Meeting of the Board of Regents | May 2009

Friday, May 1, 2009 - 8:30am

sed seal

THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

TO:
FROM:	Frank Muñoz
SUBJECT:	Proposed Amendments to the Regulations of the Commissioner of Education Relating to the Licensure Requirements for Certified Public Accountants
DATE:	May 1, 2009
STRATEGIC GOAL:	Goal 3
AUTHORIZATION(S):

Summary

Issue for Discussion

Should the Board of Regents amend section 29.10 of the Rules of the Board of Regents and section 52.13 of the Regulations of the Commissioner of Education and Repeal and add a new Part 70 to the Regulations of the Commissioner of Education, relating to education, examination and experience requirements for licensure of certified public accountants; endorsement of out-of-state CPA licenses or foreign licenses, and the issuance of foreign limited permits or temporary practice permits?

Reason(s) for Consideration

Required by State statute and Review of policy.

Proposed Handling

This item is being shared for discussion purposes. Final discussion and potential action on emergency regulations will take place at the June 2009 meeting of the Board of Regents. Because of the extent of the amendments to the Regents Rules and Commissioner’s Regulations, the presentation of the specific amendments is being divided, with half the amendments being presented this month and the other half at the June meeting

Procedural History

On January 27, 2009, the Governor signed Chapter 651 of the Laws of 2008, which makes extensive amendments to the laws relating to the practice of public accountancy and becomes effective on July 26, 2009. The implementing rules and regulations will be presented for emergency action in June so that they will be in place when the new law takes effect.

Background Information

Oversight by the Board of Regents has historically been limited to professional services in the areas of audit and attestation services. Under the new law, however, the Board of Regents is responsible for the oversight of all professional services rendered by CPAs and PAs. Discussion at the May Professional Practice Committee meeting will focus on proposed regulations in the following eight areas of professional licensure or practice impacted by the new accountancy law.

Experience for licensure. The experience requirement for licensure as a certified public accountant is associated with the change in the scope of practice of public accountancy. The current experience requirement includes a provision that the applicant shall obtain a minimum of 75% of his/her experience in the performance of attest services. The new public accountancy law expands the scope of practice for certified public accountants to include all professional services rendered and clarifies that professional services rendered for one’s employer are within the scope of practice. The proposed amendment broadens acceptable experience for licensure to include providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills under the direct supervision of a certified public accountant licensed in the United States or a public accountant licensed in New York. Further, experience may be gained through employment in public practice, government, industry or educational institutions. The proposed regulations will require an applicant to obtain the necessary experience within 10 years of having passed the licensing examination. Applicants who fail to meet the 10 year requirement will be required to complete continuing professional education as determined by the state board for public accountancy.

Competency requirement. The proposed amendment broadens the experience requirement to recognize the broad definition of the scope of practice of public accountancy and represents a paradigm shift in the manner that applicants meet the experience requirement for licensure. Traditionally, the narrow experience requirement meant that every applicant was pre-qualified to perform the profession’s core attest and compilation functions, no matter what the individual’s practice goals were. For example, an individual graduating with an M.S. Tax degree whose intent was to provide tax preparation and advisory services would need to obtain 75% of his/her experience in audit to become licensed. Because this individual could be licensed with 100% tax preparation experience under the proposed regulations, there is a need to establish minimum competencies for individuals performing core attest services. The proposed regulations define as unprofessional conduct the supervision of attest or compilation services or signing or authorizing someone to sign the accountant’s report on financial statements unless the individual met a minimum set of competencies. These competencies include the following:

having no less that 1,000 hours in the last five years in the preparation or review of financial statements or reports on financial statements gained through employment in public practice, private industry, government or educational institutions;
having no less that 40 hours of continuing professional education in the area of accounting, auditing or attest during the three years immediately prior to the performance of such services; and
maintaining a level of education, experience and professional conduct set forth in professional general accounting standards governing the attest or compilation services performed.

Education for Licensure. The purpose of the proposed amendment to section 52.13(b)(1) of the Regulations of the Commissioner of Education is to update and expand the curricular content for licensure-qualifying registered programs in public accountancy to reflect the current educational model. The evolution of the practice of public accountancy has resulted in the broadening of the nature and types of course content for students to gain the necessary background to become successful licensed certified public accountants. The proposed amendment is necessary to provide greater flexibility to colleges and universities seeking to adapt their programs to a changing professional practice environment when registering and/or changing licensure-qualifying public accountancy programs in New York.

Examination for Licensure. Effective August 1, 2009, the education requirement for licensure as a certified public accountant will increase from 120 to 150 semester hours. The proposed amendment to section 70.3 of the Commissioner’s regulations will provide students with the opportunity to apply for admission to the Uniform CPA Examination after completing 120 semester hours of professional study, including at least one course in each of the mandatory professional accountancy content areas: financial accounting, managerial or cost accounting, taxation, and auditing and attestation services. Forty-six other licensing jurisdictions have transitioned to a 150 semester hour professional study requirement. In most cases, these states have sustained a significant decrease in candidates for two or more years following the adoption of the 150 hour education requirement. The Uniform CPA Examination is a test of general knowledge. Requiring candidates to wait an additional year while they complete a specialized degree or begin a career in a specialized field may have a negative impact on candidates. The proposed amendment provides a better opportunity for candidates who might otherwise be impeded by time and monetary factors due to the increased education requirement. In reaction to these considerations, approximately 20 states have adopted provisions similar to the proposed amendment to allow candidates to apply for admission to the examination after 120 semester hours of study.

Foreign Limited Permits. Education Law §7406(1) provides that a foreign credentialed accountant could apply for a two-year limited permit to practice public accountancy in New York using his/her foreign designation. Existing law was amended to remove a requirement that foreign countries specifically recognize CPAs and PAs licensed in New York. Instead, the new law authorizes a foreign candidate to obtain a limited permit if the foreign country that issued the candidate a license or its foreign equivalent, recognizes certified public accountants licensed in the United States. The proposed regulation also allows the Department or an organization acceptable to the Department to evaluate and verify that the professional licensing process of an applicant is significantly comparable to the requirements for a license as a certified public accountant in the United States. The regulation also establishes a fee of $100 for issuance of the limited permit.

Temporary Practice Permits. Education Law §7406(2) was added by Chapter 651 of the Laws of 2006 to allow CPAs licensed in another state, with a principal place of business an another state, to apply for a temporary practice permit in order to provide attest and compilation services in New York. The temporary practice permit would be valid for up to 180 days during a twelve-month period and would be renewable no more than three times. As a condition of the exercise of the temporary practice permit, out-of-state CPAs and their firms consent to the disciplinary authority of the Board of Regents. The proposed regulation provides that an out-of-state CPA, licensed by another state that has significantly comparable licensure requirements as determined by the Department, may obtain a temporary practice permit or an individual whose individual qualifications are verified by the Department to be significantly comparable to New York’s licensure requirements may obtain a temporary practice permit. The proposed regulations also require the submission of application materials and the payment of a $50 application fee and renewal fee.

Endorsement of Out-of-State CPA License. The proposed amendment updates existing language in section 70.4 of the Regulations of the Commissioner of Education relating to the issuance of a CPA license through endorsement. The current regulation requires an applicant to have met New York’s education, examination and experience requirements; or, if the licensure standards in the other state at the time of licensure were not fully equivalent to New York’s at the time of application for endorsement, the state board could accept four years of professional experience in public accounting in the last 10 years immediately preceding the application for licensure by endorsement. The proposed regulation provides that an applicant licensed by a state with significantly comparable licensure requirements, meaning those states recognized by the Department to have significantly comparable requirements, would be eligible for a license through endorsement. If the applicant was licensed in a state that did not have significantly comparable licensing requirements, the individual’s credentials would be evaluated to determine if his or her credentials are significantly comparable to New York’s requirements. In either case, the applicant would have to demonstrate four years of professional experience in public accounting in the last 10 years immediately preceding the application for licensure by endorsement. It is proposed that the Department would recognize the 46 jurisdictions that have been identified as being substantially equivalent by the National Association of State Boards of Accountancy’s National Qualifications Appraisal Board as having significantly comparable licensure requirements.

Endorsement of a Foreign License, Certificate or Degree. The proposed amendment updates existing regulatory language relating to the endorsement of a foreign licensure by adding a new section to the Commissioner’s regulations regarding the issuance of a CPA license through endorsement of an acceptable foreign credential. Currently, foreign applications are processed in the same manner as applicants for a first-time licensee. The new section provides for licensure by endorsement of a foreign applicant with an acceptable license, certificate or degree from a foreign country with significantly comparable licensure requirements, meaning those foreign licenses, certificates or degrees recognized by the Department to have significantly comparable requirements. These applicants would be eligible for a license through endorsement if the applicant meets certain requirements, including having passed an acceptable examination and having four years of experience acceptable to the state board in the 10 years preceding the application. It is proposed that the Department issue licenses through endorsement to qualified foreign applicants, including those recognized foreign authorities that have entered into Mutual Recognition Agreements (MRA) with the National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants as having significantly comparable licensure requirements. To date, MRAs have been entered into with the Canadian Institute of Chartered Accountants, CPA Australia, the Institute of Chartered Accountants in Australia, the Institute of Chartered Accountants in Ireland, the Instituto Mexicano de Contadores Publicos. Under the proposed process, the applicant would need to pass an acceptable examination and document to the state board four years of acceptable experience during the ten years immediately preceding the application.

Timetable for Implementation

If adopted at the June 2009 Regents meeting as an emergency measure, the proposed amendment would take effect on July 26, 2009.

AMENDMENT TO THE REGULATIONS OF THE COMMISSIONER OF EDUCATION

Pursuant to sections 207, 210, 6506, 6507, 7401, 7401-a, 7402, 7404, 7406, 7406-a, 7406-a, 7408, 7409 and 7410 of the Education Law and Chapter 651 of the Laws of 2009.

1. A new paragraph (13) is added to subdivision (a) of section 29.10 of the Rules of the Board of Regents, effective July 26, 2009, as follows:

(13) failing to meet the competency requirements of this paragraph when supervising attest or compilation services or signing or authorizing someone to sign an accountant's report on the financial statements of a firm,.

(i) Applicability of the requirement. Any licensee who supervises attest or compilation services or signs or authorizes someone to sign an accountant’s report on the financial statements of a firm shall meet the competency requirements in subparagraph (ii) of this paragraph.

(i) Competency. Any licensee that performs the services prescribed in subparagraph (i) of this paragraph shall have the following competencies:

(a) at least 1,000 hours of experience within the last five years in the preparation or review of financial statements or reports on financial statements gained through employment in government, private industry, public practice or an educational institution; and

(b) at least 40 hours of continuing education in the area of accounting, auditing or attest during the three years immediately prior to the performance of such services; and

(c) the licensee shall maintain the level of education, experience and professional conduct required by generally accepted accounting standards as described in paragraph (7) of this subdivision, relating to the attest or compilation services performed

2. Paragraph (1) of subdivision (b) of section 52.13 of the Regulations of the Commissioner of Education is amended, effective July 26, 2009, as follows:

(1) Definitions. As used in this subdivision:

(i) Professional accountancy content area shall mean curricular content in professional accountancy that includes but is not limited to each of the [following] subjects identified in clauses (a) through (d) of this subparagraph and may also include but need not be limited to the subjects identified in clauses (e) through (g) of this subparagraph:

(a) financial accounting [theory and principles] and reporting;

(b) cost or managerial accounting;

(d) auditing and [computer auditing] attestation services[.];

(e) fraud examination;

(f) internal controls and risk assessment; and

(g) accounting information systems.

(ii) General business content area shall mean curricular content [that includes] relating to the development of knowledge in traditional business principles and technical skills. Curricular content in general business may include but is not limited to each of the following subjects:

(a) business statistics;

(b) [commercial] business law;

(d) economics; [and]

(e) finance[.];

(f) management;

(g) marketing;

(h) operations management;

(i) organizational behavior;

(j) business strategy;

(k) quantitative methods; and

(l) information technology and systems.

3. Sections 70.1 through 70.6 of the Regulations of the Commissioner of Education are repealed and new sections 70.1 through section 70.6 are added to the Regulations of the Commissioner of Education, effective July 26, 2009 as follows:

§70.1 Professional study of public accountancy

(a) For purposes of this section, acceptable accrediting agency shall mean an organization accepted by the department as a reliable authority for the purpose of accreditation of accountancy programs, having accreditation standards that are substantially equivalent to the requirements for programs registered pursuant to section 52.13 of this Title, and applying its criteria for granting accreditation in a fair, consistent, and nondiscriminatory manner.

(b)(1) To meet the professional educational requirements for licensure, the applicant shall present satisfactory evidence of completion of a baccalaureate or higher degree program in accountancy that is registered by the department pursuant to section 52.13 of this Title, or a baccalaureate or higher degree program in accountancy that is accredited by an acceptable accrediting agency, or a baccalaureate or higher degree program, or its foreign equivalent, that is deemed to be the substantial equivalent of a registered or accredited program, as determined by the department.

(2) An applicant who applies to the department for licensure on or after August 1, 2009 shall be required to have satisfactorily completed a curriculum of at least 150 semester hours in a program described in paragraph (1) of this subdivision, except that an applicant who applies for licensure on or after August 1, 2009 and was licensed in another state prior to August 1, 2009 may meet the education requirements by having satisfactorily completed a curriculum of at least 120 semester hours in a program described in paragraph (1) of this subdivision.

(3) An applicant who applies to the department for licensure prior to August 1, 2009 shall be required to have either:

(i) satisfactorily completed a curriculum of at least 150 semester hours in a program prescribed in paragraph (1) of this subdivision; or

(ii) satisfactorily completed a curriculum of at least 120 semester hours in a program prescribed in paragraph (1) of this subdivision prior to August 1, 2009 and submitted the required application forms for licensure to the department prior to August 1, 2009.

(c) In lieu of meeting the education requirements prescribed in subdivision (b) of this section and the experience requirements prescribed in section 70.2 of this Part, the applicant may meet the following requirement: at least 15 years of full-time experience in the practice of public accountancy satisfactory to the State Board for Public Accountancy.

§ 70.2 Experience requirements.

(a) An applicant who has satisfied the requirements as to education shall meet the experience requirement for licensure as a certified public accountant by submitting documentation, satisfactory to the Board of Regents, of completion of the following experience requirements:

(1) One year of acceptable full-time experience, or the equivalent thereof, shall be required for an applicant who has met the professional education requirements for licensure in section 70.1 of this Part through completion of a curriculum of at least 150 semester hours in a baccalaureate or higher degree program in accountancy, or its foreign equivalent, in accountancy that is registered by the department pursuant to section 52.13 of this Title, accredited by an acceptable accrediting agency, or determined by the department to be the substantial equivalent of a registered or accredited program.

(2) Two years of acceptable experience, or the equivalent thereof, shall be required for an applicant who has met the professional education requirements for licensure in section 70.1 of this Part through completion of a curriculum of at 120 semester hours in a baccalaureate or higher degree program in accountancy, or its foreign equivalent, that is registered by the department pursuant to section 52.13 of this Title, accredited an acceptable accrediting agency, or determined by the department to be the substantial equivalent of a registered or accredited program.

(3) For purposes of this subdivision, one year of full-time experience shall mean an aggregate total of twelve calendar months of full-time employment. Full-time shall be defined as a five-day work week, with at least 35 hours of experience per week, excluding overtime. The State Board for Public Accountancy may also credit an applicant for part-time experience in the amount of one week of experience for every two weeks of acceptable part-time experience earned. Part-time shall be defined as at least 20 hours of experience per week.

(4) Such experience shall be attested to by a certified public accountant licensed in New York or in another political subdivision of the United States or by a public accountant licensed in New York, provided that such certified public accountant or public accountant acted in a supervisory capacity to the applicant in the employing organization.

(b) Acceptable experience in the practice of public accountancy shall be limited to experience in providing accounting services or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills under the supervision of a certified public accountant licensed in the United States or a public accountant licensed in New York.

(c) Acceptable experience in the practice of public accountancy shall be earned through employment in public practice, government, private industry or an educational institution.

(d) For purposes of subdivision (a), if the experience was earned more than ten years after the applicant passed the certified public accountant licensing examination, a license will not be issued until the applicant completes a satisfactory amount of continuing professional education, as is deemed appropriate by the State Board.

§ 70.3 Licensing examinations

(a) Content. The examination shall consist of the following sections:

(1) financial accounting and reporting;

(2) business environment and concepts;

(3) regulation; and

(4) auditing and attestation.

(b) Passing score. The passing score in each section shall be 75.0.

(c) Retention of credit. A candidate shall be subject to the retention of credit requirements of paragraph (1) of this subdivision, unless the candidate passed two or more sections of the paper-and-pencil version of the examination administered prior to December 4, 2003 in which case the candidate shall be subject to the retention of credit requirements of paragraph (2) of this subdivision.

(1) For purposes of this paragraph, examination window means a three-month period in which the examination is available within a quarter of the year, the beginning and ending of which shall be established by the examination provider. A candidate may take the required sections of the examination individually and in any order. Credit for any section passed shall not be valid for more than 18 months, calculated from the last day of the examination window in which the candidate sat for such section of the examination. A candidate must pass all four sections of the examination within a rolling 18-month period, which begins on the last day of the examination window in which the candidate sat for any section of the examination that the candidate passed. A candidate may not retake a failed section of the examination in the same examination window.

(2) Transitional retention period. A candidate who has acquired credit for passing two or more sections of the paper-and-pencil version of the examination administered prior to December 4, 2003 shall be allowed a transitional retention period to obtain a passing score on the remaining sections of the computer-based format of the examination. The transitional retention period shall consist of the three-year period in which the candidate was required to pass all sections of the paper-and-pencil examination, extended to the last day of the month in which the three-year period ends, provided that such period shall terminate before the end of such three-year period as extended, if the candidate has exhausted six opportunities to pass the remaining sections of the licensing examination in whatever format before the end of that period. In that case, the transitional retention period shall terminate on the date the candidate has exhausted the six opportunities. A candidate may not retake a failed section of the examination in the same examination window, meaning a two-month period in which the examination is available within a quarter of the year.

(3) A candidate who has been awarded credit for passing a section of the licensing examination administered prior to December 4, 2003 shall receive credit for the corresponding section of the licensing examination administered after that date, as follows, provided that the candidate has met the retention of credit requirements of this subdivision:

(i) a candidate who has been awarded credit for financial accounting and reporting shall be awarded credit for financial accounting and reporting;

(ii) a candidate who has been awarded credit for business law and professional responsibilities shall be awarded credit for business environment and concepts;

(iii) a candidate who has been awarded credit for accounting and reporting shall be awarded credit for regulation; and

(iv) a candidate who has been awarded credit for auditing shall be awarded credit for auditing and attestation.

(d) The department shall accept passing scores on the uniform certified public accountant examination, or on an examination determined to be comparable in content, as meeting the requirement of the licensing examination, except where the department determines that the administration, scoring, content or other comparable factors concerning such examination have affected the validity and/or integrity of such examination so as to render acceptance of such scores inappropriate. Candidates shall complete a minimum of 120 semester hours of study in a regionally accredited college or university which shall include at least one course in each of the mandatory professional accounting content areas defined in subparagraph (i) of paragraph (1) of subdivision (b) of section 52.13 of the Regulations of the Commissioner of Education, or its equivalent as determined by the department, for admission to the licensing examination as a New York candidate.

(e) Transfer of examination credit. Candidates who have passed, in another state, sections of the licensing examination used by New York State may have their grades transferred upon application, if the requirements of this Part concerning education, and retention of credit for sections passed have been met. A score of 75.0 or higher shall be considered passing for the purposes of transferring grades from another jurisdiction.

§70.4 Licensure by endorsement

(a) Endorsement of licenses of other states.

A license to practice certified public accountancy issued by another state or political subdivision of the United States may be endorsed by the department for practice in New York State if the applicant:

(1) is either:

(i) licensed by a state that has significantly comparable licensure standards to New York. For purposes of this section, states that have significantly comparable licensure standards shall mean those states that are recognized by a national professional accounting organization acceptable to the department as having licensure requirements for certified public accountants that are significantly comparable to New York State; or

(ii) licensed by a state that has not been recognized as having significantly comparable licensure standards to New York, provided that the department has determined that the applicant has completed licensure requirements significantly comparable to the licensure requirements for certified public accountants in New York State;

(2) presents satisfactory evidence to the State Board of at least four years of professional experience in the practice of public accountancy following initial licensure and within the 10 years immediately preceding application for licensure by endorsement; and

(3) submits a completed application, on a form prescribed by the department, which shall include, but need not be limited to, the following information:

(i) certification by the applicant of good moral character;

(ii) verification of the applicant’s licensure status in his/her initial state of licensure and, if different, verification of the applicant’s licensure status in the state of the applicant’s principal place of business;

(iii) verification by the applicant of the location of his or her principal place of business;

(iv) certification by the applicant that he or she has completed the continuing education requirements of the state where the applicant’s principal place of business is located in the year prior to submission of the application form; and

(v) certification of satisfactory completion of the required education and professional experience in the practice of public accountancy, as required in paragraphs (1) and (2) of this subdivision.

(b) Endorsement of foreign licenses. A certified public accountancy license, or its foreign equivalent, that is issued by a foreign country in which licensure or registration is regulated by an authority responsible for the regulation of the practice of public accountancy in such foreign jurisdiction and acceptable to the Board of Regents, may be accepted by the department for licensure in New York State if the applicant:

(1) (i) presents satisfactory evidence of a license in certified public accountancy, or its foreign equivalent, from a foreign jurisdiction that is recognized by the department or a national professional accounting organization acceptable to the department, as having significantly comparable licensure standards to New York; and

(ii) presents satisfactory evidence of a license in certified public accountancy, or its foreign equivalent, from a foreign jurisdiction that has not been recognized as having significantly comparable licensure standards to New York, provided that the department has determined that the applicant has completed licensure requirements significantly comparable to the licensure requirements for certified public accountants in New York State.

(3) received acceptable grades on a professional competency examination acceptable to the State Board; and

(4) submits a completed application, on a form prescribed by the department, which shall include, but not be limited to:

(i) certification by the applicant of good moral character;

(ii) verification of the applicant’s licensure status in his/her initial state of licensure and if different, verification of the applicant’s licensure status in the state of the applicant’s principal place of business;

(iii) verification of acceptable grades on a professional competency examination acceptable to the State Board;

(iv) certification of completion of the required education for licensure as a certified public accountant.

(v) certification of completion of four years of satisfactory professional experience in public accountancy, as required in paragraph (2) of this subdivision.

§70.5 Limited permits

(a) Pursuant to the provisions of Education Law section 7406(1) and upon the recommendation of the State Board, the department will consider applications for limited permits, following receipt from the appropriate authority in the foreign country, of documentation which establishes or sets forth:

(1) the licensing standards and processes applied by the licensing authority of that country;

(2) the certificate, license, or degree which is recognized in the foreign country as qualification to perform the acts specified in Education Law section 7401; and

(3) that the foreign country grants equal authority to certified public accountants or public accountants licensed in the United States.

(b) Upon receipt of an application and supporting evidence, and upon recommendation of the board, the department will issue a limited permit to an applicant who holds a degree, certificate or license specified in subdivision (a) of this section from a foreign country which has complied with said subdivision, if the applicant:

(1) demonstrates that he or she has professional qualifications which are determined by the board to be significantly comparable of those required for New York licensure;

(2) evidences proficiency in the use of generally accepted accounting principles and auditing standards as practiced in New York;

(3) demonstrates that the applicant resides or has a place for the regular transaction of business within New York State;

(4) is of good moral character; and

(5) has paid an application fee of $100 for issuance of a limited permit.

(d) A limited permit issued pursuant to these provisions:

(1) shall be valid for a period of two years;

(2) may be renewed on recommendation of the board upon reapplication, payment of a renewal fee of $100 and a demonstration that the purposes intended to be served by the original permit have not been accomplished;

(3) shall authorize the holder to use only the titles or designations used in the foreign country, followed by the name of the country from which he or she received his or her certificate, license or degree; and

(4) shall subject the holder to the jurisdiction of the department and the Board of Regents in matters relating to the regulation of professional misconduct under the provisions of article 130 of the Education Law and regulations promulgated under authority of such law.

§70.6 Temporary practice permits.

(a) Pursuant to the provisions of Education Law section 7406 (2) and upon recommendation of the board, the department may issue, to a certified public accountant who holds a valid license or certificate to practice public accountancy issued by another state and is in good standing and practices public accountancy in another state that is his or her principal place of business, a temporary permit to perform the public accountancy services described in Education Law section 7401(1) and (2), provided that the applicant meets the following requirements:

(1) (a) the applicant is licensed by another state that the Board of Regents has determined has significantly comparable licensure requirements to New York. For purposes of this section, states that have significantly comparable licensure requirements shall mean those states that are recognized by a national professional accounting organization, such as, but not limited to, the National Association of State Boards for Public Accountancy’s National Qualification Appraisal Board, to have licensure standards that are significantly comparable to the licensure requirements in New York State; or

(b) the applicant is licensed by another state that has not been determined to have significantly comparable certified public accountant licensure requirements, provided that the applicant’s individual licensure qualifications are verified by the department to be significantly comparable to the licensure requirements in New York State.

(2) the applicant submits a completed application, on a form prescribed by the department, which shall include the following information:

(i) verification by the applicant of his or her residence, principal place of business and his/her state of licensure;

(ii) certification by the applicant of good moral character;

(iii) certification by the applicant that he or she has met the continuing education requirements of the state of his or her principal place of business in the year prior to submission of the application form; and

(iv) payment of a $50 fee for the issuance of a temporary practice permit.

(b) A temporary practice permit issued pursuant to these provisions:

(1) shall be valid for an aggregate total of 180 days during the twelve month period beginning on the effective date of the permit;

(2) may be renewed by the department upon reapplication and payment of a renewal fee of $50, up to three times provided the applicant remains in good standing in this state and his or her state(s) of licensure and is in compliance with all laws, rules and regulations governing the practice of public accountancy in New York State.

(c) An applicant may practice in this state once the department renders an initial determination that the information submitted under paragraph two of subdivision (a) of this section, including payment of the temporary permit fee, has been received.

(d) An applicant shall immediately cease the practice of public accountancy upon notification by the department that his or her application for a temporary practice permit under this section has been denied.

(e) An individual, licensed as a certified public accountant in another state, who is practicing public accountancy in this state pursuant to this section may use the title “certified public accountant” or the designation “CPA” if the individual identifies his or her state of principal place of business in parentheses following his or her title or designation.

(f) Any certified public accountant who practices in New York State pursuant to Education Law 7406(2), and any firm that employs such certified public accountant to provide such services in New York State, shall consent to all of the following as a condition of the exercise of such temporary practice privilege:

(1) to the personal and subject matter jurisdiction and disciplinary authority of the Board of Regents;

(2) to comply with Article 149 of the Education Law and the Rules of the Board of Regents and the Regulations of the Commissioner of Education; and

(3) to the appointment of the Secretary of State or other public official acceptable to the department, in the certified public accountant’s state of licensure or the state in which the firm has its principal place of business, as the certified public accountant or firm’s agent upon whom process may be served in any action or proceeding by the department against such certified public accountant.

(g) A certified public accountant licensed by another state and in good standing, who obtains a temporary practice permit under this section and files an application for licensure under Education Law section 7404 on or before the expiration date of such temporary practice may continue to practice under such permit for a period coterminous with the period during which his or her application for licensure remains pending with the department.