KRS § 325.301 — KY Code / Title XXVI / Chapter 325 / Section 325.301
325.301 Firms required to obtain license to practice in Kentucky -- Firms exempted from licensure requirement -- Criteria for license -- Peer Review Oversight Committee -- Administrative regulations
Status: in_force

325.301 Firms required to obtain license to practice in Kentucky -- Firms exempted

from licensure requirement -- Criteria for license -- Peer Review Oversight

Committee -- Administrative regulations.

(1) The following firms shall obtain a license to practice in this state:

(a) Any firm with an office located in this state performing attest services, as

defined in KRS 325.220; and

(b) Any firm with an office in this state that uses the title "CPA" or other phrase

or abbreviation in any manner described in KRS 325.410 to suggest it is a

certified public accounting firm.

(2) A firm which does not have an office in this state that performs services described

in KRS 325.220 for a client having its home office located in this state or a client

who is a resident of this state shall not be required to obtain a license to practice in

this state and may use the title "CPA" in the name of the firm if:

(a) The firm complies with the requirements contained in subsections (3)(a) and

(10) of this section;

(b) All services provided by the firm are performed by an individual with a

practice privilege granted under KRS 325.282; and

(c) The firm can legally provide the services in the state where the individual with

a practice privilege has his or her principal place of business.

(3) All firms required to obtain a license to practice in this Commonwealth shall meet

the following requirements:

(a) Certified public accountants shall hold fifty-one percent (51%) or more of the

ownership of the firm in terms of financial interests and voting rights of all

partners, officers, shareholders, members, or managers of the firm;

(b) All owners of the firm who are not certified public accountants shall be

natural persons actively engaged in the firm's operations and shall satisfy

additional requirements established by the board through promulgation of an

administrative regulation;

(c) The name of the firm shall comply with the requirements of KRS 325.380;

(d) All certified public accountants who are sole proprietors, partners,

shareholders, members, officers, directors, or employees of a firm with an

office located in this state, who regularly practice in this Commonwealth,

shall maintain current licenses to practice issued by the board;

(e) Any individual licensee and any individual qualifying for a practice privilege

under this chapter who is responsible for supervising attest services and signs

or authorizes someone to sign the report on behalf of the firm shall meet the

competency requirements established by the board through promulgation of an

administrative regulation; and

(f) The firm shall comply with the provisions of this chapter, the administrative

regulations promulgated by the board, and all other laws of this

Commonwealth applicable to the firm's particular form of business

organization.

(4) Before a firm may practice in this Commonwealth, the firm manager shall:

(a) Submit an initial application which contains information required by the board

through promulgation of an administrative regulation; and

(b) Pay a fee not to exceed two hundred dollars ($200) established by an

administrative regulation promulgated by the board.

(5) The firm license shall be renewed on or before August 1 every two (2) years by the

firm manager:

(a) Completing the renewal process according to the procedures as established in

administrative regulation promulgated by the board; and

(b) Paying the renewal fee, which shall not exceed two hundred dollars ($200), as

established by administrative regulation promulgated by the board.

(6) If a firm license has been expired for a period of less than one (1) month and the

firm has not violated any other provision of this chapter or the accompanying

administrative regulations promulgated thereunder, the firm manager may renew the

license by:

(a) Satisfying all the requirements of this subsection, including any requirements

established by the board through promulgation of an administrative regulation;

and

(b) In addition to the renewal fee, paying a late fee not to exceed one hundred

dollars ($100).

(7) A firm with a license expired for a period of longer than one (1) month after the

date of expiration shall cease operating immediately. The firm shall not operate

until the board approves the issuance of a new license to the firm.

(8) Sole proprietors shall comply with the licensing requirements for firms under this

section.

(9) The firm manager shall notify the board in accordance with procedures established

in an administrative regulation promulgated by the board, of any change in its

licensing information within thirty (30) days. Any change in the name of a firm

shall require the filing of an initial application.

(10) (a) All firms that perform attest or compilation services shall enroll in, schedule,

undergo, and complete its peer review in an approved peer review program

with standards that are equivalent to or better than the peer review program

administered by the American Institute of Certified Public Accountants as

determined by administrative regulations promulgated by the board.

(b) Every firm shall comply with any requirements or restrictions placed on its

license as prescribed by the board in response to the results of peer reviews;

and

(c) Every firm shall allow the sponsoring organization to provide the board access

to the peer review documents via a secure Web site process, such as

Facilitated State Board Access and its successor operated by the American

Institute of Certified Public Accountants, or similar system operated by

another equivalent sponsoring organization.

(11) Nothing contained in this chapter shall require a certified public accountant or firm

of certified public accountants licensed by another state to obtain a license to

practice in this Commonwealth if the certified public accountant or firm of certified

public accountants enters this Commonwealth solely to:

(a) Conduct a peer review of a firm; or

(b) Perform attestation work, incidental to an engagement which was initiated

with a client located outside of the Commonwealth and has extended into the

Commonwealth due to common ownership or existence of a subsidiary,

assets, or other operations located within the Commonwealth.

(12) A Peer Review Oversight Committee may be appointed by the board to monitor the

board-approved peer review program, including sponsoring organizations. The

purpose of the committee is to provide reasonable assurance that peer reviews are

being conducted and reported in accordance with peer review standards. The board

shall promulgate an administrative regulation setting forth the process and

procedures of the committee.