Activity Review
North Carolina State
Board of Certified Public
Accountant Examiners
1101 Oberlin Road, Suite 104 • PO Box 12827 • Raleigh, NC 27605 • (919) 733-4222 • No. 11-2003
Rules Effective January 1, 2004
On October 18, 2002, theN orth Carol i na
State Board of CPA Examiners held a
public rule-making hearing to amend
the N orth C arol i na A ccou ntancy Ru I es.
A portionoftheamended ruleswere
dfecti veA pri 1 1, 2003, whi letheremai n-
ing amendmentsaredfecti vej anuary 1,
2004.
TherulesthatwereeffectiveApril 1,
2003, were printed in the April 2003
issue of the Activity Ra/i
ел/;
the rules
dfecti vej an uary 1, 2004, areas fol I ows:
21NCAC
8Д
.0301 DEFINITIONS
(a) The def i niti ons set ou t i n G. S. 93- Ka) shal I
apply when those ddined terms are used in
21 NCAC 8.
(b) In addition to the definitions set out in
G.S. 93- 1(a) , thefol I ow i ngd di niti onsand other
definitions in this Section apply when these
terms are used in 21 N CAC 8:
(1) "Active" when used to refer to thestatus
of a person, descri besa person who possesses
a N orth Carol i nacertifi cateof qual if i cation and
w ho has not otherw i sebeen granted " Reti red, "
"I native," or "Conditional" status;
(2) "Agreed upon procedure" means a client
hasengaged aCPA to issueareport of findings
based on specific procedures performed on
specific subject matter of specified elements,
accounts, or accounting information that is
part of but significantly less than a financial
statement;
(3) "A I CPA " means theA meri can I nsti tute of
Certified PublicAcrauntants;
(4) "Applicant" means a person who has
applied to take the CPA examination;
(5) "Attest service" means:
(A) any audit;
(B) any review of a fi nancial statement;
(C) any compilation of a financial statement
when theCPA expects, or reasonably might
expect, thatathird party will usethecompilation
and the CPA does not disclose a lack of
independence;
(D) any exami nation of prospective financial
information; or
(E) any agreed upon procedure
(6) "Audit" meansan examination of financial
statements of a person by a C PA , cond ucted i n
accordance with generally accepted auditing
stand ards, to determi ne whether, i n theC PA 's
opi ni on, thestatements conform w ith general I
у
accepted acmunti ng pri na pi esor, if ap pi i cabl e
withanothercomprehensi vebasisof acrounti ng;
(7) "Calendar year" means the 12 months
begi nni ngj anuary land endi ng December 31;
(8) "Candidate" means a person whose
application to take the CPA examination has
been accepted and who may sit for theCPA
examination;
(9) "Cl ient" means a person who orally or in
writing agrees with a licensee to receive any
professional services;
(10) "Commission" means compensation,
except a referral fee for recommending or
referri ngany product or serviceto besuppl ied
by another person;
(11) "Compilation of a financial statement"
means presenting in the form of a finanaal
statement i nformati on that i sthe rep resentati on
of any other person without the CPA's
undertaking to express any assurance on the
statement
(12) "Conditional," when used to refer to the
statusof aperson, describes a person who hoi ds
a North Carolina certificate of qualification
under certain conditions as imposed by the
Board, such as additional requirements for
fai I u re to
со
mp I etetherequ i red
С
P E hou rs i n a
calendaryear;
(13) "Contingent fee" means a fee established
fortheperformanceofanyservicepursuantto
an arrangement i n w hich nofeew i 1 1 becharged
uni essa specified fi ndi ng or result is attai ned,
or in which theamountof thefeeisotherwise
dependent upon the f i ndi ng or result of such
service;
(14)"CPA" meanscertified publicaccountant;
(15) "CPA firm" meansasoleproprietorship,
a partnership, a professional corporation, a
professional limited liability company, or a
registered limited liability partnership which
uses "certified public accountant(s)" or
"CPA(s)” in or with its name or offers to or
renders any attest servi ces i n thepu blicp racti ce
of accountancy;
(16) "CPE" means continuing professional
education;
(17) "Discipl i nary acti on" means revocati on or
suspension of, or refusal tog rant membership,
or the imposition of a reprimand, probation,
constructivecomment, or any other penalty or
condition;
(18) "Examination of prospective financial
information" meansan evaluati on bya CPA of:
(A ) a forecast or project on,
(B) thesu pport underl
у
i ng theassu mpti ons i n
theforecastor projection,
(C ) w hether the p resentati on of theforecast or
projection is in conformity with AICPA
presentati on guidelines; or
(D ) whether theassu mpti ons i n theforecastor
projection provide a reasonable basis for the
forecastor projection;
(19) "FASB" means the Fi nancial Accounting
Standards Board;
(20) "Forecast" means prospective financial
statements that present, to the best of the
responsible party's knowledge and belief, an
entity's expected financial position, results of
operati ons, and changesi nf i nanci alpositionor
cash flows that are based on the responsible
party's assumpti ons refl ecti ng conditi ons the
enti ty expects to exi st and th e cou rse of acti on
theentity expects to take;
(21) "GASB" means the Governmental
Account] ng Standards Board;
(22) " I nacti ve" w hen used to refer to thestatus
of a person, descri bes one w ho has requested
Rules
continued on page 2
