North Carolina Administrative Code › Title 21 - OCCUPATIONAL LICENSING BOARDS AND COMMISSIONS › Chapter 08 - CERTIFIED PUBLIC ACCOUNTANT EXAMINERS › Subchapter A - DEPARTMENTAL RULES › Section .0300 - DEFINITIONS › Section 08A .0301 - DEFINITIONS

Current through Register Vol. 39, No. 2, July 15, 2024
(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), 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 identified subject
				  matter;
(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"
				  means a professional service whereby a CPA in the practice of public accounting
				  is engaged to issue or does issue:
(A) any
				  audit or engagement to be performed in accordance with the Statements on
				  Auditing Standards, Statements on Generally Accepted Governmental Auditing
				  Standards, Public Company Accounting Oversight Board Auditing Standards, and
				  International Standards on Auditing;
(B) any review engagement to be performed in
				  accordance with the Statements on Standards for Accounting and Review
				  Services;
(C) any compilation
				  engagement to be performed in accordance with the Statements on Standards for
				  Accounting and Review Services; or
(D) any 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 an applicable reporting framework, that enhances the degree of
				  confidence that intended users can place on the financial statements, items,
				  accounts, or elements of a financial statement;
(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;
(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 that
				  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, 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) "Firm network" means an association of
				  entities that includes one or more firms that cooperate for the purpose of
				  enhancing the firms' capabilities to provide professional services and share
				  one or more of the following characteristics:
(A) the use of a common brand name, including
				  initials, as part of the firm name;
(B) common control among the firms through
				  ownership, management, or other means;
(C) profits or costs, excluding costs of
				  operating the association; costs of developing audit methodologies, manuals,
				  and training courses; and other costs that are immaterial to the
				  firm;
(D) common business strategy
				  that involves ongoing collaboration amongst the firms whereby the firms are
				  responsible for implementing the association's strategy and are accountable for
				  performance pursuant to that strategy;
(E) significant part of professional
				  resources; or
(F) common quality
				  control policies and procedures that firms are required to implement and that
				  are monitored by the association;
(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 has 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) "Referral fee" means
				  compensation for recommending or referring any service of a CPA to any
				  person;
(31) "Revenue Department"
				  means the North Carolina Department of Revenue;
(32) "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;
(33) "Reviewer" means a member of a review
				  team including the review team captain;
(34) "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;
(35)
				  "Trade name" means a name used to designate a business enterprise;
(36) "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 in any other form of letters, words,
				  pictures, sounds, or symbols; and
(37) "Work product" means the end result of
				  the engagement for the client that may include a tax return, attest or
				  assurance report, consulting report, or 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.