CHAPTER 193

AN ACT TO AMEND CHAPTER 1, TITLE 24, DELAWARE CODE, ENTITLED "ACCOUNTANT (CERTIFIED PUBLIC)" BY REPEALING SAID CHAPTER AND ENACTING A NEW CHAPTER REGULATING THE PRACTICE OF CERTIFIED PUBLIC ACCOUNTANTS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Chapter 1, Title 24, Delaware Code, is repealed and a new chapter 1 enacted in lieu thereof to read as follows:

CHAPTER I. ACCOUNTANTS (CERTIFIED PUBLIC)

§ 101. Board of Accountancy; appointment; qualifications; terms of office

The State Board of Accountancy heretofore established and hereafter in this chapter referred to as the "Board" is continued and shall consist of five members who shall be appointed by the Governor. Four members of the Board shall be certified public accountants and the fifth member a practicing attorney at law in this State. All appointments to the Board shall be for a period of three years and until their successors are appointed and qualified, and any appointment made to fill a vacancy arising during a term shall be for the unexpired portion of the three year term. The Board shall adopt by-laws governing its affairs, which shall provide for the annual election of a president and a secretary from its members, and further shall provide that at any properly called meeting, the presence of a majority of the Board shall constitute a quorum.

§ 102. Compensation of Board members

The members of the Board shall be paid not more than $10 per day, to each member of the Board, for the time actually expended, and also all necessary traveling expenses incurred in the performance of their duties under this chapter.

§ 103. Certified public accountant; who may use title

Any person who has received from the Board a certificate of his qualifications to practice as a public expert accountant, as provided in this chapter, shall be known and styled as a certified public accountant.

A partnership may register with the Board as a partnership of certified public accountants provided it meets the following requirements:

(a) At least one general partner thereof be a certified public accountant in good standing of this State.

(b) Each partner thereof personally engaged within this State in the practice of public accounting as a member thereof must be a certified public accountant in good standing of this State.

(c) Each partner thereof must be a certified public accountant in good standing of some state.

(d) Each resident manager in charge of an office of the firm in this State must be a certified public accountant in good standing of this State.

Application for such registration must be made upon the affidavit of a general partner of such partnership who is a certified public accountant in good standing of this State. The Board shall in each case determine whether the applicant is eligible for registration. The Board shall be notified, within one month, after the admission to or withdrawal of a partner from any partnerships so registered.

No other person, partnership or firm and no corporation shall assume such title, or the title of certified accountant, or chartered accountant, or the abbreviations C.P.A. or C.A., or any other words, letters, or abbreviations tending to indicate that the person, firm or corporation so using the same is a certified public accountant,

§ 104. Certificate, requirements for obtaining

(a) The certificate of certified public accountant shall be granted by the Board to any person who:

(1) is a citizen of the United States; and

(2) has attained the age of twenty-one years; and

(3) is of good moral character; and

(4) is a graduate of a high school course or an equivalent course in any other school or institution of learning; and

(5) is and has been a resident of the State for at least twelve consecutive months preceding the date of his application for examination; or for twelve consecutive months preceding the date of such application has maintained an office in the State from which he regularly and continuously engaged in the practice of public accountancy either as principal or as a co-partnership, or has been in the employ of a person or copartnership having an office and engaged in the practice of public accountancy in Delaware, and personally devoted and expects to continue to devote all of his normal working time to such public accounting practice; and

(6) except as otherwise provided in Section 107 of this title, has successfully passed an examination in accounting and auditing and such related subjects as the Board shall determine to be appropriate.

(b) In the case of an application filed before January 1, 1969, the applicant must, in addition to meeting the requirements of (a) above:

(1) be a graduate of a college or other institution of learning recognized by the Board, and have satisfactorily completed not less than twenty semester credits in the study of accounting; or have not less than twenty-four months experience in the practice of public accountancy either as principal or as

a member of a co-partnership or in the employ of a person or co-partnership engaged in the practice of public accountancy.

(c) In the case of an application filed after December 31, 1968, by an applicant who has not theretofore sat for examination, such applicant must, in addition to meeting the requirements of (a) above:

(1) be a graduate of a college or university, approved by the Board at the time of graduation, with a baccalaureate degree, or what the Board determines to be substantially the equivalent thereof; have satisfactorily completed at least twenty semester credits in accounting, not necessarily as part of his undergraduate work; and have not less than twenty-four months of public accounting experience satisfactory to the Board; or

(2) be a graduate of a two-year independent business school, accredited as a Junior College of Business by the Accrediting Commission for Business Schools or a successor organization at the time of graduation, which course of study included the satisfactory completion of at least twenty semester credits in accounting, and have not fewer that forty-eight months of public accounting experience satisfactory to the Board.

(d) The Board may require an applicant to appear in person before the Board in connection with his application for a certificate as certified public accountant.

§ 105. Examinations

All examinations provided for in this chapter shall be in writing and shall be conducted by the Board. The time and place of holding examinations shall be duly advertised for not less than three consecutive days in one daily newspaper published in each of the places where the examinations are to be held and not less than thirty days prior to the date of each examination.

in one or more of the subjects indicated in Section 104 (a) (6) above may be re-examined in only the remaining subjects, with credit for the subjects previously passed. It may also provide by regulation for a reasonable waiting period for a candidate's re-examination in a subject he has failed.

The examination shall take place as often as may be necessary in the opinion of the Board, but not less frequently than once each year.

§ 106. General powers of the Board

(1) To provide for and to regulate the issuance of certificates and to issue a certificate of certified public accountant to any person, (a) who meets the general qualifications and education and experience requirements provided herein and who passes the examination required by the Board, or (b) who meets the requirements for the issuance of a certificate by reciprocity.

(2) To prescribe the subject, manner, time and place of examination for the certificate of certified public accountant. The Board may make use of all or any part of the Uniform Certified Public Accountant Examination and/or Advisory Grading Service of the American Institute of Certified Public Accountants as it deems appropriate to assist in performing its duties hereunder.

(3) To suspend for a fixed term or revoke the certificate of any certified public accountant or to censure the holder of such certificate as provided for in Section 108 of this act.

(4) To arrange for assistance in the performance of its duties, and to administer and enforce the laws of the State relating to practice by certified public accountants, and to instruct and require its agents to bring a prosecution for a violation of this act.

(5) To keep minutes and records of all its transactions and proceedings. Copies thereof duly certified by the Secretary of the Board shall be received as evidence in all courts of this State.

(6) To become a member of the Association of Certified Public Accountant Examiners, or a similar organization, and to pay such dues as said association shall establish and to send delegates to the annual meeting of the Association and to defray their expenses.

(7) To adopt, promulgate and enforce such administrative rules and regulations not inconsistent with this act, or other acts, as are necessary and proper to carry into effect the provisions of this act.

(8) To promulgate and amend rules of professional conduct appropriate to establish and maintain a high standard of integrity and dignity in the profession of public accountancy.

§ 107. Waiver of examination

The Board may waive the examination of, and issue a certificate as Certified Public Accountant to, any person possessing the qualifications set forth in Section 104 of this title who, at the time of application for said certificate:

(1) is engaged full-time in the public practice of accountancy; and

(2) is the holder of a "C.P.A." certificate under the laws of another state, provided the requirements for such certificate in the state which has granted it to the applicant are, in the opinion of the Board, equivalent to those provided in this chapter; or

(3) is the holder of a certificate, license or degree, of a foreign country constituting a recognized qualification for the practice of public accounting in such country, comparable to that of a certified public accountant of this State, which is then in full force and effect.

§ 108. Revocation, suspension, censure; notice and hearing

(a) The Board may revoke or suspend any certificate issued under this chapter, or may censure the holder of any such certificate for any one combination of the following causes:

(1) Fraud or deceit in obtaining a certificate as certified public accountant under this act.

(2) Dishonesty, fraud or gross negligence in the practice of public accounting.

(3) Violation of a rule of professional conduct promulgated by the Board under the authority granted by this act.

(4) Pleading guilty, entering a plea of nolo contendere, or being found guilty of a felony under the laws of any state or political subdivision of the United States or of the United States.

(5) Pleading guilty, entering a plea of nolo contendere, or being found guilty of any crime, an element of which is dishonesty or fraud, under the laws of any state or political subdivision of the United States or of the United States.

(6) Conduct discreditable to the public accounting profession.

(b) The Board may initiate proceedings under this section either on its own motion or on the complaint of any person. Any action under this section shall be by majority vote of all members of the Board. Written notice of the cause for such contemplated action, and the date of the hearing thereon by the Board, shall be mailed to the holder of such certificate, at least twenty days before such hearing.

(c) No certificate issued under this chapter shall be revoked until a hearing shall have been held.

(d) At all such hearings, the Attorney General of this State, or one of his assistants designated by him, shall appear and represent the Board.

(e) The Board may in its discretion publish notice of any action taken under this section.

§ 109. Reinstatement

Upon application in writing, and after hearing pursuant to notice, the Board may issue a new certificate to a certified

public accountant whose certificate has been revoked or modify the suspension of any certificate which has been suspended.

§ 110. Ownership of working papers

All statements, records, schedules, working papers and memoranda made by a certified public accountant incident to or in the course of professional service to clients by such certified public accountant, except reports submitted by a certified public accountant to a client, shall be and remain the property of such certified public accountant in the absence of an express agreement between the certified public accountant and the client to the contrary.

§ 0. Register, publication of

The Board shall have printed and published annually for public distribution a register which shall contain the names, arranged in alphabetical order, of all practitioners holding certificates to practice under this act; the names of members of the Board; and other matters as may be deemed proper by the Board. A copy of such register shall be mailed to each certificate holder.

§ 1. Fees

The fee to be paid to the Board:

(1) by an applicant for an examination or re-examination in all subjects to determine his fitness to receive a certificate as a Certified Public Accountant shall be $50;

(2) by an applicant for re-examination in less than all subjects to determine his fitness to receive a certificate as a Certified Public Accountant shall be $25 for each re-examination;

(3) by an applicant for a certificate as a Certified Public Accountant, who is a certified public accountant registered or licensed under the laws of another state or territory of the United States, or of any foreign government, shall be $50.

§ 113. Annual report and receipts

The Board shall report annually the number of certificates issued and receipts and expenses under this chapter to the Governor. All income shall be deposited to the credit of the State Treasurer as part of the General Fund of the State, in accordance with chapter 61 of Title 29.

§ 0. Violations and penalties

Whoever represents himself to the public as having a certificate provided for in this chapter, or assumes to practice as a certified public accountant without having received such certificate, or having received such certificate provided for in this chapter, thereafter loses the same by revocation or suspension and continues to practice as a certified public accountant, or uses such title or any other title mentioned in section 103 of this title, or violates any of the provisions of this chapter, shall be fined not less than $100 and not more than $500, or imprisoned for a period of not less than one month and not more than six months, or both, for each day during which he so practices or violates any of the provisions of this chapter.

Approved December 9, 1965.