The Board of Accountancy met on Friday, October 29, 2004 in the conference room of Legislative Audit’s office at 427 S. Chapelle, South Dakota. Chair John Graham called the meeting to order at 8:10 a.m. Other Board members present were Marty Guindon, Mary Day, John Mitchell, David Olson and John Peterson. Also present were Sherri Sundem Wald, Legal Counsel and Executive Director, Bobbi Barnhill. Marcia Hultman, Department of Labor attended from 10:30-11:00 a.m.

John Graham asked if there were any additions to the agenda. The following items were added to the agenda:

A motion was made and seconded to approve the August 11, 2004 board meeting minutes, the motion was unanimously carried.

A motion was made and seconded to approve the issuance of permits and certificates through October 27, 2004, the motion was unanimously carried.

A motion was made and seconded to approve the 2005 and 2006 budgets. The board acknowledges the deficit budget and anticipates the utilization of cash reserves to fund the deficit. The motion was unanimously carried.

A discussion ensued regarding the financial statements. The consensus of the board was exam expenses be entered on an accrual basis on the year end financial statements only. A motion was made and seconded to approve the financial statements through September 30, 2004. The motion was unanimously carried.

Chair, John Graham called the Rules Hearing to order at 9:10 a.m. The Rules Hearing minutes have been drafted under separate cover. The Rules Hearing was adjourned at 10:20 a.m.

Marcia Hultman, Department of Labor gave a report to the board on Governor Rounds’ intent to introduce legislation during the upcoming legislative session, which directly affects Boards and Commissions. The Board members requested that Ms. Hultman define "appropriate" as it relates to an appropriate number of public members appointed to each board. The Board of Accountancy currently has one public member on the six member board. SDCL: 36-20B-4 governs how members are appointed to the Board of Accountancy. The Governor is not limited to any particular lists from any particular group by this statute, in his appointment of board members. The Executive Director requested Ms. Hultman, keep her in mind as willing to sit on any task force which may be created to assist the Governor with legislation affecting boards. It was further reported, the Governor may change the term limits from two, four year terms to three, three year terms. Ms. Hultman completed her report to the board at 11:00 a.m.

The Board made a motion to continue discussion of the Public Company Accounting Oversight Board’s (PCAOB) Acknowledgement and Agreement until receipt of further clarification from Noel Allen, Attorney for the National Association of State Boards of Accountancy. The motion was seconded. The motion unanimously carried.

A motion was made and seconded to enter into executive session to discuss peer review. The motion was unanimously carried. Pursuant to SDCL: 36-20B-36, all peer review documents are deemed confidential out of executive session.

A motion was made and seconded to come out of executive session, the motion was unanimously carried.

A motion was made and seconded to adjourn for lunch at 12:30 p.m. The motion was unanimously carried.

Chair John Graham called the meeting to order at 1:30 p.m.

Two additions to the certificates issued were presented to the board members. A motion was made and seconded to approve issuance of the two additional certificates. The motion was unanimously carried.

A discussion regarding the status of a firm permit following the death of a sole proprietor ensued. A motion was made and seconded to request the Executive Director draft a letter to the attorney for the executor of the estate, requesting the firm respond to the board in writing within 30 days regarding assurances that attestation standards are being complied with and that quality control procedures remain in place in absence of the owner. The board further authorized the firm to continue to provide attestation services under the current firm permit until January 1, 2005. The motion was unanimously carried.

A discussion regarding the continuing professional education credits submitted by a licensee for the 2004 reporting period ensued. A motion was made and seconded to disallow 16.75 hours of the 38 hours of continuing professional education submitted, based on specific criteria, which has not been met as required by ARSD: 20:75:04. The board allowed 21.25 hours of continuing professional education for the 2004 reporting period. The motion was unanimously carried.

The board was presented with a report by the Executive Director requesting a determination of acceptable experience from a prospective licensee. A motion was made and seconded allowing experience gained from duties executed for the South Dakota Division of Insurance as Division Counsel, as well as, experience gained from working with the NASD, reviewing security firm’s compliance with federal securities laws and examining their books for financial soundness. However, this experience would not qualify the prospective licensee to perform attestation work. The motion was unanimously carried.

The board members reviewed the score reports for candidates sitting for the Uniform CPA Examination during the second testing window (July-September 2004). A motion was made and seconded to ratify the score reports as presented. The motion was unanimously carried.

A motion was made to enter into executive session for the purpose of discussing an investigation. A motion was made and seconded to come out of executive session. The motion was unanimously carried.

A motion was made and seconded to send a cease and desist letter to Liberty Tax located on Minnesota Avenue in Sioux Falls, requesting they cease and desist from advertising under the heading Accountants – Public in the McLeod Yellow Book Directory.

John E. Peterson reported on the Annual Meeting held by the National Association of State Boards of Accountancy (NASBA) in Chicago.

Bobbi Barnhill reported to the board her appointment by NASBA to the newly formed Compliance Assurance Committee for the 2004-05 year. The committee’s charge is: "To explore, develop and implement opportunities for state boards to become involved in standard setting and oversight of mandatory peer review programs."

Future meeting dates were discussed and set as follows:

November 19, 2004, Conference Call, 10:00 A.M. (CST)

December 10, 2004, Eide Bailly Conference Room, Sioux Falls, 8:30 A.M.

January 28, 2005, Conference Call, 10:00 A.M. (CST)

March 25, 2005, Conference Call, 10:00 A.M. (CST)

April 29, 2005, Rapid City, South Dakota, Casey Peterson & Associates, 8:30 A.M.

All business having come before the board was concluded and the meeting was adjourned by the chairman of the board at 4:30 P.M.

_____________________

John D. Graham, CPA, Chair

Attest: ______________________

Bobbi Barnhill, Executive Director _________________________

John M. Mitchell, CPA Secretary/Treasurer