant in good standing of one state or is a professional corporation registered under paragraph (g);

(3) each resident manager in charge of an office of the firm located within the commonwealth is a certified public accountant registered under section eighty-seven A? and holds a valid biennial license issued under section eighty-seven B or is a professional corporation registered under paragraph (g).

Application for such registration shall be made upon the affidavit of a member of such partnership who is a certified public accountant registered under section eighty-seven A? and who holds a valid biennial license issued under section eighty-seven B. The board shall in each case determine whether the applicant is eligible for registration. A partnership which is so registered and which holds a valid biennial license issued under section eighty-seven B? may use the words "certified public accountants" or the abbreviation "CPA" in connection with its partnership name. Such a partnership may also use the words "public accountants" or the abbreviation "PA" in connection with its partnership name. Notification shall be given the board, within ninety days, after the admission to or withdrawal of a partner from any partnership registered, and after the commencement or termination of any partner's personal and regular practice of public accounting in the commonwealth as a member thereof. The board shall collect a fee for the registration of such a partnership.

(g) A professional corporation engaged within the commonwealth in the practice of public accounting may register with the board as a professional corporation of certified public accountants; provided, however, that such professional corporation is organized pursuant to the provisions of chapter one hundred fifty-six A. Application for such registration shall be made upon the affidavit of an officer, director or shareholder of such professional corporation who is a certified public accountant registered under section eighty-seven A? and who holds a valid biennial license issued under section eighty-seven B. The board shall in each case determine whether the applicant is eligible for registration.

A professional corporation which is so registered and which holds a valid biennial license issued under section eighty-seven B? may use the words "certified public accountants" or the abbreviation "CPA" in connection with the professional corporate name. Notification shall be given the board within ninety days after the admission to or withdrawal of an officer, director or shareholder from any professional corporation so registered, and after the commencement or termination of any officer's, director's or shareholder's personal and regular practice of public accounting in this state as a member thereof. The board shall collect a fee for the registration of such a professional corporation.

(h) The board shall revoke the registration of a partnership or a professional corporation registered as certified public accountants under this section, or corresponding provisions of prior law or as public accountants under the laws of the commonwealth if at any time it does not have all the qualifications prescribed by the provisions of law under which it qualified for registration, and the board may revoke or suspend any such registration of a partnership or a professional corporation or may revoke, suspend or refuse to renew any biennial license issued to such partnership or professional corporation so registered for any of the causes enumerated in section eighty-seven D and for the following additional causes:-

(1) the revocation or suspension of the certificate, registration or biennial license of any partner or any officer, director, shareholder or employee thereof;

(2) the cancellation, revocation, suspension or refusal to renew the authority of the partnership or the professional corporation or any partner or officer, director, shareholder or employee thereof to practice public accounting in any other state, for any cause other than failure to pay a registration fee in such another state.

Section 87C. (a) Persons and firms who hold registrations as public accountants and licenses to practice public accountancy issued under prior law of the commonwealth shall be entitled to have their licenses to practice renewed under sections eighty-seven B and eighty-seven B?; provided, however, that they fulfill all requirements for renewal under those provisions. So long as such licensees hold valid licenses to practice under sections eighty-seven B and eighty-seven B?, they shall be entitled to engage in the practice of public accountancy to the same extent as other holders of such licenses, and in addition they shall be entitled to use the designations "public accountants" and "PA", but no other designation in connection with the practice of public accountancy.

(b) Any person who is a citizen of the United States, is domiciled in the commonwealth, has attained the age of twenty-one years, is of good moral character, and who meets the requirements of any of the following clauses shall upon application to the public accountants administrative committee be registered by said committee as a public accountant and may, if he also holds a valid biennial license issued under section eighty-seven B so style himself and may use the abbreviation PA:

(1) a person who holds himself out to the public as a public accountant and who was engaged in the commonwealth on the seventeenth day of November, nineteen hundred and sixty-three, in the practice of public accounting as his principal occupation on his own account or as a member of a partnership and who makes application to said committee on or before the thirtieth day of October, nineteen hundred and sixty-four, for registration as a public accountant;

(2) a person who, on the seventeenth day of November, nineteen hundred and sixty-three, was serving in the armed forces of the United States or of the United Nations, and who, immediately prior to entering such service held himself out to the public as a public accountant and was engaged within the commonwealth in the practice of public accounting as his principal occupation on his own account or as a member of a partnership and who made application to said committee for registration as a public accountant within twelve months from the time of his discharge from such service;

(3) a person who, on the seventeenth day of November, nineteen hundred and sixty-three, was employed as a staff accountant by a certified public accountant or by a public accountant and was regularly assigned to accounting engagements, or who at said date was serving in the armed forces of the United States or of the United Nations and was employed as aforesaid immediately prior to such service, and who filed with said committee, not later than the thirtieth day of October, nineteen hundred and sixty-four, a declaration of intent to register as a public accountant, or, if in said armed forces files such declaration within twelve months from the time of his discharge therefrom, when such person who has filed such declaration applies for registration, he shall state in his application for registration his intention to engage within six months from the filing thereof in the practice of public accounting as his principal occupation on his own account or as a member of a partnership; registration under this clause shall be revoked unless the person so registered shall within twelve months of such registration furnish evidence satisfactory to said committee that he is actually engaged in this commonwealth in the practice of public accounting as his principal occupation on his own account or as a member of a partnership.

(4) a person who, on the seventeenth day of November, nineteen hundred and sixty-three, was engaged in field audit work with the United States government in civil service Grade 7 or higher, or who, at said date, was serving in the armed forces of the United States or of the United Nations and was engaged as aforesaid immediately prior to such service, and who has had at the time he applies for registration at least two years experience in such field audit work, and who satisfies said committee that his qualifications are substantially equivalent to those of persons who may register under clause (1), (2) or (3); provided, however, that such person filed with the committee not later than the thirtieth day of October, nineteen hundred and sixty-four a declaration of intent to register as a public accountant, or if serving in the above armed forces filed such declaration of intent within twelve months from the time of his discharge therefrom; when such person who has filed such declaration applies for registration under this clause, he shall state in his application for registration his intention to engage within six months from the filing thereof in the practice of public accounting as his principal occupation on his own account or as a member of a partnership; registration under this clause shall be revoked unless the person so registered shall within twelve months of such registration furnish evidence satisfactory to said committee that he is actually engaged in this commonwealth in the practice of public accounting as his principal occupation on his own account or as a member of a partnership.

(5) a person who, on the seventeenth day of November, nineteen hundred and sixty-three, was engaged in field audit work with this commonwealth or a political subdivision of the commonwealth, or who at said date was serving in the armed forces of the United States or of the United Nations and was engaged as aforesaid immediately prior to such service, and who has had at the time he applies for registration at least two years experience in such field audit work, and who satisfies said committee that such field audit work was substantially equivalent to the field audit work required of persons who may register under clause (4), and that his qualifications are substantially equivalent to those of persons who may register under clause (1), (2) or (3); provided, however, that such person filed with said committee not later than the thirtieth day of October, nineteen hundred and sixty-four, a declaration of intent to register as a public accountant, or if serving in the above armed forces files such declaration of intent within twelve months from the time of his discharge therefrom; when such person who has filed such declaration applies for registration under this clause, he shall state in his application for registration his intention to engage within six months from the filing thereof in the practice of public accounting as his principal occupation on his own account or as a member of a partnership; registration under this clause shall be revoked unless the person so registered shall within twelve months of such registration furnish evidence satisfactory to the committee that he is actually engaged in this commonwealth in the practice of public accounting as his principal occupation on his own account or as a member of a partnership.

(6) a person who, on or before the thirtieth day of June, nineteen hundred and sixty-six, was a public accountant registered or licensed under the laws of a state of the United States which grants to public accountants registered under this section a comparable reciprocal right of registration of licensing, and at the time of his application for registration under this clause is still so registered or licensed; in the event an application for registration under this clause meets all the requirements for such registration other than the requirement of domicile in the commonwealth, said committee may, in its discretion, allow him to register temporarily, effective only until it shall notify him that his application has either been granted or rejected; in no event shall such temporary registration be in effect for more than eighteen months after the date of its allowance; no fee shall be charged for such temporary registration.

(7) a person who, at the time of his application for registration under this clause is registered or licensed under the laws of a state which grants to public accountants registered under this section a comparable reciprocal right of registration; provided, however, that the state under whose laws such application is licensed or registered had, on the seventeenth day of November, nineteen hundred and sixty-three, no provision for the licensing or registration of public accountants; and provided any registration under this clause shall be discretionary with said committee and subject to the prior approval of the board of public accountancy; in the event an applicant for registration under this clause meets all the requirements for such registration other than the requirement of domicile in the commonwealth, said committee may in its discretion, and subject to the prior approval of said board, allow him to register temporarily, effective only until said committee shall notify him that his application has either been granted or rejected; in no event shall such temporary registration be in effect for more than eighteen months after the date of its allowance; no fee shall be charged for such temporary registration.

(8) a person who on the seventeenth day of November, nineteen hundred and sixty-three, is engaged in the commonwealth in the practice of public accounting on a part-time basis and has been doing public accounting as part-time work for a period of five years next prior to said effective date, and who makes application to the committee on or before the thirtieth day of October, nineteen hundred and sixty-four for registration as a public accountant.

(c) A partnership engaged within the commonwealth in the practice of public accounting may register with the public accountants administrative committee as a partnership of public accountants; provided, however, that each partner personally and regularly engaged within the commonwealth in the practice of public accounting as a member thereof is a certified public accountant holding a license to practice under sections eighty-seven B and eighty-seven B?, or is a public accountant registered under section eighty-seven B as a public accountant and holds a valid biennial license issued under section eighty-seven B? or a professional corporation registered under the provisions of paragraph (g) of section eighty-seven B?; and provided, further, that each resident manager in charge of an office of a firm within the commonwealth is so qualified. Application for such registration shall be made upon the affidavit of a partner who meets the requirements of this paragraph.

The public accountants administrative committee shall in each case determine whether the partnership is eligible for registration. A partnership which is so registered and which holds a valid biennial license issued under section eighty-seven B? may use the words "public accountants" or the abbreviation "PA" in connection with its partnership name. Notification shall be given said committee, within ninety days, after the admission to or withdrawal of a partner from any partnership so registered, and after the commencement or termination of any partner's personal and regular practice of public accounting within the commonwealth as a member thereof.

(d) A professional corporation engaged within the commonwealth in the practice of public accounting may register with the public accountants administrative committee as a professional corporation of public accountants; provided, however, that each officer, director or shareholder personally and regularly engaged within the commonwealth in the practice of public accounting as a member thereof, is a certified public accountant registered under section eighty-seven A? or a registered public accountant under section eighty-seven C and holds a valid biennial license issued under said section eighty-seven B?. Application for such registration shall be made upon the affidavit of an officer, director or shareholder who meets the requirements of this paragraph. The committee shall collect a fee for the registration of such a partnership.

The public accountants administrative committee shall in each case determine whether the professional corporation is eligible for registration. A professional corporation which is so registered and which holds a valid biennial license issued under section eighty-seven B? may use the words "public accountants" or the abbreviation "PA" in connection with its professional corporate name. Notification shall be given said committee within ninety days, after the admission to or withdrawal of an officer, director or shareholder from any professional corporation so registered, and after the commencement or termination of any officer's, director's or shareholder's personal and regular practice of public accounting in this state as a member thereof. The committee shall collect a fee for the registration of such a professional corporation.

Section 87C?. (a) After notice and hearing, the board may revoke any certificate or license issued under sections eighty-seven A?, eighty-seven B and eighty-seven B? suspend any such certificate or license or refuse to renew any such license for a period of not more than five years, reprimand, censure or limit the scope of practice of any licensee, impose an administrative fine not exceeding one thousand dollars, or place any licensee on probation, all with or without terms, conditions and limitations, for any one or more of the following reasons:-

(1) Fraud or deceit in obtaining a certificate or license;

(2) Cancellation, revocation, suspension or refusal to renew authority to engage in the practice of public accountancy in any other state or foreign country for any cause;

(3) Failure, on the part of a holder of a license under section eighty-seven B or eighty-seven B?, to maintain compliance with the requirements for issuance or renewals of such license or to report changes to the board;

(4) Revocation or suspension of the right to practice before any state or federal agency;

(5) Dishonesty, fraud or gross negligence in the practice of public accountancy or in the filing or failure to file his own income tax returns;

(6) Violation of any of the provisions of sections eighty-seven A to eighty-seven E, inclusive, or any rules promulgated by the board;

(7) Conviction of a felony, or of any crime an element of which is dishonesty or fraud, under the laws of the United States, or the commonwealth, or of any other state, if the acts would have constituted such a crime under the laws of the commonwealth;

(8) Performance of any fraudulent act while holding a certificate or license issued under prior law dealing with registration and the conduct of public accountancy;

(9) Any conduct reflecting adversely upon the licensee's fitness to engage in the practice of public accountancy.

(b) In lieu of or in addition to any remedy specifically provided in paragraph (a) the board may require of a licensee:

(1) A quality review conducted in such fashion as the board may specify; and

(2) Satisfactory completion of such continuing professional education programs as the board may specify.

(c) In any proceeding in which a remedy provided by paragraph (a) or (b) is imposed, the board may also require the respondent licensee to pay the cost of the proceeding.

The board may, upon receipt of a complaint or other information alleging violations of section eighty-seven A? to eighty-seven E, inclusive, or of the rules of the board, conduct investigations to determine whether there is probable cause to institute proceedings against any person or firm for such violation; but an investigation under this section shall not be a prerequisite to such proceedings in the event that a determination of probable cause can be made without investigation. In aid of such investigations, the board or the chairman thereof may issue subpoenas to compel witnesses to testify and to produce evidence.

The board may designate a member, or any other person of appropriate competence, to serve as investigating officer to conduct an investigation. Upon completion of an investigation, the investigating officer shall file a report with the board. The board shall find probable cause or lack of probable cause upon the basis of the report, or shall return the report to the investigating officer for further investigation. Unless there has been a determination of probable cause, the report of the investigating officer, the complaint, if any, the testimony and documents submitted in support of the complaint or gathered in the investigation, and the fact of pendency of the investigation shall be treated as confidential information and shall not be disclosed to any person except law enforcement authorities and, to the extent deemed necessary in order to conduct the investigation, the subject of the investigation, persons whose complaints are being investigated, and witnesses questioned in the course of the investigation.

Upon a finding of probable cause, if the subject of the investigation is a licensee, the board shall direct that a complaint be issued and, if the subject of the investigation is not a licensee, the board shall take appropriate action pursuant to the provisions of section eighty-seven D?. Upon a finding of no probable cause, the board shall close the matter and shall thereafter release information related thereto only with the consent of the person or firm under investigation.

In any case where probable cause with respect to a violation by a licensee has been determined by the board, whether following an investigation, or upon receipt of a written complaint furnishing grounds for a determination of such probable cause, or upon receipt of notice of a decision by the board of accountancy of another state furnishing such grounds, the board shall issue a complaint setting forth appropriate charges and set a date for hearing before the board on such charges. The board shall, not less than thirty days prior to the date of the hearing, serve a copy of the complaint and notice of the time and place of the hearing upon the licensee, together with a copy of the board's rules governing proceedings under this section, either by personal delivery or by mailing a copy thereof by registered mail to the licensee at his last known address.

A licensee against whom a complaint has been issued under this section shall have the right, reasonably in advance of the hearing, to examine and copy the report of investigation, if any, and any documentary or testimonial evidence and summaries of anticipated evidence in the board's possession relating to the subject matter of the complaint. The board's rules governing proceedings under this section shall specify the manner in which such right may be exercised.

In a hearing under this section the respondent licensee may appear in person, or, in the case of a firm, through a partner, officer, director, or shareholder, by counsel, examine witnesses and evidence presented in support of the complaint, and present evidence and witnesses on his own behalf. The licensee shall be entitled, on application to the board, to the issuance of subpoenas to compel the attendance of witnesses and the production of documentary evidence.

The evidence supporting the complaint shall be presented by the investigating officer, by a board member designated for that purpose, or by counsel. A board member who presents the evidence, or who has conducted the investigation of the matter shall not participate in the board's decision of the matter.

In a hearing under this section the board shall be advised by counsel, who shall not be the same counsel who presents or assists in presenting the evidence supporting the complaint.

In a hearing under this section the board shall not be bound by technical rules of evidence.

In a hearing under this section a stenographic or electronic record shall be made, and filed with the board. A transcript need not be prepared unless review is sought or the board determines that there is other good cause for its preparation.

In a hearing under this section a recorded vote of a majority of all members of the board then in office, excluding members disqualified, shall be required to sustain any charge and to impose any penalty with respect thereto.

If, after service of a complaint and notice of hearing the respondent licensee fails to appear at the hearing, the board may proceed to hear evidence against the licensee and may enter such order as it deems warranted by the evidence, which order shall be final unless the licensee petitions for review; provided, however, that within thirty days from the date of any such order, upon a showing of good cause for the licensee's failure to appear and defend, the board may set aside the order and schedule a new hearing on the complaint, to be conducted in accordance with applicable subsections of this section.

Any person or firm adversely affected by any order of the board entered after a hearing may obtain review thereof by filing a written petition for review with the supreme judicial court within thirty days after the entry of said order. The procedures for review, and the scope of the review shall be as specified in chapter thirty A.

In any case where the board renders a decision imposing discipline against a licensee under this section, the board shall examine its records to determine whether the licensee holds a certificate or a license to practice public accountancy in any other state; and if so, the board shall notify the board of accountancy of such other state of its decision by mail within forty-five days of rendering the decision. The board may also furnish information relating to proceedings resulting in disciplinary action to other public authorities and to private professional organizations having a disciplinary interest in the licensee.

In any case where the board has suspended or revoked a certificate or a license or refused to renew a license, the board may, upon application in writing by the person or firm affected and for good cause shown, modify the suspension or reissue the certificate or license.

The board shall by rule specify the manner in which such applications shall be made, the times within which they shall be made, and the circumstances in which hearings will be held thereon.

Before reissuing or terminating the suspension of a certificate or license, and as a condition thereto, the board may require the applicant to show successful completion of specified continuing professional education; and the board may make the reinstatement of a certificate or permit conditional, and subject to satisfactory completion of a quality review conducted in such fashion as the board may specify.

Section 87D. (a) No person or firm not holding a valid license issued under section eighty-seven B or eighty-seven B? shall issue a report on financial statements of any other person, firm, organization or governmental unit. This prohibition does not apply to an officer, partner or employee of any firm or organization affixing his signature to any statement or report in reference to the financial affairs of such firm or organization or subsidiary or franchisee of said organization with any wording designating the position, title or office that he holds therein; nor does it apply to any act of a public official or employee in the performance of his duties as such; nor does it apply to the performance by persons other than licensees of other services involving the use of accounting skills, including the preparation of tax returns, and the preparation of financial statements without the issuance of reports thereon.

(b) The prohibition contained in paragraph (a) is applicable to issuance, by a person or firm not holding a valid license, of a report using any form of language conventionally used by licensees with respect to a review of financial statements.

(c) The prohibition contained in paragraph (a) is applicable to issuance, by a person or firm not holding a valid license, of a report using any form of language conventionally used by licensees with respect to a compilation of financial statements.

(d) No person not holding a valid certificate and a valid license shall use or assume the title or designation "certified public accountant", or the abbreviation "CPA", or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a certified public accountant.

(e) No firm shall assume or use the title or designation "certified public accountants", or the abbreviation "CPA", or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such firm is composed of certified public accountants, unless (1) the firm holds a valid license issued under section eighty-seven B? and (2) all partners, officers and shareholders of the firm hold certificates and valid licenses.

(f) No person shall assume or use the title or designation "public accountant", or the abbreviation "PA", or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such person is a public accountant unless he holds a valid license issued under section eighty-seven B.

(g) No firm not holding a valid license issued under section eighty-seven B? shall assume or use the title or designation "public accountant", or the abbreviation "PA", or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that such firm is composed of public accountants.

(h) No person or firm not holding a valid license issued under section eighty-seven B or eighty-seven B? 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 the titles "certified public accountant" or "public accountant", or use any of the abbreviations "CA", "EA", "LA", "RA", "AA", or similar abbreviation likely to be confused with the abbreviations "CPA" or "PA"; provided, however, that a holder of a certificate who does not also hold a license may use the titles pertaining to such certificate in any manner not prohibited by rules promulgated by the board.

(i) No person or firm not holding a valid license issued under section eighty-seven B or eighty-seven B? shall assume or use any title or designation that includes the words "accountant", "auditor", or "accounting", in connection with any other language, including the language of a report, which implies that such person or firm holds such a license or has special competence as an accountant or auditor; provided, however, that this subsection does not prohibit any officer, partner or employee of any firm or organization from affixing his signature to any statement or report in reference to the financial affairs of such firm or organization or subsidiary or franchisee of said organization with any wording designating the position, title or office that he holds therein; nor prohibit any act of a public official or employee in the performance of his duties as such.

(j) No person holding a certificate shall engage in the practice of public accountancy unless he also holds a valid license issued under section eighty-seven B.

(k) No person or firm holding a license under section eighty-seven B or eighty-seven B?, shall engage in the practice of public accountancy using a professional or firm name or designation which is misleading as to the legal form of the firm, or as to the persons who are partners, officers or shareholders of the firm, or as to any other matter; provided, however, that names of one or more former partners or shareholders may be included in the name of a firm or its successor.

(l) None of the foregoing provisions of this section shall have any application to a person or firm holding a certificate, designation, decree or license granted in a foreign country entitling the holder thereof to engage in the practice of public accountancy or its equivalent in such country, whose activities within the commonwealth are limited to the provision of professional services to persons or firms who are residents of or government of or business entities of the country in which he holds such entitlement, who issues no reports with respect to the financial statements of any other persons, firms or governmental units within the commonwealth, and who does not use in the commonwealth any title or designation other than the one under which he practices in such country, followed by a translation of such title or designation into the English language, if it is in a different language, and by the name of such country.

Any person or firm who knowingly violates any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction thereof shall be subject to a fine or not more than one thousand dollars or imprisonment for not more than one year, or both.

Section 87D?. Whenever, as a result of an investigation or otherwise, the board believes that any person or firm has engaged, or is about to engage, in any acts or practices which constitute or will constitute a violation of section eighty-seven D, the board may make application to the appropriate court for an order enjoining such acts or practices, and upon a showing by the board that such person or firm has engaged, or is about to engage, in any such acts or practices, an injunction, restraining order or other order as may be appropriate shall be granted by such court.

Whenever, by reason of an investigation, the board has reason to believe that any person or firm has knowingly engaged in acts or practices which constitute a violation of section eighty-seven D, the board may bring its information to the attention of the attorney general, or other appropriate law enforcement officer, who may, in his discretion, cause appropriate criminal proceedings to be brought thereon.

In any action brought pursuant to the provisions of this chapter, evidence of the commission of a single act prohibited by said provisions shall be sufficient to justify a penalty, injunction, restraining order or conviction, respectively, without evidence of a general course of conduct.

Section 87E. All statements, records, schedules, working papers, and memoranda made by a licensee or a partner, shareholder, officer, director, or employee of a licensee, incident to, or in the course of, rendering services to a client in the practice of public accountancy, except the reports submitted by the licensee to the client and except for records which are part of the client's records, shall be and remain the property of the licensee in the absence of an express agreement between the licensee and the client to the contrary. No such statement, record, schedule, working paper, or memorandum shall be sold, transferred, or bequeathed, without the consent of the client or his personal representative or assignee, to anyone other than one or more surviving partners or stockholders or new partners or stockholders of the licensee, or any combined or merged firm or successor in interest to the licensee.

A licensee shall furnish to his client or former client, upon request and reasonable notice:

(1) a copy of the licensee's working papers, to the extent that such working papers include records that would ordinarily constitute part of the client's records and are not otherwise available to the client; and

(2) any accounting or other records belonging to, or obtained from or on behalf of, the client which the licensee removed from the client's premises or received for the client's account. The licensee may make and retain copies of such documents of the client when they form the basis for work done by him.

Except by permission of the client engaging a licensee or the heirs, successors or personal representatives of such client, a licensee or any partner, officer, shareholder or employee of a licensee shall not voluntarily disclose information communicated to him by the client relating to and in connection with services rendered to the client by the licensee in the practice of public accountancy. Such information shall be deemed confidential; provided, however, that nothing herein shall be construed as prohibiting the disclosure of information required to be disclosed by the standards of the public accounting profession in reporting on the examination of financial statements, or as prohibiting disclosures in court proceedings, in investigations or proceedings conducted pursuant to the provisions of this chapter, in ethical investigations conducted by private professional organizations, or in the course of quality reviews.

SECTION 5. This act shall take effect on December thirty-first, nineteen hundred and eighty-five.