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HB 1648: Replacing Inactive Certificates with License Designation for CPAs, Study notes of Accounting

A house bill report for hb 1648, which outlines the replacement of inactive certificate status for certified public accountants (cpas) with an inactive license designation. The bill also includes provisions for renewal, substantial equivalency, and license activation. The document also includes background information on the board of accountancy and the current certification and licensing process.

What you will learn

  • What is the purpose of HB 1648?
  • How does the bill affect the current certification and licensing process for CPAs?
  • What are the requirements for activating a CPA license in an inactive status?

Typology: Study notes

2021/2022

Uploaded on 09/12/2022

seymour
seymour 🇬🇧

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HOUSE BILL REPORT
HB 1648
As Passed House:
January 21, 2022
Title: An act relating to replacing an inactive certificate status with an inactive license
designation.
Brief Description: Replacing an inactive certificate status with an inactive license designation.
Sponsors: Representatives Vick, Kirby and Dufault.
Brief History:
Committee Activity:
Consumer Protection & Business: 1/10/22, 1/12/22 [DP].
Floor Activity:
Passed House: 1/21/22, 98-0.
Brief Summary of Bill
Discontinues certificate holder status for certified public accountants,
beginning on July 1, 2024, and replaces it with the designation of
licensee in inactive status.
Provides that certificate holders must meet requirements to become
active licensees by July 1, 2024, or automatically become inactive
licensees.
Establishes a definition for substantial equivalency as it relates to license
holders from other jurisdictions.
HOUSE COMMITTEE ON CONSUMER PROTECTION & BUSINESS
Majority Report: Do pass. Signed by 7 members: Representatives Kirby, Chair; Walen,
Vice Chair; Vick, Ranking Minority Member; Dufault, Assistant Ranking Minority
Member; Corry, Ryu and Santos.
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
HB 1648
- 1 -
House Bill Report
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HOUSE BILL REPORT

HB 1648

As Passed House: January 21, 2022 Title: An act relating to replacing an inactive certificate status with an inactive license designation. Brief Description: Replacing an inactive certificate status with an inactive license designation. Sponsors: Representatives Vick, Kirby and Dufault. Brief History: Committee Activity: Consumer Protection & Business: 1/10/22, 1/12/22 [DP]. Floor Activity: Passed House: 1/21/22, 98-0. Brief Summary of Bill Discontinues certificate holder status for certified public accountants, beginning on July 1, 2024, and replaces it with the designation of licensee in inactive status.

Provides that certificate holders must meet requirements to become active licensees by July 1, 2024, or automatically become inactive licensees.

Establishes a definition for substantial equivalency as it relates to license holders from other jurisdictions.

HOUSE COMMITTEE ON CONSUMER PROTECTION & BUSINESS

Majority Report: Do pass. Signed by 7 members: Representatives Kirby, Chair; Walen, Vice Chair; Vick, Ranking Minority Member; Dufault, Assistant Ranking Minority Member; Corry, Ryu and Santos. This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not part of the legislation nor does it constitute a statement of legislative intent.

Staff: Michelle Rusk (786-7153) Background: The Board of Accountancy (Board) regulates the accounting profession and administers a licensing program for persons that engage in the practice of public accounting. The Public Accountancy Act (Act) governs the practice of accounting in Washington. Prior to July 1, 2001, the Board also issued certificates as a certified public accountant (CPA) to qualified applicants. Certificates. On June 30, 2001, individuals who held then-valid certificates were automatically deemed to hold inactive certificates. An inactive certificate is renewable every three years subject to continuing professional education (CPE) requirements but remains an inactive certificate until the certificate holder petitions the Board and becomes a licensee. A certificate holder is an individual who holds an inactive certificate as a CPA and has maintained CPE requirements but has not become a licensee and does not practice public accounting. Licenses. The Board issues licenses to individuals subject to satisfaction of certain requirements including education and examinations, professional experience, and competency requirements set by the Board. A certificate holder who petitions the Board to become a licensee is required to demonstrate completion of 120 hours of CPE in a prior 36-month period and document professional experience in a relevant sector. The Board also issues licenses to license holders with licenses issued by other states and countries when the license holder meets certain requirements, and the Board may consider requirements satisfied based on a standard of substantial equivalency, which is undefined. Summary of Bill: Inactive Licensee Status. Beginning July 1, 2024, Board-issued certificates are not a recognized form of licensure. The Board must the allow renewal of certificates until June 30, 2024, as an alternative license type indicating the holder passed the CPA examination but has not had their experience verified and is not fully licensed to practice public accounting. After June 30, 2024, a valid certificate will automatically convert to a CPA license in an inactive status. To activate a license and become an active licensee, an individual must apply to the Board and meet requirements including documentation of professional experience and completion of 120 hours of CPE during the preceding 36 months. Individuals who apply before January 1, 2024, must demonstrate one year of professional experience in a relevant field within the prior eight years. A licensee in good standing may also request to have the license placed on inactive status,

they do not have their first meeting until January 28, 2022, but the Board staff fully support this change and anticipate the citizen members issuing a formal letter of support. (Opposed) None. Persons Testifying: Representative Brandon Vick, prime sponsor; Thomas Neill, Washington Society of Certified Public Accountants; and Dave Trujillo, Washington State Board of Accountancy. Persons Signed In To Testify But Not Testifying: None.