Current through Register Vol. 49, No. 9, September, 2024
BOARD RULES
Rule 1
DEFINITIONS
1.1 ACT, BOARD,
STATE, EXAMINATION, PRONOUNS
Throughout these Rules, the "Public Accountancy Act of 1975, as
amended," codified as A.C.A. §
17-12-101 et
seq., may be referred to as "the Act" and the Board of Public Accountancy as
"the Board;" "this State" refers to the State of Arkansas; "examination" means
the examination required for a certificate as a Certified Public Accountant
prescribed by A.C.A. §
17-12-301
et seq.; and masculine terms shall include the feminine and, when the context
requires, shall include partnerships, limited liability companies and
corporations.
1.2 ATTEST
Providing the following financial statement services: any audit
or other engagement to be performed in accordance with the "Statement on
Auditing Standards," any review of a financial statement to be performed in
accordance with the "Statements on Standards for Accounting and Review
Services," any examination of prospective financial information to be performed
in accordance with the "Statements on Standards for Attestation Engagements,"
and any engagement to be performed in accordance with PCAOB Auditing
Standards.
1.3 CERTIFICATE
A certificate as "certified public accountant" issued under
A.C.A. §
17-12-301
or a corresponding certificate as "certified public accountant" issued after
examination under the laws of any state.
1.4 CLIENT
The person or entity which retains a licensee for the performance
of professional services.
1.5 COMMISSION
An allowance or consideration paid upon completion of the
transaction for recommending or referring a product or service to be supplied
by another person.
1.6
COMPILATION
Providing a service to be performed in accordance with
"Statements on Standards for Accounting and Review Services" that is presenting
in the form of financial statements information that is the representation of
management and/or owners without undertaking to express any assurance on the
statements.
1.7 FINANCIAL
STATEMENTS
Financial statements are statements and footnotes related thereto
that purport to show actual or anticipated financial position which relates to
a point in time or changes in financial position which relate to a period of
time, including statements which use a cash or other comprehensive basis of
accounting. The term includes balance sheets, statements of income, statements
of changes in comprehensive income, statements of retained earnings, statements
of cash flows and statements of changes in owners' equity, but does not include
incidental financial data included in management advisory services reports to
support recommendations to a client, nor does it include tax returns and
supporting schedules.
1.8
FIRM
A partnership, corporation, limited liability company, sole
proprietorship, or other entity required to be registered with the Board under
the provisions of A.C.A. §
17-12-401
et seq.
1.9 GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
"Generally accepted accounting principles" shall be deemed and
construed to mean accounting principles or standards generally accepted in the
United States. For purposes of these rules and regulations, generally accepted
accounting principles are considered to be defined by pronouncements issued by
the Financial Accounting Standards Board and its predecessor entities and
similar pronouncements issued by other entities having similar generally
recognized authority.
1.10
GENERALLY ACCEPTED AUDITING STANDARDS
"Generally accepted auditing standards" shall be deemed and
construed to mean the generally accepted auditing standards adopted by the
Board. The Board shall take into consideration interpretations of Generally
Accepted Auditing Standards as issued by the American Institute of Certified
Public Accountants and other pronouncements having similar generally recognized
authority.
1.11 HOME OFFICE
The location specified by the client as the address to which a
service described in A.C.A. §
17-12-311(a)(4)
is directed.
1.12 LICENSEE
The holder of a license, meaning a certificate issued under
A.C.A. §
17-12-301
or registered under A.C.A. §
17-12-312
or A.C.A. §
17-12-401
et. seq. or, in each case, a certificate or permit issued or a registration
under corresponding provisions of prior law.
1.13 PEER REVIEW
The process of reviewing the work product of a licensee by a
qualified individual or firm, the purpose of which is to assure that
professional services are performed consistent with applicable
standards.
1.14 PERMIT TO
PRACTICE
Permit to practice means a permit to practice public accountancy
issued under prior provisions of the Act, or under corresponding provisions of
the law of other states.
1.15 PRACTICE OF, OR PRACTICING PUBLIC
ACCOUNTING
The performance of attest services as defined in this section or
the performance of professional services while using the title or designation
certified public accountant, public accountant, CPA, PA, accountant, or
auditor.
1.16 PRINCIPAL
PLACE OF BUSINESS
The primary location from which professional services are
performed. A person or firm may only have one principal place of business at
any one time. Individuals who perform professional services at multiple
locations, such as individuals who perform attest services on assignment as
needed in multiple jurisdictions, may designate as their principal place of
business the location that most often serves as the individual's home base of
operations.
1.17
PROFESSIONAL SERVICES
Services arising out of or related to specialized knowledge or
skills performed by certified public accountants or public accountants,
including issuing reports on financial statements, providing management or
financial advisory services or consulting, preparing tax returns, or providing
advice on tax matters, providing forensic accounting services, or providing
internal auditing services.
1.18 PUBLIC COMMUNICATION
A public communication is a communication made in identical form
to multiple persons or to the world at large, as by television, radio, motion
picture, newspaper, pamphlet, mass mailing, letterhead, business card,
electronic transmission or directory.
1.19 RETURNING MILITARY VETERAN
A former member of the United States Armed Forces who was
discharged from active duty under circumstances other than dishonorable.
1.20 SUBSTANTIAL EQUIVALENCY
A determination by the NASBA National Qualification Appraisal
Service that:
a. The education,
examination and experience requirements of the state in which the individual
holds a valid license are comparable to or exceed the education, examination
and experience requirements contained in the Uniform Accountancy Act; or
b. The individual CPA's education,
examination and experience requirements are comparable to or exceed the
education, examination and experience requirements contained in the Uniform
Accountancy Act.
1.21
UAA
The Uniform Accountancy Act issued jointly by the American
Institute of Certified Public Accountants (AICPA) and the National Association
of State Boards of Accountancy (NASBA), as amended from time to time.
Rule 2
BOARD RULES
AND MEETINGS
2.1 BOARD OF PUBLIC
ACCOUNTANCY
Any interested person may obtain information, including copies of
all forms and instructions used by the Board, or make submissions or requests
by writing the Board at its principal office and official address which is
appended hereto in Appendix One.
2.2 RULES AND REGULATION
A.C.A §
17-12-203
provides that the Board may prescribe rules and regulations for the conduct of
its affairs and for the administration of the Act.
2.3 ANNUAL MEETING
The annual meeting of the Board shall be held in June of each
year at the office of the Board, or at such other place as the Board may have
designated by previous resolution and, at such time, the president, secretary
and treasurer shall be elected to serve until their successors are elected. The
office of secretary and treasurer may be held by the same individual. The
election of such officers shall be the first order of business at such meeting
after hearing the reports of outgoing officers, and the newly elected officers
shall assume the duties of their respective offices at the conclusion of the
meeting at which they were elected.
2.4 OTHER MEETINGS
In addition to the annual meeting and in addition to future
meetings, the time and place of which may be fixed by resolution of the Board,
any meeting may be called by the president of the Board or by joint call of two
of its members.
2.5 RULES
OF ORDER
Meetings of the Board shall be conducted in accordance with
Robert's Rules of Order insofar as compatible with the laws of the State
governing the Board or its own resolutions as to its conduct.
2.6 OPEN MEETINGS
All meetings of the Board shall be conducted in accordance with
applicable state laws, including the Freedom of Information Act.
2.7 RULES OF CONDUCT
The rules of conduct are set out in Appendix Two.
Rule 3
EXAMINATIONS
3.1 SEMESTER HOUR;
ACCREDITED COLLEGES, UNIVERSITIES, SCHOOLS AND PROGRAMS; CREDIT FOR COURSES
(a) As used in these Rules, a "semester hour"
means the conventional college semester hour. Quarter hours may be converted to
semester hours by multiplying them by two-thirds.
(b) As used in these Rules, "accreditation"
refers to the process of quality control of the education process.
The applicant's degree must have been granted by a four-year
degree-granting college or university that is accredited by one or more
recognized regional accrediting agencies (including their predecessor or
successor agencies). The Board recognizes the following six (6) regional
accrediting agencies.
Middle States Association of Colleges and Schools;
New England Association of Schools and Colleges Commission on
Institutions of
Higher Education;
The Higher Learning Commission;
Northwest Commission on Colleges and Universities;
Southern Association of Colleges and Schools Commission on
Colleges; and the
Western Association of Schools and Colleges Accrediting
Commission for Senior
Colleges and Universities.
Colleges and Universities accredited by these associations are
listed in Accredited Institutions of Postsecondary Education published by the
Council of Postsecondary Accreditation of the American Council on
Education.
(c) A candidate
is considered as graduating from an accredited educational institution if at
the time the educational institution grants the applicant's degree, it is
accredited at the appropriate level as outlined in these Rules.
(d) If an educational institution was not
accredited at the time an applicant's degree was received but is so accredited
at the time the application is filed with the Board, the institution will be
deemed to be accredited for the purpose of subsection (c), provided;
(1) the educational institution certifies
that the applicant's total educational program would qualify the applicant for
graduation with a baccalaureate degree during the time the institution has been
accredited; and
(2) the educational
institution furnishes the Board satisfactory proof, including college catalogue
course numbers and descriptions, that the pre-accrediting courses used to
qualify the applicant as an accounting major are substantially equivalent to
post-accrediting courses, and
(3)
the applicant has met the educational requirements outlined in Section
3.2.
(e) If an
applicant's degree was received at an accredited educational institution
pursuant to subsection (c) or (d), but the educational program which was used
to qualify the applicant as an accounting major included courses taken at
non-accredited institutions, either before or after graduation, such courses
will be deemed to have been taken at the accredited institution from which
applicant's degree was received, provided the accredited institution either -
(1) has accepted such courses by including
them in its official transcript; or
(2) has certified to the Board that it will
accept such courses for credit toward graduation.
(f) A graduate of a four-year degree-granting
college or university not accredited at the time applicant's degree was
received or at the time the application was filed will be deemed to be a
graduate of an accredited educational institution if -
(1) a credentials evaluation service that is
a member of the National Association of Credential Evaluation Services or one
approved by the Board certifies that the applicant's degree is equivalent to a
degree from an accredited educational institution defined in subsection (b);
or
(2)
(A) an accredited educational institution as
defined by subsection (b) accepts applicant's non-accredited baccalaureate
degree for admission to a graduate business degree program;
(B) the applicant satisfactorily completes at
least fifteen semester hours,
or the equivalent, in post-baccalaureate education at the
accredited institution, of which at least nine semester hours, or the
equivalent, shall be in accounting; and
(C) the accredited educational institution
certifies that the applicant is in good standing for the continuation in the
graduate program, or has maintained a grade point average in these courses that
is necessary for graduation.
(g) The advanced subjects completed to
qualify under subsection (f)(2) may not be used to satisfy the requirements of
section (h).
(h) The accounting and
business concentration or equivalent shall consist of the semester hours
specified in Rule 3. 2 below.
3.2 EDUCATION REQUIREMENT
(a) An applicant will be deemed to have met
the education requirement if the applicant has earned a graduate or an
undergraduate degree, either of which includes at least 30 hours in business as
listed in Section 3.2(c) and at least 30 upper-level or 20 graduate hours in
accounting (or a combination thereof) as listed in Section 3.2(b), from a
college or university that meets the criteria for accreditation defined in
Section 3.1(b). Applicants must meet the accounting education requirements
defined in Section 3.2(b) and the business education requirements defined in
Section 3.2(d).
(b) The accounting
component of the applicant's educational program must include at least 30
semester credit hours (SCH) of undergraduate accounting courses above the
principles level or 20 SCH of graduate-level accounting courses, or a
combination thereof. The accounting component must include coverage of
financial accounting, management accounting, governmental and not-for-profit
accounting, federal taxation, auditing and attestation, and accounting
information systems. The applicant must earn a grade of "C" or better in each
course included in the accounting component.
(c) The business component of the applicant's
educational program must include at least 30 SCH of undergraduate courses in
business, other than accounting, or 20 SCH of graduate business courses other
than accounting (or a combination thereof). The applicant must earn a grade of
"C" or better in each course included in the business component.
(d) The Board recognizes the essential need
to include coverage of ethics and written communication in the accounting
component and, therefore, encourages institutions to integrate coverage of both
topics appropriately in the accounting component.
(e) The Board recognizes the essential need
to include coverage of ethics and written communication in the business
component and, therefore, encourages institutions to integrate coverage of both
topics appropriately in the business component.
(f) Content areas specified in the accounting
component may be covered in stand alone courses at some institutions or may be
integrated or embedded within related courses at other institutions.
Institutions that use an integrated approach that covers multiple subjects will
be responsible for providing the Board with documentation to establish the
courses within which each content area is covered.
(g) Internship credit: The accounting or
business component (but not both) may include a maximum of 3 SCH earned for an
accounting internship. Internship credit may not be used to fulfill the subject
matter requirements listed in 3.2(b). The business component may include a
maximum of 3 SCH earned for a business internship, other than in
accounting.
(h) Independent study:
The accounting or business component (but not both) may include a maximum of 3
SCH earned for an independent study. When appropriately documented by the
institution, these hours may be used to fulfill part of the subject matter
requirements listed in 3.2(b).
3.3 APPLICATIONS FOR EXAMINATION
(a) Applications to take the Certified Public
Accountant Examination must be made on a form provided by the Board and
received by the Board on or before a date specified by the Board in the
application form. See Rule 3.8
(b)
An application will not be considered filed until the applicable fees required
by these Rules and all required supporting documents have been received,
including proof of identity as determined by the Board, official transcripts,
proof the educational requirement has been satisfied, and proof that the
Candidate has received the applicable degree, or certification from the school
on a form prescribed by the Board that the degree has, in fact, been earned,
but will be conferred at a later date. In the case where the degree is to be
conferred at a later date, the Applicant shall not be credited with any
score(s) until the official transcript showing that the degree has been
conferred is received by the Board. All transcripts and verification of receipt
of degree must be sent from the appropriate school officials directly to the
Board.
(c) The candidate must cause
official transcripts documenting the degree conferred to be received by the
Board office within 30 days after the degree is conferred.
(d) The Board or its designee will forward
notification of eligibility for the computer-based examination to NASBA's
National Candidate Database.
3.4 TIME AND PLACE OF EXAMINATION
A Notice to Schedule (NTS) will be sent to eligible candidates
via the address indicated on the application form. The candidate will have six
months from the date the NTS is issued to schedule and take the approved
examination sections. Utilizing the NTS, candidates are required to contact the
test delivery provider identified by the Board to schedule the time and place
for the examination at an approved test site. If a candidate requires
rescheduling, the candidate must contact the test delivery provider. Scheduling
reexaminations must be made in accordance with Rule 3.7 below.
3.5 EXAMINATION CONTENT
The examination required by A.C.A. §
17-12-301
shall test the knowledge and skills required for performance as an entry-level
certified public accountant. The examination shall include the subject areas of
accounting and auditing and related knowledge and skills as the Board may
require.
3.6 DETERMINING
AND REPORTING EXAMINATION GRADES
A Candidate shall be required to pass all Test Sections of the
Certified Public Accountant Examination in order to qualify for a certificate.
The Candidate must attain the uniform passing grade established through a
psychometrically acceptable standard-setting procedure and approved by the
Board. Upon receipt of grades reported by the examination provider, the Board
will review and may adopt the examination grades and will report the adopted
grades to the qualified Candidate (one who has met all requirements of Rules 3.
2 and 3. 3 above).
3.7
RETAKE AND GRANTING OF CREDIT REQUIREMENTS
(a)
A Candidate shall be required to pass all Test Sections of the Certified Public
Accountant Examination in order to qualify for a certificate. A Candidate may
take the required Test Sections individually and in any order. Credit for any
Test Section(s) passed shall be valid for eighteen months from the actual date
the Candidate took that Test Section, without having to attain a minimum score
on any failed Test Section(s) and without regard to whether the Candidate has
taken other Test Sections.
(1) Candidates must
pass all four Test Sections of the Uniform CPA Examination within a rolling
eighteen-month period, which begins on the date that the first Test Section(s)
passed is taken.
(2) Candidates
cannot retake a failed Test Section(s) in the same examination window. An
examination window refers to a three-month period in which Candidates have an
opportunity to take the CPA examination (comprised of two months in which the
examination is available to be taken and one month in which the examination
will not be offered while routine maintenance is performed and the item bank is
refreshed). Thus, Candidates will be able to test two out of the three months
within an examination window.
(3)
In the event all four Test Sections of the Uniform CPA Examination are not
passed within the rolling eighteen-month period, credit for any Test Section(s)
passed outside the eighteen-month period will expire and that Test Section(s)
must be retaken.
(b) The
Board may in particular cases extend the term of conditional credit validity
notwithstanding the requirements of subsection (a) and ( upon a showing that
the credit was lost by reason of circumstances beyond the Candidate's
control.
(c) A Candidate shall be
deemed to have passed the Uniform CPA Examination once the Candidate holds at
the same time official credit for passing each of the four Test Sections of the
examination. For purposes of this section, credit for passing a Test Section of
the computer-based examination is valid from the actual date of the Testing
Event for that Test Section, regardless of the date the Candidate actually
receives official notice of the passing grade.
3.8 CANDIDATE TESTING FEE
(a) The Candidate shall, for each applicable
Test Section pay to the Board or its designee fees charged by the AICPA, NASBA,
and the Test Delivery Provider, as well as the application and section fees
established by the State Board. The application and section fees are
nonrefundable and nontransferable. The fees for AICPA, NASBA, and the Test
Delivery Provider are collected by the Board and held for transfer to the
entities. Those fees are nontransferable, but may be partially refunded if
extreme hardship precludes the applicant from scheduling or taking the exam.
Extreme hardship is defined as medical emergency of candidate or candidate's
immediate family, or death in immediate family. Any other extreme hardship
situation will be reviewed on a case-by-case basis by the Board. Documentation
of such circumstances must be submitted along with written request as soon as
possible, but no later than 30 days from the date the candidate was scheduled
for the applicable section(s) or 30 days from the expiration of the NTS
whichever occurs first. The fees to sit for the examination are enumerated in
Rule 12.
(b) A first-time applicant
is defined as an applicant who has never sat for any section of the CPA
examination as an Arkansas applicant, or has never received official scores as
an Arkansas candidate.
(c) A
re-exam applicant is defined as an applicant taking any section of the CPA
examination after sitting as a first-time Arkansas applicant.
3.9 CHEATING
(a) Cheating by a Candidate in applying for,
taking or subsequent to the examination will be deemed to invalidate any grade
otherwise earned by a Candidate on any Test Section of the examination, and may
warrant summary expulsion from the test site and disqualification from taking
the examination for a specified period of time.
(b) For purposes of this Rule, the following
actions or attempted activities, among others, may be considered cheating:
(1) Falsifying or misrepresenting educational
credentials or other information required for admission to the
examination;
(2) Communication
between Candidates inside or outside the test site or copying another
Candidate's answers while the examination is in progress;
(3) Communication with others inside or
outside the test site while the examination is in progress;
(4) Substitution of another person to sit in
the test site in the stead of a Candidate;
(5) Reference to crib sheets, textbooks or
other material or electronic media (other than that provided to the Candidate
as part of the examination) inside or outside the test site while the
examination is in progress.
(6)
Violating the nondisclosure prohibitions of the examination or aiding or
abetting another in doing so.
(7)
Retaking or attempting to retake a Test Section by an individual holding a
valid Certificate or by a Candidate who has unexpired credit for having already
passed the same Test Section, unless the individual has been directed to retake
a Test Section pursuant to Board order or unless the individual has been
expressly authorized by the Board to participate in a "secret shopper"
program.
(c) In any case
where it appears that cheating has occurred or is occurring, the Board or its
representatives may either summarily expel the Candidate involved from the
examination or move the Candidate to a position in the Test Center away from
other examinees where the Candidate can be watched more closely.
(d) In any case where the Board believes that
it has evidence that a Candidate has cheated on the examination, including
those cases where the Candidate has been expelled from the examination, the
Board shall conduct an investigation and may conduct a hearing consistent with
the requirements of the state's Administrative Procedures Act following the
examination session for the purpose of determining whether or not there was
cheating, and if so what remedy should be applied. In such proceedings, the
Board shall decide:
(1) Whether the Candidate
shall be given credit for any portion of the examination completed in that
session; and
(2) Whether the
Candidate shall be barred from taking the examination and if so, for what
period of time.
(e) In
any case where the Board or its representative permits a Candidate to continue
taking the examination, it may, depending on the circumstances:
(1) Admonish the Candidate;
(2) Seat the Candidate in a segregated
location for the rest of the examination;
(3) Keep a record of the Candidate's seat
location and identifying information, and the names and identifying information
of the Candidates in close proximity of the Candidate; and/or
(4) Notify the National Candidate Database
and the AICPA and/or the Test Center of the circumstances, so that the
Candidate may be more closely monitored in future examination
sessions.
(f) In any
case in which a Candidate is refused credit for any Test Section of an
examination taken, disqualified from taking any Test Section, or barred from
taking the examination in the future, the Board will provide to the Board of
Accountancy of any other state to which the Candidate may apply for the
examination information as to the Board's findings and actions taken.
3.10 SECURITY AND IRREGULARITIES
Notwithstanding any other provisions under these rules, the Board
may postpone scheduled examinations, the release of grades, or the issuance of
certificates due to a breach of examination security; unauthorized acquisition
or disclosure of the contents of an examination; suspected or actual
negligence, errors, omissions, or irregularities in conducting an examination;
or for any other reasonable cause or unforeseen
circumstance.
3.11 EDUCATION REQUIREMENT FOR LICENSURE
Any candidate who successfully completes the CPA examination must
also complete 150 SCH of education in order to be licensed. Successful
candidates must complete this education requirement within 3 years of the date
the last CPA exam section was passed. Candidates who are unable to complete
this education requirement within 3 years due to extreme hardship (medical or
other) may apply to the Board for an extension.
3.12 REQUIREMENTS FOR RELICENSURE
Anyone applying for relicensure who meets the conditions
established in ACA
17-1-107(b)(1)
and can demonstrate that he or she passed the Certified Public Accountants
(CPA) exam with scores sufficient for licensure at the time the individual's
initial license was issued:
A) Shall
not be required to re-take the CPA exam in order to be re-licensed;
B) Shall not be required to take additional
college courses to meet current standards for licensure, as long as the
education standards were met at the time of initial licensure.
Rule 4
RECIPROCITY
4.1 QUALIFICATIONS
FOR ISSUANCE OF A RECIPROCAL CERTIFICATE
(a)
With regard to applicants that do not qualify for reciprocity under the
substantial equivalency standard set out in §
17-12-311,
the Board shall issue a certificate to a holder of a certificate, license, or
permit issued by another state upon showing that:
(1) The applicant passed the uniform CPA
examination;
(2) The applicant had
four years of experience of the type described by Rule 16, after passing the
examination upon which the applicant's certificate was based and within the ten
years immediately preceding the application; and
(3) If the applicant's certificate, license,
or permit was issued more than four years prior to the application for issuance
of an initial certificate under this Section, that the applicant has fulfilled
the requirements of continuing professional education that would have been
applicable under subsection (d) of this Section.
(b) As an alternative to the requirements of
Rule 4.1(a), a certificate holder licensed by another state who establishes
their principal place of business in this state shall request the issuance of a
certificate from the Board prior to establishing such principal place of
business. The Board shall issue a certificate to such person who obtains from
the NASBA National Qualification Appraisal Service verification that such
individual's CPA qualifications are substantially equivalent to the CPA
licensure requirements of the AICPA/NASBA Uniform Accountancy Act.
4.2 RECIPROCAL CERTIFICATE FEE
The fee for a reciprocal certificate is set forth in Rule
12.
4.3 APPLICATION FOR A
RECIPROCAL CERTIFICATE
An application for a reciprocal certificate is obtainable from
the Board's office. See Rule 10.
Rule 5
FOREIGN ACCOUNTANTS
5.1 QUALIFICATIONS FOR ISSUANCE OF A
RECIPROCAL CERTIFICATE TO A HOLDER OF A SUBSTANTIALLY EQUIVALENT FOREIGN
DESIGNATION
See A.C.A. §
17-12-308(c)
for the qualifications for issuance of a reciprocal certificate to the holder
of a substantially equivalent foreign designation.
5.2 BACKGROUND CHECK REQUIREMENT
Such an applicant is also required to undergo a federal and state
background check, as is required of non-foreign accountants for a certificate
as a Certified Public Accountant.
Rule 6
PRACTICE UNDER SUBSTANTIAL
EQUIVALENCY
6.1 INDIVIDUALS AND FIRMS
PRACTICING UNDER SUBSTANTIAL EQUIVALENCY
(a)
Individuals practicing under substantial equivalency
(1) Pursuant to A.C.A. §
17-12-311,
a CPA who holds a current valid license from a state other than Arkansas whose
principal place of business is not in this state may perform certain
professional services in this state without registering with the
Board.
(2) To qualify for practice
under substantial equivalency, the NASBA National Qualification Appraisal
Service must have determined that:
a. The
education, examination and experience requirements of the state in which the
individual holds a valid license are comparable to or exceed the education,
examination and experience requirements contained in the UAA; or
b. The CPA holds a valid license issued by a
state whose education, examination and experience requirements are not
comparable to those contained in the UAA, but the individual CPA's education,
examination and experience requirements are comparable to or exceed the
education, examination and experience requirements contained in the UAA. If
requested by the board, the individual and the firm for which the individual
CPA is performing services in this state shall provide a copy of the NASBA
National Qualification Appraisal Service verification letter.
(3) An individual who qualifies
for practice privileges under substantial equivalency may offer or render
professional services in person, by mail, by telephone, or by electronic means
without notifying the Board, registering with the Board, or paying a
fee.
(4) An individual who
qualifies for practice privileges under substantial equivalency may perform the
following services for a client with its home office in this state only through
a firm that has registered under A.C.A. §
17-12-401:
a. A financial statement audit or other
engagement to be performed in accordance with the "Statements of
Auditing Standards";
b. An
examination of prospective financial information to be performed in accordance
with "Statements on Standards for Attestation Engagements";
or
c. An engagement to be
performed in accordance with PCAOB Standards.
(5) An individual licensee who performs
professional services under substantial equivalency and the firm which employs
that individual licensee consent and agree, as a condition of the exercise of
this privilege to:
a. The personal and subject
matter jurisdiction and disciplinary authority of the Board,
b. Comply with the Arkansas Accountancy Act
and Rules of the Board, and
c.
Cease offering or rendering professional services in this state individually
and on behalf of a firm if the license from the state of the individual's
principal place of business is no longer valid, and
d. The appointment of the board issuing the
individual's license and the firm's license as the individual's agent upon whom
process may be served in an action or proceeding of the Arkansas State Board of
Public Accountancy against the licensee.
(6) An individual who passed the Uniform CPA
Examination and holds a valid license issued by any other state prior to
January 1, 2012 may be exempt from this state's education requirements in
A.C.A. §
17-12-302
for purposes of determining substantial equivalency under Rule 6.
(7) An individual who held an Arkansas CPA
certificate or license at one time whose Arkansas CPA certificate or license
has been revoked or surrendered in connection with a disciplinary investigation
or proceeding is prohibited from practicing public accounting or using the
title "CPA" in this state whether or not such an individual may otherwise
qualify for practice privileges under Rule 6.1.
(8) If a CPA does not qualify under the
substantial equivalency standards in A.C.A. §
17-12-311,
the Board may issue a reciprocal certificate or license to the holder of a
certificate, license or other authority by another state provided that the CPA
qualifies pursuant to A.C.A. §
17-12-308.
(b) Firms practicing under
substantial equivalency
(1) A firm that does
not have an office in this state may perform professional services other than
those listed in Rule 6.1(a)(4), for a client having its home office in this
state, without notifying the Board, registering with the Board, or paying a
fee, provided that:
a. The firm meets the
applicable requirements of A.C.A §
17-12-401
and Rule 14.3(e);
b. The firm
performs the services through an individual who is registered with the Board or
through an individual who is practicing under the provisions of substantial
equivalency defined in Rule 6.1 (a); and c. The firm can lawfully perform the
services in the state where the individual with practice privileges has his or
her principal place of business.
(2) A firm may not perform certain services
under substantial equivalency. The following services for a client with its
home office in this state may only be performed through a firm that is
registered in this state:
a. A financial
statement audit or other engagement to be performed in accordance with the
Statements of Auditing Standards,
b. An examination of prospective financial
information to be performed in accordance with Statements on Standards
for Attestation Engagements, and
c. An engagement to be performed in
accordance with PCAOB Standards.
(3) A firm that is exercising the privilege
to practice under substantial equivalency as defined above and the responsible
individuals employed by the firm consent and agree to:
a. Personal and subject matter jurisdiction
and disciplinary authority of the Board,
b. Comply with the Arkansas Accountancy Act
and Rules of the Board,
and
c. Cease
offering or rendering services in this state individually and on behalf of a
firm if the license from the state of the individual's principal place of
business is no longer valid, and
d.
The appointment of the board issuing the individual's license and the firm's
license as the individual's agent upon whom process may be served in an action
or proceeding of the Arkansas State Board of Public Accountancy against the
licensee.
6.2 DISCLOSURE OF STATE OF LICENSURE BY
INDIVIDUALS OR FIRMS WITH PRACTIVE PRIVILEGES
(a) Individuals or firms practicing public
accounting in Arkansas or practicing public accounting for a client with its
home office in Arkansas while exercising a practice privilege shall not make
any representation tending to falsely indicate that the individual or firm is
licensed under A.C.A. §§
17-12-301,
17-12-308
or
17-12-401.
Such individuals or firms may truthfully identify themselves as licensed in any
jurisdiction in which they hold a valid, active, unexpired license to practice
as certified public accountants. For example, a practitioner could not use the
term "Arkansas CPA" or otherwise state or infer licensure in Arkansas, but if
true the individual or firm could use titles such as "CPA or firm licensed in
Texas" or "Oklahoma CPA". Such individuals or firms could also use cards,
stationery or similar materials with the title "CPA" as long as the materials
reflect the individual's or firm's principal place of business outside of
Arkansas. Such individuals could also truthfully state that they are CPAs
practicing under a practice privilege.
(b) Firms and individuals practicing public
accounting in Arkansas shall provide, upon a client's or prospective client's
request, accurate information on the state or states of licensure, principal
place of business, contact information, and manner in which licensure status
can be verified.
6.3
INDIVIDUALS INELIGIBLE FOR PRACTICE PRIVILEGES
(a) Unless prior approval is obtained from
the Board, the practice privileges described in Rule 6.1 shall not be
applicable if:
(1) The individual has been
convicted of a felony under the laws of any jurisdiction.
(2) The individual has been convicted of any
crime under the laws of any jurisdiction if an element of the crime involves
dishonesty or fraud, such as forgery, embezzlement, obtaining money under false
pretenses, theft, extortion, conspiracy to defraud, or similar
offenses.
(3) The individual's
license to practice public accounting has been suspended, revoked, or otherwise
disciplined by a licensing authority in this or another state, territory, or
country, for any cause other than failure to pay appropriate fees.
"Disciplined" shall include the voluntary surrender of a license to resolve a
pending disciplinary investigation or proceeding in Arkansas or other
jurisdiction.
(4) The individual's
right to practice public accounting before any state or federal agency or
before the PCAOB has been suspended or revoked.
(5) The individual has applied for licensure
as a certified public accountant in Arkansas or other jurisdiction and that
application has been denied.
(6)
The individual's authority to exercise practice privileges has been revoked in
Arkansas or another jurisdiction.
(b) The Board will determine upon request
whether the criminal or disciplinary history or other regulatory action
provides grounds for denial of practice privileges under substantial
equivalency.
(c) Individuals
precluded from exercising practice privileges under this rule may apply for
licensure in Arkansas if otherwise qualified. The Board will determine when an
application is submitted whether the criminal or disciplinary history or other
regulatory action provides grounds for denial of licensure.
Rule 7
OWNERSHIP OF
FIRMS
7.1 DEFINITIONS
(a) For purposes of these rules, "actively
participate" means the providing of personal services in the business entity
licensed in Arkansas to practice public accounting, in the nature of
management, performance of services for clients, or similar activities.
Individuals and entities whose primary source of income from the business
entity is provided as a result of passive investment will not be considered as
actively participating in the business entity.
(b) For purposes of these rules, an "owner"
is defined as a person who actively participates in a business entity licensed
in Arkansas to practice public accounting, and who (1) has an interest in
profits and losses of such business entity, or (2) owns all, or any portion, of
the equity capital of such business entity, or (3) has a vote with respect to
matters of such business entity.
(c) For purposes of these rules, "profits and
losses" are defined as the net taxable income or loss, determined prior to
payment of any form of compensation to owners, of a business entity licensed in
Arkansas to practice public accounting.
(d) For purposes of these rules, "equity
capital" is defined as (a) capital stock, capital accounts, capital
contributions, or undistributed earnings of a business entity licensed in
Arkansas to practice public accounting; and (b) loans and advances to a
business entity licensed in Arkansas to practice public accounting, made or
held by its owners. "Equity capital" does not include an interest in bonuses,
profit sharing plans or defined benefit plans or loans to a business entity
licensed in Arkansas to practice public accounting from banks, financial
institutions or other third parties that do not actively participate in such
business entity.
(e) For purposes
of these rules, a "business entity" is defined as a proprietorship,
partnership, corporation, limited liability company or any other permissible
form of practice which is licensed in Arkansas to practice public
accounting.
(f)
(1) "Good standing" as used in A.C.A.
§§
17-12-401,
17-12-402,
17-12- 603 (d), and Rule 7.4 (a) is defined as a CPA or PA who holds an active
license for the current year issued by the applicable Board.
(2) "Good standing" as used in §
17-12-504(a) and
(b) means a CPA, public accountant, or a firm
whose license, registration, or inactive license has not lapsed pursuant to
Ark. Code Ann. §
17-12-504(f)(2).
7.2 CORPORATIONS
Any corporation granted a license under the Act shall be subject
to the Rules of Professional Conduct. Any shareholder who ceases to be eligible
to be a shareholder shall be required to dispose of all of his or her shares
within a reasonable period to a person qualified to be a shareholder or to the
corporation.
7.3
PARTNERSHIPS, CORPORATIONS, LIMITED LIABILITY COMPANIES, SOLE PROPRIETORSHIPS
AND OTHER PERMISSIBLE FORMS OF PRACTICE; GENERAL REQUIREMENTS; OWNERSHIP
(a) A person who is not a certified public
accountant or public accountant in this or some other state or jurisdiction but
who actively participates within this state in the business conducted in
Arkansas by a business entity licensed in Arkansas to practice public
accounting may be an owner, director, officer, limited liability company
member, or manager in any such business entity, under the following conditions:
(1) Such person shall not hold himself or
herself out as a certified public accountant or public accountant.
(2) The name of such person shall be provided
to the Board by a business entity in connection with the granting or renewal of
a license in Arkansas to such business entity.
(3) Such person shall not have ultimate
responsibility for the performance of audits, reviews or compilations of
financial statements or other forms of attestation related to financial
information.
(b)
Limitations; Equity Ownership. Persons who are not certified public accountants
or public accountants in this or any other state or jurisdiction but who are
owners of a business entity licensed in Arkansas to practice public accounting,
shall neither (a) hold, in the aggregate, more than a minority interest of such
business entity's equity capital or voting rights, nor (b) receive, in the
aggregate, more than a minority interest of such business entity's profits or
losses.
(c) Sole Proprietorships. A
certified public accountant or public accountant operating as a sole
proprietorship and engaged in Arkansas in the practice of public accounting is
considered a firm.
(d) Other forms
of practice. These rules shall be applied to individuals and to any business
entity licensed in Arkansas to practice public accounting in a manner
consistent with carrying out the intent of these rules.
(e) Eligibility; Disqualification; Owners.
With respect to owners who are not licensed in this state or any other state or
jurisdiction as certified public accountants or public accountants, if at any
time the Board determines that any such owner no longer is eligible to be an
owner by virtue of not being in compliance with the criteria set forth in the
Public Accountancy Act and rules, such owner and the business entity in which
ownership exists shall be notified that if a Board hearing is not requested
within thirty (30) days of the date of mailing notification of such
determination, an order will then be entered that such owner must divest
himself or herself of ownership in the business entity within sixty (60) days
of entry of the order.
(f)
Corporations; Other Requirements. The principal executive officer of a
corporation licensed in Arkansas to practice public accounting shall be a
shareholder and a director who is a licensed certified public accountant or
public accountant. Directors and officers who are not licensees shall not
exercise any authority whatsoever over professional matters relating to the
practice of public accountancy.
7.4 APPLICATION PROCEDURES; FORMS
(a) Each applicant for registration as any
type of licensed business entity shall register with the Board of Public
Accountancy prior to performing public accounting work in the state of
Arkansas. Except as described below, such registration form must include an
affidavit signed by a general partner, shareholder, or member of such business
entity who is a certified public accountant or public accountant of Arkansas in
good standing, attesting to the accuracy of the information in the application
materials. In the case of an entity practicing under substantially equivalency,
such registration form must include an affidavit signed by a general partner,
shareholder, or member of such business entity who holds a current valid
license in good standing as a certified public accountant in Arkansas or some
other state or jurisdiction of the United States attesting to the accuracy of
the information in the application materials.
(b) After the Board has accepted the initial
registration application and has issued a license to practice, the registered
business entity may practice in the state of Arkansas under the title which
appears on the license to practice as the name of the business
entity.
(c) Arkansas registered
business entities shall renew their registration on an annual basis, on forms
provided by the Board. Failure or refusal to provide complete and accurate
responses to all questions on the registration renewal forms by the deadline
noted on such forms may be grounds for refusal to renew such
registration.
(d) Arkansas
registered business entities shall include on their initial registration with
the Board, and subsequent renewal of such registration, a complete listing of
the names and the state of residency of all owners and the percentage of
ownership and voting rights of each owner.
(e) In the case of firms with multiple
offices, the licensee shall identify on its original and each renewal
application each office to be registered, as prescribed on a form approved by
the Board.
7.5
NON-RESIDENT PUBLIC ACCOUNTANTS
A non-resident Public Accountant and an Arkansas Public
Accountant or Certified Public Accountant may form a partnership or corporation
for the practice of public accountancy, which shall be registered with the
Board, provided that the non-resident Public Accountant holds a valid and
unrevoked license in a jurisdiction having a regulatory law and, further
provided that the non-resident Public Accountant shall not actively practice
public accounting in Arkansas as an individual or as a partner or shareholder
of the firm.
The Board will not register such a partnership or corporation if
the non-resident Public Accountant lives in a state which does not have a
regulatory accountancy law.
7.6 PRACTICE PRIVILEGES FOR OUT OF STATE
PUBLIC ACCOUNTING FIRMS
Non resident firms: Corporations, Limited Liability Companies,
Partnerships, Sole Proprietorships, and other permissible forms of practice
that are practicing in Arkansas under practice privileges are subject to the
following:
(a) Ownership: A person who
does not hold a current valid license as a certified public accountant in
Arkansas or some other state or jurisdiction of the United States, but who
actively participates within this state with a firm exercising practice
privileges in Arkansas is subject to the following conditions.
(1) Such person shall not hold himself or
herself out as a certified public accountant or public accountant.
(2) Such person shall not have ultimate
responsibility for the performance of audits, reviews, or compilations of
financial statements, PCAOB engagements or any other form of attestation with
regard to financial information.
(b) Equity ownership limitations: Persons who
are not certified public accountants or registered public accountants shall not
(a) hold, in the aggregate, more than a minority interest of such firm's equity
ownership or voting rights, or (b) receive, in the aggregate, more than a
minority interest of said entity's profits or losses.
(c) Corporations, Limited Liability
Companies, Partnerships, Sole Proprietorships, other requirements: The
principal executive officer, managing member, or managing partner shall be a
shareholder, member, or partner who is a licensed certified public accountant
or public accountant, who holds a current, valid license in this or another
state or jurisdiction. Directors, members, partners, and officers who are not
licensees shall not exercise any authority whatsoever over professional matters
relating to the practice of public accounting.
7.7 NOTIFICATION OF FIRM CHANGES
Firms established pursuant to A.C.A §
17-12-401
and
17-12-402
shall file with the board a written notification of any of the following events
concerning the practice of public accountancy within this State within thirty
(30) days after its occurrence.
(a)
Formation of a new firm;
(b)
Addition of a partner, member or shareholder;
(c) Retirement, withdrawal or death of a
partner, member, manager, or shareholder;
(d) Any change in the name of the
firm;
(e) Dissolution of the
firm:
(f) Change in the management
of any office location registered in this State;
(g) Establishment of a new office location
providing accounting services in this state or the closing or change of address
of an office location registered in this State; and
(h) The occurrence of any event or events
which would cause such firm not to be in conformity with the provisions of the
Act or these Rules.
Rule
8
PROFESSIONAL STANDARDS
8.1 COMPLIANCE WITH PROFESSIONAL STANDARDS
Licensees shall comply with professional standards in the
performance of professional services.
8.2 "PROFESSIONAL STANDARDS" DEFINITION
"Professional standards" means the following, as in effect at the
time the professional services were provided:
(1) Statements on Auditing Standards (SAS)
and related Auditing Interpretations issued by the AICPA;
(2) Statements on Standards for Accounting
and Review Services (SSARS) and related Accounting and Review Services
Interpretations issued by the AICPA;
(3) Statements on Standards on Consulting
Services (SSCS) and related Consulting services Interpretations issued by the
AICPA;
(4) Statements on Standards
for Attestation Engagements (SSAE) and related Attestation Engagements
Interpretations issued by the AICPA;
(5) Statements on standards for Accounting
Services on Prospective Financial Information, Financial forecasts and
Projections and Reporting on Pro Forma financial Information and related
Prospective Financial Information, Forecasts, Projections and Pro Forma
Interpretations issued by the AICPA;
(6) Statements on Responsibilities in Tax
Practice and related Tax Practice Interpretations issued by the
AICPA;
(7) Statements for
Performing and Reporting on Quality Reviews and Interpretations of Standards
for Performing and Reporting on Quality Reviews issued by the AICPA;
(8) Standards for Audits on Governmental
Organizations Programs, Activities and Functions issued by the Comptroller
General of the United States;
(9)
Generally Accepted Accounting Principles and Interpretations of Generally
Accepted Accounting Principles issued by the Financial Accounting Standards
Board (FASB);
(10) Generally
Accepted Accounting Principles and Interpretations of Generally Accepted
Accounting Principles issued by the Governmental Accounting Standards Board
(GASB);
(11) Similar pronouncements
by the AICPA, FASB, GASB, Securities and Exchange Commission, Public Company
Accounting Oversight Board (PCAOB) and other organizations having generally
recognized authority over licensees of the Board.
8.3 RECORDS RETENTION
(a) Each licensee shall retain attest working
papers for a minimum of five years from the report date and in a readily
accessible form. Failure to comply with the more restrictive record retention
provisions contained in the rules and regulations of other Federal Regulatory
bodies such as the Internal Revenue Service, Securities and Exchange
Commission, and the Public Company Accounting Oversight Board will constitute a
violation of this rule.
(b) In the
event that a Board investigation or disciplinary action is pending on the date
identified in paragraph (a) of this rule or the licensee is notified by the
Board to retain attest work papers for a longer time, the licensee shall retain
the subject work papers until receipt of written notice from the Board that the
investigation or disciplinary action has concluded or that the subject work
papers need not be retained.
(c)
The provisions of this rule are not applicable to engagements that are subject
to the jurisdiction of the PCAOB or the Comptroller General of the United
States which are specifically regulated as to the time for the licensee's
retention of audit work papers.
Rule 9
COMMUNICATION, CHANGE OF ADDRESS
OR BUSINESS AFFILIATION
9.1 NOTICE OF
NEW RESIDENCE OR BUSINESS ADDRESS, OR ADDRESS OF ADDITIONAL OFFICE; NOTICE OF
CLOSING OF OFFICE; RETURN OF CERTIFICATE OF REGISTRATION
Notice shall be given by the licensee to the Board within thirty
(30) days of any new residence or business address or the address of any
additional office opened for the practice of public accounting in this State.
Address changes to be communicated to the Board include mailing and electronic
mail addresses. Notice must be similarly given by the licensee of the closing
of any such offices. No form is provided for such notices, but they must be in
writing and whether in letter form or otherwise, they must be clearly headed
with "Notice of New Office", "Closing of Office", or similar wording, and, in
the case of a new office, the name and the certificate or registration number
of the resident manager is to be furnished. All offices of the practice of
public accounting, on closing, must return any certificate of registration
issued by the Board.
9.2
NOTICE OF CHANGE OF EMPLOYMENT OR BUSINESS AFFILIATION AND OF EMPLOYER OR
BUSINESS AFFILIATE ADDRESS
The Board shall be notified by the licensee within thirty (30)
days of any change employment or business affiliation, together with the
address (including e-mail address) of the new employer or business
affiliate.
9.3 SUPERVISED
PERMIT OF FIRM OPERATIONS UPON DEATH, INCAPACITY, OR BANKRUPTCY
Upon the death or incapacity of a licensee or the closing of an
accounting firm for any reason, including bankruptcy, the Board may in its
discretion, based upon the merits and circumstances of each case, permit the
accounting firm to continue operating for a period of time not to exceed one
hundred eighty (180) days under the supervision of a person approved by the
Board and subject to conditions prescribed by the Board.
Rule 10
REGISTRATION
10.1 INITIAL
APPLICATION, RECIPROCAL, OR REINSTATEMENT
Application for an initial license, reinstatement, or renewal
shall be made on a form provided by the Board, and in the case of application
for renewal, shall be filed by January 1 of each year.
10.2 CRIMINAL BACKGROUND CHECKS
(a) Each applicant for an initial license,
including a reciprocal license, or for a new license under Ark. Code Ann.
§
17-12-504(h),
shall apply, using forms furnished by and pursuant to instructions provided by
the Board, for state and national criminal background checks to be conducted by
the Identification Bureau of the Department of Arkansas State Police and
Federal Bureau of Investigation; the Board may in its discretion on reasonable
cause require an applicant seeking the reinstatement of a license under Ark.
Code Ann. §
17-12-504(g)
to apply for the criminal background checks as provided herein.
(b) The criminal background checks shall have
been completed no earlier than six (6) months prior to the date of receipt of
the application, unless the delay is beyond the control of the
applicant.
(c) An applicant who
seeks a waiver of a conviction under paragraph (d) below must cause the
following certified documentation to be transmitted directly to the Board by
the court or other entity or individual that is providing documentation about
the applicant:
(1) Copies of court documents
pertinent to conviction, i.e., information, indictment, or other charging
documents, and judgments, orders, final rulings, or other documents specifying
conviction and sanctions, and penalties; and
(2) Documentation from the appropriate
governmental official regarding the applicant's status and compliance with
regard to terms of probation, parole, restitution, penalty, or any other
sanctions.
(d)
(1) A person convicted of a felony or crime
involving moral turpitude or dishonesty in any state or federal court may not
receive or hold a license as a certified public accountant or public
accountant.
(2) Provided; however,
upon written request submitted with the application or after receipt of the
criminal background check reports, an applicant who has a criminal conviction
may seek to have the conviction waived and application approved, subject to
appropriate terms and conditions.
(3) The request for waiver shall not be
considered until the application, fees, applicable documentation, both federal
and state criminal background check reports, and written request for waiver
stating the applicant's reasons why the conviction should be waived are
received by the Board.
(4) The
Board, after service of notice upon the applicant, shall conduct a hearing on a
request for waiver of a conviction; the hearing shall be conducted pursuant to
the relevant provisions of Rule 11.
10.3 LICENSE RENEWAL
The Board will renew the license to the applicant who has
complied with the registration in 10.1 provided:
(1) the necessary information was furnished
on the annual registration form;
(2) the required fee for said registration
was paid, and
(3) there is no
existing suspension of certificate, license or right to apply.
10.4 REPEALED
10.5 FIRM REGISTRATION
(a) A firm engaged in the practice of public
accounting that has an office in this state must register with the Board.
Application for an initial firm registration and subsequent renewal must be
made on a form provided by the Board.
(1) As
defined in Rule 7, a firm includes a corporation, partnership, limited
liability company, sole proprietorship, and other permissible forms of
practice.
(b) A firm
engaged in the practice of public accounting that does not have an office in
this state must register with the Board in order to provide the services listed
below for any client whose home office is in this state. Applicants for an
initial firm registration and subsequent renewals must be made on a form
provided by the Board. Services requiring firm registration include:
(1) A financial statement audit or other
engagement to be performed in accordance with the Statements on
Auditing Standards,
(2) An
examination of prospective financial information to be performed in accordance
with Statements on Standards for Attestation Engagements,
and
(3) An engagement to be
performed in accordance with PCAOB Standards.
(c) In the case of firms with multiple
offices, the licensee shall identify on its original and each renewal
application each office to be registered, as prescribed on a form approved by
the Board.
10.6
TEMPORARY LICENSURE
Notwithstanding the provisions of rules 10.1 through 10.5 above,
the Board may issue temporary licenses to certain persons under the conditions
set forth in Rule 18.1.
Rule
11
HEARINGS BEFORE BOARD-NOTICE-PROCEDURE-REVIEW
11.1 INVESTIGATIONS
(a)
(1) All
investigations of possible violations of the Act, Code of Professional Conduct,
or the Rules of the Board shall be investigated by the Board investigator under
the supervision of the Board's Compliance Committee or CPE Compliance
Committee.
(2) The Compliance
Committee shall be comprised of one member of the Board, appointed by the
President, and the Board's Executive Director.
(3) The CPE Compliance Committee shall be
comprised of one member of the Board, appointed by the President, and the
Board's Executive Director.
(b) Some possible minor violations may be
expected to be of such nature that they can be disposed of informally by
correspondence between the designee of the Board acting under the Board's
instructions and the person or persons involved.
(c) The Board may conduct any investigation
by a staff person and/or may designate investigating officer(s) to conduct
investigations who shall be competent by reason of training or
experience.
(d) No person or entity
being investigated has a right to be present or to be heard during the
investigation, but before any finding is recommended, such person or entity
being investigated shall be advised of the nature of the conduct which is being
investigated and shall be given an opportunity to make a statement personally
or by counsel, verbally or in writing, sworn or unsworn, explaining, refuting
or admitting the alleged misconduct, which shall be considered by the
Compliance Committee in making any finding and recommendation to the Board as
to the disposition of the investigation.
(e) Upon completion of an investigation, the
chair of the Compliance Committee shall present a summary of the result of the
investigation and recommendation as to whether the Board should make a finding
of probable cause to order a hearing or other action on alleged violations of
the Act, Code of Professional Conduct, or these Rules.
11.2 COMPLIANCE COMMITTEE RECOMMENDATION
(a) The Board shall consider the
recommendation by the Compliance Committee and may find:
(1) probable cause;
(2) no probable cause; or
(3) instruct the investigating officer(s) to
further investigate the matter.
(b) A finding of no probable cause by the
Board shall be final, and after such finding no further proceedings shall be
had in the matter by the Board unless new or additional evidence not available
or made known to the Board at the time of the finding is thereafter brought to
the attention of the Board. The Board shall promptly notify the person or
entity being investigated and any complaining party of the Board's finding of
no probable cause.
(c) If the Board
finds probable cause it may direct:
(1) that
disciplinary proceedings against a licensee be initiated under these rules by
the filing of a hearing notice, setting forth the particular act or acts of
conduct for which the person may be disciplined;
(2) that an action be instituted pursuant to
A.C.A §
17-12-104 or
§ 17-12-
105; or
(3)
that other appropriate action be taken.
(d) When a hearing notice is filed, it shall
be given a docket number, and any motions or other papers thereafter filed in
the case shall refer to such docket number.
(1) At the time the hearing notice is filed,
a copy thereof shall be mailed, under the direction of the Board, by registered
mail or certified mail, return receipt requested, to the respondent at the
respondent's address as shown upon the records of the Board, notifying the
respondent that a hearing thereon will be held at a time and place to be
specified, not less than thirty days after the mailing of such notice. The
notice of hearing shall state the legal authority and jurisdiction under which
the hearing is to be held.
(2) All
pleadings, motions and orders filed in the case, except applications for
witness subpoenas, shall be served on each party. Service shall be made by
delivery of a copy of the document to be served to the party or the party's
attorney or by mailing or emailing it to the party at the party's last known
address or email address. Delivery of a copy within this rule shall mean:
handing it to the attorney or to the party, or leaving it at the attorney or
the party's office with the attorney or the party's secretary or other person
in charge of the office, or, if there is no one in charge, leaving it in a
conspicuous place therein.
If the office is closed or the attorney or party to be served has
no office, leaving it at the attorney or party's usual place of abode with some
person of the attorney or party's family above fifteen (15) years of age and
informing such person of the contents thereof. Service by mail shall be deemed
complete upon mailing. When an attorney makes the service, a certificate of
service conforming to that required by the Arkansas Rules of Civil Procedure
shall be taken as prima facie proof of such service in compliance with these
rules.
(e) Upon
the failure of a respondent to appear at a scheduled hearing, the Board may
proceed to hear evidence against the respondent and may enter such order as
shall be justified by the evidence, provided, however, that within thirty days
from the date of any order, upon a showing of good cause for failure to
respond, the Board may reopen said proceedings.
(f) The respondent has a right to information
pursuant to A.C.A. §
25-15-208(a)(3).
(g) Hearings upon motions may be deferred
until the final hearing, and rulings thereon may be reserved until the
conclusion of the final hearing.
11.3 COMPUTATION OF TIME
(a) In computing any period of time
prescribed or allowed by these rules, the day of the act or event from which
the designated period of time begins to run shall not be included. The last day
of the period so computed shall be included unless it is a Saturday, Sunday or
legal holiday in which event the period shall run until the end of the next day
which is neither Saturday, Sunday nor legal holiday. When the period of time
prescribed or allowed is less than seven (7) days, intermediate Saturdays,
Sundays and legal holidays shall be excluded in the computation.
(b) When a party has the right or is required
to do some act or take some proceeding within a prescribed period after the
service of a notice or other paper upon him and the notice or paper is served
upon him by mail, three (3) days shall be added to the prescribed
period.
11.4 SUBPOENAS
(a) Subpoenas for the attendance of the
witnesses at hearings and for the production of documents shall be issued by
the Board upon its own initiative or upon the written application of any party.
The application shall state the name and address of the witness for whom the
subpoena is to be issued, the party on whose behalf the witness is expected to
testify, the time and place for the witness to appear, and the designated
books, papers, documents, or tangible things, if any, to be produced.
(b) Subpoenas shall be served as required by
Rule 45 of the Arkansas Rules of Civil Procedure, and the party at whose
instance the subpoena is issued shall be responsible for obtaining service of
the subpoena.
(c) Witness fees,
expenses, and mileage, if requested by the witness, shall be paid by the party
at whose instance the witness is summoned and shall be the same as prescribed
by Rule 45 of the Arkansas Rules of Civil Procedure.
11.5 HEARINGS BEFORE THE BOARD
(a) If a hearing is to be conducted by the
Board, its presiding officer or any designated hearing officer shall have the
authority to:
(1) Administer oaths and
affirmations;
(2) Rule upon offers
of proof and receive relevant evidence;
(3) Regulate the course of the
hearing;
(4) Hold conferences for
the settlement or simplification of issues by consent of the parties;
and
(5) Dispose of procedural
requests or similar matters.
However, the Board shall determine any issue that would dispose
of the matter without a determination on the substance of the matters at
issue.
(b) The
Board, at the conclusion of the final hearing, or within a reasonable time
thereafter, shall make findings of fact and conclusions of law as to each item
of misconduct with which the respondent is charged and shall enter an order
stating the effective date and providing for the appropriate disciplinary
action, if any, and recovery of the costs of the proceedings pursuant to A.C.A.
§
17-12-602
when the Board deems such recovery appropriate.
(c) The Board shall promptly notify the
respondent and any complaining party of its findings and order.
11.6 HEARINGS BEFORE A HEARING
EXAMINER OR MEMBER OF THE BOARD
(a) In the
alternative, the Board may appoint a hearing examiner or member of the Board,
who may conduct hearings in the absence of the Board. Such member or hearing
examiner shall have the authority to:
(1)
Administer oaths and affirmations;
(2) Rule upon offers of proof and receive
relevant evidence;
(3) Regulate the
course of the hearing;
(4) Hold
conferences for the settlement or simplification of issues by consent of the
parties;
(5) Dispose of procedural
requests or similar matters.
(b) In the event that the respondent
challenges the sufficiency of the proffered charges or the jurisdiction of the
Board, any recommended ruling in favor of the respondent shall be referred to
the Board for decision. Any recommended finding against the respondent shall be
included in the Board member or hearing examiner's report.
(c) Within thirty (30) days after the
conclusion of the final hearing before the hearing examiner or member of the
Board, or within such extended period of time as may be allowed by the Board
for good cause shown, the hearing examiner or member of the Board shall make a
report to the Board. The report shall include:
(1) Recommended findings of fact and
conclusions of law as to each item of misconduct with which the respondent is
charged;
(2) Recommendations as to
whether or not the respondent should be found guilty of misconduct justifying
disciplinary measures;
(3)
Recommendations as to the disciplinary measures to be applied, if any;
and
(4) A recommended form of
order.
(d) A copy of the
hearing examiner's or member of the Board's report shall be served upon the
respondent.
11.7 REVIEW
OF HEARING EXAMINER'S OR MEMBER OF THE BOARD'S REPORT
(a) Within ten (10) days after the hearing
examiner or member of the Board files his or her report with the Board, or
within such extended time as may be allowed by the Board, the record of the
proceedings, including the transcript of all the testimony and exhibits, shall
be filed with the Board.
(b) Within
thirty (30) days after the hearing examiner or member of the Board files his or
her report, or within such extended time as may be allowed by the Board for
good cause shown, the respondent may file with the Board exceptions to the
hearing examiner's or member of the Board's report and may file a brief in
support of such exceptions. If the respondent files a brief, the Executive
Director may, within twenty (20) days after the respondent's brief is filed
with the Board, or within such extended time as may be allowed by the Board for
good cause shown, file a brief in response. The parties shall also serve a copy
of any such filings upon the opposing party or that party's counsel.
(c) The Board shall notify the respondent of
the time and place of its meeting, at least ten (10) days in advance thereof,
at which the Board will review the hearing examiner's or member of the Board's
report. The respondent or the respondent's counsel may attend and present oral
argument in support of any exceptions filed under Rule 11.7(b). If the
respondent or the respondent's counsel presents such oral argument, the
Executive Director may, through counsel, present oral argument in response.
Each side will be allowed a stated amount of time, designated by the Board for
argument.
(d) The Board, after
review of the record and the hearing examiner's report, and considering the
briefs and oral argument, if any, shall, within a reasonable time, make
findings of fact as to each item of misconduct with which the respondent is
charged, ma ke conclusions of law, and enter an order stating the effective
date and the disciplinary action pursuant to A.C.A. §
17-12-602 or
otherwise exonerating the respondent.
11.8 DISPOSITION OF PROCEDURAL REQUESTS
In the event the hearing is to be conducted pursuant to Rule
11.6, or if no decision has been made by the Board to appoint a hearing
examiner or member of the Board to hear the a disciplinary matter, the Board
may appoint one of its members or a designated hearing officer to rule upon
procedural requests or similar matters. Such rulings shall be reviewed by the
Board at its hearing on the matter or at the time it reviews the report of the
hearing examiner or member of the Board.
11.9 EVIDENCE
The admission of evidence shall be governed by A.C.A. §
25-15-213(4).
11.10 RECORD OF PROCEEDINGS
(a) An accurate record of the testimony,
evidence, and all proceedings made before a hearing examiner, a member of the
Board, or before the Board shall be reported, transcribed, indexed and bound by
a court reporter supplied by the Board. Any party may contract with the court
reporter for a transcript of the proceedings.
(b) In the event that judicial review is
sought of any Board action taken pursuant to these rules, the Board shall
prepare or have prepared a certified transcript of record pursuant to A.C.A.
§
25-15-212
and submit the same to the reviewing court.
(c) The party or parties seeking judicial
review of an order rendered by the Board may apply to the Board for a stay of
that order. The stay may be granted upon such conditions as shall be
reasonable, and any order granting a stay shall specify the conditions upon
which the stay is granted.
11.11 PUBLICATION OF DISCIPLINARY SANCTIONS
The Board may cause to be published in the Board's and NASBA's
official publications (printed and electronic), and may publish in newspapers
of general circulation in the state, the name of any certificate or
registration holder who is the subject of any disciplinary action. Such
publication shall not occur until a final Board order has been issued. The
publication may contain a narrative factual summary of the actions and
violations which were the basis for the disciplinary action.
Rule 12
FEES
The fees for various services of the Board are as follows (must
be paid in U. S. dollars):
CPA EXAMINATION:
* Application Fees - First-Time and Section Fees (non-refundable
and non-transferable):
|
First-time application fee
........................................................................... |
$50 |
|
Applying for one section
............................................................................ |
$75 |
|
Applying for two sections
........................................................................... |
$90 |
|
Applying for three sections
........................................................................ |
$105 |
|
Applying for four sections
.......................................................................... |
$120 |
* Other Costs:
Fees for the NASBA, AICPA, and Test Delivery Provider are also
collected by the Board and held for the candidate for transfer to these
entities. These entities set fees separate from the Board. The Board will
display such fees on the examination application.
APPLICATION FEES (non refundable):
|
CPA/PA License
.......................................................................................... |
$50 |
|
Reciprocal License
...................................................................................... |
$50 |
|
Registration as a Public Accountant
........................................................... |
$50 |
|
Firm Registration of Partnership, Limited Liability
Company or Corporation Composed of CPAs
............................................................ |
$110 |
|
Firm Registration of Partnership, Limited Liability
Company or Corporation Composed of PAs
............................................................. |
$110 |
|
Firm Registration of Sole Proprietor, Partnership,
Limited Liability Compa or Corporation Composed of CPAs required to register
under Substantial Equivalencyny
................................................................................................. |
.$110 |
|
Reinstatement .......................... |
$150 |
|
Duplicate or replacement
certificate................. |
$ 40 |
|
Transfer of Credits From Another
Jurisdiction: |
|
Transfer Fee for Each Part
......................................................................... |
.. $10 |
ANNUAL REGISTRATION FEES
|
License to Practice................
.............................. |
$110 |
|
Inactive License
Status....................... |
$55 |
|
Firm Registration: Partnership, Corporations and Limited
Liability Company
.............................................................................................. |
$110 |
|
Firm Registration of Sole Proprietor, Partnership,
Limited Liability Company or Corporation Composed of CPAs required to register
under Substantial Equivalency
................................................................................................ |
.$110 |
|
Registration of each firm office in excess of one
office.......... |
$ 25 |
|
Late Fee - License to Practice/Firms.............per
month |
$ 25 |
|
Late Fee - Inactive License Status..........
................. per month |
$10 |
QUALITY REVIEW
|
Fee for First Report....................... |
$100 |
|
Fee for each additional type of report
submitted........... |
$50 |
Fees are due at the time reports are submitted for review in
response to QR Survey.
Rule
13
CONTINUING EDUCATION
Pursuant to the provisions of the Act, the Board prescribes the
following regulations amending requirements of continuing education to be met
from time to time by licensees in order to maintain the highest standard of
proficiency in the profession of public accountancy.
13.1 DEFINITIONS THAT ARE APPLICABLE TO RULE
13:
(a) Continuing Professional education
(CPE): An integral part of lifelong learning required to provide competent
professional accounting service to the public. The set of activities that
enables accounting professionals to maintain and increase their professional
competence.
(b) Group Program: An
educational process designed to permit a participant to learn a given subject
through interaction with an instructor and other participants either in a
classroom setting or using the Internet or video conferencing technology
(non-interactive Internet courses will not qualify in this area). Interactive
webinars are considered group programs. The key component in interactive CPE
courses is that the content is delivered in a manner so that the participants
can interact with the remote instructor.
(c) Independent Study: An educational process
designed to permit a participant to learn a given subject under a learning
contract with a CPE program sponsor (all independent study must be approved in
advance by the Arkansas State Board of Public Accountancy).
(d) Self-study Program: An educational
process designed to permit a participant to learn a given subject without major
involvement of an instructor. Self-study programs use a word count formula or a
pilot test (a sampling of at least three individuals) to measure the average
completion time from which the recommended CPE credit is determined.
(e) Authorship: An education process designed
to permit a participant to increase professional competence through research
and writing articles, books or CPE programs. For the writer to receive CPE
credit, the article, book, or CPE program must be in the subject areas
specified in Rule 13.2(a)(1) and formally accepted in writing for
publication.
13.2 BASIC
REQUIREMENTS
(a) An applicant for renewal of a
license must have completed acceptable continuing education, except as
otherwise provided in Section 13.2(b), in the amount of 120 hours within 36
months or 40 hours within 12 months immediately preceding January 1 of the year
for which the license is renewed, and further provided that:
(1) Beginning January 1, 2014, all license
holders shall complete at least 50% of the required hours in the subject areas
of accounting, accounting ethics, attest, or taxation.
(2) License holders engaged in any attest or
compilation function shall complete at least 20% of the required hours in the
subject areas of attest and accounting theory/practice.
(3) License holders must complete at least 4
hours of CPE in the area of accounting professional conduct and ethics during
the 36-months immediately preceding the expiration date of their current
license. Licensees who received their initial license during the current
calendar year are exempt from the ethics requirement until their first full
calendar year of licensure. Licensees must also complete one hour of CPE on
Arkansas State Board of Public Accountancy specific laws and rules. This
requirement may be satisfied by completing a web based course via the Board's
website or attending group training taught by a board member, board staff
member, or a designee of the Board, and will count towards the 4 hour ethics
requirement. The hour of CPE on Board specific rules and laws must be completed
during the 36 months immediately preceding the expiration date of the current
license.
(4) Licensees who are in
their first calendar year of licensure must obtain CPE hours pro-rated based on
the date of initial licensure.
(b) The Board may make exceptions for reasons
of individual hardship including, but not limited to, health, military service,
foreign residency, or other good cause. No exception shall be made solely
because of age or retirement.
(c)
As required by ACA
17-1-106(f),
the Board shall allow a full or partial exemption from continuing education
requirements for the following licensees:
(1)
An active duty military service member deployed outside of the State of
Arkansas;
(2) A returning military
veteran within one (1) year of his or her discharge from active duty;
or
(3) The spouse of a person under
(1) or (2) above.
In order to receive a full or partial CPE exemption, a qualifying
individual must submit a written request for an exemption to the Board. The
written request must explain whether a full or partial waiver of the CPE
requirement is sought and why such waiver is appropriate under the individual's
specific circumstances. In deciding the extent of any CPE waiver allowed under
this Rule, the Board will take into consideration factors including, but not
limited to:
(1) ability to access any
CPE programs;
(2) ability to access
various types of CPE;
(3)
applicant's personal circumstances; and
(4) the length of time on duty.
(d) Responsibility for
documenting the acceptability of the continuing education requirement rests
with the applicant, who must retain such documentation for a period of five (5)
years following the end of the year of completion of the continuing education
hours.
13.3 PROGRAMS
WHICH QUALIFY
(a) A program qualifies as
acceptable continuing education if it is a formal program of learning which
contributes directly to the professional competence of an individual licensed
to practice as a public accountant. The responsibility for substantiating that
a particular program meets the requirements of this paragraph rests solely upon
the licensee.
(b) Continuing
education programs requiring attendance will qualify only if
(1) An outline of the program is prepared in
advance and preserved.
(2) The
program is at least one hour (fifty-minute period) in length, excluding meal
time and business session. Credit shall be based on contact hours. A 50-minute
period will be considered as being equal to one hour. One-half CPE credit hours
(equal to 25 minutes) are permitted after the first hour has been earned in a
given program. Hours devoted to preparation by the participant shall not be
counted as a contact hour.
(3) The
program is conducted by a qualified instructor. A qualified instructor or
discussion leader is anyone whose background, training, education or experience
makes it appropriate for her/him to lead a discussion on the subject matter of
the particular program. A lecturer or discussion leader shall be afforded CPE
credit for preparation and presentation of a program for twice the number of
CPE hours applicable for participants to the extent that the program
contributes to the professional accounting competence of the applicant. Such
credit does not pertain to the teaching of academic courses or other CPE
courses that do not meet the criteria of Rule 13.3(a). Repetition of the same
course material in the same year will not be allowable for credit as continuing
education.
(4) A record of
registration or attendance is maintained.
(5) The sponsor of the program is either
approved registered or exempt from registration pursuant to the provisions of
Rule 13.4.
(c) The
following programs are examples deemed to qualify, provided Subsection 13.3(a)
and (b) are met:
(1) Programs or seminars
sponsored by accredited higher educational institutions [see Rule 13.4(f)(2)],
government agencies, NASBA, professional organizations of Certified Public
Accountants and Public Accountants, firms of Certified Public Accountants and
Public Accountants, and industrial firms that meet the guidelines of Rule
13.3(b).
(2) Technical sessions at
meetings of recognized national and state accounting organizations and their
chapters.
(3) University or college
courses offered by accredited institutions [see Rule 13.4(f)(2)] through
classroom, correspondence, or distance learning. Courses taught must be upper
level college courses and may only be used for CPE one time in a three year
period. For credit courses, each semester hour of credit shall equal 15 hours
towards the requirement, and a quarter hour credit shall equal 10 hours. For
non-credit short courses, credit is computed by contact hours.
(d) Individual study programs,
distance learning, independent study and self-study for which evidence of
satisfactory completion is issued by the provider organization prior to January
1 of the year for which the licensee is being renewed may qualify. The Board
shall accept the hours of continuing education credit recommended by the
provider organization (subject to the constraints of Rule 13.3(b)(2)). NASBA's
Quality Assurance Services (QAS) hours will be accepted if the course is QAS
registered. Sponsors of such programs, excluding those offered by providers
listed in paragraphs (c1), (c2), and (c3) above, must be registered or exempt
from registration pursuant to the provisions of Rule 13.4 (see Rule 13.3(f)
below).
(e) Articles, books, or CPE
programs, as indicated in Rule 13.1(e), may qualify for self-declared CPE
credit if the article, book or CPE program contributes to the professional
competence of the licensee and has been formally accepted for publication in
writing prior to the effective date of the license year (see Rule 13.3(f)
below).
(f) Combined credit awarded
in paragraphs 13.3(d) and 13.3(e) above shall not exceed 60 percent of the
total CPE hours required.
(g)
Acceptable continuing education will not include any education leading to
completion of the requirements to acquire a CPA certificate. Included in this
category is (1) any academic work necessary to qualify to take the CPA
Examination [per Board Rule 3.3(b)] and (2) any CPA Review courses or course(s)
offered for the specific purpose of preparing to take the CPA
Examination.
(h) Computer science
courses include those courses related to computing, networks, communications,
and the internet; system software; application software involving web browsers,
word processing, spreadsheets, database management systems and presentation
software. These courses must have a connection to the practice of accounting,
auditing, or taxation. Acceptable computer science courses do not include
tutorials and/or related videos. Computer Science courses may not be used to
meet the attest and accounting requirements of Rule 13.2(a)(2).
(i) Continuing education programs accepted in
other jurisdictions that have a sponsor review program will be
accepted.
(j) For a holder of an
active CPA license in multiple jurisdictions, continuing education courses
accepted by the jurisdiction of residence will be accepted. However, minimum
requirements prescribed in Rule 13.2(a) must be met.
(k) Specialized knowledge courses are those
courses that are related to a concentrated, specialized skill set. This field
of study also includes subjects related to specialized industries, such as
not-for-profit organizations, health care, or oil and gas. Specialized
knowledge courses may not be used to meet the requirements of Rule
13.2(a)(1).
(l) Programs in the
following subject areas are not acceptable continuing education: spirituality,
personal health and/or fitness, sports and recreation, foreign languages and
cultures and other subjects which will not contribute directly to the
professional competence of the licensee.
13.4 APPROVED SPONSORS
(a) The sponsor of any continuing education
program(s), which is not exempt under Rule 13.4(f), must, prior to offering
such program(s) register as follows:
(1) Those
sponsors offering programs totaling more than 16 credit hours per year, or
offering programs more than 5 times per year must register with the National
Registry of CPE Sponsors, administered by the National Association of State
Boards of Accountancy (NASBA); sponsors of such programs in self-study format
may register with NASBA's QAS as an alternative to, or in addition to,
registration with the National Registry of CPE Sponsors.
(2) Those sponsors offering programs which
total 16 credit hours or less per year and offering programs 5 times or less
per year must either register with the National Registry of CPE Sponsors
administered by NASBA or register with the Board annually using a registration
form prescribed by the Board; sponsors of such programs in self-study format
may register with NASBA's Quality Assurance Services as an alternative to, or
in addition to, registration with the National Registry of CPE
Sponsors.
(b) The
sponsor of any continuing education program registered with NASBA's National
Registry of CPE Sponsors or Quality Assurance Service shall comply with the
requirements of the Registry. Those sponsors registering with the Board as well
as those exempt under Rule 13.4(f) shall keep detailed records of the
following:
(1) The date and location of the
program presentation;
(2) The names
of each instructor or discussion leader;
(3) A list of licensees attending each
program presentation, and the license numbers of such attendees; and
(4) A written outline of the program
presentation.
(c) The
records required by subparagraph 13.4(b) shall be retained for a period of 5
years after the end of the year of each program presentation.
(d) The sponsor of any continuing education
program approved or exempt from registration pursuant to this rule must advise
attendees of such approval or exemption, together with the sponsor number,
subject code and the number of continuing education hours allowable.
(e) The Board may withdraw approval of any
continuing education program if the sponsor of such program fails to comply
with the provisions of this Rule.
(f) The following are exempt from registering
with the Board and the NASBA Registry of CPE Sponsors:
(1) Professional accounting and legal
organizations such as the American Institute of Certified Public Accountants,
the Arkansas Society of Certified Public Accountants, the National Society of
Public Accountants, the Arkansas Society of Public Accountants, NASBA, the
Institute of Management Accountants, the American Accounting Association, the
American Bar Association, the Arkansas Bar Association, and other similar
organizations;
(2) Universities or
colleges that are accredited per Rule 3.1;
(3) Firms, both accounting and industrial,
offering organized in-firm education programs which meet the requirements of
Rule 13.3(a); and
(4) Governmental
entities.
13.5 CPE REPORTING REQUIREMENTS
(a) Applicants for renewal of a license must
submit with their annual registration a representation that the applicant has
met the CPE requirement for issuance of a license together with a CPE
statement, in a form prescribed by the Board, showing the continuing education
programs and hours completed during the twelve months immediately preceding
January 1 of the year for which the license is being renewed. The applicant
must retain all supporting documentation for the programs and hours for five
(5) years following the end of the year of completion.
(b) The CPE statement shall show the
following:
(1) Name of the attendee;
(2) NASBA registration number or an E, if the
sponsor is exempt;
(3) Sponsoring
organizations;
(4) Location of
program;
(5) Title of program or
description of content;
(6) Dates
attended and/or completed and submitted;
(7) Field of Study
(8) Hours claimed; and
(9) Other information as designated by the
Board.
(c) On an annual
basis, the Board will audit the CPE statements of a selected number of
licensees, and those licensees will be required to submit support documentation
acceptable to the Board as part of the audit process. Licensees who fail the
CPE audit can appeal to the CPE Compliance Committee, and if necessary, the
full Board.
13.6
NONCOMPLIANCE AND SANCTIONS
(a) Should a
licensee report less than the required number of CPE hours, the licensee shall
complete the balance of the CPE hours for the reporting period and provide the
Board with appropriate documentation no later than January 31 of the following
CPE reporting period. Delinquent CPE hours reported to the Board under Section
13.6 shall first apply to the deficiency and any remaining CPE hours shall be
applied to the current CPE reporting period.
(b) Should a licensee fail to timely report
CPE hours in conjunction with the renewal application or fail to timely file a
report on completion of the balance of the CPE hours as provided in paragraph
(a) of this section, the Board shall serve notice of noncompliance upon the
licensee. The notice shall state the nature of the noncompliance. The licensee
shall, within thirty (30) days of the date of the notice, deliver acceptable
documentation to the Board that the licensee has successfully completed the
minimum CPE hours to correct the noncompliance.
(c) In addition to the notice of
noncompliance described above, the Board may institute a proceeding to impose
disciplinary action against a licensee who fails to comply with any provision
under Rule 13. The disciplinary action for a licensee who completes the minimum
number of CPE hours during the period provided in paragraph (a) of this section
shall be a monetary penalty unless the Board determines that other disciplinary
action is appropriate. The disciplinary action for a licensee who failed to
obtain the minimum CPE hours before the date for correction of the delinquency
under paragraph (a) of this section or who completed the minimum CPE hours
after notice of noncompliance under paragraph (b) of this section may be
suspension of the license unless the Board determines other disciplinary action
to be appropriate.
(d) A licensee
who has been suspended pursuant to this section may file a petition for
reinstatement which shall state the reasons for noncompliance, that the
licensee is presently in compliance, any other material information and that
the licensee has not performed any of the services set forth in A.C.A §
17-12-505 since
the suspension under this section. The petitioner may request a hearing and the
Board may require additional CPE hours as a condition of reinstatement. Any
reinstatement shall be subject to the provisions of Rule 13.9.
13.7 INACTIVE STATUS
(a) A licensee on inactive status shall not
perform any of the services set forth in A.C.A. §
17-12-505. If the
licensee performs any such services, he shall be subject to discipline by the
Board pursuant to A.C.A. §
17-12-602,
et seq. or §
17-12-105.
(b) A licensee who complies with this Rule
13.7 shall be granted an exception to the continuing education requirement of
A.C.A. §
17-12-502.
(c) To qualify for this exception, the
licensee must annually pay the appropriate inactive status registration fee as
determined by the Board and complete a form prescribed by the Board.
(d) A person on inactive status may convert
to active status as follows:
1. Complete a
form prescribed by the Board and submit payment of the appropriate fee(s)
(initial or upgrade) for active status.
2. Comply with CPE requirements under these
rules for the renewal period following reinstatement on a pro rata basis, such
hours to be computed at a rate of 3 1/3 hours per month from the date of
reinstatement to the end of the renewal period in which reinstatement
occurs.
3. Undergo a federal and
state background check.
4. Comply
with the appropriate condition below:
(A) If
inactive for less than three (3) years, the licensee must deliver documentation
acceptable to the Board showing completion of forty (40) hours of CPE,
qualified pursuant to Rule 13.2, for each consecutive (12) month period the
licensee was on inactive status. For any period of less than twelve (12)
consecutive months, whether alone or as part of a period exceeding twelve (12)
months, the number of CPE hours shall be prorated at the rate of 3 1/3 hours of
CPE per month of inactive status.
(B) If inactive for less than (1) year, the
licensee will be considered not to have been inactive for CPE reporting
purposes.
(C) If inactive for three
(3) years or more, the licensee must develop and deliver to the Board a
proposed program of CPE as specified in Rule 13.2(a) (to include four hours of
accounting professional conduct and ethics). After the Board's approval of the
CPE program, the licensee shall complete all of the CPE hours during the
36-month period immediately preceding the date of the licensee's application
for active status. The licensee shall attach to said application documentation
acceptable to the Board showing successful completion of all of the CPE hours
comprising said CPE program.
(D)
Applicants who have been inactive for three (3) years or more must have at
least one year of experience verified by a form approved by the Board from a
licensee as defined in the Act or from another state. This experience must have
been earned within the five years preceding the application for active
status.
13.8 RETIRED STATUS
(a) Any Licensee who is no longer employed
because of retirement may notify the Board of that status. A retired CPA or PA
is not required to comply with the continuing professional education
requirements set forth in Rule 13 or to make payment of annual license fees. To
qualify for this status the CPA or PA must represent in writing to the Board
that he or she does not intend to receive in the future any earned compensation
for current personal services in any job whatsoever. Retired CPAs or PAs may
not perform any services set forth in A.C.A. §
17-12-505, but
this status does not preclude volunteer services for which the retired CPA or
PA receives no direct or indirect compensation so long as the individual does
not sign any documents related to such services as a CPA. If a retired CPA or
PA wishes to return to active status he or she must comply with the provisions
of Rule 13.7(d).
(b) Licensees who
have attained the retired status may use the term "retired" adjacent to their
CPA title, or PA title in lieu of "inactive" as required in A.C.A. §
17-12-505.
13.9 ACTIVATION OF DELINQUENT,
SUSPENDED OR REVOKED LICENSES
(a) A person
whose license is delinquent, suspended, void, or revoked and who applies for
active status will be subject to the same CPE requirements as those who wish to
activate inactive licenses (see Rule 13.7).
Rule 14
QUALITY REVIEW PROGRAM
14.1 PURPOSE
There is hereby established a Quality Review Program (the
"Program"). The purpose of the Program is to improve the quality of financial
reporting and to assure that the public can rely on the fairness of
presentation of financial information on which licensees issue reports. The
Program emphasizes education and rehabilitation rather than disciplinary
action. Appropriate educational programs or procedures will ordinarily be
recommended or required where reporting does not comply with appropriate
professional standards. However, when a licensee is unwilling or unable to
comply with such standards, or a licensee's professional work is so egregious
as to warrant disciplinary action, such action may be taken as the appropriate
means of protecting the public interest.
14.2 QUALITY REVIEW COMMITTEE
(a) The Quality Review Committee (the
Committee) will assist in the implementation and administration of the Program.
The Committee's responsibilities will include:
(1) Developing procedures for the internal
operation of the Committee,
(2)
Developing criteria for assignment of reviewers to specific tasks,
(3) Assisting the Board in the selection and
training of reviewers of reports,
(4) Evaluating the findings of the reviewers
of reports and making reports and recommendations to the Board,
(5) Compiling and reporting to the Board
statistics on the impact and effect of the Program, and
(6) Considering such other matters and
performing such other duties regarding the Program as may be assigned to it by
the Board from time to time.
(b) The composition of the Committee:
(1) The Committee shall be comprised of nine
licensees appointed by the Board.
(2) The President shall annually appoint one
member of the Board who shall be chair.
(3) The remaining members shall be selected
at the Board's discretion from nominees submitted by professional accounting
associations or from other qualified licensees identified by the Board. Their
terms shall be three years and shall be staggered.
(c) The qualifications for serving as a
member are:
(1) Licensed by and in good
standing with the Board.
(2) The
licensee or firm with which he is associated has completed an acceptable peer
review, pursuant to Rule 14.3(d), or has completed the Board's Quality Review,
both including a minimum of one category of compilation, review,
and/or audit with no substandard report within three years immediately
preceding the appointment; and
(3) The licensee or his firm has no pending
investigations or disciplinary matters by the Board.
(d) The chair shall vote only in case of a
tie.
14.3 QR SURVEY
Quality Review (QR) is to be conducted annually on one third of
the licensees on a rotating basis. QR may be required more frequently as
provided herein.
(a) The Board will
mail a QR survey to one-third of its licensees annually. The recipient shall
return the completed survey form within the time specified and submit reports,
for QR purposes, when reports have been issued during the QR period as stated
in the instructions in said survey form.
(b) Failure to respond to the QR survey
mailed by the Board or to submit reports for QR purposes, when reports were
issued during the subject period, shall be a basis for the non-renewal of the
license, after notice and hearing, as provided by Ark. Code Ann. §
17-12-507.
(c) In response to the QR survey, the
licensee shall submit an audit report, agreed upon procedures report, review
report, governmental audit report, examination of prospective financial
information, and compilation report with disclosures if any were issued and, if
not, a compilation report without disclosures, issued by the licensee during
the 12 month period identified in the QR survey.
(d) Submission to the Board of an acceptable
peer review report, performed by a CPA, PA or firm, licensed in this or another
state, and the individual CPA or PA is qualified pursuant to the provisions of
Rule 14.4-14.5(a)-(e), or 14.11,which is conducted consistent with a peer
review program authorized by a professional accounting organization and
approved by the Board, dated within the QR period or the twenty-four months
immediately preceding the QR period, will exempt the licensee from QR on that
type of report. For purposes of this paragraph, acceptable peer review reports
shall be those classifications designated by the peer review program that are
generally comparable to acceptable and marginal QR reports as defined in Rule
14.8, and which the Board identifies in its approval of the individual peer
review program as comparable to acceptable and marginal QR reports.
(e) A firm or licensee registered in a
jurisdiction other than Arkansas that is not required to register in this state
pursuant to A.C.A. §
17-12-311
or A.C.A. §
17-12-401
and that performs engagements for clients in this state that are performed in
accordance with Statements on Standards for Accounting and Review Services
(SSARS), such as compilations and review, must receive an acceptable peer
review performed by a CPA, PA or firm in lieu of the Quality Review required
under Rule 14.3 or must receive an acceptable quality review performed under
the rules of the state of licensure.
14.4 QR REVIEWERS
The QR reviewers shall have the following qualifications:
(a) Licensed by and in good standing with the
Board,
(b) The licensee or firm in
which he is associated has completed an acceptable peer review pursuant to Rule
14.3(d), or has completed the Board's Quality Review both including a minimum
of one category of compilation, review, and/or audit with no substandard report
within three years immediately preceding the appointment,
(c) The licensee or his firm has no pending
investigation or disciplinary matters by the Board, and
(d) Shall have a minimum of 5 years
experience in accounting and auditing, including experience in the type of
report he will be reviewing.
14.5 TEAM CAPTAINS
Team captains shall have the following qualifications:
(a) Licensed by and in good standing with the
Board,
(b) The licensee or firm in
which he is associated has completed an acceptable peer review pursuant to Rule
14.3(d), or has completed the Board's Quality Review both including a minimum
of one category of compilation, review, and/or audit with no substandard report
within three years immediately preceding the appointment,
(c) The licensee or his firm has no pending
investigation or disciplinary matters by the Board, and
(d) Shall have a minimum of 5 years
experience in accounting and auditing, including experience in the type of
report he will be reviewing.
(e)
Shall have served as a quality reviewer for a minimum of one year,
and
(f) Shall be approved by the QR
Consultant.
14.6 QR
CONSULTANT
The QR consultant shall have the following qualifications:
(a) Licensed by and in good standing with the
Board,
(b) The licensee or firm in
which he is associated has completed an acceptable peer review pursuant to Rule
14.3(d), or has completed the Board's Quality Review both including a minimum
of one category of compilation, review, and/or audit with no substandard report
within three years immediately preceding the appointment,
(c) The licensee or his firm has no pending
investigation or disciplinary matters by the Board, and
(d) Shall have a minimum of 5 years
experience in accounting and auditing, including experience in the type of
reports he will be reviewing, and
(e) Shall be approved by the Board.
14.7 QR PROCEDURE
The QR process shall include:
(a) Review and classification of the report
and a statement of reasons for the classification by an assigned
reviewer.
(b) Review of that
classification and reasons therefore by the QR team captain who may make
appropriate changes after consulting with the assigned reviewer.
(c) Review of that classification and reasons
therefore by the Board's QR
Consultant who may make appropriate changes after consulting with
both the assigned reviewer and team captain.
14.8 QR CLASSIFICATIONS
The QR will result in a determination whether each report is
acceptable, marginal, or substandard.
(a) "Acceptable" means that the report
contains no deficiencies or only minor deficiencies.
(b) "Marginal" means that the report contains
more serious deficiencies, such as departures from the technical reporting or
accounting standards set forth in Board Rule 8, but of the type that will not
render the statement materially inaccurate or misleading.
(c) "Substandard" means that the report is
materially inaccurate or misleading; such a report violates one or more
significant reporting standards, seriously departs from Generally Accepted
Accounting Principles, or does not include material disclosures necessary for a
fair presentation.
(d) "Deficiency"
means a failure to comply with any provision in the Professional Standards
identified in Board Rule 8.
14.9 NOTIFICATION AND RESPONSE
(a) The licensee will be notified in writing
of the QR classification of each report. Notice of marginal and substandard
reports shall be by certified mail, return receipt requested. No response is
necessary for an "acceptable" or "marginal" classification, and QR will be
closed. If the licensee who has received a marginal classification disagrees,
he should notify the Board in writing within 30 days. The notification will
instruct the licensee who has received a substandard classification to reply to
the Board in writing within 30 days.
(b) Marginal Classification. If the licensee
agrees with the marginal classification, no reply is necessary and the QR is
complete. However, if the licensee disagrees with the classification, he may,
but is not required to file a notice including an explanation of his objection,
citations to applicable professional standards, and any relevant documentation
supporting his objection to the classification for consideration by QR
Consultant. This notice must be written and filed with the Board within 30
days. After reconsideration of the Summary of Deficiencies and Comments,
original documents from the licensee, and any supplemental information from the
licensee that may have been requested by the QR Team, the QR Consultant will
affirm the classification of or reclassify the licensee's report. The licensee
will be notified of this result in writing for informational purposes. The QR
will be closed and the licensee will remain in the same QR cycle.
(c) Substandard Classification.
(1) First substandard classification.
(A) Within 30 days the licensee shall respond
in writing to the Board's notification of a first substandard classification
stating whether he agrees or disagrees with that classification.
(B) If the licensee agrees with the
substandard classification, the Board shall request that the licensee obtain 16
hours of CPE in specific subjects. In the event there is another substandard
classification on a different type of report in the same QR cycle, additional
CPE may be requested. Said CPE is intended to be educational, for the purpose
of improving the quality of the licensee's reports, rather than disciplinary in
nature, shall not be self-study, and shall be approved in advance by the
Board's Executive Director. The licensee shall complete said CPE hours and
deliver acceptable documentation thereof to the Board on or before June 30 of
the following year.
(C) If the
licensee disagrees with the substandard classification, he may deliver written
notice to the Board within 30 days explaining the objection to the
classification, citation to applicable professional standards and any relevant
documentation supporting the licensee's objection to the classification. The QR
Consultant shall review the Summary of Deficiencies and Comments, original
documents from the licensee, and any supplemental information from the licensee
that may have been requested by the QR Team, and will affirm the classification
of, or reclassify the licensee's report. The licensee will be provided written
notice of the QR Consultant's review of the report by certified mail, return
receipt requested. (D)The licensee can request that the QR Committee review the
QR Consultant's reconsideration of the classification of the licensee's report.
Said request shall be filed with the Board in writing within 30 days.
(E) The QR Committee will consider the
classification based upon all records considered by the QR Consultant as
described by paragraph (b) and determine the appropriate classification for the
report. The licensee will be notified of the Committee's classification of the
report in writing by certified mail, return receipt requested.
(F) The licensee can appeal the QR
Committee's decision on the classification, and obtain a hearing by the Board
by filing a written notice of appeal with the Board within 30 days. The Board
shall notify the licensee of the time and place of the hearing and shall
consider the classification of the report based solely upon the record
considered by the QR Consultant and QR Committee, as per paragraph (b). When
the evidence of record that the report is substandard is considered, the Board
will consider all relevant facts. Should the facts show convincingly that the
report is substandard, the Board will consider the report substandard. If the
evidence of record is equally balanced, or the Board cannot find that the facts
are convincing, the Board shall determine that the report is not substandard.
Should the Board find that the report is substandard, it may require
appropriate action by the licensee that is designed to assure that the
licensee's professional services are performed consistent with applicable
professional standards as provided under these procedures.
(G) Following any first substandard
classification of the report that becomes final prior to appeal to the Board,
the licensee will be requested to obtain the 16 hours of CPE as stated in
paragraph 14.9(c)(1)(B) above. Upon request of the licensee, or should the
licensee not agree to obtain CPE described above, fail to complete said CPE, or
fail to timely deliver satisfactory documentation thereof to the Board, the
Board shall conduct a hearing to determine whether the licensee has failed to
comply with the Code of Professional Conduct and the Public Accountancy Act of
1975, Ark. Code Ann. §
17-12-101 et
seq. and, if so, the necessary corrective action to be taken to improve the
quality of the licensee's reports or to otherwise protect the public
interest.
(2) Second
consecutive substandard report.
(A) Within 30
days the licensee shall respond in writing to the Board's notification of a
second substandard classification stating whether he agrees or disagrees with
that classification.
(B) If he
agrees with the classification, the licensee will be requested to submit all of
the types of reports classified as substandard to a licensee approved by the
Board for pre-issuance review pursuant to the Board's current Pre-Issuance
Review Procedures that shall be provided to the licensee.
(C) If the licensee disagrees with the
substandard classification, he will be instructed to file notice including an
explanation of his objection to the classification, citation to applicable
professional standards, and any relevant documentation supporting his position
for reconsideration by QR Consultant. The provisions set forth in subparagraph
14.9(c)(1)(D-G) for reconsideration by the QR Consultant, for review by the QR
Committee and appeal to the Board are also applicable to second consecutive
substandard reports.
(D) Upon
appeal, should the Board find that the report is substandard, it may require
that the licensee take action deemed appropriate by the Board to assure the
licensee's professional services are performed consistent with applicable
professional standards or to otherwise protect the public interest.
(E) If at any stage of the QR procedure in
this subparagraph 14.9(c)(2) pertaining to second consecutive substandard
reports, the licensee fails to respond to the notice of the classification of
the report as substandard in the original review or upon reconsideration by the
QR Consultant or review by the QR Committee, the Board will determine whether
to schedule a hearing to find whether the licensee's report is substandard and
whether the Board shall require the licensee to obtain pre-issuance review and
subsequent QR pursuant to the Board's current Pre-Issuance Review Procedures or
take other action appropriate to protect the public interest.
(3) Third consecutive substandard
report.
(A) Within 30 days the licensee shall
respond in writing to the Board's notification of third substandard
classification stating whether he agrees or disagrees with that
classification.
(B) If the licensee
agrees with the classification, the Board will determine whether to conduct a
hearing to consider whether the licensee's report violates the Board's Code of
Professional Conduct and the Public Accountancy Act of 1975, Ark. Code Ann.
§
17-12-101 et
seq.
(C) If the licensee disagrees
with the substandard classification, he will be instructed to file notice
including an explanation of the objection to the classification, citation to
applicable professional standards and any relevant documentation supporting his
position for consideration by QR Consultant.
(D) The procedure set forth in subparagraph
14.9(c)(1)(D-G) for reconsideration by the QR Consultant, for review by the QR
Committee and appeal to the Board are also applicable to third consecutive
substandard reports.
(E) Upon
appeal, should the Board find that the report is in violation of the Code of
Professional Conduct or the Public Accountancy Act of 1975, Ark. Code Ann.
§
17-12-101 et
seq., it may take appropriate action to protect the public interest.
(F) If at any stage of the QR procedure in
this paragraph 14.9(c)(3), the licensee fails to respond to the notice of the
classification of the report as substandard in the original review or upon
review by the QR Consultant or review by the QR Committee, the Board will
determine whether to schedule a hearing to determine whether the licensee has
violated the Board's Code of Professional Conduct or the Public Accountancy Act
of 1975, Ark. Code Ann. §
17-12-101 et
seq., and the appropriate action to be taken as a result of the violations
found.
(G) Consent orders. At any
stage in the QR process, when a licensee will agree not to perform any further
reports that have been classified as substandard or to other appropriate action
to protect the public interest, the Board may resolve the controversy by an
appropriate Consent Order.
14.10 PRE-ISSUANCE REVIEW PROCEDURES
(a) Pre-Issuance Reviewer (Reviewer) shall be
a CPA or PA currently holding an Arkansas license to practice public
accountancy, who has undergone quality or peer review within the past 3 years
with reports thereon determined to be acceptable pursuant to Rule 14.3(d), and
approved by the Board prior to performing pre-issuance reviews for the subject
Accountant (Respondent). Prior to performing any pre-issuance review services,
the Reviewer shall deliver a written confirmation to the Board to provide
pre-issuance review of each financial statement or related attestation report
(cumulatively "Report") prepared by the subject respondent for the period of
the engagement. The Respondent whose Reports are being reviewed shall be solely
responsible for any expense for the pre-issuance review.
(b) Reviewer shall review, prior to release
to Respondent's client, each Report as identified above to determine compliance
with professional standards identified in Board Rule 8 or otherwise applicable
to the particular type of Report and shall authorize the release of a Report
only after making a written determination that the Report complies with said
standards. In the event a submitted Report does not comply with said standards,
the reviewer shall provide written comments or instructions for the Respondent
to revise the Report in compliance with applicable professional
standards.
(c) Reviewer shall
maintain a pre-issuance review file on each Report review performed. The file
shall contain each original Report submitted to reviewer, the reviewer's
written comments or instructions in any form regarding necessary revisions for
the Report to comply with professional standards, any revised Report(s) and the
Report approved for release to the client. Reports reviewed and found
acceptable with no change shall be clearly noted on the file Report,
"Accepted-No Change Required".
(d)
Reviewer shall maintain the pre-issuance review files for a minimum of five
years after each pre-issuance review engagement is completed and shall make
said records available to the Board upon request.
(e) Reviewer shall submit a written report to
the Arkansas Board of Public Accountancy every ninety (90) days following the
date of the Reviewer's confirmation to the Board. The report shall contain a
summary of the number and type of Reports reviewed, number of Reports with no
change required, and number of Reports requiring amendment. For Reports
requiring change, a copy of each original Report submitted by Licensee,
Reviewer notations, and/or comment sheet(s) and the revised and approved
Report(s) must accompany the report.
(f) Reviewer may recommend in writing with
accompanying supporting documentation that the Respondent be released from
continuing pre-issuance review. Should the Board determine that the Respondent
appears to have demonstrated an ability to issue Reports in compliance with
applicable professional standards without the necessity of continuing
pre-issuance review, it shall terminate the pre-issuance review, but may
require the Respondent to participate in annual quality review for a specific
or indefinite term.
14.11 PEER REVIEWER STANDARDS
(a) In order to qualify to perform peer
review for the exemption from Quality Review requirements of 14.3, an
individual licensee must have the applicable qualifications for reviewers set
forth in Rules 14.4, or supervisors set forth in Rules 14.5, except 14.5(f) for
team captains.
(b) An individual
peer reviewer not licensed or registered in Arkansas under Ark. Code Ann.
§
17-12-301
et seq., shall meet the requirements set forth in Ark. Code Ann. §
17-12-311.
Rule 15
SAFE HARBOR LANGUAGE
15.1
NON-LICENSEES - ISSUANCE OF COMPILATION REPORTS
A.C.A. §
17-12-107(b)
provides that non-licensees are not prohibited from issuing any compilation
report prescribed by the Statements on Standards for Accounting and Review
Services (SSARS) on any services to which those standards apply, indicating
that the services were performed in accordance with standards established by
the AICPA, provided that the report discloses that the person does not hold a
license.
15.2 NON-LICENSEES
DISCLAIMER LANGUAGE - COMPILATIONS
Non-licensees must use the following disclaimer language in
reports issued in connection with compiled financial statements to not be in
violation of the Act: I (we) have prepared the accompanying (financial
statements) of (name of entity) as of (time period) for the (period) then
ended. This presentation is limited to preparing in the form of financial
statements information that is the representation of management (owners).
I (we) have not audited or reviewed the accompanying financial
statements and accordingly do not express an opinion or any other form of
assurance on them. I (we) am (are) not licensed by the Arkansas State Board of
Public Accountancy. In addition, the following language must appear on each
page of the financials that contain the non-licensee's name: "See
accompanying report".
15.3 NON-LICENSEE DISCLAIMER LANGUAGE - USE
OF TITLE "AUDITOR" OR "ACCOUNTANT"
A.C.A. §
17-12-106(i)
prohibits unlicensed firms or individuals from holding out to the public as an
"accountant" or "auditor" by use of either or both of such words on any sign,
card, electronic transmission, or letterhead or in any advertisement or
directory without indicating thereon or therein that the person must include
the following statement within any signage, document or letterhead,
advertisement, or electronic transmission:
"Not licensed by the Arkansas State Board of Public
Accountancy"
This statement must not be abbreviated and must appear in legible
fashion so that the public could reasonably be expected to be able to read and
understand the statement.
Rule
16
EXPERIENCE REQUIRED
The experience required to be demonstrated for issuance of an
initial certificate pursuant to A.C.A. §
17-12-309
shall meet the requirements of this rule:
(a) Experience shall include providing any
type of services or advice involving the use of accounting, attest, management
advisory, financial advisory, tax or consulting skills.
(b) The applicant shall have their experience
verified to, and on a form approved by, the Board by a licensee as defined in
the Act or from another state. Acceptable experience shall include employment
in industry, government, academia or public practice. The Board shall look at
such factors as the complexity and diversity of the work.
(c) One year of experience shall consist of
full or part-time employment that Extends over a period of no less than a year
and no more than three years and includes no fewer than 2,000 hours of
performance of services described in (a) above. The one year of experience
gained must have occurred within the 3 years preceding the date of licensure
application. Applicants may appeal to the board for extension of time in cases
of extreme medical or other hardships.
Rule 17
DECLARATORY ORDERS
17.1 ISSUANCE OF DECLARATORY ORDERS
To the extent any licensee or other interested party has
questions concerning the applicability of any rule, statute, or order enforced
by the Board, the licensee or interested party may submit a written petition to
the Executive Director for a declaratory order. The petition should include a
recitation of all facts relevant to the subject matter of the inquiry. The
Executive Director shall present the written request to the Board within ninety
(90) days of receipt thereof, unless good cause requires a longer period, along
with the Executive Director's proposed response to the request. The Board shall
approve, modify or reject the Executive Director's proposed response within
thirty (30) days of receipt thereof from the Executive Director, unless good
cause requires a longer period.
17.2 DECLARATORY ORDERS APPROVED BY THE BOARD
No declaratory orders prepared under this Rule by the Executive
Director or by the Board's staff or counsel, whether in draft or final form,
shall be valid, official or of any effect unless and until such order has been
approved by the Board. The Executive Director's response to a request for a
declaratory order shall be prepared by the Executive Director in consultation
with the Board's legal counsel, as appropriate, and presented by the Executive
Director to the Board for consideration.
17.3 FORM OF DECLARATORY ORDERS
Declaratory orders shall set forth the assumed facts upon which
the orders are based. The Board shall accept the facts presented in the
petition and any supplement to the petition as true for purposes of formulating
the declaratory order. Such assumed facts shall not constitute formal findings
of fact by the Board.
Declaratory Orders shall address only the application of a rule,
statute, or order enforced by the Board to an intended or contemplated, future
course of conduct. The declaratory order shall interpret the applicable law or
rule as applied to the facts presented, and shall not address the legality of
any past or present conduct.
The identity of the requesting person shall be disclosed in the
declaratory order.
If the facts and circumstances provided in the petition are
insufficient in detail to enable the Board to render a declaratory order, the
Board shall request supplementary information from the petitioner to enable the
Board to render such order. If such supplementary information is still
insufficient or is not provided, the Board shall so state and shall not render
a declaratory order based upon what it considers to be insufficient detail. The
timeframes outlined in this Rule shall reset upon receipt of any supplement to
the petition.
17.4 RECORDS
The Executive Director shall provide a copy of each declaratory
order to the requesting party and to each member of the Board. The Executive
Director shall keep the original order along with a copy of the original
request for the declaratory order and any information or documents provided to
the Board by the requesting party for a period of three years after final
disposition of the declaratory order. Copies of all documents considered by the
Board, the staff, or counsel in the drafting or rendering of a declaratory
order shall be retained by the Executive Director and kept in the file for that
particular declaratory order.
17.5 EFFECT OF ORDERS
The Board may reconsider, withdraw, or amend prior orders upon
request of a licensee or other interested party, or on its own motion, upon
approval by the Board. Upon receipt of a request for reconsideration,
withdrawal, or amendment of a prior declaratory order, or, upon passage of the
Board's own motion to reconsider, withdraw, or amend a prior declaratory order,
written notice of the request or passed motion shall be mailed to the original
petitioner at the last address for that party provided to the Board. The
original petitioner shall be given 30 days from the date of mailing to provide
a written response. If the Board ultimately withdraws or amends the prior
declaratory order, written notice of the change shall be mailed to the original
petitioner at the last address for that party provided to the Board.
Rule 18
LICENSURE
FOR ACTIVE DUTY SERVICE MEMBERS, RETURNING MILITARY VETERANS, AND
SPOUSES
The following rules are promulgated under the authority of ACA
17-1-106.
18.1 TEMPORARY LICENSURE
Upon the Board's receipt of an application for full licensure,
the Board will grant to the following individuals a temporary license while
completing the application process for full licensure, if the individual is the
holder in good standing of a CPA license from another U.S. jurisdiction:
(1) An active duty military service member
stationed in the State of Arkansas;
(2) A returning military veteran applying
within one (1) year of his or her discharge from active duty; or
(3) The spouse of a person under (1) or (2)
above.
Completing the application process for full licensure means
either:
1) Approval of the application
for full licensure by the Board; or
2) The expiration of any period of time
permitted to seek judicial review of the denial of an application for full
licensure or completion of any judicial review proceeding and any subsequent
remand proceedings following judicial review, whichever is later.
18.2 EXPEDITED
PROCESSING FOR FULL LICENSURE
The Board will give preference in the order of processing to
applications for full licensure filed by the following individuals:
(1) An active duty military service member
stationed in the State of Arkansas;
(2) A returning military veteran applying
within one (1) year of his or her discharge from active duty; or
(3) The spouse of a person under (1) or (2)
above.
18.3
CONSIDERATION OF MILITARY TRAINING AND EXPERIENCE
When considering an application for full licensure from an active
duty military service member stationed in the State of Arkansas or a returning
military veteran applying within one (1) year of his or her discharge from
active duty, the Board will:
(1)
Consider whether or not the applicant's military training and experience in the
practice of accounting is substantially similar to the experience or education
required for licensure.
(2) Accept
the applicant's military training and experience in the practice of accounting
in lieu of experience or education required for licensure, if the Board
determines that the military training and experience is a satisfactory
substitute for the experience or education required for licensure.
18.4 EXTENSION OF EXPIRATION DATE
OF LICENSE
(a) The license of an active duty
military service member or spouse of an active duty military service member
will not expire until one hundred (180) days following the active duty service
member's or spouse's return from active deployment.
APPENDIX ONE
PHYSICAL ADDRESS
The principle office and official address of the Board is as
follows: Arkansas State Board of Public Accountancy, 101 East Capitol Avenue,
Suite 450, Little Rock, AR 72201. Telephone (501) 682-1520 and Facsimile (501)
682-5538.
APPENDIX TWO
CODE OF PROFESSIONAL CONDUCT
PREAMBLE
This Code of Professional Conduct is promulgated under the
authority granted by the Public Accountancy Act of 1975, as amended, codified
as A.C.A. §
17-12-101
et.seq., (hereafter referred to as "the Act") which delegates to the Arkansas
State Board of Public Accountancy the power and duty to prescribe rules of
professional conduct for establishing and maintaining high standards of
competence and integrity in the profession of public accountancy.
The Rules of Conduct set out below rest upon the premises that
the reliance of the public in general and of the business community in
particular on sound financial reporting, and on the implication of professional
competence which inheres in the authorized use of legally restricted title
relating to the practice of public accountancy, imposes on persons engaged in
such practice certain obligations both to their clients and to the public.
These obligations, which the Rules of Conduct are intended to enforce where
necessary, include the obligation to maintain independence of thought and
action, to strive continuously to improve one's professional skills, to observe
where applicable generally accepted accounting principles and generally
accepted auditing standards, to promote confidence, to uphold the standards of
the public accountancy professional, and to maintain high standards of personal
conduct in all matters affecting one's fitness to practice public
accountancy.
Acceptance of licensure to engage in the practice of public
accountancy, or to use titles which imply a particular competence so to engage,
involves acceptance by the licensee of such obligations, and accordingly of a
duty to abide by the Rules of Conduct.
The Rules of Conduct are intended to have application to all
kinds of professional services performed in the practice of public accountancy,
including tax and management advisory services, and to apply as well to all
licensees, whether or not engaged in the practice of public accountancy except
where the wording of a Rule clearly indicates that the applicability is more
limited.
A licensee who is engaged in the practice of public accountancy
outside the United States will not be subject to discipline by the Board for
departing, with respect to such foreign practice, from any of the Rules, so
long as his or her conduct is in accordance with the standards of professional
conduct applicable to the practice of public accountancy in the country in
which he or she is practicing. However, even in such a case, if a licensee's
name is associated with financial statements in such manner as to imply that he
or she is acting as an independent Public Accountant and under circumstances
that would entitle the reader to assume that United States practices are
followed, he or she will be expected to comply with Rules 201, 202 and
203.
In the interpretation and enforcement of the Rules of Conduct,
the Board will give consideration, but not necessarily dispositive weight, to
relevant interpretations, rulings and opinions issued by the Boards of other
jurisdictions, and by appropriately authorized committees on ethics of
professional organizations.
RULES OF CONDUCT
INDEPENDENCE, INTEGRITY AND OBJECTIVITY
Rule 101
Independence.
A licensee in public practice shall be independent in the
performance of professional services as required by professional standards as
defined in Board Rule 8.2.
When a licensee or registered firm is associated with a
non-licensed office or business, the licensee or registered firm shall disclose
the licensee's or registered firm's lack of independence when performing attest
services or compilation services for a client who has paid or is expected to
pay a commission or contingent fee to such non-licensed office or
business.
Definition of "Associated With:"
For purposes of Rules 101, 406, 407 and 408, the term "associated
with" shall include (1) any written or non-written contractual relationship
between the licensee or registered firm and non-licensed office or business
whereby compensation is paid to or received from the non-licensed office or
business by the licensee or registered firm in connection with the performance
of professional services, (2) a situation where a relative (spouse, child,
parent or sibling) of the licensee owns an interest in the non-licensed office
or business, or (3) a situation where any (licensed) owner or employee of the
firm, registered firm or licensee owns an interest in the non-licensed office
or business.
Definition of "Registered Firm:"
For purposes of Rules 101, 406, 407 and 408, the term "registered
firm" shall be defined as any partnership, corporation, professional
corporation, and limited liability company of certified public accountants or
public accountants registered with the Board pursuant to A.C.A. §
17-12-401
et seq.
Rule 102
Integrity and Objectivity.
In the performance of professional service, a licensee shall
maintain objectivity and integrity, shall be free of conflicts of interest, and
shall not knowingly misrepresent facts nor subordinate his or her judgment to
others. In tax practice, however, a licensee may resolve doubt in favor of his
or her client as long as there is reasonable support for his or her
position.
Rule 103
Incompatible Occupations.
A licensee shall not concurrently engage in the practice of
public accountancy and in any other business or occupation which impairs his or
her independence or objectivity in rendering professional
services.
COMPETENCE AND TECHNICAL STANDARDS
Rule 201
General Standards.
A licensee shall comply with the following standards:
(A) The licensee or licensee's firm shall
undertake only those professional services that can reasonably be expected to
be completed with professional competence.
(B) The licensee shall exercise due
professional care in the performance of professional services.
(C) The licensee shall adequately plan and
supervise the performance of professional services.
(D) The licensee obtain sufficient relevant
data to afford a reasonable basis for conclusions or recommendations in
relation to any professional services performed.
Rule 202
Compliance with
Standards.
A licensee who performs auditing, review, compilation, management
consulting, tax, or other professional services shall comply with professional
standards as defined in Board Rule 8.2.
Rule 203
Accounting Principles.
A licensee shall not (1) express an opinion or state
affirmatively that the financial statements or other financial data of any
entity are presented in conformity with generally accepted accounting
principles or (2) state that he or she is not aware of any material
modifications that should be made to such statements or data in order for them
to be in conformity with generally accepted accounting principles, if such
financial statements or data contain any departure from an accounting principle
promulgated by bodies identified in Board Rule 8 to establish such principles
that has a material effect on the financial statements or data taken as a
whole, unless the licensee can demonstrate that by reason of unusual
circumstances the financial statements or data would otherwise have been
misleading. In such a case, the licensee's report must describe the departure,
the approximate effects thereof, if practicable, and the reasons why compliance
with the principle would result in a misleading statement. For purposes of this
Rule generally accepted accounting principles are considered to be defined by
pronouncements issued by the Financial Accounting Standards Board and its
predecessor entities and similar pronouncements issued by other entities having
similar generally recognized authority.
Rule 204
Prospective Financial
Statements or Data.
A licensee shall not in the performance of professional services
permit his or her name to be used in conjunction with any prospective financial
statements or data in a manner which may reasonably lead to the belief that the
licensee vouches for the achievability of the prospective financial statements
or data.
RESPONSIBILITIES TO CLIENTS
Rule 301
Confidential Client
Information.
A licensee shall not without the consent of his or her client
disclose any confidential information pertaining to his or her client obtained
in the course of performing professional services.
This Rule does not (A) relieve a licensee of any obligations
under Rules 202 and 203, (B) affect in any way a licensee's obligation to
comply with a validly issued subpoena or summons enforceable by order of court,
or prohibit a licensee's compliance with applicable laws and government
regulations, (C) prohibit review of a licensee's professional practice under
Board authorization, or (D) preclude a licensee from initiating a complaint
with, or responding to any inquiry made by the Board or any investigative or
disciplinary body established by law or formally recognized by the
Board.
Members of the Board and professional practice reviewers shall
not use to their own advantage or disclose any confidential client information
which comes to their attention in carrying out those activities. This
prohibition shall not restrict licensee's exchange of information in connection
with the investigative or disciplinary proceedings described in (D) above or
the professional practice reviews described in (C) above.
Rule 302
Records.
Licensees should make every attempt to resolve record request
disputes in a professional and timely manner. In cases where agreement cannot
be reached, the rules below will apply. (for purposes of the definitions below,
the term "client" includes both current and former clients).
(1)
Client-provided records
are accounting or other records belonging to the client that were
provided to the licensee, by or on behalf of, the client or former client,
including hardcopy or electronic reproductions of such records. A licensee
shall return client provided records to a client within a reasonable time after
the client or former client has made a request for those records. A reasonable
time shall not exceed 10 business days, though the Board may determine that the
records must be returned sooner in cases in which time is of the essence. The
licensee shall provide these records to the client, regardless of the status of
the client's account and cannot charge a fee to provide such records. Such
records shall be returned to the client in the same format, to the extent
possible, that they were provided to the licensee by the client. The licensee
may make copies of such records and retain those copies.
(2)
Licensee-prepared records
are accounting or other records that the licensee was not specifically
engaged to prepare and that are not in the client's books and records or are
otherwise not available to the client, with the result that the client or
former client's financial information is incomplete. Examples include
adjusting, closing, combining, or consolidating journal entries (including
computations supporting such entries) and supporting schedules and documents
that are proposed or prepared by the licensee as part of an engagement. These
records shall also be furnished to the client within a reasonable time after
the client has made a request for the records, not to exceed 20 business days.
The board may determine that the records must be returned sooner in cases in
which time is of the essence. The licensee may charge a reasonable fee for
providing such records, and the records provided should be in a format that the
client can reasonably expect to use for the purpose of accessing such work
papers. Licensees may require outstanding fees to be paid before providing
copies of licensee-prepared records to the client.
(3)
Licensee work products are
deliverables set forth in the terms of the engagement, such as tax returns or
audit reports. Work products should be provided to the client as soon as
possible, except that such work products may be withheld if:
A) there are fees due to the licensee for the
specific work product;
B) the work
product is incomplete;
C)
professional standards require withholding the work products (i.e. holding an
audit report due to outstanding audit issues) or:
D) threatened or outstanding litigation
exists concerning the engagement or licensee's work.
Licensees may charge a reasonable fee for providing copies of
work products after the originals have been provided to the client.
(4)
Licensee
working papers
are items prepared solely for purposes of the engagement and
include items prepared by the licensee, such as audit programs, analytical
review schedules, and statistical sampling results and analyses, which reflect
testing or other work performed by the licensee. Working papers remain the
property of the licensee who developed the working papers and licensees are
under no obligation to provide copies to clients or other parties unless
required by law or requested by the Arkansas State Board of Public
Accountancy.
It is recommended that a licensee obtain a receipt or other
written documentation of the delivery of records to a client. Licensees are not
required to convert records that are not in electronic format to electronic
format or to convert electronic records into a different type of electronic
format. However, if the client requests records in a specific format and the
records are available in such a format within the licensee's custody and
control, the client's request should be honored. In addition, the licensee is
not required to provide the client with formulas, unless the formulas support
the client's underlying accounting or other records, or the licensee was
engaged to provide such formulas as part of a completed work product.
Documentation or work documents required by professional
standards for attest services shall be maintained in paper or electronic format
by a licensee for a period of not less than five years from the date of any
report issued in connection with the attest service. Licensees must comply with
the rules and regulations of authoritative federal regulatory bodies, such as
the IRS, SEC, or PCAOB when the licensee performs services for a client and is
subject to the rules and regulations of such regulatory body. Failure to comply
with the more restrictive provisions contained in the regulations of the
applicable regulatory body will constitute a violation of this Rule.
OTHER RESPONSIBILITIES AND PRACTICES
Rule 401
Discreditable Acts.
A licensee shall not commit any act discreditable to the
profession.
Rule 402
Acting Through Others.
A licensee shall not permit others to carry out on his or her
behalf, either with or without compensations, acts which, if carried out by the
licensee, would place him in violation of the Rules of
Conduct.
Rule 403
Advertising and Other Forms of Solicitation.
A licensee shall not seek to obtain clients by advertising or
other forms of solicitation in a manner that is false, misleading, or
deceptive. Solicitation by the use of coercion, over-reaching, or harassing
conduct is prohibited.
Rule
404
Firm Names.
A licensee may practice public accounting only in a form of
organization permitted by the Act. A licensee shall not practice public
accountancy under a name which is misleading in any way, as to the legal form
of the firm, or as to the persons who are partners, managers, members, officers
or shareholders of the firm, or as to any matter with respect to which public
communications are restricted by Rule 403. However, names of one or more past
partners, members or shareholders may be included in the firm name of a
partnership, limited liability company or corporation or its successor, and a
partner or member surviving the death or withdrawal of all other partners or
members may continue to practice under a partnership or limited liability
company name for up to two (2) years after becoming a sole practitioner.
A fictitious firm name (that is, one not consisting of the names
or initials of one or more present or former partners, members or shareholders)
may not be used by a CPA firm unless such name has been registered with and
approved by the Board as not being false or misleading.
A firm may not include the term "Associates" or "Company" unless
the firm has at least two full time CPAs on staff.
Rule 405
Practice in Un-registered
Entity.
A licensee shall not practice public accountancy in association
with a sole proprietor, partnership, corporation or other entity which is not
registered with the Board, unless the appropriate disclaimer is used as
provided in Board Rule 15.3.
Rule
406
Notification by Licensees Who Are Associated With a
Non-licensed Office or Business.
A licensee or registered firm that is associated with a
non-licensed office or business which performs professional services as defined
in §
17-12-103(15)
of the Act shall notify the Board of such offices or businesses within 30 days
after the creation of the relationship. Notice must be similarly given by the
licensee or firm when the relationship terminates. No form is provided for such
notices, but they must be in writing and whether in letter form or otherwise,
they must clearly be labeled with "Notice of Association With, or Ownership of,
Non-Licensed Office or Business." A separate notice must be provided for each
such non-licensed office or business.
Information to be contained in the notices shall include:
Name of Non-licensed Office or Business
Name of Owner(s), and Percentage of Ownership of Each (if more
than one)
Name of Manager of Office or Business
Address of Office or Business
Phone Number of Office or Business
Nature of Professional Services Performed
Effective Date of Relationship or Termination.
Additional information may be requested by the
Board.
Rule 407
Referral or Recommendation between a Licensee or Firm in Which a Licensee
is an Owner or Employee and a Non-licensed Office or Business Performing
Professional Services With Which the Licensee or Firm is Associated.
Any licensee or registered firm that accepts a client that
results from a recommendation or referral by a non-licensed office or business
with which the licensee or firm is associated shall disclose such association
or ownership to the client at the time the client is accepted. Similarly, a
licensee or registered firm that refers or recommends a client to a
non-licensed office or business with which the licensee or firm is associated
must disclose that relationship to the client at the time of the referral or
recommendation. No form is provided for such notices, but they must be in
writing and delivered to the client.
Rule
408
Notification to Client of Acceptance of Commissions or
Referral Fees.
A licensee or registered firm that is paid or expects to be paid
a commission or who accepts a referral fee shall disclose the existence of such
commission or referral fee to the client at the time the referral is made. A
licensee or registered firm who pays a referral fee to obtain a client shall
disclose to the client the existence of such payment of the fee prior to
accepting the client. No form is provided for such notices, but they must be in
writing and delivered to the client.
Rule
409
Communications.
A licensee shall, when requested, respond to communications from
the Board within thirty (30) days of the mailing of such communications by
registered or certified mail. The Executive Director of the Board may require a
response earlier than 30 days if he or she determines that an earlier response
is necessary to prevent public harm.
Rule
410
Change of Address or Business Affiliation.
A licensee shall comply with Board Rule 9 regarding change of
address or business affiliation.
Rule
411
Failure to File Tax Returns.
The willful failure by the licensee to file an income tax return,
including his or her own, and the resulting conviction, plea of guilty or nolo
contendere in connection therewith, shall be considered conduct discreditable
to the public accounting profession.
Rule
412
Criminal Convictions/Disciplinary Actions
a) A licensee who is convicted of or pleads
guilty or nolo contendre to any crime other than a traffic violation,
regardless of whether the adjudication of guilt or sentence is withheld,
suspended or deferred in any court of this state, another state, or the federal
government, shall make a written report thereof to the Board within thirty (30)
days after the conviction or plea. The report shall include the date of the
offense and of the conviction or plea, the name and address of the court, the
specific crime for which convicted or to which the plea is entered, the fine,
penalty and/or other sanctions imposed, and copies of the charging document and
judgment of conviction or other disposition, including probation or suspension
of sentence. The report shall also include the licensee's explanation of the
circumstances which led to the charge and conviction or plea, along with any
other information which the licensee wishes to submit.
b) A licensee who after the initiation of an
investigation, hearing or other administrative action surrenders or who has a
professional, vocational or occupational license, permit certification or
registration to practice public accountancy by an agency of any state or the
federal government denied, revoked, suspended or cancelled or who is subject to
any sanctions, including probation, involving such license, permit
certification or registration shall make a written report thereof to the Board
within thirty (30) days after such action. The report shall include the date of
the action, the name and address of the regulatory agency which has taken the
action and copies of documents pertaining thereto. The report shall also
include the licensee's explanation of the circumstances which led to the
action, along with any additional information the licensee wishes to
submit.
c) An applicant for a
license who has been convicted of or pleaded guilty or nolo contendre, as
described in paragraph (a) above, to any crime other than a traffic violation
or who after initiation of an investigation, hearing or other administrative
action has surrendered or has had a professional, vocational or occupational
license, permit, certification or registration denied, revoked, suspended or
canceled or who has been subjected to any sanctions, including probation, as
described in paragraph (b) above, involving such a license, permit,
certification or registration shall furnish the written report referred to in
paragraph (a) and/or (b) above to the Board at the time the application is
submitted if such action has already occurred; otherwise, such report shall be
made immediately after the action occurs.
