3 Colo. Code Regs. § 705-1.9

Current through Register Vol. 47, No. 22, November 25, 2024

Section 3 CCR 705-1.9 - [Effective 12/15/2024] CERTIFICATE REQUIREMENTS, DISCIPLINE, MAINTENANCE, AND STATUS CHANGES

This Rule is promulgated pursuant to sections 12-20-202, 12-20-204, 12-100-105(1)(b), and 12-100-112, C.R.S., and sets forth the general rules regarding a certificate, including CPE requirements, and how a certificate holder may renew, reactivate, or reinstate a certificate, and obtain a retired or inactive status certificate. For specific CPE requirements also see Rule 1.10. A certificate holder is responsible for completing the renewal process when and as required if he wants to maintain his certificate in an active, retired, or inactive status.

A.GENERAL INFORMATION

1. No individual can hold out as defined in Rule 1.4 unless that individual holds an active certificate issued pursuant to the Act or under the laws of any other state, except that:

a. An individual whose license or certificate is in an inactive status in this or another state may use or assume the title or designation "certified public accountant" or "CPA" or similar designation followed or preceded by the term "inactive"; or

b. An individual whose license or certificate is in a retired status in this or another state may use or assume the title or designation "certified public accountant" or "CPA" or similar designation immediately followed or preceded by the term "retired," and

c. While practicing in this state under section 12-100-117(2), C.R.S., and Rule 1.14 (Practice Privilege/Mobility), an individual who holds an active CPA license or certificate issued pursuant to the laws of another state may use or assume the title or designation "certified public accountant" or "CPA" or similar designation and an individual holding equivalent authority in a non-U.S. jurisdiction may use or assume the equivalent designation authorized in his non-U.S. jurisdiction.

2. No individual, while holding out as defined in Rule 1.4, can perform for any client, employer, or other person, one or more kinds, or any combination of services involving the use of accounting or attestation skills, including, but not limited to, issuance of reports on financial statements, or of one or more types of management advisory or consulting services, or the preparation of tax returns, or the furnishing of tax advice unless that individual:

(1) holds an active certificate issued pursuant to the Act, or

(2) is authorized to provide such services pursuant to Rule 1.14 (Practice Privilege/Mobility).

3. A certificate holder offering or rendering services or using his CPA title in another state is subject to disciplinary action in this state for conduct in another state if that conduct violates the Act or these Rules or the laws or rules of that state.

4. Every certificate holder holding an active status certificate must complete CPE. CPE accrues at a rate of ten hours for every full quarter during which the certificate holder holds an active status certificate. The CPE must be completed on or before December 31 of the year ending the CPE reporting period in which the CPE obligation is incurred. Failure to complete accrued CPE on or before December 31 of the year ending the CPE reporting period in which the CPE obligation is incurred is cause for discipline up to and including revocation. A change to expired, inactive, or retired status does not eliminate the obligation to complete accrued CPE before applying for reactivation or reinstatement.

5. Falsely attesting or otherwise providing false information to the Board may violate sections 18-8-501(2)(a)(I), and 18-8-503, C.R.S., and is also grounds for discipline by the Board up to and including denial, suspension, or revocation of a certificate.

B.NOTICES

1. Certificate Holder Address and Name Changes

a. Certificate holders shall inform the Board of any name, assumed or trade name, address, telephone, or email change within thirty days of the change. The Board will not change a certificate holder's information without explicit notification provided in a manner prescribed by the Board. Individuals and firms must provide separate notices under this Rule. Information provided to the Board in a firm renewal or initial application and firm changes reported pursuant to Rule 1.15 do not fulfill the individual notice requirements under this Rule 1.9(B).

b. The Board requires one of the following forms of documentation to change a certificate holder's name or correct a social security number or individual taxpayer identification number:

(1) Marriage license;

(2) Divorce decree;

(3) Court order;

(4) Documentation from the Internal Revenue Service verifying the licensee's valid individual taxpayer identification number; or

(5) A driver's license or social security card with a second form of identification may be acceptable at the discretion of the Division of Professions and Occupations.

c. Board communications are sent to the last address furnished to the Board. Failure to respond to a Board communication within thirty days, as provided in section 12-100-121, C.R.S., is grounds for discipline up to and including revocation. Failure to notify the Board of a change of address does not relieve a certificate holder of the obligation to respond to a Board communication.

2. Renewal Notices to Certificate Holders.

a. The Board may send notices for renewal of certificates according to a schedule established and in a manner approved by the Division of Professions and Occupations pursuant to section 12-20-202, C.R.S., to the last address furnished to the Board.

b. There is a sixty-day grace period from the expiration date of the certificate within which to pay the renewal fee, plus a late fee. A certificate holder will not be disciplined for holding out or practicing public accounting with an expired certificate during the grace period.

c. Failure to receive a renewal notice does not relieve the certificate holder of the obligation to renew a certificate.

C.NAMES

1. A certificate holder engaged in the practice of public accounting must not hold out, perform, or offer to perform professional services using a name that has not been provided to the Board.

2. A certificate holder shall not use an assumed or trade name unless:

a. The assumed or trade name is filed with the Colorado Secretary of State pursuant to section 7-71-101, C.R.S.;

b. The assumed or trade name has been provided to the Board in a manner prescribed by the Board; and

c. The assumed or trade name otherwise complies with these Rules.

3. The name under which a certificate holder holds out or engages in the practice of public accounting must not be misleading.

4. A name is considered misleading if the name:

a. Implies the existence of a corporation by the use of words or abbreviations such as "Corporation," "Incorporated," "P.C.," "Corp.," or "Inc.," if the CPA is not incorporated or is not a professional corporation.

b. Implies the existence of a partnership by the use of a designation such as "Smith & Jones," "C.P.A.s," "Partnership," "Ltd.," "LP", "LLP", or "LLLP" if the CPA is not such an entity.

c. Implies the existence of a limited liability company by the use of abbreviations such as "Ltd.," "L.L.C.," "LLC," or "LC" if the CPA is not such an entity.

d. Implies that the CPA is associated with or employs another person by the use of terms such as "& Company," "& Associates," or "Group" if, in addition to the CPA, there is not at least one other owner or person employed by, professionally associated, or contractually related on a regular and continuous basis with the CPA.

e. Implies the existence of more than one CPA by the use of terms such as "CPAs," or "Certified Public Accountants" if no more than one CPA is an Owner or is employed by, or professionally associated, or contractually related on a regular and continuous basis with the CPA.

f. Includes the name of a person who is neither a CPA in any State nor a CPA or legal equivalent in a foreign country if "CPA" is included in the name.

g. Indicates or implies an association with persons who are not associated with the CPA, except that a CPA who is a member of a network may include the brand name or initials of the Network provided that the name does not otherwise violate this Rule 1.9(C).

h. Contains any representation that would likely cause a reasonable person to be misled or confused about the CPA's legal entity type, e.g., corporation, partnership, limited liability company, or sole proprietorship, or about ownership.

i. Contains any representation that would likely cause a reasonable person to have a false or unjustified expectation of favorable results or capabilities.

j. Claims or implies the ability to influence a regulatory body or official.

k. Includes the name of any CPA or Firm whose certificate, license, or registration has been revoked or disciplined whereby the CPA or Firm is prohibited from practicing public accounting or prohibited from using the title CPA or holding out if the name includes the designation "CPAs" or any other language or device tending to indicate the disciplined CPA or firm possesses an active certificate, license, or registration.

l. Contains other representations or implications that in reasonable probability would cause a reasonable person to misunderstand or be deceived.

5. A name must not be formulated in such a manner that the initials or parts of the name form a term, phrase, or imply an association that is misleading.

D.OFFERING SERVICES VIA THE INTERNET

Any certificate holder offering or performing professional services via the Internet must include the following information on the Internet site:

1. Name of the certificate holder;

2. Mailing and physical address of the principal location where the certificate holder offers and/or provides professional services;

3. Business telephone number; and

4. Colorado certificate number.

E.DISCLOSURE - LICENSEES

1. A licensee must notify the Board within thirty days of any of the following events relating to the licensee:

a. Imposition of Discipline by:

(1) The SEC, PCAOB, or IRS.

(2) Another state board of accountancy for any cause other than failure to pay a professional license fee by the due date.

(3) Any other federal or state agency or any professional association or entity regarding the licensee's conduct while rendering professional services.

(4) Any federal or state taxing, insurance, or securities regulatory authority.

(5) Any non-U.S. authority or credentialing body that regulates the practice of accountancy.

b. Notice of disciplinary charges filed by the SEC, PCAOB, IRS, or another state board of accountancy, or a federal or state agency concerning the practice of public accounting or a non-U.S. authority or credentialing body that regulates the practice of public accounting.

c. Initiation of a civil proceeding or an alternative dispute resolution proceeding by a governmental entity relating to an audit report for a public or non-public company.

d. Judgment, settlement, or resolution of a civil proceeding or an alternative dispute resolution proceeding by a governmental entity relating to an audit report for a public or non-public company.

e. Initiation of an administrative proceeding or disciplinary proceeding by any federal, state, or non-U.S. agency, board, or administrative or licensing authority, or any professional association or entity regarding an audit report for a public or non-public company.

f. Any decision, judgment, settlement, or resolution of an administrative proceeding or disciplinary proceeding by any federal, state, or non-U.S. agency, board, or administrative or licensing authority, or any professional association or entity regarding an audit report for a public or non-public company.

g. Any judgment, award, or settlement of a civil action or arbitration proceeding of $150,000 or more in which the licensee was a party if the action or proceeding included any allegation of negligence, violation of specific standards of practice, fraud, or misappropriation of funds in the practice of public accounting or during employment.

h. A criminal charge against or a conviction of the licensee, deferred prosecution, or a plea of guilty or nolo contendere to a crime by the licensee if:

(1) The crime is a felony under the laws of any state, or of the United States, or of any territory or insular possession of the United States, or the District of Columbia or any non-U.S. jurisdiction; or

(2) An element of the crime is dishonesty or fraud.

i. Occurrence of any matter that must be reported by the licensee to the PCAOB pursuant to the Sarbanes-Oxley Act of 2002, 15 U.S.C. sec. 7201 et seq., and PCAOB Rules and forms adopted pursuant thereto.

2. The notice to the Board shall include the following information regarding the reportable event:

a. If the reportable event is a disciplinary proceeding, alternative dispute resolution proceeding, administrative proceeding, or civil action by any entity referenced in Rule 1.9, the name of the entity, its jurisdiction, the case name, the docket or proceeding or case number by which it is designated, a description of the matter, or a copy of the document initiating the action or proceeding and, if the matter has been adjudicated or settled, a copy of the consent decree, order, or decision.

b. If the reportable event is a criminal conviction or plea, the court, its jurisdiction, the case name, the case number, and a description of the matter or a copy of the indictment or charges, and, if the matter has been adjudicated, a copy of the judgment of conviction.

c. If the reportable event concerns a civil action or arbitration proceeding, the court or arbiter, the jurisdiction, the case name, the case number, a description of the matter, or a copy of the complaint, and a copy of the verdict, the court or arbitration decision, or, if settled, the court's order of dismissal.

3. The reporting licensee may submit a written explanatory statement to be included in the Board's records.

4. Documents provided to the Board shall be closed to public inspection if federal or state statute, rule, or regulation so provides.

5. This Rule shall apply to any reportable event that occurs on or after the Rule's effective date.

F.APPLICATION FOR BOARD ACTION

A certificate holder or a person wishing the Board to take any action regarding the status of a certificate shall apply in a manner prescribed by the Board, except as otherwise provided under Rule 1.9 (transfer to inactive status).

G.ACTIVE CERTIFICATE

An active certificate expires and must be renewed according to the schedule established by the Division of Professions and Occupations pursuant to section 12-20-202, C.R.S., in order to maintain the certificate in active status.

1. CPE hours completed prior to certification, but within the CPE reporting period, may be eligible for CPE credit upon Renewal.

2. A certificate holder, including the holder of an initial certificate, must complete ten hours of CPE for each full quarter in which the certificate holder is actively licensed during a CPE reporting period.

a. No more than twenty percent of CPE can be in Personal Development, as defined by the Fields of Study.

b. Four hours of CPE must be in Ethics, of which two hours may be in CR&R.

c. No more than fifty percent of CPE can be in any combination of teaching or publishing an article or book.

3. As a condition of renewal, certificate holders shall attest that they have complied with the requirements of this Rule 1.9(G).

4. The Board cannot renew the certificate of a certificate holder who issues attest or compilation reports unless he attests to having undergone a peer review as provided in Rule 1.11.

5. As a condition of renewal, a certificate holder shall attest that he has complied with the requirements of Rule 1.12(K).

H.INACTIVE STATUS CERTIFICATE

An inactive certificate expires and must be renewed according to the schedule established by the Division of Professions and Occupations pursuant to section 12-20-201, C.R.S., to maintain the certificate in inactive status.

1. Transfer of a Certificate to Inactive Status

To transfer a certificate to inactive status, a certificate holder must submit notice in a manner prescribed by the Board or provide written notice by first class mail to the Board.

2. Conditions of an Inactive Certificate

a. Inactive certificate holders are not required to comply with CPE requirements for the period during which the certificate is inactive.

b. Inactive status must be indicated by the word "Inactive" (e.g., Inactive CPA or Inactive Certified Public Accountant) if the certificate holder uses the CPA designation in any manner.

c. A certificate holder with a certificate in inactive status cannot hold out or perform any service for which an active certificate is required under section 12-100-116(1), C.R.S.

3. A certificate holder may transfer a certificate to inactive status whether or not he has complied with his current CPE requirements. However, transferring a certificate to inactive status does not relieve the certificate holder of the obligation to complete any CPE accrued but not completed as of the date he transferred the certificate to inactive status. The certificate holder may be subject to discipline for failure to timely complete such CPE and he must complete that CPE prior to returning the certificate to active status (i.e., to reactivate the certificate) as provided in Rule 1.9(K).

4. A certificate may be reactivated to active status as provided in Rule 1.9(K).

I.RETIRED STATUS CERTIFICATE

A retired certificate expires and must be renewed according to the schedule established by the Division of Professions and Occupations pursuant to section 12-20-202, C.R.S., to maintain the certificate in retired status.

1. A certificate holder may transfer a certificate from active, inactive, or expired status to retired status. To transfer a certificate to retired status, the certificate holder must:

a. Submit an application in a manner prescribed by the Board;

b. Be at least fifty-five years old; and

c. Have held an active certificate in good standing issued by any State for a total of at least fifteen years and must have held an active Colorado certificate for at least two of those years.

2. Conditions of a Retired Certificate

a. A retired certificate holder is not required to comply with CPE requirements for the period during which the certificate is in retired status.

b. Retired status must be indicated by the word "Retired" (e.g., Retired CPA or Retired Certified Public Accountant) if the certificate holder uses the CPA designation in any manner.

c. A retired certificate holder cannot hold out or perform any service for which an active certificate is required under section 12-100-116(1), C.R.S.

3. A certificate in retired status may be reactivated to active status pursuant to Rule 1.9(K).

J.EXPIRED STATUS CERTIFICATE

1. A certificate that is not renewed on or before the expiration date will expire; however, there is a sixty-day "grace period" from the expiration date within which the certificate may be renewed, subject to a late fee. A certificate holder will not be disciplined for holding out or practicing public accounting with an expired certificate during the grace period.

2. Conditions of an Expired Certificate

a. After the grace period, a certificate holder whose certificate has expired cannot hold out or perform any service for which an active certificate is required under section 12-100-116(1), C.R.S.

b. A certificate holder is not required to comply with CPE requirements for the period in which his certificate is in expired status.

3. An expired certificate may be transferred to Inactive status as provided in Rule 1.9(H)(1).

4. Allowing a certificate to expire does not relieve the certificate holder of the obligation to complete any CPE accrued but not completed as of the date the certificate expired. The certificate holder may be subject to discipline for failure to timely complete such CPE and he must complete that CPE prior to reinstating the certificate to active status as provided in Rule 1.9(K).

5. An expired certificate may be reinstated to active status as provided in Rule 1.9(K).

K.REACTIVATION OF A RETIRED OR INACTIVE STATUS CERTIFICATE, AND REINSTATEMENT OF AN EXPIRED CERTIFICATE

1. Conditions of Reactivation/Reinstatement - Less Than 2 Years

When a certificate has been in retired, inactive or expired status for less than two years, it may be reactivated or reinstated, provided the certificate holder has met the following requirements preceding the application receipt date.

a. Completed the minimum eighty hours of CPE required for the CPE reporting period immediately preceding the CPE reporting period in which the application for reactivation or reinstatement is received; and

b. Completed a minimum of ten hours of CPE for each full quarter during the current CPE reporting period in which the certificate was retired, inactive or expired, up to eighty hours.

c. No more than twenty percent of the required CPE can be in Personal Development, as defined by the Fields of Study, and no more than fifty percent can be in any combination of teaching or publishing an article or book.

2. Conditions of Reactivation/Reinstatement - 2 Years or More but Less Than 6 Years

When a certificate has been in retired, inactive or expired status for at least two but less than six years, it may be reactivated or reinstated, provided the certificate holder has met the requirements set forth in section (1) of this Rule 1.9 and completes and passes the Professional Ethics: The American Institute of Certified Public Accountants' Comprehensive Course (for Licensure) or a subsequently named course.

3. Conditions of Reactivation/Reinstatement- 6 Years or More

When a certificate has been in retired, inactive or expired status for six years or more, it may be reactivated or reinstated, provided the certificate holder has satisfied the conditions set forth in paragraphs (a), (b), or (c) of this Rule 1.9(K)(3).

a. The certificate holder must:

(1) Meet the requirements of section (2) of this Rule 1.9(K); and

(2) Obtain:

(a) One year of experience as provided in Rule 1.7, except that the experience must be obtained within two years immediately preceding the application receipt date; or

(b) A Master's degree or higher with a concentration in accounting deemed obtained from an Accredited Baccalaureate Granting College, as provided in Rule 1.5, within two years immediately preceding the application receipt date.

b. The certificate holder may reinstate or reactivate a certificate that has been retired, inactive or expired for six years or more by satisfying the same conditions as an applicant for initial certification, including passing the examination, meeting the education and experience requirements as established by statute and these Rules, and completing and passing the AICPA Ethics Course and Examination.

c. The certificate holder may reinstate or reactivate a certificate that has been retired, inactive or expired for six years or more if the certificate holder holds a certificate, license or other recognized qualification in full force and effect from a foreign country that has entered into an MRA as provided in Rule 1.8, or a certificate or license in active status issued by another state provided the other state meets the substantial equivalency requirements defined in Rule 1.4.

(1) The certificate holder must submit with the application for reinstatement or reactivation an official verification of licensure from the other state or foreign country; and

(2) Attest to having completed eighty hours of CPE as described in this Rule 1.9 (K).

4. The certificate holder must meet the requirements for reinstatement or reactivation to active status based on the total combined period during which the certificate was expired, retired, or inactive. For example, if a certificate had been in an inactive status for three years and a retired status for four years, the certificate holder must meet the reactivation requirements pertaining to six years or more per Rule 1.9(K)(3).

L.CPE REQUIRED AFTER REACTIVATION OR REINSTATEMENT TO ACTIVE STATUS

1. When a certificate is reactivated or reinstated to active status, the CPE required for the current CPE reporting period is ten hours for each full quarter remaining in the CPE reporting period in which the certificate was reinstated or reactivated. No more than twenty percent of the CPE can be in Personal Development, as defined by the Fields of Study and, no more than fifty percent can be in any combination of teaching or publishing an article or book. Two hours of CPE must be in Ethics, which cannot be in CR&R.

2. CPE used for reactivation or reinstatement to active status cannot be used to satisfy the requirements of this Rule 1.9(L).

M.EXCEPTIONS

The Board in its discretion may grant exceptions to the requirements in this Rule 1.9 for reasons of individual hardship or other good cause.

3 CCR 705-1.9

44 CR 03, February 10, 2021, effective 3/2/2021

44 CR 20, October 25, 2021, effective 11/14/2021

45 CR 11, June 10, 2022, effective 6/30/2022

45 CR 17, September 10, 2022, effective 9/30/2022

45 CR 20, October 25, 2022, effective 11/14/2022

47 CR 22, November 25, 2024, effective 12/15/2024