The following words and terms, when used in title 22, part
22 of the Texas Administrative Code relating to the Texas State Board
of Public Accountancy, shall have the following meanings, unless the
context clearly indicates otherwise. The masculine shall be construed
to include the feminine or neuter and vice versa, and the singular
shall be construed to include the plural and vice versa.
(1) "Act" means the Public Accountancy Act, Chapter
901, Occupations Code;
(2) "Advertisement" means a message which is transmitted
to persons by, or at the direction of, a person and which has reference
to the availability of the person to perform Professional Accounting
Services;
(3) "Affiliated entity" means an entity controlling
or being controlled by or under common control with another entity,
directly or indirectly, through one or more intermediaries;
(4) "Attest Service" means:
(A) an audit or other engagement required by the board
to be performed in accordance with the auditing standards adopted
by the AICPA, PCAOB, or another national or international accountancy
organization recognized by the board;
(B) a review or compilation required by the board to
be performed in accordance with standards for accounting and review
services adopted by the AICPA or another national or international
accountancy organization recognized by the board;
(C) an engagement required by the board to be performed
in accordance with standards for attestation engagements adopted by
the AICPA or another national or international accountancy organization
recognized by the board; or
(D) any other assurance service required by the board
to be performed in accordance with professional standards adopted
by the AICPA or another national or international accountancy organization
recognized by the board;
(5) "Board" means the Texas State Board of Public Accountancy;
(6) "Charitable Organization" means an organization
which has been granted tax-exempt status under the Internal Revenue
Code of 1986, §501(c), as amended;
(7) "Client" means a party who enters into an agreement
with a license holder or a license holder's employer to receive a
professional accounting service or professional accounting work;
(8) "Client Practice of Public Accountancy" is the
offer to perform or the performance by a person for a client or a
potential client of professional accounting services or professional
accounting work, and also includes:
(A) the advice or recommendations in connection with
the sale or offer for sale of products (including the design and implementation
of computer software), when the advice or recommendations routinely
require or imply the possession of accounting or auditing skills or
expert knowledge in auditing or accounting; and
(B) the performance of litigation support services;
(9) "Commission" means compensation for recommending
or referring any product or service to be supplied by another party;
(10) "Contingent fee" means a fee for any service where
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. However, a person's non-Contingent
fees may vary depending, for example, on the complexity of the services
rendered. Fees are not contingent if they are fixed by courts or governmental
entities acting in a judicial or regulatory capacity, or in tax matters
if determined based on the results of judicial proceedings or the
findings of governmental agencies acting in a judicial or regulatory
capacity, or if there is a reasonable expectation of substantive review
by a taxing authority;
(11) "Financial Statements" means a presentation of
financial data, including accompanying notes, derived from accounting
records and intended to communicate an entity's economic resources
or obligations at a point in time, or the changes therein for a period
of time, in accordance with generally accepted accounting principles
or other comprehensive basis of accounting. Incidental financial data
to support recommendations to a client or in documents for which the
reporting is governed by Statements on Standards for Attestation Engagements
and tax returns and supporting schedules do not constitute financial
statements for the purposes of this definition;
(12) "Firm" means a sole proprietorship, partnership,
limited liability partnership, limited liability company, corporation
or other legally recognized business entity engaged in the practice
of public accountancy;
(13) "Good standing" means compliance by a licensee
with the board's licensing rules, including the mandatory continuing
education requirements, Peer Review, and payment of the annual license
fee, and any penalties and other costs attached thereto. In the case
of board-imposed disciplinary or administrative sanctions, the person
must be in compliance with all the provisions of the board order to
be considered in good standing;
(14) "Licensee" means the holder of a license issued
by the board to a person pursuant to the Act, or pursuant to provisions
of a prior Act;
(15) "Out of state practitioner and out of state firm"
means a person licensed in another jurisdiction practicing in Texas
pursuant to a practice privilege as provided for in §901.461
and §901.462 of the Act (relating to Practice by Certain Out-of-State
Firms and Practice by Out-of-State Practitioner with Substantially
Equivalent Qualifications);
(16) "Peer Review," "Quality Review" or "Compliance
Assurance" means the study, appraisal, or review of the professional
accounting work of a public accountancy firm that performs attest
services by a certificate holder who is not affiliated with the firm;
(17) "Person" means an individual, sole proprietorship,
partnership, limited liability partnership, limited liability company,
corporation or other legally recognized business entity that provides
or offers to provide professional accounting services or professional
accounting work as defined in paragraph (22) of this section;
(18) "Principal office" means the location specified
by the client as the address to which a service described in §517.1(a)(2)
of this title (relating to Practice by Certain Out of State Firms)
is directed and is synonymous with Home Office where it appears in
the Act;
(19) "Practice unit" means an office of a firm required
to be licensed with the board for the purpose of the client practice
of public accountancy;
(20) "Practice privilege" means the privilege for an
out-of-state person to provide certain Professional Accounting Services
or Professional Accounting Work in Texas to the extent permitted under
Chapter 517 of this title (relating to Practice by Certain Out of
State Firms and Individuals);
(21) "Preparation engagement" means the preparation
of financial statements that do not include an audit, review or a
compilation report on those financial statements in accordance with
Standards for Accounting and Review Services adopted by the AICPA;
(22) "Professional Accounting Services" or "professional
accounting work" means services or work that requires the specialized
knowledge or skills associated with certified public accountants,
including but not limited to:
(A) issuing reports on financial statement(s);
(B) preparation engagements pursuant to SSARS;
(C) providing management or financial advisory or consulting
services;
(D) preparing tax returns;
(E) providing advice in tax matters;
(F) providing forensic accounting services;
(G) providing internal auditing services;
(H) accounting, auditing and other assurance services;
(I) providing litigation support services; and
(J) recommending the sale of a product if the recommendation
requires or implies accounting or auditing skills.
(23) "Report" means an opinion, report, or other document,
prepared in connection with an attest service that states or implies
assurance as to the reliability of financial statement(s); and includes
or is accompanied by a statement or implication that the person issuing
the opinion, report, or other document has special knowledge or competence
in accounting or auditing. A statement or implication of assurance
as to the reliability of a financial statement or as to the special
knowledge or competence of the person issuing the opinion, report,
or other document includes any form of language that is conventionally
understood to constitute such a statement or implication. A statement
or implication of special knowledge or competence in accounting or
auditing may arise from the use by the issuer of the opinion, report,
or other document of a name or title indicating that the person is
an accountant or auditor; or the language of the opinion, report,
or other document itself.
(24) Interpretive Comment: The practice of public accountancy
is defined in §901.003 of the Act (relating to the Practice of
Public Accountancy).
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| Source Note: The provisions of this §501.52 adopted to be effective June 11, 2000, 25 TexReg 5334; amended to be effective December 6, 2001, 26 TexReg 9857; amended to be effective February 4, 2004, 29 TexReg 963; amended to be effective June 9, 2004, 29 TexReg 5625; amended to be effective October 11, 2007, 32 TexReg 7059; amended to be effective February 17, 2008, 33 TexReg 1090; amended to be effective June 11, 2008, 33 TexReg 4502; amended to be effective June 10, 2015, 40 TexReg 3564; amended to be effective August 4, 2016, 41 TexReg 5548; amended to be effective June 3, 2020, 45 TexReg 3631 |
