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Repealed Eff.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Repealed Eff.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.
