Activity review

              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

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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.

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( 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-

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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:

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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.

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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