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Code of Professional Conduct

The Board of Directors of the North Carolina Association of Certified Public Accountants adopted the following policy during its meeting on September 7, 1990:

"The Board of Directors of the North Carolina Association of Certified Public Accountants subscribes to the Code of Professional Conduct of the American Institute of CPAs and the Rules of Professional Ethics and Conduct of the North Carolina Board of CPA Examiners. In the event of any conflict, the provision of the North Carolina Board of CPA Examiners shall prevail."

Subchapter 8N 

Professional Ethics & Conduct

Section .0100 - Scope and Applicability

.0101 Scope of These Rules

(a) The rules in this Subchapter are the rules of the professional ethics and conduct which G.S. 93-12(9) authorizes the Board to adopt. As such, they complement the other statutory causes for discipline set out in G.S. 93-12(9) (a) through (d) and other provisions of G.S. 93, 55B, 57C, and 59-84. These rules cover a broad range of behavior and do not enumerate every possible unethical act.

(b) In the interpretation and enforcement of these rules, the Board will give consideration, but not necessarily dispositive weight, to relevant interpretations, rulings and opinions issued by the boards in other jurisdictions and by appropriately authorized ethics committees of professional organizations.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0102 Applicability and Organization of Rules

These rules are generally applicable to all certificate holders. Rules in Section .0200 of this Subchapter relate to CPAs whether or not employed in the public practice of accountancy. Rules in Section .0300 of this Subchapter pertain to CPAs using the CPA title in connection with providing products or services to clients. Rules in Section .0400 of this Subchapter pertain to CPAs whenever engaged in attest services.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0103 Responsibility for Compliance by Others

A CPA shall be responsible for assuring compliance with the rules in this Subchapter by anyone who is the CPA's partner, fellow shareholder, or unlicensed principal, or whom the CPA supervises. A CPA or CPA firm shall not permit others (including affiliated entities) to carry out on the CPA's behalf, with or without compensation, acts which if carried out by the CPA would be a violation of these rules. A CPA firm shall be responsible for assuring compliance with these rules by any of its officers, directors, shareholders, unlicensed principals, partners, proprietors, employees, or agents.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

Section .0200 - Rules Applicable to All CPAs

.0201 Integrity

The reliance of the public and the business community on sound financial reporting and advice on business affairs imposes on the accounting profession an obligation to maintain high standards of technical competence, morality, and integrity. To this end, a CAP shall at all times maintain independence of thought and action, hold the affairs of clients in strict confidence, strive continuously to improve professional skills, observe generally accepted accounting principles and standards, promote sound and informative financial reporting, uphold the dignity and honor of the accounting profession, and maintain high standards of professional conduct.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0202 Deceptive Conduct Prohibited

(a) Deception Defined - A CPA shall not engage in deceptive conduct. Deception includes fraud or misrepresentation and representations or omissions which a CPA either knows or should know have a capacity or tendency to deceive. Deceptive conduct is prohibited whether or not anyone has actually been deceived. Deception includes not only deceptive statements but also includes the knowing failure to disclose material facts.

(b) Prohibited Deception - Prohibited conduct under this Section includes but is not limited to deception in:

(1) obtaining or maintaining employment;

(2) obtaining or keeping clients

(3) obtaining or maintaining certification, retired status, or exemption from SQR;

(4) reporting CPE credits;

(5) certifying the character or experience of exam or certificate applicants;

(6) implying abilities not supported by valid education, professional attainments, or licensing recognition;

(7) asserting services or products sold in connection with use of the CPA title are of a particular quality/standard when they're not;

(8) creating false or unjustified expectations or favorable results;

(9) using or permitting another to use the CPA title in a form of business not permitted by the accountancy laws or rules;

(10) permitting a person or firm not certified in this state (including one licensed in another state) to unlawfully use the CPA title in this state; or

(11) falsifying a review, report, or any required program or checklist of any quality review program.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0203 Discreditable Conduct Prohibited

(a) Discreditable Conduct - A CPA shall not engage in conduct discreditable to the accounting profession.

(b) Prohibited Discreditable Conduct - Discreditable conduct includes but is not limited to:

(1) acts that reflect adversely on the CPA's honesty, integrity, trustworthiness, good moral character, or fitness as a CPA in other respects;

(2) stating or implying an ability to improperly influence a governmental agency or official.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0204 Discipline by Federal and State Authorities

(a) Violations of Other Authorities' Laws or Rules - A CPA shall not act in a way that would cause said CPA to be disciplined by federal or state agencies or boards of violations of law or rules on ethics. CPAs who engage in activities regulated by other federal or state authorities (including but not limited to the following agencies: IRS, Department of Revenue, SEC, State Bar, North Carolina Secretary of State, Department of Insurance, GAO, HUD, State Auditor, State Treasurer, or Local Government Commission) must comply with all such authorities' ethic laws and rules).

(b) Prima Facie Evidence - A conviction of final finding of unethical conduct by a competent authority is prima facie evidence of a violation of this Rule.

(c) Notice to the Board Required - A CPA shall notify the board in written form within 30 days of any conviction or final finding against him or her of unlawful conduct by any federal or state court or regulatory authority.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0205 Confidentiality

(a) Nondisclosure - A CPA shall not discuss any confidential information obtained in the course employment or a professional engagement except with the consent of the employer or client.

(b) Exceptions - This Rule shall not be construed:

(1) to relieve a CPA of any report obligations pertaining to Section .0400 of this Subchapter; or

(2) to affect in any way the CPA's compliance with a validly issued subpoena or summons enforceable by this Board or by order of a court; or

(3) to preclude the CPA from responding to any inquiry made by the AICPA Ethics Division or Trial Board, by a duly constituted investigative or disciplinary body of a state CPA society, or under state statues; or

(4) to disclose confidential client information necessary for the SQR process or for any quality review program.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0206 Cooperation with Board Inquiry

A CPA shall fully cooperate with the Board in connection with any inquiry it shall make. Full cooperation includes fully responding in a timely manner to all inquiries of the Board or representatives of the Board and claiming Board correspondence from the U.S. Postal Service.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0207 Violation of Tax Laws

A CPA shall not knowingly violate any state or federal tax laws in handling the CPA's personal business affairs, or the business affairs of an employer or client, or the business affairs of any company owned by the CPA.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0208 Reporting Convictions, Judgements, and Disciplinary Actions

(a) Criminal Actions - A CPA shall notify the Board within 30 days of any conviction or finding of guilt, or of pleading nolo contendere to:

(1) a felony; or

(2) any crime an essential element of which is dishonesty, deceit, fraud, a violation of federal or state tax law, or a violation of the rules of Professional Ethics and Conduct contained in this Subchapter.

(b) Civil Actions - A CPA shall notify the Board within 30 days of any judgement or settlement in a civil suit, the basis of which is grounded upon an allegation of gross negligence, dishonesty, fraud, misrepresentation, incompetence, or violation of any federal or state tax law which was brought against either the CPA or a North Carolina office of a firm of which the CPA was a managing partner.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0209 Accounting Principles

(a) Generally Accepted Accounting Principles – A CPA shall not express and opinion that financial statements are presented in conformity with generally accepted accounting principles if such statements contain any departure from an accounting principle which has a material effect on the statements taken as a whole, unless the CPA can demonstrate that due to unusual circumstances the financial statements would otherwise have been misleading.

(b) Statement of Financial Accounting Standards – The Statements of Financial Accounting Standards, together with those Accounting Research Bulletins and Accounting Principles Board Opinions which are not superceded by action of the FSAB, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered generally accepted accounting principles for the purposes of Paragraph (a) of this Rule.

(c) Departures – In such cases the CPA’s report must describe the departure, the approximate effects thereof, if practicable, and the reasons why compliance with the principle would result in a misleading statement.

(d) Copies of Standards – Copies of the Statements of Financial Accounting Standards may be inspected in the offices of the Board, as described in 21 NCAC 8A .0102. Copies may be obtained from the FASB, High Ridge Park, Post Office Box 3821, Stanford, Connecticut 06905-0821 as part of the "FASB Accounting Standards." They are available at cost, which is approximately thirty-four dollars ($34.00) in paperback form or three hundred eighty-three dollars ($383.00) in loose-leaf subscription form.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0210 Forecasts

(a) Forecast of Future Transactions – A CPA shall not permit the CPA’s name to be used in conjunction with any forecast of future transactions in a manner which may lead to the belief that the CPA vouches for the achievability of the forecast.

(b) Applicable Standards – A CPA shall not render services associated with prospective financial statements unless the CPA has complied with the standards for accountants’ services on prospective financial information.

(c) Statements on Standards – The Statements on Standards for Accountants’ Services on Prospective Financial Information issued by the AICPA, including subsequent amendments and editions, are adopted by reference, as provide by G. S. 150B-21.6, and shall be considered the approved standards for services on prospective financial information for the purposes of Paragraph (b) of this Rule.

(d) Departures – Departures from the statements listed in Paragraph (c) of this Rule must be justified by those who do not follow them. Copies of Standards – Copies of the Statements on Standards for Accountants’ Services on Prospective Financial Information may be inspected in the offices of the Board as described in 21 NCAC 8A .0102. Copies may be obtained from the AICPA, 1211, Avenue of the Americas, New York, New York 10036 as part of the "IPA Professional Standards." They are available at cost, which is approximately twenty-eight dollars ($28.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0211 Responsibilities in Tax Practice

(a) Standards for Tax Services - A CPA shall not render services I the area of taxation unless the CPA has complied with the standards for tax services.

(b) Statements on Responsibilities – The Statements on Responsibilities in Tax Practice issued by the AICPA, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered as the approved standards for tax services for the purposes of Paragraph (a) of this Rule.

(c) Departures – Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Standards – Copies of Statements of Responsibilities in Tax Practice may be inspected in the offices of the Board as described in 21 NCAC 8A .0102. Copies may be obtained from the AICPA, 1211, Avenue of the Americas, New York, New York 10036 as part of the "IPA Professional Standards." They are available at cost, which is approximately twenty-eight dollars ($28.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0212 Competence

A CPA shall perform professional services competently and shall:

(1) undertake only those engagements which the CPA or CPA’s firm can reasonably expect to complete with professional competence;

(2) exercise due professional care in the performance of an engagement;

(3) adequately plan and supervise and engagement; and

(4) obtain sufficient relevant data to afford a reasonable basis for conclusions or recommendations in relation to an engagement.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0213 Other Rules

A CPA shall not willfully violate any other rule in Chapter 8 nor any other provision of the Accountancy Statutes, the Professional Cooperation Act, or the North Carolina Limited Liability Company Act.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

Section .0300 - Rules Applicable to All CPAs Who Use the
CPA Title in Offering or Rendering Products or Services to Clients

.0301 Professional Judgement

(a) Professional Judgement - A CPA shall not subordinate the CPA's professional judgement to non-CPAs.

(b) Tax Practice - In tax practice, the CPA may resolve doubt in favor of the CPA’s client as long as there is reasonable support for the CPA's position.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0302 Forms of Practice

(a) Authorized Forms of Practice - A CPA shall not directly or indirectly offer or render accounting services (including tax and management advisory services) to clients except through a duly authorized CPA sole proprietorship, partnership for CPAs, CPA Professional Corporation, Professional Limited Liability Company, or Registered Limited Liability Partnership.

(b) Authorized Partners - A CPA shall not engage in the public practice of accounting with a partner who is anyone other than the holder of an unrevoked and currently valid CPA certificate.

(c) Ancillary Practice - A CPA may, through another lawful form of professional practice, offer or render such non-attest accounting services as are ancillary to another learned profession regulated by a statutorily authorized licensing board in this state; further provided, the CPA offers or renders those services through a business form authorized by the respective licensing board and does not hold out the non-CPA form as a CPA firm. Any such CPA must nevertheless register for SQR as an exempt individual practitioner.

(d) Firm Registration Required - A CPA shall not engage in the public practice of accountancy through a firm which is in violation of the registration requirements of 21 NCAC 8J .008, 8J .0010, or the SQR requirements of 21 NCAC 8M .0102.

(e) Supervision of CPA Offices - Every CPA office or CPA firm in North Carolina shall be actively and locally supervised by a designated actively licensed North Carolina CPA whose primary responsibility and a corresponding amount of time shall be work performed in that office.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0303 Objectivity and Conflicts of Interests

(a) Personal Financial Interests in Advice - When offering or rendering accounting or related financial, tax, or management advice, a CPA shall be objective and shall not place the CPA's own financial interests nor the financial interests of a third party ahead of the legitimate financial interests of the CPA's client or the public in any context in which a client or the public can reasonably expect objectivity from one using the CPA title.

(b) Expectation of Objectivity Presumed - If the CPA uses the CPA title in any way to obtain or maintain a client relationship, the Board will presume the reasonable expectation of objectivity.

(c) Acceptance of a Commission or Referral Fee - A CPA shall not pay a commission to obtain a client, nor accept a commission for a referral to a client, of products or services of others. This Rule shall not prohibit payments for the purchase of an accounting practice, retirement payments to individuals formally engaged in the practice of public accounting, or payments to heirs or estates.

(d) Acceptance of a Contingent Fee -

(1) The offering or rendering of professional services for, or the receipt of, a disclosed contingent fee by a CPA is not prohibited except for engaging to render or rendering by a CPA for a contingent fee:

(a) of professional services for, or the receipt of such fee from, any person for whom the CPA also performs attest services, during the period of attest services engagement and the period covered by any historical financial statements involved in such attest services; and

(b) for the preparation of original or amended tax returns or claims for tax refunds.

(2) Fees are regarded as being 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.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0304 Management Consulting Services Standards

(a) Standards for Management Consulting Services - A CPA shall not render management consulting services unless the CPA has complied with the standards for management consulting services.

(b) Statements on Standards for Management Consulting Services - The Statements on Management Consulting Services (including the definition of such services) issued by the AICPA, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered as the approved standards for management consulting services for the purposes of Paragraph (a) of this Rule.

(c) Departures - Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Statements - Copies of the Statements on Standards for Management Consulting Services may be inspected in offices of the Board, as described in 21 NCAC 8A.0102. Copies may be obtained from the AICA, 1211 Avenue of the Americas, New York, New York 10036 as part of the "AICPA Professional Standards." They are available at cost, which is approximately ten dollars ($10.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0305 Retention of Client Records

(a) Return Upon Demand - A CPA must return client records in his or her possession to the client after a demand is made for their return. If the client is a partnership, records shall be returned upon request to any of its general partners. If the client is a corporation, records shall be returned upon request to its president. Joint records shall be returned upon request to any party. The records must be returned immediately upon demand unless circumstances make some delay reasonable in order to retrieve a closed file or to extract the CPA's work papers described in Paragraph (e) of this Rule. If the records cannot be returned immediately upon demand, the CPA shall immediately inform the client of the date the records will be returned. Nothing in this Rule shall be interpreted to require a CPA to pay delivery costs when the records are returned to the client and the business does not sell or serve to the CPAs.

(b) Return of Original Records - If a CPA is engaged to perform certain work for a client, the CPA is only required to return or furnish copies of those records originally given to the CPA by the client if one of the following occurs:

(1) the engagement is terminated prior to the completion of such work, or

(2) the CPA's work product has neither been received nor paid for by the client.

(c) Retention to Force Payment - A CPA shall not retain client's records in order to force payment of any kind.

(d) Work Papers Included in Client's Records - Work papers are usually the CPA's property and need not be surrendered to the client. However, in some instances work papers will contain data which should properly be reflected in the client's books and records but for convenience have not been duplicated therein with the result that the client's records are incomplete. In such instances, the portion of the work papers containing such data constitutes part of the client's records, and copies shall be given to the client along with the rest of the client's records. Work papers considered part of the client's records include but are not limited to:

(1) Worksheets in lieu of original entry (e.g, listings and distributions of cash receipts or cash disbursements on columnar work paper);

(2) Worksheets in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar types of depreciation records;

(3) All adjusting and closing journal entries and supporting details not fully set forth I the journal entry and;

(4) Consolidating or combining journal entries and worksheets and supporting detail used in arriving at final figures incorporated I an end product such as financial statements or tax returns.

(e) Work Papers Belonging to the CPA - Work papers developed by the CPA incident to the performance of an engagement which does not result in charges to the client's records, or are not in themselves part of the records ordinarily maintained by such clients, are solely the CPA's work papers and are not the property of the client. For example, the CPA may make extensive analyses of inventory or other accounts as part of the selective audit procedures. These analyses are considered to be part of the CPA's work papers, even if the analyses have been prepared by client personnel at the request of the CPA. Only to the extent these analyses result in changes to the client's records would the CPA be required to furnish the details from the work papers in support of the journal entries recording the changes, unless the journal entries themselves contain all necessary details.

(f) Reasonable Fees for Copies - Nothing in this Rule shall be construed to require the CPA to furnish a client with copies of the client's records already I the client's possession. However, if the client asserts that such records have been lost, or are otherwise not in the client's possession, the CPA shall furnish copies of the records within a reasonable time for a fee.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0306 Advertising or Other Forms of Solicitation

(a) Deceptive Advertising - A CPA shall not seek to obtain clients by advertising or using other forms of solicitation in a manner that is deceptive.

(b) Specialty Designations - A CPA may advertise the nature of services provided to the clients but the CPA shall not advertise or indicate a specialty designation or other title unless the CPA has met the requirements of the granting organization for the separate title or specialty designation and the title or specialty designation has been approved by the Board.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0307 Firm Names

(a) Deceptive Names Prohibited - A CPA or CPA firm shall not trade upon the CPA title through use of any name that would have the capacity or tendency to deceive.

(b) Style of Practice - It is considered misleading if a firm practices under a name or style which would tend to imply the existence of a partnership or registered liability partnership or a professional corporation or limited liability company of more than one shareholder or member or an association when in fact there is no partnership nor is there more than one shareholder or member in the firm. For example, no firm having just one owner may have as part of its name the words "associates" or "company" or their abbreviations.

(c) Assumed Names Subject to Approval - Before any firm uses an assumed name (as described in G. S. 66-68) it must submit the proposed name for Board approval.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0401 Public Reliance

The rules in this section apply to any CPA who engages in the attest functions including, but not limited to audit, compilation, review, exam, forecast, and projection as defined in 21 NCAC 8A .0301 (b). CPAs who engage in such services are also subject to the SQR requirements of Subchapter 8M.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0402 Independence

(a) A CPA, or CPA's firm, who is performing an engagement in which the CPA, or the CPA's firm, will issue a report on financial statements of any client (other than a report in which lack of independence is disclosed) must be independent with respect to the client in fact and appearance.

(b) Independence is impaired if, for example, during the period of the professional engagement, or at the time of issuing the report, the CPA or the CPA's firm:

(1) had or was committed to acquire any direct or material indirect financial interests in the client;

(2) was a trustee or executor or administrator of any estate that had or was committed to acquire any direct material indirect financial interest in the client;

(3) had a joint or closely held business investment with the client or any officer, director or principal stockholder thereof which was material in relation of the net worth of the client, the CPA, or the CPA's firm, or;

(4) had nay loan to or from the client or any officer, director or principal stockholder thereof other than loans of the following kinds made by a financial institution under normal lending procedures, terms, and requirements:

(a) loans obtained by the CPA or the CPA's firm which are not material in relation to the net worth of the borrower;

(b) home mortgages; and

(c) other secured loans, except those secured solely by a guarantee of the CPA or the CPA's firm.

(d) Independence will also be considered to be impaired if, during the period covered by the financial statements, during the period of professional engagement, or at the time of issuing the report, the CPA:

(1) was connected with the client as a promoter, underwriter, voting trustee, director, officer, or in any capacity equivalent to that of a member of management or of an employee; or

(2) was a trustee for any person or profit-sharing trust of the client.

(d) The examples in this Rule are not intended to be all-inclusive.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0403 Auditing Standards

(a) Standards for Auditing Services - A CPA shall not render auditing services unless the CPA has complied with the applicable generally accepted auditing standards.

(b) Statements on Auditing Standards - The Statements on Auditing Standards issued by the AICPA, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered generally accepted auditing standards for the purposes of Paragraph (a) of this Rule.

(c) Departures - Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Statements - Copies of the Statements on Auditing Standards may be inspected in the offices of the Board, as described in 21 NCAC 8A .0102. Copies may be obtained from the AICPA, 1211 Avenue of the Americas, New York, New York 10036 as part of the "AICPA Professional Standards"." They are available at cost, which is approximately twenty-eight dollars ($28.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G.S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0404 Accounting and Review Services Standards

(a) Standards for Accounting and review Services - A CPA shall not render accounting and review services unless the CPA has complied with the standards for accounting and review services.

(b) Statements on Standards for Accounting and Review Services - The Statements on Accounting and Review Services issued by the AICPA, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, as shall be considered as the approved standards for accounting and review services for the purposes of Paragraph (a) of this Rule.

(c) Departures - Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Statements - Copies of the Statements on Standards for Accounting and review services may be inspected in the offices of the Board, as described in 21 NCAC 8A .0102. Copies may be obtained from the AICPA, 1211 Avenue of the Americas, New York, New York 10036 as part of the "AICPA Professional Standards"." They are available at cost, which is approximately twenty-eight dollars ($28.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G. S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0405 Governmental Accounting Standards

(a) Standards for Governmental Accounting - A CPA shall not permit the CPA's name to be associated with governmental financial statements for a client unless the CPA has complied with the standards for governmental accounting.

(b) Statements on Governmental Accounting and Financial reporting Services - The Statements on Governmental Accounting and Financial Reporting Services issued by the GASB, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered as the approved standards for governmental accounting for the purposes of Paragraph (a) of this Rule.

(c) Departures - Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Statements - Copies of the Statements on Governmental Accounting and Financial Reporting Standards, including technical bulletins and interpretations, may be inspected in the offices of the Board, as described in 21 NCAC 8A .0102. Copies may be obtained from the GASB, Post Office Box 9126, Dept. 285, Stanford, Connecticut 06925. They are available at cost, which is approximately forty-seven dollars and fifty cents ($47.50). In addition to the basic set, an updating subscription service is available for approximately sixty-five dollars ($65.00) annually.

[History Note: Statutory Authority G. S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0406 Attestation Standards

(a) Standards for Attestation Services - A CPA shall not render attestation services unless the CPA has complied with the applicable attestation standards.

(b) Statements on Standards for Attestation Engagements - The Statements on Standards for Attestation Engagements issued by the AICPA, including subsequent amendments and editions, are hereby adopted by reference, as provided by G. S. 150B-21.6, and shall be considered attestation standards for the purposes of Paragraph (a) of this Rule.

(c) Departures - Departures from the statements listed in Paragraph (b) of this Rule must be justified by those who do not follow them.

(d) Copies of Statements – Copies the Statements on Standards for Attestation Engagements may be inspected in the offices of the Board, as described in 21 NCAC 8A .102. Copies may be obtained from the AICPA, 1211 Avenue of the Americas, New York, New York 10036 as part of the "AICPA Professional Standards." Hey are available at cost, which is approximately thirty dollars ($30.00) in paperback form or two hundred dollars ($200.00) in loose-leaf subscription form.

[History Note: Statutory Authority G. S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0407 Competitive Bidding

Regarding an invitation for competitive bids on attest services, it shall be discreditable for a CPA or CPA firm to knowingly offer or perform said services below cost for the purposes of injuring or destroying competition; provided, it shall not be a violation to do so in order to meet competition. Nothing herein shall be construed to prohibit competitive bidding nor establish a minimum price of any CPA service.

[History Note: Statutory Authority G. S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]

.0408 Quality Review Standards

A CPA who is engaged to perform a quality review shall not violate the rules or standards of the quality review program under which the review is made or the engagement contract connected with that quality review.

[History Note: Statutory Authority G. S. 55B-12; 57C-2-01; 93-12(9); Eff. February 1, 1994.]