accountants, even though some of the partners are not certified in the District of Columbia. This is a change from existing law (sec. 1 of the act), which among other things requires all partners to hold certificates before the partnership can hold itself out as "certified public accountants."

Subsection (c), as does existing law, prohibits use by corporations of designations of a certified public accountant.

Subsection (d) states that the bill should not be construed as prohibiting the practice of public accountancy by any person, partnership, or corporation, so long as there is no use of a title or initials indicating that such person, partnership or corporation is a certified public accountant.

Section 4 of the bill authorizes the Commissioners to establish a Board of Accountancy of three members currently registered under section 9 of the bill, and to delegate to such Board any of the technical and professional functions vested in the Commissioners by the bill. Board members must have engaged in the practice of public accountancy as a certified public accountant for not less than 10 years, at least 5 of which were in the District. The requirement is not made applicable to present incumbents. The terms are 3 years with a two-term limitation. The Commissioners are authorized to determine compensation of Board members from time to time, and to remove members for neglect of duty or other sufficient cause.

Section 3 of the act created a three-member Board of Accountancy, with terms of the members being fixed at 3 years. The Commissioners were authorized to remove members for cause. Two members were to constitute a quorum and the Board was authorized to make rules and regulations to carry into effect the purposes of the act.

By operation of the Reorganization Act of 1949 (63 Stat. 203) and Reorganization Plan No. 5 of 1952 (66 Stat. 824) the Commissioners are presently vest with the functions of the Board of Accountancy established by the 1923 act. By Reorganization Order No. 59, the Commissioners created the present Board of Accountancy and delegated their functions to it. Administrative functions were delegated to the Director, Department of Occupations and Professions. The Commissioners believe that the provisions of section 4 of the bill relating to number of Board members and periods of time for Board qualifications and membership may prove to be unduly restrictive. They would prefer a provision giving them flexibility in determining such number and periods. Accordingly, they recommend that the bill be amended by striking lines 19 through 25 on page 4 and line 1 on page 5 and inserting, in lieu thereof, the following: "a certified public accountant for such period or periods, either within or outside the District of Columbia as the Commissioners shall, from time to time, determine. The Commissioners shall determine, from time to time, the length of terms of Board members and may limit the number of terms of members of the Board. The Commissioners shall have".

Section 5 of the bill authorizes the Commissioners to adopt rules, regulations, and bylaws to carry into effect the provisions of the legislation, and to adopt and prescribe rules of professional conduct, and grounds for denial, suspension or revocation of any certificate, endorsement or registration. The Board of Accountancy is directed to make recommendations to the Commissioners concerning adoption of such rules and regulations, which shall only be adopted after public hearings thereon.

Subsection (a) of section 6 requires that an applicant for a certificate shall be at least 21 years of age; be a U.S. citizen or have declared his intention to become one; lived, been domiciled in, or worked in the District for a certified public accountant for at least 1 year, or, while employed by a public accountant certified or endorsed in the District, was a foreign resident for not less than 18 months immediately preceding the filing by the applicant; have the education and experience specified in section 7; have passed the examination; be of good moral character; and have paid all fees. In comparison, section 4 of the act requires that an applicant for certification be a citizen of the United States and over 21 years of age or have declared his intention to become a citizen; be of good moral character; be a high school graduate or the equivalent, or have sufficient commercial experience, in the opinion of the Board; have a diploma from a recognized school of accountancy, and 1 year's employment by a certified public accountant; and pass an examination in accounting and related subjects. The Board of Accountancy may waive the accounting experience requirement in favor of 2 years' employment by a certified public accountant, or 5 years' experience at auditing the books and accounts of other persons in three or more distinct lines of commercial business.

Subsection (b) of section 6 provides that an application for a certificate by examination approved prior to the bill's passage shall be regarded as an application filed under the bill, and the terms and conditions governing carryover credits for having passed part of the examination are to control with respect to such applications. The reference in this subsection to "the Board of Accountancy for the District of Columbia, created under prior law" should be "the Commissioners of the District of Columbia," in accordance with the operation of Reorganization Plan No. 5 of 1952, which vested these functions in the Commissioners.

Subsection (c) provides that a certificate issued under prior law shall be considered a certificate under the bill.

Section 7 of the bill sets out educational and experience requirements. Subsection (a) provides that from the effective date of the bill until 1 year thereafter educational and experience requirements shall be (1) high school graduation or the equivalent; (2) completion of a course of study satisfactory to the Commissioners of 60 semester hours, 30 of which are in accounting and related subjects, in an institution, junior college, or school of accountancy, or combination thereof; (3) employment for 1 year with a practicing certified public accountant. Subsection (b) provides that, effective 1 year after the effective date of this legislation, in addition to the requirement for completion of a 4-year course in an approved high school or its equivalent, the applicant shall have completed 30 semester hours in accounting and related subjects in an institution, junior college or school of accountancy, or combination thereof, and also have, in addition to such 30 hours of study, the following alternative combinations of semester hours of study satisfactory to the Commissioners and employment experience with a certified public accountant:

(1) 30 hours and 4 years;
(2) 60 hours and 3 years;
(3) 90 hours and 2 years.

Subsection (c) provides that the Commissioners on unanimous recommendation of the Board of Accountancy, may accept in lieu of any required year of employment with a certified public accountant, 11⁄2 years of experience (1) in auditing books and accounts in three lines of commercial business; or (2) in reviewing financial statements of private business entities in relation to Government regulations. During the period set forth in subsection (a), 5 years of the experience provided in subsection (c) may be substituted for the 1 year of employment with a practicing certified public accountant. Government experience may be considered under this subsection.

Section 7 further provides that the educational and experience requirements specified therein shall be those in effect on the final date for accepting application for examination for which the applicant first sits, but the Commissioners may permit exceptions to prevent undue hardship.

Although the Commissioners offer no objection to the educational and experience requirements specified in this section, they believe it to be desirable that they be given authority to raise such standards in the future in order to keep pace with the standards in other jurisdictions. Such authority would be consistent with that conferred on the Commissioners with respect to educational standards for the practice of optometry by the act approved May 28, 1924, entitled "An act to regulate the practice of optometry in the District of Columbia" (43 Stat. 180; D.C. Code, sec. 2-512). Therefore, the Commissioners recommend that section 7 of the bill be amended by inserting between lines 21 and 22 on page 12, the following subsection:

"(d) The Commissioners are authorized and empowered to alter, amend, and otherwise change the educational and experience requirements specified in this section at any time, but in altering, amending, or changing said standards the Commissioners shall not be permitted to lower the same below the standards herein set forth."

Section 8 of the bill provides for issuance by the Commissioners of an endorsement of certificate of certified public accountant, renewable biennially, to the holder of a certificate from a State, territory, or foreign country the requirements of which are, in the opinion of the Commissioners, equivalent to those contained in this bill, and who declares his intention of practicing in the District of Columbia. In comparison, section 6 of the act authorizes the Board of Accountancy to issue a certificate to a person possessing the qualifications contained in the act who holds a certificate from any State, territory, or foreign country which extends a similar privilege to certified public accountants of the District of Columbia, provided that its requirements, in the opinion of the Board, are equivalent to those in the act.

The Commissioners note that in the bill there is no requirement that the States, territories, or foreign countries whose certificates are recognized by the District extend similar recognition to District certificates.

Section 9 of the bill requires biennial registration with the Commissioners by certified public accountants. Although there is no comparable requirement in existing law, this appears to be a desirable provision, which would aid in recordkeeping and enforcement of requirements of the act.

Section 10 of the bill provides for registration, renewable biennially, of partnerships all of whose members are certified public accountants in some State or territory and whose partners or resident manager practicing in the District of Columbia are or is certified or endorsed in the District. As indicated previously, section 1 of the act, inter alia, prohibits use of indicia of certified public accountants by partners all of whom do not hold certificates in the District of Columbia. As in the case of the educational and experience requirements provided in section 7, the Commissioners believe it to be desirable that they be given authority to set longer or shorter registration periods, as time and experience indicate to be appropriate. They therefore recommend that in sections 8, 9, and 10 the word "biennially" (line 1, p. 13, and lines 8 and 24, p. 14) be stricken, and "periodically" be inserted in lieu thereof.

Section 11 of the bill authorizes the Commissioners to revoke or suspend for not more than 3 years, a certificate, endorsement or registration, to refuse to grant or renew the same or to censure the holder or applicant for violation of the rules of professional conduct. Notice by registered mail and opportunity for a hearing must be provided. The Commissioners believe that the notice provision should be expanded to authorize use of certified mail, and they therefore recommend that after "registered" in line 19 on page 15, there be inserted "or certified". A denial, suspension, or revocation must be upon specific charges, in writing, with a certified copy being sent to the person affected, who shall be given at least 20 days' notice of the hearing. Existing law (sec. 7 of the act) provides for revocation of a certificate for unprofessional conduct or other sufficient cause, and provides that notice be mailed at least 20 days before hearing; that nonappearance of the holder of a certificate shall not prevent such hearing; and that the Corporation Counsel shall represent the interests of the public at such hearing.

Section 12 of the bill authorizes the Commissioners to subpena witnesses, books, papers, records, and documents in connection with hearings, but contains no provision for enforcement of such a subpena. In this latter connection, the act of July 1, 1902, authorizes the Commissioners, inter alia, to issue subpenas enforceable in the U.S. District Court for the District of Columbia in investigations of municipal matters. Therefore, the Commissioners recommend that section 12 be amended by adding at the end thereof (line 15, p. 16) the following:

"Any such hearing shall be considered an investigation of a municipal matter within the meaning of the Act of July 1, 1902 (32 Stat. 591; D.C. Code, sec. 1-237)."

Section 13 of the bill provides that after notice and hearing the Board may revoke or suspend the registration of a partnership for any of the causes enumerated in section 11, and also for the following:

bill.

(1) Failure to maintain the qualifications prescribed by section 10 of the

(2) Revocation of suspension or the certificate or endorsement of a partner.

(3) Cancellation, revocation, suspension, or refusal to renew the authority of the partnership or any partner thereof to practice public accountancy in any State or territory.

Section 14 of the bill requires the Commissioners to prescribe "administrative procedures" for hearings. The Commissioners believe that authority to make rules and regulations, contained in section 5 of the bill, extends to the establishment of administrative procedures, and that this section is unnecessary.

Section 15 of the bill authorizes issuance by the Commissioners of a new certificate, endorsement, or registration after revocation, upon application, after a hearing thereon.

Section 16 of the bill provides that the bill does not prohibit a person from serving as an employee of or an assistant to a certified public accountant or a partnership of certified public accountants, nor does it prohibit a CPA of a State from temporarily performing specific accounting engagements in the District in conformity with the rules of professional conduct.

Section 17 of the bill imposes a penalty of not more than $500 or imprisonment for not more than 1 year, or both, for a violation of section 3, which prohibits a person from holding himself out as a certified public accountant if not

certified, endorsed, or registered under the legislation. The section contains additional language to the effect that the Corporation Counsel "may cause the proper proceedings to be brought." The Commissioners recommend that there be substituted for this provision, lines 10 to 15, page 18, the usual statutory provision vesting prosecutive functions in the Corporation Counsel, reading as follows: "Prosecutions for violations of any provision of section 3 of this Act shall be conducted in the court of general sessions for the District of Columbia in the name of the District of Columbia by the Corporation Counsel or any of his assistants."

Under existing law (sec. 9 of the act), if an unauthorized person holds himself out as a certified public accountant, or if a person violates any other provision of the act, he shall be guilty of a misdemeanor and be punished by a fine not exceeding $500 or by imprisonment not exceeding 6 months, or both.

Section 18 of the bill provides that certain acts, such as, for example, use of a letterhead bearing a person's name in conjunction with the words "certified public accountant," shall be prima facie evidence in an action brought under section 17 that the person whose name is so displayed, caused or procured the display, and that such person is holding himself out to be a certified public accountant. A single act is declared sufficient to justify an injunction or conviction without evidence of a general course of conduct.

Section 19 of the bill provides that, in the absence of an agreement with a client to the contrary, the statements, records, etc., made by the certified public accountant shall remain his property. Such material shall not be sold, transferred, or bequeathed to anyone other than a partner without the consent of the client. Since the penalty provisions of the bill in section 17 relate only to violations of section 3, there appears to be no penalty of fine or imprisonment prescribed for violation of this section, but the certificate, endorsement, or registration of the accountant would be subject to revocation or suspension for such violation.

Section 20 of the bill declares that its provisions are severable, and section 21 authorizes the Commissioners, after public hearing, to establish, abolish, increase, or decrease fees to defray cost of administering the bill's provisions. All fees are to be paid into the Treasury of the United States, to the credit of the District of Columbia. Existing law (section 8 of the act) directs the Board to charge a specified fee for examinations and reexaminations, such fee to pay for expenses incident to such examinations. The act approved June 5, 1953 (67 Stat. 43, D.C. Code, secs. 1-252 and 1-253) authorizes the Commissioners to increase or decrease fees prescribed by the Accountancy Act, after public hearing, so as to defray the costs of administering such act.

Section 22 of the bill authorizes appropriation of such funds as may be necessary to pay the expenses of administering the bill.

Section 23 of the bill repeals the act, and makes the effective date of this legislation the date of enactment.

The Commissioners believe that this bill, if enacted, should be in accordance with the intent of the Reorganization Act of 1949 and Reorganization Plan No. 5 of 1952 (66 Stat. 824) that all functions, substantive and administrative, of the District government be centralized in the Commissioners, with authority to redelegate such functions as appropriate. Accordingly, they recommend that a section be added to the bill, similar to provisions appearing in many acts of Congress since the reorganization of the District government, expressing this intent. Therefore, the Commissioners recommend the addition to the bill of the following:

"SEC. 24. Nothing in this Act shall be construed so as to affect the authority vested in the Board of Commissioners of the District of Columbia by Reorganization Plan Numbered 5 of 1952 (66 Stat. 824). The performance of any function vested by this Act in the Board of Commissioners or in any office or agency under the jurisdiction and control of said Board of Commissioners may be delegated by said Board of Commissioners in accordance with section 3 of such plan."

Although in the foregoing analysis the Commissioners have recommended specific amendments to the bill to improve its administration should it be enacted, they reiterate their primary recommendation, contained in their report to the committee dated October 8, 1965, that action on this bill be held in abeyance pending consideration by the committee of the proposed District of Columbia Licensing Procedures Act, draft legislation which, if enacted, would permit the modernization not only of the existing Accountancy Act, but also of 19 other acts of Congress relating to various professions, occupations, and businesses.

Sincerely yours,

WALTER N. TOBRINER, President, Board of Commissioners, District of Columbia.

DISTRICT OF COLUMBIA,

INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS,
Washington, D.C., January 29, 1966.

Hon. THOMAS G. ABERNETHY,

Chairman, Subcommittee No. 2, Committee on the District of Columbia, U.S. House of Representatives, Washington, D.C.

DEAR MR. ABERNETHY: We are happy to respond to your invitation to comment on the letter of January 27, 1966, sent you by the President of the Board of Commissioners of the District of Columbia proposing nine amendments in the bills H.R. 7624 and H.R. 9815 that would regulate the practice of certified public accountants in the District of Columbia-bills on which Subcommittee No. 2 held a public hearing on January 19.

Four of the nine amendments proposed in Mr. Tobriner's letter raise no issues of policy and we do not oppose them. These are the following:

1. The proposal in the first paragraph on page 5 of Mr. Tobriner's letter to substitute the Commissioners for the Board of Accountancy in subsection b of section 6;

2. The proposal on page 8 to insert the words "or certified" after the word "registered" in line 19 on page 15;

3. The amendment suggested at the bottom of page 8 for line 15 on page 16, which is probably unnecessary but can do no harm.

4. The amendment proposed near the top of page 10, for lines 10 to 15 on page 18, which likewise is probably unnecessary but can do no harm.

We hope, however, that the committee will not approve the following amendments proposed by the Commissioners:

1. The amendment proposed near the bottom of page 3 of the Commissioner's letter would delete from section 4 of the bill a statement of the qualifications to be possessed by anyone appointed to serve on the Board of Accountancy as well as the length of terms for Board members. We believe that the Congress should legislate on these important questions instead of delegating authority to make these decisions to the Commissioners. You will notice that the Commissioners do not oppose the specific qualifications and terms now spelled out in Section 4 of the bill;

2. We oppose even more strongly the proposed amendment in section 7 that appears near the bottom of page 6 of the Commissioner's letter. That amendment would authorize the Commissioners to modify the educational and experience standards in the future by administrative action without congressional consideration of the proposed changes, so long as the standards that would be established by the bill are not lowered. The wording of the proposed amendment would establish no standard whatever to guide or control the Commissioners in the exercise of such future legislative power. We do not believe that it is wise for the Congress to delegate such broad legislative power to the Commissioners, and the amendment raises very serious questions as to its constitutionality. The increase in standards that would be made by passage of the bill will be sufficient for many years to come, and in our judgment it would be appropriate that future further increases in those standards be considered and enacted through legislation rather than through administrative action by the Commissioners;

3. Near the top of page 8 of the Commissioner's letter it is proposed to provide for "periodic" registration in lieu of "biennial." If the committee is inclined to approve this request, we recommend that the phrase "periodically but no more frequently than annually" be substituted for the word "biennially;"

4. We do not agree with the Commissioners' suggestion on page 9 of their letter that section 14 of the bill be deleted as unnecessary. We believe the bill should specifically require administrative procedures to govern such hearings, and would prefer not to rely on the more general language in section 5;

5. The last amendment recommended by the Commissioners at the bottom of page 11 of their letter would, if approved, enable the Commissioners wholly to disregard any action or recommendation of the Board of Accountancy. I think this would be most unwise, especially with reference to the evaluation of individual experience in accountancy under section 7c of the bill at pages 11 to 12. We hope the committee will not approve this recommendation. We appreciate your giving us this opportunity to comment on these proposed amendments.

Sincerely yours,

ROBERT BERNSTEIN, President.

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