Section .0100 ‑ Organizational Rules

Link to law: http://reports.oah.state.nc.us/ncac/title 21 - occupational licensing boards and commissions/chapter 08 - certified public accountant examiners/subchapter a/subchapter a rules.html
Published: 2015

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CHAPTER 08 ‑ BOARD OF CERTIFIED PUBLIC ACCOUNTANT

EXAMINERS

 

SUBCHAPTER 08A ‑ DEPARTMENTAL RULES

 

SECTION .0100 ‑ ORGANIZATIONAL RULES

 

21 NCAC 08A .0101          FORMAL NAME

The formal name for the agency is the State Board of

Certified Public Accountant Examiners. The informal and acceptable title of the

Board is the Board of CPA Examiners.

 

History Note:        Authority G.S. 93-12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. July 1, 1987;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

21 NCAC 08A .0102          ADDRESS AND

PHONE NUMBER

The Board's physical address is Suite 104, 1101 Oberlin

Road, Raleigh, North Carolina 27605.  The mailing address is Post Office Box

12827, Raleigh, North Carolina 27605-2827.  The telephone number is (919) 733-4222.

 

History Note:        Authority G.S. 93-12(3);

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. May 1, 1989; April 1, 1987; October 1, 1984;

April 1, 1982;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

 

21 NCAC 08A .0103          OFFICE HOURS

The office hours are 8:00 a.m. to 5:00 p.m., Monday through

Friday. The office is closed on recognized state holidays.

 

History Note:        Authority G.S. 93-12(3); 150B-11(1);

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. May 1, 1989; October 1, 1984;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

 

21 NCAC 08A .0104          MAILING ADDRESS

 

History Note:        Authority G.S. 150B‑11(1);

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. April 1, 1982;

Repealed Eff. October 1, 1984.

 

 

 

21 NCAC 08A .0105          PURPOSES AND RESPONSIBILITIES

 

History Note:        Authority G.S. 93‑12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. April 1, 1991; May 1, 1989; June 1, 1988;

May 1, 1987;

Repealed Eff. April 1, 1994.

 

 

 

 

section .0200 - BOARD OF CERTIFIED PUBLIC ACCOUNTANT EXAMINERS

 

21 ncac 08a .0201          ELECTION OF OFFICERS

The Board shall annually, prior to March 31 of each year,

elect a President, Vice-President and Secretary-Treasurer.

 

History Note:        Authority G.S. 93-12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. April 1, 2003; May 1, 1989; June 1, 1985; October 1, 1984;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

 

21 NCAC 08A .0202          MEETINGS OF THE BOARD

 

History Note:        Authority G.S. 93‑12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Repealed Eff. May 1, 1989.

 

 

 

21 NCAC 08A .0203          QUORUM

Four members of the Board shall constitute a quorum to

transact all business.

 

History Note:        Authority G.S. 93-12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. October 1, 1984; August 24, 1981;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

 

21 NCAC 08A .0204          COMPOSITION

21 NCAC 08A .0205          QUALIFICATION

21 NCAC 08A .0206          TERM OF OFFICE

 

History Note:        Authority G.S. 93‑12;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. August 24, 1981; June 16, 1980;

Repealed Eff. October 1, 1984.

 

 

 

section .0300 - DEFINITIONS

 

21 NCAC 08A .0301          DEFINITIONS

(a)  The definitions set out in G.S. 93-1(a) apply when

those defined terms are used in this Chapter.

(b)  In addition to the definitions set out in G.S. 93-1(a),

other definitions in this Section, and the following definitions apply when

these terms are used in this Chapter:

(1)           "Active," when used to refer to

the status of a person, describes a person who possesses a North Carolina

certificate of qualification and who has not otherwise been granted

"Inactive" status;

(2)           "Agreed upon procedures" means a

professional service whereby a CPA is engaged to issue a report of findings

based on specific procedures performed on financial information prepared by a

party;

(3)           "AICPA" means the American

Institute of Certified Public Accountants;

(4)           "Applicant" means a person who

has applied to take the CPA examination or applied for a certificate of

qualification;

(5)           "Attest service or assurance

service" means:

(A)          any audit or engagement to be performed in

accordance with the Statements on Auditing Standards, Statements on Generally

Accepted Governmental Auditing Standards, and Public Company Accounting

Oversight Board Auditing Standards;

(B)          any review or engagement to be performed in

accordance with the Statements on Standards for Accounting and Review Services;

(C)          any compilation or engagement to be performed in

accordance with the Statements on Standards for Accounting and Review Services;

or

(D)          any agreed-upon procedure or engagement to be

performed in accordance with the Statements on Standards for Attestation

Engagements;

(6)           "Audit" means a professional

service whereby a CPA is engaged to examine financial statements, items, accounts,

or elements of a financial statement, prepared by management, in order to

express an opinion on whether the financial statements, items, accounts, or

elements of a financial statement are presented in conformity with generally

accepted accounting principles or other comprehensive basis of accounting;

(7)           "Calendar year" means the 12

months beginning January 1 and ending December 31;

(8)           "Candidate" means a person whose

application to take the CPA examination has been accepted by the Board and who

may sit for the CPA examination;

(9)           "Client" means a person or an

entity who orally or in writing agrees with a licensee to receive any

professional services performed or delivered in this State;

(10)         "Commission" means compensation,

except a referral fee, for recommending or referring any product or service to

be supplied by another person;

(11)         "Compilation" means a professional

service whereby a CPA is engaged to present, in the form of financial

statements, information that is the representation of management without

undertaking to express any assurance on the statements;

(12)         "Contingent fee" means a fee

established for the performance of any service pursuant to an arrangement in

which no fee will be charged unless a specified finding or result is attained, or

in which the amount of the fee is otherwise dependent upon the finding or

result of such service;

(13)         "CPA" means certified public

accountant;

(14)         "CPA firm" means a sole

proprietorship, 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 services in the public

practice of accountancy;

(15)         "CPE" means continuing professional

education;

(16)         "Disciplinary action" means

revocation or suspension of, or refusal to grant, a certificate, or the

imposition of a reprimand, probation, constructive comment, or any other

penalty or condition;

(17)         "FASB" means the Financial Accounting

Standards Board;

(18)         "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

operations, and changes in financial position or cash flows that are based on

the responsible party's assumptions reflecting conditions the entity expects to

exist and the course of action the entity expects to take;

(19)         "GASB" means the Governmental

Accounting Standards Board;

(20)         "Inactive," when used to refer to

the status of a person, describes a person 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 nor she nor anyone

else refers to him or her in any representation as described in Rule .0308(b)

of this Section;

(21)         "IRS" means the Internal Revenue

Service;

(22)         "Jurisdiction" means any state or

territory of the United States or the District of Columbia;

(23)         "License year" means the 12 months

beginning July 1 and ending June 30;

(24)         "Member of a CPA firm" means any

CPA who has an equity ownership interest in a CPA firm;

(25)         "NASBA" means the National

Association of State Boards of Accountancy;

(26)         "NCACPA" means the North Carolina

Association of Certified Public Accountants;

(27)         "North Carolina office" means any

office physically located in North Carolina;

(28)         "Person" means any natural person,

corporation, partnership, professional limited liability company, registered

limited liability partnership, unincorporated association, or other entity;

(29)         "Professional" means arising out

of or related to the particular knowledge or skills associated with CPAs;

(30)         "Projection" means prospective

financial statements that present, to the best of the responsible party's

knowledge and belief, given one or more hypothetical assumptions, an entity's

expected financial position, results of operations, and changes in financial position

or cash flows that are based on the responsible party's assumptions reflecting

conditions it expects would exist and the course of action it expects would be

taken given such hypothetical assumptions;

(31)         "Referral fee" means compensation

for recommending or referring any service of a CPA to any person;

(32)         "Revenue Department" means the

North Carolina Department of Revenue;

(33)         "Review" means a professional

service whereby a CPA is engaged to perform procedures, limited to analytical

procedures and inquiries, to obtain a reasonable basis for expressing limited

assurance on whether any material modifications should be made to the financial

statements for them to be in conformity with generally accepted accounting

principles or other comprehensive basis of accounting;

(34)         "Reviewer" means a member of a

review team including the review team captain;

(35)         "Suspension" means a revocation of

a certificate for a specified period of time. A CPA may be reinstated after a

specific period of time if the CPA has met all conditions imposed by the Board

at the time of suspension;

(36)         "Trade name" means a name used to

designate a business enterprise;

(37)         "Work papers" mean the CPA's

records of the procedures applied, the tests performed, the information obtained,

and the conclusions reached in attest services, tax services, consulting

services, special report services, or other engagements. Work papers include

programs used to perform professional services, analyses, memoranda, letters of

confirmation and representation, checklists, copies or abstracts of company

documents, and schedules of commentaries prepared or obtained by the CPA. The

forms include handwritten, typed, printed, word processed, photocopied,

photographed, and computerized data, or any other form of letters, words,

pictures, sounds or symbols; and

(38)         "Work product" means the end

result of the engagement for the client which may include a tax return, attest

or assurance report, consulting report, and financial plan. The forms include

handwritten, typed, printed, word processed, photocopied, photographed, and

computerized data, or in any other form of letters, words, pictures, sounds, or

symbols.

(c)  Any requirement to comply by a specific date to the

Board that falls on a weekend or federal holiday shall be received as in

compliance if postmarked by U.S. Postal Service cancellation by that date, if

received by a private delivery service by that date, or received in the Board

office on the next business day.

 

History Note:        Authority G.S. 93-1; 93-12; 93-12(3);

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. January 1, 2014; February 1, 2011; January

1, 2006; January 1, 2004; April 1, 1999; August 1, 1998; February 1, 1996;

April 1, 1994; September 1, 1992.

 

21 NCAC 08A .0302          ACCOUNTANT

21 NCAC 08A .0303          BOARD

21 NCAC 08A .0304          CERTIFIED PUBLIC ACCOUNTANT

21 NCAC 08A .0305          PUBLIC ACCOUNTANT

21 NCAC 08A .0306          PUBLIC PRACTICE OF ACCOUNTANCY

 

History Note:        Authority G.S. 93‑1;

Eff. February 1, 1976;

Readopted Eff. September 26, 1977;

Amended Eff. June 16, 1980;

Repealed Eff. June 1, 1983.

 

 

 

21 NCAC 08A .0307          PUBLIC PRACTICE OF ACCOUNTANCY OR

ACCOUNTING

(a)  A person is engaged in the "public

practice of accountancy" who:

(1)           holds himself or herself out

to the public as a certified public accountant or an accountant; and

(2)           in consideration of

compensation received or to be received, offers to perform or does perform for

other persons services which involve:

(A)          preparing, auditing or verifying

financial transactions, books, accounts, or records, or

(B)          preparing, verifying or certifying

financial, accounting and related statements intended for publication,

including preparing tax returns, or

(C)          rendering professional services or

assistance in or about any and all matters of principle or detail relating to

accounting procedure and systems, or

(D)          recording, presenting or certifying

and interpreting such service (including tax, consulting or management advisory

services) through statements and reports.

(b)  Services, as described in Subparagraph

(a)(2) of this Rule, may be performed on a full‑time, part‑time or

temporary basis in the various accounting fields, including, but not limited

to, public accounting, governmental or other not‑for‑profit

accounting, industrial, commercial or financial accounting, taxation and tax‑related

matters or accounting education.

 

History Note:        Authority G.S. 93‑1; 93‑12;

Eff. October 1, 1984;

Amended Eff. April 1, 1994; March 1, 1990.

 

 

 

21 NCAC 08A .0308          HOLDING OUT TO THE PUBLIC

(a)  The phrase "holds himself out to the public as a

certified public accountant," as used in defining "public practice of

accountancy" in G.S. 93-1(a)(5) and in these rules, means any

representation that a person holds a certificate of qualification, if that

representation is made in connection with an offer to perform or the

performance of accountancy services for the public, regardless of whether that

representation is made by the person, someone associated with that person, or

someone serving as that person’s agent. Any such representation is presumed to

invite the public to rely upon the professional skills implied by the

certificate in connection with the professional services offered to be

performed or performed by the person.

(b)  For purposes of this Rule, a representation shall be

deemed to include any oral, electronic, or written communication indicating

that the person holds a certificate, including without limitation the use of

titles or legends on letterheads, reports, business cards, brochures, resumes,

office signs, telephone directories, websites, the Internet, or any other

advertisements, news articles, publications, listings, tax return signatures,

signatures on experience or character affidavits for exam or certificate

applicants, displayed membership in CPA associations, displayed CPA licenses

from this or any other jurisdiction, and displayed certificates or licenses

from other organizations which have the designation "CPA" or

"Certified Public Accountant" by the person's name.

 

History Note:        Authority G.S. 93-1(a)(5); 93-12;

Eff. September 1, 1988;

Amended Eff. January 1, 2006; April 1, 1999; April 1,

1994; May 1, 1989.

 

21 NCAC 08A .0309          CONCENTRATION IN ACCOUNTING

(a)  A concentration in accounting includes:

(1)           at least 30 semester hours, or the

equivalent in quarter hours, of undergraduate accountancy courses which shall

include no more than six semester hours of accounting principles and no more

than three semester hours of business law; or

(2)           at least 20 semester hours or the

equivalent in quarter hours, of graduate accounting courses that are open

exclusively to graduate students; or

(3)           a combination of undergraduate and graduate

courses which would be equivalent to Subparagraph (1) or (2).

(b)  In recognition of differences in the level of graduate

and undergraduate courses, one semester (or quarter) hour of graduate study in

accounting is considered the equivalent of one and one-half semester (or

quarter) hours of undergraduate study in accounting.

(c)  Up to four semester hours, or the equivalent in quarter

hours, of graduate income tax courses completed in law schools may count toward

the semester hour requirement of Paragraph (a) of this Rule.

(d)  Where, in the Board's determination, an accounting

course duplicates another course previously taken, only the semester (or

quarter) hours of one of the courses shall be counted in determining if the

applicant has a concentration in accounting.

(e)  Accounting courses include such courses as principles

courses at the elementary, intermediate and advanced levels; managerial

accounting; business law; cost accounting; fund accounting; auditing; and

taxation.  There are many college courses offered that would be helpful in the

practice of accountancy, but are not included in the definition of a

concentration in accounting.  Such courses include business finance, business

management, computer science, economics, writing skills, accounting

internships, and CPA exam review.

 

History Note:        Authority G.S. 93-12(5);

Eff. May 1, 1989;

Amended Eff. February 1, 2011; January 1, 2001; April 1,

1994.

 

21 NCAC 08A .0310          DIRECT SUPERVISION DEFINED

"Direct supervision" means:

(1)           having jurisdiction and oversight authority over

the process of planning, coordinating, guiding, inspecting, controlling, and

evaluating on a continuing basis the activities and accomplishments of the

employees under one's command;

(2)           having the power of direction and decision in

implementing activities to meet the objectives of one's stewardship;

(3)           having authority delegated by higher management to

hire, transfer, suspend, recall, promote, assign, or discharge an employee

under one's charge or to recommend such action through the proper

administrative chain of command;

(4)           having authority to supervise the employee in the

usual line of authority unrestricted by multiple positions of influence; and

(5)           having authority to verify the employee's

experience in a notarized experience affidavit.

 

History Note:        Authority G.S. 93-12(5);

Eff. May 1, 1989;

Amended Eff. April 1, 1999;

Pursuant to G.S. 150B-21.3A, rule is necessary without

substantive public interest Eff. October 28, 2014.

 

21 NCAC 08A .0311          EMPHASIS IN TAXATION OR ACCOUNTING

 

History Note:        Authority G.S. 93-12(5);

Eff. March 1, 1990;

Repealed Eff. January 1, 2006.

 

21 NCAC 08A .0312          RESERVED FOR FUTURE CODIFICATION

 

 

 

21 NCAC 08A .0313          RESERVED FOR FUTURE CODIFICATION

 

 

 

21 NCAC 08A .0314          RESERVED FOR FUTURE CODIFICATION

 

 

 

21 ncac 08a .0315          NEW CPA FIRM, ONGOING CPA FIRM

 

History Note:        Authority G.S. 93‑1; 93‑12(8c);

Eff. April 1, 1991;

Amended Eff. April 1, 1999;

Repealed Eff. January 1, 2004.