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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 Issue No. 10- 2002 Inside this issue... Board Meetings ............................... 2 Certificates Issued ........................... 4 Correction: Tax ID Number ............ 3 Disciplinary Actions .................. 2, 6 IRS Circular 230 .............................. 4 IRS VITA Program........................... 5 Exam Schedule ................................ 3 Notice of Address Change ............. 8 Office Closed .................................... 3 Reclassifications ............................. 7 www. state. nc. us/ cpabd SSARS No. 8: New Guidance for Compilation Engagements Although the Accounting and Review Services Committee ( ARSC) of the Ameri-can Institute of CPAs ( AICPA) put an end to plain- paper financial statement engagements with the issuance of State-ment on Standards for Accounting and Review Services ( SSARS) No. 1, Compila-tion and Review of Financial Statements, the accounting profession has continued to debate the issue. Rapid advances in information tech-nology and low- cost software have en-abled even the smallest of reporting en-tities to record its own transactions and prepare its own financial statements. Nevertheless, many non- public en-tities rely on their CPAs for varied ac-counting and business advisory services that often include the preparation of financial statements, even if only for management use. When the ARSC issued SSARS No. 7, Omnibus Statement on Stan-dards for Accounting and Review Services, practitioners supposedly had complete clarification of when a compilation re-port needed to be attached to the finan-cial statements. In many cases, however, the guidance in SSARS No. 7 has not been followed. In October 2000, the ARSC issued SSARS No. 8, Amendment to Statement on Standards for Accounting and Review Ser-vices No. 1, Compilation and Review of Financial Statements. SSARS No. 8 provides communica-tion and performance requirements for unaudited financial statements where there is no expectation that the financial statements will be utilized by third par-ties. Many reporting entities that need timely financial information for management’s use may not need that information in the form of financial state-ments that comply, in all material re-spects, either with generally accepted accounting principles ( GAAP) or an other comprehensive basis of account-ing ( OCBOA). ARSC has concluded that a compi-lation report may not be necessary for these types of reporting entities and has developed new compilation engagement guidance that allows “ restricted use” financial statements to be compiled with-out following the reporting guidance in the SSARSs. Nonetheless, the performance stan-dards in the SSARSs must still be fol-lowed. If the financial statements are not expected to be used by a third party, the new guidelines in SSARS No. 8 provide the following communication options: • A compilation report may be issued in accordance with the reporting requirements of SSARS No. 1 ( essen-tially, the status quo). • An understanding of the en-gagement with the client may be docu-mented through an engagement letter, preferably signed by management, re-garding the services to be performed and the limitations on the use of financial statements. If the engagement letter approach is used, documentation of the understand-ing of the engagement in the engagement letter should include the following state-ments: • The nature and limitations of the services to be performed are described in the letter. • A compilation is limited to pre-senting, in the form of financial state-ments, information that is the represen-tation of management. • The financial statements will not be reviewed or audited. SSARS No. 8 continued on page 5 Disciplinary Actions 2 Bruce S. Atkins # 11796 Weaverville, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. Bruce S. Atkins is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. Bruce S. Atkins 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. Bruce S. Atkins 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. Bruce S. Atkins’ failure to timely obtain an 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. Bruce S. Atkins’ 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 Bruce S. Atkins 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 office. 3. If Bruce S. Atkins returns his sus-pended certificate within fifteen ( 15) days of the receipt of this Order, Bruce S. Atkins 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 ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. 4. If Bruce S. Atkins returns his sus-pended certificate in excess of fifteen ( 15) days of the receipt of this Order, Bruce S. Atkins can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion which includes: a. Application form ( which includes statements regarding use of title during forfeiture), 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. Christopher P. Buck # 26406 Huntersville, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, at its offices at 1101 Oberlin Road, Raleigh, Wake County, North Carolina, with a quo-rum present, the Board finds, based on the clear and convincing evidence pre-sented, that: FINDINGS OF FACT 1. Christopher P. Buck was the holder of a certificate as a Certified Public Ac-countant in North Carolina and is there-fore subject to the provisions of Chapter 93 of the North Carolina Gen-eral Statutes ( NCGS) and Title 21, Chap-ter 8 of the North Carolina Administra-tive Code ( NCAC), including the Rules of Professional Ethics and Conduct pro-mulgated and adopted therein by the Board. 2. Christopher P. Buck 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. Christopher P. Buck 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. 4. On August 7, 2002, Board staff sent, via Certified/ Return Receipt Mail, Christopher P. Buck a Notice of Forfei-ture and Demand for the return of his certificate. Christopher P. Buck received and signed for said Notice on August 13, 2002. 5. On August 28, 2002, Board staff re-ceived Christopher P. Buck’s forfeited CPA certificate. CONCLUSIONS OF LAW 1. Christopher P. Buck’s failure to timely obtain an 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. The status of Christopher P. Buck’s forfeited certificate is changed to sus-pended for at least thirty ( 30) days from the date this Order is approved and Board Meetings Monday, November 18 Tuesday, December 17 Meetings of the Board are open to the public except when, under State law, some portions of the meetings are closed to the public. Unless other-wise noted, meetings are held at the Board’s office in Raleigh. 3 Lloyd C. Folks # 7761 Kinston, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. Lloyd C. Folks is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. Lloyd C. Folks 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. Lloyd C. Folks 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. Lloyd C. Folks’ failure to timely obtain a SQR prior to the prescribed comple-tion date is a violation of NCGS 93- 12 ( 8c) and 21 NCAC 8M .0102. BASED ON THE FOREGOING, the Board orders that: 1. Lloyd C. Folks’ 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 Lloyd C. Folks 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 office. 3. If Lloyd C. Folks returns his sus-pended certificate within fifteen ( 15) days of the receipt of this Order, Lloyd C. Folks 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 ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight ( 8) hour accoun-tancy law course pursuant to 21 NCAC 8F .0504. 4. If Lloyd C. Folks returns his sus-pended certificate in excess of fifteen ( 15) days of the receipt of this Order, Lloyd C. Folks can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his certifi-cate 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 ( 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. until the required SQR compliance in-formation is received by the Board. 2. Christopher P. Buck can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. Correction: Board’s Tax ID Number The August 2002 issue of the Activity Review, contained a completed IRS Form W- 9 for the Board. However, two numbers were in-advertently transposed when the form was completed. The correct tax ID number for the NC State Board of CPA Examiners is: 56- 6017386. The Board regrets any inconve-nience this error may have caused. Board Office Closed The Board office will be closed Mon-day, November 11, 2002, in obser-vance of Veterans’ Day. In addition, the Board office will be closed Thursday, November 28, 2002, and Friday, November 29, 2002, in observance of Thanksgiving. November 2002 Uniform CPA Exam Schedule The November 2002 Uniform CPA Examination will be administered November 6- 7 at the Raleigh Con-vention and Conference Center in Raleigh and the Benton Convention Center in Winston- Salem. The sched-ule is as follows: Business Law & Professional Responsibilities ( LPR) Wednesday, November 6, 2002 9: 00 a. m. - 12: 00 noon Auditing ( AUD) Wednesday, November 6, 2002 1: 30 p. m. - 6: 00 p. m. Accounting & Reporting ( ARE) Thursday, November 7, 2002 8: 30 a. m. - 12: 00 noon Financial Accounting & Reporting ( FARE) Thursday, November 7, 2002 1: 30 p. m. - 6: 00 p. m. For additional information about the Uniform CPA Examination, please visit the Board’s web site ( www. state. nc. us/ cpabd). 4 Elizabeth J. Aurilio William Mullen Aycock Christine Victoria Barcay Cerene Oceana Beauregard Adrian James Beasley Daniel Joseph Berry Peyton Randolph Black Thomas Robert Boothby Brian Dale Bradford Janette Louise Brown Jason Nicholas Brown Kathleen Donovan Bucher Lisa Langdon Burgess Cynthia Debra Carter Kellice Renee Chance Andrew David Cheplick Shelly Renee Coe Richard Timothy Conner Michael Wayne Cook Brenda K. Currie Kristine Lynn Cutler Jessica Adeline Danninger Richard Earle deButts, III Vincent Michael DiSandro, Jr. William Robert Dresback, Jr. Robert Michael Fitzula, Jr. Deborah Fleischman Susan Carol Fox- Kirk Amanda Kinch Green Tammy Lynn Gregory Taylor Elizabeth Griffin John Frederick Hamilton Certificates Issued The following certificate applications were approved by the Board at its August 16, 2002, and September 23, 2002, meetings: Brian Scott Hendrickson Thomas Michael Herbert W. Kelly Hill Christina Renee Hodge Dan Overby Holder, Jr. William Forrest Holder Michael G. Holmes Amanda Elizabeth Hubbard Angela Susan Jenkins Jamie Lynne Jones Jason Lee Kelley Emmitt Clark Kernoodle Anna Burgess Lau Martin Alan Lee Karen Fang Liu Michael Alan Mankowski Carol E. Martin Julia Lynn Martin John Alan Maser Adrienne Scherer McKinney Matthew James Molbert John Berchmans Montoro Timothy Randolph Morris Preeta Nayak Joseph Edward Oprosko, Jr. John Boone Paden Brian J. Petrequin Sidney Roy Pickett, Jr. James Lester Pierce Lisa Dianne Pierce Francis Xavier Pirozzi Eric C. Pompi Andrew David Proctor Matthew D. Rice Kendra Dee Rich John Kim Richardson Randy Wayne Richartz Deanna Lynn Rios Patricia Ann Sabrinsky Lisa Hall Satterfield Kimberly Ann Savva Asit Sharma Maureen Virginia Sheehy Marion Holloway Simmons Laura Knight Smith Patricia Elizabeth Smith Ajamu H. Stoner Diane Leigh Taylor Jacqueline S. Taylor Samuel C. Thomas, III Kelly Ann Thornton Robert Marion Tilton Etim Jeremiah Udoh Jamen Earl Voss Kristin Lee Votta Alexander George Vuchnich Eric P. Wallace Kim M. Ward William Kent Weaver Lori Langley Webb Candice Sexton Whitehurst Clayton Anderson Whitesell Krista Lea Woodside James Bertram Zellmer Sarah Zinzer The Internal Revenue Service ( IRS) has published final regulations regarding amendments to Circular 230 involving non- tax shelter related practice before the IRS. Circular 230 governs the right of CPAs, attorneys, enrolled agents, and enrolled actuaries to practice before the IRS, Over the next few months, the IRS is expected to re- propose amendments to Circular 230, involving tax shelter re-lated practice matters. A brief summary of some of the major provisions of the final regulations fol-lows: IRS Releases Amendments to Circular 230 • Section 10.20 requires ( under certain limited conditions) that a prac-titioner provide information to the IRS regarding the identity of persons who may have possession or control of re-quested documents. • In addition to a requirement to notify a client about any noncompli-ance, error, or omission on a client’s part, Section 10.21 generally provides that a practitioner must advise the cli-ent of the consequences of such non-compliance, error, or omission. • Section 10.27 clarifies the rules governing the prohibition on practitio-ners receiving a contingent fee for posi-tions taken or to be taken on an original tax return. • The new regulations also ad-dress such issues as ( a) the return of a client’s records, ( b) matters involving practitioner advertising and solicita-tions, ( c) the disreputable conduct of a tax practitioner, and ( d) IRS disciplin-ary proceedings. These final regulations ( TD 9011) are published in the Internal Revenue Bulletin ( IRB 2002- 33, 356) dated Au-gust 19, 2002, and are available on- line at www. irs. gov/ bus_ info/ bullet. html. 5 • No opinion ( or any other form of assurance) on the financial statements will be provided. • Management has knowledge about the nature of the procedures ap-plied, and the basis of the accounting and assumptions used in the prepara-tion of the financial statements. • The financial statements reflect management’s representation and it is agreed that they are not to be used by third parties. • The financial statements can-not be relied upon to disclose errors, fraud, and illegal acts. If applicable, the required documen-tation should also note the following statements: • Material departures from GAAP or OCBOA may exist and the effects of those departures on the finan-cial statements may not be disclosed. • Substantially all disclosures and the statement of cash flows may be omitted. • The CPA may lack indepen-dence with respect to the client. • A reference to supplementary information is included in the financial statement package. In those cases where a compilation report is not issued, CPAs must include a reference on each page of the financial statements indicating that they are “ Re-stricted for Management’s Use Only.” Other phraseology that may be utilized in this financial statement legend could be “ Solely for the Information of and Use by Management of Ann Wholesale, Inc., and Not Intended to Be and Should Not Be Used by Any Other Party.” When a CPA is engaged to report on compiled financial statements and the statements are, or reasonably might be expected to be, used by a third party, a compilation report still must be attached to the financial statements. In all cir-cumstances, CPAs will be required to comply with the SSARS performance guidelines when they are compiling fi-nancial statements. The performance standards for compilation engagements, whether or not a report is issued as a result of the engagement, are as follows: • The CPA should possess a level of knowledge of accounting principles and practices used in the industry in which the entity operates that will en-able the compilation of financial state-ments appropriate in form for that in-dustry. • The CPA should possess a gen-eral understanding of the nature of the entity’s business transactions, the form of its accounting records, the stated quali-fications of its accounting personnel, the accounting basis on which the fi-nancial statements are to be presented ( e. g., GAAP, OCBOA), and the form and content of the financial statements. • The CPA should read the fi-nancial statements and consider whether they appear to be appropriate in form and free from obvious material errors. CPAs are not required to make in-quiries or perform other procedures to verify, corroborate, or review informa-tion supplied by the reporting entity. In cases where a CPA does make inquires that reveal unsatisfactory information, the CPA should obtain additional and revised information. If management re-fuses, the CPA should withdraw from the engagement. Besides the communications op-tions it makes available, SSARS No. 8 makes a fundamental change in the definition of “ submission” of financial statements. By modifying this defini-tion, the ARSC believes that the majority of SSARS applicability problems faced by the profession will be solved. Under SSARS No. 7, submission of financial statements was defined as presenting to a client ( or others) financial statements that the CPA has 1) generated, either manually or through computer soft-ware, or 2) modified, by materially chang-ing account classifications, amounts, or disclosures directly on client- prepared financial statements. Under SSARS No. 8, submission of financial statements is defined as presenting to a client ( or third parties) financial statements that the practitioner has prepared either manu-ally or through computer software. Although CPAs must still use their professional judgment in determining whether they have prepared or pre-sented a financial statement, SSARS No. 8’ s modification to the sub-mission of financial statements ad-dresses issues associated with today’s technological environment while main-taining a minimum level of service. Pursuant to 21 NCAC 8N .0302( a), a CPA providing a SSARS No. 8 compi-lation to a client can only do so in a registered CPA firm. For CPA firms en-rolled in a peer review program, a SSARS No. 8 compilation would have to be included in the engagements covered by SSARS. However, for CPA firms not enrolled in a peer review program, where the SSARS compilation with no report is the highest level of service provided to a client, would not be required to enroll in an approved practice monitoring pro-gram. -- From the article, “ SSARS No. 8: New Guidance for Compilation En-gagements,” by Thomas A. Ratcliffe, Ph. D., CPA, as published in The CPA Journal, June 2001. SSARS No. 8 continued from front page The Internal Revenue Service is seek-ing North Carolina tax professionals to serve as instructors for the Volun-teer Income Tax Assistance ( VITA) program. Instructors will train VITA vol-unteers to prepare basic tax returns for taxpayers with limited income, with disabilities, the elderly, and non- English speaking taxpayers. If you are interested in partici-pating, please contact John Lenik by telephone at ( 336) 378- 2306. Although enrolled agents can earn Continuing Professional Edu-cation ( CPE) credits for participating in this program, North Carolina CPAs cannot. Pursuant to 21 NCAC 8G .0409( d), CPAs cannot claim CPE credit for teaching or presenting a course unless the course is specifi-cally designed as a CPE course for CPAs. IRS Seeks Volunteers for VITA Program; No CPE Credit for CPAs 6 Disciplinary Actions W. Kenneth Wease # 12286 Cary, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. W. Kenneth Wease is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. W. Kenneth Wease 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. W. Kenneth Wease 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. W. Kenneth Wease’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. W. Kenneth Wease’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 W. Kenneth Wease 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 office. 3. If W. Kenneth Wease returns his suspended certificate within fifteen ( 15) days of the receipt of this Order, W. Kenneth Wease can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. 4. If W. Kenneth Wease returns his suspended certificate in excess of fifteen ( 15) days of the receipt of this Order, W. Kenneth Wease can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his certifi-cate 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 ( 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. Maurice S. Hamilton # 22354 Germantown, MD 08/ 16/ 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 is the holder of North Carolina certificate number 22354 as a Certified Public Accountant. 2. In June of 1999, the Board approved a Consent Order with Respondent re-garding, in part, Respondent’s failure to return client records upon demand to at least four ( 4) clients and failure to respond in a timely manner to Board inquiries. Under the terms of that Order, Respondent agreed to a one- year sus-pension that was stayed upon the con-dition that he violate no accountancy law or rules at any time during the pe-riod of June 1999 through June 2000. 3. Respondent gave notice to the Board that he was dissolving his practice and moving out- of- state as of December 31, 1999. Respondent secured client records in storage areas but was not readily accessible to clients in order to return client records upon demand. 4. In November of 2000, the Board re-ceived a complaint that for a period of at least fifteen ( 15) months Respondent had again failed to return client records upon demand. 5. Despite two subsequent letters re-questing Respondent’s reply to the com-plaint, Respondent did not reply to these Board inquiries until Board staff con-tacted Respondent by telephone. 6. In May of 2001, the complainant sent a letter to Board staff informing the Board that Respondent had returned all client records and the complainant requested that his complaint be withdrawn. 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 conduct as set out above constitutes violations of NCGS 93- 12( 9) e and 21 NCAC 8N .0206 and 8N .0305 ( a). 7 BASED ON THE FOREGOING and in lieu of further proceedings under 21 NCAC Chapter 8C, the Board and Respondent agree to the following Or-der: 1. Respondent’s certificate is suspended for one ( 1) year; however, said suspen-sion is stayed. 2. Respondent has voluntarily surren-dered his North Carolina CPA certifi-cate to the Board and agrees that he will not request the reinstatement of his sur-rendered certificate for at least one ( 1) year. 3. Respondent shall send a letter by certified/ return receipt mail to all North Carolina clients whose records Respon-dent still has in his possession in an attempt to return all of those client records. Reclassifications Reinstatements 08/ 16/ 02 Debra Spainhour Batts # 13181 Deborah Pugh Jefferson # 17245 09/ 23/ 02 Barbara B. Carter # 13307 Brent Donald Hollingsworth # 24908 Danny B. West # 12287 Susan Elizabeth Youngblood # 24192 Reissuance 09/ 23/ 02 Calvin Lewis Blanton # 16066 Tanya Yvette Mitchell # 14136 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)]. 08/ 16/ 02 Martin W. Doherty Chapel Hill, NC 09/ 23/ 02 Charles C. Cline Statesville, NC Inactive “ 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)]. 07/ 31/ 02 Harper Cole, Jr. Cary, NC 07/ 31/ 02 Robert George Willey, Jr. Charlotte, NC 07/ 31/ 02 William Sherrod Rhodes Brentwood, TN 07/ 31/ 02 Blair Tucker Hatcher Chicago, IL 07/ 31/ 02 David Edwin Allen Raleigh, NC 07/ 31/ 02 Michael Ray Cauble Asheville, NC 07/ 31/ 02 Judith Ann Melton Sanford, NC 07/ 31/ 02 Alita Dionne Balmer Cedar Park, TX 07/ 31/ 02 Melissa Smith Phillips Columbia, TN 07/ 31/ 02 Angela L. Burcham Davidson, NC 07/ 31/ 02 Eric William Gilbert Zetterholm Asheville, NC 07/ 31/ 02 Philip J. Jehle St. Charles, MO 07/ 31/ 02 Kimberly Winn Brooks Research Triangle Park, NC 08/ 01/ 02 Marilyn Michelle Chism Durham, NC 08/ 01/ 02 William Arthur Collins Greensboro, NC 08/ 01/ 02 Robert G. Riley Randolph, NJ 08/ 05/ 02 Kelly Ferrell Price Gray, TN 08/ 19/ 02 Phil Norman Carter Hickory, NC 08/ 19/ 02 Jason Bradley Wells Denver, CO 09/ 05/ 02 Robert Michael Wallace Panama City Beach, FL 09/ 09/ 02 Charles E. Saul Roswell, GA 09/ 09/ 02 Andrea Delk Warhurst Raeford, NC 09/ 19/ 02 Mark Thomas Ott, Jr. Baton Rouge, LA 09/ 23/ 02 George Kelly Moore, Jr. Charlotte, NC 09/ 23/ 02 Amy Phillips Torvinen Rutherfordton, NC Address Changed? 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 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 Martha Traina. Changes may also be e- mailed to marthatraina@ bellsouth. net. Exam candidates should mail or fax the change( s) to Phyllis Elliott or Judith Macomber. Changes may also be e- mailed to pwelliot@ bellsouth. net or jmacombe@ bellsouth. net. Comments? Do you have questions or comments regarding items published in the Activity Review? If so, please e- mail your ques-tions or comments to Lisa R. Hearne at ( lhearne@ bellsouth. net). Certificate No. Send Mail to Home Business New Home Address City State Zip CPA Firm/ Business Name New Bus. Address City State Zip Telephone: Bus. ( ) Home ( ) Bus. fax ( ) E- mail Address Certificate Holder Last name Jr./ III First Middle North Carolina State Board of Certified Public Accountant Examiners Post Office Box 12827 Raleigh NC 27605- 2827 PRST STD US Postage PAID Greensboro, NC Permit No. 393 21,000 copies of this document were printed for this agency at a cost of $ 2,758.29 or 13¢ per copy in October 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 O. Charlie Chewning, Jr., CPA President, Raleigh Michael H. Wray Vice- President, Gaston Walter C. Davenport, CPA Secretary- Treasurer, Raleigh Barton W. Baldwin, CPA Member, Mount Olive Scott L. Cox, CPCU, CIC Member, Charlotte Leonard W. Jones, CPA Member, Morehead City R. Stanley Vaughan, CPA Member, Charlotte Staff Executive Director Robert N. Brooks Legal Counsel Noel L. Allen, Esq. Administrative Services Felecia F. Ashe Communications Lisa R. Hearne, Manager Examinations Judith E. Macomber, Manager Phyllis W. Elliott Licensing Buck Winslow, Manager Alice G. Steckenrider Martha Traina Professional Standards Ann J. Hinkle, Manager Jo Gaskill Marie Moss Receptionist Karen Burton
Object Description
Description
Title | Activity review |
Date | 2002-10; * |
Description | No. 10, 2002 (October) |
Digital Characteristics-A | 55 KB; 8 p. |
Digital Format |
application/pdf |
Pres Local File Path-M | \Preservation_content\StatePubs\pubs_borndigital\images_master\ |
Full Text | Activity Review North Carolina State Board of Certified Public Accountant Examiners 1101 Oberlin Road, Suite 104, PO Box 12827, Raleigh, NC 27605 ( 919) 733- 4222 Issue No. 10- 2002 Inside this issue... Board Meetings ............................... 2 Certificates Issued ........................... 4 Correction: Tax ID Number ............ 3 Disciplinary Actions .................. 2, 6 IRS Circular 230 .............................. 4 IRS VITA Program........................... 5 Exam Schedule ................................ 3 Notice of Address Change ............. 8 Office Closed .................................... 3 Reclassifications ............................. 7 www. state. nc. us/ cpabd SSARS No. 8: New Guidance for Compilation Engagements Although the Accounting and Review Services Committee ( ARSC) of the Ameri-can Institute of CPAs ( AICPA) put an end to plain- paper financial statement engagements with the issuance of State-ment on Standards for Accounting and Review Services ( SSARS) No. 1, Compila-tion and Review of Financial Statements, the accounting profession has continued to debate the issue. Rapid advances in information tech-nology and low- cost software have en-abled even the smallest of reporting en-tities to record its own transactions and prepare its own financial statements. Nevertheless, many non- public en-tities rely on their CPAs for varied ac-counting and business advisory services that often include the preparation of financial statements, even if only for management use. When the ARSC issued SSARS No. 7, Omnibus Statement on Stan-dards for Accounting and Review Services, practitioners supposedly had complete clarification of when a compilation re-port needed to be attached to the finan-cial statements. In many cases, however, the guidance in SSARS No. 7 has not been followed. In October 2000, the ARSC issued SSARS No. 8, Amendment to Statement on Standards for Accounting and Review Ser-vices No. 1, Compilation and Review of Financial Statements. SSARS No. 8 provides communica-tion and performance requirements for unaudited financial statements where there is no expectation that the financial statements will be utilized by third par-ties. Many reporting entities that need timely financial information for management’s use may not need that information in the form of financial state-ments that comply, in all material re-spects, either with generally accepted accounting principles ( GAAP) or an other comprehensive basis of account-ing ( OCBOA). ARSC has concluded that a compi-lation report may not be necessary for these types of reporting entities and has developed new compilation engagement guidance that allows “ restricted use” financial statements to be compiled with-out following the reporting guidance in the SSARSs. Nonetheless, the performance stan-dards in the SSARSs must still be fol-lowed. If the financial statements are not expected to be used by a third party, the new guidelines in SSARS No. 8 provide the following communication options: • A compilation report may be issued in accordance with the reporting requirements of SSARS No. 1 ( essen-tially, the status quo). • An understanding of the en-gagement with the client may be docu-mented through an engagement letter, preferably signed by management, re-garding the services to be performed and the limitations on the use of financial statements. If the engagement letter approach is used, documentation of the understand-ing of the engagement in the engagement letter should include the following state-ments: • The nature and limitations of the services to be performed are described in the letter. • A compilation is limited to pre-senting, in the form of financial state-ments, information that is the represen-tation of management. • The financial statements will not be reviewed or audited. SSARS No. 8 continued on page 5 Disciplinary Actions 2 Bruce S. Atkins # 11796 Weaverville, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. Bruce S. Atkins is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. Bruce S. Atkins 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. Bruce S. Atkins 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. Bruce S. Atkins’ failure to timely obtain an 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. Bruce S. Atkins’ 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 Bruce S. Atkins 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 office. 3. If Bruce S. Atkins returns his sus-pended certificate within fifteen ( 15) days of the receipt of this Order, Bruce S. Atkins 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 ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. 4. If Bruce S. Atkins returns his sus-pended certificate in excess of fifteen ( 15) days of the receipt of this Order, Bruce S. Atkins can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion which includes: a. Application form ( which includes statements regarding use of title during forfeiture), 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. Christopher P. Buck # 26406 Huntersville, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, at its offices at 1101 Oberlin Road, Raleigh, Wake County, North Carolina, with a quo-rum present, the Board finds, based on the clear and convincing evidence pre-sented, that: FINDINGS OF FACT 1. Christopher P. Buck was the holder of a certificate as a Certified Public Ac-countant in North Carolina and is there-fore subject to the provisions of Chapter 93 of the North Carolina Gen-eral Statutes ( NCGS) and Title 21, Chap-ter 8 of the North Carolina Administra-tive Code ( NCAC), including the Rules of Professional Ethics and Conduct pro-mulgated and adopted therein by the Board. 2. Christopher P. Buck 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. Christopher P. Buck 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. 4. On August 7, 2002, Board staff sent, via Certified/ Return Receipt Mail, Christopher P. Buck a Notice of Forfei-ture and Demand for the return of his certificate. Christopher P. Buck received and signed for said Notice on August 13, 2002. 5. On August 28, 2002, Board staff re-ceived Christopher P. Buck’s forfeited CPA certificate. CONCLUSIONS OF LAW 1. Christopher P. Buck’s failure to timely obtain an 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. The status of Christopher P. Buck’s forfeited certificate is changed to sus-pended for at least thirty ( 30) days from the date this Order is approved and Board Meetings Monday, November 18 Tuesday, December 17 Meetings of the Board are open to the public except when, under State law, some portions of the meetings are closed to the public. Unless other-wise noted, meetings are held at the Board’s office in Raleigh. 3 Lloyd C. Folks # 7761 Kinston, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. Lloyd C. Folks is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. Lloyd C. Folks 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. Lloyd C. Folks 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. Lloyd C. Folks’ failure to timely obtain a SQR prior to the prescribed comple-tion date is a violation of NCGS 93- 12 ( 8c) and 21 NCAC 8M .0102. BASED ON THE FOREGOING, the Board orders that: 1. Lloyd C. Folks’ 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 Lloyd C. Folks 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 office. 3. If Lloyd C. Folks returns his sus-pended certificate within fifteen ( 15) days of the receipt of this Order, Lloyd C. Folks 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 ( 3) moral character affidavits, and d. Forty ( 40) hours of CPE in the twelve ( 12) months preceding the application including an eight ( 8) hour accoun-tancy law course pursuant to 21 NCAC 8F .0504. 4. If Lloyd C. Folks returns his sus-pended certificate in excess of fifteen ( 15) days of the receipt of this Order, Lloyd C. Folks can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his certifi-cate 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 ( 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. until the required SQR compliance in-formation is received by the Board. 2. Christopher P. Buck can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. Correction: Board’s Tax ID Number The August 2002 issue of the Activity Review, contained a completed IRS Form W- 9 for the Board. However, two numbers were in-advertently transposed when the form was completed. The correct tax ID number for the NC State Board of CPA Examiners is: 56- 6017386. The Board regrets any inconve-nience this error may have caused. Board Office Closed The Board office will be closed Mon-day, November 11, 2002, in obser-vance of Veterans’ Day. In addition, the Board office will be closed Thursday, November 28, 2002, and Friday, November 29, 2002, in observance of Thanksgiving. November 2002 Uniform CPA Exam Schedule The November 2002 Uniform CPA Examination will be administered November 6- 7 at the Raleigh Con-vention and Conference Center in Raleigh and the Benton Convention Center in Winston- Salem. The sched-ule is as follows: Business Law & Professional Responsibilities ( LPR) Wednesday, November 6, 2002 9: 00 a. m. - 12: 00 noon Auditing ( AUD) Wednesday, November 6, 2002 1: 30 p. m. - 6: 00 p. m. Accounting & Reporting ( ARE) Thursday, November 7, 2002 8: 30 a. m. - 12: 00 noon Financial Accounting & Reporting ( FARE) Thursday, November 7, 2002 1: 30 p. m. - 6: 00 p. m. For additional information about the Uniform CPA Examination, please visit the Board’s web site ( www. state. nc. us/ cpabd). 4 Elizabeth J. Aurilio William Mullen Aycock Christine Victoria Barcay Cerene Oceana Beauregard Adrian James Beasley Daniel Joseph Berry Peyton Randolph Black Thomas Robert Boothby Brian Dale Bradford Janette Louise Brown Jason Nicholas Brown Kathleen Donovan Bucher Lisa Langdon Burgess Cynthia Debra Carter Kellice Renee Chance Andrew David Cheplick Shelly Renee Coe Richard Timothy Conner Michael Wayne Cook Brenda K. Currie Kristine Lynn Cutler Jessica Adeline Danninger Richard Earle deButts, III Vincent Michael DiSandro, Jr. William Robert Dresback, Jr. Robert Michael Fitzula, Jr. Deborah Fleischman Susan Carol Fox- Kirk Amanda Kinch Green Tammy Lynn Gregory Taylor Elizabeth Griffin John Frederick Hamilton Certificates Issued The following certificate applications were approved by the Board at its August 16, 2002, and September 23, 2002, meetings: Brian Scott Hendrickson Thomas Michael Herbert W. Kelly Hill Christina Renee Hodge Dan Overby Holder, Jr. William Forrest Holder Michael G. Holmes Amanda Elizabeth Hubbard Angela Susan Jenkins Jamie Lynne Jones Jason Lee Kelley Emmitt Clark Kernoodle Anna Burgess Lau Martin Alan Lee Karen Fang Liu Michael Alan Mankowski Carol E. Martin Julia Lynn Martin John Alan Maser Adrienne Scherer McKinney Matthew James Molbert John Berchmans Montoro Timothy Randolph Morris Preeta Nayak Joseph Edward Oprosko, Jr. John Boone Paden Brian J. Petrequin Sidney Roy Pickett, Jr. James Lester Pierce Lisa Dianne Pierce Francis Xavier Pirozzi Eric C. Pompi Andrew David Proctor Matthew D. Rice Kendra Dee Rich John Kim Richardson Randy Wayne Richartz Deanna Lynn Rios Patricia Ann Sabrinsky Lisa Hall Satterfield Kimberly Ann Savva Asit Sharma Maureen Virginia Sheehy Marion Holloway Simmons Laura Knight Smith Patricia Elizabeth Smith Ajamu H. Stoner Diane Leigh Taylor Jacqueline S. Taylor Samuel C. Thomas, III Kelly Ann Thornton Robert Marion Tilton Etim Jeremiah Udoh Jamen Earl Voss Kristin Lee Votta Alexander George Vuchnich Eric P. Wallace Kim M. Ward William Kent Weaver Lori Langley Webb Candice Sexton Whitehurst Clayton Anderson Whitesell Krista Lea Woodside James Bertram Zellmer Sarah Zinzer The Internal Revenue Service ( IRS) has published final regulations regarding amendments to Circular 230 involving non- tax shelter related practice before the IRS. Circular 230 governs the right of CPAs, attorneys, enrolled agents, and enrolled actuaries to practice before the IRS, Over the next few months, the IRS is expected to re- propose amendments to Circular 230, involving tax shelter re-lated practice matters. A brief summary of some of the major provisions of the final regulations fol-lows: IRS Releases Amendments to Circular 230 • Section 10.20 requires ( under certain limited conditions) that a prac-titioner provide information to the IRS regarding the identity of persons who may have possession or control of re-quested documents. • In addition to a requirement to notify a client about any noncompli-ance, error, or omission on a client’s part, Section 10.21 generally provides that a practitioner must advise the cli-ent of the consequences of such non-compliance, error, or omission. • Section 10.27 clarifies the rules governing the prohibition on practitio-ners receiving a contingent fee for posi-tions taken or to be taken on an original tax return. • The new regulations also ad-dress such issues as ( a) the return of a client’s records, ( b) matters involving practitioner advertising and solicita-tions, ( c) the disreputable conduct of a tax practitioner, and ( d) IRS disciplin-ary proceedings. These final regulations ( TD 9011) are published in the Internal Revenue Bulletin ( IRB 2002- 33, 356) dated Au-gust 19, 2002, and are available on- line at www. irs. gov/ bus_ info/ bullet. html. 5 • No opinion ( or any other form of assurance) on the financial statements will be provided. • Management has knowledge about the nature of the procedures ap-plied, and the basis of the accounting and assumptions used in the prepara-tion of the financial statements. • The financial statements reflect management’s representation and it is agreed that they are not to be used by third parties. • The financial statements can-not be relied upon to disclose errors, fraud, and illegal acts. If applicable, the required documen-tation should also note the following statements: • Material departures from GAAP or OCBOA may exist and the effects of those departures on the finan-cial statements may not be disclosed. • Substantially all disclosures and the statement of cash flows may be omitted. • The CPA may lack indepen-dence with respect to the client. • A reference to supplementary information is included in the financial statement package. In those cases where a compilation report is not issued, CPAs must include a reference on each page of the financial statements indicating that they are “ Re-stricted for Management’s Use Only.” Other phraseology that may be utilized in this financial statement legend could be “ Solely for the Information of and Use by Management of Ann Wholesale, Inc., and Not Intended to Be and Should Not Be Used by Any Other Party.” When a CPA is engaged to report on compiled financial statements and the statements are, or reasonably might be expected to be, used by a third party, a compilation report still must be attached to the financial statements. In all cir-cumstances, CPAs will be required to comply with the SSARS performance guidelines when they are compiling fi-nancial statements. The performance standards for compilation engagements, whether or not a report is issued as a result of the engagement, are as follows: • The CPA should possess a level of knowledge of accounting principles and practices used in the industry in which the entity operates that will en-able the compilation of financial state-ments appropriate in form for that in-dustry. • The CPA should possess a gen-eral understanding of the nature of the entity’s business transactions, the form of its accounting records, the stated quali-fications of its accounting personnel, the accounting basis on which the fi-nancial statements are to be presented ( e. g., GAAP, OCBOA), and the form and content of the financial statements. • The CPA should read the fi-nancial statements and consider whether they appear to be appropriate in form and free from obvious material errors. CPAs are not required to make in-quiries or perform other procedures to verify, corroborate, or review informa-tion supplied by the reporting entity. In cases where a CPA does make inquires that reveal unsatisfactory information, the CPA should obtain additional and revised information. If management re-fuses, the CPA should withdraw from the engagement. Besides the communications op-tions it makes available, SSARS No. 8 makes a fundamental change in the definition of “ submission” of financial statements. By modifying this defini-tion, the ARSC believes that the majority of SSARS applicability problems faced by the profession will be solved. Under SSARS No. 7, submission of financial statements was defined as presenting to a client ( or others) financial statements that the CPA has 1) generated, either manually or through computer soft-ware, or 2) modified, by materially chang-ing account classifications, amounts, or disclosures directly on client- prepared financial statements. Under SSARS No. 8, submission of financial statements is defined as presenting to a client ( or third parties) financial statements that the practitioner has prepared either manu-ally or through computer software. Although CPAs must still use their professional judgment in determining whether they have prepared or pre-sented a financial statement, SSARS No. 8’ s modification to the sub-mission of financial statements ad-dresses issues associated with today’s technological environment while main-taining a minimum level of service. Pursuant to 21 NCAC 8N .0302( a), a CPA providing a SSARS No. 8 compi-lation to a client can only do so in a registered CPA firm. For CPA firms en-rolled in a peer review program, a SSARS No. 8 compilation would have to be included in the engagements covered by SSARS. However, for CPA firms not enrolled in a peer review program, where the SSARS compilation with no report is the highest level of service provided to a client, would not be required to enroll in an approved practice monitoring pro-gram. -- From the article, “ SSARS No. 8: New Guidance for Compilation En-gagements,” by Thomas A. Ratcliffe, Ph. D., CPA, as published in The CPA Journal, June 2001. SSARS No. 8 continued from front page The Internal Revenue Service is seek-ing North Carolina tax professionals to serve as instructors for the Volun-teer Income Tax Assistance ( VITA) program. Instructors will train VITA vol-unteers to prepare basic tax returns for taxpayers with limited income, with disabilities, the elderly, and non- English speaking taxpayers. If you are interested in partici-pating, please contact John Lenik by telephone at ( 336) 378- 2306. Although enrolled agents can earn Continuing Professional Edu-cation ( CPE) credits for participating in this program, North Carolina CPAs cannot. Pursuant to 21 NCAC 8G .0409( d), CPAs cannot claim CPE credit for teaching or presenting a course unless the course is specifi-cally designed as a CPE course for CPAs. IRS Seeks Volunteers for VITA Program; No CPE Credit for CPAs 6 Disciplinary Actions W. Kenneth Wease # 12286 Cary, NC 09/ 23/ 02 THIS CAUSE coming before the Board on September 23, 2002, 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. W. Kenneth Wease is the holder of a certificate as a Certified Public Accoun-tant 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 Profes-sional Ethics and Conduct promulgated and adopted therein by the Board. 2. W. Kenneth Wease 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. W. Kenneth Wease 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. W. Kenneth Wease’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. W. Kenneth Wease’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 W. Kenneth Wease 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 office. 3. If W. Kenneth Wease returns his suspended certificate within fifteen ( 15) days of the receipt of this Order, W. Kenneth Wease can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his cer-tificate to active status by submission and approval of a reissuance applica-tion 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504. 4. If W. Kenneth Wease returns his suspended certificate in excess of fifteen ( 15) days of the receipt of this Order, W. Kenneth Wease can, after at least thirty ( 30) days, and the completion of his firm’s SQR, apply to return his certifi-cate 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 ( 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 ( 8) hour accountancy law course pursuant to 21 NCAC 8F .0504, and e. Consent Order requiring payment of at least $ 100.00 in administrative costs. Maurice S. Hamilton # 22354 Germantown, MD 08/ 16/ 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 is the holder of North Carolina certificate number 22354 as a Certified Public Accountant. 2. In June of 1999, the Board approved a Consent Order with Respondent re-garding, in part, Respondent’s failure to return client records upon demand to at least four ( 4) clients and failure to respond in a timely manner to Board inquiries. Under the terms of that Order, Respondent agreed to a one- year sus-pension that was stayed upon the con-dition that he violate no accountancy law or rules at any time during the pe-riod of June 1999 through June 2000. 3. Respondent gave notice to the Board that he was dissolving his practice and moving out- of- state as of December 31, 1999. Respondent secured client records in storage areas but was not readily accessible to clients in order to return client records upon demand. 4. In November of 2000, the Board re-ceived a complaint that for a period of at least fifteen ( 15) months Respondent had again failed to return client records upon demand. 5. Despite two subsequent letters re-questing Respondent’s reply to the com-plaint, Respondent did not reply to these Board inquiries until Board staff con-tacted Respondent by telephone. 6. In May of 2001, the complainant sent a letter to Board staff informing the Board that Respondent had returned all client records and the complainant requested that his complaint be withdrawn. 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 conduct as set out above constitutes violations of NCGS 93- 12( 9) e and 21 NCAC 8N .0206 and 8N .0305 ( a). 7 BASED ON THE FOREGOING and in lieu of further proceedings under 21 NCAC Chapter 8C, the Board and Respondent agree to the following Or-der: 1. Respondent’s certificate is suspended for one ( 1) year; however, said suspen-sion is stayed. 2. Respondent has voluntarily surren-dered his North Carolina CPA certifi-cate to the Board and agrees that he will not request the reinstatement of his sur-rendered certificate for at least one ( 1) year. 3. Respondent shall send a letter by certified/ return receipt mail to all North Carolina clients whose records Respon-dent still has in his possession in an attempt to return all of those client records. Reclassifications Reinstatements 08/ 16/ 02 Debra Spainhour Batts # 13181 Deborah Pugh Jefferson # 17245 09/ 23/ 02 Barbara B. Carter # 13307 Brent Donald Hollingsworth # 24908 Danny B. West # 12287 Susan Elizabeth Youngblood # 24192 Reissuance 09/ 23/ 02 Calvin Lewis Blanton # 16066 Tanya Yvette Mitchell # 14136 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)]. 08/ 16/ 02 Martin W. Doherty Chapel Hill, NC 09/ 23/ 02 Charles C. Cline Statesville, NC Inactive “ 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)]. 07/ 31/ 02 Harper Cole, Jr. Cary, NC 07/ 31/ 02 Robert George Willey, Jr. Charlotte, NC 07/ 31/ 02 William Sherrod Rhodes Brentwood, TN 07/ 31/ 02 Blair Tucker Hatcher Chicago, IL 07/ 31/ 02 David Edwin Allen Raleigh, NC 07/ 31/ 02 Michael Ray Cauble Asheville, NC 07/ 31/ 02 Judith Ann Melton Sanford, NC 07/ 31/ 02 Alita Dionne Balmer Cedar Park, TX 07/ 31/ 02 Melissa Smith Phillips Columbia, TN 07/ 31/ 02 Angela L. Burcham Davidson, NC 07/ 31/ 02 Eric William Gilbert Zetterholm Asheville, NC 07/ 31/ 02 Philip J. Jehle St. Charles, MO 07/ 31/ 02 Kimberly Winn Brooks Research Triangle Park, NC 08/ 01/ 02 Marilyn Michelle Chism Durham, NC 08/ 01/ 02 William Arthur Collins Greensboro, NC 08/ 01/ 02 Robert G. Riley Randolph, NJ 08/ 05/ 02 Kelly Ferrell Price Gray, TN 08/ 19/ 02 Phil Norman Carter Hickory, NC 08/ 19/ 02 Jason Bradley Wells Denver, CO 09/ 05/ 02 Robert Michael Wallace Panama City Beach, FL 09/ 09/ 02 Charles E. Saul Roswell, GA 09/ 09/ 02 Andrea Delk Warhurst Raeford, NC 09/ 19/ 02 Mark Thomas Ott, Jr. Baton Rouge, LA 09/ 23/ 02 George Kelly Moore, Jr. Charlotte, NC 09/ 23/ 02 Amy Phillips Torvinen Rutherfordton, NC Address Changed? 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 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 Martha Traina. Changes may also be e- mailed to marthatraina@ bellsouth. net. Exam candidates should mail or fax the change( s) to Phyllis Elliott or Judith Macomber. Changes may also be e- mailed to pwelliot@ bellsouth. net or jmacombe@ bellsouth. net. Comments? Do you have questions or comments regarding items published in the Activity Review? If so, please e- mail your ques-tions or comments to Lisa R. Hearne at ( lhearne@ bellsouth. net). Certificate No. Send Mail to Home Business New Home Address City State Zip CPA Firm/ Business Name New Bus. Address City State Zip Telephone: Bus. ( ) Home ( ) Bus. fax ( ) E- mail Address Certificate Holder Last name Jr./ III First Middle North Carolina State Board of Certified Public Accountant Examiners Post Office Box 12827 Raleigh NC 27605- 2827 PRST STD US Postage PAID Greensboro, NC Permit No. 393 21,000 copies of this document were printed for this agency at a cost of $ 2,758.29 or 13¢ per copy in October 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 O. Charlie Chewning, Jr., CPA President, Raleigh Michael H. Wray Vice- President, Gaston Walter C. Davenport, CPA Secretary- Treasurer, Raleigh Barton W. Baldwin, CPA Member, Mount Olive Scott L. Cox, CPCU, CIC Member, Charlotte Leonard W. Jones, CPA Member, Morehead City R. Stanley Vaughan, CPA Member, Charlotte Staff Executive Director Robert N. Brooks Legal Counsel Noel L. Allen, Esq. Administrative Services Felecia F. Ashe Communications Lisa R. Hearne, Manager Examinations Judith E. Macomber, Manager Phyllis W. Elliott Licensing Buck Winslow, Manager Alice G. Steckenrider Martha Traina Professional Standards Ann J. Hinkle, Manager Jo Gaskill Marie Moss Receptionist Karen Burton |
OCLC number | 20740890 |