SB 1181 Arizona Senate · 57th Legislature - Second Regular Session

certified public accountants; certification; alternative

SB 1181 amends Arizona's accounting law to clarify key terms by adding specific definitions for "accounting services," "attest services," "baccalaureate degree," and "disciplinary action." These definitions will help the Arizona State Board of Accountancy and certified public accountants (CPAs) understand regulatory requirements and scope of practice. The bill directly affects CPAs, accounting firms, and the Board in enforcing state regulations. It does not change existing certification standards but ensures consistent terminology in the law.

Bill status signed all 5 stages cleared

Introduction

Jan 2026

Committee Review

Mar 2026

Senate Passage

Feb 2026

House Passage

Mar 2026

Signed into Law

Apr 2026

Introduced Jan 20, 2026 Signed Apr 7, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

Senate Engrossed Version (02/26/2026) → Chaptered Version · 6 edits

MODERATE

This bill updates Arizona's Certified Public Accountant regulations to modernize definitions, clarify disciplinary powers, and establish clearer pathways for out-of-state professionals to practice. The changes include adding new definitions for modern accounting services, expanding the Board's ability to impose restitution and peer reviews, and creating a streamlined 'limited reciprocity privilege' for foreign CPAs. These updates aim to protect the public by ensuring higher standards of competence while accommodating the evolving landscape of accounting practices and cross-border professional mobility.

Scope change

The bill expands the scope of regulated activities to explicitly include modern services like management advisory and litigation support, and it broadens the applicability of the law to include non-resident CPAs and foreign firms operating under specific conditions.

DEFINITION

Added new definitions for 'Management advisory services' and clarified 'Accounting services' to include modern technical skills and consulting.

REQUIREMENT

Updated educational and experience requirements for CPA certification to reflect current industry standards, including specific semester hour counts and upper-level course requirements.

Modified firm registration rules to allow certain foreign-owned businesses to use the CPA designation without registering as a firm if they are owned by a qualified reciprocity holder.

ENFORCEMENT

Expanded the Board's disciplinary powers to include restitution payments to victims and mandatory pre- and post-issuance peer reviews.

ELIGIBILITY

Created a new 'limited reciprocity privilege' allowing out-of-state CPAs to practice in Arizona without full registration if they meet specific experience and education criteria.

TIMELINE

Set the effective date of the new regulations to December 31, 2026.

Introduced Version → Senate Engrossed Version (02/26/2026) · 8 edits · Feb 26, 2026

MODERATE

This bill updates Arizona's Certified Public Accountant regulations to modernize definitions, clarify disciplinary powers, and adjust eligibility requirements. Key changes include adding restitution as a disciplinary tool, clarifying the definition of 'financial statements' to include non-GAAP bases, and modifying experience and education thresholds for CPA certification and reciprocity.

Scope change

The scope remains focused on regulating CPAs and accounting firms in Arizona, but the applicability of specific rules regarding firm registration and limited reciprocity privileges has been refined.

ENFORCEMENT

Added 'restitution payments' to the list of disciplinary actions the Board can impose to compensate clients for economic losses.

DEFINITION

Updated the definition of 'financial statements' to explicitly include statements prepared using comprehensive bases of accounting other than GAAP.

Added a new definition for 'Postbaccalaureate degree' to clarify its status relative to baccalaureate degrees for educational requirements.

REQUIREMENT

Adjusted CPA certification requirements to allow applicants with postbaccalaureate degrees to qualify with less upper-level accounting coursework compared to those with only baccalaureate degrees.

Changed the experience requirement for reciprocity applicants from a strict 'five of the ten preceding years' to a more flexible 'five of the ten preceding years' calculation.

Reduced the minimum registration fee range for CPAs and firms from $100-$300 to $100-$300 (clarifying the previous text had conflicting formatting) and added specific late fee limits.

Modified the requirements for firm registration to ensure a simple majority of ownership belongs to CPAs in good standing.

ELIGIBILITY

Refined the 'limited reciprocity privilege' rules to clarify how out-of-state CPAs can practice in Arizona without full registration, including specific conditions for business organizations.

Floor votes · Senate Feb 26, 2026 · House Mar 31, 2026

How they voted

27–0

Passed · 3 other

Total votes 30

Feb 26, 2026

D Democratic13

12 Yea 1

92% Yea

R Republican17

15 Yea 2

88% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Apr 7, 2026

Signed into law

Signed by Governor

executive

Mar 31, 2026

Lower · Passed

PASSED

lower

Mar 26, 2026

Lower · Passed

lower

Mar 10, 2026

Lower · Passed

lower

Feb 26, 2026

Upper · Passed

PASSED

upper

Feb 4, 2026

Upper · Passed

upper

1 primary · 0 co-sponsors