The Board proposes the rule amendment to clarify the dollar amount of irrevocable letter of credit required for certain Florida firms for use in meeting the minimum capitalization requirements to engage in the practice of public accounting and to ...

 

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
Board of Accountancy

RULE NO.: RULE TITLE:
61H1-26.002: Minimum Capitalization or Adequate Public Liability Insurance for Florida Firms with the Exception of a Sole Proprietorship

PURPOSE AND EFFECT: The Board proposes the rule amendment to clarify the dollar amount of irrevocable letter of credit required for certain Florida firms for use in meeting the minimum capitalization requirements to engage in the practice of public accounting and to remove language concerning submission of financial statements.

SUMMARY: Language concerning submission of financial statements will be removed. The dollar amount of irrevocable letter of credit required for certain Florida firms for use in meeting the minimum capitalization requirements to engage in the practice of public accounting will be clarified.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has been prepared by the agency.

The following is a summary of the SERC:

• Based on the annual average number of applicants, 464 applicants are expected to comply with the rule.

• There will be no costs to the Department for implementing the proposed rule.

• There will be no costs to any other state and local government entities for implementing the proposed rule.

• There will be no costs to any other state and local government enforcing the proposed rule.

• The costs incurred by individuals and entities required to comply with the requirements of the proposed rule will be minimal.

• The estimated number of small businesses that would be subject to the rule is between 100-499.

• No small county or small city will be impacted by this proposed rule.

• No good faith written proposals for a lower cost regulatory alternative to the proposed rule were received.

The agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 473.304, 473.309 FS.

LAW IMPLEMENTED: 473.309 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAW.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Veloria A. Kelly, Division Director, Board of Accountancy, 240 N.W. 76th Drive, Suite A, Gainesville, Florida 32607

THE FULL TEXT OF THE PROPOSED RULE IS:

61H1-26.002 Minimum Capitalization or Adequate Public Liability Insurance for Florida Firms with the Exception of a Sole Proprietorship.

A Florida firm, with the exception of a sole proprietorship, shall not engage in the practice of public accounting in this state unless:

(1) No change.

(2) It has an irrevocable letter of credit of at least equal to $50,000 per shareholder, officer, member, or partner and any Florida licensed certified public accountant to a maximum of $2,000,000, which meets the following criteria:

(a) through (c) No change.

(3) No change.

(4) For purposes of subsection 61H1-26.002(1), F.A.C., financial statements prepared to substantiate the excess of assets over liabilities must be submitted to the Board with the application for licensure. These Financial statements must be prepared in accordance with Generally Accepted Accounting Principles and Work-in-Process may be considered as an unbilled receivable together with an appropriate evaluation allowance.

Rulemaking Authority 473.304, 473.309 FS. Law Implemented 473.309 FS. History–New 12-4-79, Formerly 21A-26.02, Amended 10-20-86, Formerly 21A-26.002, Amended 11-30-93, 5-23-94, 6-10-96, 10-6-96, 12-30-97, 9-21-00, 12-10-09,_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Board of Accountancy

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Board of Accountancy

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: June 7, 2012

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: June 29, 2012