0001| AN ACT | 0002| RELATING TO PUBLIC ACCOUNTANCY; AMENDING SECTIONS OF THE PUBLIC | 0003| ACCOUNTANCY ACT. | 0004| | 0005| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0006| Section 1. Section 61-28A-3 NMSA 1978 (being Laws 1992, Chapter | 0007| 10, Section 3) is amended to read: | 0008| "61-28A-3. DEFINITIONS.--As used in the Public Accountancy Act: | 0009| A. "board" means the New Mexico state board of public | 0010| accountancy; | 0011| B. "certified public accountant" means an individual who | 0012| has successfully met the certification requirements for certified | 0013| public accountant set forth in the Public Accountancy Act and who has | 0014| been granted a certificate by the board; | 0015| C. "continuing professional education" means courses in | 0016| accounting, auditing, tax or other functions of public accountancy | 0017| identified and approved by the board and provided to individuals | 0018| seeking to maintain a valid permit to practice; | 0019| D. "firm" means a sole proprietorship, a professional | 0020| corporation, a partnership, a limited liability company or other form | 0021| of business entity permitted by state law; | 0022| E. "fund" means the public accountancy fund; | 0023| F. "person" means an individual or firm; | 0024| G. "practice" means the performance of public accountancy | 0025| or the offering to perform public accountancy for a client or | 0001| potential client by a person holding himself out to the public as a | 0002| permit holder or registered firm; | 0003| H. "practitioner" means a registered firm or an individual | 0004| engaged in the practice of public accountancy holding a valid | 0005| certificate and permit; | 0006| I. "public accountancy" means the performance of one or | 0007| more kinds of services involving accounting or auditing skills, | 0008| including the issuance of reports on financial statements, the | 0009| performance of one or more kinds of management, financial advisory or | 0010| consulting services, the preparation of tax returns or the furnishing | 0011| of advice on tax matters; | 0012| J. "quality review" or "peer review" means a study, | 0013| appraisal or review of one or more aspects of the accounting and | 0014| auditing work of a practitioner by a practitioner who is not | 0015| affiliated with the person or firm being reviewed; | 0016| K. "reciprocal jurisdiction" means a state or foreign | 0017| country identified by the board by rule as having standards for | 0018| authorizing a person to practice public accountancy equivalent to | 0019| those prescribed in New Mexico law and by board rule; | 0020| L. "registered firm" means a firm that has been granted a | 0021| registration by the board pursuant to the Public Accountancy Act; | 0022| M. "registered public accountant" means an individual who, | 0023| prior to December 31, 1990, successfully met the certification | 0024| requirements for registered public accountant set forth in the Public | 0025| Accountancy Act or in prior law and who has been granted a certificate | 0001| by the board; | 0002| N. "report" means an opinion or other writing that: | 0003| (1) states or implies assurance as to the reliability | 0004| of any financial statements; | 0005| (2) includes or is accompanied by any statement or | 0006| implication that the person issuing it has special knowledge or | 0007| competency in accounting or auditing indicated by the use of names, | 0008| titles or abbreviations likely to be understood to identify the author | 0009| of the report as a practitioner; and | 0010| (3) includes the following types of reports as they | 0011| are defined by board rule: | 0012| (a) a compilation report; | 0013| (b) a review report; or | 0014| (c) an audit report; | 0015| O. "rule" means any written directive of general | 0016| application duly adopted by the board; and | 0017| P. "state" means any state or insular possession of the | 0018| United States, including the District of Columbia, Puerto Rico, the | 0019| United States Virgin Islands and Guam." | 0020| Section 2. Section 61-28A-15 NMSA 1978 (being Laws 1992, Chapter | 0021| 10, Section 15, as amended) is amended to read: | 0022| "61-28A-15. REGISTRATION--FIRMS.-- | 0023| A. All firms that are engaged in the practice of public | 0024| accountancy in New Mexico shall register annually with the board. | 0025| B. Registration of firms shall require that: | 0001| (1) a sole practitioner shall be a holder of a | 0002| current permit; | 0003| (2) any partnership desiring registration as a firm | 0004| shall be composed solely of partners who hold current permits; | 0005| (3) any corporation shall be organized under the | 0006| Professional Corporation Act or similar provisions of the laws of | 0007| another state, and all shareholders shall hold current permits; | 0008| (4) any limited liability company shall be organized | 0009| under the Limited Liability Company Act or similar provisions of the | 0010| laws of another state and all members shall hold current permits; | 0011| (5) if any partner, shareholder or member is a | 0012| partnership, corporation, limited liability company or other form of | 0013| business entity permitted by state law, that partnership, corporation, | 0014| limited liability company or other form of business entity permitted | 0015| by state law shall be a registered firm; | 0016| (6) any partnership, corporation, limited liability | 0017| company or other form of business entity permitted by state law | 0018| seeking registration as a firm to allow it to engage in the practice | 0019| of public accountancy in New Mexico shall provide documentation to the | 0020| board that all partners, shareholders or members practicing in New | 0021| Mexico hold current permits and that all partners, shareholders or | 0022| members in the firm not practicing in New Mexico are duly authorized | 0023| to practice public accountancy in a reciprocal jurisdiction; and | 0024| (7) prior to December 31, 1998, the board shall | 0025| establish by rule a peer review program under which a registered firm | 0001| shall undergo a peer review at least once every three years. The rule | 0002| shall require firms that contract to perform audits of state agencies, | 0003| as defined in the Audit Act, to comply with federal or state peer | 0004| review standards applicable to those audits. The rule shall require a | 0005| firm registering pursuant to the provisions of this section to provide | 0006| documentation to the board that it meets the requirements of the peer | 0007| review program. The rule shall establish standards for granting | 0008| continuing professional education credits to practitioners during the | 0009| years in which their firms undergo peer reviews. | 0010| C. Application for registration pursuant to provisions of | 0011| this section shall be made upon affidavit of individuals and in a form | 0012| specified by the board. | 0013| D. Registration shall be denied to any firm that has failed | 0014| to comply with any provision of the Public Accountancy Act. | 0015| E. Failure of a firm practicing public accountancy in this | 0016| state to file an annual application for registration renewal is cause | 0017| for suspension or revocation of the right of the firm to practice in | 0018| New Mexico. | 0019| F. The board may collect a registration fee prescribed by | 0020| board rule not to exceed fifty dollars ($50.00) from firms required to | 0021| register pursuant to provisions of this section. | 0022| G. Any registered firm whose registration has been | 0023| canceled for failure to pay the annual renewal fee may secure | 0024| reinstatement of its registration at any time within three months | 0025| following June 30 of the year of the delinquent payment upon | 0001| payment of the annual renewal fee and of a delinquency fee | 0002| prescribed by board rule not to exceed fifty dollars ($50.00). | 0003| After the three-month period, no registration shall be reinstated | 0004| except upon application satisfactory to the board." | 0005| |