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- 2005

Ethics CPE: Question and Answer

Have the rules regarding CPE changed?

Yes. Effective January 1, 2005,

21 NCAC 8G .0410 requires that all ac-tive

licensees must complete either a

two- hour group study professional eth-ics

and conduct course or a four- hour

self- study professional ethics and con-duct

course as part of the annual 40-

hour CPE requirement.

Does it matter which ethics course I

take to fulfill the requirement in

21 NCAC 8G .0410?

Yes. Only courses that have been

approved by the Board and which are

offered by Board- registered CPE spon-sors

( which includes NASBA CPE spon-sors)

can be used to fulfill the two- hour

group study professional ethics and

conduct course or the four- hour self-study

professional ethics and conduct

course in 21 NCAC 8G .0410.

Has the Board approved any ethics

courses to meet the ethics CPE require-ment?

Yes. As of the December 20, 2004,

Board meeting, the Board had approved

two courses which will satisfy the ethics

CPE requirement--“ North Carolina Ac-countancy

Law Course – Ethics, Prin-ciples,

and Professional Responsibili-ties,”

and “ Professional Ethics and Con-duct.”

“ North Carolina Accountancy Law

Course – Ethics, Principles, and Profes-sional

Responsibilities,” is an eight- hour

group study course offered by the North

Carolina Association of CPAs

( NCACPA).

The NCACPA’s other course, “ Pro-fessional

Ethics and Conduct,” is a two-hour

group study course.

Information about these courses is

available from the NCACPA’s web site,

www. ncacpa. org.

Has the Board approved any self- study

ethics CPE courses which will satisfy

the requirement in 21 NCAC

8G .0410?

No. The Board has not yet approved

a self- study ethics course that will sat-isfy

the requirement in 21 NCAC

8G .0410. However, the NCACPA is de-veloping

a four- hour self- study course

which, if approved by the Board, will

satisfy the requirement.

If I take the NCACPA’s eight- hour

course, “ North Carolina Accountancy

Law Course – Ethics, Principles, and

Professional Responsibilities,” can I

use two hours of the course to meet the

ethics CPE requirement for this year

and then carry- forward the other six

hours to meet the requirement for next

year?

No. Although you may carry the

extra hours forward, they will not count

towards the ethics CPE requirement in

21 NCAC 8G .0410.

The ethics CPE requirement is an

annual requirement, so you must take an

ethics CPE course every year to remain in

compliance with the rule.

I took the NCACPA’s eight- hour ac-countancy

law course as part of my

application for licensure. Do I have to

take another ethics CPE course?

If you were licensed for the first time

in 2005 and you took the NCACPA’s

eight- hour accountancy law course in

2005, you may use the course to meet the

requirement in 21 NCAC 8G .0410.

Does the ethics CPE course count as

part of the annual 40- hour CPE require-ment

or is it an extra requirement?

Whether you take a two- hour group

study course, an eight- hour group study

course, or a four- hour self- study course,

the course will count as part of the an-nual

40- hour CPE requirement.

If you have questions about the Board’s CPE

rules, please contact Buck Winslow by tele-phone

at ( 919) 733- 1421 or by e- mail at

buckwins@ bellsouth. net. You may also

contact Jodi Nelson by telephone at ( 919)

733- 1423 or by e- mail at jodisnelson

@ bellsouth. net.

Inside this issue...

2005 Board Meetings ........................ 3

Audit Documentation ....................... 6

Certificates Issued ............................. 3

Disciplinary Actions ..................... 2, 4

Exam Issues, Part VI .......................... 5

Inactive Status .................................... 7

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

Reclassifications ................................ 7

Reporting Net Assets ........................ 6

www. cpaboard. state. nc. us

2

Disciplinary Actions

Lloyd Council Folks, # 7761

Kinston, NC 10/ 25/ 2004

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, the Board and Respon-dent

stipulate the following Findings:

1. Respondent was the holder of North

Carolina certificate number 7761 as a

Certified Public Accountant.

2. In September of 2003, four ( 4) Arrest

Warrants were issued alleging that Re-spondent

had failed “ to pay North Caro-lina

Withholding Tax withheld for his

employees” for calendar years 1999,

2000, 2001, and 2002. Four ( 4) Arrest

Warrants were also issued alleging that

Respondent had failed “ to file a tax

return” for each of the calendar years

1998, 1999, 2000, and 2001.

3. On January 22, 2004, pursuant to a

plea bargain, Respondent entered guilty

pleas to four ( 4) counts of failure to file

North Carolina individual income tax

returns for calendar years 1998, 1999,

2000, and 2001, but the four ( 4) counts of

failure to pay withholding taxes were

dismissed.

4. The District Court consolidated the

four counts for purposes of sentencing,

entered an order of conviction, and sen-tenced

Respondent to forty- five ( 45) days

in Wake County Jail. The sentence was

suspended and Respondent was placed

on unsupervised probation for twenty-four

( 24) months and ordered to perform

one hundred ( 100) hours of community

service in the first twelve ( 12) months of

probation, pay a one thousand dollar

($ 1,000.00) criminal fine and court costs.

5. Despite at least three requests from

Board staff to Respondent for informa-tion

regarding Respondent’s failures to

pay Employee Withholding Taxes and

failures to file North Carolina tax re-turns,

Respondent has failed to provide

the requested information.

6. Respondent contends that the above

described acts and omissions can be

attributed to and were a result of serious

personal health issues that contributed

to extraordinary stress and physical as

well as emotional hardships, which,

Respondent contends, rendered Re-spondent

unable to comply with dead-lines

placed upon him by the Board as

well as by tax authorities, but that such

stress and hardships only affected his

own affairs and not the interests of his

clients.

7. 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) b

and e and 21 NCAC 8N .0201, .0202( a),

.0203( b)( 1), .0204( c), .0206, .0207, and

.0208( b).

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. The Certified Public Accountant cer-tificate

issued to Respondent

Lloyd Council Folks is hereby perma-nently

revoked.

David N. Hemphill, # 11778

Asheville, NC 12/ 20/ 2004

THIS CAUSE coming before the Board

on December 20, 2004, at its offices at

1101 Oberlin Road, Raleigh, Wake

County, North Carolina, with a quorum

present, the Board finds, based on the

clear and convincing evidence pre-sented,

that:

FINDINGS OF FACT

1. David N. Hemphill ( hereinafter

“ Mr. Hemphill”) is the holder of a cer-tificate

as a Certified Public Accountant

in North Carolina and is therefore sub-ject

to the provisions of Chapter 93 of the

North Carolina General Statutes ( NCGS)

and Title 21, Chapter 8 of the North

Carolina Administrative Code ( NCAC),

including the Rules of Professional Eth-ics

and Conduct promulgated and

adopted therein by the Board.

2. Mr. Hemphill failed to timely obtain

a State Quality Review ( SQR) in accor-dance

with provisions as required by

NCGS 93- 12( 8c) and 21 NCAC 8M. 0102.

3. Mr. Hemphill has subsequently failed

to provide documentation to the Board

that his SQR has been completed and is

in excess of 120 days from the required

completion date.

CONCLUSIONS OF LAW

1. Mr. Hemphill’s failure to timely ob-tain

a SQR prior to the prescribed

completion date is a violation of

NCGS 93- 12( 8c) and 21 NCAC 8M .0102.

BASED ON THE FOREGOING, the Board

orders that:

1. Mr. Hemphill’s certificate is sus-pended

for at least thirty ( 30) days from

the date this Order is approved and

until the required SQR compliance in-formation

is received by the Board.

2. If Mr. Hemphill fails to return his

suspended certificate within fifteen ( 15)

days of the receipt of this Order, the

thirty ( 30) day suspension will be ex-tended

by the number of days that his

certificate is late in being returned to the

Board.

3. If Mr. Hemphill returns his suspended

certificate within fifteen ( 15) days of the

receipt of this Order, Mr. Hemphill can,

after at least thirty ( 30) days, and the

completion of his firm’s SQR, apply to

return his certificate to active status by

submission and approval of a

reissuance application which includes:

a. Application form,

b. Payment of the application fee,

3

Certificates Issued

Emily Williams Arledge

Margaret Olivia Ashburn

Pamela Gwen Atkinson

Kimberly S. Avery

Bradley W. Barbour

Ray Hugh Baynard, Jr.

Brad Mitchell Bernstein

Ilissa Bernstein

Julia Elizabeth Black

Brett Phillip Blattner

Terrie Jean Blevins

Mark Richard Bourg

Jennifer Helen Boykin

Elizabeth Leigh Bradburn

Jeffrey Michael Brinn

Carrie Leigh Rodman Brondyke

Paul Christian Brown

Brian Gregory Bruchs

Jennifer Renee Burris

William Christian Carter

Glenn D. Clausing

Julie Ann Clem- Toschlog

Jacqueline Knotts Crotts

Faith Hawkins Crump

Jodi Renae Dodgen

Lacy M. Drummond

Michael Lee Edwards

Jameson Michael Ellis

Chris S. Elrod

Luke J. Estola

Bruce Alexander Farley

Jack Edward Finley

Jennifer Marie Fisher

Haoyu Gan

Julia Eaker Gardner

Patricia Diane Gaunt

Garit Anthony Gemeinhardt

Susan Glendenning

Alison Fromme Gomez

Banisha Lena Gott

Luke Anthony Governale

Bradley McDonald Greer

Katherine L. Griffin

Elizabeth Karen Hagerty

Maria Paulina Haro- Camm

Jamie Elizabeth Harper

Lauren G. Harrison

Richard Warren Hartzell

Bobby Wendell Herring, Jr.

Jill Cornelius Hobbs

Jacquelyn Michelle Kastner

Allan Clayton Kitchen

Ryan Alan Kompanik

Stephen Joseph Krol

James Adam Landis

Barry Tyrone Leonard

Melissa Jane Linn

Kevin Mark Loiselle

James Henry Lombardi

Laurie Ann Lovelady

W. Scott Luper

Nancy Marc- Thrasybule

Kamala M. Massey

Linda Carol Maxwell

Brian Joseph McMerty

Michael E. Metz

Sarah Lawrence Nold

Scott Alexander Oliver

Toshio Osaka

Bethany A. Osborne

Douglas Alan Paddock

John Burwell Parker, Jr.

Elizabeth Sosa Perez

Edward Neil Renner

Jeffrey Neil Rhodes

Kristen Norris Rogers

Misty Jenkins Saldi

David Eric Sites

Christopher C. Smith

Mark Paul Soticheck, II

Karen Spear

Julie LeAnn Spivey

Lauren Jocelyn Stoner

Jason Jeremiah Strange

Wendy Elizabeth Sutton

Tara French Tatum

Dale Hunter Taylor

James Will Vannoy

Regina Wahab

Tanya T. Ward- Gupton

Kerry Lee Watson

Mary Martin White

At its January 24, 2005, meeting, the Board approved the following applications for

licensure:

c. Three moral character affidavits, and

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504.

4. If Mr. Hemphill returns his suspended

certificate in excess of fifteen ( 15) days of

the receipt of this Order, Mr. Hemphill

can, after thirty ( 30) days plus the num-ber

of days that his certificate was late in

being returned to the Board, and the

completion of his firm’s SQR, apply to

return his certificate to active status by

submission and approval of a

reissuance application which includes:

a. Application form ( which includes

statements regarding use of title during

forfeiture),

b. Payment of the application fee,

c. Three moral character affidavits ( on

forms provided by Board),

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504, and

e. Consent Order requiring payment of

at least $ 100.00 in administrative costs.

2005 Board Meetings

March 17*

April 20

May 16

June 21

July 14**

August 22

September 19

October 24

November 21

December 19

Meetings of the Board are open to

the public except when, under State

law, some portions may be closed to

the public.

Unless otherwise noted, meet-ings

are held at the Board office and

begin at 10: 00 a. m.

* 2: 00 p. m.

** Greensboro

4

Thomas R. Sawyer, # 27005

Glenville, NC 12/ 20/ 2004

THIS CAUSE coming before the Board

on December 20, 2004, at its offices at

1101 Oberlin Road, Raleigh, Wake

County, North Carolina, with a quorum

present, the Board finds, based on the

clear and convincing evidence

presented, that:

FINDINGS OF FACT

1. Thomas R. Sawyer ( hereinafter “ Mr.

Sawyer”) is the holder of a certificate as

a Certified Public Accountant in North

Carolina and is therefore subject to the

provisions of Chapter 93 of the North

Carolina General Statutes ( NCGS) and

Title 21, Chapter 8 of the North Carolina

Administrative Code ( NCAC),

including the Rules of Professional

Ethics and Conduct promulgated and

adopted therein by the Board.

2. Mr. Sawyer failed to timely obtain a

State Quality Review ( SQR) in

accordance with provisions as required

by NCGS 93- 12( 8c) and 21 NCAC

8M. 0102.

3. Mr. Sawyer has subsequently failed

to provide documentation to the Board

that his SQR has been completed and is

in excess of 120 days from the required

completion date.

CONCLUSIONS OF LAW

1. Mr. Sawyer’s failure to timely obtain

a SQR prior to the prescribed completion

date is a violation of NCGS 93- 12( 8c)

and 21 NCAC 8M .0102.

BASED ON THE FOREGOING, the Board

orders that:

1. Mr. Sawyer’s certificate is suspended

for at least thirty ( 30) days from the date

this Order is approved and until the

required SQR compliance information

is received by the Board.

2. If Mr. Sawyer fails to return his

suspended certificate within fifteen ( 15)

days of the receipt of this Order, the

thirty ( 30) day suspension will be

extended by the number of days that his

certificate is late in being returned to the

Board.

Disciplinary Actions

Finger

continued on page 5

3. If Mr. Sawyer returns his suspended

certificate within fifteen ( 15) days of the

receipt of this Order, Mr. Sawyer can,

after at least thirty ( 30) days, and the

completion of his firm’s SQR, apply to

return his certificate to active status by

submission and approval of a

reissuance application which includes:

a. Application form,

b. Payment of the application fee,

c. Three moral character affidavits, and

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504.

4. If Mr. Sawyer returns his suspended

certificate in excess of fifteen ( 15) days of

the receipt of this Order, Mr. Sawyer can,

after thirty ( 30) days plus the number of

days that his certificate was late in being

returned to the Board, and the completion

of his firm’s SQR, apply to return his

certificate to active status by submission

and approval of a reissuance

application which includes:

a. Application form ( which includes

statements regarding use of title during

forfeiture),

b. Payment of the application fee,

c. Three moral character affidavits ( on

forms provided by Board),

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504, and

e. Consent Order requiring payment of

at least $ 100.00 in administrative costs.

Ronald F. Finger, # 9231

Maiden, NC 12/ 20/ 2004

THIS CAUSE coming before the Board

on December 20, 2004, at its offices at

1101 Oberlin Road, Raleigh, Wake

County, North Carolina, with a quorum

present, the Board finds, based on the

clear and convincing evidence pre-sented,

that:

FINDINGS OF FACT

1. Ronald F. Finger ( hereinafter

“ Mr. Finger”) is the holder of a certifi-cate

as a Certified Public Accountant in

North Carolina and is therefore subject

to the provisions of Chapter 93 of the

North Carolina General Statutes ( NCGS)

and Title 21, Chapter 8 of the North

Carolina Administrative Code ( NCAC),

including the Rules of Professional Eth-ics

and Conduct promulgated and

adopted therein by the Board.

2. Mr. Finger failed to timely obtain a

State Quality Review ( SQR) in accor-dance

with provisions as required by

NCGS 93- 12( 8c) and 21 NCAC 8M. 0102.

3. Mr. Finger has subsequently failed to

provide documentation to the Board that

his SQR has been completed and is in

excess of 120 days from the required

completion date.

CONCLUSIONS OF LAW

1. Mr. Finger’s failure to timely obtain a

SQR prior to the prescribed completion

date is a violation of NCGS 93- 12( 8c)

and 21 NCAC 8M .0102.

BASED ON THE FOREGOING, the Board

orders that:

1. Mr. Finger’s certificate is suspended

for at least thirty ( 30) days from the date

this Order is approved and until the

required SQR compliance information

is received by the Board.

2. If Mr. Finger fails to return his sus-pended

certificate within fifteen ( 15)

days of the receipt of this Order, the

thirty ( 30) day suspension will be ex-tended

by the number of days that his

certificate is late in being returned to the

Board.

3. If Mr. Finger returns his suspended

certificate within fifteen ( 15) days of the

receipt of this Order, Mr. Finger can,

after at least thirty ( 30) days, and the

completion of his firm’s SQR, apply to

return his certificate to active status by

submission and approval of a

reissuance application which includes:

a. Application form,

b. Payment of the application fee,

c. Three moral character affidavits, and

5

The last testing window of the first year

of the computer- based Uniform CPA

Examination will close at the end of

February and the Exam will be in refresh

mode during March. While the Exam is

in refresh mode, you may apply to take

the Exam and if you have received a

Notice to Schedule, you may schedule

an appointment with a Prometic test

center.

To reduce the problems you may

encounter with the Exam, please review

the following questions and answers:

Is “ session time” the same thing as

“ Exam time”?

Exam time is the time designated for

a candidate to complete the Exam ses-sion

on the computer. Session time is the

Exam time plus 30 minutes. The extra 30

minutes gives you time to complete the

sign- in process and the survey without

affecting the Exam time.

When does the clock start on the Exam

time?

The Exam clock begins to count

down as soon as you open the first

testlet. The Exam clock continues to run

even when you are on a break between

testlets and simulations or when you

are speaking with the test center staff.

The Exam clock stops only when there

is a power failure. Once the Exam has

started, the Exam clock cannot be reset,

adjusted, or extended by anyone.

How I can make the best use of my time

when taking the Exam?

Most candidates have found that

they need 30 – 50 minutes per simula-tion.

When planning for an Exam sec-tion,

allocate the time for the simula-tions

and then divide the remaining

time in three equal parts for the mul-tiple-

choice testlets.

Immediately report equipment and

computer malfunctions to the test center

staff. Do not attempt to correct such

problems yourself— you will lose valu-able

Exam time and still won’t be able to

resolve the problem.

Wait until you have completed the

Exam to report any content problems.

The test center staff is not responsible for

Exam content issues, so it is a waste of

your Exam time to attempt to report such

problems to the test center staff.

Don’t spend time writing down any

content issues or Exam answers on the

scratch paper provided by the test cen-ter

staff. All scratch paper is collected

after the Exam and shredded. Write

down any content issues on the “ Con-firmation

of Attendance” you receive

after you exit the Exam room.

Follow directions carefully. If a simu-lation

requires a written response, don’t

try to create a response by using the

copy/ cut/ paste functions. Likewise, if

a simulation requires a copy/ cut/ paste

response, don’t waste time trying to cre-ate

a lengthy written response.

How do I prevent early Exam termina-tion?

Test sessions are designed to auto-matically

terminate if the allotted time

( approximately 5 – 10 minutes) for the

introductory screens is exceeded. To pre-vent

early Exam termination, don’t take

time to make notes, do relaxation exer-cises,

or make unnecessary conversa-tion

with the test center staff before open-ing

the first testlet. Promptly move

through the sign- in and preliminary

screens at the beginning of each Exam.

Are my Exam answers lost if I run out

of Exam time and don’t have time to

click on “ done” to indicate that I have

completed my last testlet or simula-tion?

Candidate responses are automati-cally

saved every 30 seconds, regard-less

if you have signaled the completion

of the final testlet or simulation.

If you have a problem, question, or con-cern

about the administration of the

Exam, the Prometic Testing Center, your

score notice, etc., please send an e- mail

to Phyllis Elliott at pwelliot

@ bellsouth. net.

Include your name, candidate id

number, daytime telephone number, and

the specifics of your problem, question,

or concern in your e- mail message.

NOTE: The National Candidate Data-base

( NCD) operated by NASBA has a

new toll- free number, 1- 866- MY-NASBA

( 1- 866- 696- 2722) for questions

about the Notice to Schedule ( NTS)

which cannot be answered by the Board.

The toll- free number can also be used to

report any Exam- related problems or

concerns.

Need More Information?

Previous articles on Exam- related is-sues

were published in the 5- 2004,

6- 2004, 9- 2004, 11- 2004, and 12- 2004

issues of the Activity Review which are

available on the Board’s web site under

the “ newsletter” link.

Additional information about the

Exam is available from the following

web sites:

AICPA: www. cpa- exam. org

Board: www. cpaboard. state. nc. us

NASBA: www. nasba. org

Prometric: www. prometric. com

Exam Issues, Part VI

Finger continued from page 4

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504.

4. If Mr. Finger returns his suspended

certificate in excess of fifteen ( 15) days of

the receipt of this Order, Mr. Finger can,

after thirty ( 30) days plus the number of

days that his certificate was late in being

returned to the Board, and the comple-tion

of his firm’s SQR, apply to return

his certificate to active status by submis-sion

and approval of a reissuance ap-plication

which includes:

a. Application form ( which includes

statements regarding use of title during

forfeiture),

b. Payment of the application fee,

c. Three moral character affidavits ( on

forms provided by Board),

d. Forty hours of CPE in the 12 months

preceding the application including an

eight- hour accountancy law course

pursuant to 21 NCAC 8F .0504, and

e. Consent Order requiring payment of

at least $ 100.00 in administrative costs.

6

In December 2004, the Governmental

Accounting Standards Board ( GASB)

issued Statement No. 46, Net Assets Re-stricted

by Enabling Legislation, an amend-ment

of GASB Statement No. 34.

The purpose of Statement 46 is to

help governments determine when net

assets have been restricted to a particu-lar

use by the passage of enabling legis-lation

and to specify how those net as-sets

should be reported in financial state-ments

when there are changes in the

circumstances surrounding such legis-lation.

A government’s net assets should

be reported as restricted when the pur-pose

for or manner in which they can be

used is limited by an external party, a

constitutional provision, or enabling

legislation.

Enabling legislation is a specific

type of legislation that both authorizes

the raising of new resources and im-poses

legally enforceable limits on how

they may be used.

Statement 46 is intended to allevi-ate

difficulties in identifying enabling

legislation restrictions by clarifying that

“ legally enforceable” means that an ex-ternal

party— such as citizens, public

interest groups, or the judiciary— can

compel a government to use resources

only for the purposes stipulated by the

enabling legislation.

Statement 46 confirms that the de-termination

of legal enforceability is a

matter of professional judgment, which

may entail reviewing the legislation and

determinations made for similar legis-lation,

as well as obtaining the advice of

legal counsel.

GASB Clarifies Reporting of Net Assets

The AICPA’s Auditing Standards Board

( ASB) has issued an Exposure Draft of a

proposed Statement on Auditing Stan-dards

( SAS) entitled Audit Documenta-tion.

If approved, the proposed Statement

will supersede SAS No. 96 of the same

name ( AICPA, Professional Standards,

vol. 1, AU sec. 319).

Copies of the Exposure Draft are

available for download from the AICPA

web site, www. aicpa. org.

The proposed SAS establishes stan-dards

and provides guidance to an au-ditor

of a non- issuer on audit documen-tation

for audits of financial statements

or other financial information being re-ported

on.

Although audit documentation

alone does not guarantee audit quality,

the process of preparing sufficient and

appropriate audit documentation con-tributes

to the quality of an audit.

The ASB believes this Exposure

Draft will improve audit practice and is

responsive to the issues that have been

raised by regulators and others who use

and rely on audited financial statements

of non- issuers.

The Standard would not apply to

audits of public companies since audit-ing

standards for those entities are pro-mulgated

by the Public Company Ac-counting

Oversight Board ( PCAOB).

Among other things, the proposed

SAS:

• Requires the auditor to consider,

when preparing audit documentation,

the needs of an “ experienced auditor,”

having no previous connection with the

audit, to understand the procedures

performed, the evidence obtained and

specific conclusions reached.

• Provides enhanced guidance on

matters that should be documented, in-cluding

guidance on documentation

that should be retained.

• Requires the auditor to document

audit evidence that is identified as be-ing

contradictory or inconsistent with

the final conclusions, and how the au-ditor

addressed the contradiction or in-consistency.

• Requires that the auditor assemble

the audit documentation to form the

final audit engagement file within 60

days following the delivery of the

auditor’s report to the entity. After this

date, the proposed SAS requires the

auditor not to delete or discard existing

audit documentation, and to appropri-ately

document any subsequent editions

or changes.

• Specifies a minimum file retention

period that is ordinarily not expected to

be shorter than five years from the date

of the auditor’s report.

In addition to the proposed SAS, the

Exposure Draft includes proposed

amendments to SAS No. 1, Codification

of Auditing Standards and Procedures

( AICPA, Professional Standards, vol. 1,

AU sec. 530.01 and .05, “ Dating of the

Independent Auditor’s Report”).

The proposed amendment requires

that the auditor’s report not be dated

earlier than the date on which the audi-tor

has obtained sufficient competent

audit evidence to support the opinion

on the financial statements.

It also proposes an amendment to

SAS No. 95, Generally Accepted Auditing

Standards ( AICPA, Professional Stan-dards,

vol. 1, AU sec. 150.05); the amend-ment

adds a requirement for the auditor

to document his or her justification for a

departure from the SASs in the working

papers.

Please e- mail your comments on the

Exposure Draft to sboothe@ aicpa. org

no later than May 15, 2005.

ASB Issues Audit Documentation Exposure Draft

The Statement indicates that gov-ernments

should review the legal en-forceability

of enabling legislation re-strictions

when new enabling legisla-tion

has been enacted to replace exist-ing

legislation and when resources

are used for purposes not specified by

the enabling legislation.

The Statement also requires gov-ernments

to disclose in the notes to

the financial statements the amount

of net assets restricted by enabling leg-islation

as of the end of the reporting

period. Statement 46 is effective for peri-ods

beginning after June 15, 2005.

GASB Statement No. 46 ( Product

Code GS46) can be ordered through the

GASB order department at 1- 800- 748-

0659 or via its web site, www. gasb. org.

7

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/ 23/ 04 Thomas Roy Styers, III Irving, TX

11/ 23/ 04 Virginia Newton Long Charlotte, NC

11/ 23/ 04 Antia Dawne Troxler- Tawasha Burlington, NC

11/ 23/ 04 Peggy LeAnn Newsome Virgie, KY

11/ 23/ 04 John Patrick McGee Durham, NC

12/ 01/ 04 Kelly Ann Mitchell Asheville, NC

12/ 01/ 04 Aletta M. Lane Winston- Salem, NC

12/ 06/ 04 Charles Marion Drum, Jr. Wilkesboro, NC

12/ 06/ 04 James Alan Giles Greensboro, NC

12/ 06/ 04 Kenneth Scott Jones Clemmons, NC

12/ 08/ 04 Judith Schwarz Patzke Millis, MA

12/ 08/ 04 Margaret Cary Lutz Durham, NC

12/ 08/ 04 Deborah Fadeley Thompson Charlotte, NC

12/ 08/ 04 Christopher Scott Gribbins Stanley, NC

12/ 08/ 04 Elizabeth Haney Funderburk Palmyra, PA

12/ 09/ 04 Daniel Tate Ervin Morganton, NC

12/ 15/ 04 Samuel Keith Newman Sunset Beach, NC

12/ 15/ 04 Talton Jerry Harrison Trinity, NC

12/ 15/ 04 Kay L. Walker Durham, NC

12/ 15/ 04 Kristina Torbett Johnsen Denver, NC

12/ 15/ 04 Sherry Marie Tonner Sophia, NC

12/ 15/ 04 Karen I. Gorman Huntersville, NC

12/ 16/ 04 Martha L. Lee Burke, VA

12/ 17/ 04 Lee Merida Ritter Charlotte, NC

12/ 20/ 04 Christopher Mangin, Jr. Richmond, VA

12/ 20/ 04 Andrew David Cheplick Stuart, FL

12/ 21/ 04 Brian Scott Suarez Statesville, NC

12/ 21/ 04 Todd Richard Crouse Cary, NC

12/ 22/ 04 Douglas James Yacenda Weddington, NC

12/ 28/ 04 Nathan Taylor Garrett Durham, NC

12/ 28/ 04 Olivia O. Anderson Hayesville, NC

12/ 28/ 04 Tabitha Nicole Townsend Jacksonville, FL

12/ 28/ 04 Troy Harding Hutchins Durham, NC

12/ 29/ 04 Cheryl L. Witt Birmingham, AL

12/ 30/ 04 Ruth Ann Huffman Dumas Gulfport, MS

12/ 30/ 04 Susan Thompson Rose Charlotte, NC

12/ 30/ 04 Donna L. Kirk Orlando, FL

01/ 04/ 05 Timothy William Jackson RTP, NC

01/ 04/ 05 Charles Douglas Phillips Orlando, FL

01/ 04/ 05 Jeffrey Alan Brovet Raleigh, NC

01/ 04/ 05 Emily Riche Massey Cary, NC

01/ 04/ 05 Jamie Hill Connotillo Matthews, NC

01/ 04/ 05 Beau Alex Miller Eslanaba, MI

01/ 18/ 05 Joe Lane McKinney Asheville, NC

01/ 18/ 05 Eugene R. Marion, Jr. Palm Springs, CA

01/ 18/ 05 Brenda Mae Stenerson ( in armed forces)

01/ 18/ 05 Heyward Dubose Armstrong Rutherford, NJ

01/ 18/ 05 Sandra Gale Newton Simpsonville, SC

01/ 18/ 05 W. Keith Davis Charlotte, NC

01/ 21/ 05 Joanna Byrum Page Kernersville, NC

01/ 25/ 05 Wilfred Bailey Leverton, II Winston- Salem, NC

01/ 28/ 05 Catherine Lynn Palermo Jacksonville, NC

01/ 28/ 05 Nicole Kaylor Wicker Raleigh, NC

01/ 31/ 05 Cassandra Audrey Cunningham Charlottesville, VA

Reissuance

01/ 24/ 05

Lawrence Walter Marley, # 14320

Reinstatement

12/ 20/ 04

Robert Kevin White, # 19548

01/ 24/ 05

Gerald Wayne Bass, # 6802

Tracie W. Cox, # 25561

Eric Andrew Erikson, # 22709

Lori Wingate Gorman, # 16248

Kathryn L. Kisiel, # 29091

John Merle Montague, # 17882

Donald Clyde Yount, Jr., # 15821

Retired

“ Retired,” when used to refer to the

status of a person, describes one pos-sessing

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)].

01/ 24/ 05

Drexel G. Durham

Rocky Mount, NC

Reclassifications

Pursuant to 21 NCAC 8J .0107, all

North Carolina CPAs and CPA firms

must notify the Board, in writing,

within 30 days of any change of ad-dress

or business location.

For your convenience, a “ Notice

of Address Change” form is printed

on the back cover of the Activity Re-view

and is available on the Board’s

web site, www. cpaboard. state. nc. us.

Address changes may be mailed,

faxed, or e- mailed to the Board.

Please fax your address changes

to the Board at ( 919) 733- 4209.

Please e- mail your address

changes to cpareceptionist

@ bellsouth. net.

Moved? Changed Jobs?

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 or 14¢ per copy in February 2005.

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

Norwood G. Clark, Jr., CPA

President, Raleigh

Leonard W. Jones, CPA

Vice President, Morehead City

Arthur M. Winstead, Jr., CPA

Secretary- Treasurer, Greensboro

O. Charlie Chewning, Jr., CPA

Member, Raleigh

Thurman L. Gause

Member, Sunset Beach

Jordan C. Harris, Jr.

Member, Statesville

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

Communications

Lisa R. Hearne, Manager

Examinations

Phyllis W. Elliott

Licensing

Buck Winslow, Manager

Jodi S. Nelson

Alice G. Steckenrider

Professional Standards

Ann J. Hinkle, Manager

Lorraine Kelley

Jo Richardson

Receptionist

Vanessia L. Willett