GENERAL PROVISIONS
§ 11.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
AICPA—American Institute of Certified Public Accountants.
Act—The CPA Law (63 P.S. § § 9.1—9.16b).
Attest activity—The provision of any of the following financial statement services together with the issuance of a report expressing or disclaiming an opinion or other assurance on the information:(i) An audit or other engagement performed in accordance with Statements on Auditing Standards.
(ii) A review or compilation of a financial statement performed in accordance with SSARS.
(iii) An engagement performed in accordance with SSAE.
(iv) An audit or other engagement performed in accordance with Government Auditing Standards issued by the Comptroller General of the United States.
(v) Other engagement performed in accordance with attestation standards established by an organization granted authority by statute or regulation to establish attestation standards, such as the AICPA or the PCAOB.
Board—The State Board of Accountancy of the Commonwealth.
CPA—Certified public accountant.
CPE—Continuing professional education.
CPE program sponsor—An individual or entity that assumes responsibility for presenting a CPE program that is structured as a group study program, interactive individual study program or noninteractive individual study program.
Candidate—A person sitting for an examination.
Certificate—A certificate as a ‘‘certified public accountant’’ issued under the act or a corresponding right to practice as a certified public accountant issued after examination under the law of another jurisdiction.
Certificate of completion—A document prepared by a CPE program sponsor evidencing a participant’s completion of a group study program, interactive individual study program or noninteractive individual study program.
Certified public accountant—An individual to whom a certificate has been issued.
Client—A person that agrees orally, in writing or in electronic form with a certified public accountant, public accountant or firm to receive a professional service.
Commission—(i) Compensation for recommending or referring a product or service to be supplied by another person.
(ii) The term does not include a referral fee.
Compilation—A service performed in accordance with SSARS that presents, in the form of financial statements, information that is the representation of management or the owners without undertaking to express any assurance on the statements.
Contingent fee—A fee established for the performance of a service under 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 the service.
Engagement—An undertaking by a licensee embodied in an agreement between the licensee and the client which defines the scope and terms of the services.
Enterprise—A person or entity, whether organized for profit or not, with respect to which a licensee performs professional services.
Financial statement—(i) A statement and footnotes related to the statement that purport to show financial position which relates to a point in time or changes in financial position which relate to a period of time.
(ii) The term includes statements which use a cash or other incomplete basis of accounting.
(iii) The term also includes balance sheets, statements of income, statements of retained earnings, statements of changes in financial position and statements of changes in owner’s equity.
(iv) The term does not include incidental financial data included in management advisory services reports to support recommendations to a client, tax returns or supporting schedules.
Firm—A qualified association that is a licensee.
GAAP—Generally Accepted Accounting Principles.
GAAS—Generally Accepted Auditing Standards.
GAGAS—Generally Accepted Government Auditing Standards.
Group study program—A CPE program that is designed to permit a participant to learn a given subject through interaction with an instructor and other participants.
Inactive status—(i) Status of a CPA or public accountant who has returned his license to practice public accounting to the Board and who has requested in writing that the Board place his name on the inactive roll.
(ii) The term does not apply to the status of a CPA or public accountant whose license to practice public accounting has expired for failure to comply with requirements for biennial renewal of licensure.
Instructional design—A teaching plan that considers the organization and interaction of program materials as well as the method of presentation such as lecture, seminar, workshop or program instruction.
Interactive individual study program—A CPE program that is designed to use interactive learning methodologies that simulate a classroom learning process by employing software, other courseware or administrative systems that provide significant ongoing interactive feedback to the participant regarding the learning process.
Licensee—(i) An individual who is certified by or registered with the Board and holds a current license to practice under section 8.2 of the act (63 P.S. § 9.8b) or a qualified association that holds a current license to practice under section 8.8 of the act (63 P.S. § 9.8h).
(ii) The term does not include an individual who is on inactive status under section 8.2(a.1) of the act or who does not otherwise hold a current license.
NASBA—National Association of State Boards of Accountancy.
New candidate—A candidate who is taking the examination in this Commonwealth for the first time.
Noninteractive individual study program—A CPE program that is designed to permit a participant to learn a given subject without interaction with an instructor or interactive learning methodologies and requires the participant to achieve a 70% minimum grade on a written examination or workbook.
PCAOB—Public Company Accounting Oversight Board.
Professional competence—Having requisite knowledge, skills and abilities to provide quality professional service as defined by the technical and ethical standards of the profession.
Professional services—Services performed by a certified public accountant, public accountant or firm as part of the practice of public accounting or services that would be part of the practice of public accounting except that the individual performing the services does not hold out as a certified public accountant or public accountant.
Public accounting—Offering to perform or performing for a client or potential client:(i) Attest activity.
(ii) Other professional services involving the use of accounting skills, including management advisory or consulting services, business valuations, financial planning, preparation of tax returns or furnishing of advice on tax matters by a person holding out as a CPA, public accountant or firm.
Public communication—A communication made in identical form to multiple persons as to the world at large, such as by television, radio, motion picture, newspaper, pamphlet, mass mailing, letterhead, business card or directory.
Qualified association—An association as defined in 15 Pa.C.S. § 102 (relating to definitions) that is incorporated or organized under the laws of the Commonwealth or any other state or foreign jurisdiction if the organic law under which the association is incorporated or organized does not afford the shareholders, partners, members or other owners of equity interest in the association or the officers, employees or agents of the association greater immunity than is available to the shareholders, officers, employees or agents of a professional corporation under 15 Pa.C.S. § 2925 (relating to professional relationship retained).
SEC—Securities and Exchange Commission.
SSAE—Statements on Standards for Attestation Engagements.
SSARS—Statements of Standards on Accounting and Review Services.
Statements on auditing standards—The Statements on Auditing Standards of the Auditing Standards Board of the AICPA, or similar professional standard which supersedes these statements.
Substantial equivalency—Either of the following:(i) The education, examination and experience requirements in the statutes and regulations of another jurisdiction are comparable to or exceed the education, examination and experience requirements in the act.
(ii) A certified public accountant’s education, examination and experience qualifications are comparable to or exceed the education, examination and experience requirements in the act.
Authority The provisions of this § 11.1 issued under section 506 of The Administrative Code of 1929 (71 P.S. § 186); and section 3 of the CPA Law (63 P.S. § 9.3); amended under sections 3(a)(10)—(12), 6 and 8.2 of the CPA Law (63 P.S. § § 9.3(a)(10)—(12), 9.6 and 9.8b)).
Source The provisions of this § 11.1 adopted September 1, 1963; amended September 21, 1979, effective September 22, 1979, 9 Pa.B. 3238; amended August 15, 1980, effective August 16, 1980, 10 Pa.B. 3354; amended May 21, 1982, effective May 22, 1982, 12 Pa.B. 1643; amended May 7, 1993, effective May 8, 1993, 23 Pa.B. 2231; amended December 23, 1994, effective December 24, 1994, 24 Pa.B. 6418; amended December 30, 1994, effective December 31, 1994, 24 Pa.B. 6559; amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 151; amended July 27, 2007, effective July 28, 2007, 37 Pa.B. 4055; amended November 30, 2012, effective December 1, 2012, 42 Pa.B. 7267; amended September 22, 2017, effective January 1, 2018, 47 Pa.B. 5940. Immediately preceding text appears at serial pages (364409) to (364410) and (378837) to (378838).
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