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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsApril 2017

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24 DE Admin. Code 100
On December 1, 2016, the Delaware Board of Accountancy published proposed changes to its regulations in the Delaware Register of Regulations, Volume 20, Issue 6. The notice indicated that written comments would be accepted by the Board, a public hearing would be held, and written comments would be accepted for fifteen days thereafter. After due notice in the Register of Regulations and two Delaware newspapers, a public hearing was held on January 18, 2017 at a regularly scheduled meeting of the Board of Accountancy to receive verbal comments regarding the Board's proposed amendments to its regulations.
3. Pursuant to 24 Del.C. §105(a)(1) the Board has the statutory authority to promulgate rules and regulations to implement or clarify specific statutory sections of its statute.
NOW THEREFORE, pursuant to 24 Del.C. §105(a)(1) and for the reasons set forth above, the Board does hereby ORDER that the regulations be, and that they hereby are, adopted and promulgated as set forth in the Delaware Register of Regulations on December 1, 2016. The effective date of this Order is ten days from the date of its publication in the Delaware Register of Regulations, pursuant to 29 Del.C. §10118(g).
SO ORDERED this 20th day of February, 2017.
1.1 Pursuant to 24 Del.C. Ch. 1, the Delaware Board of Accountancy (“the Board”) is authorized to, and has adopted, these Rules and Regulations. The Rules and Regulations are applicable to all certified public accountants, public accountants, permit holders and applicants to the Board.
1.7 Board members are subject to the provisions applying to “honorary state officials” in the “State Employees’, Officers’ and Officials’ Code of Conduct,” found at 29 Del.C. Ch. 58. No member of the Board shall: (1) serve as a peer reviewer in a peer review of a licensee; or (2) be an instructor in an examination preparation course or school or have a financial interest in such an endeavor.
An “agreed-upon procedures engagement” is one which is to be performed in accordance with applicable attestation standards and is one in which a Licensee is engaged to issue a written finding(s) that (i) is based on specific procedures that the specified parties agree are sufficient for their purposes, (ii) is restricted to the specified parties, and (iii) does not provide an opinion or negative assurance.
For purposes of the definition of “attest”, the Board adopts and incorporates by reference the AICPA’s Statements on Auditing Standards (SAS) as they existed as of May 25, 2016.
Audit” means the procedures performed in accordance with applicable auditing standards for the purpose of expressing or disclaiming an opinion on the fairness with which the historical financial information is presented in conformity with generally accepted accounting principles, another comprehensive basis of accounting, or basis of accounting described in the report.
Financial statements” means statements and footnotes related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, cash flow, or changes in financial position for a period of time, in conformity with generally accepted accounting principles or another comprehensive basis of accounting. The term does not include incidental financial data included in management advisory service reports to support recommendations to a client; nor does it include tax returns and supporting schedules.
34.0 Applications
34.1 An aApplications for examination, certificates, and permits to practice and renewals of permits to practice shall be submitted on forms approved by the Board.
34.2 The Board may require additional information or explanation when it has questions about an applicant’s qualifications or application materials. An application is not complete or in proper form until the Board has received all required and requested documents, materials, information and fees.
46.0 Requirements and Qualifications for a Certificate and Permit to Practice as a Certified Public Accountancy Accountant
4.16.2 Each applicant for a certificate and permit to practice certified public accountancy pursuant to 24 Del.C. §107 must provide the Board with the following:
4.1.16.2.1 A statement under oath or other verification satisfactory to the Board that the applicant is of good character as that term is defined in 24 Del.C. §107(a)(1) has not been convicted of a crime that is substantially related to the practice of accountancy as stated in subsection 12.1.
4.1.26.2.2 Evidence in a form satisfactory to the Board that the applicant has successfully passed the Uniform Certified Public Accountant Examination or its successor examination as established by the AICPA and the National Association of State Boards of Accountancy (NASBA).
6.2.2.6 The examination required by 24 Del.C. §107 shall test the knowledge and skills required for performance as an entry-level certified public accountant. The examination shall include the subject areas of accounting and auditing and related knowledge and skills as the Board may require.
4.1.36.2.3 Evidence in a form satisfactory to the Board that the applicant has successfully completed the AICPA self-study program "Professional Ethics for CPAs," or its successor course, with a passing grade of not less than 90% within 10 years of the date of the application.
4.1.46.2.4 Evidence in a form satisfactory to the Board that the applicant has completed at least 150 semester hours of college education including a Baccalaureate Degree or a higher degree or met the educational requirements of a state that was deemed to be substantially equivalent as of January 1, 2009 and in which the applicant was a CPA examination candidate and passed said exam. The total educational program shall include a concentration in accounting.
4.1.4.16.2.4.1 The applicant also must, upon request, submit proof that the college or university granting the degree was, at the time of the applicant's graduation, accredited by the Middle States Association of Colleges and Secondary Schools or by another comparable regional accrediting association. A degree granted by a college or university not so accredited at the time of applicant's graduation will not be accepted. Graduates of non-United States (U.S.) degree programs will be required to have their credentials evaluated by a credential evaluation service acceptable to the Board, to determine equivalency to U.S. regional accreditation.
4.1.4.26.2.4.2 The concentration in accounting must be completed at an accredited college or university and consist of at least 24 semester hours of accounting courses covering some or all of the following subject matter content, which are to be derived from the current Uniform CPA Examination Content Specification Outline (CSO):
These courses may be taken either as part of the applicant's Baccalaureate or Master's Degree program or subsequent to the completion of the program. Each applicant must have completed courses in financial accounting and reporting, auditing and attestation services, and taxation as components of the 24 hour concentration in accounting. in accounting principles, intermediate accounting, cost accounting, tax, auditing, advanced accounting, accounting information systems, and law. Courses in other business subjects, such as banking, computer science, economics, finance, insurance, management and marketing will not be accepted as accounting courses for this purpose.
4.1.56.2.5 Evidence in a form satisfactory to the Board that the applicant meets the all of the following experience requirements: provided in 24 Del.C. §107(a)(5) and Rule 5.0 of these Rules and Regulations, as applicable.
6.2.5.1 Experience may consist of providing any type of services or advice using accounting, attest, compilation, management advisory, financial advisory, tax or consulting skills.
6.2.5.2 Qualifying experience shall be verified by a United States certified public accountant who at the time of supervision held a valid CPA permit to practice from Delaware or a comparable license from another United States jurisdiction and who supervised the applicant. The verification shall be notarized.
6.2.5.4 Only experience obtained after the conferring of the degree under which the candidate applies shall be accepted. A "year" of qualifying experience shall consist of full or part-time employment that extends over a period of no less than a year and no more than three years and includes no fewer than 2,000 hours of performance of services described in subsection 6.2.5.1.
4.1.66.2.6 A statement under oath or other verification satisfactory to the Board that the applicant has not engaged in any acts that would be grounds for discipline by the Board.
4.1.76.2.7 A certified statement from the licensing authority, or comparable agency, that the applicant has no pending disciplinary proceedings or complaints against him or her in each jurisdiction where the applicant currently or previously held a permit to practice.
5.1 The experience required for issuance of an initial permit pursuant to 24 Del.C. §107(a)(5) shall meet the requirements set forth in this Rule.
7.1.1 These regulations provide two distinct routes for an individual already licensed in another state to obtain a reciprocal permit to practice in this State. Individuals may qualify for a reciprocal permit to practice as described in 24 Del.C. §109 (substantial equivalency) or as described in Section 108(c)(2) and subsection 7.2 below. Individuals with a principal place of business in another state may offer or render services in this state pursuant to substantial equivalence (see 24 Del.C. §109).
7.1.2 If the substantial equivalency standard set out in 24 Del.C. §109 is not applicable, the Board shall issue a reciprocal permit to practice to the holder of a certificate, license or permit issued by another state provided that the applicant meets each of the following requirements:
7.1.2.3 Has experience of the type required under the 24 Del.C. §107(f) and this regulation for issuance of the initial permit to practice.
69.0 Requirements for Permit to Practice Public Accountancy
69.1 Each applicant for a permit to practice public accountancy must provide the Board with the following:
69.1.1 A statement under oath or other verification satisfactory to the Board that the applicant is of good character as that term is defined in 24 Del.C. §107(a)(1)110(c)(1).
69.1.2 Evidence in a form satisfactory to the Board that the applicant holds, as a minimum, an associate degree with a concentration in accounting. Subsections 4.1.4.1 6.2.4.1 and 4.1.4.2 6.2.4.2 also apply to applicants for permits to practice public accountancy.
69.1.3 Evidence in a form satisfactory to the Board that the applicant has successfully passed the accounting examination given by the Accreditation Council for Accountancy and Taxation, which is the examination recognized by the National Society of Public Accountants, or both the Financial Accounting and Reporting (FAR) and Auditing and Attestation (AUD) portions of the Uniform Certified Public Accounting Examination. Effective August 1, 2012, aAn applicant shall qualify to sit for the FAR and AUD portions of the Uniform Certified Public Accountants Examination only if he or she holds at least a Baccalaureate Degree with 120 credit hours.
69.1.4 Evidence in a form satisfactory to the Board that the applicant has successfully completed the AICPA self-study program "Professional Ethics for CPAs," or its successor course, with a grade of not less than 90% within 10 years of the date of the application.
69.1.5 A statement under oath or other verification satisfactory to the Board that the applicant has not engaged in any acts that would be grounds for discipline by the Board.
69.1.6 A certified statement from the licensing authority, or comparable agency, that the applicant has no pending disciplinary proceedings or complaints against him or her in each jurisdiction where the applicant currently or previously held a permit to practice.
7.1 Any person holding a valid Delaware certificate issued on or before June 30, 1985 remains a certificate holder. Even if a prior permit to practice has lapsed, he or she is deemed by statute (24 Del.C. §122(c)) to have achieved sufficient education and experience and may obtain a permit to practice by applying to the Board.
7.2 Any person issued a certificate after July 1, 1985 and those applicants who meet the requirements of 24 Del.C. §122(d) on or before January 1, 2006 will remain certificate holders. He or she may obtain a permit to practice by meeting the experience requirements as established in the Delaware Accountancy statute and Rules and Regulations.
9.2 The provisions of Rule 5.1 shall also apply to the experience required by 24 Del.C. §109(a)(3) for the granting of a permit by reciprocity.
10.1 Rule 10.0 in its entirety does not apply to a firm that does not maintain an office in this State and is practicing certified public accountancy through an individual practicing pursuant to the practice privilege afforded by 24 Del.C. §108 and Rule 9.3. A CPA firm that does not maintain an office in this State and is practicing certified public accountancy through an individual practicing pursuant to the practice privilege afforded by 24 Del.C. §109 and Section 8.0 is not required to have a CPA firm permit to practice or otherwise notify the Board.
10.2.1 “Firm” means a sole proprietorship, partnership, corporation or any other entity authorized under Delaware law or a similar statute of another state.
10.2.2 The term “principal of a firm” is defined as any individual who has an equity interest in the firm.
10.32 Each firm which intends to be or is engaged in the practice of certified public accountancy or the practice of public accountancy in this State shall be required to obtain and maintain a valid permit to practice. Individuals not currently practicing certified public accountancy or public accountancy shall not be required to obtain a firm permit to practice until such time as that person begins to perform certified public accounting or public accounting services in this State or for clients located in this State. A sole proprietor is required to hold both an individual permit to practice public accountancy and a firm permit to practice public accountancy.
10.4 Each applicant for issuance or renewal of a firm permit to practice certified public accountancy for a firm with an office or offices in this State shall be required to show that: 1) each principal who performs services in this State, who performs services for a client(s) located in this State, or who is responsible for the accounting work in this State, holds a valid Delaware individual permit to practice certified public accountancy; 2) each employee holding a certificate who performs services in this State or who performs services for a client(s) located in this State, except for employees who have not as yet accumulated sufficient experience to qualify for a permit under 24 Del.C. §107, holds a valid Delaware individual permit to practice certified public accountancy and 3) a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members or managers, belongs to holders of a permit who are licensed in some state, and such partners, officers, shareholders, members or managers, whose principal place of business is in this state, and who perform services in this state hold a valid permit under 24 Del.C. §107. Firms may include non-licensee owners provided that all non-licensee owners are individuals of good moral character and are active individual participants in the firm.
10.4 Each applicant for issuance of an initial firm permit to practice certified public accountancy must be enrolled in a peer review program pursuant to subsection 10.13.
10.5 Each applicant for issuance or renewal of a firm permit to practice public accountancy shall be required to show that: 1) each principal who performs services in this State, who performs services for a client(s) located in this State, or who is responsible for the accounting work in this State, holds a valid Delaware individual permit to practice public accountancy; and 2) each employee holding a certificate who performs services in this State or who performs services for a client(s) located in this State, except for employees who have not yet met the requirements to qualify for a permit under 24 Del.C. §110, holds a valid individual permit to practice public accountancy. For purposes of 24 Del.C. §111110 and this Section, employees of a firm with its principal offices outside of Delaware that work in excess of eighty (80) hours in this State or who work for a client(s) in this State must have a valid Delaware individual permit to practice.
10.6 Each applicant for issuance of an initial firm permit to practice public accountancy must be enrolled in a peer review program pursuant to subsection 10.13.
10.67 An applicant for issuance or renewal of a firm permit to practice certified public accountancy or public accountancy shall be required to register each office of the firm within this State with the Board, and to show that each such office is under the charge of a person holding a valid Delaware permit to practice.
10.8 Notification of changes by firms.
10.8.1 A firm registered pursuant to 24 Del.C. §111 shall file with the Board a written notification of any of the following events concerning the practice of certified public accountancy or public accountancy within this State within thirty (30) days after its occurrence:
10.89 Certified public accounting and public accounting firms practicing as corporations organized pursuant to Delaware law must be organized in compliance with The Professional Service Corporation Act, 8 Del.C. §601, et. seq.
10.910 All firms and accountants practicing in firms shall be bound by professional responsibility standards no less stringent than those stated in 8 Del.C. §608. Each applicant for issuance or renewal of a firm permit to practice certified public accountancy or public accountancy shall be required to cause a duly authorized individual to verify under oath that upon issuance by the Board of a firm permit to practice, the firm will be bound by professional standards no less stringent than those stated in 8 Del.C. §608.
10.1011 Certified public accounting and public accounting firms may not practice using firms names that are misleading as to organization, scope, or quality of services provided.
10.12.1 “Enrollment in a peer review program” means a firm is required to follow all requirements of the peer review process, cooperate with those performing and administering the peer review, comply with the peer review standards and inform sponsoring organizations when firm changes occur.
10.12.2 “Peer Review Programs” mean the sponsoring organization’s entire peer review process, including but not limited to the standards for administering, performing, and reporting on peer reviews, oversight procedures, training, and related guidance materials.
10.12.3 “Peer Review Standards” mean the Board-approved professional standards for administering, performing and reporting on peer reviews.
10.12.4 “Peer Reviewer/Reviewing Firm” means a certified public accounting firm responsible for conducting the peer review, holding a valid and active license to practice public accounting in good standing by this state or some other state, and meets the peer reviewer qualifications to perform peer reviews established in the Board-approved peer review standards.
10.12.5 “Sponsoring Organization” means a Board-approved professional society, or other organization responsible for the facilitation and administration of peer reviews through use of its peer review program and peer review standards.
10.12.6.4 On and after July 1, 2017, each applicant for renewal of a permit to practice under 24 Del.C. §108 or 24 Del.C. §110 in the case of a permit holder who issues compilation reports to the public other than through a CPA or PA firm, and each applicant for renewal of a firm permit to practice under 24 Del.C. §111 shall furnish in connection with their renewal, evidence of enrollment in a Board approved Peer Review Program. Such evidence shall be at the Board’s discretion and may consist of a check box on the renewal form. Further proof of enrollment shall be at the Board’s discretion.
11.6.1 Primary responsibility for documenting the Board’s continuing professional education requirements rest with the applicant. Evidence in support of the requirements shall be retained for a period of five years after completion of the educational activity.
11.6.2 Sufficiency of evidence includes retention of course outlines and such signed statements of attendance as may be furnished by the sponsor.
11.6.3 For courses taken for scholastic credit in accredited universities or colleges, evidence of satisfactory completion of the course will satisfy the course outline and attendance record.
11.6.4 For non-credit courses at accredited universities or colleges, a statement of the hours of attendance signed by the instructor or an authorized official of the sponsoring institution, must be obtained and retained by the applicant. Course outlines may be retained by the sponsoring institution for a period of five years in lieu of retention of the outlines by the applicant.
11.7 The regulated professional's records of participation in the Voluntary Treatment Option will not reflect disciplinary action and shall not be considered public records open to public inspection. However, the participating Board may consider such records in setting a disciplinary sanction in any future matter in which the regulated professional's chemical dependency or impairment is an issue.
11.10 Failure to enter into such agreement or to comply with the terms and make satisfactory progress in the treatment program shall disqualify the regulated professional from the provisions of the Voluntary Treatment Option, and the participating Board shall be notified and cause to be activated an immediate investigation and disciplinary proceedings as appropriate.
12.1 All examinations required under 24 Del.C. Ch. 1 and these Rules and Regulations shall be graded by the applicable grading service of the organization offering the examination.
12.0 Crimes Substantially Related to the Practice of Accountancy:
12.1.1 Aggravated menacing. 11 Del.C. §602(b).
12.1.6 Assault in the first degree. 11 Del.C. §613.
12.1.9 Terroristic threatening; felony. 11 Del.C. §621(a) and (b).
12.1.15 Promoting suicide. 11 Del.C. §645.
12.1.17 Unlawful sexual contact in the first degree. 11 Del.C. §769.
12.1.28 Arson in the second degree. 11 Del.C. §802.
12.1.29 Arson in the first degree. 11 Del.C. §803.
12.1.33 Possession of burglar’s tools or instruments facilitating theft. 11 Del.C. §828.
12.1.37 Carjacking in the first degree. 11 Del.C. §836.
12.1.38 Shoplifting; felony. 11 Del.C. §840.
12.1.39 Use of illegitimate retail sales receipt or Universal Product Code Label; felony. 11 Del.C. §840A.
12.1.40 Theft. 11 Del.C. §841.
12.1.42 Theft; false pretense. 11 Del.C. §843.
12.1.43 Theft; false promise. 11 Del.C. §844.
12.1.44 Theft of services. 11 Del.C. §845.
12.1.45 Extortion. 11 Del.C. §846.
12.1.48 Identity theft. 11 Del.C. §854.
12.1.49 Forgery. 11 Del.C. §861.
12.1.50 Possession of forgery devices. 11 Del.C. §862.
12.1.54 Offering a false instrument for filing. 11 Del.C. §877.
12.1.57 Fraud in insolvency. 11 Del.C. §892.
12.1.62 Deceptive business practices. 11 Del.C. §906.
12.1.66 Unlawfully concealing a will. 11 Del.C. §908.
12.1.68 Debt adjusting. 11 Del.C. §910.
12.1.70 Fraudulent receipt of public lands. 11 Del.C. §912.
12.1.72 Health care fraud. 11 Del.C. §913A.
12.1.76 Theft of computer services. 11 Del.C. §933.
12.1.78 Misuse of computer system information. 11 Del.C. §935.
12.1.82 Dealing in children. 11 Del.C. §1100.
12.1.85 Possession of child pornography. 11 Del.C. §1111.
12.1.87 Sexual solicitation of a child. 11 Del.C. §1112A.
12.1.89 Bribery; felony. 11 Del.C. §1201.
12.1.94 Official misconduct. 11 Del.C. §1211.
12.1.95 Profiteering. 11 Del.C. §1212.
12.1.106 Interfering with child witness. 11 Del.C. §1263A.
12.1.113 Hate crimes; felony. 11 Del.C. §1304.
12.1.114 Stalking; felony. 11 Del.C. §1312A.
12.1.116 Bombs, incendiary devices, Molotov cocktails and explosive devices. 11 Del.C. §1338.
12.1.117 Adulteration. 11 Del.C. §1339.
12.1.119 Unlawfully dealing with a dangerous weapon; felony. 11 Del.C. §1445.
12.1.125 Victim or Witness Intimidation 11 Del.C. §3522 and 3533.
12.1.133 Drug paraphernalia; felony. 16 Del.C. §4771 (b) and (c) [manufacture and sale, delivery to a minor].
12.1.134 Attempt to evade or defeat tax. 30 Del.C. §571.
12.1.136 Failure to file return, supply information or pay tax. 30 Del.C. §573.
12.1.143 Violations of the Securities Act. 6 Del.C. §7322.
12.1.144 Attempt to Intimidate. 11 Del.C. §3534.
12.1.145 Alteration, Theft or Destruction of Will. 12 Del.C. §210.
12.2 Crimes substantially related to the practice of accountancy shall be deemed to include any crimes under any federal law, state law, or valid town, city or county ordinance, that are substantially similar to the crimes identified in this regulation.
13.1 Excepted Practices: The offering or rendering of data processing services by mechanical or electronic means is not prohibited by 24 Del.C. §120. However, the exception applies only to the processing of accounting data as furnished by the client and does not include the classification or verification of such accounting data or the analysis of the resulting financial statement by other than mechanical or electronic equipment not prohibited by this Rule. The rendering of advice or assistance in regard to accounting controls, systems and procedures is exempt only as it pertains to the specific equipment or data processing service being offered. The exemption does not cover study and/or advice regarding accounting controls, systems and procedures in general. Persons, partnerships or corporations offering or performing data processing services or services connected with mechanical or electronic equipment are subject to all provisions of 24 Del.C. Ch. 1.
13.2 Working Papers: For purposes of 24 Del.C. §120, the term “working papers” does not properly include client records. In some instances, a permit holder’s working papers may include data which should be part of the client’s books and records, rendering the client’s books and records incomplete. In such instances, that portion of the working papers containing such data constitutes part of the client’s records and should be made available to the client upon request.
14.1.4 If a hearing is requested by the Deputy Attorney General, the notice of hearing shall fully comply with 29 Del.C. §§10122 and 10131 pertaining to the requirements of the notice of proceedings. All notices shall be sent to the respondent’s address as reflected in the Board’s records.
14.1.6 If the respondent fails to appear at a disciplinary hearing after receiving the notice required by 29 Del.C. §§10122 and 10131, the Board may proceed to hear and determine the validity of the charges against the respondent.
16.1.1 Aggravated menacing. 11 Del.C. §602(b).
16.1.9 Terroristic threatening; felony. 11 Del.C. §621(a) and (b).
16.1.40 Theft. 11 Del.C. §841.
16.1.45 Extortion. 11 Del.C. §846.
16.1.48 Identity theft. 11 Del.C. §854.
16.1.49 Forgery. 11 Del.C. §861.
16.1.68 Debt adjusting. 11 Del.C. §910.
16.1.89 Bribery; felony. 11 Del.C. §1201.
16.1.95 Profiteering. 11 Del.C. §1212.
16.1.114 Stalking; felony. 11 Del.C. §1312A.
16.1.117 Adulteration. 11 Del.C. §1339.
16.1.133 Drug paraphernalia; felony. 16 Del.C. §4771 (b) and (c) [manufacture and sale, delivery to a minor].
Last Updated: December 31 1969 19:00:00.
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