Part XXII.
Texas State Board of Public Accountancy
Chapter 501.
Professional Conduct
Subchapter B. Professional Practices
22 TAC §501.12
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §501.12 concerning Integrity and Objectivity.
The amendment to §501.12 will require that CPAs maintain integrity
and objectivity and avoid conflicts of interest.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. The additional estimated cost to the state expected as a result of enforcing
or administering the rule will be either zero or minimal because the Board
is already enforcing integrity and objectivity.
B. The estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule will be zero because there
are no services or actions which are being reduced or eliminated.
C. The estimated loss or increase in revenue to the state as a result of
enforcing or administering the rule will be zero because the proposed rule
is neither a revenue generator nor a revenue consumer.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment are that CPAs and the public will have a clearly articulated standard
by which to measure CPA's conduct; and that the quality of services offered
to the public will improve.
The probable economic cost to persons required to comply with the rule
will be zero or minimal because the proposed amendment does not require CPAs
to do anything.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on June 30, 1998. Comments should be addressed to Amanda
G. Birrell, General Counsel, Texas State Board of Public Accountancy, 333
Guadalupe, Tower III, Suite 900, Austin, Texas, 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed rule will not have an adverse
economic effect on small businesses because the proposed amendment expressly
articulates a standard that is already stated in Section 1 of the Public Accountancy
Act and implied by the Boards existing rules, including current rule 501.12.
The Board specifically invites comments from the public on the issues of
(a) whether or not the proposed rule will have an adverse economic effect
on small business; (b) if the rule is believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the rule is to be adopted; and (c) if the
rule is believed to have such an effect, how the cost of compliance for a
small business compares with the cost of compliance for the largest business
affected by the rule under any of the following standards: (a) cost per employee;
(b) cost for each hour of labor; or (c) cost for each $100 of sales. See Texas
Government Code, §2006.002(c).
The proposed amendment is proposed under the Public Accountancy
Act, Texas Civil Statutes, Article 41a-1, 6(a) (Vernon Supp. 1998), which
authorizes the Board to adopt rules deemed necessary or advisable to effectuate
the Act.
No other article, statute or code is affected by this proposed amendment.
§501.12.Integrity and Objectivity.
(a)
A certificate or registration holder in the
performance of professional services shall
maintain objectivity and integrity,
shall be free of conflicts of interest and shall
not knowingly misrepresent
facts nor subordinate [
(b)
A conflict of interest may occur if a
certificate or registration holder performs a professional service for a client
or employer and the certificate or registration holder has a relationship
with another person, entity, product, or service that could, in the certificate
or registration holder's professional judgment, be viewed by the client, employer,
or other appropriate parties as impairing the certificate or registration
holder's objectivity. If the certificate or registration holder believes that
the professional service can be performed with objectivity, and the relationship
is disclosed to and consent is obtained from such client, employer, or other
appropriate parties, the rule shall not operate to prohibit the performance
of the professional service because of a conflict of interest.
(c)
Certain professional engagements, such
as audits, reviews, and other attest services, require independence. Independence
impairments under rule 501.11 of this title (relating to Independence), its
interpretations, and rulings cannot be eliminated by disclosure and consent.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
May 27, 1999.
TRD-9903169
William Treacy
Executive Director
Texas State Board of Public Accountancy
Earliest possible date of adoption: July 11, 1999
For further information, please call: (512) 305-7848
22 TAC §501.47
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §501.47 concerning Firm Names.
The amendment to §501.47 will allow CPA firms to use any firm name
that is not misleading and is registered with this Board.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. The additional estimated cost to the state expected as a result of enforcing
or administering the rule will be zero because the state is currently enforcing
a more stringent and restrictive rule and the new rule may result in fewer
investigations.
B. The estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule will be zero to local governments.
The state is currently enforcing a more stringent and restrictive rule and
the amendment may result in fewer investigations. The board has no firm data
on reduced costs to the state but estimates about $300 per year for 3 years.
C. The estimated loss or increase in revenue to the state as a result of
enforcing or administering the rule will be zero because the state is currently
enforcing a more stringent and restrictive rule and the new rule may result
in fewer investigations.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be that CPA firms are allowed more leeway in the firm names
they may use, which may help the consumer to locate the service provided they
need.
The probable economic cost to persons required to comply with the rule
will be zero because the state is currently enforcing a more stringent and
restrictive rule.
Mr. Treacy has determined that a Local Employment Impact Statement is
not required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on July 1, 1999. Comments should be addressed to Amanda
G. Birrell, General Counsel, Texas State Board of Public Accountancy, 333
Guadalupe, Tower III, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed rule will not have an adverse
economic effect on small businesses because the state is currently enforcing
a more stringent and restrictive rule and the new rule may result in fewer
investigations.
The Board specifically invites comments from the public on the issues of
whether or not the proposed rule will have an adverse economic effect on small
business; if the rule is believed to have such an effect, then how may the
Board legally and feasibly reduce that effect considering the purpose of the
statute under which the rule is to be adopted; and if the rule is believed
to have such an effect, how the cost of compliance for a small business compares
with the cost of compliance for the largest business affected by the rule
under any of the following standards: (a) cost per employee; (b) cost for
each hour of labor; or (c) cost for each $100 of sales. See Texas Government
Code, §2006.002(c).
The amendment is proposed under the Public Accountancy Act,
Texas Civil Statutes, Article 41a-1, 6(a) (Vernon Supp. 1998), which authorizes
the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.47.Firm Names.
(a)
No certificate or registration holder shall engage in the
practice of public accountancy using a firm name that includes descriptive
words relating to the quality of services offered or that is misleading about
the legal form of the firm, or about the persons who are partners, officers,
or shareholders of the firm, or about any other matter, provided, however,
that names of one or more former partners or shareholders may be included
in the name of a firm or its successor.
(b)
A firm name will be considered to be misleading if:
(1)
it is not the lawful and registered name
of the firm;
(2)
[
(3)
[
(4)
[
(A)
the name indicates a geographic area of service which is
not based on verifiable facts; or
(B)
the firm name includes a non-owner firm employee.
(5)
[
(6)
[
(7)
[
(8)
[
(9)
[
(10)
[
(11)
[
(12)
[
(c)
A partner surviving the death or withdrawal of all other
partners may continue to practice under a partnership name for up to two years
after becoming a sole practitioner.
(d)
The name of any former partner or former shareholder may
not be used in a registered firm name during the period of sanction when the
former partner or former shareholder has been prohibited from practicing public
accountancy or prohibited from using the title "CPA" or "PA."
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
May 27, 1999.
TRD-9903164
William Treacy
Executive Director
Texas State Board of Public Accountancy
Earliest possible date of adoption: July 11, 1999
For further information, please call: (512) 305-7848
22 TAC §505.5
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §505.5 concerning Secretary of the Board. This amendment
is the result of the Rule Review required by Rider 167 of the General Appropriations
Act of 1997.
The amendment to §505.5 will allow the secretary to perform any duties
as assigned rather than enumerating the duties.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. The additional estimated cost to the state expected as a result of enforcing
or administering the rule will be zero because the amendment requires nothing
of anyone.
B. The estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule will be zero because the
amendment requires nothing of anyone.
C. The estimated loss or increase in revenue to the state as a result of
enforcing or administering the rule will be zero because the amendment requires
nothing of anyone and is not a revenue generator.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be a shorter, simpler rule.
The probable economic cost to persons required to comply with the rule
will be zero because the amendment requires nothing of anyone.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on July 1, 1999. Comments should be addressed to Amanda
G. Birrell, General Counsel, Texas State Board of Public Accountancy, 333
Guadalupe, Tower III, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed rule will not have an adverse
economic effect on small businesses because the amendment requires nothing
of anyone or of any small businesses.
The Board specifically invites comments from the public on the issues of
whether or not the proposed rule will have an adverse economic effect on small
business; if the rule is believed to have such an effect, then how may the
Board legally and feasibly reduce that effect considering the purpose of the
statute under which the rule is to be adopted; and if the rule is believed
to have such an effect, how the cost of compliance for a small business compares
with the cost of compliance for the largest business affected by the rule
under any of the following standards: (a) cost per employee; (b) cost for
each hour of labor; or (c) cost for each $100 of sales. See Texas Government
Code, §2006.002(c).
The proposed amendment is proposed under the Public Accountancy
Act, Texas Civil Statutes, Article 41a-1, 6(a) (Vernon Supp. 1998), which
authorizes the Board to adopt rules deemed necessary or advisable to effectuate
the Act.
No other article, statute or code is affected by this proposed amendment.
§505.5.Secretary of the Board.
The secretary [
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May
27, 1999.
TRD-9903165
William Treacy
Executive Director
Texas State Board of Public Accountancy
Earliest possible date of adoption: July 11, 1999
For further information, please call: (512) 305-7848
22 TAC §505.9
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §505.9 concerning Order of Business. This amendment is
the result of the Rule Review required by Rider 167 of the General Appropriations
Act of 1997.
The amendment to §505.9 will correct the language regarding the time
period for a board member to request that an item be placed on the agenda.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. The additional estimated cost to the state expected as a result of enforcing
or administering the rule will be zero because the amendment requires nothing
of anyone.
B. The estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule will be zero because the
amendment requires nothing of anyone.
C. The estimated loss or increase in revenue to the state as a result of
enforcing or administering the rule will be zero because the amendments requires
nothing of anyone and is not a revenue generator.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be a rule that correctly states the board's practice regarding
board members and agendas.
The probable economic cost to persons required to comply with the rule
will be zero because the amendment requires nothing of anyone.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on July 1, 1999. Comments should be addressed to Amanda
G. Birrell, General Counsel, Texas State Board of Public Accountancy, 333
Guadalupe, Tower III, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed rule will not have an adverse
economic effect on small businesses because zero because the amendment requires
nothing of anyone or of any small businesses.
The Board specifically invites comments from the public on the issues of
whether or not the proposed rule will have an adverse economic effect on small
business; if the rule is believed to have such an effect, then how may the
Board legally and feasibly reduce that effect considering the purpose of the
statute under which the rule is to be adopted; and if the rule is believed
to have such an effect, how the cost of compliance for a small business compares
with the cost of compliance for the largest business affected by the rule
under any of the following standards: (a) cost per employee; (b) cost for
each hour of labor; or (c) cost for each $100 of sales. See Texas Government
Code, §2006.002(c).
The proposed amendment is proposed under the Public Accountancy
Act, Texas Civil Statutes, Article 41a-1, 6(a) (Vernon Supp. 1998), which
authorizes the Board to adopt rules deemed necessary or advisable to effectuate
the Act.
No other article, statute or code is affected by this proposed amendment.
§505.9. Order of Business.
(a)
The executive director, in conjunction with the chairman,
shall prepare a written agenda for each board meeting and distribute a copy
of the agenda to each board member.
(b)
Any board member may place an item on the board's agenda
by written request to the chairman
at least
[
(c)
Conduct of board meetings shall be guided by Roberts' Rules
of Order, except that no board action shall be invalidated by reason of failure
to comply with those rules.
(d)
Any person may request an appearance before the board for
the purpose of making a presentation on a matter under the board's jurisdiction,
provided that at least 20 days' advance written request to appear is made
to the chairman; however, the chairman may waive the 20-day notice requirement
if such action would best serve the public interest. The chairman may deny
a request to appear based on time constraints or other reasons which, in the
chairman's opinion, warrant such denial. When practicable, a specific date
and time to appear shall be set by the chairman, and a time limit may also
be imposed. The person requesting the appearance should state in writing in
reasonable detail the request to be made of the board and the estimated time
needed.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May
27, 1999.
TRD-9903166
William Treacy
Executive Director
Texas State Board of Public Accountancy
Earliest possible date of adoption: July 11, 1999
For further information, please call: (512) 305-7848
22 TAC §505.10
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §505.10 concerning Board Committees. This amendment is
the result of the Rule Review required by Rider 167 of the General Appropriations
Act of 1997.
The amendment to §505.10 will allow but not require the board chairman
to consider committee assignments annually and changes "chapters" to "sections"
in subsection (e) (3) (A) and (C).
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. The additional estimated cost to the state expected as a result of enforcing
or administering the rule will be zero because the amendments require nothing
of anyone.
B. The estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule will be zero because the
amendments require nothing of anyone, of the state or of local government.
C. The estimated loss or increase in revenue to the state as a result of
enforcing or administering the rule will be zero because the amendments require
nothing of anyone and because the amendments are not revenue generators.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be that the board chair may, but does not have to consider
committee appointments annually.
The probable economic cost to persons required to comply with the rule
will be zero because the amendments require nothing of anyone.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on July 1, 1999. Comments should be addressed to Amanda
G. Birrell, General Counsel, Texas State Board of Public Accountancy, 333
Guadalupe, Tower III, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed rule will not have an adverse
economic effect on small businesses because the amendments require nothing
of anyone or of any small businesses.
The Board specifically invites comments from the public on the issues of
whether or not the proposed rule will have an adverse economic effect on small
business; if the rule is believed to have such an effect, then how may the
Board legally and feasibly reduce that effect considering the purpose of the
statute under which the rule is to be adopted; and if the rule is believed
to have such an effect, how the cost of compliance for a small business compares
with the cost of compliance for the largest business affected by the rule
under any of the following standards: (a) cost per employee; (b) cost for
each hour of labor; or (c) cost for each $100 of sales. See Texas Government
Code, §2006.002(c).
The proposed amendment is proposed under the Public Accountancy
Act, Texas Civil Statutes, Article 41a-1, 6(a) (Vernon Supp. 1998), which
authorizes the Board to adopt rules deemed necessary or advisable to effectuate
the Act.
No other article, statute or code is affected by this proposed amendment.
§505.10.Board Committees.
(a)
Committee appointments. Appointments to standing committees
and ad hoc committees shall be
considered annually
[
(b)-(d)
(No change.)
(e)
Standing committee structure and charge to committees.
The standing committees shall consist of the following individuals and shall
be charged with the following responsibilities.
(1)-(2)
(No change.)
(3)
The qualifications committee shall be comprised of
at least two board members, one of whom shall serve as chairman. The committee
shall make recommendations to the board regarding:
(A)
the educational qualifications of an applicant for the
Uniform Certified Public Accountant Examination in accordance with
§§
[
(B)
the administration, security, discipline, and other aspects
of the conduct of the Uniform Certified Public Accountant Examination in Texas;
(C)
the work experience qualifications of an applicant for
the certified public accountant certificate in accordance with
§§
[
(D)
where applicable, the equivalency examination measuring
the professional competency of an applicant for a CPA certificate by reciprocity;
and
(E)
proposed changes in board rules, opinions, and policies
relating to the qualifications process.
(4)-(11)
(No change.)
(f)-(i)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May
27, 1999.
TRD-9903167
William Treacy
Executive Director
Texas State Board of Public Accountancy
Earliest possible date of adoption: July 11, 1999
For further information, please call: (512) 305-7848
a
] judgment to others. In tax practice,
however, a certificate or registration holder may resolve doubt in favor of
his client as long as there is reasonable support for the position.
Subchapter E. Other Responsibilities and Practices
(1)
] the name contains a misrepresentation
of facts;
(2)
] the name indicates character
or grade of service which is not based upon verifiable facts;
(3)
] the name is likely to
mislead or deceive because it fails to make full disclosure of relevant facts;
the following are examples, but are not inclusive:
(4)
] the name is intended
or likely to create false or unjustified expectations of favorable results;
(5)
] the name implies special
expertise;
(6)
] the name implies educational
or professional attainment or licensing recognition of the firm and/or of
its owners, partners, or shareholders which are not supported in fact;
(7)
] the name of the firm
that is incorporated does not include the words "corporation," "incorporated,"
"professional corporation," or "company," or in each case, an abbreviation
thereof, as a part of the firm name; the words "professional corporation,"
or "PC" are not included with the firm name each time it is used; and the
name of a firm organized under the limited liability partnership rules does
not include the words "professional limited liability company" or "professional
limited liability partnership" as appropriate, or an abbreviation thereof
as part of the firm name unless the entity was organized prior to September
1, 1993;
(8)
] the name includes the
designation "and company," "company," "group," "associates" or "and associates"
or abbreviations thereof or similar names implying more than one employed
member of the firm unless there are at least two licensees involved full time
in the practice;
(9)
] the name of a firm that
is a partnership or professional corporation fails to contain the personal
name or names of one or more individuals presently or previously a partner,
officer, or shareholder thereof;
except that an acronym may be used
for a firm name if the acronym is composed exclusively of the first letters
of the surnames of current or past partners or shareholders of the firm.
(10)
] the name of a firm
that is a sole proprietorship fails to contain the name of the sole proprietor;
or
(11)
] the name contains other
representations or implications that in reasonable probability will cause
a person of ordinary prudence to misunderstand or be deceived.
Chapter 505.
The Board
shall be responsible for the permanent records
of the meetings and transactions of the board, the maintenance of an attendance
record, and the maintenance of records of all examinations, registrations,
and license applications. The secretary shall also be responsible for the
maintenance of a record of certificates issued to all certified public accountants,
and of all persons registered as public accountants, together with all necessary
information relative thereto. The secretary
] shall perform such [
other
] duties as in the judgment of the board are necessary.
within
]
20 days
before
[
of
] the next board meeting.
made
annually
] by the board chairman to assist in carrying out the functions
of the board under the provisions of the Public Accountancy Act of 1991 (the
Act). The board chairman shall be an ex officio member of each standing committee
and ad hoc committee and chairman of the executive committee.
chapters
] 511.51-511.59 of this title (relating to
Educational Requirements);
chapters
] 511.121-511.124 of this title (relating
to Experience Requirements); and/or
Chapter 509.
Rulemaking Procedure