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Activity Review North Carolina State Board of Certified Public Accountant Examiners 1101 Oberlin Road, Suite 104, Post Office Box 12827, Raleigh, NC 27605- 2827 ( 919) 733- 4222 No. 5 2002 Inside this issue... Board Meetings ............................... 3 Certificates Issued .......................... 5 Contact the Board ........................... 7 Disciplinary Actions................... 2, 6 Inactive Status ................................ 7 Junk E- Mail...................................... 6 Notice of Address Change ............ 8 Reclassifications ............................. 6 www. state. nc. us/ cpabd The New Audit Documentation Requirements: SAS No. 96 Working papers, which often consist of electronic files and have been renamed “ audit documentation,” are the subject of new guidance from the Auditing Standards Board ( ASB) of the Ameri-can Institute of CPAs ( AICPA). Issued in January 2002, Statement on Auditing Standards ( SAS) No. 96, Audit Documentation, provides general guidance on the nature and extent of documentation necessary to support an auditor’s report and specific docu-mentation guidance for several other SASs. Effective for audits of financial statements for periods beginning on or after May 15, 2002, SAS No. 96 super-sedes SAS No. 41, Working Papers. SAS No. 96 reaffirms the objectives in SAS No. 41 that audit documenta-tion serves mainly to provide the “ prin-cipal support for the auditor’s report,” and to help an auditor conduct and supervise an audit. Because it is not feasible for audi-tors to document all the evidence they obtain and conclusions they reach on an engagement, the ASB carried for-ward a SAS No. 41 footnote that stated there is no intention to imply the audi-tor would be precluded from support-ing his or her report by other means “ in addition to [ audit documentation].” This enables auditors, when neces-sary, to supplement or clarify informa-tion in the audit documentation, which itself must meet all the new statement’s requirements. A CPA firm may want to use audit documentation for purposes other than those stated in SAS No. 96. For example, the firm may choose to examine audit documentation to de-termine whether an engagement com-plied with the firm’s quality control policies and procedures. Also, certain third parties may want to use the docu-mentation for other purposes. However, given the overall objec-tive of a GAAS audit— to express an opinion on the fairness with which the financial statements present, in all ma-terial respects, the financial position, results of operations, and cash flows in conformity with GAAP— the ASB de-veloped guidance that would satisfy the needs of those parties involved in the performance, supervision, and re-view of the audit. Under the new guidance, the docu-mentation should be sufficient to en-able engagement team members with supervision and review responsibili-ties to understand the evidence obtained and the nature, timing, extent and re-sults of auditing procedures performed; and indicate the engagement team member( s) “ who performed and re-viewed the work.” For the purposes of these require-ments, the ASB intended that auditors consider any applicable second- part-ner reviewer a member of the engage-ment team. SAS No. 96 introduces factors the auditor must consider in determining the nature and extent of documenta-tion for a particular audit area or proce-dure. Although the auditor exercises pro-fessional judgment in making this de-termination, he or she must take into account each of the factors, which are • Risk of material misstatement associated with the assertion or with the account or class of transactions; • Extent of judgment the auditor exercises in performing the work and evaluating the results; • Nature of the auditing proce-dure; • Significance, to the assertion be-ing tested, of the evidence the auditor obtains; • Nature and extent of exceptions the auditor identifies; and • The need to document a conclu-sion or the basis for a conclusion not evident from the documentation of the work the auditor performed. SAS No. 96 continued on page 4 2 William Patrick Farrell, # 23620 Cary, NC 03/ 22/ 02 Disciplinary Actions 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 23620 as a Certified Public Accountant. 2. In March of 2001, Board staff re-ceived a complaint from Complainant stating that Respondent had failed to return client records upon demand. 3. Board staff sent a letter dated April 4, 2001, to Respondent’s last known business address requesting that Re-spondent reply to the allegations. 4. Receiving no response, Board staff sent a second letter dated April 26, 2001, to Respondent’s last known busi-ness address by certified/ return re-ceipt mail requesting that Respondent reply to the allegations and that Re-spondent explain his failure to re-spond to the April 4, 2001, letter. 5. In a letter dated April 30, 2001, Respondent stated that in March of 2001 he had faxed the requested depre-ciation schedule to Complainant and that Respondent had no knowledge of what happened to the fax on Complainant’s “ end.” 6. In this letter, Respondent also stated that he had not responded to the Board April 4, 2001, letter “... because I was not going to have my tax season inter-rupted again by Complainant or his complaints. I was too busy.” 7. Respondent further stated that if Complainant withdrew his complaint and apologized for the situation or if Complainant paid Respondent $ 75.00, Respondent would then again send Complainant the requested deprecia-tion schedule. 8. Subsequently the Board’s Profes-sional Standards Committee reviewed a redacted version ( Respondent’s name was removed) of the information per-taining to this matter, and instructed the Board staff to close the matter with-out prejudice upon the conditions that Respondent receive a Letter of Warn-ing regarding his firm’s policies on re-turning client records, and that Re-spondent provide the Complainant with all client records including the depreciation schedule within fifteen ( 15) days. The Board staff issued the Letter of Warning and demand regard-ing client records on June 1, 2001. 9. In a reply dated July 14, 2001, Re-spondent denied that he had failed to cooperate with a Board inquiry but that the first letter had come “ in the middle of the busiest time of the year for any CPA office.” Despite his earlier claim that he had received “ threaten-ing messages” from the Complainant during this time, Respondent also stated that he assumed that the Com-plainant had the depreciation sched-ule since Respondent had not heard any more from him since faxing the depreciation schedule in March of 2001. 10. In this letter, Respondent also re-quested that the Letter of Warning be removed from his Board records. 11. Respondent states that, upon re-ceipt of the Board’s June 1, 2001, letter, he tried several times to fax the depre-ciation schedule to the Complainant but it failed to go through. Respondent states that he then called Complainant’s spouse’s office and left a message for the Complainant’s spouse that the Complainant’s spouse could pick up the depreciation schedule at Respondent’s office. 12. In response to inquiries from Board staff, the Complainant has confirmed that Respondent continued to refuse to provide the requested depreciation schedule. The Complainant has in-formed the Board that, since requested depreciation schedule was not pro-vided, Complainant engaged another CPA to recreate those records. 13. Respondent contends that the sev-enty- five dollar ($ 75) charge was for answering the Complainant’s questions which Respondent contends required him to pull the Complainant’s file a total of five ( 5) times. 14. 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 Caro-lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics and Conduct promulgated and adopted therein by the Board. 2. Respondent’s conduct as set out above constitute violations of NCGS 93- 12( 9) e and 21 NCAC 8N .0206, 8N .0212, and 8N .0305. 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 is censured. 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 was the holder of North Carolina certificate number 13104 as a Certified Public Accountant. 2. In December of 2000, the Board approved Respondent’s request that his North Carolina license be placed on inactive status. 3. Based upon Respondent’s represen-tation that he was inactive and as a Edward J. Logue, Jr., # 13104 Pasedena, CA 03/ 22/ 02 3 result of the grant of his request for inactive status, Board staff informed the North Carolina Secretary of State’s office that the Articles of Incorporation for Respondent’s firm, Ed Logue, CPA, CFP, P. A., should be suspended. 4. Sometime in late 2000, Respondent sold his CPA practice to Raymond A. Dunn, II, of Liberty Tax Service. Re-spondent has informed the Board that Trey Middleton ( Mr. Middleton) pur-chased the firm as a franchise from Liberty Tax Service. 5. Despite the sale to Liberty Tax Ser-vice, Respondent drafted a letter to be sent to clients which introduced Mr. Middleton as the new owner of Respondent’s firm. In this letter, Re-spondent states that he has “ trans-ferred” each client’s “ tax records to Trey and feel very confident that he will do an excellent job” for the client. 6. Despite the sale of Respondent’s firm to a non- CPA, representatives of the firm continued to make unautho-rized use of and reference to the CPA title in connection with the services of the new firm. 7. The Board obtained a “ Notice of Apparent Violation and Demand to Cease and Desist” from Mr. Middleton demanding that both Mr. Middleton and The Accounting Store immediately cease and desist from use of or refer-ence to the CPA title. 9. 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 Caro-lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics and Conduct promulgated and adopted therein by the Board. 2. Respondent’s release of client in-formation to Liberty Tax Service or to Mr. Middleton without prior permis-sion of the client represents violation of NCGS 93- 12( 9) e and 21 NCAC 8N .0203( a) and 8N .0205( a). 3. Respondent’s failure to ensure that the buyer did not continue to illegally use or trade upon the CPA title is a violation of NCGS 93- 12( 9) e and 21 NCAC 8N .0202( b)( 2) and ( b)( 9). 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 inactive certificate is suspended for at least one year. 2. If Respondent returns his suspended certificate within fifteen ( 15) days of the receipt of this Order, Respondent can, after one ( 1) year, apply to return his certificate to active status by sub-mission and approval of a reinstate-ment application which includes: a. Application form, b. Payment of the application fee, c. Three ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight- hour accountancy law course pursuant to 21 NCAC 8F .0504. 3. If Respondent returns his suspended certificate in excess of fifteen ( 15) days of the receipt of this Order, Respondent can, after one ( 1) year plus the number of days that his certificate is late in being returned, apply to return his cer-tificate to active status by submission and approval of a reinstatement appli-cation which includes: a. Application form, b. Payment of the application fee, c. Three ( 3) moral character affidavits ( on forms provided by Board), d. Forty ( 40) hours of CPE in the twelve ( 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. Board Meetings Monday, June 24 Tuesday, July 23* Friday, August 16* Monday, September 23 Friday, October 18 Monday, November 18 Tuesday, December 17 Meetings of the Board are open to the public except when, pursuant to State law, some portions of the meet-ings are closed to the public. Unless otherwise noted, meetings are held at the Board’s office in Raleigh. * New date Address Changed? Pursuant to 21 NCAC 8J .0107, all North Carolina CPAs and CPA firms must notify the Board, in writ-ing, within 30 days of any change of address or business location. For your convenience, a “ No-tice of Address Change” form is printed on the back cover of each issue of the Activity Review. Licensees should mail or fax the change( s) to Alice Steckenrider. Changes may also be e- mailed to ( alicegst@ bellsouth. net). CPA firms should mail or fax the change( s) to Lynn Wyatt. Changes may also be e- mailed to ( lynnwyat@ bellsouth. net). Exam candidates should mail or fax the change( s) to the Examina-tions staff. Changes may also be e-mailed to ( pwelliot@ bellsouth. net) or ( jmacombe@ bellsouth. net). Do you have questions or comments about items published in the Activ-ity Review? If so, please contact Lisa R. Hearne, Communications Manager, by telephone at ( 919) 733- 4208 or by e- mail at ( lhearne@ bellsouth. net). Comments? Questions? 4 SAS No. 96 includes two require-ments dealing with certain types of audit evidence. The ASB developed these in response to comments practi-tioners involved in the peer review process made about the quality of au-dit documentation and to the concerns of the Panel on Audit Effectiveness. One requirement is that the docu-mentation must include abstracts or copies of significant contracts or agree-ments the auditor examined to evalu-ate the accounting for significant trans-actions. The other is that audit documenta-tion for tests of operating effectiveness of controls and substantive tests of de-tails involving inspection of documents or confirmation should include an iden-tification of the items tested. How the auditor identifies the tested items depends on how he or she selected them. For example, if the auditor selected from a particular accounting record all items meeting certain criteria ( for in-stance, items that are over a specified dollar amount), he or she can simply identify that record and those criteria. In other situations— for example, when an auditor uses statistical sam-pling— the documentation may need to include identifying characteristics ( such as the specific invoice numbers) of the selected items. The key question auditors should ask themselves is whether another au-ditor on the engagement team would be able to identify— by reviewing the audit program and related documen-tation— the particular items the origi-nal auditor selected for testing. The ASB considered it impractical to develop specific documentation guidance for substantive tests of de-tails that involve procedures other than inspection of documents and confir-mation This is because auditors can use these other types of procedures, such as observation, for a variety of purposes and can execute them in a number of different ways. Other standards, laws and regula-tions also may include specific docu-mentation requirements applicable to an engagement. Auditors therefore will need to consider them in addition to the ones in SAS No. 96. Some, such as the ones in Govern-ment Auditing Standards ( also known as the yellow book), may be more rigor-ous than the requirements in SAS No. 96. SAS No. 96 requires the auditor to document certain audit findings or is-sues he or she considers significant— an existing best practice among firms of many sizes. Generally, these findings or issues are so important that they would affect the auditor’s report if not resolved. They include the following: • Matters that are significant and involve issues regarding the appropri-ate selection, application and consis-tency of accounting principles pertain-ing to the financial statements, includ-ing related disclosures. Such matters often relate to accounting for complex or unusual transactions or to estimates and uncertainties and any applicable management assumptions. • Results of auditing procedures that indicate the financial statements or disclosures could be materially mis-stated or that the auditing procedures need to be significantly modified. • Circumstances that cause the auditor significant difficulty in apply-ing auditing procedures he or she con-siders necessary. • Other findings that could result in modification of the auditor’s report. SAS No. 96 stresses that the audi-tor owns the audit documentation. It also requires an auditor to adopt rea-sonable procedures to retain such docu-mentation long enough “ to meet the needs of his or her practice and to satisfy any applicable legal or regula-tory requirements for records reten-tion.” Because laws and regulations vary by jurisdiction and the nature of the engagement, SAS No. 96 does not say how long the retention period should be. It simply requires the auditor to adopt procedures that enable him or her to gain access to the documentation throughout that period. One way for auditors to accom-plish this is by creating a policy to maintain electronic documentation in a format that ensures its compatibility with newer versions of audit software or by retaining older versions of such software and, if necessary, the hard-ware on which it runs. SAS No. 96 includes amendments that add documentation requirements to three other statements: SAS No. 47, Audit Risk and Materiality in Conducting an Audit, SAS No. 56, Analytical Proce-dures, and SAS No. 59, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern. The amended SAS No. 47 requires an auditor to document the nature and effect of aggregated misstatements and his or her conclusion as to whether they cause the financial statements to be materially misstated. This facilitates compliance with the requirement in SAS No. 89, Audit Ad-justments, that a summary of uncor-rected financial statement misstate-ments aggregated by the auditor be included in or attached to management’s written representation regarding its belief that the uncorrected misstatements are immaterial, both in-dividually and in the aggregate. The amendment to SAS No. 56 requires auditors to document certain aspects of substantive analytical pro-cedures they perform as a principal audit test of a significant financial state-ment assertion. Three requirements apply. First, auditors now must document the factors they considered in develop-ing the expectation for a particular ana-lytical procedure. They also have to document the expectation if it is not apparent from the documentation of the work they performed. To illustrate this requirement, as-sume that auditors perform a substan-tive test of sales and accounts receiv-able by developing an expectation of the number of days’ sales in accounts receivable based on relationships in prior years. The documentation should include the number of— or range of— days’ sales expected for the current year and the factors, such as current economic conditions, considered in de-veloping this expectation. The other two requirements of the amended SAS No. 56 will oblige audi- SAS No. 96 continued from front page 5 tors to document the results of their comparison of the expectation with the recorded amounts or the ratios the au-ditors develop from those amounts; and any additional auditing procedures they perform in response to significant unexpected differences arising from analytical procedures and those addi-tional auditing procedures’ results. These requirements add more structure to situations in which ana-lytical procedures provide substantial evidence about a significant balance or class of transactions. This amendment to SAS No. 56 applies only to substantive analytical procedures that an auditor performs as a principal audit test of a significant financial statement assertion. For all other analytical procedures, auditors should refer to the general documenta-tion guidance in SAS No. 96. The Panel on Audit Effectiveness called for improvement in the docu-mentation of the auditor’s consider-ation of an entity’s ability to continue as a going concern, especially as it re-lates to his or her evaluation of pro-spective financial information that is significant to management plans. SAS No. 96’ s amendment to SAS No. 59 addresses the panel’s rec-ommendation and requires the auditor to document the conditions or events that led him or her to believe there is substantial doubt about the entity’s ability to continue as a going concern; the work performed in connection with the auditor’s evaluation of management’s plans; the auditor’s con-clusion as to whether substantial doubt remains about the entity’s ability to continue as a going concern for a rea-sonable period of time; and the consid-eration and effect of that conclusion on the financial statements, disclosures and the audit report. SAS No. 96 provides overall docu-mentation requirements for GAAS au-dits. The ASB will use the statement’s documentation concepts and guidance when developing more specific require-ments in future SASs. Because some of the content in SAS No. 96 is relevant to practitioners performing attest engagements, the ASB issued Statement on Standards for Attestation Engagements ( SSAE) No. 11, Attest Documentation, which in-corporates SAS No. 96’ s concepts and terminology and consolidates all docu-mentation guidance in the attestation standards. SSAE No. 11 is effective for attest engagements when the subject matter or assertion is as of, or for a period ending on or after, December 15, 2002, with earlier application permitted. Reprinted from “ The New Audit Documentation Requirements,” by Ray Whittingon and Gretchen Fischbach published in the Journal of Accountancy, April 2002. Jenna Angelo Laura Kelley Arthur William O. Bailes Deborah Hoadley Balduff Gerald Balonis Henry Clay Beck Kermit Killian Bolick George Thomas Bolton, III Jeffrey R. Boyle Rachel A. Brassine Tara Frohn Brittain Melanie Brueck Miguel Angel Castillo Deborah Ann Charles Xiaojing Chen Lawrence Ray Crews Terry E. Dail Douglas A. Dreher Dwayne Leland Eanes Robert Edley Donna Roach Edmonds David N. Elder Eric Lance Eubanks Susan Lynn Evans Lee F. Fritts John Randall Funk David L. Garriques Marcene Marie Graves Roberta Bittner Grider Steven L. Haenchen Alexander Bruch Harding Stephen D. Harrell Vance Alan Harritan Norman Dwight Hash James C. Hedstrom Mark Stephen Helms Linda L. Henderson Duncan Broughton Hilburn James Earle Hinton Gladys Latonya Johnson Wilmot Carlyle Jones, III Jeffrey Joseph Kantor Gregory Scott Kirkland Laura Germaine Lancaster Grant E. Leister Cathy Weaver Liles Christopher Mangin, Jr. Dexter K. Manning Heather Cudd Martin Peter Michael Messana Theresa Spring Meza Phillip Ezra Mills, III Litsa Nicole Mitropoulos Gail Nadia Moore Joseph R. Munday Eric Menton Padgett Stephen Gillette Perkins Christopher Michael Pierce John Stephen Quinn Lawrence Joseph Redler Pressley Ausdon Ridgill, Jr. Tiffany Marie Sams Heather Lea Schonfeldt John Lewis Seabrook, III Michael Neal Shelton Angela Lynn Shipley Robin Moore Sikes David Philip Sirois Charles Seifert Smith Jennifer Ann Smith Michelle Lynn Sosnowski Patricia Jane Spinella Heather L. Spreeman John W. Stewart Stephen Marcus Strader Hannalie Trautman Jodi L. Watterson Jackie H. White Everett O. Winn Certificates Issued The following certificate applications were approved by the Board at its April 18, 2002, meeting: 6 James F. Young, # 26986 James Young CPA, P. L. L. C. Charlotte, NC 03/ 22/ 02 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 James F. Young ( hereaf-ter “ Respondent”) is the holder of North Carolina certificate number 26986 as a Certified Public Accountant. 2. Respondent James Young CPA, P. L. L. C. ( hereafter “ Respondent firm”), is a registered certified public account-ing firm in North Carolina. 3. In September of 1999, Respondent registered Respondent firm with the Board as a professional limited liabil-ity company with one office location. 4. Respondent subsequently dissemi-nated brochures which indicated that Respondent firm had three ( 3) office locations. 5. Respondent advertised two ( 2) un-registered office locations in connec-tion with a non- CPA firm in a check-cashing business in offering to prepare and preparing tax returns. 6. 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 Caro- Disciplinary Action lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics 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 8K .0104( d)( 2), 8N .0202( a), and 8N .0306( a). 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 is censured. 2. Respondent shall immediately close or register any unregistered firm loca-tions. 3. Respondent shall take all steps nec-essary to ensure that his firm ceases and desists from participation in any and all misleading or confusing adver-tising in conjunction with non- CPA businesses. Reclassifications Reissuance Harold Claude Reid, # 10154 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)]. 04/ 18/ 02 Bobby Eugene Combs, Statesville, NC Millard Pratt, Norfolk, VA Curtis Toms, Jr., Raleigh, NC Tired of Junk E- mail? Do you receive lots of junk e- mail messages (“ spam”)? The Federal Trade Commission ( FTC) offers the following tips for reducing the amount of unwanted commercial e- mail you receive: • Don’t display your e- mail address in public, including newsgroup postings, chat rooms, web sites, or in an online service’s membership directory. • Check the privacy policy when you submit your address to a web site. See if the policy allows the company to sell your address. You may want to opt out of this provision or not submit your address at all to web sites that won’t protect your e- mail address. • Read the entire form before you transmit personal information through a web site. Some web sites allow you to opt out of receiving email from their “ partners” - but you may have to uncheck a preselected box to opt out. • Use a unique e- mail address. Spammers use “ dictionary attacks” to sort through possible name combinations hoping to find a valid address. Thus, a common name such as jdoe may get more spam than a more unique name like jd51x02oe. • Use an e- mail filter. Check your e-mail account to see if it provides a tool to filter out potential spam or a way to channel spam into a bulk e- mail folder. • Report the spam to the FTC. Forward a copy of unwanted messages to uce@ ftc. gov. The FTC uses the unsolicited e- mails stored in this database to pursue law enforcement actions against people who send spam or deceptive e- mail. • Forward a copy of the spam to your ISP’s abuse desk and the spammer’s ISP’s abuse desk. By doing this, you can let the ISPs know about the spam problem on their systems and help them stop the spammer from continuing to abuse the system. 77 “ 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)]. 04/ 02/ 02 Victoria Plaster Warren Bristol, TN 04/ 02/ 02 Thomas Bruce Brown Pittsboro, NC 04/ 02/ 02 Jack C. Robinson Greenville, SC 04/ 02/ 02 Misty McMullen Glass Montgomery, AL 04/ 04/ 02 Michael Ruel Johnson Marietta, GA 04/ 04/ 02 Ernest Lee Puschaver Bonita Springs, FL 04/ 04/ 02 Ocie Kyle Hogan, III Asheboro, NC 04/ 04/ 02 Amy Allen Lewis Jamestown, NC 04/ 04/ 02 Samuel Leigh Burke Midlothian, VA 04/ 04/ 02 Robert Joseph Difelice Vero Beach, FL 04/ 04/ 02 Anne Jennings Sanders High Point, NC 04/ 10/ 02 Don Ray Lloyd N. Myrtle Beach, SC 04/ 10/ 02 Elizabeth Ann Staker Apex, NC 04/ 11/ 02 William Albert Brasington Houston, TX 04/ 11/ 02 Annemarie Thomas Willow Spring, NC 04/ 12/ 02 Deborah Queeney Ellis Castle Rock, CO 04/ 12/ 02 Ashley Baker Neale Mount Pleasant, SC 04/ 12/ 02 Warren Martin McLean, VA 04/ 16/ 02 Denise Nichols Perry Winston- Salem, NC 04/ 16/ 02 Mary Mercer Tugwell Washington, DC 04/ 16/ 02 Jennifer Leah Horton Greensboro, NC 04/ 17/ 02 Edgar Raymond Wood, Jr. Cornelius, NC 04/ 17/ 02 Daneil Lee Belongia Charlotte, NC 04/ 17/ 02 Cathy Ruffalo Callahan Herndon, VA 04/ 17/ 02 Amy Elizabeth Read Charlotte, NC 04/ 17/ 02 Julia Elizabeth Guifoyle Charlotte, NC 04/ 18/ 02 Joseph Thomas Jordan, Jr. Raleigh, NC 04/ 18/ 02 Roger Paul Legendre Belle Mead, NJ 04/ 18/ 02 Cathy Elaine Vetter Raleigh, NC 04/ 18/ 02 Renee Brock Daw Wilson, NC 04/ 18/ 02 Jennifer McCall Kennedy Roanoke, VA 04/ 18/ 02 Letitia Fowler Granados Wake Forest, NC 04/ 22/ 02 Roger Gale Simmons Wilmington, NC 04/ 22/ 02 Bryant Lee Deaton Belmont, NC 04/ 22/ 02 Jeffrey Hollister Getz Easton, CT 04/ 23/ 02 Alfred Giannella Matthews, NC 04/ 25/ 02 David Brown Watkins Cumming, GA 04/ 29/ 02 Danny Ray Hines Greenville, NC 04/ 29/ 02 Alan Hunt Duncan Little Rock, AR 04/ 29/ 02 Lori McIlroy Calhoun Charlotte, NC 04/ 29/ 02 Michelle Sigmon Jones Charlotte, NC 04/ 30/ 02 Mary Wyant Stebbins Williamsburg, VA Inactive Status Main Telephone Number ( 919) 733- 4222 Fax Number ( 919) 733- 4209 Toll- Free Application Line 1- 800- 211- 7930 Address 1101 Oberlin Road, Suite 104 PO Box 12827 Raleigh, NC 27605 Web Site http:// www. state. nc. us/ cpabd Administrative Services ( 919) 733- 4223 Felecia Ashe feleciaa@ bellsouth. net Communications ( 919) 733- 4208 Lisa R. Hearne lhearne@ bellsouth. net Examinations ( 919) 733- 4224 Judith E. Macomber jmacombe@ bellsouth. net Phyllis W. Elliott pwelliot@ bellsouth. net Executive Director ( 919) 733- 4222 Robert N. Brooks rnbrooks@ bellsouth. net Licensing ( 919) 733- 1421 Buck Winslow buckwins@ bellsouth. net Licensing ( applications) ( 919) 733- 1422 Alice G. Steckenrider alicegst@ bellsouth. net Licensing ( firms/ SQR/ CPE) ( 919) 733- 1423 Lynn Wyatt lynnwyat@ bellsouth. net Professional Standards ( 919) 733- 1426 Ann H. Hinkle ahhinkle@ bellsouth. net Jo Gaskill jogaskil@ bellsouth. net Receptionist Karen Burton karenburton@ bellsouth. net Contact the Board 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 $ 2,758.29 or 13¢ per copy in May 2002. 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 R. Stanley Vaughan, CPA President, Charlotte O. Charlie Chewning, Jr., CPA Vice President, Raleigh Michael H. Wray Secretary- Treasurer, Gaston Barton W. Baldwin, CPA Member, Mount Olive Scott L. Cox, CPCU, CIC Member, Charlotte Walter C. Davenport, CPA Member, Raleigh Leonard W. Jones, CPA Member, Morehead City 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 Lynn Wyatt Professional Standards Ann J. Hinkle, Manager Jo Gaskill Receptionist Karen Burton
Object Description
Description
Title | Activity review |
Date | 2002-05 |
Description | No. 5, 2002 (May) |
Digital Characteristics-A | 53 KB; 8 p. |
Digital Format |
application/pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_borndigital\images_master\ |
Full Text | Activity Review North Carolina State Board of Certified Public Accountant Examiners 1101 Oberlin Road, Suite 104, Post Office Box 12827, Raleigh, NC 27605- 2827 ( 919) 733- 4222 No. 5 2002 Inside this issue... Board Meetings ............................... 3 Certificates Issued .......................... 5 Contact the Board ........................... 7 Disciplinary Actions................... 2, 6 Inactive Status ................................ 7 Junk E- Mail...................................... 6 Notice of Address Change ............ 8 Reclassifications ............................. 6 www. state. nc. us/ cpabd The New Audit Documentation Requirements: SAS No. 96 Working papers, which often consist of electronic files and have been renamed “ audit documentation,” are the subject of new guidance from the Auditing Standards Board ( ASB) of the Ameri-can Institute of CPAs ( AICPA). Issued in January 2002, Statement on Auditing Standards ( SAS) No. 96, Audit Documentation, provides general guidance on the nature and extent of documentation necessary to support an auditor’s report and specific docu-mentation guidance for several other SASs. Effective for audits of financial statements for periods beginning on or after May 15, 2002, SAS No. 96 super-sedes SAS No. 41, Working Papers. SAS No. 96 reaffirms the objectives in SAS No. 41 that audit documenta-tion serves mainly to provide the “ prin-cipal support for the auditor’s report,” and to help an auditor conduct and supervise an audit. Because it is not feasible for audi-tors to document all the evidence they obtain and conclusions they reach on an engagement, the ASB carried for-ward a SAS No. 41 footnote that stated there is no intention to imply the audi-tor would be precluded from support-ing his or her report by other means “ in addition to [ audit documentation].” This enables auditors, when neces-sary, to supplement or clarify informa-tion in the audit documentation, which itself must meet all the new statement’s requirements. A CPA firm may want to use audit documentation for purposes other than those stated in SAS No. 96. For example, the firm may choose to examine audit documentation to de-termine whether an engagement com-plied with the firm’s quality control policies and procedures. Also, certain third parties may want to use the docu-mentation for other purposes. However, given the overall objec-tive of a GAAS audit— to express an opinion on the fairness with which the financial statements present, in all ma-terial respects, the financial position, results of operations, and cash flows in conformity with GAAP— the ASB de-veloped guidance that would satisfy the needs of those parties involved in the performance, supervision, and re-view of the audit. Under the new guidance, the docu-mentation should be sufficient to en-able engagement team members with supervision and review responsibili-ties to understand the evidence obtained and the nature, timing, extent and re-sults of auditing procedures performed; and indicate the engagement team member( s) “ who performed and re-viewed the work.” For the purposes of these require-ments, the ASB intended that auditors consider any applicable second- part-ner reviewer a member of the engage-ment team. SAS No. 96 introduces factors the auditor must consider in determining the nature and extent of documenta-tion for a particular audit area or proce-dure. Although the auditor exercises pro-fessional judgment in making this de-termination, he or she must take into account each of the factors, which are • Risk of material misstatement associated with the assertion or with the account or class of transactions; • Extent of judgment the auditor exercises in performing the work and evaluating the results; • Nature of the auditing proce-dure; • Significance, to the assertion be-ing tested, of the evidence the auditor obtains; • Nature and extent of exceptions the auditor identifies; and • The need to document a conclu-sion or the basis for a conclusion not evident from the documentation of the work the auditor performed. SAS No. 96 continued on page 4 2 William Patrick Farrell, # 23620 Cary, NC 03/ 22/ 02 Disciplinary Actions 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 23620 as a Certified Public Accountant. 2. In March of 2001, Board staff re-ceived a complaint from Complainant stating that Respondent had failed to return client records upon demand. 3. Board staff sent a letter dated April 4, 2001, to Respondent’s last known business address requesting that Re-spondent reply to the allegations. 4. Receiving no response, Board staff sent a second letter dated April 26, 2001, to Respondent’s last known busi-ness address by certified/ return re-ceipt mail requesting that Respondent reply to the allegations and that Re-spondent explain his failure to re-spond to the April 4, 2001, letter. 5. In a letter dated April 30, 2001, Respondent stated that in March of 2001 he had faxed the requested depre-ciation schedule to Complainant and that Respondent had no knowledge of what happened to the fax on Complainant’s “ end.” 6. In this letter, Respondent also stated that he had not responded to the Board April 4, 2001, letter “... because I was not going to have my tax season inter-rupted again by Complainant or his complaints. I was too busy.” 7. Respondent further stated that if Complainant withdrew his complaint and apologized for the situation or if Complainant paid Respondent $ 75.00, Respondent would then again send Complainant the requested deprecia-tion schedule. 8. Subsequently the Board’s Profes-sional Standards Committee reviewed a redacted version ( Respondent’s name was removed) of the information per-taining to this matter, and instructed the Board staff to close the matter with-out prejudice upon the conditions that Respondent receive a Letter of Warn-ing regarding his firm’s policies on re-turning client records, and that Re-spondent provide the Complainant with all client records including the depreciation schedule within fifteen ( 15) days. The Board staff issued the Letter of Warning and demand regard-ing client records on June 1, 2001. 9. In a reply dated July 14, 2001, Re-spondent denied that he had failed to cooperate with a Board inquiry but that the first letter had come “ in the middle of the busiest time of the year for any CPA office.” Despite his earlier claim that he had received “ threaten-ing messages” from the Complainant during this time, Respondent also stated that he assumed that the Com-plainant had the depreciation sched-ule since Respondent had not heard any more from him since faxing the depreciation schedule in March of 2001. 10. In this letter, Respondent also re-quested that the Letter of Warning be removed from his Board records. 11. Respondent states that, upon re-ceipt of the Board’s June 1, 2001, letter, he tried several times to fax the depre-ciation schedule to the Complainant but it failed to go through. Respondent states that he then called Complainant’s spouse’s office and left a message for the Complainant’s spouse that the Complainant’s spouse could pick up the depreciation schedule at Respondent’s office. 12. In response to inquiries from Board staff, the Complainant has confirmed that Respondent continued to refuse to provide the requested depreciation schedule. The Complainant has in-formed the Board that, since requested depreciation schedule was not pro-vided, Complainant engaged another CPA to recreate those records. 13. Respondent contends that the sev-enty- five dollar ($ 75) charge was for answering the Complainant’s questions which Respondent contends required him to pull the Complainant’s file a total of five ( 5) times. 14. 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 Caro-lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics and Conduct promulgated and adopted therein by the Board. 2. Respondent’s conduct as set out above constitute violations of NCGS 93- 12( 9) e and 21 NCAC 8N .0206, 8N .0212, and 8N .0305. 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 is censured. 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 was the holder of North Carolina certificate number 13104 as a Certified Public Accountant. 2. In December of 2000, the Board approved Respondent’s request that his North Carolina license be placed on inactive status. 3. Based upon Respondent’s represen-tation that he was inactive and as a Edward J. Logue, Jr., # 13104 Pasedena, CA 03/ 22/ 02 3 result of the grant of his request for inactive status, Board staff informed the North Carolina Secretary of State’s office that the Articles of Incorporation for Respondent’s firm, Ed Logue, CPA, CFP, P. A., should be suspended. 4. Sometime in late 2000, Respondent sold his CPA practice to Raymond A. Dunn, II, of Liberty Tax Service. Re-spondent has informed the Board that Trey Middleton ( Mr. Middleton) pur-chased the firm as a franchise from Liberty Tax Service. 5. Despite the sale to Liberty Tax Ser-vice, Respondent drafted a letter to be sent to clients which introduced Mr. Middleton as the new owner of Respondent’s firm. In this letter, Re-spondent states that he has “ trans-ferred” each client’s “ tax records to Trey and feel very confident that he will do an excellent job” for the client. 6. Despite the sale of Respondent’s firm to a non- CPA, representatives of the firm continued to make unautho-rized use of and reference to the CPA title in connection with the services of the new firm. 7. The Board obtained a “ Notice of Apparent Violation and Demand to Cease and Desist” from Mr. Middleton demanding that both Mr. Middleton and The Accounting Store immediately cease and desist from use of or refer-ence to the CPA title. 9. 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 Caro-lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics and Conduct promulgated and adopted therein by the Board. 2. Respondent’s release of client in-formation to Liberty Tax Service or to Mr. Middleton without prior permis-sion of the client represents violation of NCGS 93- 12( 9) e and 21 NCAC 8N .0203( a) and 8N .0205( a). 3. Respondent’s failure to ensure that the buyer did not continue to illegally use or trade upon the CPA title is a violation of NCGS 93- 12( 9) e and 21 NCAC 8N .0202( b)( 2) and ( b)( 9). 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 inactive certificate is suspended for at least one year. 2. If Respondent returns his suspended certificate within fifteen ( 15) days of the receipt of this Order, Respondent can, after one ( 1) year, apply to return his certificate to active status by sub-mission and approval of a reinstate-ment application which includes: a. Application form, b. Payment of the application fee, c. Three ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight- hour accountancy law course pursuant to 21 NCAC 8F .0504. 3. If Respondent returns his suspended certificate in excess of fifteen ( 15) days of the receipt of this Order, Respondent can, after one ( 1) year plus the number of days that his certificate is late in being returned, apply to return his cer-tificate to active status by submission and approval of a reinstatement appli-cation which includes: a. Application form, b. Payment of the application fee, c. Three ( 3) moral character affidavits ( on forms provided by Board), d. Forty ( 40) hours of CPE in the twelve ( 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. Board Meetings Monday, June 24 Tuesday, July 23* Friday, August 16* Monday, September 23 Friday, October 18 Monday, November 18 Tuesday, December 17 Meetings of the Board are open to the public except when, pursuant to State law, some portions of the meet-ings are closed to the public. Unless otherwise noted, meetings are held at the Board’s office in Raleigh. * New date Address Changed? Pursuant to 21 NCAC 8J .0107, all North Carolina CPAs and CPA firms must notify the Board, in writ-ing, within 30 days of any change of address or business location. For your convenience, a “ No-tice of Address Change” form is printed on the back cover of each issue of the Activity Review. Licensees should mail or fax the change( s) to Alice Steckenrider. Changes may also be e- mailed to ( alicegst@ bellsouth. net). CPA firms should mail or fax the change( s) to Lynn Wyatt. Changes may also be e- mailed to ( lynnwyat@ bellsouth. net). Exam candidates should mail or fax the change( s) to the Examina-tions staff. Changes may also be e-mailed to ( pwelliot@ bellsouth. net) or ( jmacombe@ bellsouth. net). Do you have questions or comments about items published in the Activ-ity Review? If so, please contact Lisa R. Hearne, Communications Manager, by telephone at ( 919) 733- 4208 or by e- mail at ( lhearne@ bellsouth. net). Comments? Questions? 4 SAS No. 96 includes two require-ments dealing with certain types of audit evidence. The ASB developed these in response to comments practi-tioners involved in the peer review process made about the quality of au-dit documentation and to the concerns of the Panel on Audit Effectiveness. One requirement is that the docu-mentation must include abstracts or copies of significant contracts or agree-ments the auditor examined to evalu-ate the accounting for significant trans-actions. The other is that audit documenta-tion for tests of operating effectiveness of controls and substantive tests of de-tails involving inspection of documents or confirmation should include an iden-tification of the items tested. How the auditor identifies the tested items depends on how he or she selected them. For example, if the auditor selected from a particular accounting record all items meeting certain criteria ( for in-stance, items that are over a specified dollar amount), he or she can simply identify that record and those criteria. In other situations— for example, when an auditor uses statistical sam-pling— the documentation may need to include identifying characteristics ( such as the specific invoice numbers) of the selected items. The key question auditors should ask themselves is whether another au-ditor on the engagement team would be able to identify— by reviewing the audit program and related documen-tation— the particular items the origi-nal auditor selected for testing. The ASB considered it impractical to develop specific documentation guidance for substantive tests of de-tails that involve procedures other than inspection of documents and confir-mation This is because auditors can use these other types of procedures, such as observation, for a variety of purposes and can execute them in a number of different ways. Other standards, laws and regula-tions also may include specific docu-mentation requirements applicable to an engagement. Auditors therefore will need to consider them in addition to the ones in SAS No. 96. Some, such as the ones in Govern-ment Auditing Standards ( also known as the yellow book), may be more rigor-ous than the requirements in SAS No. 96. SAS No. 96 requires the auditor to document certain audit findings or is-sues he or she considers significant— an existing best practice among firms of many sizes. Generally, these findings or issues are so important that they would affect the auditor’s report if not resolved. They include the following: • Matters that are significant and involve issues regarding the appropri-ate selection, application and consis-tency of accounting principles pertain-ing to the financial statements, includ-ing related disclosures. Such matters often relate to accounting for complex or unusual transactions or to estimates and uncertainties and any applicable management assumptions. • Results of auditing procedures that indicate the financial statements or disclosures could be materially mis-stated or that the auditing procedures need to be significantly modified. • Circumstances that cause the auditor significant difficulty in apply-ing auditing procedures he or she con-siders necessary. • Other findings that could result in modification of the auditor’s report. SAS No. 96 stresses that the audi-tor owns the audit documentation. It also requires an auditor to adopt rea-sonable procedures to retain such docu-mentation long enough “ to meet the needs of his or her practice and to satisfy any applicable legal or regula-tory requirements for records reten-tion.” Because laws and regulations vary by jurisdiction and the nature of the engagement, SAS No. 96 does not say how long the retention period should be. It simply requires the auditor to adopt procedures that enable him or her to gain access to the documentation throughout that period. One way for auditors to accom-plish this is by creating a policy to maintain electronic documentation in a format that ensures its compatibility with newer versions of audit software or by retaining older versions of such software and, if necessary, the hard-ware on which it runs. SAS No. 96 includes amendments that add documentation requirements to three other statements: SAS No. 47, Audit Risk and Materiality in Conducting an Audit, SAS No. 56, Analytical Proce-dures, and SAS No. 59, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern. The amended SAS No. 47 requires an auditor to document the nature and effect of aggregated misstatements and his or her conclusion as to whether they cause the financial statements to be materially misstated. This facilitates compliance with the requirement in SAS No. 89, Audit Ad-justments, that a summary of uncor-rected financial statement misstate-ments aggregated by the auditor be included in or attached to management’s written representation regarding its belief that the uncorrected misstatements are immaterial, both in-dividually and in the aggregate. The amendment to SAS No. 56 requires auditors to document certain aspects of substantive analytical pro-cedures they perform as a principal audit test of a significant financial state-ment assertion. Three requirements apply. First, auditors now must document the factors they considered in develop-ing the expectation for a particular ana-lytical procedure. They also have to document the expectation if it is not apparent from the documentation of the work they performed. To illustrate this requirement, as-sume that auditors perform a substan-tive test of sales and accounts receiv-able by developing an expectation of the number of days’ sales in accounts receivable based on relationships in prior years. The documentation should include the number of— or range of— days’ sales expected for the current year and the factors, such as current economic conditions, considered in de-veloping this expectation. The other two requirements of the amended SAS No. 56 will oblige audi- SAS No. 96 continued from front page 5 tors to document the results of their comparison of the expectation with the recorded amounts or the ratios the au-ditors develop from those amounts; and any additional auditing procedures they perform in response to significant unexpected differences arising from analytical procedures and those addi-tional auditing procedures’ results. These requirements add more structure to situations in which ana-lytical procedures provide substantial evidence about a significant balance or class of transactions. This amendment to SAS No. 56 applies only to substantive analytical procedures that an auditor performs as a principal audit test of a significant financial statement assertion. For all other analytical procedures, auditors should refer to the general documenta-tion guidance in SAS No. 96. The Panel on Audit Effectiveness called for improvement in the docu-mentation of the auditor’s consider-ation of an entity’s ability to continue as a going concern, especially as it re-lates to his or her evaluation of pro-spective financial information that is significant to management plans. SAS No. 96’ s amendment to SAS No. 59 addresses the panel’s rec-ommendation and requires the auditor to document the conditions or events that led him or her to believe there is substantial doubt about the entity’s ability to continue as a going concern; the work performed in connection with the auditor’s evaluation of management’s plans; the auditor’s con-clusion as to whether substantial doubt remains about the entity’s ability to continue as a going concern for a rea-sonable period of time; and the consid-eration and effect of that conclusion on the financial statements, disclosures and the audit report. SAS No. 96 provides overall docu-mentation requirements for GAAS au-dits. The ASB will use the statement’s documentation concepts and guidance when developing more specific require-ments in future SASs. Because some of the content in SAS No. 96 is relevant to practitioners performing attest engagements, the ASB issued Statement on Standards for Attestation Engagements ( SSAE) No. 11, Attest Documentation, which in-corporates SAS No. 96’ s concepts and terminology and consolidates all docu-mentation guidance in the attestation standards. SSAE No. 11 is effective for attest engagements when the subject matter or assertion is as of, or for a period ending on or after, December 15, 2002, with earlier application permitted. Reprinted from “ The New Audit Documentation Requirements,” by Ray Whittingon and Gretchen Fischbach published in the Journal of Accountancy, April 2002. Jenna Angelo Laura Kelley Arthur William O. Bailes Deborah Hoadley Balduff Gerald Balonis Henry Clay Beck Kermit Killian Bolick George Thomas Bolton, III Jeffrey R. Boyle Rachel A. Brassine Tara Frohn Brittain Melanie Brueck Miguel Angel Castillo Deborah Ann Charles Xiaojing Chen Lawrence Ray Crews Terry E. Dail Douglas A. Dreher Dwayne Leland Eanes Robert Edley Donna Roach Edmonds David N. Elder Eric Lance Eubanks Susan Lynn Evans Lee F. Fritts John Randall Funk David L. Garriques Marcene Marie Graves Roberta Bittner Grider Steven L. Haenchen Alexander Bruch Harding Stephen D. Harrell Vance Alan Harritan Norman Dwight Hash James C. Hedstrom Mark Stephen Helms Linda L. Henderson Duncan Broughton Hilburn James Earle Hinton Gladys Latonya Johnson Wilmot Carlyle Jones, III Jeffrey Joseph Kantor Gregory Scott Kirkland Laura Germaine Lancaster Grant E. Leister Cathy Weaver Liles Christopher Mangin, Jr. Dexter K. Manning Heather Cudd Martin Peter Michael Messana Theresa Spring Meza Phillip Ezra Mills, III Litsa Nicole Mitropoulos Gail Nadia Moore Joseph R. Munday Eric Menton Padgett Stephen Gillette Perkins Christopher Michael Pierce John Stephen Quinn Lawrence Joseph Redler Pressley Ausdon Ridgill, Jr. Tiffany Marie Sams Heather Lea Schonfeldt John Lewis Seabrook, III Michael Neal Shelton Angela Lynn Shipley Robin Moore Sikes David Philip Sirois Charles Seifert Smith Jennifer Ann Smith Michelle Lynn Sosnowski Patricia Jane Spinella Heather L. Spreeman John W. Stewart Stephen Marcus Strader Hannalie Trautman Jodi L. Watterson Jackie H. White Everett O. Winn Certificates Issued The following certificate applications were approved by the Board at its April 18, 2002, meeting: 6 James F. Young, # 26986 James Young CPA, P. L. L. C. Charlotte, NC 03/ 22/ 02 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 James F. Young ( hereaf-ter “ Respondent”) is the holder of North Carolina certificate number 26986 as a Certified Public Accountant. 2. Respondent James Young CPA, P. L. L. C. ( hereafter “ Respondent firm”), is a registered certified public account-ing firm in North Carolina. 3. In September of 1999, Respondent registered Respondent firm with the Board as a professional limited liabil-ity company with one office location. 4. Respondent subsequently dissemi-nated brochures which indicated that Respondent firm had three ( 3) office locations. 5. Respondent advertised two ( 2) un-registered office locations in connec-tion with a non- CPA firm in a check-cashing business in offering to prepare and preparing tax returns. 6. 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 Caro- Disciplinary Action lina Administrative Code ( NCAC), in-cluding the Rules of Professional Eth-ics 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 8K .0104( d)( 2), 8N .0202( a), and 8N .0306( a). 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 is censured. 2. Respondent shall immediately close or register any unregistered firm loca-tions. 3. Respondent shall take all steps nec-essary to ensure that his firm ceases and desists from participation in any and all misleading or confusing adver-tising in conjunction with non- CPA businesses. Reclassifications Reissuance Harold Claude Reid, # 10154 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)]. 04/ 18/ 02 Bobby Eugene Combs, Statesville, NC Millard Pratt, Norfolk, VA Curtis Toms, Jr., Raleigh, NC Tired of Junk E- mail? Do you receive lots of junk e- mail messages (“ spam”)? The Federal Trade Commission ( FTC) offers the following tips for reducing the amount of unwanted commercial e- mail you receive: • Don’t display your e- mail address in public, including newsgroup postings, chat rooms, web sites, or in an online service’s membership directory. • Check the privacy policy when you submit your address to a web site. See if the policy allows the company to sell your address. You may want to opt out of this provision or not submit your address at all to web sites that won’t protect your e- mail address. • Read the entire form before you transmit personal information through a web site. Some web sites allow you to opt out of receiving email from their “ partners” - but you may have to uncheck a preselected box to opt out. • Use a unique e- mail address. Spammers use “ dictionary attacks” to sort through possible name combinations hoping to find a valid address. Thus, a common name such as jdoe may get more spam than a more unique name like jd51x02oe. • Use an e- mail filter. Check your e-mail account to see if it provides a tool to filter out potential spam or a way to channel spam into a bulk e- mail folder. • Report the spam to the FTC. Forward a copy of unwanted messages to uce@ ftc. gov. The FTC uses the unsolicited e- mails stored in this database to pursue law enforcement actions against people who send spam or deceptive e- mail. • Forward a copy of the spam to your ISP’s abuse desk and the spammer’s ISP’s abuse desk. By doing this, you can let the ISPs know about the spam problem on their systems and help them stop the spammer from continuing to abuse the system. 77 “ 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)]. 04/ 02/ 02 Victoria Plaster Warren Bristol, TN 04/ 02/ 02 Thomas Bruce Brown Pittsboro, NC 04/ 02/ 02 Jack C. Robinson Greenville, SC 04/ 02/ 02 Misty McMullen Glass Montgomery, AL 04/ 04/ 02 Michael Ruel Johnson Marietta, GA 04/ 04/ 02 Ernest Lee Puschaver Bonita Springs, FL 04/ 04/ 02 Ocie Kyle Hogan, III Asheboro, NC 04/ 04/ 02 Amy Allen Lewis Jamestown, NC 04/ 04/ 02 Samuel Leigh Burke Midlothian, VA 04/ 04/ 02 Robert Joseph Difelice Vero Beach, FL 04/ 04/ 02 Anne Jennings Sanders High Point, NC 04/ 10/ 02 Don Ray Lloyd N. Myrtle Beach, SC 04/ 10/ 02 Elizabeth Ann Staker Apex, NC 04/ 11/ 02 William Albert Brasington Houston, TX 04/ 11/ 02 Annemarie Thomas Willow Spring, NC 04/ 12/ 02 Deborah Queeney Ellis Castle Rock, CO 04/ 12/ 02 Ashley Baker Neale Mount Pleasant, SC 04/ 12/ 02 Warren Martin McLean, VA 04/ 16/ 02 Denise Nichols Perry Winston- Salem, NC 04/ 16/ 02 Mary Mercer Tugwell Washington, DC 04/ 16/ 02 Jennifer Leah Horton Greensboro, NC 04/ 17/ 02 Edgar Raymond Wood, Jr. Cornelius, NC 04/ 17/ 02 Daneil Lee Belongia Charlotte, NC 04/ 17/ 02 Cathy Ruffalo Callahan Herndon, VA 04/ 17/ 02 Amy Elizabeth Read Charlotte, NC 04/ 17/ 02 Julia Elizabeth Guifoyle Charlotte, NC 04/ 18/ 02 Joseph Thomas Jordan, Jr. Raleigh, NC 04/ 18/ 02 Roger Paul Legendre Belle Mead, NJ 04/ 18/ 02 Cathy Elaine Vetter Raleigh, NC 04/ 18/ 02 Renee Brock Daw Wilson, NC 04/ 18/ 02 Jennifer McCall Kennedy Roanoke, VA 04/ 18/ 02 Letitia Fowler Granados Wake Forest, NC 04/ 22/ 02 Roger Gale Simmons Wilmington, NC 04/ 22/ 02 Bryant Lee Deaton Belmont, NC 04/ 22/ 02 Jeffrey Hollister Getz Easton, CT 04/ 23/ 02 Alfred Giannella Matthews, NC 04/ 25/ 02 David Brown Watkins Cumming, GA 04/ 29/ 02 Danny Ray Hines Greenville, NC 04/ 29/ 02 Alan Hunt Duncan Little Rock, AR 04/ 29/ 02 Lori McIlroy Calhoun Charlotte, NC 04/ 29/ 02 Michelle Sigmon Jones Charlotte, NC 04/ 30/ 02 Mary Wyant Stebbins Williamsburg, VA Inactive Status Main Telephone Number ( 919) 733- 4222 Fax Number ( 919) 733- 4209 Toll- Free Application Line 1- 800- 211- 7930 Address 1101 Oberlin Road, Suite 104 PO Box 12827 Raleigh, NC 27605 Web Site http:// www. state. nc. us/ cpabd Administrative Services ( 919) 733- 4223 Felecia Ashe feleciaa@ bellsouth. net Communications ( 919) 733- 4208 Lisa R. Hearne lhearne@ bellsouth. net Examinations ( 919) 733- 4224 Judith E. Macomber jmacombe@ bellsouth. net Phyllis W. Elliott pwelliot@ bellsouth. net Executive Director ( 919) 733- 4222 Robert N. Brooks rnbrooks@ bellsouth. net Licensing ( 919) 733- 1421 Buck Winslow buckwins@ bellsouth. net Licensing ( applications) ( 919) 733- 1422 Alice G. Steckenrider alicegst@ bellsouth. net Licensing ( firms/ SQR/ CPE) ( 919) 733- 1423 Lynn Wyatt lynnwyat@ bellsouth. net Professional Standards ( 919) 733- 1426 Ann H. Hinkle ahhinkle@ bellsouth. net Jo Gaskill jogaskil@ bellsouth. net Receptionist Karen Burton karenburton@ bellsouth. net Contact the Board 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 $ 2,758.29 or 13¢ per copy in May 2002. 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 R. Stanley Vaughan, CPA President, Charlotte O. Charlie Chewning, Jr., CPA Vice President, Raleigh Michael H. Wray Secretary- Treasurer, Gaston Barton W. Baldwin, CPA Member, Mount Olive Scott L. Cox, CPCU, CIC Member, Charlotte Walter C. Davenport, CPA Member, Raleigh Leonard W. Jones, CPA Member, Morehead City 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 Lynn Wyatt Professional Standards Ann J. Hinkle, Manager Jo Gaskill Receptionist Karen Burton |
OCLC number | 20740890 |