Notice is hereby given that pursuant to authority vested in the Accounting Examining Board in ss. 15.08 (5) (b), 227.11 (2) and 440.08 (3), Stats., and interpreting ss. 440.08 (3), 442.04 (4) and (5) and 442.08, Stats., the Accounting Examining Board will hold a public hearing at the time and place indicated below to consider an order to amend s. Accy 3.05 (1); to repeal and recreate s. Accy 3.05 (3); and to create ss. Accy 3.09 (1) (e) and (f), 3.11 and 4.035, relating to examinations, educational and graduation requirements and late renewal.

Interested people are invited to present information at the hearing. People appearing may make an oral presentation, but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to:

Written comments must be received by September 11, 1995 to be included in the record of rule-making proceedings.

Statutes authorizing promulgation: ss. 15.08 (5) (b), 227.11 (2) and 440.08 (3)

Statutes interpreted: ss. 440.08 (3), 442.04 (4) and (5) and 442.08

The proposed rule-making order of the Accounting Examining Board primarily relates to the certified public accountant examination (CPA examination) provided by the American Institute of Certified Public Accountants (AICPA). That examination is administered nationally through the AICPA and its successful completion is one of the requirements for obtaining a certificate and license to practice as a Certified Public Accountant in this state. One requirement for eligibility to sit for the CPA examination is that the candidate possess a bachelor's or higher degree from an institution, with a resident major in accounting or its reasonable equivalent. (See s. 442.04 (4), Stats.; ch. Accy 7, Wis. Adm. Code.) The current rules of the Board authorize a candidate to take the CPA examination based upon the candidate's affirmative statement on the application that he or she has obtained the required education. The proposed rule-making order would modify the procedure by which a candidate's credentials are verified and make modifications to other related rules regarding the examination. Also, in an unrelated section, the proposal creates a provision addressing the requirements for renewing a license to practice as a certified public accountant which has previously expired.

Section 1 would require that a candidate for admittance to the CPA examination submit certified copies of transcripts reflecting the course work completed and the granting of a bachelor's or higher degree at least 60 days prior to the date the CPA examination is to be administered. The purpose for the change is to assure that the Board has received independent documentation of a candidate's eligibility to sit for the examination, rather than granting admission based solely upon the applicant's representation of eligibility or own evaluation of his or her educational credentials.

This change in procedure is based upon the fact that beginning with its administration in May, 1996, the CPA examination will be “nondisclosed” ; meaning that the questions and answers to the examination will no longer be published or disclosed by the AICPA following its administration. In order to safeguard the security of the CPA examination content, it has been recommended by the AICPA that each state's CPA credentialing authority,

“...have rules and procedures to ensure that only candidates qualified to take the (CPA examination) can register and sit for it. Rules and procedures should require the verification of qualifications before a candidate can be permitted to register. Failure to do so will encourage unqualified test takers to take the (CPA examination), unnecessarily increasing the risk of a security breach.” [From ”INFORMATION FOR BOARDS OF ACCOUNTANCY, Implementing the Non disclosed Uniform CPA Examination, THIRD INSTALLMENT (April 26, 1995)”, p. B-1].

An amendment to the Board's rule to require a candidate to submit academic transcripts indicating possession of a bachelor's or higher degree, rather than relying upon the mere representation to that effect, is necessary in order to meet the CPA examination security concerns regarding access to its contents by unqualified individuals.

The proposed rule would also require that the transcripts be submitted to the Board at least 60 days prior to the administration of the CPA examination. This filing deadline is necessary in order for Board staff to evaluate the materials and make a determination as to whether or not the individual possesses the necessary academic qualifications to sit for the examination. It also will permit the applicant time to submit additional supportive materials in the event of deficient filings, as well as provide adequate time to resolve any questions regarding an applicant's eligibility to take the CPA examination.

In addition, the proposal repeals the current requirement that a notarized photograph of the applicant must be submitted with the application to take the CPA examination. In reviewing the various security issues raised by virtue of the AICPA developing a nondisclosed examination, the Board noted that the notarized photograph requirement did not serve a valid security purpose, since the application is not present at the examination site at the time it is administered. Rather, the identity of the applicant is verified at the testing location through requiring the applicant to present identification with his or her photograph and signature. Accordingly, the Board has repealed the requirement that a notarized photograph must be submitted with the application.

The last subsection of the proposal provides that the application contain any request an applicant may have for an accommodation of a disability. This is in recognition of the Americans with Disabilities Act and the need to determine any necessary accommodations in order that appropriate arrangements may be made.

Section 2 repeals and recreates s. Accy 3.05 (3), concerning the time at which an individual becomes eligible to apply to take the CPA examination. Under the current language, an applicant may take the CPA examination at its first administration subsequent to the applicant's graduation. The need to review and process the academic transcripts received under proposed s. Accy 3.05 (1), requires not only that a specific filing deadline be established, but that the applicant must have completed all academic course work and have graduated by the time of the filing deadline. Accordingly, the proposal sets forth that requirement.

Section 3 also relates to attempting to assume that the CPA examination content will remain nondisclosed and secure in order to protect the integrity and validity of future examinations as reliable indicators of the professional knowledge possessed by individual candidates. Section Accy 3.09 (1) lists conduct at the examination which is considered to constitute cheating upon the examination. The proposed additions would additionally specifically prohibit candidates from disclosing the nature or content of the examination or answers subsequent to the examination, and prohibit candidates from removing any examination materials or notes from the examination room.

Section 4 creates s. Accy 3.11, regarding the procedures by which an unsuccessful candidate upon either the CPA examination or the professional ethics examination may obtain a review of his or her examination. Subsection (1) provides that the candidate must contact the advisory grading service of the AICPA in order to obtain a review of the CPA examination. Subsection (2) refers to the professional ethics examination described within s. Accy 3.10, which is administered by Board staff and consists of an open book examination addressing the specific Wisconsin statutes and rules governing the practice of public accounting. Among other things, the proposal would permit a candidate to review the professional ethics examination either in person or by telephone within 30 days after the results had been mailed to the candidate.

Section 5 relates to the requirements which must be met in order to renew a license as a Certified Public Accountant which has previously expired. Under s. 440.08 (3), Stats., an expired license generally will be renewed upon payment of a late fee. However, if the license has not been renewed within 5 years after its renewal date, the Board may by administrative rule require an examination or education, or both, prior to renewing the license. In cases involving a license which has not been renewed for 5 years or more, the intent of the proposed rule is to permit the Board to review each applicant's individual circumstances in making a determination of what, if any, examination or education will be required. For example, some applicants for renewal after a 5 year absence from practice as a licensed CPA may not have been practicing in an accounting-related field during that time period. Under such circumstances, an examination or additional education, or both, may be necessary to assure that the applicant has sufficient currency of accounting knowledge to resume professional practice. However, there may be other individuals who continued to practice in accounting-related areas which did not require a current license as a CPA in which to practice, and for whom a need for examination or additional education may be less extensive or unnecessary. The proposed rule is intended to provide the Board with the appropriate flexibility to determine each situation according to the individual circumstances presented.

SECTION 1. Accy 3.05 (1) is amended to read:

Accy 3.05 Examination application. (1) A candidate for the certified public accountant examination shall apply on an application form provided by the board. Applications must be complete, signed by the candidate, received in the board office no later than 60 days prior to the examination date, and be supported by the following:

(a) The appropriate fee specified authorized in s. 440.05, Stats.

(b) Identification photograph properly notarized Certified copies of transcripts for all academic work completed at an institution, as defined in s. 442.04 (4) (a), Stats. The award of a bachelor's or higher degree must be reflected on one of the transcripts.

(c) A statement by the candidate that the education required by ss. Accy 7.02 and 7.03 has been completed Request for accommodation of disability, if applicable.

  Note: Application forms are available upon request to the board office located at 1400 East Washington Avenue, P.O. Box 8935, Madison, WI 53708.

SECTION 2. Accy 3.05 (3) is repealed and recreated to read:

Accy 3.05 (3) Applicants who have completed the education and graduation requirements by the application deadline may apply to take the next scheduled examination, but no certified public accountant certificate may be issued until all other requirements are met.

SECTION 3. Accy 3.09 (1) (e) and (f) are created to read:

Accy 3.09 (1) (e) Divulging the nature or content of any examination question or answer to any individual or entity subsequent to the conclusion of the examination.

(f) Removing any examination materials, notes or other unauthorized materials from the examination room.

SECTION 4. Accy 3.11 is created to read:

Accy 3.11 Examination review. (1) Applicants for the certified public accountant examination may request a review of their examination papers from the American institute of certified public accountants advisory grading service.

(2) An applicant who fails the professional ethics examination may request a review of the examination. The following conditions apply:

(a) The applicant shall file a written request to the board within 30 days of the date on which examination results were mailed and pay the fee under s. RL 4.05.

(b) Examination reviews are by appointment only and shall be limited to 1 hour.

(c) Reviews shall be conducted prior to the time an applicant applies to retake the examination.

(d) An applicant may review a failed examination only once.

(e) The examination may be reviewed by telephone. During a telephone review an applicant shall be provided with the statute or administrative code reference number and the topic of the test questions the applicant failed.

(f) An applicant may not be accompanied during the review by any person other than the proctors.

(g) Bound reference books shall be permitted. Applicants may not remove any notes from the area. Notes shall be retained by the proctor. The proctor shall not respond to inquiries by the applicant regarding allegations of examination error.