PROPOSED RULES
Supplemental Notice to WSR 04-17-085.
Preproposal statement of inquiry was filed as WSR 04-08-033.
Title of Rule and Other Identifying Information: WAC 4-25-400 What is the authority for and the purpose of the board's rules?, 4-25-410 Definitions, 4-25-510 What is the board's meeting schedule and how are officers elected?, 4-25-540 What rules govern the proceedings before the board?, 4-25-550 Do I need to notify the board if I change my address?, 4-25-551 Must I respond to inquiries from the board?, 4-25-610 Which rules govern the conduct of CPAs?, 4-25-620 What are the requirements concerning integrity and objectivity, 4-25-626 What restrictions govern commissions, referral, and contingent fees?, 4-25-630 What are the requirements concerning competence?, 4-25-631 With which rules, regulations and professional standards must a CPA, CPA firm, and firm owner comply?, 4-25-640 What are the requirements concerning records and clients confidential information?, 4-25-650 What acts are considered discreditable?, 4-25-660 What are the limitations on advertising and other forms of solicitation?, 4-25-661 What are the limitations regarding firm names?, 4-25-670 What enforcement actions must be reported to the board?, 4-25-710 What are the education requirements to qualify to apply for the CPA examination?, 4-25-720 How do I apply to take the CPA examination?, 4-25-721 What does the board consider to be cheating on the CPA examination, what actions may the board take if cheating is suspected, and what sanctions may the board impose if cheating occurs?, 4-25-730 What are the experience requirements in order to obtain a CPA license?, 4-25-735 What rules must a certificateholder comply with and how does a certificateholder apply for licensure?, 4-25-745 How do I apply for an initial CPA license?, 4-25-746 How do I apply for a Washington state CPA license if I hold a valid CPA license in another state?, 4-25-750 What are the CPA firm licensing requirements?, 4-25-783 How do I renew a Washington CPA certificate and/or license granted through foreign reciprocity?, 4-25-790 How do I renew my individual license, certificate, or registration as a resident nonlicensee firm owner?, 4-25-791 I am a certificateholder. Prior to July 1, 2001, I held a license. How do I apply to return to my previous status as a licensee?, 4-25-792 How do I reinstate a lapsed individual license, certificate, or registration as a resident nonlicensee firm owner?, 4-25-793 If I am retired, how do I apply to return to my previous status as a licensee or a certificateholder?, 4-25-795 How do I reinstate a revoked or suspended license, certificate, or registration as a resident nonlicensee firm owner?, 4-25-830 What are the CPE requirements?, 4-25-831 What are the program standards for CPE?, and 4-25-910 What are the bases for the board to impose discipline?
Hearing Location(s): Hilton Seattle Airport & Conference Center, 17620 Pacific Highway South, SeaTac, WA, on December 10, 2004, at 9:00 a.m.
Date of Intended Adoption: December 10, 2004.
Submit Written Comments to: Dana M. McInturff, Executive Director, P.O. Box 9131, Olympia, WA 98507-9131, e-mail webmaster@cpaboard.wa.gov, fax (360) 664-9190, by December 6, 2004.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by December 6, 2004, TTY (800) 833-6384 or (360) 664-9194.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The board conducted a public rule-making hearing on October 28, 2004. After considering testimony received the board made several revisions to its proposed rules and makes this supplemental notice to ensure broad participation on the rule proposals and rule-making process. The original purpose of the proposal filed as WSR 04-17-085 still stands. Please review WSR 04-17-085 and see below for revisions, additions, and clarifications to the proposal as previously filed, including the purpose, anticipated effects, and reasons for supporting each revision, addition, and/or clarification and the anticipated effects.
As stated in the original notice, WSR 04-17-085: General Note: The transition period implemented by the revisions to chapter 18.04 RCW (the Public Accountancy Act) passed through the 2001 legislative session (E2SSB 5593) ended June 30, 2004. Effective July 1, 2004, all certificateholders must use the CPA-Inactive title. Board rules currently include "certificateholders" in the definition of "CPA." Now that 100% of the certificateholders must use the title "CPA-inactive," the rules need to be changed to address the required "CPA-Inactive" title use and to also ensure that CPA-Inactive certificateholders understand the rules continue to apply to them. Virtually all of the rules need language clean up to address this clarification.
Additionally, the board is revising language to:
• Promote clarity.
• Ensure effective communication.
• Ensure fairness in interpretation and application of the rules.
• Promote efficiencies through minimizing gray areas.
This includes incorporating current policy into rule. Please see the original notice, WSR 04-17-085, for specifics and the following clarifications, revisions, additions to the original notice as previously filed.
| WAC section: | The suggested revision: |
| WAC 4-25-400 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-410 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
|
| WAC 4-25-510 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-540 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-550 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-551 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-610 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-620 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-626 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-630 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-631 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
• The U.S. General Accounting Office (GAO) to the General "Accountability" Office. Reason for supporting supplemental proposal: The GAO has changed its name. This change reflects the change for clarity. • Subsection (5) - statements of financial accounting standards and interpretations, and staff positions. Reason for supporting supplemental proposal: To reflect the exact name of the standards issued by FASB. |
| WAC 4-25-640 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-650 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-660 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
|
| WAC 4-25-661 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-670 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-710 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
• Changes the word upper "division” to upper "level” for consistency throughout the rule. • Change the definition of an upper level course to a course that frequently carries completion of a lower level course. • Moves the current 1.5 credit multiplier for graduate level course credits from board policy to the rule for the accounting subject portion of the accounting concentration requirement. Reason for supporting supplemental proposal: The board recognizes the need to provide greater flexibility to candidates in using community college accounting credits for meeting the accounting subject portion of the accounting concentration requirement. |
| WAC 4-25-720 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-721 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. |
| WAC 4-25-730 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-735 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-745 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
|
| WAC 4-25-746 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-750 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
• Subsection (5)(g), removes the requirement that a CPA firm must provide the names of corporate directors, limited liability company managers, and all officers. Reasons for supporting supplemental proposal: The suggested removal of language is based on the board's history of not collecting this information. • Subsections (6) and (9), the reasons/justification that the board will consider when considering a late fee waiver request or request for additional time to correct noncompliance with licensure requirements due to change in firm ownership or of an owner's credentials. Reasons for supporting supplemental proposal: The suggested language is based on the board's history of approving waiver requests. |
| WAC 4-25-783 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. |
| WAC 4-25-790 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
|
| WAC 4-25-791 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-792 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-793 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-795 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-830 | Please see WSR 04-17-085 for changes in
existing rules and reasons supporting proposal.
• Subsection (3), adds that a course instructor may submit documentation associated with an ethics CPE course to the board for approval. • Prior subsection (4), eliminates the twenty hours a year minimum. Reasons for supporting this proposal: The board believes CPAs are able to define the number of hours needed each year in order to comply with the one hundred twenty CPE hour requirement and ensure professional competency. • New subsection (7), changes "three-year" period to "thirty-six month" period for verbiage consistency with other rules. • New subsection (8), clarifies the reasons/justification that the board will consider when considering a CPE waiver request. The suggested language is based on the board's history of approving waiver requests. |
| WAC 4-25-831 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
| WAC 4-25-910 | Please see WSR 04-17-085 for changes in existing rules and reasons supporting proposal. The board does not propose supplemental changes to this proposal. |
Reasons Supporting Proposal: Generally, the board's goal with all of its rule proposals is to:
• Promote clarity.
• Ensure effective communication.
• Ensure fairness in interpretation and application of the rules.
• Promote efficiencies through minimizing gray areas.
For the board's specific reasons for supporting each revision, addition, and/or clarification to each rule as previously filed please see Purpose above.
Statutory Authority for Adoption:
Statute Being Implemented: See Statutory Authority above.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Primarily the Washington State Board of Accountancy, governmental.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, Olympia, Washington, (360) 586-0163.
No small business economic impact statement has been prepared under chapter 19.85 RCW.
A cost-benefit analysis is not required under RCW 34.05.328. The Board of Accountancy is not one of the agencies required to submit to the requirements of RCW 34.05.328.
November 1, 2004
Dana M. McInturff, CPA, CFE
Executive Director
OTS-7451.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-400
What is the authority for and the purpose
of the board's rules?
The Public Accountancy Act (act),
chapter 18.04 RCW, establishes the board as the licensing and
disciplinary agency for certified public accountants (CPA),
CPA-Inactive certificateholders, CPA firms, and owners of CPA
firms. The act authorizes the board to promulgate rules to
carry out the purpose of the act, which include:
• Protecting the public interest;
• Enhancing the reliability of information used for guidance in financial transactions or for accounting for or assessing financial status or performance;
• Establishing one set of qualifications to be a licensee;
• Assuring that CPAs practicing in Washington have substantially equivalent qualifications to those practicing in other states;
• Regulating ownership of CPA firms;
• Publishing consumer alerts and public protection information regarding persons and firms who violate the act or board rules; and
• Providing general consumer protection information to the public.
The board's rules, contained in chapter 4-25 WAC, encompass these subjects:
• Definitions;
• Administration of the board;
• Ethics and prohibited practices;
• Entry and renewal requirements;
• Continuing competency; and
• Regulation and enforcement.
[Statutory Authority: RCW 18.04.055. 01-22-036, § 4-25-400, filed 10/30/01, effective 12/1/01; 00-11-067, § 4-25-400, filed 5/15/00, effective 6/30/00; 93-12-063, § 4-25-400, filed 5/27/93, effective 7/1/93.]
OTS-7452.2
AMENDATORY SECTION(Amending WSR 03-24-033, filed 11/25/03,
effective 12/31/03)
WAC 4-25-410
Definitions.
For purposes of these rules
the following terms have the meanings indicated unless a
different meaning is otherwise clearly provided in these
rules:
(1) "Act" means the Public Accountancy Act codified as chapter 18.04 RCW.
(2) "Active individual participant" means a natural person whose primary occupation is at the firm or affiliated entity's business. An individual whose primary source of income from the business entity is provided as a result of passive investment is not an active individual participant.
(3) "Affiliated entity" means any entity, entities or persons that directly or indirectly through one or more relationships influences or controls, is influenced or controlled by, or is under common influence or control with other entities or persons. This definition includes, but is not limited to, parents, subsidiaries, investors or investees, coinvestors, dual employment or management in joint ventures or brother-sister entities.
(4) "Applicant" means an individual who has applied:
(a) To take the CPA exam;
(b) For a CPA license, a CPA firm license, registration as a resident nonlicensee owner, or practice privileges;
(c) To renew a CPA license, a CPA-Inactive certificate, a CPA firm license, or registration as a resident nonlicensee firm owner;
(d) To reinstate a CPA license, a CPA-Inactive certificate, or registration as a resident nonlicensee firm owner.
(5) "Attest services" are services performed by a licensee in accordance with:
(a) Statements on Auditing Standards and related Auditing Interpretations issued by the American Institute of Certified Public Accountants (AICPA);
(b) Statements on Standards for Accounting and Review
Services and related Accounting and Review Services
Interpretations issued by the AICPA; ((and))
(c) Statements on Standards for Attestation Engagements and related Attestation Engagements Interpretations issued by the AICPA; or
(d) Auditing standards issued by the Public Company Accounting Oversight Board (PCAOB).
(((5))) (6) "Audit," "review," and "compilation" are
terms reserved for use by licensees and individuals granted
practice privileges under the act.
(((6))) (7) "Board" means the board of accountancy
created by RCW 18.04.035.
(((7))) (8) "Certificate" means a certificate as a
CPA-Inactive issued in the state of Washington prior to July
1, 2001, as authorized by the act, unless otherwise defined in
rule.
(((8))) (9) "Certificateholder" means the holder of a
valid CPA-Inactive certificate ((as a certified public
accountant who has)) where the individual is not ((become)) a
licensee((, has maintained CPE requirements,)) and ((who does
not practice)) is prohibited from practicing public
accounting.
(((9))) (10) "Client" means the person or entity that
retains a CPA firm, a CPA, the CPA's firm, or a firm owner, an
affiliated entity, or the owner of an affiliated entity
through other than an employer/employee relationship.
(((10))) (11) "Commissions and referral fees" are
compensation arrangements where:
(a) The primary contractual relationship for the product or service is not between the client and the CPA firm, the CPA, the CPA's firm, or a firm owner;
(b) The CPA firm, the CPA, the CPA's firm, or a firm owner is not primarily responsible to the client for the performance or reliability of the product or service;
(c) The CPA firm, the CPA, the CPA's firm, or a firm owner adds no significant value to the product or service; or
(d) A third party instead of the client pays the CPA firm, the CPA, the CPA's firm, or a firm owner for the products or services.
(((11))) (12) "Contingent fees" are fees established for
the performance of any service pursuant to an arrangement in
which no fee will be charged unless a specified finding or
result is attained, or in which the amount of the fee is
otherwise dependent upon the finding or result of such
service.
(((12))) (13) "CPA" or "certified public accountant"
means a natural person holding a ((CPA certificate or a)) CPA
license to practice public accounting recognized in the state
of Washington, including a person granted practice privileges
pursuant to RCW 18.04.350(2).
(((13))) (14) "CPA-Inactive" means a natural person
holding a CPA-Inactive certificate recognized in the state of
Washington. An individual holding a CPA-Inactive certificate
is prohibited from practicing public accounting and may only
use the CPA-Inactive title if they are not offering
accounting, tax, tax consulting, management advisory, or
similar services to the public.
(15) "CPE" means continuing professional education (((see
also "Interactive self-study program"))).
(((14))) (16) "Entering the state" means an individual is
practicing public accounting in the state of Washington and
that individual spends more than ((ten percent of his or her
total)) one hundred billable work hours in any calendar year
on activities conducted within the state of Washington,
maintains an office or workstation in the state of Washington
or advertises to provide his or her services within the state
of Washington.
(((15) "Enterprise" means any person or entity, whether
organized for profit or not, with respect to which a CPA firm,
a CPA, a CPA's firm, or a firm owner performs professional
services.
(16))) (17) "Firm" means a sole proprietorship, a corporation, or a partnership. "Firm" also means a limited liability company formed under chapter 25.15 RCW.
(((17))) (18) "Generally accepted accounting principles"
(GAAP) is an accounting term that encompasses the conventions,
rules, and procedures necessary to define accepted accounting
practice at a particular time. It includes not only broad
guidelines of general application, but also detailed practices
and procedures. Those conventions, rules, and procedures
provide a standard by which to measure financial
presentations.
(((18))) (19) "Generally accepted auditing standards"
(GAAS) are guidelines and procedures, promulgated by the
AICPA, for conducting individual audits of historical
financial statements.
(((19))) (20) "Holding out" means any representation to
the public by the use of restricted titles as set forth in RCW 18.04.345 by a person or firm that the person or firm holds a
license or practice privileges under the act and that the
person or firm offers to perform any professional services to
the public as a licensee. "Holding out" shall not affect or
limit a person or firm not required to hold a license under
the act from engaging in practices identified in RCW 18.04.350.
(((20))) (21) "Inactive" means the ((certificate is in an
inactive status because a)) person((, who)) held a valid
certificate on June 30, 2001, has not met the current
requirements of licensure and has been granted CPA-Inactive
certificateholder status through the renewal process
established by the board. A CPA-Inactive may not practice
public accounting nor may the individual use the CPA-Inactive
title if they are offering accounting, tax, tax consulting,
management advisory, or similar services to the public.
(((21))) (22) "Independence" means an absence of
relationships that impair a licensee's impartiality and
objectivity in rendering attest services.
(((22))) (23) "Interactive self-study program" means a
CPE program ((designed to use learning methodologies that
simulate a classroom learning process by employing software or
administrative systems that provide significant ongoing
interactive feedback to learners regarding their learning
progress)) that provides feedback throughout the course.
(((23))) (24) "IRS" means Internal Revenue Service.
(((24))) (25) "License" means a license to practice
public accountancy issued to an individual ((under the act))
or a ((license issued to a)) firm under the act.
(((25))) (26) "Licensee" means ((the holder of)) an
individual or firm holding a valid license to practice public
accountancy issued under the act.
(((26))) (27) "Manager" means a manager of a limited
liability company licensed as a firm under the act.
(((27))) (28) "NASBA" means the National Association of
State Boards of Accountancy.
(((28))) (29) "Natural person" means a living, human
being.
(((29))) (30) "Nonlicensee owner" means a CPA firm owner
who is not licensed in any state to practice public
accountancy.
(((30))) (31) "PCAOB" means Public Company Accounting
Oversight Board.
(((31))) (32) "Peer review" means a study, appraisal, or
review of one or more aspects of the attest work of a licensee
or licensed firm in the practice of public accountancy, by a
person or persons who hold licenses and who are not affiliated
with the person or firm being reviewed, including a peer
review, or any internal review or inspection intended to
comply with quality control policies and procedures, but not
including the "quality assurance review" under RCW 18.04.025(14).
(((32))) (33) "Practice privileges" means an individual:
• Has a principal place of business outside of Washington state;
• Is licensed to practice public accounting in another state;
• Has notified the board of intent to enter the state;
• Meets the statutory criteria for a grant of privileges;
• Is subject to discipline in the state of Washington; and
• Must comply with the act and all board rules applicable to Washington state licensees to retain the privilege.
(((33))) (34) "Principal place of business" means a
single fixed location designated by the individual from which
the individual directs, controls, and coordinates the majority
of his or her business activities.
(((34))) (35) "Public practice" or the "practice of
public accounting" means performing or offering to perform by
a person or firm holding itself out to the public as a
licensee, or as an individual holding practice privileges, for
a client or potential client, one or more kinds of services
involving the use of accounting or auditing skills, including
the issuance of "audit reports," "review reports," or
"compilation reports" on financial statements, or one or more
kinds of management advisory, or consulting services, or the
preparation of tax returns, or the furnishing of advice on tax
matters. The "practice of public accounting" shall not
include practices that are permitted under the provisions of
RCW 18.04.350(6) by persons or firms not required to be
licensed under the act.
(((35))) (36) "Quality assurance review or QAR" is the
process, established by and conducted at the direction of the
board, of study, appraisal, or review of one or more aspects
of the attest work of a licensee or licensed firm in the
practice of public accountancy, by a person or persons who
hold licenses and who are not affiliated with the person or
firm being reviewed.
(((36))) (37) "Reciprocity" means board recognition of
licenses, permits, certificates or other ((professional))
public accounting credentials of another jurisdiction that the
board will rely upon in full or partial satisfaction of
licensing requirements.
(((37))) (38) "Referral fees" see definition of
"commissions and referral fees" in subsection (((10))) (11) of
this section.
(((38))) (39) "Reports on financial statements" means any
reports or opinions prepared by licensees, based on services
performed in accordance with generally accepted auditing
standards, standards for attestation engagements, or standards
for accounting and review services, as to whether the
presentation of information used for guidance in financial
transactions or for accounting for or assessing the status or
performance of ((commercial and noncommercial enterprises)) an
entity, whether public, private, or governmental, conforms
with generally accepted accounting principles or other
comprehensive bases of accounting. "Reports on financial
statements" does not include services referenced in RCW 18.04.350(6) provided by persons not holding a license under
the act.
(((39))) (40) "Representing oneself" for the purposes of
RCW 18.04.295(2) and WAC 4-25-910(3), means having a license,
practice privilege, certificate or registration that entitles
the holder to use the title "CPA," "CPA-Inactive," or be a
nonlicensee firm owner.
(((40))) (41) "Rules of professional conduct" means rules
adopted by the board to govern the conduct of CPAs and CPA
firms while representing themselves to others as CPAs. These
rules also govern the conduct of CPA-Inactive
certificateholders, nonlicensee firm owners, and ((all persons
using the title CPA or CPA-Inactive)) persons granted practice
privileges pursuant to RCW 18.04.350(2).
(((41))) (42) "SEC" means the Securities and Exchange
Commission.
(((42))) (43) "State" includes the states and territories
of the United States, including the District of Columbia,
Puerto Rico, Guam, and the United States Virgin Islands.
(((43))) (44) "Statements on auditing standards (SAS)"are interpretations of the generally accepted auditing
standards and are issued by the Auditing Standards Board of
the AICPA. Licensees are required to adhere to these
standards in the performance of audits of financial
statements.
(((44))) (45) "Statements on standards for accounting and
review services (SSARS)" are standards, promulgated by the
AICPA, to give guidance to licensees who are associated with
the financial statements of nonpublic companies and issue
compilation or review reports.
(((45))) (46) "Statements on standards for attestation
engagements (SSAE)" are guidelines, promulgated by the AICPA,
for use by licensees in attesting to assertions involving
matters other than historical financial statements and for
which no other standards exist.
[Statutory Authority: RCW 18.04.055. 03-24-033, § 4-25-410, filed 11/25/03, effective 12/31/03. Statutory Authority: RCW 18.04.055(16). 02-04-064, § 4-25-410, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.04.055(11). 01-11-124, § 4-25-410, filed 5/22/01, effective 6/30/01; 98-12-020, § 4-25-410, filed 5/27/98, effective 6/27/98; 94-23-071, § 4-25-410, filed 11/15/94, effective 12/16/94.]
OTS-7453.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-510
What is the board's meeting schedule and
how are officers elected?
Regular board meetings begin at
9:00 a.m. on the last Friday of the month in the months of
January, April((,)) and July ((and October)). The board holds
an annual meeting beginning at 9:00 a.m. on the ((second))
last Friday of ((December)) October.
The board consists of nine members. At the annual
meeting the board elects the chair, vice-chair, and secretary
from its members. The newly elected officers assume the
duties of their offices ((at the conclusion of the meeting
and)) on January 1 following the annual board meeting.
Officers serve a term of one year((. Officers)) and can be
reelected for one additional term.
Either the chair or a quorum of the board has the authority to call meetings of the board. The chair presides at all meetings. In the event of the chair's absence or inability to act, the vice-chair presides. The board determines other duties of the officers.
The board's meetings are open public meetings conducted pursuant to chapter 42.30 RCW. WAC 4-25-521 provides information on how to contact the board's office for meeting times and locations or additional information regarding the board's activities.
[Statutory Authority: RCW 18.04.055 and 42.30.070. 01-22-036, § 4-25-510, filed 10/30/01, effective 12/1/01; 00-11-068, § 4-25-510, filed 5/15/00, effective 6/30/00; 99-18-111, § 4-25-510, filed 9/1/99, effective 1/1/00. Statutory Authority: RCW 18.04.055. 93-12-077, § 4-25-510, filed 5/27/93, effective 7/1/93.]
OTS-7454.1
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-540
What rules govern the proceedings before
the board?
Except where they are inconsistent with the rules
in this chapter and subject to additional rules that the board
may adopt from time to time, practice and procedure in and
before the board are governed by the uniform procedural rules
codified in the Washington Administrative Code, chapter 10-08 WAC.
For certain types of decisions, the board has adopted an appeal process authorized by RCW 34.05.482 through 34.05.494 which is called a brief adjudicative proceeding. Decisions to which this appeal process will be applied are:
(1) Denials of initial individual license applications, renewals, or applications for reinstatement;
(2) Denials of CPA-Inactive certificate renewals or applications for reinstatement;
(3) Denials of practice privilege;
(4) Denials of initial resident nonlicensee firm owner registration applications, renewals, or applications for reinstatement;
(5) Denials of initial firm license applications ((and)),
renewals, and amendments;
(6) Denials of exam applications; and
(7) A determination whether a licensee ((or)),
CPA-Inactive certificateholder, or registered nonlicensee firm
owner has been certified by a lending agency and reported for
nonpayment or default on a federally or state-guaranteed
student loan or service conditional scholarship. To appeal a
decision you must submit your request for a brief adjudicative
proceeding, in writing, to the board within thirty days after
the decision by board staff is posted in the U.S. mail. The
presiding officer for the brief adjudicative proceedings is
the executive director, or designee. After consulting with a
board member, the executive director, or designee, renders a
decision either upholding or overturning the decision by board
staff. This decision, called an order, is mailed to you.
If you are dissatisfied with the order in the brief adjudicative proceeding, you may appeal to the board's vice-chair, or designee. This appeal process is called an administrative review. Your appeal must be received by the board, orally or in writing, within twenty-one days after the brief adjudicative proceedings order is posted in the U.S. mail. The vice-chair, or designee, considers your appeal and either upholds or overturns the brief adjudicative proceeding order. The vice-chair's, or designee's, decision, also called an order, is mailed to you.
[Statutory Authority: RCW 18.04.055(1), 34.05.220, and 34.05.482. 02-04-064, § 4-25-540, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.04.055(1) and 34.05.482. 00-11-070, § 4-25-540, filed 5/15/00, effective 6/30/00; 98-12-022, § 4-25-540, filed 5/27/98, effective 6/27/98. Statutory Authority: RCW 18.04.055. 93-12-074, § 4-25-540, filed 5/27/93, effective 7/1/93.]
OTS-7455.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-550
Do I need to notify the board if I change
my address?
Yes. All CPAs, CPA-Inactive certificateholders,
CPA firms licensed with the board, ((and)) individuals
registered with the board as resident nonlicensee firm owners,
and applicants must notify the board in writing within thirty
days of any change of address. Firms must notify the board of
any opening, closing, or relocation of the main office or a
branch office.
[Statutory Authority: RCW 18.04.055(16). 01-22-036, § 4-25-550, filed 10/30/01, effective 12/1/01. Statutory Authority: RCW 18.04.055. 98-12-023, § 4-25-550, filed 5/27/98, effective 6/27/98; 93-12-073, § 4-25-550, filed 5/27/93, effective 7/1/93.]
OTS-7456.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-551
Must I respond to inquiries from the board?
Yes. All CPAs, CPA-Inactive certificateholders, CPA firms
licensed with the board, ((and)) individuals registered with
the board as resident nonlicensee firm owners, and applicants
must respond, in writing, to board communications requesting a
response. Your response must be made within twenty days of
the date the board's communication is posted in the U.S. mail.
Communications from the board to you are directed to the last
address you furnished the board.
[Statutory Authority: RCW 18.04.055(16). 01-22-036, § 4-25-551, filed 10/30/01, effective 12/1/01. Statutory Authority: RCW 18.04.055. 98-12-047, § 4-25-551, filed 5/29/98, effective 6/29/98; 93-12-072, § 4-25-551, filed 5/27/93, effective 7/1/93.]
OTS-7457.1
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-610
Which rules govern the conduct of CPAs,
CPA-Inactive certificateholders, CPA firms, and firm owners?
The rules that govern the conduct of CPAs, CPA-Inactive
certificateholders, CPA firms, and firm owners are as follows:
(1) Professional judgment - In carrying out their responsibilities, a person representing oneself as a CPA, CPA-Inactive certificateholder, or using the CPA or CPA-Inactive title, CPA firms, and firm owners must exercise professional judgment in all their activities.
(2) The public interest - A person representing oneself as a CPA, CPA-Inactive certificateholder, or using the CPA or CPA-Inactive title, CPA firms, and firm owners must accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.
(3) Integrity - To maintain and broaden public confidence a person representing oneself as a CPA, CPA-Inactive certificateholder, or using the CPA or CPA-Inactive title, CPA firms, and firm owners must perform all professional responsibilities with the highest sense of honesty.
(4) Objectivity - Objectivity is to be maintained by a person representing oneself as a CPA, CPA-Inactive certificateholder, or using the CPA or CPA-Inactive title, CPA firms, and firm owners. Specifically, a person representing oneself as a CPA, CPA-Inactive, or using the CPA or CPA-Inactive title, CPA firms, and firm owners must:
(((1))) (a) Avoid rendering professional services where
actual or perceived conflicts of interest exist;
(((2))) (b) Be independent in fact and appearance when
providing attestation services.
(5) Due care - A person representing oneself as a CPA, CPA-Inactive certificateholder, or using the CPA or CPA-Inactive title, CPA firms, and firm owners must comply with federal and state laws and the profession's technical and ethical standards, maintain competence and strive to improve the quality of services, and discharge professional responsibility to the best of the person's or the firm's ability.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-610, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-610, filed 10/28/93, effective 11/28/93.]
OTS-7458.1
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-620
What are the requirements concerning
integrity and objectivity?
When offering or performing
services, CPAs, CPA-Inactive certificateholders, CPA firms,
and firm owners must:
• Remain honest and objective;
• Not misrepresent facts;
• Not subordinate their judgment to others; and
• Remain free of conflicts of interest unless such conflicts are specifically permitted by board rule or professional standards listed in WAC 4-25-631.
If the language of the professional standards listed in WAC 4-25-631 differ from or conflict with specific board rules, board rules prevail.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-620, filed 1/31/02, effective 3/15/02; 98-12-048, § 4-25-620, filed 5/29/98, effective 6/29/98. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-620, filed 10/28/93, effective 11/28/93.]
OTS-7459.1
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-626
What restrictions govern commissions,
referral, and contingent fees?
For the purposes of this
section, the term "licensed firm" includes any affiliated
((entities)) entity(ies) and the term "firm owner" includes
the owner(s) of any affiliated ((entities)) entity(ies).
(1) A CPA, CPA-Inactive certificateholder, a firm owner, or a licensed firm must not for a commission recommend or refer to a client any product or service, or for a commission recommend or refer any product or service to be supplied by a client, or receive a commission, when the CPA, CPA-Inactive certificateholder, the CPA's or CPA-Inactive certificateholder's firm, the owner's firm, or the firm performs attest services for that client. This prohibition applies during the period in which the CPA, CPA-Inactive certificateholder, the CPA's or CPA-Inactive certificateholder's firm, the owner's firm, or the firm is engaged to perform the attest services and the period covered by any historical financial statements involved in the attest services.
(2) A CPA, ((a)) CPA-Inactive certificateholder, licensed
firm, or ((a)) firm owner who is not prohibited by this
section from performing services for or receiving a commission
and who is paid or expects to be paid a commission must
disclose, consistent with the requirements set forth in
subsection (7) of this section, that fact to any person or
entity to whom the CPA, CPA-Inactive certificateholder, the
CPA's or CPA-Inactive certificateholder's firm, the firm
owner, the owner's firm, or the licensed firm recommends or
refers a product or service to which the commission relates.
(3) A CPA, ((a)) CPA-Inactive certificateholder, firm
owner, or ((a)) licensed firm accepting a referral fee for
recommending or referring any services to any person or entity
or who pays a referral fee to obtain a client must disclose,
consistent with the requirements set forth in subsection (7)
of this section, such acceptance or payment to the client.
(4) A CPA, ((a)) CPA-Inactive certificateholder, firm
owner, or ((a)) licensed firm must not:
(a) Perform for a contingent fee any professional services for, or receive such a fee from a client for whom the CPA, CPA-Inactive certificateholder, the CPA's or CPA-Inactive certificateholder's firm, the firm owner, the owner's firm, or the licensed firm performs attest services; or
(b) Prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client.
(5) The prohibition in subsection (4)(a) of this section applies during the period in which the CPA, CPA-Inactive certificateholder, the CPA's or CPA-Inactive certificateholder's firm, the owner's firm, or the licensed firm is engaged to perform the attest services and the period covered by any historical financial statements involved in the attest services.
(6) Fees are not considered contingent if fixed by courts or other public authorities, or, in tax matters, if determined based on the results of judicial proceedings or the findings of governmental agencies. Fees may vary depending, for example, on the complexity of services rendered.
(7) All CPAs, CPA-Inactive certificateholders, firm owners, and licensed firms who accept commission, referral and contingent fee arrangements must:
(a) Disclose the arrangement in writing and in advance of client acceptance;
(b) Disclose the method of calculating the fee or amount of fee;
(c) Specify the CPA's, CPA-Inactive certificateholder's, or firm owner's role as the client's advisor; and
(d) Obtain the client's consent to the fee arrangement in writing.
(8) Nothing in this rule shall be interpreted to preclude a CPA, CPA-Inactive certificateholder, firm owner, or licensed firm from purchasing, selling, or merging all or a portion of a CPA practice or to require disclosure to clients of terms or payments made or received pursuant to the purchase, sale, or merger.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-626, filed 1/31/02, effective 3/15/02; 01-03-012, § 4-25-626, filed 1/5/01, effective 2/5/01; 98-12-055, § 4-25-626, filed 5/29/98, effective 6/29/98.]
OTS-7460.1
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-630
What are the requirements concerning
competence?
CPAs, CPA-Inactive certificateholders, CPA firms,
and firm owners must not undertake to perform any service as a
CPA, CPA-Inactive certificateholder, CPA firm, or as a firm
owner unless they can reasonably expect to complete the
service with professional competence.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-630, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-630, filed 10/28/93, effective 11/28/93.]
OTS-7461.3
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-631
With which rules, regulations and
professional standards must a CPA, CPA-Inactive
certificateholder, CPA firm, and firm owner comply?
CPAs,
CPA-Inactive certificateholders, CPA firms, and firm owners
must comply with rules, regulations, and professional
standards promulgated by the appropriate bodies for each
service undertaken. However, if the requirements found in the
professional standards listed in this section differs from the
requirements found in specific board rules, board rules
prevail.
Such appropriate bodies include, but are not limited to,
the Securities and Exchange Commission (SEC); the Public
Company Accounting Oversight Board (PCAOB); the Financial
Accounting Standards Board (FASB); the Governmental Accounting
Standards Board (GASB); the Cost Accounting Standards Board
(CASB); the Federal Accounting Standards Advisory Board
(FASAB); the U.S. General ((Accounting)) Accountability Office
(GAO); the Federal Office of Management and Budget (OMB); the
Internal Revenue Service (IRS); the American Institute of
Certified Public Accountants (AICPA), and federal, state, and
local audit, regulatory and tax agencies.
Such standards include:
(1) Statements on Auditing Standards and related Auditing Interpretations issued by the AICPA;
(2) Statements on Standards for Accounting and Review Services and related Accounting and Review Services Interpretations issued by the AICPA;
(3) Statements on Governmental Accounting and Financial
Reporting ((Services)) Standards issued by GASB;
(4) Statements on Standards for Attestation Engagements and related Attestation Engagements Interpretations issued by AICPA;
(5) Statements of Financial Accounting Standards((,)) and
Interpretations, and Staff Positions issued by FASB, together
with those Accounting Research Bulletins and Accounting
Principles Board Opinions which are not superseded by action
of the FASB;
(6) Statement on Standards for Consulting Services issued by the AICPA;
(7) Statements on Quality Control Standards issued by the AICPA;
(8) Statements on Standards for Tax Services and Interpretation of Statements on Standards for Tax Services issued by the AICPA;
(9) Statements on Responsibilities in Personal Financial Planning Practice issued by the AICPA;
(10) Statements on Standards for Litigation Services issued by the AICPA;
(11) Professional Code of Conduct issued by the AICPA including interpretations and ethics rulings;
(((11))) (12) Governmental Auditing Standards issued by
the U.S. General Accounting Office;
(((12))) (13) AICPA Industry Audit and Accounting Guides;
((and
(13))) (14) SEC Rules, Concept Releases, Interpretative Releases, and Policy Statements;
(15) Standards issued by the PCAOB; and
(16) IRS Circular 230.
If the professional services are governed by standards
not included in subsections (1) through (((13))) (16) of this
section, you must:
• Justify the departure from the standards listed in
subsections (1) through (((13))) (16) of this section;
• Determine what standards are applicable; and
• Comply with the applicable standards.
Copies of the above standards may be inspected at the board's office.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-631, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.04.055 (2) and (6). 00-11-071, § 4-25-631, filed 5/15/00, effective 6/30/00. Statutory Authority: RCW 18.04.055(6). 98-12-050, § 4-25-631, filed 5/29/98, effective 6/29/98. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-631, filed 10/28/93, effective 11/28/93.]
OTS-7462.1
AMENDATORY SECTION(Amending WSR 03-24-033, filed 11/25/03,
effective 12/31/03)
WAC 4-25-640
What are the requirements concerning
records and clients confidential information?
(1) Client:
The term "client" as used throughout this section includes
former and current clients. For purposes of this section, a
client relationship has been formed when confidential
information has been disclosed by a prospective client in an
initial interview to obtain or provide professional services.
(2) Property of the licensee: In the absence of an express agreement between the licensee and the client to the contrary, all statements, records, schedules, working papers, and memoranda made by a licensee incident to or in the course of professional service to clients, except reports submitted by a licensee, are the property of the licensee.
(3) Sale or transfer of client records: No statement, record, schedule, working paper, or memorandum, including electronic records, may be sold, transferred, or bequeathed without the consent of the client or his or her personal representative or assignee, to anyone other than one or more surviving partners, shareholders, or new partners or new shareholders of the licensee, partnership, limited liability company, or corporation, or any combined or merged partnership, limited liability company, or corporation, or successor in interest.
(4) Confidential client communication or information: A licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee must not without the consent of the client or the heirs, successors or personal representatives of the client disclose any confidential communication or information pertaining to the client obtained in the course of performing professional services.
This rule does not:
(a) Affect in any way a licensee's, CPA-Inactive certificateholder's, firm owner's, or employee of a licensee's obligation to comply with a lawfully issued subpoena or summons;
(b) Prohibit disclosures in the course of a quality review of a licensee's attest services;
(c) Preclude a licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee from responding to any inquiry made by the board or any investigative or disciplinary body established by law or formally recognized by the board. However, a licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee must not disclose or use to their own advantage any confidential client information that comes to their attention in carrying out their official responsibilities; or
(d) Preclude a review of client information in conjunction with a prospective purchase, sale, or merger of all or part of a CPA's practice.
(5) Client records: Licensees, CPA-Inactive certificateholders, and firm owners must furnish to their client or heirs, successors or personal representatives, upon request and reasonable notice:
(a) A copy of the licensee's, CPA-Inactive certificateholder's or firm owner's records, schedules, and electronic documents, to the extent that such records and schedules would ordinarily constitute part of the client's records and are not otherwise available to the client; and
(b) Any accounting or other records belonging to, or obtained from or on behalf of, the client, that the licensee, CPA-Inactive certificateholder, or firm owner removed from the client's premises or received for the client's account, including electronic documents; but the licensee, CPA-Inactive certificateholder, or firm owner may make and retain copies of such documents of the client when they form the basis for work done by the licensee, CPA-Inactive certificateholder, or firm owner.
Licensees, CPA-Inactive certificateholders, and firm owners must not refuse to return client records, including electronic documents, pending client payment of outstanding fees.
(6) Audit and review record retention requirements: For a period of seven years after a licensee concludes an audit or review the licensee must retain the following records and documents, including electronic records unless hard copies of such exist:
(a) Records forming the basis of the audit or review;
(b) Records documenting audit or review procedures applied;
(c) Records documenting evidence obtained including financial data, analyses, conclusions, and opinions related to the audit or review engagement; and
(d) Records documenting conclusions reached by the licensee in the audit or review engagement.
[Statutory Authority: RCW 18.04.055(2), 18.04.390 (4)(b) and 18.04.405(1). 03-24-033, § 4-25-640, filed 11/25/03, effective 12/31/03. Statutory Authority: RCW 18.04.055(2). 02-22-082, § 4-25-640, filed 11/5/02, effective 12/31/02. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-640, filed 10/28/93, effective 11/28/93.]
OTS-7463.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-650
What acts are considered discreditable?
CPAs, CPA-Inactive certificateholders, CPA firms, and firm
owners must not:
• Commit, or allow others to commit in their name, any act that reflects adversely on their fitness to represent themselves as a CPA, CPA-Inactive certificateholder, CPA firm, or a firm owner;
• Seek to obtain clients by the use of coercion, intimidation or harassing conduct; or
• Permit others to carry out on their behalf, either with or without compensation, acts which violate the rules of conduct.
[Statutory Authority: RCW 18.04.055(2). 01-22-036, § 4-25-650, filed 10/30/01, effective 12/1/01. Statutory Authority: RCW 18.04.055. 93-22-090, § 4-25-650, filed 11/2/93, effective 12/3/93.]
OTS-7464.2
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-660
What are the limitations on advertising and
other forms of solicitation?
(1) CPAs, CPA-Inactive
certificateholders, CPA firms, and firm owners must not make
false, fraudulent, misleading, deceptive or unfair statements
or claims regarding their services. Examples of such
statements or claims include, but are not limited to,
statements or claims which:
(a) Contain a misrepresentation of fact;
(b) Fail to make full disclosure of relevant facts;
(c) Imply your professional services are of an exceptional quality, which is not supported by verifiable facts;
(d) Create false expectations of favorable results;
(e) Imply educational or professional attainments, specialty designations, or licensing recognition not supported in fact; or
(f) Represent that professional services will be performed for a stated fee when this is not the case, or do not disclose variables that may reasonably be expected to affect the fees that will be charged.
(2) If you are a licensee using the CPA title to perform or solicit services via a website, you must either include a statement on the website that you hold a current Washington state license or provide a name and contact information for an individual in your organization who will respond to inquiries regarding individual license information within seven business days. The required information must be clearly visible and prominently displayed.
(3) If you are a CPA-Inactive certificateholder using the
((CPA or)) CPA-Inactive title to perform or solicit services
via a website you must clearly, visibly, and prominently
display the following on the website:
(a) That you hold a current Washington state CPA-Inactive
certificate((.));
(b) That you do not hold a license to practice public
accounting((.)) ; and
(c) That Washington state law does not allow a
((certificateholder or a)) CPA-Inactive certificateholder to
offer or provide accounting, auditing, attest, reports on
financial statements, tax preparation or advisory, management
advisory, consulting or similar services to the public in
association with the use of the title "CPA," "Certified Public
Accountant," "CPA-Inactive," or "Certified Public
Accountant-Inactive."
(((d) After your first renewal cycle, you must display
the information that you are a "CPA-Inactive."))
(4) If you are a resident nonlicensee owner of a firm licensed by the board and you perform or solicit services in association with the firm via a website, you must clearly, visibly, and prominently display a statement that you are a nonlicensee owner registered with the Washington state board of accountancy or provide a name and contact information for an individual in your organization who will respond to inquiries regarding registration information within seven business days.
[Statutory Authority: RCW 18.04.055(2). 02-04-064, § 4-25-660, filed 1/31/02, effective 3/15/02; 00-11-072, § 4-25-660, filed 5/15/00, effective 6/30/00. Statutory Authority: RCW 18.04.055. 93-22-090, § 4-25-660, filed 11/2/93, effective 12/3/93.]
OTS-7465.1
AMENDATORY SECTION(Amending WSR 01-22-036, filed 10/30/01,
effective 12/1/01)
WAC 4-25-661
What are the limitations regarding
individual and firm names?
A firm name that does not consist
of the name(s) of one or more present or former owners must be
approved in advance by the board as not being deceptive or
misleading.
Misleading or deceptive firm names are prohibited. The following are examples of misleading firm names. The board does not intend this listing to be all inclusive. The firm name:
(1) Implies it is a legal entity when it is not such an entity (as by the use of the designations "P.C.," "P.S.," "Inc. P.S.," or "L.L.C.");
(2) Implies the existence of a partnership when one does not exist;
(3) Includes the name of a person who is neither a present nor a past owner of the firm; or
(4) Implies educational or professional attainments, specialty designations, or licensing recognition not supported in fact.
A licensee may not operate under an alias, a firm name, title, or "DBA" that differs from the firm name that is registered with the board. A CPA or a CPA-Inactive certificateholder may not use the title in association with a name that is not registered with the board.
[Statutory Authority: RCW 18.04.055(8). 01-22-036, § 4-25-661, filed 10/30/01, effective 12/1/01; 00-11-073, § 4-25-661, filed 5/15/00, effective 6/30/00. Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-661, filed 10/28/93, effective 11/28/93.]
OTS-7466.1
AMENDATORY SECTION(Amending WSR 03-24-033, filed 11/25/03,
effective 12/31/03)
WAC 4-25-670
What enforcement actions must be reported
to the board?
(1) A licensee, CPA-Inactive certificateholder,
or nonlicensee firm owner must notify the board, on a form and
in the manner prescribed by board policy, within thirty days
of the issuance of:
(a) A sanction, order, suspension, revocation, or modification of a license, certificate, permit or practice rights by the SEC, PCAOB, IRS, or another state board of accountancy for any cause other than failure to pay a professional license fee by the due date or failure to meet the continuing professional education requirements of another state board of accountancy; or
(b) Charges filed by the SEC, IRS, PCAOB, another state board of accountancy, or a federal or state taxing, insurance or securities regulatory body that the licensee, CPA-Inactive certificateholder, or nonlicensee firm owner committed a prohibited act that would be a violation of board ethical or technical standards.
(2) Sole practitioners are to report action pursuant to subsection (1) of this section taken against the sole practitioner, the sole practitioner's individual CPA license, the CPA firm, or the CPA firm license.
(3) Licensed CPA firms are not required to report on action taken against owners, principals, partners, or employees.
(4) If you hold a license or CPA-Inactive certificate issued through the foreign reciprocity provisions of the act, you must notify the board of any investigations undertaken, or sanctions imposed, by a foreign credentialing body against your foreign credential within thirty days of your receiving notice that an investigation has begun or a sanction was imposed.
[Statutory Authority: RCW 18.04.195 (10)(b) and 18.04.215 (9)(b). 03-24-033, § 4-25-670, filed 11/25/03, effective 12/31/03.]
OTS-7467.2
AMENDATORY SECTION(Amending WSR 02-04-064, filed 1/31/02,
effective 3/15/02)
WAC 4-25-710
What are the education requirements to
qualify to apply for the CPA examination?
(1) Education
requirements: Effective July 1, 2000, to apply for the CPA
examination you must have completed:
(a) At least one hundred fifty semester hours (two hundred twenty-five quarter hours) of college education, including
(b) A baccalaureate or higher degree; and
(c) An accounting concentration as defined as at least:
(i) Twenty-four semester hours (thirty-six quarter hours)
or the equivalent in accounting subjects of which at least
fifteen semester hours must be at the upper ((division)) level
or graduate level (an upper ((division)) level course is
defined as a course ((only available to students who have
standing as a junior, senior, or graduate;)) that frequently
carries completion of ((an elementary)) a lower level
course(s) as a prerequisite ((for admission; and is usually
designated as "upper division" by the school offering the
course); and)). For the purposes of meeting this subsection,
individuals will be given 1.5 credits for each 1.0 graduate
level credit of accounting courses taken; and
(ii) Twenty-four semester hours (thirty-six quarter hours) or the equivalent in business administration subjects at the undergraduate or graduate level.
(d) The board will not recognize accounting concentration credits awarded for "life experience" or similar activities retroactively evaluated and recognized by colleges or universities. This restriction is not intended to apply to internships prospectively approved by colleges or universities.
(2) One hundred eighty-day provision: If you expect to
meet the education requirements of this section within one
hundred ((twenty)) eighty days following the examination, you
((are)) will be eligible to take the CPA examination provided
you submit, on a form provided by the board's designee, signed
confirmation from the university that you are enrolled in
stating that you will meet the board's education requirements
within one hundred ((twenty)) eighty days following the day
you first sit for any one section of the examination. ((If
you are admitted to the examination on the expectation that
you will complete the educational requirement within one
hundred twenty days,)) If you apply for the exam using the one
hundred eighty-day provision, then within two hundred ten days
of first sitting for any section of the exam, you must provide
the board complete documentation demonstrating that you met
the board's education requirements within one hundred eighty
days of first sitting for any one section of the exam. If you
do not provide such documentation within the required two
hundred ten-day time period, your exam score(s) will not be
released and you will not be given credit for ((the
examination or)) any section(s) of the examination ((unless
you demonstrate you meet the education requirements within one
hundred twenty days of that sitting)). Applicants failing to
provide such documentation must reapply as a first-time
applicant.
(((2))) (3) Education obtained outside the United States:
If you obtained all or a portion of your education outside the
United States you must have your education evaluated by a
board approved foreign education credential evaluation
service. The board will establish the criteria for board
approval of foreign education credential evaluation services.
The board will not provide education credential evaluation
services.
(((3))) (4) Semester versus quarter hours: As used in
these rules, a "semester hour" means the conventional college
semester hour. Your quarter hours will be converted to
semester hours by multiplying them by two-thirds.
(((4))) (5) Accreditation standards: For purposes of
this rule, the board will recognize colleges and universities
which are accredited in accordance with (a) through (c) of
this subsection.
(a) ((An)) The accredited college or university ((is a
four-year degree-granting college or university)) must be
accredited at the time your ((degree)) education was
((received)) earned by virtue of membership in one of the
following accrediting agencies:
(i) Middle States Association of College and Secondary Schools;
(ii) New England Association of Schools and Colleges;
(iii) North Central Association of Colleges and Secondary Schools;
(iv) Northwest Commission on Colleges and Universities (formerly the Northwest Association of Schools and Colleges);
(v) Southern Association of Colleges and Schools;
(vi) Western Association of Schools and Colleges; and
(vii) Accrediting Commission for Independent Colleges and Schools, or its predecessor, the Accrediting Commission of the Association of Independent Colleges and Schools.
(b) If an institution was not accredited at the time your
((degree)) education was ((received)) earned but is so
accredited at the time your application is filed with the
board, the institution will be deemed to be accredited for the
purpose of (a) of this subsection provided that it:
(i) Certifies that your total educational program would qualify the applicant for graduation with a baccalaureate degree during the time the institution has been accredited; and
(ii) Furnishes the board satisfactory proof, including college catalogue course numbers and descriptions, that the preaccrediting courses used to qualify you for a concentration in accounting are substantially equivalent to postaccrediting courses.
(c) If your degree was received at an accredited college or university as defined by (a) or (b) of this subsection, but the educational program which was used to qualify you for a concentration in accounting included courses taken at nonaccredited institutions, either before or after graduation, such courses will be deemed to have been taken at the accredited institution from which your degree was received, provided the accredited institution either:
(i) Has accepted such courses by including them in its official transcript; or
(ii) Certifies to the board that it will accept such courses for credit toward graduation.
(((5))) (6) Alternative to accreditation: If you
graduated from a four-year degree-granting institution that
was not accredited at the time your degree was received or at
the time your application was filed, you will be deemed to be
a graduate of a four-year accredited college or university if
a credentials evaluation service approved by the board
certifies that your degree is equivalent to a degree from an
accredited college or university as defined in subsection
(((4))) (5) of this section. The board does not provide
education credential evaluation services.
[Statutory Authority: RCW 18.04.055(5) and 18.04.105(1). 02-04-064, § 4-25-710, filed 1/31/02, effective 3/15/02. Statutory Authority: RCW 18.04.055(5). 95-20-065, § 4-25-710, filed 10/3/95, effective 11/3/95; 93-12-071, § 4-25-710, filed 5/27/93, effective 7/1/93.]
OTS-7468.2
AMENDATORY SECTION(Amending WSR 03-17-041, filed 8/15/03,
effective 9/30/03)
WAC 4-25-720
How do I apply to take the CPA examination?
(1) Application form and due dates:
(((a) For examinations held prior to January 1, 2004:
(i) Your application to take the CPA examination must be made on a form provided by the board's designee and filed with the board's designee on or before March 1 for the May examination and September 1 for the November examination. Applications, including all required documentation, for the May examination must be postmarked by March 1 (and received by March 10). Applications, including all required documentation, for the November examination must be postmarked by September 1 (and received by September 10). An application is not considered filed until the board's designee has received the examination fee.
(ii) Proctoring CPA exam candidates: The board may agree to request the assistance of another accountancy board in proctoring Washington's applicants at out-of-state exam sites and may agree to proctor another accountancy board's applicants at a Washington exam site, both subject to space and staffing constraints. The board will not arrange for out-of-state proctoring for applicants domiciled out-of-state who wish to take the uniform CPA exam as Washington candidates. Such applicants must take the CPA exam in Washington on a space available basis.
(b) For examinations held after December 31, 2003:))
Your application to take the CPA examination must be made on a
form provided by the board's designee and filed with the
board's designee by the due date specified by the board on the
application form. Applicants must submit all required
documents to complete their application within sixty days of
the date their application is received by the board's
designee. Applicants are responsible for submitting all
required documentation, application forms, and fees. Your
application is not considered ((filed)) complete until all of
the following are received by the board's designee:
• A fully completed application form;