Activity review |
Previous | 141 of 213 | Next |
|
small (250x250 max)
medium (500x500 max)
Large
Extra Large
large ( > 500x500)
Full Resolution
|
This page
All
|
Activity Review North Carolina State Board of Certified Public Accountant Examiners 1101 Oberlin Road, Suite 104 • PO Box 12827 • Raleigh, NC 27605 • 919- 733- 4222 • No. 01- 2006 On September 19, 2005, the North Caro-lina State Board of CPA Examiners con-ducted a public rule- making hearing to amend the North Carolina Accountancy Rules and in late December, the Board was notified that the Office of Adminis-trative Hearings and the Rules Review Commission had approved the changes. The complete text of the amended rules, which have an effective date of January 1, 2006, is available on the Board’s web site. Excerpts of the changes are shown below. [ References are to the North Carolina Register, Volume 20, Issue 4.] 21 NCAC 08A .0301, is amended as pub-lished in 20: 04, pages 205- 207, with changes, as follows: .0301 DEFINITIONS ( b) In addition to the definitions set out in G. S. 93- 1( a), the following definitions and other definitions in this Section apply when these terms are used in 21 NCAC 8: ( 2) “ Agreed upon procedure” means a client has engaged a CPA to issue a report of findings based on specific pro-cedures performed on specific subject matter of specified elements, accounts, or accounting information that is part of but significantly less than a financial statement; “ Agreed upon procedures” means a professional service whereby a CPA is engaged to issue a report of find-ings based on specific procedures per-formed on financial information pre-pared by a responsible party. ( 3) “ AICPA” means the American Insti-tute of Certified Public Accountants; ( 4) ” Applicant” means a person who has applied to take the CPA examina-tion; examination or applied for a certifi-cate of qualification; ( 5) “ Attest service” service or assurance service” means: ( A) any audit; audit or engagement to be performed in accordance with the State-ments on Auditing Standards, State-ments on Generally Accepted Govern-mental Auditing Standards, and Public Company Accounting Oversight Board Auditing Standards; ( B) any review of a financial statement; or engagement to be performed in accor-dance with the Statements on Standards for Accounting and Review Services; ( C) any compilation of a financial state-ment when the CPA expects, or reason-ably might expect, that a third party will use the compilation and the CPA does not disclose a lack of independence; or engagement to be performed in accor-dance with the Statements on Standards for Accounting and Review Services; or ( D) any examination of prospective fi-nancial information; or agreed- upon procedure or engagement to be per-formed in accordance with the State-ments on Standards for Attestation En-gagements. ( E) any agreed upon procedure; ( 6) “ Audit” means an examination of financial statements of a person by a CPA, conducted in accordance with gen-erally accepted auditing standards, to determine whether, in the CPA’s opin-ion, the statements conform with gener-ally accepted accounting principles or, if applicable, with another comprehen-sive basis of accounting; “ Audit” means a professional service whereby a CPA is engaged to examine financial statements, items, accounts, or elements of a finan-cial statement, prepared by management, in order to express an opinion on whether the financial statements, items, accounts, or elements of a financial statement are presented in conformity with generally accepted accounting principles or other comprehensive basis of accounting. ( 11) “ Compilation of a financial state-ment” means presenting in the form of a financial statement information that is the representation of any other person without the CPA’s undertaking to ex-press any assurance on the statement; “ Compilation” means a professional service whereby a CPA is engaged to present, in the form of financial state-ments, information that is the represen-tation of management without under-taking to express any assurance on the statements. ( 12) “ Conditional,” when used to refer to the status of a person, describes a person who holds a North Carolina certificate of qualification under certain conditions as imposed by the Board, such as addi-tional requirements for failure to com-plete the required CPE hours in a calen- Rules Effective January 1, 2006 Rules continued on page 2 2 dar year; year, for failure to comply with CPA firm registration, or for failure to comply with peer review reporting and or participation in peer review. ( 18) “ Examination of prospective finan-cial information” means an evaluation by a CPA of: ( A) a forecast or projection, ( B) the support underlying the assump-tions in the forecast or projection, ( C) whether the presentation of the fore-cast or projection is in conformity with AICPA presentation guideline; or ( D) whether the assumptions in the fore-cast or projection provide a reasonable basis for the forecast or projection; ( 36) ( 35) ” Review” means to perform an inquiry and analytical procedures that permit a CPA to determine whether there is a reasonable basis for expressing lim-ited assurance that there are no material modifications that should be made to financial statements in order for them to be in conformity with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting; “ Review” means a profes-sional service whereby a CPA is en-gaged to perform procedures, limited to analytical procedures and inquiries, to obtain a reasonable basis for expressing limited assurance on whether any ma-terial modifications should be made to the financial statements for them to be in conformity with generally accepted ac-counting principles or other compre-hensive basis of accounting. ( 39) “ Work papers” mean the CPA’s records of the procedures applied, the tests performed, the information ob-tained, and the conclusions reached in attest services, tax, consulting, special report, or other engagement. Work pa-pers include, but are not limited to, pro-grams used to perform professional ser-vices, analyses, memoranda, letters of confirmation and representation, check-lists, copies or abstracts of company documents, and schedules of commen-taries prepared or obtained by the CPA. The forms include, but are not limited to, handwritten, typed, printed, word pro-cessed, photocopied, photographed, computerized data, or any other form of letters, words, pictures, sounds or sym-bols. ( 40) “ Work product” means the end result of the engagement for the client which may include, but is not limited to a tax return, attest or assurance report, consulting report, and financial plan. The forms include, but are not limited to, handwritten, typed, word processed, photocopied, photographed, comput-erized data, or in any other form of let-ters, words, pictures, sounds, or sym-bols. 21 NCAC 08A .0308, is amended as pub-lished in 20: 04, pages 207- 208, with changes, as follows: .0308 HOLDING OUT TO THE PUBLIC ( b) For purposes of this Rule, a represen-tation shall be deemed to include any oral oral, electronic, or written commu-nication indicating that the person holds a certificate, including without limita-tion the use of titles or legends on letter-heads, reports, business cards, bro-chures, resumes, office signs, telephone directories directories, websites, the In-ternet, or any other advertisements, news articles, publications, listings, tax re-turn signatures, signatures on experi-ence or character affidavits for exam or certificate applicants, displayed mem-bership in CPA associations, displayed CPA licenses from this or any other state, jurisdiction, and displayed cer-tificates or licenses from other organiza-tions which have the designation “ CPA” or “ Certified Public Accountant” by the licensee’s person’s name. 21 NCAC 08A .0311, is repealed as pub-lished in 20: 04, page 208, as follows: .0311 EMPHASIS IN TAXATION OR ACCOUNTING 21 NCAC 08F .0103, is amended as pub-lished in 20: 04, pages 208- 209, with changes, as follows: .0103 FILING OF EXAMINATION APPLICATIONS AND FEES ( h) ( g) An applicant shall include as part of any application for the CPA ex-amination a statement of explanation and a certified copy of the final deposi-tion disposition if the applicant has been arrested, charged, convicted or found guilty of of, received a prayer for judgment continued or pleaded nolo con-tendere to any criminal offense. ( l) ( k) Effective with the administration of the computer- based CPA Examina-tion, candidates Candidates shall file initial and re- exam applications to sit for the CPA Examination. Examination on forms provided by the Board. ( m) ( l) Effective with the administration of the computer- based CPA Examina-tion, examination Examination fees will be valid for a six- month period from the date of the notice to schedule. Notice to Schedule ( NTS). 21 NCAC 08F .0105, is amended as pub-lished in 20: 04, page 209, with changes, as follows: .0105 CONDITIONING REQUIRE-MENTS ( c) ( b) Military Service. A candidate who was or is in active military service after receiving conditional credit shall have counted as succeeding examinations only those exams for which that candi-date applied and was approved during active military service. Military Service. A candidate who is on active military service shall not have the time on active military service counted against ( d) ( 1) of this rule unless the candidate applies to take the examination during the ac-tive military service in which case each month a candidate sits shall be counted toward ( d)( 1) of this rule. 21 NCAC 08F .0107, is amended as pub-lished in 20: 04, pages 209- 210, as follows: .0107 COMMUNICATION OF RE-SULTS OF CPA EXAMINATIONS ( c) Examination grades shall be mailed on the uniform national release date agreed to with the NASBA and the AICPA. However, candidates may re-ceive their grades personally at the of-fices of the Board on the release date by notifying the Executive Director in writ-ing not later than five days prior to the release date. to the candidates upon receipt by the Board. Rules continued from front Rules continued on page 3 3 ( d) Information prepared by the Board’s staff about the results of the examina-tion and intended for public informa-tion shall be made available no earlier than the day after the uniform national release date. 21 NCAC 08F .0110 and .0112, are re-pealed as published in 20: 04, page 210, as follows: .0110 PROCTORING OTHER JU-RISDICTIONS’ CANDIDATES .0112 CANDIDATE’S REQUEST TO SIT IN ANOTHER JURISDIC-TION 21 NCAC 08F .0304, is amended as pub-lished in 20: 04, page 210, with changes, as follows: .0304 WAIVER OF EDUCATION REQUIRED PRIOR TO EXAMINA-TION ( a) The Board will shall waive the edu-cation requirements specified in 21 NCAC 8F .0302( a)( 1) and ( 2) upon receipt of proof acceptable to the Board that the applicant has scored: ( 1) in the 50th percentile rank or higher on each part of either the Graduate Record Examination or the Graduate Management Admission Test; and ( 2) in the 50th percentile rank or higher on the AICPA Level II Achievement Test. ( b) The Board shall waive the examina-tion set forth in Paragraph ( a) of this Rule upon proof acceptable to the Board that: ( 1) ( 2) the applicant has enrolled for an advanced degree at a regionally accred-ited school and, prior to filing an appli-cation with the Board, has satisfactorily completed ten semester hours, or the equivalent, of graduate courses, includ-ing six semester hours in graduate ac-counting courses; or courses. ( 2) the applicant has completed 15 se-mester hours, or the equivalent, of un-dergraduate courses, including six se-mester hours, or the equivalent, in un-dergraduate accounting courses at a regionally accredited school if the ap-plicant possesses a bachelor’s degree supplemented by a concentration in accounting but either the bachelor’s degree or the concentration in account-ing is not from a regionally accredited school. 21 NCAC 08F .0401, is amended as pub-lished in 20: 04, pages 210- 211, with changes, as follows: .0401 WORK EXPERIENCE RE-QUIRED OF CANDIDATES FOR CPA CERTIFICATION ( a) G. S. 93- 12( 5)( c) G. S. 93- 12( 5) c ( in the text surrounding the second set of a., b., c., and d.) sets forth work experience alternatives, one of which is required of candidates applying for CPA certifica-tion. In connection with those require-ments, the following provisions apply: ( 1) The work experience shall be ac-quired prior to the date a candidate applies for certification. ( 2) All experience which is required to be under the direct supervision of a CPA shall be under the direct supervision of a CPA on active status. ( 3) A candidate who applied for the CPA examination under the special examination exception set out in G. S. 93- 12( 5), and further described in 21 NCAC 8F .0302( a)( 2) and ( d) shall meet the work experience requirement prior to applying to take the CPA exami-nation. ( b) The following provisions apply to all candidates seeking to meet the work experience requirement of G. S. 93- 12( 5) c. 3 by working in the field of accounting. G. S. 93- 12( 5)( second a.) and ( second c.). ( 1) One year of work experience is 52 weeks of full- time employment. The can-didate is employed full- time when the candidate is expected by the employer to work for the employer at least 30 hours each week for an indefinite pe-riod or for a set period of at least one year. Any other work, including working on an “ as- needed” or a temporary basis, work is working part- time. ( c) 21 NCAC 8F .0409 applies to teach-ing experience acquired pursuant to G. S. 93- 12( 5)( second b.). G. S. 93- 12( 5)( c). 2 and 4. 21 NCAC 08F .0409, is amended as pub-lished in 20: 04, page 211, as follows: .0409 SATISFACTION OF EXPERI-ENCE REQUIREMENT BY TEACH-ING ( a) Teaching Experience. The require-ment of “ five “ four years experience teaching accounting,” G. S. 93- 12( 5), means teaching accounting full- time for five four years. 21 NCAC 08G .0410, is amended as pub-lished in 20: 04, page 212, with changes, as follows: .0410 PROFESSIONAL ETHICS AND CONDUCT CPE ( b) A non- resident licensee who main-tains an office in North Carolina must comply with ( a) of this rule. All other non- resident licensees may satisfy ( a) of this rule by completing the ethics re-quirements in the jurisdiction in which he or she resides. If there is no ethics CPE requirement in the jurisdiction where he or she currently resides, he or she must comply with ( a) above. 21 NCAC 08H .0101, is amended as pub-lished in 20: 04, page 212, as follows: .0101 RECIPROCAL CERTIFI-CATES ( d) An applicant applying for a recipro-cal certificate under G. S. 93- 12( 6) must also meet the following requirements which the Board considers to be sub-stantially equivalent to those of G. S. 93- 12( 5): ( 1) The applicant shall have 150 semes-ter hours of college or university educa-tion including a bachelors or higher degree with a concentration in account-ing and one year of experience in the field of accounting verified by a certified public accountant who was the applicant’s direct supervisor and oth-erwise comply with 21 NCAC 8F .0410; or ( 2) The applicant: ( A) within 10 years immediately pre-ceding the filing date of the application, has had two years of experience in the field of accounting under the direct su- Rules continued from page 2 Rules continued on page 4 4 pervision of a CPA who held a valid license during the period of direct su-pervision in any state or territory of the United States or the District of Colum-bia; or ( B) has eight years of experience in the field of accounting, or eight years of experience teaching accounting as de-fined and calculated in 21 NCAC 8F .0409, or any combination of such experience earned within the 12 years immediately preceding the filing date of the application; and ( 3) During the two years preceding the applicant’s filing date for a reciprocal certificate, the applicant has completed 80 hours of CPE in courses meeting the requirements of 21 NCAC 8G .0401( a). However, an applicant who received his or her initial CPA license within four years from the filing date of the applica-tion for a reciprocal certificate is exempt from this CPE requirement. ( e) ( d) An applicant for change in status, reissuance, or reinstatement of a recip-rocal certificate that was inactive, for-feited, or retired more than 10 years before the date of reapplication, must comply with all current requirements for a reciprocal certificate. 21 NCAC 08M .0105, is amended as pub-lished in 20: 04, page 213, with changes, as follows: .0105 PEER REVIEW REQUIRE-MENTS ( a) A CPA or CPA firm providing any of the following services to the public shall participate in a peer review program: ( 1) Audits; audits; ( 2) Reviews reviews of financial state-ments; ( 3) Compilations compilations of finan-cial statements; and ( 4) Examinations of prospective finan-cial statements agreed- upon procedures. ( 5) Compilations of prospective finan-cial statements; ( 6) Agreed- upon procedures of prospec-tive financial statements; ( 7) Examination of written assertions; and ( 8) Agreed- upon procedures of written assertions. ( d) Participation in and completion of one of the following peer review pro-grams is required: ( 1) AICPA Division for CPA Firms SEC Practice Section; AICPA Center for Pub-lic Company Audit Firms; ( 2) AICPA Peer Review Program; or ( 3) NCACPA Peer Review Program; or ( 4) Any other peer review program found to be substantially equivalent to ( 1), ( 2) or ( 3) f this Paragraph in advance by the Board. ( 3) Any other peer review program found to be substantially equivalent to ( 1) or ( 2) of this Paragraph in advance by the Board. 21 NCAC 08M .0106, is amended as pub-lished in 20: 04, page 213, as follows: .0106 COMPLIANCE ( a) A CPA firm registered for peer review shall provide to the Board the following: ( 4) A package to include the Peer Review Report, Letter of Comments, Letter of Response and Final Letter of Accep-tance for all adverse and second con-secutive modified reports issued by a peer review program within 60 days of the date of the Final Letter of Accep-tance. 21 NCAC 08N .0103, is amended as pub-lished in 20: 04, page 213, with changes, as follows: .0103 RESPONSIBILITY FOR COMPLIANCE BY OTHERS A CPA and CPA firm shall be respon-sible for assuring compliance with the rules in this Subchapter by anyone who is the CPA’s partner, fellow shareholder, partner, fellow shareholder, member, officer, director, licensed employee, un-licensed employee or agent or unlicensed principal, or by anyone whom the CPA supervises. A CPA or CPA firm shall not permit others ( including affiliated enti-ties) to carry out on the CPA’s behalf, with or without compensation, acts which if carried out by the CPA would be a violation of these Rules. A CPA firm shall be responsible for assuring com-pliance with these Rules by any of its officers, directors, shareholders, unli-censed principals, partners, proprietors, employees, or agents. 21 NCAC 08N .0204, is amended as pub-lished in 20: 04, pages 213- 214, with changes, as follows: .0204 DISCIPLINE BY FEDERAL AND STATE AUTHORITIES ( a) Violations of Other Authorities’ Laws or Rules. A CPA shall not act in a way that would cause said CPA to be disciplined by federal or state agencies or boards for violations of laws or rules on ethics. CPAs who engage in activi-ties regulated by other federal or state authorities ( including but not limited to the following agencies: IRS, Department of Revenue, SEC, State Bar, North Caro-lina Secretary of State, PCAOB, NASD, Department of Insurance, GAO, HUD, State Auditor, State Treasurer, or Local Government Commission) must com-ply with all such authorities’ ethics laws and rules. ( b) Prima Facie Evidence. A conviction or final finding of unethical conduct by a competent authority is prima facie evi-dence of a violation of this Rule. ( c) Notice to the Board Required. A CPA shall notify the Board in writing within 30 days of any conviction or final find-ing against him or her of unlawful con-duct by any federal or state court or regulatory authority. 21 NCAC 08N .0208, is amended as pub-lished in 20: 04, page 214, as follows: .0208 REPORTING CONVIC-TIONS, JUDGMENTS, AND DISCI-PLINARY ACTIONS ( a) Criminal Actions. A CPA shall notify the Board within 30 days of any convic-tion or finding of guilt of, or pleading of nolo contendere nolo contendere, or receiv-ing a prayer for judgment continued to any criminal offense. 21 NCAC 08N .0210, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: Rules continued from page 3 Rules continued on page 5 5 .0210 FORECASTS ( d) Departures. Departures from the statements listed in Paragraph ( c) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0211, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0211 RESPONSIBILITIES IN TAX PRACTICE ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0214, is adopted as pub-lished in 20: 04, page 214, with changes, as follows: .0214 OUTSOURCING TO THIRD-PARTY SERVICE PROVIDERS ( a) A CPA shall provide a written disclo-sure to the client that he or she is using a third- party provider to assist the CPA in providing any professional services to the client. ( b) A CPA shall provide annual disclo-sure in a written statement of the ser-vices to be rendered by the third- party provider as well as the third- party provider’s name, address, and phone number. The written statement shall be dated, signed by both the CPA and cli-ent in advance of the outsourcing, and a copy provided to the client. ( c) A CPA outsourcing professional ser-vices to a third- party provider is respon-sible for insuring a third- party provider is in compliance with all rules of Profes-sional of Conduct and Ethics in 21 NCAC 08N. 21 NCAC 08N .0302, is amended as pub-lished in 20: 04, page 214, with changes, as follows .0302 FORMS OF PRACTICE ( a) Authorized Forms of Practice. A CPA who uses CPA in or with the name of the business or offers or renders attest or assurance services in the public prac-tice of accountancy to clients shall do so only through a registered sole propri-etorship, partnership, Professional Corporation, Professional Limited Li-ability Company, or Registered Limited Liability Partnership. ( e) CPA Firm Requirements for CPA Ownership. A CPA firm and its desig-nated supervising CPA shall be held accountable for the following in regard to a CPA owner: ( 1) A CPA owner shall be a natural person or a general partnership or a limited liability partnership directly owned by natural persons. ( 2) A CPA owner shall actively partici-pate in the business of the CPA firm. ( 3) A CPA owner who, prior to January 1, 2006, is not actively participating in the CPA firm may continue as an owner until such time as his or her ownership is terminated. ( e) ( f) CPA Firm Requirements for Non- CPA Ownership. A CPA firm and its designated supervising CPA partner shall be held accountable for the follow-ing in regard to a non- CPA owner: ( 1) a non- CPA owner shall be a natural person or a general partnership or lim-ited liability partnership directly owned by natural persons; ( 2) a non- CPA owner shall actively par-ticipate in the business of the firm or an affiliated entity as his or her principal occupation; ( 3) a non- CPA owner shall comply with all applicable accountancy statutes and the administrative code; ( 4) a non- CPA owner shall be of good moral character and shall be dismissed and disqualified from ownership for any conduct that, if committed by a lic-ensee, would result in a discipline pur-suant to G. S. 93- 12( 9); ( 5) a non- CPA owner shall report their his or her name, home address, phone number, and social security number, and or number and Federal Tax ID num-ber ( if any) on the CPA firm’s registra-tion; and ( 6) a non- CPA owner’s name may not be used in the name of the CPA firm or held out to clients or the public that implies the non- CPA owner is a CPA. 21 NCAC 08N .0303, is amended as pub-lished in 20: 04, pages 214- 215, with changes, as follows: .0303 OBJECTIVITY AND CON-FLICTS OF INTEREST ( d) Acceptance of a Contingent Fee. ( 1) The offering or rendering of profes-sional services for, or the receipt of, a contingent fee by a CPA is not prohib-ited except for engaging to render or rendering by a CPA for a contingent fee: CPA: ( A) of professional services for, or the receipt of such a fee from, for any person for whom the CPA also performs attest services, during the period of the attest services engagement and the period covered by any historical financial state-ments involved in such attest services; and ( B) for the preparation of original or amended tax returns or claims for tax refunds. ( 2) Fees are not regarded as being con-tingent if fixed by courts or other public authorities or, in tax matters, if deter-mined based on the results of judicial proceedings or the findings of govern-mental agencies. ( e) For the purposes of this Rule, a CPA shall provide disclosure to a client in accepting a commission, referral, or con-tingent fee. A CPA shall provide disclo-sure in a written statement of the service or product to be rendered or referred with the contingent fee, commission, or referral fee to be charged or received. The written statement shall be dated; signed by the CPA and client in advance of any sale, referral, or service provided; and a copy given to the client. A CPA shall communicate in advance to a client the scope of services or products to be ren-dered or referred for which the CPA will receive a commission, referral, or con-tingent fee. A CPA shall provide disclo-sure in a written statement within ten business days of the service or product to be rendered or referred with the com-mission, referral, or contingent fee to be charged or received by the CPA. Rules continued from page 4 Rules continued on page 6 6 21 NCAC 08N .0304, is amended as pub-lished in 20: 04, page 215, with changes, as follows: .0304 MANAGEMENT CONSULT-ING SERVICES STANDARDS ( c) Departures. Departures from the state-ments listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the state-ments. 21 NCAC 08N .0305, is amended as pub-lished in 20: 04, pages 215- 216, with changes, as follows: .0305 RETENTION OF CLIENT RECORDS ( a) Return upon Demand. A CPA must return client records in his or her posses-sion to the client after a demand is made for their return. The records must be returned immediately upon demand unless circumstances make some delay reasonable in order to retrieve a closed file or to extract the CPA’s work papers described in Paragraph ( f) of this Rule. If the records cannot be returned immedi-ately upon demand, the CPA shall im-mediately notify the client of the date the records will be returned. Nothing in this Rule shall be interpreted to require a CPA to pay delivery costs when the records are returned to the client. ( b) Who may Demand Client Records. If the client is a partnership, records shall be returned upon request to any of its general partners. If the client is a limited partnership or a registered limited li-ability partnership, records shall be re-turned upon request to its general partner( s) and the managing partner or his or her designated individual respec-tively. If the client is a corporation, records shall be returned upon request to its president. If the client is a limited liabil-ity company, records shall be returned upon request to the manager. Joint records shall be returned upon request to any party. The records must be re-turned immediately upon demand un-less circumstances make some delay rea-sonable in order to retrieve a closed file or to extract the CPA’s work papers de-scribed in Paragraph ( e) of this Rule. If the records cannot be returned immedi-ately upon demand, the CPA shall im-mediately notify the client of the date the records will be returned. Nothing in this Rule shall be interpreted to require a CPA to pay delivery costs when the records are returned to the client. ( c) ( b) Return of Original Records. If the engagement is terminated prior to completion or the CPA’s work product has neither been received nor paid for the by the client, the CPA is only re-quired to return those records origi-nally given to the CPA by the client. ( g) ( f) Reasonable Fees for Copies. Noth-ing in this Rule shall be construed to require the CPA to furnish a client with copies of the client’s records already in the client’s possession. However, if the client asserts that such records have been lost, or are otherwise not in the client’s possession, the CPA shall fur-nish copies of the records for a fee. and may charge a reasonable fee. ( h) ( g) Retention of Work product and Work papers. A CPA shall ensure that the work product and the work papers created in the performance of an en-gagement for a client are retained for a minimum of five ( 5) years after the date of issuance of the work product unless the CPA is required by law to retain such records for a longer period. 21 NCAC 08N .0307, is amended as pub-lished in 20: 04, page 216, with changes, as follows: .0307 CPA FIRM NAMES ( b) Style of Practice. It is considered misleading if a CPA firm practices un-der a name or style which would tend to imply the existence of a partnership or registered limited liability partnership or a professional corporation or profes-sional limited liability company of more than one CPA shareholder or CPA mem-ber or an association when in fact there is no partnership nor is there more than one CPA shareholder or CPA member of a CPA firm. For example, no CPA firm having just one CPA owner may have as a part of its name the words “ associ-ates” “ associates,” “ group,” or “ com-pany” or their abbreviations. It is also considered misleading if a CPA ren-ders non- attest professional services through a non- CPA firm using a name that implies any non- licensees are CPAs. 21 NCAC 08N .0308, is adopted as pub-lished in 20: 04, page 216, 216, with changes, as follows: .0308 VALUATION SERVICES STANDARDS ( c) Departures. Departures from the stan-dards listed in Paragraph ( b) of this Rule must be justified by those who do not follow them as set out in the state-ments. 21 NCAC 08N .0401, is amended as pub-lished in 20: 04, pages 216- 217, with changes, as follows: .0401 PUBLIC RELIANCE The rules in this Section apply to any CPA who engages in the attest or assur-ance services functions including, but not limited to audit, compilation, re-view, exam, forecast, and projection, as defined in 21 NCAC 8A .0301( b). CPAs who engage in such services are also subject to the SQR Peer Review require-ments of Subchapter 8M. 21 NCAC 08N .0403, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0403 AUDITING STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0404, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0404 ACCOUNTING AND RE-VIEW SERVICES STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0405, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0405 GOVERNMENTAL AC-COUNTING STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who Rules continued from page 5 Rules continued on page 7 7 New E- Mail Addresses for Board Staff Executive Staff Robert N. Brooks, Executive Director rbrooks@ nccpaboard. gov J. Michael Barham, CPA, Deputy Director mbarham@ nccpaboard. gov Administrative Services Felecia F. Ashe, Accounting Specialist feleciaa@ nccpaboard. gov Vanessia L. Willett, Receptionist/ Customer Service Representative vanessiaw@ nccpaboard. gov Communications Lisa R. Hearne, Manager lhearne@ nccpaboard. gov Examinations Phyllis W. Elliott, Examinations Specialist phyllise@ nccpaboard. gov Licensing Buck Winslow, Manager buckw@ nccpaboard. gov Alice G. Steckenrider, Licensing Specialist ( individuals) alices@ nccpaboard. gov Lisa Moy, Licensing Assistant ( firms, peer review, CPE) lmoy@ nccpaboard. gov Professional Standards Ann J. Hinkle, Manager ahhinkle@ nccpaboard. gov Paulette Martin, Professional Standards Specialist paulettem@ nccpaboard. gov Mary Beth Britt, Professional Standards Assistant mbbritt@ nccpaboard. gov do not follow them. them as set out in the statements. 21 NCAC 08N .0406, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0406 ATTESTATION STAN-DARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0408, is amended as pub-lished in 20: 04, page 21, with changes, as follows: .0408 QUALITY PEER REVIEW STANDARDS A CPA who is engaged to perform a quality peer review shall not violate the rules or standards as set in Subchapter 8M of the quality peer review program under which the review is made or the engagement contract connected with that quality peer review. Please e- mail all questions regard-ing the amended rules to rbrooks @ nccpaboard. gov. Rules continued from page 6 Licensing Activity Certificates Issued 12/ 19/ 05 John Michael Daratony 12/ 19/ 05 Matthew Philip Leach 12/ 19/ 05 Brian Joseph Schepperley 12/ 19/ 05 Brenda Elizabeth Walton Reinstatement 12/ 19/ 05 William Michael Kay 12322 12/ 19/ 05 James Connor Lutz 22231 12/ 19/ 05 John David Nivens 5168 12/ 19/ 05 Phillip Bradley Roberts 22489 12/ 19/ 05 Lindon Gene Robertson 18887 12/ 19/ 05 Sherri L. Rose 22940 12/ 19/ 05 Patricia L. Williams 18914 Reissuance 12/ 19/ 05 John F. Darcy 8812 Retired “ Retired,” when used to refer to the status of a person, describes one possessing a North Carolina certificate of qualification who verifies to the Board that the applicant does not receive, or intend to receive in the future, any earned compen-sation for current personal services in any job whatsoever and will not return to active status [ 21 NCAC 8A .0301( b)( 23)]. 12/ 19/ 05 Jerry Hufton Aiken, SC Certificate No. Send Mail to Home Business New Home Address City State Zip CPA Firm/ Business Name New Bus. Address City State Zip Telephone: Bus. ( ) Home ( ) Bus. fax ( ) E- mail Address Cerrtificate Holder Last name Jr./ III First Middle North Carolina State Board of Certified Public Accountant Examiners Post Office Box 12827 Raleigh NC 27605- 2827 PRST STD US Postage PAID Greensboro, NC Permit No. 393 20,000 copies of this document were printed for this agency at a cost of $ 2,836.22 or 14¢ per copy in January 2006. Certificate holders not notifying the Board in writing within 30 days of any change in address or business location may be subject to disciplinary action under 21 NCAC 8J .0107. Notice of Address Change Signature Date Mail to: NC State Board of Fax to: 919- 733- 4209 CPA Examiners PO Box 12827 Raleigh, NC 27605- 2827 State Board of CPA Examiners Board Members Leonard W. Jones, CPA President, Morehead City Arthur M. Winstead, Jr., CPA Vice President, Greensboro Jordan C. Harris, Jr. Secretary- Treasurer, Statesville Norwood G. Clark, Jr., CPA Member, Raleigh Tyrone Y. Cox, CPA Member, Durham Thurman L. Gause Member, Sunset Beach Michael C. Jordan, CPA Member, Goldsboro Staff Executive Director Robert N. Brooks Deputy Director J. Michael Barham, CPA Legal Counsel Noel L. Allen, Esq. Administrative Services Felecia F. Ashe Vanessia L. Willett Communications Lisa R. Hearne, Manager Examinations Phyllis W. Elliott Licensing Buck Winslow, Manager Lisa Moy Alice G. Steckenrider Professional Standards Ann J. Hinkle, Manager Mary Beth Britt Paulette Martin
Object Description
Description
Title | Activity review |
Date | 2006-01 |
Description | No.1, 2006 (January) |
Digital Characteristics-A | 52.1 KB; 8 p. |
Digital Format |
application/pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_borndigital\images_master\ |
Full Text | Activity Review North Carolina State Board of Certified Public Accountant Examiners 1101 Oberlin Road, Suite 104 • PO Box 12827 • Raleigh, NC 27605 • 919- 733- 4222 • No. 01- 2006 On September 19, 2005, the North Caro-lina State Board of CPA Examiners con-ducted a public rule- making hearing to amend the North Carolina Accountancy Rules and in late December, the Board was notified that the Office of Adminis-trative Hearings and the Rules Review Commission had approved the changes. The complete text of the amended rules, which have an effective date of January 1, 2006, is available on the Board’s web site. Excerpts of the changes are shown below. [ References are to the North Carolina Register, Volume 20, Issue 4.] 21 NCAC 08A .0301, is amended as pub-lished in 20: 04, pages 205- 207, with changes, as follows: .0301 DEFINITIONS ( b) In addition to the definitions set out in G. S. 93- 1( a), the following definitions and other definitions in this Section apply when these terms are used in 21 NCAC 8: ( 2) “ Agreed upon procedure” means a client has engaged a CPA to issue a report of findings based on specific pro-cedures performed on specific subject matter of specified elements, accounts, or accounting information that is part of but significantly less than a financial statement; “ Agreed upon procedures” means a professional service whereby a CPA is engaged to issue a report of find-ings based on specific procedures per-formed on financial information pre-pared by a responsible party. ( 3) “ AICPA” means the American Insti-tute of Certified Public Accountants; ( 4) ” Applicant” means a person who has applied to take the CPA examina-tion; examination or applied for a certifi-cate of qualification; ( 5) “ Attest service” service or assurance service” means: ( A) any audit; audit or engagement to be performed in accordance with the State-ments on Auditing Standards, State-ments on Generally Accepted Govern-mental Auditing Standards, and Public Company Accounting Oversight Board Auditing Standards; ( B) any review of a financial statement; or engagement to be performed in accor-dance with the Statements on Standards for Accounting and Review Services; ( C) any compilation of a financial state-ment when the CPA expects, or reason-ably might expect, that a third party will use the compilation and the CPA does not disclose a lack of independence; or engagement to be performed in accor-dance with the Statements on Standards for Accounting and Review Services; or ( D) any examination of prospective fi-nancial information; or agreed- upon procedure or engagement to be per-formed in accordance with the State-ments on Standards for Attestation En-gagements. ( E) any agreed upon procedure; ( 6) “ Audit” means an examination of financial statements of a person by a CPA, conducted in accordance with gen-erally accepted auditing standards, to determine whether, in the CPA’s opin-ion, the statements conform with gener-ally accepted accounting principles or, if applicable, with another comprehen-sive basis of accounting; “ Audit” means a professional service whereby a CPA is engaged to examine financial statements, items, accounts, or elements of a finan-cial statement, prepared by management, in order to express an opinion on whether the financial statements, items, accounts, or elements of a financial statement are presented in conformity with generally accepted accounting principles or other comprehensive basis of accounting. ( 11) “ Compilation of a financial state-ment” means presenting in the form of a financial statement information that is the representation of any other person without the CPA’s undertaking to ex-press any assurance on the statement; “ Compilation” means a professional service whereby a CPA is engaged to present, in the form of financial state-ments, information that is the represen-tation of management without under-taking to express any assurance on the statements. ( 12) “ Conditional,” when used to refer to the status of a person, describes a person who holds a North Carolina certificate of qualification under certain conditions as imposed by the Board, such as addi-tional requirements for failure to com-plete the required CPE hours in a calen- Rules Effective January 1, 2006 Rules continued on page 2 2 dar year; year, for failure to comply with CPA firm registration, or for failure to comply with peer review reporting and or participation in peer review. ( 18) “ Examination of prospective finan-cial information” means an evaluation by a CPA of: ( A) a forecast or projection, ( B) the support underlying the assump-tions in the forecast or projection, ( C) whether the presentation of the fore-cast or projection is in conformity with AICPA presentation guideline; or ( D) whether the assumptions in the fore-cast or projection provide a reasonable basis for the forecast or projection; ( 36) ( 35) ” Review” means to perform an inquiry and analytical procedures that permit a CPA to determine whether there is a reasonable basis for expressing lim-ited assurance that there are no material modifications that should be made to financial statements in order for them to be in conformity with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting; “ Review” means a profes-sional service whereby a CPA is en-gaged to perform procedures, limited to analytical procedures and inquiries, to obtain a reasonable basis for expressing limited assurance on whether any ma-terial modifications should be made to the financial statements for them to be in conformity with generally accepted ac-counting principles or other compre-hensive basis of accounting. ( 39) “ Work papers” mean the CPA’s records of the procedures applied, the tests performed, the information ob-tained, and the conclusions reached in attest services, tax, consulting, special report, or other engagement. Work pa-pers include, but are not limited to, pro-grams used to perform professional ser-vices, analyses, memoranda, letters of confirmation and representation, check-lists, copies or abstracts of company documents, and schedules of commen-taries prepared or obtained by the CPA. The forms include, but are not limited to, handwritten, typed, printed, word pro-cessed, photocopied, photographed, computerized data, or any other form of letters, words, pictures, sounds or sym-bols. ( 40) “ Work product” means the end result of the engagement for the client which may include, but is not limited to a tax return, attest or assurance report, consulting report, and financial plan. The forms include, but are not limited to, handwritten, typed, word processed, photocopied, photographed, comput-erized data, or in any other form of let-ters, words, pictures, sounds, or sym-bols. 21 NCAC 08A .0308, is amended as pub-lished in 20: 04, pages 207- 208, with changes, as follows: .0308 HOLDING OUT TO THE PUBLIC ( b) For purposes of this Rule, a represen-tation shall be deemed to include any oral oral, electronic, or written commu-nication indicating that the person holds a certificate, including without limita-tion the use of titles or legends on letter-heads, reports, business cards, bro-chures, resumes, office signs, telephone directories directories, websites, the In-ternet, or any other advertisements, news articles, publications, listings, tax re-turn signatures, signatures on experi-ence or character affidavits for exam or certificate applicants, displayed mem-bership in CPA associations, displayed CPA licenses from this or any other state, jurisdiction, and displayed cer-tificates or licenses from other organiza-tions which have the designation “ CPA” or “ Certified Public Accountant” by the licensee’s person’s name. 21 NCAC 08A .0311, is repealed as pub-lished in 20: 04, page 208, as follows: .0311 EMPHASIS IN TAXATION OR ACCOUNTING 21 NCAC 08F .0103, is amended as pub-lished in 20: 04, pages 208- 209, with changes, as follows: .0103 FILING OF EXAMINATION APPLICATIONS AND FEES ( h) ( g) An applicant shall include as part of any application for the CPA ex-amination a statement of explanation and a certified copy of the final deposi-tion disposition if the applicant has been arrested, charged, convicted or found guilty of of, received a prayer for judgment continued or pleaded nolo con-tendere to any criminal offense. ( l) ( k) Effective with the administration of the computer- based CPA Examina-tion, candidates Candidates shall file initial and re- exam applications to sit for the CPA Examination. Examination on forms provided by the Board. ( m) ( l) Effective with the administration of the computer- based CPA Examina-tion, examination Examination fees will be valid for a six- month period from the date of the notice to schedule. Notice to Schedule ( NTS). 21 NCAC 08F .0105, is amended as pub-lished in 20: 04, page 209, with changes, as follows: .0105 CONDITIONING REQUIRE-MENTS ( c) ( b) Military Service. A candidate who was or is in active military service after receiving conditional credit shall have counted as succeeding examinations only those exams for which that candi-date applied and was approved during active military service. Military Service. A candidate who is on active military service shall not have the time on active military service counted against ( d) ( 1) of this rule unless the candidate applies to take the examination during the ac-tive military service in which case each month a candidate sits shall be counted toward ( d)( 1) of this rule. 21 NCAC 08F .0107, is amended as pub-lished in 20: 04, pages 209- 210, as follows: .0107 COMMUNICATION OF RE-SULTS OF CPA EXAMINATIONS ( c) Examination grades shall be mailed on the uniform national release date agreed to with the NASBA and the AICPA. However, candidates may re-ceive their grades personally at the of-fices of the Board on the release date by notifying the Executive Director in writ-ing not later than five days prior to the release date. to the candidates upon receipt by the Board. Rules continued from front Rules continued on page 3 3 ( d) Information prepared by the Board’s staff about the results of the examina-tion and intended for public informa-tion shall be made available no earlier than the day after the uniform national release date. 21 NCAC 08F .0110 and .0112, are re-pealed as published in 20: 04, page 210, as follows: .0110 PROCTORING OTHER JU-RISDICTIONS’ CANDIDATES .0112 CANDIDATE’S REQUEST TO SIT IN ANOTHER JURISDIC-TION 21 NCAC 08F .0304, is amended as pub-lished in 20: 04, page 210, with changes, as follows: .0304 WAIVER OF EDUCATION REQUIRED PRIOR TO EXAMINA-TION ( a) The Board will shall waive the edu-cation requirements specified in 21 NCAC 8F .0302( a)( 1) and ( 2) upon receipt of proof acceptable to the Board that the applicant has scored: ( 1) in the 50th percentile rank or higher on each part of either the Graduate Record Examination or the Graduate Management Admission Test; and ( 2) in the 50th percentile rank or higher on the AICPA Level II Achievement Test. ( b) The Board shall waive the examina-tion set forth in Paragraph ( a) of this Rule upon proof acceptable to the Board that: ( 1) ( 2) the applicant has enrolled for an advanced degree at a regionally accred-ited school and, prior to filing an appli-cation with the Board, has satisfactorily completed ten semester hours, or the equivalent, of graduate courses, includ-ing six semester hours in graduate ac-counting courses; or courses. ( 2) the applicant has completed 15 se-mester hours, or the equivalent, of un-dergraduate courses, including six se-mester hours, or the equivalent, in un-dergraduate accounting courses at a regionally accredited school if the ap-plicant possesses a bachelor’s degree supplemented by a concentration in accounting but either the bachelor’s degree or the concentration in account-ing is not from a regionally accredited school. 21 NCAC 08F .0401, is amended as pub-lished in 20: 04, pages 210- 211, with changes, as follows: .0401 WORK EXPERIENCE RE-QUIRED OF CANDIDATES FOR CPA CERTIFICATION ( a) G. S. 93- 12( 5)( c) G. S. 93- 12( 5) c ( in the text surrounding the second set of a., b., c., and d.) sets forth work experience alternatives, one of which is required of candidates applying for CPA certifica-tion. In connection with those require-ments, the following provisions apply: ( 1) The work experience shall be ac-quired prior to the date a candidate applies for certification. ( 2) All experience which is required to be under the direct supervision of a CPA shall be under the direct supervision of a CPA on active status. ( 3) A candidate who applied for the CPA examination under the special examination exception set out in G. S. 93- 12( 5), and further described in 21 NCAC 8F .0302( a)( 2) and ( d) shall meet the work experience requirement prior to applying to take the CPA exami-nation. ( b) The following provisions apply to all candidates seeking to meet the work experience requirement of G. S. 93- 12( 5) c. 3 by working in the field of accounting. G. S. 93- 12( 5)( second a.) and ( second c.). ( 1) One year of work experience is 52 weeks of full- time employment. The can-didate is employed full- time when the candidate is expected by the employer to work for the employer at least 30 hours each week for an indefinite pe-riod or for a set period of at least one year. Any other work, including working on an “ as- needed” or a temporary basis, work is working part- time. ( c) 21 NCAC 8F .0409 applies to teach-ing experience acquired pursuant to G. S. 93- 12( 5)( second b.). G. S. 93- 12( 5)( c). 2 and 4. 21 NCAC 08F .0409, is amended as pub-lished in 20: 04, page 211, as follows: .0409 SATISFACTION OF EXPERI-ENCE REQUIREMENT BY TEACH-ING ( a) Teaching Experience. The require-ment of “ five “ four years experience teaching accounting,” G. S. 93- 12( 5), means teaching accounting full- time for five four years. 21 NCAC 08G .0410, is amended as pub-lished in 20: 04, page 212, with changes, as follows: .0410 PROFESSIONAL ETHICS AND CONDUCT CPE ( b) A non- resident licensee who main-tains an office in North Carolina must comply with ( a) of this rule. All other non- resident licensees may satisfy ( a) of this rule by completing the ethics re-quirements in the jurisdiction in which he or she resides. If there is no ethics CPE requirement in the jurisdiction where he or she currently resides, he or she must comply with ( a) above. 21 NCAC 08H .0101, is amended as pub-lished in 20: 04, page 212, as follows: .0101 RECIPROCAL CERTIFI-CATES ( d) An applicant applying for a recipro-cal certificate under G. S. 93- 12( 6) must also meet the following requirements which the Board considers to be sub-stantially equivalent to those of G. S. 93- 12( 5): ( 1) The applicant shall have 150 semes-ter hours of college or university educa-tion including a bachelors or higher degree with a concentration in account-ing and one year of experience in the field of accounting verified by a certified public accountant who was the applicant’s direct supervisor and oth-erwise comply with 21 NCAC 8F .0410; or ( 2) The applicant: ( A) within 10 years immediately pre-ceding the filing date of the application, has had two years of experience in the field of accounting under the direct su- Rules continued from page 2 Rules continued on page 4 4 pervision of a CPA who held a valid license during the period of direct su-pervision in any state or territory of the United States or the District of Colum-bia; or ( B) has eight years of experience in the field of accounting, or eight years of experience teaching accounting as de-fined and calculated in 21 NCAC 8F .0409, or any combination of such experience earned within the 12 years immediately preceding the filing date of the application; and ( 3) During the two years preceding the applicant’s filing date for a reciprocal certificate, the applicant has completed 80 hours of CPE in courses meeting the requirements of 21 NCAC 8G .0401( a). However, an applicant who received his or her initial CPA license within four years from the filing date of the applica-tion for a reciprocal certificate is exempt from this CPE requirement. ( e) ( d) An applicant for change in status, reissuance, or reinstatement of a recip-rocal certificate that was inactive, for-feited, or retired more than 10 years before the date of reapplication, must comply with all current requirements for a reciprocal certificate. 21 NCAC 08M .0105, is amended as pub-lished in 20: 04, page 213, with changes, as follows: .0105 PEER REVIEW REQUIRE-MENTS ( a) A CPA or CPA firm providing any of the following services to the public shall participate in a peer review program: ( 1) Audits; audits; ( 2) Reviews reviews of financial state-ments; ( 3) Compilations compilations of finan-cial statements; and ( 4) Examinations of prospective finan-cial statements agreed- upon procedures. ( 5) Compilations of prospective finan-cial statements; ( 6) Agreed- upon procedures of prospec-tive financial statements; ( 7) Examination of written assertions; and ( 8) Agreed- upon procedures of written assertions. ( d) Participation in and completion of one of the following peer review pro-grams is required: ( 1) AICPA Division for CPA Firms SEC Practice Section; AICPA Center for Pub-lic Company Audit Firms; ( 2) AICPA Peer Review Program; or ( 3) NCACPA Peer Review Program; or ( 4) Any other peer review program found to be substantially equivalent to ( 1), ( 2) or ( 3) f this Paragraph in advance by the Board. ( 3) Any other peer review program found to be substantially equivalent to ( 1) or ( 2) of this Paragraph in advance by the Board. 21 NCAC 08M .0106, is amended as pub-lished in 20: 04, page 213, as follows: .0106 COMPLIANCE ( a) A CPA firm registered for peer review shall provide to the Board the following: ( 4) A package to include the Peer Review Report, Letter of Comments, Letter of Response and Final Letter of Accep-tance for all adverse and second con-secutive modified reports issued by a peer review program within 60 days of the date of the Final Letter of Accep-tance. 21 NCAC 08N .0103, is amended as pub-lished in 20: 04, page 213, with changes, as follows: .0103 RESPONSIBILITY FOR COMPLIANCE BY OTHERS A CPA and CPA firm shall be respon-sible for assuring compliance with the rules in this Subchapter by anyone who is the CPA’s partner, fellow shareholder, partner, fellow shareholder, member, officer, director, licensed employee, un-licensed employee or agent or unlicensed principal, or by anyone whom the CPA supervises. A CPA or CPA firm shall not permit others ( including affiliated enti-ties) to carry out on the CPA’s behalf, with or without compensation, acts which if carried out by the CPA would be a violation of these Rules. A CPA firm shall be responsible for assuring com-pliance with these Rules by any of its officers, directors, shareholders, unli-censed principals, partners, proprietors, employees, or agents. 21 NCAC 08N .0204, is amended as pub-lished in 20: 04, pages 213- 214, with changes, as follows: .0204 DISCIPLINE BY FEDERAL AND STATE AUTHORITIES ( a) Violations of Other Authorities’ Laws or Rules. A CPA shall not act in a way that would cause said CPA to be disciplined by federal or state agencies or boards for violations of laws or rules on ethics. CPAs who engage in activi-ties regulated by other federal or state authorities ( including but not limited to the following agencies: IRS, Department of Revenue, SEC, State Bar, North Caro-lina Secretary of State, PCAOB, NASD, Department of Insurance, GAO, HUD, State Auditor, State Treasurer, or Local Government Commission) must com-ply with all such authorities’ ethics laws and rules. ( b) Prima Facie Evidence. A conviction or final finding of unethical conduct by a competent authority is prima facie evi-dence of a violation of this Rule. ( c) Notice to the Board Required. A CPA shall notify the Board in writing within 30 days of any conviction or final find-ing against him or her of unlawful con-duct by any federal or state court or regulatory authority. 21 NCAC 08N .0208, is amended as pub-lished in 20: 04, page 214, as follows: .0208 REPORTING CONVIC-TIONS, JUDGMENTS, AND DISCI-PLINARY ACTIONS ( a) Criminal Actions. A CPA shall notify the Board within 30 days of any convic-tion or finding of guilt of, or pleading of nolo contendere nolo contendere, or receiv-ing a prayer for judgment continued to any criminal offense. 21 NCAC 08N .0210, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: Rules continued from page 3 Rules continued on page 5 5 .0210 FORECASTS ( d) Departures. Departures from the statements listed in Paragraph ( c) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0211, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0211 RESPONSIBILITIES IN TAX PRACTICE ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0214, is adopted as pub-lished in 20: 04, page 214, with changes, as follows: .0214 OUTSOURCING TO THIRD-PARTY SERVICE PROVIDERS ( a) A CPA shall provide a written disclo-sure to the client that he or she is using a third- party provider to assist the CPA in providing any professional services to the client. ( b) A CPA shall provide annual disclo-sure in a written statement of the ser-vices to be rendered by the third- party provider as well as the third- party provider’s name, address, and phone number. The written statement shall be dated, signed by both the CPA and cli-ent in advance of the outsourcing, and a copy provided to the client. ( c) A CPA outsourcing professional ser-vices to a third- party provider is respon-sible for insuring a third- party provider is in compliance with all rules of Profes-sional of Conduct and Ethics in 21 NCAC 08N. 21 NCAC 08N .0302, is amended as pub-lished in 20: 04, page 214, with changes, as follows .0302 FORMS OF PRACTICE ( a) Authorized Forms of Practice. A CPA who uses CPA in or with the name of the business or offers or renders attest or assurance services in the public prac-tice of accountancy to clients shall do so only through a registered sole propri-etorship, partnership, Professional Corporation, Professional Limited Li-ability Company, or Registered Limited Liability Partnership. ( e) CPA Firm Requirements for CPA Ownership. A CPA firm and its desig-nated supervising CPA shall be held accountable for the following in regard to a CPA owner: ( 1) A CPA owner shall be a natural person or a general partnership or a limited liability partnership directly owned by natural persons. ( 2) A CPA owner shall actively partici-pate in the business of the CPA firm. ( 3) A CPA owner who, prior to January 1, 2006, is not actively participating in the CPA firm may continue as an owner until such time as his or her ownership is terminated. ( e) ( f) CPA Firm Requirements for Non- CPA Ownership. A CPA firm and its designated supervising CPA partner shall be held accountable for the follow-ing in regard to a non- CPA owner: ( 1) a non- CPA owner shall be a natural person or a general partnership or lim-ited liability partnership directly owned by natural persons; ( 2) a non- CPA owner shall actively par-ticipate in the business of the firm or an affiliated entity as his or her principal occupation; ( 3) a non- CPA owner shall comply with all applicable accountancy statutes and the administrative code; ( 4) a non- CPA owner shall be of good moral character and shall be dismissed and disqualified from ownership for any conduct that, if committed by a lic-ensee, would result in a discipline pur-suant to G. S. 93- 12( 9); ( 5) a non- CPA owner shall report their his or her name, home address, phone number, and social security number, and or number and Federal Tax ID num-ber ( if any) on the CPA firm’s registra-tion; and ( 6) a non- CPA owner’s name may not be used in the name of the CPA firm or held out to clients or the public that implies the non- CPA owner is a CPA. 21 NCAC 08N .0303, is amended as pub-lished in 20: 04, pages 214- 215, with changes, as follows: .0303 OBJECTIVITY AND CON-FLICTS OF INTEREST ( d) Acceptance of a Contingent Fee. ( 1) The offering or rendering of profes-sional services for, or the receipt of, a contingent fee by a CPA is not prohib-ited except for engaging to render or rendering by a CPA for a contingent fee: CPA: ( A) of professional services for, or the receipt of such a fee from, for any person for whom the CPA also performs attest services, during the period of the attest services engagement and the period covered by any historical financial state-ments involved in such attest services; and ( B) for the preparation of original or amended tax returns or claims for tax refunds. ( 2) Fees are not regarded as being con-tingent if fixed by courts or other public authorities or, in tax matters, if deter-mined based on the results of judicial proceedings or the findings of govern-mental agencies. ( e) For the purposes of this Rule, a CPA shall provide disclosure to a client in accepting a commission, referral, or con-tingent fee. A CPA shall provide disclo-sure in a written statement of the service or product to be rendered or referred with the contingent fee, commission, or referral fee to be charged or received. The written statement shall be dated; signed by the CPA and client in advance of any sale, referral, or service provided; and a copy given to the client. A CPA shall communicate in advance to a client the scope of services or products to be ren-dered or referred for which the CPA will receive a commission, referral, or con-tingent fee. A CPA shall provide disclo-sure in a written statement within ten business days of the service or product to be rendered or referred with the com-mission, referral, or contingent fee to be charged or received by the CPA. Rules continued from page 4 Rules continued on page 6 6 21 NCAC 08N .0304, is amended as pub-lished in 20: 04, page 215, with changes, as follows: .0304 MANAGEMENT CONSULT-ING SERVICES STANDARDS ( c) Departures. Departures from the state-ments listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the state-ments. 21 NCAC 08N .0305, is amended as pub-lished in 20: 04, pages 215- 216, with changes, as follows: .0305 RETENTION OF CLIENT RECORDS ( a) Return upon Demand. A CPA must return client records in his or her posses-sion to the client after a demand is made for their return. The records must be returned immediately upon demand unless circumstances make some delay reasonable in order to retrieve a closed file or to extract the CPA’s work papers described in Paragraph ( f) of this Rule. If the records cannot be returned immedi-ately upon demand, the CPA shall im-mediately notify the client of the date the records will be returned. Nothing in this Rule shall be interpreted to require a CPA to pay delivery costs when the records are returned to the client. ( b) Who may Demand Client Records. If the client is a partnership, records shall be returned upon request to any of its general partners. If the client is a limited partnership or a registered limited li-ability partnership, records shall be re-turned upon request to its general partner( s) and the managing partner or his or her designated individual respec-tively. If the client is a corporation, records shall be returned upon request to its president. If the client is a limited liabil-ity company, records shall be returned upon request to the manager. Joint records shall be returned upon request to any party. The records must be re-turned immediately upon demand un-less circumstances make some delay rea-sonable in order to retrieve a closed file or to extract the CPA’s work papers de-scribed in Paragraph ( e) of this Rule. If the records cannot be returned immedi-ately upon demand, the CPA shall im-mediately notify the client of the date the records will be returned. Nothing in this Rule shall be interpreted to require a CPA to pay delivery costs when the records are returned to the client. ( c) ( b) Return of Original Records. If the engagement is terminated prior to completion or the CPA’s work product has neither been received nor paid for the by the client, the CPA is only re-quired to return those records origi-nally given to the CPA by the client. ( g) ( f) Reasonable Fees for Copies. Noth-ing in this Rule shall be construed to require the CPA to furnish a client with copies of the client’s records already in the client’s possession. However, if the client asserts that such records have been lost, or are otherwise not in the client’s possession, the CPA shall fur-nish copies of the records for a fee. and may charge a reasonable fee. ( h) ( g) Retention of Work product and Work papers. A CPA shall ensure that the work product and the work papers created in the performance of an en-gagement for a client are retained for a minimum of five ( 5) years after the date of issuance of the work product unless the CPA is required by law to retain such records for a longer period. 21 NCAC 08N .0307, is amended as pub-lished in 20: 04, page 216, with changes, as follows: .0307 CPA FIRM NAMES ( b) Style of Practice. It is considered misleading if a CPA firm practices un-der a name or style which would tend to imply the existence of a partnership or registered limited liability partnership or a professional corporation or profes-sional limited liability company of more than one CPA shareholder or CPA mem-ber or an association when in fact there is no partnership nor is there more than one CPA shareholder or CPA member of a CPA firm. For example, no CPA firm having just one CPA owner may have as a part of its name the words “ associ-ates” “ associates,” “ group,” or “ com-pany” or their abbreviations. It is also considered misleading if a CPA ren-ders non- attest professional services through a non- CPA firm using a name that implies any non- licensees are CPAs. 21 NCAC 08N .0308, is adopted as pub-lished in 20: 04, page 216, 216, with changes, as follows: .0308 VALUATION SERVICES STANDARDS ( c) Departures. Departures from the stan-dards listed in Paragraph ( b) of this Rule must be justified by those who do not follow them as set out in the state-ments. 21 NCAC 08N .0401, is amended as pub-lished in 20: 04, pages 216- 217, with changes, as follows: .0401 PUBLIC RELIANCE The rules in this Section apply to any CPA who engages in the attest or assur-ance services functions including, but not limited to audit, compilation, re-view, exam, forecast, and projection, as defined in 21 NCAC 8A .0301( b). CPAs who engage in such services are also subject to the SQR Peer Review require-ments of Subchapter 8M. 21 NCAC 08N .0403, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0403 AUDITING STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0404, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0404 ACCOUNTING AND RE-VIEW SERVICES STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0405, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0405 GOVERNMENTAL AC-COUNTING STANDARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who Rules continued from page 5 Rules continued on page 7 7 New E- Mail Addresses for Board Staff Executive Staff Robert N. Brooks, Executive Director rbrooks@ nccpaboard. gov J. Michael Barham, CPA, Deputy Director mbarham@ nccpaboard. gov Administrative Services Felecia F. Ashe, Accounting Specialist feleciaa@ nccpaboard. gov Vanessia L. Willett, Receptionist/ Customer Service Representative vanessiaw@ nccpaboard. gov Communications Lisa R. Hearne, Manager lhearne@ nccpaboard. gov Examinations Phyllis W. Elliott, Examinations Specialist phyllise@ nccpaboard. gov Licensing Buck Winslow, Manager buckw@ nccpaboard. gov Alice G. Steckenrider, Licensing Specialist ( individuals) alices@ nccpaboard. gov Lisa Moy, Licensing Assistant ( firms, peer review, CPE) lmoy@ nccpaboard. gov Professional Standards Ann J. Hinkle, Manager ahhinkle@ nccpaboard. gov Paulette Martin, Professional Standards Specialist paulettem@ nccpaboard. gov Mary Beth Britt, Professional Standards Assistant mbbritt@ nccpaboard. gov do not follow them. them as set out in the statements. 21 NCAC 08N .0406, is amended without notice pursuant to G. S. 150B- 21( a) 6 as fol-lows: .0406 ATTESTATION STAN-DARDS ( c) Departures. Departures from the statements listed in Paragraph ( b) of this Rule must be justified by those who do not follow them. them as set out in the statements. 21 NCAC 08N .0408, is amended as pub-lished in 20: 04, page 21, with changes, as follows: .0408 QUALITY PEER REVIEW STANDARDS A CPA who is engaged to perform a quality peer review shall not violate the rules or standards as set in Subchapter 8M of the quality peer review program under which the review is made or the engagement contract connected with that quality peer review. Please e- mail all questions regard-ing the amended rules to rbrooks @ nccpaboard. gov. Rules continued from page 6 Licensing Activity Certificates Issued 12/ 19/ 05 John Michael Daratony 12/ 19/ 05 Matthew Philip Leach 12/ 19/ 05 Brian Joseph Schepperley 12/ 19/ 05 Brenda Elizabeth Walton Reinstatement 12/ 19/ 05 William Michael Kay 12322 12/ 19/ 05 James Connor Lutz 22231 12/ 19/ 05 John David Nivens 5168 12/ 19/ 05 Phillip Bradley Roberts 22489 12/ 19/ 05 Lindon Gene Robertson 18887 12/ 19/ 05 Sherri L. Rose 22940 12/ 19/ 05 Patricia L. Williams 18914 Reissuance 12/ 19/ 05 John F. Darcy 8812 Retired “ Retired,” when used to refer to the status of a person, describes one possessing a North Carolina certificate of qualification who verifies to the Board that the applicant does not receive, or intend to receive in the future, any earned compen-sation for current personal services in any job whatsoever and will not return to active status [ 21 NCAC 8A .0301( b)( 23)]. 12/ 19/ 05 Jerry Hufton Aiken, SC Certificate No. Send Mail to Home Business New Home Address City State Zip CPA Firm/ Business Name New Bus. Address City State Zip Telephone: Bus. ( ) Home ( ) Bus. fax ( ) E- mail Address Cerrtificate Holder Last name Jr./ III First Middle North Carolina State Board of Certified Public Accountant Examiners Post Office Box 12827 Raleigh NC 27605- 2827 PRST STD US Postage PAID Greensboro, NC Permit No. 393 20,000 copies of this document were printed for this agency at a cost of $ 2,836.22 or 14¢ per copy in January 2006. Certificate holders not notifying the Board in writing within 30 days of any change in address or business location may be subject to disciplinary action under 21 NCAC 8J .0107. Notice of Address Change Signature Date Mail to: NC State Board of Fax to: 919- 733- 4209 CPA Examiners PO Box 12827 Raleigh, NC 27605- 2827 State Board of CPA Examiners Board Members Leonard W. Jones, CPA President, Morehead City Arthur M. Winstead, Jr., CPA Vice President, Greensboro Jordan C. Harris, Jr. Secretary- Treasurer, Statesville Norwood G. Clark, Jr., CPA Member, Raleigh Tyrone Y. Cox, CPA Member, Durham Thurman L. Gause Member, Sunset Beach Michael C. Jordan, CPA Member, Goldsboro Staff Executive Director Robert N. Brooks Deputy Director J. Michael Barham, CPA Legal Counsel Noel L. Allen, Esq. Administrative Services Felecia F. Ashe Vanessia L. Willett Communications Lisa R. Hearne, Manager Examinations Phyllis W. Elliott Licensing Buck Winslow, Manager Lisa Moy Alice G. Steckenrider Professional Standards Ann J. Hinkle, Manager Mary Beth Britt Paulette Martin |
OCLC number | 20740890 |