The Public Accountancy Act

1 Chapter 901of theOccupations CodeEffective as of September 1, 2015 Prepared as an information brochure onlyand not necessarily in conformitywith Chapter 901, Occupations CodeTexas State Board of Public Accountancy333 Guadalupe, Tower 3, Suite 900 Austin, Texas 78701-3900(512) Accountancy ActThecelebratio n191 5 201 5 Centennial100yearsThe Public Accountancy ActChapter 901 of the Occupations CodeContentsSubchapter A. General ProvisionsSec. and Implication of of Public ; ; Public Policy; of Sunset B. Texas State Board of Public AccountancySec. of Public and Employee ..14 Sec. ; Executive for Diem; .. 15 Subchapter C. Executive Director and Other PersonnelSec. Director and of and Standards of Conduct Ladder Program; Performance Employment Opportunity Policy; on State Employee Incentive D. Board Powers and DutiesSec.

2 Powers and Duties of of Board Public Accountancy ActChapter 901 of the Occupations CodeSec. 19 Sec..20 Sec. Trust Fund for Fifth-Year 20 Sec. of Professional 21 Sec. on Consequences of Criminal 21 Sec. for Restricting Competitive 21 Sec. 21 Sec. and Confidentiality of Certain 22 Sec. for Certain 23 Sec. from Analysis of for Attest to Issue Subpoena, Administer Oath,and Receive Rulemaking and Alternative DisputeResolution E. Public Interest Information and Complaint ProceduresSec. Interest ..26 Sec. F. Certificate RequirementsSec. Education Requirements for Experience and Certificate Public Accountancy ActChapter 901 of the Occupations CodeSec. of Complete Examination Credit Based on Based on Foreign G. Uniform CPA ExaminationSec. ; Board of of and Security of.

3 34 Sec. Examination of of Partial Examination Credit H. Firm License RequirementsSec. License for Firm License or License Information and for Certain Foreign I. License Requirements, Issuance, and RenewalSec. Requirements; General for and Renewal of of License for Public Accountancy ActChapter 901 of the Occupations CodeSec. of Failure to Pay Certain Reduction for Retired or Disabled Exemption for Certain License Professional J. Practice of Public AccountancySec. of title or Abbreviation for Certified PublicAccountant ..43 Sec. of title or Abbreviation for Public Accountant ..44 Sec. of Other Titles or Used by Certain Out-of-State or Foreign Requirements and on Financial Statements; Use of Nameor Signature on Certain of of Partnership Requirements to Attest by Certain Out-of-State.

4 49 Sec. by Out-of-State Practitioner With SubstantiallyEquivalent K. Prohibited Practices and Disciplinary ProceduresSec. Powers of for Disciplinary Action Involving Revocation Based on Violation of Suspension ..54 Sec. Pending Final Conviction of Certain Surrender of Certificate or Firm ..56 Sec. to of Representation at Action for Act Committed in Another Public Accountancy ActChapter 901 of the Occupations CodeSubchapter L. Administrative PenaltySec. of Administrative of and Notice of Violation and 57 Sec. to Be Paid or Hearing Following Decision: Pay or of of Penalty and M. Other Penalties and Enforcement ProvisionsSec. and Desist ..60 Sec. in Act as Evidence of of Secretary of State as From N. Scholarships for Fifth-Year Accounting StudentsSec. Purpose ..62 Sec. and Disadvantaged Student on Accountant Scholarship Public Accountancy ActChapter 901 of the Occupations CodeThe Public Accountancy ActChapter 901 of the Occupations CodeCHAPTER 901.

5 ACCOUNTANTSSUBCHAPTER AGeneral ProvisionsSec. SHORT title .(a) This chapter may be cited as the Public Accountancy Act.(b) A reference in law to the Public Accountancy Act of 1979 or thePublic Accountancy Act of 1991 means this GENERAL DEFINITIONS.(a) In this chapter:(1) Attest service means:(A) an audit or other engagement required by the board to beperformed in accordance with the auditing standards adoptedby the American Institute of Certified Public Accountants oranother national Accountancy organization recognized bythe board;(B) an engagement required by the board to be performed inaccordance with standards for accounting and review ser-vices adopted by the American Institute of Certified PublicAccountants or another national Accountancy organizationrecognized by the board;(C) an engagement required by the board to be performed inaccordance with standards for attestation engagementsadopted by the American Institute of Certified PublicAccountants or another national Accountancy organizationrecognized by the board.

6 Or(D) any other assurance service required by the board to beperformed in accordance with professional standards adoptedby the American Institute of Certified Public Accountants oranother national Accountancy organization recognized bythe board.(2) Board means the Texas State Board of Public Accountancy .(3) Certificate means a certificate issued to a certified publicaccountant.(4) Certified Public accountant means a person who holds acertificate issued under this chapter or who practices in thisstate under Section Public Accountancy ActChapter 901 of the Occupations Code(5) Certified Public Accountancy firm means a person who holds afirm license or a firm that practices in this state under (6) Client means a person who enters into an agreement with alicense holder or a license holder s employer to receive a profes-sional accounting service.(7) Corporation means a corporation authorized by a statuteapplicable to this state or by an equivalent law of another stateor aforeign country, including a professional Public accountingcorporation organized under The Texas Professional Corpora-tion Act (Article 1528e, Vernon s Texas Civil Statutes).

7 (8) Firm means a sole proprietorship, partnership, corporation,limited liability company, or other business entity engaged inthe practice of Public Accountancy .(9) Firm license means a license issued under Subchapter H.(10) License means a license issued under Subchapter I.(11) Peer review means the study, appraisal, or review of the pro-fessional accounting work of a Public Accountancy firm thatperforms attest services by a certificate holder who is notaffiliated with the firm.(12) Professional accounting services or professional accountingwork means services or work that requires the specializedknowledge or skills associated with certified Public accountants,including:(A) issuing reports on financial statements;(B) providing management or financial advisory or consultingservices;(C) preparing tax returns; and(D) providing advice in tax matters.(13) Public accountant means a person authorized to practice publicaccountancy under the Public Accountancy Act of 1945 (Article41a, Vernon s Texas Civil Statutes).

8 (b) The board by rule may define financial statement to comply withthe standards adopted by generally recognized bodies responsiblefor setting accounting MEANING AND IMPLICATION OF REPORT.(a) In this chapter, a reference to a report used with respect to afinancial statement means an opinion, report, or other document,including an assurance prepared in accordance with standards for9 The Public Accountancy ActChapter 901 of the Occupations Codeaccounting and review services adopted by the American Institute ofCertified Public Accountants or another national accountancyorganization recognized by the board, that:(1) states or implies assurance as to the reliability of the financialstatement; and(2) includes or is accompanied by a statement or implication thatthe person issuing the opinion, report, or other document hasspecial knowledge or competence in accounting or auditing.(b) A statement or implication of assurance as to the reliability of afinancial statement or as to the special knowledge or competence ofthe person issuing the opinion, report, or other document includesany form of language that is conventionally understood to constitutesuch a statement or implication.

9 (c) A statement or implication of special knowledge or competence inaccounting or auditing may arise from:(1) the use by the issuer of the opinion, report, or other document ofa name or title indicating that the person is an accountant orauditor; or(2) the language of the opinion, report, or other document PRACTICE OF Public Accountancy .(a) In this chapter, practice of Public Accountancy means:(1) the performance for a client by a person who is certified, licensed,or registered under this chapter of a service that involves the useof accounting, attesting, or auditing skills;(2) the performance or offer of performance for a client or potentialclient by a person who represents to the Public that the personis certified, licensed, or registered under this chapter of a servicethat involves the use of accounting, attesting, or auditing skills;(3) the performance of activities of a person or practice unit licensedunder this chapter in:(A) preparing or reporting on a financial statement or report thatis to be used by an investor, the management of an organi-zation, a third party, or a financial institution, unless thereport is prepared for internal use only; or(B) preparing a tax return that is filed with a taxing authority.

10 Or(4) the supervision of an activity described by Subdivision (3).(b) For purposes of this section, a service that involves the use ofaccounting, attesting, or auditing skills includes:(1) issuing a report on or preparing a financial statement;10 The Public Accountancy ActChapter 901 of the Occupations Code(2) providing management or financial advisory or consultingservices; and(3) preparing a tax return or advising or consulting on a tax matter.(c) For purposes of this section, a person represents to the Public thatthe person is certified, licensed, or registered under this chapter ifthe person makes an oral or written representation that the person iscertified, licensed, or registered. A written representation includes arepresentation communicated by office sign, business card, letter-head, or advertisement. A representation does not include:(1) the display of an original certificate or registration unless alicense is also displayed;(2) a representation made by a faculty member of an educationalinstitution solely in connection with the duties of the person asa faculty member; or(3) a representation in a book, article, or other publication, or arepresentation made in connection with the promotion of the publi-cation, unless the representation includes an offer to perform aservice or to sell a product other than the CONSTRUCTION; LIMITATIONS.