References
are to North Carolina Administrative Code, Title 21 - Occupational Licensing
Boards, Chapter 08 - Board of Certified Public Accountant Examiners, as amended
through January 1, 2007.
SUBCHAPTER 08A - DEPARTMENTAL RULES
SECTION .0100 - ORGANIZATIONAL RULES
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.
08A .0102 ADDRESS AND PHONE NUMBER
The Board's physical address
is
The office hours are 8:00 a.m. to 5:00 p.m., Monday through
Friday. The office is closed on recognized state holidays.
SECTION .0200 - BOARD OF CERTIFIED PUBLIC ACCOUNTANT
EXAMINERS
08A .0201 ELECTION OF OFFICERS
The Board shall annually, prior to March 31 of each year,
elect a President, Vice-President and Secretary-Treasurer.
Four members of the Board
shall constitute a quorum to transact all business.
(a) The definitions set out in G.S. 93-1(a) shall
apply when those defined terms are used in 21 NCAC 08.
(b) In addition to the definitions set out in
G.S. 93-1(a), the following definitions and other definitions in this Section
apply when these terms are used in 21 NCAC 08:
(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
"Retired," "Inactive," or "Conditional" 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
responsible 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 and who may sit
for the CPA examination;
(9) "Client" 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 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) "Conditional," when used to
refer to the status of a person, describes a person who holds a North Carolina
certificate of qualification under certain conditions as imposed by the Board,
such as additional requirements for failure to complete the required CPE hours
in a calendar year, for failure to comply with CPA firm registration, or for
failure to comply with peer review reporting and or participation in peer
review;
(13) "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;
(14) "CPA" means certified public
accountant;
(15) "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;
(16) "CPE" means continuing
professional education;
(17) "Disciplinary action" means
revocation or suspension of, or refusal to grant, membership, or the imposition
of a reprimand, probation, constructive comment, or any other penalty or
condition;
(18) "FASB" means the Financial
Accounting Standards Board;
(19) "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;
(20) "GASB" means the Governmental
Accounting Standards Board;
(21) "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 nor she nor anyone
else refers to him or her in any representation as described in 21 NCAC 08A
.0308(b).
(22) "IRS" means the Internal
Revenue Service;
(23) "Jurisdiction" means any state
or territory of the
(24) "License year" means the 12
months beginning July 1 and ending June 30;
(25) "Member of a CPA firm" means
any CPA who has an equity ownership interest in a CPA firm;
(26) "NASBA" means the National
Association of State Boards of Accountancy;
(27) "NCACPA" means the North
Carolina Association of Certified Public Accountants;
(28) "
(29) "Person" means any natural
person, corporation, partnership, professional limited liability company,
registered limited liability partnership, unincorporated association, or other
entity;
(30) "Professional" means arising
out of or related to the particular knowledge or skills associated with CPAs;
(31) "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;
(32) "Referral fee" means
compensation for recommending or referring any service of a CPA to any person;
(33) "Retired," when used to refer
to the status of a person, describes one possessing a
(34) "Revenue Department" means the
North Carolina Department of Revenue;
(35) "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;
(36) "Reviewer" means a member of a
review team including the review team captain;
(37) "Suspension" means a revocation
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;
(38) "Trade name" means a name used
to designate a business enterprise;
(39) "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, consulting,
special report, or other engagement. Work papers include, but are not limited
to, 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, but are not limited to, handwritten, typed, printed,
word processed, photocopied, photographed, computerized data, or any other form
of letters, words, pictures, sounds or symbols;
(40) "Work product" means the end
result of the engagement for the client which may include, but is not limited
to a tax return, attest or assurance report, consulting report, and financial
plan. The forms include, but are not limited to, handwritten, typed, word
processed, photocopied, photographed, 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 or received in the
Board office on the next business day.
08A .0307 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.
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.
08A .0309 CONCENTRATION IN ACCOUNTING
(a) A concentration in accounting shall include:
(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 shall be 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 discretion, 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.
(f) A candidate who has conditional credit prior
to January 1, 2001, may continue to apply to sit for the examination as long as
the conditional credit is valid. A candidate who no longer has valid
conditional credit after January 1, 2001, shall be required to meet all
education requirements in effect at the time of the candidate's subsequent
application.
08A .0310 DIRECT SUPERVISION DEFINED
(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.
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