PERMANENT RULES
Purpose: 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. The rules address the required 'CPA-Inactive' title.
Additionally, the board revised language to:
| | Promote clarity. |
| | Ensure effective communication. |
| | Ensure fairness in interpretation and application of the rules. |
| | Promote efficiencies through minimizing gray areas. |
| | Incorporate current policy into rule. |
| WAC section: | The revision: | |
| WAC 4-25-400 | Addresses the required title usage: CPA-Inactive. | |
| WAC 4-25-410 | | Adds a definition of "Applicant" which was incorporated by way of SB 6123 into RCW 18.04.295: |
| The board shall have the power to: Revoke, suspend, {+or +} refuse to {+ issue, +} renew, or reinstate a license or certificate; impose a fine in an amount not to exceed thirty thousand dollars plus the board's investigative and legal costs in bringing charges against a certified public accountant, a certificate holder, a licensee, a licensed firm, {+ an applicant, a non-CPA violating the provisions of RCW 18.04.345, +} or a nonlicensee holding an ownership interest in a licensed firm; may impose full restitution to injured parties; may impose conditions precedent to renewal of a certificate or a license; or may prohibit a nonlicensee from holding an ownership interest in a licensed firm, for any of the following causes: ... | ||
| | Adds Public Company Accounting Oversight Board (PCAOB) auditing standards to the list of what "Attest Services" includes. | |
| | Revises the definition of "Certificateholder," "CPA," and "Rules of professional conduct" to address the new CPA-Inactive title use requirement. | |
| | Adds the definition of "CPA-Inactive" and clarifies what is meant by "Inactive." | |
| | Eliminates the definition of "Enterprise" because the term is no longer used in the rules. | |
| | Clarifies what is meant by "Interactive self-study program." | |
| | Clarifies that "Licensee" means both an individual CPA and a CPA firm (note - this definition is established in chapter 18.04 RCW). | |
| | Adds clarifying information to the definition of "Public practice," "Reciprocity," and "Reports on financial statements." | |
| WAC 4-25-510 | Eliminates the December board meeting and establishes the October meeting as the board's annual meeting. | |
| WAC 4-25-540 | | Clarifies the language to address the new CPA-Inactive title. |
| | Adds firm license amendments to those applications subject to brief adjudicative proceedings (BAP). | |
| | Adds clarifying language to note that both the executive director and the vice-chair may delegate the position of presiding officer for a BAP and BAP appeal, respectively. | |
| | Other verbiage improvements. | |
| WAC 4-25-550 | | Reflects the new CPA-Inactive title use requirement. |
| | Adds the requirement that applicants must notify the board of a change in address. | |
| | Clarifies that firms must notify the board of changes in the main office or a branch office. | |
| WAC 4-25-551 | | Reflects the new CPA-Inactive title use requirement. |
| | Adds the requirement that applicants must respond to board inquiries. | |
| WAC 4-25-610 | Adds clarifying language to reflect the new CPA-Inactive title use requirement plus other general language clarifications. | |
| WAC 4-25-620 | Adds clarifying language to reflect the new CPA-Inactive title use requirement. | |
| WAC 4-25-626 | Adds clarifying language to reflect the new CPA-Inactive title use requirement plus other general language clarifications. | |
| WAC 4-25-630 | Adds clarifying language to reflect the new CPA-Inactive title use requirement. | |
| WAC 4-25-631 | | Clarifies language to reflect the new CPA-Inactive title use requirement. |
| | Adds the PCAOB as a regulatory body. | |
| | Corrects the language referring to Statements of Financial Accounting Standards. | |
| | Adds the new AICPA Statements on Standards for Litigation Services and the standards issued by the PCAOB as required standards. | |
| | For clarification, adds IRS Circular 230 (compliance with IRS standards is required by way of the first two paragraphs of the rule). | |
| | Changes references to the United States General Accounting Office (GAO) to the current title "Governmental Accountability Office." | |
| | Subsection (5), Statements of Financial Accounting Standards and Interpretations, and staff positions reflectd the exact name of the standards issued by FASB. | |
| WAC 4-25-640 | Adds clarifying language to reflect the new CPA-Inactive title use requirement. | |
| WAC 4-25-650 | Adds clarifying language to reflect the new CPA-Inactive title use requirement. | |
| WAC 4-25-660 | | Clarifies language to reflect the new CPA-Inactive title use requirement. |
| | Eliminates the subsection regarding when certifcateholders must display the title "CPA-Inactive" because as of July 1, 2004, all certificateholders must use the title "CPA-Inactive." | |
| WAC 4-25-661 | Establishes the requirement that individuals may only use the CPA or CPA-Inactive title in association with the name that they have registered with the board. To use the title with a nonregistered name could be considered false and or misleading to the public. | |
| WAC 4-25-670 | Clarifies language to reflect the new CPA-Inactive title use requirement. | |
| WAC 4-25-710 | | Clarifies the number of quarter hours that equates to semester hours. |
| | Changes the word upper "division" to upper "level" for consistency throughout the rule. | |
| | Changes the definition of an upper level course to a course that frequently carries completion of a lower level course to provide greater flexibility to candidates in using community college accounting credits for meeting the accounting subject portion of the accounting concentration requirement. | |
| | 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. | |
| | One hundred twenty day provision changes: Colleges and universities are offering courses that are up to five months in length where the course is set up to support preparing for the entire exam; however, the attendees study and prepare to sit for one section of the exam at a time. This change extends the current one hundred twenty day provision to one hundred eighty days to ensure applicants are able to take the sections in alignment with these college courses designed to support their study (and not have to delay taking a section of the exam until they are one hundred twenty days away from the end of the course). Also, the revision changes the requirement so that applicant's must submit documentation of meeting the one hundred eighty day requirement within two hundred ten days of first sitting for the exam. This will support administration of the examination files. | |
| | Clarifies the "accreditation standards" do in fact allow community college credits earned after the individual was awarded a degree. | |
| | Clarifies the name of the NW Commission on Colleges and Universities. | |
| | Clarifies that the board does not provide education credential evaluation services. | |
| | Includes other verbiage improvements. | |
| WAC 4-25-720 | | Eliminates the pre-January 1, 2004, application requirements. |
| | Moves the following from board policy to the rule: (1) Requirement for completing an application within sixty days, (2) the current fee refund/forfeiture provision, and (3) current passing score of 75. | |
| | Eliminates the provisions related to a pre-January 1, 2004, notice of denied application. | |
| | Aligns the language in the rule to the national language re: Notice to Schedule (NTS). | |
| WAC 4-25-721 | Aligns the rule with the 2004 SB 6123 changes to RCW 18.04.295 which authorizes the board to fine and recover legal and investigative costs from individuals found guilty of cheating on the CPA exam. | |
| WAC 4-25-730 | | Clarifies the verifying CPA requirements currently established in policy. |
| | Revises language based on the CPA-Inactive title requirements. | |
| | Moves the applicant records retention requirements from board policy to rule and extends the applicant's required record retention period from one year to three years. | |
| | Establishes a specific time period in which a board audit of experience must occur (within three years after licensure). | |
| WAC 4-25-735 | | Revises language based on the CPA-Inactive title requirements and the fact that all certificateholders must now use the CPA-Inactive title. |
| | Adds references to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Eliminates the reference to a fee (there is no fee for a CPA-Inactive certificateholder to convert to a license). | |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| WAC 4-25-745 | | Because of the high number of individuals who reference this particular rule, for clarity, includes the CPE requirements for licensure. |
| | Currently individuals who allow four years (or more) to lapse between passing the exam and applying for a license must meet the CPE requirements that a CPA must complete in order to qualify for renewal (one hundred twenty hours, limited to twenty-four hours of nontechnical, and including four hours of ethics). The suggested revision changes the licensure requirement so that the four CPE hours in ethics must be completed within the six months of applying for a license. This will help ensure the applicant will be current on the ethics requirements for holding a CPA license in Washington state. | |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| WAC 4-25-746 | | Adds the new interstate reciprocity statutory provision (from SB 6123) allowing for licensure via interstate reciprocity if the CPA has three years public practice experience out of the prior five years. |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| WAC 4-25-750 | | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. |
| | Eliminates the requirement to name the corporate directors, LLC managers and all officers based on the board's history of not collecting this information. | |
| | Clarifies the reasons/justification that the board will consider when approving a late fee waiver request based on the board's history of approving waiver requests. | |
| | Eliminates the requirement to report as a firm amendment the opening, closing or relocating a main or a branch office (this requirement is governed by WAC 4-25-550 Do I need to notify the board if I change my address). | |
| WAC 4-25-783 | | Revises language based on the CPA-Inactive title requirements. |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| | Includes other minor verbiage improvements. | |
| WAC 4-25-790 | | Revises language based on the CPA-Inactive title requirements. |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Clarifies the reasons/justification that the board will consider when approving a late fee waiver request based on the board's history of approving waiver requests. | |
| | Clarifies that if a CPA-Inactive certificateholder allows their certificate to lapse, they may not use the title. | |
| WAC 4-25-791 | | Revises language based on the CPA-Inactive title requirements. |
| | Clarifies that the "CPA" title may not be used until notice of licensure has been received from the board. | |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| WAC 4-25-792 | | Revises language based on the CPA-Inactive title requirements. |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Moves the following three provisions from board policy to rule: (1) That the reinstatement is effective until June 30th of the 3rd calendar year following reinstatement (2) the CPE reporting period for the next renewal begins on January 1st of the calendar year in which the reinstatement occurs, and (3) CPE used for reinstatement purposes cannot be reused for renewal. | |
| | Adds that title use is contingent upon receipt of notice from the board. | |
| | Adds language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| WAC 4-25-793 | | Revises language based on the CPA-Inactive title requirements. |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Requires the applicant to certify, under the penalty of perjury, that they have not used the title when their license or certificate was retired. | |
| | Moves the following provisions from board policy to rule: (1) That renewal is effective until June 30th of the 3rd calendar year following reinstatement, (2) the CPE reporting period for the next renewal begins on January 1st of the calendar year in which the renewal after retirement occurs, and (3) CPE used for renewal after retirement purposes cannot be reused for renewal. | |
| | Clarifies the language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| | Includes other verbiage improvements. | |
| WAC 4-25-795 | | Revises language based on the CPA-Inactive title requirements. |
| | Adds a reference to the appropriate subsection in WAC 4-25-830 so individuals can easily find the CPE requirements. | |
| | Moves the following provisions from board policy to rule: (1) That renewal is effective until June 30th of the 3rd calendar year following reinstatement, (2) the CPE reporting period for the next renewal begins on January 1st of the calendar year in which the reinstatement occurs, and (3) CPE used for reinstatement purposes cannot be reused for renewal. | |
| | Adds that the title use is contingent upon receipt of notice from the board. | |
| | Adds language regarding provision of attest services to note that out-of-state sole practitioning CPAs holding valid practice privilege are not required to have a firm license. | |
| | Includes other verbiage improvements. | |
| WAC 4-25-830 | | Eliminates the twenty hours a year minimum to allow CPAs 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. |
| | Requires that beginning with CPE reporting periods starting January 1, 2006, or later that the required ethics CPE must be a course that has been approved by the board and the CPE must contain specific information (board rules, AICPA code, variances between the rules and the code). | |
| | Subsection (3), adds that a course instructor may submit documentation associated with an ethics CPE course to the board for approval. | |
| | Revises language per the new CPA-Inactive title requirement. | |
| | CPE requirement to renew a retired license or certificate: Moves the requirement for CPE to be completed within the thirty-six month period immediately preceding the submission of the application from board policy to rule and changes the requirement so that the required ethics CPE must be completed within the six months before the application is submitted (previously was within thirty-six months preceding application). | |
| | CPE requirement for a certificateholder applying for a license: Eliminates the incremental requirement for CPE depending upon the length of time a certificateholder held a certificate because as of July 1, 2004, all certificateholders will have held their certificates for three years or more. | |
| | New subsection (7), changes "three-year" period to "thirty-six month" period for verbiage consistency with other rules. | |
| | CPE requirement for reinstatement: Changes the CPE ethics requirement so it must be completed within six months of applying for a license (previously was within thirty-six months preceding application). | |
| | Clarifies the reasons/justification the board will consider when granting a CPE waiver request based on the board's history of approving waiver requests. | |
| | Includes other verbiage improvements. | |
| WAC 4-25-831 | | Clarifies the language regarding what is a qualifying program. |
| | Adds that volunteer board service qualifies for up to thirty-two hours of technical CPE. | |
| | Eliminates the (now) duplicate provision regarding ethics CPE applicable to the practice of public accounting in Washington state. | |
| | Includes other verbiage improvements. | |
| WAC 4-25-910 | | Revises language based on the CPA-Inactive title requirements |
| | As a result of SB 6123 that changed the provisions of chapter 18.04 RCW, adds 'applicants' to several examples of prohibited acts. | |
Citation of Existing Rules Affected by this Order: Amending 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?
Statutory Authority for Adoption:
Adopted under notice filed as WSR 04-17-085 on August 16, 2004, and WSR 04-22-096 on November 2, 2004.
Changes Other than Editing from Proposed to Adopted Version: WAC 4-25-410 Definitions, did not adopt the suggested changes to subsection (16); 4-25-631 General accountability office and general accounting office were changed to governmental accountability office in second paragraph and in subsection (12); 4-25-830(3), in the six places where the word "ethics" appears, the board inserted "and regulations" and eliminated the word "only" from the last line of the first paragraph of the subsection.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 33, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 33, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 33, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 33, Repealed 0.
Date Adopted: December 10, 2004.
Dana M. McInturff
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-7452.3
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 work hours 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-7461.4
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)) Governmental
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)) Governmental Accountability
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 fur