1-312.   Grounds for denial, revocation or suspensionof firm's registration; other administrative remedies.(a) Except as provided in subsection(b), the board may deny an application to register a firm, revoke or suspend afirm's registration, censure a firm, limit the scope of practice of a firm orimpose such remedial action as it deems necessary to protect the publicinterest, or both, and impose an administrative fine not exceeding$5,000 for any one of thefollowing causes:

      (1)   Failure to meet the requirements of K.S.A. 1-308 and amendments thereto;

      (2)   fraud, dishonesty or deceit in obtaining a registration;

      (3)   revocation or suspension of a firm's right to practiceby the PCAOB or any state or federal agency;

      (4)   dishonesty, fraud or gross negligence in the practice of certified publicaccountancy;

      (5)   violation of any provision of chapter 1 of the Kansas Statutes Annotatedand rules and regulations promulgated by the board except for a violation of arule of professional conduct;

      (6)   willful violation of a rule of professional conduct;

      (7)   violation of any order of the board;

      (8)   cancellation, revocation, suspension or refusal to renew the authority ofa firm to practice certified public accountancy in any other state;

      (9)   conviction of any felony, or of any crime an element ofwhich is dishonesty, deceit or fraud, under the laws of the UnitedStates, of Kansas or of any other state, if the acts involved would haveconstituted a crime under the laws of Kansas; or

      (10)   failure to establish timely compliance with peer review pursuant toK.S.A. 1-501 and amendments thereto;

      (b)   In actions arising under peer reviewfor reports modified for matters relating to attest services, the board maytake such remedial action as it deems necessary to protect the public interest.However, the board may not limit the scope ofpractice of attest services of a firm or limit the scope of practice of attestservices of any permit holder underK.S.A. 1-311, and amendments thereto,for failure to complywith generally accepted accounting principles, generally accepted auditingstandards and other similarly recognized authoritative technical standardsunless:

      (1)   The firm has received at least two modified peer review reports during 12consecutive years relating to attest services andthe board finds that the firm has exhibited a course of conduct thatreflects a pattern of noncompliance with applicable professional standards andpractices; or

      (2)   the firm has failed to abide by remedial measures required by a peerreview committee or the board.

      (c)   Nothing in subsection (b) shall be construed to preclude the board from:Limiting the scope ofpractice of attest services of a firm or limiting the scope of practice ofattest services of a permit holder underK.S.A. 1-311, and amendments thereto; or taking such remedial action as theboard deems necessary to protect the public interest, afterthe board's review of anadverse peer review report based on matters relating to attest services if theboard determines that the firm failed to comply with generally acceptedaccounting principles, generally accepted auditing standards and othersimilarly recognized authoritative technical standards.

      (d)   After considering AICPA standards on peer review, the board maydefine, by rules and regulations, the terms "modified" and "adverse."

      (e)   At the time of suspension or revocation of a firm's registration, theboard may suspend or revoke the permit to practice of a member, shareholder orpartner of a firm if the permit holder is the only Kansas member, shareholderor partner of the firm. The permit shall be reinstated upon reinstatement ofthe firm's registration.

      (f)   All administrative proceedings pursuant to this sectionshall beconducted in accordance with the provisions of the Kansas administrativeprocedure act and the act for judicial review and civil enforcement of agencyactions.

      (g)   The board shall not have the power to assess finesunder this section ifa fine has been assessed for the same or similar violation under the provisionsof subsection (a) of K.S.A. 1-311 and amendments thereto.

      History:   L. 1951, ch. 1, § 16;L. 1981, ch. 3, § 2;L. 1984, ch. 313, § 43;L. 1995, ch. 152, § 6;L. 2001, ch. 120, § 4;L. 2007, ch. 97, § 6;L. 2009, ch. 38, § 9; Apr. 2.