32-731. Certified public accountant partnership; qualifications

A. Except as provided in section 32-725, subsection G, a partnership engaged in this state in the practice of accounting by certified public accountants shall register biennially with the board as a partnership of certified public accountants and shall meet the following requirements:

1. At least one partner shall be a resident and a full-time practicing certified public accountant in good standing in this state.

2. At least fifty-one per cent of the ownership of the partnership, in terms of direct and indirect financial interests and voting rights, must belong to holders in good standing of certificates or licenses to practice accounting as certified public accountants in any state or foreign country. Only certified public accountants whose qualifications are considered to be substantially equivalent, as provided by section 32-726, may be considered as meeting the requirement prescribed by this paragraph.

B. A partnership registered with the board pursuant to this section may include owners who are not certified pursuant to this chapter if all of the following apply:

1. The partnership designates an individual who is certified pursuant to this chapter and who is responsible for the proper registration of the firm.

2. All noncertified partners actively participate in the management of the partnership or a directly affiliated entity that has been approved by the board. For the purposes of this paragraph:

(a) A partner actively participates if all of the following occur:

(i) The partner performs at least five hundred hours of professional services for the public accounting partnership during the calendar year.

(ii) The professional services performed constitute the partner's principal occupation.

(iii) The partner's interest in the public accounting partnership reverts to the partnership if the partner stops performing services for the partnership.

(b) "Directly affiliated entity" means a firm in which each owner of an equity interest in the entity actively participates in the business of providing services to the firm's clients.

3. Any partner who is ultimately responsible for supervising attest services in this state or the partner who signs any reports related to restricted financial services on behalf of the partnership in this state shall be certified pursuant to this chapter and shall meet the experience requirements for carrying out these functions adopted by the board in its rules.

4. The partnership complies with other requirements imposed by the board in its rules.

C. Application for registration pursuant to this section shall be made on affidavit of a partner of the partnership who is a certified public accountant in good standing in this state. The board shall in each case determine whether the applicant is eligible for registration. A partnership that is registered pursuant to this section may use the words "certified public accountants" or the abbreviation "C.P.A.'s" or "CPA's" in connection with its partnership name as provided for by the board in its rules. Partnerships registered pursuant to this chapter may provide restricted financial services. Notification shall be given to the board within one month of the termination of any partnership, or of the admission to or withdrawal of an Arizona partner from any partnership registered pursuant to this section.

D. A partnership that applies for an initial registration or a renewal pursuant to this section shall list in its application all states in which the partnership has applied for or holds a registration, license or permit as a certified public accountant partnership and shall list any past denials, revocations or suspensions of registrations, licenses or permits by any other state.

E. An applicant for registration or a partnership registered pursuant to this section shall notify the board in writing within one month of any change of partners whose principal place of business is in this state, any change in the number or location of offices of the partnership in this state, any change in the identity of the individuals in charge of the partnership's offices in this state and any issuance, denial, revocation or suspension of a registration, license or permit by any other state.

F. A partnership that desires to practice under this chapter must register with the board for a two year period in the month of the effective date of the formation of the firm and every two years thereafter and pay a registration fee of at least one hundred dollars but not more than three hundred dollars for the privilege of practicing in this state. A partnership registering for less than two years must pay a pro rata portion of the fee.

G. A partnership that fails to comply with this section due to changes in the ownership of the firm or personnel after receiving or renewing the registration must take corrective action to comply with this section as quickly as possible. The board may grant a reasonable period of time for the firm to take these corrective actions. A failure to comply with these requirements is grounds for suspension or revocation of the partnership registration.

32-731. Certified public accountant partnership; qualifications

A. Except as provided in section 32-725, subsection G, a partnership engaged in this state in the practice of accounting by certified public accountants shall register biennially with the board as a partnership of certified public accountants and shall meet the following requirements:

1. At least one partner shall be a resident and a full-time practicing certified public accountant in good standing in this state.

2. At least fifty-one per cent of the ownership of the partnership, in terms of direct and indirect financial interests and voting rights, must belong to holders in good standing of certificates or licenses to practice accounting as certified public accountants in any state or foreign country. Only certified public accountants whose qualifications are considered to be substantially equivalent, as provided by section 32-726, may be considered as meeting the requirement prescribed by this paragraph.

B. A partnership registered with the board pursuant to this section may include owners who are not certified pursuant to this chapter if all of the following apply:

1. The partnership designates an individual who is certified pursuant to this chapter and who is responsible for the proper registration of the firm.

2. All noncertified partners actively participate in the management of the partnership or a directly affiliated entity that has been approved by the board. For the purposes of this paragraph:

(a) A partner actively participates if all of the following occur:

(i) The partner performs at least five hundred hours of professional services for the public accounting partnership during the calendar year.

(ii) The professional services performed constitute the partner's principal occupation.

(iii) The partner's interest in the public accounting partnership reverts to the partnership if the partner stops performing services for the partnership.

(b) "Directly affiliated entity" means a firm in which each owner of an equity interest in the entity actively participates in the business of providing services to the firm's clients.

3. Any partner who is ultimately responsible for supervising attest services in this state or the partner who signs any reports related to restricted financial services on behalf of the partnership in this state shall be certified pursuant to this chapter and shall meet the experience requirements for carrying out these functions adopted by the board in its rules.

4. The partnership complies with other requirements imposed by the board in its rules.

C. Application for registration pursuant to this section shall be made on affidavit of a partner of the partnership who is a certified public accountant in good standing in this state. The board shall in each case determine whether the applicant is eligible for registration. A partnership that is registered pursuant to this section may use the words "certified public accountants" or the abbreviation "C.P.A.'s" or "CPA's" in connection with its partnership name as provided for by the board in its rules. Partnerships registered pursuant to this chapter may provide restricted financial services. Notification shall be given to the board within one month of the termination of any partnership, or of the admission to or withdrawal of an Arizona partner from any partnership registered pursuant to this section.

D. A partnership that applies for an initial registration or a renewal pursuant to this section shall list in its application all states in which the partnership has applied for or holds a registration, license or permit as a certified public accountant partnership and shall list any past denials, revocations or suspensions of registrations, licenses or permits by any other state.

E. An applicant for registration or a partnership registered pursuant to this section shall notify the board in writing within one month of any change of partners whose principal place of business is in this state, any change in the number or location of offices of the partnership in this state, any change in the identity of the individuals in charge of the partnership's offices in this state and any issuance, denial, revocation or suspension of a registration, license or permit by any other state.

F. A partnership that desires to practice under this chapter must register with the board for a two year period in the month of the effective date of the formation of the firm and every two years thereafter and pay a registration fee of at least one hundred dollars but not more than three hundred dollars for the privilege of practicing in this state. A partnership registering for less than two years must pay a pro rata portion of the fee.

G. A partnership that fails to comply with this section due to changes in the ownership of the firm or personnel after receiving or renewing the registration must take corrective action to comply with this section as quickly as possible. The board may grant a reasonable period of time for the firm to take these corrective actions. A failure to comply with these requirements is grounds for suspension or revocation of the partnership registration.