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. 2- 2003

Inside this issue...

Certificates Issued ............................. 5

Commissions & Referral Fees .......... 7

Disciplinary Actions ......................... 2

Exam Committees .............................. 5

Inactive Status ................................... 6

IRS Form W- 9 ..................................... 6

Taxpayer Assistance Numbers ........ 5

Notice of Address Change ............... 8

Reclassifications ................................ 6

www. state. nc. us/ cpabd

NOTE: Not all requirements for the com-puter-

based Uniform CPA Examination

have been finalized. The following answers

are believed to be accurate, but are subject to

change as the implementation of the CBT

draws closer and will be updated as more

information becomes available. These an-swers

were last updated January 8, 2003.

Frequently Asked Questions about the Computer- Based Exam

When is the final administration of the

pencil- and- paper Uniform CPA Exami-nation?

November 2003 is scheduled to be

the final administration of the pencil-and-

paper exam.

When will the computer- based Uni-form

CPA Examination ( CBT) be intro-duced?

The CBT is scheduled for introduc-tion

by May 2004.

Will the content of the CBT be different

from the content of the pencil- and- pa-per

exam?

Yes, the content of the CBT will be

different from the content of the pencil-and-

paper exam. ( For a comparison of the

two exams, please see chart on page 4.)

What are the content changes?

Information on the proposed struc-ture

and content of the CBT is discussed

in “ Proposed Structure & Content Speci-fications

for the Uniform CPA Examina-tion,”

which is available for download

from www. cpa- exam. org, the AICPA’s

exam web site.

What is the length of the CBT?

The CBT will be 14 hours long

whereas the pencil- and- paper exam is

15.5 hours long. ( For a comparison of the

two exams, please see chart on page 4.)

Will the CBT include essay questions?

Yes, essays ( constructed responses)

will be incorporated into the exam simu-lations.

Are the education requirements for tak-ing

the exam also changing?

The education requirements for the

CBT are the same as the education re-quirements

for the pencil- and- paper

exam.

Will I still have 120 days after taking the

exam to meet the educational require-ments?

Yes, you will still have 120 days after

taking the exam to meet the educational

requirements.

Will the fee for taking the exam in-crease?

Yes, there will be an increase in the

fee to take the exam. The estimated total

cost for all four sections of the CBT is

between $ 500.00 - $ 700.00.

Will my current conditioning change

under the CBT?

A candidate will retain credit for the

sections of the exam already passed.

However, if a candidate does not pass

the remaining sections of the exam prior

to October 31, 2005, the credits earned on

the pencil- and- paper exam will expire.

How will my current credits transfer to

the CBT?

Credits earned on the pencil- and-paper

exam will transfer to the CBT as

shown in the chart on page 4.

How much time do I have to pass all

sections of the CBT?

Once you receive credit for a section

of the exam, you will be allowed a maxi-mum

of 18 months to pass all remaining

sections of the exam in order to retain

credit for the passed section.

What is a “ testing window”?

The CBT will be available approxi-mately

60 days out of each calendar

quarter. This 60 day period is called a

testing window and there will be four

testing windows each calendar year.

A candidate may take any of the four

exam sections during any testing win-dow.

However, a candidate may take

each section of the exam only one time

during a testing window.

CBT

continued on page 4

Disciplinary Actions

2

Name Not Published

THIS CAUSE, coming before the Board

at its offices at 1101 Oberlin Road, Ra-leigh,

Wake County, North Carolina,

with a quorum present. Pursuant to

NCGS 150B- 41 and 150B- 22, the Board

and Respondent stipulate the follow-ing

Findings:

1. Respondent is the holder of a certifi-cate

as a Certified Public Accountant in

North Carolina.

2. In a complaint filed with the Board,

Complainant stated that she and her ex-husband

were members of a Limited

Liability Company ( LLC). She stated

further that Respondent prepared the

LLC’s tax returns including a K- 1 that

the LLC had sent her. Complainant fur-ther

alleged that upon receiving a K- 1,

she had contacted Respondent in his

capacity as certified public accountant

for the LLC that she co- owned and re-quested

documentation supporting the

income and withdrawals for the

Complainant’s capital account. The

K- 1 indicated that Complainant had

owned ninety- five ( 95) per cent of the

LLC during the period covered by the

K- 1. Complainant asserted that Respon-dent

refused to provide these requested

records to Complainant. Respondent

contends that he was not obligated un-der

the accountancy rules to return LLC

records to the Complainant since she

was not, at the time of the request, the

designated Manager of the LLC.

3. According to the Complainant, some-time

after the request referenced in # 2

above, Complainant also requested cop-ies

of the joint tax returns prepared by

Respondent over the last five ( 5) years

for Complainant and her ex- husband.

Complainant alleges that Respondent

also refused to provide her with the

requested copies of the joint tax returns.

Respondent contends that he never re-ceived

complainant’s request for the

joint tax returns.

4. Despite at least two written demands,

Respondent failed to respond to the

Board’s requests for an explanation as

to how his actions would comply with

Board rules regarding the return of cli-ent

records. Respondent contends that

he did not intentionally fail to respond

to the Board and that he relied upon his

attorney to respond. Said attorney was

legal counsel for the complainant’s ex-husband

and had actually retained

Respondent as an expert “ in anticipa-tion

of the litigation” between the com-plainant

and her ex- husband. Respon-dent

did not agree to compensate said

attorney and the attorney never repre-sented

to the Board that he was also

serving as Respondent’s attorney.

5. Respondent contends that he did not

intentionally violate the accountancy

statutes and rules. Nevertheless, Re-spondent

wishes to resolve this matter

by consent and agrees that the Board

staff and counsel may discuss this Or-der

with the Board ex parte, whether or

not the Board accepts this Order as writ-ten.

BASED UPON THE FOREGOING, the

Board makes the following Conclusions

of Law:

1. Respondent is subject to the provi-sions

of Chapter 93 of the North Caro-lina

General Statutes ( NCGS) and

Title 21, Chapter 8 of the North Carolina

Administrative Code ( NCAC), includ-ing

the Rules of Professional Ethics and

Conduct promulgated and adopted

therein by the Board.

2. Respondent’s failures to return client

records upon demand represent viola-tions

of NCGS 93- 12( 9) e, and 21 NCAC

8N .0305.

3. Respondent’s failures to cooperate

with Board inquiries represents viola-tions

of NCGS 93- 12( 9) e and 21 NCAC

8N .0206.

BASED ON THE FOREGOING and in

lieu of further proceedings under

21 NCAC Chapter 8C, the Board and

Respondent agree to the following Or-der:

1. Respondent shall receive an unpub-lished

reprimand.

2. Respondent shall reimburse the Board

for administrative costs incurred in the

cost of this investigation.

David B. Watkins # 26877

Cumming, GA 01/ 21/ 03

THIS CAUSE, coming before the Board

at its offices at 1101 Oberlin Road,

Raleigh, Wake County, North Carolina,

with a quorum present. Pursuant to

NCGS 150B- 41 and 150B- 22, the Board

and Respondent stipulate the follow-ing

Findings:

1. Respondent was the holder of North

Carolina certificate number 26877 as a

Certified Public Accountant.

2. In July of 1999, Respondent was

notified in a letter from Robert N. Brooks

that his application for an original CPA

certificate had been granted by the North

Carolina State Board of CPA Examiners

( Board).

3. In June of 2000, Respondent signed

and submitted to the North Carolina

Secretary of State’s office an Applica-tion

for Certificate of Authority on be-half

of Winn Caribe Communications,

Inc., ( Winn Caribe) a Georgia corpora-tion

and a wholly owned subsidiary of

CoreNet Services Inc. In said applica-tion,

Respondent was identified as the

Assistant Secretary.

4. On his 2001- 2002 individual certifi-cate

renewal as filed with the Board in

June of 2001, Respondent denoted that

his employer and employment address

had changed to “ CoreNet Services, Inc.,

3500 Parkway Lane, Norcross, Georgia

30092.”

5. Sometime in the spring of 2001, while

an employee of CoreNet Services, Inc.,

Respondent prepared, as an individual

practitioner located in Cumming, Geor-gia,

a reviewed financial statement on

behalf of Winn Caribe. During this time

period, Respondent was not registered

with the Board as offering services

through an individual practitioner firm

and was not registered as participating

in a Board- sanctioned peer review pro-gram.

6. In said reviewed financial statement,

Respondent did not disclose any lack of

independence. In an e- mail dated

May 31, 2001, Respondent informed an

official with Winn Caribe that his prepa-ration

of the reviewed financial state-ment

was a violation of the American

Institute of Certified Public Accoun-

3

tants’ ( AICPA) ethics rules and “ possi-bly

a violation of North Carolina law.”

7. Sometime in 2001, Winn Caribe, with

Respondent’s knowledge, submitted the

reviewed financial statements to the Ar-kansas

Contractors Licensing Board

( Arkansas Licensing Board) in support

of Winn Caribe’s renewal application

for a contractors license in Arkansas.

8. In April of 2002, Respondent re-quested

that his North Carolina certifi-cate

be placed on “ inactive” status.

Under 21 NCAC 8J .0106, Respondent

could have subsequently applied to

change the status of his North Carolina

certificate to “ active” status.

9. In May of 2002, the attorney for the

Arkansas Licensing Board filed a com-plaint

with the Board alleging that Re-spondent

had failed to comply with

North Carolina’s statutes and rules.

10. As an employee of Winn Caribe’s

parent company and as an officer in

Winn Caribe, Respondent was not in-dependent

with respect to Winn Caribe

and therefore could not, in accordance

with applicable accounting and audit-ing

standards, provide Winn Caribe

with reviewed financial statements.

11. Respondent wishes to resolve this

matter by consent and agrees that the

Board staff and counsel may discuss

this Order with the Board ex parte,

whether or not the Board accepts this

Order as written.

BASED UPON THE FOREGOING, the

Board makes the following Conclusions

of Law:

1. Respondent is subject to the provi-sions

of Chapter 93 of the North Caro-lina

General Statutes ( NCGS) and

Title 21, Chapter 8 of the North Carolina

Administrative Code ( NCAC), includ-ing

the Rules of Professional Ethics and

Conduct promulgated and adopted

therein by the Board.

2. Respondent’s actions as set out above

constitute violations of NCGS 93- 12( 7b),

93- 12( 8c), 93- 12( 9) d, and 93- 12( 9) e and

21 NCAC 8J .0108, 8M .0102, 8N .0201,

8N .0202( a), 8N .0202( b)( 3), 8N .0203( a),

8N .0203( b)( 1), 8N .0204( a), 8N .0209,

8N .0301 ( a), 8N .0303( a), 8N .0402( a),

8N .0403, 8N .0404, and 8N .0406.

BASED ON THE FOREGOING and in

lieu of further proceedings under

21 NCAC Chapter 8C, the Board and

Respondent agree to the following Or-der:

1. Respondent’s CPA certificate status

is hereby changed from inactive to per-manently

revoked.

John Thomas Margeson # 9521

Raleigh, NC 01/ 21/ 03

THIS CAUSE, coming before the Board

at its offices at 1101 Oberlin Road, Ra-leigh,

Wake County, North Carolina,

with a quorum present. Pursuant to

NCGS 150B- 41 and 150B- 22, the Board

and Respondent stipulate the follow-ing


Findings:

1. Respondent is the holder of North

Carolina certificate number 9521 as a

Certified Public Accountant.

2. In May of 2001, Respondent was

charged with the misdemeanor of im-personating

a duly authorized em-ployee

of the North Carolina Depart-ment

of Health [ a violation of

NCGS 14- 277] and with “ unlawfully,

willfully and feloniously” violation

NCGS 14- 277.3 [ stalking].

3. Also, in May of 2001, Respondent

was cited for possession of less than ½

ounce of marijuana, a controlled sub-stance.

4. Sometime later in 2001, Respondent

was found “ not guilty” on the charge of

impersonating an authorized employee

of the North Carolina Department of

Health.

5. In early 2002, Respondent was con-victed

of stalking a sixteen- year- old girl

and of possessing less than ½ ounce of

marijuana. Respondent appealed both

convictions.

6. In August of 2002, Respondent noti-fied

the Board that he has dropped both

appeals and had requested that the cases

be remanded to District Court for sen-tencing.

7. In an Order issued by Judge Anne

Salisbury on July 29, 2002, Respondent

was sentenced to 45 days of imprison-ment.

The sentence was suspended sub-ject

to the following conditions: that

Respondent’s pay $ 190.00 in fines and

costs; that Respondent participate in a

mental health and substance abuse as-sessment;

that Respondent not have any

contact with the sixteen year old girl;

and that Respondent stay away from

any public school grounds unless

Respondent’s child is involved in a

school function. Respondent was

placed on eighteen ( 18) months of un-supervised

probation.

8. Respondent did not report the charges

described above on his individual 2001-

2002 certificate renewal.

9. Respondent did not provide the Board

with any information regarding the

charges until Board staff sent a letter to

his last known home address in Decem-ber

of 2001.

10. Despite a request by Board staff that

Respondent keep the Board apprised of

the charges, Respondent did not pro-vide

subsequent information regarding

the charges except in response to direct

requests from Board staff.

11. Respondent wishes to resolve this

matter by consent and agrees that the

Board staff and counsel may discuss

this Order with the Board ex parte,

whether or not the Board accepts this

Order as written.

BASED UPON THE FOREGOING, the

Board makes the following Conclusions

of Law:

1. Respondent is subject to the provi-sions

of Chapter 93 of the North Caro-lina

General Statutes ( NCGS) and

Title 21, Chapter 8 of the North Carolina

Administrative Code ( NCAC), includ-ing

the Rules of Professional Ethics and

Conduct promulgated and adopted

therein by the Board.

2. Respondent’s actions as set out above

constitute violations of NCGS 93- 12( 9) e

and 21 NCAC 8N .0201, .0203, .0204,

.0206, and .0208.

BASED ON THE FOREGOING and in

lieu of further proceedings under

21 NCAC Chapter 8C, the Board and

Respondent agree to the following Or-der:

1. Respondent’s certificate is revoked

for a period of at least eighteen ( 18)

months.

2. Respondent may apply for the rein-statement

of his certificate after at least

eighteen ( 18) months and as long as he

has completed his sentence of proba-tion

as ordered by the Court and as long

as he has not been convicted of any other

criminal offense during the revocation

period.

4

ferent tests, the specifications will en-sure

that the results are comparable.

The specifications will also include

“ exposure controls” to limit the extent

to which examinees are administered

the same sets of questions.

With candidates taking different tests,

how do you ensure that each candidate

is being correctly assessed?

The test delivery system will ensure

that all tests meet content and psycho-metric

specifications.

The testing package delivered to

test centers will contain not only test

items, but also the rules for the adminis-tration

of tests drawn from that collec-tion

of items.

All items will be classified accord-ing

to their content and statistical prop-erties

before they are administered in an

operational test.

The testing software will then ad-minister

items according to the specifi-cations

to ensure that each candidate is

administered a test of appropriate con-tent

coverage and difficulty.

Who will be responsible for certifying

someone as an ADA candidate?

State boards will continue to deter-mine

if a candidate qualifies as an ADA

candidate.

Will the scoring/ grading change to pass/

fail with the CBT?

It has not been determined if candi-dates

will continue to receive numerical

grades or if grades will be reported only

as pass/ fail.

Can I immediately find out my score/

grade after taking a section of the exam?

No, the CBT will contain structured

responses that must be transmitted to

the AICPA for scoring.

When will I receive my scores/ grades?

There will no longer be a Uniform

Grade Mailing Date. The CBT will con-tain

structured responses that must be

transmitted to the AICPA for scoring, so

it is anticipated that it will be several

weeks before scores/ grades are avail-able

for mailing.

Can I request a review of my grades or

an appeal of my grades under the CBT?

Yes, you can still request a review or an

appeal of your grades, but the process

will be slightly different than with the

pencil- and- paper exam.

How often can I take the CBT?

A candidate will be allowed to take

each section of the exam up to four times

a year with a limit of one time per section

in each testing window.

What will be the deadlines for apply-ing

to take the CBT?

Application deadlines will be elimi-nated,

allowing candidates to apply at

any time of year.

Where will the CBT be administered?

The NC State Board of CPA Exam-iners

has not yet determined if it will

operate its own testing center or use a

Prometric testing center.

Will the CBT inhibit state boards’ abil-ity

to monitor candidates?

No. State boards’ responsibilities

will not be diminished or negatively

affected by the CBT. State boards will

continue to determine candidates’ eligi-bility

and notify candidates of their

grades. State boards have the responsi-bility

to administer or oversee the ad-ministration

of the exam in their juris-diction.

What assistance will be provided to

candidates to help them prepare for

the CBT?

Familiarization materials will be

available on the AICPA’s exam web site

( www. cpa- exam. org) and on CD- ROM.

The AICPA will develop the mate-rials

and will make them available to

state boards, state societies, schools, and

candidates, prior to the launch of the

CBT.

Will I be required to take all four sec-tions

in a two- day period?

No, you may take each section sepa-rately

and you will schedule when you

want to take each section.

Will I be required to take the sections

in a specific order?

No, you can choose to take the sec-tions

in any order.

Will I be required to pass one section of

the exam before applying to take an-other

section?

No, you will not be required to pass

one section before applying to take an-other

section of the exam.

Once I apply for the exam, how long

will it be before I actually take the

exam?

The Board will need to verify a first-time

( initial) candidate’s educational

eligibility before issuing a “ Notice to

Schedule,” so the process will take a few

weeks.

A re- exam candidate should receive

a Notice to Schedule within a few days

of applying to the Board.

The Notice to Schedule is valid for

6 months from the date of issue, so you

will have a set period of time to schedule

and take the exam section( s).

How will I schedule an appointment to

take the exam?

After applying to the Board and

receiving a Notice to Schedule, you will

contact the testing center to schedule a

testing appointment. The Notice to

Schedule is valid for 6 months from the

date of issue, so you will have a set

period of time to schedule and take the

exam section( s).

Will all candidates take the same ex-amination,

or will each candidate take

a different test?

Candidates will take different,

equivalent exams. In the computerized

testing environment, each candidate’s

examination will consist of items drawn

from a pool of test questions according

to defined specifications.

Although candidates will take dif-

CBT continued from front

COMPUTER- BASED EXAM

Auditing & Attestation ( 4.0 hours)

Financial Accounting & Reporting

( 4.0 hours)

Regulation ( 3.0 hours)

Business Environment & Concepts

( 2.5 hours)

PAPER- AND- PENCIL EXAM

Auditing ( 4.5 hours)

Financial Accounting & Reporting

( 4.5 hours)

Accounting & Reporting ( 3.5 hours)

Business Law & Professional

Responsibilities ( 3.0 hours)

5

The following applications for certification were approved by the Board at its

December 17, 2002, and January 21, 2003, meetings:

Certificates Issued

Brian Kirk Arney

Sheila Jones Bacelli

Sue Styles Bailey

Carl Franklin Beal, III

Sarah E. Blanchard

James A. Blevins

Rhonda Vashti Brickner

Claire Melissa Burrell

Mary Elizabeth Cannady

Jamie Michael Coffey

Tara Jacqueline Corcoran

Melanie Ann DeGroft

Jennifer Renee Detelich

Kenni Elaine Doyle

Owen William Drugan

Laura W. DuBose

Glenn E. Emery

Joy Michelle Eure

Shandra Leah Faw

Diana Moore Fishburne

Amy Malpass Fowler

Angela Eubanks Fowler

Michael Eric Friedlander

Mitchell Clare Grondalski

Gregory Merle Hathorne

Donna L. Hawkins

Sonia R. Hines

Brandie P. Hodge

Kellie Dawn Honeycutt

Timothy Caine Hooks

Terry Lynn Howell

Amy Shea Howie

Jonathan Bradley Hoy

Ryan Dale Hunsucker

Elizabeth Lee Integlia

Angela Dawn Jarvis

Cathleen Barbara Johnson

Stacie Lynn Kimes Jones

Diane Lynn Jost

Jennifer Leigh Karriker

Karen Lee Kelley

Amy Rebecca King

Tracy Elizabeth Lebos

John C. Lenker, II

Jonathan Michael McCarty

Eileen N. McGinn

Tamara Danielle McMahan

Megan Joy Hart Michaels

Aaron Douglas Milheim

Jaylene Moss

Jason Scott Murphy

Susan Joy Murphy

Joseph Gerald Nawrocki

Leah S. Nazworth

Nghi Phuong Ngo

Jin Su Park

Kirsten Lynn Parriott

John Robert Peirson

Joanna Marie Phillips

Hope Shammara Piggee

Matthew Weber Pohlman

Patrick Vincent Powers

John Christopher Purdy

Katherine Lentz Rendleman

Jennifer Lynn Shafer

Johnathan Brook Smith

Kristy Lynn Smith

Paula Elisabeth Smith

Rachel Elaine Smith

Sun Cho Song

Melissa A. Stewart

Alicia Jones Stone

Melinda Reynolds Storey

John William Struble

Stacie Denise Suggs

Anita Davis Surphlis

Kathy Lewis Tillman

Barry Cornell Webb, Jr.

Kathleen Lorraine White

Carolina Wibmer

James Anthony Wittmer

Alan Richard Wood

IRS Taxpayer

Assistance Numbers

The Internal Revenue Service ( IRS) has

established the following taxpayer as-sistance

telephone numbers:

• 1- 800- TAX- 1040 - for individuals

• 1- 800- TAX 4933 - for small businesses

related to business returns, 940, 941,

1041, 1065, 1120, 1120S, excise returns,

estate and gift returns, and EINs

• 1- 800- TAX 1954 - refund hotline for

1040s only

• 1- 800- TAX- FORM - forms and publi-cations

• 1- 877- 777- 4778 - National Taxpayer

Advocate

• 1- 800- 555- 4477 or 1- 800- 945- 8400 -

EFTPS hotline

• 1- 877- TAX- 5500 - tax- exempt and

government helpline, including retire-ment

plans

• 1- 866- 860- 4259 - Practitioner Priority

Service

Volunteers Needed for

Exam Committees

The National Association of State

Boards of Accountancy ( NASBA) has

asked the NC State Board of CPA Exam-iners

to recommend qualified individu-als

to participate in all aspects of the

Uniform CPA Examination program.

For 2003- 2004, recommendations

are needed for the AICPA Board of Ex-aminers;

the Content Committee and its

subcommittees; the International Uni-form

Certified Public Accountant Quali-fication

Examination ( IQEX); and vari-ous

task forces.

For detailed information, such as

objectives, major initiatives, qualifica-tions,

and annual time commitments,

on the Board of Examiners and the com-mittees,

please visit the Board’s web site

( www. state. nc. us/ cpabd).

If you are interested in serving on a

committee or task force, please contact

Robert N. Brooks, the Board’s Executive

Director, by telephone at ( 919) 733- 1425

or via e- mail at rnbrooks@ bellsouth. net.

6

Inactive Status

“ Inactive,” when used to refer to the status of a person, describes one who has

requested inactive status and been approved by the Board and who does not use

the title “ certified public accountant” nor does he or she allow anyone to refer to him

or her as a “ certified public accountant” and neither he or she nor anyone else refers

to him or her in any representation as described in 21 NCAC

8A .0308( b) [ 21 NCAC 8A .0301( b)( 23)].

11/ 22/ 02 Angela D. DeBoeser Raleigh, NC

11/ 22/ 02 Andrea Lavery Maas Greensboro, NC

11/ 25/ 02 Robert Dayle Voigt Mount Pleasant , SC

11/ 25/ 02 Amy Blackard Weir Raleigh, NC

11/ 26/ 02 Gary M. Kramer Matthews, NC

12/ 03/ 02 Sarah Zinner Folsom, CA

12/ 09/ 02 Carla L. Peterson Chapel Hill, NC

12/ 09/ 02 James Davidson Rizzo Denver, NC

12/ 09/ 02 Carla Carbonara Rizzo Huntersville, NC

12/ 09/ 02 Grant Joel Johnson Bountiful, UT

12/ 10/ 02 Paula Marie Toole Matthews, NC

12/ 10/ 02 Andrea Babbitt Snyder Charlotte, NC

12/ 12/ 02 Amy Swing Heese Pelham, NY

12/ 12/ 02 Mona Vijay Doshi New York, NY

12/ 16/ 02 Ginger Lynn Lanier Huntersville, NC

12/ 17/ 02 William MacMinn Fort Mill, SC

12/ 19/ 02 Wallace Reid Kearns Asheboro, NC

12/ 19/ 02 John Richard Goodwin Cary, NC

12/ 19/ 02 Scott Donald Schauer Raleigh, NC

12/ 23/ 02 Elizabeth Sue Rinehardt Concord, NC

12/ 23/ 02 Terry Wells Baker Raleigh, NC

12/ 27/ 02 Julia Pruett Dameron Knoxville, TN

12/ 30/ 03 George William Clapp Westfield, NC

12/ 30/ 02 Marcus Alan Dedmond Ellenboro, NC

12/ 30/ 02 William Homer Saunders, Jr. Walterboro, NC

12/ 30/ 02 Carolyn Stevenson Offill Hickory, NC

12/ 30/ 02 William Arthur Prosser, III Richmond, VA

12/ 30/ 02 Philip Roe Warren Durham, NC

12/ 30/ 02 Eric V. Schmid Cleveland, OH

01/ 07/ 03 Ann Astin Hardin Matthews, NC

01/ 07/ 03 James Wesley Carland, Jr. Cullowhee

01/ 07/ 03 Jeffrey Warren Battle Wilmington, NC

01/ 07/ 03 Jane Harris Pate Durham, NC

01/ 07/ 03 Marc Cullen Apex, NC

01/ 07/ 03 Emily Dearman Cullen Apex, NC

01/ 07/ 03 Angela Rosemarie Smith Charlotte, NC

01/ 07/ 03 Suzanne H. Macy Charlotte, NC

01/ 07/ 03 Cynthia Burgess Fischer Longboat Key, FL

01/ 07/ 03 Bridgett Mathis Pratt Charlotte, NC

01/ 09/ 03 Barbara Gail Hein Raleigh, NC

01/ 09/ 03 Judith Ann Johnson- Cohen Waxhaw, NC

01/ 14/ 03 Janice Toothaker Gore High Point, NC

01/ 14/ 03 Allison Jane Leonard Kentwood, MI

Reclassifications

Reinstatements

12/ 17/ 02

Claire Crepeau Hinspeter, # 19237

Janet Willard Holbrook, # 14399

Shawn Francis Kowalewski, # 25583

Beth G. Monaghan, # 19255

Gary Lee Ward, # 16814

01/ 21/ 03

Karen Hutchison Curran, # 13599

James Michael Farless, # 21964

Gina Parrott Glick, # 22872

Richard R. Hodge, # 23123

Richard Sterling Ingram, Jr., # 16111

Ross William McCanless, # 19768

Joseph C. Osborn, # 27697

Terry Fletcher Pope, # 8195

Susan McBride Richardson, # 19686

William Kenneth Wease, # 12286

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

compensation for current personal

services in any job whatsoever and

will not return to active status

[ 21 NCAC 8A .0301( b)( 23)].

12/ 17/ 02

Carl Wilkins

Lumberton, NC

01/ 21/ 03

Christine Carol Hildebrand

Apex, NC

Kelly Howard Young

Waxhaw, NC

IRS Form W- 9

If you need a copy of the Board’s IRS

Form W- 9, please visit the Board’s

web site ( www. state. nc. us/ cpabd)

and click on the “ Forms” link.

7

Commissions and Referral Fees

What is the difference between a

commission and a referral fee?

A commission is compensation

for recommending a product for sale

or service to be provided by the CPA

or a third party.

The commission is always based

on whether the product is purchased

or the service is provided.

A referral fee is compensation

paid by a third party to a CPA for

referring a client to the third party for

the sale of a product or service to be

provided by the third party.

The referral fee is usually not

based on whether the product is pur-chased

or the service is provided to

the client.

May I accept a commission or

referral fee from a client for whom

I provide audit or review services?

21 NCAC 8N .0303( c) prohibits

a CPA from accepting a commission

or contingent fee from clients for

whom you provide audit or review

services.

21 NCAC 8N .0303( c) allows, in

limited circumstances, the accep-tance

or a commission or contingent

fee from a client for whom you pro-vide

the compilation of financial

statements.

I have a friend who is a licensed real

estate broker. May I receive a refer-ral

fee for referring a client to him?

May I receive a commission

if my friend sells a house to my

client?

In North Carolina, only indi-viduals

licensed by the NC Real Es-tate

Commission ( NCREC) may re-ceive

a referral fee for the referral of a

client or receive a commission for the

sale of real estate, so you may not

receive a referral fee or commission

from your friend.

My friend is a licensed insurance

agent. May I receive a referral fee

for referring a client to her? May I

receive a commission if the client

purchases a policy from my friend?

A CPA may receive a referral fee

from a licensed agent, agency, or

insurance company as long as the

fee is not contingent upon the sale of an

insurance product or service. The NC

Department of Insurance ( NCDOI) pro-hibits

referral fees based on a sale.

A CPA who is licensed by the

NCDOI may be paid a commission by,

or split a commission with, a licensed

agent, agency, or insurance company

for the sale of products or services to a

client that is referred to the agent, agency,

or insurance company by the CPA.

May I receive a referral fee for refer-ring

my clients to the company that

prints my checks?

If you comply with 21 NCAC

8N .0303( c) and ( e), you may accept a

referral fee for referring your clients to

the company that prints your checks.

I have a friend who is a stockbroker.

May I receive a referral fee for refer-ring

a client to him? May I receive a

commission if my friend sells stocks or

mutual funds to the client?

A stockbroker may not pay a refer-ral

fee to any person other than a li-censed

employee of the broker/ dealer

firm. Likewise, a stockbroker may not

pay to, or split a commission with, any

person other than a licensed employee

of the broker/ dealer firm.

May a CPA receive a referral fee or

commission from a registered invest-ment

advisory firm?

A CPA may receive a referral fee for

referring a client to a registered invest-ment

advisory ( RIA) firm only if the

CPA is properly registered as an invest-ment

advisory representative ( IA) with

the RIA firm.

In some cases, there may be an ex-ception

to registering as an IA. The Se-curities

Division of the Office of the NC

Secretary of State can provide informa-tion

on registering as an IA or an RIA

firm.

A CPA may receive a commission

from the RIA firm for placement of a

client’s funds for asset management by

the RIA firm.

A CPA may be registered with

more than one investment adviser only

in the following two situations: all of

the investment advisers with whom

the investment adviser representative

wishes to be associated are under com-mon

ownership or control; or the in-vestment

adviser representative is act-ing

as a “ solicitor” for more than one

investment adviser firm. A “ solicitor”

is a person who receives compensa-tion

for referring business to an invest-ment

adviser firm.

What, if anything, am I required to

disclose to a client if I receive a refer-ral

fee or commission?

A disclosure to a client regarding

a referral fee or commission must meet

the following requirements:

• The disclosure must be in writing;

• The disclosure must be dated;

• The disclosure must state the service

or product to be rendered or referred as well

as the amount of the referral fee or commis-sion

to be charged;

• The disclosure must be made by the

CPA and signed by the client prior to the

referral, sale, or performance of services;

• The disclosure must be made on

every referral, sale, or service to be pro-vided

to the client; and

• A copy of the disclosure must be

provided to the client.

Which Board rules that I should read

and understand before I accept a re-ferral

fee or commission?

Before accepting a referral fee or

commission, you should be familiar

with the following:

8N .0202( b)( 6)( 7)( 8) - Deceptive

Conduct Prohibited;

8N .0204( a) - Discipline by Federal

and State Authorities;

8N .0205( a) - Confidentiality;

8N .0212 - Competence;

8N .0301( a) - Professional Judgment;

8N .0303 - Objectivity and Conflicts

of Interest;

8N .0304 - Management Consulting

Service Standards;

8N .0305 - Retention of Client

Records; and

8N .0402 - Independence

If you have any questions regard-ing

commissions or referral fees, please

contact Robert N. Brooks, Executive

Director of the Board, by telephone at

( 919) 733- 1425 or via e- mail

( rnbrooks@ bellsouth. net).

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

Certificate 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

21,000 copies of this document were printed for this agency at a cost of $ 2,994.28 ( approximately 14¢ per copy) in February 2003.

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.

Address Change? Let Us Know!

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

O. Charlie Chewning, Jr., CPA

President, Raleigh

Michael H. Wray

Vice- President, Gaston

Walter C. Davenport, CPA

Secretary- Treasurer, Raleigh

Barton W. Baldwin, CPA

Member, Mount Olive

Scott L. Cox, CPCU, CIC

Member, Charlotte

Leonard W. Jones, CPA

Member, Morehead City

R. Stanley Vaughan, CPA

Member, Charlotte

Staff

Executive Director

Robert N. Brooks

Legal Counsel

Noel L. Allen, Esq.

Administrative Services

Felecia F. Ashe

Communications

Lisa R. Hearne, Manager

Examinations

Judith E. Macomber, Manager

Phyllis W. Elliott

Licensing

Buck Winslow, Manager

Alice G. Steckenrider

Martha Traina

Professional Standards

Ann J. Hinkle, Manager

Jo Gaskill

Marie Moss

Receptionist

Libby Carson